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Monday, 20 May 1957

Sir WILFRED KENT HUGHES (Chisholm) . - After the denunciation of the honorable member for Scullin (Mr. Peters), I have a shrewd suspicion that he does not like this Government. He does not seem to agree with what the Liberal and Australian Country parties have done.

Mr Pollard - I do not think you are too keen on it yourself.

Sir WILFRED KENT HUGHES - I am a good supporter of this Government and I know what I am supporting. That is more than the honorable member for Lalor (Mr. Pollard) can say. He is not certain who his leader is or which section of the Labour party he is supporting. That applies also to the honorable member for Scullin. I have known him for a long time and the longer I have known him the more I have become convinced that, the weaker his case, the louder is his declamation on what he calls his political principles. It was an interesting speech, but I advise him not to go into training too early. I hate to disappoint him, but there is no sign of an election coming. If he goes into training too early he will over-train and become stale. He might practise in Queensland, but I am not certain whom he would support, Gair or Bukowski.

Those are interesting side-lights, but I want to ask the House to return to something which is more interesting at the present time - a few quiet moments over a cup of tea. In a debate on another matter earlier this afternoon, some honorable members opposite seemed to think that a very grave difference of opinion exists between the Minister for Trade (Mr. McEwen) and myself on this matter. I assure them again that they are in for a very big disappointment, because both the Minister and I are in agreement on all the main points of this matter. As a matter of fact, if the Minister had not given the decision in the way he did, I do not think the subsequent events would have taken place. In a way, I was the catalyst and the Minister's decision was what started the subsequent train of events. I realize that the Minister felt a little aggrieved that I had suggested he should give a decision against the advice of his departmental officers. On the case which I produced and which was in my hands at the time, the circumstantial evidence was strong, but apparently wrong, according to what the Minister has said. But I do not find it any detriment; it is a matter for praise that Ministers do sometimes go against the advice of their departmental officers. Otherwise, there would be no need for a Minister; the head of the department would be sufficient. On the other hand, when a Minister does not take the advice of his officers - and that is not so in this case - subsequent events will prove whether he is right or wrong.

The matter of the price of tea started in a very small way. I knew something about Taiwan tea, having had some myself, and I asked a firm, which I knew was in touch with Taiwan, to obtain a few samples and find out the price. I had no idea when I did that that a " tea-bomb " would evolve out of the action, and that the few samples that were obtained at my request would trigger off a series of very much bigger explosions. The price fell at once by 3d. per lb. It has since fallen by another 3d. in Adelaide and Brisbane to 6s. 9d. per lb., and it was selling at one of the big stores in Melbourne last Friday at 5s. 6d. per lb. So, I am hoping that this trend will continue, and that there will be further falls in the very near future.

There has been no explanation as to how the disclosure of the name of an applicant for an import licence was made to other people who already had licences. I am sure that the Minister for Trade (Mr. McEwen) will have taken action in regard to this matter to ensure that such an event will not recur. It was a very serious leakage of information. The Minister seemed to feel - perhaps rightly, who knows - that if no licences were required for the importation of tea there would be an accumulation of vast stocks of tea in this country to the detriment of our overseas balances. I do not know whether anybody should be criticized for what has happened. If so, I take my share of the criticism, because I was a member of the Cabinet in the two years to which I shall refer. At least, I was a member for one month of the first year.

Apparently, the only time that there has been stockpiling of tea to any extent since 1949 was in 1950-51 and 1954-55. In 1950-51, 61,250,000 lb. of tea were brought into this country as against 54,500,000 lb. which were imported in the previous year and in the following year. In 1954-55, 65,000,000 lb. of tea were imported. In both those years, the tea board, which was appointed by the Government, was operating. If I remember rightly, in the firstmentioned year 6d. per lb. was taken off the government subsidy, and the subsidy was removed on 1st July, 1955. I do not want to make any wild accusations, but, ifI remember rightly, in both these cases a period of time elapsed before the price of tea was allowed to rise or be re-adjusted by subsidy. But it appears to an inexpert man, on the surface, that our main trouble with regard to the price of tea over the last two years has been the 65,000,000 lb. that were brought in in 1954-55 at the top of the post-war tea market.

I give the following figures subject to correction, becauseI have not done as much arithmetic for a long time as I did in trying to equate pounds worth with pounds weight of imported tea. But, as far as I can work out, in 1954-55, 62,000,000 lb. of the 65,000,000 lb. of tea were imported at an average price of 6s. 8½d. per lb. At that time, tea was stockpiled to the extent of about 10,000,000 lb. over and above the maximum consumption in Australia, and it has taken quite a considerable time to offload that tea on to the public at the price at which it was bought, even allowing for the government subsidy. Again talking subject to correction, I point out that the price of Ceylon tea has dropped from 6s.8½d. per lb. in 1954-55 to 5s. per lb. in 1955-56, the price which applied at the end of March of this year. For Indian tea, which was the same price in the last year of control, the relative figures are 6s. 8½d. and 4s. 5d., respectively. We bought less than 2,000,000 lb. of Indonesian tea during the time of the high prices, when Indonesian tea was only 5s. 6d. per lb. It subsequently dropped to 4s. 6d. per lb., and went up again to 4s.11d. per pound, but we bought 9,000,000 lb. of Indonesian tea in 1955-56, and 12,250,000 lb. of it during the first nine months of this year.

Therefore, if the pound weight is equated with the pound's worth of tea it seems to me that there is a very interesting field for investigation into the question which I asked the Minister for Trade (Mr. McEwen) to look into last Wednesday. That question was whether the cancellation of import licences for tea would not result in the public drinking tea for which top world price would not have to be paid, and which would therefore draw less from our overseas balances than we have been drawing in the past. I do not want to make any wrong accusations in this matter, but I think that an investigation would be interesting. In any case, I direct the attention of the Minister for Air (Mr. Osborne), who is at the table, to the fact that the only time that tea was stockpiled was during the period of operation of the tea controller and the tea board.

Tea is a perishable product unless it is stored under excellent conditions, and that again reduces the chance of stockpiling. Since 1949, we have imported tea from East Africa, Malaya, Viet-Nam, Kenya, Nyasaland, Tanganyika and various other places. I am not particularly interested in Formosa. I am interested to see that the public should get as wide a choice of tea as possible, and that prices should be competitive.

Another matter that needs to be looked into is how far the interlocking rings of licensed importers and capital interests in tea estates affect the price of tea. If a man has capital invested in a tea estate in Ceylon he is much more likely to want to import tea from that country than if he did not have that interest. I do not say that anything is wrong. But the influence of import licensing, combined with capital interest, might possibly lead to a wrong decision as to where large quantities of tea should come from.

I understand that a trade promotion delegation recently went to Ceylon and India. That delegation was promoted and assisted by the Minister for Trade, and was an excellent idea. But if trade is to be dealt with on a governmenttogovernment basis I think we have to be very careful that we do not tax one section of the people at the expense of another. I understand that one of these trade promotion delegations engaged in discussions as to whether we should buy extra tea from a certain country in return for which it would buy more of our wheat and flour. Every member of this House wants to see more markets for our wheat and our flour, but if it means - and everybody knows there has been an international price ring on wheat - that the housewife's cup of tea is to be taxed because we have to buy more expensive tea than would otherwise be the case, the decision is wrong. In other words, if we are to make government trade deals of this nature, I think that any increased taxation should fall on the whole of the community by the payment of a subsidy or in some other way. I want to see all the markets possible for our wheat and flour, but if this means dearer imports the burden should fall on the shoulders of all taxpayers and not merely on the housewife who enjoys her cup of tea.

I would like the Minister at the table to take note of those points and discuss them with the Minister for Trade (Mr. McEwen). In fact, it might be even more interesting if it were possible for the Government to lay on the table of the House or of the Library the papers giving accounts of the discussions which our trade promotion people have had overseas. If some are confidential, I do not ask for those to be laid on the table.

Finally, I want to refer to something which is perhaps more in the nature of foreign policy. The Minister said last week that Formosa is a country with which Australia has friendly relations. I hope that means that the Government is at last going to send an Australian diplomatic representative to the Republic of China and so place that republic on the same basis as every other free country in the Western Pacific as regards diplomatic relations with Australia.

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