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Thursday, 7 October 1971
Page: 2061

Mr ARMITAGE (Chifley) - This afternoon I wish to deal with a few issues and particularly with the controversy which is spreading right throughout the community these days relating to protection versus free trade for Australian industry. I am not going to over-emphasise protection because I think that most of us realise that we must endeavour to use our. resources as effectively and as efficiently as we possibly can.. .If any industry hides behind a very high tariff wall which allows it to increase costs and prices then it. should be reviewed. There is little doubt that there is insufficient steady review of the protection afforded to the various areas of industry. The machinery must be set up to endeavour to increase or to make those reviews far more regular so that we can plan our economy in a more effective manner. At the same time there are some people in the community today who could bc described only as almost complete free traders. We have in this place a modest parliamentarian who writes for the 'Australian Financial Review' at regular intervals and he always puts this case very effectively. One could say it is a lobby viewpoint.

I feel that many people are taking an over academic view of this matter because they are ignoring the lessons of history in Australia. I am surprised at the attitude taken by members of the Australian Country Party on this issue. When Sir John McEwen was Minister for Trade and Industry he prosecuted a very strong programme to build up Australian secondary industries. I sincerely hope that it is not suggested by honourable members on the Country Party benches that this was not a sound policy for the development of this country because had we not developed secondary industries and become a mixed rural-cum-industrialised economy we would have had a great deal to worry about today with the plummeting returns to the rural sector. For this reason I think it is very important for us to look at the lessons of history and I believe we should do so whenever this argument comes up once a decade. Fortunately ever since the late 1930s Australia has gone ahead with a strong policy of developing our industries and affording them the protection the same as other countries have afforded to their industries which are our competitors. Japan is the best example of this.

This policy of development must be continued to enable this country to develop industrially at the rate warranted. This policy should continue on 2 grounds: Firstly, with the maintenance of Australian industry and the development of Australian industry and employment and secondly, with the maintenance of our overseas reserves. Far too often this latter ground is overlooked because of the very fat reserves which we have at the present time and which undoubtedly were made far by a great deal of 'hot' money coming into Australia. This controversy which has been going on for the last 12 months will shortly be illustrated when we debate the proposed tariff revision for woven shirts, knitted shirts and outer garments, and also for construction equipment manufacturers. There is a very big factory in Seven Hills in my electorate which is producing industrial tractors, loaders and back hoes.

This industry does not enjoy very heavy tariff protection although it does have protection of up to 50 per cent on loaders and back hoes. If Australia imported this equipment it would result in a very heavy expenditure of foreign exchange. In my electorate the firm of Whitmont and Sons Pty Ltd has a factory which produces shins. This firm will be greatly affected by the proposed tariff review. If that firm or the firm of construction equipment manufacturers I referred to is put out of business there would be a very decisive down- . turn in employment throughout the western suburbs of Sydney. I have only mentioned 2 companies. This policy which has been suggested would have a tremendous impact in these industrialised areas. Furthermore it would prevent the further development of industry throughout the western surburbs.

I point out that from the point of view . of import replacement it is important for us to maintain these industries. I do not know how many honourable members have read the pamphlet put out by the Australian Industries Development Association on arguments for and against appreciation of the Australian dollar but I think it is one of the clearest expositions on this issue which I have seen to date. That document makes the point that although we have very big reserves at this point of time they only represent returns on imports for a period of 6 months. If honourable members cast their minds back they will recall that in 1950-51 when there was tremendous pressure for an appreciation of the Australian pound we had at that time very big reserves, but again representing only imports over 6 months, and within a matter of a year we had to impose import licensing. For this reason I think that one must issue the warning that the maintenance of our reserves is crucial. The maintenance of our secondary industry is crucial, for employment as well as import replacement so as to maintain our reserves.

Of course some industries will have to acclimatise themselves gradually to the new conditions and 1 think that we would all appreciate this. I think we realise that it will not be as easy to export in the future as it has been in the past. We had a warning only last week from the Japanese Ministry of International Trade and Industry which pointed out that countries are unlikely to stand for Japan taking too much of their mineral resources. The Ministry said that for this reason Japan should look for other sources from which it could obtain minerals. The Ministry pointed out that a few overseas corporations control most of Australia's mineral extracting industries and that these corporations could by agreement halt the supply of minerals to Japan. For this reason the Ministry has said that it has to look for other areas of supply. With this sort of situation the maintenance of our reserves is crucial. I believe it is time that we had a little more economic planning in this country. Perhaps we could look at the system which Japan itself used so effectively over the years. Japan set up her industries in various segments and' she laid down the amount of development permitted for each segment. One segment may have . had to increase production by a certain percentage or another segment may have had to reduce production. Japan's industries were given fair warning over a period of 5 years. Accordingly industry accommodated itself to this overall plan because it knew that if it did not do so action would be taken to correct the position.

I think it is time Australia had a look at such a proposal for economic planning for this country. I think it could do a great deal of good for this nation, lt would allow those sections of our industry which may have to accommodate themselves to new lines, possibly reducing production in some fields or increasing production in others, to have ample warning in regard to their future. I think it is very important in view of the possible over academic approach to remember the lessons of history in that Australia built secondary industry as other countries did by the protection of their industry but if we go too far with the theorists Australia may suffer in the future.

The DEPUTY CHAIRMAN (Mr Cope) - Order! The honourable gentleman's time has expired.

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