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Tuesday, 19 March 1957

Mr BURY (Wentworth) .- I rise to second the motion. 1 feel that it is a great honour to be associated with this expression of loyalty to Her Majesty Queen Elizabeth the Second, and I congratulate His Excellency upon his Speech. I take advantage of this opportunity to express my gratitude and sense of duty towards the electors of Wentworth, who were responsible for enabling me to join the ranks of the prime profession. I might venture the thought that whatever may be said about this profession from time to time, it is parliamentary government which is the greatest gift of our forebears to the civilized arts of living, and I am proud to join the ranks. What is more, it will be a sad and sorry day for English-speaking peoples if this profession ever ceases to be the prime profession.

The Governor-General's Speech dealt with many issues. The speech of the honorable member for Barker (Mr. Forbes) filled me with a certain amount of selfconsciousness. In the whole of my electorate I have never seen a sheep or a ewe or a ram. His Excellency's Speech covered a great deal of ground and, in fact, there are many matters upon which the older hands could, and will, no doubt, speak for many hours. However, there is one matter here 1 should like to deal with in the first place. It is contained in these two sentences tucked away in the section dealing with trade -

The United Kingdom has entered upon negotiations for a Free Trade Area which would bring her, and perhaps other countries of Europe, into association with the Common Market of the six. Such far-reaching changes could have important implications for the Australian economy and these developments are being kept under close review.

These developments, I beg to suggest, have implications very much wider than the field of trade. When they were first broached officially at the last meeting of Commonwealth Finance Ministers by the then Chancellor of the Exchequer and now Prime Minister of the United Kingdom, Mr. Macmillan, and also by the present Chancellor of the Exchequer, Mr. Peter Thorneycroft, their enthusiasm for the proposals was extremely impressive and avowedly political. The present Prime Minister of Great Britain has a long history of association with movements for closer integration in Europe. This meeting took place before the Suez dispute and before the governments of western Europe were so forcibly reminded by the events which followed that without a large degree of unity between them they were of small account in the world of power politics. The forces making for unity will, I believe, receive further impetus in the future, and I should like to suggest that this particular issue is one to which the Minister for External Affairs (Mr. Casey), the Minister for Defence (Sir Philip McBride), the Treasurer (Sir Arthur Fadden) and the Minister for Trade (Mr.

McEwen) will, in the near future, be obliged to give their close attention. If Australia, as such, is to make its views effective as to very important future developments, the sooner those views are formed the more effective they will be.

I should like to turn to that part of the Speech which deals with the economy as a whole. The Governor-General reports that the economy is now on a much more stable basis. He indicates, also, that the views of the Government on the economy, and on future economic policy, are flexible. Hesaid -

My Government accordingly has the facts of the situation and its economic policies under close and continuous review.

He added -

A comprehensive economic statement will soonbe laid before Parliament.

It is in relation to this flexibility of mind on the part of the Government that I should like to make one or two comments, particularly in relation to economic development, which was touched upon by the honorable member for Barker. Economic development, broadly, implies two things. Firstly, it implies the expansion and duplication of existing facilities by the mere expansion of our present population and resources. But it also has a very definite and sometimes conflicting secondary implication of increased productivity, improved standards of living, and increased general wherewithal for production of the existing apparatus.

Ever since World War II., Mr. Speaker, it has been the policy of both the Labour Government and the present Government, which succeeded it, to concentrate upon the gross expansion of the economy, and rightly so, particularly in regard to immigration and the building up of our population. In fact, we took advantage - and are still taking advantage - of a situation in which large numbers of high-class people, who perhaps will not be available later, are prepared to emigrate from other countries. But it would be idle to suggest that this huge immigration programme which has brought so many long-term potential benefits to Australia has not cost us a very high price. We have paid that price with our eyes open, of course. Both governments knew of the immigration programme's inflationary implications before they ventured to embark upon it. It would be idle for me now to remind the House of the evils of inflation of which it is only too well aware. In fact, the GovernorGeneral mentioned that it cannot be said too frequently that inflation is the enemy of progress and national development. There is in the Governor-General's speech a long list of the rotten fruits of inflation.

There is mention also of another matter which is perhaps not given so much emphasis - the very harsh imports control which has been the lot of this country ever since the war owing to the payments difficulties which began during the war and have never ceased since, though subject to certain easements from time to time when the price of wool has risen or other rather adventitious circumstances have occurred. After each relaxation we have been obliged, as an alternative to depreciation, to tighten up once more to prop up the value of our currency. On each occasion the measures that we have been obliged to take have been more harsh. Indeed, we have now reached the stage at which old-established businesses, which do not come within the definition of essential businesses, and which have taken many years - in some instances, generations - to build up are being slowly suffocated, not by act of Parliament but by the actions of officials from which, in their very nature, there can be no appeal. In practice, the most effective economic planning in Australia has been undertaken, not as a result of debates in this chamber, or of legislation written into the statute-book, but in the ordinary every-day acts of officials who, by the nature of the system, are accountable to no one. This is one of the severe penalties of inflation. It is inevitable so long as we live with inflation. The only alternative would be a disastrous exchange devaluation of our currency, which, in all probability, would make inflation worse and retard progress in almost every aspect of our economic life.

The only final solution, sir, is to tackle inflation. In saying this, I do not attack in any way the immigration policy which has been one of the main causes of inflation, nor do I indicate that our huge immigration programme has been by any means the only cause of inflation. But it is true to say that an immigration programme providing for the intake of upwards of 100,000 souls a year, and economic stability and the suppression of inflation are incompatible objectives. I believe that both the governments concerned have pursued the right course in suffering this inflation. However, we should recognize the price that we are paying, and from time to time re-think our views on these basic issues. For that reason, I welcome the assurance that all these matters will be kept constantly under review. The Governor-general stated -

My Government will continue an active and balanced immigration programme appropriate in our capacity.

That is entirely unexceptionable. Neither would I wish to advocate, in making these remarks, that we scrap our immigration programme. That is by no means what J would suggest. I do suggest that our future aim should be to pay much more attention to those aspects of development concerned with increasing productivity and developing to the full the schemes that we already have under way, and to pay less attention to our gross immigration intake, because the resources which we apply to one cannot be applied to the other. Whereas both processes must proceed along parallel lines, excessive concentration on one at the expense of the other will lead to a very illbalanced result. I believe, Mr. Speaker, that it is more important to us that two or fewer Australians should be able to do to-morrow what three Australians can do to-day than that we should have a population of 15,000,000 or 18,000,000 by a certain date. .

It is not enough merely to say that we should concentrate on increasing productivity. The Government has already taken action to do so. His Excellency mentioned in his Speech that the Ministry of Labour Advisory Council has this problem under close review, and I welcome the activities of that committee. But the fundamental and greatest contribution to increased productivity can come only from the investment of great amounts of capital. At the moment, we are extremely short of capital. Our transport systems are run down and large numbers of industries and businesses throughout Australia are short of capital, not through any fault of any policy-making body but just because the demands, relative to the supply, are so huge; and what we should concentrate on in the forthcoming years is increasing the supply of capital available to not only private and public industry but almost every fundamental activity in the country. This task is by no means easy. There are only two major sources of supply. One is foreign savings and foreign capital, and the other is domestic savings. The limitations of foreign capital are well known to most honorable members. In fact, if large supplies of foreign capital were now available as they have been in past generations, our immigration programme and our programme to increase productivity and raise the standard of living within Australia could probably both proceed at a much higher level. But these limitations are very severe. We have, in fact, enjoyed a large flow from private sources, but the London market has virtually closed up since the war, except for very minor amounts. The Swiss market is small, and so is the Canadian, which we managed to tap recently. The United States market also is of almost negligible proportions. It is only from the International " Bank for Reconstruction and Development that we have been able to obtain any regular trickle of capital at all, and even this has been on a very small scale relative to our requirements and our development programme.

If we could enjoy the facilities which are available to Canada it would be of tremendous help. Canada is a classic example of a country which is said to have leapt forward because of vast investments of United States capital; but if we examine the Canadian position carefully, it emerges that 90 per cent, of capital investment in that country since the war has been financed from domestic sources. It is only by expanding our domestic sources of savings that we can hope to indulge in the development which has become the ambition of all respectable Australians. This is a difficult and complex task. It requires, firstly, a confidence that savings will not be eroded by inflation or stolen away by an overgrasping Government. It requires, secondly, that there will be proper rewards, stage by stage, for such saving as is made. I believe that we shall not get enough saving for our Government bond market while it remains true that at the end of a year the sum invested, plus the return of its interest, is less valuable than the total investment made at the beginning of 'he vear. It is no easy task to retrace our steps in this field. It demands measures which would be unpalatable to every sector of this House.

I believe that we should, in our longterm interests, endeavour to move along this path, but outside government we need a campaign of some sort, probably not governmental, which will interest the vast numbers in this country in investing in our industries. It is only when we have as much interest on the stock market and in our big industrial' ventures as we now have on the races that, we shall attain a healthy, balanced economy. It is no good expecting the industry of the future to be financed by the few. The next stage in our development should be industry owned, and in which an interest is taken and voted upon by vastly increasingnumbers.

What my plea adds up to in the end isthat for the next few years we should concentrate not so much upon numbers of Australians but upon the individual quality of the Australian.

Debate (on motion by Dr. Evatt) adjourned.

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