Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Full Day's HansardDownload Full Day's Hansard    View Or Save XMLView/Save XML

Previous Fragment    Next Fragment
Wednesday, 3 April 1957

Mr CALWELL (Melbourne) .- The Opposition opposes this bill, which authorizes the borrowing of another 50,000,000 dollars from the International Bank for Reconstruction and Development. This is the fifth of a long, sad series of measures of this kind in the " borrow or bust " policy of the Menzies Government. This bill, like all the preceding measures in the series, seeks to validate something that has already been done. Expenditure out of the proceeds of the loan has already been incurred since the agreement with the bank was signed on 3rd December last. The passage of this measure will bring to 308,500,000 dollars the total amount borrowed from the International Bank on the credit of this nation for purposes similar to those set out in the schedules to this bill. The Loan (Qantas Empire Airways Limited) Bill 1957, which the House passed a few minutes ago, authorized the borrowing of 9,230,000 dollars from the bank for the purchase of seven Boeing jet aircraft and of other aircraft from the United States of America under a loan agreement signed in New York on 15th November last. The addition of that borrowing will bring Australia's total borrowings from the International Bank under measures of this kind to 317.730.000 dollars. Australia is the biggest borrower from the bank, which was established to help under-developed countries. We are paying heavily for the accommodation that wc have received. We are paying, among other things, a 1 per cent, commission charge, which is intended to cover default by borrowing governments that, in Australian parlance, take the knock on the bank.

The Opposition opposes this bill, as it opposed the Loan (Qantas Empire Airways Limited) Bill 1957, and for precisely the same reasons.

Mr Hamilton - Does the Opposition oppose the programme for which the money is being borrowed?

Mr CALWELL - I shall deal with the programme afterwards. I think 1 shall be able to convince the honorable member that much of the material and equipment listed in the schedules to this measure need not be imported from the dollar area, because it could be manufactured in Australia.

Mr Hamilton - Will the honorable member tell us where in Australia it could be manufactured?

Mr CALWELL - I shall certainly do so. For a beginning, I could refer the honorable member to the tractor factory of Chamberlain Industries Limited, in Western Australia, which could produce a lot of the equipment on which the Government intends to spend dollars.

Mr Cleaver - Chamberlain Industries Limited makes good tractors, but could it produce all the other equipment required?

Mr CALWELL - There are other factories that make good tractors also. Honorable members who suggest that the necessary equipment cannot be made in Australia must accept the onus of proving that it cannot be made here when we come to consider the schedules to the bill. A lot of excellent equipment used in Australia to-day is Australian made. I feel that the listing in the schedules of tractors, trucks, and other machinery does not tell the full story.

With the exception of a loan of 20,000,000 dollars obtained from the International Monetary Fund by the Chifley Government after the conclusion of World War II the Australian Labour party has neither condoned nor supported measures such as this one. Labour members object to international money lenders. During theconsideration of the Loan (Qantas Empire Airways Limited) Bill 1957, 1 said something about J. P. Morgan and Company Incorporated financing part of the loan, and much more could be said about that firm and others like it. Because Labour does not like this form of borrowing, and because Australia has suffered a good deal in the past at the hands of international money lenders and other social drones, the Opposition is not prepared to give its blessing to this measure any more than to the one that authorized the borrowing by Qantas Empire Airways Limited.

The Government has repaid 8,020,000 dollars of the 317,730,000 dollars that it has borrowed from the International Bank. The Menzies Government, which might very well be described as the overseas borrowing government, has mismanaged Australia's affairs so gravely that every year the Treasurer (Sir Arthur Fadden) or his agents have to take the hat round the world in an attempt to cadge funds from this country or that country in order that Australia may fulfil its loan obligations to the States in the terms of agreements made at meetings of the Australian Loan Council. T use the word " agreements ", but the State Premiers would dispute that claim. They must accept what the Treasurer of the day gives them, and he gives them what he thinks the loan market will yield. The difference between what the loan market yields and the cost of the programme upon which he decides is financed by the imposition of additional taxes, by the raising of loans overseas, or by a combination of both methods.

We now borrow Swiss francs, Canadian dollars, and United States dollars. The only countries that seem to be fairly prosperous at the moment and which we have not yet tapped are Germany, Russia and China. I have not the slightest doubt that one of these days the Prime Minister, if he remains in office long enough, will make another trip to Egypt; but he will not be going there to settle the Middle East crisis. He will be going to borrow dollars from President Nasser. They will be Canadian dollars and American dollars and all the other moneys that Nasser will have collected from tolls levied on ships passing through the Suez Canal. I would not be surprised to find in the not too distant future that we will be trying to borrow roubles from Russia. We might even be borrowing from China.

Mr Fox - lt will be twenty years before you will be getting those roubles.

Mr CALWELL - We will not be looking for roubles from Russia because we do not believe in overseas borrowing.

Mr Hamilton - The honorable member must admit that we have an enhanced reputation as a nation.

Mr CALWELL - 1 do not know that we have. 1 do not think our reputation was enhanced when the Prime Minister met President Nasser at midnight by moonlight on the Nile. Nor do I think our reputation is being enhanced by overseas borrowing.

So 1 come back to the bill, sir. The Treasurer (Sir Arthur Fadden) is prepared to borrow anywhere. He borrows from poor little Switzerland, and when I said that once before he said that Switzerland is little but not poor. However, there is money to be loaned in Switzerland. It is no use reiterating what we have said on previous occasions. If this country is as prosperous as the Government claims it to be, we should be able to fill our loans. We should be able to fill a loan programme of something like £190,000,000 a year. Our national income is about £4,000,000,000 a year; but somehow this Government cannot persuade the Australian people to take money out of their savings bank accounts and put it into Government loans. Accordingly, we have to resort to this particular form of finance to supplement internal loans so that the States can carry on and do the things they have to do.

There are five reasons why the Opposition opposes this legislation. The first reason is that, as I have said before, the Opposition does not believe in borrowing overesas. That is an article of faith with us. In the days of the Curtin and Chifley Governments we demonstrated our faith in our principles.

Mr Turnbull - There was no development then.

Mr CALWELL - There was a lot of development, even while the war was on.

Mr Turnbull - The Labour Government co iiI -' not even get enough petrol.

Mr CALWELL - Let me tell the honorable member for Mallee (Mr. Turnbull) just what did happen in the days of uV Curtin and Chifley Governments. We not only refrained from pledging the credit of this nation in the money-lending establishments of London and New York, but. although the nation was struggling for it? very existence, with a labour force of more than 1,000,000 service men and women withdrawn from production, and a labour force of 100,000 or more civilians diverted to the making of munitions and equipmenand the production of food for the services, we were able to reduce our indebtedness overseas by more than £80,000,000 sterling in London and 14,000,000 dollars in New York. We were able to do this while we raised and spent £1,500,000,000 for wai purposes alone.

Mr Hamilton - Tell us what developmental projects were undertaken between J 946 and 1949.

Mr CALWELL - I will. Part of that £1,500,000,000 was raised between 1945 and 1949, and to the credit of the Chifley Government, every loan it floated was filled, and filled at 3 per cent, or 3£ per centinterest! lt did not have to jack up the interest rate in order to persuade the people to invest. Because we could raise the money internally and at the same time reduce our overseas indebtedness or repatriate some of the loans overseas, we were able to finance our repatriation and our rehabilitation schemes, to start the Snowy River project, to establish TransAustralia Airlines, to lay a firm foundation for the Australian National University, to establish the whaling industry, and to do a number of other things which this Government has to some extent carried on. Of course, this Government sold its whaling station and got rid of Commonwealth Oil Refineries, which was established long before the war, but it has maintained much of the work that we started.

Mr Hamilton - It abolished petrol rationing.

Mr CALWELL - The Labour Government refused to abolish petrol rationing because by saving dollars we were trying to help the British people to buy food. Government supporters sacrificed the interests of the British people in order to get petrol.

The Opposition's second point is that if this country was properly governed, the stability of its economy maintained, and its overseas funds built up, there would not be any necessity to go begging for loans anywhere overseas. The people would have enough confidence in their government and in their country to invest in Commonwealth loans.

Thirdly, the Opposition believes that if overseas money is invested in this country it should come in the form of investment in new industries established here by companies or individuals from the United States, Great Britain, or anywhere else, rather than through the negotiation of loans from the International Bank or any other similar body. When money comes to this country by way of investment and not by way of loan there flows with it that indefinable quality which is so valuable - the quality of knowhow. When overseas people bring into this country their money, their equipment and their technicians, they help to teach Australians the latest methods, and that is an invaluable contribution to the well-being of the nation. But the moneylender does not do anything except finance the importation of goods made overseas. No good flows in the train of borrowing from overseas lenders. We have had too many sad experiences in this country of how overseas lenders behave when a drought or an economic blast strikes the nation. In 1889 and again in 1929 Australians had their wages and living standards reduced. People were forced into unemployment and an existence on the dole because the holders of our loans in other countries demanded payment as the loans fell due and refused to agree to a moratorium until things got better.

Mr Anderson - They were in the same boat themselves.

Mr CALWELL - Were they?

Mr Anderson - Of course, they were.

Mr CALWELL - I am not so sure that any lender country was in exactly the same position as a debtor country. The honorable member might say so, but those who took their money out of this country in those two great periods of depression certainly harmed our economy and set us back for a long, long time. Of course, it may be that people who lend their money, as money was lent in previous days, might do some harm to their own country as well. It would be very much better for us as a nation if a good deal of investment came from Great Britain in the form of decentralization of industries and population. Probably both countries would be better able to meet any economic troubles that might arise later on.

My fourth submission is that the Government has not provided in this legislation, or on any previous similar occasion, sufficient information to enable members of both Houses of the Parliament to judge whether the money being borrowed is really needed or will be spent efficiently. The schedules to past bills have told us about as much as the schedule to the present bill tells us about the expenditure which is to be incurred and which may even have been incurred since the agreement was signed, on hay balers and tractors and machinery of all kinds, much of which, as I have said previously, could have been manufactured in this country. While honorable members are told how the money will be spent, we are never given a report after a period of time following the passage of the bill on how the money has been spent. I doubt whether the Public Accounts Committee has ever been able to discover the facts. I do not know whether it has ever tried to discover the facts. I do not know whether it has been allowed to examine the Department of the Treasury yet. But I do know that the Public Accounts Committee has never made a report to the Parliament on the manner in which these international loans have been spent.

When I look at the schedule to the bill, which indicates the alleged purposes for which the loan is being raised, I find that we have four programmes. They are an agriculture and forestry programme, a road transport programme, a railway programme and an industrial development programme. Under the first programme, the imported equipment to be financed out of the proceeds of the loan includes tractors and spare parts, components for the manufacture of tractors, agricultural machinery and implements and spare parts therefor, components for manufacture of agricultural machinery in Australia and forestry equipment and spare parts. I think that the Australian manufacturers of all these pieces of equipment and spare parts would readily say that they could manufacture everything that is being imported, with the exception of some highly specialized items. The only item in this programme the importation of which could be justified - and if it is justified, it should be purchased out of dollar earnings and not out of loan funds - is helicopters and light aircraft and spare parts therefor. That is the only portion of this programme which, on the face of it, can be regarded as a justifiable item to be covered by loan expenditure.

Under the road transport programme, we are told that the imported equipment to be financed out of the proceeds of the loan includes tractors and spare parts. Any number of firms around the more settled districts of Australia are making tractors and spare parts. Quite a number of firms are making trucks and components and quite a number are making road trains and transporters, earth-moving equipment and spare parts therefor and the equipment for the construction and maintenance of roads.

Mr Hamilton - Do they make the big earth-moving tractors?

Mr CALWELL - Not the big earthmoving equipment, but some earth-moving equipment.

Mr Hamilton - What is the horsepower?

Mr CALWELL - I do not know. 1 would know if the Government gave us the information. We are asked to vote for something about which we are told nothing. If the Government desires to secure the approval of the Parliament for the importation of equipment of the kind mentioned, the very question which the honorable member for Canning (Mr. Hamilton) has asked me should have been answered in anticipation by the Government providing a schedule showing how it is all to be done.

Mr Brimblecombe - But the honorable member said it could be made here!

Mr CALWELL - I said that some of it could be made here.

Mr Brimblecombe - I do not think the honorable member knows what he is talking about.

Mr CALWELL - T do not think the honorable member for Maranoa ever knows what he is talking about. I may fail sometimes, but I am not in perpetual ignorance of everything. I should like the honorable gentleman to join me in asking die Government to shed a little light on the question. 1 know many places around Melbourne, Sydney and Adelaide where quite a number of the items covered in this legislation are being made.

Under the railway programme, I rind that the imported equipment to be financed nin of the proceeds of the loan include? components for diesel-electric locomotives, components for rail car assembly, control equipment and equipment for track maintenance. I know that the Clyde Engineering Company Proprietary Limited in New South Wales is manufacturing diesel-electric locomotives, but may need to bring in certain parts. But the extent to which these importations are necessary should be stated by the Government, and the House should not be treated in the contemptuous way in which it is always treated by the Government on measures of this kind.

I have not a general knowledge of the matters covered by the industrial development programme, but, prima facie, the matters included in the other three programmes could, in my view, be manufactured largely in this country, if not entirely so. In any event, the Government should give the House all the information it has in its possession, because I do not like this country to be put into pawn any more than is necessary.

We should be trying to reduce our loan indebtedness. When the Labour party was in power, as I have pointed out. we certainly reduced our debt abroad and interest rates on the money still owing abroad was also reduced. The conversion loans we negotiated were always floated at a lower rate of interest than was then being paid. Our overseas debt has increased in total to-day, compared with the time when we were the government. It is possible for honorable members opposite to say that our loans in London have fallen by £14.000.000 sterling since the present Government came into office. They have been reduced from £48.300.000 to £34.000,000. Loans in New York have fallen from 24.600.000 dollars to 16,500.000. But our indebtedness to the International Bank for loans of this kind has increased by 27.500.000 dollars, our indebtedness to Canada is 1.700.000 dollars and we owe Switzerland 12,600,000 francs.

Mr Whitlam - That is Farouk's nest egg.

Mr CALWELL - I have no doubt that King Farouk has a little money there and it may be that King Farouk is lending to the Swiss bankers and the Swiss bankers are lending to us. That is quite possible.

The average rate of interest being paid by this Government in London is .1 per cent, more than it was in our day. It is lower in the dollar area in New York, where it has dropped from 3.9 per cent, to 3.7 per cent. But our International Bank loans have been floated at 4.53 per cent., our Swiss debt is raised at 3.9 per cent, and our Canadian indebtedness carries the interest rate of 4 per cent. The Treasury has supplied me with figures which are most interesting. They show the total public debt per head in Australia to-day, as against the total public debt per head when we were the government. As the end of the last financial year in the period of office of the Chifley Government, the total public debt was £2,923,000,000. At 31st December last, the total public debt had risen to £4,246,000,000. Of course, State loans were included in that amount. The population at 30th June, 1949, was 8,000,000 and at 31st December, 1956, was 9,500,000. But the debt per head of population has risen since this Government took office from £365 to £447.

Mr Hulme - There has been a lot of development in that period.

Mr CALWELL - I do not know that there has been development which would justify the increase of the public debt by 33i per cent.

Mr Fox - The honorable gentleman has told us that money has lost its value by more than that percentage.

Mr CALWELL - And is not that true?

Mr Fox - The honorable gentleman cannot have it both ways.

Suggest corrections