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Wednesday, 28 April 1965

Senator HENTY (Tasmania) (Minister for Civil Aviation) . - The Senate is indebted to Senator Lillico for the usual thoughtful contribution which he has made to the debate on the problem with which we have been dealing for the last few days. He has brought into the debate a note of restraint and has made a contribution which is of some significance in the solution of this problem. I have listened with a great deal of interest to the debate on the letter of the Prime Minister (Sir Robert Menzies) to the President of the United States of America, and the President's reply on the measures which he has proposed in order to dampen down American capital investment overseas and to repatriate dollars as urgently as possible to the United States because of the adverse balance of payments position in which that country finds itself.

I have noted with great interest that within a period of almost one month, the deficit which for three months was somewhere in the region of 6,100 million dollars was reduced to about 3,000 million dollars. lt would have been reduced further. but for the delays caused by maritime strikes in the United States of America. Exports were held up and their value could not be included in the three monthly period in which it should have been included. That is a vast improvement of the position in the United States.

I wish to reply to two or three matters raised by the Opposition during the course of this debate. The Leader of the Opposition in the Senate (Senator McKenna) repeatedly said something which, of course, is axiomatic. He said that, in order to benefit Australia we must increase exports. Of course we must. Nobody would quarrel with that proposition. The Government has given great attention to that aspect and has offered export incentives to industry knowing full well that, by our exports, we can earn more income to control the balance of imports and to meet our commitments overseas. The Government has a good record in this field, lt did not start to take action only yesterday. During the last two or three years incentives have been offered to Australian industry to enter the export field and assist to solve our balance of payments problem. From listening to the Opposition one would gain the impression that the idea of increasing exports had never occurred to the Government. In fact we have been taking clear steps -

Senator Cant - Backwards.

Senator HENTY - To meet this position as it has arisen. If Senator Cant were aware of the facts he would never have made the stupid suggestion that we are taking steps backwards.

Senator Cant - Have a look at the trading position.

Senator HENTY - We have been giving incentives to industry because, as Senator McKenna has said and every member of this House should say, we must aim to cure the problem of increasing our exports as early as possible. Nobody would suggest that we can wipe out the total deficit immediately by increased exports. Of course, that is impossible.

I want, now, to deal with one or two aspects which will be appreciated by Senator McKenna as a Tasmanian. I have never been able to understand the opposition of the Australian Labour Party to capital inflow into this country. The Labour Party is living in the past - in centuries gone by. In fact, I have always thought that members of the Labour Party are mentally constipated in respect of the use of overseas capital investment here. I shall give two instances from the Tasmanian scene, because Senator McKenna and I are both from Tasmania. I ask him to have a look at the position of the aluminium industry, which was a Government venture entered into by the Australian Labour Party and taken over and expanded by the present Government when it came into office.

Senator O'Byrne - Part of it was sold out to an international combine.

Senator HENTY - Bless your heart. I was hoping you would say that. There is always a mug who will come in. Senator O'Byrne, another Tasmanian, says part of it was sold out to overseas interests. In the last four years, the production of aluminium ingots at the Bell Bay plant in the hands of private enterprise has been increased from 12,000 tons to 52,000 tons annually. That is the detrimental effect that Senator O'Byrne suggests has resulted from the takeover of the plant by private enterprise. Production has been increased by about 400 per cent, in four years, yet Senator O'Byrne suggests that it was detrimental to Australia for the Government to get out of the plant in favour of private enterprise, with its knowhow and drive. This is a reflection of the mental constipation to which I have referred. The Labour Party is living in the past.

One of the great developments in Australia in recent times has been seen in the aluminium industry into which private capital has been introduced. As a result, I repeat, production has been increased by about 400 per cent, in four years. From the port of Bell Bay the increased production of aluminium ingots flows out in ships. Waterside workers are employed to load those ships. More and more people are employed. Senator O'Byrne ought to be aware of this position because he comes from Launceston, as I do. He has seen the great advantages of the introduction of private capital into the Bell Bay venture.

The Labour Party is terrified of overseas investment which creates the type of expansion seen in the aluminium industry, and the increased employment for waterside workers and other people which follows. Additional revenue is obtained by the port of Bell Bay because of the ships which come there to load the increased production we have experienced. Yet Senator O'Byrne, a Tasmanian, says this is wrong. What nonsense! This is the outlook of the Australian Labour Party on the development of Australia. It explains why I say the Labour Party is living in the past. Its whole outlook and upbringing is about 50 years behind the times. This is why the young people of Australia will not have a bar of the Labour Party. They know it is living in the past.

Senator Aylett,another Tasmanian, is attempting to interject. When he lived in Tasmania - some years ago - he knew something about that State. He knew something about the west coast of Tasmania. Senator O'Byrne says that we sold out the aluminium industry to private enterprise. I shall now tell him about the iron ore industry on the west coast of Tasmania, which the Tasmanian Labour Government has given wholly and solely to a JapaneseAmerican combination.

Senator O'Byrne - But the Tasmanian Government kept its interest in Bell Bay. You could not take that away.

Senator HENTY - Senator O'Byrne cannot answer as to the iron ore industry. He used the expression " sold out ". The Tasmanian Labour Government has sold out the iron ore industry in Tasmania to Japanese and American interests. Good luck to them, if they develop the industry for the benefit of Tasmania. Senator Aylett used to know something about Tasmania until he went to live on the Gold Coast. .Good luck to the foreign interests if they develop the iron ore industry in Tasmania for the benefit of Tasmanians.

For the benefit of Senator McKenna, who occasionally visits Tasmania to see us, I have cited these instances of the benefits gained from the capital inflow into Tasmania. They are down to earth, practical illustrations of the results obtained. If Senator O'Byrne wishes to return to Tasmania and debate this matter with me on the public platform, I shall go with him to Bell Bay or to Queenstown to do so at any time he wishes.

Senator O'Byrne - I will quote to the honorable senator the Leader of the Country Party, Mr. McEwen.

Senator HENTY - The honorable senator can quote whomever he wishes. If the introduction of overseas capital, wherever it comes from, is for the benefit of Tasmania, I am for it. Senator O'Byrne is at variance with the Labour Premier of Tasmania who has brought about the sale of the iron ore industry there. I turn now to deal with one or two other matters. I was interested in a point raised by Senator Willesee. He uttered a couple of little sentences which I though were significant. He said, as reported in yesterday's " Hansard " -

If we look back over the years we see the thrilling expansion that they have made. In 1944 it was not possible to visualise that West Germany or Japan would recover so quickly or become so important in world affairs.

Then I rudely interjected and asked -

Where did they get their capital?

Senator Willeseereplied ;

I think the honorable senator is agreeing with me that their capital originally came from America.

That puts the whole thing in perspective.

Senator O'Byrne - They will own the lot in the end.

Senator HENTY - That remark is another example of the mentality I was talking about earlier. When Australia was founded, the United States of America was a country of 4 million people. Because it was not afraid and terrified, as is the Australian Labour Party, to borrow capital overseas it has become a country of 190 million people. It is one of the greatest countries in the world. It was prepared to take risks, just as we in Australia are. We as a Government encourage people to take risks, and we believe that people who take risks should be able to retain some of the rewards that are won.

Senator Willeseespoke about the development of Japan and West Germany. He admitted that the development of those two countries was achieved with capital borrowed from the United States. A great deal of the tremendous amount of development that has occurred in Australia in the last 15 years has stemmed from the fact that the Australian people have been prepared to take risks. We have encouraged people to come to this country with knowhow and techniques and to develop industry, to the great benefit of Australian working men. Our workmen enjoy immeasurably better jobs and better paid jobs as a result of the development that has been achieved. We have been able to increase the Australian population by 100.000 people a year as a result of the investment of capital and the development of great secondary industries. The Australian Labour Party wishes that we had not achieved this result. Senator McKenna has been moaning about the inflow of capital since 1956 - a period of nearly 10 years. If he continues to do so for long enough, he may be right. If he does so for the next 25 years - I am sure he will be in opposition for that time - he may be right in the end. But if he is right in 25 years time, then we will have been right for 35 years. Let us make no mistake about the fact that what we have done has been to the great benefit of the people of Australia.

Senator Hendrickson - Is the Minister happy?

Senator HENTY - I am. I have been saying one or two things about Senator McKenna. Senator Kennelly had a great beef about the development of overseas industry in Australia. I though it would not be out of place to remind him that the Australian Labour Party, to its credit, induced the General Motors organisation to come to Australia. But now that organisation has been successful, the Labour Party wants to rake everything off it. It does not worry about the people who have come here and have not been successful; it hates the people who have been successful. Labour Party members hate the people who have developed their industries and who have employed thousands and thousands of Australians. Our Labour friends hate those people because they have been successful and have made profits. Oh, how they hate the profit motive! How they hate the capitalist system. How they like to ally themselves with those who do not like the capitalist system but would destroy it - the Communists. How they like to ally themselves in thought with such people. Is there any member of the Labour Party who will rise and say that the late Mr. Chifley did not encourage the General Motors organisation to come to Australia?

Senator O'Byrne - And guaranteed their account.

Senator HENTY - Yes, and guaranteed their account, bless your heart. But once an organisation has become successful, how the Labour Party hates it. What have General Motors-Holden's Pty. Ltd. and other organisations done for Australia? They have produced wealth.

Senator Fitzgerald - What is America doing for Australia now?

Senator Cant - What about the Johnson letters?

Senator HENTY - Don't they hate the truth. By Jove, when you touch them with the truth they hate it. Senator Cant asks: " What about the Johnson letters?" Let me tell him something about the export income of the General Motor-Holden's organisation. It has been reported that Mr. Hegland predicts record sales of Holden vehicles this year. He predicts that Holden exports will top last year's peak of 13,693 vehicles. Last year this organisation exported 13,693 vehicles and earned income overseas. Mr. Hegland predicts that he will top that figure this year by 2,000 vehicles. That is the type of American I like to see in Australia. This is the type of industry I like to see in Australia. It is giving to Australian workmen well paid jobs which the Australian Labour Party would deny them. The Labour Party would like to take over the industry and socialise it. Labour would like to place it under government ownership, with the result that those who worked in the industry would never receive the benefits that they get from private enterprise.

Senator Cant - The Minister has 10 minutes left. Let him tell us about the Johnson letters.

Senator Fitzgerald - Tell us why this debate was introduced?

Senator HENTY - I have been dealing with some of the matters that have been raised by honorable senators opposite. There is one other matter that I must refer to, because the figures quoted obviously were wrong. Obviously Senator Kennelly did not know what he was talking about. He referred to the inflow of private investment to Australia and to dividends remitted overseas and said that in the three years ended in June 1964 we had sent overseas £22.8 million more than we had earned. I am indebted to the Department of the Treasury for certain figures I have before me. They are not my own. Senator Kennelly's calculations should have shown that dividends remitted overseas amounted to £205.1 million and that the inflow of new money after deducting reinvested profits amounted to £432.9 million, a net gain in foreign exchange of £227.8 million - not an outflow of £22.8 million. I thought 1 should point out that there was an error of a couple of hundred million pounds which is coming our way instead of going the other way. I am sure that the honorable senator will appreciate that that is the position.

Senator Kennellyreferred also to the steps that Canada has taken. They were dealt with in the " Daily Telegraph " of 28th April. Canada proposed to raise its own capital, but Canada is in a vastly different position from that of Australia.

Senator Cavanagh - I agree with the honorable senator on that point.

Senator HENTY - I would not expect the honorable senator to understand, but if he listens 1 shall try to explain the position. If he is a good boy and sits quietly, perhaps the facts will permeate his mind. As a result of the Ottawa Agreement, Empire preference was established. A great deal of American industry went across the border into Canada to gain access to the Empire markets. The production was then Canadian based. That, of course, led to a far greater inflow of capital into Canada than ever there has been into Australia. As the Treasurer pointed out, at the present time only about 2 per cent, of our gross national product is payable overseas from the investment that has come here. Canada's position is entirely different from our position. The inflow of capital into Canada to secure the preference at that stage was very great.

Senator Aylett - Tell us what Mr. McEwen said.

Senator HENTY - This is not Gold Coast philosophy; this is sound common sense. If the honorable senator had studied the history of the matter and knew what it meant, he would realise that the Ottawa Agreement was built around Empire preference. This position has been brought about as a result of the action that was taken by the United States of America. It is a step which is driving Canada somewhat into isolation. We may be forced into the same position. In case honorable senators have not read the letter which the Prime Minister sent to President Johnson, I shall refer to one passage in it. He said -

This is not to say that we would oppose the issue by United States investors of some equity capital in their subsidiaries here to finance new investment in this country; indeed it would accord with an attitude we have frequently expressed . . .

On the other hand, however, we would be troubled and embarrassed if United States investors were to begin repatriating capital, substantially increasing the proportion of profits remitted or adding largely to their fixed interest borrowings or other forms of capital raising in Australia which gave Australian investors no equity share in the businesses in question. Developments such as these could very well force upon us the need to reconsider the policies we have hitherto followed in these areas.

The Prime Minister pointed out to the United States that it may, in fact, drive us into a sphere of isolation if it pursues the policies which it is following at the present time.

Senator Cavanagh - Too many dollars.

Senator HENTY - The honorable senator may know something about too many dollars, but I would have thought that the Australian Labour Party was very averse to having too many dollars invested in Australia. For my part, we cannot have enough. That is the difference.

Senator Cant - Tell us what the President said.

Senator HENTY - A copy of the letter which was sent by the President has been made available to the honorable senator. He can study it himself. No doubt it would be a very profitable exercise for him. I want to refer to what Senator Kennelly said about, the Treasurer's mission to the United States. He instanced it in the very narrowest sense as crawling cap in hand. That was a pretty miserable type of criticism to offer. The Treasurer has gone to put Australia's point of view to the United States, to which we are allied and which is one of our great friends.

I know that the Labour Party loves the blunderbuss attitude; I know that it loves controls and to force everybody into a pattern. That is its economic outlook when dealing with matters affecting Australia. The Labour Party loves to force everybody to adopt this blunderbuss attitude. But it is a much more intelligent approach to go to your friends, put the point of view that Australia holds very dearly and let them know what it means to us as a nation. Having discussed the matter in a man to man way across the table, at least you are sure that the United States of America knows Australia's point of view. That is a much more mature and a much more sensible approach than to use the blunderbuss tactics that have been suggested by the Opposition. It suggests that we should adopt some attitude of force; that we should take some economic steps and introduce import controls; and that we should return to the position where bureaucracy says what are the necessities in this country and what are the luxuries. As a Government, we have always stood for the greatest possible freedom in international trade. It is here that I disagree with the United States of America.

Senator O'Byrne - Oh, no!

Senator HENTY - Yes, I do. The members of the Opposition prefer to sit back and snipe at the United States all the time. They will not face the Americans in a man to man way and say: "This is where we disagree with you." The Opposition hates the United States of America and has always hated it. It hates everything the Americans do.

Senator Hendrickson - What did you do in 1942?

Senator HENTY - The Labour Party would never have allowed the Americans on to the west coast of Australia. It hates our great allies. As soon as I mention the United States of America honorable senators opposite get upset. lt is a much more sensible approach to go to the United States and point out to the Americans what they are doing to this great nation of Australia. They have imposed a duty on raw wool. They are the only great nation in the world that imposes a duty on wool, which is the most important Australian product. They have placed a 25.5 cents .duty on it. We can ask the Americans to have a look at the position. In fact, they have damaged their own wool industry by this action. The quality of their wool declined as soon as they placed a duty on Australian wool. Do not honorable senators opposite think that it is a wise move to go to them and say as the Treasurer said at a symposium in the United States: " We have not access to your markets in lead and zinc." Is it not a proper, man to man attitude, as distinct from a blunderbuss, stupid, unintelligent attitude such as the Opposition adopts, to say to the Americans: " You made a meat agreement with us and we believed you made it in good faith, but 28 States of the United States of America have taken steps to see that what you have done federally is undone at the State level by forcing imported meat to be so labelled as to be to the detriment of the sale in those States of Australian meat?" Is not this sensible and mature?

Is not this the proper way to tackle the position, and not the silly, blunderbuss way of import restrictions? We are not yet in difficulties. We only have a credit balance of £740 million overseas. We only have a second line at call of £250 million. We have about £1,000 million sterling at call overseas in case we ever get into difficulties. Of course, the amount is running down; nobody denies that. But this is no time for panic action. This is a time to look at the matter in a sensible, mature way, to talk to our friends, to put our case to them and to say: " Will you have another look at this? " It is not crawling, cap in hand, as Senator Kennelly said, for the Treasurer to go overseas, face the Americans man to man and put our case to them. I believe it will have good results.

Senator Cavanagh - Please give me a penny, Sir.

Senator HENTY - Senator Cavanagh thinks that it is infra dig, that it is crawling, for the Treasurer of this great Commonwealth to say to the United States of America: " These are the steps that you have taken which we think damage Australia ".

Senator Cavanagh - Is his cap in his hand or on his head?

Senator HENTY - That is all right. Nobody squealed louder to the Americans when we thought we were going to be invaded than did representatives of the Labour Party in the last war. Bless their hearts. Were they pleased to see the Americans? Did they welcome them? Did they send S.O.S's to the Americans to send their conscripted troops over here to defend Australia? Representatives of the Labour Party were pleased to squeal to the Americans then even though at that stage the Labour

Prime Minister of the country was wise enough to exclude some people from security areas in Australia, which we have not done.

Senator Hendrickson - The honorable senator opposed them in this chamber.

Senator HENTY - They sound a little disgruntled when told the truth, do they not?

Senator Gorton - Yes.

Senator HENTY - It is amazing. These points were raised by the Opposition and I thought it was time to put the matter into perspective. Honorable senators opposite have had a great time standing up over there and making all these accusations and criticisms. I thought it was just as well that somebody should answer them. There are one or two other matters upon which I want to speak before I sit down. They would like me to sit down now but I am not going to sit down yet. I think that I have given pretty good examples of the great cleavage that exists in the Labour Party.

Senator Hendrickson - The honorable senator is the only one that thinks so.

Senator HENTY - I know that it exists in the Labour Party. We had to listen to Senator Kennelly letting off a bit of steam. The Labour Party would not allow him to let it off in Hobart. He was taken there but he was told: "You must not talk." This is the great democratic Labour Party. It would not allow the Deputy Leader of the Opposition in this chamber to put his point of view to the Hobart conference. I know that there is a cleavage over the other side, but let me state that there is a great cleavage between, on the one hand, the Liberal and Country parties and, on the other hand, the Labour Party. I have given an indication of the great cleavage that exists. Here we have an Opposition that is terrified of borrowing money overseas. It has no faith in the development of Australia. It has no faith in the ability of the Australian people to pay back borrowings, as we have done for generations. It has not the slightest faith in the ability of the people of Australia to continue the development of Australia. Since we turfed the Socialists out in 1949 there has ensued the greatest 15 years period of development that Australia has ever seen. This has been achieved by the system of free enterprise, by the profit making and all the other things that the Socialist Opposition hates and which it would destroy tomorrow if it got into Government. Honorable senators opposite have been in opposition for 15 years and they are getting used to it, but if they got into office they would destroy these things. This is the great cleavage between the outlook of the Liberal and Country parties and the outlook of the Labour Party.

Senator Ridley - Keep talking, and soon honorable senators opposite will be over on this side of the chamber.

Senator HENTY - I do not think that we will be over there in my lifetime, but if we ever get into opposition we will be a darned sight more effective Opposition than those fellows over there have been for 15 years, because they have been talking with about three voices. They have not even consolidated in opposition. Heaven knows what they would be doing in Government. They cannot agree amongst themselves in opposition, so they will never agree in government; but that will not be in my lifetime.

I have been astounded at the ideology that has been promulgated by the Opposition during the course of the debate, and which so closely follows the pattern of that of their bedfellows. They love all controls. That is why they would love to get over here. They would love to be in office so they could control industry and tell the people of Australia what they must do - so, as the great white fathers of the Commonwealth of Australia, they could order little Australians about. I do not think that they will get that opportunity. The ideology for which we stand and under which we and all the other free countries of the world operate, embraces increased development and increased international trade.

Senator HENDRICKSON (VICTORIA) - Name a free country. We would like to hear about it. Is Vietnam a free country?

Senator HENTY - The honorable senator finds it very difficult to get his eyes off Communist Russia and Communist China, but there are other countries. The United Kingdom, the great United States of America, Canada and the other free countries of the Western world are still democracies. I know that the honorable senator would love to alter this. I know that he would like to introduce his own system of democracy, which is control, but he will not get the chance for a long time. The Australian people are a wake-up to the Opposition. I abhor the pattern that may be developing in the world, the driving into isolation of the great free countries.

Senator Hendrickson - What rot.

Senator HENTY - lt is not rot. Here is the United Kingdom now restricting its exports. lt is restricting its income. Now the United States is taking action which may well drive the Western nations into isolation. Surely honorable senators recall the dreadful growth of isolationism between 1914 and 1939. This is the danger to the free world posed by the steps now being taken. The world will continue to develop, the peoples of the world will continue to be employed and their standard of living will continue to be raised only if there is a great expansion of international trade and if there is free access to the markets of all nations.

Senator Cant - Has the Government told President Johnson this?

Senator HENTY - Of course honorable senators opposite would not have the Treasurer of this great country go to America. They would have him remain here to receive the insults that they would like to hurl at him.

Senator Cant - We would not need to send him to America.

Senator HENTY - Do not worry, the Opposition will not have a Treasurer to send to America. The point I want to make to the Senate-

Senator Hendrickson - We are broke.

Senator HENTY - We are broke? Goodness, that is the expression that Senator McKenna used. He said " We are bankrupt ". What nonsense. If we were bankrupt we would not be able to borrow as much overseas as we have been borrowing. We can take steps to overcome the present situation just as every other country has taken steps when it has been faced with a similar difficulty.

Senator Hendrickson - I hope so.

Senator HENTY - We will not act until we see that there is a dire necessity to do so because we believe that an increase in international trade is the best way to make employment available to the peoples of the world and to raise their standards of living.

Question resolved in the affirmative.

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