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Thursday, 7 July 1949


Mr DEPUTY SPEAKER - Order : The honorable member must return to s discussion of the measure.


Mr HOLT - The people of the world are short of essential goods that are no* directly .concerned with this measureThere have been no radical changes in thesituation of the peoples of the world. The goods are still present; all that hap changed is the mechanism, with the result that what is produced in one country cannot be transported to another. It it against that background that we must consider this general problem.

Although the Prime Minister has stated that there is a likelihood of the supply of petrol to this country being reduced, he has not attempted to convince us that there is a world shortage of petroleum products. It is quite clear that as postwar reconstruction has got under way the production of petroleum products has steadily increased. New fields have been opened up, and the old fields have bees yielding increased production, including fields which were put out of action by our enemies during the war. So far from there being a shortage of petroleum products throughout the world, many of the producing countries find difficulty in obtaining markets for their petrol, and that is particularly true of the United States of America, which is probably the largest producer of petroleum products at the present time. Therefore, the problem is not one of a world shortage of petrol, but one of world exchange and currency systems, and it is related to the difficulties of those countries which have not the necessary foreign exchange to import the quantities of fuel oil which they require. The situation is not one that calls for treatment of the kind to which other countries, whose shortages could not be fulfilled, have had to resort. The solution of the problem requires statesmanship; and I define statesmanship as the application of common sense to political action. The world needs petroleum products. There are countries which can supply those products, but because of difficulties of exchange and currency, to which the Prime Minister has referred, such countries as the United Kingdom and Australia, together with other countries within the sterling group, are required to go short of the petroleum products which they so urgently need. Because this is only one facet of the general problem of world trade we hear increasing talk of " depression " and " recession ". I consider, therefore, that it is necessary for us to examine the situation of Great Britain in this matter. It is quite clear that if we did not have any commitment to the sterling pool and were able to sell our own products in the best markets that we could find, we could accumulate sufficient credits in the dollar areas by the sale of our wool, wheat, butter and other valuable commodities to purchase all the dollar goods that we require. However, for reasons which no member of the House will challenge we have recognized our responsibility to other members of the British Commonwealth. We recognize that such credits as we can establish by our sales should be brought into the sterling pool so that al] can share in the dollar goods available. As I have said, the matter does not affect Australia alone, because we could sell sufficient wool, butter, wheat, steel and gold abroad to give us all the dollar credits that we need for our requirements. Our problem is very directly bound up with the economic problem of the British people and the economic policies of the British Government. I stress to the House now my belief that, far from finding a solution of the problem in a policy o? restriction such as that expounded to us by the United Kingdom Government as well as our own Government, thai policy will have world wide repercussions Indeed, what is now referred to as a " recession " may degenerate into a far more grave situation, and may ultimately lead us into another world economic' depression. So, I stress the point that this is a matter in which statesmanship must be exercised by the leaders of the world. During the period of the war we were able to devise the lend-lease formula which enabled a country such as the United States of America to give the benefit of its vast productive machine to the allied nations and, in return, accept goods and services from them. I do not think that anybody will argue that if we could devise a similar formula to-day, petroleum products which are urgently needed by this country, and other products which require the provision of dollars, could not be readily made available. I level at the Government the criticism that it has made no serious attempt to seek from the Government of the United States a formula for meeting the present difficulties which would operate on a basis somewhat similar to the lend-lease arrangement. A little while ago there was hope that that could be done. The United States of America, which is producing more than 50 per cent, of the manufactured goods used by the nations of the world, and which is utilizing more than 16 per cent, of its own budgetary provision for aid to other countries, particularly to European countries, has been searching for such a formula. It has been talked of in terms of the off-shore purchase scheme, the principle underlying that schema being that countries which could assist the United States of America to provide the needs of European countries should do so and thereby build up dollar credits which they in turn could utilize for the purchase of American goods. Many of us were hopeful that such a constructive proposal would be implemented, and that Australia would be able to send to Europe its wool, wheat and other products, and that in return the Governments of European countries would be able to purchase goods in terms of their own exchange and currency. We hoped that this proposal would fit into the pattern of European recovery and that in that way we should be able to establish dollar credits in the United States of America. We are entitled to an explanation 'from the Prime Minister or from the Minister for Post-war Reconstruction (Mr. Dedman), of why the Government has not sent one of its senior representatives to Washington to endeavour to work out a scheme along those lines. Why should such a gesture of co-operation which was found to be so eminently practical in time of war prove to be impracticable, or not even be considered, in the economic crises of peace? The Minister for External Affairs (Dr. Evatt) is the presiding officer of the General Assembly of the United Nations. When that body was first established we were told that one of its objectives was to deal, through one of the organizations established under its charter, with economic and social questions. I have yet to learn that the United Nations has faced up to the problems of currency and exchange in a practical or constructive way. I wonder why the Minister for External Affairs, who exercises such a high responsibility in relation to the proceedings of the United Nations, has never submitted to it a proposal for dealing with such matters. I fear that the world may be heading into a recession or even another economic depression as the result of the policies that are being pursued at present, particularly by Great Britain, and to a lesser extent, because we count for so much less in the world scene, by the Government of Australia.

This matter has a very direct relation to the problem presented to us in the bill now before the House. The British and Australian Governments have given lip service to the principle of international trade. Their representatives have attended conferences at Havana which have been held under the auspices of the International Trade Organization. Both governments have subscribed to the charters of that organization and to the principles of the Atlantic Charter relating to world-wide free-trade or a freeing of the barriers of trade so that greater freedom of movement in world trade may be achieved. Australia played an active role in those negotiations. Honorable members on this side of the House predicted at the time that the proposal for the establishment of the International Trade Organization was visionary and impractical, and that, having regard to world currency and exchange problems it would not be possible to devise a practical scheme for bringing together so many nations and getting them to lower their tariff barriers. Our predictions have been verified by the result. The International Trade Organization has not yet commenced to function. Although it was established years ago I should not like even now to forecast when it will commence to function. Any man of common sense who had practical political experience in world affairs in the years leading up to the war could have foreseen what would happen, ls it likely that the United States of America, with its Congress and its Senate dominated by the political consideration of preserving American trade and industry will, in the teeth of all the experiences of the past, adopt a policy for the radical lowering of its trade barriers in such a way as to permit the goods of other countries to enter freely into the United States of America? It is all very well for economists in the Department of External Affairs to talk about these things; it is a very much more serious and difficult matter to get them translated through political action into actual reality. So, the British and Australian Governments, which have pinned their faith to the International Trade Organization, have found that that organization has not been able to function. In practice both governments have pledged themselves to the principle of free world trade; but they have found in practice that they have had to resort to the narrowest of all forms of trade, namely, trade arranged through bilateral trade agreements. The British Government under Sir Stafford Cripps has outHi tiered Hitler in its adherence to a policy of bilateralism at the expense of the freedom of world trade, and of the restriction of trade throughout the world generally. I remind the House that despite the European recovery plan more than 300 bilateral agreements have been adopted by countries nearly all of which have pledged themselves to the principles of the International Trade Organization.


Mr DEPUTY SPEAKER - Order! Has the honorable member any ideas in relation to the bill?


Mr HOLT - With respect, Mr. Deputy Speaker, I am not going beyond the arguments which were advanced by the Prime Minister and to which other honorable members have already addressed themselves.


Mr DEPUTY SPEAKER - Order ! The honorable member must return to the bill.


Mr HOLT - The effect of these bilateral agreements has been to establish


Mr DEPUTY SPEAKER - Order ! The honorable member's remarks may have some relevancy to the motion for the printing of papers relating to international affairs which is listed on the notice-paper. The honorable member should endeavour to relate his remarks to the bill before the House. It is true that other honorable members have spoken of the difficulties of currency and exchange; but the honorable member is endeavouring to make a speech which would more appropriately be made when the debate on international affairs is resumed. The Chair will not permit him to continue along those lines.


Mr HOLT - I am quite prepared to have the remarks that I have addressed to the House to-night examined against those made by-


Mr DEPUTY SPEAKER - Order ! The honorable member must not reflect upon the Chair. If he does not confine his remarks to the bill, I shall ask him to resume his seat.


Mr HOLT - I am endeavouring to deal with the arguments put forward by the Prime Minister. I think that it will be generally agreed that, in the course of this discussion, honorable members have addressed themselves to the background of world trade and in particular to the problem of Great Britain - a country to which either the Prime Minister or a senior Minister of the Government will go within the next few weeks. If the Chair insists that the debate must now be restricted to the specific problem of petrol, I can only say that a ruling is being made in respect of myself that was not directed against any previous speaker.


Mr DEPUTY SPEAKER - Order ! The honorable member must not reflect on the Chair.


Mr HOLT - I understand that the Government is anxious to conclude these proceedings, and I imagine therefore, we shall not be given the same opportunity to discuss this matter that was given to certain other honorable members. However, I accept the ruling of the Chair. The use of petrol by the people of Australia is very directly linked with the policy of the Government of Great Britain on imports and exports generally. Although we are now being asked to restrict our use of petrol, despite the world glut of that commodity, the stringency of the economic situation in the United Kingdom is such that the British Government, under the economic leadership of Sir Stafford Cripps, is paying - and I use dollar terms to make the illustration clearer - 1G7 dollars a ton for newsprint obtained from Scandinavian countries, although it is available from Canada, a country within the British Commonwealth, at 112 dollars a ton. To-day, we are so accustomed to mumbojumbo about the dollar problem, that we are losing sight of the course that common sense dictates that we should take. Here we have the British Government paying Scandinavian countries 167 dollars a ton for such an essential commodity as newsprint when it could be purchased from a British dominion for 112 dollars a ton ! At the same time, the British Government is refusing to import from Australia, certain commodities that we manufacture, and instead is importing them from European countries some of which formerly were our enemies. All that is done in this curious process of bilateralism that has been set in motion. The people of Australia are naturally devoted to the British Commonwealth, with which this country is linked. "Whenever, by our sacrifices, we have been able to assist our kith and kin in other parts of the Commonwealth, we have never shown the least reluctance to do so, whether in time of war crisis or in time of peace crisis, provided that we have been convinced that a reasonable and common-sense policy was being followed. But if anybody can say that it is commonsense policy for the British Government to buy from European countries at 50 per cent, higher prices, goods which could be obtained within the British Commonwealth, common sense is an expression that has ceased to have any significance. I hope that when Australia's representative goes to Great Britain to discuss the petrol position and the general problem of currency and exchange, he will take a little healthy Australian common sense into the council room with him. He should endeavour to show first of all that a visionary and impracticable international trade organization will not get us anywhere, as events have already proved, and that a policy of bilateralism which ignores the prospects of opening up trade with other countries is a policy of futility and despair. That was the very policy that we attacked so vigorously when Hitler and' Mussolini tried it, and I have yet to learn that it has developed any greater utility since then. Surely, between the two extremes, there is a com,Iii on -sense middle path. It is seventeen years since representatives of the countries of the British Commonwealth of Nations met in an economic conference. The last meeting was at Ottawa in the middle of the depression. As the result of the cooperation that was achieved at that conference, the British Commonwealth countries were able to assist each other to get out of the economic mess in which they then found themselves. Another meeting of representatives of the British Commonwealth of Nations would be of considerable value to-day. Then there are the countries of Western Europe.


Mr DEPUTY SPEAKER - Order I The honorable member must keep to tha bill.


Mr HOLT - Conferences of thos* groups of nations would gradually have the effect of increasing international trade, freeing the channels of that trade, and ridding us of present-day trade absurdities. It is ridiculous, for instance, that a country such as this, which in terms of money is able to produce more goods for exports than it requires in imports, should have to restrict the importation of essential fuel oil, capital equipment and goods which could raise our standard of living. We have ample overseas credits to purchase these things. Our problem is not one of exchange. We can still sell more abroad than we need' to import. Our problem, is that of currency. It is to be hoped that when the Prime Ministers of the British Commonwealth get together, they will be able, by the application of common sense, and by the abandonment of this stupid doctrinaire approach which ' has brought the British Commonwealth, and particularly the people of Great Britain, to the brink of depression and despair, to rescue us all from our difficulties.







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