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Wednesday, 14 September 1949


Mr BURKE (Perth) .- The censure motion before the House must surely be the weakest ever moved in this assembly. It seeks to censure the Government on the handling of the petrol situation. The motion reads -

That, in the opinion of this House, the present shortage of petrol supplies in Australia, which is increasingly affecting vital production and transport, is to a substantial extent due to the policy and inaction of the Government, and that the Government in consequence deserves the censure of this House.

No evidence has been brought forward to prove that that is the case. No evidence has been submitted to show that petrol supplies can be obtained outside the sterling area. It is true that statements have been made from time to time that petrol can be obtained. In fact, the Leader of the Australian Country party (Mr. Fadden) suggested that petrol was flowing like water throughout the world. Of course, the Opposition is wholly disingenuous in this matter, and its allegations are entirely unsupported by the facts of the present situation. The honorable member for Warringah (Mr. Spender) truly said that petrol is the life-blood of Australia to-day. In fact, it is the life-blood of all modern communities in peace as well as in war. For that reason it is doubly true that if the total supplies of petrol to this country have to be limited some form of rationing must necessarily be introduced. Since petrol is the life-blood of the country, it follows that the continued distribution of petrol without rationing at a time when we are confronted by a serious shortage, would definitely have the effect of starving the Australian community by creating dislocation and chaos in all forms of production. The honorable member for Warringah went on to say that our first obligation is to Australia. That is undoubtedly true. Our first obligation is to Australia, but our obligation to ourselves involves us in obligations throughout the world. We are also under an obligation to Great Britain, not for sentimental reasons at all, as the Prime Minister (Mr. Chifley) truly said to-day, hut because of the cold hard facts of the present situation. We do not earn sufficient dollars to buy all the petrol and other dollar products that we need. For that reason we have to go to the centre of the sterling area, the British Isles, to obtain the extra dollars that we require. Honorable members opposite appear to suggest that we have some actual or legal right to obtain the dollars that we require. We have no such legal right. By sheer force of circumstances Great Britain might be forced to deny dollars to us. Indeed, by its own deliberate action Great Britain 'could deny dollars to us. We 'have no right that could not "be alienated if the United Kingdom sought to obtain more dollars for itself or was unable to obtain dollars. Custom and practice throughout the years have Jed us to believe that "we can obtain all the dollars that we 'require by holding out balances in London. However, the fact cannot be too strongly stressed -that we have no legal claim or automatic right to demand from the United Kingdom the dollars that we need . That means, therefore, that our obliga- tion to Australia - 'the very obligation to which the honorable member for Warringah has .referred - demands that *e join with 'Great Britain in an attack upon this very real dollar problem.

The honorable gentleman also told us that Australia -should receive something in return for all that it is giving. We are building up sterling balances abroad, and because of that, he suggests that we should obtain dollar goods. However, nearly every country in the world - certainly all the countries in the sterling area with the exception of a few like Ceylon - has the same dollar problem. I stated on a previous occasion, and I repeat it this evening, that the dollar problem is not a recent development. Indeed, it has existed for many years, and was met in the pre-war period only by the enormous volume of American tourist traffic and a growing volume of American investments abroad. The American tourist traffic was a real source of benefit to the countries in which the dollars were expended. However, American investments abroad were not such a material advantage as is generally believed to-day. Shortly after World War I-, American investments abroad made a substantial contribution to the improvement of conditions in all the countries of Europe, 'but when a financial and economic depression developed and it appeared likely that the countries to which the loans had been granted or in which the investments had been made were not able to meet the interest payments or repay the capital, the American investments were withdrawn. On that account, the deteriorating economic situa-tion in the countries concerned Was greatly accentuated. Consequently, an increase 'tff American investments overseas is no't the real -answer to 'the present dollar problem. Indeed., American investments 'in the past have aggravated, not cured, -the situation. That might be repeated at a future date, should a financial 'and economic depression develop.

The honorable member for Warringah claimed 'that he .possessed an easy solution of the dollar problem. He declared that an increased production of gold would solve our dollar problem overnight. What the honorable gentleman forgets is that gold mines are a wasting asset. The gold is continually petering out, and cannot always be mined profitably. Such a situation now exists in the Australian gold -mining industry. After having 'been worked for a long period, many mines are petering out, and that factor is probably one of the major causes of the decline of gold production to-day. lt is true, of course, that high costs in the industry generally have had a marked effect upon the production of gold. However, another fact is inescapable. The United States of America is the only final buyer of gold in the world, and it refuses to pay more than the amount fixed in dollars for an ounce of fine gold. It is true, in theory, that the price is fixed by the International Monetary Fund, to which the United States of America is a large contributor, but whether that fund existed or not, America, as the only buyer of gold in unlimited quantities, would still be the nation that would determine the price of gold. The American nation, and not necessarily the International Monetary Fund, has expressly stated that it will not buy gold from countries which subsidize the production of the precious metal. That is the first answer to the claim that the increased production of gold will solve our dollar problem overnight.

However, there is a second answer, and, in my opinion, it is an even more vital one. I refer to the manpower situation in this country. Even if the gold were iri the earth, We could not greatly increase the production without also increasing the man-power engaged iti it. Every industry urgently requires man-power In order to obtain additional gold with which to purchase more e dollars, we should need to divert man-power from Other essential industries. Such a policy would not be to the advantage of food-producing industries, and certainly would not alleviate the hunger and famine that still exist in many countries. The honorable member for Warringah said that he would gladly give away our sterling balances in London for the goods that we need. He meant, of course, that he would gladly exchange our sterling balances in London for all the dollar goods that we need. What is the position? Even if we were to give away every penny of our sterling balances in London, we should still be unable to buy more dollars from the general pool for the simple reason that additional dollars are not available to countries which desire to convert their sterling balances into the hard currency. The honorable member for Warringah said that the Government had done too little, too late. Actually, the Government's policy has been ahead of the situation on every occasion. The Government sought, by referendum, to obtain power to continue prices control, because it realized that the authority which it derived from the defence power under the Constitution was disappearing. The Government also sought to obtain power to continue rationing, because it knew that its authority in that respect would be tested in the post-war period. The Government was denied those powers. The people believed that the Commonwealth's authority would continue until conditions returned to normal. Instead of being guilty of the charge of " too little, too late ", the Government has been ahead of public opinion in these matters. Too late, the people realized that the Government's approach to the problems was the correct one.


Mr Turnbull - Can the honorable member prove that?


Mr BURKE - The growing feeling in the States to-day indicates that my assessment of the position is strictly accurate. Liberal governments and Labour governments are willing to refer to the Commonwealth power to continue petrol rationing. Is that not evidence of the truth of my words? The Liberal governments of Western Australia and South Australia, which are content to refer to the National Parliament power to continue petrol rationing, clamoured loudly a few years ago for the return to the States of various powers that the Commonwealth had exercised during the war. Their slogan was, " No more power to the Federal Labour Government ". Petrol is only one aspect of the larger dollar problem, which has been thoroughly analysed by the Minister for Post-war Reconstruction (Mr. Dedman). Honorable members opposite state that Australia should seek more dollars from, the pool for the purchase of additional petrol to meet its domestic requirements. This demand is an example of the factors that have caused the whole dollar problem. The vast loan that the United States of America granted to Great Britain after World War II. was a most worthy effort on the part of the American people. However, the granting of the loan was contingent upon a condition which, in my view, has brought about the existing situation and defeated, in a large measure, the whole purpose of the loan. That condition required the United Kingdom Government to agree to convert sterling into dollars twelve months after the granting of the loan. That caused a run upon British sterling, and resulted in the present drastic dollar situation. Immediately that twelve months ended the countries throughout the world that were selling commodities to Great Britain demanded convertibility of sterling to dollars, and there was an enormous drain on the accumulated dollars in the pool. That loss has never been recovered. In less measure the Opposition claims that we should get more dollars, thus causing a greater strain upon Great Britain's sterling reserve pool. As honorable members know, Great Britain is suffering hardships greater than any that exist in Australia to-day. The speech of the Leader of the Australian Country party was most unworthy. The right honorable gentleman referred in most disparaging terms to the British Government and the British people. He quite clearly stated his position. It is abundantly clear that whatever views favorable to the people of Great Britain he expressed in bygone years were solely due to the fact that a tory administration had ruled the British nation for many years. Apparently it only takes a change in the British Government from

Liberal to Labour to make the right honorable gentleman, and, I am sorry to say, some of hi3 supporters, anti-British in their outlook. The right honorable gentleman has said that Great Britain is capturing the markets of the world. Is that a terrible thing to do? That is the claim that is made by the industrial magnates of the United States of America, particularly the financiers of "Wall-street, because Great Britain has sold sterling petrol to countries which otherwise would have needed dollars to pay for it. His speech did nothing to advance his case, and was most unworthy, having regard to the hardships through which the British people have gone, both during and since the war period. The right honorable gentleman mentioned that Great Britain had supplied petrol to countries throughout the world. The sources of petrol are well known, and the spheres of influence into which they fall can very easily be decided. Broadly speaking, there are three main sources from which petrol can be obtained at present, according to geographical groupings. First, there is the American source, which demands dollars for all petrol supplied. Secondly, there are the British interests in the oil-fields throughout the world. The petrol situation, of course, from the time that use was first made of oil, has been a most mixed one in the industrial history of the world. "We still cannot decide to what degree other interests are involved and dollar commitments are concerned in connexion with supplies of British petrol that might come to this country. It is certainly true that even in British petrol there is some dollar content, as the Prime Minister has said. Thirdly, there is the Russian source, embracing countries within the Russian sphere of influence. It is interesting to hear honorable members opposite suggest that petrol rationing is unnecessary in this country because of supplies that are available from behind the Iron Curtain. Although in the past they have argued long and loudly against any association with countries coming within the Russian sphere of influence, to-day they suggest that we should in fact, use all of the available supply, and enter an unrationed period, relying on the thought that we might obtain sufficient supplies of petrol from Russian zones or Russian spheres of influence to carry us through.


Mr Calwell - Ban the " Corns ", but buy their petrol!


Mr BURKE - Although the Leader of the Opposition (Mr. Menzies) has suggested that the Communists should be banned in this country, Mr. "Warner, Minister for Housing in Victoria, expressed his opposition to that view very forcibly. He said that he did not believe that the banning of the Communist party would achieve any useful purpose. I understand, however, that he is the head of a group which seeks to obtain Russian petrol. This interesting situation has been brought to my mind by the interjection of the Minister for Information (Mr. Calwell). However, as I have said, we know these three main spheres of petrol supplies through the world. It is idle to suggest that in holes and corners throughout the world there are tucked away vast stores of petrol to be had by this country for the asking. The simple fact is that every nation that has petrol to-day, with the possible exception of the United States of America, can sell it readily to buyers throughout the world. That is not wholly true of crude petroleum and crude petrol. It is certainly true that, except for the dollar problem, every gallon of petrol raised and refined could be sold to ready buyers throughout the world. That explains the British situation, and particularly the British deal with Argentina. Great Britain requires a vast amount of goods that are not available from countries that are allied to Great Britain in the sterling bloc. A considerable quantity must come from the United States of America. For the purchase of goods from other countries; however, particularly the Latin American countries, oil is quite useful Great Britain was able .to obtain vast quantities of meat and other goods from Argentina because it had petrol to offer in exchange. Had that petrol not been available Great Britain would have had to pay out dollars that it sorely needs for a variety of other commodities from the hard currency areas. The Leader of the Australian Country party himself delivered a smashing blow to the case that he presented. He pointed out that the bulk of the petrol coming to Australia to-day is brought in American tankers, and although wo are buying sterling petrol, a vast amount of dollar expenditure is incurred for tanker space. That as true of the present situation. Any increase of the quantity of petrol brought here would involve additional dollar commitments. In any case, even if we were able to buy more petrol from British suppliers and bring it to Australia in British tankers, Great Britain would still be committed to sell large quantities to consumer countries throughout the world. That would involve* the Mother Country obtaining petrol from dollar sources in order to honour commitments. No matter how the situation were juggled, any increase of petrol supplies to this country would result in additional dollar commitments. Let us consider the application of petrol rationing in the various countries of the British Commonwealth. They have all had problems, such as problems of distance, to which the honorable member for Warringah referred. The most striking example that can be brought home to us is the spectacle of what happened in our sister dominion of New Zealand. That country had a period of unrationed petrol, when, shortly after the war, it abolished petrol rationing. The dollar situation was then not so acute as it is to-day. However, the people of that country could not get through successfully during that period of unrationed supply. People who could afford to buy, and were " in the know ", were able to get petrol, whilst others were not able to obtain supplies vitally required. The Government of New Zealand then somersaulted, which is one of the most difficult things for a government to do. It reimposed petrol rationing and, I presume, reintroduced a coupon system. That demonstrates conclusively that petrol rationing is still necessary in the Dominions. It would be necessary here, even if we were not assured, as we undoubtedly are, that we cannot obtain additional supplies of petrol without drawing upon the sterling area dollar pool. That pool is diminishing at an alarming rate. Petrol is still rationed in Great Britain although, as I have already pointed out, the Government of

Great Britain has a perfect right to say, if it so desires, "We can get sufficient dollars from the dollar pool to meet all of out essential requirements ". Great Britain needs petrol for transport and other industrial purposes equally as much as we need it in Australia, but, owing to the stringency of the dollar situation, it is unable to abolish petrol rationing. We are equally unable to do so. Even if none of the facts of the present situation had been made available to us, I believe that the acute shortage of dollars that now exists throughout the world and will continue to exist for some years to come would make us very careful about taking steps to abolish petrol rationing in this country, if we had power to retain it, owing to the additional dollar expenditure that the abolition of rationing might involve.

A conference between representatives of Great Britain, the United States of America and Canada has just concluded at which various means of alleviating the present acute dollar shortage were considered. The United States of America has made some very generous concessions. I believe that it has been forced to do so. I do not mean that it has made the concessions against its will, but that it has done so because it realizes that Great Britain is a very fine customer of the United States of America and a major world power that may collapse, with disastrous consequences to the rest of the world, if aid is not extended to it. The United States of America has made some vital concessions, to which large sections of the American people are bitterly opposed. It has made them partly because it realizes that Britain has done a great deal for the world in recent years, but mainly, I believe, because it understands, first, that Britain constitutes a market for American goods that is of vital importance to the United States of America; secondly, that Britain is important as a bastion against the rising tide of communism ; and thirdly, that Britain is a factor of vital importance in preventing the outbreak of a third world war. I believe that the United States of America has made concessions because of those three factors. Let us leave aside questions of sentiment, to which the honorable member for Warringah referred scathingly.

Because Britain is very important to us as a market for our goods, because its position in the defence systems of the world affords a guarantee against a third world war, and because it is a bastion against the rising tide of communism in Europe, Australia cannot do less for it than the United States of America has done. Petrol rationing in Australia was irksome and inconvenient, but it did not impose a great hardship upon the Australian people. "When petrol rationing was in force here, persons who needed petrol for vital purposes were always assured of supplies that would be ample for their needs. It is true that, under rationing there was some black marketing, but if petrol remains unrationed there will be a much more extensive black market than existed previously. The Prime Minister, in his handling of this situation, as in his handling of so many others, has given a lead which honorable members on both sides of the House might well follow. It is in the interests of Britain and of Australia that we should ration petrol here again. "We can do it without imposing great hardships upon our people. The Prime Minister has said that the Commonwealth is prepared, if the States will refer the necessary powers to it, to conduct the rationing of petrol itself and to accept the odium that is associated with any restrictive measure in this country. He has also said that, if the State governments desire to conduct the rationing of petrol themselves in collaboration, the Commonwealth will provide the funds necessary to enable rationing to be reintroduced.

I believe that this motion is not only useless but also harmful. It has not been justified by argument, and cannot be so justified. It is a disservice to the interests of this country and of the British Commonwealth of Nations.







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