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Thursday, 22 September 1949


Mr FADDEN (Darling Downs) (Leader of the Australian Country party) . - One could only conclude from the speech of the honorable member for

Wilmot (Mr. Duthie) that he is endeavouring, by every means available to him, to disown the pledge that he obviously must have signed when he became a member of the Australian Labour party. In common with all other members of that party, he must have signed a pledge under which he actually gave a power of attorney to give effect to, or allow to be carried out to the greatest degree possible, his association with the fundamental principles and policy of Labour's platform. The fundamental principle of Labour is the socialization of the means of production, distribution and exchange. The methods by which that basic or fundamental objective is to be carried out are outlined in no uncertain or ambiguous form in the printed policy of the Australian Labour party. I repeat that the honorable member must have signed a pledge to carry out that policy and that objective. Irrespective of whatever apology he has endeavoured to make to-night, either he intends to adhere honorably to that pledge, or he does not intend to carry it out. I shall leave the decision in that regard to the honorable member.

There is ample scope for criticism and condemnation of the budgetary proposals, particularly in the light of subsequent events under which the sterling £1 has been devalued. In consequence it appears that the Government is belatedly canvassing or investigating the opportunity or possibility of raising a dollar loan. Although Sir Stafford Cripps, British Chancellor of the Exchequer, announced officially to the world only on Monday last that the British £1 was to .be devalued, it is an economic fact that sterling devaluation actually occurred months ago, because, if what we read is correct, in many of the European countries sterling has been found to be too " hot " to hold by most of the countries that held it. Consequently black-marketing was being indulged in for the purpose, of getting rid of sterling for the available number of dollars that could be obtained. That number was obviously less than the recognized or official number. Sir Stafford Cripps has actually admitted that this is important, because he stated that in the difficulty of devaluation his

Government had to take into consideration the black-market price of dollars that had been prevailing. The devaluation of sterling has been forced on the British economy by the indisputable fact brought about by the United Kingdom Government's socialistic policy. That cannot be denied. The facts could be proved by one simple illustration, if illustration were necessary. The United Kingdom socialistic Government recently, at the first opportunity, nationalized or socialized the coal industry of that country. The loss in the first year was so great that the Government was forced to increase the price of monopolized coal by approximately 4s. a ton. As a consequence of that increase the users of coal had to increase correspondingly the price of their products. The spiral thus commenced has run right through the fabric of the economy of the United Kingdom.

In consequence of rising and uncontrolled costs in the United Kingdom, British export prices to dollar markets have become too high for people desirous of buying the goods that the United Kingdom could export or desires to export into the dollar areas. Therefore, unfortunately, the adjustment that we have been acquainted with has had to be brought about, in the hope, that by reducing the dollar value of the SI, Great Britain will be able to sell more goods at lower prices. That country now receives only 280 cents for the same quantity of goods that would have brought 403 cents if devaluation had not become necessary. As the Leader of the Opposition said last night, this means that the United Kingdom will have to step up dollar export sales by not less than 44 per cent, before it can obtain the same dollar return as it obtained previous to the devaluation of the pound. But we have been given to understand, and it has not been denied, that there is full or, at least, maximum employment in the United Kingdom. If that is so, how will England be able to produce say, three motor cars where it is now producing two? That, of course, is what it will require to do to even up its dollar returns. In addition to that; it will have to sell its cars in the United States of America at the same price as that which prevailed last week. "We have already been told that the living standards of England must decline, particularly in respect of bread and possibly in respect of meat. That will mean a lowering of the living standards of the British worker at a time when it will be necessary to obtain greater production.

Australia's position through devaluation is somewhat similar to that in the United Kingdom, except that the primary producer of Australia, and not the industrial worker, will be hit hardest and hit earliest. There is a great shortage of farming implements in Australia, which has resulted in no small way in an unsatisfactory production barometer, as 1 shall outline in the course of my remarks. In addition to the problem occasioned by that shortage, which has persisted far too long, what will be the future position regarding the earnings of primary production? The prices of American tractors will increase enormously, and so will the price of petrol. As a. consequence of those increases the cost of transport by motor trucks and utility, trucks. The cost of weed killers, rabbit poisons, and many other necessities indispensable for production, that all have a dollar content, will also increase. For each tractor with a dollar content the farmer will have to pay 9s. for every dollar .represented in the price, compared with 6s. 3d. prior to devaluation. That will mean an increase of from 40 to 50 per cent., and as a consequence of that, if justice is to be done at the point of production, primary products will cost more and Australian living costs will rise, because wages will have to be increased. The inflationary spiral will thus be accentuated. It has been stated, on the credit side, that there will be an increased opportunity, as a result of devaluation, for the sale of more Australian wool. But if Australia is able to sell more wool for dollars it will have to sell, at the least, only a few points under 50 per cent, more to obtain even the former dollar return. "We have no huge exportable surplus of wool, by which we can earn more dollars, nor, having regard to the policy of this Government, is such an increase in sight. The productive potential of Australia 'has not been encouraged, and indeed has been discouraged, because of the policy that this

Government has pursued. It is claimed that as the result of the policy of this Government employment in Australia is at its maximum, and that, in effect, there is full employment. If that is so, how can we rear and shear three sheep for every two that we reared and sheared prior to devaluation ?

Dollar goods are required immediately to increase primary production. That cannot be denied. We require more production to secure more dollars to buy the materials necessary to increase production. So there is a sphinx-like riddle that only a dollar loan can solve. Obviously such a loan, or some alleviation in that direction, is an immediate necessity. If we are to take advantage of the market for wool, as some optimists have claimed we can do, then three blades of grass must grow where only two grew before, and that grass must feed three sheep where only two subsisted before. Three bales of wool must be sold in the dollar market where previously we sold only two, before we can get even the same return for that commodity as we obtained prior to devaluation. Primary production will assuredly be called upon to carry the added cost of dollar imports required to increase output.

There are only two paths out of the maze that I can see. The first is to step up production, and the second is to negotiate a substantial dollar loan to enable us to buy necessary goods and implements hitherto unavailable to the producer, but absolutely indispensable if production is to be maintained, much less increased. I propose, therefore, to deal with those two prerequisites in their proper sequence, and to examine the Goverment's attitude and record regarding them. First, let us take production, which constitutes the source from which the millions of pounds of revenue expended by the Government are derived. Governments do not make money. They merely collect it and expend it. The quantum of production conditions the volume of governmental expenditure. Secondly, the level of production, compared with the real and potential national capacity, is a prime test of good or bad government. The Treasurer has indicated in his budget speech that for the second time since the end of the war hia budget has been balanced. He did not say, however, that that result had been achieved at the expense of the aggregate household budgets of Australia. He claimed, further, that there had been a great improvement in national finances under post-war conditions. He did not emphasize however that continued heavy governmental expenditure depends upon the maintenance of high export prices and favorable seasons, although he did acknowledge that Australia had been aided by the seasons and by unusually high export prices. The Treasurer has warned us that good times cannot be expected to last. What a masterly understatement, when the export value and quantity of Australia's exportable products in 1938, compared with the latest available figures, those for 1947-4.8, are considered. let us examine the figures for butter, wheat, wool, beef and sugar, which are our five most representative primary products. I have compiled a table in which the value of the quantity of each of these commodities exported in 1938-39 is compared with the value of similar exports in 1947-48, the latest year for which official figures are available Those figures reflect Australia's prosperity to-day in relation to our prosperity in the year immediately preceding the recent war. I have made my calculations as nearly as possible on a comparable basis allowing for the slight variation in the arrangement of the Commonwealth Statistician's export tables for that period of ten years. Consequently, my calculations are sufficiently accurate to provide a basis for broad general conclusions. They show, first, that in 1947-48 the volume of exports of the five products I have mentioned was only ninetenths of the volume of exports of the same products in 1938-39; and, secondly, that, on the basis of 1938-39 values, the value of those products exported in 1947-48 would have been approximately £60,000,000, or £7,000,000 less than the income that was actually realized' from exports of those commodities in 1938-39. The quantities of those commodities which were actually sold for £201,000,000 in 1947-48 would have brought a return of only approximately £60,000,000 ten years earlier at the prices ruling at that time. The value of those commodities in 1947-48 was three times their value in 1938-39. Thus, the real unit of production of primary products has been almost obscured by the high prices which we are obtaining for our exports. Our high export incomes of the post-war years have been due to the acute world demand for food and raw materials. Therefore, the Government cannot by any stretch of the imagination claim sole credit for these unusual conditions. Indeed, the figures that I have taken out show clearly that this country's capacity to export primary products has seriously declined. Because of the importance of these figures, I shall, with the consent of honorable members, incorporate in Hansard the table that I have prepared. It is as follows : -

 

In addition to the facts that I have already mentioned, the table shows that exports of the five products I have mentioned have declined as follows: - Butter 44,700,000 lb.; wheat 2,900,000 bushels; greasy wool, 19,200,000 lb.; beef, 25,300,000 lb.; and sugar, 342,649 tons. That is the test of the effectiveness of the Government's rural policy.

I come now to the subject of costs. The Treasurer and his colleagues constantly claim that the nation's finances are stable. "What are the facts? An analysis of the factors involved shows that hundreds of thousands of wageearners find it almost impossible to make ends meet because of the soaring cost of living. Thousands of people are homeless and vital necessities are in acutely short supply. Yet the Treasurer claims that the nation's finances are stable. Controlled economies throughout the world are in a shocking mess so far as production is concerned, whereas the free economies of the United States of America, Canada, South Africa and Belgium are well ahead of ours. Reports indicate that shops in those countries are bulging with goods, and that their exports are at record . levels. Surely, results of that nature are preferable to the theoretical planning of the socialists and to their blue prints for a golden age. Neglect of production is characteristic of socialistic control. Socialists invariably concentrate upon distribution. In theory, they leave production to the primary industries, but in fact they hamper those industries by imposing all sorts of controls.

I shall now analyse the budget from the point of view of the man in the street. The honorable member for Wilmot (Mr. Duthie) claimed that primary producers in this country were never so prosperous as they are to-day. He and his colleagues cite as evidence for that claim the increased bank balances of primary producers and reductions of overdrafts which have been effected by farmers. However, honorable members opposite in citing that evidence make no allowance for postponed improvements and maintenance charges requisite for maximum production. Because of the policy pursued by the Government, producers have been obliged to bank their surplus money instead of being enabled to expend it on the provision of fencing, general repairs, pasture improvements, restocking and the purchase of implements. Their surplus money has been immobilized because under present conditions they have not been able to invest in it revenue-producing assets for their farms. One of the greatest drawbacks to maximum rural output is the acute shortage of farm machinery and other rural requirements. Three factors are primarily responsible for that shortage. The first is the almost continuous industrial dislocation which the Government has allowed to go unchecked; the second is the Government's unsympathetic attitude to the needs of primary producers; and the third is the Government's failure to appreciate fully the requirements of rural industries in its handling of the dollar situation. The magnitude of existing shortages may be gathered from surveys conducted by rural organizations. Requirements of members of the Farmers Union of Western Australia include 3,100 tractors, 1,800 harvesters, 2,000 combines, 2,350 ploughs, 1,700 trucks and utilities, 65,000 miles of fencing wire, 4,000,000 steel posts, 9,750,000 feet of galvanized piping, and 1,000 stationary engines. Members of the United Graziers Association of Queensland need nearly 10,000 tons of barbed and fencing wire, 5,400 tons of steel posts, 1,900 tons of wire and strip netting, 5,110 tons of galvanized iron, 6,600 tons of water piping and 2,300 tons of bore casing as well as hundreds of tractors. Information received by the Graziers Association of New South Wales from fourteen of its branches indicates that members of that association need 6,000 tons of fencing wire, 2,889,000 steel posts, 4,800 tons of strip netting, 1,830 tons of galvanized iron, 566 tons of water piping, plus considerable quantities of wire netting, barbed wire and bore casing.

The Farmers and Settlers Association of New South Wales is planning an investigation, but it has already been advised that shortages in New South Wales are equally acute as those in other States. The association's secretary has informed me that, last month, New South Wales farmers were still awaiting delivery of machinery ordered three and four years ago. It has been estimated also that Australia requires 300,000 miles of rabbit netting. Notwithstanding this appalling situation the Minister for Commerce and Agriculture (Mr. Pollard) admitted in

September, 1948, that during the financial year 1947-48 agricultural machinery, including ploughs, harrows, harvesting machinery, &c, valued at £596,671, was exported. Of that total, more than £270,000 worth went to foreign countries. In the nine months ended March, 1949, exports of ploughs, cultivators, harrows, harvesters, combines, reapers and binders and miscellaneous harvesting machinery totalled £340,848. Twice in the past eighteen months representatives of the Graziers Association of New South Wales, the Farmers and Settlers Association of New South Wales and the Queensland Grain Growers Association have discussed with the Minister for Trade and Customs the restrictions on imports of tractors, agricultural machinery and spare parts from dollar sources. The deputations suggested that greater dollar allocations should be made available to import tractors of more than 30 horse-power and also certain agricultural machinery, and that if a dollar allocation could not be secured, a dollar loan should be arranged for the purpose. The Minister said that he could not hold out any hope for sufficient improvement in the dollar position over the next two or three years to enable importation of the desired machinery and equipment. Yet, in April, the Minister for Commerce and Agriculture was reported to have urged intending importers of equipment from dollar countries to submit their applications for agricultural sponsorship. The fate of these applications can be gauged from information given to me by the Prime Minister to the effect that provision had been made for the 1948-49 financial year for the importation of the following limited numbers of special types of agricultural machinery from dollar sources : - 124 pick-up hay balers, 44 combine or all-crop harvesters - small seed harvesters - 36 corn planters, 23 corn pickers, 9 ensilage cutters and harvesters, 4 hay' choppers, 4 manure spreaders, 3 ensilage blowers, 2 hammer drills, 2 beet harvesters, 1 cotton harvester, 1 beet drill, 1 beet loader and 1 disc harrow. This list contains just over 250 different pieces of agricultural machinery for the whole of Australia for one financial year. The programme was prepared in consultation with the Department of Commerce.

In view of this ultra-restrictive programme with which the Minister must have been conversant, his announcement to the Australian Agricultural Council, that, despite the dollar exchange position, new machines imperative for primary production would be imported, must be regarded as just one of those election year assurances that cannot be taken seriously. Only last week, it was reported that the New Zealand Government had, since 1948, allocated 5,500,000 dollars to buy tractors and machinery, in addition to an earlier allocation of 1,000,000 dollars. The Chifley Government cannot have it both ways. It cannot impose its policy of savage restrictions on dollar imports and, at the same time, expect primary producers to step up or even maintain output. The Government prates about the prosperity of the primary industries. We are told that most primary producers have paid off the mortgages on their properties. What is responsible for this prosperity apart from the hard work that the farmers themselves have done? It is due to good seasons, and the high prices ruling overseas for our exportable commodities. Primary producers have the cash, but they cannot buy with it the materials and machinery that they so urgently require to maintain the productivity of their properties. What else can a farmer do with his money when he cannot spend it on a new tractor, fencing wire, galvanized iron, a utility truck or the thousand and one items which every farm needs but cannot get? One thousand pounds in the bank is as useless to a farmer as an engine without petrol, but how can he spend it on a new tractor or combine when the Government will not supply facilities for their importation ?

That brings me to a consideration of food production in this country in relation to the world food shortage, and particularly in relation to the requirements of the United Kingdom. Primary industry as a whole in Australia has reached danger point. The Minister for Commerce and Agriculture has warned us that, unless primary production is increased, Australia will be forced to import food as its population expands. What are the facts? Last year, we had fewer cattle, sheep and pigs than in 1945. Wool production in 1948-49 was lower than in the five years ended 1943-44. Wheat acreage was less than in the five pre-war years, although production was somewhat higher. Butter production was 30,000 tons below the average for the five years ended 1938-39. Production of mutton and pork was below the 1938-39 figure, while the total meat production was only 5,000 tons above 1938-39.

The Australian population has increased by 1,142,000 since 1938-39. Consequently the demand for foodstuffs within Australia itself, to say nothing of Britain and Europe, has increased considerably. Apart from providing for the natural increase of the Australian population, provision must also be made to feed the huge army of migrants coming to this country. The Chifley Government, however, has failed to appreciate the need for a vigorous rural policy, and as a result Australia, a major primary producing country, faces the prospect of having to import food for its growing population. Could anything be more fantastic? Could anything constitute a greater indictment of this Government than that? The Government cannot escape these unpleasant facts by a monotonous recital of the monetary values of rural products and of the surface prosperity of farmers who are unable to obtain the material requirements necessary to enable them to get on with the job. The essential requirements of our primary producers are being denied to them because of industrial strife and dislocation and the socialistic monetary policy of the Government, and the Government stands idly by. Ministers should have wakened from their lethargy and apathy and have done something positive to help the man on the land.

Obviously the Government's supporters are the only persons in the community who are satisfied with our efforts in the food production sphere. Rural Australia would be on a sound footing to-day had the Government heeded the advice given to it by the Opposition for some time past. The Australian Country party has consistently advocated a better deal for the primary producer to enable him to increase production so that Australia may take its rightful place in meeting the requirements of the starving world. The Opposition has offered constructive suggestions designed to obtain a greater flow of badly needed dollar imports to Australia, but it has been rebuffed by socialist Ministers. The Government should have given to the producers a greater share in the handling and disposal of their products, and Ministers should have taken them into their confidence when overseas contracts were being negotiated. The Australian primary producer wants only the opportunity to work to the maximum of his energy and capital, to utilize his land to the best possible advantage, to sell his products at a reasonable margin of profit, and to live his life in his own way without interference from socialist planners. Ministers have been unrestrained in the tributes they have paid to Sir David Rivett. Addressing the British Association in Great Britain early this month, Sir David Rivett said that Australia's contribution towards feeding the world was disappointing. Ministers who never tire of proclaiming their desire to assist Great Britain and the starving countries of Europe should take that statement to heart.

I come now to the consideration of the cost of goods and services. Every householder is well aware of the impact of rising costs on the family budget. One would expect, in the years following the cessation of hostilities, there would have been such a remarkable expansion of commercial and industrial activities that production would have reached a scale unparalleled in our history. "We had all the opportunities for such an expansion. We had great resources and the markets of the world were open to us. We had the advantages of improved technique in every field of industry. Modern machinery had been installed in our factories and every facility was available to us to step up production to meet the nation's many post-war demands as well as the special requirements of a starving world. But the Government's appeasement of industrial outlaws, its inexplicable delay in arresting Communist infiltration, its failure to outlaw strikes and petty stoppages, and its inaction in the face of pronounced "go slow " methods, gave rise to a spirit of " don't care " in industry as the result of which production has lagged and goods which were sorely needed for industrial expansion were not available and are still not yet available. This trend was accentuated by the maintenance of taxes at inordinately high rates for an unnecessarily long period. From the point of view of money values the effect of this trend is seen in the falling barometer of the purchasing power of the Australian pound. Goods are in short supply and many are not serviceable as they are of inferior quality. The Treasurer has already pointed out that overseas prices may not be maintained. He has expressed this fear on other occasions. In the meantime, what has he done to safeguard the nation against the disadvantages that will accrue from a fall in overseas prices? The obvious safeguards are, first, to increase the output of commodities, both for internal and external consumption, and, secondly, to combat any price recession by minimizing and stabilizing the cost of producing goods without interference with local standards. Australians generally do not share the satisfaction of the Treasurer and his colleagues at our present situation because the Government's policy has tended to discourage incentive in this country. Substantial increases have been made in the cost of fares, freights, electricity and gas, and recently the Government increased postal, telephone and telegraph charges. There is no necessity for me to emphasize the shortage of houses and building materials. The cost of houses, both to build and to buy, has increased to such an extent that the acquisition of a home is far beyond the reach of thousands of potential home owners.. To sum tip, while wages and salaries are increasing, costs are increasing even more steeply and they will continue to increase. The recent devaluation of sterling will do nothing but aggravate the position. Australia should be warned by the fact that there are far too many crippled economies in the world to-day as the result of planning and austerity controls. The Australian people should insist that the Government shall not place them in a similar plight by denying to our economy the products so essential for continued expansion. [Extension of time granted.']

I thank the committee for the indulgence that it has extended to me.

I come now to the means that I believe to be at hand to arrest, if not to cure, the unsatisfactory situation that I have outlined. I have in mind particularly the need to overcome the shortage of essential goods so that we .may produce to the maximum of our capacity. Any financial realist would have concluded long ago that the Government would be forced to explore the possibilities of obtaining a dollar loan. Had the Government carried out a survey similar to that made by the farmers' organizations, to which I referred earlier, it should have been seised with the necessity to remedy the first situation by encouraging the farmers to maintain their existing rate of production, apart altogether from any consideration of increasing that rate of production. Now, belatedly, the Treasurer has admitted that the Government is examining the possibilities of borrowing as a means to provide additional dollars. His attitude is a welcome change from the negative stubbornness that has characterized the Treasurer's mishandling of the dollar position. His negative approach and rejection of Opposition suggestions has proved costly to Australia. In December, 1948, the Prime Minister said the Government had no intention to negotiate^ a dollar loan from America. Australia is a member of the International Bank for Reconstruction and Development and of the International Monetary Fund. "We have deposited in those institutions many millions of pounds in gold and securities but we have received exactly nothing in return. In other words, we have contributed in order that other nations may become the beneficial recipients. Australia has 200,000,000 dollars worth of shares in the Bank, of which 2 per cent, has been paid in gold and 18 per cent, in currency. The balance is subject to call when required. When I suggested during March last that we could obtain dollar credits from the International Bank for Reconstruction and Development and/or from the Export-Import Bank, the Minister for Post-war Reconstruction (Mr. Dedman) retorted -

If Mr. Fadden wants to have for electioneering platform purposes the borrowing of money from America, he can have it as an election issue as far as I am concerned.

In. May last, when I repeated my suggestion, the Minister declared that it was " a ridiculous policy ". He said also that when one took into account the national interest, the policy I had advocated was obviously very foolish. On the 30th June, I inquired what investigation had been made regarding the possibility of obtaining a dollar loan from the International Bank or the Export-Import Bank. The Prime Minister replied that the Government was reluctant to raise further loans which would involve dollar commitments. The right honorable gentleman went on to say that at the moment the Government did not feel disposed to enter into such an arrangement. In the first three years' existence of the International Bank for Reconstruction and Development, to which we have contributed, it has made fourteen loans, aggregating 635,000,000 dollars. The paid-in capital of the bank, which is one-fifth of its subscribed capital, is about 1,660,000,000 dollars. The bank itself obtained some of its loanable funds by borrowing in its own name from investors in countries that are able to invest capital abroad. To do so, the bank sold two bond issues, amounting to 250,000,000 dollars to the investing public and institutions of the United States in July, 1947. The interest rate for the loans is as low as 2-J per cent, and has been not higher than 3^ per cent. In 1947 the bank made a loan of 250,000,000 dollars to France to assist the reconstruction and development of that country's French economy. In the same year the bank lent 195,000,000 dollars to the Netherlands, and a further small loan was made to that country in 1948. Loans were made by the bank to four Dutch shipping companies at an interest rate of 2i per cent, about twelve months ago. Denmark, which is our greatest competitor in the British market for dairy produce, borrowed 40,000,000 dollars to finance payment for essential import goods, including agricultural and textile machinery, machine tools, trucks and steel products. Luxembourg purchased equipment for its steel industry, and rolling stock for its railways by obtaining a loan of 12,000,000 dollars from the International Bank. An instrumentality of the Chilean Government that was created to promote economic development, also obtained a loan from the bank to purchase United States equipment and supplies that were required for the development of electrical power and water facilities in Chile. A second Chilean loan, at 2^ per cent, interest, was granted in March, 1948, to finance the purchase of agricultural machinery in the United States. A loan of 75,000,000 dollars was negotiated at the beginning of 1949 by the Brazilian Traction Light and Power Company for expansion of hydro-electric generation and the distribution of facilities and the installation of long-distance and local telephone services. Two further loans have been granted to electricity commissions in Mexico for similar purposes. At the beginning of 1949, the bank had before it applications from a dozen or more different member countries. Australia, however, was not included. All we did was to contribute the means, the method and the facilities for other nations to become participants. My latest information is that the Netherlands has borrowed a further 15,000,000 dollars from the bank to modernize its industrial plants. Finland was lent 12,500,000 dollars to finance imports of special equipment. The railways of India will also receive 34,000,000 dollars, and a further loan of 41,000,000 dollars will be made to that country in the immediate future for electric power development. A development company in Colombia also got a 5,000,000 dollar backing for imports of agricultural machinery. Last month, the bank was reported to be investigating projects in Yugoslavia, connected with an application by that country for a loan of 280,000,000 dollars.

It is indeed ironical that Australia, which is being starved by government policy of petrol, motor vehicles and tractors from dollar areas has not. even attempted to approach the International Bank, notwithstanding that it has, I repeat, contributed directly to assist other nations that are in competition with it. Other countries, including such competitors as Denmark, have used the International Bank to obtain loans to finance agricultural machinery imports, as also has a private company in Colombia. Australian production is being gravely retarded because of the lack of American utilities and other motor vehicles, and yet the Government has not even seen fit to approach the International Bank for the necessary dollars to obtain them.

Of course, the International Bank for Reconstruction and Development is not the only ' agency from which we could obtain a dollar loan. Australia is also a member of the International Monetary Fund. At the end of May, 1949, the fund held 8,400,000 dollars worth of Australian gold, and 191,600,000 dollars worth of our currency, which is equivalent to 96 per cent, of our quota. Australia is entitled to purchase 25 per cent, of its quota in any period of twelve months, and to purchase even more if the fund deems it desirable to waive the 25 per cent, restriction. Generally speaking, the fund's resources are to be used for exchange stabilization purposes by helping member countries to finance temporary deficits in their international current accounts. Australia now finds itself confronted by a temporary deficit in its international current account. The regulations that govern the operation of the fund also provide that its resources are not to be used for reconstruction or for development, because the provision of finance for reconstruction and development is the function of the International Bank.

To the 30th April, 1949, the fund sold more than 700,000,000 dollars for membercurrencies. Seventeen member countries purchased United States dollars in exchange for their own currencies. Great Britain purchased 300,000,000 United States dollars from the fund. France obtained 125,000,000 United States dollars, the Netherlands 62,500,000 dollars, India 100,000,000 dollars, Belgium 33,000,000 dollars, Mexico 22,500,000 dollars, South Africa 10,000,000 dollars and Denmark more than 10,000,000 dollars. Brazil, Chile, Costa Rica, Czechoslovakia, Egypt, Norway, Turkey and even Ethiopia received some millions 'of dollars from the fund. Australia has had the honour and the privilege of being only a contributor to it. On the 25th March, 1948, India applied for and received from the fund 25,000,000 dollars in exchange for rupees in order to assist it to meet its trade deficit with the United States of America. Australia is not mentioned in the list of purchasers of United States dollars from the fund, despite our need to overcome the dollar deficit which is strangling our progress. This country could have been receiving annually from the fund approximately 50,000,000 United States dollars, but the Government apparently did not even bother to make the necessary inquiries. Other countries which I have mentioned have had the advantage of obtaining dollars from the fund.

Another avenue which could have been explored with advantage is the American Export-Import Bank. That institution was established in 1934 as a wholly government-owned corporation devoted to financing and facilitating the exports and imports of the United States of America to the extent of 3,500,000,000 dollars. By 1947 the amount outstanding had been reduced to about 2,700,000,000 dollars so that approximately 800,000,000 dollars were available at the time for additional loans. As the result of repayments about 960,000,000 dollars were available for loan early this year. This month, it was announced that the bank had granted to Yugoslavia a loan of 29,000,000 dollars for American mining materials and equipment. The Export-Import Bank also approved a loan to Israel for the purchase of American materials for harbour works at Haifa. On the 7th February last, the bank made a loan of 20,000,000 dollars to Chile for steel plant construction. That loan was in addition to a loan of 28,000,000 dollars that had been granted in 1945. The rate of interest is 4 per cent. On the 19th January last, the bank granted to Israel a loan of 35,000,000 dollars for the purchase in the United States of America of equipment and materials for the development of Israel's agriculture, and a further credit of 65,000,000 dollars for the development of transport, communications and the like. Both loans were at the rate of 3^ per cent. The agricultural credit was calculated to establish and equip 8,000 new farms, re-equip 16,000 farms and 6,000 citrus groves. The credits as a whole were a part of an overall programme for a balance^ development designed to establish a self -sustained economy in Israel. [Further extension of time granted^] I thank honorable members for their indulgence. I desire to develop my survey of the dollar position.

In April, 1948, the Export-Import Bank provided a loan of 29,000,000 dollars to Japan to finance cotton shipments. In December, 1947, Belgium was granted a loan of 50,000,000 dollars by the bank for the purchase of United States raw materials and equipment. That was the second loan to Belgium. The first loan, which was an amount of 100,000,000 dollars was made in 1945. Italy has been granted a loan of 100,000,000 dollars by the bank, which has also extended to various countries short-term, credits amounting to 140,000,000 dollars for the purchase in the United States of America of specific commodities such as tobacco and cotton.

As Professor Copland has suggested, there is a fourth course - a loan on the New York market. With the other avenues available, the adoption of that course should not be necessary; but I point out that recently Canada floated1 a loan of 100,000,000 dollars on the New York market and it was over-subscribed, although the rate of interest offered was less than 3 per cent. A loan sought by Australia would probably not be quite so successful as was the Canadian loan, but, at least, I am sure that the money would be available.

Before I leave the subject of dollars, I ask honorable members to note that the many European countries that have obtained dollar loans from the international agencies to which Australia has subscribed have abandoned petrol rationing. For example, the consumption of fuel is not restricted in France, Belgium, Luxembourg, Portugal, Turkey and Finland. 'There is no rationing in the strict sense in Holland and the Scandinavian countries with the exception of Sweden. Gasolene, it is stated officially, is unrationed in Poland and Roumania, and since April last, in Hungary.


Mr Beazley - Those countries are producers of fuel.


Mr FADDEN - They are not all producers of petrol. Last Tuesday it was reported that because of the devaluation of sterling the price of petrol in Australia would be increased by Id. a gallon. The Prime Minister has advanced various arguments to show the dollar content of petrol consumed in Australia. Again, he has been caught in a cleft stick. The increase that is allowed in the price of petrol should truly reflect its dollar content, otherwise the Government would be compounding a black market. An increase of Id. a gallon is equivalent to only 3 per cent, of the retail price, so the real dollar content, both direct and indirect, must ~be smaller than we have been led to believe. A dollar's worth of petrol now costs 9s. instead of 6s. 3d., out the price of petrol in Australia, instead of being increased by approximately 5d. a gallon, will be increased by only Id. a gallon. That is the answer to the question whether petrol should be rationed in this country on account of the dollar content. The Treasurer will need all his ingenuity, and will need to exchange many cables with Sir Stafford Cripps, in order to explain away that discrepancy. The ministerial attitude in this matter is characteristic of the Chifley Government's general approach to problems, the solution of which calls for vision and enterprise. Having no ideas of their own, Ministers resent it when others advance constructive suggestions, especially when those suggestions emanate from honorable gentlemen on this side of the chamber. Instead of exploring the possibility of adopting the suggestions, they resort to criticism, and frequently abuse, of members of the Opposition who submit proposals for stabilizing the Australian currency. Honorable members on this side of the chamber are just as conscientious and eager to render public service as are the Prime Minister and other Ministers.

The Government has been like a glider, riding high on an up-current of hot air. It has little visible means of support, once the unusual conditions of the starving post-war world become nearer to normal. It has rejected a far-sighted policy for encouraging production in favour of the goal of socialization for as many means of production, distribution and exchange as the High Court and the easy-going elector will allow. The Government has ignored the fact that wealth cannot be distributed unless it is produced. It has failed to use the means available to secure dollars in order to purchase essential requirements that are at present scarce.' It has deserted the primary producer, who has had to fight a losing battle single-handed against declining production and shortages of every kind, when the Government could have alleviated the position by raising a dollar loan. For these reasons, the Government's policy, as set forth in the budget, must be condemned as contrary to the best interests of Australia, to the interests of this nation as an integral part of the United Nations, and as a potential contributor to world peace by feeding the hungry people of the world. The Australian Country party, on the other hand, is pledged to a prosperous, expanding economy, free of restriction, and of the taint of socialism.







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