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Wednesday, 25 February 1959


Mr SPEAKER (Hon John McLeay (BOOTHBY, SOUTH AUSTRALIA)

I think the honorable member is in order. He is entitled to refer to his notes, but I ask him to keep within the Standing Orders.


Mr FORBES - I wish to refer, in the time available to me, to what I believe to be two of the most important problems facing Australia, which were mentioned in His Excellency's Speech. The first of these is wool, and I am, therefore, particularly glad that the Minister for Primary Industry (Mr. Adermann) is sitting at the table. The second is Commonwealth-State financial relations. His Excellency said -

The prices of a number of our exports have risen but the price of wool, which is of the greatest importance for Australia-

Which is a classic understatement, if I may say so - has remained at a relatively low level.

Almost entirely because of this fall, the value of our exports has dropped by £7,509,000 in the six months ended December, 1958, compared with the same period in 1957.

It should not be necessary for me to emphasize the importance to Australia of that capacity to import. The honorable member for Wakefield (Mr. Kelly) did that when he pointed out that the condition precedent to our future growth is not only the maintenance of our capacity to import at the level of recent years but also the raising of those levels quite considerably in the very near future. That is the stark reality. I believe that we cannot escape from it by import replacement or import licensing or, least of all, by an artificially generated internal demand. Whether we like it or not, if we cannot earn enough overseas funds we must cut down on our immigration programme, plans for internal development, plans for raising the standards of living of all of the Australian people and, in fact, on our vision of Australia Unlimited. That is the measure of the importance of wool. That is why not only the woolgrowers but every man, woman and child in Australia are concerned with the future of wool. Because they are concerned, so also are the Australian Government and this Parliament.

What has happened to wool? We were going along comfortably with wool at a good price when suddently, with little warning, it dropped catastrophically to a level which, in many cases, is below the cost of production. The level is 34 per cent, lower in the first half of 1958-59 than it was in the corresponding period in 1957-58. Of course, when this sort of thing happens, everybody has a particular theory as to why it happened. In this case, an extraordinary variety of bogies have been produced from under the bed. The honorable member for Yarra (Mr. Cairns) blames pies and the rigging of the auction system. It should be remembered that the honorable member is not disinterested in giving that explanation. Others blame competition from synthetics. As a number of my colleagues have mentioned, others have blamed the import, duty free - or almost duty free - of certain synthetics from overseas. Others blame hire purchase and other forms of competitive finance for durable consumer goods. I could go on with this list almost indefinitely. There is probably some element of truth in every one of those explanations.

In putting them forward, I think it important to keep both eyes on the ball, and to remember that, whatever the effect of those factors, the overwhelmingly important reason for the decline in the price of wool has been the recession in the major industrial countries overseas and, in particular, in the United States of America. There is nothing new about this. Similar circumstances have accompanied every steep decline in prices in the history of our wool industry. What is new in the present situation is the failure of wool to recover in a normal way with the quickening in industrial activity that has taken place in those countries in the past few months. I hasten to add that I believe this to be purely a lag and not an absolute state. I have every confidence that in the long run wool prices will return to a reasonable level.

Could this lag, however, be a measure of the inroads made by synthetics since there was last a substantial decline in world economic activity? I believe, Mr. Speaker, that it is a measure of the advance made by synthetics in their competition with wool. They are not, as I said, the principal cause of the decline in price but a very important subsidiary cause - a cause which is growing more important year by year as wool is left further behind in the promotional race.

I believe, Mr. Speaker, that we have been appallingly complacent in our approach to the problems of this our most important industry. By we, I mean this House, all Australian governments, the Australian people and even, incredible as it may seem, the Australian wool-growers themselves. The Australian Wool Bureau, which is controlled by the growers, incidentally, has done virtually nothing in the last few years except accumulate, so fa/ as I can make out, about £4,000,000 in trust fund balances. The bureau has now announced a superb programme for wool promotion in Australia and to bolster the situation overseas, but I have a feeling that such a programme should have been undertaken before and not after the recent catastrophic drop in wool prices.

However that may be, Mr. Speaker, my concern is with the role of the Commonwealth Government in selling the maximum quantity of Australian wool to the peoples of the world at the best possible price. I believe the role of the Government should be to provide leadership, to co-ordinate, to encourage and to take the responsibility for ensuring that there are no weak links in the chain, and if necessary to provide funds on a massive scale, in conjunction with the wool-growers, for world promotion of wool. That, Sir, should be the role of the Government. It is a role made necessary by the atomistic structure of the industry - an industry that is made up of tens of thousands of small growers, all producing wool with superb efficiency, but few actively concerned with the fate of their product after it is sold.

In contrast to this atomistic structure, we have the monolithic structure of the vast companies which produce the synthetic fibres. They are companies of the type of Imperial Chemical Industries and Du Pont. In such an unequal contest, there is no doubt which will win, but there is no reason, as I see it, for the contest to be unequal. A co-ordinating authority which took responsibility for ensuring that nothing was missed in the chain of action necessary to make wool the most attractive fibre on the world market could adjust the balance. If such an authority existed, the contest would not be the unequal battle that it is at present.

As a small illustration of what I am driving at, I remind the House of a point that was made by the honorable member for Farrer (Mr. Fairbairn) in a most interesting and able speech last Thursday night on this subject. While in the United States of America recently, the honorable gentleman, in his usual thorough fashion, studied everything in that country which is of significance to the Australian wool industry. Among other things, he discovered that some of the biggest woollen textile manufacturers in America had never heard of the new processes developed by the Commonwealth Scientific and Industrial Research Organization such as permanent pleating, shrink.proofing and moth-proofing. They are processes which, in terms of the bally-hoo developed by the synthetic manufacturers, have made wool a miracle fibre.

Sir, whatI want to know is why woollen textile manufacturers have not heard of those processes. They should have heard of them, and it is just not good enough that they have not. This is just one example of dozens that I could give the House which illustrate beyond contradiction that too much is left to chance. Wool is too important to the future of Australia to be left .to chance.

I urge the Government to call an immediate conference of all interested bodies and government departments - every one who is concerned with wool from the time it begins to grow on the sheep's back until it is a finished article in the hands of the consumer. I would hope that such a conference would set up a co-ordinating secretariat with the task of ensuring that Australian wool is presented to the world with the same monolithic efficiency as are the synthetic fibres. If we can achieve this with wool, then I am sure that it will beat into a cocked hat every synthetic fibre that is available to-day or is likely to be developed in the future.

The other matter which I wish to consider briefly in the short time available to me is the vital question of CommonwealthState relations. I believe, Sir, that the forthcoming Premiers conference on this question could be the most important of its kind since federation. I say this because 1 think it possible that the conference could represent a turning point in our constitutional advance, or retrogression, whichever way you happen to look at it. It may well be the means of saving the federal system from what appears to be an irresistible trend towards a unitary system of government. It may well be the means by which the growing tendency towards irresponsible government is reversed, so that we achieve again the responsible government which is meant to be such an important feature of the British parliamentary system, wherever it nourishes.

We still delude ourselves, Mr. Speaker, that we have a federal system in this country. I believe that we only delude ourselves. We have the forms of federal government, but the substance is something entirely different. A system of government is called federal when the central government on the one hand, and the units on the other, have separate and sovereign powers. This is true in Australia insofar as it relates to formal legislative :power. The legislative powers of the States and the Commonwealth are separate and sovereign, and they are exercised. But is legislative power real and effective power if the government concerned has not independent control over separate financial resources sufficient to enable it to meet its legislative responsibilities? I do not believe that any meaningful use of the term " federation " can apply to cover such weak creatures as the Australian States have become .since they were deprived of independent control over a section of the income tax field. My point is that whatever our view may be as to the desirability of the present state of affairs, let us not delude ourselves that in it we have a true federal system, because we have .not.

Last year most States celebrated their centenary of responsible government. I think Queensland is to do so this year. The implication in those celebrations was that the States still had responsible government. But did they, and do they to-day? Can any student of governmental institutions describe a government as -responsible which is not responsible for raising the money which it spends in fulfilling its legislative responsibilities? On the contrary, it would be better described as an irresponsible government, and many of the State governments are becoming more and more irresponsible as time goes on. I believe, Sir, that the deleterious effects of this irresponsibility on the attitude of the Australian people to government activity has been incalculable.

I hope that the forthcoming conference will take action leading to the restoration of the federal system. I do not believe that any better system has been devised for a country like Australia, with the problems that Australia has to face, nor are the Australian people ready to change to any other system. Restore it, therefore, to its former pristine state. It can be done, I believe, given the will, and the will, I am sure, will be there once it is realized that under the present system - and I do not think everybody does realize it - we no longer have a federal form of government in any meaningful sense of the term, nor do we have responsible government in any meaningful sense of that term.







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