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Thursday, 12 May 1960

Mr DEPUTY SPEAKER - Order! There is no reflection on the Chair implicit in the right honorable gentleman's statement.

Mr Peters - I rise to a point of order, Mr. Deputy Speaker. I take grave exception to the reflection on me voiced by the Acting Prime Minister, who has said in so many word's that I would engage in a timewasting process in this House. That is an absurd statement.

Mr DEPUTY SPEAKER - Order! The point of order has no sound basis.

Mr McEWEN - The issue that is ostensibly before the House touches the general economic circumstances of the country and the policy of the Government. The Government is proud that it has so managed the economy that we have consistent, full employment and a tempo of development the like of which has never been seen before in this country or in any other country We have also maintained a level of prosperity that makes Australia the envy of the world. This is the outcome of Government policy.

It has had the effect of making Australia the focal point for potential overseas investors. This is the first country to which people turn to make a new life as migrants. In addition, overseas investors and industrialists feel that here there is economic and political stability and a certainty of growth. There is such a confidence in the whole community that people are literally clamouring to come here to share with Australia the benefits that have resulted from the policies of this Government.

These policies have been difficult to maintain because measures to ensure rapid expansion, rapid population growth and high prosperity themselves tend to generate inflationary pressures. The Government believes that it has interpreted the Australian will that it should proceed with these policies, notwithstanding that we have known at all times that within them are the ingredients of inflation. The Government has managed, despite the circumstances, to maintain such economic stability as to result in the inflow of volunteer capital from overseas because of confidence in our economy.

This has resulted from a variety of policy practices, but time does not permit me to describe them. However, to absorb into the labour force the population intake as well as the natural population growth, we have given a measure of protection through tariffs and stimulated the confidence of Australian secondary industries. There has been an unprecedented expansion of industry, lt would be a complete negation of all that we have worked to achieve if any policy action of ours to-day were to weaken the security of our manufacturing industries. We are conscious of what we are doing. With the success of our export drive and with the inflow of capital, notwithstanding enormous drawings on our overseas funds for the purpose of expansion, we have been able to stand up in the world councils and say that this young and expanding country is now able to terminate import licensing for 90 per cent, of commodities. We have retained control over the remaining 10 per cent, because we want to be sure that the instantaneous removal of licensing will not have a severe impact on Australian industry.

It is nonsense to say that the Government would consciously take action that would damage Australian secondary industries. Our industries, be they secondary or primary, have interwoven interests. The greatest importers in Australia to-day are the manufacturers. Consumer importation is insignificant when compared with importation of raw materials, components and specialized equipment. How do we pay for these imports? To pay for them we sell abroad our wool, wheat, meat, butter and the whole variety of primary products, including metals, for which we have to fight to gain markets overseas. This, as every one knows, has been an unceasing fight by the Government. It has been my fate to conduct it, but I have done so merely as the instrument of the Government. We have unceasingly told other countries that they are obliged to accept our products under the General Agreement on Tariffs and Trade. I point out here - as a fact and not as a criticism - that the Australian Labour Party committed Australia to this convention. We have said to West Germany, to Japan and to other countries, " We call upon you to admit our products for sale because you have no balance of payments problem and you have international commitments that oblige you to accept our products ". Progressively, around the world, I have been able, for the Government and for the people of Australia, to achieve access to these countries. There is a long story to that, but honorable members are familiar with it.

If the view of the Australian Labour Party is to be interpreted to mean that we, with our present adequate overseas balances, should deny other countries the right to sell freely in Australia, subject only to a tariff barrier, and should retain arbitrary restriction by a government department, then I point out that I. or whoever may stand in my place, would not be able to argue validly along the lines that we have successfully argued in recent years. It is our intention to maintain our strength in negotiation, and the removal of import licensing is one step designed for this purpose. True, it has an anti-inflationary element.

I spoke of the expansionist policies of the Government and of its determination to sustain full employment. We have maintained these policies, notwithstanding undulating economic conditions both at home and over seas and notwithstanding the notorious fluctuations in the price of wool and in wheat sales. I remind honorable members that a couple of years ago we had a whole crop of wheat unsold. To sustain the stability of our economy, we have where necessary engaged in deficit financing - sometimes very heavy deficit financing - which has an inflationary pressure. We have weighed the advantages to all of the Australian people and the Australian sentiment for expansion against the disabilities of the inflationary pressures of deficit financing. The very thing that we have done in the interests of the Australian community, and particularly to sustain full employment is the thing that has contributed, I freely admit, to some extent to the inflationary pressures that have become troublesome in recent months.

What would be the result of policies designed to reverse this trend? They would be policies to produce artificial depression. They are the historic policies, the policies of the old world, designed to raise interest rates, to tighten credit and to shake confidence. We have not engaged in these policies. One of our actions has been to permit a freer flow of imports into Australia. This has already had some impact as an anti-inflationary force in bringing about a reduction of prices. The Government knows where it is going and is determined that it shall sustain the capacity of the Australian community to expand, to develop and to remain prosperous. It will not introduce elements of instability which would put a brake on expansion, produce unemployment and shake the confidence of overseas investors.

I conclude by saying to Australian industry that it can be confident that the Government will continue to give it adequate protection in the normal way through the Tariff Board. But where extraordinary circumstances arise suddenly, it will take emergency action, as it has done already on several occasions, to protect Australian industry pending the conclusion of normal Tariff Board investigations.

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