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Wednesday, 13 March 1968


Mr CREAN (Melbourne Ports) - In opening this debate on behalf of the Labor Party I should like to join with other honourable members, even though we did this formally yesterday, in expressing deep regret at the death and the manner of passing of the previous Prime Minister. Our tributes were paid yesterday; nevertheless I should like to say that at one stage as a member of the Victorian State Parliament prior to becoming a member of the Commonwealth Parliament, I represented an electorate that was part of the former Federal division of Fawkner, then held by Mr Holt. I regarded him is a personal friend and a worthy parliamentary representative.

Oddly enough, I begin my speech by praising the Government for one aspect of the Governor-General's Speech. I refer to the intention of the Government to increase the amount of economic assistance which is to be given to Indonesia. A short time ago I had the opportunity to visit Indonesia for a fortnight. It seems to me that people in Australia feel there is more political stability in Indonesia now than was the case some years ago. I would accord with that. At least the government under Suharto is a more stable kind of arrangement than was the government under Sukarno. However, it seems evident that that kind of stability will be maintained only if economic development takes place in Indonesia. I believe that Australia is especially well cast in helping in this direction both because Indonesia is our neighbour and because we have technical skills and knowhow that would be of considerable advantage to Indonesia if better mechanisms of distribution and administration of aid were evolved. I hope that the additional amount that is forecast will be regarded as only a very small instalment of much more substantial sums that will be required in the future. It seems to me that some of the money that might be regarded as being saved because of a reduction in our defence activities in regard to Indonesia could be devoted to economic aid. In the past there has been an attempt to concentrate on defence as the sole means of protecting ourselves or building stable relations in this part of the world. I believe that not only Indonesia but also India should be given increasing amounts of economic aid and that this aid should be given with something like the same dedication and precision as apply when military operations are undertaken. In my view, only when we make the same kind of systematic arrangements for the administration of aid as are made when warfare breaks out will undeveloped and underdeveloped parts of the world be raised to somewhere near the standards to which people in civilised communities are entitled. The task is a tremendous one.

I noticed this morning in one of the newspapers a review of a report recently published by Professor Gunnarmyrdal in the United States of America which states that about 2,000 million of the world's population are still living in circumstances that are far below the standards of the more advanced parts of the world. He believes - I think quite rightly - that the main means of improving living standards in the foreseeable future is the rapid development of agricultural production. Of course, this does not mean that industrial production should be overlooked. But it is rapid improvement in agricultural production that is required. It seems to me that Australia in particular is in a position to help at least Indonesia and India in that field.

In many respects the Speech delivered yesterday by the Governor-General is a rather odd one. He said:

My Government will continue the policies of economic development of the previous Government.

I am afraid that not many of us regard the present Government as being very much different from any other government. It is still the Liberal-Country Party coalition Government with a change of one or two r .embers. As I have indicated, all of us regret the circumstances that made the major change necessary. But I do not believe that anyone in a parliamentary system believes that in the middle of the Government's term of office - after all, it was elected some 15 or 16 months ago - the character of the Government is suddenly to change because of a change in one or two of the personnel of the Government. At least, that is not my view of parliamentary government as it ought to operate. Therefore, whilst not saying much about the previous government as against the present Government, it seems to me that it te still the same wolf in sheep's clothing.

I would like to look at its thesis that the policies of economic development will be continued. After visiting other countries, I suppose no-one could seriously argue that Australia is one of the lowest countries on the ladder of economic development. I do not believe that and it would be wrong to suggest it. However, what I do believe is that economic development in Australia at March 1968 is not as good as it ought to be. In my view, it will not grow in the next few months as the Government suggests unless some alterations are made in the direction in which things are being done. I want to refer to one or two recent statistics. It seems to me that some statistics can be used to prove almost anything. My colleague, the honourable member for Hunter (Mr James), this afternoon asked a question concerning sets of figures which apparently had been given different interpretations by two Ministers of the Government. I think one Minister was talking about the level of real wages and the other was talking about average earnings. I still contend that at this point of time nowhere is our economic performance as good as it ought to bc.

I would like to take this thesis of economic development as the central point and refer to some statistics. I shall cite only these statistics as they are contained in various official and semi-official publications, and leave the House to draw its own conclusions as to whether what is called economic development is being pursued in Australia as systematically as it ought to be. The Bureau of Census and Statistics the other day issued a document which bears a note that it is secret until noon on Wednesday, 21st February 1968. Honourable members can see that it is a reasonably recent document. The document is entitled 'Australian National Accounts, 1953-54 to 1966-67. Preliminary Statement No. 1, Gross National Product at Current and Constant Prices'. I refer to Table 2 of this document which gives the picture of the gross national product at average 1959-60 prices. Expressed in current terms the gross national product is significantly different from what it was at average 1959-60 prices and the difference is some measure of the degree of inflation that has occurred since that time. What is called gross national expenditure, expressed in current prices for 1966- 67, is almost $23,000m but when you deflate it and express it in average 1959-60 figures it is reduced to not much more than $19,000m. So over that 7 year period there has been a difference of over $3,000m due to inflation. For those who pin their hopes on what is called 'economic development' the important figure seems to be what is called 'gross fixed capital expenditure'. In an economy which the Government claims to be a private enterprise economy the significant figure is private fixed capital expenditure for the category 'other', that is, apart from dwellings. For 1965-66 other fixed capital expenditure amounted to $2,546m but in 1966-67 the figure, expressed at average constant prices, had fallen to $2,429m. In other words, there was a decline in real terms of private investment for other than dwellings amounting to $117m. It would seem that the industrial capacity of the nation declined between 196S-66 and 1966-67 and that that decline has not yet abated. In delivering his Budget Speech last year the Treasurer (Mr McMahon) said that the nation's defence capacity is intimately linked with its industrial capacity.

I draw the attention of the House to the most recent issue of 'Business Indicators', published by the Australia and New Zealand Bank Ltd and dated February 1968. The Bank, under a heading reading 'Expansion Continues with Restraint' states:

Although several factors could be expected to have already affected business confidence . . .

The Bank lists devaluation in the United Kingdom, capital curbs in the United States, rising defence commitments externally and drought internally, and continues: the only statistical indicator to remain weak is capital expenditure by industry.

I suggest that such an indicator is too important to be described as 'the only statistical indicator to remain weak'. That it is weak bodes ill for the future development of our economy. The statement continues: . . this weakness is concentrated in nonbuilding capital equipment, and in certain industry groups. The significance of changes in employment statistics remains obscure . . .

I suggest that it remains obscure when you look at the rather dangerous revelations in the figures contained in the bulletin released by the Minister for Labour and National Service (Mr Bury) on 19th February 1968. I draw particular attention to the employment situation as it affects females under the age of 21 years, particularly those resident in Tasmania, Queensland and South Australia. The bulletin shows that as at 2nd February 1968 almost 23,000 junior females under the age of 21 years were registered for employment. In addition, 13,000 adult females were registered for employment, making a total of almost 36,000 females registered for employment. But only 14,000 job vacancies for females were listed. On other occasions I have said that something seems to be wrong with the qualifications of girls under the age of 21 years as far as the labour market is concerned. I see no reason to be complacent about this matter or to claim that a condition of total employment exists in this country.


Mr Griffiths - Many of these people have been refused unemployment benefits.


Mr CREAN - That is so. In the last 2 years for which official statistics are available the rate of absorption of males and females in private and public employment has been of the order of only 100,000 persons in a full year. There have been instances in our history when as many as 200,000 persons have been absorbed in a year. Between June 1966 and June 1967 the increase in the number of persons in employment was only 75,000 and between November 1966 and November 1967 fewer than 100,000 additional persons entered the work force. If Australia is to expand in the way some people suggest it will, our performance as regards total employment should be better. I suggest that progress towards total employment is more sluggish than has been admitted. I suggest further that some of the statistics that have been handed out referring to average rates and nominal rates only conceal the fact that in 1 968 the work force represents a smaller proportion of the total population than it has for several years. Perhaps the Commonwealth Statistician could provide figures to confirm my belief. I suggested that in the last 2 or 3 years the wage force relatively has been declining. If this is so, to refer to statistics as average wages serves only to distort the real position. The Government's own figures show that fixed private investment in other than the construction of dwellings declined by $1 17m between June 1966 and June 1967. That decline is continuing. In its publication to which I have previously referred the Australia and New Zealand Bank Ltd stated:

Preliminary, seasonally adjusted figures of new capital expenditure for the September quarter 1967 were $25.7 million lower than for the September quarter 1966. While expenditure on building and structures made a significant increase of 9.8% on a year earlier and 10.6% on the previous quarter, spending on other new capital equipment dropped by 13J5% on the year, and 3.6% on the previous quarter.

Industry groups showing the greatest falls over the year were extracting, refining, founding (down 31.9%), chemicals (down 43.7%), textiles and clothing (down 14.1%), other manufacturing (down 16.5%), and other non-manufacturing (down 12.2%). Industry groups showing good increases were vehicles (up 35.1%), paper and printing (up 35.9%) and mining (up 42.6%).

It is most unlikely therefore that the 5.5% rise foreshadowed in the Commonwealth Statistician's survey for the first half of 1967-68 will materialise, and the outlook for this indicator is not good.

Therefore, I take issue with the contention of the Government - and indeed, the previous Government - that the policies of economic development in this country are satisfactory. I suggest that the position is quite to the contrary. Other man agricultural production - which at the moment is going through the difficulties of a drought - the only place in which one can hope to look for a real physical increase in the production of goods and services in the years ahead is the field of private enterprise other than building. But the records show a decline in this field of $117 in a 12- month period. The latest statistics that are available, and they were published as recently as 16th February 1968, point to the fact that that abatement has not been halted in any fashion and that the situation is still declining.

To my mind it is an indictment of the Liberal Party that the Prime Minister (Mr Gorton) had to be brought down from another place to lead this Government. It surely is a reflection upon this Government to suggest that merely by shuffling a portfolio or two there will be a radical change in the performance of the Government. I do not believe that there will be. I am one who believes that the responsibility lies with the majority of the ruling party and should not rest with one person rather than another.

The development that the Prime Minister hopes will take place will not take place unless there is a fundamental reversal in the attitude of what might be called the private investors. They seem to be highly dubious about the future. I do not know whether the future is highly dubious to them because of the fact that real purchasing power is declining. In my opinion real purchasing power is declining. I am one who believes that the greatest stimulus to an economy in the long run is adequate purchasing power in the hands of the great majority of the people. The great majority of the people in Australia are wage earners and people on fixed incomes, particularly pensioners. To my mind no statistics can suggest that their standards are rising.







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