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Thursday, 14 March 1968


Mr IAN ALLAN (Gwydir) - It is always a pleasure to follow the honourable member for West Sydney (Mr Minogue). His work on behalf of pensioners is known and appreciated on both sides of the chamber. The most striking tribute that could possibly be paid to our new Prime Minister (Mr Gorton) has been paid in the last couple of days by the Opposition in this House. The Opposition has chosen to launch a scurrilous attack on the character of the youngest member of the House and has also vigorously attacked the honour and integrity of certain Army personnel who interrogated a Vietcong spy a couple Of years ago. I do not know whether the intention is to damage the respect in which the Army is held in the community at large, but it may have that effect if the debate is prolonged and carried on in the way that it has been by the Opposition. It is to be deplored, but Government supporters can draw comfort from the fact that with all the great issues available today, domestic and foreign, the Opposition has been reduced to attacking the Government on such a ragbag of scurrilous trifles. The appointment of the new Prime Minister has quite evidently demoralised the Opposition. Although this Parliament has not met for some months, that is the best that the Opposition can produce. That says more for the character, intention and effect of the new Prime Minister on the Australian people than any personal tribute that I could pay.

I feel very strongly that we are at a point in our history in Australia when we should take a new look at the Australian economy and the Australian situation in the world. I believe that Australia is the richest country, per head of population, in the world today. Our standard of living compares more than favourably with the standard of living of any other country in the world. Despite the high standard of living we divert away from consumption towards foreign aid, defence and capital works, so necessary in a developing economy, a greater proportion of our national income than any other country in the world. While we are diverting funds away from consumption and deliberately suppressing our standard of living we are maintaining our standard at a level comparable with other countries such as the United States of America, Canada or Sweden. Any traveller who has visited other countries and witnessed their agonies of racialism, poverty and distress has returned with the conviction that Australia is by far the most attractive country in which to live. We are the richest country, per head, in the world today. Yet we can see, thanks to the discoveries of minerals, oil and gas, that new riches await us just around the corner. In 10 or 20 years time when these riches have been developed, have become hard cash and their potential has been realised, Australia's wealth is bound to grow and so our standing in the world is bound to rise. We must anticipate the heavy responsibilities which will fall upon our shoulders in such a short time; we must be ready to accept them. We must take action now to ensure that our governmental institutions, our attitude to the world and our policies are correct and in accord with the heavy responsibilities that are shouldered by wealthy and powerful people, who are the envy of those less fortunate in the world. So I welcome the change in the Government at this particular time, although I am sad that it should have come to about in the way that it did. It was our destiny that the change should come about at a particular stage in our history that is so vital to our future.

Having said that we are so wealthy, I want to highlight the three great and grave problems which still confront us on the domestic front. Quite clearly we have only a few years to run with our available water reserves. Investment in conservation works is a long term project, as was pointed out this afternoon by my colleague, the right honourable member for Fisher (Mr Adermann). The need to act well in advance, by making funds available for conservation works, is urgent and we should make sure that we profit by the lessons learnt by other countries which have been at the game longer than we have. We should adopt the procedures that have been adopted in other countries, such as the United States, in conservation works. We should establish a national co-ordinating body, because the task of conserving our water and soils is far and away beyond the resources of the States. We must provide the national coordinating body with the necessary funds. We must coordinate all forms of conservation. Matters concerning soils, forests, flora and fauna, and everything associated with water conservation and the pollution of water should be covered. All the works that such a body believes should be co-ordinated must be controlled so that we do not waste money but make the best possible use of the slender funds that we can allocate for such a purpose. They are slender by comparison with the need. People do not appreciate sufficiently how short of fresh water the United States of America is now; yet the United States of America has infinitely greater reserves and resources of fresh water than Australia has. There the problem is extremely grave and is recognised as such. I read a report in the Press today that in the Union of Soviet Socialist Republics alarm is being expressed because industry consumes and pollutes such a lot of water that there is a growing shortage of fresh water for human consumption. Water conservation must receive our closest and most urgent attention if we are to achieve results before disaster strikes. Water is the one resource in Australia to which there is a definite limit, and that limit is not very far away. Thank goodness that the lesson of conservation has been brought home in the last few years to the people who live in the large cities of Sydney and Melbourne. Perhaps now we will get some support for water conservation from those cities that are so well favoured in other respects. I look forward to positive action on the part of the Government. I believe that the Government is determined to implement positive policies, and water conservation on a national basis should receive first attention.

The second major problem that confronts the nation is the building up of our work force. We are very fortunate in having a homogeneous work force, a happy and highly skilled work force. But we need more of the same type of people. We need more and more people to bring our great mineral resources and our developmental work to fruition. We need more and more highly skilled, able people. This should be the criterion for immigration. We should consider not the racial origin of an intending migrant but solely his ability to make a useful and worthwhile contribution to the Australian economy. I have spoken previously of the advantage that would accrue to Australia by bringing here highly skilled Japanese and Chinese and I have been viciously attacked by members of the Opposition for making such a statement. The fact remains that small numbers of these people have been excellent settlers in this country and in the United States. The record of Japanese and their loyalty to the United States, after they have settled there, is a striking one. It is well worth studying and bearing in mind for future application in Australia. Highly skilled tradesmen and professional people in Japan, Hong Kong and other places are being attracted to the United States and Canada now. They are being accorded a warm welcome in those countries. How can we be foolish enough to have them kept out of Australia because of some narrow and anachronistic attitude on the part of certain sections of the Australian people? We are very foolish if we allow ourselves to be swayed by these illogical, irrational sentiments. We need to build up a powerful work force, and we need to build it up as rapidly as possible. We must not degrade it by bringing into this country only people who are destitute and despairing, people who can make no worthwhile contribution to our future; we must look to the importation of quality all the time, from wherever it may come.

The third problem, which is a constantly pressing and worrying one, is the supply of capital for the continuing development of Australia. Fortunately, capital comes to us in many ways from many countries. We now attract capital in its various forms from most of the advanced countries in the world - from European countries, from the United Kingdom, from Canada and from the United States of America. But we constantly need more capital and so long as we maintain a stable administration in Australia, so long as we maintain good housekeeping in this country, so long as we can show a wealth of resources to be tapped through the application of capital, we shall continue to attract it to our shores.

But the more urgent need is not capital that comes to us by way of loans or by way of investment. I say in passing that there has been very much criticism of investment capital in Australia by sections of the Australian Labor Party that overlooks completely the value of investment capital. A very large proportion of this capital comes in as risk capital, or venture capital, the kind of capital that we cannot supply in Australia. We just do not have enough money to undertake risky ventures; so we are dependent on foreign investors to take these big plunges and to engage in wildcat investments in Australia.

We also need capital that comes in association with know-how. A great deal of capital that comes into Australia is in this category. The range extends from skilled cotton farmers from California right up to chemical plants. This capital which comes in association with technical know-how that we cannot supply in Australia is extremely valuable and I hope we get much more of it.

I indicated that I propose to speak of another form of capital. That is the capital that we earn ourselves from our exports, or the capital that we save by not importing goods from overseas because we are producing them ourselves. At the present time, with our economy moving along so rapidly there is a danger that our trade gap will widen. A trade gap has been with us for the last 10 years or so. We have had to live with it, and there is a danger that it may widen this year, or some time thereafter because the economy is importing so much machinery that is essential for development and so many materials that cannot be supplied in Australia. We could do more to build up our export trade and I was very pleased to see in His Excellency's Speech a promise that we are to have coming before us, later in the year, legislation to provide for some additional incentives to manufacturers to encourage them to get into the export trade. We can do very much more than we have done in the past in supplying import replacements, particularly in the rural sector. For example, we are now importing $200m worth of forest products a year, whereas we should be exporting $200m worth of forest products annually. We have the potential here to produce softwoods in a large way, and we should utilise that potential. I am sure from ali the indications we have seen that the Government is ready to develop import replacement and export incentives and I hope that it does so on a large enough scale to be worth while.

We should not be importing vegetable oils; yet we are. There is a large export market for vegetable oils of different kinds. We should be encouraging and stimulating their production in Australia and their export from Australia. For example, we do not produce soya beans. But we could establish a very large export trade in these beans. Since soya beans are grown from Canada right down to South America, I see no reason at all why we cannot find in Australia climatic conditions suitable for the production of one, two or even more strains of soya beans and so get into the export trade with that commodity.

I have a suggestion to offer the Govern ment at this point for diverting rural production away from industries which are languishing for one reason or another into more useful and more valuable forms o.r production. It relates to supervised credit. Supervised credit is a form of supplying finance to farmers which has worked eminently successfully in the United States of America. It has worked also in a form in the United Kingdom but I do not intend to draw any parallel between Australian conditions and those obtaining in the United Kingdom, because to do that would bc absurd. The United States, however, can be compared with Australia and, since this form of providing finance to farmers has been so successful in the United States I believe that it is certainly worth a try in Australia. Its effect would be to encourage farmers to aggregate holdings and move out of small uneconomic areas and uneconomic or less valuable forms of production into economic holdings and more valuable forms of production. Professor J. N. Lewis, of the University of New England says that supervised credit is the most efficient method by which farmers can finance development of their properties. He said:

Supervised credit means money is advanced to the borrower for an approved programme of farm development or reorganisation.

This programme is appraised by specialist agriculture consultants, who satisfy themselves and the lender that the measure is economically sound.

Apart from applying this job of loan appraisal, the consultants also provide a service to clients. They assist in the preparation of the farm plan, make sure the fanner understands the full implications and requirements for success and provided specialised advice on technical problems involved.

Unfortunately, 'supervised credit' is a term that is virtually unknown in Australia. It is known to a few experts such as Professor Lewis, but, for some reason or other, it has not received wide acceptance among fanners' organisations or among departments of agriculture. One expert, a departmental officer whose name I shall not mention, said this recently:

The benefit to be gained by bringing together the farmer, his technical and economic advisers, and the finance supplier into a systematic use of credit through an agreed and supervised farm plan for development has so far not been availed of in this country.

Why has this not been availed of? Why has this not been fitted into the general picture of farm credits? The ignorance is extraordinary. It is hard to explain when our need is so great. There are farmers in my electorate who suffered very badly during the drought that was centred in that area 2 years ago. They lost their stock so they turned to wheat production last year. Well, in many cases they did not get a crop and now they are worse off than they were 2 years ago. This is the type of people who could be helped with a system such as I have referred to and who cannot get any help at all from the present banking system. In fact, the banks themselves do not know what to do. They have no suggestions to offer. They merely turn these men away.

The Farmers Home Administration which looks after this scheme in the United States of America provides 40- year loans at 5% interest for the purchase, enlargement, or. development of farms not larger than family farms. The scheme has been very successful in the U.S.A. I will not read all the details in this report of the scheme which I have but it has been stated by an eminent authority on agricultural credit that credit to farmers without technical assistance is futile, and technical assistance without credit is dangerous. Experience in the United States of America and many other countries confirms the importance of coordinating these two forms of assistance.

I will leave the matter at that stage, Mr Deputy Speaker. The system of supervised credit deserves a much wider appreciation in Australia than it has received. It deserves very close study by this Government. It would be much cheaper to institute such a system than to adopt a proposal to buy out dairy farmers which was mentioned in the Governor-General's Speech. This could be a dead loss and a complete waste to the Treasury because die farmers, with a bit of cash in their pockets, might go back up into the hills and again start producing more milk and butter. They should not be allowed to do anything of that kind. Instead, the good, active, progressive dairy farmers should be able to receive the kind of accommodation they need to succeed in production by aggregating their properties or changing to other forms of production which would be more valuable to the community and far more profitable to them. I commend that suggestion to the Government







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