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Tuesday, 19 March 1968

Mr WHITLAM (Werriwa) (Leader of th3 Opposition) - Since I became a member of this Parliament I have heard seven speeches by the Governor-General. The Speech we heard on Tuesday was incomparably the least substantial, the least significant, of all those speeches. Never has a Speech contained so few proposals; seldom has a regular session of a Parliament been asked to examine so little legislation. The new Prime Minister declared his intention to 'rule off the book'. He has written nothing on the new page. Briefly, let me itemise the most obvious and in some cases quite astonishing omissions from the Speech.

In his speech opening the Senate election campaign, the late Prime Minister said that the present Prime Minister (Mr Gorton), who was then Minister for Education and

Science, was examining proposals for Commonwealth aid for school libraries and preschool training centres. No such proposals are contained in the Governor-General's Speech. If Mr Holt had not disappeared, the Parliament would presumably have met weeks ago and the Minister for Education and Science would have been obliged to produce legislation to honour Mr Holt's election promise. On the same occasion, Mr Holt foreshadowed proposals for dealing with the problem of the chronically ill. We could fairly expect that this election promise, too, would have been presented to the Parliament in the form of legislation if Mr Holt had lived. But now, more than 4 months after the late Prime Miinster's promise, the Speech merely refers vaguely to 'proposals to remove from the minds of Australians the fear of economic consequences of long continued illness'.

Shortly after the new Prime Minister was sworn in, the postal workers went on strike. The Prime Minister said on 17th January that there was 'an underlying malaise in the Post Office'. But there is not one word about the strike or, more importantly, the need to establish a contemporary framework for Australia's greatest business undertaking and to simplify Australia's most cumbersome arbitration procedures. For the past 3 months the Arbitration Commission has been subject to a series of frontal attacks by the Minister who is responsible for industrial relations at the national level, the Minister for Labour and National Service (Mr Bury). The Speech was silent on the implications of this Minister's statements.

At a time when eastern Australia faces the severest water restrictions in history, the Speech mentions the drought only to note its existence. No mention is made of plans for further allocation of the $50m for water conservation projects over a 5-year period promised by the late Prime Minister 16 months ago. The late Prime Minister subsequently inserted prohibitions against any of this money being spent on urban water or hydro-electricity projects. These prohibitions presumably still apply. Elsewhere the Prime Minister has referred to his interest in national development, yet in the Speech he gave no justification for continuing the Commonwealth's plans for the winding up of the Snowy Mountains Authority or its suspension of work on the Chowilla dam.

New oil and gas discoveries in Bass Strait received perfunctory mention. There is still no suggestion of the need for the development of a national fuel policy to dovetail and distribute our sources of power. The Prime Minister has admitted that the problems of urban development are part of national development problems, but again the Speech is silent on the matter.

The financial relations between the Commonwealth and States have reached an impasse. In his correspondence with the Premier of Victoria, the Prime Minister said on the one hand that the States would not be permitted to enter the income tax field, but on the other hand he has encouraged the States to proceed with the State receipt taxes already imposed by Victoria and Western Australia.

Mr McMahon - That is not true.

Mr WHITLAM - These taxes were suggested at the last Premiers Conference by the Treasurer (Mr McMahon), as the former Queensland Premier, Mr Nicklin, has publicly stated. Yet on a question involving the whole matter of Commonwealth control over national economic policy, the Speech says nothing. Last October, the late Prime Minister gave an undertaking for an early meeting of Commonwealth and State leaders of the Parliamentary Liberal Parties for talks on Commonwealth-State financial relations. This undertaking has been ignored.

While detailing the overseas purchase of defence equipment, nothing is said about the final cost of the Fill, despite the promises by the Minister for Defence (Mr Fairhall) during the Senate campaign that the final cost would be given in January of this year. There is no reference to the new 3-year defence programme which should have been ready to go into operation next July.

The Speech performs the remarkable feat of dealing with foreign affairs without mentioning Japan or China. Vietnam is discussed as if the disastrous events of the past 7 weeks had never happened. No reasons were given for the Prime Minister's expressed belief that the present Australian commitment has reached its 'permanent' limit, or for what appears to be his new position that it has not. The Government's response to the accelerated British withdrawal from our region was couched in negatives; we cannot fill Britain's role; although we will participate in any fivepower meetings, we will not initiate them. Nor does the Speech present any positive proposals to meet the changed situation. The meetings of ANZUS and SEATO in Wellington next month, the meeting of ECAFE at Canberra, are ignored. Perhaps the most striking omission is the utter silence of the Speech on the Nuclear Non-proliferation Treaty. There is not even the broadest indication of the Government's attitude towards it.

This catalogue of omissions applies only to matters which have arisen since last session of the Parliament, lt would be an interminable list if extended to all the important matters which should engage the attention of this Parliament over the rest of its life. One of the most notable aspects of the Speech is its lack of any originality. Its proposals, sparse as they are, are all left-overs from the previous Administration. This is demonstrated in a striking way if we examine the matters of legal significance which will be dealt with this session - half the ascertainable proposals for legislation in the Governor-General's Speech. The Commonwealth Superior Court was authorised by Cabinet in December 1962. The Tokyo Convention on Crimes on Aircraft was drawn up in September 1963. Mr Holt, when Treasurer, appointed a committee to recommend a new Cheques Act in April 1962 and received its report in May 1964. Amendments to the Commonwealth Employees Compensation Act were promised by Mr Holt as Treasurer in November 1964. Still, however, no steps have been taken to co-ordinate the score of workers' compensation Acts in this country - State, Territorial and Federal.

The new law on copyright was promised in the Governor-General's Speech of August 1954. A committee was appointed in September 1958. In December 1959 the committee recommended a Bill which would at last enable Australia to become a party to conventions drawn up in 1948 and 1952. The Bill was introduced in May last. It was already out of date, for it was not wide enough to permit Australia to become a party to a further copyright convention which had been drawn up in the meantime in 1961. That Bill was further outdated when yet another convention was drawn up last July. Australian authors and artists and scriptwriters are now denied the benefits of four international conventions concluded over the past 20 years.

The plain fact is that, while the Ministry has a new name, a new Prime Minister, it remains unchanged in its essential parts. We have neither new men nor new measures. For all the earlier talk about upheaval, the changes made in the new Ministry are marginal. If the Prime Minister had really intended significant changes and reforms, he had by far his best and probably his last opportunity to make them at the very outset of his Prime Ministership. The great offices remain unchanged. The Treasurer, unacceptable to the Deputy Prime Minister, the Minister for Trade an'1 Industry (Mr McEwen) as head of the Government but acceptable presumably as Treasurer, remains at his post. He is the architect of the policy which has compelled the States to raise new forms of taxation. By pegging all pensions, he has placed the burden of the defence build-up and the war in Vietnam upon those dependant on the Commonwealth for their income. He has forced the States to raise new taxes and increase charges. By his refusal to review the taxation schedules, he has placed an increasingly inequitable burden on the lower and middle income groups. He has conducted a running public argument with the Minister for Labour and National Service on the true state of the economy. He remains Treasurer.

The Minister for Labour and National Service has launched a sustained and deliberate campaign of abuse upon the Commonwealth Conciliation and Arbitration Commission and on trade union leadership. He has encouraged employers in their resistance against the application of longargued, long-deliberated and long-delayed judgments of the Commission. He remains to repudiate what he refuses to reform. He remains Minister for Labour and National Service. The Postmaster-Genera] (Mr Hulme) has presided over two years' turbulence, discontent and decline in the Post Office. He has failed to take the postal unions into his confidence over the crucial question of automation. He remains PostmasterGeneral.

The Minister for National Development (Mr Fairbairn) held the Ord scheme in doubt and indecision for 3 years. He unceremoniously suspended the Chowilla programme, unanimously agreed upon by five hundred members of four Parliaments. He is winding up the Snowy Mountains Hydro-electric Authority at the time of one of the worst droughts in our history. He will not or cannot devise and develop a national fuel policy. He remains Minister for National Development. The survival of the Minister for External Territories (Mr Barnes) is a remarkable illustration of the Country Party's power to maintain its influence at the expense of the national interest. Under his administration, industrial conditions in New Guinea have deteriorated, educational opportunities have been reduced and independence has been retarded. Only yesterday, the ViceChancel lor of the University of Papua-New Guinea, Dr John Gunther, said that in 3 years New Guinea would be 'less equipped with tertiary manpower' than any country in the world - but the Minister remains.

The Minister for the Interior (Mr Nixon) has remained in his post to promote an electoral gerrymander on behalf of the Country Party. The Minister for Repatriation (Senator McKellar), under whom repatriation benefits have sunk to their lowest real value for 50 years, is retained. The Minister for Health (Dr Forbes), bravely insisting that Australia's health scheme is the best in the world, is retained. The Minister for Social Service is changed. To bear out the Prime Minister's professed interest in social welfare, the Ministry goes from the Cabinet to twentyfifth, second last place, in the outer Ministry.

The real point of difference between this Ministry and its predecessor is that its internal tensions have become, spectacularly, public property. Three months ago, we could only have guessed at the depth of antagonism, personal and political, between the Deputy Prime Minister and the Treasurer. Now we have seen the Deputy Leader of the Liberal Party branded by the Leader of the Country Party as unfit and unacceptable as Prime Minister. Three months ago, we could only have guessed at the differences between the Treasurer and the Minister for Labour and National Service. Now we have had the demonstration evidenced not merely by their dispute on the state of the economy, but by the very deliberate and public manner in which the Treasurer has been at pains to contradict the Minister. Perhaps, then, it is not surprising that the GovernorGeneral's Speech was such a disappointing document. A government which cannot agree even on its propaganda can hardly be expected to produce policies.

What should the Speech have contained? It should have dealt with the initiatives which a national government could take to ensure that our resources, particularly our human resources, are used in the best possible way to raise the quality of life in this nation, and to increase our ability to influence events in this region. It should have shown how the National Government proposes to do better those things which it alone can do; how it proposes to do those things which it can do better than State or local governments; how it proposes to make arrangements with those other authorities to do better those things which cannot be done, or done well, by private individuals or groups; and how it proposes to marshal, use and develop Australia's available resources so that our standards can equal and surpass those achieved in comparable countries. The Government is clearly inhibited by its refusal to admit that our performance is falling behind that of overseas countries with the same standards and systems as our own. The Prime Minister has consistently emphasised the difficulties in the way of advance. In fact, in important areas such as health, social welfare, education, water conservation, transport and urban development, better arrangements for spending the vast amounts which governments already find would achieve immeasurably better results even without increasing expenditure.

This is made very clear in the field of health. The Government's sole action, as indicated by the Speech, is to inquire into the sole contribution it makes to health costs in Australia, namely Commonwealth benefits paid through the health funds. This is the least relevant way of approaching the problem of personal and governmental costs in health. It is fundamentally irrelevant to the nature or quality of health services available to the public. It is entirely irrelevant to the health services available to people not covered by the voluntary schemes. The Prime Minister said at the opening of the by-election campaign in Higgins on 13th February:

We have here in Australia a health scheme which is good; it is amongst the best in the world which permits choice by the patient of a doctor, which does not ration hospital or other accommodation.

As a picture of the actual operation of the health scheme, this is pure fantasy. The fact is that the present Government has established and entrenched an extremely expensive form of voluntary health insurance, Australian health insurance has special features which inflate operating costs and reserves to grotesque proportions. As a result of high operating costs and high reserves, Australians pay their health insurance funds $4 for every $3 that they get back. Seventeen percent of Australians have no medical cover whatsoever, and 15% no hospital cover. The cost of voluntary health insurance falls most heavily on those least able to afford it. Contribution tables are fixed without regard to the contributors' ability to pay. Contributors on higher incomes can deduct the cost of their health insurance and the uncovered portion of their medical and hospital bills from their taxable incomes.

The key to an effective health service lies in the hospital system. Expensive medical equipment and specialised medical services can be economically provided and effectively used only within a network which integrates small community hospitals, base hospitals and metropolitan general hospitals. Hospital treatment is by far the most expensive aspect of health for both governments and individuals. It is in hospitals that doctors and other qualified persons exercise their greatest skills and that patients receive their most vital attention. The Commonwealth Government is the only government in Australia which can shoulder the high cost of hospital services, but the present Government has reversed the immediate post-war trend towards Commonwealth responsibility for hospital finance. The present Government has preferred an uneconomic and inequitable system to one which is economic and equitable.

The Commonwealth spends as much on pharmaceutical benefits as on medical and hospital benefits combined. Its expenditure on pharmaceutical benefits has doubled in the last 7 years. Through the national health service, the Repatriation Department and hospitals, Australian governments pay for at least 85% of the drugs prescribed in Australia. In these circumstances, it is deplorable that the Government still deliberately limits the Commonwealth Serum Laboratories to supplying no more than 2% of the market and prevents it from increasing its production, purchasing formulas and generally competing in a way which would increase Australian skills and reduce government expenditure. The inquiry promised by the Government will achieve little if the Government intends merely to dabble in fringe improvements to the existing health scheme. A radical new approach is urgently required. The Prime Minister's comfortable acceptance of the basic merits of the existing scheme hands out little hope that anything significant will be achieved.

Before he announced his Ministry there was a great deal of speculation, certainly not discouraged by the Prime Minister, that the Departments of Health and Social Services would be consolidated. Any plans of this nature have been shelved. Instead, we are to have a sub-committee of the three Ministers who have some responsibility for aspects of social welfare - repatriation, social services and health - none of them in the Cabinet. The Department of Health should be merged with the Repatriation Department and the Department of Social Services to form a new department of social welfare. The new department should be responsible for providing an integrated welfare service based on research into the needs of persons at various stages of their lives and the circumstances in which they become dependent upon the community for the satisfaction of those needs.

If little can be expected on those matters which the Speech does mention, how much less can we look forward to improvement on matters on which the Speech is silent? The present Prime Minister was virtually Minister for Education and Science from December 1963. The Speech continues the silence he has consistently maintained ever since he became Prime Minister on this very matter for which he held ministerial responsibility for 4 years. He accelerated the policy of the last decade under which university fees doubled and in some cases tripled. At the University of Western Australia, as a direct result of the Menzies Government's insistence that fees should be charged, the cost of a degree rose eightfold and in some cases tenfold. University quotas have been introduced and have been defended by the present Prime Minister, not merely as a necessary evil, but as a positive good in ensuring that only the most able students can go to university. He rejected the teacher training proposals of the Martin Committee on the Future of Tertiary Education in Australia, the most vital part of that report, since teachers form the whole basis of any educational system. He rejected the proposals of the Weeden Advisory Committee on Educational Television Services on the grounds that educational television was a matter for the States. The education policy of the Government when the Prime Minister was Minister in charge of education was to slash or shelve the recommendations of its own expert committees.

We now have it on the authority of Sir Robert Menzies himself that Melbourne University had been obliged to reduce its allocations for research, thus 'severely limiting the vital provisions for post-graduate students and gravely handicapping the university's future service to the community'. Sir Robert went on to say in his Dunrossil Memorial Lecture a week ago that the Prime Minister had given a misleading explanation of the Government's action. Last weekend, he said that the explanation by the new Minister for Education and Science (Mr Malcolm Fraser) is equally misleading. Let it be said that Sir Robert Menzies was never much interested ir. schools. He retrenched half the staff of the Commonwealth Office of Education. He never allowed the attenuated staff to carry out its statutory duty to advise the Government concerning the grant of Commonwealth financial assistance to the States and to other authorities for educational purposes. But he was interested in universities, for the ablest students at least, even il not for all qualified students. Australia is one of the few countries where most of those who qualify for matriculation are prevented from matriculating - due to doubled fees and tougher quotas. The real significance of Sir Robert Menzies' dispute with the present Prime Minister and the new Minister for Education is that Sir Robert knows that

Australian universities desperately need staffs, and that staffs of Australian universities must now be produced by Australian universities.

It is now clear that, under its new leadership, the Government will still not draw up a long term and consistent plan for education, the whole basis of which must be that the Commonwealth should accept increasing responsibility for education at all levels. Between the First and Second World Wars, Australia accepted the principle that education up to the age of 14 or IS should be available to all and free to all. It is now essential that this principle should be accepted for tertiary education. It would cost less than $10m a year to abolish university fees altogether. In short, we must extend the principle of free education already accepted in primary and secondary education to university level, and we must extend the principle of Commonwealth participation already accepted at the university level to all other levels of education, primary and secondary schools and technical and teachers' colleges.

The same prodigal attitude which the Government has shown in the treatment of our human resources is apparent in the Government's failure to develop plans for the development of our natural resources. Clearly there is no intention to reverse the decision by the previous Ministry to wind up the Snowy Mountains Authority, despite the drought, despite requests from the Premiers, despite the warnings by Sir William Hudson that the team, once dispersed, can never be re-assembled. The new Minister for the Navy (Mr Kelly), formerly Minister for Works, said on 22nd February in Adelaide that it was 'unrealistic to expect the Snowy Mountains Authority to be the development and construction authority for irrigation schemes'. He said it was 'sloppy and sentimental' to view the Snowy Mountains Authority in this role, and went on to describe the Authority as 'a wonderful mob'. The Prime Minister himself said last Wednesday: lt should not be thought that the Authority is idle. My information is, for example, that the Authority has been retained by the New South Wales Government to provide engineering assistance and advice in connection with the building of the Eastern Suburbs Railway.

The Snowy Mountains Authority is the greatest planning and construction body this country has ever seen. It is uniquely equipped to handle problems of water conservation. The members of the Snowy teams, both Australian and those brought from overseas, possess together an unparallelled amount of skill and experience in the problems of investigation, design and construction involved in any worthwhile developmental project. The retention of these teams and the retention of the Authority itself as the nucleus of a national water conservation authority is essential if we are to reduce the losses from drought and the waste of our rarest and most precious asset, water, and the salting up of our greatest river system, the Murray-Darling.

The Government does not even follow through the planning for projects it has already started. Although the Minister for National Development announced on 1st November last that the Commonwealth would assist Western Australia to proceed with stage 2 of the . Ord irrigation project, the Government has still held no negotiations and made no arrangements with Western Australia concerning inundation and irrigation in the Northern Territory, where at least one-third of the additional Ord water must be used, if it is to be used at all.

Australians live in a great continent with large concentrations of population hundreds of miles apart. We are an urban and industrial country living by the export of primary and mineral products. In the Australian economy today, cheap, fast and flexible transport is the key to efficiency in almost every field. Equally, it is essential for civilised living in our crowded cities.

Perhaps the most significant change in the Ministry will prove to be the appointment of the former Minister for Social Services (Mr Sinclair) to the Ministry for Shipping and Transport. While this confirms the Country Party hegemony on all trade matters, it does permit the Ministry to escape from the Liberal Party's prohibition, contained in its platform, against Australian participation in her own overseas trade. But if so desirable a result follows, it will be fortuitous. It will not be the result of a forward policy for transport.

Under existing Administrative Arrangements Orders, 8 Federal Ministers share responsibility for Australia's transport facilities with 6 State and 900 municipal authorities. Our 90 ports are administered by more than 30 different authorities under arrangements which have remained essentially unchanged since early settlement. The key to Australia's transport needs is an integrated transport system. We should make a start ait developing such a system by integrating federal responsibilities under a single Minister for Transport. The Commonwealth's financial grants should be made with a view to co-ordinating the activities of State and municipal authorities which have responsibility for some aspects of transport.

In particular, our aim should be to bring together the mainland railways under Commonwealth management. To compare other federal systems, the railways of West Germany are run by the Federal Government; the railways of Canada consist of one Federal Government corporation and one nation-wide company; and the railways of the United States, which have for generations been co-ordinated by the Interstate Commerce Commission, are now rapidly merging.

Our railways should bind the continent, and bring its resources efficiently together. No State acting alone can link its capital by rail with the capital of another State. No State can tap resources or supply markets in another State by rail, lt is 80 years since neighbouring States last built railways to meet at their border. The Commonwealth alone can now finance such railways. No State has refused to give it the consent required by section 51 (xxxiv) of the Constitution. The Commonwealth has now built standard gauge railways to link Brisbane and Sydney, Melbourne and Sydney and Perth and ' Sydney. In 1949 the Chifley Labor Government passed an Act to link Adelaide by standard gauge with Brisbane and Sydney and the west. The Menzies, Holt and Gorton Governments have not implemented the Act. Adelaide is still out on a limb, still separated from its markets, east and west.

The Parliament has still not been told the arrangements, if any, which the Commonwealth has secured for the acquisition of the Silverton tramway pursuant to the 1949 legislation; it has not yet considered the legislation promised in the 1966 Budget for the up-grading of the Parkes to Broken Hill railway.

Transport is one of the keys to the kind of cities we are to have in the Australia of the future. Opening his Higgins campaign, the Prime Minister said on 13th February:

We have here developing in Australia, cities which are going to be at least twice as large as they are now, and cities in which the congestion of traffic is going to pose really vast economic problems in the future and the beginning of studies by the Commonwealth and State Governments which I would hope would take place, which I would seek to see did take place, into this matter and how it could be overcome, must take its place with development, alongside the development of areas outside the cities.

Yet again, the Governor-General's Speech is silent. Vague generalisations about the existence of the problems of urban development are not enough. Clearly the activity and the responsibilities of the Department of Housing should be greatly expanded to include urban affairs. The Commonwealth regulates almost all the funds for the acquisition of residential land and houses. It takes no responsibility for the cost of land or housing. The Commonwealth takes a great interest in the number of housing units constructed. It takes no responsibility for the quality or siting of houses. Directly or indirectly, the Commonwealth is in a position to regulate 90% of housing finance. This gives the Commonwealth a very great opportunity to enforce proper town planning principles. Where there is the opportunity, there is the responsibility.

In accepting increased responsibility for town planning, the Commonwealth should simultaneously pay more attention to the plight of local government authorities throughout Australia. We hear a great deal about the difficulties of the States, but in fact the indebtedness of local government and semi-governmental authorities has risen over the past IS years at a markedly higher rate than that of the States, while the Commonwealth indebtedness has fallen. In these circumstances, it is not at all surprising that essential urban services provided by local government or statutory authorities such as the Melbourne Board of Works are lagging. Between 1946 and 1966, the number of homes served by sewerage authorities fell in Melbourne from 95.3% to 76.8%, and in Perth from 76.4% to 43.4%. Over the same period, Sydney was able to lift its proportion of sewered homes by only 1.4% and Brisbane by only 0.3%. No wonder migrants are appalled. Forty-one years have gone by since the signing of the first Commonwealth-State Financial Agreement. The Commonwealth should convene a conference of interested parties with a view to amending the Agreement and clearing the way for tripartite financial agreements between the Commonwealth, the States and local government.

Overall, there must be a total reappraisal of the role of the Commonwealth and the States in planning and co-ordinating the conduct of governmental activities and the development of national resources by both Commonwealth and State governments. The present balance of finances and functions is unsatisfactory. If State governments are not to be forced to adopt regressive and unjust taxation measures, then CommonwealthState fiscal relations must be more flexible. In Australia the balance between Federal and State finances is weighted much more heavily in favour of the Federal Government than in the federal systems of the United States, Canada and West Germany. In Australia the balance between Federal and State functions is still weighted more heavily in favour of the States than in those other federal systems. The Australian Constitution provides two methods of redressing the balance of finances and functions. Under paragraph (xxxvii) of section 51, the Parliament or Parliaments of any State or States can refer functions to the Commonwealth Parliament. Under section 96, the Commonwealth Parliament may grant financial assistance to any State on such terms and conditions as the Commonwealth Parliament thinks fit. The important issue is not whether the Commonwealth or a State should discharge a particular governmental function, but that the governmental function should be well discharged.

Australians will continue to suffer in the quality, availability and equity of services which governments alone can provide, or which governments provide better than anybody else, so long as they allow themselves to be fobbed off with the ruling philosophy of the Liberal and Country parties that the basic matters with which I have dealt - education, health, housing, urban planning and transport - are solely or primarily matters for the States; they are no longer regarded as solely or primarily State or local matters in any country with which Australia compares herself. The Federal-State wrangle between the Premiers and the Treasurer is applauded by those who wish to minimise or discredit comparable government activity, intervention or initiative in Australia.

This Government is in the rat of inherited attitudes, inherited philosophies, inherited policies and inherited personnel. Its inability and refusal to take initiatives at home is paralleled by its inability and refusal to take initiatives abroad. In particular, in Vietnam it refuses to take any initiative whatsoever to change the course of this disastrous conflict. It denies that it has any influence. Even at this stage of the war, it has nothing to substitute for the policy enunciated 3 years ago by Sir Robert Menzies: 'Just keep banging away'. In the last debate on Vietnam in this House, on 26th October last, the Minister for External Affairs (Mr Hasluck) said:

I am able to report to the House on the improved military outlook in Vietnam ... a careful assessment of the facts leads to the clear conclusion that the military situation in South Vietnam is moving steadily in our favour . . . The proportion of population under enemy control steadily declines ... lt is worth bearing in mind that the full weight of the -allied military effort in Vietnam is only now beginning to be felt . . . The war is by no means over but it is not at a stalemate. The immense build-up in strength and the logistic preparation give today a capacity to increase pressure at al) points. In short, we are steadily winning the war.

Could anyone accepting the Minister's remarks last October have expected that a mere 4 months later the United States of America would be contemplating a 40% buildup upon the enormous buildup which, as the Minister correctly, said, had been brought to completion last year?

The events of the last few weeks prove once more what has been repeatedly made clear throughout the course of this war: Every escalation brings its counter escalation. The Vietcong are stronger now than when Australians first went to Vietnam. When the bombing of the North began in February 1965, there was one battalion of North Vietnamese regulars confirmed by American intelligence as fighting in South Vietnam. As America enlarged the number of her ground combat forces, the North Vietnamese increased their commitment.

The intensification of the bombing of North Vietnam has resulted in the development in North Vietnam, with increasing Russian assistance, of the most formidable air defence system yet used in war. lt has resulted in increased losses of American planes and pilots. As the Americans have introduced more and more fire power, so have the Vietcong and the North Vietnamese become better and better equipped. Five years ago, the Vietcong relied largely on obsolete homemade or captured weapons. Today they are equipped with the very latest and best Russian, Chinese, Czechoslovakkian and German weapons. The very steps which the allies have taken to end the war by military means and to win the war by military means have guaranteed its prolongation and its intensification. The escalation and intensification have happened, not despite the allies' strategy, but because of it. Prolongation is inherent and inevitable with the present method of conducting the war. The most significant result of the present mode of conducting the war is that its original objectives automatically are obscured even to the point of disappearing. Increasingly, it becomes a war not about the rights of the Vietnamese people but about the prestige of America, on the one hand, and Russia, on the other, in Asia. In these circumstances, the people of Vietnam increasingly are forgotten and the South Vietnamese Government itself falls increasingly into a subordinate, almost irrelevant, role.

If this process continues, all the declared objectives of the Manilla Conference - a viable South Vietnamese Government, free elections, withdrawal of all allied forces within 6 months of pacification - become absolutely meaningless and unattainable. Either the conduct of the war must bv redrawn or its objectives must be redefined. The current course of the war cannot achieve the present avowed objectives of the allies. The strategy is inherently destructive of the objectives. Perhaps the most revealing comment of the whole war was made by an American officer after the recapture of one of the thirty-six provincial centres overrun during the Tet offensive when he said: 'It was necessary to destroy the town in order to save it'. Is the epitaph of this war to be: It was necessary to destroy Vietnam in order to save Vietnam?

One of the declared objectives of the Manila Conference was that the war would be ended on the basis of a negotiated settlement as soon as North Vietnam would negotiate. It is time that the Australian Government - one of the signatories - insisted on a return to the objectives of the Manila Conference. The history of the attitude of both sides to the negotiations is a tragic one. Both sides have claimed that their objective is to negotiate at some time - but never now. A temporary advantage for one side has been used by both sides as a reason to postpone negotiations. A temporary setback has equally been used as a reason against negotiations. When one side appears to be making ground, the argument advanced is that if it holds out a little longer, it can win complete victory. Conversely, if it loses ground, the argument is that it cannot negotiate from a weakened position. Thus, the relatively promising appearance of the war early in 1967 and the darker appearance of the war in 1968 are used equally as arguments against the possibility and desirability of trying to negotiate now. This is a recipe for perpetual war.

It is in this context that the absolute necessity of ending the bombing of North Vietnam becomes apparent. The truth of the statements last year by the former United States Defence Secretary, Mr McNamara, has now become very clear. He said that the bombing had not substantially hampered the flow of men and materials to the South, and it would not bring Hanoi to the conference table. Cessation of the bombing is the most fruitful act of de-escalation now open to the a;lies. It could not guarantee that negotiations would begin, although Hanoi states that it could, the French Government asserts that it would, and U Thant believes that it would. In the perspective of world wide diplomacy, the continuation of the bombing represents a grave and continuing source of weakness in America's international stance. Stopping the bombing would overnight change this situation. It would change the nature and direction of the pressure being put upon the combatants by their respective allies and friends. While the bombing continues, North Vietnam is encouraged to resist; America is pressured to desist. If the bombing stopped, the pressure would be on North Vietnam to negotiate.

More than anything else, America's European allies and Asian friends object vo the bombing of North Vietnam. Russia, Hanoi's chief backer, will put no pressure on North Vietnam to negotiate while the bombing continues. Russia cannot afford to see America humiliated in this war; it is a blind mistake to believe that Russia wants to see an end to American influence and the American presence in South East Asia. To believe otherwise is to have total disregard for every significant development in the Communist world for the last decade. But equally, Russia cannot afford to allow North Vietnam to be defeated in this war. There is no contradiction in this Russian attitude. The reason is the same in both cases - her relations with China. But Russia will not, and cannot, put pressure on Hanoi to negotiate unless the bombing is stopped.

In the case of the nuclear nonproliferation treaty, the two great super-powers have clearly shown how well and how effectively they can co-operate when they believe their vital interests are involved. But there will be no co-operation to end the war in Vietnam until the bombing stops, and no government is so well placed to insist that it should be stopped as the Australian Government.

There is a curious contradiction in the Government's approach. In domestic matters, it exaggerates our current performances; in international matters, it downgrades our significance. The present Prime Minister always emphasises the limitations imposed by our own demands and desires. The former Prime Minister used to assert: We are not a major power'. The fact is that in our region we are a very significant nation indeed by any standard. Even in terms of population, we are in the middle range of the South East Asian nations. We are the most industrialised of these nations. We are the most highly skilled of these nations. Except possibly for Indonesia, we have the greatest known resources. We have by far the highest gross national product. Not the facts of geography alone compel us to play an increasing role in the affairs of this region; our strengths demand it.

The Prime Minister said on television on 21st January:

If all our resources were directed towards assistance in these countries, they would not make a significant amount of difference there.

This is a totally fallacious view. It underrates the value of what could be done; it under-rates the power of Australia to help do it. It is necessary to see both the need and our own resources in perspective. In the current financial year, the Commonwealth has granted to Western Australia an amount exceeding 85% of all the international aid received by Indonesia from the eight donor countries last year. Is it suggested that this aid does not make a 'significant amount of difference'? But, of course, we are not acting alone. The Pacific area is bordered by the richest power in the world, the United States, the third richest, Japan, and two of the leading developed nations, Canada and Australia. With each of those three, we have special relationships, and Australia, Japan and Canada each stand in special relationship to the United States. These are the basic fact's to be taken into account when assessing Australia's capacities for influence in this region, and her responsibility to use her influence in this region.

I have spoken of the need to establish conditions whereby Russia and America can co-operate to end the war in Vietnam. If it is true that we would not be in Vietnam except for the United States, it is also true that the United States would not be in Vietnam except that Vietnam is adjacent to China. In the end analysis, this war is one of the results of a mutually mindless animosity with which these two nations have viewed each other through the lens of hatred and ignorance for nearly two decades. Our responsibility is to work to create the conditions in which the two systems can compete rather than conflict. In such a competition, I have no doubt whatsoever that the United States and the best she represents is truly invincible. In creating the conditions for competition, and in the competition itself, Australia has a major role to play in building the economies, the societies and the defences of the nations of our region. Japan and Canada are ready to co-operate in this task.

We will fulfil that role better if we develop and use our resources here better. The Prime Minister seems to see these as mutually exclusive. In fact, they are complementary. We shall adequately achieve neither if the negative, unimaginative, inhibited and half-hearted policies of this

Government, as expressed in the GovernorGeneral's Speech, are continued or condoned.

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