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Wednesday, 28 October 1970

Dr J F Cairns (LALOR, VICTORIA) - The Minister for Trade and industry (Mr McEwen) is again the harbinger of bad news. Recently he told us that what had happened to the price for wool was an international disaster. He has now informed the House that we face a national disaster in respect of a number of other products. The Minister mentioned beef, veal, mutton, lamb, cereals, milk powders, condensed milk and cream. The situation must be causing a great deal of disquiet not only to the Australian Country Party, which is very fully represented in the House at the moment, but also to the Liberal Party, which is hardly represented at all in this place at the moment. The difference between the number of seats occupied at the moment by members of the Country Party and those occupied by members of the Liberal Party is nothing less than astonishing. About 90 per cent of Country Party members are in their seats, like crows in the wind, but the Liberal is hardly represented at all.

The Minister for Trade and Industry has supervised the drift of Australia into this situation. The seriousness of what was happening with our trade with the United Kingdom and Europe first became clear in 1963. I well remember the initial debate and the role taken in that debate by the present Treasurer (Mr Bury). But up to now the Minister for Trade and Industry and the Government with which he is associated have done nothing whatever to prepare Australia for the situation which he has just announced. We are producing more of every commodity. We are now producing more than when we first recognised that we faced this crisis. The right honourable gentleman has refused to take any initiative to protect the Australian farmers from walking into the trap that

Britain's entry into the European Common Market has represented for six or seven years. The Minister has done nothing to prevent the Australian farmer from walking headlong into the trap of producing more although he well knew that the markets for that increased production would not be available. The Minister wants to get it both ways and has hopes that have no foundation in fact or in the future.

The first thing which is not apparent from the right honourable gentleman's statement is whether Britain is breaching our trade agreement with that country. He has told us that the trade agreement is terminable by 6 months notice by either side. I would like to know whether we have been given notice. The right honourable gentleman has not told us.

Mr McEwen - No, we have not.

Dr J F Cairns (LALOR, VICTORIA) - In that case the British cannot bring their system into operation as the Minister has said they intend to do. The right honourable gentleman says at page 4 of his statement:

The British Government will introduce the new measures when its discussions with overseas suppliers have been completed.

The right honourable gentleman adds: la any case, the objective is to bring them into Operation at least by 1st April 1971.

That is less than 6 months from now. So, the British Government is to break the trade agreement with Australia if what the right honourable gentleman says is true, Slid noi a word of protest is heard about ft. What is the use of a trade agreement with a country like Great Britain that is supposed to have been so favourable to Australia if that country is to be allowed to get away with breaking that trade agreement without one word of protest by the responsible Australian Minister.

We turn to the important question of what can be done. The Minister is sending the Deputy Secretary of the Department of Trade and Industry to London. What an utter and complete waste of time. If what the right honourable gentleman says on the second page of his statement is true, he must know that it is a waste of time sending the Deputy Secretary of his Department to London. The Minister states:

It is clear to me that this is a deliberate move to adapt their arrangements-

That is, British arrangements: . . in view of" their prospective membership of the European Economic Community when they would be adopting the Common Agricultural Policy of the EEC.

Of course it is a complete waste of time sending the Deputy Secretary of the Department of Trade and Industry to London for talks. This is the best that the right honourable gentleman can do in the circumstances.

I think that it is appropriate to have a look at what has been happening to Australia's markets because this situation that we are Witnessing now - the imposition of levies for the first time in history upon the export of these basic commodities to Britain - lead the right honourable gentleman to say:

.   . for the first time the Australian products concerned will be faced with real barriers to trade in this traditional market outlet.

It is time that we had a look at the market outlets to see what has been happening to them. The right honourable gentleman may be aware of what is happening to our market outlets but he has never informed this House about what is happening to them. He has never invited the House to have a discussion about the trends. He has never raised any of the questions about why the trends are changing and how perhaps they can be made more favourable where they are changing favourably and less so in other places.

There is a decline in our trade particularly with the United Kingdom and with most of the countries in north eastern Europe, in particular, Germany, the Netherlands, Sweden, Switzerland and Norway but, I emphasise, not with France or Italy. Over the last 10 years our exports to France have risen from about $50m to about SI 20m. Our exports to Italy have risen from $17m to $70m. Our imports from France have risen from $47m to SI 06m. Our imports from Italy have increased from $16m to $78m. Why is it that our trade balance has been much more favourable with France and Italy and less favourable with the other countries? The right honourable gentleman has not asked us in this House to analyse this trade situation and has not suggested what can be the reasons for this situation.

But with our more traditional markets, our exports have decreased. Our exports to the United Kingdom reached their highest figure of $516m in 1964-65 but have declined since then. We have a fantastically high level of goods imported from the United Kingdom. The level of imports 10 years ago was $340m. This has risen to $845m now. Our imports from the United Kingdom are nearly twice the value of the goods that we sell to that market. Is there not some way in which the right honourable gentleman can bargain here? We are taking from the United Kingdom goods worth over $800m. It is taking from us goods worth about $400m. Is not that $800m of goods worth something with which we can bargain in this situation? Will the Deputy Secretary of the Department of Trade be in a position to be able to bargain?

I think that this is the kind of situation in which the right honourable gentleman himself ought to go to Britain. He ought to be telling Britain that she cannot expect to send forever over $800m in goods to Australia - this figure has been rising constantly over the last 10 years - as though nothing had ever happened. He ought to be there telling Britain that she cannot : expect to have this kind of market in Australia when our best customer, Japan, bought $1,000 in goods from us last year while we were able to buy from Japan goods worth over $400m only. Is it not time that this situation was put into some context? If Japan is to buy from us goods worth $ 1,000m, we will have to face the situation. I should imagine, before long that we will be buying more from Japan and we will be telling Britain that we will be buying less from her.

Mr Robinson - You opposed the Japanese arrangement when it first started.

Dr J F Cairns (LALOR, VICTORIA) - All right. Well, let mc talk about the future.

Mr Anthony - What an easy way out.

Dr J F Cairns (LALOR, VICTORIA) - There is no easy way out of it. I would suggest to the honourable gentleman who is interjecting that if he would have a little more regard to the mistakes which have been made on his side instead of living in the shadow of them continuously - and the shadow is getting older every day - he would be contributing more to the debate in this House.

In addition to the position that the United Kingdom is in, there is the factor also of our changing markets. Why is it that we have had such a favourable situation with China? Our sales to China 10 years ago were worth $40m. Today our sates to China are over $130m each year. Undoubtedly the figure would be considerably more if it was not for the political prejudice which exists. Our exports to Hong Kong have risen from S20m to $85m in that decade. What is the explanation for this? Could we not make more of it? Our exports to New Zealand in that 1 0-year period have risen from S60m to $199m. In that same period our exports to the Philippines have risen from S12m to $55m. Singapore now imports $99m of our goods compared with {12m a decade ago. Thailand's imports of Australian goods have risen in that period from $6m to $29m. Our exports to Canada have risen from $17m to $144m in that decade while in the same period our exports to Malaysia have risen from $12m to $68 m. Also in that decade Poland's imports from Australia have increased from $9m to $20in while Australian goods exported to Yugoslavia have risen from $6m to SI 7m in that decade. These are the countries to which we will have to be selling in the future. These are the countries to which we will need to look for a continuation of the rise in our exports. I do not believe that the Government is doing nearly enough work in those areas.

Finally, even in the face of the market prospects that we have, there will need to be a restructuring of Australian primary industry. It is not much good continuing to expect that we can leave it broadly to a laissez-faire market situation and continue to subsidise primary industry. It is time that this nation decided that we are to have some planning in our primary industrial situation. It is time that we had a department, such as the eDpartment of Trade and Industry, working out future demand for our primary production as the situation will allow us to do so that we will be able to have some anticipation of what the future will hold. Had the Minister done this 6 years or 7 years ago, he must have been able to tell producers in a number of these fields that are so disadvantaged now something about what was going to happen to them and something about what was going to happen to the demand for their products. He would not have had to allow them to walk headlong into this trap that has been laid open for them.

So, in brief, Mr Deputy Speaker, J would say that the situation that we face now has been clear to us for 6 years or 7 years and that the Government has done nothing to prepare for the development that has been announced in such black terms by the Minister this afternoon. It has allowed us to drift into this situation. It has allowed all its supporters in the country to walk into the trap that the declining and disappearing market in the United Kingdom in fact represents for them. Secondly, I would say that the Government has not placed Australia's interests in England in as strong a position as it could place them. Australia continues to buy goods worth over $800m per annum from the United Kingdom at the same time as our sales to that country have been declining continuously. Obviously the Government has not done enough to press Australia's interests in that situation. Thirdly, we must expect the Government to explore more thoroughly the changing nature of our markets and to be prepared to tell the nation and the Parliament more about the reasons why markets in different areas of the world are changing favourably and why they are changing unfavourably in other parts of the world. To mention a few of those countries I have listed, Japan, the United Slates of America, China, Hong Kong, the Philippines, Singapore, Thailand, Canada, Malaysia, Poland and Yugoslavia all have certain discernible characteristics and are all open to further expansion of markets if we are realistic about this.

Mr McEwen - Has the honourable member read the success story?

Dr J F Cairns (LALOR, VICTORIA) - I am arguing that it could be much more of a success story if we broke away from the old traditional trading links that have been delaying our development. I am suggesting that it could be more of a success story if there were less reactionary politics in our attitude to these new markets. Finally, I am suggesting that unless we have some planned anticipation of expected demand for Australian primary output in the next 5 years and begin to gear our production to that we will have nothing but an enormous burden falling on the Australian taxpayer, whether it be in assisting wool or the other products involved. Laissez-faire plus subsidies is no substitute for a policy.

Debate (on motion by Mr Giles) adjourned.

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