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Wednesday, 30 August 1972
Page: 902

Mr JAMES (Hunter) - 1 am privileged to participate in this Budget debate. Before entering into a discussion of what I consider to be the most important aspects of this Budget I want to make brief reference to some of the comments made by members of the Government parties who have spoken in this debate in the last day or so. The honourable member for Maranoa (Mr Corbett), whose personal integrity is highly regarded by honourable members on this side of the House, spoke of wrangling in the Labor Party because of a statement made by the Leader of the Opposition (Mr Whitlam) on the upward revaluation of the Australian dollar. I understand, though 1 have not given a good deal of thought to it, that this was a personal opinion expressed by the Leader of the Opposition when questioned about revaluation. The Leader of the Opposition readily succumbs to majority decisions in the party room and practises true democracy in that field. The honourable member for Maranoa makes no reference to the fighting and wrangling within the ranks of the Liberal-Country Party coalition about the intended development of a rural bank. There is bitter and strong opposition in the Liberal ranks to the Country Party's domination of decision making in this particular field. I challenge any member of the Government to deny that statement.

I fear that the honourable member for Maranoa has been participating in too many witchety grub eating contests and viewing too many lizard races in his electorate in the outback of western Queensland. He should get down to the realities of what is going on. Yesterday the honourable member for Chisholm (Mr Staley) made one of the frankest confessions that has been made in this Parliament for some time. The honourable member who succeeded that distinguished Australian, the late Sir Wilfrid Kent Hughes, when speaking in the Budget debate used these words which are attributed to him at page 804 of Hansard:

Without doubt, it will get the country going again. There are many signs--

Mr Giles - Hear, hear.

Mr JAMES - The honourable member for Angas says 'hear, hear'. The passage in Hansard goes on: that confidence is returning to the Australian economy. There have been many recent economic indicators of the fact that confidence is returning to the economy.

Who created this chaotic state of affairs? The Government which has been in power for almost 23 years has created it. The Government frankly admits that public confidence in it has slumped to an all-time low. What a confession to make. I must congratulate the honourable member for Chisholm on his frankness.

Mr Giles - Hear, hear.

Mr JAMES - Obviously the truth slipped out. The honourable member for Angas again says 'hear, hear'. He has been a member of this Parliament for a lot longer than has the honourable member for Chisholm, and he has participated in bungling the affairs of the country, a situation which the honourable member for Chisholm so readily admitted yesterday. The honourable member for Maranoa has suggested that the Leader of the Opposition should resign. What a sigh of relief would go up from members of the Government parties if the Leader of the Opposition did resign. They would be able to sleep peacefully in their beds, because the first time the Leader of the Opposition led the Labor Party to the electorate he captured 17 or 18 seats from the ToryCountry Party Government. That is why they want him to resign. They know the writing is on the wall. They know that they are about to incur political annihilation at the hands of the electorate. The Budget under debate is the effort of a demoralised, dying Government clutching at straws like a drowning man does. Honourable members opposite are trying to save the old coalition boat. The old Liberal-Country Party ship is sinking. The Treasurer (Mr Snedden) and the Prime Minister (Mr McMahon) are running around with inferior putty trying to plug the holes. The ship is waterlogged. She is sinking. She has no buoyancy tanks. I tell honourable members that the old mixed marriage is breaking up as mixed marriages invariably do.

The Government is handing out a few crumbs to pensioners and some small tax concessions in the hope that it may be reprieved by the people of Australia at the next Federal election from the political scaffold. Through bungling, internal fighting and sadistic jealousy the present Government is a government with a cabinet in exile. Will the measures proposed by this Government remove the economic ills of the nation which have been suffered for so long? We of the Opposition say affirmatively no. Unemployment continues to grow. The unemployment figures in Newcastle and the Hunter electorate have reached saturation point. The position of the coal industry in Newcastle and the. Hunter electorate is more acute than it has been for many years. The few remaining coal mines operating are threatened with closure. Homes, public property like hospitals and schools, and the ruination of coal seams are threatened. The future education of children - which touches me more than anything - is in jeopardy. I consider that this is the most important factor of all. The Government has failed repeatedly to implement a national fuel policy to control the orderly marketing of our export coal. The Government by its attitude has allowed international consortiums like Utah Development Co. and the Mitsubishi interests - who have formed a multinational consortium known as Central Queensland Coal Associates - to dominate the export coal industry of this nation. The Government's action is virtually bringing about the closure of townships in coal mining areas. This has caused great consternation to my colleagues from the South Coast area of New South Wales such as the honourable member for Hughes (Mr Les Johnson) who has forcefully spoken on this matter during special debates and the honourable member for Cunningham (Mr Connor), because the matters to which T have referred have affected their areas, their townships and their people.

Open cut coal is invariably close to the surface and can be mined more cheaply than underground coal. There is a growing imbalance between open cut coal mining and underground mining, particularly in Queensland where the Queensland CountryLiberal Party Government allows international consortiums to go on their happy way unmolested and ungoverned. In 1970-71 underground coal mined in Queensland amounted to 3,449,000 tons. Open cut coal mined was almost double that figure at 7,498,000 tons. The total amount mined was 10,974,000 tons. In New South Wales where the Joint Coal Board has some jurisdiction over the production of coal under the Joint Coal Board legislation operated by the Commonwealth and New South Wales governments there is an entirely different set of figures. In New South Wales for the year 1970-71 underground coal produced amounted to 32,608,000 tons and open cut coal produced amounted to 2,547,000 tons, making a total of 35,155,000 tons.

In Queensland it is expected that in the next 2 years the ratio of coal from underground mines will be only 20 per cent of total production. Eighty per cent will come from open cut mines. Does this not mean that international consortiums are going to rip - if I may use the vernacular - the very guts out of the coal industry, getting cheap coal at a quick profit for overseas investors. The savagery of open cut coal mining because it temporarily offers big profits to international consortiums should be repelled and controlled by the implementation of a national fuel policy. For many years the Australian Labor Party has been protesting to the Government about the uncontrolled flow of foreign investment into this country. I hope in the next few minutes to reveal some astounding figures with respect to overseas investors, particularly the investments of the United States of America in various countries of the world. I remember that in 1964 the former honourable member for Scullin, Mr Ted Peters, who at that time had written a booklet on this subject, protested to the Commonwealth Government at the domination of Australian industries and our economy by overseas investors. After years of protesting by the Australian Labor Party the Government now is showing some interest in this matter. The former Prime Minister, the right honourable member for Higgins, (Mr Gorton) could see the dangers that were being exemplified by the Australian Labor Party and he advocated that guidelines should be adopted with respect to foreign investment. He obstructed the takeover of the Mutual Life and Citizens Insurance Co. by overseas investors. Of course, we know that he was criticised by the Liberal hawks who guide and manage the Liberal Party machine in this country. They demand that he be replaced because he was interfering with foreign investors.

I wish to spell out to the Parliament the views of 2 Harvard economists on United States investment overseas. They are Thomas Weisskoff and Frank Ackerman who computed figures from United States Government data to show that the rate of profit on private foreign investment by American corporations has consistently exceeded their return on domestically invested capital. These economists state that from 1950 through to 1969, after tax profits on domestic capital fluctuated between 6.3 per cent in 1961 and 9 per cent in 1951, with the exception of the 11.1 per cent rate in 1950. The rate of after tax profits on foreign investment reached a peak of 17.3 per cent in 1951 and averaged 11 per cent to 12 per cent through the 1960s, which was nearly twice the level of domestic profitability.

On top of that, Weisskoff and Ackerman point out that the share of total corporate profits derived from foreign operations has been climbing steadily. In the early 1950s, foreign earnings constituted between 7 per cent and 11 per cent of all corporate profits. By the late 1960s, 14 per cent to 18 per cent of all corporate profits were coming from overseas operations. Can we not truly say that Australia is being used in the same way as other countries are being used? American foreign capital is dominating the economies of these countries and they are being used virtually as milking cows for the United States investors on Wall Street. Moreover, there are 2 sources of understatement in the statistics of these 2 forthright economics. I refer to the statistics of profitability on direct investments. Firstly, profits made by overseas affiliates, these economists say, are affected by deductions for exploration and depletion costs, especially in the oil industry. This is something of which most Australians are aware. These profits are affected also by artifically high prices paid for inputs purchased from parent companies in the United States. The 2 Harvard economists mention also that there are strong indications that for the 200 or so corporations which increasingly determine the state of health of the economy, foreign profits are decidedly more important than those reflected in the statistical averages, impressive though they are in their own right.

For example, in 1970 the International Business Machines company - the organisation which is spreading its computers throughout the world, particularly to Australia where it has a firm footing - earned over half of its net profits from external operations. During 1970, the Chairman of IBM, Thomas J. Watson, stated that more of IBM's profit was derived outside than inside the United States, and that this was a most exciting turning point in the history of IBM. For both the National Cash Register organisation and the Gillette company, 51 per cent of total profits were generated abroad. The Dow chemicals organisation, a supplier for the germicidal and herbicidal war in Vietnam, to its everlasting disgrace, made 44 per cent of its profits overseas; Goodyear 43 per cent; Revlon, a company well known to the honourable member for Hughes (Mr Les Johnson), because it has earmaked certain land on the south coast of New South Wales, 40 per cent; Johnson and Johnson 36 per cent; Otis Elevator 35 per cent; Union Carbide 29 per cent; General Electric 21 per cent; and General Motors, which has a big share of the Australian motor industry, 19 per cent. Other companies with high foreign profit ratios were Armco Steel; Alcoa, which is well known in Australia; Bucyrus-Erie, Eaton Yale and Towne: Colgate Palmolive, the old 'PickaBox' show; Proctor and Gamble; Polaroid; International Harvester; Caterpillar Tractor; Minnesota Mining and Manufacturing; Uniroyal; National Biscuit; Eastman Kodak; Chrysler; Ford; Pfizer; Singer; Woolworths; and all the international petrol companies.

Recently the international oil companies almost brought this nation to a stop sooner than see the workers who helped them to make their lucrative profits receive a just and fair wage. Government supporters blamed that situation on the unions, but the unionists were fighting for justice and a respectable wage to pay off expensive homes and land, to rear and educate their children and to ensure them a decent footing in their own country. I have not mentioned the celebrated ITT conglomerate - International Telephone and Telegraph Corporation - the extensive overseas operations of which have involved it waist deep in foreign politics from Chile to the Common Market countries. Former Belgian Prime Minister Paul Spaak is one of the fathers of ITT and a board member of ITT in the United States of America.

For the major banks, too, the proportion of deposits, loans and earnings acquired through foreign branches is large and is increasing. Among the few large banks with substantial earnings gains in 1971, according to the magazine 'American Banker', higher profits were derived largely from increases in their international earnings, reflecting the large rise in total assets and liabilities of United States branches in foreign countries. They rose from $47 billion at the start of 1971 to almost $57 billion at the end of September 1971. This is United States international imperialism to which the late Lord Russell of Britain referred not long before he died by naming it as the greatest threat to world peace amongst all countries in the world.

Richard Wolff, an economist of Columbia University, New York, has found that by late 1970 from 26 per cent to 46 per cent of all deposits of the 8 biggest New York banks was foreign. Chase Manhattan, David Rockefeller Foundation, Standard Oil and the First National City Bank, the leading international banks, had from 40 per cent to 46 per cent of their total deposits overseas. The Government is at the end of its tether. The people of Australia are demanding that a true Australian government take over the Treasury bench of this Parliament to legislate in the interests of all Australians. I believe: It's time.

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