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Thursday, 7 October 1971
Page: 2092

Mr CONNOR (Cunningham) - When Pitt the Younger heard that war was breaking out with France he said: You can roll up the map of Europe and put it away for the next 10 years.' Similar remarks might be made with relation to the future functions of the Tariff Board, because whatever the validity of the arguments that have been advanced here tonight we face an economic watershed in world affairs. The hard and real truth is that Bretton Woods and all that it stands for is in the discard and we are on the verge of a world trade war. Let there be no mistake about that, because that is the inner and the real meaning of Nixonomics That being so, a lot that has been said here tonight might be academically correct but in terms of hard realism it is very far from the truth.

Today the world is breaking up into protective blocs. Britain, which has been the largest open market in the world for primary produce and foodstuffs is going into the largest of those economic protective blocs. Let there be no mistake about it. Similarly, the United States of America, which still packs more economic clout than the rest of the world together in terms of trade, has laid it on the line as to what the future will be. There will be another protective bloc that will constitute the continents of North and South America. There is another economic bloc, too, that must be reckoned with and that is the bloc of the Comintern countries. The gross national product of the United States is $1,050 billion a year, but the whole of world trade is $280 billion a year. The United States depends on world trade for only a matter of 4i per cent of its gross national product. It is still in a position to lay it on the line as to the terms on which world trade will be dictated.

The United States can see the trends. It can also see that Japan and Australia are on the outer. Let there be no exercise in self deception with regard to our potential market in Asia, because Australia, with 12i million people, has a gross national product equal to that of Indonesia, the Philippines, North and South Vietnam when they are at peace, Camobidia and Thai land. We can throw in Burma, too. As for the chimera of China, with anything between 700 million and 800 million people, its contribution to world trade is $4.2 billion which is a little more than that of Australia at $4.1 billion. The position is - and it ought to be stated - that Australia is dependent on an inflow of anything between $800m and $ 1,000m a year to rectify its balance of payments on current account. Consistently for the last 15 years the terms of trade have flowed against Australia in respect of its exports of primary produce and that is the dilemma that this Government faces. We need to be hard fisted and we need to be hard hearted because today in this world we are out on our own. It will be necessary for us wherever we can to make a dollar by trade or by protection. We will be in a stark hard and vicious trade war, and that is the inner meaning of Nixonomics.

When all the manipulations are finished in relation to foreign exchange parties this will be the position: The surcharge of 10 per cent on American imports will remain and even greater than that is the other concession that is given internally in the United States, a matter of another 10 per cent by way of tax concessions for the purchase of American manufactured goods such as heavy machinery, and in addition there will be the measure of deflation. In other words the United States in terms of world trade will get in out of the wet and the rest of the world can fend for itself.

In relation to our own immediate prospects, we depend upon the Pacific triangle of trade. We have a very favourable balance with Japan. In turn Japan has an equally favourable balance with the United States and the US has an extremely favourable balance with us. As a broad illustration the 3 -way trade balances itself but this will not be the position in the future. Our future will depend on just what Japan decides to do because Japan has to break in somewhere and it will not be in the US. What are to be our remedies? Firstly, a good hard look at ourselves and where we can trade. There will be very few places indeed. The economy of Australia will be distorted in the future if the Government's present relations, and its dependence in particular for political survival, depends upon the economic vagaries and whims of the Australian Country Party. That will be the position.

Mr Birrell - What a choice.

Mr CONNOR - Yes. What are we to do? Firstly, we need to name our contracts in respect of exports in Australian dollars. We need to repatriate our foreign exchange reserves right into Australia. We can trust no-one with the future of world trade. In addition to that we have to prune our balance of payments on current account. Let us have a good hard look at the $792m that we are paying out for freight and transport. The question is whether we should not have our own national shipping line. The next thing is this: Are we getting the proper price for our mineral exports? We are not. Let me take a case concerning my own electorate where through crass stupidity the coal producers cut one another's throats when the Japanese came and as a consequence we are getting $12.80 per ton for our coal while similar quality coal is being purchased by Japan for $20 from the United States.

The other day in the Ministry of International Trade and Industry statement the squeeze play started. It would not be a very bad idea if Australia had its own MITI. We could have a Ministry not of one-way trade, because that is how the Japanese one is stigmatised, but when we come into the picture we should come in with one hit. The Japanese Ministry finds out the collective requirements of the various industries. Having ascertained them it does the negotiating. We can do the same and we will need to because we have no alternative. In addition to that we need to end the restrictive franchises that have been imposed upon our exports. We have imported a good deal of technology and we have paid a high price. Despite my probing over 7 years the Government has never conducted a full inquiry into the 1,100 agreements which exist and in each case Australia goes into the export market hobbled because it is limited as to where it can sell its exports and on what terms it can sell them. Let us get to an end to that. In addition there is the little matter of taxation fiddles and I do not think there is any need for me to instance the long protracted litigation between the Commissioner for Taxation and the Shell company. Even after all that it ended in a compromise or in a draw. We are not getting paid a proper price for what we are capable of producing and what the world market will accept. For the future we will need to be hard fisted, hard hearted and think in terms of ourselves because we have gone out of the soaring sixties and we are now into the sombre seventies. Let every nation look after itself and the devil will take the hindmost.

Progress reported.

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