R Is
CHAMBER OF MANUJFACTURhES
A7-NNUAL DINNER, SYDNEY, N. S. W. L I BR A9
AUGUST, 1967
Main points from speech made by
the Prime Minister, Mr. HaroldiTlolt
Developments since , iorld_'\' ar II
Since the second world war thereo has been a
tremendous surge of development which has completely
transformed the Australian economy.
iiany of you will have little difficulty recalling
the days when it was said " Australia rides on the sheep's
back". There was some important mining activity and an iron
and steel industry. But in the main, manufacturing was still
confined to food processing plus some embryo industries
struggling to penetrate the local market.
There was a time when the tag " imported" appeared
to mean " superior". The pos,_ ibility of exporting manufactured
goods would have been regarded as rather fanciful in those
days. In the two decades since, Australian primary
industry has progressed to a point where it is one of the
most advanced and diversified in the world; it is highly
productive with perhaps the only obvious limit to its
potential being the barriers it meets in marketing its
products overseas. This development has stemm--ed largely from the
application of capital and improved technology a
development in which secondary industry has had a large
and important role to play. Improved machines and
fertilisers combined with the skills of our farmers have
combined to make these adva-nces in primary industry possible.
The massive mineral discoveries of recent yeors
not only offer gi eat new sources of export earnings but they
will provide new sources of power and the prospects for the
development of a great new range of processing and manufacturing
industries. They are also calling for many products of
secondary industry, for mining on the scale envisaged in this
country today is a highly inechanised, capital intensive
operation. Once we got settled down after the immediate
post-war period, Australia's manufacturing industry made
rapid progress. For some, old traditions die hard, but I
think it is fair to say that in this period the old tag
" imported is better" was laid to rest. Dfanufacturing
quietly and efficiently went about the business of supplying
a wide range of domestic needs, and a whole new range of
consumer durable industries appeared to meet the demands
of rapidly improving standards of living which put
refrigerators, washing machines and other appliances into
almost every home and added an ever-growin' stream of
motor cars to the roads.
The Lord lyayor and Yr. Askin might, of course,
have mixed feelings about some of the blessings engendered
by the latter item. I recall here Henry Kaiser's aphorism
" problems are opportunities in work clothes' ( quoted at
the Queensland alumina opening early this month). And all
these things demanded great quantities of the products of
the more basic secondary industries such as iron and steel
and these in turn responded with a tremendous development
and expansion which can be seen so dramatically in the area
from Newcastle to : i', ollongong and at Whyalla.
Australia now has a very wide range of manufacturing
industry with over 60,000 factories employing about 1.3 million
people. This is some 28% of the work force, a proportion which
is higher than that engaged in manufacturing in Canada, France
and Japan and little lower than that in what are truly the
great industrialised nations of the world. For instance, in
the United 63tates the proportion of the work force employed
in manufacturing is 29%.
Dut these bare statistics, important though. they
may be as indicators of industrial progress, do not reflect
the impact that manufacturing industry has had on the lives
and well-being of millions of Australians.
If I may again revert to the immediate post-war
period in the first post-war census, that of 1947 the
Australian population was about 7.6 million, today it stands
at 11.7 million. In those days the wrork force numbered
3.2 million, today it is about 4.7 maillion. But this
accumulation of people and of workers did not come, as it
were, only from our own resources, many came to us from
overseas. Our continuing immigration policy has since
become an absolutely basic factor in the economic life of
Australia. But these new settlers needed jobs and they -wanted
homes and all the things that go with them. IW. anufacturing
has delivered on both sides; it has provided the goods and
the jobs. Some 26% of the work force currently employed in
manufacturing industry are migrants. In the period ' 1947-61
the male wiork,, force employed in manufacturing rose by
270,000 of whom 222,000 or 82% were people who arrived in
Australia since 1947.
Pe rcentage o Jirants of
otl Emplonmnt-in rcent age
Car and ship-building industry 28
Petroleum and coal products 36
Extracting, refining and founding
of metals 33
There is no overall figure for th-e iron and steel
industry, but the employment of migrants is relatively highin
some cases as much as
In the vollongong-Port T,' embla area where there
has been so much manufacturing development, 28,/ of the
popjulation is overseas-born. For these people the development
of industry in Australia is not just a statistic, it is a
vital part of the way of life they have come to emnbrace in
this country. I talked earlier about the importance in this
country of the production of consumer goods and particularly
consumer durables. But we must remember that Australian
industry is not merely concerned with producing washing
machines and T. V. sets, important as these things are in
our standard of living. Australian manufacturing industry
is much more varied and sophisticated than many people
realise.
vle produce items many people associate only with
the most highly developed industrial economies. For example,
radio telephone equipment and transistorised airways beacons
are made here. 4e have developed some unique and complex systems
like the Jindivik pilotless jet, the Ikara anti-submarine
missile and the 1! alkara anti-tank guided weapon, products
which have been produced not only for our own use but for
export to overseas markets including the United Kingdom and
the United States.
In one of the most advanced fields of technology
space exploration we are making a contribution. At ioomera
Australia has one of the largest land rocket ranges in the
world 1,200 miles long over practically uninhabited country.
Currently we are engaged, in conjunction with the United States
and B~ ritain, in investigating problems of re-entry from heights
exceeding 500 miles.
New Opportunities for Trade
If I may re-enter the early post-war period I would
like to say a few words about exports of manufactured goods.
In this field also there has been notable growth flowing from
manufacturing industry. I mentioned a few moments ago some
items which we export to the United States and Britain but
these were only a few of many items which we now manufacture
and export to countries from which wie once imported the same
types of goods. But we cannot rest upon our laurels, we must
continually be on the lookout for new markets for the products
of all types of industry.
4e are all aware of the remarkable development of
our trade with Japan. For the three years prior to the signing
of the Trade Agreement with Japan our exports to Japan averaged
,134m. In 1966-67 we exported goods valued at .588m. to Japan,
an increase of 339% during the period of the , gAr eement.
But the importance and attraction of the Japanese
market should not be allowed to lead us into neglecting other
areas of Asia where trade prospects are bright.
Our exports to other Asian countries last financial
year exceeded .416m. or 13.7%-0 of our reported exports even
though our share of the total market available in Asia was
small. In Malaysia, for instance, wie supplied about of
the market. It is true, of course, that much of the available
market is virtually closed to us because of the nature of the
products required or other economic factors, but there is a
vast, largely untapped market for Australian products in the
Asian area. As economic development in Asia proceeds opportunities
will increasingly arise for alert Australian exporters. Taiwan
is planning an iron and steel industry and Australia will have
an opportunity to supply iron ore. In South Korea, the
extraordinary economic growth there has created a potentially
large market for Australian foodstuffs and materials, machines
and machinery. In some countries such as Vietnam, Cambodia and Laos
trading opportunities may presently seem to be small but if
there can be stable government and peace in the region these
nations will11 progress to a stage wNh: re improved trading
possibilities will arise.
Zconomic rehabilitation in Indonesia would open up
another dimension of trading opportunities.
Tariff Policy lvuch has been written lately about tariffs and
tariff policy and some people have been demanding that the
Government should state just what is its tariff policy.
Some years ago Sir Robert Dlenzies, in his 1962
inaugural John Storey memorial lecture excellently summarised
the Government's position. I would like to quote to you the
relevant parts of his statement on that occasion:-
" The Tariff Board is a purely statutory body, created
by the discretion of P1" arliament and, indeed, subject to
the control of Parliament. In this sense, it is an
instrument of policy and in no sense its master.
It has, however, been recognised by successive governments
that, though what I have said is constitutionally true,
it is important that, for international as well as
domestic purposes, the Tariff Board should possess a
high measure of independence, that the integrity of
its advice should be preserved, and that it should not
be subject to any form of" day-to-day political
instruction.
I accept and maintain these propositions. Yet the Tariff
Board, our principal adviser on import duties, cannot
sensibly be expected to operate in a completely detached
intellectual vacuum. It must have in its mind some
standards or policies by which to teat the cases
presented to it.
For a long time it has acted on the principle that it
should recommend tariff protection only to " economic and
efficient industries'. But that principle was, and is,
itself an expression of Government policy. Of late,
indications have been given on behalf of my own. Government
that the princi-,) e needs extension, and that the Tariff
Board should have in its mind thne national economic policy,
meaning by that the national economic objectivcs, as a
whole There are certain features of national economic policy,
which I do not regard as the subject of party controversy,
which cannot be ignored by any statutory body if the
nation is to achieve a dynamic progress, growing in
resources, population, employment, industry, and
international solvency. For a Tariff Board to ignore
their existence would be to detach its work from the
great stream of Australian development. ' This, I am sure,
it would not wish to do."
The tariff policy of the Government has been clearly
stated for a long time, and I reaffirm it to be that reasonable
and adequate protection will be given to economic and efficient
industry. The Government looks to the Tariff Board for advice
on whether an industry is economic and efficient. On a few
occasions they have been comparatively few the Governmen~ t
has seen fit to say in the terms of reference to the Tariff
Board that its policy is to give assistance to a particular
industry, for example, copper production in remote areas,
crude oil production and production of penicillin. On these
occasions the 3oard is asked to recommend in its published
report its view of the best way to carry out the policy.
But outside of these, tariff protection has been
given to industry only following a finding by the Tariff Board
that the industry is economic and e ffici ent.
The policy does not include, as some peopl? pretend
it does, that every industry that seeks protection shall be
given protection. Industry is given protection if it measures
up as being economic and efficient.
There has been some talk of there being a " high
protection" policy. In truth, our overall level of tariffs
is moderate, and we do not use the quotas and other
administrative devices that so many other countries turn to.
And an important point is that tariff prot~ ction is not given
in excess of that recommended by thc Tariff Board after an
open public inquiry and report. The Government is bound to
this under the U. K.-/ Australia Trade Agreement.
Periodically there are claims that some definition
of the termns " econom-. ic and efficient" should be laid down.
This is a matter that has been carefully considered on a
number of occasions. ? ieteran industry is economic and efficient is a
matter of judgment, and it is a judgment that must take in
all the relevant circumstances of each particular case. There
is a wide range of isaes which can affenct such a judgment and
these can vary in emphasis depending on the circumstancc-s of
each case. The Government, rather than confine the Board to
thc limits of some definition which it may or may not be
possible to lay down, prefers to leave the question to the
independent judgment of the Board, taken in the lighlt of all
the circumstances. Finally, let me turn to the quite baseless charges
sometimes made about political pressure b , ing applied to the
Tariff Board and about its ind~ ependence being undermined. I
take it that the adherents of this line don't build their case
on the few occasions when the Government does not accept the
recommendations of the Board. Afterall, responsibility for
tariff policy and tariff-making rcsts with the Government and
the Government alone. The Tariff Board's role is advisory.
On the same grounds their case could hardly be based
on the Government's desire that the Board should, in offering
its advice, have regard to the general objectives of overall
Government policy. Nor could it rest on the few occasions when
the Government considers it necessary to tell the Board in a
reference that it has a particular line of policy.
The truth is that the ' 2ariff Board has complc: te
independence in conducting its inquiries. It is expected to
exercise its independent judgment in offering advice to the
Government. If the Government wants the Loard to take note of
a particular line of policy it says so in public, in the
reference. I know of no hidden instructions, no secret messages
and no surreptitious pressures. M~ y colleague the Mviriister for
Trade has confirmed this. If the people who harp on that line
believe they have knowledge to the contrary they should bring it
out into the open and it will be investigated and answvered.