O~ ATER's o6-,
ANNUAL DINNER OF THE SOUTH AUSTRALIAN Q. 17 NOV
CHAJVMER OF MANUFACTUES
ADELAIDE, S. A. i:;
14TH OCTOBER, 1967
Speech by the Prime6 Minister, Mr. Harold Holt
Mr. President, Mr. Premier, Mr. Leader of' the Opposition, Ministerial and Parliamentary colleagues, so many distinguished guests whose names appear in this fine print in this very elaborate programme, and the six hundred odd remaining members of this assembly: In any other State 698 would have been rounded off to 700 but such is the innate honesty of South Australia that they state the matter pra~ cisely to us.
You have made me feel a little weary, Mr. President, with your recital of what has gone on over the last twenty-one months and this week has been running quite true to form but lest anybody reading the public print should imagine that I am a compulsive air journeyer, let me assure you that the most enjoyable part of any flight that I make is the walk down the steps from the aircraft as we land. I think that's the experience of most of us.
I am honoured to be your guest tonight in my capacity
as Prime Minister, and I have listened with very great interest
to what the Premier, the Leader of the Opposition and you have
had to say, Mr. President. Before I make some comment myself,
may I be permitted a few personal references.
First I would wish to join with you in the good wisheB
you have conveyed to your Governor, who I may say, we are indebted
to from the Commonwealth for the very able way and ready manner
in which he acted as Administrator for us during the absence
overseas of our own Governor-General. W7e join with you in wishing
him a speedy recovery.
M~ ay I also say how much I have regretted to learn today
of the passing of a very distinguished South Australian in Sir
George Ligertwood. He was not only a very distinguished member
of your own judiciary but he servod the Commonwealth in a publicspirited
manner on at least three occasions that I can personally
recall as a RI'oyal Commissioner, as the Chairman of a Committee
looking into the situation of the Members of the Parliament and,
more recently, in a very much more onerous role as Chairman of a
Committee on Taxation in a very complex field. We join with you
in mourning him and I pay this public tribute for the service he
has rendered not only your State but the nation.
Then may I single out, if I ccn, from the many distinguished
guests here tonight one man to whom the Premier and
others have rightly paid tribute. I thought that when Tom Playford
ceased to be Premier he would cease to occupy the centre of the
stage. I find I was mistaken, he has stolen the show again tonight,
but he has done that as he has at so many Premiers' Conferences
and Loan Council meetings without saying very much himself. He
manages, or did manage to get the results, but I am delighted to
see him again and see him obviously in such good form. He is not
only a citizen of South Australia but an honoured citizen of the
Commonwealth of Australia who has meant so much to the development
of your State. And looking at your State, I sometimes feel that
never has more been done by people with less to do it with, because
you have not enjoyed some of the rather fortuitous advantages of
other States, the rich natural resources, the great mineral discoveries and matters of that sort. But to come to this wellordered,
prospering city is to realise how wall the South
Australian has done with the resources available to him and the
prosperity, the efficiency, the success of Australian manufacturing
industry is nowhere better exemplified than it is in your State
of South Australia and I will say a little on that in a moment or
two. The Premier did make a reference to the absence of
ladies, and like himself, I always feel a little lighter in heart
if the ladies are present to give a decorative contribution to the
gathering and to keep us in reasonable order in our own behaviour.
But I would like to point out to him that not only have I recognised
this in my own Ministry by having a woman in my Ministry,
I think an advantage I possess over him at this point of time,
but the woman happens to be a Dame and as you know there is
nothing better than a Dame. Perhaps he may be encouraged by
this example. But, Mr. President, since the Second W~ orld V/, ar there
has been a tremendous surge of development in this country which
has completely transformed the Australian economy and, as you
have said yourself, we no longer ride on the sheep's back. W~ e
have developed diversified industries, industries of strength
and variety which are capable of not merely meeting the requirements
of the home market, but in a growing number of instances,
capable of going out and finding a market for themselves in other
parts of the world. There was a time when " imported" meant
something superior. ' de have abandoned, I hope, that psychology
in this country for all time, because while we are capable of
meeting and matching, as you have done in so many instances, the
markets of the rest of the world then there is nothing inferior
about Australian production. And while in the early years it
was mainly the supply of the needs of the consumer food
processing and matters of that sort we have now got to the
stage where we can produce highly sophisticated items of manufacture
and where we can look to an increasing proportion of our
export income derived from the products of our manufacturing
industries. It has become fashionable at this time for some of the
academics and theorists to address the argument that we ought to
modify quite radically the general policy which I bclieve has been
supported on both sides of politics in Australia now for many years,
and that is reasonable and adequate protection for economic and
efficient Australian industry. ' ve hear people arguing that now
we are building up such a big export income with the aid of our
mineral discoveries that we could be a little more choosy, more
selective as to those industries for which we provide with
reasonable tariff protection. Iell I go on public record again
as saying that for as far ahead as I can see, Australia is not
only going to need its manufacturing industries, it's going to
need a steady expansion of its manufacturing industries and that
is because apart from other considerations and I will mention
two or three of them our industrial development is linked with
one of the most important aspects of national policy and that
is population growth.
We have got three million square miles of country here
with less than twelve million people in en area of the world where
they count their population in tens or hundreds of millions, and
we have a responsibility to develop this country and to populate
it, and in these modern times wvith the degree of industrial
development that we have achieved and the organisational technical
efficiency we have achieved, we don't find industries throwing
up, as they did in the past, the great opportunities for employment.
Certainly our primary industries can't in an area in which more mechanisation is occurring in the primary industry
field. Even these great developments that I've been seeing in
Western Australia and Queensland in recent months, although they
mean tens and hundreds of millions in their aggregate to our
export income, they employ modern equipment, modern mechanisation,
as you see in Hamersley, where in one township you will find,
Dampier, the products being brought from Mt. Tom Price where a
shovel will pick up twenty-five tons at one pull and load it into
a truck costing a quarter of a million dollars that will carry
away a hundred tons of material. In that situation numbers are
not great in relation to the capital expenditure, but in the
manufacturing industries this is where we have found in this
post-war era that we have been able to absorb so much of the
employment which has come to us from overseas and so much of the
growing work-force inside Australia itself. So there is in terms
of national policy one powerful reason why we should be encouraging
expansion of the manufacturing industry in this country. And
there is another. You mentioned our sister countryr of New Zealand, Mr.
President. I don't think New Zealand would have been in as
difficult an economic position as it is had it been able to
establish, ( and this is no criticism of the New Zealanders because
they haven't got the domestic market to do this), industry of a
variety and scale that we have here. Then they would have been
the better able as we have been in the past, and shall be in the
future, to meet the fluctuations which inevitably occur for a
primary-producing country, both of price for what it can secure
for its product on international markets and the production it
can secure from chancy seasonal conditions. We are the stronger
and the better able to meet these variations of fortune because
we hav.-a wider dispersed and diversified nanufacturing industry
in this country. Now I would hope that these considerations will not
only be in your minds but in the minds of many of those who speak
of radical reform of our policy in relation to the protection of
economic and efficient Australian industry. There has been no
change in the basic policy, nor the philosophy of my own Government
on this matter, which follows closely that of my predecessor and
which I believe represents the view of all sections of the National
Parliament on this particular topic.
Now, I wanted to speak tonight not merely on manufacturing
industry in any narrow sense because you are here not merely as
manufacturers, but in this highly representative gathering as
fellow citizens of the Commonwealth of Australia, and we have
before us by our geographical situation and by the circumstance
of the growth of the economy of Asia at this time, not only great
problems but great opportunities. I think it was Henry Kaiser
who very aptly said that problems are really opportunities in their
work clothes. Well, Australia sees many problems around us, situated
as we are with less than twelve million people in this area
where so many difficulties exist but where for the first time in
centuries of history our countries are emerging with an independent
identity and searching for the development of their own national
resources, and this opens up for Australia a great opportunity of
influence of growth in trade.
In the 1950' s 15 per cent approximately of our export
income was earned in the countries east of Suez. Currently we
are earning just on 40 per cent of our export income from that
area of the world which includes just on three-fifths of humankind
and where the age-old evils, the age-old weaknesses are being
overcome in modern terms and with modern technology. / 4
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Now that cairvt is a steadily rising wurvt,. You mentioned
the visit here this week of the Prime DMinister of' Japan. The
growth of' Australia's trade with Japan is itself' a matter of'
historical noteworthiness and remarkable in its degree, but even
that, we believe, is only at the threshold of' the kind of' collaboration
in trade between the two countries that we can see ahead for
us. The Prime Minister of' Japan told us first at our Cabinet
discussion and I would not have voiced it here had he not
repeated it at his press conf'erence but in a matter of' a few
years he can see Japan taking two-thirds of' its iron ore imports
for a growing steel industry from Australia and two-thirds of' its
coal imports, and that would be, I think, more than double the
proportion that we are currently contracting to send to that
country. As Japan itself' and the growing economies which I
have seen myself' in person in the course of' this year in Korea
and Taiwan, in Cambodia and to a lesser degree because it still
has to face the presence of' 40,000 North Vietnam troops in its
territory of' Laos, but as these countries can shake off the
menaces which have afflicted them in recent times, then their
own economies will f'orge ahead and they are looking to Australia
as one of the principal suppliers of' their raw materials, their
foodstuffs and even some of our manufactured items.
Now this, I repeat, opens up great opportunities for
this country of ours. I know that the Prime Minister of' Japan
did make some reference to the gap which exists at the present
time between the volume of purchase or value of purchase and
volume of goods from Australia contrasted with what we take from
Japan, but you must remember, as I am sure he realises, that we
arc less than twelve million people. They are closer to a hundred
million people and per capita we take far more in value from Japan
than Japan takes from us. In any event, of course, this is hardly
the realist's view on international trade.
Countries look to an overall balance if they can secure
it in their international trade, but they don't, if they are
realists, attempt to balance their trade with every trade partner
with whom they deal and this is true of Japan with us as it is
true with our trade relationship with several of the countries of
Europe who are big purchasers of our wool and some of our foodstuffs.
We have a very favourable balance with them; they don't buy from
us because they love Australia and Australians. Each country
watches its own national interest in the purchases that it makes
and in these European countries they may purchase our wool they
do so because they either require it for the needs of' their
domestic market or because they are going to process it into
textiles and clothing and export it to some other part of the
world. And so with much of' what we send to Japan.
We have a very favourable balance with New Zealand but
New Zealand does not produce in the sort of quantities that would
enable the balance, the goods that we require. They, as we, look
to an improvement in the trading position, but as realists we face
the fact that our goal is both a balance overall in our international
trade and a growth overall of international trade for all
international traders. As we expand international trade, so we
all have the prospect of' some improvement in our own trading
position. We have a very unfavourable balance with the United
States of America but we are able to offset that with the favourable
balance we obtain in some other direction with some other
countries. Now one other matter on which I would like to comment
quite briefly is that from time to time we hear fears expressed
about the extent of overseas investment in this country and I,
both as a Minister and as a Treasurer and more recently, of course,
as Prime Minister, have kept my eye closely on this matter over
a great many years and I have alw"-ys been conscious of this fact
in my mind thvct the United States became the greatest economic
power and military power in the world through a process of importing
people and importing capital. There were periods in which
their rate of immigration flow far exceeded anything that we have
attained and I don't know of any point in the history of the
United States when they have placed any restraint upon any investment
in their country from any other part of the world, and I
don't find America dominated by foreign capital or foreign
capitalists because, as we have discovered in this country, one
investment stimulates another.
A foreign investment stimulates a great deal of domestic
investment. People can point to General Motors-Holden, and you
are very well aware of the activities of General Motors-Holden.
What I am aware of is these two or three principal factors. First
of all that the sub-contractors and suppliers to General Motors-
Holden, are in the main Australian-owned and -based industries
and they provide a great deal of employment for a great many people,
and Australian industry has been able to grow because of this
stimulus, not only through General Motors-Holden I am not
promoting them tonight but Chrysler, Ford, the rest, the
British Motor industries all these automotive industries
Volkswagen any that you care to name that have established
themselves here have given their own stimulus to Australian
production. The second point I make is that Australia has a very
substantial equity in all foreign-owned enterprise because we
drag our 42J per cent from profits anyhow by way of company tax
apart from what we derive from the individual who works for the
organisation, and if they do remit dividends overseas there is
normally a 15 per cent withholding tax on the dividends remitted.
Most of them plough back a fair share of the profits earned into
further development which means more employment, and incidentally,
more national revenue for the tax gatherer from their activities.
Over recent years that particular company has, if my recollection
is correct, kept its overserns remittances well inside the earnings
it has made of foreign exchange for Australia from the sale of its
products overseas. So I am not one of those who lose sleep about
the activities of foreign investors in tAstralia. I believe they
have benefitted this country very greatly.
Going round these mineral developments, you only have
to look at them on the spot to realise the secondary effects
generated from them which benefit Australian industry generally.
Take the show I saw recently up at Port Hedland, the Mount Newman
project just getting under way. It is going to put in its own
railway line of 270 miles at its own cost. I saw one area cleared,
of a mile length, which was to accommodate the sleepers and the
rails for the railway line. Now the sleepers came from the South-
Wiest of Western Australia and I could just imagine the stimulus
it had given to the timber industry of that State. The rails
were to come from B. H. P. and one could imagine the valuable effect
this would have on the order books of that company and the useful
influence on employment and general economic effect throughout
the community. And that is just to pick out two aspects as one
looks at all these projects together in Western Australia and
you hear the talk about you mustn't make this country just a
quarry for overseas interests.
I predict that within a foreseeable period of years
there will be a great industrial complex reaching down through
those industries linking one up with the other, because as they
develop and they generate income they touch off further development. / 6
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You need engineering shops to service them, you need a variety
of' other undertakings. There is even salt works going down there
to take advantage of the proximity of' power and energy and the
other facilities which these industries bring with them. And
this is the way a country develops. This is how it gets a really
effective decentralisation of national activity, and we are
fortunate that when the rest of' the world, the under-developed
world, is scram~ bling to attract the foreign investor that
Australia has built up so successfully an environment of political
and economic stability that we readily attract investment and
resources and techanical know-how to this country.
Now, the final thing I would like to say to you and
this is well away from the issue perhaps of industry, but we arc
here tonight as fellow Australians and the greatest matter which
concerns us in external terms for this country currently is
what is going on in Vietnam. Associated with that as part of our
general security problem is the situation we face with the British
announcement of intention to withdraw its forces East of Suez an~ d
this creates for Australia this total complex, a situation we have
never had to face before in our national history.
He are being made to stand on our own two feet to an
extent that we have never known before but we are not entirely
on our own feet, and indeed at this stage of our national growth
and with our limited population, it would be almost visionary to
expect a time that I can see ahead of me when we would be able to
stand entirely on our own two feet in defence terms. And so we
have, and I believe it to have been a major Australian diplomatic
achievement, linked ourselves for our security with the United
States of America in the ANZUS pact and in the SEATO arrangement.
But as a good ally, as a country which has gone out in two world
wars much further from our own shores than the situation in Vietnam
to resist aggression and try to preserve -the freedom and independence
of small countries, so we have gone again as has been our historical
tradition into Vietnam.
In Korea we were the first country after the United
States to take up the United Nations resolution of support against
the aggression to South Korea which was coming from the North and
join in resisting that aggression, and as one who has been in Korea
recently, I can say that this was not only right in terms of moral
principle it was right in the results which it produced of an
independent country capable of forging ahead economically once its
independence had become reasonably assured. Had we not moved in
to Korea we certainly would not have moved into Vietnam and I
question whether we would have held Taiwan. I question whether
Indonesia would have been held secure from Communist influence
and so we are in Vietnam at this time consistently with the
principles we followed in the two world wars and in our intervention
in Korea. Wle are there consistently with the alliance we have
with the mightiest national power in the world in the United
States it has underwritten our security in the ANZUS treaty
and we are there as one of the free countries of the South East
Asian and Pacific region looking to the time which has been
emerging quite realistically over recent years in which there can
be greater co-operation, and greater friendliness between the
countries of this region. What is often lost sight of by those
who concentrate on the day-by-day episodic events in Vietnam has
been the achievement of economic growth, of diplomatic collaboration
between the free countries around the periphery of Asia. Through
the Asian and South Pacific Council, through the Asian Development
Bank, through various other institutions we have been able in a way
never before known in centuries to work together and to bring our
policies more closely in line. */ 7
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And so, gentlemen, in the Knowledge of this, your own
Govornment has been quite firm in its policy attitudes, unwavering
in its own resolution to see this matter through. WNe have noted
what our allies are prepared to do in order to bring as speedily
as they can this matter to a peaceful and honourable conclusion
and we bow to nobody in our desire to see this matter speedily
and honourably resolved. ' 1* aer e more to be served by peace than
most other countries of the world because with peace we can go
ahead with the development of this great country and the resources
which lie open to us and in that development I know that the manufacturing
industries of Australia have a growing and increasingly
important part to play and it is in that recognition that I am
delighted to be here with you tonight, Mr. Preasident, to salute
yo. u as the man of industry for the year and to salute the efficient
South Australian industry which makes its own valuable contribution
to the national effort.
Thank you, gentlemen, for having me as your guest
tonight and rmy best wishes to your continuing prosperity and
growing success.