0AUSTRALIAN PRODUCTIVITY COUNCIL
MELBOURNE
8th February, 1961
Speech by the prime Minister, the Rt. Hon. R. G. Menzies
Sir and ladies and gentlemen:
I was very interested in your reference to the
presence here of the Leader of the Opposition, and of myself.
le conceals, publicly, his personal regard for me ( Laughter); and
I reciprocate in kind. ( Laughter)
As a matter of fact I want to toll you this, hoping
that it will go no further that he and I are both rather
lovers of Dickens. I am at present directing my studies to
Bleak House, and he is reading, avidly, GJeat Expectations!
( Laughter, applause)
I always like to have two preliminary remarks and
perhaps, therefore, I ought to make another. This isn't the
first time that I have spoken in this Lecture Theatre. I once
was one of the adjudicators, many years ago, in a debate between
the Oxford Debaters and the Mclbourne University Debaters the
Oxford Debaters being witty, but inaccurate; and the Melbourne
Debaters being dull, but, on the , ahole, rig! 2t.
On another occasion I committed myself to making a
political speech in here great fun: I was counted out, not
once but many times! Of course, tonight, the audience is of a
different quality. But I am bound to say that it is the first time that
I have been sitting on this most costly looking dais. In the
old days there was a sort of counter that ran along. Ono
looked around to see where the Bunsen Burners wore. ( Laughter)
But this is now, of course, completely scientific. I haven't
had time to study it I should have been given a chance. There
are switches here; all sorts of gadgets here. It is like
making a speech after dinner in America whore there are buttons,
and if you press one inadvertently you are electrocuted, much to
the relief of the audience ( Laughter); and if you press the
other one, inadvertently, and you are leaning forward at the
time, you have your neck broken. ( Laughter) None of these
adventitious aids to good cheer on the part of the audience seem
to be available tonight.
I really don't quite know what I ought to be saying to
you. I was told first of all, in a disarming way, that the
Managers would like me to make a speech, of sorts, on
productivity and the standard of living. And then, after a
discreet interval, they told me that my friend, Mr. Calwoll,
would be speaking on the same subject. Now * that should have
happened of course w. as that we should have got together on
this matter. But perhaps by the time we finish tonight we will
find that we iave a :, reat deal in common. Bec: 2use I am sure,
and you are sure, that it requires only a few minutes thought to
establish the proposition that productivity is at the very basis
of all national and individual material development in our
country. And I myself was delighted when the Productivity
Council was established. It may still be regarded, and perhaps
is, as a little tentative, a little speculative. There may be
those in the community who feel a little cautious about
associating themselves with it. But all I need to do is to
remind you that in Eiany countries in the world, great countries, 7
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countries with irmmense problems, productivity councils are
becoming a commonplace.
It has been realised, for example in Great Britain,
with remarkable success, that to have a productivity council in
which a great variety of experiences, and of personalities, can
cone together, is of the essence. The tine has gone by when we
can just sit down and wait for the wind to change, wait for
something to turn up.
Now, if we are going to talk about productivity and
the standard of living, I suppose the first thing to do is to
say to ourselves, " What is the standard of living?". Because
that deserves thought.
We have been, on the whole, rather accustomed to
thinking of the standard of living in terms of something like
the Series Index; as something which is measured in
relation to a certain number of cornodities, in relation to
house rent; in relation to this, that, and the other. This is
a narrow conception of the standard of livii. Because the true
standard of living in our country is the level at which we ha ve,
and enjoy, at least three groups of things, sone of which are
occasionally overlooked.
The first group is the iroup that we instinctively
think of the level at which we have and e ' joy a hone, modern
labour-saving amenities in a home, good and doquate food, good
and adequate clothing. These are things, tangible, easily
understood, and they are perhaps the first things that we think
about when we think of the standard of living.
But there is another group coming into the standard
of living: good schools, good Universities, good technological
institutions, good organisations which bear on the creation of
skill and the encouragement of the mind. Proper leisure: this
too has some relation to the standard of living. Not perhaps so
much as some people occasionally think it depends on the use
of leisure. But proper leisure and recreation, and adequate
transport, all these things still speaking within that broad
compass are part of the standard of living.
But if we are to be judged by the mind of history some
day, as perhaps we shall be, then we cannot omit the third
group, because this also relates to the standard of living the
level at which we have a sense of community, a consciousness of
mutual interests, a developed sense and a developing sense of
social duty and a spiritual and intellectual existence.
We might, by some means or another, turn out to be the
best fed and the best housed, and the best clothed persons in
the world, and yet we might, in the eye of history be barbarians.
All these things form part of the standard of living,
and I refer to thema not just to state the obvious, or to dwell
in the abstract, but to remind you of this: that behind all
of these things we have a problem of productivity. tt may seem
odd, nay it not, to talk about the problem of productivity in
relation to these rather general intellectual and spiritual
conceptions. But of course there is a problem of productivity,
if we agree, as I am going to suggest to you we should, that
the whole problem of productivity has been too long looked at in
a narrow, compartnented sense, and has not been adequately seen
as requiring an entire joint connunity effort.
Now to achieve the things that I have been talking
about, particularly in the earlier brackets, we need, -f
course, national development. National development produced
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itself by increasing population this is one of the great
phenomena of our time. And it is a phenomenon honourably
associated with the name of r. y friend and opponent who began this
great irmigration movement, postwar, into Australia.
We need increasing population, and we need the
exploitation of resources. Indeed I should have said, " We need
the discovery of resources", and than their oxploitation and
their developont. I hope that there are fewer people now who suffer from
the illusion that I suffered from as a school boy that there was
a certain amount of fertile country around the eastern and
southern seaboard of Australia and that all beyond that was a
wilderness. I hope that conception has gone.
If we are to have national development then we must
have full employment because we cannot afford to waste the
resources ofnanpower that we have, or that we attract. We nust
have savings to produce capital, so far as we can cvrsalvcs and
we nust attract capital fron people who have confideonc: us.
We nust have encouragement to enterprise. I don't say in
sone partisan political sense. Jhat we need to do is to oncJurage
in the ninds of people the enterprising s . irit, the willingness
to take a risk. This has nothing to do with politics.
But it has everything to do wit;' huan beings. We must have
enterprise because enterprise, vigorous an.. imaginative, is one
of the great productive agents in our world. And we rust have
imaginative leadership which doesn't morely nean in the field of
politics. Yes, we must have it on both sides in Parliament.
But we must have it in anagenmnt; we must have it in the trade
unions; we ust have it in all of those organisations which
have a part to play in the development of Australian production.
Now all I an getting at when I say these things is
that national productivity does not depend upon any one of these
thin6s. It depends on all of these things. And the great
beauty of having a Council representing widely groups of
competent and-interested people, is that it gives emphasis to
the fact that weo cannot afford just to think about one element.
We nust think about all, because this is our great coumunity tae.
Now, Sir, once we see that productivity is the whole
condition of national growth and inproved individual living we
will see that it has a challenge for all of us. The totality of
our individual efforts I repeat that the totality of our
individual efforts, not only those who are here tonight, but all
of those around Australia, will determine our national
productivity; and, of course, will determine, not only the
volume of production, but what we take out. When you have
discovered what we put in, then you may begin to talk about what
we take out. Now what are the various elements in this mattor? I
know that there are sooe old-fashioned people who, when they talk
about productivity, think instantly of the man who is working at
the bench, for exanmle. " Now, if he did more our problem would
bo solved" they say. And perhaps, on occasions, he ought to do
more. But he is only one element in this rattor. The plant
will, in many cases, deterine how much he does, how much he can
do. The availability of power and we have gone through
periods of a shocking shortage of power is a real factor.
Fortunately, in every State and in the Conmonwealth, tremendous
efforts have been put forward to increase the supply of power at
the elbow of the man who works. Buildings, naterials, the skill
of management these too, are factors. I a-very glad to see
here tonight one or two representatives of the Institute of
Management, because ranageomnt has an enormous part to play if we
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are to reach, and ultimately surpass, the visible maximum of
production. The skill of the nanagement, the skill of the
operative, are complementary.
I don't like the idea of thinking of a nan, for
exanple, who works in a factory, as being the nere servant of
his machine because we, in Australia, happen to belong to a race
of people who have innense resourcefulness and ingenity. And
many contributions have been nade by ordinary operatives at a
bench for the inprovement of procedures, and the improvement of
machines. Their skill is something tremendously to be
required. And above all, , f course, we must have in all
productive activity a mutual desire for success, a mutual desire.
It is a very great pity that in the bad old days and most of
them were, looking at then justly, bad old days there was so
much division of mind between the nan who managod, the ran who
employed, the nan who owned, and the ran who worked in some
enterprise as an employee as if there were hostility between
them. All too frequently there was.
We will never achieve national production on the g-rnd
scale until we all gain mutual confidence, pr.. ctise mutual fair
play, bend every effort to understanding, until we learn that
the interests of everybody from the Chairnan of Directors right
through the processes of nan~ e1. ent, to the nost newly joined
boy, in a factory, are common and those interests are that their
enterprise should succeed and should sustain then all.
And of course if we are to have that, then the other
thing that has to be put in to any productivity drive is
inagination yes, of course and pride.
I constantly wonder at the misuse of language that
occurs. Pride is a grand word, too frequently interpreted as if
it neant vanity or conceit or something cheap and silly. Why
are we here tonight? Why are you, ladies and gentlemen,
concerned in the affairs of this productivity council, so
interested in it, so willing to contribute your minds to it? It
is because you have a pride in this country and an even greater
pride in the kind of country it is going to be by the time your
grandchildren have lived in it.
And therefore all of these things that I have
mentioned are theelements. I may have omitted half a dozen.
It doesn't matter, for this purpose. But every one of them is
an essential constituent. And when I recite these things it is
perfectly clear that there is a common nature in this task a
cormon nature which requires that a Productivity Council should
be all-embracing in membership and in interests.
I hope I say this with great respect and with no
desire to be nisunderstood that the Trade Union movement will
more and more identify itself with your work as it has in
Great Britain. It won't if it feels that what Joes on is a
series of discussions to discover how much more work you can get
out of Bill Snith. Bill Smith is not unwilling to work we
cannot have much complaint about that in our country, We have
only to look around and see what has happened in this country
over the last 40 or 50 years to be vastly proud of the fact that
somebody, some thousands, some millions of people have been
doing a great deal of work. But the worker does not want to be
told that he is the one element. Let it be made clear to him
that he is one of a dozen elements, all of which have to be
brought totgther in the cormon interest. Once that is understood,
I venture to say, subject to correction that he will
cone. Because he will see that this is a reat national task.
Now, Sir, I just go on fron that to say this.
Domestically in Australia, we know that the standard of living
as I have endeavoured to describe it cannot be raised by the
noro force of an Act of Parliament. If all you had to do was to
pass an Act of Parliament to say the standard of living is
raised 25% I think that is a natter on which both parties Iight
be at one at an election. And in order to be different one
would have tj nove an amend& ont to make it 50% and not 25. But
of course you cannot do it by putting down some words on a piece
of paper and calling it an Act of Parliament and getting
Parliament to vote for it.
Governments can, of course, facilitate expansion. Some
people have been rude unough to say that Governments can
facilitate recessions and falls. But have it your own way. A
Governnont can do that. A Government can directly, or indirectly,
affect the supply of roney; it can directly or indirectly,
chiefly directly, affect the tax structure and the tariff
structure. These are all, of course, ir. iensely controversial
elements in the work of governmont. But the government th
country cannot in any real sense spend money of value wh: i i. the
people have not earned and paid to it. Or, as I once said, :-nd
I still stick to it, governments, contrary to the public
impression, have no money of their own. This is something to be
remembered at all times.
A Governr nt can make laws about goods and services.
But they will be goods and services which the people have
laboured to produce. A Government cannot, to take a current
example, solve the recurring problem of the balance of payments
except by stinulating the productivity, including the export
productivity of the nation, or doing something artificial
about the volume of imports into the country.
But whatever the views may be on these things, the
point is that everything the Government does directs itself to
the products of individual and corporate effort in the country.
Now what I have just said about the balance of
payments particularly applies to Australia. Would you mind if
I sort of made a prolonged interjection to myself by saying
something about that? Because once nore we know but little of
our own country and its problems.
Australia happens to be intrinsically not relatively
but intrinsically a great trading nation. Not per capita, but
in total terms this is a great trading nation one of the first
eight or nine in the world and has been for a long time. We
have a volume of export trade in Australia which represents a
greater proportion of our total trading than does the external
trade of Japan or of the United States. This, of course,
presents great problens to us. We may say, if we are foolish,
" Well the right way to get rid of all those problems is to
insulate your economy from the rest of the world". I don't
believe that anybody, sensibly, believes that. Because you can't
insulate our economy, if you think about it for ten minutes,
from the rest of the world and at the same time have great
national growth and developnent.
Why do we have balance of payrents problems? Why do
we have them coming with almost monotonous and painful
regularity? And the answer, if you think about it is simple
enough. The croat bulk of our export trade is in the products of
the soil, or of the pasture wool, meat and the rest of our
primary exports with manufacturing as yet a small fraction,
though a growing one, of our exports. fAnd because our exports
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are in this primary field they are subject to all the chances
of wind and weather in the world. If the price of wool falls
there is not much we can do to prevent it. If the price of
meat falls there is not much we can do to prevent it. We may
go on increasing our actual production in these fields as
indeed Australia has but in the long run the cheque for the
export income will fluctuate violently from year to year. More
Sol I venture to say, than in the case of any other major
country. Now, how arc we going to deal with this? Because the
price of wool may fall, because there may be a drought that
reduces the quantity of wheat available to be sold, prices rise
and fall in the world's markets. But at home, provided we have
a state of affairs in which people are employed and well paid
and willing to spend money, then our demand on the rest of the
world for imports will achieve an almost appalling stability at
the very moment when our export income, year by year, is, in
the homely phrase, going up and down like a ye ye.
Now what is the answer to all that? I don't wnnt to
trench on these matters, but I have heard it said that the
answer is to cut your imports appropriately. Now I ask xci
just to think about that. Here you have an export incom-l-,
which may vary by a hundred or two hundred millions as bct-, t; , cn
two years. Are you to follow it up and down by a series of
fluctuating controls, physical controls over your imports? It
is very difficult, I would think, vastly frustrating I would
think. I myself don't believe tflat there is much hope in the
long run along those lines. On the contrary I believe that what
we. must aim at in Australia is to dov,; lop the character and
quality of our export income. Because when it is so varied and
depends on so many particular commodities and circumstances that..
it assumes a higher degree of stability from year to year than
it has now, then we may find and I bolieve we would find that
our balance of payments problem, so peculiarly acute in the case
of Australia, will tend to settle itsolf, the curve will become
a little flatter. And how are we to do that? That brings me back to
where I began. d~ e are to do that by doing everything we can to
ensure that a much groater proportion of our export business is
done in commodities and in fields in which the fluctuation of
the world market does not produce such violent results. In
other words we are to reduce the fluctuation in our export
income so far as we can and this is not to be done overnight
by developing new markets, by expanding old markets, and by
selling in those miarkets not only the products of the field, but
the manufactured commodities of Australia. Is this hopeless?
Does anybody want to tell me that in Australia, with our native
wit and our native skill, with the rising levels of competence
in management, with the development of plant, with the
increasing use of power and of miodern machinery we cannot
compete in a whole lot of markets in the world? I don't
believe it. This to me is defeatism. But it will involve in
Australia a conception of production, a devotion to the idea of
productivity which so far we have not reached. But if we do
reach it we will find that markets that now seemi to be quite
closed to us are open to us, just as much as they are to other
industrialised nations in the world.
Therefore it all comes back, whatever we talk about,
whatever we think about, to production. It is no use getting-a
market overseas if you have no production to back it. It is no
use starting off in a market overseas and doing frightfully well
with the first orders unless all the production is coming up
behind it to supply it that is the right way to lose a market,
not to rain it.
141 7.
And so the accent all the tine is on production, on
productivity both externally and domestically. We know, do we
not, that domestically if we had none of those complications of
overseas balances to think about at all, the right way to
stabilise the value of money would be to increase the production
that we achieve in Australia, matching it, and more than matching
it with the growing demand of an increasing population. And
externally, without a great conception of production we will
have a chronic balance of payments problem which will load to
widely varying applications of policy from time to time, intense
irritation, and a good deal of avoidable loss.
So Sir in this great task we must all take a hand
because we are all in it. ' hether it has something to do with a
spiritual excitement, whether it has something to do with an
intellectual contribution to the growth of civilisation in
Australia, whether it is producing nuts and bolts in a factory,
whether it is managing something here or there, wherever it r. iay
be, whether it is teaching in a school, or teaching in a
university we are all in this task. Because this tasi-of
productivity is, I believe, the greatest task that conf:-': . tq the
nation. If we realise that it is a task for all of us, rt to be
pushed off on to somebody else, a responsibility not to be
dodged by any individual so that somebody else will carry more
than his share of the burden, if we can realise that, then I
believe that we will achieve, not only the most temondous
national growth, in Australia, our c. untry, our heritage, but we
will achieve a community spirit which will be infinitely more
important than half the things we talk about.