61/ 040
PUBLIC MEETING AT BURNIE
on 4th July, 1Q61
Speech by the Prime iinister, the Rt. Hon. R. G. Menzies
Mr. Warden, parliamentary colleagues and ladies and gentlemen:
I won't need to tell you that the hero of that story
that the garden told you was my old friend Sam Bird, whom I missed
very much indeed when I called at the " seat of the great" this
afternoon to see the 1arden himself. I said " Tell me, was Sam
warden of Burnie for 20 years, or was it 25?" They took me and
showed me a photograph which seemed to show that he was warden
only for 9 years. I don't believe it, I don't believe it. And
Mr. Bruce, as he then was, wouldn't have believed it either,
because he and Sam had this little interlude that you heard about.
Now I am in a sort of dubious position tonight: I'm
not here on an election campaign; I rather like to get around the
4 country from time to time Vwhen there is not an election on. They
are having one in Victoria but it's not mine it's a State
election. No doubt, if all goes well, somewhere towards the
Fcderal election I will be around, as usual, in Burnie,
Sappreciating the beautiful draughts that flow up the streets from
i the sea ( Laughter) and having a good reception, or a bad one, as
the case may be. But on this occasion I thought it might be
useful not to make a contentious speech to you, but to say
something to you about what is going on overseas, and here; and I
know that what goes on here has a very particular interest for all
of us. In the last 12 years I have had a good deal to do,
rightly or wrongly, with Australian foreign policy; and a good
deal to do, rightly or wrongly, with some of the leaders of the
great nations in Che world. They are nations with whom we do have
Ssome influence that's the remarkable thing to me. . e are a
small country, 10 or 11 million people, hew could we have any
influence with great countries with 180, or 200, or 400 millions?
But the fact is that we do.
' 9io have some influence because we go to some pains to
undurstand what the problems of the world are, and are willing, on
suitable occasions, to tell our friends what our opinions are, and
what our suggestions are. It would be very easy for us to nurse
ourselves, comfortably, into a belief that the only problems we
have are those that we see at our front door. We have, I venture
to say, Sir, very nuch greater problems in the world at large.
Because the first problem for Australia is to remain a free, safe
country, able to work out its own future.
( To an inturjector: I know that you are delighted to
think that there aru s. me unemployed there have been mighty few
during my torn of office, righty few during my term of office. Of
all the periods of Australian history that you can select the
period of my own Government has eon the highest record of
employment. ( Applause) I know there are sono people who,
professionally want to whip up the agony and make things worse,
instead of better. But I happen to be talking to you about
something that is Luch mnro important than you, my friend, or than
me, and that is the peace of the world, the peace of the world.)
I was saying something about a matter that ay
interjector ought to understand, the peace of the world and how
it affects Australia. Australia has fjund itself engaged in
two wars in our lifotirco. It is troeendously important that we,
as an intelligent and self-respecting people, should do our best
to contribute to the maintaining of the peace and security of the
free world.
( Interjections) Now, ladies and gentlemen I'm accustomed to this kind
of thing but I just want to point out to you that the world,
today, is eJez'y bit as uneasy as it has been at any time in the
last 10 years. Je talk about the cold war as if it . rere something
frozen. The cold jar goes on because the Communist powers want it
to go on; the cold war goes on because by threat and pressure,
by blackmail, by violence where necessary, they keep the free
nations of the world all agog, all anxious, all more or loss
standing to arms. This is the tragedy of the decade. And before
this year is out we will have discovered whether all this is
bluff, whether bluffs have to be called. Bacause before this
calendar year is out we will know whether Khrushchev's talk about
Berlin is merely talk; or whether he means war about Berlin, war
about East Germany. These are tremendously important matters for
us to be thinking about.
. c have in south-cast Asia, practically next doer to us,
problems now bubbling up in the country called Laos, and liable to
bubble up in other countries on its perimeter. They greatly
concern us. Because if the Communist nations of the : orld can
take over an Asian country whose only ambition it is to live
quietly within its own boundaries, if they can take over a
country like Laos where do they stop? They have already taken
North Viot-Nam which is part of ihat we used to call, many years
ago, French Indo-China. South Viet-Nam is exposed to daily acts
of revolution and violence within her own boundaries. Thailand,
which we used to call Siam, is there with a long land frontier
with Laos. And if Laos goes, Thailand will find
perhaps, more difficult to stand. If South Viet-Nam is exposed to
attack then we have a problem which concerns every nation which is
involved in the South East Asian Treaty, what we call SEATO Great
Britain, France, the United States of America, Australia, Now
Zealand, Pakistan, Thailand, the Philippines. Here you have a
group of countries who, between thomsalvos, have entered into
Treaty obligations which, or the performance of which, alone
stands between us and aggressive Communism in Asia.
When people want me to put an order of importance on to
things I am quite prepared to say that the most important thing in
our national life is that we should not pass into the Communist
orbit in this world. That is the imperative thing for which
Australia rust stand, and for which every honest political party
in Australia must stand. At this very moment there is a
Conference at Geneva about Lior, with much manoeuvring going on.
I haven't the slightest doubt myself that the Soviet Union are
playing for time because they believe the more tie that is
occupied in discussion at Geneva, the more opportunities will
their Communist supporters have to put themselves into a position
to take over the entire country.
. e cannot be uninterested in these matters. The very
reason why we exist in SEATO, the very reason why we hope under all
circumstances to keep American interest in South-east Asia, which
I am glad to say is great and powerful, the very reason for it is
that if the forward surge of Communism in South-East Asia continues
uninhibited, then before we are very much older we can look out
across our northern seas and contemplate a Communist world as our
nearest neighbour. Now, Sir, having said just so little, or so much as that,
about the international position which is, of course, very grave,
which will require cool heads and firm minds, firm judgments, and
.3.
firm actions, I want to turn to the position of our own country
because it happens that after a period of 10 years which nobody
will deny has been a period of the greatest prosperity this
country has over enjoyed ( Applause) ( Interjections)
No responsible person I'll amend my statement no
responsible person could denly that in the last 10 years we have
had the most remarkable period of growth in the history of this
country. I am surprised that anybody should deny it in Burnie
which itself is a--magnificent example of the growth that has gone
on during the last 10 years.
Right through this period we have attracted enormous
capital investments into Australia, we have seen the most
phenomenal industrial growth, we have seen the development of
national resources on the grand scale, we have been increasing
our population by natural increase and by immigration at a rate
even higher than that in Japan; and, in the result we have a
country so strong, so respected so worthy of credit in the
world, so full of busily engages people that we, today, represent
in the other countries of the world, the most attractive field of
investment that they know.
Now this is worth considering. I know there are people
who just take a superficial view, you know what I noan, about
these things. ( Interjections) But I wonder, I wonder if my
friend will know what I mean if I say that there is one rather
good way of testing the prospects of the development of a young
nation like ours. First of all l'e--us ackuiowvdgo I hopo wo
all will that 10 million people, 1 O( million people, eanst, out
of their own savings produce all the capital that is required to
develop a continent the size of the United States of America.
That is pretty obvious isn't it? Therefore if we are going to
develop our resources, if we are going to have great water supply
schemes, great power schemes, and great mineral developments, then
we must be able to look to the rest of the world for some of the
capital at least, that is required for these purposes. If the
people In the rest of the world are not prepared to trust us with
their money, then we are going to be handicapped, we are going to
be tied down to a lower rate of progress. I want to say this to
you that if, over these last 10 years, the investors of the world,
the citizens of other countries, had not been willing to invest
money in Australia we couldn't have had the immigration programme
that we have had, we couldn't have had the same increase in the
standard of living, and we couldn't have had the same high level
of employment. Now that is perfectly plain English. And I will
demonstrate it to you.
About 10 years ago we had a look at the accounts of
money coming into Australia to be invested, not in Government, but
in ordinary business activity In Australia, and it amounted to
something a little under œ lO00m. That was a lot, a great sun of
money to have coming in. Last year it was over œ 300m. And in
the current financial year, in spite of the fact that iv-, who
have worked so hard to develop prosperity in Australia, are
supposed now to be busy destroying it, the amount coming into
Australia from oversoas is higher than it was in the previous
' ycar, It has reached an all-time record. ( Interjections)
( Well if I may put it not in roubles, madam but in
Australian ( Applause) well over œ 300m. Australian ana in anybody's
language that seems to me to be quite a bit of money)
What happens with it? It develops industry. You go
around Australia and look at some of the great industries which
give employment to t'liusands and thousands of A,' ustralians and you
will be surprised how frequently that its an industry7 the
financial prevision for which has come fron. outside L~ stralia.
Does anybody complain about that? Is anybody prepared to say to
those people, " Don't bring your money here; we don't need you".
I remember making a speech at the last election in a
great factory, financed by AIerican capital and my opponent
incautiously, the previous day, said that they objected to this
importation of capital, that we were pawning ourselves to the
overseas money lenders a very attractive phrase. But I said it
was simple to test. I said to these thousands of non, " You know,
you're engaged in earning a good living, a steady living, in a
good job with prospects, in this business which is entirely
financed from outside Australia. Are you in favour of cutting off
the supply of finance? Are you in favour of telling people in
Canada, people in the United States of America, they are not to
invest their money in Australia?"
I apologise to you for talking so long about so
elementary a matter. But I began it and I end that particular
thing by pointing out to you that the people who have control of
investable funds outside Australia are not to be treated as fools;
they are pretty shrewd people. They are just as shrewd as the
average financial critic in a newspaper in Australia, just as
shrewd. And while a local man wastes his time occasionally by
saying " We are confronting nothing but disaster", which is utter
drivel, the fellow outside, the shrewd man, who has money to
invest, and money to lose, wrho has to back his judgment with his
investment, finds us rore attractive this year than he ever did
before. Now I ask you to make a mental note that.
And now perhaps you will allow me to put one or two
questions to myself, then answer then myself. I find that is a
rather convenient arrangement.
( Interjections) ( Well madam I an sorry to disappoint you but I like
putting questions to myself because I find them intelligible)
( Laughter, applause)
The first question I want to put is this: Why should
the Government of Australia, having presided over these
remarkable developments, suddenly go mad and decide to tear down
the whole building that they have been working to construct for
or 11 years? Last year, 1960, the prosperity in this couhtry
converted itself into a great inflationary boon and I have yet to
read any expert, so-cilled, in any organ of opinion, who denies
the existence of the boon, an inflationary boom. Costs were
rising, prices were rising, there was a great shortage of labour,
with far more jobs than there were men to hold them, or women to
hold then, a great shortage of labour, prices rising, costs
rising. The effect of that kind of thing is two-fold.
First of all it meant the most tremendous demand for
imports. Whenever people feel well-off, whenever overtio is
high, whenever wages are much higher than the award rates, whenever
there is a shortage of labour, whenever people are fooling
good and prosperous, then you will have, always in the experience
of any country like our own, a tromendous demand for imports;
because the local production can't satisfy the demand. The
result was that imports were flowing into Australia under
circunstances which were lowering our overseas reserves so
vital to our solvency month by month. At the same time, of
course, inflation was inflicting grievous injury on people who
can't chase the market, but who live on fixed incomes. Whether
they are people on salaries, or fixed waess, whether they are
people on pensions or social benefits, whether they are people on
superannuation, it is they who are on fixed incomes who suffer
murderously through inflation. Thereforo social justice required
that we should quell this beoi, and international solvency
required that we should quell this boon.
Now, Sir, it must be at somebody's expense, I'n sure you
realise that. I'm sure that you are not so naive as to believe
that you can que'. l arn infla'ti: nary boor and not touch anybody. Of
course you have to touch sor.: body. The greatest complaint that
have come as a result of our neasures have not cone from people on
fixed incomels, have not come from employed people; but have come
from others. But you must hit and hurt somebody if you are going
to get rid of an inflationary boon.
( TI-_ erjection) ( My dear sir the worker is the least affected by this,
and will profit most by the success of our policy. All right, I
know you don't agroe with no, you've registered your pointo
( Interjections) If I belonged to your Party, Sir, and had no
outlook on the problems of the country, I would pray for more and
more inflation every month, because that is your only stock-intrade.)
I have a great responsibility in this matter. It is, of
course, deplorable that you should have to enco: unter any degree of
uhcuployment in Australia. But it is much better to encounter
some, by strong measures, and get back to full. employment at the
quickest possible moment, than it would be to sit quietly by and
allow the boon to go on and burst. If it were allowed to go on,
and burst, then I want to tell you that unemployment in Australia
wouldn't be measured by thousands, it would be measured by
quarters of millions. You can't afford to trifle with a great
serious economic problem like an inflationary boon.
( Interjection) ( You know I marvel at the vanity of some of you chaps.
You sit there and you chatter the same little bits over and over
again; I'm sure you have & ot them written down on a piece of
paper. I remember two or three chaps like this years ago at a
meeting of . ine and they kept saying the most pungent things, but
unfortunately when they left at the end of the meeting they left
their printed bits of paper behind them. And I read then.)
Now, ladies and gentlemen, lot re ask, " What would have
happened if we hadn't taken these counter-inflationary measures?"
Would it just have settled itself, quietly, with no assistance by
anybody? If we had lot the boon run on and said, " No, we're
afiaid to touch it, it will hurt somebody and it will make us
unpopular" as if unpopularity ought to trouble responsible
people suppose we had just stood by and said, " No, we will do
nothing about it', the boom would have run on, costs would have
risen, prices would have risen. And in the result two things would
have happened to this country of ours that I want you all to think
about. The first of them is that our primary industries in
Australia, which are our life blood in international trade, which
provide over 900 of the whole of the export income of Australia,
would have been put at great risk. What a fantasy it would have
been if, following the popular course, we had sat down and said
" We are not doing anything", and the price of wool had not been
adequate to cover the cost of producing wool in Australia, then I
want to tell you that this country would be bankrupt in every
international sense of the word.
L
ai~ no,' or :' ofo-Vx y Governuent, going tO see
that fha pp'r. ! le must na-. intain s wd on thao Dlcr. lants of
cost, for the sake of o) ur exr-. ort :. Indus trios, whfichi hav a D
battle today in the mw'iikct-s of the uorld, and rmay ia ve an even
-r. tr b-~ l in the fWu o mch _ 1e ,; 3eneing upon 7 lat : 7aspi
Europo. If. ru are gto ' aold those cxcports of ouors and hos
gr~ at inhcabsuiZ~ rai rd anin or1
a. w~ cen'vru u. j~ st.: J aining a it a
_ 1 t b( , i nn; t with.
Novw a is one reason, I ; iljust 6ive y. Du one more,
II 1ustral-Ja we Lc,.-c 7,. x sta'a Govornnen-;: s and a Cumrab
Gmre'm( 1_ 1mnT. o; ret t1no'e have eonormous 1publJ c works to
I. o 11; I dozli,: 1t--_ Llr KIjey wfo-st ieney on thorn-. I ' nave no
c! Ltl; cisr of the orlspogare of the Stlatfes of . ustUral~ ia, or
of the Counonwal. th-14ll I know is thnat thLa avoi~ n'a go citizen in
his ow. n dList;-ict v.-nts thy::-to 1o nc rot less. ndwhat are
thaose public works? Theoe are not frippori-es. When StLA:-, e
Government, for example, bil--ds a sc!, ool, sciaools, it is
building sonothing, vital to the prog ross of theo Sta,, te; whe; n it
r. mokes roads it is doing Sorl~ inE vital to tho expansio) n of
enterporise and of coim1e-rco-, when we spend money year by year,
large am~ ounts of it on the Snewy, we :, re doing soi: eth-inEg vital for
tho provision of poor in factoriejs inVictoiii and Now ot
1+ 1 C, and for ir2? igation in the who I broad ; ep of thle
You look at any of these public wiori ho-using,
sch.-ools, roa-ds, transport, water supply, irrigto. p~ ower, all
thiose rnatters tha.-t I have been rafoniing
( Interj ection) My friend down hcere and I are on the saine wave length
at last ( Laughter) He said " Not enough" il. I think I agree.
But thjro wouldnMt be as m~ uch se-,-) nt o. n it teDda-y if we
haC. an inflationary boon.-. May I toll y-u w-hy? Because tho money
that the St~ itos spend on p,,, blic works, on kid tlh Itm es I
ho,_ ve rentioned, COCeS, non -ally, fronm theo LoanA Ha: koet. Tae States
don't use their ordinary r,_ venuo to provide capitol go0ods, capital
se-rvices, capital building-, S and works, but Loan nroney. The Lean
Market in A1ustralia improves when you don't hiaver inflation
boc. ctuLuo peo> 1havo more c+ nfidonce) in a fixed interest investment.
The Loan Market drics up when you haave an infj. ationary boor) 1'
because people say " The value of r-iy mioney is runnig away ai th
tii-e. Uhet is the point in taking? out a 5'-yoar Bond, or a
3ond?" A1nd, Sir, what has huplec-Led in fa,, ct, is that m-, y
Government, as thei first GoDvernment. Jn -! srla over to do it,
has every yea-r, supplemrl-. e d heLcatn Mar-ket mn behalf 3f the
Staze Governments. WIe 1iovec. madeI the diffcer ence botween what
the lenders of money w% ould give the G-ov-ior. enIC.!, uthat was
needed for the vrorks pregrarme.
( Interjection) Ladlies and ~ lto t7u. sm ng et away f1-rm this. He
doesn't understand what I talkin6 about. But do, yrou do.
The fact is tha-t unlesS you can -get rid of an in'fia-tinary boom
theo prospects of aorr:) wiigir cq for Public works will -dir:ñ iJnish
year by year. N-ow,, nnybo'iy can understand that. A1nd under thec
system that we have had thais wuld riean tha,. t the Cmowat
itself wmuld find thrat groater mnd sreate r proportiuin ) f the
rioney for State work". s out of its Budget. And what heappons -then
is that the taxpayer of AustraiJe and that is probably every
grown-up person here to) ni gh and a lot nore has to find the
extra m. oney out of revenue fir tha,, t year.
Does it strike you as reasonable that the taxpayers of
1961 should have to find, in cash, out of their annual o rnings
for that year the whole capital cost of works which will be
enjoyed by their children? I don't think so. I think it is a
fair thing that the burdens of these i. naters should be spread.
But the point that I want you to have in mind is that unless you
can got rid of inflationary boons, unless you can produce stability
in our econo. iy, then the ; works progranmes are going to represent,
overy year, increasing burdens on taxes and taxes will be steadily
increased year by year.
Now I'n not a theoretical econonist; I've been
entrusted by the people of ny country with these matters for a
long time, longer than anybody else ever was, and I've got to know
something about then. I'm not talking theory; I'n talking hard,
practical experionce on these matters.
Now, Sir, those are two illustrations of the enorous
practical inportance of dealing rwith an inflationary boon and
dealing with it strongly, firmly, not being afraid of a little
unpopularity over it.
You ray think, you know, that we are unpopular. I've
boon pretty unpopular with some regularity all through my life;
and I'm still here. And I don't mind being unpopular in a good
cause. Now, how have these policies of ours been rworking out?
Have we had the discnfort, have we had this tenporary phase of
some unemploynent not a great figure, but an undesirable figure
of course, a miserable figure from the point of view of the people
who are out of a job bave we had these results for nothing? Has
the policy produced positive results? Has it produced results so
positive that we can look forard to a period in the near future
in which evorything will get back on to its normal tracks, and we
will be going about our affairs in the ordinary way? I think the
answer to that is " Yes".
There are two or three matters that this policy of ours
was ained at. The first was to protect our overseas balances,
money built up overseas in order to pay for imports as they cone
in. The first thing was to protect those from running away. The
fact is that the policy has been so effective that at Juno
just the other day, the diminution of the balances that we had
feared back in November had not happened, because of the policies
and the neasures taken. I an happy to say that at the end of
June ( Interjection: Do we ha. ve to nport things? Can't vwe produce our
own? ( Well, unfortunately we can't)
( Intorjection: Why?)
( If you think that by a stroke even of your pen you
could produce in . ustralia tomncrrow œ 1 00Om. worth of goods now
imported, then you are the greatest optinist I over know in ny
life). I have no apologies to make about the developc-. nt of
Australian rmanufacturing during our torr of office. It has boon
phenomenal. I know that sonething is made, occasionally, of some
enterprise that has increased' i. ts o nloynont year by year by year
over the last 8 or 9 years, not being able to increase it this
tine, or even to reduce it a little. This is sinply one of those
8.
things that happens in any economy. But the point that I an
getting at is that the balance of payments position in Australia
has been arrested in the nost dranatic fashion by the stops taken
by us. It was only today, as I was coning across to Tasmania,
that I was able to read in a loading article in the Financial
Tines of London, applauding what had boon done in Australia, and
this remarkable result.
What about land speculation? Did you like it? Did you
think it was a helpful thing? Did any serious married couple of
people in this hall, thinking about a house, not worry about the
prices that were being run-up for a block of land to put a house
on? The land speculation boon in Australia, in all its various
forms, was becoming a social menace. That boon has finished.
There are all sorts of other things: the activities in
the hire purchase field, adn irable up to a point, were reaching
such dimensions that people were acquiring liabilities on household
goods which they would not be able to discharge if there were
one breath of adversity in the family earnings. All this has been
quietoned down; brought back to a reasonable level. We are not
looking for a low-level of activity; we are looking for a high
steady level of activity. Therefore when I talk about quelling
the boon I talk about bringing matters back to that level at which
money, in other words incomno wages, salaries, whatever they nay
be, will maintain some steadiness of value, and enable people to
plan their future with some security.
Finally, I just want to say this to you: these are all
natters worth thinking about. They are matters, I agree, worth
explaining on behalf of the Governeont from time to time; but,
above all, I do want you to believe this simple truth, that 20 nen
don't go mad, all at the same tine, suddenly. If anybody had
talked, 12 months ago, about our policy we wouldn't have heard any
of these criticisms. People wo. uld have said, " Oh, things are going
along; in fact they are booming along. Everything in the garden
is lovely". And for 10 years, with one or two interludes in which
we have had to take stringent measures and they haven't been
extraordinarily popular at the time for all this period of time,
' 49, 59~ ' 5 8, you have voted for us. I don't think
many people have regretted that they did. I just want you to
understand that if we, in a few matters, take steps which you don't
like very much, or which may hurt somebody hero or there, we are
not taking then for fun.
Now, ladies and gentlemen, I have talked long enough for
my good, if not for yours. I just want to say that I ua
delighted to be hero t. night, i really dicn't intend to become
involved in a political argumecnt; I thought I might have saved
that until the next election. But as my friend over there seemed
to believe that the next election won't be much good to me,
perhaps I was right to take the opportunity of talking about it
now. ( Applause)
l,