61/ 041
LIBERAL PARTY RALLY, LAUNCESTON
_ Jthu ly, 1961
Speech by the Prime Minister, the Rt. Hon. R. G. Menzies
Sir, Senators, members, prospective members, ladies and gentlemen:
I want to tell you that I really feel that I am here
under false pretences, Among the insinuating qualities bhat the
Chairman has is one of leading you on. When Icpencddmy sheet of
paper you know we always get a sheet of paper when we are
travelling I thought that we wjre going to stand around, and
that I was to speak for 10 minutes. However I will probably havo
to talk a little longer.
I think perhaps I ought to begin by saying that I have
a very soft spot in me for anybody who will undertake to win
. ilmot. I have never understood why we lost !! ilmot; I've never
understood why we haven't won ' Jilmot back; and now that I see two
candidates, and havo heard them, jointly and severally engaged in
the good work I begin to have hope that good judgment will come
back to . ilmo this ye: r. Because, really, Wilmot ought to be
represented by somebody of cons. quence. ( Applause)
As for Bass, well I take my hat off to Brownie
Marriott. ( Applause) You see this is a perfect example of
example being better than precept. Here he is, an eminently
respectable member of the Tasmanian Parliament, likely, under the
deep mysteries of the Hare-Clark voting system ( Laughter) to
remain a member of the Tasmanian Parliament forever, or so long as
life lasts: and he turns his back on this rather verdant prospect
and says, " I'll have a crack at Bass". And good luck to him.
( Applause) But if there is one thing that stings me a little it is
that it isn't so long ago that wo held four of those seats out of
five. iJe have, at one time or another, in imy period at Canberra,
held each of the five. Today we hold two. This is not good
enough. Do you know this really makes Tasmania a rather
backward State, the one State I say this to you quite frankly
in which the decline of our political fortun-s in the Federal
field has been so remarkable.
Now whose Cault is that? You can't say it's iay fault
entirely bccuse I'm the Prime Minister of all the States and it
hasn't happened in other places: it hasn't happened in
Queensland; it hasn't tappened in Victoria; it hasn't happened
in Jeostern Australia. It has happened hero. Perhaps the reason
for it is that in a smaller couunity we know each other so well
that we are mor. conscious of each other's faults, than we are of
the virtues of the other mane " Oh, so-and-so, I know him well; I
was at school with him. Oh, he's just an ordinary fellow, yes"
And having disposed of your own man on that basis you then vote
for somebody who is practically a half-wit' ( Laughter, applause)
And it won't do; it won't do. If there is one thing
I want to say tonight it is to seek to recall this State, this
favourite State of mine, as you know, in a personal way, to
recall this State to a sense of its own pride and responsibility.
It is your simple duty to give back, in the Federal Parliament,
Braddon, i-ilmot, Bass, to the Govcrnont. And it can be done if
everybody in this Hall tonight and there are not so many of us
said " This is my great objective for 1961". It co uld be done.
There is nothing that can't be done by enthusiastic supporters;
there is n. thing that can't be undone by feeble friends, the kind
of friends who say " Oh, yes, " Yus, but" won't put thesn
boys, or oither of then, into Parliamnnt; " Yes, but" won't put
Brownie Marriott in as mr., bor for Bass. Of course not.
You can't have this qualifici support. This I believe
is an occasion, for reasons that Denhan Henty has mentioned, when
nothing but the warnest support will do, because if we can't win
our full quota of scats in the Sonate and we won't do that
unless we win in the Lower House then, although after the
Election we will still be in Office, I don't doubt it for a
morment, we will have the serious risks of having a Senate of which
we don't have coimand. What happens then? We are entering a
period of great economic troubles; oven more so we are entering
a period of im. onso international problems and complications, so
imnmoise that I hardly care to think about them except in private.
Fancy having a Government at Canberra, the Government of the
nation, the only Govornment that ropresents Australia in the
Councils of the , orld, rendered frustrated and futile by a hostile
Senate. I had this once you know, when you were first good
enough to send me back into Office at the end of 1949 we had a
big hostile majority in the Senate. And right through 1950, and
the first half of 1951, we were in trouble constantly. We
couldn't got a Bill through the Senate; we were always liable to
have . ny of our measurus just pushed asid,, made to look foolish;
we woro being rendured, in the public mind, futile not because
we woro futile, but because we didn't have a rmajority in the
Senate. Thereforo I began that now classical series of
movements which brought about the d. uble dissolution of 1951, a
double dissolution which the learned gentlemen of the Opposition,
including your famous ox-Tasnanian Sonator said c:) uld not be done.
But it was done. And we got a double dissolution. And we cane
back with a rLajority in both houses.
So that our real period, you know, of authoritative
Government didn't begin at the end of ' 49; it began, because of
these reasons, in the niddle of ' 51. That is why it is, in
reality, 10 years old, although by the end of this year the
Government itself will be 12 years old. Dut in trrms of
effective adinistrative authority and legislative corinand, and
an authoritative v-oice in the rest of the world, 10 years. But
it night h: ve been 11-.
Now I beg of you, don't let that happen again. You know
the business of th. e Governu-nt of a nation is troeendously
inportant. You have to ovtoe your days and nights to it, you
have to concentrate all the intelligence that can be marshalled in
order to deal with the oroblemr. s of a nati. on in this cormplox,
. odern world. A lot of your friends think you are righft;
even rore ny think you are wrong. But the fact is that you
ca! not ( do the job as it ought to be done if you are devoting your
attention to side issues, to the eochanics of staying in office,
to the mechanics of conducting a. anoeuvre so that the Senate
won't be able to frustrato y: ou. Look if you don't mind no
saying so, I speak with oxport knowledge on this mattor. I have
had more oxperience of this kind of thing than any other living
political loader. T can r.. neranbr when I -was first Prime
Minister, which will be beyond the memory of some of you, in 1939,
trying to conduct a Gov. rnront which was a minority Government
because the Country Party w. ulln't play, and sat on the crossbenchos.
' henover I went back to the L. d)* c on Friday evening
when the House was up, my wife would say " Joll how are things
going?" ind I w: uld say, " My dear, we arle safe until T1uesday".
( Laughter) Lo. kin. back on it, it sens funny doesn't it? But
living thr: ugh it it didn't soem funny because it rmeant thot
of your time was being devoted to political exorcises which no
Govornment in a tim! e of great national importance ought to be
roeuired to engago in. There is no m:-% re copletIo way in which
you can avoid these unhappy results than by taking this wonderful
opportunity that now presents itself in Tasmania, or that will,
at the end of the year, to win back these throe seats all of
which ought to be ours, and to give us a majority in he Senate
which I believe we will need in this State if we are to have one
in the Senate as a whole.
Now having said that to you I just want to mention,
quite briefly, two or three other aspects of the affairs that we
have been odaling with. Mr. Thonas said, very rightly, that he
hoped that in this tine, the period of economic difficulties, the
position of the primary industries w:, uld not be overlooked. Now
of course, as he knows, we have been extraordinarily conscious of
this problen. I said something about it last night in speaking at
Burnie. What can be done for the primary industries in terns of
taxation measures, and so on, has long since been done by us, far
more than for any other aspect of industry. But we believe that
hard as inflation is upon oll people with fixed incomes, it bears
most cruelly on rural industry. They can't pass their costs onto
somebody else, unless they are very lucky and live in a little
closed market. The wool industry has been referred to. This is
the great industry of Australia, the industry of all industries
upon which our international solvency depends; which enables us
to buy from the rest of the world all the things that we need. I
wonder if I might put it to you in this way. If the wool industry
in Australia were blotted out tomorrow and we no longer had an
inco: me from woo, hardly a manufacturer in iAustralia would fail to
receive a violent blow. Because, of all the imports that cone
into Australia, 60, 70%, maybe more, are imports on behalf of
manufacturers raw materials, plant, all these things. And yet
of all the export income that we earn with which to pay for our
imports, a high percentage, perhaps 40%, sometimes 50% is earned
by the wool industry of Australia.' So all you have to do is to
abolish our wool income and you can write an end to our present
high and happy state of living, our high and happy state of
national development. These are important facts to h: ive in mind. WJe must
never lose sight of them. -de don't want to soc the wool industry
subsidised: this would be the crowning folly, wouldn't it, of
national economic history, to subsidise the wool industry? Who
subsidises whom? It will be a problem, won't it, in due course.
do don't want to be subsidising other primary industries which
produce, primarily, for export to the rest of the world. But if
we are not going to, then we must take groat pains to see that
their costs are not added to by a high and rising inflationary
pressure. The greatest sufferers in an inflationary boom in
Australia are the men who produce from the soil for export. Now I
say that as a member for a metropolitan seat. I haven't the
faintest doubt that this is the truth. But of course the moment
you begin to attack inflation then the fun begins. How do you
attack inflation? Nobody denies that in 1960, last year we had
an inflationary boom. I occasionally indulge myself in the luxury
of reading " Our Ecnomist", or something, in a newspaper or " Our
Financial Editor", in a newspaper, or " Our Commentator" in a
newspaper. I read them all for they are most readable most
readable. They usually disagree with each other by and lge; but
anyhow there is no harm done by reading them. Not one of them
denies that in 1960, this last calendar year, we were confronting
an inflationary boon, shortages of labour. People are always
willing to tell mo that there are a hundred thousand people
registered f) r employment, or whatever it nay be; and of course
I don't want that to happen. But they don't tell me that last
year the position was exactly the opp. site, that to get labour
you had to bid up, and pay oxt'a rates over the awards, you had
to buy people's servicos by heav'y ovortdrae. t) uito rightly, when
people aro scaC2' ce in coi... paroison wJitht s tthiyi ~~ r pce
That is good priivate ent( riprise rnips. But i~ t doe), sn't reduce
the costs of pr-ocUIction in industry; it doesn't red-' uce the costs
of the man tt'h e land. i. J ho: n he finds that it cost-Is imr ano; ther
2d7 3d, 4+ d, 501. to produce a pound of wool he can't say to himself
" Mark it up to the public" to the sane extent, because he ca~ n't.
He sells his wool by auction; heo gets what the world will give
him. A" nd I want to make it qu-ite clear to you that wej live in a
world in wbhicl our grea&, test nati.. nal or: oducts ' on tho wor-ld market
receive the s >" cThey ma~ y be -roo. ll theyo nay be moat,
they maybe ase rnt,: 0s -incirensingly ip,-itant ut~ a
including thie no--ferz'eus :: Iotals b LIt -ih y reu2 tU .; 1K0 Vcorld
will give fo-r thrro,. I f You lift z ho. cost of10?. 2~ in o o
by having a rierry, inflationary hol41iday, theon yo.. u will end b
destroying the.
Now I an an old : oolitic-al sweat and qulte, franly I
have got to a stare of lifa Jhen I an-not4--AT to cry 7 a, f to
sloocp if somobod:. k,-icks me out. Ilve, bee,-b. r a. lrng to. Bat
I would resign rlmy job if I -didn't th. ink i hono) ujh guits in
no to stand up to-an inflati. inaW-probleii and, D htIto
was the right thh t d bot t ( dpplaase)
Xc~ w tK _ ro is sonoithin7 rat! ' or c. orortable about
inflation. It's -er-ofitabeI~ from, the oitof view. of somle
people. I u-a'dersC-nd that: more oolrigpic level, more
turnover theIse UThings have tho ir getatato; Btte
have no attiractio-n wha-IIIeor for pople vhoso iqe-Io-nes are
reatively fixocd, no attraction uhate. ver for people viho are
living on sup) re: -.-uati-Dn, or pension benefits, no attraction
whatever for po; ewho have pr. ovided for theimselves by
investments on f -ed rates of interest, as so rmanv people havo,
nco attractio) n wl) hatever for the holders of over f-l, OO0m, worta of
Savings Bank del) o: sits in i', ustralia. They don't want inflation.
ndin order to deoal with inflation you must hit it quite
violently on the heoad, yo-u mustn't be toe p) ollto about it, you
must bring it to a hajt, I notice thiat everybody now concedes
thiat we have, tL. tth..' bo-m has passe d ever, that land
sp culation has fallent back to a ver-7 remr.-.. kable de ree0 I don't
find many people who Idony TShat. But we st.. 1 ' have pe) ople who will
say to and no ' Dou:-ot say to y Ibrother candidates hare on the
platform in due course, th-. at the cause of all, tho, tro) uble is
" lthle crendit squeeze". It is o) ne of those beaut-iful uexpressions.
I don't thiink too -, any ople, except a few business men, know
what it -moans. But I will explain it to) yo) u in one paragraph.
You havo an inflatio--, nary b om: when there is miore money
av. oilable to be spent than there are goodr)( s and services available
to be bo-ught. 1When that hiapp-ens the-: price of everything ; OOJS LIP
thec price of labour, if it's labour that is short; the price
of m~ aterials, if it's matorials that are sho rt. ldhatovor it may
be, yoju can't halvo two people with the moneny in theair hands
competing for one lot of supply without seeoing the price go up.
Of course if you are dealing, with such a, situation yo) u are going
to m.-ake an coemy of one or other, or perhaps both, of the two
buyers. Theiy say, " This is terrible, this is terrible. You
should have allowed us to geo ahead in the ordinary way". You make
an enemy of the fello. w who has the , oods to sell beca. use he was
contemplating-: etting a fancy price for them in an inflated
market. I understand thant; I didn't conic Joivn_ in the la., st
showcr. But the interests of the ordIInary peep of Alustralia
a-cc pnramount. You vote, th-a Labour TParty O.. ffice at i-he end
of the year as I said t. uwill bn,, toa.,_ S y pi) lw you
-vio then-in and the infI ,--, nary iofn l9( 2D . they ~ aa
of thi-: ir pror. ises, lie n h gto thc fI'-, ncial õ . ateu
th,( at will ove,, rtake this couantry wlt , in six m MYUtis of theirL
arrival. 4. pplause)
Now, Sir having said that I wonder if I could just
answer quite briefly, two points thai have been put to no and I
am sure have been put to some of my colleagues from tino to tino.
First, somebody will say to you, " Yes, well of course we know the
Govornment has this great probluem and we are great supporters of
the Governnent, you know, but why do you change your minds so
much? None of us knows what is going to happen next." Now that
is good Labour propaganda and I an surprised when I find any
Liberal falling for it. " Why do you change your minds so nuch?"
You know you would think that managing money and credit in a
cormmunity was child's play. , J11 you have to know is the seven
tines table and put a competent clerk on the job and leave it to
him. In Groat Britain which doesn't have a Federal system,
in which the central Governent has uninhibited power over any
subject that you care to mention, there is the Bank of England in
the middle of the structure, like our Reserve Bank, formerly the
Commonwealth Bank. But the Bank of England, lot's say, announces
tomorrow that the bank rate has boon changed, raised 1% or 1%,
the Bank discount rate on first class bills. The effect of that
right through the economy, right through the business centres of
London, right through the financial centres of Great Britain is
instant, and draatic. Wo have no such power in Australia. But
when the bank rate is raised in IMrch and l. wered in July, and
raised again in October, and lowered again in January I have never
yet heard anybody say in England " What a lot of boobies they are
at the Bank of England, they don't know their own minds, they are
always changing their minds". I would hate to go to sea with a
navigator in a rough sea who gave the helmsman the course and
said " I'm going to bed, that's fixed, because it would never do
for me to change my mind". That would be a horrible way of going
to King Island judging by what I saw of it the other day.
( Laughter) Any competent people must be prepared, not to change the
broad course; and our policy is quite simple: we want stability,
economically in Australia, and development on the basis of
stability. But when it comes to applying policy you would be
foolish if you ignored changes of wind, changes of the sea
particular storns that arise, particular circurstances that arise,
very few of which are created inside / iustralia but which affect
us for a very simpile reason, nuch overlooked, that we don't
happen to be the only country in the world. No are, in fact, a
very small country in terms of numbers. But we are a great
trading nation; and we are affected by the wild currents of world
economic events, and of wor. ld trading crises, and so on, just as
much as countries 10 tilns the size of ustralia. Therefore you
muEt expect some variations of application of policy as
circumstances change.
You know, of course, I am a very great admirer of the
newspaper press. It seldom gets what I say right ( Laughter) but
still, no doubt it has a part to play in these matters. They
always have in a newspaper office a gentlemen whose task it is to
write the headlines. Deliver me from head lines. You can make a
prosaic, simple statement of the kind that I characteristically
make and when you see the headline that is put on it you say,
" Did I say that?"
Now it happens that last November when we were
bringing down a few additional economic easur. s, all of which I
firmly believe were quite right and well justified, we gave
thought to whether we iight strengthen our overseas reserves. I
don't want to be too technical about this matter but the nation
has balances overseas which are the result, partly, of the sale
of exports, partly the result of borrowing overseas, or investments
by people overseas, and these overseas reserves of ours must, at
any given timne, be ) retty subs tant-ial. I won't give it a
preciso. i~ r butl coer i-y e n offico. I , i-ve never been very
happy to have theo ove rso as r, s,; rvos loss than F. 400na. because that
represents no nero t. a. an albout ~ 5 non'trs'I purch:: se of imports. rf
we had someo sudden fiflnaflci, tro-uble, a fatal coillap,-.-in the wool
market, or a great drought in the wheat industry, or something
happening, in . Ie iieat industry, we wo'-uld, in -order to avoid
banrutc itoratonll, have to have reserves overseas on
which-impo) rters c) uld draw thkro3ugh1 their banks, in orcdhr to pay
for the p,-ods co,--ing-into L1
ustrailia., By land large we are so
poverty stricken in ' Lustralia that our eople between then Tianage
to buy œ l, 000Li. worth of : Lm. prts every year. Not bad for
million people in a state of incipient ba-_ nkruptcy, is it?
Therefore we must h-ave -ilequate o) verseas reserves. AnMd we said,
" Very well, in ordeor to avoid any suggestion o) f panic, or crisis,
we will, before theo overseas reserves 1fall t, 1o-far as they were
at -that tine by re-, ason of the boon ore will nake a drawi,, ing on
the int. ernati :) nal MontaPry Fund",
The Interinati: on-l 1' on; tiry FLa--d is Oo if thlose
rmysterious bodies like the ,: ati'L..' niI Jank fro7-, wdhich fellows
like me oil be ha1I o f oto~ people, boawmnyfro-rl time to
tine. We decidedf -, hat we 1.'. uld 1ahavj., a.? a po-: rf,-ct right to clo so,
make a drawing; on ti-e Intoernaiti-o nal VootryIund becaus we had
deposited 1--any rllasin it, like all the cother co) nsti,-; tuent
countries. Iesaid "' doll, we will draw e will tuck it
into our o) verso" as re1sorves. It prbal w!, rn't. be noedel but at
any rate it will prevent pepefrom ge:, tting, -n idea thcv there is
so-iel critical state affairs". Thea last thin,] to ha,. ve is this
miserable attitude of crisis, the loss -of c:) nfidonco, the
p) rophets of' gloom, tho peoplle whio create depre; ssions by advertising
their owrn troubles about TTihieenr. e fore we-made this drawing.
At the tineo we riade it we , DUt a statemeont in to the
International Monetary Fund. and my colleag-, ue, the Treasurer, Mr.
Holt, tabled it in the Huse, of Represenltatives with an
accompanyin stoteurent. P-rlianont approv( : d of the drawn and
the headline that nigwht in the" papulr was relaxati~ n in credit
squeeze until. June, 1962". Thor r-ust halve been afair number of
business. ien whio road tChat hoadlino and went ba, c k and said " Well
-that's the end of' it. Not until June, t62. 1rnother 12 months
with nothing. doneo to relieva tho pros. ent position". The headline
was, as a point of fact, completely falso, I b. rc,-u -ht with meo to
Tasmania the precise words of our st-atement to thLe Fund. I will
read them'. to you: they are not varr they arc completely
true, they are consistent with everything that tie have done;
and they are consistent vith the re~ narkable fact that between the
tinec whie. we prosiintc. this d-cumeont to the M-rne-tary Fund and
tuday, we have made two or thr-so iL. ajor relaxiations in the policy.
It is wo-rth remem: bering; that, bocause people who thought weM htad
contracted out of doing it must h3ove buoon surprised when we did
it, Here is the rclevant part of our statement:
" Economic c-. nditions in _ ustraia -r suJetorai
chan( e r * nnf luenced 1by a number of external factors
outside the Government's control. Poli -cy has thoreforo
frequently to be ad1ap) ted to meet a shift in conditions. The
declarations of policy riade here miust the-refco be undo rstoo) d
as applying, only to conditions as theoy now appe;-r. Sho) uld any
m~ ajor shi ft in the direction or emphaasis of policy become
necessary dluring the currency of the stand-by arrangem,):, ent, the
I . ustLralian Govcernmeint would, at th e request of thie Monaging
Dircctor, ready to co+ nsult wdth ' the Fun,,, nd, if nece3ssary,
reach now und ; rstanding ;: ofore any request -for a further
dra-wing+-under s nd-by, : 7rran-oii+ ent is made",.
Th-at doesn't s . und m-. uch like a cast-iron p ositio) n fo-r 12 monthls,
) os it?
" Seasonal needs apart, however, the Monetary
authorities"
that's the Reserve Bank and ourselves
" intend to keep a firm control over the liquidity position of
the banks"
which I nay say the Banks would do themselves, anyhow, because
that is part of their great art and responsibility
" with a view to limiting during the year ending June ' 62 the
amount of outstanding bank advances to a total that would be
consistent with the maintenance of financial stability".
And on those words you wore told by some clown " No relaxation in
credit squeeze until June, 1962". The document as I have read it
to you makes it quite clear, now, as then, that our policy is to
maintain financial stability insofar as any Government of the
Cor. monwealth can do it; and by maintaining financial stability
encourage the development of Australian enterprise to the fullest
extent and the increase in the . ustralian population by
immigration and otherwise.
The last thing that I want to say to you, because I
have spoken much longer than I had any desire to do, is this.
Prophets, notoriously, have no honour in their own countries;
Governments have very little honour in their own countries. The
number of people I have met who could run the financial affairs of
Australia bettor than we could are le. ion. The pity is that they
don't go into Parliament.
But outside Australia there are hard-headed people who
want to invest in Australia people in the United States, in
Canada, in the United Kingdom which, with all its own profound
economic troubles, much more grave than ours at this monent, is
still the largest investor of private funds in ustralia
A few years back I used to say to my Treasury people,
" Tell ne, what do you estimate to be the inflow of private
capital investment into Australia, not public borrowing by
Governments but private capital investment, a company deciding to
start something, a company investing its money in sonmthing?"
And when the answer used to be, 10 years ago, 8 years ago, round
about œ 100m. I must say I used to rub ny hands and say " That's
wonderful, that's wonderful". ' nd so it was. Because
million people can't find all the capital that they need to
develop this enormous continent with its resources. By last year
that inflow had reached a figure roughly three times the size of
that of ten years ago.
Then along cane the blunderin~ Monzios Government and
wrecked the economy. I suppose that all these wise, shrewd
follows not philanthropists, I haven't encountered too many
philanthropists in the overseas money markets, though I have had
a groat deal to do with a great number of then, nice fellows, but
not philanthropists want to see the right investment, they want
to believe in the country that they are putting the money into,
they want to believe that it has stable Governmrent and sound and
stable ideas, and a future. And in this very year, just ended,
the financial year 1960-61 most of it disfigured, I'm told, by our
reckless policies, the amount that has cone into Australia for
private investment from outside ustralia is an all-time record.
( Applause) I don't feel happy if ny supporters are occasionally
doubtful, critical. You can't win elections, you can't maintain
8.
Government on the basis of doubtful supporters, supporters who
leave, supporters who arc half-hearted. If you are half-hearted
about us then I want to say at once to my friends hero they
haven't a dog's hope of winning the next election, not a dog's
hope. Good as they are, they are not going to win their elections
if the cor. nnunity behind then has reservations about the Governnent
that they are going in to support. Therefore the first condition
of gotting these nen into Parliament House of Representatives
and Senate is to be able to go behind then with a full heart
and a satisfied nind, and a belief, which I say is a well-founded
belief, that there could be no greater disaster cone to Australia
than that the inconpetents whon I look at across the table in
Canberra should be entrusted with the affairs of this country.
( Applause)