AUSTRALIAN INSTITUTE OF' DIRECTOES? LUNCHEON,
IM LBOURHE
Speech by the Prime Minister, Mr. Harold Halt.
Mr. President and Gentlemen:
I regard that as a somewhat qualified introduction but
I have already been told that you will have to leave at two otclock,
so I shall not be speaking to you either at the length the
Treasurer finds necessary at Budget time, or as Prime Minister
on a leisurely evening occasion such as I felt able to indulge
my audience and myself in just on 12 months ago.
It wias for me a priviledge to be chosen as the guest
of honour at the first annual dinner of the first annual conference
of the Australian Institute of Directors and I look back to that
occasion with a great deal of pleasure. Your reference to having
acquired a proprietary interest over me Mr. President, which in
some other context might not have worked out so favourably, does
not appear to have done me very much harm in the meantime in the
eyes of the Australian electorate. If there was any blur on my
national image as a result of hobnobbing with so many directors
at one time on that occasion, at least the twelve months seem to
have given me time to live it down.
There is in Australia, I'm glad to say, a growing
maturity, a growing sopilhistication, not registered always in
all quarters at one and the same time, but broadly this is a
generalisation I think vie can claim. Where at one time a
prophet was not only without honour in his own country but a
profit spelt rather differently was almost a matter of guilt,
people these days realise that . ic are producing a few Australian
prophets who are listened to at times abroad and can with equal
advantage be heard at home, and that a profit in the well
conducted industrial enterprise is a national dividend capable
of being distributed through the medium of the tax mechanism
through all sections of the Australian community.
In one sense I am here with you as a fellow director,
indeed I think I could claim to be a Chairman of Directors of
the National Corporation. You mentioned my previous incumbency
of the Treasury, Mr. President, that, of course, made me probably
the biggest shareholder in most of the companies represented here
today, so that I feel I have come not only amongst friends I
hope they are still friends but I h ive coma amongst people
whose language I understand and whose problems also I have had
to cope with in various Ministerial capacities.
Now you have enjoined me, Mr. President, that these
busy, alert, brisk, intelligent executives must be springing
from their seats and getting into action on behalf of the
national economy by two o'clock and I'll do my best to distill
such wisdom as occurs to me oil this occasion in the time which
remains available to me.
In the twelve months since I last met the national body
much has happened. This is a continent and a nation in which
much continues to happen. It is-undoubtedly the most stimulating
and exciting period in our national history, and in the course of
the year amongst other things I, a-s a good national chairman of
the board of the National Corporation, found it necessary to give
some account of my stewardship to my shareholders, to several
millions of them who record a vote ( I hope not much more
frequently than every three years) and to give them some account
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of what we had in store for them over the period ahead.
I think it's a good Chairman of the Board who, while giving
a faithful account of what has occuired, and gives the facts
about what is planned for the future, doesn't try to promiso
too much. Better the people should be agreeably surprised
that you have done rather more than you undertook to do,
than that they should build false expectations on rosy and
glowing promises which are incapable in the result of
fulfilment, and that was the approach I chose to make at
the time of the last national assessment.
Wie set about a programme for the electorate which
we felt was manageable, which would not unduly disturb the
national economy and yet which continued our forward advance
on a number of fronts and I am glad to be able to say that
the Government having come officially and formally back into
office vwe have set briskly about giving affect to those
undertakings. I won't, because of the lim-itation of time,
try to take you through in any detail just what we have already
done and where we stand at present in relation to these mattersthat
will emerge from statements made by my colleagues and
certainly by the end of the current Parliamentary Session,
I hope to be able to give some account of how rapidly we have
advanced in all the directions which we undertook to attend to.
In the fields of education, social services, housing,
water conservation, beef roads, the wool -industry, tourism,
which I specifically mentioned in the Policy Speech, I can
tell you that action has already been put in hand, some are
completed, much of it to be completed by the end of this
Parliamentary Session.
My colleagues and I and vie are in a sense the
Directors of this National Corporation can look with pleasure
and a certain measure of pride at the general state of affairs.
The past year has not beon an easy one, only those of us
and this includes many of you in this room who have had to
grapple with quite abnormal circumstances developing in the year,
realise this because for the most part the public was relatively
unaffected by the problems with which we had to grapple.
Internally we experienced a major drought and the effects of
this are only now beginning to ease. Perhaps I could just pause
there for a moment because I don't think there has been a full
realisation of just what this drought meant to Australia.
If you -look at it merely in terms of farm incomes,
in 1964/ 65 the farm income amounted in total to $ 1,255 million.
In the following, year and normally we would have expected
some reasonable progression in our earnings from farm income
it dropped to $ 902 million. In other words a drop of 37% in
farm income, and if you carry forward as one might reasonably
have been expected to do if you were planninG a business,
what you would have earned h~ ad you retained the stock of cattle
and sheep we possessed at that time, then we could have
anticipated a drop amounting to 40% o below what we had received
in the previous year and certainly much lower even than that
we might have expected in the year which was to follow.
Translating it into rather different terms, if you
take the fall in our sheep population. In Queensland, there
was a fall of 32%, in New South Wales a drop of 15%. Altogether
we lost 18.6 million sheep in that period in thlose two droughtaffected
States. The total of sheep population didn't fall as
much because in other States there was somae Gain, but with
nor= s. l conditions there would have been a gain, of course, in
New South Wales and Queensland too, but in those States alone
there was a loss of 18.6 million sheep. There was . a loss of
just on a million head of cattle. . Here I think we can claim
some credit that the loss was held as low as the statistics now
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confirm, because wie had, as you will be aware, been giving
effect to a programme of beef road construction and this
enabled the rapid movement of drought effected stock from one
area to more favourable areas and so we were holding down that
particular drought effect in relation to a very valuable stock
of beef cattle. You get some indication of the ma.-nitude of this
programme when I tell you that our commitment up to the end
of June this year of beef roads will be of the order of
$ 57 million and we have made offers to the States of a further
million to be spont on the beef road programme over the five
or six years which lie ahead of us. As this programme takes
full effect not only will we open up areas of great potential
value for beef production in a world which is increasing its
requirements of beef, but vie shall also be helping to safegruard
against the effects of drought as it no doubt will occur from
time to time in this country in the future.
But those of you who have to conduct your owin
businesses, if you found a drop in income in a major area
of your resources, from $ 12.5 million to $ 9 million would
know that pretty serious adjustments would. have to be made
and when this occurred at a time whsLn we wveie in the process
of doubling our expenditure on defence and diverting national
resources for this purpose, wheni in the same period we had to
contend, particuliarly in more recent months with the effects
of flood and bushfire, you will I think, be the more impressed
by the relatively even way in which the economy has moved
throughout this period, and on present indications the prospect
is an even brighter one ahead.
We might have been pardoned if wie had regarded the
nation's performance as falling far below what actually occurred,
but in the result we moved steadily forward. In the December
quarter of this year, the post-Budget critics and analysts were
saying that not enough stimulus had been given but there was
actually in that quarter an increase in gross national product
of the order of 8% as compared with thu December quarter of
the previous year, and even then that is reduced in real terms
making full allowance for price changes and matters of that sort,
you get a ye rysignificant increase in gross national product
upwards of The December quarter also saw~ a revival in retail
sales of goods. The value of retail sales was up 5.6% above
the level of sales in -the December quarter of the previous year
and, more importantly, during the September quarter there was
a most notable improvement in the percentage increase in the
sales of the clothing and consumer durables group, an increase
which at very least promises improved conditions for
manufacturers of these particular goods.
Also i~ portant in the December quarter of course
was the rise in the level of motor vehicle registrations.
However it's not always easy to please everybody and some
people have suggested that the most recent figures for
February reflect a falling off in the motor vehicle market.
In fact the February sales suggest an annual rate of sale
of a minimum of just under 400,000 and the industry appeared
to be in an excellent position to move along over that
400,000 annual mark as the year progresses.
Housing. This was an area of expenditure about which
some doubt was expressed at times last year, but at the close
of the year, housing approvals wiere running at an annual rate of
124,000 and commencements at an annual rate of 117,000 which are
very close, both of them, to record levels and present indications
are that a higher level of activity will be maintained in 1967.
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The other encouraging picture is in relation to exports
in recent months and these have reached record level. In the
first seven months of 1966/ 67 exports have been 107o greater than
in -the same period of -the previous year and as a result, in these
seven months the balance of overseas trade was 157 million dollars
more favourable than it was at the same stage of 1965/ 66. The
strength of our export sales is, of course, largely due to the
improvement of conditions in the rural industries, which I have
already mentioned, and of course to an increasingly important
extent to our exporting capacity of minerals.
Exports of iron ore, oxide and their derivatives are
fast developing into a major item in our overseas trade. You
might be interested just to have a quick glance at the way in
which these export figures have moved, because they have risen
over the last six or seven years from $ 1,851 million value in
1960/ 61 wie reached the highest point in the following year in
our history to $ 2,128 million. There was a sharp jump again
in 1963/ 64 to $ 2,732 million and this year the estimate is
$ 2,900 millions, and taking an informed guess for 1967/ 68
I would say that we could expect $ 3,100 million or $ 3,200 million
in 1967/ 68. No--v going back to 1960/ 61, or if you thin'-that was a
bad year, but it wiasn't a bad year actually for exports. I'll
take you back then to 1961/ 62, which was the previous record
year for export income, $ 2,128 million. If by 1967/ 68 we hit
$ 3,100 $ 3,200 million, which is roughly a 50% increase on the
earlier record figure, you will see that the national policies
have been fruitful in stimulating that most valuable of our
goals, a rising export income enabling us to maintain a good
level of imports and at the same time build up the internal
standards of the country and the living standards of our people.
There is just one cautionary word I'd offer about this
whole picture, because, as you know restraints have been imposed
in the United States and the United Kingdom, on the investment
of capital from those countries, and vwhereas wie had a
phenomenally large increase in the previous year, some of it
is due to abnormal factors of a temporary character. We are
now finding a fall away from those levels, anyhow, to what we
would regard as more normal levels of investment, particularly
from the United Kingdom and the United States. I hope that in
respect of both these countries, this is only a passing phase.
I am convinced that it can be demonstrated to the satisfaction
of thoughtful planners and heads ol" government in those countries,
that it's in their own economic interests, to see Australia
develop. Most of our reserves are held in sterling for a start,
to the extent that wie better our position, wie better the position
of sterling and it is demonstrable that in the case of the United
States, our export earnings, and in particular the investment
of capital from the United States and this country, has been
accompanied by increased export earnings and increased purchases
from the United States of America, far outweighing any investment
total which may come to us from that particular country. And so
we hope thlat we'll have some success in persuading the governments
of those countries that they are taking a short view of the
economic picture if they in any way inhibit the development of
Australian resources.
But quite apart from th _ At aspect we have to play our
owin part internally, and wie knowi that over a period of at least
a couple of years vie are going to face a fall in our overseas
reserves. We are fortunately strongly placed there, and to have
a certain degree of room for manoeuvre, but it behoves us at the
same time to take our own situation quite responsibly and I say
that because our rise in the wiage level last year wias, I think
of an order which it's going to take industry some time to digest.
If my recollection is correct the total rise was of
the order of and I speak subject to correction but that's
my recollection of it, and anyhow it was of a dimension which
will take industry some time to digest. Faced with problems
for our export industries, many of w~ hom are facing difficult
competitive positions overseas, and faced with a need to digest
an increase of this sort, and to keep the economy in good flexible
supple condition to meet whatever problems we havu to face with
decline in overseas reserves, vie can hope in 1967 that we will
have a year of comparative wage stability. That anyhow is the
view which the Government takes of that matter.
Now I did say something about investment, I'd like
to elaborate on that a little. To reach this stage of our
development, and to carry on our programmes development in
various parts of the Commonwealth, vast amounts of capital
have been and will be required. My colleague the Minister
for National Development has provided a number of detailed
facts about Australia's development programme in a publication
which I recommend your officers secure, which showis that at
the end of June last, major development work under construction
in Australia had an estimated total value of completion of
$ 2,327 million. These works, chiefly those of Commonwealth
and State Governments and their instrumentalities, dont
include such things as expenditure on housing, hospital and
educational facilities, which would of course have swollen
the total very much more, and the figures do not include
expenditure of nearly $ 600 million by the Commonwealth
Government on the Snowy Mountains Scheme. The figures
I have quoted are really on the small side because to keep
the publication to a reasonable size water projects costing
less than a million dollars and railway and road works costing
less than half a million dollars are not counted. Now by any
standards this total is a huge investment programme for a
nation of under 12 million people. We have now in hand
investments in development equivalent to some two hundred
dollars a head of our population.
I spoke of myself as Chairman of the National Corporation
but we don't see that in competition, with the other corporations
and companies repressnted here, ours is a national partnership
with you and it's our responsibility to work in aid of the
development by free . enterprise of the potentialities which emerge
from time to time, whether it's building, railways, improving
loading facilities at ports, establishing wharves and townships
as we are doing now, particularly in the north and over in
Western Australia various facilities in the Northern Territory
and other developmental areas, these are to be carried out to
assist the amazing developments which are occurring in these parts
of Australia. The Government's approach to the developments is
by no means dominated by the view that the project must be big
to be important or worthwhile, and indeed in a multiplicity of
relatively small projects there may be even greater national
advantage than in one or more of the major or more spectacular
developments. Where a n--ed exists and is seen and where it is
clear the Government can make a real contribution then given all
the demands on our limited finances wie wish to co-operate.
I want to say a word about the supply of capital in
order to assist the Australian entrepreneur to take a bigger
hand in the development of our own national resources. This
has been much canvassed and I can assure you a great deal of
work has been done on this matter at our own Cabinet level.
I am hoping that within a matter of days my colleague the
Treasurer will be able to make an announcement on one aspect,
and an important aspect, of this problem vie have been looking
at in Cabinet, not just one proposal nor is one proposal
necessarily exclusive of another or of others, but we do knowi
that our own banking system is here to be helpful in this matter
by some combination of resources and of facilities; wie do know
that there is a willingness on behalf of the trading banks to .6.
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join together for these purposes, and wie have had some fruitful
discussions with them.
The objective will be to assist the Australian
entrepreneur who wants to secure a larger or even the
total Australian equity for this country in these
developments of our national resources, not to be frustrated
by a lack of locally available capital. It may be that in
each case it won't be possible to furnish all. It may be that
there are very good reasons why this should be less than a full
Australian equity participation, but at least we are mobilising
ourselves to do far more in this direction than, vie have found
it practicable to do in the past, and the story doesn't end there.
We are looking at other proposals which could have the effect
of enabling an Australian equity participation to occur in
conjunction with overseas debenture capital brought in by other
interested parties. I can only tell you this in the broad at
this time but you can be sure that as finality-. is reached in
negotiations on these matters statements will be made by the
Ministers most directly conce~ rned.
Sir, my final word is really in the nature of
an appeal to calm judgement and good sense in relation to a
matter which doesn't directly concern you in your conduct of
your businesses, but which does concern us all in the conduct
of the nation. Just as you have to overhaul the machinery of
your business organisation from time to time and make
readjustments in staffing or additions to staff where great
expansion has occurred, so it becomes necessary -although
at very much less frequent intervals in practice -for us to
make some study of the machinery of government, and you will
be aware that wie are bringing forward a referendum which is
designed to break what is known as the nexus between the
House of Representatives and the Senate, regarding the
membership of Parliament.
Nowi we can expect between now and the date of the
poll that there will be a great deal of misrepresentation on
this issue, attempts made to mislead the people as to what is
really involved. Although the leaders of the three principal
parties, the Liberal Party, the Country Party and the Labour
Party have all joined together unanimously, and the vote was
unanimous in the House of Representatives in supporting this
particular proposal, there are opponents and there are critics
including some sections ofthe Press and the Press are able to
present this matter in a way which doesn't either tell the story
fully or give a completely clear account of what is intended.
I say that deliberately because already I've run into situations
where even that august institution the A. B. C. and this has been
repeated in some of the newspapers have presented this referendum
as a referendum to increase the size of the House of Representatives.
This was the way in which the A. B. C. recently led in a new~ w comment
after Itd fixed the date for the referendum.
The referendum to increase the size of the House of
Representatives will be held on May 27th. Well if we just want
to increase the size of the House of Representatives, we don't
need a referendum. We have got full power to do that at this
time. Those people who say we don't want more Members of
Parliament, might very well reflect on our objective, which is
designed to enable from time to time modest increases without
at the same time being compelled to increase the size of the
Senate, which most people regard as being large enough anyhow
for Australia's present and prospective needs. It will have
been twenty years since the last increase occurred by the time
we reach the next Parliament the next election. a
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We do~ put out of range the possibility of
increasing the size of the Senate at some future time,
but we say it's absurd if we want to increase the House
of Representatives by say twelve or thirteen, but on the
present system of voting, we have to increase the total
number of Members of Parliament by seventytwo. That
wouldn't strike you as being good business and it doesntt
strike us as being good sense, and yet without an alteration
of the Constitution, if we wanted to provide a Member of
Parliament for every 85,000 persons ( and that's above the
figure we had back in 1949 when the last increase occurred)
then if we stuck to the pr esent system of voting we would
need to increase the Senate by twonitgfour aud tho ' House of
Representatives by fortyeight. I won't spell out the detail
of it for you now, Just take my word for tiat, they will do
it so well before the campaign comes along. There have been
suggestions that we could alter by having our twelve in the
House of Representatives and only appoint one additional
person to each State in the Senate. Well that would mean
you would have six people elected in one three year period,
five elected in another. The possibility of deadlock would
be about double the present level, and heaven knows we have
enough trouble now with an evenly-divided Senate.
Quite apart from the rather odd circumstance that
on the system of proportional representation those who are lucky
enough to have been chosen in the period when six went out would
virtually have a life tenure of their occupancy of the Senate
without any serious prospect of challenge, but a. o have it in
mind that if we want to make some sort of increase, a modest
increase, not year by year thc, last one was just on twenty
years ago but from time to time then what better time than at
the beginning of a new Parliament, when no one can seriously
argue that in the light of our current majority we are doing
this in order to take some particular advantage of our Opposition.
The Opposition joins us in supporting this, so does the Leader
of the Country Party and his colleagues in the Parliament. The
vote, I repeat, was unanimous in the House of Representatives,
and if you are running a business and knew that when we last
increased to our. ipresent numbers the population of Australia was
just on eight millions, and . when we next meet the electors it will
be just on twelve millions, you'd say it's not unreasonable that
we should have a handful more people to assist in doing the
increasingly complex task that a Government and Parliament have
to carry out.
Well gentlemen more, no doubt, will have to be said
on these matters as we get closer to the event. Some people
have vested interest, one party in particular which can't win
a seat in the House of Representatives, and makes its gains in
the Senate, wants to see a larger Senate, of course, because then
its quota for return in the Senate drops accordingly and becomes
easier, and you'll find it quite vocal. Other people who become
critics have talked about use doing ill by the smaller States.
Well that's not the view of the State organisations represented
on our own political party bodies and I think that 9Qn be shown
to be a very feeble fear. You do get thcase misrepresentations,
some are quite accidental. I read in my paper this morning one of
my colleagues saying that the Commonwealth Government had no
contact with the State Government. When I asked him about this
he said the word was conflict, not contact, and there's quite
a difference in meaning. Then he said he was reported as saying
that the Federal Government is always in a state of flux. What
he said was the Federal Constitution is alwiays in a state of flux.
And again there can be this failure of communications, and our
problem in getting tho story over is to have it clearly and
reasonably understood by our people.
Well Sir, by my clock I am five minutes late.
Sorry to have detained you so long, thank you very much for
your attentive hearing.