OFFICE OF THE HIGH COMMISSIONER FOR AUSTRALIA IN THE UNITED KINGDOM
Australian News and Information Bureau, Australia House,
Strand, London, W. C. 2 Telephone: TEMple Bar 2435
AUSTIALIAN PRIME MINISTER REVIWS
TH C1IM1 , VEALTH ' S ECON0 11Y
The Prime Minister of Australia, Mr. R. G. Menzies,
and the President of the British Board of Trade, Mr. R. Maudling,
addressed members of the Australian Association of British manufacturers
and their guestsat a dinner at the Mayfair Hotel on
s qs? 4 hd to celebrate the association's
S pDurmetsh idaendn. ivTheers aprrye, s ident ofA the association, Mr. Jocelyn Morton,
In the course of his speech Mr. Menzies reviewed the
Australian economy. The main text of his speech follows:
Now, Sir, an occasion like this is not an occasion, as
I long since learned, for heavy political observations. But it
may be perhaps an opportunity for expounding quite mildly, quite
lightly, a few aspects from my point of view of the Australian
economy. I think there are three or four matters that I would
just l-ike to mention to you,
The first of them is that in 1950 17inston Churchill sent
me a cable about import licensing. Not that Winston was a great
expert on import licensing. Let that be conceded at once. But
because there was a certain amount of uproar here about tne steep
impositions of import licensing to which we resorted at that time
and particularly two years later. I remember it very well.
I was put up on a platform over past Westminster somewhere. I had
a delegation from Manchester modest fellows those! They didn't
merely make it clear to me that what Manchester thinks today London
thinks tomorrow. They gave Ye a pretty broad hint that what
Manchester thinks at any time the Australians would never think of
in a century' But anyhow it was all quiie enjoyable and I went away
feeling that there was how shall I put it slight objection to
import licensing' Well, in effect we took it off the other day and Iexpected
to get votes of thanks even frcm Manchester. o. votes of thanks from
Manchester dear me' what it was a crime to impose it was a
double crime to remove. But all I want to remind you about is
this. Tariffs yes. The Tariff Board yes. It's our great
instrument and I am delighted to have heard your reference to it.
It's our great instrument of providing the terms and conditions
on which goods wi: lpass into Australia.
But import licensing what you might call the blunt
instrument of import licensing this is something which can be
justified only for balance of payments and balance of funds' reasons.
And when, as it's happened with us, through the inscrutable
wisdom pa5rtly of Providence and partly of' my own Government;
when it turns out that our balances of payment are good and our
overseas funds are good, it is, quite seriously, necessary, if'
we are to maintain our position as honest international traders,
that we should reduce and ultimately eliminate the arbitrary
impact of import licensing and leave these matters to the tariff'
and to the Tariff' Board.
Now of' course my friend the chairman very naturally has
said that he feels anxiety, and some of you do too, about what
may now happen. If we are to put up a tariff in A:* ustralia high
enough to keep out low cost commodities and of course you
realise Japan is by no means the lowest of the low cost countries;
if we are to do that then we may lave to put up a tariff so high
that it will. impose grievous disabilities on the exporters from
this country.
B~ Now all I want to say to you, Sir, is that that is
Wa problem well known to the Tariff Board; to which the A ustralian
Tariff' Board has been directing and is directing a great deal of'
attention. And in its consideration of that matter it has, as
Susual, been tremendously helped by the representative of your own
WAssociation in Australia,
It isn't an easy one tc get some flexibility into a tariff
structure which will enable you to deal properly with one and
equally properly with an entirely different one. But I do know
for myself that the Board is itself very exercised about this
matter and all I need say to you is that you need have no fear that
it will do its very-best to avert the kind of consequence that you
had in mind., Now the second thing that I want to say a word about.,. 0
Vis this. I have been a long time on the political scene much
too long I think. But I have been here almost a ridiculous number
of times and we've had all sorts of arguments. I. can go back
years to a time when you could genuinely find people in this
country who thought that Australians ought to hew wood and draw
water and grow wool and leave the manufacturing to people who
understood it. That's onl. y 25 years ago.
But a great change has come on the world. The truth is,
and this is the lively thing about our association, this is the
1i211 thing about the Commonwealth or at any rate about Great
Britain and Australia that we know that it is through co-operation,
not throu ' gh hostility; through dynia-mic ideas, not through a set
of static ideas, that we are both going to develop to our fullest
possible extent.
And for that reason one of the things that I want just
to mention to you is the extent of capital investment in Australia.
Recently, when, for some purpose or other, I was looking up the
records, I found that in the last 50 years the population of
Australia had doubled. That's really an enormous increase.
Since the War ended, the last War ended, our population
has been increased by more than two million people which in
a country of our population-size is an enormous development.
We've had the most enormous immigration policy and
programme, W'e have been going through a period of development
so fantastic in the last ten years that I don?' t think anybody
would have dreamed about it 20 or .30 years ago.
And of course you can't have a great programme of
development, you can't have new works of irrigation, of powier,
of bydro-electric works; all the great foundational things that
have to be done mna country the size of the United States and
with one-fifteenth or sixteenth of its population, without making
tremendous calls on capital and therefore without involving yourself
in enormous inflationary pressures. A nd one of the great
answers to inflationary pressures has been to attract into
Australia capital investment, genuine capital investment from
other countries which will supplement the very remarkable amount
of saved and invested capital that goes to work in my own country.
S Again may I trouble YOU to give you a figure or two?
Figuzres that ought to be given Take June 1947 to June 1959
that is 12 years, all post-war years. The private investment of
capital from overseas directly or indirect~ ly I'm saying nothing
about public investment, nothing about public loans either in
Londun, or New York or in Switzerland or from the W orld Bank, but
private investment has been -0819 million. Z: 280 million of that
represents undistributed income left and therefore reinvested in
Australia, and r: 5.79 million represents othor inflow of capital.
Anyhow, .!: 819 million.
Now I turn to the domicile of the investors from overseas.
Uiited Kingdom: Cœ 520 million. out of r' 819 million Z? 520
million.' United States and Canada.: .(" 214 million, and other
sources ( E~ urope and so on): .7285 million.
You know, I think it's a r-. emarkable thing. It's one
of the greatest gestures of co-ope ration and underostanding and
* inteligence in my political lifetime that this country, with all
its problems, with its own tremendous battles on its own balance
Isotef rplainymgen ts, with its owin struggles to advance to a state where
and dollar reserves, trading and financial balances,
vould move towards a period of conversion that in this very
time people in this country, not Government, people like youshould
have invested in Australia. 252D mi-llion out of a total of
œ 819 million passing into Australia,
Now, of course, Sir, I know theire are tho3e who, no doubt,
for their own good reasons, feel a little reluctant about a flow
of capital into their country because they say that ' W-vell, that
means that money will go out. That means that w--e're in the hands
of other people. That means that dividends will be paid out,
and this will become an intolerable burden on our trading position."
And 8.0 if you are troubled by that at all I'm not I would.
comfort you by telling you that at the present tiimie taking our
present financial position in Australia, of all companies' income
after tax and tax takes, of course, about a third of it of
all companies' incomes after tax, œ 160 million goes as dividends
to resident-shareholders and œ 043 million as dividends and profits
remitted overseas.
Now that, I think is a fascinating figure M% left in
Australia, paid in Australia as dividends, and on top of that, if
you take the undistributed profits, which again represent roughly
a third of the profits earned, then of the undistributed profits
œ 201 million accrue to resident shareholders and Pœ 34 million to
non-re sidents.
~ 4.
So you see the point I'm making: that there's been
this tremendous pouring-in of investable capital into Australia,
particularly from here and so far from putting Australia in
pawn.. so far from laying burdens on the Australian economy, the
whole of these transactions have resulted in immeasurable benefits
to my owni country.
And, I hope, considerable satisfaction to those who have
put their money in.
Now I won' t weary you with any more figures. I mentioned
those simply because I think there is some misunderstanding....
But I woDuld like to say something to you about this
celebrated legal expression as it was once " seven and sixpence".
You knt-w, of course, most of you were much too young to remember
the time when a solicitor was expected to charge 7s. 6d. for an
interview. And as I was never a solicitor myself I didn't ever
know it. But we've all become accustomed, haven't we, Mr. Maudltoin
gc, o ntcoe atl atlhkei ngd iraebcoutitn nt heo f sethvee n satrnodk et, h e thseix . s ix Oarn di fth ew e sewavnetne, d
I think perhaps it is desirable that I should just say
something to you about our attitude on this natter because it can be
easily misunderstood, I say " our" attitude, I speak for
* Australia, at least so far as I know I haven' t been beaten since
I left home, though one never knows. But anyhow, our attitude,
and I have no doubt it is the attitude of other Commonwealth
countries, We did not object to the creation of the Common Market,
we did not object to the creation of the Six. We felt that it
was unfortunate that a movement calculated to strengthen the
economy of six European powers should even ap~ m ar to be something
in rivalry to the economic strength of Great Britain or of the
other Wiestern European powers,
But every movement in the world which is calculated to
Sstrengthen an economy of a group of nations is a good movement,
Wand we had no complaint about it because may I remind you we
are, though you think us tiresome occasionally, and even more
frequently irrelevant, we are a very considerable trading nation,
I spoke a little while ago about what the position was
years ago, The exports and imports of Australia at that time
averaged about S70 million each way, And today they're within
a touch of 1?, 000 million each way. We do have the great honour
and the great responsibility of being one of the first ten trading
nations, international trading nations, in the world.
Always remember that,. because that will keep a few things
in proportion when you find us mTaking deals with various people
who are prospectively good customers, Wie are a very very considerable
trading nation, And as a trading nation we felt at once
that the agreement between the ' Issina powers had something in it--
that if this could strengthen the economy of Europe: good.
And then, of course, right on top of that, like yourselves,
it presented itself to our minds that if this were the beginning
and the end, then Europe would be divided economically and a Continent
which is divided economically can before long find itself
divided politically. And there could be no greater disservice / to the
to the free world than to have the whole of the Western European
powers divided into two sections because that would of course
begin tby all thiose pleasantries that economists, Ministers of
Trade and so on engage in, and could easily end up by producing
hostilities, dislikes and finally perhaps tear apart the whole
structure or Western defence a structure which has not become
irrelevant just because there is going to be a meeting at Paris.
And theref( hre when the proposals for the Seven were
avalved. what is called by some people the " Little Free Trade
Area!; when these proposals came forward you mustn' t assume~ that
we were objecting to them. on the cotntrary, we saw in this the
gathering together of a group of people vho vculd be in a powerful
position to construct a bridge between the " Seven" 1 and the " Six".
In a powerful position to have all the thirteen nations associated
in a way which would help their common economy, strengthen their
position, and make them as a result a more considerable trading
Svfiaecwto, r in the world, a selling factor perhaps from their point of
but a buying factor from our point of view.
And we still think that. Nobody need suppose for one
moment that there is some doctrine in the Commonwealth which opposes
this kind of thing, We think that this is a good idea and we
think, really, that it is an urgent idea, just say two things
Wabout it, They're both qualifications but they don't materially
alter what I have been saying,
In the first place we think that as a Commonwealth
country, with all o'dr old associations with this country and with
all t ose mutual benefits that we have extended to each other we
ought to be at the party. We and other people like us ought to
be in the closest consultation when the bridge is being built.
Now that's fair enough, isn't it? Because we In ve our interests,
though we're well aware, as I have said to you, of our common duty
to do everything that can be done to strengthen this structure,
And in the second place, yes, some of you who met some
Iofm my opowerrful enego tiators like Sir John Crawford and so on much
difficult fellows than I an the President of the Board of
Trade he's familiar with my colleaguie, John McEwen, who is now
enjoying the novel experience of fighting my battles at Canberra
and leaving mri, to make the extraordinary statements on the trade
front overseas ( all that's right) of course we'll argue about
this and that. Of course we'll be interested in our exports to
FRurope. Of course we will want to argue sensibly, as I believe,
about preferences which we enjoy, just as you want to argue
sensibly about preferences that you enjoy in Australia,
And the whole point that I want to make is that it would
be a cardinal blunder for anybody to think that those who have
some interest, and they're not here, but those who have some
interest to keep the Seven and the Six separate, to keep the
European economy divided; it would be a very great mistake to
assume.. that they are the people to whom we in the homely Australian
phruse wre " barracking". Because they' re not. We want to see
the highest possible measure of unity. 1-Tieaon't want Vo see it.
at the sacrifice of matters that are important to you and that are
important to -as.
But for the life of us we can' t urderstand, nor indeed
ivould the President deny it for one moment, ' Pe can't understand
/ any reason
any reason why Commonwealth countries like my own, increasingly
si. gnificant in the world, should not be at the party, at all
relevant times, able tn say what we think, able to be told what
goes on. We still have a little to learn about the price of
effective brotherhood, and the great price of effective brotherhood
is that we should have no secrets one from the other; that
we should always sit down together and commaune with each other
at the right time; that whatever disagreements we have should
be in private. and whatever agreements we have should be placed
in the shop windows.
Now I know that in saying that I am speaking merely the
mind of my distinguished col-e ague, the President of the Board
of Trade. But I thought I would make a reference to this matter,
because I know how some of you may have felt that we are developing
in a turbulent, aggressive fashion. Itm flattercd when someone
tells me that I'm aggressive, Opponents at Canberra assure me
week in week out that I'm a weak-kneed apologist. And so I don't
mind who tells me that I'm being aggressive. I'm not really
aggressive because I begin all my thinking on these problems and
end all my thinking with whatever little differences and occasional
irritations may have intervened I keep coming back to it and
saying that iWell, you' re half Scots and half Cornish and you're
British to the boot-heels and we will sink or swim together.
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