ANNUAL CONFERENCE OF FARMERS' SETTLERS? ASSOCIATION
SYDNEY, 31ST JUL; Y, . l
Speech by the Prime Minister, the Rt. Hon, R. G. Men& ze
Mr. President, and ladies and gentlemen:
If, technically, my job this afternoon is to declare
the Conference " Open" at the end of my speech I think it might be
a wise precaution if I declared it open now ( Laughter) which I
do, Sir, with great goodwill.
This afternoon I don't want to talk too much about
things that you will talk about later on. One of them, for
example, is the recent change in the basic wage. Now I am not
going to debate that unduly because, like you, we take these
things, if we can, as they come. But there are two aspects of
the basic wage inquiry that I would like to mention very briefly.
The first of them is that the thing that troubles me
most about the last decision is that it seems to contemplate an
annual adjustment of the basic wage on the basis of the changes
i. n the Consumer Price Index. Now I don't say that it literally
said that; but it appears to contemplate something in the nature
of an annual adjustment on the basis of an Index figure. For
myself, and speaking with great respect to the Commission which I
am sure considered these matters with great care, I don't like
this business of adjusting things on the basis of an Index
figure, and above all, the great mass of wages in the country,
because this means that overy time there is an increase the
tendency will be for it to produce in the following year another
increase. Consumer price indexes tend to respond, pretty
accurately, to the cost level. I don't like that very much. I
think that we ought always to be in a position to have the basic
elements ii costs determined from time to time on a perfectly
independent investigation, and on an independent footing.
There are a lot of people in Australia, there may be
many of them in thiscity, who don't nind if these items keep
rising because, let's face up to it, there are quite a few people
in Australia who have a vested interest in a degree of inflation.
But you haven't. From the point of view of the man on the Land,
whatever he may be producing, inflation is enemy 110o 1; and any
policies that are taken to restrain inflation are of most vital
importance to the great primary industries of Australia.
Therefore I don't look very happily at anything that suggests
that there will be automatic changes, or that we have reconciled
ourselves to going up, and Iup. Speaking on behalf of the
Government that has recently, I'm iold, made itself a little
unpopular ( Laughter) with anti-inflationary measures, I repeat
here what I have said time after time elsewhere that some people
can pass on the cost of inflation, But the primary industries
can't. Therefore I am not surprised, and you won't be surprised,
when I tell you that although I have found in Sydney or
Melbourne a few rather acid remarks being dropped w. ith great
courtesy into my ear., ha~ en't found it in
been recently in uoeensland, Jestcrn Aastralia. Tha mania,
moving around here and there and I find, as I expected to find,
a very profound belief in the minds of those who conduct rural
industry that stability in prices and costs is of tremendous
importance, to them; and therefore of trcmendous importance to
the Australian nation.
There are two groat organisms in Australia which have
much to do with economic policy now get out of your minds this
old idea that Canberra has all the econom. ic powers, and that
Canberra can do what it wants to do, because of course it has
extremely limited authority but two great organisms have very
great authority. One is the Tariff Board, a much respected
institution, which is at the very basis of our tariff policy,
and of all parties' tariff policy; and the other is the
Arbitration Commission which is at the very basis of wage-fixing.
I will take the second to illustrate what I have in
mind. Frankly I don't think that the primary industries have yet
taken sufficiently seriously the immense authority of the
Arbitration Commission. There is, for instance, a claim by
some Industrial Union, there is a response by a series of people
in the manufacturing world, Counsel for the Union gets up and
quotes balance sheets, profit and loss accounts, demonstrates
that a great number of leading companies are doing very well
indeed as they are and I want to know why it is that on these
occasions there is not, regularly, a formidable presentation of
the case for the primary industries. Nobody can do it for you.
My experience in life is that if yot want something done
powerfully, from your own point of view, you jolly well do it
yourself. Nobody else will do it for you. There was a tinm
when wage fixing did not have a direct impact on many rural
industries but today it does. And I would think that the
Arbitration Commission itself would welcome a powerful presentation
by the primary industries of the impact of whatever claim
is being made on their industries, and therefore, on the export
business of Australia as a whole.
I have mentioned this to individual friends of mine who
are farmers and graziers and they look at mo, they detect in me
the horrible signs of a former lawyer ( Laughter) and they say,
" You know, very expensive; you lawyers are very expensive"
although, mind you, they are very much more expensive now than
they were in my time.( Laughter) And my reply to this is,
" Well, that's all right. Suppose it costs a few thousands
pounds to out a case to the great wage-fixing tribunal of
Australia; what is that compared to the many, many millions of
pounds involved, or possibly involved, in a decision?"
Now I just throw that out to you not because I am
advocating the interests of a profession to which no doubt I
shall not return ( Laughter) much to my sorrow but because I
seriously think that this is a matter that deserves constant
thought. We cannot afford to have great industrial issues
determined on a narrow basis; they ought to be determined on
the broad national basis. They can't be, unless people like
yourselves take a hand in the game.
Now that is all I want to say on that matter. What I
really wanted to do, Sir, in opening your Conference, which I
have already done, was to say something to you about a matter
which is, I suppose, on the lips of all of you today the
possible entrance of the United Kingdom into the European Common
Market. I understand that some announcement al be made on this
matter one way or the other by the Prime Minister of the United
Kingdom, at about 1 o'clock in the morning, our time that is to
say just before the tea adjournment at the Test match. ( Laughter)
I won't presume to anticipate what may or may not be said. All
I know is that this decision is one of the most momentous
decisions that the United Kingdom has had to take, in time of
peace, in my lifetime, a tremendously significant decision. If
the decision is to go into negotiations then of course when the
negotiations have been completed and the United Kingdom knows
the best turns on which it can go into the Common Market, there
will be another decision, even more momentous, and that will be
the decision whether to go in on the negotiated terms. So here
we have an epoch-making ratter, a matter which has been in the
air now for a couple of years, a matter on which Imysolf have
had discussions over the last two years with Chancellor
Adonauer of Germany, with General De Gaulle, the President cf
France, and of course with Ministers in Groat Britain. And the
other day the Secretary of State for Commonwealth Relations, Mr.
Duncan Sandys, came out hero and he had discussions with us,
having had discussions in Now Zealand. And having had talks
with us he went on to Canada and had discussions thereo
In the first place, we have had general talks about, this
matter for a long time past. This was the first time on which
we had had specific talks and had got down to what you might.
call some of the brass tacks of the problem. Because this will
be very much, no doubt, in the press in the neal future, it might
help you if I tried to explain to you what the various aspects of
this matter are that concern us, that concern you and rn,
Nobody in Australia can be dogatic at this time because
half of the questions that arise are not yet capable of answer.
Don't write me down as being violently opposed to something, or
in support of something: I'm just going to tell you what I
believe to be the issues, and how we ought to approach them.
First let us have in mind that the Treaty of Rome was
executed years ago there are six countries in it, France
Germany, Italy, and what we call the Bonelux countries, Belgium,
the Netherlands and Luxembourg. The object of the exercise was
that over a period of years 10 years in the first place I
think it was, now lookihg rather more like 8 or 7, or perhaps 6,
they would gradually develop a Common External Tariff so that
there would be a uniform customs duty right round this area. as
against the rest of the world. There are one or two exceptions
like tropical colonies, but I won't complicate the matter by
dealing with them.
At the same time as they achieved a conmon external
customs barrier, they were to develop internal free trade, so
that in due course the products of Germany would enter France
free of duty, the products of France enter Germany free of duty,
and so on. Therefore if Great Britain were to go into that
schere now, unconditionally, as the other six have, the position
would be that French wheat would go into England free of duty,
and that Australian wheat would pay a duty to go in. This would
be preference in reovrso; this would mean a complete internal
preferential free trade area in Europe, including Great Britain,
and a common customs barrier against the rest of the world,
including countries like our own.
Now that is if they went in unconditionally. I've no
reason to suppose that they will. But the other six have all
gone in unconditionally and they are working towards that
conclusion. If Great Britain wont in unconditionally then I have
no doubt that the Scandinavian countries would; and if that
turned out to be right, as I am sure it would, then the position
would be that Danish butter would pass in free of duty into the
United Kingdom market whereas Australian buttor, and Now Zea. land
butter because butter is an enormous item in that country
would be up against a tariff barrier. These are obviously very
grave considerations for us.
But it isn't fer us to tell Great Britain how to run her
business. IJe can offer our views I got almost hoarse offering
mine in the course of our negotiations with my friend Duncan
Sandys we can offer our views, we are not without them. But in
the long run, as we emphasised at all stages, the United Kingdon
will determine for itself what it is going to do. No doubt it
will pay great attention to what has been said in the
Commonwealth countries.
4.
One of the things that Great Britain has to answer and
I don't know the answer to this is whether in fact her memborship
of the Connon Market would strengthen her own economy. Now
it is tremendously important to us that her oconomy should be
strengthened, because if it weakens, and ieakens and weakens
our own direct market will weaken and weaken and weaken. We have
a great commercial, material interest in the non-weakening of the
United Kingdom oconomy. Some United Kingdom lead*, rs, no doubt,
believe that if they o into the Cor. on Market they will have a
big hone market, 200, 250 million people, bigger than the United
States of Aeorica and that this will, by extending their home
market, increase their competitive position in the world. That
is a very intelligible argument.
But of course, on the other hand, countries like
Germany which, having had their heavy industries wiped out during
the war now have completely modern heavy industries, may find
thor: 3elves able to compete in Great Britain itself at a position
of gireat advantage, compared with s,. me of the older heavy
industries in the old country. iell these are great
considerations. Weo nust all hope that no error will be made in
the conclusion that is arrived at bec-use we have a very large
indirect interest in the wisdom of any decision that is taken.
Now I say no more about that; I just turn to our own particular
interests. We have benefiting from Commonw-alth referenco, or from
special agreements, wheat, butter, dairy products of one kind and
another, moat, sugar, dried fruits, I needn't go through the
whole list, as distinguished from wool whica com. mands its own
world market. With these products we have special arrangements
which are of irmmense value to us. We regard ourselves, as the
Australian Government, as having a primary duty, a primary duty
to protect those interests. Therefore we devoted a good deal
of time to discussing then, to pointing out that you can't simply
turn a preferential system upside down without exposing our
export industries in these fields to very great danger. We have
teen told by the United Kingdom representative that not only will
we be, of course closely consulted on these matters, but, as we
ourselves requested, they will do their best to see that when
they come, in the course of negotiaticns, to deal with our
products, wheat, meat, whatever they r. ay be, Australia, if they
have their way, will be represented in the negotiations
themselves. Now that, of course, depends not merely on the
goodwill of the old country, but it depends on the attitude of
the Six, all of whom are getting stronger and stronger under the
Common Market system. But we will persist in our view that
nobody can argue the case for our export industries half so well
as we can ourselves; that we are not willing, or not happy, to
have these things dealt with by deputies. We must, ourselves,
have the opportunity of beingpresent, and presenting the view
that we want to present about the industries that I have been
referring to. I am sure that the British Government will do its
best to produce that result.
It may well be that if negotiations started next month
it ,.. ould be months before any conclusion had been reached; but
the day will come, perhaps in the first half of next year, I
wouldn't think before, when the whole negotiation having been
thrashed out, the Government of the United Kingdom will know what
terms it can get for a modified accession to the Treaty of Rcme,
to the Cor. on Market. Then we will have one of the great and.
climactic decisions of modern history. Because if the decision
fell -against the interlests of the Cormonwealth countries if the
decision meant that our preferences that we now enjoy either were
very heavily modified or disappe. red, then of course it would.
mean the beginning of the und of the whole preferential trade
texture that has characterised the British Commonwealth almost
since its boeinning. So that is a great, historic event.
I
And from our point of view more than an historic event
because it would imean that we would be forced by circunstances
to develop new markets we are always looking for tho of
course but the heat would be on to develop now markets, to try
to repair the partial loss of the old. No doubt Great Britain
herself would be forced to realise that preferential trade is a
two-way trade and this, therefore, might have enormous
significance to the business that the United Kingdom writes in
Australia. I don't know; we haven't worked that one out; we
prefer to look at that if, and when, the occasion arises.
Now all that is on the economic side. All I want to say
to you gentlemen is that nobody could be more clearly seized than
we are of the vital importance of protecting ou positions in
these respects. I already had a cormmittee of officials working
in London before Mr. Sandys came out here. There will no d-' ubt
be further conferences, either official or unofficial, in the
course of the next month or two. It all depends on whether the
British Government decides to neotiate; and we will know that
by tomorrow morning. But on top of all that and this is
going to , ive us a tremendous task on behalf of the export
industry on behalf of industries that are vital to the
development of Australia, l-t's make no error about it the
decision here can have a very big impact on the whole Commonwealth
structure. You know this thing we used to call the British Empire
has g.. ne through some strange changes in my own political
lifetime. It bucame D Comm. irnwealth and nov it has changed; it
has a wider membership, it has less cohesion; its members
disagree with one another more than they over did before. True,
Canada, Auralia, New Zealand stand in the allegiance to the
Throne that groat subtle element that charact. rises the old
British Empire but the rest. Republics, one thing and another,
are not in the allegiance to the Throno. They a: re now countries,
they are not as familiar as we are with our systems of Governn~
nt, or our instinctive feelings about Governront. ie have an
immense variety of nations in the Commonwealth and they grow
every day. ioll that is a metaphorical expression: there are
two or three recently in each year. It is very important
therefore to consider from our point of view whether the
relationship, the Commonwealth relationship, that exists between
a country like Australia and the old country remains intact;
whether, when I go, if I'n still Prime Minister, which they tell
me is improLable, whether when I go to London to have a
conference, I can still talk to the Prime Minister of the United
Kingdom as the Prime Minister of the United Kingdom, not as
something else, but as the head of another Government in
another great Commonwealth country. Now this seems to me to be
tremendously important because it is those contacts and these
discussions which now contain, I think, the true essence of the
Commonwealth. Suppose, on some terms or another, Great Britain goes
into the Common Market. The Com-mon Market is not only an
economic device, not , merly something designed to build up the
industrial strength of the European nations, it is a great
political conception. I r. ade rather a point of that when Mr.
Sandys was out here and I saw it strongly confirmed a few days
ago when the Six had a meeting, and issued a communique in which
they said that the political aspects were tremendously important
and that they were going to work towards coinmon political
organisms, towards cor-aon policies. l" ow this may be a very
great thing for the world I don't sit in jud eint, becausa I
don't know how it is going to be worked out.-it may be that it
will be a tremendous thing for the world to have a cohesive
Europe so that you have, in effect, a third great world power,
and one on the free side. That has iimense and exciting
possibilities.
6.
All I do is to say this: I record the fact that if that
happens and Europe, including Great Britain, develops these new
political organisms, common policies, integrated policies then
you can hardly say that the British Cor. m-onwealth remains the
sane. Because then a Priue Minister of Australia would be
dealing with the Prime Minister of Grcat Britain, not as the
Prime Minister of Great Britain, but as a very influential member
of a European association which had, perhaps, overwhelming
importance and very naturally in the mind of London, Now
rwhether that is good or bad don't ask me to say. I used to be
accused of being an old-fashioned Imperialist; I have even been
referred to, quite courteoa sly, as a great Cormonwealth man; I
achit that I am almost lost in a lot of these modern dovelopnents
almost lost. But I don't think that it is sensible to pretend
that something is the sane, wlhen it has changed. Therefore
think we must make up our minds that if there is a ne otiation,
and if the negotiation succeeds on torms which may not be
entirely satisfactory to us, then the new set-up, not only
economically, but politically, will tend to direct the attention
of Great Britain to Europe, and to that extent, away from some
other parts of the world.
Sir, that is not a very cheerful reflection; but it is
one that is in my mind and that is in the minds of all my
colleagues and I sincerely hope that we are wrong. We may well
be. There have been people unkind enough before today to say
that wje were wrong about somethings once or twice between you
and me I hazve thought we wore. ( Laughter) I hope we are wrong on
this natter. But what I have been saying to you is not designed -o
represent a series of do;~ atic views but to illustrate to you
that if the decision is taken to negotiate we are going to be
onlookers, and I hope participants, so far as the Government is
concerned, in a series of economic and political negotiations,
which I believe will be the most important that we have been
involved in in ry lifetime. Therefore we must hope for
wisdom; we must have patience; we must not rush, unduly, to
conclusions. But the price of our maintaining our position as a
nation will be eternal vigilance. And all I promise to you on
behalf of my own Governmeont is that we will be vigilant, we will
be persistent, we will be getting in the back door from tine to
time if we can't get in the front; we are determined that on all
these matters the interests of our own country shall never be
overlooked.