SPEECH 3Y THE PRIME MINISTER THE RT. HON.
R. G. MENZIES, AT THE ANNUAL FEDERAL COUNCIL
MEETING OF THE LIBERAL PARTY, AT CANBERRA,
2TH SEPTEMBER, 1961
Mr. President and ladies and gentlemen:
I must begin by agreeing with the President, not for
the first time, that we can look forward, I believe, with no kind
of pessimism, to the electoral events of the future. It is quite
true that we have a very great problem in the Senate a problem
rendered, on the whole, more difficult by some recent unhappy
events. But that means that we must concentrate our attention
more than we ever have before on the Senate vote, and on the
Senate voting. I know that the Federal Executive has had this
very much in mind; I know that some of the State Executives, at
least, have. When one considers the number of informal votes
that come to be put into the ballot box in a Senate Election it
is a pretty serious reflection on the intelligence of our people;
and a pretty serious reflection on the effect that we have had in
making, at any rate, our own supporters understand how to vote.
Because don't let us be superior about this: it is pretty safe
to say that a good half of the informal votes are cast by people
of our political persuasion. And indeed, perhaps more, A lot
of work will have to be done. All of -s who go and make speeches
in the campaign are not to be content just to feel that on the
platform somewhere the names of the three Senate candidates are
displayed. I think we want to make a great resolution that every
time we speak, before we conclude, we will say something dut
the Senate vote, we will say something about the Senate
candidate, and draw specific attention to how you can make an
effective vote in tnoir favour. I say that to all my brother
practising politicians, to all candidates, and to all those who
will be speaking in support of candidates.
Now I want, if I may, to do what I usually have done in
the past on this occasion, to say something about one or two
issues overseas, one or two external problems, and something
about internal problems. I will take the external ones first
because as it happens we have, in the last few weeks, almost in
the last few days, been witnessing the occurrence of events
which will have a profound effect on the future of the world.
First of all we have seen the tragic death of the
Secretary-General of the United Nations. Now the Secretary-
General of the United Nations occupies a post, the full
significance of which may not have been seen when the United
Nations was established. But as time has gone on he has become
the chief functionary of the United Nations; he has become, in
a true sense, its Chief Executive Officer; and, in a very large
degree a director of operations which occur under the United
Nations: a species of what shall I say? managing director
with rather more power than the average managing director would
possess, The result has been that whenever the Security Council
has passed a resolution and that does happen occasionally
whenever the General Assembly has passed a resolution, and the
Secretary-General has been instructed to take certain step, it
has been he who has been going to the spot, who has been trying
to bring contending parties together, trying to arrive at some
means of pacification in some part of the world. While Mro
Hammarskjoeld had his critics I was guilty of crit: icising him
myself more than once I think that everybody outside theSoviet
Union regarded him as a man of great integrity and remarkable
talent And now there is no Socretary-CGenral, Now there is, I
imagine, a species of paralysis in the administration of the
United Nations. And this is the great opportunity for Khrushchev;
Last year in Noveibor, at the Assembly, you will renmemnber
that he devo ed most of his efforts to attacking the
Socretary-General, to attacking the principle if a single Sacrctmy
-Gonoral and of advocating what has now becorac familiar as the
troika the throoee horses driven abreast. He said there ought to
be three Secrotarios-Goncral, one fron the Communist countries
ano fron the West, and one from the so-called uncomnitted countrit
each of tho with a power of vote. In other words three
Secrotarics-Geneoal unable to take a single doecision, or mako a
single step, without unaninity.
Well, of course, as everybody knew, anI as he knew we
know, this was a more attack upon the existence of the United
Nations. The whole idea was to render it complotely futile
because, of course, Comunism flourishes in tr. ublod waters and any
organisatich which enajos the support of 99 or 100 nations in the
world, ost of whom want to have peace is sonmething that stands in
the way of Communist aggrossion. So all of us understood at that
time in New York that this was an attack on the existence of the
United N.. tions certainly upon its capacity to function. I an
hoping very nuch that this icok when the great -o there to speak
they will make it quite clear that the troika principle in the
Unital , a1tions is intolerable and will, under no circumstances, be
accepted. It is about time that Khrushchov was nad to understand
quite clearly that there is a point beyond which he can't go,
Anyhow this is his great opportunity.
And while this is occurring, and while thoSO threat wiil
be nmade and manoouvros performed, thoro will be gr.. at agitation,
great pressure: " But we haven't a Secrotary-General, vo'e ust do
sonothing otherwise the whole thing will become paralysod". You
seeo the traedy of it? All the pressure will be in favour of a
quick cou-pronise: we nust have sonmobody, And that is t* ie time in
life when you are liable to make errors, and to be forced into
positions that you wouldn't want to adopt under any other circunstances.
Therefore we are going to witness a very significant woad
in United Nations history, and therefore in the history of the
world, since the Great War.
Now while that is goin on we have had some ron.-iarkable
experiences in Great Britain and, to a trifling extent, in
Australia. You all renomber that at the last Prime Ministers?
Confeounce we unaninously said, in a decl. aration about disarr. cancnt,
that the first thing to do was to bring about a suspension of
nuclear tests because, as we said, the danger didn't so much arise
from the groat responsible powers which have the bonb as it would
arise fror2 the oxtonsion of this power to other countries less
responsiblo and therefore more likely to bring about, by accident
or by design, some groat world conflict. The right way to do that
was to got an areoonent betoon the great powers, the nuclear
powers, that they would not have any mor tests either in the air
or below the surface, It sounded rather sin1ple. They had been
working on it in Geneva for a long tie; they had got within
measurablo distance of each other; there wore some argunants left
about the nature of the inspection body and how many inspectors
there ought to be and what the nature of the r. anc-ging c cmnittoo
ought to be. But on the principle that you ought to suspond these
tests, on the principle that there ought to be internati-nal control,
on the principle that there ought to bb some effective intoe-
-national inspection to soo that the agroieont was being carried
out on these natters there was no disagreement in principlo at al,
Well you know what has happened. The Soviet Union,
having gone alon nmonth after nonth, nonth after nonth, sparring
for tinme, agroing to somthing and then cancelling its areOcont
a few weeks lator, having alnmost exhausted the patience of the
Western world, but not copltely, suddonly announces that it is
going to renew its tosting and poops off six or seven testing
explosions within the next three or four days.
Now I have had something to say about that in another
place. But I want to say something about it in another
connection today. Aren't we a strange lot of people in te
Western world? I think we are probably more sensible than most
because so far we haven't had anybody attempting to organse
10,000 people to sit down and disrupt the traffic of a city.
What for? Because they are against the bomb. We had a poor
bediaggled remnant who came up here to Canberra the otherday; I
gathered from somebody that they were on the same lineo They
don't go to the Kremlin; they don't go to the people who alone
have shown that they don't want to ban the testing of bombs, the
one group of people who have absolutely ruined the world's
prospects of cutting off further tests. They don't go to then,
no. They sit down in the heart of London just making nuisances
of themselves, challenging the police to take action about them.
What do they think, if they think at all? It can't be
very easy to think if you are squatting in Trafalgar Square, or
in Parliament Place. But let us assume that they think,, What do
they think they think? Do they bla: me the Government of Great
Britain for the fact that there are nuclear tests going on? Or
are they, in fact, whether they know it or not, weakening the
resolution of the Western world and conveying to Khrushchev and
his people the belief that there is an enormous body of ornion
in Great Britain which believes that Great Britain ought :-ot to
be in the nuclear business, and that Great Britain will not
dream of using nuclear weapons, and that in Great Britain there
is a wave of pacifism which is completely inconsistont ~: ith the
will to fight the will to defend? That is what they are
conveying to the Soviet Union. In short, these nisguidedy~ ople
are increasing the danger of war, not reducing it. And t1hat I
think is something that we have to have very very clearly in niLLd
If the complaint is that there are tests of bombs,
whose fault is that? If the proposal is that we should, in the
West and I use that word comprehensively because we don't have
nuclear weapons in Australia but if the proposal is that the
West should throw away nuclear weapons because of the appalling
character of a nuclear war, then all I can say is, to use the
famous old phrase that was used about George Lansbury once in
the Sunday Observer, " This is the very ecstasy of suicide"
because it would be.
Bury all the nuclear , weapons deep in the sea if you
can bury these wriched things deep in the sea put theo cut of
the mind of man, put them out of the capacity of man to produce,
put then out of existence in themselves., and the result would be
that in terms of what we are pleased to call conventional trces,
the Soviet Union plus the satellites could dominate Europe,
could overrun Europe in a few days, And that is not a position
that the Western world wants to be in.
There is another matter which is, in a sense, external
to us I want to say very little about it and this i-the
discussion that is about to begin over the Common Markct. I am
not going to rehearse the arguments you have all had the
opportunity at any rate of hearing the views of the Government,
and of reading a pretty carefally composed statement that I made
on the matter myself but I would like to tell you, ii. a
summary way, what the procedure is.
At this moment we have officials in London and they are
having a lot of discussions on coi modities it may be butter,
it may be dried fruits, it may be canned fruits, neat wheato
All the various commodities that are involved in our Lrade
pattern have boon under discussion beot'ion our people and . ther
Commonwealth people and the officials in Groat Britain, Not with
the idea that the Britisii officials can say " Well, that is what
we are going to get for you" because they don't know what they
can get; not that our people are saying " If you got that we are
quite satisfied". But the real thing is that they are exploring
the ground and examining how far it might be possible to deal
with this connodity in terns of tariff, or how far with that
commodity in terms of quota, or with that other coanuodity in
terms of some special levy arrangement. There are myriads of
fashions in which these natters can be dealt with. And they are
having, therefore, exploratory talks.
But before long the negotiations with the Six will
begin, It is anybody's guess as to how long they will takeø
The first estimate that came to us was that once begun they might
take nine months. There are some now who think that they might
not take so long as that, that there night be either sudden
agreement or sudden disagreement on some vital matter. But I
think that we have to face up to this fact that the Government
of the United Kingdom would not have announced that it was
applying for membership and proceeding to negotiate the terms
unless it felt that the argument for going in was, from its
point of view, tremendously powerful. We want to face up to that,
nustntt just regard this as a sort of debating society
gesture. No country like Great Britain, having, after great
reflection in 1956, decided to stay out of the negotiations for
the Comnon Market, and now in 1961, having decided to go in to
negotiations for the Common Market, makes that tremendous change
in outlook and opinion without the most profound thought, and
without a pretty clear determination I should think, in its
mind, that if it can got any kind of arrangement which seems
reasonable in relation to the Comonwealth in relation to the
Free Trade Association, in relation to British agricultire, then
it will accept membership on those terms.
There'ore we must negotiate closely, valiantly,
intelligently; and we must conduct ourselves in all these
negotiations at the moment, and next year particularly, with a
sense of responsibility and with considerable authority. For
once people have to be reminded, I think, that this job, this
enormous negotiation that will affect the whole course of
Australian overseas trade and affect Australia's internal
economy possibly quite profoundly must be conducted by people
of judgent of experience, and, above all things, of authority
in the greal countries with whom we negotiate. This is no job
for unknown people; this is no job for untried people.
we have, I am happy to say, a pretty good repute in
these countries overseas. ' l not only can talk to a country like
the United States, but the United States encourages us at all
stages to speak up and say exactly what we think, frequently
asking us for our views. Our views nay be right or wrong, but
they are respectable views in those countries. In Great Britain,
as I don't need to tell you, we as a senior Commonwealth member,
and as a country so intimately associated with Great Britain in
every way, have a voice that is listened to. On the Continent
of Europe increasingly, our voice is heard. We will need to
have every bit of prestige that . e have been able to acquire,
every bit of influence that we have been able to exercise, in
these negotiations, because wo have much to lose; but we have a
great deal to gain by putting forward, effectively putting
forard, the position of our industries and their irresistible
claims in a growing country to be growing industries with
growing markets. Now I don't imagine for one nonent that the Common
Market is, in the true sonsc, a political issue in our next
election, It ought not to be, I We ouht to have a complete
community of interest on these matters in Australia. I confess
I was disappointed when, having made a statement on this matter
which was, I thought, completely objective and balanced, putting
the problen and explaining the nature of the Treaty of Rome and
the nature of the arrangement, I was disappointed when the Leader
of the Opposition, instead of saying, as I would have expected,
" We are one people on this matter; this is no Party matter; we
will all stand together to do the best thing that we can for
Australia on this matter", moved a vote of censure on us for
some silly reason, and then proceeded to make a highly comic
speech which those present will remnober, I don't understand
the position of the Opposition but then I never could. And
they can't which is perhaps one of the great sources of their
weakness. Now I want to turn away from those natters and say
something about the internal position; and I do this very
largely by way of reminder, and by way of record.
We have had an experience in the last few months, in
the last year or so, which has given rise to violent opinions,
; o groat fluctuations of fortune on the part of the Governrmnt,
Having encountered a boom in 1960 a boom, the existence of
which is admitted by everybody, except, strangely enough, the
Leader of the Opposition we took steps to deal with it. And
of course whatever steps you take to get rid of a boon cre bound
to be unpopular with a lot of people. They have to be, because
boons are very profitable for a lot of people. They are
unprofitable for the ordinary man and woman who finds the value
of his money running out, who finds that things are becoming
dearjr, while a lot of other people find that their profits are
rising in an astronomical way.
You can't quell a boom by letting industries run along
exactly as they were. lJhat do you take economic steps for?
Take an example: ieJ found that one industry, which was an
outstanding example of tremendous boom conditions and
inflationary pressure, was the motor car industry, with a
delivery of vehicles on to the register of about 1,000 a day an
almost fantastic state of affairs for Australia, Well, wore we
to let it go? I know there are poop, including some so-called
economists, who think that inflation is not a bad ideas " It's
not a bad thing; let it ride; let it go; let the boom go
until it bursts". The fact that for every hundred people
directly affected by neasures against a boom, there will be
thousands and thousands of people ruined by the burst after the
boom, the collapse after the boom, this doesn't trouble some of
these so-called experts very much at all. It troubles us.
It is the first duty of a Government, in the economic
sphere, to look for progress , Jf courseo of all things progress
and development for the nation un a basis of stability which
does justice between man and man in the community. What would
you think of a Government which paid no attention to an
inflationary boom, which did nothing about it? I dare say it
would -et an awful lot of votes in the next six months; but it
would lose an awful lot of reputation six months thereafter,
And the country would lose far more than the Government itself
lost in terms of reputation. There are times, and we know it,
and we have some reason to be proud of it, when you nust, if you
follow the light that you see, take steps which will be
unpopular with some. In the course of nature they are going to
be unpopular with some people who normally vote for us, people
engaged in business activities of one kind or another, We can't
help thato Now if you are , ping to dampen down the boom, if you
are joing to take steps which will prevent the motor car industry,
for example, fron boing. the outstanding example of inflationary
pressure, of course you are joing to reduce the demand for cars.
What is the use of playing with words on these natters? Of
course you are going to r. 2duce the demand for cars. That is the
object of the exorcise. And if you reduce the demand for cars
then you are going to reduce the employment, in a direct sense,
of people who are engaged in producing the cars. There is no use
people getting into a grat flutter over this and saying " Look
at thon, deliberately creating unemployment". You are not
deliberately creating unemployment; you are putting people out,
if you like, of employment in an over-flush industry. But you
are releasing those very people for employment in other
industries. A lot of people were paid off from various
activities. Mr. Bolte down in Victoria for the first time found
he was able to got the men he needed in the railways and in the
tranways, which had been gravely understaffed. There is a
movement of employment. But what I want to say to you is: for
Heaven's sake don't be afraid of these people who put it all on
a purely sentimental basis. If you are going to put down a boom,
then you must be prepared to hit a few heads in the process.
And we have done it. And the boom has gone. I dare say some of
the people mngaoed in speculative activities in land curse the
very sound of our name. I hope they do. And they no doubt
will complain. But speculation in land was becoming a minor
tragedy in Australia. How on earth people simple, ordinary
people could afford to buy a block of land to put a home on
began to elude my imagination.
All these are aspects of a boom and they have all been
dampened down to a point where all talk of the credit squeeze
let me say quite plainly is purely a matter of history. There
is no such thing as a " credit squeeze" today. I know everybody
who can't get the finance that he wants attributes it to the
credit squeeze. Of coursel But if you were to say to him,
" What do you mean by ' the credit squeezeI doubt whether you
would got an answer. The banks are liquid much more liquid
than the conventional minimum of liquidity that they observe
The only restriction on the banks' capacity to advance today is
one that everybody would approve of, and that is that they are
asked not to finance speculative activities, and they are asked
to keep their attention very clearly on export industries and on
home building. Now those are very good Central Bank directives.
That is all that is left of the credit squeeze.
But of course, you know, a lot of people who have boen
over-trading, playing it up when the boom was on, are naturally
going to find that things are not so easy when the boom is
exhausted. In the old days they would have said " Well there
you are, I played it up and the boom burst and I ve ot it in
the neck. What a fool I was". But today it's " the credit
squeeze". It isn't the boom that produced their trouble they
claim; it's the corrective measures of the Government that
produced their trouble, Now you want to keep some of those
things, I believe, very clarly in mind.
' lell in effect, what has happened? The boom has been
brought down, has been quelled, Inflation has, for all
practical purposes, been arrested; not completely yet, but the
Consumer Price Index, as you have all observed, is becoming
comparatively stable,
One of the great problems that we had, the problem of
the running down of our overseas reserves a very serious
problem for a great international trading country like
Australia has been solved. At the beginning of the year, or
at the end of the last calendar year, as we saw it, we had a
great chance, if we did nothing, of seeing our overseas reserves
run down to a -oint of dangero All the advocates of letting a
boon roar along, T think, would hardly have b c-n satisfied if
they had found at the end of a financial year that our overseas
reserves were not competent t. pay for nore than two or throo
months of normal imports, ost of which are for manufacturing
But we took our steps and in the result our overseas balances at
the end of June were healthy, remarkably healthy, And apart
altogether from a borrowing or drawing made according to our
rights, from the International Monetary Fund, our overseas
reserves were near enough to œ O0m. But if we had done nothing,
if we had not taken these economic measures, then our reserves
overseas would have been, well, with a bit of luck, half that.
The result of this, of course, is tremendously
important, because if our reserves are high and healthy, if our
credit is so good with the International Monetary Fund that we
are able to put in a sort of premium against run-down with them,
then our progress in Australia becomes more and more assured.
Don't forget I know you all know these things, but have them
in mind as you go into an election that this country can't go
on at its ,-ate de. velopment unless it has more and more capital
from outside T'-ni and a half million people can't generate the
capital tha. : ceded to develop a continent the size of the
United States of America. It can't be done. Therefore we are
chronically a capital-hungry country; and a capital-hungry
country depends very fundamentally on its repute and credit
abroad. If my Government, so disastrous a Government as I now
learn, hadn't been able to establish in the sources of investment
overseas, or helped to establish, a reputation for reliability,
a reputation for being credit-worthy, a belief in the minds of
people in the irmense possibilities of expansion in Australia,
then I don't know where we would be. But as it is, as you kno;,
last year in the boom year, we had a very large investment of
capital from overseas in. , ustralia between œ 100m. and œ 200m,
This is tremendously significant. Not public borrowing, but
private investnent, productive investment. This year, in spite
of all the disasters that we are supposed to have brought about
by the credit squeeze, and by our policy, investment from
overseas has reached a record luveL Wle have had much more capital
flowing in in the year of corrective measures than we had in the
year of boom. ,] ow this is a tremendous thing. Don't let us pass it
over lightly. We were complimenting my friend Mr. Bolte just a
little while ago about the result of his election. He wouldn't
have won his election if it hadn't been that in the economic
climate that I believe we have helped powerfully to createo ho
himself has been able to ipursue a driving policy in Victoria
which has developed the State, developed its industries, and givn
people a feeling of high optimism about their own State, This,
I am sure he would a: ree with me, is the dominating factor in
the position that he not, and enabled him to increase his
majority although unemployment was already the theme of the
Opposition. So I remind you that if the object was to arrest
inflation it has been substantially achieved; if the object was
to preserve our balances and strengthen our balances overseas it
has been more than successfully achieved, if the object has been
to reduce the inflationary pressures, and particularly
speculative pressures, then I think everybody would agree th: a
it has been achieved.
The one thing, the one thing that remains which is
unpleasant, is that we have some uner. ploynnt. We don't answer
that by saying " Well . e have always had some', because, of
course, there are people who are normally not likely to be
8.
employed we know that in a large numbor of millions of
people. But forget about that. If we have at any stage oven
50,000 or 60,000 who are willing to work, who are competent to
work, and for whom there is no work, that presents a problem
which, in an economic sense nay be regarded as fairly small, but
in a human sense is serious, in a human sense must engage our
constant attention. As a man said to me recently, and I
thought he put it very well, " You can with great truth from an
economic point of view in Australia say you have 1lo or 2% of
people who are out of work, and that means you have 98 or 98-%
who are in work, which is perhaps a better and more positive way
of putting it. But to the ran who is out, and who oughtn't to
be out, unemployment is 100%".
Now that is, in a human sense, profoundly true. That
is why we have concentrated so much effort, so much attention and
no small amount of money on helping, the re-employment of people
in some of these areas by providing, to a greater extent, the
means of finance in local government, by making greater
provision in relation to housing in arrangement with the States,
by entering into an arrangement with the States that in the
first half of the financial year they would tend to accelerate
their works expenditure in relation to the total. All of these
things have been directed, essentiallyto getting rid of what is,
in mass, a small amount of unenployment; but what is, for the
worthy individual, a very serious human problem.
We are doing that and I am bound to tell you that I am
quite optimistic about it. We observed that in the last month
the figures of those registered for unnmploymont, registered as
unemployed, fell and that the number of vacancies rose. though
there may be a little variation here and there I'm told in the
future. But I myself will be very greatly disappointed if, in
another month or two, we don't find that the figures on the one
side are continuing to fall, and the figures on the other side
are continuing to rise.
I mention that matter to you not because I have he
slightest sympathy with an Opposition which, in order to win an
election, will try to create a panic about employrent. There is
no occasion for panic about empl: yment. Unemployment is, I
repeat, in the economic sense, in the statistical sense, smaller
here than in any other country, any other free country, you might
care to mention. It is, in a sense, nominal. But our great
human responsibilities are to put unemployment out of existence
as quickly as we can for the people who are willing and able to
work in Australia. All round, Sir, I think that one can report that the
policies have worked well. The best proof that most of then have
worked well is that we have been able to abandon most of them
once they achieved their results. For 1962, as I have said
repeatedly in other places, I am a complete optimist. I think
that economically in 1962 we may run some risk of some boom
conditions; but no risk of a depression at all. I would like all
of you to say to those people who keep preaching depression that
they are the only people who could produce one. Today a
depression on the old model is just not possible.
Therefore let us go into this battle with some pride in
what we have done. We have been doing it now for 12 years. The
country is in pretty good shape; it attracts increasing
attention all round the world; it is, in a true sense, regarded
more and more as the country of the future. I an veryproud to
have had some connoction with the foundation laying of the last 12
ears and I belivo that this Party is going to have, as it lodks
ack in another 10 years, a . roat pride in showing that it was,
from the beginning, the Party of the future, that it has gone on
being the Party of the futu're and that it has : iven great oncouragemren
to he people of Australia and great growfh to
Austral a itself. D
P I I