Australia

on the World Today

THE discovery of uranium in Australia in considerable quantities has enhanced her value to her allies, and may also increase her value as a prize. Progress during the last two years indicates that Australia will become one of the world’s leading uranium producers.

Agreements have been signed by which the output of Australia’s most promising fields, with the exception of supplies required for her own use, will go to America and Britain, while Australia is assured of financial and technical assistance for the development of the fields. It is expected, also, that uranium will become an increasingly important factor in helping to solve Australia’s dollar problems.

The finding of uranium, coupled with the British atomic explosion on the Monte Bello Islands, has aroused interest among Australian scientists regarding the possible use of atomic energy as a source of power supply, particularly in areas remote from coal and water. Australia has a nucleus of top-ranking scientists with experience in the atomic field, and research facilities are available. An Australian Atomic Energy Commission has been formed, whose duties include research into, and development of, atomic energy both for defense and for industrial purposes.

Planes without men

The Long Range Weapons Establishment in South Australia, known as the Woomera Rocket Range, links Australia directly wilh Britain’s guided-missile research and experiments. If was set up by arrangement with Britain shortly after the war as a testing ground for the new weapons, and will eventually cover an immense area extending from southern Australia to beyond the northwest seaboard, a distance of 1200 miles on land and a further 1500 miles out to sea.

Great progress has been made in the development and use of the range, and it is claimed that projects now in hand will make Woomera one of the best equipped installations of its kind in the world.

Early in May, tests were run at Woomera of two pilotless aircraft: a jet designed and built in Australia and a new British rocket-engine plane. For the first time, the press was permitted to see missiles fired on the range, which is jointly operated by the British and Australian governments. Since 1950, 440 guided missiles and 700 rockets have been fired at Woomera.

A second test center for rockets and guided missiles is being set up at Salisbury in South Australia by Armstrong Whitworth Aircraft, Ltd. In addition to the testing range, the center will have a factory which will produce rockets and guided missiles after basic research has been carried out in the company’s plant in England. Although privately financed, the Salisbury project will be operated in conjunction with the British and Australian governments.

The Anzus Treaty

The Pacific treaty, now known as the Anzus Treaty, which was signed by America, New Zealand, and Australia in September, 1951, was a step towards Australia’s integration into a Pacific defense plan. The treaty has been welcomed in Australia as an insurance against aggression.

However, in view of Australia’s membership in the British Commonwealth, there has been some confusion in the minds of Australians as to the precise impact of the treaty upon Commonwealth relations. Australia wants to maintain her intimate association with Britain, but the unstable world situation and the inescapable facts of geography press for a closer relationship between Australia and America in defense matters. Australia is only too conscious of the need for America and Britain to evolve a common and unified defense policy for the whole Pacific area.

Australia tightens her belt

After six years of high profits and full employment, Australia is now going through a period of readjustment to changed economic conditions. Measures introduced by the Liberal-Country Party Coalition Government in 1951 were designed to halt inflation by means of heavy taxation and credit restrictions, and to divert labor from nonessential to essential industries such as fuel and steel, the products of which had been in short supply for several years. These measures were followed in March, 1952, by severe import restrictions, consequent on a glut of imports which threatened to wipe out Australia’s overseas balances.

The full effect of the anti-inflationary program has only made itself felt in recent months: the rise in prices has been checked, sterling balances have improved, blackouts have been reduced, and shortages and black markets have largely disappeared. There has been a marked diminution of industrial disputes and a steady movement of labor into agriculture and the heavy industries.

Steel output, for instance, is now back to normal and the industry is planning further large expansion. There has also been a noticeable improvement in the efficiency of management and labor, both of which had developed a tendency towards slackness under the easy conditions to which they had grown accustomed.

There is, unfortunately, another side to the picture. The Government’s plan to divert labor did not stop at its displacement from the less essential industries. The tightening of credit and the imposition of heavy taxation, coinciding with a sharp fall in wool prices from their previous fantastic level, and a large accumulation of imports, all combined to bring about a general business recession, and unemployment on a fairly substantial scale made its appearance for the first time since the war.

Heavy industry slumps

The result was a lowering of demand for the products of the heavy industries. This has been particularly evident in the case of the coal industry. In place of an acute coal shortage the industry is now faced with overproduction.

Because wages are tied to variations in the cost of living, they rose to unprecedented heights during the inflation period. Together with high taxation they have brought manufacturing costs to a level which threatens Australia’s ability to meet overseas competition. Last September employers’ organizations applied to the Arbitration Court for a reduction in wages and for an extension of the working week, which was reduced from forty-four to forty hours immediately after the war. The employers’ application was naturally opposed by the combined trade unions. And on April 17 the Australian Arbitration Court announced further increases varying from about 20 cents to 75 cents on a basic wage of roughly $25.

Communists in the unions

Following the depression of twenty years ago, the Communist Party made serious inroads into trade-union leadership, and through the apathy of union members they were able gradually to entrench themselves in several key unions. It has since been proved that they maintained their position by ballot rigging and other means.

In the last two years the efforts of Labor Parly members in the unions, aided by an amendment to the law, which provided for secret union ballots, have had spectacular successes in eliminating or reducing Communist influence. Three years ago, one of the largest of the metal trades unions was staffed almost entirely by Communist officials and contributed liberally to Communist Party funds. There is now not a single Communist among its officials.

Communist influence still retains a hold over the waterfront unions, but Communism can no longer be regarded as a menace to the trade unions as a whole. There never was any question of Communism’s being widespread among the rank and file of union members.

Too many immigrants

The recession has also led to a 50 per cent cut in immigration, which will mean an intake for this year of not more than 80,000 persons. During the four years to December, 1952, Australia received nearly 700,000 immigrants — equivalent to about one twelfth of the present population. The influx of migrants did much to relieve the acute labor shortage of the post-war years, and migrant labor was particularly useful in enabling the steel industry to reach capacity production during the last quarter of 1952.

Last year nearly 128,000 people migrated to Australia, half of them from the United Kingdom, Eire, and Commonwealth countries. Of the rest, 29,000 came from Italy, 15,000 from the Netherlands, and 8000 from Germany, with smaller numbers from Greece, Yugoslavia, and Poland.

The reduction of the immigration target for 1953 is a regrettable but temporary measure forced upon Australia by the increase in unemployment and the need to absorb fully the migrants who have already arrived. The Government has said that, for the present, immigration would be restricted to craftsmen and that no unskilled labor would be admitted. Of the 80,000 new immigrants for 1953, Australia will accept 40,000 British, half of which will be “assisted passage” migrants.

All parties are in agreement on the urgent need for population and the necessity to keep immigration at the highest possible level. However, a considerable improvement in the economic situation will be necessary before immigration again reaches the scale of the last few years.

There are already signs that the recession may be lifting, and that confidence, a prerequisite to any improvement, is returning. Exports of primary products are now at a high level, and wool prices, on which so much of Australia’s prosperity depends, remain satisfactory, although growers are concerned at the prospect of competition from American synthetic fibers. Unemployment figures have taken a turn for the better.

Expanding food production

Australia recognizes that to support a growing population and meet an increasing world demand for food, she must expand her primary industries as quickly as possible. Australians were shocked a year or so ago when adverse weather conditions revealed shortages of certain basic foodstuffs. The decline in production was due almost entirely to the war and its aftermath. Fixed prices, the drift of labor to the cities, shortages of equipment and of materials for building and fencing, had all conspired to depress production.

The Australian Agricultural Council last year adopted a plan to raise food production by 20 per cent in five years. Results so far are encouraging and it is expected that at the end of five years the rate of progress will be much greater. Meanwhile prices have been adjusted, and labor has been returning to the farms.

Agriculture will, in addition, benefit to the extent of $43 million from the $150 million which Australia has borrowed from the International Bank for Reconstruction and Development. In spite of all this, however, Australia will have to make a really great effort if she is to keep pace with the demand for food.

There is still room for an expansion of primary industry. Australia’s fertile land within the belt of closer settlement is not yet being exploited to its fullest capacity. In many areas production could be increased and costs lowered by the provision of adequate water, power, and transport. There are also considerable areas of marginal land which could be brought into production by the same means. Furthermore, exciting possibilities have been opened up by the application of trace elements to certain Australian soils. Already great tracts of hitherto desert country have been made fertile by their use.

Swing to the left?

What are Australia’s immediate political and economic prospects? The government of the country alternates between a Liberal-Country Party coalition, representing roughly the manufacturing and property-owning classes, and the Labor Party, which draws its main strength from the trade unions and the workers generally. Neither side can hope to hold office without broad middle-class support.

Labor was defeated in 1949 after eight years in office. It is, however, confident of a return to power at the next election in 1954. Election results within the last year certainly point that way, since three out of four byelections held in 1952 showed a decided swing to Labor. The increase in unemployment was a major issue.

Except that Labor is committed to a policy of full employment, there is little indication of what its general policies will be if it is elected. During its last term of office, although Labor was fully occupied with the war and post-war problems, the huge Snowy Mountains hydroelectric scheme was put under way. This scheme, which will harness the waters of Australia’s Southern Alps for the production of power and great irrigation works, is the largest project of its kind ever to be undertaken in Australia and is to some extent comparable with the Tennessee Valley scheme.

In common with her allies, Australia is undertaking a very considerable defense effort. Her social services, too, are on a liberal scale. Both of these will be maintained by whichever Government is elected.

It seems certain that in the next few years great emphasis will be laid on primary production and the type of basic development that goes with it. Immigration will be limited — or raised —to the numbers which can be safely absorbed. The rate of development will depend upon how much of the necessary capital can be provided from Australia’s own savings and how much will be available from overseas.

Tax-free dividends

It has been estimated that U.S. investments in Australia total upward of $225 million, from which American investors receive some $13 million in profits and dividends. In May three double-taxation agreements covering income taxes and estate and gift duties were signed in Washington by the Australian and U.S. governments. The principal effect of the new agreements was that earnings of American capital invested in Australia may now be sent to the United States tax free, although foreign exchange limitations on the amount of profits that can be remitted in American dollars are still in force.

Self-interest demands that Australia should ensure and retain the support of her powerful allies— Britain and America; but Australia’s continued security and progress are also important to the free world. An extension of Communism in Southeast Asia, resurgent Japanese militarism, an eruption of population from the overcrowded areas to her north — any of these would weaken Australia’s security and could even threaten her independence.

Australia is not only a source of food supplies and raw materials, but is also a great natural base. Her manpower is limited by the size of her population — about 8.5 millions. Nevertheless she has introduced universal military training, and her soldiers, sailors, and airmen are making a direct contribution to the tight against aggression in Korea.