MR. BREZHNEV ON THE IMPORTANCE OF INDUSTRIAL STRIKES

The Weekly Review July 18, commenting on the Communist World Federation of Trade Unions' drive to take over control of automobile unions throughout the great world centres of the car industry, quoted Mr. Brezhnev's speech on the importance of strikes in non-Communist countries as part of the "anti-imperialist struggle" in which he said: " One decisive sector of the anti imperialist struggle naturally runs through the capitalist countries themselves. The blows, which the revolutionary forces are dealing imperialism in its very citadel, are highly important for world development. The 1960's have introduced many new elements in this front of the struggle as well. A sharpening of the class struggle in the capitalist world is an inexorable fact. Suffice it to say that from 1960 to 1968 a total of over 300,000,000 persons took part in strikes as compared with 150, 000,000 in the preceding years." Mr. Brezhnev continued:
"The strikers have more and more frequently succeeded in imposing their demands on the capitalists and this has given them confidence in their strength and stimulates the development and extension of this front of the struggle. Apart from intensifying the work among the working classes, we should pay attention to activities in the most diverse mass organisations of which workers are members - co-operatives, sports clubs, and democratic religious organisations which take part in the struggle for peace - in short, wherever there are large numbers of working people."

It should be reflected that Mr. Brezhnev bases his confidence on financial policies, which automatically ensure dissatisfaction, whether it be the worker, the producer or the businessman in "imperialist" society who is dissatisfied. The bookkeeping technique of ensuring continued inflation and erosion of purchasing power places the communist union agitator in an almost impregnable position from which to advance his case against "capitalist." and "imperialist" exploitation.

MR. ANTHONY DEFENDS THE GOVERNMENT

"The Federal Minister for Primary Industry (Mr. Anthony) yesterday denied that the Government was responsible for the marketing difficulties facing the wheat industry. He appealed to Australia's 60,000 growers to support "an industry -proposed, Government backed" delivery quota scheme. The alternative was "chaos." - The Age, July 22.

Mr. Anthony said he was "sick and tired" of references to "the Government's delivery quotas scheme." it is not a Government scheme, but an industry scheme," he said, "and to my mind, is a responsible reasonable and necessary industry reaction to a situation that cannot be blamed on anyone but must be faced up to." Mr. Anthony's endeavour to pass the buck and have the wheat industry leaders accept the blame for the quota system will fool no one. The quota system is the result of economic policies for which the Government and no other body is directly responsible. Mr. Anthony tacitly admitted this when he went on to say that the Commonwealth support had made the scheme possible, because the Government had agreed to arrange loans totaling $440 million so that the first advance on all quota wheat could be maintained at $1.10 per bushel.

Then Mr. Anthony went on to ask a question to which we would be glad to supply an answer. He said, "Now of course growers do not like the scheme, but I hope they will ask themselves what the alternatives are."
Whatever the hidden threat in the alternative visualised by Mr. Anthony, it is to be hoped that the growers will let Mr. Anthony know there is a genuine alternative available which would rectify the situation without penalty to any section of the Australian community. What Mr. Anthony did not say when he said the Government had agreed to arrange loans totaling $440 million, is that this sum of money is advanced through the Government's control of the central banking system. How this is done is made clear in The Creation and Control of Money available from The Institute of Economic Democracy, P.O. Box 33, Paddington 4064, Queensland, 25 cents posted.

Professor Brian Tew, formerly of the University of Adelaide is quoted from his standard a reference work Wealth and Income used at the Melbourne University. This makes it clear that,
"The central government therefore can always get as much money as it wants by virtue of the privilege accorded to it by the central bank."

It is by such means the Government makes available to industry credit to finance every expansion of costs. e. g. when the arbitration court grants an overall wage increase, the banking system is directed by the Government to grant increased overdrafts to accommodate the demand for the additional money needed by industry. The result is cost inflation and a rising cost structure. The tremendous increase in production of wheat is due to the struggle of primary producers to maintain their income in the face of rising costs. Consequently increased acreages of wheat have been sown over the years. From 1958-9 the acreage sown, 10,399,168, exploded to 22,440,979 acres in 1967-68. A steady increase to reach those figures took place each year.

If Mr. Anthony's Government - and he is a responsible Minister, whether he likes to accept responsibility or not - had instituted policies which directed the Arbitration Court when recommending an increase in purchasing power, to direct that such increases be paid in the form of price discounts paid at the counter for all Australian produce, a genuine increase in purchasing power would have been admitted into the economic life stream of the nation which would not have resulted in the increased costs which have brought about over-production of wheat and many other commodities.
Mr. Anthony talks about the farmer facing up to alternatives. He should be invited to also look at an alternative, which would not only help himself and his party to survive, but the Australian producer also.

SOUTH AFRICA "GIBRALTAR OF THE SOUTH"

Mr. Eric Butler provides the following report after two weeks tour of South Africa:

The Commandant-General of the South African Defence Force, General R. C. Hiemstra, recently stated in an address in Pretoria while I was there, that South Africa had now become the "Gibraltar of the South." The South African General's brilliant survey of strategic developments in the struggle for the world should be carefully studied by Australian and New Zealand politicians in particular. General Hiemstra observed that much had changed since the West's Atlantic Alliance was formed. At that time the Soviet constellation was limited to its own area and South Africa's strategic importance to the West was not rated a high priority. But the position had changed substantially with the Soviet overflowing into Africa, and its surrounding oceans, the Mediterranean, the Atlantic and Indian Oceans.

Calling for an urgent re-appraisal of Western strategy, General Hiemstra said that from such a re-appraisal "it would appear that South Africa is in a key position for the Western sea powers in the South Atlantic and Indian Oceans against a Soviet threat from West Africa and the Middle East."

At least one British political leader, Sir Alec Douglas-Home, former British Conservative Prime-Minister, has openly stressed the growing strategic importance of South Africa. His recent statement that a Conservative Government would rescind the ban on Soviet arms sales to South Africa has been warmly received in South Africa. Sir Alec, speaking as Shadow Foreign Secretary for the British Conservative Party, said that the provision of British arms to South Africa would be undertaken "in the light of Southern Africa's role in the security of Europe." He observed that with the closing of the Suez Canal and the permanent routing of the oil of the Persian Gulf around the shores of Africa, together with the appearance of the Soviet navy in the Indian Ocean, South Africa's strategic importance had been given a new significance. It is to be hoped that Sir Alec's considered views will be carefully studied in both Canberra and Wellington.
The British Conservative leader made it clear that recognition of South Africa's greatly increased strategic importance did not necessarily mean endorsement of South Africa's internal policies.

Evidence produced at the trial of terrorists in Windhoek, South-West Africa, has left no doubt about the importance the Communist strategists attach to maintaining increasing pressure on South Africa. Terrorists admitted that they had received training for guerrilla warfare in Tanzania under instructors who told recruits from South-West Africa that they had received their training in Russia, Algeria, China and Egypt. Some of the recruits from South-West Africa had later received further training in Egypt.

Although the terrorist organisations north of the Zambesi are having many internal problems, all the evidence suggests that overall terrorist build up for action against the Rhodesians, South Africans and Portuguese will continue. In this situation, it is criminally irresponsible for Western Governments to be attacking in any way the internal policies of the three Southern African countries maintaining stability in an area of such strategic importance. Solving race problems is not the easiest under the best of conditions.
The Europeans in Southern Africa are well aware that their survival depends upon the best relations possible with their African populations. Prime Minister Vorster has said that while South Africans do not agree with the race policies of their Portuguese neighbours, they do not interfere in their internal affairs.

Inside South Africa there are big changes taking place, and perhaps the biggest problem is that the policy of separate development becomes increasingly difficult to operate as originally envisaged because economic development is making it essential for more and more Bantu labour to be used for trades previously not available to the Bantu. There is some serious re-thinking on how best to pursue a policy of separate development. It is engendering considerable political controversy in the ranks of the Nationalist Party. Prime Minister Vorster has come under heavy criticism from many Nationalists. But my assessment is that unless something completely unexpected happens, Mr. Vorster will have no difficulty in maintaining his leadership.

MR. ST. JOHN POINTS OUT A TRUISM

"For most practical purposes the backbencher has practically nothing to do except vote. He is not really wanted as a person of independent judgment. He is wanted as one of the blokes to keep up the numbers." - The Age, July 22.

The above was the only piece of sense in a tirade of nonsense in which Mr. St. John suggested we have 400 M.P's in the House of Representatives. Justifying the need for such an army of M.P.'s Mr. St. John said, "We need a lot more members because the range and complexity of matters before Parliament are such that staff and facilities are inadequate to handle them." Mr. St. John called for more members of independent thought who would bring the necessary reforms. We would hope that such people would see clearly the reason why the present parliament cannot handle the "complexity of matters" before it. Obviously it has intruded into fields, which are not the responsibility of the Federal Parliament.
Such matters as public health, education, roads, and matters of purely domestic importance should be the sole prerogative of the States, and are best administered by them. The Federal Government should confine itself to defence, diplomacy and those matters peculiar to a central administration. A public expenditure formula, which was predominantly controlled by the States, should be the first consideration of M.P.'s of a truly independent character.

A NAVAL BASE AT COCKBURN SOUND?

"Development of a naval base in Western Australia would be very valuable for the Western world, the Commander in Chief of the U.S. Pacific Fleet (Admiral J. Hyland) said yesterday. - The Age, July 22.

The subject of a naval base at the deep-sea port of Cockburn Sound has been a topic of controversy for some years. The Government has consistently denied the need for such a base.

ON TARGET BULLETIN

TARGET FOR THE WEEK
SUPPORT FOR MR. A.B. WOOD

In this week's On Target we have commented on Mr. Anthony's support for quota restriction on wheat growing. In that comment we have mentioned a possible reform of the Arbitration system. This concept grew out of the final paragraph in the report of the speech made by Mr. A. B. Wood, the President of the Victorian Farmers Union, which we reported in On Target, July 11. There Mr. Wood said, "I have stated many, many times that arbitration is working against the primary producer and if we can get a political party to alter this - to bring down legislation to alter the Arbitration Act so that the arbitration system will work for us instead of against us - then we will at least have achieved something."

Unfortunately Mr. Wood made no suggestions regarding what reforms he had in mind. We suggest therefore, that at least one important reform be supplied. The Arbitration Court has the power to make alterations to award rates paid by industry and commerce to employees. It is patently obvious that each time a rise is granted it is immediately swallowed in rising prices, which are the direct result of the additional costs to the producer. Therefore, if the Arbitration Act is to be altered as suggested by Mr. Wood, it will be useless unless the court is able to direct how the increased purchasing power it has granted can be paid in such a way as to give a genuine benefit to the recipients. Increased wages are of no benefit to the recipient if that increase has to be passed on in increased prices therefore, the increased purchasing power has to be made available so that it does not affect the price structure. The Arbitration Court therefore, should have the power to direct that the money which industry is forced to find for the purpose of increasing wages should be paid direct to the consumer outside the wage system.

At the moment, the Arbitration Court is no more than an umpire operating the rules as laid down and cannot alter the terms by which it grants wage (purchasing power) increases. There would need to be an alteration to the act for the Arbitration Court to alter the basis on which purchasing increases were granted. The Government would have to acknowledge that under the present act the Arbitration Court is powerless to grant purchasing power increases which are of genuine benefit to the recipients. Under the present policy of full employment there is a simple technique available for the payment of discounts on the products of Australian industry purchased by the consumer at the point of sale. For example, if the Arbitration Court should direct that the total wage should be increased from $40.00 to $42.00 a price discount amounting to five cents in the dollar should be paid. On a pound of butter costing 55 cents, the discount would save the purchaser approximately 2.75 cents, or to the nearest cent 3c. On a motorcar costing $2,000.00 the discount would be $100.00. On a tractor for a wheat farmer battling to keep his costs down, costing $6,000.00 the discount would be $300.00.

The discount would be paid to industry from a Production Bonus Account established in all banks servicing industry through the Reserve Bank of Australia. The credit made available for the purpose being that credit which would normally be released under the old system of Arbitration Awards, when the employer to cover increased wage grants made by the court goes to his bank and increases his overdraft, which he later seeks to reduce when he raises his prices. The farmer does the same thing; he increases his indebtedness in the hope of recouping sufficient from the sale of his produce to reduce his loan. That he is failing is born out by the fact that from 1961 to 1967 his debt structure rose from $76 million to $629 million and figures over the last two years will show a tremendous increase on those last figures quoted.

As industry finds its costs stabilised and reduced by the payment of the discount, the growth of monopolistic tendencies would be checked bringing increased efficiency and competition. The results would be passed on to the consumer and the value of the dollar further enhanced. There is no physical reason why this cannot be done, but there are plenty of political reasons why it will be resisted to the utmost. Therefore, we need to exert all the leverage possible to bring the necessary reforms. Mr. Wood should be supported and advised as to these alternatives, which are available. So should every other representative of both primary and secondary industry.

We need to build a slow fire under our representatives, which will finally get so hot that it will scorch them out of their comfortable seats unless they get to it and alter the present Arbitration Act in such a way to establish the necessary authority to bring about genuine increases in purchasing power.