Australia in the Post-War World


By DR. H. C. COOMBS, Director General of Post-War Reconstruction in Australia

Delivered Before the Chamber of Commerce of the State of New York, New York City, May 6, 1943

Vital Speeches of the Day, Vol. IX, pp. 600-603.

I FEEL that a very great privilege is being extended to me to address so old and so fine an institution as this Chamber. I was interested to hear that this body is no less than 175 years old. It is older than the country from which I come. When this Chamber was carrying out its first activities, Australia was completely unsettled by white people. I think it is worth-while bearing in mind when you come to hear something of the work we have to do, that we are a young people conscious of our youth, and conscious of the dependence which goes with youth.

First, I would like to deliver to you a message from Dr. Evatt, our Foreign Minister, who is heading the mission here of which I am a member. He asked me to express to you his regret that he was not able to meet you, and to give you, on his behalf, the good will of the Australian Government and the Australian people.

As your Chairman has said, I am concerned with the problems which the war is creating, but which will have to be solved after the war. It is an odd thing that great men stem te have had something to say on almost everysubject, but I must confess that I was surprised to discover only yesterday that Abraham Lincoln said: "Reconstruction is a more difficult and a more dangerous task than either construction or destruction." I personally, at any rate, am very conscious of the difficulties and the dangers which lie ahead of my country, and, I think, of your country, in the post-war period.

We see reconstruction as a two-fold job. It is firstly to swing our economy back to the purposes of peace, and secondly to give effect to those aspirations for which this war has been fought. These two purposes, of course, represent the problem of reconstruction not only in our Country but in all countries of the United Nations.

The problem of the transition back to peace will be no easy one in Australia. Over a period of three and a half years, we have struggled to divert to war purposes every atom of our resources which can be so diverted, to change the structure of our economy, to eliminate the non-essentials, to restrict and control private activity, to guide and direct it so that every ounce of available resources in manpower,in equipment, and in materials is serving the vital purpose of winning the war.

We take, I think, justifiable pride in the achievements which have been the result of that policy. Australia has a population, men, women and children, between the ages of 14 and 65, of only 5,000,000. Not less than 68 per cent of the people within those ages, including women and children, are engaged in the armed forces, in munitions production, or in other work directly or indirectly associated with the war.

We have, for instance, more than 700,000 men and women enlisted in our armed forces. That figure, to an American audience, perhaps sounds very small. It may put it in better proportions if I tell you that that is the equivalent, on a population basis, of armed forces for this country of 14,000,000.

Before the war we were relatively an unindustrialized country. The total factory employment in Australia before the war was about a little over 500,000 people. Today we have 500,000 people engaged in war factories alone, factories producing munitions and other equipment for war. That has been achieved only by cutting down very severely on the production of goods for civilian purposes. Whereas before the war 500,000 of our people were engaged in factories producing for civilian purposes, that figure now has been cut to less than 200,000.

Three out of every five of our workers previously engaged in factory production for civilian purposes have been transferred over to war purposes, and for each three of those we have found two additional people to throw into factory production for war.

That, then, is very broadly a picture of our economy now, the way our resources are distributed. That distribution has not been achieved without hardship. Our people are facing every day shortages and in many cases complete absence of goods which they have, over a long period of years, taken as normal. We are faced with food shortages, some of them acute.

Many classes, for instance, of basic foodstuffs are so heavily demanded now, both for our exports to maintain the food supplies in the United Kingdom, for our armed forces and for the American forces, not only in Australia but in the South and Southwest Pacific, that many of those foodstuffs have completely disappeared from the civilian life.

We have a clothing rationing scheme which limits very severely the purchases of clothing by individuals. Some idea of the severity of that rationing can be obtained from the fact that it takes more than a third of your annual supplies of coupons to purchase a suit of clothes. It takes more than a third to purchase an overcoat. Few people are in position to buy more than one pair of shoes in a year on the coupons that they have. The scheme has weighed with considerable weight particularly on those classes of the community who did not have good stocks of clothing when rationing was introduced.

I tell you these things to give you some impression of the way we have recast our economy and concentrated our energies in one direction, to illustrate the problem of diversion which we are going to face in the post-war period. We have more than 700,000 people in the armed forces; we have more than 700,000 people engaged on direct war work of other sorts. Something has to be done to swing those people back to other jobs. We are tackling it in a number of ways.

Firstly, from the point of view of the servicemen themselves, we have already enacted a comprehensive plan for pensions, for those who are affected physically by their participation in the war for medical aid, and for general rehabilitation. Under this plan, very large numbers of our armed forces will be eligible for various types of vocational training.

During the war the Government has found it necessary to set up a comprehensive vocational training scheme for the purpose of training people who previously worked in peacetime jobs, or did not work at all, to take up work necessary for the war. That machinery of training is now being examined or overhauled, and adapted so that it will be directed towards training people for peacetime functions, functions which we expect to require more manpower in the post-war period than they did before the war.

We have also, during the war, set up an organization for directing labor into the channels where it is necessary. It was a new thing to Australia to have to establish a government placement organization but we are hoping that it will be capable of being adapted to the problem of the post-war period, that it will be the machinery through which this million and a half men and women will pass, to ease their movement back into normal peacetime occupations.

We are trying to prepare plans for the orderly demobilization of our soldiers, so that they will not be released too quickly or in categories where they can not be readily absorbed. This is not easy. It is a pleasant pastime to sit in a study or in an office and work out ideal principles upon which demobilization should proceed. Unfortunately, or perhaps fortunately the soldiers themselves have very definite ideas about demobilization policy. In the last war very elaborate plans were worked out for releasing men according to previously determined plans, but the men at that time said, "First in, first out," and "First in, first out" it was, whatever the experts said.

So we are trying to take into account, at the present time, what it is the men themselves want. We are placing the issues before them in various ways, through their publications, through pamphlets or speakers, and attempting to give them some instruction about the problems involved, so that when they make up their minds about the way they want to be demobilized it will be a decision based upon understanding of the problems, and will be perhaps easier for us to implement.

That is, then, the way that we are trying to tackle the problem from the point of view of the individual. On the other hand, we hope to be able to create economic conditions generally in which there will be jobs for these men. That is the more general issue, to which I will come back in a moment. Before that I want to refer to the fact that we have a demobilization problem in our factories just as we have in our manpower.

As we have increased our industrial manpower, so we have increased our industrial equipment. In Government-owned factories and annexes alone we have somewhere between $200,000,000 and $250,000,000 worth of machinery and equipment (and that is a big figure for Australia) which is suited to the production of things like machines, machine tools, engineering products, chemicals, all of which we in Australia have never made before.

What do we aim to do with this equipment? Can we turn it over to peacetime jobs? One of the problems, of course, which we will have to face is the problem of costs. In wartime, costs become a secondary factor. If we want air planes, and the only way we can get them physically is by making them ourselves, then we must make them, cost what they may; but when the post-war period comes we will have to face the issue of whether, by swinging this equipment over to peacetime jobs in Australia, we will not be attempting to establish industries which have no economic future in the long run. That is a very difficult problem politically and administratively, because, as you will realize, it is difficult to discard, to write off equipment which you have built up over a period of years.

These are, so to speak, the more specific problems, of demobilization, of the transition from war to peace. I believe that our success in solving them turns primarily upon how well we manage the major task of building an expanding economy in which, our resources will be generally fully employed and progress maintained.

To establish an expanding economy with resources fully employed is a problem which, if it is solved, will be solved in different ways in different countries. Every country has its own economic traditions, and their solutions will be influenced by those traditions.

The Australian economic tradition differs somewhat from that of America, so far as 1 am able to interpret it in the short time that I have been here.

We in Australia are a very undoctrinaire people. We hear arguments about the relative merits of private enterprise on the one hand and public activity on the other, and I think I am right in saying that to the Australian the argument seems somewhat academic. We have no preference, so to speak, for one or the other. We find private enterprise does certain jobs very well; others perhaps not quite so well. We find that there are certain things that public activity does admirably; some that it does badly, and our approach to this problem is pragmatic, experimental. Where we have tried certain avenues of public activity and found failures we have on the whole been willing to discard our failures. I think the general tenor of public opinion in Australia at the present time is that in the post-war period public activity will play a larger part in our economy than it has done in the past.

The people of Australia, for instance, look in the post-war period for such things as planned housing, for the provision of community facilities, schools, libraries, hospitals, health centers, and playing fields, for the modernization and extension of our transport system, for regional developmental projects which will decentralize our community and bring some of the amenities of the city to country dwellers. These things many people in Australia feel can be done effectively in Australia, at any rate, only by public authorities, and that public authorities will play an important part in the planning and carrying out of those projects.

We are attempting, therefore, to plan for an orderly development of our economic resources, and for a continuous improvement in the environment in which the common life of our people is lived.

While this plan is designed primarily to give effect to the hopes and ambitions of our people, it will, it is hoped, be capable of adjustment so that it will fit in with the fluctuations from time to time of private activity, so that out physical and manpower resources will be continuously and profitably employed so far as intelligent cooperation between private enterprise and government activity can achieve this result.

This, in the economic sense, is our program of reconstruction to change over as smoothly as we can to a peacetime economy directed towards the achievement of the economic objectives set out in the Atlantic Charter, freedom from want; a freedom which we believe is not merely negative. We seek a freedom which offers positive opportunity for economic advancement, opportunity for a fuller life, for collective and for individual adventure.

The program that I have outlined to you has been stated primarily in terms of our own internal economy. This does not mean that we believe that we can go our own way without consideration for the rest of the world. As I said at the outset of my remarks, we are very conscious of ouryouth and our dependence. Our capacity to carry out this program, and the level of prosperity and standard of living at which it can be carried out, are dependent upon our relations with the rest of the world.

Australia is very sensitive to economic changes in other parts of the world. A large part of our production is for export, and our exports consist primarily of goods the production of which fluctuates very widely from year to year with seasonal conditions. Droughts, or "bad years," as we call them, are a normal part of our life. We reckon on one bad year in five, sometimes more, and the whole of our economy, our financial and other economic institutions are designed to take the shock of those bad years and to ease their effect on the economic life of our people.

Consequently, both because of the hazards of nature, and because of fluctuations in export prices, we find that one of the most important factors in determining the level of prosperity in our country is beyond our control. When export income is high, other incomes in Australia are high; there is good employment, and business is profitable. When export income is low, the reverse is true, and we face depression and unemployment.

It is natural that the demand for our exports depends upon the economic conditions in the rest of the world. When business is profitable, when employment is high in the United States, in the United Kingdom, and in other major economic countries of the world, we can sell our exports and we can sell them at prices which pay us to produce them. Therefore, we are vitally concerned with the level of economic activity in this country, as well as in other major countries.

I would say, too, that that is not a one-way traffic; just as we sell exports profitably when your employment and economic activity is high, so, too, we buy from this country and other countries in the years when activity and employment are high in Australia. There is a direct relationship between the level of our imports, our purchases in other countries, and the level of employment and incomes in our own country.

It is important to realize that economic conditions are not merely the concern of the country in which those conditions exist. They are the concern of every other country in the world. We are not merely interested in the level of activity in this country, but, to some extent, we are dependent on it, and we feel therefore that this country has a responsibility not merely to its own people to maintain a high level of economic activity and employment, but a responsibility also: to us and to the other parts of the world.

We think it is important that those people in the United States who make decisions in the field of economic activity, businessmen, bankers, public servants, political leaders, should be aware that the economic policy, economic activity of the United States are no longer matters of merely domestic concern. The United States in the post-war period will more than any other single country determine the economic background against which we will play our parts.

Upon what you do depends whether we will be able to achieve the things that we desire. I think there is an increasing awareness in this country of that responsibility. It is an awareness which shows itself in a greater willingness to participate in international collaboration, both political and economic It shows itself in a willingness to conclude trade treaties which are of mutual benefit both to this country and to the countries with whom they are concluded. In this new enthusiasm for international collaboration there is a danger that it will be forgotten that the most important international results will come from action in the domestic field. Much as we desire to see improved international economic relations, through a relaxation of those trade barriers and restrictions which have so dampened down the economic development in the international field in the prewar period, we feel that that desire will remain a desire unless there is a high level of activity and employment in the countries concerned.

As a political fact, I think I can say that when we have an economic situation which can be summed up in the words "full employment" people are prepared to look at, tolerantly, questions of modification of trade restrictions in the interest of better international relations. However, once employment with its waste of resources, develops on any substantial scale—and I think this is true not only of our people but of the people of many countries of the world—once unemployment develops, then no restriction on trade is too severe, whatever ill effects it might have on other countries of the world, and no relaxation, however mild and however obviously beneficial in the general sense, is practicable. Economic security is, I believe, one of the things which individuals and nations place first, and when that security is threatened, there is a tendency for them to become increasingly selfish in their international relations. It is for that reason that we look, in the hope of an improvement of international economic relations, first of all to the creation internally in the major countries of the world of a condition of economic activity which will make possible a relaxation of those barriers and an improvement in the level of prosperity right through the world.

Without that, we feel that our talk of lower trade barriers may well remain in the field of academic discussion.

I would like to conclude, therefore, by emphasizing; our point of view. We are dependent to a degree which it is difficult for an American to understand upon the rest of the world. We are conscious of that dependence, and we look to you for help; but the nature of the help is such that it can be given not so much in the international field alone but primarily here in your own country.

There is in New Zealand, a neighbor of ours, a very fine old folk tale about a Maori warrior who was caught at sea in a small boat. A storm blew up, the sky became overcast, and the wind grew wild and the seas mountainous. He feared whether he could survive, and he decided to pray. We feel in Australia and in New Zealand that his prayer is rather fine. He prayed, not for the abating of the storm or the dying down of the winds. He prayed that the sky might clear so that he could see the stars to steer by.

He didn't want help; he just wanted a chance. What we ask is just that. The conditions in which we will have to work in the post-war period will be made by you. We ask that you will make conditions which will give us a chance to fight our own battles and work out our own solutions to our own problems.

Note: Dr. Coombs wished it noted that the opinions expressed are his own and not necessarily those of the Government of the Commonwealth of Australia.