15th Parliament · 2nd Session
Mr Speaker (Hon. G. J. Bell) took the the chair at 10.30 a.m., and read prayers.
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SirCHARLE S MARR. - Can the Treasurer saywhether the information supplied when the national registration which was effected a year ago, and in connexion with which cards were filled in to denote each man’s occupation for the purpose of ascertaining the man-power of Australia, has been correlated, and, if so, whether any use has been made of it?
– The information has been correlated, and the task has almost been completed. Prom time to time information has been conveyed to the appropriate authorities.
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– Will the Minister for Supply and Development make inquiries as to the truth or otherwise of the report that wool supplied by Australian Woollen Mills for socks for soldiers at 5s. per lb. is being sold by retailers in Sydney at 16s. per lb.
– I shallhave inquiries instituted into the matter referred to.
– Can the Minister for Commerce say whether the. Government has come to any decision on the question of the price at which wool is to be’ released next year to Australian woollen manufacturers for local requirements, exports of tops, and other partly made-upwoollen materials ? If so, what are the terms of the new arrangement?
– The matter referred to by the honorable member has been considered on several occasions during the last few months by the Central Wool Committee, with the result that a regulation was gazetted lastweek, empowering the Central Wool Committee to determine the price at which wool will be available to Australian manufacturers. Under the old arrangement, Australian manufacturers obtained wool at the Appraised price, plus¼d. per lb. From the point of view of the grower, the present arrangement will be more satisfactory.
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Mr.ARCHIE CAMERON (BarkerMinister for the Navy). - by leave - I wish to bring before the House the following statement contained in a letter from Admiral A. B. Cunningham, at Malta, to Commander Waller of H.M.A.S. Stuart : -
On the conclusion of the important operation which I entrusted to H.M.A.S.Stuart, I wish to convey to the commanding officer, officers and ship’s company of His Majesty’s Australian ship under your command my appreciation of the way in which this duty was carried out.
The interception of the ship and the subsequent embarkation of the personnel and stores, and their final disposal was. carried out in a most able and seamanlike manner which reflects great credit on allhands.
Subsequent to this, H.M.A.S. Stuart has again shown her mettle in the way in which she brought helpto the S.S. Trocas. In the weather conditions prevailing, this operation called for particular seamanlike judgment and it was carried through with a determination for which there can be nothing but praise.
Iam very glad to have the Australian destroyers under my command, and these two incidents have shown how ready they are to seize any situation and cheerfully carry it through to a successful conclusion.
While the present situation in the Mediterranean makes our duty seem monotonous at times,we must remember that the enemy will attack us when and where he thinks we. are weak and unprepared.I know full well that if he ever gives us a chance nobody will appreciate the “ scrap “ betterthan the officers and men of the Australian destroyers.
B. Cunningham, Admiral.
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– Is the AttorneyGeneral in a position to say whether the Government has issued notices to the owners of any coal-mines to re-open their pits? If so, can he announce which pits have been mentioned, and whether they belong to members of the owners’ association,or are what is known as nonassociation pits? Further, can he say whether these pits are worked by federation lahour, and whether it is a fact, as reported in to-day’s press, that production at these mines is to be substantially increased ?
– I am unable, at the moment, to supply the information contained in the first part of the honorable member’s question. As to the second part, the pits in respect of which notices have been issued are non-federation, pits.I believe that the report in to-day’s press is correct.
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– In view of the restrictions imposed on the use ofgas and electricity, which were gazetted recently by the Government of NewSouth Wales, and having regard to their serious effect on employment, and the inconvenienceto the public, can the Acting Leader of the House say whether the Commonwealth Government is in consultation with the Government of New South Wales with a view to alleviating the position, or is this a matter entirely under the control of the State Government?
– There have been consultations between the two governments, and I have no doubtthat the present situation will be the subject of further discussions during this week-end.
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– On the 8th May, the honorable member for Bourke (Mr. Blackburn) asked me why an applicant for appointment as a special peace officer is required to state his religion, and whether I would lay on the table of the House a copy of the application form for such appointment. I then promised I would have inquiries made into the matter. I now desire to inform the honorable member that the form used in recording particulars concerning special peace officers includes provision’ for a statement by them as to their religion. This follows the practice which prevails in most, if not all, of the States in connexion with the engagement of members of police forces. The form is identical with the form that was in use in New South Wales when the first appointments of peace officers were made in 1925. It has continued ever since. There is no discrimination against any religious denomination. I notice that the form for enlistment of members of the Australian Imperial Force contains provision enabling any person who has conscientious objections to stating his religion to decline to do so. I propose to have the application form for special peace officers amended to bring it into conformity with the enlistment form. As promised on the 8th May, I now lay a copy of.: the application form on the table of the House.
– I direct the attention of the Attorney-General to section 116 of the Constitution, which provides inter aiia that “no religious test shall be . required as a qualification for any office or public, trust under the ‘Commonwealth “, and ask him whether it is not a fact that, when Commonwealth Oil Refineries Limited asked candidates for employment to state their religion, the Government of the day, of which he was a member, instructed the company to delete the question from the application form which candidates for employment had to sign? Further, can he say why, having regard to the purport, and particularly the spirit, of section 116, any citizen of Australia should be asked, other than for statistical purposes, a question which conflicts with that section, and how it is that any candidate for employment, or any person whose services are sought for salary by the Commonwealth Government, shall have to indicate his religion ?
– To reply to the honorable member at length would he to occupy too much time, and, therefore, I shall endeavour to deal with- the matter shortly. First, as to the interpretation of the Constitution. That is a matter of law, upon which it is not usual to express an opinion offhand. I do not propose to break such an excellent rule so early in the morning. As to the question asked of applicants, I remind the honorable gentleman that he and I have been members of this assembly for some years, and that although this practice has been going on all the time it has left him with an untroubled mind until this morning.
– That is not correct. The right honorable gentleman struck a similar question off the form of application for employment with Commonwealth Oil Refineries Limited when I directed attention to it.
– There is nothing unusual in this procedure. Similar informationwas demanded of every soldier during the- last wai-, and -that practice still obtains. Moreover, I understand that similar information is demanded of every police officer throughout the Commonwealth, although I am informed that in New
South “Wales there has been a modification, in that, although the question is not. now included on the application form itself, the information is supplied on the back of the form. There are very many excellent reasons why this information should be supplied.
– Let us hear one of them*-
– If the honorable gentleman were a policeman, which, happily, he is not-
Honorable members interjecting,
– The AttorneyGeneral must be heard in silence.
– There is nothing unusual or extraordinary in this procedure. The question is not framed with a view to discrimination against any sect or denomination. From, the inception of this Parliament, this information has been sought, and before this Parliament was established- -it was- - the practice -of- theStates to ask for it. iSo far as I know, it is a common practice all over the world.
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– Has the Treasurer yet. obtained from the Minister for Trade and Customs the information which a week ago he promised to procure with respect to the announcement that the Australian tobacco industry was to be made -the subject of a further inquiry by the Tariff Board ? Can the honorable gentleman himself throw any light on the mystery as to why, after some eight months have elapsed, still no move is being made to include tobacco, the imports of which represent some £2,000,000 of Australian money, on the list of prohibited imports from the United States, which is a non-sterling country ?
– The answer to the first question is “ No “, but I shall personally communicate with the Minister in order that a reply may he furnished to the honorable member. My reply to the second part of the question is, that I have no knowledge of the alleged mystery to which the honorable member refers. If the Minister for Trade and Customs knows anything about it, I am sure that he will make an explanation to the honorable member.
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– I ask the Minister for Supply and Development whether the Government has received any reply from the director of Commonwealth Oil Refineries Limited in connexion with the petrol position?
– The whole matter to which the honorable member’s question refers is still being investigated.
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– Is the Treasurer yet in a position to make a statement regarding an amendment of the Gold Tax Act to afford relief to non-paying gold mines ?
– I regret that I am not yet in a position to make this statement. The matter has been under continuous consideration. The difficulty is, in respect of hardship cases, to find a working formula to deal with the matter. I assure the honorable member that it has not been lost sight of. I am hopeful that I shall be able to let him have an answer next week.
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Questions having been disallowed by the Chair,
– Will you, Mr. Speaker, explain what the position is in regard to the recording by Hansard of questions that you disallow?
– Questions that are disallowed do not appear in Hansard.
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Compensation for Resumed Premises
– Can the Minister for the Army explain the withholding for the long period of six months of the payment of £20 by way of compensation due to a citizen of La Perouse who was forced to vacate premises to make way for the Defence Department?
– I am not aware of the particular case mentioned by the honorable gentleman, but I shall have investigations made and later furnish him with an answer to his question.
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Departure of Troops from Brisbane.
– Is the Minister for the Army yet in a position to furnish any information in reply to the complaints with respect to the arrangements for the march through the city by and the departure of Australian Imperial Force troops from Brisbane at the end of April?
– I have received report on the matter. The march was made via Grey-street instead of Queenstreet for two main reasons - first, to avoid congestion of traffic; and, secondly, because the route chosen was slightly shorter. As the honorable gentleman knows, there is no tram traffic over Greystreet Bridge, whilst very heavy traffic passes over Victoria Bridge, and consequently any march over the latter bridge would have caused considerable traffic congestion. It is, perhaps, incorrect to say that the route over which the troops passed consisted of back streets, because several of them cross main arterial highways. With regard to the second part of the question, it is regretted that very little time was allowed to relatives at the railway station. This was due, not to any fault of the railway authorities, but to misunderstanding between the records office and the embarkation staff: Steps have been taken to ensure the avoidance of a similar occurrence in future,
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– In view of the fact that the Commonwealth possesses a most excellent service in New Guinea, will the Minister in charge of External Territories say whether the experts in agriculture, medicine, and other offices of the administration might be co-ordinated in a territorial service so that the services of these gentlemen might be made available to all of the tropical and sub-tropical territories of the Commonwealth?
– There is no provision in the mandates under which Nauru and New Guinea are held for a pooling of resources, But I believe that it would be possible to make some arrangements voluntarily for payment to be made from their resources to enable joint use to be made of the service of officers, as the honorable member suggests. I shall go into the matter.
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– Has the Minister for the Navy any information to the effect that negotiations have been entered into for the removal of the floating dock now established at Walsh Island, Newcastle, to Whyalla or any other part of the Commonwealth?
– I have no personal knowledge of the matter, but I shall make inquiries and communicate with the honorable gentleman next week.
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– Will the Minister for Commerce state whether Mr. Hogan, Minister of Agriculture in Victoria, at first declined to attend the conference held in Canberra last week to discuss the position in respect of marginal wheat lands? Did Mr. Hogan subsequently attend that conference? If so, what inducement did the Commonwealth Government hold out to him to cause him to change his mind ?
– It is a fact that the Minister of Agriculture in Victoria telegraphed the information that he would not be able to attend the conference referred to by the honorable member. He was informed by telegram that the meeting would be held in his absence. Subsequently, the Ministers of Agriculture in the different States were asked to come to the conference prepared to discuss the matter of potatoes. To Mr. Hogan, the subject of potatoes is a magnet. If one were to tell him that one wanted to discuss potatoes with him, he would agree to confer at the end of the world.
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Raising of Funds
– Has the Treasurer given consideration to the request of co-operative building societies for permission to raise funds for the building of homes in NewSouth Wales? If so, what is the present attitude of the Government?
– There seems to be some misapprehension as to the Government’s function in respect of the raising of finance by co-operative societies. The present practice is for those societies to make application to me for permission to raise money. The only limitation imposed on the raising of money by such societies is in respect of the interest to be paid. On one occasion when permission was sought to raise in respect of four items a total amount of £200,000, the interest rate required was 5 per cent. I refused to consent to the request except on the condition that the rate was 4¾ per cent. The money was finally raised at that figure.
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– Will the Minister for Air state whether or not it is a fact that a very large proportion of the men whom his department requires for the Royal Australian Air Force, such as mechanics and the like, are drawn from garages and engineering shops? Is the honorable gentleman aware that at the present time many of these employees are being called up for ordinary military service under the compulsory training system, and that their training intechnical matters is thereby being interrupted, the ultimate effect possibly being disadvantageous to his appeal for enlistments in the Royal Australian Air Force? If so, will he make representations to the Minister for the Army tosecure the exemption from military service of men who may later be required for the Royal AustralianAir Force?
– I am aware of the existence of the situation outlined by the honorable member, and have discussed it with the Minister for the Army, who has assured me that exemption from training will be granted to those who have volunteered for service with the Royal Australian Air Force and have been accepted, even if they have not yet been called up to begin their service.
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Wages and Conditions
-I ask the Minister for Supplyand Development if it is a fact that a regulationpromulgated in his department has been tabled. which. interferes with the wages and .conditions of. .the employees in the aircraft section? If so, is this- not a violation of the Supply and Development .Act, which makes, it clear that regulations shall not be used to interfere with either the wages or the conditions of the employees? I. ask the question because I have received from the Metal Trades Union in Melbourne a communication affirming the existence of this Regulation. Although I have made a search for it with the assistance of officers, I have been unable to locate it, and I should like. the Minister to either correct or deny the statement.
– I have no personal knowledge of any such regulations, and the honorable member himself has intimated that he has not been able to discover any; but I shall have a further, search made.
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– by leave - In response to the request made to. me yesterday by the honorable member for Wannon (Mr. Scholfield),- I have pleasure in making this statement. A great deal of what I shall say has already been said by the Prime Minister (Mr. Menzies) or myself, but as there seems to be a great deal of misunderstanding about the undertaking, and ;as a number of points have not been” emphasized to any degree, I think an elaboration of what has been said is justified.
Honorable members will recollect that, towards the end of September last year, the Prime Minister announced that it had been proposed that the Dominions of Canada, Australia, and New Zealand should co-operate with the United Kingdom in a scheme for training pilots, observers, and air gunners on a scale never before contemplated. I was sent to Ottawa with air force and finance advisers to discuss the proposal with representatives of the other three governments. Upon our arrival in Ottawa, Lord Riverdale, the leader of the mission from the United Kingdom, outlined the need for this great air training scheme and the lines upon which it should be organized. He explained that, in spite of the tremendous expansion of the Royal Air Force and of the efficiency of its per- sonnel and aircraft, it was considered by the Allied leaders that, if an end were to be put to German aggression, it would be necessary to develop an air force on a scale that would-.not.only match the German aircraft numerically, hut also have such a superiority as would give the Allies a command of the air comparable to their command of the sea. It had been calculated that British and French aircraft production, plus the production of the United States of America, which would be available to the Allies, could produce sufficient aircraft, for this purpose. He went on to explain, however, that owing to the definite limits imposed by the size of the British Isles and the handicaps inseparable for haying to carry on .offensive and defensive operations in the air, it would’ npt be- possible to train, in the United. Kingdom, sufficient- air crews to man such . an aerial armada. So it was suggested that., the three dominions, with their unlimited, spaces, ideal climatic conditions, and freedom from the handicaps imposed by air operations against a powerful enemy, should set up a vast training organization, which would supply rather more than half of the air crews that would be necessary. . The original proposal .was? that - the dominions, in approximate proportions to their populations, should each set up training establishments to carry out the elementary training of their quotas, and that the more advanced intermediate and service training should be completed in a vast organization to be set up in Canada. It was at once agreed that each dominion should undertake its share, and the details of the necessary organization were then discussed.
Australia’s share in this original proposal was to establish nine elementary training schools for pilots, and a corresponding number of schools for observers and air gunners, who would complete their training in nine schools. A corresponding number of observer and air gunner schools was to be established in Canada.
While the mission from the United Kingdom was outlining the original proposal, I noticed that the aircraft to be used for the advanced training in Canada were all to be supplied from the United Kingdom with the exception of one American type, which we happened to be manufacturing in Australia. I was surprised, as I had imagined the main -reason for concentrating the advanced training in Canada was that dominion’s proximity to the aircraft factories of the’ United States of America. I thereupon made a counter proposal.
After a good deal of consideration and consultation with the Government, I proposed that, as the aircraft were all either to be sent from the United Kingdom or to be produced here, Australia might “undertake seven-ninths of the advanced training with this country. This counter proposal, which was finally agreed upon, was, in several directions, a considerable improvement on the original proposal. The organization originally proposed might well have proved beyond the capacity of Canada, whereas the alteration has reduced it to manageable proportions, though it will still impose a tremendous strain upon our sister dominion.
The alteration will also effect a great reduction of the dollar exchange. Under the original scheme, it would have been necessary to find, in- the first three years, £51,000,000 worth of ^Canadian dollars, which would have meant incurring a considerable debt in dollars and almost certainly most drastic reduction of our imports from Canada, thus causing great loss to the exporters of that dominion and [considerable hardship to Australian industries and individuals requiring Canadian goods.
Under the revised proposal it will only be necessary to find, in the first three years, £11,000,000 worth of Canadian dollars. In other words, the variation has effected a saving of approximately £40,000,000 worth of dollar exchange.
Another point of very considerable importance to us is that, under the present scheme, we shall have concentrated in Australia more than 1,200 service aircraft with a very great striking capacity, in addition to our nineteen active service squadrons. To illustrate the security value of this force, I point out that 1,200 service aircraft are considerably more than double the number of seaborne aircraft of any navy in the world. So when we take into consideration that only seaborne aircraft can come against us and are at a very considerable disadvantage when opposed to land based aircraft, it can be realized what a tremendous addition to local security the aircraft to be used in this training .scheme will give to the Commonwealth. These 1,200 aircraft, added to our existing squadrons, will give us a superiority of three to one over the aircraft carried by any navy in the world.
– May these aircraft be taken to any field?
– No. They are for service here, but would be available against any force that may attack the Commonwealth.
– Is the three-to-one strength a strength of- numbers or of striking force?”
– It is a strength of numbers. Its striking force would probably be very much greater, for aircraft which can: be -carried upon, and catapulted from, ships at sca are, generally speaking, considerably lighter types than the aircraft that will be used in connexion with this scheme.
Another not inconsiderable merit of the revised scheme is ‘ that it will cost Australia more than £4,000,000 less than the scheme originally proposed, and that more than £30,000,000 which would have had to be spent abroad will be spent in and circulated throughout Australia, thus increasing our capacity to bear the financial burden of our war effort.
Two questions will naturally arise in the minds of. members from the foregoing observations. First, why is training in Australia so much less costly than in Canada, and, secondly, if so much less costly, why are Ave not completing all of our training within the Commonwealth?
The answer to the first question is that in Canada the great majority of the landing grounds will have to be prepared at ah estimated average cost of about £50,000 each, whereas in Australia Ave already have more adequate landing grounds than will be required. Owing to climatic conditions, hangars and buildings will also have to be built on much more expensive lines in Canada. Hangars there, for instance, have to be centrally heated and’ fitted with mechanically operated doors that can open and close very rapidly so as to minimize the intake of intense cold every time an aircraft is taken out Or brought in. Another additional cos.t is the necessity for the continual rolling of the snow during the winter to keep the landing areas consolidated. Let me add, by way of re-assurance, that apart from the cold adding to the cost for these reasons, winter flying conditions in Canada are very good. I make that remark because some people have certain misgivings about winter flying conditions in Canada. The fact is that, though the cold is intense during the winter in Canada, the weather, ia crystal clear and very good indeed for flying.
The reason why there is a definite limit to the amount of training we can do in Australia is that our supply of fitters is inadequate. That will be one of our great problems. Canada, however, has the great advantage of being able to draw on. a vast reservoir of man-power from across its border in the United States.
– What evidence has the Minister to justify his statement that there is a shortage of fitters in Austral ia ?
– I assure tho honorable member that up to date we ave receiving very few. applications from fully trained litters, owing to the expansion of the aircraft industry in this country, and to other industrial expansion in connexion with which the services of trained fitters are required.
– The trouble is that the Government is not offering decent wages.
– I do not think it would be advisable to allow myself to be drawn off on- that point. I simply pause to observe that the wages offered by the Royal Australian Air Force have been calculated upon the wages paid in industry.
Tho arrangement for sharing the cost of the scheme among the four governments is as follows: - Each dominion is to bear the cost of training its own quota of personnel, except that the United Kingdom is to make a very substantial contribution of aircraft and equipment to be used for training purposes. The estimated value of the aircraft and equipment to be supplied by the United Kingdom is £77,000,000. ‘ After the completion of training, the Government’ of the
United Kingdom is ito bear all cost of paying, equipping and maintaining the personnel and squadrons, even to the extent of paying their pensions, though where the pay and pension rates of a dominion exceed those paid in the Royal Air Force, the particular dominion is to make up the deficiency. The cost to the Government of the United Kingdom of maintaining the squadrons that will be manned and reinforced by dominions’ personnel trained under the scheme, will be £300,000,000 sterling per annum. The cost to the Commonwealth of the air training scheme for the first three years is calculated to be £54,890,000.
– Will the Imperial Government meet those costs wherever the operations are being conducted?
– Yes ; the Government of the United Kingdom is bearing the complete cost except in respect to any expense. that may be involved in making up a “higher rate of pay that may apply in a particular dominion. In such a case, the dominion concerned will be at liberty to increase the pay of the men. The Government of the United Kingdom has even undertaken to pay pensions at the rate applicable to the Royal Air Force. If a pension scheme in operation in any particular dominion is more liberal than ‘that applicable to the Royal Air Force personnel, the dominion concerned will be required to make up the difference if it considers .it desirable to do so.
Although all personnel,’ on completion of training, are to serve in Royal Air Force squadrons, every .effort is to be made to maintain their dominion identity. Australian personnel ‘ will romain members of the Royal Australian Air Force during the whole of their service, and will wear the Australian uniform. They will also be grouped into squadrons, which will bear the name of Australia. For instance, a. squadron would be called No. 1001 Australian (Bomber) Squadron. It is planned to exchange Australian regular officers with Royal Air Force officers to enable’ them to obtain experience of active service flying prior to the arrival of Australian trainees at the theatre of war, so “that these officers, with the experience thus gained, may command the -flights and squadrons in which Australians are to serve. Exchanges will also be arranged for more senior officers. If> later, it is found possible to train more ground personnel in Australia than are necessary for our home defence squadrons and the air training scheme, ground personnel will be sent over also so that a certain number - of squadrons, at any rate, will be 100 per cent. Australian. All squadrons in which .Australians are grouped will be affiliated with squadrons of the Royal. Australian Air Force, so that their records may be added to the traditions of those squadrons.
On being enrolled, air crew trainees will be selected for training as .pilots, observers or air gunners and will undergo their training as airmen. On completion of their training 50 per .cent, of pilots and observers will receive commissions and the remaining 50 per cent, will have the rank of sergeant. Air gunners, on completion of training, will serve as aircraftsmen, or. leading aircraftsmen, “according to how they pass out ‘of their course, except for approximately 10 per cent., who will be granted commissions. “ ! Apropos of air gunners, I should like to correct any erroneous impression that the air gunner is a comparatively unimportant member of an air crew. It is true that the air gunner- does not need quite such a high standard of education 1 as a pilot or observer, as he does not have to master the intricacies of navigation; but, as the war progresses, more and more importance is being placed on getting fighting men of the right type to fill positions as air gunners. Often the safe return of a formation of bombers is due even more to the skill and courage of the air gunners in fighting off the enemy than to the skill of the pilots and observers.
Conditions of service are’ contained in pamphlets which I have circulated to honorable members and which are being circulated throughout the Commonwealth. T should be pleased at any time to discuss with honorable members points which may not be clear to them in these pamphlets.
The two immediately urgent problems which have to be overcome, and in the overcoming of which all honorable members of this House may be able to help by explaining the true position as widely as possible, are the need for young men with some mechanical experience to come forward and be trained as fitters, and to persuade men who. wish to .serve as air crew, members to possess themselves in patience until such time as it is -possible to call them up for training. The fitter position is particularly urgent, as there are ‘not sufficient trained fitters available in the Commonwealth to fill the requirements of the air. training scheme. If sufficient men with some mechanical knowledge are not forthcoming rapidly to be trained, it will not be possible to carry through the- programme. Possibly many suitable young men are holding back because they do not feel that serving as ground personnel is a sufficiently combatant occupation- to justify their giving up their civil employment. To them it should be explained that no war service can be more valuable than service as a fitter, because, if the- fitters are not forthcoming, it will not be possible for the air crew personnel ‘ to be trained. Here is a- wonderful opportunity for young men to perform- valuable war service for their country and at the same time receive training which will be invaluable for them in the post-war years. Already more than 2,000 men are in training as fitters in engineering and technical schools at Canberra, Sydney, Melbourne, and Adelaide. Other schools are shortly to be opened in other State capitals. Men of a splendid type are at present in training in the schools, but I cannot exaggerate the importance and urgency of obtaining many more of this type promptly to fill the schools to capacity.
With regard to air crews, the problem is rather the reverse to the fitter problem, but it is equally important. Here the problem is to persuade nien who have the qualifications and the inclination to serve as air crews to be patient until such time as it is possible for them to be taken in for training. If we could take all who wished to serve into training, immediately, I have no doubt that we could get the 30,000 men who will be required during the first three years of the scheme to come forward within a few weeks ; but. owing to the fact that there is already a waiting list of more than 2,500 who have been selected, and another list of some thousands awaiting selection, many are apt to become so impatient and disheartened by the delay that they enlist to serve in some other capacity. If some thousands should do this the result will be disastrous, as the 30,000 men needed to undergo training within three years must approach the Commonwealth’s capacity of young men who have both the qualifications and the inclination to serve as air crew, and there may well be difficulty later in getting a sufficient number of men of the type required.
– The trouble is that soma of them have to take other service because they are unemployed.
– I realize that to a certain degree that may be so. Although a waiting list of 2,500 seems formidable at present when only 380 are to commence training during May, the intake will increase every two months as new schools are established, according to programme until the full capacity of the organization is developed. The intake will then be 1,148 every four weeks. It will be realized how necessary a big waiting list will be later on to provide for such colossal requirements.
I am not so much worried about those whohave already been selected and are on the waiting list, because waiting is never so bad when one knows that one is definitely to be called up and knows the date, as I am about those who are waiting tobe interviewed and examined. Everything possible is being done to expedite the interviewing and medical examining of candidates, but it is a most complicated business. Interviewing candidates, deciding on their general suitability and their particular suitability to serve as pilots, observers or air gunners, and the complicated medical, dental, and optical examination take more than an hour. I am particularly sympathetic with those who have to undergo this ordeal of waiting and. uncertainty, well remembering my own concern and impatience when I had to wait only a few weeksto be called up for training in the flying corps during the last war.
I express appreciation of the way in which honorable members on both sides have refrained from carping criticism of our recruiting officer’s, who arestraining every nerve and working long hours and Saturdays and Sundays to overcome the difficulties. I should also appreciate very much anything that honorable members can do to explain the difficulties to prospective candidates and the importance of patience.
Intothisbald, dry statement of fact I enf use the spirit of the Empire air training scheme by quoting anextract front a remarkable speech made at the Openingof the Royal Canadian Air Force recruiting campaign by Air-Marshal Bishop,V.C., the famous Canadian fighter pilot of the last war, who by shooting down between 70 and 80 German aircraft proved himself oneof the greatest individual fighters in history. At the end of a remarkably fine speech, Bishop said -
Germany lied and failed us so often that she only succeeded in deceiving Herself. As in 1914 she could not conceive that two things might happen - first, that England would fight her, and, second, that the British Empire was a united Empire. She did not realize that when the lion roars the cubs will answer the call. The cubs are there now in their battle kit, waiting to fight any foe to freedom; to play their part and give their lives, if necessary, to the sacred cause of Empire. We come from a proud race. We are the descendants of generations whohave waged war through the centuries for our ideals of liberty, and let no one think that we have forgotten the lessons this record has taught us. Many months, perhapsmany years-long and anxious times lie before us ; but we face the future with a spirit of serious resolve.This Empire has weathered many terrible storms, and by God’s grace it will weather this one, too.
When Bishop spoke those words he was speaking for the whole Empire, not merely for Canada.
page 703
– Has the Attorney-
General seen the statement in the press that, in order to stimulate production of coal in thenon-feder ation mines, the proposal has been made for the introduction of second and third shifts? Is that an authentic statement of the Government’s policy? If so, how can that statement be reconciled with the recent statement of the Prime Minister that the coal-mines would be opened only on conditions of the award ? Doesthe right honorable gentleman remember that in 1914 there was a general strikein thecoal industry and that the War Precautions Act, which I believe the righthonorable gentleman himself introduced, abolished the afternoon shift because of the extraordinary number of casualties that occurred among experienced miners ?
-Order! The honorable member is not asking a question now.
– Will not the introduction of an afternoon shift definitely break an award given by the Arbitration Court under the War Precautions Act in 1914, when the second shift was abolished ? Will it not also be not in conformity with the Prime Minister’s own statement?
– I am not cognizant of any such proposal or of the introduction of any such scheme. If the mines are working a second shift, the Government has ‘nothing to do with it. If the honorable gentleman says, “Is this the policy of the Government V, I say that the Government has nothing to do with the working of those mines in any way at all.. If the honorable gentleman Jays. “ Here is a breach of the award,” that is a matter to which I shall direct my attention immediately.
page 704
– In view of the fact that many returned soldiers find it difficult to compete in industry with younger , men, but are well able to join the garrison battalions for guard duty, I ask the Minister for the Army if he will remove the age limit of 45 years, which debars many returned soldiers from joining those battalions, and allow the commanding officers in the various military districts to treat each application on its merits.
– There are throughout the military districts various units known as garrison battalions, which are composed entirely of returned soldiers. They are doing work of the type to which the honorable member refers. 1 am not quite sure what he is driving at. and I should like him to discuss the matter with me personally. As I understand the position, however, the point that he has raised is at present being met.
page 704
– Will the Minister for Air state whether the Government has decided to abandon, or not to proceed with at the present time, the scheme decided upon some time ago to extend the area of the Essendon aerodrome? If such be the case, will the Government return to the original holders the land resumed for extension purposes, so that they will have an opportunity to dispose of their land at a more reasonable price than the extremely low figure offered by the Government?
– The complete extension programme that was considered prior to the outbreak of the war is not to be proceeded with at once, but I waa not under the impression that any resumption had yet taken place for that purpose. Only “lesser extensions, if any, are likely to be made during the war. I shall look into the matter to ascertain whether any unnecessary resumptions have been made.
page 704
– Will the AttorneyGeneral state whether the Government has been advised that a commercial inquiry agency in Sydney has been investigating the private business affairs of the Minister for Supply and Development? If so, does the advice suggest that such inquiries are related to recent .criticism by ..the Minister of certain commercial interests? Does the Government propose to compel disclosure of the identity of the person or persons under whose instructions the inquiries were initiated?
– My attention has, of course, been drawn to certain movements directed, I assume, to elicit information which might be used: against my colleague the Minister for Supply and Development. I assume that these inquiries are prompted by persons who have a direct interest at the present moment in damaging the reputation of the Minister. If the honorable gentleman asks me, as I understood him to do, whether the Government proposes to compel the agency which is conducting this matter to disclose the name of its principal, my reply is that I shall give careful consideration to the request without delay”, and see what power,” if any, ihe Government has to compel such a disclosure.
page 705
– Some time ago, the Minister for the Army, in answering questions regarding anomalies in connection with the separation allowances of members of the Australian Imperial Force, said that the Government was reviewing this matter. Will the Minister now state whether the Government has done so, and, if it has, with what result?
– The review has not yet been completed, but I am anxious to deal with the matter as soon as possible.
page 705
– Having regard to the ‘‘public interest aroused, by .the announcement by the Minister for Health that national measures are proposed to combat tuberculosis and chest diseases, can the Minister give to the House any information on this . important matter?
– A conference of medical men has been called. Circulars have already been issued to. them, and they will assemble in Canberra towards the end of the present month to deal with problems affecting the health of the nation.
page 705
– In view of the statement by the Minister for Air regarding the large air force that will be maintained in Australia, and the largescale production of aircraft that is to take place in this country, will the Minister for Supply and Development state what action has been taken by his department to ensure a supply of aluminium alloys? Does he intend to take any action? If not, why not? Sir FREDERICK STEWART. - Appropriate action has been taken to ensure that ample supplies of aluminium and other products necessary for the fabrication of aircraft will be available in Australia, having regard, of course, to the fact that there is a world shortage of aluminium.
page 705
– As the Minister for Air apparently failed to appreciate the point of the question that I addressed to him earlier this morning, I mention for his information that I have received a letter from a garage proprietor in Lismore, New South Wales, who employs seventeen men, of whom ten have enlisted for service in the Royal Australian Air Force and seven are being called’ Tip for compulsory service with the Militia, and will join infantry battalions. My informant states that the latter men are taking courses in engineering subjects at a technical college. In view of the statement by the Minister regarding the shortage of fitters and others with engineering knowledge, is it not incumbent on the Government to see that the technical training of these young men is not interrupted? Will -he make representations to the Minister for the Army to secure the exemption from training for all such men as these throughout Australia, who may be called upon later to fill vacancies in the Air Force.
– I shall discuss the proposal submitted by the honorable member with the Minister for the Army. I fully realize how employers, particularly those owning garages and engineering workshops, are being embarrassed by the large number of apprentices and men who are joining the Air Force. It is fairly obvious that we cannot grant exemptions from service to individuals unless they have signified their intention to enter another branch of the Defence Forces at a later period. It may be possible for them to enrol for service after they have completed their training.
– I understand that 2.000 men are being trained in engineering and technical schools in Canberra, Sydney, Melbourne and Adelaide. In view of the fact that a large number of recruits have been enlisted in Queensland, will the Minister for Air inform the House why a technical school has not been established in that State?
– The intention is to provide technical training facilities in every State where technical schools have the necessary capacity for the particular type of training to be given. For obvious economic reasons it has been decided to start training in Melbourne, Sydney, Canberra, and Adelaide, as those are the centres from which the largest number of applications have been received, and not in other States until the schools mentioned are filled to capacity. The reasons are obvious and logical. It is desired to spread the benefit of the schools as far as possible. I have, however, given instructions that technical schools shall be established as early as possible in other capitals where existing schools have the necessary facilities, even before the schools in the more highly industrialized States are filled.
– Including Tasmania?
– Yes, andWestern Australia.
page 706
-Will the Minister representing the Minister for Trade and Customs state whether the Government has given consideration to the Townsend report on shipbuilding in Australia? When will the report be made available?
– It is now being considered by the sub-committee of the Cabinet, which will report to Cabinet regarding it very shortly.
page 706
– In view of the importance of air defence throughout Australia and the Empire, will the Minister consider subsidizing the Australian Air League, thus encouraging its members to become increasinglyairminded, with a view tothe adequatedefence of this country?
– Like the honorable member I fully appreciate the excellent work being done voluntarily, particularly in New South Wales, by the Australian Air League. Instructions have been given to air force stations throughout Australia to give the league all possible assistance, and many officers have, in their spare time, been giving a great deal of help to the branches of the league, despite the fact that they are working at great pressure. However, the honorable member will realize the danger in establishing the precedent of subsidizing private organizations.
page 706
-As by far the majority of the troops going overseas embark at the port of Sydney, will the
Minister for the Army give to the people a greater opportunity than is now provided to see these men on parade, particularly on the day of embarkation ? In view of the fact that the troops merely march through portions of the electorates of Werriwa, West Sydney, Dalley and Parkes, does the Minister suggest that this is due to the enthusiasm of the honorable members representing those electorates regarding the enlistment of men in the Australian Imperial Force?
– An opportunity has been given to the public of Sydney to see the troops marching prior to embarkation, although no march, as such, has been staged on the day of embarkation. No doubt the representations made by the honorable members mentioned have had a good deal to do with the selection of the route of these marches. sydneywaterandsewerage board’sloan.
– Will the Treasurer takesteps through the Treasury, the Commonwealth Bank or the Loan Council to provide the Sydney Water and Sewerage Board with the £500,000 required by it, in order to prevent a large number of its employees from being put off, thus adding to the volume of unemployment in the Commonwealth?
– The position of the Sydney Water and Sewerage ; Board is the same as that of other local governing bodies.The loan programme for this year was laid down by the Loan Council, and the Government has not in any way sought to limit the amount to be raised. Notwithstanding the increasing war commitments, the board went on the market early this year, and a loan of £1,000,000 was subscribed in a very short period. Immediately, pressure was brought to bear to seek permission to go on the market again. I pointed out that local governing authorities in the other States had a right to consideration of their claims. I recently indicated to the board that, inview of the fact that the Commonwealth Government is going on the loan market at the end of this month or the beginning of next month, I was not prepared to allow the board to seek a further public loan at the present time. Iam not prepared to reconsider t hat decision. I have made it clear, however, to the Premier of New South Wales that permission will he granted to the board to approach the loan market again before the closeof the present financial year.
page 707
– Has the Government decided to abandon the gliding clubs? Docs the Minister for Air consider that the services of these clubs, which promote the flying spirit and assist in the preliminary training of airmen, is of material value ? If so, will the Government restore the small grants formerly allowed to glidingclubs?
– For some years a small sum- I think about £600 - was set aside annually to subsidize gliding clubs, for which they could qualify by fulfilling certain conditions. I do not think that in any financial year such clubs qualified for anything approaching the amount appropriated. When unduly heavy war expenditure was forced upon the Government it was thought that that was one of the directions in which economy could be effected. Gliding is a fascinating sport which has a definite value in promoting air-mindedness, and it also enables interested persons to gain some experience in the air with little expense. As it is now possible for young men to gain flying experience at the expense of the Government, it has been consideredunnecessary to continue the subsidy. None of the major air forces of the world considers that the preliminary training obtained in gliding clubs in any way reduces the training necessary for service pilots. Gliding was promoted in Germany to increase airmindedness; but I road an article some time ago by an American who has studied the system of training in that country and he said that the Germans did not consider that gliding reduced the time in which a pilot can be trained.
page 707
– I desire to ask you, Mr. Speaker, whether you or this House possesses the power of recall with respect toan honorable member who is a member of an organization with sympathies which coincide very closely with those of organizations in enemy countries?I understand that the honorable member for Wentworth is a member of the New Guard, which has definite Nazi sympathies, and I should like to know whether that honorable member can be recalled.
– I do not think that this House would exercise its powers for any of the reasons mentioned by the honorable member.
page 707
– Can the Minister representing the Minister for the Interior state whether the Advisory Committee which the Government appointed to conduct an investigation into its building programme has presented its report, and, if so, can he indicate the character of its recommendations ?
– No information on the subject has yet been received ; but I shall remind the department to expedite the presentation of the report.
page 707
– In view of the information disclosed in the statement read by the Minister for Air this morning that difficulties are being experienced in absorbing all of those who have applied for training in the Empire air scheme, will he consider seriously the numerous requests made by public bodies controlling country aerodromes, and also other organizations willing to undertake the initial training of pilots, to equip them for the more advanced work in which they will have to engage later ? Would it not be an advantage to the department if the requests of such bodies were favorably considered ?
– All such bodies with the necessary training capacitywill be given an opportunity to quote for conducting elementary flying training schools forthe Air Force. Such bodies will necessarily need to have considerable capacity, because a standard school under the air training scheme must have the capacity for 96 pupils at a time, with, I think, 56 aircraft. The aircraft would be provided by the Air Force; but, nevertheless, considerable organization will be required to conduct a schoolon even half a school, the minimum unit to be set up. The desirableness of maintaining any civil flying organization, apart from those connected with the Empire air training scheme, is very doubtful, because it has been found that a few hours’ experience gained in civil schools does not reduce to any appreciable degree the instruction needed when air pilots commence training under the Air Force curriculum.
page 708
– Will the Minister for Commerce state whether the recent conference .of Commonwealth and State Ministers held in Canberra to consider the allocation of the Commonwealth grant in respect of marginal lands gave any consideration to affording relief this year to distressed farmers in States other than Victoria? If so, will he say that the decision not to grant relief to farmers in those States was induced by his attitude or by that of the Ministers of Agriculture in the other wheat-growing States? I understand that certain farmers in my electorate last year received relief under that grant, and that when they applied this year they were informed by the Minister for Agriculture of New South Wales that no relief could be afforded. unless the Commonwealth authorities so decided, the inference being that if they did not obtain any relief it would be. due to the action of the Commonwealth ?
– I have already informed the House on two occasions that this matter was threshed out thoroughly at the meeting of the Agricultural Council held in Hobart, when it was unanimously agreed by the Ministers for Agriculture that the money should be used only in respect of marginal areas. Last harvest produced a record wheat crop. The subject of relief was thoroughly considered by the Commonwealth Government, and there is no form of relief which is beyond the capacity of any of the States. The Australian Wheat Board has been informed that whenever a State government considers that a farmer should have seed or superphosphates, the board is to record the lien given to the supplier so that it can he paid for out of the next harvest.
page 708
– Will the Minister representing the Minister for the Interior 6tate whether any developments have occurred recently in connexion with the search for oil in Papua ? Can he supply the House with any particulars concerning operations in that area?
– There has been a considerable aerial survey in Papua by a company, known as Australasian Petroleum Company Limited - a combination of the Anglo-Iranian Oil Company, Standard Vacuum of America, and Oil Search of Australia - which has expended from £400,000 to £500,000” on ground and photographic surveys in an endeavour to obtain suitable sites. The company, which is operating over, an area of 20,000 square miles, has imported £200,000 worth of drilling machinery, which has now reached Port Moresby. Although the site selected is only one mile from the river, a road’ 4J miles in length in which it will be necessary to construct 33 bridges and 70 culverts has to be traversed in order to get the machinery to the site. That work has now been commenced. The survey work, has been expensive, because cameras can be used for an average of only eighteen minutes daily owing to the dense cloud formation. Another company utilizing a drilling plant hired from the Commonwealth, which is operating over an area of 75 square miles, has sunk a bore to a depth of from 1,000 to 1,500 feet. Oil has not yet been encountered ; but in view of the activities displayed and the expenditure being incurred, it would appear that the companies have some faith in their projects.
page 708
– In view of the fact that a number of members of the Australian Imperial Force and also militiamen have been injured while on duty in camp and on leave and have subsequently been discharged without compensation or pensions will the Minister for the .Army state whether, pending the passage of legislation to deal .with this problem, action will be taken under the National Security Act to ensure that those men who have been rendered unfit receive sufficient compensation to enable them to maintain themselves until they are restored to health?
– Under existing regulations members of the Militia Forces are already covered. With respect to the members of the Australian Imperial Force who have been injured and subsequently discharged, the position is not quite clear at the moment; but insofar as I know, those men suffering from more or less permanent injury are at present receiving compensation to the degree to which I, as Minister, have power to grant it. In every case brought under my notice compensation has been granted. If the honorable member knows of instances in which this has not been done I shall be glad if he will bring them under my notice.
page 709
– In view of the fact that the Public Works Committee has had referred to it for examination and report a proposal for the reconstruction of the wharf at Port Augusta, will the Minister representing the Minister for the Interior take steps to ensure that there is also referred to the committee the proposal for the extension of the wharf ‘at-Darwin?
– I understand that investigations are being made into the proposal for the extension of the wharf at Darwin.
page 709
– Honorable members received this morning a communication from the Minister for Air containing certain information. I ask the Minister whether he’ will have this communication printed so that honorable members may be able to convey the official attitude of the department to applicants for admission to the Air Force?
– Yes, and I am grateful to the honorable member for making this suggestion.
page 709
Motion (by Mr. Menzies through Mr. A ite hie Cam.br.on) agreed to -
That the honorable member for Hume (Mr. Collins) be appointed Deputy Chairman of Committees, pursuant to Standing Order No. 21 fi a.
page 709
Debate resumed, from 9th May (vide page 684), on motion by Mr. Spender -
That the paper be printed.
– Yesterday, 1 asked the Treasurer (Mr. Spender) whether the increased income tas rates would apply to income from those government bonds which were converted in 1931 to lower rate of interest, and I was informed that they would not. It seems to me that the Government is sheltering one section of the community, which should be called upon, at this time, to bear its proper share of the burden of increased taxation. According to section 3 of the Income Tax Assessment Act, the interest received on bonds converted in 1931 may not be taxed at rates higher than those prevailing in 1930. Since thai time, income tax rates have been increased, particularly during the years 1938-39,’ when an increase of 15 per cent, was made. These increases, however, do -not .apply .to.the incomes to which I have referred. Interest received on bonds issued in respect of the recent loan has to pay tax at the full rate, but that does not apply to the income derived from the converted bonds. When we remember that, the holders of converted bonds are also exempt from State income tax, it will be seen that they enjoy a distinct advantage over other sections of the community, and even over the wage earners, who must pay wages tax on all income over £3 a week. The Treasurer said yesterday that the amount involved was about £500,000,000 of public debt, the income from which was hot subject to any taxation increases. The excuse offered by the Government is that the bonds were issued on a certain ‘prospectus, and that it would’ be tantamount to repudiation to vary the terms. Seeing that the Government if making such heavy demands upon the public1 - the Assistant Treasurer referred to “ searching the pockets of the public ‘: - it is very difficult to sustain the argument that the income from £500,000,000 of Government bonds should be exempt from- all tax increases.’ When it was decided in 1931 to convert Government loans at a lower rate of interest, the belief waa held, and rightly so I believe, that this action should be taken because the Government was not in a position to pay the higher rates of interest, and this notwithstanding the terms upon which the loans had been issued in the first place. The position is worse now than it was then. At that time our difficulties were economic only; now the country is fighting for its life. Therefore, I cannot accept the statement of the Treasurer that it would amount to repudiation to depart from the terms of the prospectus issued at the time of the loan conversion. These bondholders should be required to pay tax at the same rate as every ‘ body else. In any case it will not be long before the ‘ Government is forced into this position by the demands of other classes of taxpayers who are taxed at the full rate. Those who draw income from Government bonds do not run the same risks as those whose money is invested in business and commercial undertakings. Bonds are giltedged securities, and those who hold them run no risk so long as the system ‘ of government remains unaltered.. Those who invest their money in ordinary commercial undertakings, however, may have the value of their investment depreciated, or even wiped out altogether, by changes of public taste, business competition or international disturbances. Section 45 of the Income Tax Assessment Act states that, where a company has paid a proportion of its dividend out of bond interest, this proportion shall be taxed at no more than the 1930 rate. This seems to me to be an extraordinary concession, and I ask the Treasurer whether it is proposed to allow it to continue. Banks and insurance companies are large investors in government loans, and a considerable proportion of their dividends, are, therefore, paid out of bond interest, so that those dividends will be taxed at a lower rate than income derived from other sources. I can see no reason why interest derived from these Government bonds should be treated differently from that derived from mortgages, loans and other investments. Even if the argument of contract is advanced in respect of interest on bonds, it could equally be advanced in respect of mortgages contracted at the time. In both instances the transaction represents a contract, although in one instance the contract may be with the Government, and in the other instance it may be with private citizens.
– There is, however, a vital distinction.
– But contracts are contracts,- whoever the parties- to them may be.
– I agree with that;
– Then there is : noreason why one contract should be moresacred than another. ‘ If. I, in my private capacity, contract to do: something which is within ‘ the ^provisions of the law; then I am entitled “to the same protection in the discharge of that contract as the Government gives to. its own contracts.
– -With the exception that, whereas” a private contract is’ subject always to the law ‘ of the land, a contract entered into’ between a government and another person is not so subject - except as regards’ repudiation. ‘
– The decision in 1931 to bring down legislation to make the conversions required at the time is evidenceof the fact that circumstances alter arguments.
– That was a voluntaryconversion. 1 j
– That is true, but’ is the Government- prepared to. bring down legislation to provide for a voluntary method whereby those who derive interest from bonds, may make the same contribution to our war effort through income taxation as is made by people drawing interest from other, sources ? The Government has taken no steps to see that that is done. It apparently intends to leave interest payable on £500,000,000 of investments entirely apart from interest derived from other sources. In these circumstances the Treasurer will have the greatest difficulty in justifying the increases provided for- in various taxation measures which will be discussed at a later stage, and in convincing the wageearners, who will be called upon to pay a large proportion of the increased taxation through indirect channels, that the Government’s proposals are equitable. How can the Government reconcile its taxation proposals with its avowed intention to secure equality of sacrifice ? How can it justify to members of the fighting forces who may be called upon to make the grea test sacrifice of all this exemption of bondholders who should be called upon to carry their share of the burden of our war effort? These people are to be exempt, not only from the increases of Commonwealth income taxation, but also from State taxes. That is a double-barrelled advantage.
– If they were not free of State taxes, the Commonwealth would have to pay more interest on the money which it borrows. Secondly, there is a fundamental objection to allowing States to tax an activity of the Commonwealth.
– If banks and insurance companies receive from the States protection in the building up of their reserves, surely it is a logical argument that these companies should make some contribution to the States for the assistance which they are given. That protection is afforded in ways too many to enumerate. But I contend that all who carry on business with an equal chance of making profits and accumulating wealth, should be on the one level of taxation and that special consideration should not be given to any one section such as bondholders over others. If it is notgoodenough for these people to make a contribution for their own protection, either by the State or the Commonwealth, then the whole system is ill-balanced. No class should be specially favoured and enabled, without payment, to secure all the benefits which a State can provide for them in the continuity and maintenance of their business, while the rest of the community has to carry the whole burden of the cost of administration. It might be just as logically argued that income from such aninvestment as that to which I am referring should be exempt from all forms of taxation payable by citizens.
– If it is a term of their contract that they shall be exempt, what is this Government to do? Should it repudiate?
– If within the next three or four months aggression should be right at our doorstep, would the Treasurer suggest that the terms of a contract entered into ten or twelve years ago with regard to investments of this character should be regarded as sacred?
– I have no doubt that in these circumstances bondholders would voluntarily make themselves subject to Commonwealth and State taxation.
– Apparently if a contract has been entered into then, irrespective of the circumstances, it should be adhered to, but if an aggressor were able to take hold of this country, what would be the value of these bonds?
– Why not suggest that the rate of interest should be reduced to 1 per cent. ? That would be just as much repudiation.
– Are not all forms of taxation, in some degree or other, calls upon a person to alter arrangements formerly entered into, and to that extent, therefore, forms of repudiation?
– By no means.
– Take the case of a wage-earner who contracts to buy a home and then, before the home is paid for, his wage level is reduced and he is unable to meet the instalments. He is obliged to repudiate his former agreement, because he is incapable of fulfilling his contract.
– The honorable member knows that he is completely confusing two concepts.
– It is quite obvious that there is one concept for the rich, and an entirely different one for the poor. That is- the logical interpretation to be placed upon the Treasurer’s statement. It is quite evident that those people who derive income from interest on bonds are to be regarded as a separate class altogether and are to receive special protection. Agreements entered into by them are always to be regarded as most sacred, but no consideration is to be given to the poorer people who have entered into contracts of another kind. I repeat that there is one concept for the bondholder, and another entirely different concept for the wage-earner.
– I point out that in the ease of a contract between two parties, one of which is not the Commonwealth, then whether those parties be rich or poor, they are subject to conditions that can be altered by the paramount authority of the State, but in the case of a contract between the Commonwealth and an individual, to alter the terms of that contract is nothing short of repudiation.
– The Commonwealth is continually altering the terms of its contracts with its own employees. I contend that my argument is sustained because it is just a matter of the groups with whom you are dealing. If it is a question of a financial arrangement, then it is repudiation, but if it is a question of the economic welfare of people, such as its own servants, then it is an entirely different matter.
– It all depends on the terms of the contract.
– That may be so, but if the circumstances of the country are such that the conditions under which we live are no longer practicable, right, or just, it is no longer right or just to continue those conditions.
If we reach the stage within the next few months that we are unable to deal with all of the matters at our disposal without making further inroads on our financial resources, will the Minister then s ay to the enemy, “ We are not in a position to resist your aggression. We have not the means to do so, because we have a lot of contracts which we have entered into with bondholders and we cannot repudiate them “ ?
– Obviously I would not.
– And what would the honorable member suggest?
– Those who hold securities and bonds should be called upon to pay the same increases of taxation as all other taxpayers have to pay. That is my simple suggestion. When the country has literally got its back to the wall bondholders should not be a privileged class, as they are to-day. Surely that is not too great a sacrifice for them to make in view of the fact that the men of our fighting forces may be called upon to sacrifice their lives. Yet the Government is seeking to permit interest on bonds worth £500,000,000 to be exempt from the ordinary rates of income. That is most unjust !
– They are not exempt from income tax, but are subject to tax at the rates for 1930.
– They are exempt from the 15 per cent. increase imposed on the 1938-39 assessments. Why should that be so? I do not know how the Government can argue about it. I am satisfied that the public generally will not support the Government in allowing this class to go free.
– Many of the bondholders have only small investments.
– That is the old story of the widow which is always trotted out as a reason why changes such as I am suggesting should not be made. It is no argument at all.
– Does the honorable member realize the extent of the taxable field of this £500,000,000, and what would be the amount returned in revenue?
– It would all be helpful. It might obviate the necessity for increasing the sales tax, or it might enable the Government to avoid making further inroads on middle-class incomes, such as those now proposed. At least it would divert this taxation to a point whereI believe these people are competent to carry it. It may be that some of the bondholders have invested only small amounts, but it is undeniable that the insurance companies and banks hold by far the larger proportion of these bonds. I am astounded at theGovernment’s endeavour to exempt this class of individual. Its attitude is even less understandable after the remarks of the Assistant Treasurer (Mr. Fadden) last night, when he appealed for equality of sacrifice in facing the difficulty now encountered by our country, which is directing every nerve to a development of its war strength. When appeals are being made for sacrifices by the people in order to impress upon them the seriousness of the present position, bow can the Treasurer justify the exemption of this class of investor ? The honorable gentleman cannot do that no matter how persuasively he may argue on points of law.
– It is a question of principle with me.
– Principles depend upon the direction from which support may be expected. In any case, the Treasurer’s argument about the principle involved in this issue cannot be sustained to the point at which the safety of the country may depend on an absolute final act on the part of the Government in order to regiment the necessary resources for the successful defence of Australia. If we had our backs to the wall would the Treasurer still argue the soundness of the Government’s proposal, and would he still stand by the principle ?
– Everything must be viewed in correct perspective. It is useless for the honorable member to carry on his argument along those lines.
– This country’s war situation was outlined last night by the Assistant Treasurer, who presented the picture as the Government sees it. As he described the position, it could not well be more serious. The honorable gentleman said that the country had to employ the whole of its resources inorder to prosecute the war to a successful conclusion, declaring that the Government “ had to search the pockets of the taxpayers “.
– Does the honorable member realize what would be the effect of the action he proposes, which I have termed repudiation, upon the market when a further loan was being sought by the Government?
– If the Treasurer suggests that the effect would be an adverse one, it appears to me thatthe investor in that class of business would be putting the safety of. his investments before the safety of the nation. I challenge the Treasurer to go before a body of Australian Imperial Force men who are about to embark for some unknown destination and say to. them, “ Gentlemen, I want to tell you how delicate is the condition of the financial market and how its response might be impaired if I were to try to place an impost upon bonds that are exempt under legislation passed in 1931 “.
– If I were talking to men of the Australian Imperial Force I would put my argument in my own way, and I think I would convince them that I was right.
– I am not overstating the position and I am not attributing to the Treasurer opinions which he has not expressed. He has said that if in the circumstances indicated he approached the market for another loan, it might not be subscribed ; meaning, presumably, that the so-called patriots of this country would not make available to the Government their influence, resources and the profits which they have accumulated over long periods, in spite of the factthat this country had done so much for them. That is, in effect, the essence of the argument againstmy proposition. I ask the Treasurer what would happen if he put that argument to men who had volunteered to give their lives for their country, or to men who were making sacrifices in commerce and industry and living from day to day on a mere pittance in order to strengthen the nation’s war effort.
– The honorable member is arguing, apparently, that money invested in Commonwealth loans comes from a small handful of people. I point out that money which comes from insurance companies or banks represents the investments of a very large body of people, many of whom are on a low level of income.
– If my argument if followed to its logical conclusion, it will be found that those incomes are derived from a particular class of investor. If ] were employed in industry my investment would be my labour, and I should have to subject it to all the conditions which war imposes on the country. The Treasurer suggests that the moneyed investor is not to be put in the same category as other sections of the community.I contend that every section of the community, no matter how large or how small its investments may be, should bear the burden of taxation in direct proportion to the size of its income. However hard the honorable gentleman may try to make investment in bonds and giltedged securities a preserve which may not be violated by tax increases, the Treasurer cannot deny the soundness of my argument.
– The right honorable member for Yarra (Mr. Scullin) was the leader of the government which gave this guarantee of exemption when the conversion loan was floated, and I cannot imagine that he would agree with the honorable member’s argument. [Leave to continue given.]
– I have no intention of canvassing the views of the right honorable member for Yarra on that point. My reply to the honorable member tor Gippsland (Mr. Paterson) is that in 1931 the right honorable member for Yarra was not in a position to foresee that in 1940-41 this country would be making a supreme effort to ensure its safety.
– The guarantee was given in order to reduce the interest on the conversion loan by 22£ per cent. That reduction has benefited this country to the extent of scores of millions of pounds.
– I do not deny that. The financial state of the country at the time called for such action.
– The only thing that can be done now is to withdraw the :tax exemption provision from future loans.
– That is being done now.
– That is so.
– I do not deny that the loan recently floated came within the range of taxable investments.
– That was the proper thing to do.
– -But I point out to the honorable member for Gippsland that conditions to-day are more serious than they were in 1931. Then the masses of the people were engaged in an economic struggle to provide themselves with the wherewithal to live. To-day the same, struggle is going on, but the position is complicated by enormous expenditure on defence requirements. Whatever views we may hold, we shall have to see many surprising things before this war is ended.
– In 1941 a large amount of loan money will mature. So the position as regards liability to taxation will automatically right itself. Mr. BEASLEY.- The world is undergoing radical changes, and conditions throughout the world may be vastly different before this war is ended. Hundreds of thousands of people in this country have great difficulty in providing the necessaries of life for themselves and their dependants. If the Governmentcontinues to protect a special class and seeks to prevent refforms by this talk about repudiation, then inevitably new forms of government will arise, and attacks upon our social system will gain strength as surely as the sun rises each day.
– The Government is not continuing, to build up this .” special class’.’ to which .the:. honorable member refers……..
-It is hard to see where any practical steps -have been taken to break away from the traditional idea of using the legislature to defend the privileged classes. of the community.
– The bondholders were not the only ones to suffer from emergency financial ^proposals in :1930-31. All sections of the people suffered.
– Yes. Bondholders whose- interest” rate1 was reduced : in 1931 from 5 -per- cent, to 3 per cent, did not lose anything, because the purchasing power of the reduced’ income was unimpaired. Lower commodity prices made a reduction of 3 per cent, as valuable as the 5 per cent, formerly received. At that time Sir Hal Colebatch, in articles to the newspapers, pointed out that investors had, in fact, made no real sacrifices, because of the lower prices charged for goods and services. The other sections of the community to which the honorable member for Melbourne Ports (Mr. Holloway) referred - the working classes - suffered heavily. When they lost their employment they lost not a mere 5 per cent, or 3 per cent, of interest on investments, but everything they had. All that they could get was a dole docketor a meal ticket.
– Is the honorable member confident that nien could be kept in employment even if higher taxation, were imposed on investments ?
– I am opposing discrimination. The Government’s decision to exempt certain classes of the . community will have a very bad psycho-; logical effect on the rank and file.. It would be useless’ to place before men and women lacking many of the comforts of life the arguments which have been advanced by the Treasurer to-day. This is a question almost of life and death to them, because of its effect on standards of living. The longer the Government continues to maintain a privileged classin the community - the more rapidly will it be moving towards the destruction of the existing social system. Protectionof a special class is the first and most definite ‘ step towards that end. No doubt the Treasurer has opportunities to meet the poorer classes of the community and I do not claim to understand their position better than he does; but my constituents include many of the poorer people. Hundreds of them visit me almost weekly in order to secure assistance. It would be impossible for me to convince them that there is justice in the arguments of the Treasurer. It would be equivalent to telling them that I would rise in my place in this House and give the investors an open order for all sorts of privileges, such as the tax exemption which the Government now proposes to grant. Even if the Treasurer cannot understand my line of argument and can see legal objections to the terms which I have used, it must be obvious to him that psychologically it would be a bad move to grant tax exemptions to a particular section of the investing public. The Government would never be able to justify its action to the people who have to struggle to secure the bare necessaries of life.
Sitting suspended from 12.43 to 2.15 p.m.
– in reply - In concluding the debate my first observation is that the comments which have come from the Opposition benches have, with few exceptions, revealed an extraordinary diversity of views and complete barrenness of ideas regarding the financial problems confronting Australia. I should like to know - although I doubt that I shall be told - what is the official view of Labour ? I invite the members of the Labour Opposition who have spoken on the financial statement, to compare their remarks, and to attempt, by some process of mental legerdemain, to reconcile them. The paucity of the criticism which has come from the Opposition benches is a clear indication that the financial policy of the Government cannot be severely criticized.
– It has been criticized.
-Criticism may be of varying degrees; some of it is not worth anything, whereas criticism like portions of that of the right honorable member for Yarra (Mr. Scullin), are valuable. I suggest that most of the criticism of the Government’s policy by honorable members opposite comes within the first categorv. Both the right honorable mem ber for Yarra and the Leader of the Opposition (Mr. Curtin) recognize, however, that the problem to be solved is how to raise £70,000,000. It was conceded by the Opposition Leader that that sum had to be raised by loans and taxes, but there was not one word from him or the right honorable member for Yarra to suggest that, at this stage, further credit should be injected into the community. The obvious reason for that is that both men have a sense of their responsibility. But other Opposition members spoke differently. The honorable member for Werriwa (Mr. Lazzarini) said that a limit could not be placed on the expansion of credit. If I were to attempt to express my conception of the honorable gentleman’s ideas I should say that, in his view, the limit is the sky. The gentleman with the prophetic political name, who represents the district of Corio, also spoke. As I see it, his way to solve the financial problem is to expand until we burst, tax until we burst, and after that, the deluge. That seems to be not an unfair commentary on the views expressed by the honorable member for Corio (Mr. Dedman). I sincerely hope that he did not present the official view of Labour, because I fear for the future of this country if, by mischance, the Labour Opposition were to occupy the treasury bench in a time of crisis and gave effect to the views expounded by him.
– The trouble with the honorable member is that he has been to Hogan’s Crossing.
– The honorable gentleman from Corio has imbibed at the wrong well. His views were hopelessly inconsistent with what I assume were the official views of the party as expressed by the right honorable member for Yarra, and also by the Leader of the Opposition insofar as the latter expressed any positive views at all apart from captious criticism. I would have thought that it is of first-class importance that the public should know precisely what is the official policy of Labour on finance.
– The public will be told.
– Yes ; it will be told be every one according to his own ideas. It would appear that members of the
Opposition are free to express entirely divergent views upon matters of policy. I again invite honorable members opposite r,o try to reconcile the views expressed by the honorable member for Corio, who, I assume, speaks with some authority for cbe Labour party, with the remarks of the right honorable member for Yarra.
It may be assumed that the right honorable member for Yarra was chosen to lead the Opposition’s attack on the proposals of the Government; because of his considern bie experience in financial matters; and it may also be assumed, I suggest, that the financial statement was subjected to the most minute scrutiny before he spoke on behalf of his party. What has emerged from the discussion ? No honorable member opposite has denied the need to impose further taxes. Neither the right honorable member for Yarra nor the Leader of the Opposition denied the need to impose indirect, as well as direct, taxes, except insofar as the latter was sufficiently definite in his financial ideas as to suggest that all income above £5,000 should be taken by the Government. It is generally agreed that a sound principle of taxation is that there shall be no discrimination between classes, and that the burden shall be in proportion to the ability to bear it. Yet the Leader of the Opposition said that all income in excess of £5,000 per annum should be taken by the Government as one means of dealing with the financial problems of this country.
– That suggestion amounts to confiscation.
– Yes, and other honorable members opposite advocated repudiation. Had the Leader of the Opposition taken the trouble to ascertain what would be the yield from the implementing of that policy, he would have earned that the total income in these groups would be only £12,000,000 after
The States had taken their share. Of this only £4,000,000 to £5,000,000 would be in excess of £5,000, and it is only this residue which would be available to the Commonwealth under the plan suggested.
– That would increase unemployment.
– Honorable members opposite, who continually profess to be desirous of maintaining employment in this country, should realize that that result cannot be achieved if the financial system be broken. Notwithstanding that the Government is faced with a task of tremendous magnitude in financing both the claims of peace and the needs of war, it has succeeded in not only maintaining, but also increasing, employment. Since August last 80,000 additional workers have found employment in Australia. Moreover, despite rising expenditure, it has maintained the full programme of works, both governmental and semigovernmental, for this year in all of the States, and has reduced substantially the burden on the community by reducing interest rates. These matters are not referred to because for them at least the Government is entitled to credit.
Before I dissect the views expressed by the right honorable member for Yarra I shall deal with those of the leader of the other Labour party in this House. The honorable member for West Sydney (Mr. Beasley) devoted well over 40 minutes to one theme. I assume it to be the only theme upon which he considered that the Government could reasonably be criticized. He said that there is £500,000,000 of loans which is free from taxation over and above the 1930 level. My first comment in respect of that is that the position arose out of the conversion operation effected by the Scullin Administration, for which I give all credit to the right honorable member for Yarra. It has been of tremendous value to this country, having resulted in the saving of millions of pounds to the national exchequer. Bondholders were asked to convert holdings carrying a certain rate of interest, into new bonds carrying a lower rate of interest, a quid pro quo being protection from increase of taxation beyond the 1930 level.
– Surely present conditions justify the alteration of that position !
– I shall come to that in good time. The honorable member for West Sydney did not see, refused to see, or pretended not to see, that there is a vital distinction between contracts made between individuals and a contract made between a government and an individual. Contracts between individuals are always subject to the condition that the dominant domain of Parliament may interfere with them. Wages and salaries are paid on the condition that the Government may take a portion of them for the purpose of financing its operations. But an obligation solemnly entered into by a government is controlled by an entirely different set of circumstances. The Government of the day gave to the investors a solemn undertaking that, in consideration of their investing their money at the rate then offered, certain protection would be afforded to them for the future. It is said that because that was done some years ago, and times have since changed, the obligation should be repudiated. Of course the use of the word “ repudiate “ is very carefully avoided; but what is it if not repudiation, when a government is under a solemn obligation to its bondholders to pay them in accordance with certain conditions and refuses to observe those conditions? It is said that the bondholders must be told that those conditions are to be broken.
– Did not the Government have the same obligation to pay a certain rate of interest, prior to the conversion ?
– The people were invited to convert voluntarily.
– What would have happened had they not converted ?
– That is purely hypothetical. I am not concerned with what was in the mind of the administration ten years ago.
– There was a threat of compulsion.
– There was no threat.
– The honorable member for West Sydney has argued that there is no distinction between a private contract and a governmental contract. I venture to suggest that it is not necessary to do more than point to the simple fact to which I have referred, to show the vital distinction that exists between the two. I repeat that there has been a careful avoidance of the use of the word “repudiation”. The honorable member says that times have changed. I say that repudiation of a government’s obligations, except in a last extremity, would indicate an unpardonable lack of national and commercial morality.
– Is there a greatermoral obligation on a government than on an individual?
– Unquestionably there is. The argument of the honorablemember for West Sydney furnishes a good party political catch-cry. Thosewho examine the matter realize how empty and fallacious it is; but it iseasy to convince the average person in the street, who knows nothing of thehistory of the conversion operation and the conditions under which it was effected,, that there is justification for compellingtotal payment of tax in respect of bondsthat are now free from tax above a certain limit.
– Oan the honorable gentleman explain what vital differencethere is between the agreement made by the Government with bondholders prior to 1931, and that made subsequently?
– In substance, thereis hone whatever. Either the Government or an individual may ask the otherparty to a contract to agree to alter it.. That is what was done. Let me make it perfectly plain that this Government will not stand for the repudiation of obligations. I suggest to the honorable members for West Sydney and Dalley that what he urges would be justified only in the last emergency. It is argued that if” the suggestion of this section of theLabour party we’re adopted, the Government would still get from future loans all of the money that it needed. Both the honorable member for Dalley, and his leader, the honorable member for West Sydney know perfectly well that a government which repudiated its obligations could not expect bondholders to accept any promise made thereafter, and that, would lead to financial disaster as well as to a vast volume of unemployment, throughout the country.
Let me turn now to the views expressedby the honorable member for Corio. It will be noticed by honorable members that, as I have already pointed out, they are hopelessly inconsistent with those of the right honorable member for Yarra. The honorable member argued that thereshould first be credit expansion to somehopelessly indefinite limit, and then taxation. He contended that it mattersnot whether the money is raised by way- of loans or taxes, because it comes from precisely the same source. I cannot conceive of a responsible man in this assembly, who claims any knowledge of finance, committing such an egregious blunder. It is perfectly obvious that the amount invested in government loans comes substantially, not from income but from past savings. Apparently the idea is that there is no distinction between the one and the other: The honorable member should have said that whether the money was raised by taxes or by loans it still is taken from the community.
– That is. what he said.
– He said nothing, of the sort. I have read his speech with great care, and it indicates complete confusion of ideas on his part.
I come now to the very critical examination of the financial statement by the right honorable member for Yarra, who made two points, the first being the nature of the taxation, and the second and major one, the state of our London funds, and the manner in which the Government is shaping up to its overseas obligations. As I understood the right honorable gentleman, what he suggested was, not that we should not further expand credit, but that the way in which itis being expanded is enabling the trading banks to make huge profits and atthe same time is permitting them to control the financial policy of the Commonwealth. Let us examine the position. The right honorable gentleman dealt first with the profits of the trading banks. There is a marked tendency on the part of some honorable members opposite to refer, on every conceivable occasion, to the report of the Royal Commission on Banking and Monetary Reform, and, in particular, to paragraph 504, which seems to be the only one that some of them have read.
– I did not refer to it.
Mr.Curtin.- Nor did I.
– Some honorable gentlemen opposite have done so, and I assume that they represent the views of the Labour party. Quite a number of questions have been asked about paragraph 504.
– One of which came from a member of the Treasurer’s own party.
– Dealing now with the profits of the trading banks-
– I did not refer to the profits of the trading banks. I discussed the control of the expansion of credit, which is being left to the private banks. I said nothing about profits.
– There was a suggestion –
– I deny that I even referred to the profits of the trading banks.
– There was a suggestion that money was being created by the trading banks as a result of the policy being pursued by the Commonwealth, and that the trading banks made profits on the money so created by reason of the lack of control on the part of the Commonwealth.
– My warning was about the danger of inflation. I think the Treasurer should answer what I said if he wishes us to understand that he is replying to my speech.
– I shall reply to the right honorable gentleman in my own way. There was an inference in his speech that by reason of the fact that the Commonwealth Bank had expanded credit the trading banks were also expanding credit of their own volition, because of the initial expansion by the Commonwealth Bank, and were thereby making undue profits. Let me refer honorable gentlemen to the report of the Royal Commission on Banking and Monetary Reform in respect of the. profits of the trading banks up to the year 1936.
– I suggest that the Treasurer should attempt to buy some shares in the privatebanks.
– The fact is that the Commonwealth Bank has a substantial measure of control- over the trading banks. The Commonwealth Government certainly has control under the National Security Act. The right honorable member for Yarra said that the trading banks should be compelled to deposit a certain proportion of their assets with the Commonwealth Bank.
– That was a recommendation of the royal commission to which I directed attention.
– W ith approval?
– Yes.
– My reply to the right honorable member is that the adoption of that course might be perfectly good under certain circumstances, but if applied at a time when an endeavour is being made to obtain the full benefit of our credit expansion it would neutralize such effort. The object of the Commonwealth Bank at present is to expand credit, through the trading banks, to the trading community, but if, at the same time, the trading banks were compelled to deposit a certain proportion of their assets with the Commonwealth Bank the attempt to expand credit would be neutralized to that extent. It may be taken for granted that this Government is as much concerned about our financial structure as the honorable members of the Opposition pretend to be. The Government is watching the whole situation’ very carefully, and if it thought that an undue use was being made of the credit being made available to the trading banks, it would not hesitate to interfere. Until that time arrives, it will seek to obtain the maximum benefit from the expanded credit. That it is doing so is undoubtedly reflected in the employment figures of this country.
Referring to London funds, the right honorable member for Yarra said that the Government was not yet facing the problem.
– I said that very little was said about it in the Treasurer’s financial statement.
– The inference from t he righthonorable member’s remarks was that the Government was not facing the position. A reference to the financial statement will reveal that it was pointed out that since the outbreak of the war there had been a substantial increase of imports, and that there had also been a measure of control of those from nonsterling countries. It was made perfectly clear, too, that the volume of those imports was such as to indicate theneed for further restrictions.
– What about the two years before the war?
– During the last four years the average annual value of the imports to this country has been £96,000,000. In the depression period, to which the right honorable member for Yarra referred, our imports reached a value of £140,000,000 in one year. The increased value of the imports into this country during the last six months has been due in the main to fortuitous circumstances. It is true that prior to that time our trade balance was being adversely affected, but surely no responsible person would suggest that because of an adverse balance over a period of two or three years due to seasonal or temporary factors the Government should adopt an increasingly drastic policy of restriction. If that course were adopted serious difficulties would fall upon certain classes of the community, particularly employees. What is necessary, of course, to enable moneys to be paid from any London funds to meet overseas commitments is not only the building up of such overseas funds, involving any necessary restriction of imports, but also resort to taxation or borrowing within this country. The Government is watching the whole situation very carefully, and will take such action as it deems necessary to preserve our stability. No one can deny that our present financial position is substantially stable. No drastic action is advisable at the moment in respect of imports. If any such drastic action were taken many people would be plunged into unemployment. It is becoming increasingly difficult to correct an adverse balance of trade by even drastic restriction of consumable goods. Further, it is commonly recognized that a considerable volume of our goods imported is required for the development of our industries. Nevertheless, the Government is doing its utmost, bearing all the facts in mind, to restrict imports from nonsterling countries. That must surely be apparent to all honorable members. But even the steps now being taken are causing complaints about the possibility of increased unemployment.
– What I said was that action should have been taken two years ago when our London funds were dwindling.
– Apparently it is to be assumed that we have now reached a situation when itshould not be done ?
– I did not make any reference to action now.
– Then I take it that the right honorable gentleman was referring to two years ago. Let ‘me point out to him the exact position. There was a fall -of our London funds from £89,000,000 in June, 1937, to £55,000,000 in June, 1939. That fall was due to the fact that our London funds were being used for the purpose for which such reserves are intended, owing to temporary circumstances, mainly a reduction of the export value of our wool and primary production generally and a fall in wool production in the season 1938-39. If it is urged that every time the prices or volume of wool and wheat fall the Government should proceed to restrict imports correspondingly [ say frankly that I am not prepared to adopt such a policy. The results of the operations of the last two years have, as I have pointed out, been due to temporary factors. It would be a hopeless procedure to restrict imports whenever a temporary fall of the price of our export commodities occurred. It is perfectly clear, also, that the extraordinary increase of the value of imports since the outbreak of the war is due substantially to’ the action of people who are endeavouring to stock up for the years ahead, so that they may. he able to maintain their industries if it becomes more difficult to secure supplies.
– The Government could have prevented the speculators from stocking up.
– It is easy to use the word “ speculators “. There is no evidence of speculation. All of the evidence points rather to prudent business management. The control of prices ‘ is, moreover, adequately provided for. Because imports have increased substantially since the outbreak of war - a fact which the Government has admitted - the right honorable member blames the policy of two years ago. What matters now is the policy of to-day. The Government is fully seised of the problem before it, and the country may rest assured that it will deal with that problem as urgently as circumstances demand. I indicated in the financial statement that it would become :more and more urgent to restrict the goods coming from sterling countries, but that raises a problem which is not capable of easy solution.
– How are London funds to be built up unless, by restricting im-r. ports from sterling countries?
– I have admitted that we shall probably be forced to do that, but we cannot restrict in the drasticway, which the right honorable gentleman suggests.
– Whatever is done will not meet the position that now exists.
– Of course it will not. 1 shall come later to the question of our immediate overseas requirements. It is the ultimate satisfaction of these requirements which has relation to the state of the London funds. No one would suggest that by any form of restriction of imports we could meet our needs from London funds at present. The right honorable member for Yarra invited me to say what we are doing in the meantime. I direct his attention to the various controls which I mentioned in the financial statement - control of the overseas position and the prevention of capital from fleeing the country. We have kept capital locked in Australia. We are restricting, .imports from non-sterling countries, not in any drastic way which would unnecessarily reflect itself in employment, but, as any sensible government, would do, by adjusting the restrictions to meet the circumstances of the country. One can readily understand the difficulties that will be heaped on Great Britain by having its export trade cut down, but we may be forced shortly to restrict substantially imports from sterling countries. In the meantime we are arranging to borrow overseas. How otherwise can we finance our overseas obligations except at the expense of employment in this country ?
– The Government has left it too late.
– The right honorable gentleman’s interjection is a good example of the fallacy of reasoning backwards.
– Unemployment due to restriction of imports could be counterbalanced by credit expansion in this country.
– The 1 honorable gentleman speaks with a great deal of authority. Drastic restriction of imports at this stage would have the direct result of throwing people in this country out of employment. Overseas commitments must be paid for out of London funds or credit established overseas. They cannot be met out of credits established in Australia; therefore, we must first have sufficient London funds, and then cither tax or borrow.
– I said that unemployment could be checked by credit expansion.
– I am sorry that I do not understand the honorable gentleman’s remarks in relation to the question we are discussing. When you reach the stage at which you have to restrict imports drastically you must’ cause unemployment in this country. This Government is fully seised of its responsibilities, and will face up to them.
– We must increase exports. Our wheat is being destroyed by weevils and mice.
– That sounds simple, but the cold fact is that, since this Government has been in power, the volume of exports has been increased by about £25,000,000 per annum.
– That does not alter the fact that weevils are getting into our wheat, which we cannot export.
– It has been made perfectly clear by the Minister for Commerce (Mr. Archie Cameron) that further exports are conditioned by the availability of shipping. Because of that limitation, nothing that this Government can do can alter the position.
I point to the liquidity of the trading banks as reflecting the benefit of this Government’s financial policy. [ Leave to continue given.] The liquidity of trading banks and the resultant increase of employment,, are to the credit of this Government. When the war broke out, the Government was faced with a recession of employment, and diminishing liquidity of the banks. The policy that the Government lias applied since the war has resulted in the liquidity of the banks being higher than at any other time for many years. If one looks at the ratio of advances to deposits and at the composition of the deposits, it will -be found that this country is, by virtue of the Government’s policy, in the best possible position to develop industry during the war, and at the same time to expand our war effort.
Now, on the question of unemployment
– This will be interesting.
– Yes. As the honorable member for Corio has just entered the chamber it is fair that I should repeat in his presence my summary of his financial policy. I summed up ‘his policy as “ expand till you burst, tax till you burst, and after that the deluge “. I assume that that honorable gentleman’s policy can be reconciled by him with the policy of the party to which he belongs. I impress upon the party opposite that, if any regard is to’ be had for the working man, his employment and conditions, the worst possible thing to do would be to inflate. We cannot be charged with not applying a liberal policy, and the crux of the matter is that because we have a policy which has the approval of the people, there is little left to criticize.
– The people of Corio did not approve of it.
– I advise the honorable gentleman not to boast too much about Corio, for his name may be prophetic of what will happen to him in his electorate at the next election.
I come now to the question of taxation. A great deal has been said by the Opposition about the indirect taxation which has been imposed by this Government. With one exception, no honorable member of the Opposition offered -any suggestion as to how otherwise we are to raise the additional £20,000,000 that is required. They know that if they themselves had to go into the minutiae of raising more revenue they could not avoid imposing indirect taxes. They know that so well that none of them suggested how this needed money could be raised, except, of course, the honorable mem her for Corio, who said in effect-
– “Pump it in”.
– Yes. I say in all sincerity that the Government’s financial programme is directed to protect the working man, to assist him, and to re- lieve him of any direct burden unless and until it becomes unavoidable. Despite the heavy war commitments 80 per cent, of Australian families will not be affected to the amount of even one penny by the new direct taxation proposals. In attacking the indirect taxation proposals, the party opposite has, however, interpreted them as meaning that every penny of the taxes will come from the workers^ Customs and excise have not been attacked except in a general way. The petrol tax has not been mentioned. The only impost at which it finger was pointed with any directness was the sales tax.
– And the flour tax.
– Tes, but the sales tax mainly. It is not inopportune to answer criticism of this kind by pointing out that it was the Labour party’s own policy which added the indirect imposts of sales tax and primage duty and the special property tax to the fiscal policy of this country.
– At what rate was the sales tax imposed?
– At the rate of 2^ per cent., at the beginning, but it rose to C per cent, during the Labour party’s term of office. Since then this Government has given exemption after exemption, thus granting relief in respect of various items ordinarily consumed by the working man.
The party opposite was also guilty of advancing the monstrosity known as the export tax on sheepskins. Of course, indirect taxation is justified by honorable members opposite when they are in office; but, as they are in opposition it is now seized upon by them, as a subject for severe criticism. In fact it is the only real criticism which has been levelled at the taxation proposals of the Government.
– No export duty was imposed on sheepskins.
– But a proposal of that kind was put forward, and what better example could be given of an indirect tax?
What is the position with regard to sales tax? The Government could have widened the scope of that impost, but it did .not do so, particularly because of the effect it would have had on the working man and on the export industries. An additional £5,000,000 is intended to be raised by reason of the tax levied in that particular field; but I ask honorable members to examine the field in order to see to what extent an extra burden has been imposed on the working man. To some extent, it is true, an extra burden has been imposed, but it is distributed throughout the community. We all share the burden, no matter what our income or our standing in the community may be. The chief objection to an indirect tax is that the burden cannot be spread equitably as the income tax spreads it.
When regard is had to the fact to which I have drawn attention, namely, that the field left open to us to raise £20,000,000 is such that the whole of the money could not be raised by direct taxation without a catastrophic effect on the community, the. argument that we should not increase indirect taxation shows a hopeless, bankruptcy of ideas, and is used only for political purposes. Let us now consider certain aspects of the income tax proposals. The question is asked why we should not increase the tax of the man whose income is obtained from property to the same extent as in the case of the taxpayer whose income is derived from personal exertion. In my speech on the Income Tax Bill I drew attention to the reasons why the Government has approached the problem in the manner it has, and I dealt with the historical development of the two rates. If taxation is to be based upon ability to pay, why should property incomes between .£1,500 and £5,000 sometimes bear twice the amount of tax of those derived from personal exertion ? Is there any justification why a man receiving £2,500. a year from property should pay twice the amount of tax contributed in respect of a similar income derived from personal exertion? There cannot be. By reason of the fact that this disparity existed before the Government was faced with its present problem, we could not merely by a percentage increase throughout the scale raise the money required, because it would have forced property income taxpayers in the upper grades to pay more than 20s. in the £1. Therefore the Government has not lacked the necessary courage to face up to this matter.
As to the personal exertion income rates, the increases generally have been subjected to a meticulous examination of the percentages of increases involved. Our critics say that the man with an income of £350 a year has had his tax increased by 100 per cent., but how much a year does that represent? Probably only two or three pounds. We must have regard to the burden already carried and its proportion to the extra burden being imposed. Nobody with a sense of fairness, who was not seeking merely to make political capital out of this financial statement, could say less than that it is designed to protect industry and employment, to relieve the family man, and to throw the burden on the shoulders of those best able to bear it. I submit that the Government has done that with great courage.
– The Treasurer skipped over unemployment.
– Not intentionally; I shall return to that subject. When the
Avar broke out, employment was diminishing. We were then faced with tremendously increased expenditure and added problems. I suggest that two factors have directly contributed to our success in dealing with the heavy problem of financing our war expenditure whilst at the same time assisting industry and providing employment. One is that the Government has adopted a liberal financial policy by using central bank credit to the extent advisable, and the other is that it has deliberately set out on a policy of reducing interest rates. The result of this policy is that employment is now greater than it had been since last August. The net increase of the number of men employed throughout the Commonwealth is, as I have already remarked, 80,000, or about 4 per cent. of our working population. When we are asked where this improvement is to be seen, I point out that it is to be found in the official statistical records. Whilst avoiding inflation on the one hand and on the other using central bank action within safe limits, the Government has shown a determination to pursue a policy directed to assist the working man and the family man, and to impose the burden of taxation on those shoulders which are broad enough to bear it.
– In view of the enormous additional expenditure in connexion with the war, and the large number of men absorbed from the labour market for defence purposes, what is left of the Government’s so-called achievement in having put more men to work ?
– If I had time to elaborate my argument in respect of the subject-matter of the interjectionI would willingly do so. Time after time the suggestion is made that only theLabour party thinks of the welfare of the working man. The cold fact is that, if we adopted the policy of credit expansion advocated by the honorable member for Corio, the savings of the workers would not be worth anything. ‘ Their wages would lag behind costs, and would have a diminished purchasing power; unless, of course, we accepted the policy of the right honorable member for Yarra and providedfor some kind of price control, which would be no different from that of Germany, involving iron regimentation of the whole of the community.
– That is not an answer to my question.
– Thepolicy which up to date has been pursued by this Government of the use of credit within proper limits, and the reduction of interest rates, will enable industry to increase its investments, and in that way to absorb men in employment.
I shall deal finally with a so-called anomaly in the allowance of rebate oh income derived from dividends of2s. in the £1 this year where thecompanies had paid tax at the rate of1s. 1.8d. Much was made of this matter, the suggestion being that there is something unjust about it, and that protection is given to the rich man. I suppose that it may be said that’ the members of the Royal Commission on Taxation, which recommended this system of taxation rebates, at least were notpolitically minded, but were only concerned with making suggestions for the improvement of our taxation measures as fiscal instruments. The recommendation of that commission wasthat the rebate should be allowed at the amount payable in the year of assessment. One very good reason was that, in respect of profits accumulated over a number of years, when different rateswereapplicable, it is impossible to determine theyears in which the profits so accumulated had been earned. A further reason was because an individual shareholder pays at the rate applicable to the year in which he is assessed on his dividends. To rebate dividends at the rate applicable to the current year in one instance, and at the rate applicable to the previous year in another instance, would be without justification. In addition, it must be remembered that if in another year the company rate is reduced, the shareholder’s rebate should, if the criticismis valid, be limited to the lowest company rate of the current year and not as calculated at the higher rate of the previous year. For those reasons the taxation commission recommended the policy which has been followed by the Government. So the criticism of the Opposition borne in a mist of words disa ppears.
– But the Minister has missed the point.
– It is usual for one who has submitted a conclusive reply to criticism to be told that he has missed the point.
– The Minister has evaded one important point, namely, that up to last year the Government rebated from reserves only in accordance with the amount of the company tax paid, but it is now rebating at a rate higher than the reserves had paid. The next point was in respect of preference shares. Ho also evaded that point. [Further leave in continue given.]
– The right honorable member’s point is that at the time when the profits were made the company rate of tax was, say,1s. By the time the rebate was made the rate was 2s., and 2s. was rebated. My answer is that the taxation commission, which dealt with the subject, recommended that that policy should be adopted.
– That does not make it right.
– I have already given the reasons behind the recommendations.
In particular, when profits have accumulated over a number of years, it is difficult to say, with exactitude, when striking a dividend, in what year any portion of the profit was earned.
– Did not the Government do it in respect of allyears prior to last year?
– Because something was done on a previous occasion thai does not prove that it was right.
– But they were able to do it.
– It can be done, but with great difficulty, and with injustice. The opinion of the right honorable gentleman differs from that of the taxation commission, whose recommendations should be regarded as impartial. A most important reason given by the commission, as I have indicated, was that when a person is seeking a rebate, and his rate is less than 2s., he can receive only a rebate based on the rate of tax he pays for the assessment year. We cannot provide one rebate for him and a different rebate for taxpayers whose rate is over 2s. They were two vital reasons given by the commission.
– In any case, when taxation is falling the system would operate in the opposite way.
– Exactly.
– It would be equally unjust that way.
– We pay a different rebate in terms of money, but in principle the approach is the same.
I now come to the subject of preference shares, which was dealt with by the Assistant Treasurer, whose arguments were perfectly good. The Government does not make a gift from the Treasury; it is recognizing a condition upon which persons in the preference shareholding class invest their money in a company. They insist that they should get for their money say7 per cent. net, and if, in point of fact, we provided that the rebate should not be paid to them they would require on additional amount of interest.
– That is not the suggestion. I said that the Government should not give them a rebate when they do not pay the tax.
– The rebate does not come from the Treasury, but from the shareholders. The revenue does not lose a penny; it is an internal arrangement by the company.
– Will the Minister say something about the Government’s views as to the desirableness of” reviewing -the seise on gold with a view to ‘stimulating the production of gold and using it to assist our London funds?
– I have already informed the honorable member for Kalgoorlie (Mr. Green), in answer to a question, that I am considering the introduction of a hardship clause, and beyond that I am not prepared to make any statement at the moment.
– In regard to the suggestion »f the Leader of the Opposition, as to the taxation, or confiscation, of income over fc’5,000 a year, I am informed that there are approximately 1,400 taxpayers with incomes of over £5,000, and their aggregate income is £12,000,000. Fourteen hundred times £5,000 is £7,000,000, so the excess would be only £5,000,000.
– I am not certain about that. My figures are to the effect that the incomes in Australia over £5,000, excluding gold-mining dividends and exAustralian incomes exempt from Australian taxation, amount to about £1.2,000,000.
– That is the total income.
– Yes, the whole of the incomes would be £12,000,000, of which £4,000,000 to £5,000,000 would represent the excess over £5,000. Out of this total we are already taking a substantial part. The Leader of the Opposition said last night that anything over £5,000 could be taken cheerfully.
– I did not use the word cheerfully “.
– This is my colour “ to the honorable member’s it-marks. I understood the honorable member to say that any one left with £5,000 a year would be able to have the ordinary amenities of life to which they are accustomed, and that all income above that figure should be taken for war purposes. The Leader of the Opposition took that figure without having regard to the effect of his suggestion.
– When I explained what I meant, the Treasurer agreed entirely with my view.
– I certainly did not.
– All I can say is that the Minister will be “astonished when he reads the report of his interjection.
– I do not think I shall. I remember my interjection quite well. I expressed astonishment, and asked why the amount should not be reduced to £2,000, or even £1,000, and the honorable member said that those receiving over £5,000 would be able to enjoy the ordinary amenitiesof life.
– 1 would have said “ extraordinary “.
– In that case why not reduce the maximum to much less than £5,000? In the ardour of debate, sometimes the truth leaks out, and we are able to see what is actually behind a speaker’s mind. It is perfectly clear that the leader of one Labour party said that there is no reason why the State should not takes - I should use the word “confiscate” - all income over £5,000! The leader of the other Labour party says that there is no reason why interest on bonds, which are tax free, should not be taxed. That, of course, would mean repudiation. So on the one hand we have confiscation, and on the other, repudiation.
I conclude by claiming that the statement which I submitted cannot be criticized on any reasonable basis, and that the Government has done a reasonably good job.
Question resolved in the affirmative.
page 725
Debate resumed from 8th May, 1940 (vide page 616), on motion by Mr. “Spender -
That the bill be now read a second time.
– This is one of the usual appropriation bills which have to be passed each year to make provision for the payment of pensions. The amount involved in this instance is £10,000,000. We have already expended £155,000,000 on war pensions in respect of the war of 1914-18, andwe know that the rate of expenditure will not taper off very much during the next twenty years. As a matter of fact, for the next few years it will probably increase. Let us try to imagine, therefore, what a tremendous pensions burden will be imposed on the community should the present war be anything like as long or as deadly as was the last. The Opposition approves of this measure.
Bill read a second time, and passed through its remaining stages without amendment or debate.
page 726
Debate resumed from the 8th May, 1940 (vide page 617), on motion by Mr. Spender -
That the bill be now read a second time.
– This is another routine appropriation bill, the purpose of which is to appropriate £17,000,000 from Consolidated Revenue, and place it in a special fund from which pensions payments will be made. I suggest to the Treasurer (Mr. Spender) that he should encourage the payment of old-age and invalid pensions by cheque to those who desire it. I know that the system has been introduced, but it should be extended as far as possible. A great many people whom I know do not like going along to the post office to collect their pensions, and it should be brought to their knowledge that they may, if they choose, have them paid by cheque. In time practically all pensions might be paid in this way, with a probable saving of administrative expenses. I also suggest that something should be done to simplify the payment of pensions to inmates of hospitals, and other institutions of the kind. Trouble frequently occurs - not that any one tries to make trouble - because confusion arises over such matters as how much the institution is to retain, how much the patient is to receive, and when he is to receive it. There is nothing contentious about this measure, and we do not intend to delay its passage.
Bill read a second time, and passed through its remaining stages without amendment or debate.
page 726
Motion (by Mr. Spender) proposed -
Thatthe House do now adjourn.
.- I ask the Government to give further consideration, in the light of amendments already made to regulations made in Great Britain, which were the same as the regulations which have been made under the National Security Act. When the regulations under the act were adopted in this House we were told that, harshas many of them might appear to be, they were part of a uniform scheme operating throughout all the dominions and in Great Britain. Then, about that very time, or perhaps a little later, Mr. Dingle Foot, a Liberal member of the House of Commons, moved that an Address-in-Reply be presented asking for the disallowance of the whole of the regulations; He took that action because it was not permissible to move for the disallowance of part only of the regulations. He initiated a very long and fruitful discussion, at the end of which Sir Samuel Hoare indicated that, if the motion were withdrawn, the Government would consider the amendment of the regulations which had been the subject of attack. Considerable changes were made by the regulations which came into force on the 23rd November last. I draw particular attention to the Australian defence regulations 41 and 42 which were criticized in this House. As it stands our regulation 41 imposes a penalty on any person convicted of endeavouring to cause disaffection among persons engaged in the service of the King or the Commonwealth, or in the performance of essential services. That, of course, meant that a person might be guilty of causing disaffection amongst employees of a private employer. Objection was taken in the House of Commons - very reasonably, I submit - to the use of the word “disaffection “, and Sir Stafford Cripps said -
It would be creating disaffection to tell soldiers that the allowance for their families was not sufficient, but that would not be seducing them from their allegiance.
The Home Secretary, Sir John Anderson, agreed that that might be so. The result of the criticism of that regulation was that it was altered recently.
As now amended, the British regulation 39 (A) provides -
No person shall -
Obviously the English regulation, as amended, is much narrower and much more limited in scope than the corresponding regulation in Australia.
The next regulation to which I should like to refer is our regulation 42, which corresponds to the English regulation 39 (B). In connexion with this regulation Mr. Dingle Foot said -
I pass to 39(B) which contains one of the most remarkable regulations that can ever have been laid on the table of the House . . .
The cautious and conservative Law Journal went further in its condemnation of that regulation, whose provisions it described as “intolerable”. These “intolerable “ provisions are still in our regulation 42. This still provides as follows -
A person shall not -
When a person has been convicted by a jury of an offence under this regulation, the court may forbid him to publish any newspaper again in Australia. The British criticism of the regulation was that it prevented not merely untrue statements of fact from being made, but also the expression of opinion. Mr. Dingle Foot referred to the distinction drawn by Sir John Simon when he was AttorneyGeneral in the Asquith Government in 1914, between mis-statements of fact and statements of opinion. Sir John Simon said -
To prevent mis-statements of facts which are prejudicial and injurious to our cause is a thing about which nobody will dispute, but statements of opinion, however foolish they may be and however far from wise in judgment, are a very different thing from mis statements of facts and a hope that in any regulations we make and in any amendment of “them we shall always draw that distinction most sharply.
That distinction was not drawn by regulation 39 (B) as originally adopted in England, and it is not drawn in our regulation 42 as it stands to-day. As the result of the discussion in the House of Commons, regulation 39 (B) was amended and, in its new form, it provides for the punishment of those making false statements, uttering false documents or false reports. It further provides, however, that the person who is prosecuted may defend himself by claiming that, although what he said was false, he reasonably believed it to be true. That regulation does not provide for the punishment of a person making a statement of opinion, whereas in Australia a statement of opinion is punishable. In England, the clause which provided that an editor who was convicted under that section could be forbidden to publish a newspaper, has been deleted. As we originally endeavoured to make our regulations uniform with those in England, I submit that we should also make them uniform with amendments of the English regulations. Sir Stafford Cripps has said -
What we must bear in mind is that it is far easier to throw liberty away casually than it is to get it back afterwards, once it has been destroyed.
And again -
What is the minimum of special regulations which will accomplish the legitimate purpose of protecting the country against its enemies? Anything that goes beyond that is an unnecessary attack against the liberty of the subject and ought not to be tolerated by those who should specially be the guardians of the liberties of the people.
That is different from the problem of what is convenient for the administrator and the bureaucrat who promises not to misuse the powers even though they are admittedly too wide.
The last sentence clearly sets out the position taken up by this Government, which in effect says that, although these regulations are in wide terms, it is promised that they will be administered in a generous and liberal way. To a large degree that promise has been kept.
– Is it not rather difficult to interpret what Sir Stafford Cripps means ?
– I do not think it is. He said that it is necessary to find out. what is required for the protection of the community, and, having done that, to frame suitable regulations.
– That is where the difficulty arises. It is all a question of interpretation.
– My submission is that, as the Government followed the original British regulations, it should be consistent and follow the amendment of those regulations made in November last. I point out that any problems and difficulties, due to Nazi propaganda, pacifist propaganda or Communist .propaganda that arise in this country, are much less acute here than in Great Britain because that country is so much closer to the main theatre of war. Organizations of pacifists, Nazi sympathizers and Communists wield much more influence in Great Britain than they do in Australia. Therefore, if the British. Government- was willing to make liberal amendments to the regulations in November, 1939, surely the Commonwealth Government should be ready to follow its example now.
– Obviously the honorable member for Bourke (Mr. Blackburn) cannot expect me to give a definite reply to the matter which he has just raised. I am not familiar with the amendments that have been made by the British Parliament to its regulations affecting censorship, but I undertake to examine those regulations and bring them to the notice of the Prime Minister (Mr. Menzies) with a view to taking action along the lines suggested by the honorable member.
.- On Friday last I again brought to the notice of the Minister for the Army (Mr. Street) complaints of wasteful expenditure in connexion with contracts for the supply of foodstuffs to the Elphin showgrounds military camp at Launceston. The Minister has since replied to my representations which were extended over a period of some months. I am indebted to the honorable gentleman for the information given ; but I am bound to say that there appears to be no good reason for the delay, and I consider that the reply does not furnish a satisfactory explanation of the high prices charged for curtain commodities supplied to that camp. As I explained previously, the camp is only a small one, and if the wasteful expenditure there is typical of the state of affairs in the larger camps all over Australia, there is definite need for a comprehensive inquiry. In his reply to my letter, the Minister stated i -
The particular contract rufur.ri.-il to waa 1 < t as a result of tenders invited by the District Contracts Board, Hobart, and the lowest tender in the aggregate was accepted for groceries. The matter was the subject of correspondent’!between the District Contracts Board, Hobart, and the Contracts Board, Melbourne, when ti it’ details of the contracts arranged were iii- received.
I am not clear what the Minister mean.when he says that the lowest tender in the aggregate was accepted for groceries.
– It means the lowest tender taken over the whole range of the contract, although for some individual items other - tenderers may have quoted cheaper rates.
– That does not clarify the position. The fact is that tenders for these commodities can be accepted according to the tender form supplied. The conditions governing the letting of contracts state -
Tenderers may tender for any item or items or part or parts thereof, and the board reserves the right to accept a tender for any item or items or part or parts thereof’ which have been tendered for.
Although the Minister has stated that the lowest tender in the aggregate for the whole range of items was accepted, there is need for further explanation why the successful tenderer is charging retail prices for some of the goods. There seem? to be a screw loose somewhere, and this House is entitled to an adequate explanation. The Minister also stated in his reply-
Substantial savings might have been effected had separate contracts been .let for certain items contained in the schedule. The figure of £400 referred to in your letter of 20th January, 1940, appears to be based on the estimated requirements shown in the tender form.
That is true. I shall refer only to butter, bacon, cheese, sugar, jam. tomato sauce, and unsweetened milk. If the money wasted on these seven items at one small camp amounts to between £300 and £400 in a period of only about ~ix months, what, must be the total waste throughout Australia in one year? The Minister went on to say -
The actual saving which might have been directed is very substantially reduced by the fact that between the invitation and acceptance of tenders, instructions were conveyed to ihe district contracts board that contracts fur a number of commodities including jam, tinned salmon, tinned fruits, preserved meat, dried fruits, tea, coffee and condensed milk were not to bc arranged except for a very limited period, in view of the fact that the requirements of all the services were being coordinated and the contracts for these items were being arranged by the central contracts board.
That is only a partial explanation. He continued -
Tt is probable that there are local factors not known to the contracts board which would com pletely justify the action of the district contracts board in connexion with this particular contract. lt is pointed out that district hoards, at the time this contract was arranged, worked under conditions which made it very difficult to give exact consideration to all facts.
That is a speculation rather than a statement of fact. If it is true that the method of procedure was altered after the contract was let, there still remains some ground for inquiry and explanation to : his House. I shall not labour this question. I merely draw attention to it in order to secure some assurance that there will be an effective tightening of control in these matters. After all, what has happened in the past cannot he remedied now. If there has been some duplication of control, resulting in loss, it is now too late to hold a post-mortem examination. I nin concerned not so much with what has happened in the past as with preventing similar happenings in the future. I should like the Minister, in his usual frank way, to give an explanation to the House, and also to make a statement on the general position in relation to the letting of contracts and the method of control to be adopted in future by the Contracts Board. I realize that this is a big and growing department and that it is not easy to keep a check on all of the expenditure; but care should be taken that there are no undue leakages, or “ rake-offs “ by popple who are always keen to exploit the community, whether in peace or war. The Minister’s letter concluded -
During January last instructions were issued to all. district contract boards which should obviate a recurrence of decisions of Hie nature now under question. 1 appeal to the Minister to make an early statement to the House as to the nature of the control to be exercised over these matters in the future.
– I wish to draw attention to some aspects of the censorship. Letters sent through the post by organized Labour bodies and also by Labour members of this Parliament to their constituents and others are being opened. In February last, Mr. McLaren, the secretary of the Australian Labour party at Wau, in New Guinea, complained to me that a letter from Mr. Macnamara., the secretary of the executive of the Federal Labour party of Australia, and sent by him in his capacity as general secretary to the secretary of this branch, and superscribed by him, was opened by the censors. I wrote a letter of complaint to the then Minister for Information (Sir Henry Gullett) in February last. I did not receive a reply from him, but later I addressed a letter to the Minister for the Army (Mr. Street), who, in his usual courteous way, replied to me on the 26th April. I suggested that there had been discrimination in the matter, because I could not imagine that a letter from the general secretary of the United Australia party to a branch secretary, or, since the coalition, a letter from the general secretary of the Country party to a member of this Parliament who belongs to that party, would be opened. The Minister for the Army was good enough to say -
I regret that circumstances at present necessitate censorship, but I can assure you that no discrimination between political parties is shown by the censorship authorities in the Commonwealth. It simply happened that the letter in question came under the selector’s hand, as the correspondence of any person is liable to, from time to time.
The fact that the letter contained nothing of importance to the censorship would not be evident until the envelope had been opened.
T was content with that reply. I believed that the Minister meant what he said. But since then several letters of mine, which during my absence from Boulder have been sent to the’ Australian Workers Union there, have been opened. I do not know why I should be suspect.
– There would be no evidence on the envelope as to the sender.
– I am now superscribing my name on all of my letters. The letters to which I refer were sent by air and were in parliamentary envelopes. One would think that the officials would know that those letters were from a member of this Parliament. Two envelopes which have been opened by the censor have also been returned from New Guinea. One of them was written by me and addressed to Mr. McLaren. I do a considerable amount of work on behalf of residents of New Guinea. Another letter addressed to Mr. Florence, a barrister in New Guinea, and sent to him by a member of the House of Commons in a House of Commons envelope, was also opened.
– Where was it opened?
– It was opened in New Guinea, but mine was opened in Sydney. In this connexion, I desire to state that the secretary of the Labour party in New Guinea has suggested that if letters from New Guinea to addresses in Australia are to be opened at all, they should be opened in Australia rather than in New Guinea. The residents of the territory fear that some partisanship may be displayed locally. I believe that until now the Minister has been convinced that, there has been no discrimination in these matters, and I hope that he will now take steps to ensure that, if letters are to he picked up at random for opening by the censors, all parties shall be treated fairly.
– I shall do what I can in the matter.
Question resolved in the affirmative.
page 730
The following papers were presented : -
Special Peace Officers - Forms of Particulars of Appointment.
Ordered to be printed.
Designs Act - Regulations Amended - Statutory Rules 1940, No.6.
Lands Acquisition Act - Land acquired for Postal purposes - Byford, Western Australia.
Patents, Trade Marks, Designs and Copyright (War Powers) Act - Regulations - Statutory Rules 1939, No. 175.
Transport Workers Act - Regulations Amended - Statutory Rules 1940, No. 62.
House adjourned at 3.52 p.m.
page 730
n asked the Minister for Commerce, upon notice -
– The answers to the honorable member’s questions are as follows: -
s asked the Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows : -
Station 7NT.
r asked the PostmasterGeneral, upon notice -
– The answers to the honorable’ member’s questions are as follows:-
e asked the Minister representing the Minister for Trade and Customs, upon notice -
– The Minister for Trade andCustoms has supplied the following answers: -
s asked the PostmasterGeneral, upon notice-
Will he inform the House of the approxi mate dates when work will be completed on the Newcastle automatic exchange, and when the exchange will be in operation?
– The department is planning to bring the new exchange into service in March, 1941. It may however be possible to cut over to automatic working at an earlier date if the delivery of additional material still required from overseas is not delayed.
n asked the Minister representing the Minister for the Interior, upon notice -
– The information is being obtained.
n askedthe Minister for Commerce, upon notice-
– The answers to the honorable member’s questions are as follows: -
n asked the Minister for Commerce, upon notice -
Have any arrangements been made, or are they being contemplated, by the department to scour all greasy wool in Australia in order to save shipping space and tonnage in the export of wool?
– No.
Price Fixation.
r.-On the8th May the honorable member for East Sydney (Mr. Ward) asked whether I would lay on the table of the House all reports and recommendations forwarded by the New South Wales Prices Commissioner to the Commonwealth Prices Commissioner.
The reports made to the Prices Commissioner by the Deputy Commissioners in the various States contain confidential information obtained from traders by authorized officers who are sworn to secrecy under the National Security (Prices) Regulations. It is not desirable that such information should be disclosed for any purposes other than those for which it was obtained. This is in conformity with normal practice where information is obtained by Government authorities in the exercise of compulsory powers.
Aeroplane Parts.
n. - On the 8th May the honorable member for Barton( Mr. Lane) asked the following question, without notice -
Can the Ministefor Air state whether or not his departmentdeclined to take delivery of very valuable special piping intended to be used as struts to cradle aeroplanes, which recently arrived in Australia, because it was unaccompanied bya licence or bill of lading, and that it was taken nut to sea and dumped?
I am now in a position to inform the honorable member that the cradles referred to were special welded angle iron trestles made to support each individual aircraft and to suit the particular position whereeachaircraft was stowed on the ship. As faras can be ascertained, no piping was used for this purpose. Whether these trestles were the property of the Commonwealth, the Lockheed Aircraft Corporation (which supplied and packed the aircraft), or the shipping company was not definitely established, but the Air Force would have claimed them had they been of any use. Consequently, the first set received was taken to the Royal Australian Air Force station at Richmond, where it was ascertained that they were of no use as trestles and, moreover, their value for any Air Force purpose did no* justify the cost of handling and transportation charges. The local Lockheed agents believed the trestles were not the property of the Commonwealth. The-, therefore, cabled their principals in America, the Lockheed Aircraft Corporation, asking if they desired the trestles returned, and a reply was received to the effect that their return was not desired. The agents then inquired regarding the scrap metal value of the trestles and found that it was below the customs duty payable to land them. While the Department of Air has no knowledge that the trestles were dumped overboard, it is probable that this action was taken by arrangement between the Lockheed Aircraft Corporation’s agents and the shipping company. It is realized that the destruction of any metal, even if only scrap, is wrong in principle, particularly under present conditions,and action is being taken by the Department of Air to prevent recurrences of this sort of thing in future.
e asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows : -
y asked the Treasurer, upon notice -
-The answers to the honorable member’squestions are as follows : -
War Service Homes Commission: Purchase of Land.
d asked the Minister repre senting the Minister in charge of War Service Homes, upon notice -
– The Minister in charge of War Service Homes has supplied the following answers: -
Cite as: Australia, House of Representatives, Debates, 10 May 1940, viewed 22 October 2017, <http://historichansard.net/hofreps/1940/19400510_reps_15_163/>.