House of Representatives
5 December 1940

16th Parliament · 1st Session

  1. House of Representatives
  2. 16th Parliament
  3. 1940

Mr. Speaker (Hon. W. M. Nairn) took the chair at 2.30 p.m., and read prayers.

page 476

BUDGET CRISIS

Mr. MENZIES (Kooyong- Prime

Minister). - The Australian Advisory War Council met this morning to discuss matters of great and obvious importance to the conduct of the business of this House. An opportunity to continue the discussions this afternoon is very much desired. In the circumstances, I have suggested to the Leader of the Opposition (Mr. Curtin), and he has been good enough to agree, that it would be desirable to suspend the sitting of the House until after dinner to-night. I have not had an opportunity to make the suggestion direct to the Leader of the Australian Labour party - Non-communist (Mr. Beasley) because of his absence, but I have no doubt that he also would agree. I therefore suggest, Mr. Speaker, that you leave the chair until 8 p.m.

Mr SPEAKER:

– If it be the wish of the House, the chair will be resumed at 8 p.m.

Sitting suspended from 2.32 to 8 p.m.

page 477

QUESTION

AIR RAID SHELTERS

Mr DRAKEFORD:
MARIBYRNONG, VICTORIA

– I ask the Minister for the Army whether the Government has yet considered the construction of air raid shelters for employees of munitions establishments at Maribyrnong and elsewhere, and for the residents of districts in the vicinity of such works? If not, will the Government, in view of the likelihood of such works being the first object of air attack by an enemy, give the matter early and favorable consideration ?

Mr SPENDER:
Minister for the Army · WARRINGAH, NEW SOUTH WALES · UAP

– I shall take an opportunity to discuss the matter with the Minister for Munitions.

page 477

QUESTION

ENLISTMENT OF AUSTRALIANS ABROAD

Moratorium

Mr FRANCIS:
MORETON, QUEENSLAND

– Will the Minister for Defence Co-ordination take steps to correct the anomaly which exists under the National Security (War Service Moratorium) Regulations in respect of Australians who have enlisted in the Imperial Army, the Royal Air Force, or the Royal Navy, especially in the early stages of the war, in order that their position in relation to the war service moratorium may be identical with thatoccupied by members of the Australian Imperial Force, the Royal Australian Navy and the Royal Australian Air Force?

Mr SPENDER:
UAP

– The subject-matter of this question has been brought to my notice. The request, on its face, appears to be perfectly reasonable. I propose to discuss it with the Attorney-General, and shall have a reply conveyed to the honorable member.

page 477

QUESTION

TEMPORARY POSTAL EMPLOYEES, BRISBANE

Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND

– I have received from the Postal Employees Union, Brisbane, a telegram which reads -

Ten temporary employees, Mail Branch, Brisbane, having services terminated Saturday. Some nearly due recreation leave. Can you arrange withdrawal of notice?

Will the Minister representing the PostmasterGeneral make inquiries into the position, and if possible see that temporary employees whose services are about to be terminated are continued in their employment, at least until the expiry of the Christmas period?

Mr FADDEN:
Treasurer · DARLING DOWNS, QUEENSLAND · CP

– I shall bring the question to the notice of the PostmasterGeneral.

page 477

QUESTION

FLYING SCHOOL, SANDGATE

Mr JOLLY:
LILLEY, QUEENSLAND

– I ask the Minister for Air whether arrangements for the establishment of a flying school at Sandgate have yet been completed?

Mr McEWEN:
Minister for Air · INDI, VICTORIA · CP

– It is the intention of the Government to establish an initial training school in the Sandgate locality. The precise site has not yet been selected. When that has been done, the construction of the necessary buildings will be begun. It is expected that the school will be opened about two months hence.

page 477

QUESTION

POTATOES FOR ARMY CONSUMPTION

Mr CONELAN:
GRIFFITH, QUEENSLAND

– Is the Minister for the Army aware that two truckloads of New Zealand potatoes, which arrived in poor condition, were condemned by an inspector in Brisbane as unfit for human consumption, and subsequently were sent to Redbank camp for consumption by the troops undergoing training there? Will the honorable gentleman see that a similar occurrence is prevented in the future?

Mr SPENDER:
UAP

– The answer to the first part of the question is “ No “ ; but in case there may be any substance in the allegation, I shall institute inquiries.

page 478

PERSONAL EXPLANATION

Mr. E. J. Hogan and Strikers

Mr.POLLARD. - I wish to make a personal explanation. Last Tuesday I asked the Prime Minister the following question : -

Has the Prime Minister noticed a report in the Melbourne Argus of yesterday, attributing to Mr. Hogan, the Minister for Agriculture in Victoria, the statement that men who went on strike for more than award rates were worse than Shylock andwere helping Hitler? Is the right honorable gentleman also aware of the fact that Mr. Hogan entered politics by means of the fame achieved by him in leading strikes in Western Australia during the last war ?

Yesterday, I received the following telegram from Mr. Hogan-

Mr SPEAKER:

– Is this an explanation which affects the honorable member personally?

Mr POLLARD:
BALLAARAT, VICTORIA

– Yes. It is necessary to quote the telegram in order to make the personal explanation intelligible.

Mr Rankin:

– I rise to a point of order. I object to the honorable member being allowed to proceed with has explanation, because I believe his object to be to escape from the odium of having made a false statement concerning an honorable member of a State parliament.

Mr POLLARD:

– I assure you, Mr. Speaker, that my explanation will be perfectly in order. I wish to correct any injustice I may have done to the Minister for Agriculture of Victoria.

Mr SPEAKER:

– I again ask the honorable member if his explanation relates to anything that has occurred in this House.

Mr POLLARD:

– It does.

Mr Curtin:

– The honorable member for Ballarat wishes to explain to the House the circumstances which led him to make a statement concerning the Minister for Agriculture of Victoria. He desires so to amend his statement that no injustice will be done to that Minister.

Mr POLLARD:

– I quote the following wire that I have received from Mr. Hogan : -

Have to-day sent following telegram to GeneralRankin: “Pollard’s remarks in House as reported to-day’s Age, that ‘Mr. Hogan had himself crashed into politics through fame he achieved in strikes during last war ‘. This is absolutely false. I entered Parliament in February,1913, eighteen months before last war started. I neither instigated, led, or was in any way connected with any strike during the last war. Please make this known in Parliament.”

I read that telegram in order that I may show that I did Mr. Hogan an injustice when I saidthat he led a strike during the last war. I now admit that it was prior to the last war. I am quite satisfied that the only strike he will lead in the future will be one directed against the Labour movement.

page 478

QUESTION

TRANS-AUSTRALIA RAILWAY

Mr MAKIN:
HINDMARSH, SOUTH AUSTRALIA

– Will the Minister representing the Minister for the Interior obtain from the Commonwealth Railways Commissioner a report concerning the steps that are being taken to meet the considerable congestion which I understand exists in the passenger service on the Trans-Australia railway, all berths from Western Australia to South Australia being already booked until about the middle of January next? Will the honorable gentleman also ask the reason for this congestion?

Mr COLLINS:
Minister without portfolio assisting the Minister for the Interior · HUME, NEW SOUTH WALES · CP

– I shall bring the matter to the notice of the Minister for the Interior, and obtain a reply for the honorable member.

page 478

QUESTION

COMMONWEALTH BONDS

Tax on Interest Payments.

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– In view of the heavy burdens imposed on the general public by the budget proposals, will the Prime Minister state whether the Government proposes to introduce legislation for the imposition of a tax on interest payments on all Commonwealth bonds?

Mr MENZIES:
Minister for Defence Co-ordination · KOOYONG, VICTORIA · UAP

– The question relates to a matter of policy, which will be, and from time to time has been, considered by the Government.

page 478

QUESTION

WORKMEN’S COMPENSATION

Mr SHEEHAN:
COOK, NEW SOUTH WALES

– Will the Prime Minister have inquiries made, and later inform the House, as to whether workmen’s compensation insurance makes any provision for injuries received while on duty, as the result of enemy action of any kind?

Mr MENZIES:
UAP

– I shall have inquiries made regarding the matter, and communicate the result to the honorable member.

page 478

ASSENT TO BILLS

Assent to the following bills reported : -

Supply Bill (No. 3) 1940-41.

Loan Bill (No. 3) 1940.

page 479

QUESTION

RETURNED SOLDIERS’ VOLUNTEER CORPS

Mr FALSTEIN:
WATSON, NEW SOUTH WALES

– I refer the Minister for the Army to a statement made byhim some months ago to the effect that he would give consideration to supplying the Returned Soldiers’ Volunteer Corps in Sydney with uniforms and other military equipment. Has any progress been made in that direction? If not, when does the Minister expect that some progress will be made?

Mr SPENDER:
UAP

– A submission on that matter will, I hope, be placed before the War Cabinet next week.

page 479

QUESTION

SOLDIERS’ PAY AND ALLOWANCES

Mr MORGAN:
REID, NEW SOUTH WALES

– Will the Minister for the Army inquire into the case of Private G. Hoddinott, which was dealt with by me on the motion for the adjournment of the House yesterday? In view of the facts disclosed by me and the frauds perpetrated during the war of 1914-18 will the Minister take steps to introduce a proper accounting system in the Army department?

Mr SPENDER:
UAP

– Subject to minor comments that could be made, I think that the accountancy system now operating is ample ; but I shall make inquiries into the matter referred to by the honorable member, and shall furnish him with an answer.

page 479

QUESTION

PETROL RATIONING

Mr DRAKEFORD:

– Has the Minis ter for Commerce yet taken steps to have the incidence of petrol rationing reviewed, with a view to easing the difficulties of those engaged in cartage and haulage for their living? If not, will he take early steps to have the matter reviewed ?

Sir EARLE PAGE:
Minister for Commerce · COWPER, NEW SOUTH WALES · CP

– The Minister for Supply and Development has already made a statement on this matter, in which he showed that great relief had already been given to the section referred to by the honorable member.

page 479

QUESTION

SALES TAX

Books - Made-to-Measture Clothing

Mr EVATT:
BARTON, NEW SOUTH WALES

– Has the Treasurer reached any decision regarding the representations made to him in connexion with the proposed sales tax on books, especially educational books and books published in Australia?

Mr FADDEN:
CP

– No.

Mr CLARK:
DARLING, NEW SOUTH WALES

– Has the Treasurer received a communication with reference to made-to-measure clothing, and the basis of computing sales tax upon it, which results in a 60 per cent. increase of the tax on this class of clothing? If such communication has been received-, what action will bo taken by the Government ?

Mr FADDEN:

– I have no recollection of having received such a communication, but I shall have the matter inquired into, and a reply will be supplied to the honorable member.

page 479

QUESTION

WHEAT PAYMENTS

Mr BREEN:
CALARE, NEW SOUTH WALES

– Will the Minister for Commerce state whether the Government intends to fix the price to be paid for wheat in the No. 3 pool?

Sir EARLE PAGE:
CP

– The extent of the first payment has already been indicated to the House. It is anticipated that the market price will be above that obtained in the last couple of years because of the relatively small exportable surplus for home consumption.

page 479

QUESTION

MONETARY AND BANKING REFORM

Mr WILSON:
WIMMERA, VICTORIA

– In view of the tremendous public interest taken in banking and monetary reform, will the Prime Minister state whether the Government will consider the advisability of having a further inquiry into this much-discussed subject, such inquiry to cover points that were not included in the terms of reference of the royal commission which investigated the monetary and banking systems a few years ago?

Mr MENZIES:
UAP

– I shall discuss the honorable member’s suggestion with my colleagues.

page 479

QUESTION

TOWNSEND REPORT ON SHIPBUILDING

Mr HOLLOWAY:
MELBOURNE, VICTORIA

– Has the Minister for Trade and Customs had time to peruse the Townsend report on shipbuilding? If so, has he yet decided whether the report is to be printed and laid on the table of the House?

Mi-. HARRISON. - The question submittedby the honorable member has been answered on several occasions. The report referred to is a departmental one, and the Government, after considering it, will determine what action shall be taken.

page 480

QUESTION

TASMANIAN SHIPPING SERVICE

Mr FROST:
FRANKLIN, TASMANIA

– Has the Minister for Commerce any further information to give to the House in reply to the deputation that waited on him early this week, comprising Tasmanian senators and members of the House of Representatives,, with regard to the passenger service to Tasmania?

Sir EARLE PAGE:
CP

– The subject of interstate and coastal shipping is receiving the attention of the Government. Regulations were promulgated to-day giving power to the Minister for Commerce to requisition ships, if necessary, with a view to improving the service on the whole of. the Australian coast.

Mr Frost:

– Is a ship available for the Hobart service?

Sir EARLE PAGE:

– That matter is being examined, and, if possible, the present situation will be relieved.

page 480

QUESTION

RAZOR BLADES

Mr MORGAN:

– In view of the fact that the man on the basic wage shaves, equally with the man on £5,000 a year, whilst our soldiers, who receive considerably less than the basic wage, are forced to shave every day, can the Treasurer say why razor blades have been placed on the carefully selected list of luxury goods that carry sales tax at 15 per cent.? Does the Minister consider it expedient, for the sake of national economy, that men should grow beards, and, if so, will he lead the new fashion?

Mr FADDEN:
CP

– The honorable member’s question is founded on wrong premises and consequently a satisfactory answer to it cannot be given.

page 480

QUESTION

MEMBER FOR KALGOORLIE

Mr WARD:

– Is it a fact, Mr. Speaker, that a member of this Parliament was once sworn in before the return to the writ? If so, why was not a similar course followed in respect of the recent Kalgoorlie by-election? Is there any significance attached to the unnecessary delay that has occurred in swearing in the new member for Kalgoorlie?

Mr SPEAKER:

– Following the byelection for Wilmot last year the successful candidate (Mr. Spurr) was sworn in before the return to the writ. On that occasion it was announced by Mr. Speaker that he had received a notification from the Chief Electoral Officer of the Commonwealth by which it appeared that Mr. Spurr had been elected in pursuance of the writ. The Electoral Act makes provision under which, in certain circumstances, a member may be sworn before the return to the writ. The condition is that the returning officer must send a telegram to the Chief Electoral Officer for the State giving the name of the person who has been elected, and also stating that it is impossible for the writ to be returned to the Speaker, or to the Governor-General, as the case may be, within seven days. That is a condition precedent to swearing in a member without the production of the original writ. In the case of the Kalgoorlie election, I understand that the result was declared on Tuesday last. According to the Electoral Act, the return should have been endorsed by the returning officer and forwarded to the Chief Electoral Officer for Western Australia, who is in Perth, and that officer should forward it to the Chief Electoral Officer for the Commonwealth, Mr. Turner, in Canberra. I have not received any advice at all. I do not see how any officer could properly make a certificate that the return could not reach Canberra within seven days of the declaration of the poll. If such a certificate does reach me, I shall act upon it, but as I have received no such certificate, nor any intimation whatever of an official character, I shall await either the return to the writ or a certificate from the Chief Electoral Officer.

page 480

QUESTION

FLOUR TAX

Mr SCULLY:
GWYDIR, NEW SOUTH WALES

– (Has a request been received by the Minister for Commerce from any big manufacturing interest for the imposition of the flour tax on flour used in the manufacture of starch or arrowroot, at present sold at a. cheaper rate than the product manufactured from maize? If so, what action does the Minister propose to take?

Sir EARLE PAGE:
CP

– I shall inquire whether any such request has been made.

page 481

QUESTION

COMPULSORY TRAINEES

Alleged Dismissal from Employment.

Mr McCALL:
MARTIN, NEW SOUTH WALES

– Has the attention of the Minister for the Array been drawn to a report that 43 compulsory trainees have been refused re-employment upon the completion of the period of their training? Can he assure the House that he will exercise his powers under the Defence Act to ensure that employers shall not penalize their employees in this way?

Mr SPENDER:
UAP

– The fact that some employees have been penalized in this way has been brought to my notice. I propose to have an investigation made, and, so far as lies in my power, I shall see that employers do their duty by their employees.

page 481

QUESTION

COMPENSATION FOR MILITIAMEN

Mr ROSEVEAR:

– Has the Minister for the Army yet made any recommendation to the Cabinet for the passing of legislation to provide for the payment of pensions or compensation to members of the Militia Forces, and of permanent garrisons, who are killed or injured, or who suffer permanent disabilities through sickness as the result of their service in Australia, in the same way as was done in the last war?

Mr SPENDER:
UAP

– That matter is at present under consideration by an interdepartmental committee, whose deliberations should be completed shortly. The recommendation of the committee will be placed before Cabinet.

page 481

QUESTION

COAL-MINING INDUSTRY

Mr JAMES:
HUNTER, NEW SOUTH WALES

– Is the Prime Minister aware that one of J. and A. Brown’s collieries has not worked for six weeks on end, and that at others, the whistle was blown for no work all this week? Is it true that the Government has invited members of the Miners Federation and representatives of the coal-owners to a conference in Canberra on Friday next for the purpose of expediting the production of coal? Does he not think that it would be wise to build up stocks of coal in this country in order to give employment to miners now idle, in the same way as was done during the last war by the then Prime Minister (Mr. Hughes).

Mr MENZIES:
UAP

– In the course of the discussions, which I hope will take place, the representations of the honorable member will be considered.

page 481

QUESTION

POSTMASTER-GENERAL’S DEPARTMENT

Lease of Tramways Building, Melbourne

Mr POLLARD:

– Can the Prime Minister state whether a request has been received from the Premier of Victoria for an inquiry into the circumstances surrounding the leasing of a building by the Melbourne and Metropolitan Tramways Board to the Postmaster-General’s Department? If so, what action does the Government propose to take?

Mr MENZIES:
UAP

– My recollection is that some correspondence has passed on this matter, and if that be so, I shall be glad to let the honorable member see the letter from the Premier of Victoria, and the reply thereto.

page 481

QUESTION

CONCILIATION COMMISSIONERS

Mr FORDE:
CAPRICORNIA, QUEENSLAND

– When does the Minister for Labour and National Services expect to be in a position to release the names of the persons to be appointed as conciliation commissioners under the Commonwealth Conciliation and Arbitration Act?

Mr HOLT:
Minister for Labour and National Service · FAWKNER, VICTORIA · UAP

– I had hoped to be in a position to make an announcement this week, but, as honorable members will understand, it is not customary to make announcements regarding new appointments in the political circumstances which have recently prevailed. Moreover, an undertaking was given to members of the War Advisory Council that, before the matter was completed, the proposed appointments would be referred to the council for consideration.

page 481

QUESTION

MILK FOR SOLDIERS

Mr JAMES:

– Will the Minister for the Army state whether it is a fact that the supply of milk by the Beauthorne Company to the Rutherford military camp for morning tea has been cancelled as from the 7th of this month. If this has been done, what was the reason?

Mr SPENDER:
UAP

– I do not know whether the position is as the honorable member alleges, but I shall make inquiries and supply the honorable member with the facts.

page 482

SINKING OF VESSEL OFF AUSTRALIAN COAST

Mr HUGHES:
Attorney-General · North SydneyMinister for the Navy · UAP

– by leave - I regret to state that I have received news that a ship has been sunk off the coast of New South Wales. The twelve survivors were picked up by another vessel at about 6 p.m. this day. The survivors have not yet been landed, and the identity of the sunken vessel is not yet known, nor is it known whether there was any loss of life. All necessary steps have been taken to safeguard shipping.

page 482

QUESTION

FARES OF MUNITION WORKERS

Mr CLARK:

– Will the Minister for Labour give consideration to the payment of railway fares of engineers, and others who consider that they are qualified for employment in the manufacture of munitions, to enable them to travel from country centres to the places where the examination of applicants for such employment takes place?

Mr HOLT:
UAP

– I shall be glad to give consideration to the honorable member’s suggestion.

page 482

QUESTION

GAS-PRODUCER UNITS

Mr WARD:

– Yesterday, I asked the following questions relating to gasproducer units for motor cars : - 1.Was any agreement entered into by the Government to assist financially private commercial interests to either manufacture or market gas-producer units for motor vehicles?

  1. If so, what are the terms and conditions of such agreement?

The replies which I received were -

  1. and 2. No. Early this year the Government guaranteed the sale of 375 units to stimulate large scale production of technically approved types. Tenders were called and accepted for this number and a condition was imposedthat the contract prices should be available to the public. Not all were sold within the period stipulated, and one contractor was given a guarantee for an overdraft instead of purchasing his units, pending their sale to the public. Practically all have now been sold and the overdraft liquidated accordingly.

Will the Minister supply further information, setting out the name of the firm which was given the guarantee, and the amount of the contract price, and will he also state whether this firm manufactures gas-producer units, or only markets them? Further, will the Government check the costs of production in order to ascertain whether the prices charged to the public are reasonable?

Mr SPENDER:
UAP

– Seven or eight firms are affected, but I have no objection to having the information supplied.

page 482

BUDGET 1940-41

In Committee of Supply:

Consideration resumed from the 4th December (vide page 468), on motion by Mr. Fadden -

That the first item in the Estimates under division I. - The Senate - namely, “ Salaries and allowances, £8,176 “, be agreed to.

Upon which Mr. Curtin had moved by way of amendment -

That the words “ agreed to “ be omitted, and the word “ postponed “ inserted in place thereof as an instruction to the Government * . . (vide* page 267).

Mr MENZIES:
Prime Minister · Kooyong · UAP

.- by leave- On the 28th November the Leader of the Opposition (Mr. Curtin), when resuming the debate on the first item in the Estimates, submitted an amendment designed to postpone the consideration of the item. He adduced reasons why the item should be postponed. Those reasons amounted to a suggestion that certain adjustments should be made in the budget to deal with matters which he proceeded to enumerate. After the debate had proceeded for some time, the Government decided that, in view of the situation which had developed, some effort must be made to secure a compromise which would be in itself feasible and just, and would, at the same time, give due recognition to the numerical strength with which the Opposition parties were returned at the recent elections. In other words, the paramount importance of the war and its administrative problems was felt to necessitate some give and take if Parliament were not to proceed from one crisis to another, with all the dangerous interruption to administration which such a state of affairs would produce. Accordingly, a meeting of the Advisory War Council was summoned, that council being, in the view of the Government, an appropriate body for the exchange of views between leading members of the various parties. The council met yesterday, and a frank, but amicable and constructive, discussion took place. As the result of that discussion, the Advisory War Council agreed that it would recommend to the various parties that certain amendments to the budget should be adopted.

I propose to read those amendments to honorable members, and in doing so, I shall read paragraph7 in the form to which it was altered at a further meeting of the council to-day -

  1. Income Tax. - Alter the exemption from £150 to £200 per annum. Wholly dependent mothers to be added to the list of dependants for purposes of exemption.
  2. In the case of all Services, a domestic allowance of 7s. a week to bo paid to wives with a child, or children.
  3. Wheat. - The Commonwealth to provide, by way of grant for drought relief to wheat farmers, the sum of £1,000,000, the allocation of such sum to be referred to the Australian Agricultural Council.
  4. Invalid and Old-age Pensions. - The standard rate of pension to be increased to 21s. a week, and to be made variable according to the cost of living, taking the present time as the base, and making provision for rises of6d.
  5. A select committee to be appointed to discuss the War Time Companies Tax, and to report within a week. It is agreed that the amount budgeted for by the Government from this source is to be raised, but the committee will advise upon ways and means.
  6. In order to permit of an investigation of the questions which have arisen in respect of central bank credit and subsequent control, the Advisory War Council will, as soon as possible, confer with the Commonwealth Bank and the Treasury.
  7. Without in any way limiting the rights of any member or party, but in order to facilitate the future work of Parliament, members of the Advisory War Council express their common intention that,in future, questions appropriate for discussion by the council will, whenever practicable, be brought before it before being raised in Parliament.
  8. The necessary legislation to give effect to the budget, as altered above, will be passed and the amendment now before the House withdrawn.

It was, as I have mentioned, agreed that these proposals should be recommended to the respective parties. This course has been followed by the Leader of the Opposition, as leader of his party, by the honorable member for West Sydney, as the leader of his party, and by myself as the head of the Government and chairman of the joint meeting of Government supporters. The recommendations have been accepted in terms by the Government and by those who’ support it, and I am happy to be able to announce that they have been similarly adopted by members sitting opposite.

The budget is now to be re-adjusted, and is to be read as if it included these matters. The legislation which had been prepared will be amended to any degree necessary to give effect to this decision.

Mr CURTIN:
Leader of the Opposition · Fremantle

– by leave - I ask leave to withdraw the amendment moved by me.

Amendment - by leave - withdrawn.

Mr MARTENS:
Herbert

– I listened with wonder and consternation to the honorable member for Wilmot (Mr. Guy) when he referred to something that was said by Mr. E. G. Theodore on one occasion on the subject of inflation. I remember that when Mr. Theodore, as Treasurer of the Commonwealth, introduced a bill to provide for what some of his opponents were pleased to call inflation to the amount of £18,000,000, the honorable member for Wilmot, who then represented the division of Bass, opposed it. I remember also that a former Prime Minister (Mr. Lyons) declared that he would not be a party to inflating the currency of this country or sending abroad its gold reserve. Both these gentlemen opposed the legislation which Mr. Theodore introduced because they said that it represented inflation and, in the words of the late honorable member for Henty (Sir Henry Gullett), the proposed fiduciary notes would not represent “ real money”. Whenever an extension of credit is suggested, we are told by honorable members opposite that it means inflation, and the printing of pound notes in much the same way as sausages are turned out of a machine. I quote a few eminent authorities in order to illustrate the significance of the expansion of credit. The Encyclopaedia Britannica, 14th Edition, contains the following statement: -

Banks create credit. It is a mistake to suppose that bank credit is created to any important extent by the payment of money into the banks. A loan made by a bank is a clear addition to the amount of money in the community.

Mr. R.G. Hawtrey, Assistant Secretary to the British Treasury, in Trade Depression and the Way Out, stated -

When a bank lends it creates money out of nothing.

Samuel Crowther, a well-known American writer, expressed this view -

The banker can lend, unless the law prevent him, up to 20 or 30 times the cash he has on hand and still meet every engagement. The loans he makesserve actually as money. Thus a bank creates money.

Mr. J. M. Butchart, in a lecture delivered under the auspices of the Melbourne Chamber of Commerce in 1918, declared -

Bank money, deposits, credit written to customer’s accounts in bank ledgers, are created by bank advances and discounts. This is an important but little understood fact in Australia.

On the 27th January, 1940, the Economist, which is the leading financial journal of the British Empire, and which is often quoted by the Melbourne Herald, expressed this opinion in reference to the British war loan -

It was suggested last week that for genuine savings, the Government should offer about 3 per cent. There would be no justification whatever for the payment of so high a rate on created credit. But in the circumstances here envisaged the rate of interest should be no more than the cost of handling the funds - say1/2 per cent.

Abraham Lincoln’s famous saying that “you cannot fool all the people all the time “ has a profound meaning when we read from The Monetary Policy of A braham Lincoln -

The privilege of creating and issuing money is not only the supreme prerogative of government, but it is the Government’s greatest creative opportunity.

If a business man requires the sum of £1,000 in order to finance an extension of his activities, he asks his banker to grant him an overdraft for that amount, and lodges deeds or some other asset as security for the loan. That gives him authority to draw up to £1,000, but, generally speaking, instead of withdrawing cash, he writes cheques. More than 90 per cent. of the money in circulation is represented by “ cheque-pounds “. Much nonsense is talked about inflation. When I have exposed the financial interests which the Government serves, honorable members opposite have laughed. Now, I quote from an article which was published in the Western Australian newspaper, The Worker. That may not impress Government supporters as substantiation of my remarks, but the author, Mr. G. Foley, enjoys a high reputation in Western Australia. The article stated -

If you doubt the ramifications of massed capital in Australia - or have any misgivings as to where it stands on the political stage - just have a glance at the few following sidelights showing the hard shell of rising capitalism in this country as represented in some of the better-known industrial personalities. More important, note the close “ hook-up “ with the United Australia partycumCountry party.

Rydge’s Business Journal, published in Sydney, is one of the best authenticated publications coming within this category of literature. In August last it issued its annual index of Australian public companies, showing also details of directorships held.

NormanRydge should know what he is talking about. His own swag of directorates runs from pubs to pictures. Incidentally, Rydge was one of the Sydney multiple-endorsed United Australia party candidates at the September Federal elections.

There are some colourful personalities in this peep behind the United Australia party screen.

First of all is our old friend, Sir Walter Massy-Greene, one-time United Australia party member for Richmond; afterwards New South Wales senator, defeated in 1937, now coordinating Empire defence at Delhi.

Director or Thirteen Public Companies

Sir Walter, as shown in Rydge’s, is a director on thirteen public companies having an aggregate paid-up capital of over £13,000,000. Nearly all are engaged on war contracts. Here they are -

Associated Paper and Pulp Mills Limited

Australian Knitting Mills Limited

Austral Silk and Cotton Mills Limited

Barnett Glass Rubber Company

Bradford Cotton Mills Limited

Dunlop Perdriau Rubber Company

Electrolytic Zinc of Australia Limited

Emu Bay Railway Company

Felt and Textiles of Australia Limited

North Broken Hill Limited

North Broken Hill Consolidated Limited

Yarra Falls Limited

Zinc Investments Limited

Now note the political “ hook-up “. Willie

Watt, ex-United Australia party Federal member for Balaclava, is chairman of the21/2 million Electrolytic Zinc show. On the same directorate also are Mr. Harold Cohen, Victorian M.L.A., and Mr. M. L. Baillieu. Sir David Gordon, M.L.C., is associated with a couple of the Baillieus and Massy-Greene on the gilt-edged North Broken Hill Limited, which in 1937 showed a profit of £175,628 and had nearly £3,000,000 posted to reserves. The war has kicked up North Broken Hill shares into strong demand, advancing them to 42s.6d. for £1 shares.

Yarra Falls Limited, of which Sir Clive Baillieu is on the London directorate, and the other textiles concerns in the grand sewing circle are doing very nicely on the warcontracts. Yarra Falls shares have advanced to 45s.

Pearce’s Competence

Ex-senator Sir George F. Pearce, now com fortably seated on the Grants Commission, and who after about twenty years in the Federal

Cabinet, bewailed bis failure to earn a competence for himself, finds his place on the directorates of Felt and Textiles Limited, and the Emu Bay Railway Company.

Senator P. A. McBride (South Australia) is listed as a director of Elder Smith and Company, whilst Mr. A. W. Fadden, member for Darling Downs, now Treasurer, was on the directorate of the Engineering Company of Australia Ltd.

Senator A. J. McLachlan (South Australia ) directs Hume Pipe Company, Hume Steel Company, and the sporting goods institution o’ Mick Simmons Limited. Hume Pipe Company in 1039 netted a surplus of £21,466.

Honorable members will recall the rapid exit which Senator A. J. McLachlan made from the Cabinet when the information that he was a director of those companies became public. He is still a member of the Commonwealth Parliament, and I have no doubt that he uses whatever influence he may possess to advance their interests. The article continued -

Mr. J. T. Vinton Smith, United Australia party candidate for Corio at the by-election in March, is on the directorates of Carpet Manufacturers Limited, Edments Limited. Modern Building and Investment Company, and the Olympic Tyre and Rubber Company.

Sir Sydney Snow, president of the New South Wales United Australia party, dabbles in Broken Hill South Limited (associated with Sir David Gordon, M.L.C., who is also with the Baillieu!* and Massy-Greene and Broken Hill North Limited), Colonial Mutual Life Assurance Limited, Direct Cash Orders Limited, General Industries Limited, Snow’s Men’s Wear and Snow’s Properties. I believe Snow’s specialize in women’s war auxiliary uniforms. In Sydney there are many thousands of such uniformed ladies.

Norman B. Rydge helps to direct thirteen companies running from booze and cash orders to talkies and vaudeville.

The munitions directorate of New South Wales includes F. P. Kneeshaw, manager of the Kandos Cement Company, and member m’ the New South Wales United Australia party Consultative Council; Mr. Essington Lewis, general manager of the Broken Hill Proprietary Company Limited, and Mr. E. R. Knox, chairman of the’ Colonial Sugar Refining Company Limited (Sir Robert Knox, of the same family, is interested in Dunlop Perdriau ) .

Baillieu Group

Of the Baillieu family group, space forbids the specification of the 30-odd public companies over which members of this family exercise directorships in association with United Australia party political identities. One of the best examples of the octopus grip of this money ascendancy is to be found in the ramifications of Carlton and United Breweries Limited, under the directorship of Mr. Olive Baillieu. This show controls the liquor trade of Melbourne so strongly that there is neither opportunity nor room for competition. In 1938, this amalgam of subsidiaries surplussed £128,043 and had in reserve £810,424.

The Honorable John Lawson, erstwhile Menzies’ Cabinet Minister, lost his portfolio through swapping horses with Mr. F. J. Smith, of the mammoth Australian Consolidated Industries show.

No bureaucracy of finance and big business would be complete without the press; hence the newspaper knight of Melbourne, Sir Keith Murdoch, emerges with a semi-political bigpoise job as Director of Information. Murdoch’s companies run through the whole gamut of publishing from the Advertiser to all those little booklets dealing with household hints and love stories.

Mr. Menzies himself had more than a passing acquaintance with the ways of big companies, and it is not so many years ago thai lie acted as legal adviser to ona of the big oil companies in an action for an alleged breach of Federal law.

These facts justify my claim that this Government represents big interests. Some of the people named are active supporters of the Government and others are actually in public life.

Any honorable member who has not already done so, should visit the exhibition in Sydney of articles which have been found in the possession of internees. The exhibits provide startling proof of the subversive tendencies of their owners. When I was there a few days ago the guide, without any prompting from me, told me that some members of this Parliament, and one Minister in particular, were active in their efforts to have released from internment two Italians who were pilots in the Italian Air Force when Italy invaded Abyssinia. They came to this country in the guise of Jewish refugees. The falsity of their claim to be refugees can be gauged from the fact that they were both guests at the wedding of Vittorio Mussolini, eldest son of the Italian dictator, and the man who declared, after he had dropped bombs, that it was laughable to see the way in which the Abyssinians scattered in all directions - that it was like a rose blooming. Proof that they were at the wedding is contained on invitation cards, autographed by Vittorio Mussolini, which are among the exhibits at the Sydney display. The two internees are members of Sydney’s elite, and honorable members opposite, including Ministers, have been at cocktail parties arranged for their entertainment.

No member of this Parliament should use his position to have friends released from internment, whether they be citizens of Australia or foreigners. I myself have been friendly for years with men who are now in internment. I believed them to be good citizens, although they may not have been, and I do not ask that they be released. All that I have done has been to request on behalf of people who have loved ones, husbands or brothers in internment, that the Minister shall investigate their cases in order to ascertain what justification there is for their internment. I do so because some do not know why they have been interned. As I pointed out the other night, I know one Italian at Bondi who was interned and then released, and is now at liberty. His people do not know either why he was interned or, having been interned, why he was released. If that man was interned because he was an active representative of the Fascists in this country he should not be at liberty during the currency of the war. The record of the two Italian airmen, about whose release, it is said, at least one occupant of the Treasury bench is concerning himself, is conclusive proof that they should not be allowed their liberty.

Mr MARTENS:

– Men at Innisfail were interned and I make no apology for them. I have made no attempt to have them released, although I have been friendly with some of them for many years.

Mr Blain:

Mr. Blain interjecting.

The CHAIRMAN (Mr. Prowse).Order! If the honorable member for the Northern Territory persists in interjecting I shall name him.

Mr MARTENS:

– The only place for men who are doing the work of the enemy is in an internment camp. Some of the guns in the Sydney exhibit were secured from Italians at Ingham. Those men are now in internment camps, and I am glad that they have been put where they can do no harm. Social standing should not influence the authorities, but it would appear that that is an important consideration, because photo graphs of some of the men who are interned at Orange have been papered over so that they will not be recognized. They are not members of the working class. The fifth column is recruited from people in the higher social strata, and not all its members are foreigners. “When this Government talks about setting up tribunals to hear appeals against internment it ought to be most careful. I am not concerned about Jewish refugees; I am only concerned with the safety of Australia. I have seen these alleged refugees taking photographs at Rose Bay. They do not do so for the good of their health, or because of the beauty of the surroundings. Dangerous work was being done by those who are interned. The wireless transmission apparatus which they were using to send information from this country is on display. In view of the evidence against them, could any honorable member think that a tribunal should even consider whether they should be at liberty or not? The principal objection that I have to their being given the right of appeal is that many of them have been interned on evidence which would not be sufficient to satisfy a court of law of their guilt. The officers who have worked for weeks and weeks on their cases would probably have to admit that they had no conclusive proof of their subversive activities if they were asked by the appeal board : “ What do you know against these people ? “ Many of the internees, and many who are not interned, claim to have come to Australia to seek a haven after having been driven penniless from Germany and Italy. What wonderful properties they have bought from their penury. If I had my way they would not only be interned for the duration of the war, but also, at the end of the wai’, sent out of the country, as they allege they came in. without a penny in their pockets. I have no use for the people who entertain them. I saw many autographed photographs of Von Luckner exhibited in Sydney and all of them bore the inscription “ Carry on ! “ ‘Carry on in the interests of the British nation or in the interests of Nazi Germany? I believe it was the latter. I hope that the internees will never be allowed out of She concentration camps. Some of them no doubt were placed under restraint because they were foolish, but that is no reason why they should be given their liberty.

Mr BAKER:
Maranoa

.- Notwithstanding the concessions that have been made by the Government as the result of discussions between the members of the Advisory War Council, I regard this budget as vicious, disastrous and deflationary. The golden rule of all taxation is capacity to pay; those who have the money should be compelled to contribute, their fair share in taxes. We all know that large sums of money have to be collected to meet the heavy cost of financing our war effort ; but in framing the budget the Treasurer (Mr. Fadden) has been at pains to place an unfair share of the load on the shoulders of the workers. Direct taxation always falls heavily upon the working class which at present is in difficult circumstances as the result of rising costs brought about by the incidence of indirect taxation, including the iniquitous sales tax. If we are not careful the standard of living which has been built up in this country over the last 50 years, will be gradually whittled away and we shall find ourselves back to the coolie level when the weekly ration of nien employed on stations was known as the 10-8-2-J In case some honorable members do not understand that term, I may explain that a station-hand in the early days was given 10 lb. of mutton, and very poor mutton at that, 8 lb. of weevilly flour, 2 lb. of black sugar, and i lb. of the worst kind of tea. We have no desire to get back to those conditions. It is regrettable that at this time of crisis the great profiteering companies and combines are not compelled to contribute their fair share of the revenues of this country. In time of war the Government should not delay in introducing a war-time profits tax. The labourer is worthy of his hire; but all remuneration in excess of what is regarded as fair for the work performed should be taxed up to a 100 per cent.

During his speech on the budget the honorable member for Kennedy (Mr. Riordan) cited figures which showed that 70 largo companies and combines were making astounding profits. In allowing them to get away with such pro fits the Government is proved as the tool of these influential concerns. If nothing be done to restrict the excess profits of large and influential combines and companies, this fair land of ours may yet see a bloody revolution. This budget is proof of what we suspected all along. The appeal for the formation of a so-called national government was simply an artifice employed by the Government to induce the Labour party to share the responsibility for the budget proposals. Had a national government been formed the workers would quickly have been told that their own party agreed to saddle them with these taxes. We do not agree with the Government’s proposals for raising the money to finance the war. We believe that the Commonwealth Bank could issue all the credit needed for this purpose. If the Commonwealth Bank provided the money to finance the war, the interest paid on it would eventually go back to the people who own the bank. We believe that the Commonwealth Bank should follow the policy as laid down by the Fisher Government and by the author of the scheme for its establishment, Mr. King O’Malley. The Commonwealth Bank could issue debt-free money. We have to fight the Nazis and the Fascists with their own weapons and one of the greatest of these is cheap finance. The Germans do not go cap in hand to the private banks for money; Hitler simply takes what he wants. We should do likewise. The word “ inflation “ is a silly little bogy word used to frighten the timid. There is no inflation in a properly controlled system of credit expansion.. We shall have to get away from orthodox methods of finance, if we are to keep pace with our enemies. Great scientific inventions have vastly improved the lot of man within the last half century ; but the out-moded and iniquitous monetary system is hindering further progress. It would seem that the Commonwealth Bank Board was appointed specially to look after the interests not of the people but of the private banks. When it was first instituted the Commonwealth Bank was to be the people’s bank; now it has become the banker’s bank. The progress pf this country will be retarded until the private banks have their fangs drawn and their claws clipped. Notwithstanding the awards of the Arbitration Court, the condition of the workers of Australia is worse than it was when the Harvester award was made by Mr. Justice Higgins 33 years ago. Heavy taxation is crushing the life blood out of the nation. We must get away from that. The wheat industry in southern Queensland is in a tragic state. In 1938 we had a record crop of millions of bushels of the best wheat. Months after the crop was harvested, the golden grain was rotting in the storage sheds, being eaten by mice and weevils ; at the same time women and children living not very far away were practically starving. Is it not tragic that in the midst of plenty people should be obliged to go hungry? I contend that the present monetary system is responsible for that state of affairs. No problem which confronts us to-day is more important than this. All human problems can be solved by the human mind if they be attacked in a spirit of sincerity, earnestness and unselfishness.

I bring to the notice of the PostmasterGeneral (Mr. Harrison) the need for new post office buildings, particularly at Dalby and Goondiwindi. The existing post offices in those towns are a disgrace to the department. The post office in Dalby, which is a thriving town, is 77 years old. It is a brick building, the walls of which are dangerously cracked. In addition, it is too small to accommodate the 37 employees engaged in it. A new post office is also badly needed in Goondiwindi. I also urge the department to provide greater telephonic and telegraphic facilities in country districts.

I now propose to touch upon public education, which is a subject near to my heart, as for many years I was employed in the Education Department of Queensland. Education should be a Commonwealth, rather than a State responsibility. Under the present system of State control of education we have six different curricula. The main objective of federation was to unite the people of Australia. I know of no greater unifying force than education; it is the hope of the world. The tragedy which now confronts us is largely the result of the systems of perverted education adopted by Germany and Italy. Education should be accepted by the Commonwealth as a national responsibility, particularly as the States are finding it increasingly difficult to finance their educational systems. Three years ago when the late Mr. Lyons was asked to make available £2,000,000 to the States for technical education, he replied, “ No ; education is the responsibility of the States “.’ One can quite understand such a reply. However, I point out that, in view of the titanic struggle in which we are now engaged, the technical education of our youth is of paramount importance.

Mr Blain:

– Does the honorable member suggest that the Commonwealth should merely find the money for education, or take over education completely?

Mr BAKER:

– My point is that the Commonwealth should take over education entirely from the States, just as it took over the Postal Department. Education should be a charge against the Commonwealth, because it is essentially a national responsibility. If this were done, we could more effectively develop a truly Australian spirit among our people as a whole. To-day, a man who comes from one of the States is regarded as a New South Welshman, a Victorian, or a Tasmanian, and so on. That attitude is undesirable, because we are primarily Australians, and a uniform system of education controlled by the Commonwealth would inculcate that fact in the minds of the children. In the words of the late Sir Edmund Barton, our first Prime Minister, we should learn to think continentally.

Mr RYAN:
Flinders

.- Before I proceed to discuss the budget, I should like to say that whilst I appreciate the honour, I also very much regret, my presence in this Parliament, because, as all honorable members know, my election is due to circumstances following the tragic death of the former honorable member for Flinders. I had the honour and the good fortune to count Jim Fairbairn among my friends. I know that honorable members as a whole will share with me a sense of personal loss in the death of a colleague who held the respect of all of them, and on whose friendship they confidently relied. Jim Fairbairn devoted to the service of this Parliament and Australia his very great gifts of sincerity, integrity and ability. It is my hope and ambition that in a small measure I may be able to carry on the work from which he was so tragically taken.

In view of the authoritative statements on the budget which have emanated from various parts of the chamber, it is with diffidence that I address myself to the manner in which the affairs of the country should be conducted in the present grave crisis. However, I am encouraged to do so for two reasons : First, because I have had some experience of public finance in circumstances which I think were somewhat similar, and at least equally difficult ; and, secondly, because I find even among honorable members opposite considerable difference of opinion with regard to the details of the budget. For instance, some honorable members have described the budget as deflationary, whilst others have said it is inflationary. Perhaps the truth lies somewhere between these two extremes, and the budget may not result in any appreciable change in present price levels in Australia. At all events I believe that the Government has given serious attention to the problem of raising sufficient funds to prosecute our war effort, without calling upon any section of the community to make a disproportionate sacrifice. For that reason I support the budget. The amendment moved by the Leader of the Opposition (Mr. Curtin), which he has just withdrawn, claimed my sympathy in several respects, particularly insofar as it proposes increases of soldiers’ pay, allowances to soldiers’ dependants, and invalid and oldage pensions. I do not suppose that any honorable member would not be prepared, out of sheer gratitude, to grant to our soldiers a substantial increase of pay. In these days of materialistic outlook, however, we are prone to forget that there are other things in life than material gain. From time immemorial citizens have regarded the defence of their country as an honour and a duty; we should not forget that ideal to-day. Yet, no one, if he had the power to do so, would begrudge to our soldiers as great a reward as that which we give to our men who are working in munitions fac tories, in less peril and under more comfortable conditions. Our fighting services are entitled to the best remuneration that we can afford to give, be cause only by their efficiency, courage and devotion to duty shall we be enabled to win the wai’, and thus ensure, not only the freedom but also the future of this and succeeding generations of Australians. All of us would like also to provide for our aged people as generously as possible in order to help them in their declining years, and as a small measure of compensation for the misfortunes which they have suffered in the past. Many old-age pensioners have served this country well, and we know that their penury is, in many cases, due to chance misfortunes rather than to their own fault. The country at large would like to be generous to its pensioners, but there are some things that we can do and some that we cannot do. It is a question not so much of what we would like to do, as of what we are able to do. Our war commitments are so great, and our war effort is so enormous, and likely to be still more enormous in the near future, that, much as we may wish to increase the rate of invalid and old-age pensions, we are now finding it extremely difficult to do so. We must in all these things be content to do the best we can in our existing circumstances. I congratulate the Government upon having agreed to’ a compromise in respect of invalid and oldage pensioners and soldiers’ dependants.

As I see it, democratic government cannot be maintained in any country without compromise. Compromise, as a matter of fact, is the base of democratic institutions. I trust that the spirit of compromise which the Government and Opposition parties have displayed in connexion with this budget will be continued.

During this discussion, a good deal has been said about living standards, particularly those of people who are in the lower income ranges. The Government has been criticized because it originally proposed to reduce the income tax exemption from £250 to £150 per annum. A compromise has been reached on that matter also. The subject, of living standards is, I think, the subject of much confused thought. Personally, I am proud of the standard of living of the Australian people. There may be one or two other countries of the world in which the standard of living is higher than in Australia, but, by and large, we enjoy, and have enjoyed for many years, an almost unequalled standard of living and prosperity. The honorable member for Hindmarsh (Mr. Makin) described the Government’s proposals as an intrusion on our standard of living. The honorable member for Riverina (Mr. Langtry) said -

We should not be asked to lower the standard of living while credit can be made available through the Commonwealth Bank.

It would be well for all of us to give a good deal more thought than we have done to living standards and the basis on which they rest. I wonder how many honorable members have ever paused to ask themselves : “ To what do we owe our living standards in Australia? “

Mr Ward:

– Has the honorable member ever been unemployed?

Mr RYAN:

– I have, and I know something about the subject. Do honorable members generally think that it is by some divine dispensation that the Australian people enjoy a prosperity greater than the people of many other countries 1 The quality of our manhood and womanhood is second to none, but I question whether any of us would assert that one Australian man is equal, as an economic unit, to one and a half Englishmen, three Germans, five Chinese, or ten Hindus. If proof is required that this is not so, we have only to look at the foreigner in our midst and his powers of work. If honorable members had lived among foreigners as I have done they would know their efficiency, their energy, and the results they have achieved.

In attempting to define the reasons for our prosperity as a people I do not altogether exclude the human element, for it is important. We Australians have come from a sturdy stock which has been successful in the four quarters of the globe, but there are other factors which have contributed to our present position. We live in . a country which has enormous natural wealth. We enjoy a climate which, notwithstanding the feelings that the people on the land may harbour in times of drought, is one of the best in the world. The comparative sparseness of our population and the richness of our country have been substantial contributors to our prosperity. Then, in consequence of the wise legislation of our Parliaments, the disparity of wealth between the different classes of our population is less marked than in any other country of which I have any knowledge. I know that honorable members opposite think that the wealth of Australia should be still more evenly divided. I agree with them. Honorable members may join issue with me in my next statement, but I hold the view that one of the effects of this wai will be to bring about a more even distribution of the wealth of the country. I believe that that was one good effect of the last war and that the same effect will follow this war.

I take one other point. If we were to redistribute the whole of the income of the classes of higher income earners in Australia, which includes honorable members of this Parliament, among the breadwinners of this country it would add only about £24 a year, or 11 per cent., to their present average income. I have based these calculations on figures in the budget, so honorable members may check them if they desire to do so. I readily admit that an addition of £24 a year to the income of people in the low ranges would be very acceptable, but it would hot make the difference between poverty and affluence.

Honorable members opposite would have us accept the view that the basic wage is sacrosanct, but they should bear in mind that this wage has been manmade by persons in possession of the relevant facts and competent to form sound judgments. But because the basic wage is man-made, it cannot withstand the impact of economic forces beyond Australia. This must -be obvious when we remember that in Australia we cannot arrange the prices of our exports on the world markets any more than we can arrange the prices of the goods which we import. We are dependent for our internal prosperity on many factors outside Australia. What do we find if we examine our economic situation in relation to external affairs and external trade? We find that the export of wine and fruit has had to be almost abandoned, and that the export of wheat is difficult now, and may become even more difficult as time goes on. Owing to shipping losses the export of our wool, meat, and various other commodities- which require great shipping space must diminish considerably. Therefore) in the future, our income from the export of goods is likely to be seriously reduced. That will mean that our income from abroad will diminish, and in view of our heavy commitments in respect of war material, the purchasing power required to bring consumption goods into this country will also diminish.

What of our internal conditions? We have taken approximately 200,000 men from productive work and put them in the fighting services. In addition, we are told that in the coming year 150,000 men will be employed in the manufacture of munitions. Apart from that, a number of factories, together with extensive plant and machinery, have been diverted from peace-time production to the manufacture of war requirements. The general effect of this will be to decrease the quantity of normal consumption goods available to the people of this country. In other words, there will be less goods to go round.

I wish to refer now to the calculation made by the Leader of the Opposition (Mr. Curtin) relating to the incidence of indirect taxation upon the lower classes of wage-earners. I do not agree entirely with the conclusions at which that honorable gentleman arrived, because I consider that he did not pay sufficient regard to the proportion of consumption as between those on high incomes and those at the other end of the scale. In other words, instead of there being a flat rate for every body, I believe that the consumption of goods by the higher classes of income-earners is greater than the honorable gentleman calculated. However, I do not propose to argue that point now. But I take his figures because I think that they give a fair representation of the amount of consumption by the three classes of wage-earners. The figures given by the Leader of the Opposition were £7,000j000, £15,000,000 and £50,000,000 respectively, for the three classes of wage-earners, starting from the top. It will (be seen that the greatest consumption is attributable to the lower classes of wage-earners, so that the brunt of any diminution of the production of goods in this country must be borne by those classes. Inevitably the low wage-earners will carry their share of the loss, and the general result will be that they will be able to purchase fewer goods. If these arguments are correct, and I believe them to be so, it will not be of the slightest use to give a wage-earner a wage increase of 10 per cent., 50 per cent, or 100 per cent., because the goods will not be available for purchase. Therefore, we must resign ourselves to the fact that the general standard of living cannot be increased, and, in all probability, will be reduced.

A very interesting speech was delivered by the honorable member for Corio (Mr. Dedman) who pointed out with some degree of accuracy that it would bc quite possible to increase the production of consumption goods in this country by bringing in to the factories those people who are now unemployed, by utilizing the services of women in industry, by working longer hours if necessary, and by improving plant and machinery to enable a speeding up of production. Those measures require organization and time, and I suggest to this Government, or whatever government may be in office, that it should, at once set about the task of organizing and getting these measures under way.

I propose to refer briefly to the subject of inflation. Some honorable members have alleged that the budget is inflationary, and others have claimed that it is deflationary. It is deflationary in the sense that a proportion of wages will be taken from the wage-earner by means of taxes. It is inflationary in that the money raised by taxation, together with the loans which are to be obtained from the people will be transferred back in the form of wages or C03ts of materials. It should be observed, in addition, that in the budget there is foreshadowed a definite increase of banking credit in order to make up any deficiency in the loans to be obtained from the public. For these reasons the general impression in my mind is that the budget is not deflationary, but definitely inflationary.

A great deal has been said in this House regarding the evils of inflation. Many honorable members are aware of what happened in Germany after the last war, whilst others may possibly have experienced the effects of inflation in Australia at that time. I lived in Germany during the whole period when inflation swept through the country and almost destroyed its entire economic structure. When I went into the Rhineland in 1919, the value of a mark was about 34 to the £1. In four years, it had declined to well over 1,000,000 to the £1, and there was practically no standard of value left. I do not intend to go into the causes or the details of inflation in Germany, about which honorable members have heard something during this debate. It is sufficient to say that the effect of that violent inflation was to wipe out entirely the solid middle class of the population, to bring untold misery to the workers, and to pave the way for the Nazi tyranny which now rules Germany and hopes to rule the world. The memory of that time has always remained with me as one of horror. I hope that the Government will continue to avoid the perils of inflation, because it is much easier to start the flood than to stem it. Inflation is a slippery slope upon which, once we have lost our footing, we have little chance of recovering our equilibrium. I have seen the effects of inflation too closely to forget, and I know that I am stating the truth. If honorable members opposite think that the dire results of inflation can be removed by ordinary administrative means they are far from the truth. The same thing applies to price control. Once prices begin to soar one has as much hope of checking their rise as of damming a mighty river in flood with a bank of mud. The experience I have had has proved to me that it cannot he done. Therefore, let us walk warily lest we bring this evil upon our country.

In the course of my remarks I have sought to emphasize two important facts. The first is that, under the present war conditions, it is impossible to raise the standard of living of the people. I believe that it is the ambition of every honorable member to improve living standards in Australia, but from the knowledge I have gained, both abroad and at home, I know that existing conditions will not allow us to fulfil that ambition in war conditions and that we shall be lucky if we maintain existing standards. It is of no use to increase wages, in terms of currency units if there are no consumption goods for the people to purchase. Inflation can occur in two ways. It can be caused by an excess of currency occurring concurrently with a static production of consumption goods, and it can be caused by a reduction of the output of consumption goods while the currency remains static. That is the second point that I have emphasized.

I conclude with an appeal for unity. All honorable members understand the value of unity and the difficulty of achieving it even inside parties. Many of us have been trying to bring about the formation of a national government; we have not yet abandoned hope of doing so. Only by the formation of a national government can we achieve the unity of purpose that is necessary for the successful prosecution of our war effort. No party government can hope to hold the confidence of the people. Only an allparty government can do that. We should also seek to unite the different classes of people in the nation. As a newcomer to Parliament, I have noticed a certain tone of bitterness in the speeches made by some honorable members opposite, a bitterness which I believe is due to suspicion of big business combines and other employers of labour. I have also noticed outside of Parliament a suspicion that the Labour party is trying to gain benefits from this war. Some of these suspicions are, I believe, well-founded in fact, but as a whole the fears behind them are grossly exaggerated. Can we not forget our personal and sectional prejudices and ambitions and remember only that we are Australians? One thing only is sure - we must sink or swim together.

Mr WARD:
East Sydney

.- I was opposed to the budget proposals in their original form, and I can see no reason why I should alter my attitude since the Prime Minister (Mr. Menzies) has indicated that a compromise has been reached. The crumbs that have been thrown to the Labour party in order to effect this compromise are so paltry and of so little consequence that they leave me cold. Like hundreds of thousands of my fellow-countrymen, I want to see this war fought to a successful conclusion, but I do not believe that that can be done should the Menzies Government remain in control and pursue its present policy. After examining the state of the defences of this country, at the outbreak of war and to-day, I have come to the conclusion that the surest way for the British Commonwealth of Nations to lose this fight is to allow governments similar in character to the Menzies Administration to continue in office. We have heard a great deal of loose talk about unity among the people, and among members of Parliament in particular, but it is impossible for the Labour party to agree with any policy likely to be put forward by the present Government. We have charged honorable members opposite with being the direct political representatives of big business monopolies, and we have proved our case. The honorable member for Maranoa (Mr. Baker), the honorable member for Kennedy (Mr. Riordan) and the honorable member for Herbert (Mr. Martens) have produced conclusive evidence, which the Government has not even attempted to refute, of the connexions between members of this Government and big business interests. The Government has made much of the phrase, “ our maximum war effort “. Why has it not marshalled the resources of the country and employed them at full capacity? It has control of both Houses of the Commonwealth Parliament and honorable members on this side of the House have not interfered in any way with its defence preparations. Ministers have announced with an air of pride that 200,000 men have been called to the colours and that approximately 80,000 have been set to work in the munitions factories. In spite of the sudden employment of that man-power there are still 40,000 unemployed men in New South Wales, and there must be more than 100,000 unemployed in all parts of the Commonwealth. Prior to the outbreak of war the Labour party challenged the accuracy of the unemployment statistics quoted by Ministers and their supporters. When we said that there were more than 200,000 unemployed men in Australia the Government quoted the Commonwealth Statistician to prove that we were wrong. But the fact that 100,000 men are still unemployed after 280.000 have been absorbed in the armed forces and munitions establishments shows conclusively that the unemployment figure prior to the outbreak of war must have been nearer to the 300,000 mark than to the 200,000 mark. Why are these men not in employment and why are some manufacturing organizations operating at full capacity, with their employees working three shifts a day every day of the week, whilst other establishments are allowed to remain practically idle? This shows conclusively that the Government has always endeavoured, where possible, to protect its political followers and direct business into their hands. The meaning implicit in the expression “ defence of the country “, when used by Labour members, is vastly different from what is meant by Government members. Honorable gentlemen opposite speak for the class that they represent in’ this Parliament, which has lived on the sweat and the labour of the workers. Their concern for the defence of this country is due, not to the desire to introduce a new order of society - which they advocate only when seeking the support of the workers - but to their determination to protect the privileges of their political supporters outside. If this country, in common with the other members of the British Commonwealth of Nations, were to lose this war, every member of the community would lose in some measure, but the material loss of the workers would be as nothing compared with the loss sustained by those gentlemen who to-day talk about giving the workers justice. I am satisfied that the only administration which can unify the people of this country behind a maximum war effort is a Labour administration, because it would not be tied to vested interests, and in making whatever provision was necessary would not worry about the effect on the profits of the Broken Hill Proprietary Company Limited, Australian Consolidated Industries, and General Motors-Holdens

Limited, but would ascertain exactly what was required in the interests of the nation and act accordingly.

Let us consider the compromise proposals. The Government skated around its intentions in regard to the control of financial policy. It is prepared to give a paltry increase to pensioners and wives of soldiers, and to make a small advance to the wheat farmers, but in respect of financial policy proposes only that a conference shall be held between members of the Australian .Advisory War Council, the Commonwealth Bank Board, and Treasury officials, to see what can be done. I tell those honorable members who believe that this conference will result in any alteration of policy, that its sole purpose is to delude those who desire such alterations and, by pretending that the Government intends to do something, prevent criticism of its programme and attacks upon it in Parliament.

The Labour party and the country have been invited to regard this as an “ all-in “ war. An “ all-in “ war is not possible without a government that is prepared to make the necessary provision for the defence of this country. What is the cost of defence? Figures have been quoted showing what the cost is likely to be to Australia, and the extent to which each individual may be affected. I do not claim to be an expert in such matters. So many experts have already spoken that they have left me in a complete maze. The ordinary man and woman, however, understands that war preparations which provided for the absorption of men, materials and equipment not now employed, would not impose any real burden on the community. Government members wish to continue the old borrowing policy which was followed in the last war. I have heard honorable members say that this country became indebted to an amount of £300,000,000 because of its participation in that war. Actually, the cost was much greater, because it included not only the loans that were raised but also the appropriations from Commonwealth revenues for the construction of war service homes, the provision of medical services to disabled men, and the payment of pensions to those who were disabled and to the dependants of those who lost their lives.

Let us consider what new money is provided by loans, apart from conversion or redemption loans. According to the latest figures that I have been able to secure, the Commonwealth has ion-owed up to date £915,000,000. The interest payments have amounted to £1,087,000,000, and we still owe £1,341,000,000. Evidently, those who lend to governments to carry on a war do not desire to be repaid; they are satisfied so long as the borrowers are able to make regular interest payments.

I shall endeavour to prove that this is a rich man’s government. There is much talk about equality of sacrifice. Members of the Labour party have heard mention of this on previous occasions, during the last war and in the depression years. The last war has now been left behind. Some honorable members may say, “What could happen in 1914-18 will not happen to-day”. Let us see whether it will happen, or is not already happening. When a few shillings are taken from the basicwage worker, he is deprived of food that he needs for himself and his family. It is said that the higher incomes are to be taxed at the rate of 14s. in the £1, which is claimed to be an enormous burden. I contend that the principal consideration is not what is taken, but what is left after the tax has been collected. Those with higher incomes are not suffering as the result of the war effort. Despite the fact that a proportion of their income will be taken from them by way of taxes, they will not be contributing to the war effort, because the war will be won not by the provision of money, but by materials and equipment provided by the labour of those who are usefully employed in their production. Those who have never worked for their income but have lived on the labour of others merely contribute a portion of what they receive in order to provide for the Government’s budgetary requirements, and still live in luxury and idleness. When provision was made for a national register to be taken, it was said that there would be a register of wealth as well as of man-power. Every one has wondered why the Government incurred the expense of compiling a register of wealth, because it- has not acted on the information it then obtained. In order to induce Labour members to give some measure of support to the proposal, the Government said that, if it became necessary to conscript labour or to require the workers to render service in defence of this country, it would see that wealth also played its part. It led the Opposition to believe that it would compel the wealthy to make some contribution to the cost of the defence of the nation. The Prime Minister attempted to belittle the amount that is to be taken by way of tax from those whose incomes are below £400 a year. The right honorable gentleman said that this would not represent 1 per cent, of the total income received by that group. Let us consider the matter of interest-free loans. I take it that a large amount has been provided in this form by persons who are not in a position to make contributions free of interest. The total amount of these loans is £5,100,000. That is only .58 per cent, of the national income for 1939-40, which was £863,000,000. The gifts contributed total the paltry sum of £585,000, or .07 per cent, of one year’s national income. In a few cases, persons not in affluent circumstances genuinely desire to lend to the Government, free of interest, a portion of their savings, but in the great majority of instances, those able to contribute in this way could easily make an absolute gift to the Government.

The war could be paid for, and social services could be increased, by taking the profit out of war; but the only members of this Parliament who are free to record their votes as their consciences dictate are the members of the Labour party. Honorable members opposite have first to consult the wishes of the employers’ organizations and representatives of private finance. If that were not so, those honorable members would probably pay closer attention than they now do to the debates in this Parliament. The Government has declared that it will prevent war profiteering, and the Minister for External Affairs (Sir Frederick Stewart) made a good deal of noise on the hustings about what he had done to prevent it. Practically all production is related to the war, in one way or another. The munitions annexes have been established by the Government mainly as show places, so that it can tell the people that its officers are carefully watching the cost of production, and preventing excess profits ; but, by way ‘ of illustration of what is happening, I would draw attention to the fact that if overalls have to be purchased for the employees in the annexes, the profits of firms such as the Myer Emporium Limited and David Jones Limited are not restricted. A great deal of the work required in connexion with defence is carried out, not in the annexes, but in the establishments of private contractors, with the result that much of the war expenditure swells the profits of the political friends of the Government.

I recall that the Minister for Trade and Customs (Mr. Harrison) attempted to smooth over my inquiries into the retirement of Mr. McCulloch who was Deputy Prices Commissioner in New South Wales. He remarked that this official had been relieved of his position because the Government of New South Wales had asked for his recall, so that he could be transferred to the position previously occupied by him. But the Government is not prepared to lay on the table the whole of the correspondence submitted to Mr. McCulloch, who had presented reports bringing under the notice of the Government certain cases of profiteering. During the last Parliament, I asked the Government whether it had received any reports from Mr. McCulloch, who, I understood, is a very competent officer. First the Government tried to evade the issue by saying that no reports had been received. Then it was compelled to admit that certain reports had come to hand, and had been referred to the Prices Commissioner. I further pressed the matter, and, when I asked what had been done with the reports received by Professor Copland, I was told that they had been sent to the Attorney-General’s Department for consideration. After a considerable time, I inquired of the Attorney-General what had been done regarding the matter. He replied that the reports had been considered and that a decision had been reached and conveyed to the Prices Commissioner. I desired to know why information on the matter had not been made available to members of the Opposition, and why a prosecution had not been launched against the profiteers concerned. How could the disclosure of such information assist the enemy? I suggest that the real reason for withholding it was that its release would not assist the friends of the Government. This Government is not anxious to prevent profiteering. If a small grocer were discovered charging Id. or ^d. over a fixed price for certain goods he would be prosecuted, but the Government is not prepared to prosecute the large combines and commercial houses which are exploiting the public to-day to a greater extent than ever before. I draw the attention of honorable members to the statement made by the Minister for External Affairs during the election campaign, that, when he occupied the position of Minister for Supply and Development, he was responsible for saving at least £500,000 by preventing profiteering. Under the National Security Act and the regulations promulgated under it, a person can be prosecuted on a charge, not only of having committed an offence, but also of having attempted to do so. If the Minister’s statement was correct, I desire to know why. the Government did not prosecute the profiteers.

Honorable members should recall the scandal over contracts for military boots. Much comment was heard in New South Wales concerning the poor quality of boots supplied to the military, naval and air forces. The Sydney Daily Telegraph took this matter up only after many thousands of pairs of boots had been thrown away by the troops marching from the Ingleburn camp to Bathurst. Some months before that, however, I had brought under the notice of this Parliament the fact that proper inspections were not carried out in connexion with the supply of footwear to the defence services. Mr. S. G. Gill was then chief boot inspector in New South Wales, a position which he had held for eleven years. He was a public servant of 28 years’ experience, a capable and honest nian. However, he offended some of the manufacturers by refusing to pass boots that were not up to specification. Suddenly, he was advised that he would be transferred from Sydney to Melbourne. He had not applied for the transfer, and was very surprised when he heard about it. He protested, and when he persisted in his objections, was informed that the Government was of the opinion that he was temperamentally unfitted for the position of chief inspector in New South Wales. Still he was not satisfied. He approached the present Minister for External Affairs (Sir Frederick Stewart) and the honorable member for Martin (Mr. McCall), and asked them to take up his case. They did so, but after they had proceeded some distance with their inquiry, they found that it was likely to hurt some of their friends, and so they dropped the matter. Then he came to me. I asked for the official files dealing with the subject. At first the Government would not give me access to them, but I persisted, and eventually they were made available. If any honorable member wishes to know what is in the files, I shall tell him. I found that Mr. Gill had been ordered to Melbourne after a depution of boot manufacturers, consisting of Mr. Goldstein, of the Rightwear Shoe Company; Mr. Mathews of Messrs. A. E. Mathews and Company; and Mr. Michaelis, of Messrs. McMurtries Limited, had waited on his superior officer. It is on record in the files that these men told Mr. Gill’s superior officer that unless he was removed from New South Wales their firms would not tender for any more government boot contracts. The Government did not want any noise to be made about the transfer, and offered to place Mr. Gill in a position of equal status, and to pay the cost of his transfer to Melbourne. At that time there was no vacancy for a chief boot inspector in Melbourne, but the Government, because it wished to meet the wishes of the boot manufacturers of New South Wales who wanted to rob the Government and the country, decided to create a position for him. Therefore, the man who was holding the position of chief boot inspector in Melbourne was transferred to another position, which had been created for him, and Mr. Gill, who was deemed temperamentally unsuited to be chief inspector in Sydney, became chief inspector in Melbourne, for which position, apparently, he was temperamentally fitted. In my opinion, there is something very shady and crooked about the whole business. Now let us see who became his successor in Sydney. The Government selected none other than Mr. Austin, who happens to be the brother of the managing director of the Austin Shoe Company, a government contractor. Is it necessary to go any further in our inquiries as to whether the Government is permitting profiteering? Let us recall what the honorable member for Parramatta said regarding certain boot contractors only a few weeks before. He named ten firms which, he said, had conspired in Melbourne to raise the price of boots supplied to the Government. They had conspired deliberately to rob the Government and the public, and among them were the firms of McMurtries, A. E. Mathews and the Right wear Shoe Company. It is quite clear just what kind of a game the Government is playing. Not only did it do its best to prevent this matter being exposed, but it used its powers under the censorship to prevent the facts being published in the newspapers. Is that the way to win Hie war? Is that using the censorship to prevent the enemy from obtaining information likely to be of use to him, or is it using the censorship to protect its political friends?

Now let us consider what happened in regard to the proposed War-time Profits Tax. The Treasurer has Stated that the measure to be introduced this session for the taxing of war-time profits is to be similar to that which was previously before Parliament. The Government has declared that every one must make equal sacrifices, that, no one shall be allowed to make profit out of the war. Then why all this talk about taxing war-time profits? Why not prevent the making of profits altogether, or if any are made, why not tax them 100 per cent., instead of taking only a proportion of the profit? I quote the following newspaper report in order to show what the capitalists think about the proposal : -

page 497

COMPANY TAX WELL RECEIVED

Mr. Spender’s definition of capital was generally well received by investors and executives of companies, particularly enterprises which, over a period of years, have built up substantial reserves from undistributed profits.

That shows clearly that the companies arc not really alarmed - at any rate, the large companies. Some of the smaller firms will be vitally affected. Let us see what happened only a little while ago in regard to the distribution of bonus shares. The Broken Hill Proprietary Company Limited issued 64 bonus shares for every 100 shares held by each shareholder. In this way £4,459,000 was distributed free of Commonwealth income tax. Every piece of legislation which the Government introduces for the ostensible purpose of preventing the exploitation, of the public is full of loopholes which furnish the Minister with an excuse to say that, under section so and so, a company is entitled to do what it has done. Some years ago, a royal commission was appointed to inquire into the operation of the income tax law, and, unlike most royal commissions, it brought in findings that were acceptable to all parties in this House. At least, the Government parties professed to find them acceptable, but that, I am convinced, was only because they did not have the courage to say otherwise. The commission found that there had been, over a period of years, large-scale tax evasions by certain companies. It recommended that early action be taken by the Government to amend the act so as to provide that, in assessing liability for tax, profits distributed as bonus shares should be taxed as profits in the same way as if they had been distributed as dividends. Mr. Casey, who was then Treasurer, introduced an amending bill to provide for this, and it should have had a speedy passage through Parliament, because there was no opposition to it. It was a Government measure, and the Opposition supported it. In the committee stage of the bill, however, Mr. Casey moved an amendment to provide that the act should not operate until the 31st December, 1934. It was then June of 1934. Thus the companies affected were given six months’ notice of the Government’s intention, and were provided with an opportunity to make their distributions of bonus shares without liability to pay tax. The Colonial Sugar Refining Company Limited, within a few weeks of the passing of this amendment, distributed £5,850,000 in bonus shares. That was the largest distribution of bonus shares in the history of the country. In 1939 Australian Consolidated Industries issued bonus shares amounting to £2,558,000. The distribution by General Motors-Holdens Limited amounted to about £1,000,000, and by British Imperial Chemicals Limited to a similar amount. That these distributions of bonus shares have taken place mainly in recent years shows that while the Government has been talking about preventing profits, these companies have been amassing great wealth. At the same time those who have been the workers of this country have been asked in their declining years to accept a paltry pension on the plea that the country could not afford more. The weekly payment to invalid and old-age pensioners is to be increased by ls. in a time of war, but the Government claims it could not afford to pay that amount earlier! Recently the honorable member for Batman (Mr. Brennan) reminded us that a former Treasurer had said, in referring to Defence Department expenditure - “The sky is the limit; the department can write its own cheque”. It is significant that these distributions of bonus shares should have taken place just when the Government was about to introduce legislation to impose a war-time tax on companies. That bill provided that on dividends above 8 per cent, there should be a rising scale of tax up to a limit of 60 per cent. What enabled these companies to anticipate the intentions of the Government, and distribute bonus shares to their shareholders? In Great Britain some time ago Mr. J. H. Thomas was dismissed from the cabinet because a leakage of information for which he was responsible enabled a number of private concerns to forestall action by the Government to their own advantage. Ho had to retire from public life. But in this country, when there was a leakage of information which enabled private companies to act to their own benefit, there was no retirement, of any member of the Government. Evidently, what is not allowed in Great Britain is permissible in Australia. I arn not astonished that business concerns know what the Commonwealth Government has ;in mind when I study the list of men whom the Government describes as its advisers, but whom I prefer to call the directors of the Government, because whatever they say is accepted by the Government. These so-called advisers include Mr. Essington Lewis, of the Broken Hill Proprietary Company Limited; Mr. Norman Myer, of the Myer Emporium Limited; Mr. Smith, of Australian Consolidated Industries Limited, and others who are in charge of big private enterprises. Let us look at the prices of the shares of some of the huge business undertakings in’ this country in order to see how the tax will affect them. Before the ex-Treasurer (Mr. Spender) introduced his budget shares in the Colonial Sugar Refining Company Limited were quoted at £51 12s. 6d., after the budget had been presented they were quoted at £52 12s. 6d. The shares of Felt and Textiles of Australia Limited which were 40s. 6d. before the ‘budget was introduced, were quoted at 42s. after its introduction. The corresponding figures for Drug Houses of Australia Limited were 25s. 10(1. and 26s. 4d. Those figures are illustrative of the general position and show conclusively that the investing public knew that the legislation to be introduced by the Government would not interfere with the profit-making capacity of these companies. According to Rydge’s Journal - Mr. Rydge is a member of the United Australia party, and was n candidate for that party at the last election - the Myer Emporium Limited, of which Mr. Norman Myer is managing director, “did well during the Great War and current reports indicate that it is doing well again “. In 1939 David Jones Limited made a profit of £1S2,561 which was an increase of £5,874 over the profits for the preceding year. That company’s profits in 1940 amounted to £217,053, an increase of £34,492 over the profit for the preceding year, or over 23 per cent, on its ordinary capital. Farmers Limited, Sydney, made a profit of £106.659 in’ 1939, ‘and of £112,331 in 1940. A similar position is revealed in the case of MacDowell’s Limited. The Myer Emporium Limited made a. profit of £35,080 in 1939, but in 1940, when the country was at war, its profits amounted to £322,260 - an enormous increase. Why are these companies allowed to make unlimited profits, when other companies which are engaged in the manufacture of munitions in annexes, are working under a system of limited profits? The annual report of David Jones Limited stated -

The board’s dividend policy is not a generous one, and the ordinary rate has been kept down to :i regular 10 pur cent, for the past seven years. By this careful handling of the funds, shareholders’ interests since 1934 have been strengthened by an amount equal to 10s. 9d. for every £1 of ordinary capital now on the register. Visible reserves now total £917,703, equal to £2 2s. 8d. for every £1 of ordinary share capital.

If the Government wants money to carry on the war, why does it not take action against those companies which have enormous reserves that are not being used? These reserves should be tapped, even if it means a reduction of their exorbitant profits and of the huge dividends paid to their shareholders. It would be well to examine the interlocking of these monopolies, with a view to ascertaining the reason for the influence that they exercise over the Government. According to the Sydney Sun of the 13th March, 1940-

Australian Iron and Steel Limited will pay two mid a half yen rs dividends on the preference shares on the 1st May next which will clear all preference arrears. As two and n half years dividends were paid earlier in the year, thu distribution of the preference shares for thu full veur will he equal to 29.00 per cent. Record profits were disclosed of £353,504 for the year ended 30th November hist’. The profits were struck after £550,772 had been provided for depreciation. Operations were on a much larger scale during the year and plant additions and improvements were continued. Additions to plant during the year involved a capital outlay of £347,295. No new capital was introduced mid although creditors balances increased by £897,445. the bank overdraft was reduced by £907,249. The expansion that occurred had therefore been chiefly financed from the company’s own resources by the retention of profits in the business.

After making the year’s appropriations, total reserves mid undivided profits amounted to £585,400. the preference shares fully paid to £1 being backed by net tangible assets of £fi 5s. 8d. per share

The expansion that occurred had, therefore, been chiefly financed from the company’s own resources by the retention of profits in the business. The huge monopolies employ many devices in order to prevent the public from, learning the real extent of their profits. For example, they use profits to finance the extension of their plant, have a revaluation of their premises, and make further issues of bonus shares. After Australian Iron and Steel Limited made the year’s appropriations, its total reserves and undivided profits amounted to £5.85,400, the preference shares fully paid to £1 being backed by net tangible assets of £6 5s. 8d. a share.

In 1937, General Motors-Holdens Limited, with a capital of £1,500,000, made a profit which exceeded £1,000,000. The company did not distribute dividends, but decided that the profits should be taken in bonus shares. In the following year, the company made a profit of £851,000, and paid a dividend of 55 per cent, on the enlarged capital. [Leave to continue given.] Sir Colin Fraser, who is one of the advisers to the Government, is a. director of Electrolytic Zinc Company of Australasia Limited, which made a profit of £448,000, an increase of £43,000 over the previous year, after allowing for depreciation of £100,000. The Government contends that big companies will be compelled to pay heavy taxes: but these business concerns provide out of their profits for the payment of taxes. To illustrate how Electrolytic Zinc Company of Australasia Limited intend to meet the increased taxation proposed in the budget, I point out that its provision for taxes this year will be £163,000, an increase of £50,7S4 compared with the preceding year.

The history of the Broken Hill Proprietary Company Limited is well known to honorable members. When this enterprise was formed in 1885, its capital was £320,000. To-day, it is set down at £11,410,868, which is composed principally of watered stock issued over a period of years, in which the company has made cash distributions to shareholders in addition to enormous distributions of bonus shares. As a result of the war, the Broken Hill Proprietary Company Limited is now making enhanced profits. Why should not its profitearning capacity be limited ? The Broken Hill Proprietary Company Limited owns all the ordinary shares in Australian Iron and Steel Limited ; two-thirds of the shares in the Broken Hill Proprietary Collieries Limited; four-fifths of the shares in the Commonwealth Steel Company Limited ; 99.9 per cent, of the shares in Rylands Brothers Australia Proprie tary Limited; and almost half of the shares in Stewarts and Lloyds (Australia) Proprietary Limited. In addition, it controls Broken Hill Proprietary ByProducts Limited, Australian Wire Rope Works Proprietary Limited, Bulli.vants Australian Company Proprietary Limited, Commonwealth Structural Steel (Western Australia) and Lysaght Brothers and) Company Limited. The Broken Hill Proprietary Company Limited holds 112,908 shares in Imperial Chemical Industries of Australia and New Zealand Limited and has interests in the Titan Wire and Nail Company, the Commonwealth Rolling Mills Limited, the Commonwealth Aircraft Corporation, the Structural Engineering Company of Western Australia, and British Tube Mills. Through its directors, it is linked with the National Bank of Australasia Limited, the Australian Mutual Provident Society, Dalgety and Company Limited, Howard Smith Limited, the Adelaide Steamship Company, Goldsbrough Mort and Company Limited, Caledonian Collieries Limited, Elder Smith and Company Limited, Anthony Hordern and Sons Limited, and the Trustees Executors and Agency Company Limited. I believe that there are many others. That list shows the enormous ramifications of this great combine, and how it has been able to spread its tentacles over the whole of the nation. If the Government sincerely desires to satisfy the workers that this wealthy concern “will be compelled to make its contribution to the war effort, it should take control of the enterprise, in the interests of the nation, to provide for national defence and d e v el opm en t al r requiremements .

An examination of the names of the directors of the Broken Hill Proprietary Company Limited is most interesting. Mr. Harold G. Darling, the chairman, is a director of Australian Iron and Steel Limited, Imperial Chemical Industries (Australia and New Zealand) Limited and the Commonwealth Aircraft Corporation. The concerns of which he is a director have an aggregate capital of £27,800,000. Is there any need to look further for the men who will sacrifice most if Australia is defeated? Sir Lennon Raws is a director of Imperial Chemical Industries (Australia and New Zealand) Limited, Howard Smith Limited, and a number of other undertakings, with a total capital of £26,S00,000. Mr. R. O. Blackford is associated with the Melbourne board of Dalgety and Company Limited. Sir Walter Duncan is a director of Goldsbrough Mort and Company Limited, and a number of other firms. The late H. R. Lysaght was a director of John Lysaght (Australia) Limited, Anthony Hordern and Sons Limited, and Australian Iron and Steel Limited. When he died last June, his estate was valued for probate purposes at £107,000. Probably that sum did not represent the value of his total estate, because the wealthy distribute their capital in order to evade the payment of large sums of money in estate duties. When we read that an estate has been declared for probate purposes at £107,000, we can take it for. granted that the actual fortune of the deceased greatly exceeded that sum. Unfortunately, the Government has taken no action to prevent such practices.

When we learn the identity of the shareholders of the Broken Hill Proprietary Company Limited, we can understand why the newspapers always protect this huge combine and invariably refrain from criticizing its activities. Among the shareholders on the Australian register are the members of the Fairfax family, who own the Sydney Morning Herald, the Syme family, owners of the Melbourne Age, the Baillieu family, of Melbourne, the Darling family, the Essington Lewis family, Howard Smith Limited, the Australian Foundation Investment Trust, Elder Smith and Company Limited, the Myer Investment Proprietary Limited, the Perpetual Trustee Company, and the Meares family. The Australian Foundation Investment Trust is one of the companies of which, I understand, the Prime Minister was previously a director, and in which he held shares. The Minister for Munitions (Senator McBride) was a director of Elder Smith and Company Limited and, I understand, was financially interested in that firm. They are the persons who express sympathy with the invalid and old-age pensioners, and state glibly that they would like, if it were possible, to do more to improve the lot of that unfortunate section of the community. Actually, they are concerned only with making the workers pay dearly for the war. As I have often stated, the Labour party urges the adequate defence of Australia, but considers that such defence should not mean the continuation of the wretched state of affairs that has, for many years, meant the impoverishment of the working class. Australia should be protected for the workers, but they demand a “new order”. In my opinion, they will never get it from the Government, which represents the forces of reaction and conservatism, and which does not want the people to enjoy a proper standard of living. It merely talks about it. Although for years the Government has been talking about a housing scheme, the workers’ homes in the principal cities, remain a disgrace to any civilized community. While children are suffering from malnutrition the Government talks about inflation and deflation, and the need to divert the money that the workers require in order to buy food to meet war requirements. When a few shillings are taken off a worker’s wages there is less bread on his table, in spite of the fact that we have more wheat than we know what to do with. The same applies to butter and to all other food necessaries.

Honorable members opposite gibe at the Opposition when it seeks improved conditions for returned soldiers. After this war they will probably tell us that, owing to the enormous financial burden cast, upon the country by the war, they cannot do for the soldiers the things that they are now promising to do for them. Men were robbed after the last war and are still being robbed. To illustrate how the returned soldiers from the last war are being robbed, I cite the case of one man. He is suffering from the following disabilities - neurasthenia, urticaria, injury to right leg, fractured nose, right femoral hernia, right inguinal hernia, all of which are accepted as being due to war service, and neuritis in the right arm, defective vision, glycosuria, emphyroma pulmonary fibrosis, spondylitis, which are not regarded as being due to such service. This returned soldier has a pension of 12s. 6d. a week. With all those ailments he would be incapable of doing any work. Yet when he applied for a service pension, which is granted only in cases of total incapacity, his application was rejected on the grounds that he was not totally incapacitated. I do not know what other disability he could be suffering from in order to render him totally incapacitated. There are many, other such cases. Similar harshness characterizes the administration of the Invalid and Oldage Pensions Act.

The Minister for Trade and Customs (Mr. Harrison) told honorable members that the Government was taking action to ensure that the price of beer was not increased in excess of the additional excise. In New South Wales it has been customary for public-houses to serve beer in S-oz., 12-oz., and 20-oz. glasses, whereas in Victoria half-pint glasses are the largest served, there being no pint measures. Either the Prime Minister or the Minister for Trade and Customs said that when the Prices Commissioner agreed to allow an increase of Id. a halfpint glass of beer, he did so to enable the publicans to recoup losses on pints. But in Victoria pint glasses are not used, and the increase to 7d. of the price of a halfpint of beer in Victoria will give the publicans an additional return of ls. 4d. a gallon as against the increased excise of 9d. a gallon. I ask the Minister for Trade and Customs to explain why this has been permitted. This instance proves that eventually all increased taxes will be passed on to the workers. It also shows how members of the Government protect their class. The Prices Commissioner, Professor Copland, does his job well in that respect. The information just given was supplied to me. In Victoria, Scotch whisky was lOd. a. nip with soda free, and in New South Wales lOd. with 2d. extra for soda. The Victorian publicans applied for permission to charge for the soda. Many consumers in Victoria say that glasses served in the hotels are not of the size that they are claimed to be, but the beer drinker is expected to pay for any deficiency in the price charged to the whisky drinker. Professor Copland refused the application. Mr. Baillieu, a friend of the Government and an admitted friend of the Prime Minister, is a director of Carlton and United Breweries.

He is one gentleman who influenced the price-fixing staff through the Government.

The Minister for External Affairs (Sir Frederick Stewart) has made frequent reference in this Parliament to profiteering. During the election campaign in the Parramatta electorate, an advertisement headed “Military Boot Facts “ was published in order to strengthen the Minister’s arguments against his political opponents. [Further leave to continue given. When the advertisement was published why did not the honorable gentleman tell his friend, Mr. McEvoy, to publish his own name and not to use the trade name of Fostars Shoes Proprietary Limited in order to delude the public and members of Parliament?

There has been a lot of talk about monetary reform and extension of credit, but everybody knows that this Government will not use the facilities of the Commonwealth Bank, not only for the war effort, but also to assist primary industry. One million pounds is a paltry amount to give to drought-stricken farmers. The Government could give them assistance without involving this country in any additional burden by empowering the Commonwealth Bank to take over their mortgages at a reduced rate of interest, but its supporters will not allow it to do so. I heard the honorable member for Wimmera (Mr. Wilson) ask for the appointment of a royal commission. Royal commissions occasionally provide the country with some interesting information and valuable data, but that is as much as can be expected with an unfavorable government in power. Some years ago a royal commission inquired into the monetary and banking systems. The Government which appointed it did not want it appointed, but it had to yield to public demand. I charge that Government with having been a party to the “ doctoring “ of the evidence at that inquiry. Honorable gentlemen must remember how I came into possession of proof that that Government was “ fixing “ the evidence. I shall refresh honorable members’ minds in regard to the incident. It will be remembered that Mr. Casey, who was Treasurer at the time, had a secretary who, unfortunately for Mr. Casey, had the same name as myself. The royal commission was sitting and Dr. Wilson, the Commonwealth Statistician, was to give evidence before it during the following week. Dr. Wilson gave an envelope to a special messenger with explicit instructions not to hand it to anybody but Mr. Ward. Unfortunately for Mr. Casey the messenger was not told which Mr. Ward, and when he arrived at Parliament House, instead of taking the envelope to Mr. Casey’s secretary, he asked for me. I was speaking in the House at the time, but the then honorable member for Reid (Mr. Gander) offered to take the envelope and hand it to me when I had finished my speech. The messenger thanked him, but said that he had explicit instructions to hand it to Mr. Ward personally. When I concluded my speech the messenger handed the envelope to me. When I looked at it I saw that it was addressed to the Treasurer and passed it back. The messenger insisted that I should take it. He said : “ Take no notice of the name. My instructions are that it must bc given to you personally.” I then believed that the envelope and its contents wore meant for me. I opened the envelope and read every word of the contents. I shall tell honorable members why I did so. If, after having read sufficient to have recognized it as being a communication of a private nature from one individual to another, I would have immediately resealed it and taken steps to see that it reached the proper person. I found, however, that it contained a covering letter and a list of questions that the Commonwealth Statistician was to be asked and the answers which he proposed to give when he appeared before the royal commission during the following week. The covering letter was as follows: -

Enclosed herewith is a copy of my proposed evidence to be given before the royal commission next week. T have also forwarded a copy to Mr. Sheehan.

Honorable members will recall that, at that time, Mr. Sheehan was Secretary of the Treasury; ho is now the Governor of the Commonwealth Bank. The letter continued - >fo doubt Mr. Sheehan will blue pencil much of it.

That letter plainly indicated that the then Treasurer, Mr. Casey, and the then Secretary of the Treasury, Mr.

Sheehan, were to edit the evidence to be given before the royal commission by Dr. Wilson, and shows conclusively what a. joke some of these royal commissions are. What happened? When the royal commission had concluded its hearings and presented its report it was found that some of its recommendations were not favorable to the Government, and, because of that, the Commission was forgotten. The Government refused to introduce legislation to implement its findings. Mr. Casey immediately ran away and had secret meetings with representatives of the private banks. This Parliament was never informed as to what was discussed at those meetings or what decisions were reached. In the Sydney Morning Herald of the 21st March, 1938, the following paragraph appeared : -

Tin; Federal Treasurer, Mr. Casey, said last night that thu meeting of bankers over which ho presided in Sydney on Tuesday and yesterday hud been very useful. There had been a very frank exchange of views, but obviously he could not divulge the nature of the discussions. The conference was arranged to discuss the report and recommendations of the Royal Commission on Banking with the object of assisting the Federal Ministry in framing amending banking legislation.

On the 7th April the same journal reported that -

Thu Federal Cabinet has agreed to compromise on certain of the recommendations of the Royal Commission on Banking to meet objections by the private banks to the form of the new banking bill.

Is it any wonder that the people have become disgusted at what we are pleased to call democratic government in this country ? There Iras never been democratic government in this country, and there never will be while vested interests are able to send their political representatives here, not to record their votes in accordance with the dictates of their consciences, but merely in accordance with the wishes of those who sent them here to do their bidding. IVo respectable or decent Labour man can accept this budget. It is a rich man’s budget. It can only add to the sufferings of the poor, and if its proposals are agreed to they will continue to suffer for generation after generation. The only way to end the sufferings of the poor is to return a government that will give the people a new order in this country? Sooner or later Labour will have power in this Parliament - not power as we have understood it in the past, power merely to sit in Parliament and to send copies of our speeches out to our electorates, but power to govern as we think best in the interests of the people, unfettered by present restricted constitutional powers. The Constitution must be amended because it does not meet the circumstances which exist to-day. The elected representatives of the people should have greater freedom to give effect to the people’s will. Justice will never be dispensed by governments formed by the parties opposed to Labour in this House. Only recently the Prime Minister, gibing honorable members on this side of the chamber, said : “ It is all very well for the Opposition to put forward proposals irrespective of what millions they may cost. They have not the responsibility of finding the money, so they may make all sorts of proposals.” Let me turn, his argument against him. The right honorable gentleman has told the invalid and old-age pensioners that today, compared with 1925, fi is worth 21s. 7d. Has he ever tried to live on 21s. 7d. a week? In my electorate a room in a slum area costs 8s. to 10s. a week. Out of the remaining 10s. or lis. the pensioner has to provide himself with 21 meals and such medicine and clothing as he needs. I appeal to honorable members opposite to be reasonable. How can they ever expect the pensioners to be satisfied merely because the Prime Minister says that they are ls. 7d. a week better off than they were in 1925? We are not satisfied, and the people are not satisfied, with such specious statements. We want something more and unless we get it the Government will have a very unhappy time in the months and years that lie ahead. My only regret is that we have been deprived of the opportunity to vote on the budget. It is only because of the unwillingness of the majority of honorable members of the Opposition to throw the country into the turmoil of another general election that this Government remains in office to-day. Profiteering is rampant in every direction; inferior quality goods are supplied to our armed forces; and yet the Government does nothing about it. How can this country put forward an effective defence effort unless it has a Government that will wipe out these sorry practices? Such a government will be a Labour government, and I hope that the day is not far distant when the people will return Labour members in sufficient numbers to enable a Labour government to be formed, and thus ensure that this Parliament will govern in the interests, not of an influential wealthy minority, but in the interests of the whole of the people.

Progress reported.

page 504

HANSARD APPOINTMENTS

Mr SPEAKER (Hon W M Nairn:
PERTH, WESTERN AUSTRALIA

– I have to announce that, consequent upon the retirement of Mr. J. S. Weatherston, Mr. G. H. Romans has been appointed Principal Parliamentary Reporter, and Mr. A. P. Adams Acting Second Reporter.

page 504

ADJOURNMENT

Mr. E. J. Hogan and Strikers: Treatment of Military Prisoner: Munitions Manufacture in New South Wales.

Motion (by Mr. Harrison) proposed -

That the House do now adjourn.

Mr RANKIN:
Bendigo

.- Honorable members will recall that this afternoon the honorable member for Bulla rat (Mr. Pollard) offered what he termed an apology for having made an inaccurate statement in which he attacked Mr. E. J. Hogan, Minister for Agriculture in Victoria.

Mr Pollard:

– I said that it was a correction.

Mr RANKIN:

– To-day, I received the following telegram from Mr. Hogan : -

Pollard’s remarks in House as reported to-day’s Age that Mr. Hogan had himself crashed into polities through fame he achieved in strikes during last war. This is absolutely false. I entered Parliament in February, 1913, eighteen months before last war started. I neither instigated, led orwas in any way connected with any strike during last war. Please make this known in Parliament.

As the honorable member for Ballarat must have known that Mr. Hogan was elected to the Parliament of Victoria at least eighteen months before the commencement of the last war, his attack was most unfair and unjust. In view of the inaccuracy of his statement, he should have been prepared to apologize unreservedly, but, on the contrary, he took advantage of your consideration towards him, Mr. Speaker, to make a further attack upon Mr. Hogan, who has no opportunity to reply to him. He also embarrassed his leader, because I am sure that when the Leader of the Opposition (Mr. Curtin) attempted to defend the honorable member, he had no knowledge of the statement which the latter was about to make. Ihope that in the future no member, unless he is sure of his facts, will attack any man who is not in a position to reply.

Mr BLACKBURN:
Bourke

.- I desire to raise a matter which I deem to be of very great importance. I have here a letter signed by 36 soldiers now in camp at Seymour. It is as follows: -

We, the undersigned, desire to lodge a protest against the sentence of one of our unit. For being A.W.L. for six hours he was sentenced to solitary confinement in a room no larger than 7 feet square, for8 days. Light, reading matter, tobacco and conversation being strictly forbidden. The room is ventilated solely by a broken window pane. The room is corrugated iron and the temperature isnearing the century mark, so conditions could hardly be worse. While the prisoner has been convicted and fined twice before for similar offences, the punishment conferred is little short of Nazi concentration camp methods.

Hoping that, as the prisoner is a member of your constituency, you could do something in the matter and so perhaps stop anything further in this direction.

My correspondents do not contend that this man should not be punished, but that the conditions under which he is being punished deserve condemnation. I know a number of the men who signed this letter, and I believe that they would not make any statement that was not true. Later, I shall give to the Minister for the Army (Mr. Spender) the name of the man involved. I ask the Minister to take appropriate action in the matter. On several occasions complaints have been made to me concerning conditions in military camps and other places used by the Army, but I have not raised such matters in this House. However, I consider this particular incident to be of sufficient importance to warrant my bringing it under the notice of honorable members. The conditions under which this man is being imprisoned are aptly likened by my correspondents to those of a Nazi concentration camp. I hope that the Government will remedy such conditions.

Mr MORGAN:
Reid

.- I wish to complain of the Government’s discriminatory treatment of New South Wales in relation to the munitions industry. Immediately after my election to this Parliament, a number of my constituents, who were desirous of applying for employment in the munitions industry, sought my advice on the subject. I expected that an office, or bureau, existed in New South Wales to handle such matters, but I was astounded to find that all such applications had to be addressed to an office in Melbourne. I directed the attention of the persons concerned to this fact, and they forwarded their applications to Melbourne. I made a special trip to that city in order to interview the Minister for Labour and National Service (Mr. Holt) on the matter,but when I found that I could not see him, I discussed the subject with his secretary. Subsequently I forwarded the following letter to the Minister: -

Dear Mr. Holt,

Last week I wrote you regarding the matter of employment of certain workers, including a constituent of mine who is a skilled worker and desires employment in the munitions industry. Since then I have learned that some two months ago the Purcell Engineering Company of Auburn, Sydney, which is carrying on business in my electorate, answered an inquiry from the Department of Munitions indicating it required 95 skilled workers immediately for work in the war industry, but the company has heard nothing further from the department.

It seems to me to be an anomalous position, especially in view of the urgentwar situation, that men should be looking for work through the department while the industry urgently requires workers. There appears to be a lack of co-ordination in this regard, which I trust your appointment will now overcome as well as help expedite the engagement of men and relieve the unemployment position which is still acute in my State.

I understand that skilled workers from other States have to apply through the Melbourne (Head) Office of the Munitions Department. This, to my mind, is an unwieldly procedure and necessarily causes delay. Perhaps this could be overcome by the delegation of the handling of such applications to an officer of the department in each capital city.

I hope to call on you to-day to discuss this matter but I should be glad if you would kindly give it your consideration, and I trust that the Munitions Department will so distribute the war contracts to help alleviate unemployment in the individual States. There is also an impression that New South Wales is not receiving its full share of the war work.

Later, I received a formal acknowledgment of my letter from the Minister, who subsequently informed me that applications of this kind should be made to a box number at the General Post Office, Sydney. The point I make is that, although the war commenced fifteen months ago, steps have only now been taken to set up a bureau in New South Wales to handle applications for employment in the munitions industry in that State. To-day I received the following letter from the Minister : -

Dear Mr. Morgan,

I refer to the question that you asked me in the House on Tuesday, 3rd December, 1940, relative to the name of the person handling employment in the munitions industry in New South Wales.

I have made inquiries in this connexion, and I am advised that the officer appointed to control the special division set up by the Area Controller of Labour in New South Wales to undertake this work is Mr. J. Hamilton, of 132 George-street, Circular Quay, Sydney. Any applications for positions in munitions factories may be made direct to him. I may add for your information that I will take an early opportunity of ascertaining whether this system is giving every satisfaction.

No doubt the Minister is doing his best, but the Government has acted very slowly in regard to this matter.

I wish now to refer to the lack of consideration to the claims of the Purcell Engineering Company Proprietary Limited, which is one of the most important machine-tool manufacturing enterprises of New South Wales. Three months ago this firm informed the Department of Munitions that it required the services of 95 skilled workers, but it received no reply to its representations.

Mr MORGAN:

– I think fitters and turners were chiefly required. It is deplorable that no response was made by the department to the firm’s request. On the 1st November last I wrote to Colonel Thorpe, Director of Machine Tools, Department of Munitions, Melbourne, in the following terms : -

Dear Colonel Thorpe,

In the interests of my constituents, I am concerned at what would appear on the face of things to be lack of support to the Demco

Machinery Company Proprietary Limited and the Purcell Engineering Company Proprietary Limited, which have their works established in my electorate. In particular, I desire to bring to your notice the following matters, namely: -

The department has declined permission for the export of Australian-built lathes of the “Visby” and “Vanguard” types; at the same time the department fails to give orders for the supply of such lathes locally. The granting of such licences would mean the employment of 95 skilled workers. On the other hand, if the department desires to give orders for the supply of the lathes, the company could turn out 30 per month on its present programme, and could increase the output to 40-50 provided men are available.

Incidentally, I am informed that about two mouths ago the department wired the company to ascertain how many skilled men were required, and it was notified that 95 men were needed to work two shifts. Nothing of this has since been heard by the company, despite the fact that the men are urgently needed and the industry is engaged on war work.

Another aspect, the company has had two Pitler automatic screw machines in stock for about two years and desire to export same, but the licence was refused. As the disposal of these machines would bring in about £2,000 extra capital which would be applied towards the manufacturing of tools required in the war industry, it is hard to understand the decision not to grant a licence for export. In view of the fact that the company has been manufacturing lathes for about 25 years, and is an established concern, it would not appear to be receiving just treatment, especially as other concerns not previously established are, I understand, receiving substantial orders from the department.

The whole question of what would appear to be preferential treatment in regard to the war contracts is one which is giving concern both to myself and other New South Wales members, and before bringing the matter up in Parliament I have decided to make a special trip to Melbourne to go into the position with your department in order to get its point of view.

J will therefore call upon you early next week, and I am advising you beforehand, as a matter of courtesy, of the general nature of my visit.

I hope that proper regard will be paid to the case that I am submitting in support of the placing of orders with these firms in New South Wales which are capable of supplying these much-needed machine tools. Undoubtedly an adequate supply of machine tools is the very foundation of a successful munitions manufacturing programme. In this connexion I direct attention to the following extract from an article that appeared in the Australasian Manufacturer on the 23rd March last-

In our opinion the Government control of machine tools is now to be forced on us because of the narrow-minded selfish policy of some manufacturers who have always persisted in opposing freer import of machinery, by Australian machinery merchants, of noncompetitive types to their own locally made types and by claiming that their own were substitutes or competitive to the imported.

Even the machinery merchants themselves failed when the opportunity arose to form a united front to request reasonable classification of the tariff to encourage freer import of such valuable capital plant as machine tools - especially high-grade lathes, tool grinders, &c, and machines which are not classified in the tariff automatically come under the high rate of duty which only keeps them out of the country.

The fairest way out of the chaos is to establish a bounty for all local manufacturers of machine tools and allow all metal working machine tools to be imported into the country at a flat rate of duty, based on weight for simplicity, which is adopted by many other countries of the British Empire - and make the duty sufficient to pay for the possible demands to be made on the bounty funds and also sufficient to bring in a revenue to the country - for instance, 10 per cent. British and 20 per cent. foreign would be a good suggestion. This would enable the country’s engineering industry to become most efficient and enable the widest range of machinery to be available to the trade - and would be the greatest boom to Australia since federation.

Machine tools mean more to Australia for defence purposes than “ Gold in the bank “.

In view of the fact that the Minister for Supply and Development (Senator McBride) recently announced that orders to the value of £2,000,000 had been placed by his department for the supply of machines and tools, it is extraordinary that the Purcell Engineering Company should have been treated with such scant consideration. It was only after my personal representations that the firm received any orders.

The tariff policy of successive antiLabour governments has been responsible, to a large degree, for the present unsatisfactory position of Australia in respect of the supply of machine tools. I understand that substantial orders for these necessities have been placed with McPherson’s Proprietary Limited, Melbourne, or its subsidiaries, of which Colonel Thorpe is a director. This gentleman may be thoroughly competent, but, in my opinion, it is highly undesirable that he should retain his directorship of McPherson’s Proprietary

Limited now that he has been appointed Director of Machine Tools in the Department of Munitions. So long as he holds this office, and remains a director of that firm, it is likely that a discriminatory attitude will be displayed against the machine-tool making firms of New South Wales.

On the 2nd December, 1940, I received the following letter from the Demco Machinery Company Proprietary Limited, of Redfern, Sydney : -

Dear Mr. Morgan,

We have pleasure in advising you that we have received an order through our Melbourne office for ten Standard Model “ Visby “ Lathes, and also a further ten of a special model. We enclose a copy of our reply to our Melbourne office regarding the second order for ten, which we want altered now to the same type as the first ordered because it would cause delay in production.

You will understand that in the absence of government orders we had to start into production of a certain model lathe to try and help in the war effort, after submitting several proposals to the department.

Now it has taken them over three months to make up their minds to give us an initial order, and in order to give them the delivery they require, we cannot stop our production on the first model in order to carry out profitably the order for the second model. It will not make any difference to their requirements because either model can be used for travelling transport workshops as each travelling transport workshop has its own electric power and generator from which to drive the electric motor, and there will be a big saving in price to the department by ordering twenty of the first model.

We are deeply grateful for this first initial order and we thank you for your interest in the matter.

We have export orders for our “ Visby “ lathes,5/8-i n. turret lathes, and plain milling machines, to be shipped to J. S. De Smit and Company, of Bandoeng, Java. Also, we have orders from the East Asiatic Company to be shipped to Calcutta and Singapore for similar machines. We have also an order for eight “ Visby “ lathes to be shipped to Malfroy and Company, of New Zealand, and orders from Tozer, Kemsley and Millbourne, on account of D. Drury and Company, of Johannesburg, to ship our5/8-in. turret lathe and “Visby” lathes.

We also have offers from B. Elliot and Company, of London, for twenty machines, but up to the present we havebeen refused export licences for these machines.

If we are able to get licences to export our surplus over local requirements, it will enable us to put fresh and larger quantities through our plant to make a profit on these machines. Dp to the present, we have only been able to got small orders from the Ministry of Munitions for two lots of ten, whereas firms of quarter our capacity have received orders for hundreds of machines of the one type.

Our production of “ Visby “ lathes will be 30 to 40 per month and, therefore, as the Munitions Department are not requiring our full output, the value of export licences for the surplus must be apparent to you.

Thanking you for the interest you have taken in the matter.

This subject is so important that it merits the most earnest consideration of the Government. I urge that further orders should be placed, without delay, with the machine-tool manufacturing firms of New South Wales, which are capable of supplying the requirements of the Government. I have been given to understand that thousands of machines of certain types that are needed can be manufactured in New South Wales, and there seems to be no reason why orders should not be placed immediately for this equipment. It is beyond my imagination why the Government should not only decline to place these orders, but should even go to the length of preventing certain firms in New South Wales from exporting their products to other parts of the British Empire where machine tools are also required for the manufacture of munitions.

I trust that immediate attention will be given to this subject, not only by the Ministry, but also by the Australian Advisory War Council.

Question resolved in the affirmative.

page 507

PAPERS

The following papers were pre sented : -

Lands Acquisition Act - Land acquired for Defence purposes - Elizabeth Bay, New South Wales.

National Security Act - National Security ( General ) Regulations - Orders - Inventions and designs (82).

Northern Territory Acceptance Act and Northern Territory (Administration) Act - Crown Lands Ordinance - Reasons for resumption of portion of reservation of certain lands in the Northern Territory.

River Murray Waters Act - River Murray Commission - Report for year 1039-40.

Science and Industry Research Act - Fourteenth Annual Report of Council for year 1930-40.

Seat of Government Acceptance Act and Seat of Government (Administration) Act - Ordinance of 1940 - No. 21 - Police Superannuation (No. 2).

page 508

ANSWERS TO QUESTION’S

The following answers to questions were circulated: -

Department of External Affairs : Remuneration and Allowances of Officers

Willhe furnish a list of the names of the officers of his department, their rates of pay, the rate of expenses allowed, and the total expenses collected by each officer, during the past twelve months?

Commonwealth Bank - Staff Appointments

Will he give consideration to the substitution of the competitive examination for the existing system of making first appointments to the Commonwealth Bank by managers’ recommendation ?

Wheat: Purchase by Japan.

  1. Did the Australian Wheat Board sell wheat from No. 1 Pool to a Japanese buyer?
  2. If so, what quantity was sold, and at what price?
  3. If this transaction did take place, what terms for finance were agreed to, and was the Commonwealth Bank concerned in it as a finance agent?
  1. Yes. 2 and 3. 33,000 tons. It is not the practice to publish the details of individual transactions.

Electoral Rolls

I am now in a position to furnish him with the following information: -

A joint roll is maintained in New South Wales for Commonwealth and State purposes. Since the last State election in this State there has been a re-distribution of the State electorates involving an extensive alteration of boundaries not only of the electoral districts but also of the electoral subdivisions. A complete reprint of the rolls in New South Wales adjusted to conform to the new electoral district and subdivision boundaries is therefore essential prior to the next State elections. These elections are due about May or June, 194.1, and in the circumstances it is anticipated that at the request of the New South Wales State authorities the rolls for that State will be wholly reprinted on the basis of the revised subdivision boundaries within the next few months.

House adjourned at 11.19 p.m.

Cite as: Australia, House of Representatives, Debates, 5 December 1940, viewed 22 October 2017, <http://historichansard.net/hofreps/1940/19401205_reps_16_165/>.

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