18th Parliament · 1st Session
Mr. SPEAKER (Hon. J. S. Rosevear) took the chair at 10.30 a.m., and read prayers.
Petitions in relation to banking in Australia were presented as follows: -
By Mr. ARCHIE CAMERON, from certain electors of -South Australia.
By Mr. HOWSE, from certain electors of the division of Calare. .
By Mr. ANTHONY, from certain electors of the division of Richmond.
By Sir EARLE PAGE, from certain electors of the division of Cowper.
Petitions received and read.
– On the 14th November, 1944, a property at 119 Milson-road, Cremorne, an aristocratic suburb of the
City1 of Sydney, New South Wales, was transferred from Cecil Ephraim Greenberg to, Dr. Herbert Cole Coombs, Director-General of Post-war Reconstruction. The selling price was registered at £3,630; the Valuer-General’s price was £2,850. Will the Treasurer lay on the table of the House the file relating to that transfer ?
– I have no knowledge of the transaction to which the honorable member has referred. I shall examine the file in connexion with it and will then consider whether it should be laid on the table of the House, or made available to the honorable member for Held for his perusal.
-I do not want to peruse it.
– It is not usual for particulars’ regarding private property transactions to be made available to everybody in the community. I have at times received requests from members of my own party for information about various transactions, and I have always refused to give it to them because I regard a man’s private business as his own. Of course, if there is something corrupt or illegal associated with a deal action must be taken. I shall look into the matter mentioned by the honorable member, and let him have a reply later.
Fab Eastern Exchange Proprietary Limited
– Oan the Treasurer say whether it is a fact that a licence for the .sum of £43,500 for the importation of materials from the United States of America was transferred from the original holder to the Ear Eastern Exchange Proprietary Limited? Was it a condition of issue that the licence would not be transferable ? Did the Department of Trade and Customs previously refuse an application for the transfer of an import licence to the Far Eastern Exchange Proprietary Limited? Did Exchange Control subsequently interest itself in the transfer and the Department of Trade and Customs later yield to pressure ?
– Pressure from whom?
– From Exchange Control. Was the transfer of the licence to Far Eastern Exchange Proprietary Limited made after the statement by the Prime Minister on the need for restriction of imports from the United States of America as they affected our dollar holdings, such restrictions to be rigorously applied against all importers? Will the Minister state (a) the name and nationality of the original holder of such import licence; (b) the conditions under which the transfer was ‘ made; (c) why such transfer was effected in the light of the statement by the Prime Minister regarding the need for conserving American dollars ; (d) why preferential treatment was given to the Far ‘ Eastern Exchange Proprietary Limited over legitimate importers to operate on the dollar pool to this extent? Is the Minister aware that one of the directors of the Far Eastern Exchange Proprietary Limited is a member of this honorable House? If so, what is the name of the member? What influence did he bring to bear as a supporter of the Government to gain such preferential treatment with regard to the transfer of the licence, and the right to operate upon the greatly depleted dollar pool ?
– The honorable member will recognize that the length and number of his questions make it necessary that I should examine them closely. I shall do so. I fear that the honorable member’s absence from the House ha? refreshed him, and it seems that he must have spent most of his time preparing this question. - I shall have the files examined, and see what information I can make available.
– In this morning’s issue of the Canberra Times the following item from Adelaide is published : -
An official report, issued here, stated that great quantities of building -materials are being exported.
During last year, the Commonwealth Government issued permits for the export of 88,000 square feet of asbestos cement sheets, 8,000 square yards of corrugated asbestos cement sheets, 5,382 tons of galvanized iron, 1,270 tons of paint, 239 tons of black steel sheets, 4,745 tons of butt welded piping and also 265 fuel stoves.
Has the Minister read that report? Is it correct ? If so, can he give the reasons why licences were granted for the export of such large quantities of those materials when they are in such short supply in Australia for our building needs?
– I understand that the major portion of those exports were to go to Australia’s mandated territories and islands for which Australia is responsible. I shall obtain detailed information on the matter and supply it to the honorable member.
Export of Cattle
– I wish to ask a question of the Minister for Commerce and Agriculture relating to the export of live cattle from the Northern Territory. I preface my question by quoting the following from a report published in the Northern Standard, Darwin : -
Even before it is properly under way, an attempt is being made to spike the export of cattle from the northern end of the Territory.
This report which is rather lengthy implies that there is some sinister influence being exercised on the part of meat exporters with a. view to convincing the Australian Meat Board that it is undesirable to allow live cattle to be exported from areas in the Northern Territory south of the Roper River where the great herds of cattle exist. If these great herds are not allowed to flood the yards at Cannon Hill abattoirs, Brisbane, the exporters will not be able to buy at those yards, as they have been doing, so great a number of export cattle at the exporters’ depressed prices. Will the Minister ensure that exporters shall not be allowed to influence the Australian Meat Board’s recommendation in favour of the export of live cattle from the Northern Territory to the Philippines? Can the Minister make a full statement dealing with this matter?
– I assure the honorable member that a close lookout will be kept to combat any sinister influences in respect of this matter. So far, the only rumour I have heard suggestive of sinister influence is that with respect to the export of live cattle to the Philip pines, one station owner is alleged to have told the people interested that unless they paid more for these cattle he would see to it that they would have their licences cancelled. I am not able to substantiate that allegation, but the name of the station owner has been mentioned to me. With respect to the general principle of exporting cattle and meat, it is generally accepted by the Parliament and the Government that our first responsibility is to the people of the United Kingdom. To the degree that the export of cattle to the Philippines is allowed, there will be a corresponding drain upon cattle and meat products available for export to the United Kingdom. The International Emergency Food Council recently granted to the Philippines an allocation of 3,000 head of cattle, and the Department of Commerce and Agriculture approved of that allocation because it considered that such action would be of assistance to the Northern Territory and would not markedly reduce the number of cattle going through to the meat works whence meat is exported to the United Kingdom. To the best of my knowledge the Australian Meat Board is carrying out its duties in this matter impartially in the interests of both this country and the people of the United Kingdom.
– In view of the heavy production of grain sorghum in New South Wales and Queensland during last season, was any action taken to promote its use for stock feeding purposes, thus enabling the export of additional quantities of wheat for human consumption overseas?
– Action has been taken to stimulate the use of grain sorghum for stock feeding purposes which has indirectly assisted and promoted the export of additional quantities of wheat. Honorable members will be aware that this Government in its generosity to those affected by drought conditions,and also with a desire to assist the stock feeders of this country, particularly the poultry-farmers, announced earlier in the year that it would subsidize to the amount of1s. 6d. a bushel the shipment of wheat to New
South Wales and Queensland where grave drought conditions had prevailed. To date payment of the subsidy in those two States has totalled £1,800,000. With the coming in of a very good crop of grain sorghum in New South Wales and Queensland, estimated at approximately 4,000,000 bushels, the Government reduced by 1,250,000 bushels the export of wheat to Queensland and New South Wales from the other States. This resulted in a stimulation of the demand by stock feeders in New South Wales and Queensland for grain sorghum as an alternative stock feed. In order to demonstrate how great that stimulation has been, I may mention that since the sorghum crop came in railway returns indicate that 1,300,000 bushels of grain sorghum have already been transported from Queensland to New South Wales stations and from station to station in New South Wales, no doubt to meet the needs of stock feeders who are now using grain sorghum instead of wheat for stock feed.
– I have received a letter from a lady who has a holding in the Commonwealth loan which matured on the 15th September last. As she was ill and urgently required funds she informed the manager of the local branch of the State Savings Bank of Victoria accordingly and was told that the money would be paid at once. All she has received so far is a telegram from the Prime Minister urging her to convert her holding into the new Commonwealth loan. Is it the practice of the Government not to repay to holders of Commonwealth loans the amount of their holdings as soon as the loans mature? Whether the answer be in the affirmative or the negative, will the Treasurer be good enough to take steps to ensure that in view of the urgency of her case that the money owed to this lady is paid to her as early as possible?
– When a conversion loan is being floated, difficulties always arise in connexion with repayments to holders of maturing loans because a great number of people do not reply to requests made to them to state whether they wish to convert or be paid off.
– This person did so.
– I shall deal with that portion of the question later. The result is that some months elapse before it is possible to ascertain whether holders of maturing loans desire to he paid or to convert their holdings into the new loan. The telegram sent by me was the usual kind of message sent to all holders in loans due for conversion asking them to convert if possible and if they have already converted thanking them for having done so. Similar telegrams have, I understand, been sent by past Treasurers. As to the case mentioned by the honorable member, it is customary for those who wish to be paid off to receive their money almost immediately. There may be some delay in connexion with some cases, but if the honorable member for Flinders will let me have the name of the person to whom he has referred I shall see that she receives her money promptly.
– I ask the Prime Minister -
-The honorable member’s questions merit a considered reply and I shall arrange for that to be provided.
– I have received the following telegram from the Farmers’ Union atGlenIines: -
New England farmers seriously perturbed over low price maize.ould the Minister consider bringing before ‘Parliament the possibility of having export ban lifted.
Will the Minister for Commerce and Agriculture give consideration to this request in view of the extremely low price prevailing in the maize markets of eastern Australia?
– The Minister for the Navy who isthe honorable member for Kennedy, the honorable member for Herbert, the Queensland Minister for Agriculture, the Atherton Maize Board, and various farmers’ organizations inQueensland and New South Waleshavealready made representations to me in regard to this matter, and I am having inquiries made. I have already sent an officer to Queensland to investigate the position. Inquiries are being made in regard to Australian requirements of maize, and when I have received further information I shall give consideration to the question of export licences.
– I askthe Prime Minister whether it is a fact that thehonorable member for Martin who left Australia last April to represent this country at a coal and transport conference held atGeneral returned to Australia only two weeks ago? What other countries didthe honorable member visit during his long absence, and upon whose authorityand for what purpose? What was the cost of theworld tour enjoyed by the honorable memberat the expense of the taxpayers? Finally, is it intended to ask the honorable member to present a report covering his tour, and in the event of such a report being received, will the Prime Minister make a copy available to honorablemembers so that they may have thebenefits of the honorable member’s animadversions?
– Thehonorable member for Martin hasbeen most anxious in the last week ortwoto give me a personal report on hisinquiries into certain matters into which he was commissioned to make inquiries on behalf of the Government. I will arrange to have prepared for the honorable member for Parramatta a statement showing the countries the honorable member for Martin visited and the cost of his trip. The honorable member for Martin has indicated to me that he is prepared to supply a written report on his activities as well as a verbal one. Time has not permitted me to receive the honorable member’s verbal report, but I will let the honorable member for Parramatta have all the available information.
Aircraft for Aircraft Carriers
– It has appeared in the press twice that one of the two aircraft carriers to be added to the Royal Australian Navy will be equipped with British aircraft and the other with American aircraft. In view of the excellence of the Seafires and other British aircraft and as the purchase of aircraft fromGreat Britain would be helpful to it and as the purchase of aircraft from the United States of America would involve a huge expenditure of dollars, will the Minister for the Navy ensure that the carriers shall be equipped with British aircraft?
– The Government intends to commission the first of the two aircraft carriers by the 30th June, 1948, and the second in the next financial year. Negotiations are proceeding for the placing of ordersfor aircraft for the vessels. At the moment it is intended to purchase British aircraft, but orders have not yet been placed because when the first carrier is commissioned next year it will he the most modern afloat and will be equipped with the most modern aircraft used by aircraft carriers. Developments are occurring constantly in the propulsion of aircraft and there may be jet propelled aircraft by the 30th June next.
Service Chevrons and Wound Stripes
– I ask the Minister for the Army whether Army RoutineOrders have been publishedbanning the wearing of service chevrons and wound stripes. If so, what are the reasons for those orders?
– I have not seen the report referred to but will have it examined and furnish a reply.
Reduction of Imports. mr. BOWDEN.- Will the Treasurer say whether the Government intends to cut imports from the United States of America and Canada by a further $20,000,000 a year? If so, will he tell the House how the cut might be given effect and the extent of the cuts on the import of motor car chassis, tobacco and textiles?
– As the honorable member knows, a survey has already been made of dollar imports and an intimation has been given to persons trading in certain commodities that there must be a reduction of dollar expenditure. This intimation covers a very wide field, and represents an attempt to bridge what might be regarded as a gap in dollar supplies in a way that will he of considerable value to the United Kingdom. Apart from that consideration, Australia was spending more dollars than it was earning directly, although, of course, a large volume of exports to the United Kingdom and other sterling areas might well be credited to Australia as indirect dollar exports. A complete statement on this matter would take some time. A conference of United Kingdom and Dominion representatives is being held in London at present to discuss dollar supplies and allocations. I have made clear to some persons associated with commodities which have already been subjected to import cuts that it may be necessary to make further reductions at a later stage. However, I shall not be able to make a definite statement in this regard until the Government receives a complete picture of the situation from the conference in London. I hope that further reductions may be avoided, because. I know that they would impose hardships on some sections of the community.Every endeavour will be made to avoid further reductions, except in cases in which it is not possible to supply dollars to meet the commitments involved. I shall not occupy the time of the House now by making a more detailed statement of what has been done up to date, but I shall try to supply the honorable member with full information after the London conference has ended. Any other honorable member who wishes to have that information will be supplied with it. After the Government receive; the report on the London conference, it may be necessary to survey the position again.
In Committee of Supply: Considera tion resumed from the 19th September (vide page 121), on motion by Mr. Chifley -
That the first item in the Estimates under Division No. 1. - The Senate - namely “ Salaries and Allowances, £9,900 “, be agreed to.
– The hundreds of millions of pounds of expenditure forecast in the budget, and the equally large number of millions of pounds of expected revenue should not be lightly regarded asa mere aggregation of figures. Every£ 1 of these huge sums must be related to the productive capacity of the nation, because that is the basis of Australia’s economy. Obviously, it is from production alone that the Treasurer (Mr. Chifley) can obtain the wherewithal to meet national expenditure. The quantum and the value of production determine the extent of the financial means upon which the Treasurer can draw to provide for an anticipated expenditure of £427,000,000 during the current financial year. Consequently, the basic approach to a discussion of the budget necessitates a sensible survey of the state of the nation’s production. The state of Australia’s production can be gauged only from the statistical information which is presented to the Parliament by responsible government departments. From this information, the country can decide what trend the Government’s activities should take.
The Treasurer concluded his budget speech with a plea for the employment of our full national resources during the coming year, which he described as a critical one for our future as a people. The official tables which he circulated convey the impression that both production and national income are at a highly satisfactory level. For instance, in terms of money, the national income increased from £S03,000,000 in 193S-39 to £1,265,000,000 in 1946-47, while in the same period, the gross national production has risen from £93S,000,000 to nearly £1,500,000,000. From these figures it would naturally be assumed that production was higher than ever before in the history of Australia. The unfortunate fact, however, is that while a satisfactory case may be made out on figures alone, the aggregate volume of production, measured in units of goods, is highly disturbing. In other words, a false and misleading picture is presented, as money values given for aggregate production are boosted by inflation, the higher cost of goods and services, higher wages and unsatisfactory man-hour output. How can it be said that the gross national production has increased by 60 per cent, since 193S-39, when other official figures show grave declines in almost every rural industry? Australia depends for its income upon the exports of the products of rural industries. These industries should have had first priority in the Government’s post-war plans. Instead, the Government has allowed them to drift to danger point, as the Commonwealth Statistician’s figures will prove. The Government’s attitude has been unsympathetic and, in the light of events, unrealistic.
An alarming condition of affairs prevails in rural industries to-day, and Australia’s internal and external economy, and our responsibilities to our kith and kin in the United Kingdom, and to the starving millions of the world, demand that it be corrected. Admittedly, adverse seasonal conditions and a natural decrease of the productivity of the land have contributed to this dangerous and alarming decline, but much of it is due to artificial factors for which the Government is to blame. Official rural statistics, which have just been released, are most disturbing. They reveal a position which demands immediate and practical consideration by the Government. Throughout Australia, the number of sheep this year was 15,300,000 fewer than in 1939, and 673,000 fewer than a year ago. Indeed, the figure for 1947 is the lowest recorded since 1924. This is the second consecutive occasion on which the numbers have fallen below 100,000,000 since that year. Again, the number of dairy cows this year is 197,000 fewer than in 1939. The total number of dairy cattle continued to decline in 1946-47. In 1943, when the Commonwealth Statistician first recorded dairy cattle separately, they numbered nearly 5,000,000. By 1944, the number had declined to 4,900,000: in 1945 to 4.SO0.OOO; in 1946 to’ 4,600,000 ; and this year to 4,590,000. The decline was most marked in New South Wales, Queensland and Western Australia. In regard to the number of beef cattle, the figures show a steady decline from 9,300,000 in 1945 to 9,200,000 in 1946, and to S,S00,000 in 1947. Although the total number of cattle showed an increase of 565,000 over the figure for 1939, there were 451,000 fewer cattle than last year. The number of pigs decreased from 1,700,000 in 19441 to 1,200,000 in 1947. There has been a continuous decrease of the number of dairy cattle. In Queensland the situation is just as alarming. The number of sheep in that State in 1947 represented only 63 per cent, of the number in 1943, and there are now fewer sheep than there have been for 30 years, while prospects for the production of meat and wool have also been most adversely affected. There were only 5,900,000 cattle in Queensland this year, which is the smallest number since 1933, and this represents a substantial decrease of last year’s figure of 6,500,000. Since 1943 there has been a continuous decrease of the number of dairy cattle.
The total area under crop in Australia in 1945-46 - the last year for which figures are available - show that therewere 3,000,000 acres less than in 1938-39. There were nearly 8,000 fewer rural holdings than in pre-war years, while thetotal area of land used for rural purposes was 1,900,000 acres less than in 1942-43. Compared with the figures for 1938-39,. the total area under wheat in 1945-46 was less by 2,900,000 acres, under harley by 45,623 acres, under maize by 88,417” acres, under hay by 500,000 acres, under sugar cane by 31,632 acres, under cotton by 58,772 acres, under tobacco by 3,948 acres, and under orchard and fruit gardens by 2,415 acres. Those statistics reveal a decrease of the areas used for the production of eight important crops, and should be sufficient to cause the Treasurer and his colleagues to initiate a searching inquiry into the reason for this appalling situation.
When we consider the figures relating to rural production we find that they are equally disturbing. Milk production in 1945-46 was 112,000,000 gallons less than in 193S-39, butter production fell below the pre-war production by more than 53,000 tons, while wool production declined by 47,300,000 lb., and wheat production showed a decrease of approximately 13,000,000 bushels. The number of persons permanently employed on rural holdings last year was 19,000 fewer than in 193S-39, and lower by at least 27,000 than in 1937-38. Production, of silver and gold in 1945-46 was lower than during any war-time year. In 1946, production of silver fell below the 1939 figure by more than 3,000,000- oz., while production of gold declined by more than 770j000 fine oz., and of lead by 62,000 tons. The production of wire has decreased from the pre-war figure of 12,000 tons to- approximately 7,S00 tons. The production of bricks, which is- averaging about 40,000’,000 a month, is only approximately two-thirds of that of the pre-war year.
These highly unsatisfactory results have been, achieved during the term of office of a government which claims that it was responsible for the re-absorption into industry of more than 420,000 exservicemen. If we are to believe Government propaganda the highly unsatisfactory statistics which I have quoted are the result of’ the country’s effort at a time of almost 100 per cent, employment. But the most disturbing feature is that only 50,000 ex-servicemen have returned to the land, and two and a half times that number have sought employment in factories. The Government cannot plead that it has been handicapped by lack of money, because it has enjoyed complete control of the nation’s credit. Since 1945, and even before, it has possessed dictatorial powers over the national banking system.
The fundamental error in the figures adduced by the Government in support of its claim of the country’s high production may be illustrated by the simple matter of building construction. The Government has entirely overlooked the fact that a house now costs twice as much to build as it did before the war, and has erroneously assumed that twice the number of houses have been constructed than is actually the case. It has also erroneously assumed that because the maximum man-power available in the country is in employment there is full employment. But the real position is that there is no decline of natural reserves of raw materials, and the Government has available all the money which it needs. It seems, therefore, that there is little possibility of achieving any substantial increase of unit production in the next financial year. All that we can expect is a continued rise of prices, and a continued shortage of goods. We cannot look forward to any relaxation of controls or to the arrest of the inflationary spiral. The only solution of the problem of increasing production is to give the individual greater incentive to produce. The basic fact must he related to what he has to contribute towards governmental expenditure and the maintenance of’ a civil service which, is daily increasing to an enormous degree.
I emphasize that- these figures a»re not mine but are those- of the’. Commonwealth Statistician,, whose duty a.nd responsibility it is to present them in a truthful and accurate way. Let us consider what has happened in other countries’ since the end df the wa*. Other nations- lost’ no time in evolving’ plans- to restore agriculture to its- pre-war level. The outstanding example in that regard is the Mother Country. Despite all the adverse circumstances conceivable,- it has utilized every resource and has made every effort to maintain its war-time expansion. Contrast that with the grave and rather disturbing position that is revealed’ by the statistics that are available im regard to’ Australia’s economy. The Government has persistently ignored demands- by members of the Oppostion for the guaranteeing of stable prices for primary products, and for1 the inauguration of a worthwhile scheme of stabilization. If has turned down a suggestion which emanated from the Australian Country party for the appointment of a body to make a speedy report as to what are reasonable prices, having regard to costs, profit, capital outlay and other considerations. That suggestion was made because of the substantial rise of the costs of indispensable requirements as a result of the increase of the basic wage a few months ago. The Government also rejected a request for a permanent independent tribunal which would be related to rural industries in the same way as the Tariff Board is related to secondary industries, in order to determine faithfully and wisely the guaranteed prices of dairy products from season to season, instead of waiting until costs had got out of control and then fixing a price for the future, with no compensation for past losses.
The Government has had to admit, also, that its immigration plans have contained no provision to encourage agriculturists with capital to come from other countries. Further, it has failed to make any survey of the rural housing situation. The statistics that I have given provide irrefutable evidence of the critical condition into which our rural industries have been allowed, to drift, with adverse effects upon the Australian countryside. They emphasize the need for arresting that drift before it is too late. If our rural industries are to he rehabilitated, and are to play the part that they were destined to play in the economic life of Australia, the Government must inaugurate a national agricultural recovery plan. This must include provision for incentive prices for our major primary products. Such prices are especially necessary at the moment in respect of wheat and dairy products. Both of those industries are the subject of protracted inquiries. In order to assist in rehabilitating rural industries, the Government should first grant guaranteed prices, based upon production costs and reasonable profits, over a period of years. It should appoint an authoritative body to conduct a continuous investigation, and to make a complete review, in order that the condition in each industry may be adjusted. It should institute a realistic rural housing policy, including the provision of modern homes and amenities for agricultural workers which will be in keeping with those that are enjoyed by city dwellers. It is of no use to encourage people to go to the countryside unless the conditions there are comparable with those of the city dwelling community. This is essential if country dwellers are to be kept contented. The Government should take any practical measures that are- considered necessary to attract workers to rural industries, in order to overtake the serious lag that has occurred since 1939.
The next matter that I want, to touch upon is our definite responsibility for affording practical and desirable aid to Britain. Quite apart from what may be described as our responsibility in a personal sense, whatever aid we gave to Britain would be in the best interests of the finest market that is available to us. In other words, if we want to look at the matter from a cold-blooded business point of view, it will be to our advantage to do all that we can to help to stabilize the Mother Country and to play our part as an important, unit of the British Commonwealth. The Prime Minister (Mr. Chifley) has said that he has assured the British Prime Minister that Australia will do its utmost to assist Britain in its present crisis. Naturally, in a country such as ours the extent of the assistance that we can give to Britain depends in the main upon the prosperity of our primary industries. On the one hand, the Prime Minister has given a pledge that we shall do our utmost to help Britain ; yet on the other hand lie intends to force upon the people of this country a. socialization policy which will cost millions of pounds and will dislocate our best productive interests. In addition, it must, by the very nature of things, ultimately result in a drastic further curtailment of our rural production. If the Prime Minister is sincere in his promise that maximum aid will be given to Britain, does he suggest that the productive capacity of this country will benefit one iota from the socialization of the banking system ? Would not Australia’s, future economy and financial stability be ensured, and would not Britain be helped to a greater and more practical degree, if even a portion of the millions. of pounds that “will be required to compensate the banks when they are compulsorily acquired upon the nationalization of the banking system were wisely used to encourage our primary industries to overcome the disaster from which they have suffered on account of the Government’s unsound policy.- combined with adverse seasonal conditions? Australia is not discharging fully its moral obligation to .Britain, and it will not be able to do so until the Government awakens to the danger towards which our primary industries are drifting. I suggest to the Government that it would be preferable 10 appropriate £100,000,000 for the purchase of selected foodstuffs and other essential goods . for distribution among the British people as a gift, rather than ro expend a similar amount in acquiring the assets of the trading banks. By the expenditure of such a huge sum iiic. Government will disturb the nation’s economy and divide the people at a time when till should be united in a great production drive to meet present and future requirements.
Another obstacle to increased production is the stodgy and unimaginative taxation policy adopted -by the Government in the post-war years. Receipts from direct and indirect taxes of all kinds amounted to approximately £’102,000.000 in 1043-44. In succeeding years it increased, first to £336,000,000, then to £301,000,000, and last year to nearly £^74,000,000. During the last three years income taxes from individuals and companies, together with the social services contribution, has yielded about £200,000.000 yearly. ‘ In the same period, commencing with 1944-45, the receipts from indirect taxes rose from £120,000,000 to £137,000,000 and then to £166,000,000. The estimate for the current year is £160,000.000. and no doubt the amount had been underestimated as in other years. The Treasurer points with pride to the fact that tax reductions since the high war-time peak have amounted to £70,000,000, and he implies that the maximum relief possible has been granted. That is not so, as a detailed survey of taxation returns will demonstrate. According to the right honorable gentleman the great majority of taxpayers are now paying only half, or less than half, the war-time rates of tax. In 1938-39 the total taxes, both Commonwealth and State, represented a per capita payment of a little less than £18. In 1942-43 the amount rose to £39, and in 1945-46, to £51. The highest aggregate income tax receipts in history were in 1944-45, when they totalled £215,000,000, representing an average of £29 7s. 9d. for every person in Australia.. In the following year, taxes, far from being half the previous rates, were only 8s. 9d. a head less than in the previous year, or £28 19s. per capita.
The estimate of income tax receipts for 1947-48, including social services contributions, is more than £25 for each person, or only about £4 less than the amount received in the last year of the war. The figures in respect of indirect taxes are even worse. Including receipts from customs and excise, sales tax and all other indirect taxes imposed by the Commonwealth, the average contribution of the population in 1943-44 was about £16 10s. By the next year the amount had risen to £16 14!s. and in 1945-46 it had reached £18 14s. A record was reached in 1946-47, when the tax represented £22 a head. This year’s estimates, which are obviously low, average £20 for each person, which is higher by a substantial margin than in any war year. As indirect taxes are imposed at fiat rates, they fall heavily on individuals in the low income groups, particularly those with family responsibilities. The Treasurer must have had his tongue in his cheek when he said that a man in receipt of £6 a week with a dependent wife and two children pays no direct tax. The fact is that the average indirect tax for 1947-4S by such a family group of four persons will be approximately £80. Little of his wages will be left to him after paying indirect taxes and endeavouring to keep a wife and two children. The Treasurer went on to say that the tax on many incomes is less to-day than in 193S-39. It is equally true that more tax is payable to-day than in 193S-39 on many more incomes, including those in the lower groups. The social services contribution is a direct tax and should, therefore, be included. The splitting up of the total amount paid into separate items under different headings in Treasury statements is purely an artificial book-keeping stratagem. A. person with no dependants who is in receipt of £125 a year will pay £2 17s. as direct tax. Should he earn £150 a year, he will pay £5 in taxes, whilst on an income of £200 he will be taxed to the amount of £10 17s. Few individuals in any of these income tax groups paid any tax at all before the war, and fewer still paid taxes at such high rates. The description of a direct tax as a social services contribution is’ a misnomer, particularly since every penny of revenue contributed in any one year under the social services tax is, in fact, withdrawn and used in that year. Although the balance shown in the National Welfare Fund is £49,900,000 it is merely a paper balance represented by treasury-bills. The Treasurer says that the actual cash expenditure on social services in 1947-48 will necessitate drawing about £S,000,000 from the balance in the fund. Consequently either revenue will be called upon to provide the extra £S,000,000, or the money will come from loan or the adoption of inflationary means during the current financial year. The expenditure is not self-supporting on a yearly basis, and there is no future provision to meet obligations to contributors.
During the year ended the 30th June, 1947, the value of treasury-bills outstanding was reduced by £65,000,000, but during the same period additional treasury-bills to the value of £25,000,000 were issued. Consequently, the aggregate public debt under this heading was reduced by only £40,000,000. In the final analysis, that reduction was effected largely by the employment of loan funds cither directly or indirectly. Loans were subscribed by the public but were not fully expended, and the surplus was utilized to reduce the amount of treasurybills outstanding. In other words, interest at the rate of 3 per cent, or 4 per cent, was paid in order to discharge obligations carrying interest at 1 per cent. The Treasurer held over £167,000,000 in statutory trust funds, of which £121,000,000 was invested in internal treasury-bills bearing interest at 1 per cent. . Naturally, a good proportion of that amount was represented by the balances withdrawn from the National Welfare Fund. The balance came from general trust funds. I do not desire to convey the impression that the Treasurer committed a breach of the Audit Act by replacing those cash balances with internal treasury-bill paper, but I do say that the general effect is to make the whole of the yearly social services contribution available for expenditure by him in the year in which it is contributed. Future deficiencies in the fund must come from general revenue, or from inflationary means, instead of being taken from the cash balances that should readily be available. It would be fairer, as well as less confusing, to call the social services contribution what it is, in fact, namely, a direct income tax, every penny of which by a simple stratagem is made available to the Treasurer in the year of contribution for general spending in the same way as other revenue is available for such purposes.
The revenue resources available to the Government are of such a nature as to make it obvious that the community has been overtaxed since the termination of the war. The Treasurer has maintained a high rate of direct and indirect taxes, and has used various devices to cloak the buoyancy of the revenue during this period. It is very difficult to assess the full extent of the country’s revenue resources because of the meagre information available. However, let us first consider revenue used for capital expenditure. This is in the nature of a secret reserve, because the assets purchased out of revenue are of a lasting capital nature, arid their beneficial use will continue over many years. If a company were allowed to operate in a similar fashion by purchasing permanent assets out pf revenue it would not need to disclose any profits, and, consequently, the Government would obtain no income tax from this source. In the current financial year, additions, new works, &c., of a capital nature, to the value of £32,600,000 will be paid out of revenue. In 1946-47, more than £17,000,000 worth of similar expenditure was incurred, including £1,S00,000 on Trans-Australia Airlines, £415,000 on the acquisition of shares in Quantas, £27,000 on the aluminium industry, and £1,425,000 on overseas telecommunications. This year, £1,500,000 has been provided for Trans-Australia Airlines, £1,455,000 for Qantas, £500,000 for shares in British Commonwealth Pacific Airlines, and other special appropriations from revenue, amounting in all to £2,636,000, are included in the amount of £32,600,000 which I previously mentioned. The irony of this method of accounting is that, although the Commonwealth follows the practice of charging capital expenditure to revenue, the Loan Council permits the States to finance capital expenditure out of loans. It is obvious that the Commonwealth is able to meet capital expenditure out of revenue only because the public are being overtaxed.
We come now to arrears of tax. This is another important branch of Commonwealth finance in which large reserves have been established. According to information supplied to me by the Commissioner of Taxation, there were no fewer than 700,000 assessments unissued on the 30th June, 1947. The tax uncollected in respect of these assessments is about £60,000,000. Moreover, there is outstanding an amount of £47,300,000 of unpaid taxes, but represented in assessments actually issued at that date. Therefore, there is over £107,000,000 of income tax payable, but uncollected, in respect of past years. This is a very nice nest egg for the Government particularly for use in an election year. A good part of this money will be available to swell the revenues this year and in succeeding years. The Commissioner for Taxation expects that, by the 30th September, the assessing of the returns for prior years will be completed. At the end of the 1945-46 financial year, approximately £50,000,000 of tax arrears were unassessed, while the assessed but uncollected tax, at the 31st January, 1947, was £31,300,000. Staff shortages in the Taxation Department, which were to some extent responsible for this lag in tax collections, should by now be largely overcome, and the collection of arrears during this financial year should be greatly accelerated.
The sale of material by the Commonwealth Disposals Commission provides a ready source of revenue for the Treasury, and the goods awaiting disposal constitute another reserve. In the statements attached to the budget speech it is indicated that disposals are expected to produce about £16,000,000 in 1947-48. This may prove to be an over-cautious estimate as, not so long ago, the regional manager for Queensland said that the Commonwealth Disposals Commission sales would continue for another twelve months in disposing of a further £50,000,000 worth of goods. Last year, miscellaneous credits, including proceeds of wai* disposals, recoveries from other administrations, and a considerable range of lesser credit items, were set down at £57,000,000. They- produced, in fact, £5S,000,000, of which disposals accounted for approximately £38,000,000. Consequently, it is a fair inference that the estimated revenue this year from disposals has also been considerably understated. In any case, the value of goods yet unsold is approximately £34,000,000. These goods are readily convertible into cash, but the money they represent has not been taken into consideration in the Treasurer’s estimates of revenue for the current year.
Another interesting item is balances owing by other administrations. The amount owing under this heading is £60,000,000 of which the Treasurer expects to collect only £10,000,00 this financial year. The balance of £50,000,000 constitutes another large reserve which can be converted into cash in the future. Most of the money will be collected.
The balance in the National Welfare Fund is approximately £50,000,000 of which the Treasurer estimates that he will need to draw £8,000,000 this year. That leaves a reserve of £42,000,000 for future drawings.
The total reserves available to the Treasurer under these various headings are : -
This is not necessarily a complete list of secret reserves, but they are all that I have been able to discover in the light of the information available to me. However, there has been no financing of a scientific nature in order to reduce taxes to the degree to which the Government could and should reduce them in the interests of production to meet not only our own but also the needs of the people of the United Kingdom. The Treasurer is able to draw upon over £250,000,000 of reserves to augment his cash resources and to improve revenue in the current financial year and future years. I have made a diligent search to uncover the extent of these reserves which form a very handy nest egg for a Treasurer with strong leanings towards nationalization. In other words, the Treasurer can retain the present unwise and unfair levels of taxes in order to make the taxpayers contribute £100,000,000 towards ‘ the cost of nationalizing the trading banks. He could finance his hanking proposal from these reserves without unduly disturbing the general financial tables set out in the budget. This budget is remarkable in that it contains no hint of the most pressing financial question of the day, namely, the nationalization of the trading banks. I shall not anticipate debate on the bill to be introduced on that subject. However, it is remarkable that no provision whatsoever is made in the budget for payment by way of compensation to shareholders of the trading banks. At least some expenditure in that direction might reasonably be incurred in the current year. Even if the Government intends that the Commonwealth Bank should acquire out of its resources the assets of the trading banks and meet the cost of just and fair compensation involved, I suggest that as the. Commonwealth Bank is a government instrumentality some statement, or some provision, should have been made in the budget with respect to this matter, because, I repeat, this question is of paramount public importance and is causing great agitation and concern in the community.
The proposed abolition of war-time company tax is the bright spot of the budget. It is estimated that this will involve a concession of £3,500,000. However, in the aggregate, the Treasurer does not expect, despite that reduction, any decrease of revenue from company tax. He estimates the revenue from taxes at the same amount, namely, £53,000,000, because he realizes that he still has £60,000,000 of unassessed tax to draw upon; that money presumably will be available this year. Thus, he will more than make up the reduction of war-time company tax amounting to £3,500,000.
Another aspect of governmental activity and expenditure with which I desire to deal relates to international organizations and conferences. A considerable portion of the budget speech is devoted to international relations with particular reference to finance and trade. During the past few years, Australia has been represented as never before at international conferences of one kind or another. In fact, our deficit of $100,000,000 with North America last year was due to some degree to the dollar expenditure of our representatives at those conferences. That is obvious, because we had a favorable commodity balance with the United States of America of over £A.4,000,000 for the financial year 1946-47. Our imports of merchandise from the United States of America in that year amounted to £43,600,000 and our merchandise exports for that country were £47,800,000. As participation at these conferences is costing us a good deal in precious dollars it is time that we gave some consideration to the benefits, if any, which we as a nation have received from them. For instance, it is now many months since a large delegation of between 30 and 40 representatives left these shores to participate in the International Trade Organization talks at Geneva. So far as I am aware that delegation has not yet returned.
The draft charter of the International Trade Organization has as its general objective the substantial removal of obstructions to world trade, the elimination of import restrictions, tariff preferences and a substantial expansion of world trade on a multi-lateral basis. Regardless of whether the objects of the International Trade Organization charter are desirable or not, it is a fact that while a costly delegation has been, and still is* abroad attempting to obtain some unity of purpose upon its objects, the Government has introduced stringent trade restrictions to cut off a considerable proportion of Australian trade with North America. I am not concerned at the moment with the merits, or demerits, of that decision, but mention it simply to illustrate the inconsistency of the Government and the desirability of taking a realistic view of our future representation at such conferences. There seems to be no general directive to our representatives, very little consistency in policy and a general lack of liasion between the Government and its agents abroad. It is about time that the Parliament was advised of the expenditure of public money in the direction that I have indicated.
The Estimates on this occasion have, no doubt, .been framed conservatively as was the case with the last budget. During the debate on the budget last year members of the Opposition were practically unamimous in the view that the Treasurer’s estimates of revenue were substantially understated whilst his estimates of expenditure were substantially overstated. The figures he has presented show clearly that members of the Opposition parties, without the benefit of expert assistance and despite the meagre means of research at their disposal, were much nearer the mark than the Treasurer. Actual collections of revenue exceeded his estimates as follows : Customs £9,000,000, excise £4,000,000, sales tax £5,000,000, income tax, including company tax, £6,000,000, and pay-roll tax £500,000. Practically every item of revenue substantially exceeded the budget estimate. Revenue was heavily drawn upon for capital expenditure. An unforeseen amount of £25,000,000 was provided as a gift to Great Britain; £65,000,000 of public treasury-bills were paid off; and despite this, the anticipated gap to be filled by loan funds was nearly £21,000,000 less than the Treasurer anticipated. Consequently, we must conclude that the Treasurer’s estimates last year were framed in an endeavour to convince the public that everything had been done and was being done to enable the Government to effect desirable reductions of taxes. In view of these facts, involving glaring errors of judgment with respect to estimates of revenue and expenditure, no reliance can be placed on the present Estimates as an indication of the ability of the Government to reduce both direct and indirect taxes. For instance, sales tax is expected to yield £7,000,000 less than last year, and for this reason, apparently, a niggardly amount of relief estimated at £2,800,000 is to be granted this financial year. If last year’s figures are any indication, it can be taken for granted that the Treasurer will probably more than recover the revenue loss by the relief which he now proposes under this heading. If that be so, many desirable reductions of sales tax will be needlessly withheld and the cost to the consumer this financial year of a great number of goods, ranging from houses to toilet soaps, will be unjustifiably high.
The amazing increase of the number of Commonwealth employees in recent times is a most disconcerting feature of the budget. It calls for a clear-cut statement from the Treasurer, who up to the present has denied the taxpayers any explanation of this vast expansion. So that there may be no misunderstanding, let me say at the outset that I have the utmost admiration for the great body of public servants who have given loyal and faithful service to the Commonwealth. I would, however, be recreant to my trust as a member of this Parliament if I failed to seek an explanation of the recent growth of the Commonwealth service, with its consequential increase of Commonwealth expenditure. According to the latest figures the number of Commonwealth employees at the end of June totalled 157,900, or 400 more than at the end of May, and 1,400 more than at the end of March. Earlier this year Commonwealth employees increased at the rate of 132 a day ! When during the last, recess I drew attention to this rapid increase, the Prime Minister brushed the matter aside with a vague reference to some sub-committee or other which, he said, was watching departmental expenditure.
The budget discloses the number of employees on the administrative side of the Department of Civil Aviation as 2,286 for 1947-4!8, or 634 more than in 194.6-47 ; increases in the administrative staff of the External Affairs Department from 135 to 216; in the Commonwealth Investigation Staff from 93 to 144 ; in the Department of the Interior from 309 to 48S; in the administrative staff of the Department of Works and Housing from 946 to 1,100 ; in the staff employed on pharmaceutical services from 74 to 136; in the administrative staff of the Department of Commerce and Agriculture from 1S2 to 233; of the Department of Immigration from 247. to 381; of the Department of Postwar Reconstruction from 48 to 244; in the staff employed in the civilian service of the Department of Air from 217 to 390; and in the Central Office of -the Postmaster-General’s Department from 587 to 734. These are but a few examples of “ growing pains “ in the administrative staffs of public departments. Then some entirely new offices and branches have been created. In the Department of Commerce and Agriculture provision has been made for a trade commissioner on the relieving staff at £1,350 a year, a Division of Agricultural Economics, with a director, an assistant director, and a stait of 41, which is estimated to cost the taxpayers more than £20,000 a year and a Division of Agricultural Production with a staff of eight, estimated to cost more than £4,300 annually. In the Department of Defence there is an elaborate body known as the Joint Intelligence Organization. This has not only a controller and a director but also nine heads of branches and a total staff of 195. The annual cost of this body is estimated at £85,200; but the Treasurer estimates that, at the close of the financial year, of that amount £47,200 will remain unexpended. The growth of staff of the Australian Broadcasting Commission and the Overseas Telecommunications Commission is undisclosed. There will also be a further enormous increase when the Government’s free medicine scheme comes into effect, and the total will be increased by many thousands more if it assumes control of the trading banks. These figures indicate that the Government has completely lost all sense of proportion, that it has no regard for economy or for the interests of the taxpayers who have to foot the bill. If all these additional Commonwealth employees were earning the money they are paid, there would he no ground for complaint, hut it is only too obvious that many have produced nothing but blueprints while others have hampered by irksome and unnecessary restrictions those who want to get on with, the job. I invite the Prime Minister to order .an immediate inquiry into this increase in Commonwealth employment or to justify it to the Parliament and to the people.
The conclusions to be reached from the examination which I have made of the financial and economic situation of Australia to-day are these : First, production, which is the foundation of all wealth, is at a disturbingly low level, and there are no immediate signs of substantial improvement, having regard to the policy being pursued by the Government. Secondly, taxation is still being levied at a rate considerably in excess of that which is necessary to carry out properly and efficiently the responsibilities of Government. It is being maintained at this unjustifiable level by a socialistic Treasurer so that he might have the means - at the taxpayers’ expense, of course - of implementing his socialist policy and of making Australian citizens subservient to government policy by enforcing collective spending as against individual spending. Thirdly, the Government’s financial policy, as shown in the budget or otherwise, demonstrates a complete lack of any co-ordinated scientific plan to finance the country’s needs. Revenue is exceedingly buoyant, and no real attempt is made to adjust its amount to conform with sensible national requirements. Expenditure is being incurred on an unprecedented scale. Vast secret reserves have been created to such an extent that the principles of sound commercial accountancy have been totally ignored. Fourthly, the Public Service is being “ packed “ to further the Government’s plan to convert Australia into a socialist state. The Communist technique of developing a service in which the official and his family will have to depend upon the Government for their existence, is being adopted. By this means the ‘Government hopes also to command an enormous voting power.
It has been said that finance is the test of Government. That being so, this Government has failed to pass the test, and far from entering the promised golden age with all sails set, Australia is drifting along in the economic doldrums.
.- The right . honorable member for Darling Downs (Mr. Fadden) has said that finance is the test of government, and that Australia instead of entering the golden age with all sails set is drifting in the economic doldrums as a consequence of the administration of the Government. It is true that finance may be said to be the test of government, and if that test be applied the Treasurer (Mr. Chifley) and the members of the Government may with absolute justification claim that their administration of the affairs of this country has been most successful because our finances are in the soundest condition we have ever known. After World War I. successive anti-Labour governments did indeed sail along with all sails set into some era, whether golden or otherwise, but about which they had only vague ideas. At a time when revenue was buoyant, purchasing power high, and goods in comparatively short supply, instead of meeting a large portion of the cost of administrative services, major replacements, and new capital works from revenue, the anti-Labour governments of those days borrowed heavily in this country and abroad. Their ship, with all sails set, guided - if guided at all - by individuals who thought nothing and careel nothing about the fate of their craft, ran on the financial rocks. The unenviable task of salvage was left to a Labour administration. To-day we are endeavouring to meet our commitments instead of borrowing heavily and passing on the burden to posterity. That is the course that was followed after the last war by governments lead by Country Party and National Party members whose ineptitude and incapacity brought financial disaster. The report of the royal commission on our banking and monetary systems shows that in the ten years between 1919 and 1929 while this country was under the control of composite Country party and National party administrations, a total of £398,000,000 was added to our public debt. Of that sum, £225,000,000 was owed overseas and £173,000,000 in this - country. These anti-Labour governments failed to take advantage of the buoyant revenues to meet a substantial proportion of the expenditure then incurred, and thus avoid a recurring interest debt on further loans. The result was that in later years when world prices dropped sharply and the markets for our export commodities contracted, it was most difficult, in fact, almost impossible, for the succeeding Labour Government to meet its commitments.
Recent speeches by honorable members opposite, particularly that of the Leader of the Australian Country party in this debate, suggest that the same muddling and mismanagement that followed the last war should have occurred again. To-day, when goods are in comparatively short supply owing to a tremendous worldwide demand, and revenue received from the export of our surplus products cannot be balanced by imports because the commodities that we require in return cannot be procured overseas, the sound course is to draw off the surplus spending power of the community to meet, as far as possible, the Government’s current commitments. Such a course is certainly sound from a Treasury point of view, and its soundness will be supported by any accountancy or business test. It is not likely to be immediately .popular, of course, but its benefits will become more apparent in the years to come. Succeeding administrations will find the problems of government finance much easier, and future generations will not have cast upon them burdens that can and will be met at the present time.
The Leader of the Australian Country party spoke first of primary industries, but there are many conditions that either validate ot invalidate the conclusions at which the right honorable gentleman arrived. He referred particularly to wheat and claimed that Australia’s national wealth, instead of growing as has been indicated by statistics, was actually sadly depleted because of the lower volume of wheat production. My answer to that is firstly that national income is only a rough guide to a country’s productivity at any time and can be affected by changing price levels and a variety of other circumstances. For instance, the 1947-48 wheat crop is expected to be a record, and to exceed any crop of recent years by a very wide margin. So, applying the test suggested by the Leader of the Australian Country party, the volume of national income should advance sharply next year. That is an indication of the value of primary production as a gauge of the influence of Government policy. National income is affected not so much by government policy as by seasonal condition.”! and other factors over which no government can be said to have control. In recent years, for instance, primary production in this country has been affected by droughts and the shortage of manpower and materials including superphosphates. Even the most hostile of critics of this administration will not argue that the Labour Government has been responsible for droughts. The sheep population of this country has been considerably depleted by a series of droughts that have raged in various parts of the Commonwealth. Also, the demand for meat overseas has affected wool production. Therefore, production in any one primary industry is not a valid test of government policy. Substantial labour forces are now engaged in the building industry and these, of course, are not available for primary production. To suggest that production in one particular primary industry, without a full examination of causes, can be anything but a rough guide to the efficacy of a government’s policy is to falsify the position completely.
The Leader of the Australian Country party referred to the incidence of income tax on individuals and companies, and endeavoured to show that the per capita burden was unduly heavy. But a much more reliable indication of whether or not taxes are onerous can be gained from a discriminating analysis of the directions in which they bear most heavily. Figures can be cited to prove any case, but if figures are required in this instance, we can produce statistics showing that in the lower and middle ranges of income, taxpayers with depen dants - a most needy class in the community - pay less to-day than they did in the immediate pre-war years. Admittedly in the higher income groups taxes are still heavy, but at a time like the present, that is not only economically sound but also completely justifiable when one considers the amount of money that a taxpayer has left for his ‘own use after he has met his commitments to his country. Indirect taxes, of course, are more selective. For instance, few of the items in the cost of living index are subject to sales tax. This is true of home building materials and fittings to which the Leader of the Australian Country party referred. For years I have been trying to discover the Opposition parties’ approach to the financing of social services. I should like to know whether, if they were returned to power, they would finance social services from direct and indirect taxes instead of from the social services contribution. Not one honorable gentleman opposite has been willing to disclose to the House and to the country what their attitude would be. When they talk glibly about reducing taxes by 10, 20, 40 and even 50 per cent., they should be frank and say how they would, at the same time, pay for social services. The right honorable gentleman also rode his hobby horse about the effect of investment in treasury-bills. He must realize that current commitments must be met from current revenue. Revenue is not put in a tin under the ground or in a safe deposit and drawn from as occasion requires to meet commitments. The banks themselves must earn from investment the interest owed by them to clients on deposits in the same year as their obligation has to be met.
The answer to the right honorable gentleman’s comments on prices for primary products, which are higher than they have been for many years, is that inquiries to establish an equitable price for an individual primary product are necessarily protracted. Would any one suggest that it would take but a little while to make inquiries on which to fix even a rough average price for wheat? Equally it is impossible in a short period to establish costs in the dairying industry on which to base a fair return to dairyfarmers. The right honorable member also referred to rural housing and amenities, but the Labour Government is not to blame for shortcomings in those respects, because for years, long before the war, the neglect of the anti-Labour governments to provide adequate housing and other amenities in rural areas caused the drift to the city. Lack of adequate housing and amenities in rural areas and cultural and educational facilities comparable with those provided in cities, even though they may not be up to the standard to which this country is entitled, has not happened over night, and it cannot be remedied soon after a war. The Labour Government has given and is giving close attention to those shortcomings and as the result country people may expect better housing and amenities than they have had. We all agree that Great Britain should be aided, but whatever we gave it, £100,000,000, more or less, would have to come from taxes paid by the Australian people, lt is impossible, therefore, for honorable gentlemen opposite to claim logically that on the one hand taxes can be reduced and on the other that Great Britain could be given the financial aid that they claim it could be given. The question is whether Great Britain should be provided with aid as a gift or as something for which its people should have to pay eventually. We are sending to Great Britain all the food we can.
– The honorable member for Barker (Mr. Archie Cameron) claims that we are not giving to our utmost. The simple fact is that more food is being used in Australia than is provided for by the ration coupons issued. If the people will not observe the existing ration laws, which are difficult to police and enforce, they are even less likely to observe more stringent laws.
Like a magician, the right honorable member for Darling Downs drew from the hat vasts sums of money that he claimed was in hidden reserves. There was, he said, in reserve more than £250,000,000 which could be used to offse1 reduced taxes. He is certainly a wizard with figures. He does things with th?m that no mathematician could ever do If, as the right honorable gentleman claims, the Government has that money in reserve from arrears of tax and other sources and if it were available for distribution amongst the community, the result would be not increased production but an immediate rise of prices because of the increased ability of people to buy in an understocked market. The right honorable gentleman claims that there is a lag of tax collections, but every year there is a lag. It is physically impossible for the Taxation Department, owing to shortage of staff, to issue assessments and collect all taxes in the years in which assessment and collection are due. I also point out to the right honorable gentleman that, with the pay-as-you-earn system operating, wage and salary earners pay tax instalments week by week, and, at the end of the year many of the assessments will have been met, indeed, there may be substantial refunds. If the right honorable gentleman could prove his’ contention that year by year more and more tax arrears accrue he may have some grounds for his argument, but no evidence has been given that arrears are greater this year than before. The main complaint of taxpayers is, as the Treasurer said, assessments come too quickly.
The right honorable gentleman next referred to additions to new works -and buildings financed from the revenue and what he referred to as “ hidden reserves “. He got himself into a. dilemma, from which he will have great difficulty in extricating himself, by describing the Treasurer as a Socialist pursuing a conservative financial policy. That description is something new to me, and it ought to go down in history. If the right honorable gentleman, as an accountant, considers it to be unsound to finance the erection of buildings out of income at a time when general purchasing power is high, then he must condemn every prosperous business in the community. Certainly, if that is his view, he must condemn the trading banks, which he has praised as being the most wisely controlled business concerns in the country. The trading banks operate on the most sound financial lines. They religiously follow a policy of transferring huge sums to secret reserves and writing down assets so as to show their holdings at less than their full value. The policy which the
Leader of the Australian Country party criticized will, in fact, reap great benefits for the people and will reduce the charges on the taxpayers in future years. The right honorable gentleman even referred to an amount that he claimed had been set aside to compensate shareholders in the private banks. I shall not discuss the nationalization of banking at this stage, except to remark that if the right honorable member, as Leader of the Australian Country party, had been a farmer instead of an accountant, he would know from bitter experience that there is a vital need for a banking system which will give the primary producers a better deal than they have had up to the present. The right honorable gentleman and his supporters may refer to isolated instances in which private banks have helped farmers, but an examination of history proves that the primary producers of Australia are in urgent need of a financial system which will not continue to extract from them the heavy charges that have been imposed by the trading banks. Under the present banking system, many primary producers exist precariously, operating on overdrafts at rates of interest which are economically unsound, and which, from a business point of view, are absolutely unjustified.
I refer now to the right honorable member’s criticism of the Public Service. I have obtained statistics which contradict his statement that the Public Service is growing beyond reasonable proportions, but as I have not checked them, I do not propose to use them. I was amazed when he added to the total number of servants of the Commonwealth the em,ployees of the new ventures, such as the telecommunications system. Telecommunications work has been taken over by governments throughout the Empire. The right honorable gentleman included that additional figure, and then complained that the same volume of work as was done previously was being performed by the greatly increased number of public servants. That is not true. When the Commonwealth expands its activities in other spheres, the number of public servants will further increase. For instance, with the nationalization of banking, 20,000 members of the banks’ staffs will be added to the Public Service pay-roll. That will not mean that the Public Service is being overloaded. It will merely indicate that the size of the Public Service is being increased in order to undertake a great deal of extra work. I do not believe the right honorable member’s statement that many public servants are not doing the work for which they are paid. It was a completely irresponsible utterance. At any rate, the right honorable member did not submit facts in support of his statement, which theref ore must be discounted.
The Treasurer’s statement foreshadowed the raising of £30,000,000 by means of loans during this financial year in order to finance budgeted expenditure. This indicates that, despite the fact that the Government has reduced taxes considerably, commitments still remain at a high level. That is due to a variety of reasons. The expenditure anticipated in the budget cannot be escaped. Certain post-war charges constitute an unavoidable obligation. Subsidies of various kinds must be provided. No reasonable person would seek to discontinue them at present. Furthermore, considerable expenditure will be incurred in respect of increased social services, which nobody has yet dared to challenge. Unless honorable members opposite can point to item3 of expenditure which they consider to be unnecessary, we must assume that the items listed in the budget represent the minimum commitments of the Government.
I turn now to the subject of revenue. We have entered upon a year in which conditions are considerably unsettled. It is true that budget estimates seldom are exact. It is difficult at any time to make an accurate estimate of governmental requirements for a full year, and, at this time, the difficulty is considerably increased. Normally one would expect that at this stage of our history, trade would be expanding. However, the dollar crisis has arisen and we do not know what conditions may develop from day to day. This makes budgeting a difficult task for the Treasurer. He is able to work only on the facts immediately available, and he can do no more than guess at what the future may bring forth. However, it is reasonable to assume that income from customs duties this year will fall, I because we are seeking to curtail imports in order to enable us to help Great Britain in its present straitened circumstances. We must reduce purchases from the dollar ;area. It is reasonable to assume that prices in most parts of the world have reached a peak, and therefore we must “expect that, with reduced imports, our collections from customs duties will be lower than in the previous year. The assessment of probable receipts from income tax is another extremely difficult task. Because of the difficult economic situation, not only in Australia, but also in other parts of the world, any estimate of revenue from this source may be sadly astray. However, because we have full employment in Australia to-day, and because substantial tax reductions were put into effect during the latter half of last year, it is reasonable to assume that income tax receipts will be lower this- year than previously.
The next item to be dealt with is that of sterling balances. The best aid that we can give to Great Britain in its present needy circumstances is the sort of aid that Great Britain suggests to us. I say earnestly to honorable members opposite that they will not help Great Britain, or improve its prestige, if they proclaim, merely for the sake of gaining some political advantage, that the Mother Country is bankrupt and that we should rush to its help with gifts, or alms of any sort. The people of the United Kingdom deserve something more than the mere charity which honorable members opposite advocate. If the sterling balances which we are accumulating to-day should embarrass the people of Great Britain at some future date, there is no doubt that this Government, or any successor to it, will be generous towards them. We should endeavour to increase our exports, but we should put an end to all the clamour that arises from the Opposition for the making of gifts to Great Britain. Such an attitude must be humiliating to the British people and damaging to their status in the eyes of the world. The fullest possible encouragement should be given to the expansion of our export trade with the United Kingdom, and the Government is working to that end now despite the shortages of machinery and equip- ment from which we are suffering. The scarcity of dollars presents a problem of the greatest magnitude. As the result of World War II., the United States of America has greatly expanded its productive capacity, but . nearly every other country which was formerly highly industrialized, has been virtually devastated. The United States of America could sell its goods in many foreign markets but is precluded from doing so because of the dollar shortage. Other countries have not sufficient dollars with which to purchase the goods which America can export. As the Treasurer said, the only way in which the difficulty may be overcome is for the United States of America to make a magnificent gesture. That position must be faced, and it is unwise and unfair to criticize the American Government and people if they are not able to make the magnificent gesture which is undoubtedly required. Americans are called upon to perform an act of generosity unparalleled in history. It would be something novel if the Australian people were asked to give away the whole of their surplus production even to their . kinsmen in Great Britain. What is the situation which now confronts the American people? To end the dollar shortage, they would have to give away the whole of their surplus production to the starving peoples of the world, including the nationals of former enemy countries with whom the United States of America was engaged in a fierce and sanguinary conflict for several years. In addition, the people of the United States of America would have to submit to the rationing of food and goods on a substantial scale, or seek by some means to prevent banked-up purchasing power and an unsatisfied demand in America from having its effect upon the production of that country, thus reducing the volume of goods for export. Those are two matters which face a government and a people who have no sentimental ties, as Australians have with Great Britain, with other nations. Their only ties are those of trade and commerce. Thus, Americans are faced with a different problem. If they do not make the magnificent gesture, chaos will probably result. It is a big thing to ask the government of any country to agree to prevent the people from buying the products of their own industry, in order to supply those goods free to the peoples of not only friendly but also former enemy nations.
I have devoted some time to a limited number of subjects. However, they are of transcending importance. Defence and post-war charges are a constant reminder to us that although we won World War II., we have not yet arrived at the stage where we can, with any degree of confidence, reduce the charge upon the people for guarding against future aggression. This is the reason why we must not withdraw from any international conference which can assist to achieve world peace, or bring a greater degree of agreement among the nations. The right honorable gentleman suggested that too many people representing the Government were travelling abroad to . attend international conferences. In my opinion, there cannot be too much of it. The more our representatives meet those of other nations in conference to discuss world problems, the more likely it is that wars and disagreements between nations will be avoided. The advantages will be that, on the human side, loss of life and suffering will be averted, and on the financial side, the enormous burden of post-war defence will be removed from the shoulders of the community. Those remarks completely answer the contention advanced by the right honorable gentleman, and some other honorable members, including the honorable member for Reid (Mr. Lang), who referred to this matter on a previous occasion, that the Government should not participate in international conferences which are held from time to time. It is in the interests of Australia as a whole that we should take our proper place in the councils of the world.
Sitting suspended from 1245 to 2.15 p.m.
– I have said that the Government is acting correctly in sending its representatives to conferences held abroad, whenever and wherever they may be held; but I believe that the Government and the governments of other nations should go farther. If we could devise some means whereby the citizens of the several nations could be permitted to intermingle I believe that we should have accomplished a great deal to prevent war. Those who oppose the Government’s policy of sending representatives abroad are adopting a shortsighted policy which does not do justice to the interests either of world peace or of Australia.
Two matters to which prominent mention was given by the Treasurer in his budget speech are the gold tax and the war-time company tax. The concessions which the Government is making will afford relief to the interests concerned, and are a fulfilment of the promise made by the Prime Minister to remove thos& imposts as soon as possible. The removal1 of the gold tax will be of particular benefit to the State of Western Australia,, and should stimulate the production of the one commodity which can to-day purchase the American dollars which we so urgently need.
It has been suggested that the Bretton Woods agreement has failed. I do not believe that it has ; the simple fact is that it was not possible, in the disordered conditions following the war, for the mechanism of the organization to function. The disturbance and disequilibrium caused by the war were too great for the organization to overcome. It is only in normal times, when the balances owing between nations are comparatively small, that the machinery set up could prove its real value and realize the hopes of those who laboured to establish it. The principal reason for the International Bank and the International Monetary Fund being brought into existence, and the reason why I supported the Bretton Woods agreement, was that it was necessary to take some action to counter the evil effects of the resurgence of economic nationalism after the war. It was clear that unless some such organization as the International Bank was created there would be no chance of agreement between the nations on such an important matter. The situation which confronts this country and the world to-day is little less stark than that which confronted us during the war. International disturbances still arise, but a lasting peace can still be achieved if the representatives of the people of the nations of the world firmly resolve to secure peace and to take advantage of the higher standards of living afforded by the developments of modern science.
Turning to Australia’s internal economy, the Leader of the Australian Country party accused the Government of responsibility for the decline of production; but if the Government must accept responsibility for any decline it must also be given credit for any increase. That is something which should he borne in mind, because we have had a good season and Australia will very shortly enjoy the proceeds of a bountiful harvest. Some criticism was directed by the right honorable gentleman at the sum kept in reserve, which, he claimed, was far greater than that disclosed in the budget. His suggestion that a reduction of taxes might be made by the use of this hypothetical sum simply does not hear analysis. The argument of the right honorable gentleman regarding the unexpended balance of loan moneys cannot be sustained. He said that the Government had, in effect, received money on loan on which it had undertaken to pay 3¼ per cent. interest, and had then invested that money at an interest rate of 1 per cent. The simple fact is that the balance of unexpended loan moneys must be deposited somewhere. It may be deposited in a bank on current account, where it earns no interest, or it may he invested in treasury-bills earning interest. That is the reason why the Government invests its funds in treasurybills. I think that the financial policy followed by the Government is one which can scarcely he bettered. It is undoubtedly a fact that goods are in greater demand than supply, and for that reason, if for no other, surplus money ought to be employed in financing social services for those whose essential needs are not satisfied. The only suggestion which I would make to the Treasurer is that he should maintain income tax at its present rate until he is able to make substantial reductions of indirect taxes, which are by far the most burdensome form of impost. Otherwise, I believe that the policy pursued by the Treasurer is sound, not only because it tends to keep prices at their present level, but because Australia’s debts are being paid in large part, by the people of this generation, instead of being passed on to posterity. I applaud the work of the Treasurer, and I believe that when an appeal is made to the country, the people will show their appreciation of his policy.
Debate resumed from the 4th June (vide page 3346), on motion by Mr. Dedman -
That the following paper be printed: -
Post-war Defence Policy - Ministerial Statement.
.- In considering our defence requirements, which are outlined in the plan that the Minister for Defence (Mr. Dedman) has presented to the House, what we want to know first is: “Whom are we to fight against?” “What sort of defences are we building up ?” and “ What sort of a war will we have to fight?” Defence, it is quite obvious, is therefore bound up very considerably with the foreign policy which the Government has been carrying out.
I want to say a few words on foreign policy as it affects our defence commitments. The first thing is that the object of our foreign policy is not the spreading of ideologies or ideas, or the encouragement of those who happen to be in sympathy with the party that is in power in this country at the present time. The primary object of our foreign policy should surely be, first, to keep this country out of war ; and second, to ensure that, if we go to war, we shall do so with the most powerful allies and with the most favorable bases we can possibly get. It is also apparent that what we might call the post-war order in the Pacific is not nearly so favorable to us as we might have hoped at the conclusion of the last war that it would be; because, when that war ended with the defeat of Japan, we saw the temporary end, at any rate, of the only power in the Pacific which had ever threatened us, or wag likely to threaten us for some considerable time. Looking round, we found in other Oriental countries - for example, China - a regime which, whatever we may think about it, was at all events benevolently disposed towards this country,
India, of course, was a part of our Empire, and an absolutely reliable ally. We were looking forward to the time when our old, trusted, and most loyal ally, the Dutch, a European people like ourselves, would shortly go back to power iri Indonesia, so called, that collection of islands with a population of vastly different peoples. Also - another point of significance - the Russians had not made any real entry on the Pacific scene. In addition, we had on our side some very powerful forces, principally the United States of America. I remind the House that, at that time, the sea, air and land forces of the United States of America were spread from Honolulu right across the Pacific, right across northern Australia, between us and any possible aggression which could have come towards us. Now, of course, the scene has changed, from our point of view very much for the worse, and that change must affect our defence policy.
The first and most vital consideration, I believe, is that Russia has appeared in the Pacific scene in a very considerable way. Under its influence, the regime which we have known in China, and which has been favorable or at any rate benevolently disposed towards us, is likely to collapse. We may look forward to the day when there will be in China some sort of a State that will be satellite to Russia, in exactly the same way as Poland and other countries in Europe are satellite to Russia. Should that happen we can hardly expect that it will be favorable to this country. As for India, our old ally, things are in the melting pot, and we cannot tell what will come out of it. In Indonesia, where we looked forward to the return of a power which traditionally had been friendly disposed towards us, that return is being resisted, and there is every possibility that the Dutch will not regain power. I do not want to go into the matter of Indonesia, because it is not, in some senses, apt to the question of our defence; but I want to say that, should the Dutch not go back, and should Indonesia continue to he governed by its present rulers; they, in the very nature of things, being an Oriental people, cannot be favorably disposed towards us, with our White Australia policy. Also, on their present trends, they are a people who strongly favour the Russian ideology and the Russian bloc, by which their present leaders are influenced to a large degree. This will bring very much closer to Australia than has ever been the case before a potentially hostile force. I know that it may suit certain honorable members to support the Indonesians. I am not in the least interested in ideologies. The Government, and certain honorable members, are supporting the rise in Indonesia of a regime which cannot possibly work to our benefit, and may very easily work to our very great disadvantage.
I want to say another word about the allies that we have had, and the support which we have received from them, in the past, in times of war. In the first place, we have grown up and have been protected over the years largely under the shield of the British fleet. That is a factor which we cannot look to in anything like the same measure in the future as we have been accustomed to in the past, because, as honorable members know, Britain no longer has the money to support a fleet which will be much more powerful than that of any other naval power in the world. Furthermore, even if it had the money, it has not now the bases which it had in pre-war days. Every honorable member knows that.
But I want to speak mainly about the way in which the Americans have left the Pacific scene. As I have already said, the Americans at the end of the war were stretched out to the north of Australia like a guard to this country. They have gone. In particular, they have gone from the great naval base of Manus Island. That island was built by the Americans into one of the first and most powerful naval bases in the world. With the exception of Honolulu, it was the first naval hase in the Pacific. It was of marvellous benefit to this country, and of prime importance to us that Manus. Island should be maintained as a firstclass base by the American fleet. Surely one would have thought that, in our foreign policy, the prime object of the Government would have been, at all costs, to keep the Americans in Manus Island; because we cannot possibly support that base as a real power, with our two light cruisers and our six destroyers. It would be ridiculous to pretend that we can. It was, as I have said, of prime importance to keep the Americans there. So long as they were there, no power could attack Australia without attacking the United States of America. I consider that the Minister for External Affairs (Dr. Evatt) has failed very seriously in his duty in not having kept the Americans there, whatever might have been the price that would have had to be paid for it. We do not know the exact terms of the negotiations that took place between the Americans and ourselves, but we do know that it was a matter of first consideration to this country that they should stay there. Furthermore, the matter was one which fell within the department that is administered by the right honorable gentleman, and he has failed, in the plainest terms, to “ produce the ;good3 “.
All of this adds up, as I view the (position, to this, that the danger to this country, from the defence point of view, will Tie far greater in the future than it has been in the past. In a world in which all the nations are looking to their defences, and very much more powerful nations than ours are spending a great proportion of their budgets on their defences, we are particularly vulnerable; because, as all the world knows,- we are rich, we are large, and we are extremely weak. Obviously, therefore, it behoves us to make the greatest contribution that we can to our defences. We find that we are, in fact, doing nothing of the sort. The first point upon which I join issue with the Government’s plans for defence is the very small proportion of our national budget which is being devoted to defence requirements. Great Britain is proposing to devote 21 per cent, of its national budget to defence requirements. In the United States of America, the figure is 34 per cent. In Russia, we do not know what the percentage is, but certainly it is not less than 20 per cent. In Australia, the country which is the weakest and most vulnerable, the allocation is only 12 per cent. If the overall vote is not enough, how can the services get sufficient to enable them to function effectively? The Prime Minister (Mr. Chifley) made it plain that he does not believe in armed forces, because in his policy speech he said that he visualized the future defence of Australia being carried out largely by scientists stationed on islands around the Australian coast. That is a fantastic idea, but he is entitled to hold that view. Though that great strategist may think that that is the way wars will be fought in the future, I do not know of any one else who has the same idea. Certainly the authorities in the United Kingdom do not think so. I should prefer to take the advice of such a distinguished soldier as Field Marshal Montgomery on this matter. He does not favour a reduction of man-power in the armed services ; nor do the Russians. Let us consider the number of armed men in various countries. Great Britain proposes to keep over 1,000,000 men under arms; the United States of America proposes to keep nearly 2,000,000 so employed. We do not know how many trained men Soviet Russia has under arms, but the number must be between 3,000,000 and 4,000,000. I shall deal with Australia’s proposals in this connexion later.
I stress the importance of the time factor in defence. In the past, we have always had time to prepare our defences. In the recent struggle our shores were not attacked until some considerable time after war was declared. The war commenced in September, 1939, but the first Australian troops did not go into action until January, 1941. They could not possibly have gone into action earlier with any chance of success. Fortunately, time was on our side, and we were able to get ready; but that may not always be the case in the future. The possibility that the lag between the declaration of war and the need to fight may never again be so great must be borne in mind. What men have we to put in the field to-day? and what is even more important, how many shall we have next year, or in five years’ time? It is proposed to have a permanent field force, so called, of one brigade. A brigade is not a large force; it is something which can fight a small engagement similar to hundreds which were fought in the war and which have since almost been forgotten, such as the engagement which took place at Wau. Such a force must be relieved after a few days in the front line, or be heavily reinforced. Where is this permanent force? At present, Australia’s only permanent force is in Japan, and there is no suggestion that it should return to Australia. I put it to the House that the Australian force in Japan would be of as rauch use in the defence of Australia as a battalion on the Khyber Pass was to the British authorities during the Battle for Britain. It is ridiculous to pretend that the force in Japan has any relation at all to the defence of Australia, yet that is the only force which we could call upon at short notice to defend us. It is true that there are 14,000 others in the armed forces, but it is not proposed, I understand, that they shall be used in an emergency. They comprise large, numbers of personnel who would be needed to train others in the event of war. There is no suggestion that these are fighting forces.
In addition to the field force, Australia is to have a militia. It is important that we consider this proposal in some detail because, apart from the permanent army, it will be all that we shall have. The militia will consist of two infantry divisions and one armoured brigade. I shall speak of the principle underlying a militia force. First, the militia forces of this country have always been a failure. They could never have been anything else, and they can not be anything else. They have never been up to strength at any time in Australia’s history. Before the war I belonged to a militia unit, and I remember that officers would give a man five shillings if he would bring along a recruit who signed up. How can an efficient army be run on that basis ? From personal experience, I can say that the standard of the militia in pre-war days was so low that on the eve of the war the militia forces could not have undertaken the simplest military operation against a trained force with the least chance of success. It was, in fact, no defence at all. They were a paper army, good for nothing for practical purposes except in the minor degree that they served as a training ground for officers. What happened to this expensive toy when war broke out? The men did not enlist. Millions of pounds had been expended on the militia forces, yet when the call came for men for the Australian Imperial Force, only a few thousand militia men enlisted immediately. It is perfectly useless to rely on militia forces for the defence of this country. It was bad enough in those days, but it is infinitely worse to-day, when the job of training men to fight and to use even the simplest arms takes so much longer than before the war. The Government proposes to have two infantry divisions and it is therefore worth while considering the training required of infantrymen. Before the war, men in infantry battalions were trained in the use of only a few weapons, such as rifle, bayonet, Lewis gun and hand grenade. Having acquainted himself with those weapons, an infantryman’s technical training was complete. To-day, he has to be taught a great deal more. There still remains training in the use of a rifle, but in addition, there are many sorts of grenades, the Bren gun, sub-machine guns, two-inch mortars, tank-attack guns, land mines and other weapons, as well as wireless, the proper use of which takes time to learn. During the war, even with excellent instructors and first-class material, a minimum of six months was required to teach a man how to handle those weapons. In the light of that experience, how can the Minister pretend that men can be trained in 38 days a year, which is all that the scheme of the Government envisages? We are told that the men are to have fourteen days in camp and another 24 days’ training in their own time.
It is also proposed to have a militia armoured brigade. The House should know how long it takes to train men to use armoured weapons efficiently. After Dunkirk, it took the British authorities nearly three years to train armoured crews for battle. We have only to consider the complicated machinery in tanks, guns of different kinds, flame throwers, complicated wireless systems, and so on, to realize that it is impossible to train men efficiently in 38 days a year. I have no hesitation in saying that this scheme is impracticable and impossible. As one who has been a soldier, the Minister for Defence must know that it is not possible to have an efficient militia armoured brigade. Neither do I believe that it is intended to have one. This is merely an imposition, a deception of the people, because an efficient armoured. brigade cannot possibly be formed of part-time soldiers. Before be came here, the Minister for ‘the Army (Mr. Chambers) was a dentist, and, from what I have heard, a very competent one. However, on that happy occasion which comes too rarely when the dentist’s own teeth need attention, would the Minister go to a man who had been instructed in his profession for only 38 days at odd times during the year? Yet in the armoured division, in regard to a much more important matter, he is asking men to become efficient at their jobs with a training of that kind. It is just as difficult to become an efficient soldier in the armoured division as to become an efficient dentist. The Minister must know that his proposal is impracticable.
I have tried to show that our position, from a security point of view, is not as happy as it might be, and only the maximum possible effort will be enough. Despite the fact that compulsory military training is against his principles, I ask the Minister for the Army whether it is not the only way in which this country can make an effective contribution to its own defence. The first task should be to make a survey of the country’s manpower so that we can decide, in the event of war, who is to work and who is to fight. Then, let those who are to fight be trained to enable them to do so efficiently.
Honorable _ members opposite often speak of the depression. They bring it up every time some restrictive legislation is before the House, and they ask us, in the name of the depression, to put up with the loss of privileges and liberties so as to prevent another depression. I am going to borrow their tactics. I remind those who are always ready to weep tears of blood over the depression that, although it was bad enough, at least, during the depression, no one died of hunger, but during the recent war far greater tragedies were enacted. I have seen some of the flower of the manhood of this country knocked down and killed because they were not properly trained. Their deaths were directly attributable to the fact that the right honorable member for Yarra (Mr. Scullin) abolished compulsory military training in Australia, and men were sent to fight who had no knowledge of how to do it. When there is only a limited amount of money to spend on defence, it would be much more economical to spend it in such a way as to ensure that all eligible men receive some training, than to use it for the maintenance of a tiny permanent army which can be little better than an expensive toy. For the cost of maintaining this small, permanent force we could establish a much larger reserve.
It has always been a characteristic of the Australian Imperial Forces that practically no differences have arisen between the permanent soldiers and the citizen soldiers. The citizen soldier in the Australian Imperial Force has always felt that if he had the ability he would be able to win his way to the highest rank available to him, and this has been of great benefit. I need merely mention the names of some of Australia’s great soldiers in support of this, such men as General Monash, General Glasgow, General Blarney, General Herring, and General Morshead, to name only a few. If the size of the permanent army is increased, and particularly the number of higher officers, it will become increasingly difficult for a citizen soldier to attain to the highest ranks. I have no wish to attack the permanent army, but it would be a bad day for Australia if our citizen soldier’s did not have the same opportunity for advancement as they enjoyed in the past. I am convinced from my own experience that the citizen soldier, when trained, is at least as capable of doing a good job as is the permanent soldier.
If, in spite of it9 shortcomings, we are to have a militia let us at least ensure that the force shall be effective. Let us no! repeat the mistakes which we made before the war. Let us not enlist men in reserved occupations who will not be able to go to fight, or who will not want to do so. We should ensure that only those who are prepared to take their places permanently in the forces in the event of war shall be trained. Those who, like myself, were in the Army during the war will have to join the militia because there will be nothing else to join, but 1 shall do so with little confidence, because I do not believe that much good will be achieved. I cannot conscientiously advise young men to join a force which I know very well will he of little use, and will not give them sufficient training to enable them to defend themselves in the event of war.
We need numbers, and we also need a large number of reserve officers to lead the forces in time of war. I recommend to the Minister for the Army - and I notice that he has not even bothered to he present during this debate - that Australia should adopt the same system of training the reserve of officers as is followed by the Canadian Government. In Canada, every man who attends a university is asked to join a reserve of officers. During university vacations,’ he can go to a military college and be trained as a soldier. For undergoing that training he is paid enough to cover his entire university expenses for the year. That is an excellent scheme, and provides a good type of reserve officer. It is very democratic, and costs the Government of Canada but little.
From what I have read, and judging from the photographs which have been published, it appears that our occupation force in Japan is a very efficient one, but the troops that we see in Melbourne are the worst dressed, the dirtiest, the . sloppiest, and the least soldierly-
– I say this quite deliberately, knowing that honorable members opposite will seize upon it as an excuse to wave the flag. .The soldiers that I have seen in Melbourne are the worst dressed and most slovenly that I have seen in any country in the world. It is obvious from their appearance that there is no discipline among them, and where there is no discipline there cannot be efficiency. It is high time that those in charge of the service departments stopped trying to run them like trade unions, and let those whose job it is, namely, the permanent officers, get on with the job of soldiering. I realize that the Minister has a rather uphill task in this respect, because when our present High Commissioner in Canada, Mr. Forde, was Minister for the Army, the practice arose on the part of other Ministers and honorable members generally to interfere with the services down to the smallest detail. I remember that practice because I was in on the receiving end. I readily recall the constant stream of useless and ill-informed interference which then came from the Minister. I hope that the present Minister will put a stop to that practice and let the soldiers, whose job it is to run the Army, get on with that work.
I emphasize that the only effective basis of defence of this country is the acceptance of the principle of universal military training; and that principle should be enforced without exception. I have little hope that it will be accepted by the present Government, because honorable members opposite will make their decision in this matter as they do in all other matters on purely party lines. However, after all, no member of the present Cabinet - and this applies to the majority of honorable members opposite - will himself be affected by defence policy whatever that policy may be, because by no stretch of the imagination could it be supposed that he will be called upon to serve in the defence of this country. That responsibility will fall upon the people as a whole, and I urge the Government for once to lay aside party politics in this matter and implement a policy which every honorable member opposite knows to be the only effective policy for the defence of this country, and that is to implement compulsory military training.
.- 1 congratulate the honorable member for Henty (Mr. Gullett) on his vigorous, thoughtful and knowledgeable speech. It is refreshing to hear a young member of the Parliament speak from experience and tell the Government what should be done. He does not do that for any party political purpose, or to achieve any personal gain. It is not easy for an honorable member to take a. courageous stand in this matter and declare that the people of Australia cannot defend themselves effectively unless our defence is based on universal military training. The honorable member for Henty has said that. I recall that in the last Parliament at least one Minister used to advocate universal military service. I refer to Mr. Frost, the former member for
Franklin. But the Labour party has never been’ defence-minded. It is prepared to devote a great deal of its time to industrial matters; but with respect to the defence of the country it becomes very party-minded and refuses to implement a policy of effective defence. If the Government would ask the service chiefs for a plan for the defence of this country, they would reply, “ You cannot obtain, train and maintain adequate forces without universal military service “. That is the opinion of the service chiefs who have held it under all administrations. But, as the honorable member for Henty has pointed out, a previous Labour government, in which the present Prime Minister (Mr. Chifley) was Minister for Defence, abolished universal military service. That Government sent back to Great Britain the two submarines we then possessed, and closed down the splendid military college at Duntroon; The college then enjoyed a reputation throughout the world for the efficiency of its training, and its students won Empire champion- ships for efficiency and skill at arms. That Government re-opened the college on a modified scale at Darlinghurst. At that time, it put our present permanent generals and members .of the military staff on half-pay, but left on full pay the clerical staffs in the department, whose work really depended upon the service officers, thus creating a ludicrous position. That was the record of the Scullin Administration. It was not surprising that the Minister for Defence in that Government, the present Prime Minister, lost his seat at the following general elections. Now that he is back in office, can we expect anything better so far as a defence plan is concerned ? I know that honorable members opposite are very sensitive about these facts. One can quote ad lib. from Ilansard their utterances in those days. Perhaps, it is sufficient to quote the view expressed by our present High Commissioner in London, Mr. Beasley, who was formerly the member for West Sydney. He said -
The language of Downing-street is not the language of Australia. With the wars of imperialism Australia can have no concern.
The workers of every nation that participated in the last war suffered the one fate; for them there was no victory.
Mr. Beasley said that in 1934; but let us look at the 1947 edition of Mr. Beasley as revealed in a speech which he made at Sheffield on the 26th June of that year, when he said -
No Australian will forget that Britain stood alone at one period of the war. I emphasize the need for the whole of the British Empire to share in its defence. Australia feels that she is a trustee with the rest of the British Empire in the Pacific.
That was not his first statement oh defence matters following his appointment as High Commissioner to the United Kingdom. At Leamington, on the 15th July, 1946, referring to Australia’s position in World War II., he said -
There was a moment when we had difficulty in stiffening the morale of our people, who were driving cattle from the coast and shifting hospitals inland. The reason was that we were ill-equipped to meet the extraordinary situation. We really had nothing. I am not here to complain, other than to say that we must never he caught in the same position aga.in.
Surely that warning should make some impression upon Honorable members opposite. Yet Australia’s present expenditure on defence averages £5.3 per capita, the corresponding expenditure of Great Britain being £19.5, the United States of America £27.1, -and the Union of Soviet Socialist Republics £17.3. As a white man’s outpost on the fringe of teeming millions of Asiatics, can we defend this country at such a low cost? Again we shall lean upon the Mother Country. Although a Labour government is in office in Great Britain - and to its credit I say that it is not of the type we have here - it has introduced universal military service. In a joint declaration in the House of Commons this week, members of the Conservative, Liberal and Labour parties declared that Great Britain must never allow its defences to be weakened, but must stand up to the forces of the Union of Soviet Socialist Republics, which are at work in various countries and are a threat to the world to-day.
Yet the Australian Government seems to be oblivious of that fact. It proposes a defence plan which would hardly do justice to a country like Albania. Even Albandia has universal military, service, and flying corps probably equal to ours. At present, in addition to the Minister for Defence, there are three other service Ministers in the present Cabinet of nineteen Ministers, yet we have no effective defence plan. It is unnecessary to have four service Ministers. One efficient Minister with an ‘assistant would be adequate to do this job effectively. Three of those Ministers are more or less in the category of mere salvage corporals. They are busily breaking up the splendid services which we organized during the war. When I suggested two years ago that we should establish a fleet air arm. I was told that that could not be done. Now, the Government intends to procure two aircraft .carriers. The honorable member for Henty examined thoroughly the position of the Army. It is not right that we should have a military board consisting entirely of regular military officers, an air board consisting entirely of regular air force officers, and a naval hoard consisting entirely of regular officers of the Navy. During the war, the army authorities recognized that the Citizen Forces should be represented on the highest command. General Sir Thomas Blarney ensured that distinguished citizen force soldiers, suchas Sir Edmund Herring and others should be appointed to high command. In the Royal Australian Air Force the contrary was the case. Throughout the war, the Air Board consisted of regular officers of the Royal Australian Air Force, and many injustices were done to thousands of magnificent men who served in that organization. Under the Empire air training scheme, the Royal Australian Air Force enlisted 187,000 men and women. Squadrons of the Royal Australian Air Force operated in Great Britain, the Middle East and the Southcast Pacific, yet when young Australians who rose to commands in their squadrons in Australia when given a change of duty, were all too frequently reduced in rank. For instance, Wing-Commander Bungey commanded the famous 452 Fighter Squadron, which at one time had the best record of the whole of the air force in Great Britain. In three successive months, it shot down more German aircraft than did any other squadron, and in another month, it tied with a second squadron. The wing- commander was due to be promoted to group captain, but desired to return to Australia. He had gone to Great Britain on a short-service commission with the Royal Air Force. On his return to the Australian service, he suffered the most humiliating conditions. He was reduced in rank to squadron-leader, and later he met a tragic death. Wing-Commander Truscott. known all over Australia as one of our most successful fighter pilots, succeeded Wing-Commander Bungey on his return to Australia. He also was reduced in rank by the Air Board when he came back to this country. Subsequently he was second in command in New Guinea, where he again distinguished himself and later was killed. Flight-Lieutenant Brennan, D.F.C., A.F.M., who in Malta had many victories in the air, returned to Australia and was reduced in rank. This was the experience not only of three eminent fighter pilots, all later killed, but also of a vast number of men who served two “ tours “ of duty over Germany before returning to Australia. I relate these incidents to show that a citizen force officer should be appointed to the Air Board. If that had been done these injustices would not have occurred.
In Great Britain hundreds of young sergeants were members of aircrews as pilots, navigators or air gunners, and though they remained in service there for long periods, they received no promotion over an inordinate period. Their treatment in that regard was completely different from that accorded to the aircrew of the other dominions and the Royal Air Force. One of these was Pilot Officer Middleton, later awarded a posthumous Victoria. Cross. When I saw him in Great Britain, he asked me what was the promotion policy of the Air Board, and I brought his name under notice. He was the only Australian in the Royal Air Force squadron to which he was attached, and at the time had the rank of sergeant. He had already carried out 22 operations over Germany, had two Royal Air Force officers in his crew, and was captain of the aircraft. He was awarded a posthumous commission when the posthumous award of the Victoria Cross was made. Had the Air Board understood the need for the appointment of citizen officers to high command and to the Air Board, these injustices would not have been perpetrated. I mention this matter in peace-time in the hope that this policy will be changed. It is a matter not of politics, but of efficiency. The Minister for Air (Mr. Drakeford) should take immediate steps to appoint a competent senior citizen force officer to act on the Air Board in an advisory capacity. The Minister for Defence (Mr. Dedman), who has an overriding influence on the three services, should see that this is done. As a former soldier, he must know that the bulk of the forces are drawn from the civilian population, and, accordingly, civilian soldiers should be represented on these service boards. After World War I., a Defence Council was established to which the late Sir John Monash and other distinguished’ citizen officers, on retirement, could be called for consultation.
– A Defence Council still exists.
– It does not meet often.
– That is not so.
– The Minister for Defence will, I am sure, agree that it would be an improvement if citizen force officers were appointed to the service boards. Our war-time commander in chief is not eligible to sit on the Military Board ; yet he was given command of a whole army, and held this post right through the war.
It is pathetic that the Minister for Air should be agreeable to the provision of such an inadequate air force as that proposed in the Government’s defence plan. The scheme provides for a static home defence organization comprising four interceptor fighter squadrons, one heavy bomber general reconnaissance squadron, one target-towing squadron, and one air-sea rescue squadron, and a task force comprising two long-range fighter squadrons, three heavy bomber squadrons, two transport squadrons, two ancillary squadrons and a survey squadron, a total of sixteen squadrons. I do not contend that it would be possible for this country to maintain an air force at anything like the strength it reached during the war, but I deplore the fact that our air defences are to be so seriously whittled away. Any one who goes along the Geelong-road to-day will see thousands of aircraft deteriorating-
– That is happening all over the world.
– Thousands of our young airmen who achieved distinction in battles in the skies are now being wasted, too. No provision has been made for the establishment of an adequate air force reserve, or the utilization of the skilled services of these young men as voluntary instructors with the air training corps. Thousands of young Australian boys wish to join the Air Training Corps, but that organization is kept to small dimensions. Our young airmen who would be glad to join as voluntary instructors, would constitute a valuable nucleus in case of need. When we spoke in this vein ten years ago, we were jeered at as “ sabre-rattlers “. Is the world any safer to-day than it was then? Russia now has far greater military forces than has the United States of America, and is anxious to discover the secret of the atom bomb. We all are aware of the great advances that have been made in aircraft design, resulting in the production of jet-fighters and press-button techniques which will enable aircraft loaded with atomic bombs to be flown great distances in order to wreak havoc on a distant enemy. The Air Force must be not only efficient but also adequate in numbers of men and aircraft. Had Air Vice-Marshal Bennett, whom the commander of Bomber Command in Great Britain declared to be the most efficient airman in the world, stayed in Australia, he would no doubt have been reduced in rank to squadron leader. Air Vice-Marshal Bennett was the founder of the Pathfinders and a leading spirit in the Royal Air Force in Great Britain. Many of our most efficient officers have been discharged from the service. Others in the higher ranks have been pushed still higher, whilst the squadrons upon which we shall have to rely should the need arise again to defend this country, have been whittled down to microscopic proportions.
I have no wish to speak at length upon this matter, but I should be recreant to my duty as a. member of this chamber if I were not to take this opportunity to draw attention to the level to which this Government is permitting our armed forces to drift. I speak with some experience of the Air Force, and I say that the proposals in respect of this service at least are evidence of neglect for which the Government will never be forgiven should a war occur. Apparently, in deciding upon the expenditure for the three services, the Government fixed the figure of £250,000,000 for five years and then divided it roughly by three, allowing £75,000,000 for the Navy, £62,500,000 each for the Army and the Air Force, £33,500,000 for research and £17,500,000 for munitions and supplies. If the Navy requires new ships it will need a greater votethan either of the other two services. The Air Force needs money to expand its personnel. Apparently, the allocations provided for the services in this budget are a compromise to satisfy contending Ministers in the Cabinet. They are quite inadequate for Australia’s requirements. I believe, therefore, that the Government should reconsider its decision and endeavour to make more adequate provisions for the defence of this country.
Debate (on motion by Mr. Chambers) adjourned.
The following paper was presented: -
Arbitration (Public Service) Act - Determination by the Arbitrator, &c. - 1947 - No. 72 - Association of Architects, Engineers, Surveyors and Draughtsmen of Australia, and others.
House adjourned at 3.17 p.m.
The following answers to questions were circulated: -
n asked the Minister for Commerce and Agriculture, upon notice -
– The answer to the honorable member’s questions are as follows : -
n asked the Minister representing the Minister for Trade and Customs, upon notice -
– The Minister for Trade and Customs has supplied the following information : -
s asked the Minister for
Commerce and Agriculture, upon notice -
– The answers to the honorable member’s questions are as follows : -
Forty-hour Week: Effect on Housing Programme.
s asked the Minister for Works and Housing, upon notice -
– The answers to the honorable member’s questions are as follows : - 1 and 2. No. However, the Court in delivering its judgment gave the opinion that the shorter working week was not likely to reduce production nearly as much as some pessimistic estimates had suggested. It expressed the view that at worst the 40-hour week will postpone for some period- not long it thought - the final overtaking of the demand for housing.
s asked the Minister for the Navy, upon notice -
– The answers to the honorable member’s questions are as follows : -
n asked the Minister representing the Acting AttorneyGeneral, upon notice -
What costs were incurred by the Commonwealth in the High Court case over section 48 of the Banking Act 1945 on - (a) its own account in (i) advice, retainers, &c., (ii) Court, and (iii) other expenses; and (b) account of the litigants whose costs were paid by the Commonwealth on the order of the High Court?
– The Acting AttorneyGeneral has advised that the information requested is being obtained and will be supplied to the honorable member as soon as possible.
d. - On the 19th September, the honorable member for Boothby (Mr. Sheehy) asked the following question : -
Has consideration been given to the reduction of duty on Oregon, which is the most suitable timber for home building? If not, will an investigation be made to ascertain what can be done in that direction?
The Minister for Trade and Customs has supplied the following information : -
With a view to relieving the shortage of timber in Australia for home building and other purposes, the Government referred the question of the temporary suspension of the Customs duties on imported timbers,’ including Oregon, to the Tariff Board in August, 1946, for inquiry and report. It was thought at the time that if the duties were suspended the importation of timber would bc stimulated. lt subsequently became apparent, however, that the quantities of timber which other countries had. to offer Australia were very limited owing to the world shortage, and that any temporary suspension of the Customs duties would not materially affect supplies in Australia. Recent advices received from North America have confirmed that this position still prevails. In view of this and of the practical difficulties which would arise from any temporary suspension of duties no action has been taken in the .matter. The general position is, however, being watched and a constant review is being made of local production, imports and stocks in bond.
s asked the Prime Minister, upon notice - ‘
The barracks are filled again and the hotels and billets are humming with life.
From absolutely trustworthy sources along the Baltic coast inside the Soviet zone, reports indicate that the gloves of war arc being put on again “ ?
– The answers to tho honorable member’s questions are as follows : -
n’ asked the Minister for the Navy, upon notice -
– The answers to the honorable member’s questions are as follows : -
n asked the Minister for the Navy, upon notice - 1. (a) What leave provision is made for members of the Royal Australian Navy; (I) is this privilege uniformly observed on all ships; if not, why not?
– The answers to the honorable members questions are as follows. - 1. (a) The Navy entitlement of recreation leave at present is 24 days per annum as approved by War Cabinet in March, 1945, for all services. The question of leave for the post-war forces is being examined by an interdepartmental committee, (o) Granting of leave is observed as uniformly as possible in all ships but as it is dependent upon the movements of ships and the exigencies of the service it is not always possible to achieve complete uniformity.
Cite as: Australia, House of Representatives, Debates, 26 September 1947, viewed 22 October 2017, <http://historichansard.net/hofreps/1947/19470926_reps_18_193/>.