House of Representatives
30 September 1947

18th Parliament · 1st Session



Mr. Speaker (Hon. J. S. Rosevear) took the chair at 3 p.m., and read prayers.

page 282

QUESTION

BANKING

Nationalization : Petition ; Propaganda

Mr. ARCHIE CAMERON presented a petition in relation to banking in Australia from certain electors of South Australia.

Petition received and read.

Mr SHEEHAN:
COOK, NEW SOUTH WALES

– I ask the Minister representing the Minister acting for the Attorney-General whether it is a fact that private employers are placing propaganda leaflets opposing the proposed banking legislation of the Government in the pay envelopes of their employees? Is it a fact that the vast majority of workers resent this action and have threatened to cease work if the practice be continued ? If so, in view of the importance of peace in industry, is the Minister able to state whether he has authority to order the discontinuance of this practice, and, if so, will he take the necessary action ?

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– I do not know whether or not the practice complained of by the honorable member is being indulged in, but I have heard rumours that it is. I do not know whether any action can be taken in the matter unless the resentment of the workers brings about an industrial dispute, in which event the complaint will be referred to the court and some publicity given to it. I shall discuss the subject with the Minister acting for the Attorney-General and endeavour to ascertain whether some means may be devised to prevent employers from intimidating their employees in this way.

page 282

HOUR OF MEETING

Motion (by Mr.Chifley) agreed to -

That the House, at its rising, adjourn to to-morrow, at 10.30 a.m.

page 282

QUESTION

EMPLOYMENT

Mr LAWSON:
BRISBANE, QUEENSLAND

– I ask the Minister for Labour and National Service: What is the state of the labour market in Australia to-day? How do the figures in regard to Queensland compare with those of other States? Is the number of unemployed persons increasing or decreasing?

Mr HOLLOWAY:
MELBOURNE, VICTORIA · FLP; ALP from 1936

– I should say that there is now full employment in fact, rather than in theory. I do not know that a closer approach could be made to it. The total numberof persons in Australia receiving unemployment relief to-day is 4,208, which is 239 fewer than the figure given in the last report received nine days ago. Queensland compares unfavorably with all the other States. That has always been the position, because of the seasonal nature of its big industries. In Queensland, 1,800 persons, or 121 fewer than last week, are receiving assistance. I think that the /numbers will continue to fall; for some time they have been decreasing. At the present time, the figures for the whole of Australia are the lowest yet reached.

page 283

QUESTION

PRICES CONTROL

Dismissal of Officials

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Nearly six months Ago I disclosed in this House that four officials of the Prices Branch had been dismissed, and I made allegations of bribery and corruption in certain sections of the branch. I was then informed that an inquiry would be held. In view of the time that has elapsed since that assurance was given to me, and the dearth of information concerning the outcome of any investigation, can the Minister representing the Minister acting for the Attorney-General say whether the promised inquiry has been held ; if so, whether it has been completed; what was the outcome of the investigation; and what action does the Government propose to take as a result? If the inquiry has not been completed, is it because the Government is gambling on the short memory of the public, and intends to pigeon-hole the matter?

Mr HOLLOWAY:
Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP

– There has been a thorough investigation of the allegation that certain officers of the Rationing Commission have acted in an irregular manner. The inquiry has revealed that there is no ground at all for any suggestion of malpractice on the part of any officer of the commission. Nevertheless, the investigation disclosed that two cafe proprietors had acted improperly, and their cases are now before the court.

Mr Harrison:

– My question has special reference to meat, and to the four officials of the Prices Branch who were dismissed.

Mr HOLLOWAY:

– On a previous occasion the honorable member asked questions relating to both subjects. The allegations regarding improper conduct of officers of the Prices Branch have been investigated with the result that four men have been dismissed. There was no evidence to justify ‘he prosecution of two of the dismissed men, but the remaining two are being proceeded against in court. The case has beer adjourned, and the matter is now sub judice.

Mr SPEAKER:

– Order ! In the circumstances, no further comment on the subject must be made.

page 283

QUESTION

SHIPPING

Tasmanian Services - Threatened Engineers’’ Strike - Sugar Supplies - Transport of Goods

Mr DUTHIE:
WILMOT, TASMANIA

– In view of Tasmania’s complete dependence on shipping, will the Minister representing the Minister for Supply and Shipping endeavour to have one or more Commonwealthowned vessels placed on the Tasmanian service in the event of shipping being tied up through a strike of engineers, as I understand that Commonwealthowned vessels are not likely to be affected by the strike?

Mr DEDMAN:
Minister for Defence · CORIO, VICTORIA · ALP

– I shall refer the honorable member’s question to the Minister for Supply and Shipping, who will undoubtedly take action, should the necessity arise.

Dame ENID LYONS:
DARWIN, TASMANIA

– In view of the acute shortage of sugar in Tasmania, particularly in the north-west, and having regard to the threat of a complete stoppage of coastal shipping, will the Minister representing- the Minister for Supply find Shipping say what, if anything, is being done to ensure that Tasmania receives adequate supplies of sugar in the future? Can he say whether, in the event of a shipping strike, sugar will be transported to Tasmania by air if necessary?

Mr DEDMAN:

– It is obvious that I cannot give any assurance in this matter, but I promise that I will discuss it with the Minister for Supply and Shipping, who will, so far as he is able, make suitable arrangements to meet the situation.

Mr WATKINS:
NEWCASTLE, NEW SOUTH WALES

– Oan the Prime Minister say what i3 the present position regarding the marine engineers’ dispute, and what action has the Government taken to effect a settlement; ?

Mr CHIFLEY:
Prime Minister · MACQUARIE, NEW SOUTH WALES · ALP

– I could make a long statement on this subject, because I have been in constant consultation with the parties concerned since last Thursday &s a- matter of fact, I was in’ Consultation with some’ o’f them until the moment I came into the House to-day in an effort to avoid a dislocation of shipping as a result of the dispute with the marine engineers. Further consultations are taking place, and in view of this fact it would be unwise for me to make a statement now. I shall try to let the honorable member know as soon as any conclusive result is obtained.

Sir EARLE PAGE:
COWPER, NEW SOUTH WALES

– In view of the threatened hold-up of shipping, will the

Prime Minister take up with the State governments the question of amending their road transport legislation which prevents goods being carried by road for long distances? I have received a letter from certain chambers of commerce pointing out that even before the threatened tie-up of ships the shortage of railway rolling-stock made it almost impossible to obtain supplies of many commodities on the north coast of New South Wales.

Mr CHIFLEY:

– I hope that common sense will prevail and that it will be possible to avoid the shipping tie-up, but if such an unfortunate happening does take place, I will certainly arrange for the Minister acting for the Minister for Transport, and, if necessary, myself, to consult the State Ministers for Transport or the Premiers to see if it is possible to improve the position regarding the carriage of goods.

page 284

QUESTION

WAR GRAVES

Visit of Australian Representatives to Gallipoli - Unveiling of Tobruk Memorial

Mr RANKIN:
BENDIGO, VICTORIA

– Is it a fact, as reported in the press, that Cabinet has rejected a proposal by the Australian Battlefields Memorial Committee that a representative Australian party should visit the war graves on Gallipoli, as well as the unveiling of the Rats’ Memorial at Tobruk? Has the Government decided that the High Commissioner in London, Mr. Beasley, is a more suitable person than a member of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia to represent Australia at those ceremonies ? If so, what are Mr. Beasley’s special qualifications that he has been chosen in preference to men who participated in the fighting at Gallipoli and Tobruk?

Mr JOHNSON:
Minister for the Interior · KALGOORLIE, WESTERN AUSTRALIA · ALP

– No decision has yet been made as to Australia’s representation at the unveiling of the memorial’ at Tobruk. A recommendation from theAustralian Battlefields Memorial Committee was discussed at a previous Cabinet meeting, but was referred back to the committee for an amended agenda. Therefore, in effect, no decision has yet been reached as to who will constitute the delegation to attend the unveiling of the war memorial at Tobruk, and no decision will be reached until the matter is discussed further by the committee and referred to Cabinet.

page 284

QUESTION

AGE AND INVALID PENSIONS

Mental Patients

Mrs BLACKBURN:
BOURKE, VICTORIA

– Earlier this year, when the Social Services Consolidation Bill was before the House, I drew attention to clause 133, which deals with pensioners who become inmates of mental hospitals, and who, in the terms of thebill, thereupon cease to receive age or invalid pensions. Does the Minister representing the Minister for Health and Social Services recall that he suggested that this might be altered by regulation?Does he know that no alteration has yet been made and that, so far, no part of the pension is paid in the ease of mental hospital patients? Will the Minister do something to improve the position of those persons and their relatives?

Mr HOLLOWAY:
ALP

– I do not know what is the position, but I undertake to obtain accurate information and supply it to the honorable member.

page 284

QUESTION

INDIA AND PAKISTAN

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– Can the Prime Minister say whether it is correct, as reported in the press, that the Dominions of India and Pakistan are seeking the good offices of the Australian and other dominion governments in an effort to reconcile their differences? Will the Prime Minister make a statement on the subject, and will he consider a suggestion, which has been made overseas, that the services of Mr. R. G. Casey might be co-opted?

Mr CHIFLEY:
ALP

– It is true that a communication was addressed by the Pakistan Government to the British Government soliciting the assistance of the British Commonwealth to help overcome difficulties which have arisen in India, as -the result of which, as the honorable member knows, there has been very serious loss of life. The most I can say at the moment is that this matter is still the subject of consultation between the governments of the various dominions. With regard to the latter part of the honorable member’s question, I have not ;given consideration to it, and no such suggestion has been made to me.

page 285

QUESTION

DAIRYING

Constitution of Australian Dairy Produce Board

Mr McLEOD:
WANNON, VICTORIA

– I wish to ask a question of the Minister for Commerce and Agriculture relating to the appointment of the chairman of the Australian Dairy Produce Board which the Government proposes to reconstitute. I point out that the dairying industry, through cooperative factories, has provided the opportunity to some dairy-farmers to become highly skilled in the commercial and marketing sections of the industry. I suggest that it would be’ most appropriate to appoint as chairman of the reconstituted board a producer who comes within that category. Will the Minister consider recommending to the Government that such an appointment be made?

Mr Anthony:

– I rise to order. As the matter raised by the honorable member is covered by the Dairy Produce Export Control Bill, the motion for the second reading of which stands on the notice-paper, is the honorable member’s question in order seeing that every honorable member will have an opportunity when that bill is being discussed to make suggestions with respect to this matter?

Mr SPEAKER:

– The fact that the question is related to a measure on the notice-paper does prevent prior debate upon it; but an honorable member is in order in asking a question in such circumstances with respect to a matter of urgency. I do not know whether this matter is urgent or not. The Minister nods his head to denote that it is.

Mr POLLARD:
Minister for Commerce and Agriculture · BALLAARAT, VICTORIA · ALP

– It is true that the Dairy Produce Export Control Bill now before the Parliament provides for the reconstitution of the Australian Dairy Produce Board. That measure provides for the appointment of the chairman of that body by the Government. I am satisfied that a number of primary producers are well versed in not only the production side but also the technical and management side of the industry. In those circumstances, I propose to recommend, when the measure has been passed, that the Government appoint a suitable primary producer as chairman of the board.

page 285

QUESTION

PALESTINE

Mr SPENDER:
WARRINGAH, NEW SOUTH WALES

– Having regard to the serious results which may follow the withdrawal of the British from Palestine, and bearing in mind the effect of occurrences to-day in Palestine upon the peace of the world, I ask the Prime Minister : Was the Australian Government consulted by the British Government before ‘announcing its decision with respect to its withdrawing from Palestine? If so, does this Government agree with that decision made by the British Government? If this -Government were not consulted, did it protest at not being consulted? If it made no protest in that respect, are we to understand that it has no interest in what takes place in Palestine ?

Mr CHIFLEY:
ALP

– The Government was informed of the British Government’s intention with respect to its withdrawal from Palestine. No protest was made by this Government against the British Government’s decision. Now that the decision has been made I may say - I have refrained from saying it previously - that the question of Palestine was discussed at the Prime Minister’s conference. It has not been the subject of consideration by the Government, and anything I said at that conference I said on my own personal responsibility. It was for a long time my belief that the United Kingdom Government should not be expected to carry the burden of maintaining what was virtually a police force in Palestine. As the honorable member is aware, a special commission inquired into the matter at that time.

Mr Spender:

– The commission made certain suggestions.

Mr CHIFLEY:

– It made no suggestions, but it recommended the admission from Europe into Palestine of an additional 100,000 Jews. In expressing my own personal view on the subject, I had regard to the number of British troops that had to be kept in Palestine and the fact that most of them had to be conscripted in Great Britain. I did not regard the matter as one upon which the Australian Government should express an opinion.

Mr Spender:

– And not one upon which the Australian Government should even be consulted ?

Mr CHIFLEY:

– The United Kingdom Government knew that my viewpoint was not necessarily that of the Australian Government. 1 was of the opinion that the drain on British man-power and money was too great and that, accordingly, the Palestine mandate should be handed back, either to the League of Nations or to the United Nations, whichever body was regarded as having responsibility for it. “The subject has not been discussed by the United Kingdom and Australian Governments. The Minister for External Affairs, who knew my views, was also present at the Prime Ministers’ conference when my personal opinions on the matter were expressed. The subject has not been discussed by Cabinet. Finally, the Australian Government was not asked for its concurrence in the proposal to withdraw British troops from Palestine. It was, however, kept fully informed of the intentions of the United Kingdom Government in the matter and, when the decision to withdraw was finally announced, the Australian Government offered no objection to it.

page 286

QUESTION

BRIGALOW SUCKER

Mr DAVIDSON:
CAPRICORNIA, QUEENSLAND

– In view of the development of the menace of the Brigalow sucker in many valuable agricultural lands in Queensland, and reports to the effect that the Council for Scientificand Industrial Research is meeting with some success in its efforts to discover effective and cheap methods for the eradication of this pest, will the Minister incharge of the Council for Scientific and Industrial Research inform theHouse if these investigations are being, carried out, and, if so, whether any measure of success has yet attended them?

Mr DEDMAN:
ALP

– The Council for Scientific and Industrial Research is conducting experiments over a very widefield. I am not aware how far it has gone towards the solution of the problem mentioned by the honorable member. I shall ascertain the facts and convey them to the honorable member.

page 286

CHINA

Mr FALSTEIN:
WATSON, NEW SOUTH WALES

– I direct the attention of the Prime Minister to an. article published in the Sydney SundaySim of the 28th September, headed “ Sun Fo’s Red Threat was Blackmail “. SunFo is Vice-President of China and leader of the Government party, the Kuomintang. The article states -

There have been times when Sun Fo hasspoken very sensibly, as, for example, whenhe denounced the break between Chiang’ Kai-shek and the Communists as the greatest disaster which had befallen the Republic sinceits establishment. In those days there was ever)’ reason for Chiang and Communist leaderMao Tsung to join to expel the Japanese. It was a matter of compromise and goodwill. There have been times, too, when Sun Fohas spoken foolishly, as, for example, last week when he threatened that, unless theUnited States continued its aid to China, the Nationalist Government would make an alliance with the Soviet. Sun Fo’s outburst was a reply to General Wedemeyer’s factfinding report to President Truman. The tenor of that report was that corruption, inefficiency and political strife were so developed in China, that to give any further support to Chiang Kai-shek would be to throw good money after a lot of bad money.

Mr SPEAKER:

– Order ! I think that the honorable member has read sufficient to make his question clear.

Mr FALSTEIN:

– I ask the Prime Minister whether, in view of the fact that General Wedemeyer’s report apparently has been made public, he will obtain a copy of it and have it examined by departmental officers responsible for the consideration and recommendation of policy in regard to the Far East ?

Mr CHIFLEY:
ALP

– The honorable member will appreciate that it is not usual for a government to seek from another government a report of a confidential nature, and I certainly should not be prepared to do that. However, it may be that the report to which the honorable member has referred has been made a public document, in which case I shall ascertain whether copies can be obtained for the information of honorable members.

page 287

QUESTION

ARMED FORCES

Payment in Lieu of Leave - Deserters.

Mr HOWSE:
CALARE, NEW SOUTH WALES

– I wish to direct a question to the Minister for the Army in regard to the Government’s recent decision relating to payment for recreation leave due to deceased members of the armed forces.Will the Minister explain to the House the reason for the differentiation between payments proposed in respect of leave due to servicemen killed in action and of servicemen who died in prisoner-of-war camps?

Mr CHAMBERS:
Minister for the Army · ADELAIDE, SOUTH AUSTRALIA · ALP

– I shall give consideration to the honorable member’s question and make a statement upon the matter to-morrow or on Thursday.

Mr RANKIN:

– I ask the Minister for the Army : If a former serviceman who deserted from the Army in 1944 now gave himself up, would he be assured of a pardon, discharge, and deferred pay?

Mr CHAMBERS:

– He would be entitled to dischargein absentia, and to deferred pay, but not to other benefits, such as war gratuity.

page 287

QUESTION

INFANTILE PARALYSIS

Mr CLARK:
DARLING, NEW SOUTH WALES

– Has the attention of the Minister representing the Minister for Health been drawn to a paragraph published in yesterday’s press stating that a German physician had developed a serum for the treatment of infantile paralysis? Will the Minister ascertain whether this serum or information in regard to it can be made available for use in this country?

Mr HOLLOWAY:
ALP

– I have seen the statement to which the honorable member has referred, but I have not had time to discuss it with the Minister for Health. I shall do so as soon as possible, and ask whether he intends to do as the honorable member has suggested.

page 287

QUESTION

BULGARIA

Execution of Nikola Petkov

Mr WHITE:
BALACLAVA, VICTORIA

– Has the Prime Minis ter seen the statement of the State Department of the United States of America relative to the execution of Nikola Petkov, Bulgarian democrat, patriot and parliamentary Leader of the Opposition, that in the court of world opinion, the Bulgarian Government has shown itself lacking in the elementary principles of justice and the rights of man? Is the right honorable gentlemen aware that there were strong protests from the governments of the United Kingdom, France, Switzerland and other countries against the execution and that all the parties in the House of Commons passed a condemnatory resolution ? Will he make a similar pronouncement expressing the sentiment of the Commonwealth Government and instruct the Minister for External Affairs to voice Australia’s protest at the United Nations Assembly ?

Mr CHIFLEY:
ALP

– I have seen some statements in the press about the matter, but I do not know that I read the particular item mentioned by the honorable member. I do know that protests have been made on behalf of a number of nations, including the United Kingdom, which speak, in a general way, I think, for most freedom-loving peoples. I will consider the other aspect of the honorable gentleman’s question.

page 287

QUESTION

THE PARLIAMENT

Letter to Mr. Speaker

Mr ARCHIE CAMERON:
Postmaster-General · BARKER, SOUTH AUSTRALIA · ALP

– I have a letter addressed to you, Mr. Speaker, by Mr. A. G. Wallman, of Yankalilla, in my electorate. I should like to know the procedure. Am I to read it or hand it to you, sir?

Mr SPEAKER:

– If the letter is addressed to me through the honorable member, the best thing to do would be to hand it to me.. I do not think the honorable member should read it.

Mr Archie Cameron:

– I shall do as yon suggest.

page 288

WHEAT

Stabilization Scheme - .Shipments

Mr POLLARD:
ALP

– The Government’s intentions in regard to the wheat industry have already been exhaustively outlined in this Parliament. It is true that, owing to the failure of the various State Parliaments to pass complementary legislation, there have been some changes in the situation, and, in view of that, I shall be glad to make a statement in the House outlining the exact situation.

Mr SHEEHAN:

– I ask the- Minister for Commerce and Agriculture to say whether the prospects are that in the ensuing season Australia will have the largest wheat harvest it has had for the last 50 years. Has the Minister made arrangements for the provision of shipping facilities for the transport of this wheat? If not, has he arranged for its storage in Australia, so that not one bushel of this valuable food will be lost?

Mr POLLARD:

– The present prospects are that the wheat crop will be excellent. I cannot prophesy that it will be the best in Australia’s history, but I hope that it will be. Shipping arrangements are made by the Australian Wheat Board on the one hand, and the purchasers of the wheat on the other hand.

The honorable member may rest assured that every endeavour is being made to ensure the provision of adequate shipping facilities. He is aware that the Commonwealth Government does not possessextensive shipping facilities. Those that it once had were sold or given away by a government dominated by the Australian Country party. The necessary arrangements for the adequate storage of this anticipated great wheat harvest will be made between the Australian Wheat Board ‘and the various bulk-handling authorities which function under the jurisdiction of the States. I believe that these bodies will ensure the adequate storage of the grain, pending its shipment.

page 288

QUESTION

COMMONWEALTH ARBITRATION COURT

Mr HOLLOWAY:
ALP

– I recall the question. I made inquiries and can supply the position as it existed five or six days ago. The Chief Judge and his assistants last week had handled 6-70 cases since January. There were seventeen cases then outstanding, some of them in South Australia. The Chief Judge wishes to clear the deck of all outstanding cases before the new legislation comes into operation, which will be within the next fortnight or so. The honorable member can rest assured that the number of outstanding cases has been further reduced since I obtained my information and will be reduced even more within the next few days.

page 288

QUESTION

MR. MACMAHON BALL

Mr FRANCIS:
MORETON, QUEENSLAND

– Did the former British Commonwealth representative on the Allied Control Council in Japan, Mr. Macmahon Ball,, report to the Prime Minister yesterday on recent developments in Japan? If so, will the right honorable gentleman inform the House of Mr. Macmahon Ball’s views on. these matters? Is it intended to appoint Mr. Macmahon Ball to some other diplomatic position ; if so, where will he be located ?

Mr CHIFLEY:
ALP

– As the House knows, Mr. Macmahon Ball tendered his resignation some time ago. The honorable member for Moreton is probably aware of that. It is .true that Mr. Macmahon Ball called on me yesterday. We had a fairly lengthy discussion - I do not know whether it would be regarded as a report by Mr. Macmahon Ball - about a number of matters relating particularly to the situation in Japan as he saw it while he was there. I took the opportunity to thank Mr. Macmahon Ball, on behalf of the Government, for the work which he carried out on its behalf and I explained quite clearly that I realized that his job in Tokyo, having regard to all the circumstances, had been very onerous and very difficult.

Mr Francis:

– We understand.

Mr CHIFLEY:

– If so, the honorable member should not have asked the question. I have nothing further to add, except that I expressed my appreciation

Mr Francis:

– What about the latter part of the question?

Mr CHIFLEY:

– In regard to that, I. point out that Mr. Macmahon Ball resigned from the Department of External Affairs and has not expressed any desire to be considered for further appointments. However, I shall give consideration to that part of the honorable member’s question.

page 289

QUESTION

REPATRIATION

Mr FALKINDER:
FRANKLIN, TASMANIA

– In the absence of the Minister for Repatriation, I ask the Prime Minister whether he is aware that the number of ex-prisoners of war developing maladies which were not apparent on medical examination at the time of their discharge from the services is increasing considerably? If so, is any action being taken to help these nien? Can the right honorable gentleman say whether any provision exists whereby exprisoners of war living in country areas and therefore forced either to consult local non-repatriation medical officers or to travel to cities, with consequent lossesof wages and travelling expenses, can becompensated by the Repatriation Commission?

Mr CHIFLEY:
ALP

– I regret that I am not able to reply offhand in detail to thehonorable member’s questions. There isa provision relating to payment of certain expenses, and I shall arrange for theMinister for Repatriation to have a full reply prepared for the honorable member.

page 289

QUESTION

DIATHERMY TREATMENT

Use of Portable Apparatus

Mr BEALE:
PARRAMATTA, NEW SOUTH WALES

– I direct the attention, of the Prime Minister to National’ Security (General) Regulation No.. 11. - (3a.), which prescribes that n. person shall not use any appliance in such a way as to cause interference with, the transmission or reception of communications by wireless telegraphy. Isthe right honorable gentleman aware that under that regulation it is not permissiblefor diathermy short-wave sets, which areused in the treatment of rheumatism and kindred complaints, tobe used unless they are screened, with the result that portable sets, which ure normally used for thetreatment of sick persons in their own homes, cannot be used without special permission, which is not readily obtainable? Will the right honorable gentleman give consideration to this matter and direct that this regulation shall berepealed, or the prohibition against theuse of portable diathermy sets rescinded ?

Mr Chifley:

– The Minister representing the Postmaster-General will answer the question.

Mr CALWELL:
Minister for Immigration · MELBOURNE, VICTORIA · ALP

– It is true that during the war a prohibition was placed on the use of diathermy sets. The ban was dictated by reasons of national security, as these sets could possibly have been used as transmitters. I shall ask the Postmaster-General just what is theattitude of the department towards the sets at present. No doubt, the regulation will be repealed ultimately. It is probably true that it has been allowed to fall into desuetude.

Mr Beale:

– No. Physiotherapists say that they have agitated unsuccessfully for the repeal of the regulation.

Mr CALWELL:

– That may be so, but it is also possible that it is inoperable.

Mr Beale:

– I was unable to obtain treatment, and had to go to hospital.

Mr CALWELL:

– I shall see that the honorable member gets all the diathermy treatment that he needs, even if the regulation has to be repealed in order that this may be done. I shall ask the PostmasterGeneral for a report on the matter. That will be more satisfactory than the honorable member and I speaking of something about which neither of us knows very much.

page 290

QUESTION

COMMONWEALTH BANK

Building Activities

Mr RANKIN:

– I ask the Treasurer whether it is a fact that prefabricated materials have been transported to Victorian country towns to accommodate officials of the Commonwealth Bank? If so, has the Treasurer seen the comment of builders that each unit contained enough flooring, cement, weatherboard, fibrous plaster, glass and other fittings for a comfortable cottage for a family of five? In view of the acute housing shortage in Victoria, will the Treasurer have inquiries made to ascertain whether the facts are as stated, and will he take action, if possible, to ensure that no additional materials of this kind shall be used for other than urgent home-building?

Mr CHIFLEY:
ALP

– I know that the Commonwealth Bank intended to make accommodation available in a number of centres in Victoria for an expansion of its activities. The honorable member will understand that I do not interfere with the work of the bank, which makes these decisions in accordance with government policy regarding the increase of its activities. Where it establishes branches, and the type of building which it erects or leases, are matters entirely for the bank itself to decide. However, I shall ask the Governor of the bank to supply to me the information that the honorable member requires.

Mr WHITE:

– From answers that were given to questions which I asked upon notice last week, as to how many prefabricated Commonwealth Bank buildings had been built and opened in each State, how many had been completed, and awaited opening, and how many were awaiting completion, I learned that the number built and opened was sixteen in New South Wales, seven in Victoria, and five in Queensland; that others had been completed and awaited opening; and that still others awaited completion; also that the cost amounted to £42,000. I have been advised that, in a suburb of Melbourne which is well catered for by private banks, three ex-servicemen who are shopkeepers have been given notice of the intention to evict them from the premises which they occupy because the buildings are to be acquired for the Commonwealth Bank. Will the Prime Minister state whether he is thus anticipating the passage of the Government’s proposed banking legislation? Does he intend to continue to have present occupiers of premises evicted from them by the process of compulsory acquisition ; or does he propose to suspend the building of further bank premises and the acquisition of existing premises until the legislation is passed ?

Mr CHIFLEY:

– I shall bring the matter to the notice of the Governor of the Commonwealth Bank, and shall let the honorable member have a considered reply.

Mr White:

– Will the right honorable gentleman intervene in respect of the premises I have mentioned?

Mr CHIFLEY:

-The Governor of the Commonwealth Bank will be visiting Canberra either to-morrow or on Thursday. If the honorable member will let me have all the particulars, I shall take the opportunity of placing them before him.

page 290

QUESTION

DOLLAR DEFICITS

Mr SPENDER:

– Last week, I indicated to the Treasurer in the House that there was difficulty in reconciling the governmental statement as to the dollar deficiency with many of the monthly statements which are issued through financial sources, and I asked the right honorable gentleman whether he would supply to honorable members details as to how the dollar deficiency, which he last announced, was made up so that we may have the information for purposes of debate. As those details should be readily available, I ask the Treasurer whether they could be announced to the House by the next speaker on the Government side in the course of the budget debate?

Mr CHIFLEY:
ALP

– I do not remember the question being asked previously, but I recollect that during the course of my budget speech the honorable member for Warringah interjected for the purpose of asking whether details could be supplied. There is considerable difficulty involved in making calculations of dollar commitments in relation to such items as petrol, but in the course of a. letter which I have forwarded to the Leader of the Australian Country party I have attempted to supply the information required. I am prepared to make that information available to the honorable member, and if other members are interested I shall have copies of the letter made.

Mr Spender:

– It is a most important subject.

Mr CHIFLEY:

– It is a subject on the discussion of which many people embark without much knowledge or experience. The calculations involved are somewhat difficult to understand-

Mr Spender:

– I shall understand them !

Mr CHIFLEY:

– I have no doubt that the honorable member, who is highly intelligent, will do so; and I shall do my best to make available sufficient information to enable him to make an informed statement.

page 291

QUESTION

CIVIL AVIATION

Departmental Accommodation at Henty House, Melbourne - Flying Doctor Service - Landing Charges.

Mr WHITE:

– Can the Minister for Air inform me whether press reports that the Department of Civil Aviation intends to acquire the warehouse of Parbury Henty and Company Proprietary Limited are correct? What is the sum involved? Could not the department have availed itself of sufficient space in the Manchester Unity Oddfellows’ building, of eleven stories, which is at present occupied by Trans-Australia Airlines and the Department of Aircraft Production, or could it not have occupied the barracks in Albert Park? Why has the cost of administration of the department risen from £307,000 in 1945 to £600,000 this year?

Mr DRAKEFORD:
Minister for Air · MARIBYRNONG, VICTORIA · ALP

– Press reports that the Government intends to acquire Henty House in Little Collins-street, Melbourne, in order to house the Department of Civil Aviation, are correct. At present the department is occupying portions of three buildings - Empire House, The Rial to and Almora House - but if the use of the whole premises at Henty House can be obtained it will be possible to accommodate the entire department there. With regard to the Manchester Unity Oddfellows’ building, the position is that Trans-Australia Airlines is occupying a substantial part of the floor space, but since it is constituted by statute an entirely independent undertaking, it is not possible for the department to interfere with its arrangements for the allocation of floor space in that building. The space required by the Department of Civil Aviation is based on an estimate of 80 square feet per person, and the present strength of the department is 530 officers. Because of the department’s increased activities, including the control of all civil air fields and services which were previously under the control of the Royal Australian Air Force, and the provision of navigational aid facilities, more space is required to accommodate the officers of the department. As an illustration of the increased activities of the department, it is now necessary for it to erect and maintain radio installations, which have hitherto been the responsibility of the Postmaster-General’s Department. The demand for additional office space is a legitimate and reasonable one, and the officers of the department should not be handicapped in the discharge of their duties by inadequate accommodation.

Mr HOWSE:

– Recently, I approached the Minister for Civil Aviation on behalf of a flying doctor at Forbes, Dr. Young, and asked that consideration be given to the doctor’s exemption from the payment of landing charges throughout New South Wales. I understand that this doctor uses his aeroplane extensively in the outlying areas, and has received no landing facilities, using mainly improvised local landing grounds. The Minister, in his reply, advised me that existing legislation made no provision for the exemption of such cases. I how ask him to state whether he will give favorable consideration to the amendment of the existing legislation, with a view to making provision for cases such as the one I have mentioned.

Mr DRAKEFORD:

– This matter has been raised not only by the honorable member but also by the flying doctors themselves. The whole subject of the charges that should be made in respect of those who are using air routes was fully considered, and it was decided that no exemptions whatever should be granted. I point out to the honorable member and to the House that the flying doctors are charged the lowest rate, which is about £3 or £4 a year.

Mr Howse:

– This man pays between £16 and £18 a year.

Mr DRAKEFORD:

– If he has more than one aeroplane, he pays in respect of each of them. It is probably correct, as the honorable member has said, that the flying doctors are using fields which are not ordinary airfields. But they are also using the ordinary airfields. With the exception of the Bush Church Aid Society, the flying doctors receive subsidies. These, of course, will be taken into consideration when the amounts are being allocated. I do not consider that flying doctors have any great cause for complaint. We are anxious to assist a service which is doing a great work, and consequently have fixed the lowest possible charges. The policy is not to have any exemptions whatever.

page 292

QUESTION

IMMIGRATION

Arrivals on “ Tidewater “.

Mr FRANCIS:

– Can the Minister for Immigration supply the House with details of the passengers coming to Australia from Marseilles on SS. Tidewater 1 Is he aware of the press reports that there are 500 refugees on board ?

Mr CALWELL:
ALP

– I shall try to get the desired information, and supply it to the honorable member. When he receives it, he can derive from it whatever satisfaction he may find in it.

page 292

QUESTION

MOTOR VEHICLES

Manufacture in Australia.

Mr ARCHIE CAMERON:
ALP

– Can the Minister for Post-war Reconstruction forecast the time that will elapse between the successful establishment in Australia of the motor car manufacturing industry, and when the Government will see. fit to nationalize it?

Mr DEDMAN:
ALP

– The question is one that will require some consideration. It also involves government policy, with which it is not usual to deal in answers to questions.

page 292

QUESTION

BARLEY

Mr ARCHIE CAMERON:
ALP

– Can the Minister for Commerce and Agriculture disclose to the Parliament the conditions, if any exist, which will govern the marketing of the forthcoming barley harvest in this country?

Mr POLLARD:
ALP

– The Premiers of South Australia and Victoria communicated to the recent Conference of Commonwealth and State Ministers their preparedness to introduce, in their respective State legislatures, suitable legislation providing for the setting up of State marketing boards in respect of barley. In the circumstances, it will not be necessary for the Commonwealth Government to extend the provisions of the Defence (Transitional Provisions) Act relating to the marketing of barley.

page 293

QUESTION

BUDGET 1947-48

In Committee of Supply: Consideration resumed from the 26th September (vida page 270), 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.

Mr FRANCIS:
Moreton

.- The budget will satisfy few people in Australia, largely because it gives no relief from heavy direct taxes and only a small measure of relief from the burden of indirect taxes. No sane person would expect pre-war standards of taxation to be reached yet, but, under Labour’s “ New Order “, they are never likely to be experienced. There are so many economists, financial wizards, professors and their assistants trailing behind the Government that it would require a financial Houdini to say how much money is contained in the exchequer and what Australia’s true financial position is. Certainly, no one can complain that our finances are not bouyant. On the contrary, the complaint is that government revenues are too great because taxes are too heavy. Business executives find taxes so crippling that they cannot expand their industries.

The budget discloses that collections of income tax and social services contributions for the year 1946-47 amounted to £207,764,940, compared with £214,593,578 for the previous year. It will, therefore, be seen that, despite the Government’s claim to have reduced taxes substantially, it has made a reduction of only £6,828,638. That is the position in Australia two years after the end of the war. Such reductions are hopelessly inadequate if there is to be any incentive to expand industry. The number of taxpayers has undoubtedly increased since the war, partly because of the absorption into industry of 500,000 demobilized exservicemen. Australia’s wages bill is greater than during the war, with the result that the pay-roll tax and the tax on incomes have yielded record revenues. The greater number of persons engaged in various industries provides a splendid opportunity to reduce taxes, yet last year, when income tax could have been reduced by £37,000,000, on figures provided by the Treasurer (Mr. Chifley), the reduction was only £6,828,638. An indication of the growth of the taxable capacity of Australia is given by the yield from the pay-roll tax. The amount derived from that source was £13,646,735 in 1945- 46, whereas for the financial year 1946- 47 the yield was 18 per cent, higher. In the light of those figures, it is clear that there is great scope for a reduction of the taxes on incomes.

The Australian system of income tax is much more complicated than the systems in operation in Great Britain and New Zealand. So difficult is the preparation of returns in Australia that many taxpayers are baffled and frightened by the task which confronts them every year. The time is long overdue for the appointment of a royal commission to inquire into ways and means of simplifying the method of assessing taxes. I strongly support the representations of the Brisbane Truth in this connexion, and, in the interests of sane methods of taxation, I sincerely hope that competent experts will be appointed to a royal commission to examine the basis on which returns are made.

The Government is undoubtedly guilty of wasteful expenditure of the taxpayers’ money, but the budget makes it difficult to ascertain where the extravagance actually takes place. There is ample scope for reductions of expenditure in war-time bureaucracies; indeed, it is time that the firestick was applied to some of the growing departments. There is need for greater efficiency and economy in government departments generally. The following table shows the amounts by which the estimated expenditure for the current financial year exceeds the amounts expended last year in some departments -

It is indeed strange that, at a time when imports are much smaller than in pre-war years, the cost of the Department of Trade and Customs should increase so greatly. This afternoon the Minister for Labour and National Service (Mr. Holloway) told the House, in reply to a question, that the number of persons in receipt of unemployment relief payments was decreasing; yet the estimate of the cost of his department is £146,649 above the expenditure last year. Despite the big increase contemplated in respect of the Department of Post-war Reconstruction, that department has not done much for ex-service men and women in spite of the best efforts of the departmental officers, because of government policy, or rather, the lack of it, tens of thousands of whom are still awaiting opportunities to undergo vocational training. It is estimated that a further two years will elapse before large numbers of young men who joined the services at about eighteen years of age will receive training. The Government has budgeted for a record expenditure of £1,032,000 for the Department of External Affairs. Of that sum, £776,000 represents the cost of legations and consular offices in other countries. As honorable members know, many defeated Labour candidates at the last general elections have been appointed to well-paid positions in that department. Our most expensive legation is that at Washington in the United States of America; it will cost the taxpayers of Australia £143,700 this year. Next in order of cost is the Australian legation in China, the expenditure for which is set down at £60,500 for this year. It is difficult to understand how so large a sum can be expended profitably in China, where conditions are topsy turvy. The Government has not made any effort to economize. It is prepared to expend hundreds of thousands of pounds to enable its supporters to career around the world, yet the widows of servicemen are granted only a miserable additional 7s. 6d. a week. Even that paltry increase is not general; it applies only to widows with one or two children.

The figures in relation to taxation receipts are staggering for a nation of a little over 7,000,000 people two years after the end ‘of the war. The yield from taxes of all kinds was £302,000,000 for the year 1943-44. In successive years the amount increased, first, to £336,000,000, then to £351,000,000, reaching the enormous sum of £374,000,000 in 1946-47. For each of the last two years, approximately £200,000,000 has been collected in income tax. During the same period, receipts from indirect taxation rose from £125,000,000 to £137,000,000 in the first year, and in the following year to £166,000,000, while for the current year the estimated receipts are £160,000,000. The Treasurer claims that most taxpayers are now paying half, or even less, of the war-time taxation rates, but let us see what the actual figures are. In 1938-39 all taxation, State and Federal, in Australia amounted to £18 per head of population. By 1942-43 it had increased to £39 per head, and in 1945-46 it rose to £51. The greatest amount ever collected in income tax was £215,000,000 in 1944- 45, which represented £29 7s. 9d. per head. Collections for the next year, 1945- 46, far from being half the previous rate, amounted to £28 19s. per head, a reduction of only 8s. 9d. The estimate for 1947-48 is well over £25 per head, or only £5 less than the peak amount in the final year of the war.

The position in regard to indirect taxation is even worse. The average contribution per head for 1943-44 was £16 10s. The following year it was £16 14s., and for 1945-46 it was £18 4s. The year 1946- 47 was a record, the amount rising to £22 per head, while this year’s estimate, obviously a low one, is £20 a head, which is considerably above the average for the war years.

One of the disturbing features of the present budget is the extraordinary amount of arrears of taxation. There is an obligation on the Government to ensure that all taxpayers pay their due tax regularly. However, in reply to a question recently, the Prime Minister said that, on the 30th June last, 700,000 assessments remained unissued for previous years, representing uncollected tax amounting to £60,000,000. In addition, an amount of £47,300,000 represented unpaid tax for which assessments had been issued. Thus, there is outstanding an amount of more than £100,000,000 of income tax payable, but not collected, in respect of previous financial years. This is a colossal amount, and it is obvious that the Government has not been as energetic as it should have been in its efforts to collect outstanding taxes. If this money had been collected the Government could have materially reduced taxation rates - which is one of the most crying needs in Australia to-day. The Government is building up a huge fund, a secret reserve, in the form of uncollected taxes, and will no doubt use this fund to further its designs for the nationalization of industry. Unless there is a substantial reduction of taxation, employers and employees will have no incentive to increase production. Nothing is so calculated to reduce production, hamper trade and lower the standard of living of the workers as excessive taxation. The Opposition has constantly maintained that the Government has failed to appreciate how a reduction of taxes would stimulate industry, and would so greatly increase national earnings that the Treasury would, in fact, suffer very little loss of revenue. Excessive taxation has caused continual friction in industry. It is, in fact, one of the most fruitful causes of industrial disturbances. “With the ending of the war, Australia, in common with other countries, was confronted with a tremendous shortage of consumer goods. During the war, the activities of the population of the warring countries had been diverted from the manufacture of consumer goods to the manufacture of war materials. When the war ended, if this Government had assisted the change-over from the manufacture of war materials to the manufacture of consumer goods, Australia could, without doubt, have become the most prosperous country in the world. We have endless supplies of raw materials, and during the war our workers had the opportunity to learn improved technical methods of manufacture. We have the workers and we have the raw materials but, because of the indifference of the Government, and the constant bickering between employers and employees, resulting in industrial stoppages in the coal mines, the shipping industry, the iron and steel industry, the engineering industry, and in a great many other industries as well, we were unable to avail ourselves of the opportunity that existed. A great deal of this industrial dissatisfaction was due to excessive taxation, as the workers have themselves stated. If, in response to a call to pro duce more, they worked overtime, they received very little of their extra earnings because so much was taken by the Treasury in taxation on their overtime arn.ings and on their ordinary wages. Thus the workers had no incentive to produce more, and production lagged, despite the fact that goods were needed so badly for our own purposes and for export to Great Britain. The dissatisfaction caused by excessive taxation has proved a happy breeding ground for communism, which has spread in Australia more rapidly than in any other country in ‘the world. Communists have assumed control of the major trade unions, and are using their position to create further industrial trouble.

The position in regard to the rural industries is no better than in the secondary industries. Compared with 1939, there has been a reduction of the number of sheep by 15,300,000. There are 673,000 fewer than a year ago, the 1947 figure being the lowest on record since 1924. The number of dairy cows has declined since 1939 by 197,000. Butter exports have declined by 40 per cent., principally because of dissatisfaction among dairyfarmers at the prices for their products. There has been a strong demand from Great Britain for more primary products, particularly butter, for the benefit of the British people, who are still living on a very meagre ration more than two years after the end of the war in which they did so much to save the world. This deterioration in our primary production is tragic. It is having serious repercussions overseas, particularly in Great Britain. The number of dairy cows has continued to decrease since 1939. In 1943, when the number of dairy cattle was first recorded separately, we had 5,000,000 head in this country. That total decreased in the following years to these figures :- 1944, 4,900,000; 1945, 4,800,000; 1946, 4,600,000; and 1947, 4,590,000. This decline was most marked in New South Wales, Queensland, and Western Australia. I repeat that this tragic trend is due to the economic policy of the Government. The number of beef cattle declined to 9,300.000 in 1945. 9.200,000 in 1946, and 8,800,000 in 1947! Although the total number of cattle showed an increase of 565,000 over the figure for 1939, we now have 451,000 fewer beef cattle than we had last year. During the same period, a substantial decrease has also occurred in the number of pigs.

I shall now deal with the decline in rural production. Milk production was 112,000,000 gallons less in 1945-46 than in 1938-39, whilst butter production last year was 53,000 tons below the pre-war figure. During the same period, the production of wool decreased by 47,300,000 lb. and the production of wheat decreased by 13,000,000 bushels. Persons permanently engaged on rural holdings were 19,000 fewer last year than in 1938-39, and more than 27,000 fewer than in 1937-3S. Statistics also reveal a marked decrease in the areas used for the production of wheat, barley, maize, hay, sugar cane, tobacco and fruit. These facts should impel the Government to initiate a searching inquiry into the causes of the decline of production in all phases cf primary industry. The key to increased production is to give to the individual a greater incentive to produce by guaranteeing payable prices for his products. While other countries lost no time in evolving plans to restore their agriculture to its pre-war level and to maintain their war-time expansion, this Government has done nothing in that direction. Even in Great Britain, in spite of all the handicaps and difficulties which confront the British people as the result of war, agricultural production has shown an enormous increase. However, this Government has persistently ignored out demands to provide payable prices for primary products and to establish worthwhile stabilization schemes.

Mr MCBRIDE:
WAKEFIELD, SOUTH AUSTRALIA

– At the same time, the Government entered into its cheap wheat agreement with the Government of New Zealand.

Mr FRANCIS:

– That is so; and by that action it lost the goodwill of the wheat-growers of this country. The Government has never been able to justify that agreement. If our rural industries are to be rehabilitated, the Government must inaugurate a national agricultural recovery plan. In this respect I support the representations made by the Leader of the Australian Country party (Mr.

Fadden). Such a plan must make provision for incentive prices for our major primary products. This course is essential in respect of wheat and dairy products, both of which industries are the subject of protracted inquiries. In order to rehabilitate rural industries, the Government should, first, guarantee prices based upon production costs and reasonable profits over a number of years ; secondly, appoint an authoritative body to conduct a continuous investigation and review in order to adjust conditions in each industry, as the Tariff Board does in respect of secondary industries; thirdly, institute a realistic rural housing policy, including the provision of modern homes and amenities for agricultural workers more in keeping with those enjoyed by city dwellers; and, fourthly, take other practical measures considered necessary to attract workers to rural industries in order to make up the serious lag that has occurred since 1939.

The Government is prepared to spend millions of pounds to further its objective of absolute socialistic control over the life of every citizen, but it is not prepared either to succour those to whom the country owes most or to reduce taxes and thereby encourage people to work harder and produce more. Increasing wages and costs are depreciating the purchasing power of persons receiving pensions and fixed salaries; yet the Government’s only plan is to retain taxes at their present exorbitant levels to “ salt “ away as much as possible into secret reserves, and work for a socialistic state in which, at enormous expense, all citizens will be made civil servants and be compelled to do as they are. told by their only employer, the Government. Already, about one-quarter of the working population of Australia is employed by government or semi-governmental instrumentalities. Many of these individuals are most useful and hard-working; but the real need in this country to-day is for people who will actually produce the goods that we ourselves need and which we should, be sending abroad to help the people of Great Britain and overcome our dollar shortage.

The incentive to increase production which the Government can offer is a reduction of taxes. The Government should make such a reduction at once instead of begging the Australian Council of Trades Unions to reconsider its rejection of the promise of its officials that it -would investigate the subject of incentive payments. When this matter was discussed at the recent conference of the Liberal party in Melbourne, an announcement was made that the Government proposed to inaugurate a system of incentive payments in industry. The Australian Council of Trades Unions immediately objected to that proposal; but after a further announcement was made by the Government, the council declared that it was prepared to give the proposal further consideration. Even the Labour Premier of New South Wales, when attending the last Conference of Commonwealth and State Ministers, held in this chamber last August, demanded that the Commonwealth reduce income tax as an incentive to increased production of building materials. He had in mind the necessity to provide homes more rapidly for our people. 1 should like to know wh.et has been the Government’s response to ths request made by the same Premier that it should reduce income tax on overtime earned by building industry employees and grant concessions to manufacturers of building materials.

I remind honorable members that it is the people in receipt of small incomes who are being hit by the present high taxes. I n 1938-39 persons with taxable incomes under £200 paid only 2 per cent, of the total collections of income tax, and those with taxable incomes of from £200 and £500 paid only 3.6 per cent, of total collections. The corresponding percentages were actually lower in 1939-40, the first year of the war. But in 1945-46, whilst persons with taxable incomes below £200 paid only 2.5 per cent, of the total collections of tax, persons with taxable incomes between £200 and £500 paid 27.8 per cent, of total collections, or a total of £57,759,000 compared with £414,000 collected from these income ranges in 1938-39. In other words, in that range the average amount paid by each taxpayer in 1945-46 was approximately £46, compared with less than £6 in 1938-39, and the total amount paid by taxpayers in that class - the hard-working middle class - was almost fourteen times as much.

I ask the Treasurer to explain why staff wages in the Governor-General’s establishments increased from £3,590 last year to an estimate of £7,470 this year. Last year, the expenditure on the GovernorGeneral’s establishments included £5,295 for the purchase of motor cars. Assuming this item to be non-recurring, the total cost of the Governor-General’s establishments is therefore estimated at £7,500 more than the vote for last year, and £7,355 more than the actual expenditure last year. This substantial increase is more difficult to understand when we remember that the Governor-General has been almost permanently residing in Canberra.

I also seek inf ormation about the intention of the Government in respect of the maintenance of war graves. Are war graves being neglected or completely overlooked? An examination of the Estimates shows that only £11,114 was expended last year for this purpose, compared with an estimate of £23,300, and that no provision has been made for this year, No subject deserves more solemn and serious consideration than the supervision, care and maintenance of the graves of those who gave their lives in the service of their country. Incidentally, the contribution to the Imperial War Graves Commission last year was only £38.000, although the vote was £128,000. What is the explanation of that small expenditure? The estimate this year is £125,000. On behalf of the relatives of servicemen who died in defence of their country I ask the Treasurer to give a clear explanation of what is proposed.

An ex-serviceman friend, a Mr.

D- , has informed me that it is his experience and that of many others who returned from the war that high .taxes are forcing ex-servicemen into debt. Many former servicemen struggling to start their own businesses are being forced into the hands of moneylenders because of the imposition of double tax on their first year’s earnings. In the Army no provision was made for the collection of income tax on the payasyouearn basis, and ex-servicemen who had private incomes found on their return from the war that they had become liable for the most crippling double taxation. Representations have been made to the Government on this subject by the exservicemen’s organizations. The Government’s surplus includes a large amount of provisional tax paid by ex-servicemen who have been left with nothing to live on. In dealing with this injustice the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia and Mr. D- state -

Double tax has hit servicemen because they were not in business in 1944. In that year the Government introduced the payasyougo principle, and all in business were required to pay provisional tax on the following year’s income, calculated at what they had earned in the current year.

To implement the scheme without crippling industry, the Government “forgave” 75 per cent, of the tax, and collected the 25 per cent, balance in three yearly payments of 8J per cent. each. Servicemen re-entering or starting business after 1944 had nothing forgiven, but were required to pay tax on their year’s earnings) and a full year’s tax ahead.

The statement then proceeds to cite the following typical cases of how hardly this tax hits ex-servicemen : -

Two returned men put their deferred pay into a tank sinking plant. By working twelve and fourteen hours a day they made a profit of £1,200 between them, and after having paid living expenses, had about £800 left. On the estimate of a weekly earning of £12 10s. each their tax was worked out at £300. An amount of £200 was paid back to repatriation and £80 was spent on repairs to equipment. That left them with £520 in the bank. On tax assessment, they each had to pay £328 3s. tax, a total of £056 6s. That left them with a deficit, and as they could not get a second loan from repatriation, they had to hawk machinery around and borrow from money lenders at a high interest rate.

Another digger put his deferred pay into a small mixed shop. By working long hours he made £300. He was called on to pay £119 tax. That meant that during the year he had to live on less than £3 10s. a week. He had allowed for the current year’s tax_ but now has to borrow to pay next year’s tax.

Doctors, dentists, chemists, legal and other professional men have been hit hard. A leading professional man made £5.000. His tax on the £5.000 and the provisional tax for the next year was £0.260.

One thousand, two hundred and sixty-six pounds more than he earned ! That is utterly absurd and can only be described as colossal madness. I ask the Treasurer to re-examine the effect of the income taxation legislation.

The budget .leaves me gravely disappointed. All taxpayers are aware that certain post-war obligations have to be met, but they are amazed at the continuance of high rates of tax in face of the extraordinarily buoyant revenues of the Government. High taxes are stifling production on all sides. I trust that the appeals that have been made and will be made by honorable members on this side of the chamber will influence the Treasurer to recast his budget and substantially to reduce taxes. Much of the burden that has now fallen on the shoulders of the taxpayer could be relieved if all outstanding tax were collected. I shall reserve my further comments on the budget proposals generally until we come to the more detailed discussion of the Estimates.

Mr THOMPSON:
Hindmarsh

– I have no desire to cover the ground traversed by the Treasurer (Mr. Chifley) or by honorable members who have so far participated in this debate. Our examination of the budget should be conducted in the light of the budget brought down by the Treasurer for the preceding twelve months. Income and expenditure during the preceding financial year should form a reliable guide as to what should be necessary for the ensuing financial year. The Leader of the Australian Country party (Mr. Fadden) and the honorable member for Moreton (Mr. Francis), who both placed before the committee a mass of figures, sought to make it appear that this Government is responsible for the great reduction of the number of livestock in Australia. Those who have had a long experience of public life, particularly in connexion with rural production, realize that the Government plays a very small part in the success or otherwise of those engaged in farming and pastoral pursuits. Generally speaking, the deciding factor is the beneficence of nature.

Mr Archie Cameron:

– The honorable member may . change his view when he has heard certain Ministers speak on that subject.

Mr THOMPSON:

– I am sure that if the honorable member for Barker (Mr. Archie Cameron) looks back over the years of development in the district in which he took up new land after World War I. he will agree that the greatest difficulty with which the hard-working settlers, including himself, have had to contend has not been a lack of legislation, but a lack of rain at the right time.

Mr Archie Cameron:

– There is no lack of legislation here, anyway.

Mr THOMPSON:

– Labour has done more than any other political party to keep farmers on the land in adverse times and to ensure reasonable prices for the commodities that they produce.

Mr Rankin:

– That was done to provide cheap food for city people.

Mr THOMPSON:

– I should be interested to hear of any cheap food that city people are enjoying at present.

Mr Rankin:

– Bread is cheap.

Mr THOMPSON:

– I remind the honorable member that some years ago the imposition of a flour tax increased the price of bread to consumers by a halfpenny a loaf. The result was, of course, greater hardship for poor people with largefamilies. The aim of the flour tax was not to provide cheap food for city people, but to ensure a more adequate return to primary producers who were having a difficult struggle.

Mr Rankin:

– That was all returned one hundred-fold.

Mr THOMPSON:

– When the honorable member attempts to show that the working people of this country are getting cheap food because they do not pay the full export price for certain primary products he should remember that for many years past the Australian public has been paying an increased price for certain commodities to compensate for losses or poor returns from exports. For instance - and this is a matter in which the right honorable member for Cowper (Sir Earle Page) will be interested - under the Paterson butter scheme Australia consumers paid an extra 3d. per lb. for butter to offset the low export price. Now, of course, there are grave shortages in many countries and almost any price can be obtained for exports; yet we are charged with legislating to give the people in the cities of the Commonwealth cheap food !

Mr Rankin:

– New Zealand, too.

Mr THOMPSON:

– The honorable member knows very well that but for the unprecedented high world-parity price of wheat to-day, the contract for the sale of Australian wheat to New Zealand at a reasonable price over a period of years would have been widely applauded instead of criticized. In the eyes of honorable members opposite the Labour party cannot do anything right. We are told that we are class conscious. In the light of my political experience I admit that we are class conscious. I am class conscious because I realize how many privileged people in this world are loath to lose some of their plenty to help others who have not enough. [Quorum formed.] I thank the honorable member for Bendigo (Mr. Rankin) for calling attention to the state of the Committee. I regret, however, that neither he nor any other member of his party was present when the honorable member for Moreton (Mr. Francis) was speaking. Although at that time there were only three members on the Opposition benches, I should not for worlds hurt the feelings of the honorable member for Moreton by drawing attention to the manner in which members of the Australian Country party and of his own party were prepared to desert him. I suggest that if the honorable member for Bendigo wishes to call for quorums, he himself should be more constant in his attendance in this chamber.

The success of a budget can be measured only in terms of what it means to the people as a whole - the bearing that it will have on employment and living standards, and the provision that it makesfor the needs of the people. A budget is not successful merely because it means higher profits for the few, and shortages and fears for the many. Honorable members opposite indicate by their interjections that their idea of a successful budget is one that ensures high profits for certain privileged individuals. My conception of a parliament is that it represents all the people, not one privileged section, and that the duty of a government in bringing down a budget and enacting legislation is to ensure the betterment of the people as a whole. Any government that neglects to provide for the welfare of what we hear described from time to time as the common people is a bad government, and cannot present a successful budget. In times of high prices - and I am not referring to high prices caused by war - the people have a “very lean time. We cannot have a successful budget without a successful government. The measure of the success of either is the volume of employment in. the country. We have full employment in Australia. Unemployment means, as I know from experience, that the unemployed and their families live in want. In the depression people subsisted, not only workers in the city, but in country areas also. I say “ subsisted “ deliberately. T remember vividly the instance of one man. He saved money while employed in the mines at Broken Hill and had a block of land allotted to him. Accompanied by my little son, I met his wife once in the township where we lived. We ourselves were on short commons. My boy said, “ We don’t get any butter on our bread, just jam “. She said, “ You should be thankful, for we cannot get even jam “. Struggling to keep their farm going, the man took a job on road work. While he was out working his wife and daughter of fourteen went out into the scrub, found a tree in which wild bees were storing honey, cut down the tree and took the honey to have something to spread on their bread. Labour governments in their wisdom, or what they consider to be their wisdom, endeavour to protect the people against such conditions, and to ensure that they shall not be deprived of the necessaries of life. Honorable gentlemen opposite claim that the taxes imposed by this Government are too high, but I have not heard any of them complain about the huge amounts of revenue used because of the high overhead charges that were imposed on exservicemen settled on the land after the first world war by the then governments, millions of pounds of which had to be written off because the burden could not possibly be borne by the settlers. Labour governments in power in the Commonwealth and the various States have done those things because they have a class consciousness, an awareness of the needs of people struggling. It is a class consciousness that is not political but economic. The people can depend that Labour governments in Australia will enact legislation designed to help the man in need regardless of the party to which he belongs or his walk of life.

We will do our best to uplift him. According to the Treasurer’s budget speech, at the 30th June last, 3,212,000 people were employed in Australia, which is 480,000 more than were employed in the year ended the 30th June, 1939. I do not propose to give the figures of unemployment, but from 1928 to 1937 hundreds of thousands of Australians subsisted on the low rations that the governments of the day were able to provide them with. The Minister for Labour and National Service (Mr. Holloway) said that about 4,000 people were unemployed in Australia to-day. That number is small when compared with our population of 7,500,000. Yet we have been told, particularly by the honorable member for Moreton, that the people have no incentive to work and produce because of the high taxes. Honorable members know that the great bulk of the people earn less than £400 a year. A man with a wife and one child with an income of £250 in the year ended the 30th June, 1947, paid £5 4s. in income tax. Now he does not pay anything. What high tax has he to pay that he should have no incentive to work and produce? A man with a wife and one child and an income of £300 paid £15 12s. in income tax last financial year, but will pay only £2 5s. this financial year, a reduction of S5 per cent. I cannot understand the vehemence of honorable members opposite in claiming that the Government will not face the need to reduce taxes.

Mr Conelan:

– Those figures include social services contributions, too.

Mr THOMPSON:

– That is so. The amount payable by the same man receiving £350 a year has been reduced from £25 4s. to £10 10s., a 59 per cent, reduction. The amount payable by the same man receiving £400 a year has been reduced from £38 9s. to £1S, a 53 per cent, reduction. The proposals of honorable members opposite, had they been put into practice, would not have effected such large reductions. The best proposal that came from the Opposition parties during the election campaign was for a 30 per cent, reduction. This Government, as I have shown, has granted reductions ranging from 100 per cent, down to 50 per cent, to persons who were most in need of relief. Honorable members opposite have not been on good ground in attempting to belittle the achievements of the Government in this respect.

In assessing the merits of a budget we have to consider also whether the Government has succeeded in approximating income and expenditure with reasonable exactitude. An examination of the’ figures for 1946-47 shows that the Government did a very good job. It was not able to make an accurate forecast of income for the year for various reasons, and actual income exceeded by about £37,000,000 the amount that was provided for in the budget. Let us examine the reason for this. Instead of throwing sticks and stones at one another, we should study the figures, learn what we can from them, and try to help achieve more successful results in the future. Receipts from income tax during 1946-47 exceeded the amount estimated by the Treasurer by £6,000,000. Honorable members opposite may say that the Treasurer should have been able to make a better estimate than that, but I remind them that they must have regard for the fact that, during the year increases were granted to many wage- and salary earners, which brought about an unpredictable increase of revenue over the estimated amount. Honorable members may also quibble about the high receipts from sales tax. Some of them have claimed, in view of the figures, that the Government has not reduced sales tax impositions sufficiently. Receipts from sales tax exceeded the budget figure for 1946-47 by £5,000,000, and collections of customs and excise duties exceeded the estimate by £13,000,000. One is inclined to wonder where all this money came from. I remind honorable members opposite that they have clamoured for a long time for the lifting of economic restrictions. They have demanded the right to buy and sell land and goods without hindrance. The Government has gradually lifted many restrictions. The reason why the Treasury is now deriving substantial receipts from sales tax, and customs and excise duties is that this Government enacted legislation which, over a period of four or five years, prevented the people from purchasing many things which they had the money to buy. The Government did this deliberately. It realized that, if the people were allowed to spend freely, a condition of inflation would occur. Honorable members opposite have been very concerned about the big increases that have been applied to wages and salaries recently, but the men receiving those wages and salaries are gravely concerned about price increases. We have started on the old, vicious spiral of rising wages and soaring prices in which a worker receives 5s. a week extra in his pay envelope but he finds that his living expenditure has increased by 6s. a week.

Mr Rankin:

– And there are no tractors for the farmers. ,

Mr THOMPSON:

– Honorable members opposite must hold themselves partly responsible for the present economic situation. They have been clamouring for th» lifting of economic restrictions. Even now they are demanding higher prices for primary products. They have complained that we cannot send more meat to Great Britain unless the price paid to the producers is increased.

Mr Turnbull:

– Do not misconstrue that statement again.

Mr THOMPSON:

– I am not misconstruing anything. If the cap fits the honorable member, he can wear it; I was not referring to him. Honorable members opposite have contended that more meat would be sent to Great Britain if the Government would buy stock at the highest market prices and accept liability for the difference between those prices and the prices paid by the British Government. That is not a misconstruction. It is a plain statement of what honorable members opposite have advocated in this House. I do not wish to debate the subject at length now, but I remind honorable members that wages and salaries cannot be kept down if prices for meat and other products are to be increased as they wish.

I refer again to the increased collections from sales tax and from customs and excise duties. Recently, I received a copy of the annual report and balance sheet of the Savings Bank of South Australia, a good, sound State institution against which I have no complaints. The figures show why collections of sales tax have increased. During the war, deposits, which represent money not spent by the people, increased by leaps and bounds. In 1940-41, balances held by the bank increased from £23,039,000 at the end of the previous year to £23,561,000, an advance of £510,000. In the following year the total increased to £25,440,000, an advance of £1,8S3,000. During the year ended the 30th June, 1943, the amount increased by £6,193,604 from £25,444,169 to £31,637,773, and, in the following year, by £7,717,000. In the year ended the 30th June, 1945, there was a further increase of £6,217,000, and in the next year an increase of £6,606,000. During the period under review the savings pf the people increased from approximately £23,000,000 to £52,000,000. That increase represented an accumulation of savings. During the years of war the people had not been able to expend that money on goods and articles which they required. However, in 1946, the Government began to remove restrictions upon the manufacture and importation of many goods in short supply, such as vacuum cleaners, radios, electrical appliances and expensive motor cars and luxury lines. For years people had not been able to purchase them. We did not manufacture them in Australia on an extensive scale. For the year ended the 30th June, 1946, deposits in the Savings Bank of South Australia increased by £6,600,000, but in the year ended the 30th June, 1947, the increase was only £1,675,000 - a reduction of nearly £5,000,000. When I examine an analysis of the accounts I find that the position is even worse than that loss discloses.

The report of the Savings Bank of South Australia contains a classification of the balances of its depositors. According to this dissection, amounts paid into accounts not exceeding £20 increased by £137,000 in the year ended the 30th June last. In accounts from £21 to £50 the increase was £34,000. In accounts exceeding £50, there have been heavy withdrawals, as the following table will show : -

Ifr. Thompson.

Those substantial reductions during the year indicate that many people are drawing heavily upon the savings which they accumulated during the war. However, in accounts from £500 to £1,000, the amount of deposits has increased by approximately £1,720,000 ; but a substantial part of this increase during the year was offset by the decreases in balances up to £500. These facts emphasize that the people of Australia have bought very freely during the last twelve months. This release of purchasing power was reflected in receipts from sales tax, but we must be prepared for a decline of revenue from that source. The time will come when Australians must call a halt to the purchase of highly priced semiluxury goods. In addition, since the cessation of hostilities, substantial customs revenue has been derived from comparatively large importations of motor chassis and complete motor cars, machinery and luxury goods. As the result of the restrictions which have recently been placed on the importation of many goods, customs revenue will decrease. Although some people complain about the high taxes which they are still required to pay on their substantial incomes, Australians must recognize that we cannot continue to prosper as we should like to do if other countries also do not prosper. We must realize that Australia is a unit among the great countries of the world, both exporting and importing, and our future depends not .only upon our own budget but also upon the purchasing power of people abroad who buy our goods.

Mr Rankin:

– Then what the Prime Minister said about the “ golden age “ was only so much “ boloney “.

Mr THOMPSON:

– For the people of Australia, the “ golden age “ has been a reality. At no other time in my life have I known anything approaching the “ golden age “ which we have experienced during the last few years.

Some time ago, the Government decided to increase social services benefits, and many people expressed the opinion that the “ means test “ should be abolished. On some social services, that has already been done. Some people display remarkable inconsistency in this contention. While advocating the abolition of the “means test”, they also declare that persons on substantial incomes should be debarred from receiving child endowment. When we on this side of the chamber speak of placing social services on a national basis, we disagree with the views of honorable members opposite as to how the benefits should be financed. The Labour party has placed on the statute-book legislation which guarantees financial security to the aged and infirm, the sick, the unemployed, the widow and the orphan. Members of the Labour party believe that the social welfare fund, from which social services payments are met, should be built up on the income or prosperity of the country, and not by a direct tax upon salaries and wages. We assert that the direct taxing of salaries and wages for the purpose of financing social benefits - a contributory scheme, it is called - is not the fairest and most reasonable way of providing the money. In our opinion, the community as a whole, according to how its members derive benefits from society and according to what they gain from the production of the country and from the manner of their employment - gardeners, - legislators, public servants, employers and employees of private enterprise - should provide the funds on the basis of their means. Because of those considerations we cannot depart from our present system of taxation, either in regard to income tax or social service contributions. Statement No. 7 of the schedule to the budget speech delivered by the Treasurer (Mr. Chifley) shows that from the National Welfare Fund £29,416,673 was paid to invalid and age pensioners in 1946-47. In the current financial year, payments to such people will aggregate £39,500,000. The increase is caused principally by the payment of an additional 5s. a week to pensioners, and partly to the fact that there is now a much larger number of pensioners. The increase of expenditure will cost an additional £10,000,000. Under the operation of the means test a husband and wife are permitted to enjoy a joint income of £5 15s. a week and still remain eligible for a pension. The provision of funeral benefits for age and invalid pensioners during the current financial year will absorb £260,000, an increase of approximately £50,000 over last year’s expenditure. The provision of funeral benefits is appreciated by poor people perhaps more than any other social service, because the prospect of being buried as a pauper is something which causes the gravest anxiety to many people. As an example of the actual results of the Government’s policy in this connexion, one has only to refer to the complaints made by members of the medical profession that they are unable to obtain sufficient bodies for anatomical dissection. An eminent medical practitioner in Adelaide actually complained to me a few years ago that because of the payment of funeral benefits by the Commonwealth Government, very few people were being buried as paupers, and that in consequence the medical profession was unable to obtain sufficient cadavers. The provision of funeral benefits to pensioners is something of which we should be very proud.

The TEMPORARY CHAIRMAN:

(Mr. Sheehan). - Order! The honorable member’s time has expired.

Sir EARLE PAGE:
Cowper

.- As the honorable member for Hindmarsh (Mr. Thompson) delivered his speech, he revealed three blind spots in his vision. The first blind spot was a physical one and was exhibited when he alleged that no member of the Australian Country party was present while the honorable member for Moreton (Mr. Francis) was speaking.’ The fact is that I was present in the chamber, and so wag the honorable member for Wimmera (Mr. Turnbull). The second blind spot which he revealed was his ignorance of the past, when he suggested that practically all the humanitarian legislation of the Commonwealth had been introduced by members of the Australian Labour party. The fact is that the measure to provide for the payment of old-age pensions was introduced by Mr. Deakin, who was then the leader of the Liberal party, while a measure to provide for the payment of child endowment was introduced by the then Minister for Labour and National Service, Mr. Holt, a member of the Menzies Government. Then he suggested that members of the Opposition. parties do not even consider the position of the poor. However, I remind the honorable member that when I was Treasurer in the Bruce-Page Government after “World War I., the first thing I did was to move Parliament to elevate the minimum of permissible income for taxation purposes to £300 per annum, and the proposals which I introduced provided that a man with a wife and four children could earn up to £700 free of income tax. Then the honorable member revealed the blind spot in his vision of the present when he went on to say that the Government would never dream of taxing people who get sick pay and unemployment relief and other social benefits, because in the next breath he told us that those people pay a social service contribution of ls. 6d. in the £1. That means that a man in receipt of the basic wage pays 7s. 6d. a week by way of -social service contribution, while a man -.receiving £8 a week pays 12s. a week in social service contribution. If we consider the benefits which would have been ^payable under the National Health and Pensions Insurance scheme introduced in 11938, we find that for the payment of 5s. a week wage earners would have received nearly double the amount payable to them under the Government’s social service scheme in certain cases. I have not time to traverse any further the honorable member’s speech; I simply indicate the three blind spots in his outlook, and trust that in future he will be able to recognize members of the Australian Country party when they are sitting in the House.

With regard to the budget speech delivered by the Treasurer (Mr. Chifley), I think that it is the most disappointing one to which I have ever listened. The negative policy of that speech, and the undeniable fact that our production has seriously declined, as disclosed by the papers accompanying the budget, must bring a hot flush of shame to the cheeks of every patriotic Australian. Especially is this so when one compares the unsatisfactory production of Australia with Britain’s record production, and realizes the world’s desperate need of food. Great Britain, despite the fact that its people are hungry, that hundreds of thousands of its homes and thousands of its factories were destroyed during the war, and that it is maintaining 1,000,000 soldiers in the field to safeguard Empire interests, which, of course, include Australia’s interests, aims at an increase of exports of 60 per cent, more than its pre-war effort. On the other hand, Australia, which was quite unscarred by war, and which was enriched during the war by millions of pounds spent here by British, American, Dutch and other servicemen, and strengthened as it is by the installation of millions of pounds worth of high-class machinery in order to stimulate our industrial war potential - machinery which has been of inestimable benefit to our peace-time industries - is producing less than it did in 1939-40. The truth of my statement is adduced by the official figures compiled by the Commonwealth Statistician, which prove that, despite an increase of population of 500,000, Australia is producing and exporting less than it did before the war. What a difference it would have made to the people of the United Kingdom if Australia, during the six years of the Australian Labour party’s occupancy of the treasury bench, had maintained the prewar production of our food exports!

The decline of production can be readily ascertained on comparing the production for the three years prior to a Labour government attaining office, namely, from 1939 to 1941, with Australia’s subsequent production. The degree to which Australia might have eased Great Britain’s dollar position by the export of foodstuffs is indicated by the recent history of the production of sugar, butter and wheat. The production of butter declined from 212,000 tons in 1939-40 to 138,000 tons in 1946-47, and exports to Great Britain declined from 120,000 to 50,000 tons. The production of sugar declined from 928,000 tons in 1939-40 to 552,000 tons in 1946-47, while the export of sugar declined from 500,000 tons to 100,000 tons. Production of wheat fell from 210,000,000 bushels to 116,000,000 bushels, and exports from 47,000,000 bushels to 12,000,000 bushels during this period. Had Australia’s production been maintained during the six years Labour has been in office at the same average rate as during the immediately preceding three years we should have exported to Britain £50,000,000 worth of wheat, £50,000,000 worth of butter and £25,000,000 worth of sugar more than we did. This would have resulted in Australian producers receiving £125,000,000 more for their products, and Great Britain would have been saved the necessity for spending £125,000,000 worth of dollars; or, in other words, the starved people of the United Kingdom would have had an additional £125,000,000 worth of food in their stomachs.

It is obvious that the essential task at the present time is to expand production, so that we may largely increase the quantity of food we are sending to Britain and other starving countries. All that the budget proposes is the adoption of quotas and the restriction of imports. It may be argued by some people that we should not increase our shipments of food to Britain because Britain cannot afford to pay us at the present time. Anticipating this, it is worthwhile recording exactly the financial relationship that existed between Britain and Australia during the war. Throughout that period, Britain bought our goods f.o.b. Australian ports, and provided the shipping for their transport. When the present Leader of the Opposition (Mr. Menzies) was Prime Minister and I was Minister for Commerce in 1941, the submarine menace was so acute that, 1,000,000 tons of shipping was being sunk every month. Britain then informed the Australian Government that, although it needed food badly, it had to reduce the shipping tonnage for the carriage of food from Australia from 1,600,000 tons to 400,000 tons a year. Arrangements were then made whereby Britain continued to buy and pay for food produced in Australia, even though it was not delivered, and agreed to defray one-half of the cost of storage until shipping became available.

In addition, in 1942, Britain quite spontaneously increased the price that it was paying for wool, not only from Australia but also from the whole of the Empire, by 2d. per lb. That increase has benefited the wool producers of Australia by £6,000,000 or £7,000,000 a year ever since, a total of at least £30,000,000. Yet we try to take credit for a miserable gift of a book entry of £25,000,000! We should have sent to Britain as a gift as much food as we could spare, so as to enable it to maintain necessary nutritional standards. Britain also increased the price which it was paying for our butter, by 2d. per lb. in 1943 and 4d. per lb. in i945, and at the end of 1944 voluntarily increased by no less than 40 per cent, the price which it was paying for our meat. Therefore, if Britain cannot, at present, pay for what it purchases from Australia, let us remember that it has always been - and will be again, I hope - the best customer we have had for many of our great food products. It bought practically the whole of our peace-time exports of butter, canned, dried and fresh fruits, meat and wheat. Therefore, surely while it is in distress we can afford to sell to it on the longest terms desired ! We were not able to send to it millions of pounds worth of food as a gift, as we on this side of the chamber advocated many months ago. If the Government claims that, with all the powers that it has taken in regard to finance, and the strength which the Commonwealth Bank has built up over the last 30 years, it cannot handle the credit side of the transaction, then all its talk about its financial powers is sheer nonsense. It is essential to increase production to the greatest degree if we are to overcome our own difficulties as well as help Britain and the rest of the starving world. What is the right way in which to encourage production? Some incentive to work must be given. I was amused, and rather amazed, to find the Minister for Labour and National Service (Mr. Holloway) expressing himself in favour of incentive payments while maintaining high taxes. Surely the easiest way to provide incentive payments is by reducing taxes, which deter every worker from performing his tasks to the fullest degree of his capacity, and place practically a total prohibition on overtime work. The second essential is that there shall be a reasonable return for enterprise and a proper reward for labour. Because of the tremendous shortages of goods, and of the lag of the last eight years that has to be overtaken, the third necessity is to have a maximum of labour-saving equipment and machinery on the farm and in the factory. There must also be amenities in the country, otherwise no one will continue to live there. The object of the budget should be to expand production so as to meet the heritage of the war and its aftermath.

The Treasurer should not be deceived by the position of post-war prices. Unquestionably, the high prices that are ruling at present for some of our products cannot continue indefinitely, although I hope that they will remain reasonably high for a long time. The import price index given by the Commonwealth Bank was 1,152 in June, 1939 and 2,317 in 1946-47. The export price index was 980 in 1939 and is now 2,068. So we find that, relatively, imports are much higher than exports under these circumstances. Quoting a mass of figures does not prove that the budget is sound. In fact, if we examine the position generally we find that our war debt has increased by no less than 900 per cent., from £1S6,000,000 at the outbreak of the war to £1,700,000,000 to-day. Thus it has grown from £26 to £225 per head of the population. The interest that we have to pay on that debt is now only six times greater than it was, although the debt itself is nine times as great as it was, the reason being that we have been fortunate iri having been able to borrow much of the money at fairly low rates of interest. To-day, the interest represents £6 per head of the population compared with £1, it having grown from £7,500,000 to £45,000,000 a year. During the same period, Commonwealth and State taxationrose from £17 to £47 per head of the population, the receipts having been £100,000,000 in 1939 ‘and £355,000,000 last year. Yet the population of Australia has increased by barely 500,000. At the same time, the administrative costs of the Commonwealth rose by 600 per cent., from £4,500,000 to over £26.000,000, an increase of the individual impost from 15s. to £3 per head of thc population. Our defence vote has grown from £24,000.000 in the year before the war to an estimate of £80,000.000 for this year, or from £3 to £10 pei- head of population. It is obvious that, in the present disturbed state of the world, wc must maintain our defences at a. high level.

A policy of import restrictions and quotas cannot possibly get us out of our difficulties,- and will not meet rising costs, which will be inescapable unless we expand production, increase our exports and add to our population. What does the Treasurer propose, with a view to meeting this difficult position ? The budget begins and ends on the same note - full employment holds the key which will solve all our problems. The honorable member who preceded me claimed that that is a great “ cure-all “ for everything. As a medical practitioner I have known of many so-called cures that have been offered to the people, but few of them have had a currency of more than three years. We are told that “full employment holds the key to solve all our problems “. That sounds all right in theory, but let us analyse the facts and judge in the light of our experience. One disturbing fact is that although more persons are employed in Australia than ever before, and that there is more electrical and mechanical power behind them, our production is less than in the last year before the war. The stark truth is that with 15 per cent, more workers, 20 per cent, more central electric generating capacity, and 30 per cent, more mechanical power in our factories, Australia’s output is from 10 per cent, to 20 per cent, less than in 1939-40. The Prime Minister has told us that the number of persons employed last J une was 3,200,000, or 480,000 more than in June, 1939. The number in employment last June must have been 600,000 more than in June. 1944, when large numbers of Australian men were with the fighting forces. Yet, according to the Commonwealth Statistician, Australia’s over-all output, as well as the production of many separate items, has fallen. It will be seen, therefore, that full employment alone will not set us out of our difficulties. Full employment must be accompanied by increased production. It is true that in terms of money the value of our lower production is greater than in pre-war years. That is because export prices are high, but, unfortunately, the prices of imported goods are higher still. Both import and export prices have more than doubled in seven years; the import price index has risen from 1,152 to 2,317, and the export price index from 980 to 2,068.

Moreover, import prices are increasing at a faster rate than export prices.

In addition to there being more people in full employment in Australia than at any previous time, the value of plant and machinery in factories has risen from £150,000,000 to £185,000,000; engines in factories have increased from 1,600,000 horse-power to 2,200,000 horse-power; central electric generating stations have increased their capacity from 1,700,000 to 2,000,000 kilowatts, and the maximum load has increased from 1,500,000 to 1,600,000 kilowatts. Despite these advantages, the production of pig iron and steel declined from 2,500,000 tons in 1939 and 2,800,000 tons in 1943-44 to 2,366,000 tons in 1946-47; the number of bricks manufactured fell from 629,000,000 to 480,000,000 in the same period; and the output of tiles decreased from 39,000,000 to 36,000,000. Notwithstanding that the need for coal is much greater than ever, the’ output from the mines has remained practically stationary. There are shortages of materials of all kinds. One direction in which this shortage is having a serious effect is in the lack of houses for the people. It takes up to two years from the receipt of the order for a household bath to be supplied. The demand for kitchen sinks, refrigerators and other household articles far exceeds the supply. For over two years I have had an electric stove on order. Recently, I asked the manager of the company from whom I had ordered it how much longer I should have to wait. He told me that he himself had been waiting eighteen months for a stove, and that I was not likely to get one before he did. We should be exporting goods of al) descriptions, particularly food, to those in need, thereby gaining their goodwill. The only bright spot in the picture, to some people, is that the monthly average of beer production has increased from 7,400,000 gallons in . 1939-40 to 10,700,000 gallons in 1946-47, whilst the supply of tobacco and cigarettes has increased from 1,920,000 lb. to 2,500,000 lb. in the same period. The effect of these shortages on the economic and social life of the people is catastrophic. Black marketing i3 rife; there is general disrespect for the law; permanent damage is being done to young children and women through periodic shortages of milk and other foods containing vitamins; there is a sense of frustration everywhere, especially in industry, because of endless delays. Among the drastic steps which have been advocated to meet the situation is the restriction of the importation of motor vehicles, including trucks. Yet much time is wasted by people who are forced to use old vehicles, which frequently break down because spare parts cannot be obtained. We must learn to put first things first. A doubleheaded tyranny is being exercised by a government bureaucracy and Communist trade union bosses drunk with power. One of the first things necessary is to make certain that too much money is not taken out of the pockets of (he people for governmental purposes.

If money were expanded only in ways that make possible a reduction of taxes, a real incentive to more and better work would be provided. A reduction of taxes would have three main effects. First, it would provide an incentive to increased production. When I was Treasurer in the Bruce-Page Government, in five years the taxes on incomes were reduced by 70 per cent, below the war-time peak. . That Government also raised the income tax exemption to £300 a year, and made substantial concessions to families. The result was record employment in Australian factories, whilst practically every primary industry doubled its production in ten years. Secondly, reduced taxes could effect a reduction of administrative costs in the Taxation Department. The present low exemption means that practically every worker is also a taxpayer. If the exemption were lifted to £300, a large number of those taxpapers would disappear from the department’s records. T recall that when the exemption was raised during my term as Treasurer, the number of taxpayers fell from about 782,000 to 231,000. If similar action were taken to-day, the results would be startling. The Government should do something in thu matter. The present stupid system of assessing the rate of tax on gross income hits hardest the workers on the lower ranges of incomes, because that system deprives them of a substantial portion of any overtime earnings. This dissatisfaction on the part of the worker would be overcome by assessing the rate of tax on net income after deductions have been allowed. If that were done the average worker would not hesitate to work overtime.

The difficulty which prevents the Government from exempting the lower ranges of income from tax is of the Government’s own. making. The Government itself has put a lion in its path in the form of the social services contribution. The honorable member for Hindmarsh (Mr. Thompson) boasted that persons on the lower ranges of income were not taxed at present. He said that they received benefits under the Government’s social services scheme on a noncontributory basis. The reverse is the fact. At present, the cost to the Government of distributing sickness and unemployment benefits valued at £1,664,000 is £217,000, or 12½ per cent. of the value of the benefits disbursed. For how long would a manager of a friendly society hold his job if his administrative expenses a mounted to 12½ per cent. of the benefits disbursed by his staff? He would quickly be relieved of his position. Under a system of national insurance administered by friendly societies, benefits would be friendly societies, benefits would be greater for a smaller contribution, administrative costs would be less, no difficulty would be found in making satisfactory agreements with doctors and chemists and the social service contribution which is now levied on incomes as low as £125 would be eliminated from the taxation field. The present system entails probably 1,000,000 more income tax returns and assessments than would be required were social services administered with the aid of voluntary organizations. However, the Government is proceeding with its various schemes for the nationalization of doctors and chemists and for taking over State hospitals; and we shall find that the more administration is centralized the cost of such schemes will correspondingly increase. We know that those who benefit most from big art unions are not those who win the prizes, but the promoters. That is all that nationalization does. It helps to build up power and authority for a few persons in executive positions, and, at the same time, deprives the individual of his freedom.

Whilst honorable members opposite oppose payment for social services on a contributory basis, those on the lower ranges of income are now contributing for the benefits they receive. The present social service contribution is a flat rate of1s. 6d . in the £1 from £5 a week up, which means that a person with an income of £6 a week contributes 9s. a week under the scheme. If the scale of contribution set out in the National Health and Pensions Insurance Act 1938 were doubled and the benefits correspondingly doubled, the allowance payable in respect of sickness, disablement, old-age pension, orphans’ pensions, and child endowment would all be greater than under the present social services scheme. At the same time, persons on the lower ranges of income would contribute less under that scheme than they are called upon to pay under the present scheme, because under the former scheme one-third of the total contributions was provided by employers and one-third by the general taxpayers. The contribution fixed under the 1938 scheme was at the rate of1s. 6d. a week for a man and1s. for a woman. For double that rate of contribution old-age pensions and widows’ pensions would be payable at the rate of £2, with no means test whilst, at the same time, endowment would be payable in respect of the first child, with no means test. It will be recalled that when the Government formed by the Opposition parties introduced child endowment, the benefit was made payable without any means test That is the only honest and decent way to deal with such a social service.

The third effect of a substantial reduction of taxes would be a reduction of the Government’s spending money, and this would force it to make the utmost use of its staffs. It would force it to eliminate duplication and unnecessary staffs with which many departments are now over loaded. In this respect I shall give one instance. The Government has appointee officers from the External Affairs Department as representatives in almost every country in the world, and, at the same time, has placed alongside those representatives officers from the Department of Commerce to deal with trade matters. I have not the slightest doubt that in most cases this duality of jobs could be eliminated and that one representative could do quite easily the work involved in the two jobs. There is no justification for double staffing. We shall find it very difficult in the future to obtain first-class men to represent this country overseas. The honorable member for Flinders (Mr. Ryan) has emphasized the damage that can be done when unsuitable men are appointed to these positions. Furthermore, this Government has established in country towns its own labour and employment bureaux to do work which can be done just as efficiently by existing State bureaux. Such duplication cannot be justified. What we need most when our production is declining to so serious a degree is to employ as many of our citizens as possible in production.

In conclusion I wish to touch upon a subject withwhich I have dealt on previous occasions. We should endeavour to put our army and air force personnel to really useful work. In this respect we should follow the example of the United States of America. This personnel should be used as a corps of engineers for the purpose of making a complete examination of the physical data of the continent both by ground and aerial survey. They should draw up plans to conserve the waters of our rivers, locate routes for roads and railways, select sites for aerodromes, and interrelate the activities of associated districts with a general master plan of development. With such a plan available we should be able to go straight ahead when we decide to undertake any particular public work. At the same time, that would prevent armyand air force personnel from wasting years of their lives and much patient endeavour in trying to do something which everybody realizes is practicable. The United States of America affords a very good example in that respect.

I urge the Government to give careful consideration to the matters which I have raised. I urge it to reduce taxes and introduce a contributory scheme in respect of social service benefits. In that way it will cushion the effect of any future depression upon such benefits. It is obvious that should another depression occur, the Government could not continue to levy social service tax at the present rate, and would, therefore, be forced to reduce such benefits, just as the Geullin Government was obliged to reduce the old-age pension in 1931. Similar circumstances may recur in the future. Now, when times are prosperous, we should be building upa fund as an insurance against unemployment. Any one who believes that we can avert another depression simply by messing around with such schemes as the nationalization of trading banks has never read history. The Government should eliminate all duplication in its administration, and ensure thatall its expenditure should be undertaken wisely. In addition, it should use army and air force personnel in the manner I have suggested instead of using them solely for the purpose of getting ready to fight another war. In that way we should get Letter value for our money. We must put first things first - power, water, transport, communications, and amenities to help to revive land industries and make them again the great purchasers of factory goods. By that means we shall increase the national income, cheapen the cost of goods, increase the purchasing power of money, enable more work to be done in shorter time, eliminate much industrial unrest, and make possible a 40-hour week without a lessening of production. In fact, we shall thereby increase total production and be enabled to reduce rates of taxes whilst, at the same time, increasing our sources of revenue. We shall thereby build up an Australia which will attract capital and migrants of the best type. We shall thus be able to have our choice of the people of all countries instead of merely being obliged to accept those who can no longer bear to stay in their own country.

Sitting suspended from 5.59 to 8 p.m.

Mr DEDMAN:
Minister for Defence, Minister for Post-war Reconstruction, and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP

– It is never possible in a budget speech to cover the whole field dealt with by the Treasurer in opening the debate. Therefore, I propose to use the time at my disposal in three ways :

First, to answer certain criticism offered by the Leader of the Australian Country party (Mr. Fadden) ; secondly, to examine in somewhat greater detail the figures relating to national income dealt with in the papers circulated by the Treasurer, and, thirdly, to make some observations of a general character about tests which should be applied to financial policy.

The Leader of the Australian Country party always reminds me of a bull in a china shop - he charges in indiscriminately, and lashes out right and left. It often happens that one of the right honorable gentleman’s statements contradicts another. At one moment he rails against inflation, and in the next advocates a policy which could result only in inflation. These charges which I make against the Leader of the Australian Country party are not groundless. I can, in fact, substantiate them by reference to the budget speech which he made last Friday. Honorable members will recall that I very successfully “debunked” the right honorable gentleman on the occasion of his last budget speech. I then pointed out that, in a certain election campaign, he had put forward financial proposals in relation to taxation, and the use of post-war credits, which, had they been accepted, would have resulted in an increase of the national debt by more than £200,000,000, with the result that the annual interest bill would have been increased by about £10,000,000. In the budget speech which he delivered last week, the Leader of the Australian Country party set out to show that an amount of approximately £258,000,000 was standing to the credit of the Treasury in what he called reserve accounts; or, if not actually in accounts, that this amount was at the disposal of the Treasurer. He said that the amount of £258,000,000 was available to the Treasury under the following headings : -

Revenue used for capital expenditure.

Arrears of taxation.

Disposals.

Balances owing by other administrations.

Money in the National Welfare Fund.

Speaking on the last item, the right honorable gentleman contradicted himself. In an earlier part of his speech he said -

Although the balance shown in the National Welfare Fund is £49,000,000, it is merely a paper balance represented by treasury-bills.

Yet, a little later, he suggested that this money could be used in lieu of revenue raised by taxation. Obviously, these two statements are contradictory. Actually, it is true that this money may be said to be paper money. It is in treasury-bills, but it would be quite wrong to expend all of the money in the National Welfare Fund in one year because then, in the following year it would be necessary to raise an even greater amount by way of taxation than would otherwise be the case.

Mr Rosevear:

– It would also be against the provisions of the act.

Mr DEDMAN:
ALP

– That is so. Referring to the item, “Revenue used for capital expenditure £33,000,000”, the Leader of the Australian Country party said that money for this purpose should be raised by loan. He suggested that it is wrong for the Commonwealth Government to raise by taxation money for capital expenditure, whether the money is to he expended on housing or defence or any other such purpose. Well, the money must be obtained from some source. If it is not raised by taxation, it must be obtained by loan. I should say that a wise Treasurer would raise all the money he could, even for capital expenditure, by taxation, because, if he raises it by loan, it must he repaid sometime, and in the meantime interest must be paid on the loan.

The second item which the Leader of the Australian Country party mentioned as part of this nebulous reserve was an amount of £100,000,000 which, he said, was available to the Treasury in the form of arrears of tax. This is what he said -

According to information supplied to me by the Commissioner for Taxation, there were no fewer than 700,000 assessments unissued on the 30th June, 1947.

I understand that it has been explained to the right honorable gentleman that not all of these 700,000 assessments are in respect of tax which still remains to be paid. A great many of them were issued to persons who have, during the year, been paying tax under the pay-as-you-earn system. For example, I have only just received my assessment for last year’s income tax. It was, therefore, one of the assessments included among the 700,000 outstanding on the 30th June last. That assessment showed that I owed the

Treasury nearly £700, but throughout the year which has just concluded I, like every other member of this chamber, have been paying under the group system into the Treasury regular deductions from the salary and other income which I have received. As a matter of fact, there is standing to my credit in the Treasury round about £800. Therefore, in my case, far from my tax being outstanding, I have actually paid more than the amount which I owed. I shall receive a refund from the Treasurer on that assessment. That will apply also to thousands of other assessments included in the 700,000 assessments totalling £60,000,000 which the Leader of the Australian Country party says are outstanding at the end of the year. Obviously a greatdeal of that money is not available to the Treasurer because it has already been collected under the pay-as-you-earn system and taken into the Treasury accounts.

The Leader of the Australian Country party also referred to unpaid taxes amounting to £47,000,000, suggesting that the Treasurer should collect that amount and use it instead of new money he proposes to raise by way of taxes. There have always been outstanding taxes at the end of every financial year. Some of this money may possibly never be collected because some of the people who owe it may have become bankrupt; and the recovery of some of it may extend over a number of years. If the Treasurer wants to use that amount of £47,000,000, it will have to be replaced in some way. As it is not immediately available he would either have to borrow the money or, alternatively, to create credit to that amount. To the extent that national credit is used to replace money the Treasurer hopes to receive by way of taxes inflation is brought about. The Leader of the Australian Country party who so frequently refers to the spiral of inflation has, in this instance, advocated a policy which can only result in inflation.

The third item referred to by the Leader of the Australian Country party relates to disposals. I was unable to understand how the right honorable member arrived at an estimate of £34,000.000 under this heading. He suggests that approximately £50,000,000 worth of goods are awaiting disposal by the Commonwealth Disposals Commission. Some of these surplus war materials - which constitute the bulk of items for disposal - are situated in remote places in the ‘Commonwealth, and some in the external territories, and consequently their disposal can be effected only over a period of time. The Commonwealth Disposals Commission is proceeding with its work as rapidly as it possibly can, but it is not conceivable that such a large sum of money will be available to the Treasurer within the next twelve months. The Leader of the Australian Country party again suggests that the Treasurer should create credit to the value of these goods, use that money for the purposes of the Government, or pay it in the form of salaries and wages to public servants. Again I say that would result in inflation.

The fourth item mentioned by the Leader of the Australian Country party relates to balances owing by other administrations amounting to £50,000,000. It is true that other administrations, including the Dutch, owe this Government considerable sums of money, amounting in the aggregate to £50,000,000. It is also true, however, that those debts cannot be collected immediately. Some of the money may not be due for some time to come, yet once again the right honorable, gentleman suggests that we should create credit on the basis of that indebtedness, again using the proceeds for the purposes of the Government. Again I say that would result in inflation. So that all the suggestions of the right honorable gentleman for the lightening of the burden of taxation by using these various sums of money, which he says amount in the aggregate to £25S,000,000, would, if adopted, result in inflation. We cannot, therefore, pay too much attention to his proposals.

Another item to which the Leader of the Australian Country party has drawn attention is expenditure in the Department of Defence on what he terms an elaborate body known as the Joint Intelligence Organization. The right honorable gentleman and other members of the Opposition have from, time to time contended that we should take from the shoulders of the United Kingdom some of the burden of the defence of the British

Commonwealth. The Joint Intelligence Organization was expressly established for that very purpose. The intelligence organization of the United Kingdom was available to us in the years before the war and the Defence Department very largely availed itself of such information as it required from that source. Notwithstanding the fact that the Joint Intelligence Organization was established to put into effect a proposal which was continually supported by the Leader of the Australian Country party and other members of the Opposition, the right honorable gentleman now criticizes it as an elaborate organization on which these sums of money should not be expended.

I turn from the matters raised by the Leader of the Australian Country party to an examination in some detail of the figures in relation to national income which were dealt with by the Treasurer in his budget speech. In 1946-47, the national income was £1,265,000,000, compared with £803,000,000 in 1938-39. Between those years the national income increased by 5S per cent. Of this increase, £80,000,000 was due to the full employment of 203,000 persons who were unemployed while governments supported by the Opposition parties were in power in this country, £98,000,000 to 268,000 additional persons entering employment, and £284,000,000 partly to the increase of productivity and partly to increased prices.

Mr SPENDER:

– The greater part of it is due to increased prices.

Mr DEDMAN:

– Not the greater part of it. According to the Commonwealth Statistician, the increase in retail prices in Australia is 27 per cent., whereas the increase in the national income is 58 per cent. It is therefore obvious that less than one-half of the increase in the national income was due to increased prices and more than one-half to full employment and consequential greater productivity. Before I proceed to deal with the next matter, I shall quote a passage from the judgment on the 40-hour week case. I am glad that a judicial authority has set down in words certain views to which I myself have given expression in this chamber. The judgment states -

The national income should be divided into two parts - one part consumed - one part saved; from another angle the national income is divided between rentiers (rent, interest and profit) and salary and wage earners. Rentiers as such perform no useful social function . . .

Mr Spender:

– Who was the judge ?

Mr DEDMAN:

– As I have said, I am quoting from the judgment on the 40-hour week case. If the honorable member obtains a copy of the judgment he can read these statements for himself. The judgment continues -

Rentiers as such perform no useful social function but part of savings comes from their incomes, and at one stage in history most of it did so. Savings now, however, come also from salaries and wages via the banking system and from taxation. The taxing authorities, in fact, use part of the tax proceeds for capital goods and buildings.

In the light of that statement, I come now to a further analysis of the figures relating to the national income. Wages and salaries, including the pay and allowances of members of the forces, have increased from £436,000,000 before the war to £756,000,000 in 1946-47, an increase of 73 per cent. In the same period, the number of employees has risen by 22 per cent., from approximately 2,082,000 to approximately 2,529,000. Although the average earnings of all employees, including females and juniors, has risen from £209 per annum to £299 per annum, an increase of 43 per cent., over the same period, the “ C “ series index figures show an increase of only 27 per cent, in retail prices. Turning from wage and salary earners who have received an increase of 73 per cent, since 1938-39, we find that other incomes from personal exertion, that is, incomes of farmers, retail traders, professional men, &c, have risen from £165,000,000 to £260,000,000, an increase of 58 per cent. It is noticeable that although this increase is considerable, it is not as great as in the case of wage and salary earners. Finally, the incomes of the inactive elements in the community, that is, those referred to in the judgment that I have quoted as “ performing no useful social ‘ function “, in the form of dividends, rent, interest and undistributed company profits, has risen from £202,000,000 in 193S-39 to £249,000,000 in 1946-47, an increase of 23 per cent. So, I put it to members of this committee, that the increase of 58 per cent, in the national income between 1938-39 and 1946-47 has gone mainly to those who most deserve it, namely, the wage and salary earners.

Another matter to which I draw attention is the beneficial effect on the community of the reduction of interest rates brought about under the financial policy of this Government. Although the public debt of this country increased from £1,250,000,000 to £2,767,000,000 during the war, the net interest payments have increased only from £54,000,000 to £83,000,000. Expressed as a percentage of the national income, the interest burden has actually decreased, because, at the earlier period, when interest rates were high, 6.7 per cent, of the national income was required for this purpose, whereas only 6.6 per cent, of the national income goes in interest payments on the very much higher national debt existing to-day, because of the very much lower rate of interest. I have been dealing so far with our internal debt. In addition, tho interest payable on overseas debts has fallen from £27,000,000 to £22,000,000. Expressed again as a percentage of the national income, this debt has fallen from :3.4 per cent, to 1.7 per cent. It is true that governmental expenditure has increased during this period. Govern.mental expenditure on administration has increased very largely because of the substantial expansion of governmental activities. We have introduced new social services and have incurred heavy expenditure on education and hospital subsidies. In spite of all that, however, the cost of governmental administration has only risen from 5.5 per cent, of the national income to 5.7 per cent. In the same period expenditure on civil works has fallen from 7 per cent, to 5.4 per cent.

I turn from these observations on the national income to other aspects of the

Government’s financial policy. No doubt the Opposition will make particular criticisms of the Government’s policy, but the true test of such a policy lies in the broad facts relating to the state of the national economy. Those broad facts are to be found in a study of employment, production and distribution. A comparison with pre-war years shows a remarkable achievement in relation to employment. The total number of people in civilian work has increased since June, 1939, by approximately 500,000 or nearly 20 per cent. Unemployment has been virtually abolished from our economy. I was only able to obtain a figure in relation to unemployment that was a month old, but the Minister for Labour and National Service .(Mr. Holloway), in answer to a question to-day, quoted a much more recent figure. But, on’ thu figure that I was given - and the figure to-day is better - the number of people receiving unemployment allowances in Australia is only 4,500, or about 15 per 10,000 of the working population.

Mr Sheehy:

– And the Opposition said that it could not be done;

Mr DEDMAN:

– Yes, the Opposition has always maintained that the policy of full employment could not be given effect. The Leader of the Australian Country party contended that employment in rural industries had declined, while factories- were getting an excessive share of available labour. The fact is that the number of people employed in rural industries did fall considerably during the war because of the demand of the services and war industries, but it is now back to the pre-war level. The number of persons engaged in agriculture, grazing, dairying, forestry, fishing and trapping was 561,000 in July, 1939. In June, this year, the figure was 559,000. Factory employment has certainly increased greatly, but surely that is nothing to complain about. It is a result of the great expansion of secondary industry which occurred during the war and has been maintained since the war. It means that we are now producing for ourselves a far greater range and volume of commodities than we produced before the war. We are also developing a big export trade in manufactured goods. In 1946T47, our exports of manufactured goods were valued at £40,000,000 compared with less than £9,000,000 in 1938-39. These exports are in some instances earning dollars for us, and every one knows how valuable dollars are in the present crisis. Civil production was necessarily cut back during the war because of a shortage of man-power, equipment and materials, but, in the last two years since the war ended, there has been a big recovery in rural production as is shown in the following tables of Quantities exported: -

It is true of course that some commodities, such as wheat, last year, have been affected by grave droughts, but the general trend of primary production is certainly upward. The brief survey that I have been able to make of conditions generally in the economy - increased production, full employment and the availability of goods for distribution in the community - shows that the financial policy applied by the Government throughout the years has been highly successful. So long as Labour is in office and continues to apply the financial policy it has applied during and since the war, the people of this countrywill be eminently satisfied with it.

Mr MENZIES:
Leader of the Opposition · Kooyong

– The Minister for Post-war Reconstruction (Mr. Dedman) has at all times such comfortable assurance of his own omniscience that one hesitates to criticize him; but it has become necessary for me to-night, before saying a few words on my own account, to offer one or two criticisms of what he has just been saying. The honorable gentleman began by describing the Leader of the Australian Country party (Mr. Fadden), who, by arrangement betweenthe Opposition parties, led the debate on this matter, as a bull in a china shop. At first, I took that remark to be intended as offensive; but, on second thoughts, I concluded that it might be flattering, because if the china is as fragile as are the arguments used by the Minister, no wonder the bull proves destructive. Having said that, the Minister went on to say, with that engaging modesty that characterizes him, “I debunked the Leader of the Australian Country party in the last budget debate “.

Mr Fadden:

– That is when he lost his £100.

Mr MENZIES:

– That appears to have been a glancing reference to that unsolved mystery. It is a wonder that, the Minister, who has just admitted that the taxation authorities owe him £100, has not used it for the purpose of discharging the liability he incurred on that occasion.

Mr Dedman:

– He has no liability.

Mr MENZIES:

– If I may adopt the old saw that those who live in glasshouses should not throw stones, before the Minister talks about debunking other people let me invite his attention to a little debunking process that I shall engage in. On the last occasion on which he addressed honorable members, the Minister addressed himself to the problem of banking, and he purported - I deliberately choose the term “ purported “ - to quote to honorable members a statement published in the Bankers’ Magazine. There was the Minister speaking to the House from his place at the table, I hope with a sense of responsibility. He was referring to events after 1924, and he said -

In order to reinforce that argument, I quote the following statement which was published in the Bankers’ Magazine at that time.

I took that to mean “ at that time “, and then he read the statement -

Capital must protect itself in every possible manner by combination and legislation. Debts must be collected, bonds and mortgages must, be foreclosed as rapidly as possible. When, through a process of law, the common people lose their homes, they will become more docile and more easily governed through the influences of the strong arm of government, applied by a central power of wealth under the control of leading financiers. This truth is well known among our principal men now engaged in forming an imperialism of capital to govern the world.

The Minister had the effrontery to read that to honorable members, as a leading article appearing in the Bankers’ Magazine at that time. No one with the faintest critical mind, listening to his perusal, would have thought any bankers’ magazine, outside Russia, would dream of publishing such drivel. I said, “ Who wrote that ? “ and the Minister said, “I do not know who wrote it, but it appeared as a leading article in the Bankers’ Magazine at that time “. Being asked by other honorable members to say when, the Minister for once fell strangely silent. It turns out that this highly fictitious document that he read to the House saw the light of day for the first time in 1890. This thing was trotted out in 1890 ! And, of course, it did great service. Soap-box orators, whether in or out of public assemblies, quoted from this imaginary statement and said, “Here we ere. This is what the bankers have said ! “ It was trotted out again, the Minister for Commerce and Agriculture will be delighted to know, in 1920.

Mr Pollard:

– They still think that.

Mr MENZIES:

– I am not asking about who thought what; I am talking about who said what. The Bankers’ Magazine had occasion to publish an article about it in 1933, and, so that the committee and perhaps other people may have the opportunity to judge who does the debunking, I shall read what it had to say. In June, 1933, it said -

As far back as 1890 these paragraphs circulated around the country at a great rate.

Honorable members will notice that what follows is a perfect summary of the alleged leading article -

They informed all who would believe that capital must protect itself by foreclosing mortgages; must hold secret and solemn meetings and there devise ways of cheating the common people of their homes; must divide the voters; and, by these and other nefarious means, govern the world with an imperialism of capital.

That is an accurate precis of what was read by the Minister the other day. That article continued -

Then in 1920 the perpetrators of these agitating sentiments again trotted them out to add to the bewilderment of the public during an unsettled period. These sentiments were attributed to a Bunkers Magazine or a bankers’ manifesto - a publication supposedly for private circulation.

That was the story that time !

Needless to say, the Bankers’ Magazine is not privately circulated, nor has it privately circulated any such bankers’ manifesto. Allow us to quote from the August, 1920, issue of the Bankers’ Magazine–

That was at least four years before the date on which the Minister said that this appeared as a leading article. The quotation proceeds -

Seeking to convey the impression that the bankers of the country are in a conspiracy to oppress the “ common people “ various agencies in some of the Middle Western States are circulating a series of pamphlets containing what purports to be a quotation from the Bankers’ Magazine.

All the way from the Middle West to Corio ! -

That such a statement as is quoted never appeared in the magazine or anything even remotely resembling it is of no interest to the originators of the propaganda, whose sole aim seems to be to create in the public mind a false impression. It seems hardly necessary to state that such words never appeared in the Hankers’ Magazine.

Then it goes on, in words which I crave leave to adopt -

The reader of such literature, especially if he be of that far too numerous class that prefers to receive its thinking ready-made, will be only too inclined to jump to the conclusion that there is a conspiracy of bankers seeking to destroy the happiness and prosperity of the people. In this state of mind, he falls an easy victim to any soap-box orator who holds out an equally false promise of Utopia in the overthrow of the so-called capitalistic classes.

I say no more about debunking. There is the simple narrative which exposes the alleged quotation from the Bankers’ Magazine as a piece of common fraud.

The next observation, and indeed the last of those made by the Minister for Post-war Reconstruction to which I want to refer, is his extremely satisfying - to himself - quotation from the judgment in the 40-hours case - the passage which reads that “ rentiers perform no useful social function “. With all respect to the source from which those words are alleged to have been taken, I say that they are utter drivel. Let us get down to plain English first of all and see what is this “ rentier “ that people talk about. It is one of the many expressions that we have borrowed from other races. After all, a rentier is merely “ a person who derives income from investments “. That is all. Let us put it into English then.

The statement is that “ persons who derive income from investments perform no useful social function “. To say in a country of this kind that people who are frugal and who are saving - and nine times out of ten they are the people who have incomes from investment - have no useful social function, is utter nonsense. As a matter of fact, of all the people in this community, they are the most socially useful. Here are the people who, by their thrift, by their feeling for independence, by their desire to put something away for the future, enable most of our industrial investment to occur, and who therefore are large contributors to the industrial progress of the country. When the country progresses industrially, then more people are employed, and when more people are employed in progressing industries, then living standards rise. I undertake to say that one could scarcely find more than two people in Australia - and we have now heard from one through the other - who would talk such nonsense about people who derive income from investments. I imagine that a great number of honorable members opposite belong to that class, and I am perfectly certain that those who do not are hoping to belong to it some day.

Mr Pollard:

– How much has the right honorable gentleman invested in war loans free of interest?

Mr MENZIES:

– Nothing. If the Minister gets on to my personal position, . might be tempted to invite a public examination of my financial position as affected by politics and that of a great number of his colleagues. Let us turn from these pleasing asides to come back, having touched lightly on the Minister for Post-war Reconstruction, to the budget.

If there is one thing that characterises this Government - and this goes for all of it, including my distinguished friend who has just interjected - it is the complete smugness of its approach to public questions. It is convinced that, of all the governments in the history of the world, it is the best and the wisest.

Mr POLLARD:
ALP

-Hear, hear!

Mr MENZIES:

– Exactly ! The only improvement that some honorable members opposite can conceivably imagine in this Government is the improvement that will occur when somebody leaves it and they join it. However, subject to that, the attitude is one of complete smugness, and on nothing are they more smug or more misleading than on the problem of full employment. Every time they make a speech here or abroad, they talk about “ our policy of full employment “. The Treasurer, after having taken us through the rather dry and rustlingsheaves of the budget, arrived at the final paragraph and gave us a passage, the literary style of which I, a former Treasurer, seem to recognize -

Two years of post-war experience have shown that full employment holds the key to many of the greatest economic problems of our community. Without full employment the financial burdens left by the war could not have been reduced so far; nor could we stand so well the present costs of defence and social services. Because of full employment, again a notable expansion of industry has been made possible and we arc able to -adopt such progressive measures as the 40-hour week. . . .

Notice the words “ because of full employment “. Honorable members will observe that in all those statements, full employment is treated as a deliberately and wisely -adopted policy which has produced results of its own force .and its own virtue; whereas, of course, the truth is that full employment in Australia is not the cause of other things. It is itself an inevitable result.

Mr Conelan:

– An inevitable result of government policy.

Mr MENZIES:

– Not of government policy, but of half a dozen other factors which can be referred to in half a dozen sentences. It would be remarkable indeed if, in Australia at this moment, large numbers of people were wandering around looking for employment. For more than six years, the country, very properly, went without masses of civil requirements so that it might concentrate its efforts on war and so that more than a million of its citizens might be engaged in one capacity or another in the armed forces. Think of all the accumulated arrears of production that those six years involved ! With all those arrears to overtake, it would be a very remarkable economy which did not find its people fully employed in the process. I say that whatever government existed in any country of this kind, after a war of this kind, there must he a period of full employment. The real problem to me is not how do we get full employment now, because that is inevitable and obvious, but how shall we preserve full employment in years to come? That is an immeasurably more difficult task.

Mr Pollard:

– After World War I., thousands of ex-servicemen were employed on relief work.

Mr MENZIES:

– I am afraid that the Minister is overlooking the fact to which 1 just referred, that in World War II., unlike World War I., more than 1,000,000 Australians were subtracted from civil occupations and restrictions of all kinds were quite properly placed upon the production of civil goods and civil services. The result was that our internal economy underwent a complete dislocation. Such a swingover did not occur in World War I., but became necessary to our internal economy in World War II. Therefore, we accumulated arrears. I have only to mention a simple every-day example - the problem of housing. Ministers themselves have repeatedly explained to the people that we have arrears of home building in Australia of the tune of something like 300,000 houses. With 300,000 houses in arrears, with all the allied trades that are associated with housing and with hundreds of thousands of people being returned from the fighting services into civil life, would you expect to have unemployment? Of course not! Pull employment in this country is the inevitable result of those things which have happened.

Then we have another factor which is both interesting and material. In the course of World War II, our war expenditure rose to heights which were never dreamed of in 1914-18, and the result was that hundreds of millions of pounds were put into circulation every year in Australia. People had to be prevented from spending their money, so that they would not create a demand for goods which they should not have, and the result was that war loans were filled, savings banks were filled and war savings certificates were accumulated until at this moment we have a record volume of purchasing power in the hands of the people. So, we have demand, purchasing power and vast arrears of production to overtake. Anybody has only to add those factors together,, and he will inevitably find that he is living in a period of full employment. What concerns me, and what will concern the people of Australia will not be that aspect. It will be how far is full employment to continue when some of those conditions no longer exist. How far is full employment to continue when we have begun to overtake our arrears? That is the important thing. That is essentially a problem of production and markets to which the Government ought to devote its attention. We on this side of the chamber have spoken time after time, almost ad nauseam, about the problem of increased production, and of increased production through giving to the people some incentive to produce. The Government always pays some lip service to it in the concluding paragraph which, as I said, always occurs in the budget speeches of the Treasurer. It is comforting to me to discover that when the Prime Minister says in his budget speech -

This menus amongst other things unremitting efforts to achieve greater production- he is giving the lie to those thousands of people outside, most of whom vote for the Government, who tell us that if we produce too well, we shall only produce our way into another economic depression. I am very glad indeed to know that the Prime Minister is on my side in that controversy. Increased production is the theme, and that means- increased production per man-hour. Let us face up to it. We shall not increase our population at any dramatic rate. Nobody supposes that we shall. The Minister for Immigration (Mr. Calwell), with all his efforts, cannot promise us a dramatic increase of population. Therefore, if we are to produce more, we must produce more per man-hour, and we can do that only by having greater efficiency of management, greater availability of horsepower at the elbow of the worker, and greater realization on the part of the worker himself that production is vital to his standard of living. Unless that happens, the 40-hour week, so far from raising the standard of living in Australia, will lower it, because unless we get greater production per manhour from a combination of all those circumstances - and everybody has his share of responsibility for that - our production will fall, or, alternatively, we shall have loaded rates of overtime to a greater extent each week; there will in fact be no 40-hour week, and our costs of production will rise. That would be not only a great misfortune for us, but also something of a tragedy for a world which is crying out for our products at this moment.

The second matter which I believe must be remembered in considering how far we are to have permanent stability is the problem of finding a permanent entry into new markets, particularly some of those close to Australia, such as the Netherlands East Indies, the Malay Peninsula, Burma, India, and southeastern Asia, if I may use that expression, without recalling some others. In those countries a vast potential market awaits Australia.

How do we suppose we are going to capture these new markets? We certainly shall not win them by talking about them. If we are to make an entry into these relatively new markets we must have firm government control of our foreign relations with the countries concerned, so that our relations with them will be really the business of the government. The control must not be subject to capricious interference by people who are, for the most part, Communists, whose allegiance is to any country other than the one in which they live. Secondly, we must aim. at exporting goods of quality, and .we must ensure continuity of supply. T. sometimes wonder whether those who, for one excuse or another, hold up production so lightheartedly, realize how frequently they strike a deadly blow against Australia’s opportunities. A sale is made, the goods are ready, the market looks good; and then we have a strike. The market slips from our grasp and falls to some other country. I do not want to discuss those matters in detail now, but it is quite clear that they all have a strong bearing on the opportunities offering for new markets for Australian goods.

I was very glad to hear the figures quoted by the Government to show that we are to-day exporting more manufactured goods. In the last few weeks I have heard many strange and wonderful theories advanced as to the reasons for the depression which occurred in Australia. Most of the explanations are completely fanciful. I had thought, long since that everybody who. had! observed the impact of the depression and who had reflected on the matter,, irrespective of what political party he favoured, had realized that the depression reached us in Australia through two channels. The first was the catastrophic fall which occurred in the prices of our primary products, and the second was the cessation, or drying-up, of borrowingon the other side of the world.. Those two factors, operating concurrently,, brought about a sudden, violent impact on the national income, which radiated out, destroying the confidence of people in the future, and bringing tragedies into the lives and homes of hundreds of thousands of people. I thought that that was well established as the explanation’ of the last depression; and because that is true I, for one, look forward greatly to seeing our exports of manufactured goods rise rapidly. If we can achieve that we shall not be in the vulnerable position of having all our eggs in the samebasket. One type of export will serve asa cushion against the fall of another type ;. and so we ought to be aiming at an enormous increase in the export of manufactured commodities. If we seize theopportunities that, are offering to us - and, unfortunately, we have lost many of them already - we shall produce such a foundation for employment in Australia that we might well be in a position to speak of “ full employment “, not as the temporary result of special circumstances, but as a steady feature of our economy, built upon a strong and lastingfoundation.

The last matter to which I shall refer is the subject of controls, although I do not wish to anticipate discussions which will occur in the House upon it. Incidently, I am sorry to disappoint theanticipatory smile on the face of thePrime Minister (Mr. Chifley) ; I am sure he thought that I was referring tobanking. He will hear more about, banking at another time.

Mr Falstein:

– So will the right honorable gentleman!

Mr MENZIES:

– I hope so; I hope I shall go on hearing about it for the next two years, because, if I do, I shall never have to hear the honorable member after the next election.

Mr Falstein:

– The right honorable gentleman has been saying that for seven years.

Mr MENZIES:

– What I do refer to is the urgent need, if employment is to be permanent and full in Australia, of a return of freedom to this country through the encouragement, the active encouragement, of the system of private enterprise. Although I have been in this House for a long time I have never been sure just where honorable members stand in regard to this matter. In their more oratorical moments they knock the stuffing out of private enterprise; they know all the answers to it, and they are set upon socialism. They can explain in words of fifteen syllables all the advantages of socialism, and then, in the next breath, one of them-

Mr Spender:

– Goes and buys himself an hotel!

Mr MENZIES:

– The Treasurer explained to us that, after all, more than 80 per cent, of all employment in this country is provided by private enterprise. That means over 80 per cent, of all “ full employment “ in this country. If that is so, I should have thought that a littleencouragement to this battered system would have been a very good thing for Australia and a very good thing for the people who are to be employed in industry. But the moment that is said somebody is bound to say : “ Do not talk about freedom; freedom does not matter, because if you were to give people their freedom chaos would result “. That is a marvellous argument to hear in a free country - “Do not give people their freedom because chaos will result “ !

Mr Edmonds:

– Who said it?

Mr MENZIES:

– If the honorable gentleman has not said it then I compliment him, because he is the only supporter of the Government who has not. Honorable members show, by their laughter, that they are now in a perfectly receptive mood for the last thing I want to say; and that is on the subject of freedom and the “ chaos “ which will occur if we let people have a little bit of what they once thought was their birthright. As usual, the matter has been expressed in lyrical terms by A. P. Herbert, and I conclude my remarks by reading his. In doing so I hope that they will be read, marked, learned and inwardly digested by every one who can read them -

page 319

QUESTION

WHAT USED TO BE

Return, sweet Chaos: come, the Bad Old Days

Before the Wise Men watched about our ways,

When Ministers had not annoyed the Sun. Not much was Planned, but many things were done;

Come, even loathly Private Enterprise

So, gentle Chaos, let me sit and dream The lost delights of your reviled regime. One pressed a switch and lo! the Light was found (To-day you would be fined £100).

Mr MENZIES:

– I am obliged to the honorable member for his suggestion that I wrote this little verse - the verse is quite good enough, of course - but it happens to have been written by A. P. Herbert. In the next few lines he deals with a familiar topic -

Water and Gas obeyed the humblest hand, Though greedy Tories still controlled the land.

Coal, too, almost like water, used to flow. A commonplace and not a curio. Coal, Chaos, was as plentiful as hay: We had so much we sent the stuff away! The Railways, not less rapid than they are, But much more regular, went just as far. The Ships, with small assistance from the State,

Sailed round the Planet and returned with Freight;

Either by Accident this isle was blessed Or there was far more planning than we guessed . . .

Thus Bees and Ants about their Business go -

Vague, as it seems; effective, as we know. Each bee, alone, from Rose to Lily flies, A wretched piece of Private Enterprise.

I have used one old “ tag “ to-night. I shall use another : “ Many a true word is spoken in jest “. All of this talk about the chaos that will descend on the land is of small avail when we consider that this country’s problems to-day largely arise from the fact that it has been fighting for years for something that is of immense importance. That something is in none of the words that one will find in this budget speech. That something is the freedom of the ordinary man.

Mr BEAZLEY:
Fremantle

.- I am sure that it must have been refreshing to hear the Leader of the Opposition (Mr. Menzies) refer to “ drivel “ in the Arbitration Court. Very rarely do we hear any honorable member of the Opposition refer to “drivel” emanating from judges. I believe that the right honorable gentleman, in so characterizing the judgment of Chief Justice DrakeBrockman, Mr. Justice Sugerman and Mr. Justice Foster, has placed himself in the same category as that of others who have attacked decisions of the Arbitration Court. I make no complaint of his statement. “ Drivel “ is drivel, whether used by judges or in the Parliament. But it is interesting to hear, in respect of a judgment which went in favour of the workers, an instantaneous criticism emanating from the Opposition. The touching literary effort with which the right honorable gentleman concluded his speech mentioned all the surpluses of the pre-war period except the surplus of labour, of 2,800,000 unemployed which existed in Britain at that time; and, of course, falsely attributed to a Labour government which has come into power in Great Britain the present difficulties of that country which at other times the right honorable gentleman is quick to remind us are due to the sacrifices that were made by it during the war.

The right honorable gentleman, in dealing with the full employment that exists in Australia to-day, stated that it is entirely due to shortages of goods and to the purchasing power that has accumulated in the hands of the public as a result of the war. Let me say instantaneously that I agree with that statement in a very large measure. There is no doubt whatever, that we are in what are naturally boom conditions, quite apart from any contribution which government policy may have made to them. But after all, the same argument can be applied to most of the other belligerents in the war. Canada, for example, diverted an enormous proportion of its man-power to the war effort, either into the army or into industry. In the same way as we have experienced an inflationary trend, so has Canada experienced an inflationary trend. But the situation in relation toemployment in Canada is entirely different from’ that which exists in Australia to-day. Since the right honorable gentleman began his speech with the complaint that sources of information were not sufficiently clearly given, I inform him that I am about to quote from the Canadian Labour Gazette, published by the Canadian Department of Labour, and the page of .the quotation is 511, in the issue of April, 1946. A graph is published at page 512, showing a rise in Canadian unemployment from under 100,000 in June, 1945, to over 250,000 in April, 1946, a rise which we did not experience at any stage during the demobilization of ou>armed forces. So that, although the natural fundamental economic conditions were the same in the two countries, there is something to be said for the greater smoothness with which Australia has carried out the transition from war to peace. This publication mentions this -

At the end of December, 1945, however, the number of unplaced applicants registered with the National Employment service was 183,821, compared with 60,609 at the beginning of the year.

There is a footnote which reads -

At the end of March, 1946, the figure wa& 260,027.

I am not going to make unfair comparisons. Canada’s population is 12,000,000, compared with our 7,000,000. So that,, had we had the like percentage of unemployment at the same point of time, we should have had 140,000 unemployed. One of the Queensland members opposite was calling out, by way of interjection, while the Minister for Post-war Reconstruction (Mr. Dedman) was speaking, that there are 5,000 unemployed in Australia.

Mr Bowden:

– In Queensland.

Mr BEAZLEY:

– That is a very poor comparison. At the same rate of unemployment as that which prevailed in Canada at the time, the number in Australia would have been 140,000.

I wish to speak- now concerning oneother aspect of the judgment of the Arbitration Court; because, after all, although the Leader of the Opposition has characterized the court’s theory concerningrentiers as “ drivel “ the court sat for a very long time in judgment upon the forty-hour week case, and had before it voluminous evidence which had been produced by employers, employees, statisticians and others who considered that they had any contribution to make to its deliberations. I want to quote from what I regard as a very significant part of the judgment. Referring to the question as to whether or not the forty-hour week should be introduced, it said this -

Employers have urged that the time for this admittedly desirable social change is not now; no alternative time was suggested unless we recall that some of their witnesses suggested that a time of depression arid unemployment would be the most advisable time and then- as a device for spreading employment - an idea already exploded - or again not until shortages wore overtaken which obviously could not occur if full employment is maintained, or again until international disparities of hours, wages and conditions no longer exist, which is never likely to occur. So that their “ not now “ might mean *’ not ever “.

All criteria of an active virile progressive economy are present to-day. Our population has increased and all are working. Our sources of power are taxed to their limit and that limit higher than ever before. Business is showing a continuous unsatisfied demand for products of all kinds. Orders sufficient to maintain activity at the highest levels are hooked for years ahead over a wide range of industry. Many industrial undertakings are expanding their capital to a total extent of millions of pounds and prospectuses indicated very good prospects.

T should like to take off a little time from this quotation to draw attention to the very interesting fact that, although week after week, in every major daily newspaper of the Commonwealth, there are solemn leading articles assuring us that there are drags on enterprise, if one turns to the financial page one finds recorded profits of record levels, and prospectuses which at least indicate to prospective shareholders that business may be expected to be good for many years to como. The contradiction between the financial page and the leading article is one of the undoubted phenomena of the Australian press. The judgment went on to say -

Oversea companies are finding in Australia increasing opportunity for further extension and development of their enterprises, while the reports of local companies are generally optimistic. The profit rate continues at high levels and substantially above the relation to gilt-edge securities usually experienced. There ure, of course, the depressive factors of industrial unrest, disorganization and reduced out put which seem to follow war and .periodsof re-adjustment, but these, though bad enough,, are not abnormally so. They show signs of some abatement. lt seems to us as it seemed to this court when it dealt with this problem before in 1920 so clear as to be beyond any cavil that the appropriate time to add burdens to industry or, from another angle, to give ourselves added benefits, is when industry isbooming and when nature is bountiful. All the economists of both sides agree that never in our history have all the factors been sofavorable, nor is it easy to conceive them ever being more favorable.

Business interests are not worse off becausethere continues to be an unsatisfied demand both internally and overseas, however much, they may feel aggrieved by the inability tomeet this demand, and when pressed in crossexamination managers agreed that they could, bettor cope with an added burden when business was booming than when curtailment was necessary in an incipient depression.

Not the apologists of business as constituted, but their scientific advisers gaveevidence before the court, and as the result of their evidence the court delivered that judgment. But as it favoured theworkers, it was, in the view of the Opposition, a bad judgment. I hope that thenext time the secretary of some industrial union criticizes the court when its judgment does not go his way it will heremembered that the Leader of the Opposition was in exactly the same “category. I shall quote some further excerpts from the judgment relating to the problem of full employment. The Leader of theOpposition suggested that full employment was an effect, rather than a cause. He would have been more scientific if he had said that it was both an effect and a. cause. On the subject of full employment, the judgment stated -

There is still another factor, the value of which is not yet appreciated, but it will be. For the first time in the history of capitalism, we have “full employment” and what ismore important, the promise that it will becontinued indefinitely. Professor Giblin tells us that we have learned the techniques necessary to prevent major depressions and a fortiori minor ones so that there must come intoindustry both for the worker and the manager, a new outlook, fu the past the worker was kept at high pressure by the cudgel of unemployment or the carrot of incentives.

It has been usual in current banking propaganda to suggest that the conscription, of labour would be one of the byproducts of nationalization. The cudgel of unemployment is conscription of labour in its most intense form. For

Ministers of any political party to insist that unless a man went to certain work he would not be given relief was, in fact, indulging in the conscription of labour of a form quite sufficient to curtail the individual’s liberty without any nationalization of banking or any particular financial policy. If 1 am not misinformed, the Leader of the Opposition was AttorneyGeneral in a State government which insisted on unemployed workers going into the mountains to work in the timber industry as a condition of their obtaining relief.

Mr Menzies:

– When was that? Perhaps the honorable member will tell me about it some time.

Mr BEAZLEY:

– It was during the depression. As to the worker’s fear of unemployment, the judgment says of hi in -

He feared that ho would ultimately work himself out .of a job and into a condition wherein while he starved he was told there was over production. Naturally, this spectre haunted him as his greatest fear and he resisted incentives and resented the threat. When the new doctrine is absorbed by employer and employee, when the employer realizes he has lost his cudgel, and when the worker realizes there is no need to fear unemployment, then we may be assured that wellplanned and safely guarded incentive systems will not only be not resisted but will be welcomed. Australian management will not be slow to realize these possibilities and Australian workmen not slow to respond.

That is the scientific approach to this problem. I remember with great interest that’ a former honorable member for Henty, Mr. A. W. Coles, a man who happened to have employed 3,000 men, as distinct from honorable gentlemen opposite, who, for the most part, are authorities on employment without having employed anybody, made observations in this chamber of a similar nature. In this judgment we have had an approach which I believe is a scientific approach to the problem of the relations between employer and employee.

I now turn from the consideration of the remarks of the Leader of the Opposition, to some of the points made in the budget speech. The Treasurer (Mr. Chifley) referred at some length to Australian sterling balances in London, which I believe amount to approximately £200,000,000. There is an entirely uncritical disposition on the part of the

Opposition to refer to the export trade as an unmitigated advantage in that it increases our wealth. When we are exporting goods and not receiving goods in return we are not increasing our wealth. Honorable gentlemen opposite speak of shortages a.s if every shortage which exists in Australia to-day were the direct result of the policy of the present Government. They ignore the fact that in pre-war times we had a large volume of goods in circulation within our economy - goods which were received from overseas, and which to-day we are not receiving from outside source. The accumulation of our sterling balances abroad arises simply from the fact that we are exporting goods and are not getting goods in return. To-day, there is an IOU in London - a claim on future British production to the amount of £200,000,000, simply because we have been exporting goods and not receiving goods in return.

Mr Archie Cameron:

– There are many shortages.

Mr BEAZLEY:

– There is a shortage of many things; clothing, for instance. In pre-war times, Australia imported a lot of clothing from Britain. The position of sterling balances requires further elaboration, because, in the present state of British industry, it seems inevitable that sterling balances will increase; and we ought to have no hesitation in allowing them to increase, thereby giving what amounts to an interest-free loan to Great Britain in the form of commodities. But we should consider its effect on our economy. We are exporting goods and are thus reducing the quantity of goods in circulation. We are exempting our customers from sending goods into our economy. At the same time we are generating money income to the exporters. The Commonwealth Bank in London holds the sterling balances, and in Australia the bank pays out in Australian currency. In other words, if the volume of money in circulation be increased and the volume of goods in circulation be decreased, the net result is inflation. If I were a betting man, I should be willing to wager that when the prices referendum is submitted to the people that will be one of the last factors spoken of as contributing to the present inflationary tendency. It is a major factor in the present inflation in the United States of America, so great is that country’s excess of exports over imports. It is an important factor in the inflationary situation existing in Australia.

I do not believe that the United Kingdom Government will ever be able to liquidate its enormous debt to India, the United States of America, the colonial Empire, Eire, Canada and Australia. The Treasurer mentioned that the sterling balances held by those countries in London amount to £3,500,000,000. I am taking the American definition of a billion as representing £1,000,000,000. So vast a claim on the future production of Great Britain is something which that country cannot sustain, and I- suggest that it is something which Britain ought not to sustain. I hope that in the future we shall continue the policy begun in a small way when this country made a gift to Great Britain of £25,000,000 to enable our sterling balance in London to be reduced. If we do not continue that policy, and the British Government attempts to honour its obligations, we must at least be realistic, and recognize that before our £200,000,000 is paid in the form of goods, we shall have to come to some agreement whereby the other creditors will have their balances liquidated on a pro rata basis, and that would mean a very slow rate of liquidation in respect of our balance. The future economy of Great Britain is obviously vital to our export trade, and only a policy of the utmost generosity, by allowing Britain time to wipe off its indebtedness slowly, will serve the purpose of Australia, which has so large a part of its own economy geared to the British market.

The Treasurer referred to the dollar scarcity, and I wish to compliment him on the transfer to Great Britain of 9,000,000 dollars worth of gold, this being the form of currency which, according to the United States of America superstitions, is acceptable in that country to enable Great Britain to purchase goods. I hope this policy is continued. Our prosperity also depends on the United States of America. Tributes have been paid to the system of free enterprise, and nobody could dispute that the economy which exhibits most of the characteristics of free enterprise is that of the United States of America. In his budget speech, the Treasurer made this reference to the United States of America -

The United States and Canada escaped war devastation and quickly regained their peacetime production. On the other hand, many countries, particularly the war devastated countries of Europe, faced enormous difficulties in reconversion and still have a long way to go.

As a result the United States has been the main centre of demand to meet the shortages of the rest of the world. United States exports have been running at a level of about sixteen billion dollars and imports at about seven billion dollars. This gap lias been financed, from loans, relief assistance (notably Unrra) and reserve of United States currency.

It has been characteristic of certain honorable members opposite to be very critical of the United States of America. It may be true that the United States of America has not applied a policy of assistance towards the rest of the world sufficiently generous to meet the challenge of the day. That argument could be advanced, but I repeat what I said on a previous occasion that even if the United States of America has not met the challenge fully, nothing like such generosity as the making of gifts to other countries of 6,000,000,000 dollars has ever previously been witnessed. Those gifts alone have financed the gap between- the imports and exports of the United States of America. However, the moment this form of assistance stops, the economy of the United States of America will be in “ queer-street “, and I very much doubt whether the most enlightened administration in the United States of America will be able to persuade the Senate and House of Representatives of that country to go on making large gifts to Europe, and loans at a very low rate of interest to western European powers, over a very long time. There is no doubt that this policy is made attractive in certain circles in the United States of America to-day by the suggestion that it is helping to keep out communism, but even that will not make the policy popular over a long period with hard-headed American business men, and we may well expect repercussions in our own economy, such as occurred during the depression, the moment the policy of making gifts for European reconstruction ceases in the United States of America.

It has been said that the Government’s policy had very little to do with the prevailing condition of full employment in Australia. I have contrasted the employment figures of Canada with our own, and such factors as freedom from war damage, and a delayed demand for consumer goods are present in both economies. The expansion of social services means essentially the moving of income from the higher income groups to the lower income groups in which the people must immediately consume instead of saving, and this has been an important factor in sustaining demand in Australia. That, [ think, is indisputable. There is also the factor of price control. If to-day we allowed prices to bolt so as to cancel out our accumulated surplus of spending power there would be a slowing down of the rate of sales, and a slowing down of industry and employment. Price control, ineffective as it has been in some instances, has yet ensured that the goods in circulation have been within reach of demand, and the result of price control has been accelerated sales and, consequently, increased employment. Other economies not devastated by war. such as tl 1 at of the United States of America, have not as good a record of price control ns this Government can claim. Those are two factors which have contributed to our relatively smooth transition from war to peace, and the Treasurer should be complimented on it, and on his budget speech.

Mr ARCHIE CAMERON:
Barker · ALP

– It is four years since I have noticed members of the Labour party to be in such a modest and chastened mood. Before the 1943 elections, when numbers were equal in this House, the Labour party did not know exactly what to do, after the 1943 elections Labour supporters had an overbearing attitude. However, since the Parliament has met for the present period, I was surprised and delighted to observe the modest bearing of some of my friends opposite. They Seem to have lost a good deal of their chirpiness, and to be taking a more realistic view of the political situation in Australia than was the case before the recess in June last.

The budget papers before us provide material enough to enable one to talk for a long time if one wanted to. However, I shall confine my remarks to a few points only. The Minister for Post-war Reconstruction (Mr. Dedman) had a good deal to say about taxation, including the company tax and the income tax. He referred to the issue of taxation assessments, and I remind honorable members that in this regard the Minister said one thing while the Commissioner of Taxation said something else in a communication over his signature dated the 22nd September, and addressed to the Leader of the Australian Country party (Mr. Fadden). According to the replies to certain questions directed to him by the Leader of the Australian Country party, the Taxation Department had approximately 700,000 assessments in respect of prior years unissued as at the 1st July, 1947. The important thing is that according to the Commissioner of Taxation, it is very difficult to give a precise estimate of the amount of tax outstanding; but it could possibly be in the vicinity of £60,000,000. An hour ago the Minister for Post-war Reconstruction denied the likelihood of so large an amount of tax being outstanding. However, according to the Commissioner of Taxation, the amount outstanding is that mentioned by the Leader of the Australian Country party, who, no doubt, based his statement on the written assurance supplied to him by the Commissioner last week. This year the Treasurer (Mr. Chifley) was good enough to provide replies to certain answers on notice with respect to taxation matters. Those questions, together with the replies, are incorporated in Hansard. At page 2549 of Hansard, of the 16th May last, I find that the Treasurer stated that in respect of the financial year 1943-44, 25 companies and 19,500 individuals had not received income tax assessments; in 1944-45, 100 companies and 41,000 individuals were waiting for assessments, and for the taxation year just ended 6,500 companies and 1,086,000 individuals had not received income tax assessments. In addition, the Treasurer was good enough to say that it was estimated that there are approximately 350,000 employees who will be entitled to refunds of excess payment of tax; but the amount of tax so involved has not yet been determined. That is a dreadful positionforanygovernmentto find itself in with regard to taxation. I believe that taxesshouldbeclearedupattheendof eachfinancialyear.Thereisnojusti- ficationwhateverfortheGovernment going aheadandblithelyleavinghuge amounts of tax uncollected . from time to time. The Minister for Post-war Recon- struction also statedthat had the scheme ofcompulsorypost-warcreditsproposed by the Leaderof the Australian Country partybeenput into operation the Governmentwould nowbe owing the people £200,000,000 more than it does at present. TheGovernment now owes £278,000,000 in inflationary treasury-bills which it would not owe to-day had it taken the adviceoftheLeaderof the Australian Country party in 1941and instituted a systemofcompulsorypost-war credits. That is afairly effectiwe answer tothe Ministeron thatpoint.

However, the principal matter with which I wish todealto-night is the paper relating to the national income and expenditure supplied by the Treasurer to the Parliament.That paper is entirely false; it isbased on entirelyfalse premises, and, therefore,any budget whichis based on that document must be false and misleadingto the community. According to the Treasurer, the national income in 1938-39 was £938,000,000, whereas it is now£1,497,000,000 or an increase of £559,000,000, or nearly 60per cent. Against that, it is also interesting to note that the Treasurer of the day in 1938-39 was conducting the affairs of Australia ona budgetary cost of well under £100,000,000. It wasnot until 1939-40 that the budget expenditure increased to about £100,000,000. The amount which the present Treasurer wants in order to conduct the nation’s affairs, is not less than £400,000,000more this year when we are inthethird year of so-called peace. Weare not exactly enjoying peace, but, at anyrate, we are not engaged in active military operations. Thus out of the additional £559,000,000 of the national income he is taking not less than £300,000,000 in taxes and government charges. That is a depressing state of affairs; but when we look at the basis upon which this so-called national income is founded we find from the statistics, with veryfew exceptions, that thepositionofindustrytodayisnotsogoodas it was in l939-40. With respect to the agricultural industries thesameresult is arrived at regardlessof the method of approach. Duringthe war, for instance, theamountofsuperphosphateused decr easedby 50per cent. ; althoughan increasing quantity is now beingused. Theareaunderwheatandothercrops decreased.TheappleorchardsofAus- traliadecreased from 1938-39 to 1944-45 by approximately 4,000 acres. When we lookatthe value ofcrops we find that although the yield is about the same the recorded value has increased by 40 per cent. Thatrate of increase of value is common throughout the fruit industry. I fiindan increase of 20 per cent, in the recorded valueof apricots,but there is only a slight increase of area under apricots. The areaunder bananashas decreased by 18 per cent., but the recorded value of thecrop has risenby 133 per cent. That trend ismaimtained throughout the list of primary products with but one exception, namely, raspberries. The area devoted tothe cultivationof raspberries has increased by 60 per cent., and, probably, the electors of Franklin are hoping toprovideenough for the discomfiture of theGovernment itself and not merelyone Minister as happened at the lastgeneral elections. The same observations apply to mineral production. The value of minerals produced from 1938-39 to 1939-40 decreased by about £3,000,000, but when we dissect that figure we find that gold production has fallen to £9,000,000. Coal production in 1944-45, the latest figures which I have been able to obtain, has slightly decreased compared with production in 1939-40, but, whereas the value of the 13,000,000 tons of coal produced in 1938-39 was £8,600,000, the recorded value of practically the same number of tons of coal last year was £12,100,000. It is quite easy, when prices are inflated like that, to obtain an increased national income.

The same observation applies to livestock. Statistics which I received only this evening show that for the five-year period ended 1939 there was an average of 2,500,000 dairy cows in milk, whilst this year the number of cows in milk has decreased by 300,000. With respect to beef cattle, the Vice-President of the Executive Council (Mr. Scully) was insistent, before his promotion to his present august occupation, that there was no reduction whatever in the number of cattle in Australia, but, on the contrary, the number had increased. However, according to statistics issued by the department which he administered, and advertised, a year ago the average number of beef cattle in Australia during the five-year period ended 1939 was 10,250,000, whereas last year the number was only 9,250,000. From those figures it is obvious that the national income shown in this document is perfectly false and highly inflated, and has not a chance of being related to the actual production of the Commonwealth. To-day, when rationing is rife, when there are all sorts of shortages, when we are changing over officially to a 40-hour week, the system under which we are working does not permit of expenditure which the Government is attempting to impose on the people of Australia. In due course, the social services scheme will be the cause of this Government or its successor having to face the national bailiffs. The burdens which the Government is placing upon the community to-day, and the financial position which it is deliberately encouraging, will produce results which it will be happy to get away from before it is very much older.

First item agreed to.

The general debate being concluded -

page 326

QUESTION

ESTIMATES 1947-48

Bemainder of proposed vote - Parlia ment £324,700- agreed to.

Proposed vote - Prime Minister’s Department, £2,335,200 - agreed to.

Department of External Affairs

Proposed vote, £1,032,000.

Mr ARCHIE CAMERON:
Barker · ALP

– I am not prepared to pass the vote for the Department of External Affairs without some comment. In my view, there should be a thorough debate on the question as to where this country is heading in its foreign affairs policy. These estimates should not be considered without due investigation of this im portant matter. The Estimates provide for an increase of the administrative costs of this department amounting to over £250,000. The Australian legation in the United States of America is estimated to cost £143,700. I am not in a position to say whether or not that amount is justified, but I can see nothing whatever to justify a proposed expenditure of £60,500 ona legation in China. The legation at Moscow is estimated to cost £39,200. The cost last year was £26,153. What justification is there for an increase of 50 per cent, in the cost of this legation ? For all practical purposes, the Australian taxpayers will not receive one pennyworth of value from the existence of an Australian legation in Moscow. The Australian legation in France is estimated to cost £43,200, and that in Brazil £26,400.I have yet to be informed what possible useful purpose can be served by the establishment of an Australian legation in a country like Brazil. It is also proposed to spend £31,000 on the legation in Chile, and £22,100 on the legation in the Netherlands, an increase of £8,282.

The estimates for this department also contain particulars of the proposed expenditure on the High Commissioners’ offices in Canada, New Zealand, India, Pakistan, Eire and South Africa. It is strange to note that the Australian High Commissioner in the United Kingdom is provided for, not in the estimates of the Department of External Affairs, but under the Prime Minister’s Department. I am at a loss to understand why it is necessary to provide such large sums for the establishment of high commissioners’ offices for these countries which are deemed to be inside the British allegiance. It appears that the expenditure on these offices is to be on a scale similar to that of the legations established in foreign countries. The estimate for Canada is £29,900, New Zealand £15,600, India £32,200, Pakistan £15,000, Eire £18,300 and South Africa, £24,600. That is a stupendous list. In addition, the cost of consular representation abroad is estimated to increase from £143,610 to £198,600. There is another item described as “ Other Representation Abroad “, for which £75,600 is to be provided. What “Other Representation Abroad” means, the Lord alone knows. These many items total £1,032,000. That is bad enough, but the story told here is not the full story. The Estimates also contain votes for special appropriations, including heavy contributions to the United Nations and large sums for Australia’s participation in the International Labour Organization and for the establishment of the South Pacific Commission. These estimates are entirely out of keeping with the usefulness of the Department of External Affairs, and need to be ruthlessly pruned. However, I do not expect that they will be pruned at the hand of this committee. Notwithstanding that, from the viewpoint of the taxpayers, the proposed expenditure of the money will serve no useful purpose, and many of our offices abroad might well be closed.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

– The representation of Australia abroad is a subject surrounded by considerable difficul lies.

Mr Archie Cameron:

– It is expensive, too.

Mr CHIFLEY:

– I agree that the expenditure on these services requires close watching. The honorable member for Barker (Mr. Archie Cameron) is aware that many other countries have strongly advocated the establishment of diplomatic and consular offices in Australia, and there is a desire that Australia should reciprocate by establishing similar offices in those countries. As the honorable member knows, the Soviet has a very strong representation here.

Mr Anthony:

– “What are its representatives doing?

Mr CHIFLEY:

– One cannot question what the representatives of’ other countries are doing. During the last eight or nine years, there has teen a considerable growth of the representation of Australia in 0:her countries, and, in consequence, the expenditure on this item has risen steeply. Whilst there is much to be said for having reliable contacts with other countries, I assure the honorable member for Barker that, in three or four instances, with the Minister for External Affairs I am having a close examination made to ascertain whether a continuance of Australian representa tion is warranted at its present status, which, of course, has a great deal to do with the expense involved. Honorable’ members will appreciate that in some cases at least only by trial can we gauge whether Australian representation abroad brings to this country the benefits that one would desire. I have no doubt that many people are critical of the expense incurred by the Department of External Affairs, but we must remember that we are living in a world in which there are more nation to nation contacts than ever before. One has only to look around Canberra and see the number of nations that are represented in this country of only 7,000,000 people to realize thatinternational representation is becoming increasingly important in almost every country. Some quite small countries have representatives in Australia, and, without mentioning names, I may say that certain other countries are also seeking an opportunity to send diplomats to Canberra. It is widely recognized that there is much to be gained from international representation. Personal contacts often obviate threatened friction between countries. Although these benefits cannot be accurately measured in pounds, shillings and pence, it is probable that, in the great struggle for better understanding and more harmonious relationships, present trends in diplomatic representation play an important part. I assure the committee, however, that the cost of Australian representation in various parts of the world is a matter in which I have been taking, and will continue to take, a personal interest.

Mr ANTHONY:
Richmond

.- This portion of the Estimates is deserving of some scrutiny, and I am glad to hear that the Prime Minister (Mr. Chifley) himself has become so much concerned with the matter that he is discussing with the Minister for External Affairs (Dr. Evatt) the enormous and still rising cost of Australian representation overseas. Whilst many people in this country admire the Minister for External Affairs, some of them also feel that he is a man of unbounded ambition and that his department and some of its trappings are merely buttresses to the importance of his status overseas. I question the necessity for some of this expenditure. The estimated expenditure for the current financial year of the Department of External Affairs is £1,032,000, compared with afew thousand pounds in pre-war years. Whilst one cannot cavil at the cost of maintaining Australian legations in countries such as the United States of America, with which we have annual trade amounting to approximately £40,000,000,or even China - althoughone is inclined to doubt the value pf our legation in that country in present circumstances- there are other countries in which the expense involved hardly appears warranted.

The cost of the Australian legation in Soviet Russia in the current financial year is estimated at £39,000. I for one doubt that Australia is receiving value forthat expenditure. We have little trade with the Soviet. An examination of the Statistician’s figures indicate that the volume ofAustralia’s trade with Russia is not even sufficient to warrant the inclusion of that country in the official list of nations trading with the Commonwealth. Any one who has listened to Australia’s former Minister to Moscow, M r. Maloney, and to others who have been associated with the Australian legation in that city, must be well aware that the activities of representatives of democratic nations in Soviet Russia are so circumscribed that their services are practically valueless. This is especially true of Australia, which has no geographical or commercial affinity with the Soviet. On the other hand, whilst not wishing to raise a thorny question, the people of Canberra have always been somewhat mystified about the activities of members of the Russian legation inthis city. I understand, that the personnel ofthe Russian legation is42, compared with a dozen or less at the American legation. These people are never seen, never heard, never contact the diplomatic representatives of other countries, and never visit Parliament; House, and one wonders exactly what services or duties they undertake, If they are performing diplomatic service, we naturally expect to see them mixing with diplomatic representatives or the representatives of the Government ; but I cansay and I think every other honorable member can support me, that

I doubtwhether any of us has set eyes on a Russian for months. What kind of duties are they performing? They have all kinds of experts in this countryexperts in mining, wool, timber and other industries. One can only come to the conclusion that they are getting some valuable information, about the resources and possibilities of Australia, whereas the representatives of Australia in Russia are denied similar information,I think it calls for comment when the value of our exchange of diplomatic representatives is being discussed. One appreciates the enormous position of Russia in the modern world; but, at the same time, if it is going to be a lopsided arrangement so far as diplomatic representation is concerned, with all the advantages of access to information given to the Russians in Australia and no access to information is given to Australians in Moscow, it requires close scrutiny.

We are spending a lot of money inother countries, for instance £26,000in Brazil. It is interesting to recall how we came to have that representation in Brazil. It followed closely on a visit by the then Premier of New South Wales, Mr. McKell, to Brazil. He was hospitably treated in Brazil it seems and, shortly after his return, apparently as the result of discussions between him and some one in Brazil, the two countries exchanged Ministers. The only things that come to Australia from Brazil that I can trace are a few minor commodities. If the External Affairs Department considers Brazil is of sufficient importance to send representatives of thiscountry there with diplomatic status, what South American republic should be excluded. What about Argentina? What about Venezuela? There are hosts of them! What about Finland and a number of other countries that one could well name? Why are one or two small countries-small insofar as their relations with Australia are concerned, but not small in population or resources- picked out by the Minister for External Affairs and the others left out? Then we go farther down the list to quite a number of countries to Australia’s representation in which we take no exception at all- the Dominions. But when, Sir Willliam Glasgow was Australian High Commissioner in Canada, he could get along well with the appointments and quarters assigned to him. Yet when Mr. Forde, the former Deputy Prime Minister of this country, takes up the position, it costs about another 500 dollars a month for accommodation.

Mr Pollard:

– You do not expect him to leave his family behind?

Mr ANTHONY:

Sir William Glasgow had a family there, too. Is the Minister prepared to spend $500 on Australian families for accommodation? Dollars should be conserved by Ministers overseas. It is staggering that Mr. Forde should see fit to demand of this Government and this country for accommodation alone 500 dollars a month more than was required by his predecessor. The vote of £1,032,000 for the External Affairs Department is not all. I do not want to go into details of the Estimates of the Department of Commerce and Agriculture, but provision is made in them for the expenditure of £149,000 for commercial representatives overseas. Therefore I very much welcome the statement of the Prime Minister that he intends to give some direct attention to this very important figure in the Estimates.

Mr Chifley:

– The. ‘honorable member will know, of course, that in Canada and elsewhere costs have increased vastly.

Mr ANTHONY:

– I realize that, but they have not risen to that extent. I think I could cite figures to show that in Canada rents at least have not risen in proportion to the amount called for by Mr. Forde.

Mr Chifley:

– I was only saying that that was a contributing factor.

Mr ANTHONY:

– I agree that in China and in the United States of America, for that matter, there is inflation. That makes it much more important that the pruning knife should be applied to all unnecessary representation of Australia in other countries. I hope that the Prime Minister, when taking this matter up with the Minister for External Affairs, will give close attention to the necessity for Australia to be represented at all in some places where it is at present represented. The dollars spent on that representation might easily be saved.

Mr ABBOTT:
New England

.. - I have been studying the Estimates closely. They make sorry reading for the people of Australia who are carrying the burden of high taxes, relief from which is denied them by the Prime Minister (Mr. Chifley). The people, if they had the same opportunity as we have of studying the Estimates, would be equally aware of the colossal waste taking place in the public departments of the Commonwealth of Australia. It has been mentioned by previous speakers that the ministerial head of the Department of External Affairs (Dr. Evatt) is a man of grandiose ideas, who likes to have a swollen department in the evident belief that the development of an enormous organization spread all over the world adds to his importance. It reminds me of Aesop’s fable about the frogs. The mother frog left the little frogs in the swamp. Presently a cow wandered into the swamp. When the mother frog returned the little frogs told her about the cow. But the mother frog said, “ It was not as big as I am “, and the little frogs said, “ It was a lot bigger “. The mother frog blew herself up until she became bigger and bigger and fatter and fatter, always asking if she was as big as the cow. She finally burst with her own vanity. That is some of the trouble with the Department of External Affairs. I admire loyalty. It is an excellent quality. I admired the loyalty of the Prime Minister to-night when he endeavoured to protect his Minister for External Affairs against criticism for the gross over expenditure of his department. I say “ gross “ and I mean “ gross “. The Prime Minister has assured the committee that he intends to go through the estimates for the Department of External Affairs with the Minister when he pays one of his rare visits to Australia in an attempt to prune them. Then the Prime Minister, with superb loyalty to his colleague, who has flown overseas, said, “ There . are greatly increased costs because of the rise in the exchange rate and various other matters. It adds to the total costs.” Let him look where there have not been greatly increased costs. The Estimates show in Division IS that provision for salaries and allowances has been greatly increased in this year of grace 1947-48 from £44,771 expended in 1946-47 to £62,400. Has there been any great increase of the cost of living in Australia to justify the raising of that item by £18,000 ? No ! The increase is wasteful. In the provision for general expenses, estimated expenditure on postage, telegrams and telephone services alone is £9,000 more than it was in 1946-47. Is it necessary to keep sending a cometlike stream of telegrams and letters overseas? I am certain that considerable reductions could be effected under this heading. The number of birthday greetings that the Department of External Affairs must send out to its people overseas and to other nations must be enormous, because the estimated expenditure on cablegrams and radiograms has been raised to the colossal total of £80,000. I remind honorable members that these increases are on behalf of the administrative staffs of the Department in Australia only.

Next I come to Division 19 - the Australian legation in the United States of America. Salaries and allowances for this office are estimated to cost approximately £12,000 more this year than last year, and provision is also made for an increase of £3,000 on behalf of temporary and casual employees. Considering current restrictions on dollar expenditure and the consequent curtailment of trade with the United States of America, it is doubtful whether that extra expenditure is warranted. I find also that there has been a phenomenal increase of the allocation for postal and other communication services between Australia and its legation in the Union of Soviet Socialist Republics. I have not heard of any great increase of postal and telegraphic rates during the past twelve months. Whatever the Prime Minister may say regarding depreciated currencies and resultant extra expenses in other countries, there has been no great inflation of international postal rates. Nevertheless, although we have no trade and very little diplomatic relationship with the Soviet Union, the estimates for postal, telegraph, telephone and cable services between Australia and our embassy in that country will increase from £2,850 in 1946-47 to £9,400 this year.

Mr Francis:

– Why?

Mr ABBOTT:

– Heaven alone knows why! Probably it is because our peregrinating Minister wishes to gratify his vanity by sending a stream of cablegrams to our embassy in Moscow so that the Postmaster-General in Russia will say, “ That is a vigorous young office in Australia; it is providing the republic with more revenue from telegraph and cable services than any other foreign country “. I come now to the Australian legation in Chile. A hefty item of £18,000 is provided for this office. What is the extent of our trade with Chile? Even more expensive than this legation is our legation in Brazil, the cost of which this year is budgeted at £26,400. What is the nature of our diplomatic relations with Brazil? What is the danger of war with that country that might justify an expenditure of £26,400 a year, on a legation there? Expenditure on trade representation in Brazil for 1946-47 amounted to £2 ! The Department of External Affairs is an absolute farce, and I hope that the Prime Minister, if ever his little wandering boy returns home once more,will go through these estimates thoroughly and put an end to this sort of nonsense. The estimates for the Department of External Affairs have been swollen beyond all sane proportions, whereas the Department of Commerce and Agriculture, whose officers are responsible for the development of Australia’s overseas markets, is receiving very cavalier treatment. There is no necessity for wasting money on diplomatic posts which have been created probably merely for the benefit of Government supporters. Australia’s overseas trade may not always be in the happy state that it is in to-day. It is entirely wrong of the Government to starve the Department of Commerce and Agriculture in comparison with the Department of External Affairs when the health, wealth and general benefit of the people of Australia depend much more heavily on overseas trade representation than on dressed-up flunkeys representing the nation in the courts of Brazil and other countries in which we have no need for diplomatic representation. For goodness’ sake let us come to realities, and put an end to this nonsense which the Minister for External Affairs is perpetrating at the expense of Australia and our trade representation abroad.

Progress reported.

page 331

PAPERS

The following papers were presented : -

Commonwealth Public Service Act - Appointments - Department -

Treasury - A. J. Hagger.

Works and Housing - G. M. Bowden,

I. R.O. Dean,E. L. Norman, T. B. Passmore, E. M. Thompson, A. N. Walton.

House adjourned at 10.27 p.m.

page 331

ANSWERS TO QUESTIONS

The following answers to questions were circulated: -

Bakelite Electrical Accessories

Mr White:

e asked the Minister representing the Minister for Trade and Customs, upon notice -

  1. What was the value of bakelite electrical accessories exported from Australia during the year ended 30th June, 1947?
  2. To which countries were such fittings exported? ‘
Mr Pollard:
ALP

– The Minister for Trade and Customs has supplied the following information : -

Exports of bakelite electrical accessories are not recorded separately and the information requested by the honorable member is therefore not available.

Food Control: World Food and Agriculture Organization; International Emergency Food Council

Sir Earle Page:

asked the Minister for Commerce and Agriculture, upon notice -

In what specific ways has Australia adopted and/or implemented the recommendations relating to agriculture policy and food distribution methods of (a) the United Nations Food Conference held at Hot Springs in 1943, and (b) the United Nations Food and Agriculture Organization?

Mr Pollard:
ALP

– The answer to the honorable member’s question is as follows : -

The Hot Springs Conference resulted in the formation of a World Food and Agriculture Organization. Australia adopted the charter and became a member of the Food and Agriculture Organization on its establishment. The

United Food and Agriculture Organization has since met at Quebec, Washington, Copenhagen and Geneva. In addition a special conference to consider world food problems has been held in Washington. Australia subscribed to and implemented as far as applicable to herself the decisions arising out of the special conference in Washington in May, 1946. Indeed many of the decisions taken by this special conference had already been anticipated and implemented by Australia and generally put into operation. In addition in order to secure the adequate distribution of available supplies Australia joined the International Emergency Food Council (an offshoot of the Food and Agriculture Organization) and is represented on all appropriate committees and the central body and executive.

Recently Cabinet gave consideration to the recommendations taken at the Special Food Conference in Washington and endorsed the formation as recommended of a World Food Council and the integration of Australian agriculture and world agriculture by international collaboration.

At the recent conference of the Food and Agriculture Organization at Geneva. Australia supported an active Food and Agriculture Organization policy in its international aspects. At this meeting a World Food Council (of which Australia is a member) was created.

In addition an Australian National Food and Agriculture Organization Committee has been set up to make recommendations for the implementation of the Food and Agriculture Organization decisions. Subsidiary State committees are also being organized.

Mr McDonald:
CORANGAMITE, VICTORIA

d asked the Minister for Commerce and Agriculture, upon notice -

  1. Has the Government a copy of the constitution of the International Emergency Food Council; if so, will he make it available to the public?
  2. What voting powers, if any,has the Australian representative on the Food Council?
  3. Has this representative ever protested against the decisions of the Food Council in asking the British people to accept a greatly reduced diet while a normal diet is maintained in the United States of America?
  4. Is it a fact that the Food Council controls the allocation of Australian meat and meat products; if so, to what countries and in what quantities have such meat and meat products been sent during 1945, 1946 and 1947?
  5. To what countries and in what quantities has Australian butter been sent during 1945, 1946 and 1947?
Mr Pollard:
ALP

– The answers to the honorable member’s questions are as follows : -

  1. The Government has a copy of the constitution of the International Emergency Food Council and I shall arrange with the Minister for External Affairs, for its publication.
  2. The Australian representative on the International Emergency Food Council has one vote. Australia, being represented on the Central Committee of the council, has a vote on that committee as well as on the various commodity committees of the council of which it is a member.
  3. Apart from the general appeals which it has made to all countries to restrict food consumption to the utmost, the council, to the best of my knowledge, has never asked the British people to accept a greatly reduced diet. On the other hand, the United Kingdom Government’s continued support of the council shows itsgeneral approval of that organization’s policies.
  4. The Food Council does not control the allocations of Australian meat and meat products. Under the long-term meat purchase arrangement between the Governments of the United Kingdom and Australia, ail meat of export quality produced in Australia from 1st October, 1944, to 30th September, 1948, surplus to local and service requirements, is made available to the United Kingdom, less sales to other markets, which are subject to prior consultation and agreement between both Governments. The International Emergency Food Council is advised of sales to other countries and such sales are offset against total allocations made to these countries by the council. The following table sets out the exports of meat and meat products to the United Kingdom and other countries for the years 1944-45, 1945-40 and 1940-47:-

Motor Vehicles : Sales Tax ; Tait Manual Control

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

n asked the Prime Minister, upon notice -

  1. Has his attention been drawn to the donations by the Red Cross Society and the Royal Australian Air Force Welfare Fund of a motor car, equipped with manual controls to a partially paralysed ex-serviceman and to their plans to make other similar donations?
  2. Has consideration yet been given to representations made for the waiving of sales tax on motor vehiclespurchased by disabled exservicemen; if so, what action is contemplated?
  3. Has the Government investigated the Tait Manual Control, devised by a Queensland exserviceman, which is claimed to have been used satisfactorily for seven months in Queensland. If not, will it make the necessary investigations?
Mr Chifley:
ALP

– The answers to the honorable member’s questions are as follows : -

  1. My attention has now been drawn to the matter referred to by the honorable member.
  2. A bill introduced into the House of Representatives on the 19th instant includes a provision for the exemption from sales tax on and from the 20th September, 1947, of the following goods : - “ 135. Motor vehicles(and parts therefor) for use in his personal transportation and not for sale by a person who has served as a member of the armed forces of His Majesty within the meaning of that expression in item 81a of this Schedule, and who as a result of that service, has lost a leg, or, for the purposes of the Fifth Schedule to the Australian Soldiers’ Repatriation Act 1920-1940, is treated a? having lost a leg.” lt is pointed out that the bill does not provide for the allowance of the concession to all disabled ex-servicemen: the exemption is limited to motor vehicles for use by a person who as a result of service in the armed forces, has lost n leg. or, for the purposes of the Fifth Schedule to the Australian Soldiers’ Repatriation Act 1920-1946, is treated as having lost a leg.
  3. This matter is being examined and I shall advise the honorable member further as soon us possible.

Banking: Overseas Organizations

Mr Archie Cameron:
ALP

n asked the Treasurer, upon notice -

  1. How many banks were in existence in (a) Germany, (b) Italy and (c) Russia on the Srd September, 1939?
  2. Were any of them (and, if so, which ones) owned by other than governments or government-controlled authorities ?
  3. What the the latest banking developments in Argentina under President Peron?
Mr Chifley:
ALP

– The answers to the honorable member’s questions are as follows : -

  1. According to a League of Nations publication there were 104 credit banks in Germany in November, 1938, and 179 banks in Italy in June 1937. No information is available regarding the number in Russia.
  2. No satisfactory information is available about these banks in 1939. C. W. Julleband, a Cambridge economist, in his Economic Recovery of Germany, 1933-38 indicated that the Gorman banks remained in private hands, with the exception of certain government institu tions such as the Reichsbank and the Gold Discount Bank. In Italy the 1936 legislation provided for the repayment of the capital of theBank of Italy to private shareholders. No information is available about any subsequent measures of nationalization. In Russia it is understood that there were no privately-owned banks iu 1939.
  3. A decree-law of March, 1946, nationalized the Central Bank of the Argentine Republic. The banking law was amended to permit the replacement of the former twelve-man board of directors, of which only one member was appointed by the National Government, by a board of directors consisting of thirteen members, eight of whom represent government financial institutions or administrative agencies and five represent industry, agriculture, live-stock, commerce and labour, all of whom are to be appointed by the President. The member banks, which before the decree-law became effective held one-half of the Central Bank’s outstanding capital stock of 20,000,000: pesos, are to receive in exchange for their shares special 21/2 per cent, treasury bonds issued for the purpose or the equivalent in. cash. The decree-law nationalizing the Central! Bank was followed in April, 1946, by a complementary measure, which brought all bank deposits under the control of the Central Bank. The National Government now undertakes to guarantee deposits of all kinds by third parties in Argentina banks, and banks must hold such deposits as agents and for the account of the Central Bank, which shall pay the interest due to depositors and compensate the individual banks for the expense involved in maintaining the deposits. The banks may not make use of the deposits without authorization from the Central Bank, although they may continue to use their own capital and reserves in their discount and investment operations and may rediscount their own bills with the Centra? Bank within limits set by that institution. The risrhts of depositors to the free use of funds deposited with the banks are not affected by the decree-law. The foregoing information was extracted from the Foreign Commerce Weekly.

Dollar Deficits.

Mr Chifley:
ALP

y. - On the 18th September, the right honorable member for Darling Downs (Mr. Fadden) asked the following questions : -

  1. What was the total dollar deficit for 1946-47 on Australian trading with North America?
  2. What was the trading balance with respect to commodity or merchandise trading?
  3. What was the specific dollar deficit in respect of each separate item of invisible imports, including freights, insurance, royalties, private and business travellers’ allowances. Government and official missions, upkeep of legations, &c.?
  4. What other specific outgoings of dollars occurred, under their appropriate headings?

I now supply the following information to the right honorable gentleman : -

  1. Accurate estimates of Australia’s balance of payments with individual countries are difficult to obtain particularly because of the high proportion of Australia’s overseas trade which is financed in sterling through London. The best available estimate of Australia’s balance of payments with the United States and Canada shows a net deficit of £A.3 1,600,000. This estimate is, however, necessarily incomplete.
  2. The adverse trading balance, as recorded in the published tradingfigures, was £ A. 9, 200,000 (with imports valued at f.o.b. prices plus 10 per cent.) . With imports valued on an f.o.b. basis, the adverse balance of merchandise trade was £A.3,600,000. 3 and 4. It is not possible to obtain accurate figures for each of the “ invisible “ items in Australia’s balance of payments with North America. Very rough estimates have been used in the following table: -

Notes on Table. - (a) No allowance is made for the inflow of North American capital into Australia. It is known that there was considerable net investment of American (and, to a lesser extent Canadian) capital in Australian industry during 1946-47, but there is no means of estimating the total amount.

  1. Australia’s gold production in 1946-47 was valued at about £A. 10,000,000. This gold did not enter into Australia’s international balance of payments for the year because it was held in Australia as an addition to the gold reserve. To assist the United Kingdom to meet the dollar crisis, 1947-48 gold production is being sold to the United Kingdom against payment in sterling. Gold may, however, be regarded as equivalent to dollars and the sale of current gold production will reduce Australia’s dollar deficit for 1947-48.
  2. The lend-lease settlement payment of £A. 6,200,000 was a final payment and no further payments are required under this head.
  3. Some of the figures given in the above table for invisible items are fairly exact, while others are very rough guesses. Action is at present being taken by the Commonwealth Bank and the Commonwealth Statistician to secure a more directrecord of Australian transactions with the United States and Canada.

Sugar.

Mr Pollard:
ALP

d. - On the 25th September, the honorable member for Herbert (Mr. Edmonds) asked -

In view of the difficulty in obtaining sugar in Queensland and portions of New South Wales notwithstanding press statements that large stocks of sugar are held at various refineries, can the Minister representing the Minister for Trade and Customs say whether there is any Government authority which can compel the refineries to release sugar stocks to the general public? If so, will he take steps to release sugar immediately?

The Minister for Trade and Customs has supplied the following information: -

If the press statements mentioned by the honorable member state that large stocks of sugar are held at refineries they are inaccurate. Actually there are comparatively small stocks held at refineries at the present time due to shipping and other difficulties. However, the Queensland Sugar Board and the refining companies are doing everything possible to ensure that sufficient sugar is available to meet the needs of the general public.

Import Licences: Cotton and Rayon Piece Goods.

Mr Pollard:
ALP

d. - On the 4th June, the honorable member for Griffith (Mr. Conelan) asked -

  1. Whether it is a fact that, from the 27th May, 1947, all imports of cotton and rayon piece goods from the United States of America and Canada were prohibited?
  2. Does the prohibition apply to linings and shirting materials?
  3. Is it a fact that this important decision was made without reference to the Minister?
  4. Is it also a fact that many merchants are bound by contracts completed prior to the 27th May, and will suffer heavy losses because they had not applied for import licences by that date?
  5. If these are facts, will the Minister state whether sympathetic consideration will be given to the granting of licences towhose traders who were bound by contracts before the 27th May, and who produce satisfactory evidence to that effect?
  6. Will the Minister also state whether the decision will have the effect of unnecessarily prolonging the rationing of clothes?

The Minister for Trade and Customs has supplied the following information. -

  1. The issue of licences to import cotton and rayon textile piece goods for dress purposes or furnishings, from the United States of America or Canada, was suspended as from the 27th May, 1B47, with the exception of rayon linings and the following essential cotton materials in short supply which were available to importers within certain price, ceilings: - Handkerchief cloth, gabardine, poplin, broadcloth, sheetings and calicoes over 50 inches wide, canvas interlining, Italians, Silesias, sateens, pocketing, flannelettes, piece goods for hag manufacture, piece goods for table cloths.
  2. The prohibitions were made effective as regards shirting materials as from the 19th June, and for rayon linings as from the 3rd July, 1947. Cotton linings are not prohibited.
  3. The Minister was informed of the decision and approved same.
  4. Until an importer applies for a licence the Department of Trade and Customs hits no knowledge of the contracts to which he hat> committed himself overseas. Importers who place orders overseas before they are in. possession of a valid import, licence do so at their own risk.
  5. Consideration will still be given to the issue of licences for goods of the classes mentioned in paragraph 1.
  6. The rationing of clothing will not he unnecessarily prolonged but . the dollar situation may result in it not being lifted as anon as bad been anticipated.

Cite as: Australia, House of Representatives, Debates, 30 September 1947, viewed 22 October 2017, <http://historichansard.net/hofreps/1947/19470930_reps_18_193/>.