House of Representatives
23 February 1949

18^th Parliament · 2^nd Session

QUESTION
- ENTERTAINMENTS TAX
QUESTION
- AUSTRALIAN-DUTCH RELATIONS
QUESTION
- AGE AND INVALID PENSIONERS
QUESTION
- NORTHERN TERRITORY
QUESTION
- PUBLIC SERVICE
QUESTION
- NEW GUINEA TIMBER LEASE
QUESTION
- FISHING
QUESTION
- EGGS
QUESTION
- MANUS ISLAND
QUESTION
- MEAT
QUESTION
- OFFICE OF EDUCATION
QUESTION
- COAL
QUESTION
- WIRE, PIPING AND STEEL
QUESTION
- CIVIL AVIATION
QUESTION
- POWER PLANT
QUESTION
- JAPANESE INTERNEES
QUESTION
- HOUSING
QUESTION
- MR. J. PLIMSOLL
QUESTION
- WAR SERVICE HOMES
QUESTION
- FINANCIAL STATEMENT 1948-49
ANSWERS TO QUESTIONS

Mr. Speaker (Hon.J. S. Rose-rear) took the chair at 10.30 a.m., and read prayers.

page 553

QUESTION

ENTERTAINMENTS TAX

Mr McLEOD:
WANNON, VICTORIA

– I preface my question, which was addressed to the Treasurer, with the statement that I have received a communication from the secretary of the Wimmera Football League expressing gratitude at the recent decision of the Government to exempt from entertainments tax admission charges to athletic meetingsup to and including1s. 3d. The annual meeting of the league is to be held during this week, when arrangements willbe made for the coming football season. Will the Treasurer say when the decision will become operative?

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

– The intention of the Government is that the provision with regard to the exemption from entertainments tax of admission charges to athletic meetings shall become operative almost immediately. I shall ascertain for the information of the honorable member the precise date upon which it will come into operation.

page 553

QUESTION

AUSTRALIAN-DUTCH RELATIONS

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

– I ask the Prime Minister in the absence of the Minister for External Affairs, whether, in view of the great public interest that has been aroused by the obvious conflict between the Ministerfor External Affairs and the Minister for Immigration-

Mr SPEAKER:

– Order ! The honorable gentleman cannot debate in a question whether there is a conflict between Ministers. It is obvious that the honorable gentleman is also about to invite the Prime Minister to debate the matter.

Mr HARRISON:

– Certain statements concerning the Dutch have been made by the Minister for Immigration. The Minister for External Affairs has so far failed to inform the House whether the Government proposes to accept them as the policy of the Australian Government towards the Dutch Government in the Netherlands East Indies. Will the Prime Minister now inform the Housewhether the statements that have been made by the Minister for Immigration are to be accepted as the policy of the Australian Government or whether there has been any retraction of them?

Mr.CHIFLEY. - A short time ago I made perfectly clear the attitude of the Australian Government with regard to the differences that have arisen between the Indonesians and the Dutch in Indonesia. I then expressed the personal opinion, which has since been supported by three very eminent Englishmenwho are in direct contact with their Govern ment, that the opportunity that was offered to react a compromise arrangement in Indonesia should have beeu accepted by both parties to the dispute. That course would ultimately have brought peace, satisfaction and contentment to both sides. That policy still stands. The honorable member now wants to discuss what this or that Minister may have said about Indonesia. The policy of the Government on that matter has never changed. Its object is to promote peace throughout Asia and elsewhere.

Mr Harrison:

– I am referring not to Indonesia but to Holland.

Mr CHIFLEY:
ALP

– The honorable member asks whether there have been bad relations between this country and the Netherlands as a result of certain ministerial statements. There have been some differences of opinion from time to time upon such matters as shipping, but my relations with the Netherlands Minister in Australia have always been excellent. We have bad some differences of opinion, of course, but that is to be expected. Whatever construction may be placed by the Opposition on words used by various Ministers, I enunciate the Government’s policy, which usually is formulated in conformity with Cabinet decisions. I do not propose to engage in a discussion of extracts from statements made by Ministers.

page 554

QUESTION

AGE AND INVALID PENSIONERS

Artificial Limbs and Eyes

Mr DUTHIE:
WILMOT, TASMANIA

– Can the Minister representing the Minister for Social Services say whether any provision is made La the Social Services Consolidation Act for the supply of artificial legs or eyes to age and invalid pensioners? If not, owing to the great cost of those necessary aids, will the Government consider the possibility of providing artificial legs and eyes, either free or at reduced charges, to age and invalid pensioners and other folk who cannot afford to pay for them?

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

– Apart altogether from the question of payment, there has been, and still is, considerable difficulty in obtaining supplies of the aids to which the honorable member has referred. There is an understanding with the repatriation authorities that, whenever possible, the Repatriation Department’s artificial limb factory, which is the largest of its type in the southern hemisphere, will supply artificial limbs for other than ex-servicemen. As much help as possible is given in this way.

page 554

QUESTION

NORTHERN TERRITORY

Medical Services - Economic Survey

Mr BLAIN:
NORTHERN TERRITORY

page 556

QUESTION

MANUS ISLAND

Mr HAYLEN:
PARKES, NEW SOUTH WALES

– Has the Prime Minister seen reports of the statement made in Washington, which expresses surprise at reports from Canberra to the effect that a difference had arisen between Australia and the United States of America concerning Manus Island, and which contains a denial that there was any conflict whatever? Has the Prime Minister seen the full report of a statement recently made by the United States Ambassador in Melbourne? Did he notice that every newspaper omitted mention of the Ambassador’s reference to the Minister for External Affairs, which was as follows: -

With the inspiring leadership and splendid co-operation of Dr. Evatt, the Far Eastern Commission developed and adopted its own initial post-surrender policy …

Mr SPEAKER:

– Order ! Comments made by ambassadors or other persons concerning the personal qualities of a Minister cannot be introduced to this chamber-

Mr HAYLEN:

– The point is, Mr. Speaker-

Mr SPEAKER:

– The point is that the honorable member ought to know by now that he cannot introduce outside argument in the course of a question. I cannot rule against honorable members on one side of the House in such matters without ruling against honorable members on the other side. I make that quite clear. I have got to be fair to all honorable members -

Opposition members interjecting,

Mr SPEAKER:

– Order ! Honorable members are not in a two-up school now. It is quite obvious that the honorable member for Parkes is not entitled to import into a question contentious statements made by individuals outside the House.

Mr HAYLEN:

– My reference contained a tribute to the Minister for External Affairs-

Mr SPEAKER:

– Order ! If the Chair permits opinions expressed by persons outside the House to be introduced in this chamber in the form of questions it must also permit members of this House to express their own opinions in the form of questions, which is obviously not permissible.

Mr HAYLEN:

– My reference was not to a press report but to the Minister for External Affairs-

Mr SPEAKER:

– Order ! The fact remains that the Ambassador’s tribute was really an expression of opinion on an arguable matter, and the honorable member’s question, which sought to include that expression of opinion, is out of order. I ask the honorable member to reconstruct his question.

Mr HAYLEN:

– I ask the Prime Minister whether he is aware of the reason for the omission from the press reports of the Ambassador’s reference to the Minister for External Affairs?

Mr CHIFLEY:
ALP

– Concerning that portion of the honorable member’s question which relates to Manus Island and the reported difference of opinion between the Governments of the United States of America and this country in connexion therewith, the position is that the only foundation for the alleged difference of opinion is a statement which appeared in the press some time ago. There was no foundation in fact for that statement. However, certain members of the Opposition treated that statement as being true and they have repeated it so often since that they now believe it themselves. There never has been any difference of opinion between this country and the United States of America concerning Manus island. No request was made by the United States Government to this Government to bc permitted to take over Manns Island for the purpose of establishing a forward naval base in the Pacific. Discussions at the Empire Prime Ministers’ conference in London concerning territory in the Pacific and regional pacts did not relate particularly to Manus Island, but were concerned with the sovereignty of a number of Pacific islands. I repeat that no offer lias been made by the Americans to establish a base at Manus, and no discussion, still less any dispute, has occurred between ourselves and the Americans in regard to that island. Concerning the second portion of the honorable member’s question, which Mr. Speaker has said was somewhat out of order, I have not seen a press report of the statement made by the United States Ambassador, but it would not be by any means uncommon for the press to omit a commendatory reference to the Minister for External Affairs.

page 557

QUESTION

MEAT

Mr RANKIN:
BENDIGO, VICTORIA

– Can the Minister for Commerce and Agriculture say whether any progress has been made in the negotiations with the British Government about a new meat contract, and can he give an indication of the prices agreed upon ?

Mr POLLARD:
ALP

– I cannot give a considered statement at this stage about thu negotiations.

page 557

QUESTION

OFFICE OF EDUCATION

Mr FRASER:
EDEN-MONARO, NEW SOUTH WALES

– In the course of a recent debate on a motion for the adjournment of the House to discuss posters issued by the Office of Education, the Minister for Post-war Reconstruction promised to obtain details of the Liberal party branches which had applied for copies of the posters and of the Current Affairs Bulletin. If the Minister has been able to obtain this information, will he please make it available to the House?

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

– It is true that, during a recent debate, some suspicion was cast on the statement I made that Liberal party organizations were paying for literature sent out by the Office of Education. I have made inquiries, and I have learned that the following Liberal party branches and organizations are receiving literature from the Office of Education : -

Liberal Party of Australia (New South Wales Division), Box 1001, General Post Office, Sydney.

Liberal Party of Australia (Victorian Division), P.O. Box 58, Collins-street, Melbourne, Victoria.

Adelaide University Liberal Union, c/o Branch Office, Universities Commission, University of Adelaide, Adelaide, South Australia.

Parramatta Liberal Youth Club, 42 Campbellstreet, Parramatta, New South Wales.

Liberal Speakers Group, Box 5S, Collinsstreet Post Office, Melbourne, C.l, Victoria.

In addition, a number of persons who are known to be members of the Liberal party also subscribe for literature sent out by the Office of Education.

page 557

QUESTION

COAL

Mr HOLT:
FAWKNER, VICTORIA

– Can the Prime Minister say whether, in view of the acute shortage of coal in Australia for essential purpose;, the Government has explored the possibility of getting coal from other countries ? Have any orders been placed in other countries, and, if so, in what countries, and for what quantities of coal ?

Mr CHIFLEY:
ALP

– The Australian Government itself has not sought to import coal from other countries, but certain State governments have considered (.he matter. I think I am at liberty to say that the Victorian Government is one of them. Mr. Kent Hughes, the Minister for Transport for that State, discussed with me the question of bringing coal from India and South Africa, and asked for an assurance that, if the State Government imported coal, its quota of black coal from New South “Wales would not be reduced. I have discussed that matter with the Minister for Shipping and Fuel and the Joint Coal Board, and such an assurance was given to the Victorian Government, which has already received some of the coal that it ordered in other countries. However, I do not think that I should furnish details of the business of a State government. In addition, Mr. Playford, the Premier of South Australia, has informed me that considerable difficulty is being experienced in that State in connexion with the carriage of concentrates from Broken Hill to Port Pirie because most of the coal now available for South Australia is conveyed to that State by sea, with the result that empty coal trucks do not now run through Broken Hill. The result is that there is a shortage of rail transport from Broken Hill to Port Pirie, and of coal for that rail transport. Mr. Playford has asked through the Joint Coal Board and the Minister what the position of South Australia would be if it obtained coal from the Uni ted Kingdom. I understand that that would involve an arrangement between the company handling the concentrates and the Government, because concentrates are badly needed. I wrote to Mr. Playford yesterday, intimating that if he was successful in obtaining coal from the United Kingdom for the specific purpose of shifting concentrates, that would not interfere with the quota of coal received by South Australia from the Joint Coal Board.

Mr Holt:

– Has the Joint Coal Board tried to get any coal from abroad ?

Mr CHIFLEY:

– No.

page 558

QUESTION

WIRE, PIPING AND STEEL

Exports

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

– Will the Minister for Commerce and Agriculture be good enough to have prepared for me a statement showing the exports of wire, piping and steel from Australia during the past year? Can the Minister also say whether it is a fact that approximately 52,000 cwt. of plain wire and 76,000 cwt. of galvanized iron was exported last year? Is the availability of steel for the manufacture of ploughshares and harrows affected by exports of those commodities? I point out that apparently there is a shortage of steel in this coun- try for the manufacture of those vital farming implements.

Mr POLLARD:
ALP

– I shall endeavour to obtain the information sought by the honorable member. Although there have been small shipments of wire and galvanized iron to the mandated territory of New Guinea and adjacent islands, and a small quantity has gone to New Zealand, there have been no exports of any magnitude of those materials.

page 558

QUESTION

CIVIL AVIATION

Mr ADERMANN:
MARANOA, QUEENSLAND

– Can the Minister for Civil Aviation indicate when TransAustralia Airlines will take over the services operated by Qantas in Queensland? In view of the uncertainty in this connexion Qantas is not prepared to continue the feeder service to Thargomindah, with the result that the people in that area are being caused a great deal of inconvenience.

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

– I understand that arrangements for the taking over of the services mentioned are in hand. There should not be any alteration of the existing services, and I have been informed that the services at present provided are superior to those that were previously in operation. That is evidenced by the fact that good loads are being carried from Townsville to the outback areas of Queensland, and there is an increasing demand for seats in aircraft operating on that run because of the excellence of the service. If the honorable member will supply me with further information relating to the particular case that he has mentioned I shall endeavour to obtain details for him.

page 558

QUESTION

POWER PLANT

Duty on Imports.

Sir EARLE PAGE:
COWPER, NEW SOUTH WALES

– Will the Trea surer consider remitting duty on capital goods being imported into this country for use in connexion with the production of power? I point out that those good3 cannot at present be manufactured in Australia, and in some instances the initial cost of the plant is increased fourfold by additional costs. This is a permanent charge during the life of the plant, and results in the cost of production of electricity being increased. In view of the buoyant state of Commonwealth finances should not the duty on such capital goods be remitted?

Mr CHIFLEY:
ALP

– As the right honorable member knows, large quantities of goods are already admitted to lii is country free of duty. The point .that the right honorable member raises is whether all capital equipment coming into Australia from abroad should be admitted free of duty because of the high cost of such equipment overseas. The right honorable gentleman knows only too well that, because of certain commitments under the Ottawa Agreement and other tariff agreements, all requests for tariff revision have to be very carefully examined. In some instances duties cannot be reduced because of the existence of these agreements. I shall discuss the right honorable gentleman’s request with the Minister for Trade and Customs, and shall endeavour to furnish him with a general explanation of what has been done and the practice that has been followed. I shall ascertain whether something can be done to remit the duties on special classes of capital equipment the importation of which would not conflict with manufacturing interests in Australia. I shall furnish the right honorable gentleman with a statement on the matter as early as practicable.

page 559

QUESTION

JAPANESE INTERNEES

Mr FALKINDER:
FRANKLIN, TASMANIA

– Will the Minister for the Army state whether it is a fact that the Government has requested the American occupation authorities in Japan to permit the return to Japan of eight Japanese internees at present held in custody at Rabaul? Is it a fact that these Japanese have resided in New Guinea for from 15 to 30 years? Will the honorable gentleman consider the request of the Rabaul branch of the Returned Soldiers, Sailors and Airmen’s Imperial League of Australia that if the internees are repatriated to Japan their properties shall be made available to Australian ex-servicemen?

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

– It is been decided to transfer from Rabaul to Japan the eight internees to whom the honorable member has referred. All the internees in question were born in Japan. When I was in New Guinea recently I visited the compound in which they are interned and spoke to them. I also discussed the matter with representatives of the exservicemen’s organizations in New Guinea. They objected strongly, and quite understandably, to these Japanese nationals being released in New Guinea. Those who witnessed the sufferings of the people of that territory during the war can easily understand why they do not want the Japanese internees to be released there. The possibility of their properties being handed over to Australian exservicemen has not yet been discussed. I shall examine that proposal immediately.

page 559

QUESTION

HOUSING

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– Has the attention of the Minister for Works and Housing been directed to the shockingly sub-normal standards of living particularly in the city of Sydney owing to the shortage of housing accommodation ? Is it a fact that about two years ago the Premier of New South Wales announced that 90,000 homes would be constructed in that State within a period of three years? To what degree has that target been attained? What is the reason for the failure of that programme in many areas? What responsibility does the Australian Government accept in order to ensure that citizens of Australia shall be adequately housed ?

Mr LEMMON:
Minister for Works and Housing · FORREST, WESTERN AUSTRALIA · ALP

– I am aware that shockingly sub-standard houses exist in the city of Sydney and that in the main they are owned by members of the Liberal party who use them for the purpose of extracting tribute from the tenants.

Sir Earle Page:

Sir Earle Page interjecting,

Mr. SPEAKER (Hon. J. S. Rosevear). Order ! The right honorable member for Cowper must not interject.

Mr LEMMON:

– I am also aware of activities on the part of certain individuals like the right honorable member for Cowper in building luxury flats while many people are forced to continue to live in sub-standard houses.

Mr SPEAKER:

– Order ! The Minister has been asked to give the reasons for the existence of sub-standard houses.

Mr LEMMON:

– Another reason for their existence is that no previous government adopted this Government’s policy under which lack of finance is not allowed to prevent people from being adequately housed. In accordance with that policy the ownership of homes is not now regarded exclusively as a field for investment by members of the Liberal party, because the Government is not only assisting in the construction of homes but is also giving tenants the opportunity to buy their homes under the most favorable conditions including the lowest rates of interest yet provided for home purchasers in the history of this country. The programme of home building announced by the Premier of New South Wales was ambitious, but I would congratulate any Premier upon having the courage to embark upon such a programme. No such Premier would be disgraced should he fail ro achieve his original target, because the fact remains that the Labour Government in New South Wales has provided a record number of houses during its regime. Although the Australian Government is not obliged to accept directly any responsibility in respect of housing, it is not dodging its general obligation in that respect. Under the Constitution the provision of housing is the responsibility of the States. At a recent conference of Ministers for Housing at which I presided the Liberal party Premier of South Australia objected to a suggestion that the Australian Government should accept direct responsibility for housing programmes. He contended that housing was the responsibility of the States, and he said the States did not want the Commonwealth to interfere in this matter. Our power is limited to the provision of adequate finance and we have promised to make available to the States whatever financial assistance they may require in carrying out their housing programmes.

Sir Earle Page:

– I desire to make a personal explanation, I have been misrepresented by the Minister. The honorable gentleman said that I had built luxury flats. That statement is definitely a lie. I have not built any flats. My son has built flats for letting at 25s. a week. There is a constant waiting list of 50 persons who are in need of homes.

page 560

QUESTION

MR. J. PLIMSOLL

Mr HOLT:

– I ask the Prime Minister, in the absence of the Minister for External Affairs, whether Mr. James Plimsol] is the Australian delegate to the United Nations Economic and Social Council ? Can the right honorable gentleman tell the House how long Mr. Plimsoll has been associated with the Department of External Affairs? Is he a permanent officer of that department? What are his qualifications for representing Australia at the meetings of that international body, and does he speak with the authority of the Government and under instructions from it?

Mr CHIFLEY:
ALP

– The honorable member for Fawkner has asked a number of questions about Mr. Plimsoll, and I shall obtain the particulars of the length and conditions of that gentleman’s service with the Department of External Affairs. I have had some experience of Mr. Plimsoll’s work for that department, and of the manner in which he has represented Australia at various conferences overseas. I regard him as one of the ablest representatives that this country has. He has done a particularly good job. I am not prepared to accept press reports of statements that Mr. Plimsol] or any other representative of Australia may make at international conferences, because they may have been torn from their context. I have not seen a report of any particular statement by Mr. Plimsoll.

Mr Holt:

– I did not ask the right honorable gentleman about any statement.

Mr CHIFLEY:

– The honorable member asked whether Mr. Plimsoll spoke for Australia, and, therefore, he must have had in mind a statement that has offended his susceptibilities. I shall obtain as much information as I can for the honorable gentleman about Mr. Plimsoll. At this stage, I content myself with paying a tribute to his efficiency and industry.

page 561

QUESTION

WAR SERVICE HOMES

Mr HARRISON:

– I inform the Minister for Works and Housing that I have received from the wife of a special war service pensioner a letter in which she complains of the condition of her war service home. I ask the House for permission to read a short extract from the letter. It is as follows: -

The vain comes in all the windows, the roof leaks, the paintwork has blots of resin running down the woodwork, the doors sag, windows rattle, &c. The fittings are so inferior thnt the copper had to be soldered three times after the first washing. When the wringer with wooden guards was placed on the tubs it just crumpled up like sand soap and fell into the tubs. The bath leaves one with a gritty scum after a bath. Compressed paper comprises the shelves in the cabinet, which bend under the weight of one bottle of Dettol. The enamelling on the gas stove turned brown the first time after using. The front door is a paintcd-up second-hand door, and the fittings and handles are rusty, cheap and inferior. One expects better than that for £1,500 or more. Our place isn’t finalized yet and we’ve been here six months. An official of War Service Homes inspected the place and admitted it was jerry-built - “ just a sign of the times “.

Earlier, the Minister, in reply to a question, stated that homes were being made available to people under conditions that had never existed before. Will he say whether the conditions that the writer of the letter has described are typical of those under which the Government is making homes available to the people? Is the Government aware that such conditions exist in war service homes? Will the Minister have a complete investigation made of those homes, and take any necessary action against contractors who fail to carry out construction work properly?

Mr LEMMON:
ALP

– Certainly I shall examine the position. It sounds to me as though the house is rather like one of the honorable member’s jerry-built questions, for which he has become notorious in this House. The fact is that there is no necessity for an applicant to accept any house constructed under the war service homes scheme if he is not satisfied with it. If the house referred to by the honorable member was recently built, it must have been erected by a private contractor because war service homes are not now built by day labour.

Mr Harrison:

– But the Minister is responsible.

Mr LEMMON:

– I am pointing out that it must have been built by private enterprise, which the honorable member is always praising. I take it that he is prepared to vouch for the statements made in the letter that he quoted. If the statements made are correct legal action will be taken immediately against the contractor.

page 561

QUESTION

FINANCIAL STATEMENT 1948-49

Debate resumed from the 22nd February (vide page 551), on motion by Mr. Chifley -

That the following paper be printed: -

Financial Statement by the Right Honorable J. B. Chifley, M.P., Treasurer.

Mr LANG:
Reid

.- The proposals under discussion reek of financial chicanery. They will entitle the Treasurer (Mr. Chifley) to pass into political history as a great financial illusionist. Recently the right honorable gentleman purchased a number of stares in broadcasting station 2HD. They were owned by an illusionist who calls himself Levante the Great. Levante’s stock-in-trade is the art of deception. He makes people believe what he wants them to believe. “ The quickness of the hand deceives the eye “ is the art practised by magicians. In addition to the shares, Levante appears to have passed on to the Treasurer some of the tricks of his trade. Levante contents himself with sawing a woman in half. That is only an illusion. The right honorable gentleman creates a different kind of illusion. He wants people to believe that they are better off because he has reduced taxation. That is just an illusion, too. The woman who has been sawn in half is just as well after as before. But not so the taxpayer under the Chifley Administration.

These proposals cannot be divorced from the Government’s decision to discontinue the payment of certain subsidies on food and clothing. The Government claims that it will save £35,000,000 because of that decision. These reductions are expected to involve a reduction of income tax collections bv £36,500,000. At first glance, that would appear to be equitable and an excellent piece of balancing by the Treasurer, but for the majority of the people it is far from equitable. Those in the middle and lower income groups will be worse off, while those in the higher groups will be better off. Once again this Government has extended its favours to those who have and has hit those who have not. The only test in regard to these matters is the effect on the household budget. At the end of the week does the amount in the pay envelope buy more than it did befire? We are told that the Australian £1 has depreciated in value and that it is now worth 9s. 3d. compared with its pre-war value. It all boils down to the purchasing power of the pay envelope. Not even a magician’s wife could live on £3 a week in these days. The Government only paid the so-called subsidies in order to maintain the purchasing power of the Australian £1. What it was doing actually was refunding a certain amount of excess taxes. The subsidies were not really subsidies but tax rebates. The social services contribution of ls. 6d. in the £1 has brought the poorest paid members of the community into the taxation field. It has undermined the principle of a basic wage. Any tax that reduces wages below the level of the basic wage reduces the minimum standard of living that has been provided by the courts of this land. That procedure cannot be justified. It is immoral. In an attempt to cover up the inequitable burden of taxation on these people the Government resorted to price subsidies. By subsidizing certain essential items in the household budget, it gave an indirect rebate to the taxpayers. The Treasurer collected an excessive amount of taxes from the lower paid members of the community and returned a certain amount in order to reduce the cost of living to them. That was the position until the Government decided to discontinue subsidies. There was a typical piece of deception about that decision.

The Government has said that its decision was made because of the defeat of the referendum on rents and prices control. That was, and is, an entirely misleading statement. The decision to discontinue subsidies was made because the Government suddenly realized that the cost of the subsidies was greater than had been expected. The cost of subsidies this year would have been much greater than £35,000,000. The prices of wool and cotton were important factors in the decision. In 1946 the amount of the subsidy paid on wool for home consumption was £3,500,000, and in 1947-4S it reached £9,250,000. What would have been the cost during the coming year, with wool prices reaching a new record level ? The Minister in charge of prices in the New South Wale? Government, Mr. Finnan, gave the show away the other day when he said that although the Government had estimated originally that the wool subsidy would cost £12,000,000 this year, at present price levels it would *co.?t £21,000,000. That was the real reason why this Government decided to shelve the burden of increased costs. It decided to discontinue subsidies altogether and then to reduce taxes by the amount that the subsidies had cost in 1947-48. That figure was £35,000,000, apart from assistance given to primary industries. Had subsidies been retained, the cost to the Australian Government would have been closer to £50,000,000 than to £35,000,000, but instead of retaining them the Government decided to pass the burden directly on to the taxpayer.

Then comes the next stage of the great illusion that has been presented by the Treasurer. Subsidies disappear and costs begin to rise immediately. The price of potatoes, suits, shoes and linen increases, but the Government still goes on collecting its taxes at the old rate. The higher the cost of goods, the more revenue is collected by the Government. It is a complete paradox, and the wage-earner of this country is the victim. Suddenly the Treasurer finds that his revenue is much greater than his budget had anticipated and it seems certain that he will have a record surplus. Therefore, he decides that he must make some gesture. The proposals that are now before the House are the product of that decision. Instead of adhering to the principle of pay as you earn, the Treasurer defers the operation of the new rates until the 1st July of this year. Prices increase as soon as subsidies go. The Treasurer benefits as soon as subsidies are discontinued, but the tax reductions do not operate until six months afterwards. In that way the Treasurer creates his own artificial time lag. For six months the taxpayer has not the prices subsidies, nor has he the tax rebates. The Treasurer will be able to show a record surplus. He will exhibit it from every election platform in the Commonwealth in the manner of Levante producing a rabbit out of his hat; but the surplus will consist of money that should have been in the pay envelopes of the Australian people to compensate them for the withdrawal of subsidies. By that trick, the people of the Commonwealth will be, collectively, £25,000,000 worse off than they should have been, and, individually, they will have to battle to make ends meet each week. What justification can there be for this time lag? Pay-as-you-earn taxation is based on the principle that income and expenditure should be concurrent. So, the moment that subsidies disappeared the Government had an obligation to remit all the taxes by means of which it had intended to pay those subsidies. Otherwise, there is a time lag that hits the taxpayer. He must suffer a reduction of his real standard of living. These tax reductions should be retrospective; instead, they are to be postponed until the 1st of July. That is a gross fraud at the expense of the taxpayers.

Then, this great political illusionist proceeds to carve up his £35,000,000 and that is where the relief which allegedly is being given to the taxpayers is shown in its true perspective. The Treasurer has sought to dazzle us with tables, graphs and percentages, but there is only one real test, and that is, “ How does the reduction now proposed compensate for the increased cost of living resulting from the withdrawal of subsidies ? “ First, take the position of a person without dependants. An employee in this category, earning £3 a week, will have 3d. a week added to his pay envelope after the 1st of July. An employee earning £4 a week will have an extra 8d. in his pay envelope. The increase for a person earning £5 a week will be 2s. 2d. If, however, a taxpayer happens to be a member of this chamber, drawing £1,500 a year, he will be given an additional £1 12s. a week-; and if he has the fortune to be a Cabinet Minister, he will benefit by £3 10s. a week. Proceeding still further, should he be in the super-income group, earning £10,000 a year, the tax reduction will mean an extra £9 a week to him. In creating his illusion, the Treasurer has approached the matter in a different way. He says that a taxpayer on £7 a week is to receive a reduction of 30 per cent., and that a taxpayer on £10,000 a year is to receive a reduction of only 7.4 per cent. That is a clear example of the danger of talking in percentages. The truth is that a worker on £7 a week will receive, by means of the Government’s proposed reductions, only enough to buy himself a haircut, whereas a taxpayer on £10,000 a year will receive an additional £9 a week, which is more than the average man has to keep himself and his family. That is not the true Labour party approach to this problem.

Consider now the position of a man who has a wife and one child. Under the Government’s taxation proposals, a man on the basic wage of £6 4s. a week will receive an extra 6d. in his pay envelope after the 1st July. For the wageearner on £S a week the increase will be ls. 9d. But the taxpayer on £1,500 a year will have an extra £1 9s., the man on £3,000 a year will have £3 9s., and the man on £10,000 a year will have £9 a week. Who, then, is getting the best deal from the Government - the man on the basic wage or the man on £10,000 a year ? A married man on £500 a year, with a dependent wife, will still be paying 10s. a week in tax after the 1st July. He cannot afford that, with living costs at their present level; but what will be the result of the withdrawal of subsidies on the family man? If he wants a new suit hp will have to pay at least an additional £2 for it. The subsidy on Australian cloth at present rates is worth 12s. 2d. a yard. It will be still higher when cloth is made out of wool being sold at present prices. So, if a man has to buy a new suit, how much benefit will his family obtain from the so-called tax reductions? That is where the family man will see through the Chifley illusion. His new suit will need lining and other materials on which subsidies were formerly paid. He will have to pay more for everything . that he buys to clothe himself and his family. The wool from which his wife knits clothes for his children will cost much more. A reel of cotton which at present is 3d. will be 7d. in future. The price of a pair of shoes will increase by 10s. or more. A shirt will cost up to 27s. instead of 12s. 6d. in pre-war days. Children’s shoes will cost up to £1 a pair. Look at the basic wage regimen and see what the withdrawal of subsidies will mean, then try to balance that with the actual tax reductions. That is the right way to look at the proposals now under discussion. The basic wage regimen provides for 11 lb. of potatoes for a family each week. If the family can get the potatoes, which are often not available in the shops, they will cost at least per lb. more than when the subsidy was being paid.

So, for potatoes alone, the cost to the family, because of the discontinuance of the subsidy, will be 2s. 5£d. a week more. That is as much as the relief that a man, with a wife and two children, earning £9 a week, will receive under this measure. Where is he to find the money to buy a new suit for himself, a dress for his wife, and shoes for the children ? Everyone receiving less than £14 a week must show a loss under these proposals. Those earning more than £14 a week will have s. much better chance of showing a profit. The family of a man earning £8 a week probably eats more potatoes than the family of a man receiving £5,000 a year. The cost of the subsidy for the suit of a man on £8 a week will be little different from the subsidy previously paid for the suit of his employer. So the more a taxpayer earns, the more he will benefit. That is Labour policy in reverse.

Subsidies were not paid on luxury goods. They were paid on essentials. That is why the Government’s decision to discontinue subsidies, and to make these taxation concessions in return, will prove inequitable. It is futile for the Government to attempt to convince the average housewife that she will be better off because of these paltry taxation concessions. She knows better. Yet the Treasurer has the hardihood to preach to those on the breadline about how they should save. The burden of taxation, after this measure takes effect, will still be crushing. There will still be many governmental extravagances. But the housewife is finding it more and more difficult to make ends meet. The Government refuses to tackle the problem of the incidence of taxation from the Labour party point of view. The Treasurer thinks in terms of budget figures, instead of in terms of human values. The wageearner on £8 a week to-day is no better off than he was before the war on £4 a week. He cannot buy as much, or as great a variety of good. That is the real meaning of inflation.

Members of this Government think too much in the terms of their own personal living standards. Those standards have improved. Honorable members will enjoy quite considerable benefits from this measure. But for the great mass of wage-earners, all the Treasurer= figures, his graphs and percentages, will be so much waste effort. Unless the pay envelopes of the workers, after taxes have been deducted, can provide them with the same standard of living as they enjoyed prior to the war, they must be worse off. That is the actual position to-day. At best, this measure creates a very paltry kind of illusion. It is intended to dupe the people into believing that they will be better off. When they find they are worse off, various reasons will be suggested. But the Government hopes to conceal the truth from them. The Government will have a gorged Treasury. It will have huge balances concealed in trust funds - the very practice that it has accused other institutions of attempting. It will still be collecting more in taxation than would be necessary to meet its legitimate requirements. Yet it has the audacity to tell the wage-earner that it is being extremely generous to him. It is handing back a few paltry pence in his pay envelope. At the same time it is taking action that will make it more difficult for his family to live. It is those people who will have every reason to remember the man who will go down in history as the great political illusionist. They will have very great cause to remember, when they feel the effects of the “ great Chifley illusion “.

Mr HOLT:
Fawkner

.- The Treasurer (Mr. Chifley) has presented to the House a short financial review that is, in fact, an abject confession of failure. There are passages in it which indicate the unhealthy state into which the economy of this country has been allowed to drift through the ineffective handling of its finances and productive resources by the Chifley socialist Government. In the statement the Prime Minister says that the expenditure on defence and allied services that he budgeted for last year will be less than the amount estimated because, he says, delays have occurred in the delivery of stores and in the manufacture of equipment on order. He goes on to deal with the works programme. This, too, is behind schedule. Provision was made in the budget for a much greater expenditure than that actually achieved. The Prime Minister says that the works programme has been retarded through difficulties of obtaining labour, equipment and materials. He confesses, as he proceeds that costs and prices have been rising at an increasing rate and, more significantly, he mentions the continuing lack of balance between the total demand for, and the supply of, goods. I could take other passages from his statement that reveal, in the Government’s own words not only how far short of the productive effort necessary to be made the actual effort achieved has fallen but how even the modest plans made by the Government in the budget have not been achieved. It has become an unhappy feature of Australian post-war life that, for reasons that other speakers have already stressed during this debate, we have not been able to achieve the production of which we know Australia to be capable. This failure to achieve production - and this Government document, I repeat, is a confession of it - the failure to hold down prices, to maintain the volume of our exports of primary products, to hold down the inflationary trends that are destroying the purchasing power of the £1, must be attributed directly to the Government and to the policies that it has been pursuing. At the moment we are not engaged in war and we have not, therefore, to divert vast quantities of raw materials and industrial resources to the prosecution of war. Furthermore, we are not now required to absorb tens of thousands of men and women in a war effort. Many who were formerly engaged in the prosecution of the war are now available for the peace-time efforts of the community. It is true that some increase of over-all production has occurred, but that increase is estimated at somewhat less than 20 per cent. If we compare the statistics of factory employment of the last year for which statistics are available with those of the last complete pre-war year it is evident that in order to obtain an increase of production of approximately only 20 per cent, the number of persons engaged in factory employment has been increased by approximately 50 per cent. In 1938-39 542,000 persons were employed in factories, compared with 822,000 at present. How does that situation compare with the situation that obtains in other English-speaking countries ? In the first half of 1948 the level of industrial production in the United States - that country which still operates under the despised system of private enterprise - had increased over the pre-war years by more than 70 per cent. In Canada, the increase of production which has occurred in the last decade is only little less than that of the United States of America. So that although production has increased in the United States of America and Canada by approximately 70 per cent., in that time Australian production has increased by only 20 per cent., notwithstanding that 50 per cent, more people are engaged in production. Turning now to Great Britain I shall quote for the information of the House comments made by the Tariff Board when comparing the metal trades group in this country with the United Kingdom group. The board stated -

Statements of costs of production of the same commodities in the United Kingdom and Australian metal working factories have frequently shown the average earnings of employees in the United Kingdom to be higher than in Australia; at the same time the labour cost per unit of production is often lower in the United Kingdom. The inference that Australian production per man-hour is less than in the United Kingdom is inescapable . . Australian industry cannot be soundly built on the ground that Australian workers should produce less per hour than the United Kingdom.

Mr Dedman:

– From what is the honor-: able member quoting?

Mr HOLT:

– From comments made by the Tariff Board on the metal trade industry. The Minister may recall that the Tariff Board is a government instrumentality. The board’s comments continue - lt must not he forgotten that in spite of the higher productivity of workers in many metal industries in the United Kingdom than in Australia, authorities in the former country arc deeply concerned by the failure of British factories to reach American levels in that regard.

I emphasize the statement that English authorities are concerned by their failure to reach American levels of production. It is evident, therefore, that Australia’s comparable increase of production falls far short of the increased production in the United Kingdom. Incidentally the attainment and maintenance of satisfactory levels of production in that country have caused so much concern to the British Labour Government that it has sought technical advice and assistance from American experts. I make it clear that in making those statements I arn not attacking the Australian working man. In common with everyone else who has had first-hand experience of the Australian working man and woman, I am convinced that, given the proper leadership and incentive, they can do as well, if not better, than the workers of any other country. However, when we discover that the workers in the United Kingdom, the United States of America; and Canada, are producing proportionately much more than are their counterparts in this country it is evident that the responsibility for our failure lies not with the working men and women of this country but with those who have failed, by lack of leadership, to inspire them to achieve the volume of production of which they are capable.

Consider, for instance, the volume of Australian exports. The Government has spoken with pride of the tremendous income derived’ by this country from its exports of primary produce. It is true that a great increase has occurred in the income that we derive from the export of primary produce, but that increase is due largely to the high prices of wool, wheat and other important primary produce. Honorable members will recall the old adage that if the price of wheat and wool was right then even the politicians could not ruin this country. If ever an Administration had reason to be grateful to the high prices of our products it is the present Government. Its whole structure would collapse if the present abnormally high, prices receded. However, when we examine, not the monetary value, but the actual volume of exports, we see a very different picture, as honorable members on this side of the chamber have frequently pointed out. The average annual export of meat, potatoes, raw sugar, cheese, butter, eggs, preserved milk products, citrus fruits and dried vine fruits during the three years that preceded the war amounted to 866,000 tons. In the three years that have elapsed since the war the total annual volume of exports, under the administration of this socialist government, has fallen to 606,000 tons, which represents a decline of 260,000 tons. Taking into consideration the probable increase of population of this country due to the natural increase and to the influx of migrants it has been estimated that our total exports will decline still further from 606,000 tons to 143,000 tons annually, assuming that the trends at present operating continue unchecked. Statistics indicate that by 1955, when it is estimated that our population will have increased to 9,000,000 people, Australia will be compelled to import such commodities as potatoes and citrus fruits, in order to maintain the present rate of supply for internal consumption. That is the background of the financial statement laid before the Parliament by the Treasurer.

I propose to examine in greater detail one particular item of production because it is, I think, a key item and supplies an acid test of the efficacy of the Government’s policy. I refer to coal, which is basic to our entire economy. The total productive effort of this country can be no greater than the volume of coal produced, and the upper and lower limits of production are determined by the volume of coal available for industry, power and transport. For another important, reason coal is also a significant item to examine. In that industry the present and preceding socialist administrations have made their most powerful efforts to increase production and promote efficiency by applying socialist methods. In respect of the coal industry Labour cannot raise the alibi that constitutional difficulties have prevented it from carrying out its policy. I remind the House that legislation was passed by this Parliament and also by the New South Wales Parliament to confer full authority and constitutional power on the instrumentalities which the governments have established. There can be no alibi for the Government. We need the coal. It is here in Australia to be won, and the Government has the constitutional power necessary to increase production. Therefore, the Government must stand or fall by the success or otherwise which has attended its efforts to get coal. Just how important coal is to Australia’s economy is stressed by the Joint Coal Board in the report which it recently presented to the Parliament. I quote from it as follows : -

At the present time, the Australian economy is suffering from an acute shortage of capital equipment and basic industrial materials, e.g., houses and building materials, rolling stock, ships and steel, electric generating plant, industrial machinery aird coal. The coal industry is basic to all these shortages and it is essential that it be reorganized and output increased as quickly as possible if the Australian standard of living is to be prevented from declining. In our present situation a sharply increasing output of coal is required to maintain the same standard of Jiving for the people. This implies recognition on the part of all relevant public authorities of the importance of the coal industry . . .

The report goes on to elaborate the need for co-operation by all sections of the community. Although the board has stressed those matters, there is, of course, nothing novel in the information which it gives us. We have known from the war years onwards that more coal was needed, and the Government was under constant pressure to obtain more coal. It cannot be argued that the failure to get the coal is due to the low price at which it is sold. Figures were supplied as recently as this week by the Metropolitan Gas Company, in Melbourne, which showed that it was then paying 59s. 9d. a ton for coal, whereas it paid 26s. 2d. a ton in 1939. We know that there have been general price increases, but surely an increase of 33s. 7d. a ton, or 128 percent., should be a sufficient incentive to produce coal. It is interesting to note that the increase of the price of coal is due very largely to action taken by thi? Government. It is due partly to the withdrawal of price subsidies; partly to the contribution which has to be made under legislation to the expenses of the Stevedoring Industry Commission; partly to the contributions which have to be made towards holiday pay for waterside workers; partly to increased railway freights in New South Wales due to the 40-hour week; and partly to the general increases of freights and charges since the beginning of the war. As far back as 1921, when there was little mechanization of the mining industry, and when the price of coal was not so high, a total of 12,800,000 tons of coal was produced, and we were able to export 2,770,000 tons.

Does it not strike honorable member? as a little odd that the Government, on the admission of the Prime Minister to me at question time to-day, has neve attempted, during the period of acute shortage, to import coal from abroad? It cannot be argued that shipping was not available to bring in a reasonable quantity of coal. There was enough shipping to export nearly 3,000,000 tons of coal in 1921, and I am sure that shipping could have been obtained to import coal in recent years, so that we might have improved our transport services and produced more power. Why has the Government never attempted to import coal ? Great Britain is prepared to export coal, and Australia has a favorable trade balance with Great Britain. In fact, Britain has to cut down its purchases of good?- which our manufacturers are keen to supply because it cannot finance the purchase of those goods. Why have we not approached Great Britain to export coal to Australia? South Africa can export coal. Why have we not attempted to import coal from that country? India, another British Commonwealth country, also exports coal. Why have we not tried to get coal from India?

Mr Dedman:

– Because a previous government sold the Australian Commonwealth Line of Steamers.

Mr HOLT:

– The Minister will have to work out a better answer to the question before he goes to the people at the next election. The Minister said that no attempt had been made by the Government to import coal because the Commonwealth line of steamers was sold. Does he suggest that the only thing preventing the bringing of coal to Australia is the want of shipping space? Has the Government at any time inquired whether shipping was available? Of course it has not, but the Prime Minister made the significant admission this morning that in two States, where there are Liberal governments, attempts had been made to get coal from other countries. These governments were (prepared to import coal, but they had to come cap in band to the Commonwealth, and say, in effect, “ We are desperately short of coal. You cannot get it for us, and we cannot get what we need from New South Wales. Will you allow us to get it from other countries ? “ When those governments first attempted to import coal, protests were raised, and they were told that their quotas from New South Wales would bc cut down by the amount they imported. Thus, the Australian Government failed to make any attempt itself to get coal from overseas, and it was only after pleading with the Commonwealth that Victoria and South Australia were allowed to import it. The Prime Minister emphasized to-day that the South Australian Government was permitted to bring in coal only for a specific purpose. That is the attitude of mind of this Government. Why, may we ask, does the Government adopt this peculiar course? Coal can be obtained from those countries where we have favorable trade balances and we have the funds available to us. Why has the present Government not secured that coal from abroad? There is only one answer, as the Minister for Post-war Reconstruction (Mr. Dedman) knows. The Government is scared stiff to set this coal from abroad because it is afraid of industrial trouble amongst the coal-miners on the New South Wales fields. It is afraid that unions dominated by Communist leaders, such as the Seamen’s union, the waterside workers union, and the miners federation would cause trouble if coal were brought to Australia. In that way, to a minor degree, the bargaining power of the miners federation would be weakened considerably. It does not matter that the Australian community is to stagnate, economically, in the meantime; that our transport services are to be restricted; that we are to have power blackouts from time to time, and industry is to be denied the use of coal ; or that the housewives are to be inconvenienced and shortages are to continue. For just so long as this Government can placate the coal-mining and other unions that are dominated by Communist leaders, will Australia be required to go short of this essential commodity. 1 hope that if a Liberal government is returned at the next general election, one of the first things that it will do will be to bring to this country from other parts of the world, sufficient coal to meet our immediate needs, and build up a substantial reserve against any contingency in the future.

Mr Dedman:

– The honorable member does not have to worry about that.

Mr HOLT:

– We shall see about that. The Minister is nothing if not an optimist, and we on this side of the House are not without our own reasons for optimism. I assure him, however, that one of the charges which the people will bring against his Government when the day of reckoning comes will be its failure to develop Australia’s resources of coal, and to supplement those resources by supplies from overseas.

There is another aspect of this matter which calls for attention. Not only has the Government failed to secure additional coal, but it has also adopted a political partisan line in determining how available coal is to be distributed. I refer to the distribution of coal between the States. According to the 1924 Official Year Book, the local consumption of coal in New South Wales in 1921 was 5,268,628 tons. In that year there was exported from New South Wales to other Australian States, 2,752,810 tons, or rather more than half as much as was retained in New South Wales. The figures for 1948 are not yet available, but in 1947 the total production of coal in New South Wales was about 11,683,000 tons. At that time we had lost our export market, which had to be abandoned.

Paragraph 21 of the First Report of the Joint Coal Board reads -

It is a fact that the underground coal industry of New South Wales has failed lamentably to meet the expanding needs of the community, and it is only a combination of four factors which make it possible for the most urgent requirements of consumers to be met. These are -

The virtual abandonment of our export markets;

The development by other States of alternative sources of power and, in some cases, the expansion of local coal production;

the expansion of open cut coal production ; and

the drastic control of coal supplies which is necessary to ensure that the most urgent needs are given their appropriate priority.

That is what the Joint Coal Board had to say about the position up to July, 1948. Although in 1921 about 2,752,810 tons of coal was exported from New South Wales to Australian ports, I point out that in 1947 less than 2,500,000 tons was sent from New South Wales to the other States. I emphasize that in the meantime New South Wales had abandoned the export of coal, and therefore had available for its own use the balance of the 11,683,000 tons produced in that year, whereas in 1921 it sent to the other States of the Commonwealth rather more than half the quantity it used within its own borders. In 1947 about one-quarter of the total New South Wales production, or less than one-third of what that State used, was sent to the other States. Last year I said in this House that the New South Wales Government and the Australian Government had, through the Joint Coal Board, permitted an inequitable distribution of coal which favoured the industries of New South Wales at the expense of the industries and transport services of other parts of this country. At the time I cited the figures for the second quarter of 1948, which are the latest figures furnished in the Joint Coal Board’s report. In August, 1947, a quota of 35,000 tons a week for Victoria was fixed by the Joint Coal Board. In the fourth quarter of 1947 that quota was almost reached, an average of 34,470 tons being the quantity that was exported weekly during that period. In the second quarter of 1948 the shipments to Victoria dropped considerably. An average of 27,740 tons a week was sent to Victoria, a decrease of almost 7,000 tons a week compared with the fourth quarter of 1947.

One would have thought that if it had become necessary to cut down the supply to Victoria by 7,000 tons a week there would have been a corresponding reduction in the quantity of coal retained in New South Wales. But that was not so, because there is a Labour Government in New South Wales, and this Parliament is controlled by a Labour Government. Instead of the New South Wales figure being reduced we find that in the fourth quarter of 1947 the average New South Wales weekly consumption was 177,400 tons. In the second quarter of 1948, far from dropping, it had increased to 181,000 tons a week. Stated in round figures, in that quarter New South Wales got about 50,000 tons more coal than in the fourth quarter of 1947, whereas in the same period Victoria received between 80,000 tons and 90,000 tons less coal. The Minister is a Victorian who represents an important industrial area. 1 furnished these figures to him at the end of last year, but I have yet to get from him a satisfactory explanation of this serious discrepancy in the treatment meted out to these two States. I could have cited figures for South Australia which would have told the same story. In Victoria and South Australia, both of which are administered by anti-Labour governments, the volume of coal supplied has been very much less than the share to which they are entitled.

Mr McEWEN:

Mr Dedman:

– As compared with £40,000,000, which was the cost of the subsidies last year.

Mr McEWEN:

– If an honorable member does not happen to be certain of his figures, the Minister for Post-war Reconstruction tries to establish that he is misrepresenting the position, but when he is certain of his figures it is the Minister who is revealed as having been guilty of misrepresentation. The Government, which has imposed taxes to meet the cost of subsidies, now claims some virtue because it has reduced taxes, although subsidies have practically been abolished. The people in the lower income groups can derive a real advantage from tax reductions only if indirect taxes are reduced.

Motion (by Mr. Harbison) negatived.

That the honorable member for Indi (Mr. McEwen) be granted an extension of time.

Mr McLEOD:
Wannon

.- It is obvious that honorable members opposite who have attempted to criticize this financial statement have been in great difficulties. They have made very heavy weather of their task. It would indeed be difficult for any one to criticize this statement, which follows so closely on the budget. I listened attentively to the speech that was delivered by the Leader of the Opposition (Mr. Menzies) yesterday. The right honorable gentleman was very fair in his criticisms. He admitted that the taxes which are payable by a man in receipt of an income of £800 a year have been considerably reduced and will be reduced further, but he argued that the reductions have been offset by the increased cost of living. The honorable member for Indi (Mr. McEwen) attempted to make the same point. The Opposition has endeavoured to lay on the Government the whole of the blame for the increase of the cost of living. It is necessary to examine the difficulties with which the Government was faced. Many people are apt to forget that not very long ago we were engaged in a war, in the course of which vast sums of money were expended and huge liabilities incurred by the Government. The financial policy that has been pursued by the Government since the end of the war has had four main objectives. The first was to eliminate the war-time gap between revenue and expenditure. The others were to ease the burden of taxation, to create reserves against future commitments, and to resist the pressure of inflation. I claim that the Government has achieved those objectives. It made no rash promises to the people. The job w’as there, and the Government had to undertake it. It was faced with the task of safeguarding the economy of the nation and of doing justice to all sections of the community. The gap between revenue and expenditure has been gradually decreased, and now there is no need to borrow because we can finance our needs from current revenue. rn 1944-45, which was the last complete war year, the gap was £266,000,000. In 1945- 46 it was £153.000,000, and in 1946- 47 it was £38,000,000. In 1947-48 it was entirely eliminated and the Government was able to balance its budget without borrowing or having recourse to bank credit, as was done during the war years. The gap was closed despite the fact that in the years between 1945 and 194S post-war expenditure to the amount of £407,000,000 had to be met. That sum was made up of public debt charges, £136,000,000; re-establishment and repatriation, £77,000,000; prices subsidies and subsidies to primary industry £109,000,000 ; international relief, £26,000.000: gift to the United Kingdom, £25,000,000; lend-lease settlement, £8.000,000 and other post-war costs £26,000,000. The closing of the gap was a great achievement.

– No. The position has been watched closely. The prices officials knew the table of limits as well as the honorable member does. The check was complete right down to the consumer. During the prices referendum campaign, the Premier of Victoria, Mr. Hollway, said that he could control prices in that State with five men. However, the Prime Minister promised that if the referendum were defeated, the States could have some of the trained and experienced men who had administered prices control for the Commonwealth. In the budget for the current year, provision is made for the States to be reimbursed the cost of controlling prices, but I am afraid that, prompted by vested interests, some of the States have no intention of controlling prices because, with savings bank deposits amounting to £688,000,000, the temptation to get some of it is very great. I need not rely upon Labour journals to prove that contention. The business community knew that after the defeat of the referendum there would not be any effective prices control, and that they could make whatever charges they liked for their goods. I shall quote from an article that appeared in the Melbourne Herald, of the 24th September, which was about the time when the States were taking over controls. The article read -

A warning on increasing prices was given to manufacturers to-day by the executive of the Victorian Chamber of Manufactures.

I stress that the statement was quoted by the newspaper as a “ warning “. The whole of the statement which I shall quote is proof that there was then no State prices control. The writer was warning individual manufacturers not to profiteer when the federal controls ended. The article continued -

In the hands of each manufacturer lies the fate of Australian industry as a whole, said the president (Mr. C. N. McKay) in a circular to members.

He warned them to consider the political repercussions of price de-control before increasing prices. “ It may seem a very big issue to depend on so small a sum as a shilling or a penny “, he said, “ but before increasing prices even by so much as a penny, it is urged that every aspect of the matter should be considered from the national, as well as the personal viewpoint.”

Mr. McKay stressed that while there would be general satisfaction throughout industry now the first steps toward the goal of normal competitive trading had been taken, the heavy responsibilities placed on manufacturers must be clearly realized.

Under the sub-heading “ Temptation the article continued -

For the past seven years manufacturers had been forced to conduct their businesses under stride government control, including rigid control of profits.

I invite honorable members to study the balance-sheets of any big company during that period of seven years. They will see that profits and dividends were continually rising. I have here the balance-sheet of one company, Paterson, Laing and Bruce Limited, published in the Melbourne Age, on the 11th January last. Including excess taxation of £111,S46 written back, the profit for the year ended the 31st July, 1948, was £201,130 compared with £S0,729 for 1946-47.

The Melbourne Herald article from which I was quoting a few minutes ago continued -

With the lifting of controls would come temptation to take advantage of the opportunity to raise prices and recoup some of the lost profits. It was on this point the executive issued a very serious note of warning.

The Victorian Chamber of Manufactures was obviously afraid that the people would wake up to the fact that they had been tricked by the Liberal party’s propaganda during the referendum campaign. To underline the guilt of the Opposition parties during the referendum even more, I shall quote from a report of a speech made by the Leader of the Australian Country party (Mr. Fadden) at Horsham during that campaign. The right honorable gentleman was “ tickling the ears “ of the farmers. I had been in that district before the right honorable gentleman spoke there and had told the farmers the facts. I said that the referendum was not a political question and that I was leaving the farmers to size up the issue for themselves. Reporting the address of the right honorable gentleman, the Melbourne Argus, of the 12th May, 1.948, stated-

It would be a good thing if Mr. Chifley carried out his threats to withdraw subsidies if the “Yes” vote were not carried at the referendum Mr. Fadden, federal Australian Country party Leader said at Horsham last night. “ If Mr. Chifley were game to face a showdown and withdraw subsidies it would mean that there could be a 28 per cent, cut in the £142,000,000 budgeted for this year “, he said.

Mr Rankin:

– If the Treasurer had the cheek to hang on to it.

Mr McLEOD:

– I was not allowed to finish.

Mr McLEOD:

– The article continued -

The State Government expects, in fact, that relaxation of controls will bring about - after a very temporary inflationary period - a reduction in prices of commodities in general use.

The Opposition parties were ready to remove all controls, including land sales control, the removal of which would have been an economic tragedy for this country. What happened during the depression, following the inflation of the 1920’s? When the crash came in the depression, farmers lost land that they had been buying with the financial assistance of the banks for up to £30 an acre. What would happen if controls on the sale of agricultural land were lifted now, with prices as they are? In h few years legislation would have to be passed by this Parliament, and the people at large would have to be taxed, in order to get the sons of to-day’s farmers out of their difficulties. The occurrence of such a state of affairs would be a national tragedy. I remind the House that every honorable member opposite agitated for the removal from the Australian Government of the power to control prices, and therefore every one of them is guilty of having assisted to bring about the present state of affairs. They seek now to excuse themselves by blaming the Government for the present high cost of living. I remind them that the President of the United States of America found it necessary to take action similar to that taken by a Labour government in this country in order to maintain the stability of the American economy. For the benefit of the honorable member for Fawkner (Mr. Holt) and his colleagues opposite, I propose to read from the report of the “ State of the Union “ speech delivered to Congress by President Truman. Referring to inflation, the President said -

I recommend legislation for the following purposes: - Firstly, to continue power to control consumer credit and enlarge the power to control bank credit; secondly, to grant authority to regulate speculation on commodity exchanges; thirdly, to continue export control authority; fourthly, to continue priorities and the allocation of authority in the field of transportation; fifthly, to authorize priorities and allocations for key materials in short supply;

It is evident, therefore, that, as in this country, many essential commodities are in short supply in the United States of America. When the war ended arguments were advanced by the representatives of “ big business “ in America similar to those that were advanced by members of the Opposition during the recent referendum on prices control. They said, in effect, “ Remove all controls; let everything go; let people buy and sell on the open market, and there will be only a short period of inflation “. However, the experience of the American people demonstrated that the inflationary trend mav continue for years, and it was because of the continuance of that trend that Mr. Truman and his political supporters were successful at the recent presidential election. A recent Gallup poll of the American people-

Mr Archie Cameron:

– What has the result of a Gallup poll held in the United

States of America to do with the finances of this country?

Mr McLEOD:

– It indicates that the average American citizen recognizes the necessity for continuing prices control. The report of President Truman’s speech, which bears out my contention, continues - sixthly, to extend and strengthen rent control ; seventhly, to provide standby authority to impose price ceilings for scarce commodities, which basically affect essential industrial production or the cost of living, and to limit unjustified wage adjustments which would force a break in the established price ceiling.

Lt is obvious, therefore, that even at this late stage the United States of America has found it necessary to reimpose prices controls. I cast back in the teeth - even in the false teeth - of members of the Opposition their allegation that the present Government has not done everything possible to stabilize prices and to minimize the cost of living. The Government has done everything that was constitutionally possible for it to do, and it will continue to do everything possible to protect the people. As an example of the exploitation of the community by certain interests, I mention the obvious profiteering that is taking place in the sale of garments manufactured from wool. A recent article in the Melbourne Herald stated -

Nevertheless, wild statements that rising wool values will increase retail price of a suit of clothes from £14 to £21 cannot be substantiated. A good worsted suit contains about 7 lb. of raw wool, worth about 80 pence a lb. Total cost of wool at latest high values is £2 fis. 8d., representing no more than an additional £1 12s. 8d. since the lifting of the Government subsidy. How then can this suggested increase of £7 be explained? [ lay all the blame for the existence of that state of affairs on the honorable member for Fawkner and his colleagues opposite. They are quite willing that prices should increase to the limit of the purchasing ability of the community. The probability is that the price of men’s suits will be increased by £7. Housewives’ organizations have from time to time decided to boycott the purchase of certain goods the prices of which are regarded as being unduly high. That is not always possible, because people must buy necessary commodities in order to exist.

Mr MCBRIDE:
Wakefield

.- If the speech of the honorable member for Wannon (Mr. McLeod) revealed one thing to the House it was that the Government is extraordinarily concerned at the ever-increasing cost of living. The honorable member attempted to deduce some of the reasons for that increase. First he criticized the States’ administration of prices control, but, unfortunately he did not adduce a tittle of evidence to support his allegation that the States had failed to control prices. As the honorable member and members of the Government are aware, prices had already “ got away “ from the Government before the Commonwealth was compelled to abandon prices control. In fact, the decision of the people at the referendum enabled the Government to shift ite responsibility to other authorities. That was made quite clear early in the debate by the Leader of the Opposition (Mr. Menzies), who pointed out that from the end of the war until the end of 194S, during which period the Government had complete control of prices and unlimited money with which to provide subsidies, prices increased by 22£ per cent. In the light of that fact I suggest that the vapourings of the honorable member will fall on deaf ears. After all, the people of Australia made a very definite decision at the referendum last year, and I have no doubt that they will make another very definite decision as soon as the opportunity is given to them to do so.

Honorable members on this side of the House are very proud of the fact that prices control was introduced, not by a Labour administration, but by the Menzies Government. The institution of the system of paying commodity subsidies was introduced by the Curtin Government only because of the experience in Great Britain. During the first two and a half years of the war, when anti-Labour administrations were in office, prices were very effectively controlled. During that period the general increase was not more than approximately 10 per cent. However, in the following twelve months prices increased by at least an additional 12 per cent., and the sharpness of the increase necessitated the introduction of commodity subsidies. The honorable member for Wannon sought to justify the Government’s decision to discontinue payment of subsidies after prices control had been transferred to the States, and in support of his contentions he mentioned two or three commodities on which subsidies are still being paid. However, for the purposes of his arguments his choice of examples was unfortunate. The honorable member mentioned tea. I point out’ that tea is purchased on a government-to-government basis. He also mentioned wool, which has never been a government-to-government purchase, but was sold at fixed prices during the war and for some time afterwards. However, I remind the honorable member that when the operation of the wool appraisement scheme terminated buyers once again purchased their requirements on the open market in free competition. In order to obtain payment of a government subsidy to off-.iCi, high prices local manufacturers of woollen goods simply presented a statement of their costs to the Government. That system continues to operate now, with the difference that instead of local buyers presenting to the Government a statement of their costs, the cost of the raw wool is included in the selling price of the manufactured article. The honorable member forgot to mention cotton, which is one of the main causes of increasing costs, and affects most seriously the basic wageearners of this country. Manufacturers of cotton goods in Australia now obtain supplies in precisely the same way as they did before the removal of control of prices from the Commonwealth to the States. I should like to correct one misstatement of the honorable member, to the effect that the State Governments had the opportunity to obtain the services of all the officers they required to administer prices control within their boundaries. The simple fact is that when the Commonwealth assumed control of prices, and the work associated wtih control grew, as it naturally did during the war, State officers were seconded to assist the Commonwealth administration. Afterwards, many of them had no wish to return to the State service from which they had come. The Commonweath, with its overflowing Treasury, could afford tobe more generous in regard to salaries and conditions than could the States under the system of uniform taxation. As a result, the States have not been able to get all their former officers to return to help in the important work of prices control. Nevertheless, the administration of prices control under the States is at least asefficient as it was under the Commonwealth, and it is certainly more expeditious. The main point, however, is that the referendum did not take from the Commonwealth the power to control prices. The decision to abandon Commonwealth control was taken by the Prime Minister in a fit of pique because the people did not accept his advice in regard to the referendum. There was no justification whatever for his action, which is now having a boomerang effect on the Government and its supporters. Consequently, whenever the occasion offers in this Parliament, on the public platform, through the press or over the air, the propaganda statement is repeated that rising costs are the result of the “ no “ vote at the referendum. I believe that the Government has completely failed to convince the people of the accuracy of that statement.

To-day, we are considering the Financial Statement made to this House by the Treasurer (Mr. Chifley) on the 15th February, Ever since he has been in power the right honorable gentleman has been consistent in one thing, and I congratulate him upon it. He has recognized clearly, and admitted fully, that the main problem confronting Australia is inflation. He has frequently said that if he is to curb the present inflationary trend he must drain off excess purchasing power from the community. Then, in a lower voice, he has added that it is also necessary to increase production in order to meet the public demand for goods. He made this statement for the fourth time. I think, in his budget speech on the 8th September of last year. He spoke, of the inflationary trend in more forceful terms than he had previously used, and he also mentioned production and its effect on inflation. He pointed out that the inflationary trend had existed during the war, and had since continued. Thus, the situation is not one which came into existence just about the time at which he delivered his speech. He mentioned Australia’s internal financial condition, and linked it with the dollar problem as it affects Australia and other countries. After discussing the inflationary trend and giving as one reason the financial position of the country as it is affected by our economic relations with other countries, he added -

The other is the insufficient output in certain key industries, upon which the output of many other industries depends. Coal, iron and steel, timber and other building materials, arc major examples, and of these the most fundamental is coal.

He discussed the same topic again in a statement which was presented to us five months later, in which he said - lt is true that local production has increased - though not as fast as necessary in certain basic industries and other fields - and that the volume of imports has risen. No possible rate of increase in supply, however, could have kept pace with the rise of nearly 50 per cent, which has taken place in national income during the past two years.

Then he went on to say with the utmost futility -

The Government is tackling the problem in two main ways. On the one hand production is being assisted by every possible means . .

L do not know what that means. There have been many discussions on the subject in this House, and if the Government has done anything to assist production, it should have been pointed out by honorable members opposite. As a matter of fact, there have been many discussions, one of which took place only last week, in which has been demonstrated beyond dispute, even by the Minister for Commerce and Agriculture (Mr. Pollard), the failure of the Government to assist and encourage the production of essential commodities. However, the Treasurer continued fatuously - . . especially production in the basic industries, such as coal, where shortage of output is holding up the flow of products elsewhere.

-Great Britain is in a very difficult position, and requires more and more of those commodities. I remind the House that the people of that country receive only1s. 2d. worth of meat a week, and even that meagre ration is to be reduced, because of the falling off of exports from Argentina. Australia is well aware of the falling off of supplies of meat to Great Britain from Argentina. What are we doing to retrieve the position. Our exports of meat to the Mother Country are becoming less and less.

On practically every occasion on which an opportunity has been offered during this debate, we have heard a good deal of criticism of the United States of America, which is the one country in the world that to-day is playing its part fully in relation to post-war reconstruction. That country is not rendering assistance in any paltry manner. I remind honorable members that Marshall aid, of the total of which Great Britain receives approximately 25 per cent., amounted last year, in round figures, to the equivalent ‘of £A.1,600,000,000. This year assistance of the same order will be given. The United States is a large and prosperous country, but it is not a member of the British Commonwealth, yet it accepts responsibility for the post-war reconstruction of Great Britain and Europe. Compare its record in this regard with that of Australia, about whose magnificent progress in the field of secondary industry and about whose general development we have heard so much. If we extended aid to Great Britain and other European countries on the same scale as has the United States we should have to earmark for that purpose no less than £70,000,000 or £80,000,000 this year. Yet we throw out our chests because we are providing a mere £10,000,000. It is well that the people should realize the futility of the assistance provided by this country foi the people of Great Britain. “We are prone to give advice. Indeed, we are most voluble in giving advice to others. We give it on all occasions-

Mr Duthie:

– “Whether you know anything about the subject or not.

Mr McBRIDE:

– If we knew all about it we should be very much more guarded in giving advice. The people of the United States are realists and take advice for what it is worth. They have sized up the situation. It is extraordinarily fortunate for us that the American taxpayer has so far been prepared to shoulder the burden of Marshall aid. I have no doubt that Americans have made up their minds about what is being done by Australia. Recently the Treasurer adopted a completely new role. Tie set about urging the nation to save. He had a good deal to say about the national savings campaign both over the air and in the press, but in this important financial statement all he had to say about savings is contained in less than two lines. The right honorable gentleman has said -

On the other hand, the Government is encouraging restraint on spending by individuals and organizations throughout the whole community.

That is surely a remarkably poor effort.

Mr Haylen:

– It makes matters very simple for honorable members opposite.

Mr McBRIDE:

– It does not make matters very simple for the people. One of the first things that the people ask is, “ “What is the Government doing about saving? “ An examination of the financial returns shows that the Government is constantly finding additional ways of spending the taxpayers’ money. It is of little use for the Government to say to the people “ Do this “, or “ Do that “, if it does not set them a practical example by doing the things that it advocates. The great savings drive was dismissed in less than two lines in the Treasurer’s statement. Incentive to save is being discouraged by the exclusion from tax remissions of those who have been thrifty in the past. Only the thrifty in the community will fail to benefit from this great vote-patching plan of the Government. All of those who have saved in the past and are now in receipt of some income as the result of their thrift will continue to pay tax at the old rates. In other words, the Government believes it to bs a crime and not a virtue to have saved mon n.v in the past. On the one hand, the Treasurer says to the people “ You must save and on the other hand he says, “ If you save, I shall penalize you.” That is the sort of contradiction in which the right honorable gentleman indulges day after day and week after week and at last the people are beginning to make up their own minds about his sincerity. I suggest that if he believes that it is necessary for individuals in the community to spend as little as possible, he should at least give them some encouragement to follow his advice. This financial statement follows closely along the lines of earlier financial statements presented by the Treasurer. After setting out the financial position the right honorable gentleman, as in other aspects of his administration, endeavours to get a little both -ways. “We have had extraordinary examples of his insincerity only recently in this House.

In democratic countries it has always been accepted that members of the government speak with one voice. Indeed, it was always accepted in the past that if a Minister found himself out of step with his colleagues in the Government, Le would immediately resign. That conception of unanimity in the ranks of the Government has gone by the board. In these days the Prime Minister says one thing, another Minister says something else, and a third Minister says something altogether different. The Prime Minister has said that he is not concerned with what the Minister for Immigration (Mr. Calwell) or the PostmasterGeneral (Senator Cameron) may have said, notwithstanding that both Ministers made statements which were in complete opposition to announcements made by the Leader of the Government. Honorable members will recall the occasion, some time ago, when the Prime Minister suddenly felt compelled to say something about production. The necessity for increased production had not escaped his notice, but he said very little about it until he left Australia last year. lt was not until the right honorable gentleman had reached Great Britain, far away from the Australian scene, that he said that our salvation lay in increased production. Indeed, if we are to survive, it is a stern responsibility of the Government to bring about increased production. Notwithstanding that statement of the Prime Minister, the PostmasterGeneral told unionists that increased production constituted a menace to the workers. Since then the Minister for External Affairs (Dr. Evatt) has told us something of the policy of the Government towards foreign powers, particularly towards the Dutch. Later, the Minister for Immigration made the most dreadful statements about our Dutch friends, which were not countered by the Prime Minister who said, in effect, “ The Minister for Immigration has merely expressed his own views “. This is a completely unusual trait in parliamentary government.

Mr DEPUTY SPEAKER:

– Order ! The honorable member’s time has expired.

Mr HAYLEN:
Parkes

.- The problems associated with the financial statement appear to exist mostly in the minds of honorable members opposite. I have listened closely for some time to their analysis of what is a joyful piece of information about the financial state of this country. It has consisted of nothing but old-fashioned slogans and doleful general conclusions that everything is at its possible worst. I have been reluctantly forced to the conclusion that the Opposition parties resemble the Bourbons who learned nothing and forgot nothing. The present, of course, is a different era from that which they bequeathed to this Government as a headache. Their mind is in the slough of their own despond. They see difficulties where none exists, and they always see extraordinarily dangerous paths ahead. But their answer to all their problems is. as usual, negative. They say that the Government is not doing the right thing. Like the monarchy to which I have referred, the Opposition appears to have lost its head and its powers, with the result that it is now in convulsions merely kicking its feet. The Opposition parties always fail to make any adequate contribution towards the problem of sustaining the economy of the country which to-day is at a record level of prosperity. That fact cannot be denied no matter how much they twist the contents of this financial statement, which is simple and straightforward. It reveals a buoyancy of revenue whilst, at the same time, the incidence of taxation is decreasing. Much has been said about the golden age, but, surely, upon serious analysis, honorable members will admit that the most favorable country in which a person can live is one in which taxes are being reduced and national development is progressing satisfactorily. Admittedly, the nation’s revenue at present i9 high, and we derive much of it from the sale of our primary products at record prices. However, the Opposition parties defeat their own arguments with their jeremiad that everything is bad. The honorable member for Wakefield (Mr. McBride), who has just resumed his seat, lamented that the Treasurer was urging the people to save. The Leader of the Opposition (Mr. Menzies) s-poke about the current inflationary movement, and what we must do to restrain it. Honorable members opposite merely indulge in jargon without offering any constructive suggestions to the Government.

The Treasurer, as is his wont, has been quietly optimistic in the financial statement he has presented to the House. He has not over-stated the position in any respect. In certain instances, because of the careering prosperity of this country at present, he has issued modified warnings that we must watch our step, but such warnings cannot be construed to mean that we are on the threshold of all sorts of disaster. They really mean that, we must ensure that the prosperity which this country now enjoys shall not come under the influence of forces subversive to the true interests of the people who are the workers. The Leader of the Opposition said that the current inflationary movement presented a major national problem. He sympathized with the Government and the world in general in dealing with such a difficulty as inflation. Again, he touched almost lyrically upon the problem of high prices and said that it was a problem for both sides and something all parties have in common. The right honorable gentleman, apparently, has a short memory. The Government has nothing in common with the Opposition parties in its approach to the problem of high prices. They exhibited their interest in the problem, when it was presented to the people at the recent referendum, in a devastating series of misleading and lying advertisements subversive of the common interests of this country. The Opposition parties financed their campaign from a “ war chest “ of large dimensions, and their opposition to the Government’s proposals to continue prices control on a national basis was unprecedented in the ‘political history of this nation. Yet, the Leader of the Opposition talks glibly of our common interest in this vital matter of keeping down prices! One must agree that there is evidence of an inflationary movement, but Government supporters must disagree that the way to cope with that problem is, as the Opposition parties advocated at the recent referendum, to abandon all controls and let prices run riot. That was what the Opposition parties urged the people to do at the recent referendum. If honorable members opposite think that in that matter they are going to get away from their responsibility, not to this Government but to the people of Australia, they are mistaken. They knew that should the Government’s proposals be defeated prices control would revert to the State governments, the majority of which were Labour administrations; but the Opposition parties advocated that prices control could be better admmistered by six State authorities than by the Australian Government alone. Instead of taking a patriotic view of tha issues involved and advocating what they knew would be of benefit to the nation,, they seduced the public by adopting the tactics of tricksters. Their campaign was against the best interests of this country. Therefore, when the Leader of the Opposition prates about our common interest in meeting the problem he is hypocritical, particularly when the Opposition parties continue to ignore the nation’s common interest by breaking down the Government’s measures to defeat the terrors of inflation. We hear much economic jargon and frequent references to formulas and plans half of which are disclosed whilst the other half are kept hidden. However, one issue remains supreme and upon it the Opposition in this House will inevitably be called to answer. It is true, as I said earlier, that the country’s revenues are now unusually buoyant due in large measure to the high prices being received for our primary products overseas; but much the same conditions prevailed when the Government asked the people to give to this Parliament power to continue to control prices on a national basis. One would have thought that the Opposition parties would have approached that issue fairly and squarely in the national interest and not on a party political basis; but that referendum suffered the fate of all referendums and was fought on party political grounds. I was never more dismayed than I was when the people voted, in effect, to increase the cost of living, and did so with alacrity and, virtually, with a smile on their faces. When the blame for the fact that the people were so misled comes to reside where it belongs, the issue will not be buried under the soft words and sophistries of the Leader of the Opposition, who, in the balmiest and blandest terms, talks so glibly about our economic troubles, in which he says that we have a common interest. It would be a sorry day for the Labour party if ever it had a common interest with the Opposition parties in its approach to the problem of high prices.

In order to refresh my mind on th” bitter and stupid campaign of the Opposition parties which led to a complete change in the trend of public thought on prices control, I took the opportunity to visit the library where I read all the advertisements which those parties circulated during the referendum campaign. To-day, those advertisements make sorry reading. Here are a few of the statements that appeared : “ Chifley will put his hand in your pockets “ ; “ Chifley dare not take subsidies, from you “ ; “ Things will be cheaper when all controls are lifted because. prices will go up so high that they will crash “. Hans Andersen never told a more charming tale; the stories of the brothers Grimm never read so cunningly. If the Opposition parties had told the story along the lines of Red Riding Hood the people might have gleaned some understanding of the dangers ahead of them. Fancy any political party urging the people not to give power to their National Parliament to control prices. What a frightening thought that the people should give to their elected parliamentary representatives power to protect them against high prices in a time of crisis ! When one reads those advertisements to-day they appear very stupid, and one senses in them an underlying mockery when one realizes that a political party could with the backing of unlimited funds subvert the minds of the people by propaganda which included cartoons which were a reproach to their common sense, and featured perverted and inverted journalism and advertising slogans. When I recall those facts I feel very strongly about the remark made by the Leader of the Opposition that all parties have a common interest in dealing with the problem of high prices. The Government has an interest to-day in dealing with a problem which has been precipitated by the Opposition parties, and in doing so it will not rely upon the rump which will remain of the new Opposition party, whatever it may be called, after the next general election.

The Leader of the Opposition also referred to the Government’s policy of full employment. He pointed out that high prices and war incomes had had the effect of increasing employment, and that the Government was not responsible for it, and had no right to claim am credit for it. According to members of the Opposition, full employment camp about overnight and required ;ii> assistance from the Government, inferentially, full employment would in time disappear, and we would return to tinstarting point. Whilst that statement i= sound as far as it goes, it set me wondering. If the Government has not made an effort to achieve full employment, although that objective is one of its high ideals and one of the major features of its policy, how is it that we have been so extremely fortunate? The wealth of the United States of America compared with that of Australia is vast indeed, yet the Americans, who are able to assist th, world with reconstruction programmes and Marshall aid, and support the broken economy of Japan, are facing the problem of 3,000,000 unemployed persons. Therefore, the story that full employment just happens, and when we wake up one morning, we shall discover that it has disappeared, may be discounted. But it is the theme song of the Leader of the Opposition. That the present condition of full employment will not endure for long is the pious dream of the Opposition parties or the forces that they represent.

– That would be disastrous, expressed in terms of human misery. It would be a colossal burden to place on the shoulders of this young nation again. The Leader of the Opposition has said that in the present economic circumstances it is only human nature for the worker to regard the pressure on him as being off, and that the worker, as things are, is not likely to produce to full capacity. Evidently, the penalty that the worker must pay is that he must have a pinched stomach, and there must be empty bellies, so that an unemployment rate of 8 per cent, may provide the full production that some people so earnestly desire. Members of the Opposition should bring their ideas up to date. Their conception that a percentage of the people must be always unemployed went out with the dodo, and no matter how piously they advance their theory, they will never be able to bring about a return to those conditions. All the criticism of the workers has its origin in the fact that labour has become a scarce Commodity. We must remember that employers always exploited their opportunities in the past, and that the worker has merely learnt from his bo3s. If we must blame the pupil for learning from the master, we have a poor argument.

The Leader of the Opposition talked about the plans that the Government had made relative to incentive payments, and expressed the view that such a system would be advantageous. He criticized the trade unions in the manner of the age-old capitalist, and then became a Communist and urged the introduction of the Stakanovist system. In other words, he wanted the strongest man in the team to set the pace for the other workers. The system of incentive payments is loaded with great difficulties, and whilst it may be useful in industry, it is not a complete answer to all the problems.

The honorable member for Wakefield (Mr. McBride) referred to the 40-hour week. Honorable members opposite, and the interests which they represent, have never recovered from their shock at the introduction of the 40-hour week. That reform was long overdue. If we are to conduct our way of life after the conclusion of a world war during which we were promised a new order, some semblance of balance of sacrifice and balance of opportunity must be preserved. The 40-hour week is, on all accounts, a most desirable reform. Even the fact that it may not work perfectly at the moment it is introduced is not a reason for eliminating it. The 40-hour week is as fixed as any progressive move has been during the last 50 years. The introduction of the shorter working week has meant great things. We may perhaps need to educate our workers to make better use of their leisure, but in a period of reconstruction, that cannot be done very easily. The honorable member for Wakefield said, in his own quaint phraseology, that we were playing a poor fist in post-war reconstruction, and proceeded to refer to the assistance that Australia has given to Great Britain. He described our latest gift of £10,000,000 to Great Britain as paltry. I remember from my reading of Hansard. that when Australia asked the financial barons of the world, and particularly the Rank of England, for a loan of £16,000,000 for housing in order to avert a financial depression and keep men in employment, we were told that we could not have the money. The balance of generosity is strongly on the side of Australia. I cannot understand for the life of me why any honorable member, be he a member of the Opposition or a Government supporter, should endeavour to make out a case against his own country in order to prove that it has not been very generous in this or that particular. The criticism that the honorable member for Wakefield utters from time to time is never softened by what should be his feeling of patriotism for his own land, because a Labour government is in office. The £10,000,000 gift to Great Britain is swept aside as though it were of no consequence. The honorable member for Wakefield ignores the fact that all available ships have been crammed with food, as the Minister for Commerce and Agriculture (Mr. Pollard) has told us. All of those things count for naught in his estimation, and he complains that the Government is doing nothing to help the United Kingdom. The whole business of post-war reconstruction does not stop with the supplying of food to Britain. The honorable gentleman used a few outworn slogans about people having been beaten to theirknees. The British people are no longer on their knees. They are walking erect into a new prosperity by the valour of their own spirit, and not merely by virtue of anything that they have received from anybody else. They probably think that we over-emphasize the facts when, in discussions of finance, marketing or employment, we refer in favorable or derogatory term’s to the fact that we have done something toassist them. Our contribution has necessarily been small because of our numbers, but it has been adequate. It is distressing to hear an Australian decrying the good work that has been done by his fellow-Australians in the general job of world reconstruction, in which our first duty was to help the Mother Country.

The honorable member glossed very smoothly and quickly over the subject of post-war reconstruction in Australia. One of the finest things thatwe have done in the field of repatriation has been to expend £80,000,000 to put potential tradesmen into training and to fill our universities with bright young men and women who would not have had a chance for higher education but for the war. The reconstruction training scheme may have some anomalies, but the whole concept of it is magnificent. Not one sailor, soldier, airman, or ex-service woman would refuse to pay tribute to it now that it is in full swing. Their only justifiable criticisms might be that it will be of too short duration and that we may not have taken up the full complement of people who desired to train. It is a surprisingly good scheme and it has worked smoothly. Australians who have taken advantage of it will repay us in rich dividends of skill and ability for the money that has been expended upon them. To dismiss as wasteful and unenterprising this Government’s post-war reconstruction plan, in its overseas or local applications, is to reveal the paucity of vision from which honorable members opposite have suffered for so long.

Mr Rankin:

– The land settlement scheme has been very poor.

Mr HAYLEN:

– That subject has nlready been thrashed out, of course. Having been born on a farm and having had some experience of farming, I know that ex-servicemen to-day are given a better deal than they received from antiLabour governments after World War I. An ex-serviceman who gets a farm to-day at least gets some of the best country in Australia. He is not given “ monkey country “, such as returned soldiers were given after World War I. The old scheme was a standing scandal. Exservicemen who had scarcely seen a fowl were given qualifying certificates and poultry farms full of gravel. Their fowls got bumble foot, and the men could not earn a living. Some of them were settled on country covered with rocks that would have made the sheer face of Gallipoli look like a circumstance. Others took over sheep farms only to find that the nearest waterholes were 20 miles away. There was never anything so stupidly absurd as the soldier settlement scheme that followed World War I. I admit that there is a time lag in the present settlement scheme, but the fact is that applicants are being provided with good properties. Honorable members opposite dislike the scheme probably because good land is being taken from fat gentlemen who have far too much land already and who have never done much to improve their properties. Closer settlement is the key to our progress to-day, as it has been during the last 150 years. Although this is a side issue, I am sure that the money that has been expended upon the Government’s scheme for the land settlement of ex-servicemen has been wisely used. The Minister for Commerce and Agriculture, who is an ex-serviceman, understands the requirements of the scheme thoroughly and isblessed with a broad vision. Also, which is very important in this House, he has a balanced judgment and the ability not to be ruffled by the unfounded criticisms of honorable members opposite.

Subsidies and prices control have been freely discussed during this debate. I re-affirm that the responsibility for the decisions that have been made in /elation to subsidies and the transfer of prices control to’ the States will rest in another place than this when the people come to judge the trick that was played upon them in respect of their costs of living.

Lt* there is anxiety in the homes of many people to-day, that is the result of their mis-judgment in allowing themselves to he misled by propaganda which, for paltry political purposes, tried to destroy our prosperity. I make that statement with great firmness and great conviction. In all discussions that have occurred in this House since it first met this year there has been a great deal of talk about full employment. The Opposition has adopted the scheme propounded by Professor Hytten, the “ Hytten-miss plan “ as it is known. The Leader of the Opposition repeated that plan in a previous debate and he did so again last night, with his customary asides to the effect that the workers are not working. He advanced the theory that we can have no balanced economy unless some one is made to suffer. He espouses the view that there can be no balance of opportunity or balance of sacrifice. According to him and his supporters somebody must get the biggest piece of cake. The Government and its supporters are here to ensure that there shall bo a fair and adequate division of opportunities and rewards. I challenge honorable members opposite to treat the subject of full employment at the forthcoming election as they have treated it in this House. I am sure that they will choose to put a very different slant upon the subject when they appeal to the electors.

One of the most urgent things to be considered in discussing the Treasurer’s financial statement is the fact that to-day we are living in an atmosphere of prosperity. “We must watch the situation carefully, but without panic, so as to ensure that adjustments shall be made as our condition of prosperity becomes more stable. Nobody is foolish enough to think that wheat, wool, and other commodities upon which our prosperity is based will continue to be sold at the famine prices that prevail to-day. “We must bridge the period when prices fall, as they inevitably must. The Treasurer has prepared a plan to bridge the difficulties of the days to come, which wil be merely days of further planning. There is no depression looming in the immediate future unless, of course, it should be a man-induced depression such as we have suffered from, before. There is no reason to fear for the stability of our economy. The hotch potch of ideas advanced by honorable members opposite resolves itself into two main desires. The first is the desire to make the people unhappy by creating fresh disabilities for which blame can be laid at the door of the Government. The second is the desire to break down full employment so that industry, as we loosely term it, may have a “ fairer deal “, may be able to hire and fire and may obtain that highly desirable queue of unemployed at the factory gate. Nevertheless, I do not believe that one employer in 2,000 entertains such a desire. In that respect, the employers’ representatives on the opposite side of the chamber lag far behind their more progressive supporters. That old creed if dead. It was killed by the unity of sacrifice of the men and women of Australia and of every other democractic country during the war. Full employment has been written into the charters of democratic countries, a fact which helps to make those charters valuable and important because of their positive ideals.

The matters that I has discussed are all inferentially related to the financial statement made by the Treasurer, which described in the quietest terms one of the most pleasant eras that has ever come to this country - peace in our time, a buoyant economy, a blanket of social services covering not only those who deserve help most but also those who need more limited forms of assistance, and a growing national strength resulting from Australia’s development, both financially and in terms of man-power. Solutions for our problems, particularly those of production, have been planned in such a way that we may look to the future calmly and without fear. There has been far too much loose talk about production by members of the Opposition, who think of production in terms of rushing out something quickly, getting some money for it, and “ to hell with those who produce the goods “ ; and that goes for the employer and the employee. Planned production is part of the policy of the Labour party. Production in areas in which production must be increased and the production of coal and steel are the important matters. There are some industries which, having been established as ancillary to the war effort, will die of their own accord in due course or take a different and profitable peace-time slant. Production must have a plan behind it. The honorable member for Wakefield thinks in terms of making everything simmer over and saying “ There you have it “, but when you have it you have got nothing. There must be a plan behind production, as there is behind the other matters to which I have referred. I congratulate the Treasurer upon his financial statement, which shows that there is a sound and orderly mind directing the sound and orderly economy of the nation.

Mr ADERMANN:
Maranoa

.- The remarks of the honorable member for Parkes (Mr. Haylen) and the honorable member for Wannon (Mr. McLeod) show that they, and doubtless all honorable members opposite, are still smarting under the people’s verdict at the referendum on rents and prices control. When the people spoke on that referendum last May they spoke in the way they did because of their experiences at the hands of this Government. The people of my electorate needed no urging to vote “ No “ on that occasion, and if they were given the chance to speak again they would repeat their verdict with emphasis-

Mr Conelan:

– The honorable member does not know his electorate.

Mr ADERMANN:

– I know my electorate. I know of primary producers in Queensland who had the bitter experience of having the prices that they could charge for their products reduced by the Prices Branch below the 1943 level although costs had increased considerably above the level at which they stood in that year. They did not need to be told that the hand of Canberra was responsible for that action, and they decided that they were not going to “ take it “ from this Government any longer. All that I had to do in my electorate was to quote the words in which the Labour Premier of Queensland, Mr. Hanlon, expressed his opinion of Canberra and its controls. Mention has been made of how the people will probably vote at the next general election. I remind honorable members opposite that by-elections have taken place since the referendum on rents and prices control was held and that at those by-elections the people have spoken in more emphatic terms than those in which they spoke before.

Mr Conelan:

– To which by-elections does the honorable member refer?

Mr ADERMANN:

– There have been by-elections in New South Wales and in Geelong in Victoria. I was very happy when the people voted on the referendum in the way they did and I have not changed my opinion that they voted correctly. T believe that the State governments can exercise a much more effective control over prices, at any rate so far as the agricultural and allied industries are concerned, than could ever be exercised by a central control in remote Canberra, which has no regard for the distant parts of this great continent of ours.

The honorable member for Parkes also referred to land settlement of exservicemen. I do not think that the honorable gentleman can justly claim any credit for the Labour Government in Queensland in regard to the provision of land for exservicemen in that State. Although thousands of Queensland ex-servicemen require land, not 100 of them have been provided with blocks. Apparently the policy is “ Let them become so tired of waiting for land that they will go into some other field of activity that is not so profitable for this country, and thus remove themselves from our lists. We will not undertake to pay out huge sums of money for land settlement “. The honorable member for Parkes sneered at previous efforts in connexion with soldiers land settlement, but surely any government must benefit from the experience of its predecessors. I remind the honorable gentleman that during the period between the two wars a Labour government was in power in Queensland. Doubtless, it co-operated in the selection of land for soldier settlement. Some blocks at Beerburrum were selected as being suitable for fruit-growing, but they proved to be quite unsuitable for this purpose. Nevertheless, years afterwards, following an investigation of the potentialities of the land, the Queensland Labour Government repeated the performance and again decided to settle ex-servicemen there. That proves the “stupidity of the Queensland Government with regard to land settlement. The sneers of the honorable member for Parkes at anti-Labour governments recoil upon him.

The honorable gentleman said that the Treasurer (Mr. Chifley) was quite moderate in his financial statement. If he had said that the information that is contained in it is moderate, or less than moderate, I should have agreed with him, because the right honorable gentleman, has adopted his usual practice of giving as little information as possible. lt has been stated that the tax reductions will be worth £36,000,000 a year, but we have learned to analyse the tax reductions that are proposed by the Treasurer in order to ascertain their real worth. We recall the supposed reductions which were made during the last financial year. I use the word “ supposed “ deliberately. We were told that those reductions were worth £26,000,000 a year, .but, having analysed the. budget for that year, we discovered that, owing to the discontinuance of subsidy payments, a burden equivalent to that amount was imposed on the taxpayers. The tax reductions for 1947-4S were offset by the withdrawal of subsidies. Had those subsidies been continued during this financial year, the amount that would have been required by the Treasury to meet the cost of them would have” been £36,000,000, or the amount that the Treasurer is proposing to give in taxation reductions now. In effect, all that the right honorable gentleman is giving back to the people is the amount that would otherwise have been expended upon subsidies. In order to satisfy the electors to some degree, the right honorable gentleman has said that he will reduce direct taxation. The present proposals constitute an effective reduction so far as direct taxation is concerned, but the people of the Commonwealth will have to use the money that they gain from the reductions to offset the increased price of goods, the increase having been caused by the withdrawal of subsidies.

Mr Beazley:

– Was not the “No” vote a vote for a free economy?

Mr ADERMANN:

– I shall deal with that point later. The Treasurer is always loathe to give full information concerning tax collections. I am basing my argument upon last year’s collections and the admission of the right honorable gentleman that revenue Estimates are being exceeded this year. If we take the experience of last year as a guide, the tax reductions that are now proposed will be worth approximately half of the amount by which the Estimates of revenue will be exceeded. In the 1947-48 budget the Treasurer estimated that revenue would be £397,000,000 but the actual amount received was £457,000,000, or £60,000,000 more than the estimate. Of that £60,000,000 the Treasurer returned to the tax-payers of this country only £26,000,000. The Treasurer has forecast in his statement a considerable increase of customs revenue. He said that in the first six months of the financial year, the value of imports was £200,000,000 compared with £157,000,000 for the corresponding period of 194-7-48, and that receipts from income tax and the social services contribution had increased partly as the result of higher incomes and partly as the res.ult of success in overtaking arrears of unassessed and uncollected taxes. The Treasurer said also that there would be a. considerable increase of revenue from the sales tax because of increased business turnover, and from the pay-roll tax because of higher employment and wage earnings. The latter statement may be correct, but it is questionable whether business turnover has increased. Increased receipts from the sales tax are due rather to the ever-increasing prices being received for our exports. That does not mean that our exports have increased in quantity but undoubtedly that their value has soared. I have before me a table which shows little evidence of increased production. For instance, in the three-year period ended the 30th June, 1939. wheat production averaged 165,000,000 bushels a year compared with 160,000,000 bushels during each of the three years ended the 30th June, 1948. Actually, increased production has been shown only in oats and barley, whereas the production of maize, hay, sugarcane, dried grapes, wool, milk and fresh meat has decreased. I contend, therefore, that the increased revenue from the sales tax is due to increased values and not to increased production.

– I made no such statement.

Mr ADERMANN:

– The Treasurer depends on present high prices being maintained to keep up his revenue from taxes. I put it to him that he has made no provision for the day when overseas prices will recede. Can we expect, the present high prices for our exports to be maintained ? I do not believe that any one in this House would suggest that they will be. I do not think that we are going to meet the shortages affecting the primary producers by keeping down production, which is so obviously the result of the policy sponsored by this Government. The centralization of labour in the cities should cease, and labour should be allowed to flow out to help the primary producers to produce those goods for which the world is asking, and for which satisfactory prices are available.

The continued high prices for primary products have been satisfactory from one point of view, but still have not allowed landholders to restore their properties to their pre-war condition. That statement may seem anomalous, but let us analyse it. First, taxation leaves the primary producer too little out of his earnings to provide the funds necessary to restore bis property; secondly, taxation has prevented manufacturers from making, in sufficient quantities, the materials required by primary producers; and, thirdly, the primary producers’ money has decreased in value because of rising prices and he cannot afford the replacements that he requires. While the primary producer is credited with having more money than before, against that his property has deteriorated extensively and has not been restored. The fact that his money is worth less than before requires to be emphasized and re-emphasized. That decrease in the value of his money has been brought about to a great degree by the actions of this Government.

The Prime Minister (Mr. Chifley), commenting upon the decrease in money values, said that there had been large and widespread rises in incomes during the past two years. At the same time costs and prices had been rising at an increasing rate. In part, he said, this had followed from release of price and cost influences and from offsetting measures such as subsidies which sooner or later had to be allowed to pass into the economic system. I do not agree that it is based upon the release of price and cost influences, because in many ways control of prices by the Queensland Government is more effective than was control by the Australian Government. The Prime Minister’s statement is hardly borne out by that fact. He made it as an excuse for continued high costs. He tried to suggest that the State governments are responsible for increased costs which have, in fact, merely continued to increase on the same ratio as before the Australian Government handed prices control over to the States. It is only three or four months since prices control was handed over to the States, but costs were soaring extensively before the Australian Government hastily passed those controls over, without giving the States enough time to make arrangements to administer them. Then the right honorable gentleman stated that offsetting measures, such as subsidies, which sooner or later have to pass into the whole economic system, would be adopted. Obviously the monetary value of subsidies has been included in the cost of the goods purchased by the community, and the taxpayers are paying at least the equivalent of the cost of the government subsidies formerly in operation. As I pointed out earlier, the reduction of taxes of £26,000,000 that was made in 1947-48 was more than equalized by the additional amount paid by consumers during that year. I repeat that the amount of £36,000,000, by which the Government proposes to reduce taxes during the current financial year, represents the amount which the Government would have been compelled to pay had the system of commodity subsidies continued in operation. In reality, the Treasurer does not propose to give any real relief to the community because the cost of living will increase by at least the amount that the subsidy payments that have been withheld by the Government would have absorbed. As prices continue to increase, the lot of the people becomes increasingly worse, although a stable economic system could have been retained by continuing the system of price subsidy. In the course of his remarks concerning the continuing increase of the cost of living, the Treasurer stated that the present situation reflected a continuing lack of balance between the total demand and the supply of goods, and proceeded to mention two methods by which he said that the Government was endeavouring to improve the situation. He maintained that the Government was endeavouring to encourage increased production, but I should like to know of any instance in which the Government has assisted production. During the war a Labour administration entered the field of production by taking over the Coalcliff colliery. However, the result was a big financial deficit, and a smaller production of coal, and the Government was soon glad to return the colliery to private enterprise. The second method of obtaining economic stability recommended by the Treasurer is to restrain unnecessary spending On the part of the community, lt seems clear that the Government is bent upon discouraging spending by the community because it is maintaining raxes at the highest possible level so that members of the community will have nothing left to spend. In any event, I am sure that expenditure by individuals who have accumulated a little money through hard labour would benefit the community much mo’re than a continuation of the Government’s policy of squandering the huge sums which it raises in taxes. Very little time is left to me, but before I conclude I point out that there is no justification whatever for the injustice that is being done to at least one class of pensioners in the community. I refer to war widows, who have to subsist on less than the basic wage. Those women are carrying a particularly heavy burden, first, because of the loss of their breadwinner; and, secondly, because of the inadequacy of the pension rates fixed by the present Government and the increasing cost of living, which have deprived them of the opportunty to maintain themselves decently. Unless and until a war widow remarries, the pension paid to her should be at least as high as the basic wage. Surely the widows of the men who fought for this country are entitled to receive at least £he basic wage?

Mr ACTING DEPUTY SPEAKER:
Mr. Burke

– Order! The honorable member’s time has expired.

Mr BEAZLEY:
Fremantle

.- f have been interested to hear the comments made by members of the Opposition oh the increased cost of living, and [ was particularly interested in the naive observations made bv the honorable member for Maranoa (Mr. Adermann), who has just concluded his somewhat distorted explanation of the reasons for the present unsatisfactory situation. I should particularly like honorable mem bers opposite itf explain one of two matters connected with the alleged inadequacy of production. I remind the House that during the campaig’n that preceded the referendum 6n rents and prices in May last year the general argument advanced by members of the Opposition was that if we removed prices control prices would rise, but that the increased prices would stimulate production, which would, in turn, result in a decline of prices. The honorable member for Maranoa was sufficiently naive, in the course of his remarks, to refer to the ineffectiveness of Commonwealth control of prices. He went on to tell us that the prices of certain Queensland commodities were fixed too low. For that reason the Queensland primary producers objected to Commonwealth control of prices, and the people of that. State voted against its continuance at the referendum. Whilst it may have been a good thing for the growers of peanuts and pineapples in Queensland to get rid of Commonwealth control of prices, I remind the honorable member that in neighbouring States, which do not produce those commodities, the net result of the transfer of prices control from the Commonwealth to the States has been an increase of prices. If the honorable member was seeking to make nut a case against prices control of any kind he would have been more convincing if he had expressed himself as approaching the matter from the point of view of the buyer rather from that of the seller.

– Does the honorable member say that Professor Copland is back with us?

Mr BEAZLEY:

– I do not think that Professor Copland will be with members of the Opposition unless he turns like a weather-cook with them at the next general election.

In one very important respect the Government’s stabilization plans were treated with silence by members of the Australian Country party, although a year ago they were very vocal on the subject, particularly the Victorian members of that party. In a series of passionate statements several honorable members opposite have informed us that the Government was quite out of touch with the sentiments of the farmers on this matter. The honorable member for Swan (Mr. Hamilton) was not backward in making that assertion, but he found that when the matter was put to the poll the farmers were very much behind the Government in the matter of stabilization. I do not wish to make a major point of that aspect, although the Australian Country party, in directing its remarks to the need for a stabilized economy, has suggested that the present inflationary situation is desirable. Perhaps later some of its members will explain why they have been silent about this aspect. I do not think that honorable members opposite will find that the electorate is so naive on the question of prices control as they believe. In the United States of America there was a tremendous campaign against prices control. There, the Republican party came up completely against Chester Bowles, and the Office of Price Administration was the target of a great number of attacks in the United States House of Representatives. Many Democrats attacked Chester Bowles. When the actual vote on the proposal to destroy the Office of Price Administration was taken - there was a mixed vote - many members on both sides of the House voted in favour of the proposal. In general, however, the Democratic administration fought to retain the Office of Price Control. It was argued by many people - and the Republicans so argued - that when price control was destroyed it was a good thing over, anyhow. They argued in the course of the following elections that many Democrats had voted for the destruction of price control but the public ultimately assessed all these things in a remarkable way. Honorable members opposite are in the position of having to make complicated explanations of their policy. They advised the people to record a “ No” vote at the referendum on the ground that, in the absence of prices control, prices would tend to fall. They advised the public in a certain way and, since the referendum they have adopted all sorts of alibis and excuses for their stand on all aspects of government policy, but they will find that the people, either to their advantage or their disadvantage - I do not know; I am not a prophet - will regard them as mainly responsible for the destruction of prices control by the Commonwealth. It will be for honorable members opposite to explain that that is not a factor responsible for present rising costs. I do not think that they will make a very convincing case. The people will not be very impressed by their arguments. That, however, is purely a matter of contention. I leave the role of prophecy to the right honorable member for Kooyong, (Mr. M.enzies) who has made several forecasts to the electors. What we should like to hear explained during the rest of this debate is whether or not honorable members opposite realize that a great many of the products which ordinarily affect our economy - the things that we import - lie quite outside our control, that the supply of these goods has been enormously reduced, that there is a pressure on prices resulting from such shortages and that there is therefore, a valid argument for the continuance of prices control.

Mr Harrison:

– Will the honorable member explain how the 40-hour week has increased production?

Mr BEAZLEY:

– Is the 40-hour week -the result of Commonwealth legislation or of a decision of the Commonwealth

Arbitration Court? The Australian Government argued for a 40-hour week in the Arbitration Court, but the court made its decision on the facts that had been placed before it. It made its decision on what purported to be an economic analysis of the situation in Australia. I am grateful to the actor from Wentworth for having come in at the right moment. The Opposition’s pretence is always that the working week was a matter for Commonwealth legislation. It is not a matter for Commonwealth legislation at all.

Mr Harrison:

– The pupil teacher to the actor !

Mr BEAZLEY:

The next question that we should ask ourselves is, What became of the money that the farmer repaid to the mortgagee? Obviously, the answer is that the money has passed into circulation, and is causing the inflation about which the Treasurer frequently complains. It is being expended in ways that are causing th, Treasurer concern. The important point is that when conditions are on a stable economic base, the man on the land can have a reasonable mortgage with advantage.

Mr Pollard:

– What!

Mr TURNBULL:

– Yes, the man on the land can have a reasonable mortgage, in the same way as business men work on an overdraft. The fact is well recognized that if a man buys a proper tv worth £20,000, he may leave £7,000 of that amount on first mortgage. Such a system of finance enables many of the1,eople who utilize it to settle on the land. Had they been obliged to pay cash for the property without this assistance, they would not have been able fo purchase it. Honorable member? opposite will not deny that many businesses operated most satisfactorily on an overdraft, and that system of finance i? advantageous, provided the rate of interest is not too high. Surely the Treasurer will agree that such businesses can be conducted economically and most prosperously in that way in the best interest? of the borrower and lender. At present, the Commonwealth Bank is offering loans to primary producers and others, thus proving definitely that the overdraft is a sound method of financing a business. A man who has a reasonable - I do not say overwhelming - mortgage on a property i.= able +.o work the holding to advantage. However, what has been happening is that the man on the land has not been able to extend his primary-producing activities, or purchase equipment. For example, primary producers on irrigation settlements are not able to obtain, angle iron for graders, and are not able to irrigate certain country. Although such conditions prevail in many parts of Australia, the Treasurer and the Minister for Post-war Reconstruction seem to regard the position as a huge joke.

Mr SPEAKER:

– Order ! The Chair Lias been very tolerant to honorable members on both sides of the chamber in this debate on the Treasurer’s financial statement, but I am not able to see that angle iron bears any relation to the Government’s taxation proposals. However, I am willing to be convinced.

Mr TURNBULL:

– 1 shall be satistied to emphasize that the whole of the equipment belonging to a primary producer has deteriorated in value by an amount substantially greater than the amount by which he has been able to reduce his mortgage. The primary producer is not so well equipped to-day as he was some time ago.

I now desire to refer briefly to the difficulties of the housewife. The Government does not welcome such references. I am continually receiving complaints from housewives that they are unable to obtain supplies of sugar for jam.

Mr SPEAKER:

– Order ! Sugar for jam has nothing to do with taxation proposals.

Mr TURNBULL:

– Then I shall deal with the Treasurer’s financial statement itself. Honorable members will recall that when introducing the budget last year, the right honorable gentleman allocated an amount of £5,000,000 from Consolidated Revenue for the war gratuity reserve. The war gratuity will be payable to ex-servicemen in 1951, and many of the prospective recipients are realizing with regret that because of inflation, the purchasing power of their gratuity is rapidly dwindling. “When they actually receive the payment, the purchasing power of the money will be low indeed. The truth of that statement is demonstrated by the decision of the Minister for Works and Housing (Mr Lemmon) to increase the loans in respect of war service homes from £1,250 to £1,500, and, in certain instances, to £1,750. If an ex-serviceman had been able to invest his war gratuity of, say, £250, in a property two years ago, he would have had the benefit of the full value of the money. Unfortunately, the Government has withheld the money from him, and, although it can be applied to housing, the value of the £250 has practically disappeared owing to the inability of ex-servicemen to have houses built. Ex-servicemen who desire to purchase shops and other businesses are in a similar predicament. The value of their gratuity will have substantially dwindled by the time they have received and invested it. The Prime Minister has been asked on numerous occasions to authorize the payment of the war gratuity earlier, but he has refused to doso on the ground that the release of somuch money would aggravate the inflationary tendencies. But inflation now exists, and it will reduce the value of the war gratuity to approximately one-third of what it was when the certificates were first issued. Such matters have to be carefully examined, because ex-servicemen have excellent reasons for demanding that the war gratuity should be paid to them as early as possible.

– When primary production is being discussed in this House, the Minister for Commerce and Agriculture (Mr. Pollard) constantly interjects with references to wheat at a price of ls. lOd. a bushel.

Mr SPEAKER:

– Order ! The price of wheat has nothing to do with taxation.

Mr TURNBULL:

– One would think that this Government has been responsible for the present high prices that are being received for primary products, but that is not so. If this country is to benefit from the lessons of the past and from the enterprise, hard work and good management that have lod to our present prosperity, the people will have to change the Government and return to the principles of private enterprise. They must forget about socialism and go back to the proper Australian way of life.

Mr SPEAKER:

– Order ! The honorable member’s time has expired.

Mr CALWELL:
Minister for Information and Minister for Immigration · Melbourne · ALP

– This House and the hundreds of thousands of Australians who are listening in to-night have heard a dismal story from a member of the Australian Country party about the plight of the Australian farmers. I should imagine that every farmer who is listening to-night must feel ashamed at the attacks that have been made upon the efficiency, acumen and sturdy common sense of the farming community which has made them the backbone of the Aus tralian economy. The Australian primary producers have every reason to be grateful to this Government for all that has been done for it. All the talk about the withdrawal of subsidies on suits and other things will not convince the thinking people of Australia that the Govern.ment have not done a good job. Whether our people live in the country or in the cities, they are Australians and their fate is bound up together. All this silly talk about the farmers of Australia being ni an awful e plight will not convince even a member of the Australian Country party that it is so. The Australian farming community was never better off than it is to-day. Farmers may not be able to get lots of things that they want, but there are many people in Australia and other countries who cannot get all that they want.

Honorable members opposite have charged the Government with the withdrawal of subsidies. Let me tell them that since the 1st July, 1941, just six months before this Government took office, the Australian Parliament has voted no less than £126,904.000 to the farming community of Australia by way of subsidies. The dairy industry has recieved £35,809,000 and the wheat industry £35,052,000. Assistance to stock feeders has cost £16,065,000 and the superphosphates subsidy, which is still being maintained although honorable members opposite have said nothing about it, requires £16,541,000. Farmers’ debt adjustment has absorbed £7,967,000. drought relief £5,878.000, apple and pear assistance £4,217,000, jute products £3,298,000, cattle tick control £946.000. and nitrogenous fertilizers £316,000. The fruit-growers have been paid £250,000, the tobacco industry £196,000 and the gold-mining industry £150,000. Other assistance has cost £219,000. The total amount is £126,904,000. Honorable members opposite have tried to convince the farmers of Australia that this Government, which has done these things for them, is their worst enemy. They will not convince anybody of that. This Government has dealt very justly with all sections of the community. It has taxed the people in accordance with their ability to pay. There is nothing wrong with that method, which accords with the right canons of taxation. When we ore in a position to give tax remissions, we give thom.

The Prime Minister of this country won the last election although he refused to try to bribe the electors. When the Leader of the Opposition (Mr. Menzies) offered a 20 per cent, tax cut, the Leader of the Australian Country party (Mr. Fadden), in the tradition of the auctioneering profession to which the honorable member for Wimmera (Mr. Turnbull) belongs, said to the people, “ I will give you a 28 per cent, cut for your votes “. The people of Australia said, “ Our votes are not in the auction mart. We shall trust the Government to give us tax reductions when the economy of the country permits of that being done “. We have kept our promises and have reduced taxes from time to time. Since the war ended we have reduced direct taxes by £133,000,000 and indirect taxes by £36.500,000, a total of £169,500,000. That is as much as nearly three pre-war budgets put together.

Mr Turnbull:

– It is not enough.

Mr CALWELL:

– The honorable member for Wimmera makes the asinine observation, “ That is not enough “. What more could the Government do than pay its way, make its interest payments to those who loaned us money, make contributions to the rehabilitation and repatriation fund, maintain the public services of this country, which, I might add parenthetically, absorb only ls. 4d. of every £1 of taxation, pay all the other expenses which are incidental to government and pay money into the National Welfare Fund, which assures the people of Australia a better standard of living than they have ever known before in their history? The age and invalid pensioners can be proud of the fact that the Government, whilst it has made tax reductions, has progressively increased their payments until they are more than 100 per cent, greater than they were when the present Opposition was in power. The people of Australia know that our story is a good one and that we have done the right thing by all sections of the community. It is only those who are in the higher income brackets who complain. They want tax reductions of the kind that they used to get when the Opposition parties were in power. What those parties used to do I ascertained the other day when I rediscovered some valued possessions of mine, notably the booklet, The Record of the Lyons Government, which was issued with the authority of the United Australia party federal organizations. These authentic documents tell the story of bow antiLabour governments governed in the depression years. What a tragic story! On page 11 of this pink document - the cover does not represent the colour of the politics of honorable members opposite - which deals with the record of the Lyons Government from January, 1932, to January, 1933, a boast is made of how that government decided to bridge the gap of £2,781,000 between expenditure and revenue. It gave reductions of taxation, but it imposed very stringent economies upon sections of the community which were least able to bear them. It boasted that, whatever happened under the Premiers plan in the matter of the reduction of the maternity allowance, age pensions and other benefits, it limited payment of maternity allowance to cases where total income did not exceed £208 a year instead of £260 a year. The Government saved £60,000 thereby. On another page of the document the claim is made that the Government saved £1,100,000 in respect of old-age and invalid pensions. The pensions were reduced from 17s. 6d., which was the figure under the Premiers plan, to 15s. The Government took money from the pensioners, but thought of its own people. A sum of £625,956 was saved by the reduction of the pensions by 2s. 6d. a week. The re- mainder of the £1,100,000 caine from the impoverishment of pensioners. Children were required to maintain their aged parents, and in some instances pensioners were compelled to hand over their homes. On page 16 of this precious document there is a reference to the amount of money that was collected by the Scullin Government and expended, or the greater portion of it, in the year 1931-32. It is pointed out that the Scullin Government expended £250,000 upon unemployment relief at that most desperate period in our history. In its estimated expenditure for 1932-33 the Lyons Governmentexcised entirely the item for unemployment relief. The Government boasted of having saved £250,000 at the expense of the unemployed. This is a very valuable document, and I shall use it a little later on during the election campaign. Such was the standard that was set by all antiLabour governments in the depression years. Recently, Professor Hytten delivered, a speech to a conference of scientists in Hobart. The Minister for Post-war Reconstruction (Mr. Dedman) dealt with it exhaustively last night. Professor Hytten, who is the economic adviser to the Bank of New South Wales, said that we should not have a policy of full employment, and that we had to keep the spur on the workers with an unemployment rate of up to 10 per cent, to get full production.

Mr Holt:

– Why not quote his words?

Mr CALWELL:

– They have already been quoted by the Minister for Post-war Reconstruction. Professor Hytten said that in pre-war years the normal state of society demanded, and had, a 10 per cent, unemployment rate. The significance of Professor Hytten’s remarks, of course, lies in the fact that he is the economic adviser to the Bank of New South Wales, the most powerful private bank in Australia. What the Bank of New South Wales says is the policy of all the other private banks, and, of course, the policy of the Australian private banking institutions is the policy of the Liberal party and the Australian Country party. The economists of the private banks came here and wrote the speeches of honorable members opposite on the Banking Bill. The private banking institutions are providing all the money that the Liberal party is expending to-day in an endeavour to destroy not only the Labour party, but also, judging by the remarks of the honorable member for Indi (Mr. McEwen), the Australian Country party. The honorable member for Indi said in the heat of the brawl -

If immense sums of money, subscribed to the; Liberal party’s funds on the solicitation that Socialism has to be ousted . . .

That money was subscribed by the banking institutions and other powerful organizations. We see honorable members opposite now struggling on the defensive, endeavouring to prove that what the honorable member for Indi said in the heat of the argument should not be remembered, and trying to dissociate themselves from the unemployment figure stated by Professor Hytten, economic adviser to the Bank of New South Wales, as being necessary to keep capitalistic society healthy. What Professor Hytten said, in effect, was that one worker in every ten in this country, and hie dependants, must live on starvation rates in order that everybody else in the community may be comfortable. If that is capitalism, the sooner we get rid of it, and the sooner we have a society in which there is no unemployment the better it will be. No doubt we shall hear later in this debate from honorable members opposite just where they stand in this matter if they can really bring themselves to the task of facing up to the issue. Perhaps they will repudiate the Institute of Public Affairs of Victoria. Perhaps they will repudiate Mr. G. J. Coles, Sir Walter Massy-Greene, Captain C. A. M. Derham, Mr. G. H. Grimwade, Mr. H. R. Harper, Mr. W. A. Ince, Mr. F. E. Lampe, Mr. H. G. Darling, Mr. L. J. McConnan, Mr. C. N. McKay, Mr. W. E. McPherson, Mr. W. I. Potter, Mr. Herbert Taylor and the Honorable A. G. Warner, all of whom are listed as members of the council of the institute. They are all big figures in Australian finance. They do not want prices control. They want to destroy it as quickly as possible. In a booklet that they published in February, 1948, they give a series of reasons why we should not have prices control, and they argue that if we must have it, we should control it rigorously and rid ourselves of it as soon as possible. They say -

The Institute of Public Affairs, Victoria, believes that a free market with prices determined by the inter-action of demand and supply is essential to the health of the Australian economy.

Now where do honorable members opposite stand? Do they believe that or not? If they say that they disbelieve it they will get no funds from Mr. G. . J. Coles, Sir Walter MassyGreene and the other signatories of the statement. On page 18 of the booklet to which I have just referred a number of reasons are given for allowing prices to rise “ under an orderly and controlled process “, which . . would automatically follow under a more courageous and positive policy of decontrol involving the rapid removal of subsidies . .

So, even as early as February, 1948, these people were urging the removal of subsidies. The statement continues -

. the release from control of those commodities now in reasonably adequate supply, and by a method of control which would pay less strict regard to profits than the present method.

The writers are not concerned about the farmer or the consumer in the city getting a fair deal. They want a system that will not provide for any control of profits. They want to be allowed to make as much profit as they can. The statement continues -

A more rapid decontrol of prices will inevitably mean, in the near future, higher living costs.

But that does not worry them because they continue to argue in the next section of the statement that -

But with the reduction of subsidies it would bt- possible for real incomes to be maintained to some extent through corresponding reductions in taxation.

Of course, by reductions of taxation they mean reductions for big income earners and not for the people on small incomes. The booklet further states -

By draining away surplus spending power, a rise in prices would contribute to- the restoration of monetary stability.

Is it not all humbug and hypocrisy for honorable members opposite to attack the Government over rising prices and to deplore the fact that prices have risen, as they knew they would inevitably rise under State control, when their mentors and masters, all the people for whom they are the mere myrmidons, tell them that “We must drain away surplus spending .power “ - the savings that the workers have been able to accumulate in the banks because of good government. They say that a rise in prices would contribute to the restoration of monetary stability. They refer, of course, to stability in their interests, and not in the national interests. They quote the argument, which is also contained in the booklet from which I have been quoting -

Sower or later Australia will have to accept the need for a higher level of values and prices to restore monetary equilibrium. The longer we delay in allowing this unavoidable rise to take place the longer will be the duration of the transition to a normal peace-time economy. . .

No wonder the Premier of Victoria, Mr. Holloway, said that controls had to go by March. What he said was in accordance with the dictum laid down by his masters. Honorable members of the Liberal and Australian Country parties in this House got into a flutter when he made that statement, and even the press told Mr. Hollway not to be so foolish as to show his hand, and not to think of removing controls so quickly. Of course, there is a very bitter political row on in Victoria between members of the Australian Country party and the Liberal party.

Mr HARRISON:

– What has that to ti” with taxation?

Mr CALWELL:

– It is all involved in taxation. That row is so bitter, possibly because some members of the Australian Country party approve of this scheme of taxation reduction that the Government is introducing, whereas the bosses of the Liberal party want a reduction of taxation on large incomes, and on large incomes only. When the people of Australia come to regard the political situation, when they are asked to choose their next Government, they will have to ask themselves whether they will trust a united party that knows what it wants’ and that will give them reductions of taxation when circumstances permit, or a disunited political combination that is even divided in its own parties and would be unable to safeguard the interests of the Australian economy.

The Prime Minister argued very ably in favour of the maintenance of the present system of taxation, and I believe that the Australian people were convinced by what he said. The press of Australia has not been unanimously hostile to the proposals that the Government has introduced. Smith’s Weekly, which usually has very little to say in favour of this

Government, stated in an article it published on the 19th February last -

Chifley has a bulging Treasury. His overseas balances arc beyond anything Australia ever recorded. He has converted loans at low interest rates. ‘J he States, our most lavish borrowers in the past, can now comfortably service their debts. In public finance we are on top of the world. . .

But he’s the first Labour Treasurer who hasn’t been a spendthrift. Usually a Labour government has taken office after a tight-wad government has straightened out finances and accumulated a surplus.

Now we are being attacked by honorable members opposite because we have a surplus. The Leader of the Australian Country party said that the fault of the Government is that it does not follow orthodox methods of finance and that it budgets for deficits and produces surpluses. When honorable members opposite were in office they used to budget for surpluses and end up with deficits. It is a good thing for this country that somebody at last has started to budget for deficits and has produced surpluses. The Smith’s Weekly article continues -

There has been no lack of money or employment in the present term of office. Chifley, nonetheless, has skimmed off the cream which the prodigal would have liked to lap up.

Result, he has in election year what no other Labour Premier ever possessed in living memory. He’s got oodles of our money . . .

Well, it’s pretty long-headed and long-sighted politics. And nobody can truthfully say it’s bad housekeeping. . . .

Mr. Chifley is the first Labour Prime Minister who has handled office like a capitalist. It’s a pretty neat trick for a socialist.

I could also read from the Melbourne Age of the 17th February last and from the Sydney Sunday Sun of the 13th February last.

The Sunday Sun on the 13th February said -

When the new cut does operate, a man, with a wife and two children, earning up to £500 a year, will pay much less than he paid in combined Commonwealth and State taxes in 1 038.

How did the Lyons Government decide to bridge the gap of £2,781,000?: -

The next part of the paragraph, which the Minister did not mention, is very significant, and I shall read it to honorable members. It is as follows: -

That last item contrasts singularly with what has happened under this Government. When the Minister quotes anything, he should quote the whole of it. We now come to the amount of £240,000 mentioned by the Minister. The only item of £240,000 which

I can find appears under the heading “ Public Service Salaries and Wages. Reduction of £8 per annum of salaries of all employees due to the fall in the cost of living.” Finally, there is the item of £l,S00,000 in respect of invalid and oldage pensions. Where, I ask, is there anything about a reduction of unemployment relief? More nonsense has been talked, and more mendacity practised, in regard to the record of the depression years than about anything else that comes up for discussion in this House. The Government is claiming that all the prosperity, or what passes for prosperity, of the present time is due solely to itself. At the same time, it insists that the whole of the depression was due to the Government which was in power at that time. Nothing could be farther from the truth, and every honorable member on the other side of the House knows the statement to be a lie. In 1932-33, the Government that had done the things which have been so roundly condemned by honorable members opposite was returned to power by an overwhelming majority, because the people realized that it had done the best possible in a very difficult situation. As honorable members know, my husband died while still in office, after he had been Prime Minister for seven years, and after a very severe struggle to bring the country out of a depression. Let it not be forgotten that, with the exception of Sweden, Australia was the first country in the world to emerge from the depression. Those who were familiar with economic conditions throughout the world expressed confidence in the methods applied by the Government of that day. I do not claim that those methods would be suitable for present conditions, but they were the methods which succeeded in those days, and that should not be forgotten.

Just as the story of the depression has been misrepresented from one end of Australia to the other, so the story of rising prices is being misrepresented now, and will be further misrepresented as the general election approaches. We hear, day after day, that the rising cost of living is due to the fact that the Commonwealth has vacated the field of prices control, and we are further asked to believe that it bad no option but to do so.

That is not in accordance with the facts. I believe that that assertion was yesterday described as mere nonsense. It is more than mere nonsense; it is mendacity. The action of the Government in that respect was one of the most glaring examples of political dishonesty that I can remember. During the referendum campaign, the case against the Government’s proposals was put fairly and squarely bv those on this side of the political fence. It was shown that the question was one merely of whether prices control should continue in the hands of the Commonwealth instead of reverting to the States, where it had always previously resided. The people accepted the view of the Opposition parties and overwhelmingly rejected the Government’s proposals. Before the referendum, the Government had received an assurance from this side of the House that the Opposition would support any legislation which it cared to bring in to prolong the operation of the defence powers of the Commonwealth. In spite of that assurance, the Government, as soon as the result of the referendum was known, announced its intention to relinquish prices control almost immediately. In other words, it did all in its power to precipitate the chaos which the Government said would result from the transfer of prices control from the Commonwealth to the States; and if such action cannot be described as political chicanery I do not know what can. There has been talk of subsidies. I have heard it said on behalf of the Government that the people were warned that if they voted against the Government’s referendum proposals price subsidies would be withdrawn.

Mr Russell:

– So they were.

Dame ENID LYONS:

– Yes, and the highwayman warns his victim that he will be shot if he does not hand over his money. The Government made the same kind of threat in regard to prices control, and because the people ignored the threat, the Government has withdrawn subsidies. I repeat that I cannot imagine anything more politically dishonorable. Some honorable members opposite claim that the Government had no power to continue the payment of subsidies after the referendum, but the fact remains that it has continued to pay them on many items.

Immediately after the referendum, the Government announced that it would continue to pay subsidies on tea and butter, because those two items were staples in the diet of the Australian working man. At the same time, the Government announced that it would withdraw the subsidy on whole milk. In whose diet is whole milk a staple if not in that of every child throughout the Commonwealth? Ha ve not the children the same rights as the working man? It ill becomes the Government to speak in such terms, and yet profess to be the friend of the under-dog. I have never before accused the Government of insincerity, but on this matter I cannot do otherwise. I cannot believe that the withdrawal of subsidies was anything but a political move. The Government withdrew the subsidies because it knew that the tendency of prices to rise, which had been in evidence for some years, was likely to continue, and that those who were charged with the responsibility of controlling prices would find it more and more difficult to do so. The Government believed that it was a heaven-sent opportunity to get out quickly before prices rose still more, and that is what it did. If the expected rise takes place, the Government must accept its full share of the responsibility because of the indecent haste with which it withdrew from the field - I could almost say in the hope that its predictions of chaos would be fulfilled. Bad weather prevented me from being in the House this afternoon, but I understand that figures were cited to show the incidence of rising prices as affected by the withdrawal of subsidies. It was shown that the rise would bear most heavily upon those in receipt of the lowest incomes. The rise in the cost of living is bearing hardest upon those with families to support. The bachelor of to-day is well off. No one denies that. If he is on the basic wage, he receives an income designed to support a man, his wife and a child, but he is not affected by the high cost of children’s clothing, for instance. He is not affected by the rising cost of woollen goods, as is the man who has to clothe his wife and children. Price increases have taken place on all items which were affected by the withdrawal of subsidies. Last year, a subsidy of £2,702,000 was paid on potatoes.’

This year it is down to £1,250,000 and will ultimately be withdrawn altogether. Which section of the community eats most potatoes? It does not comprise those who dine at Princes or other expensive restaurants in Sydney and elsewhere, or in the Parliamentary Refreshment Rooms; it consists of those who have to make their budgets spin out, and aboveall, those with children. The subsidy on tea remains as it was, for the reason that I have stated, whilst that on whole milk is disappearing and will soon he withdrawn altogether. I suggest to any one who believes that this is not a serious matter that he should consider it as applied to his own household. I recently visited an institution in Melbourne that cares for foundling children. The milk bill of that institution for last month alone was £141, so that the effect of the rise in prices on that institution may well be imagined. Of course it affects every person in the community, but mostly mothers who are trying to rear their children, and people who care for unwanted children. The subsidy on wool is to be withdrawn completely. Again, family units use wool more than does any other section of the community. Last year the subsidy on wool was £9,226,000, whilst this year it will be £500,000. Many people in this country are wondering about the’ supply of wool next year. It is becoming increasingly difficult to buy knitting wool because the more provident people in the community have already bought up most of the available supplies to do their knitting before the price rises further. This Government must take a large share of the responsibility for the rise of the price of that commodity. I protest once’ more that two main lines of talk that this Government has indulged in over’ the last few years, and will indulge in during the next few months, are completely without foundation. The first is that the depression was wholly due to governments on this side of politics, that the sufferings of the depression years were laughed at by those governments at that’ time, and that the prosperity which foi-‘ lowed the war, in this and every othercountry, which managed to escape1 the direct physical effects of war, was* due to the governments in power. Whilst’ that was inevitable, the present Government had the good fortune to be able to hoodwink the mass of the people into believing that that prosperity was of its making. In fact the present Labour Government has done a great deal to wreck the whole situation, and, more than any other single factor, has been responsible during the last few months, through the withdrawal of subsidies, for prices rising steeply in this country.

Mr DALY:
Martin

.- Later I shall have a fair amount to say in relation to the crocodile tears that were shed by the honorable member for Darwin (Dame Enid Lyons) and also about how members of the Opposition succeeded in leading the people of Australia to adopt a wrong attitude in connexion with the rents and prices referendum. At this stage, however, I shall address my remarks to the proposed substantial reductions of taxation which were outlined in the financial statement presented to the House by the Prime Minister (Mr. Chifley) a few days ago. As honorable members and the people of Australia are aware, reductions totalling £36,500,000 were announced. That represents a reduction of 23 per cent, of the total amount at present paid by individuals. In addition, entertainments tax concessions for the remainder of this year will total about £50,000. This is just another instalment of the Government’s policy of meeting the needs of the community, wherever possible, by reducing taxes substantially. It is interesting to note-

Mr Gullett:

– Mr. Deputy Speaker, I draw attention to the state of the House. There are only six Government members present.

Mr DEPUTY SPEAKER:

– There are more than that present.

Mr Gullett:

– There are seven present, to be exact

Mr DALY:

– That is a peculiar statement for the honorable member for Henty (Mr. Gullett) to make when there are only two Liberal members present. Is it right, Mr. Deputy Speaker, for this action to be taken when only two Liberal members are present?

Mr McBride:

– Is it right that we should have to suffer this when there are only seven Government members present? [Quorum formed.)

Mr DALY:

– Income tax concessions already approved by this Government total over £176,000,000, inclusive of all items. In direct taxation alone, concessions totalling £133,000,000 have been approved since 1942. The reductions now proposed range between 42 per cent, and 4 per cent. The major reduction, of course, will benefit the lower and middle income groups with dependants, whilst the reduction of 4 per cent, is a token gesture to that struggling section of the community that exists on an income of about £15,000 a year! In respect of the average family man, substantial remissions of taxation are proposed.

Having addressed myself to those fundamentals of the financial statement, I shall proceed to deal with a few of the hypocritical remarks that were made a few moments ago by the honorable member for Darwin with relation to the unsavoury record of the Lyons Government. No Australian can look with pride at the records of Liberal governments in this country in days gone by, and it is to the everlasting shame of the Lyons Administration that thousands of Australians were unable to get anything better than food relief during the greater part of the time that that Government occupied the treasury bench of this country. The honorable member defended that system to-night, and also defended the government that capitulated to the banking interests of this country and forced thousands of Australians to face the utmost economic humiliation and servitude imaginable. Even in 1940, after the commencement of the war, the Leader of the Opposition (Mr. Menzies) said that there were only 250,000 people unemployed in this country. According w tue Australian Worker of the 22nd January, 1936, there were 350,000 jobless workers in Australia at that date. A little later, in 1940, there were in New South “Wales alone 39,000 food recipients who, with their dependants, totalled 100,000 persons. That is the state of affairs about which the honorable member for Darwin is so proud. That is what ‘the Government that she then supported - the Lyons Government - forced upon the people of Australia. That is what the Lyons Government called the way back to prosperity. That is the grand way in which it went about the pursuit of that ideal. The great majority of the people who suffered at that time will derive no satisfaction to-day from the thought that in the ranks of the Liberal party there are still people who, if that state of affairs existed to-day, would continue to support the inflationists and the capitalist and banking institutions and do everything they could to ensure that the interests which they represent in this Parliament would continue to receive their unjust dues. Right throughout the tragic years from 1930 to 1940 the people continued to be oppressed. We have constantly to refer back to that period in order to bring home to the young generation of Australia the fact that, until the Curtin and Chifley Labour Governments came into office, those who controlled the treasury bench thought little of the welfare of the great majority of Australians and much about the profits that accrued to those who provided the financial backing which enabled them to continue in office. On the 1st September, 1934, when thousands of people were unemployed, and plenty of money was a vailable to the Government if it wanted to use it, The Clarion, a well-known Melbourne newspaper, published the following headlines : -

So this is prosperity!

Two Australian mothers and eleven defenceless children thrown into the streets.

Family sleeps in lane - Mother nurses her nick child.

That is what happened under the administration of a government over the demise of which the honorable member for Darwin wept to-night. The same newspaper also reported the eviction of a family at Richmond and how a man who had been cheered in 1914 was evicted from his war service home because he could not meet the payments due. I take no pride in the fact that any government of this country allowed such a state of affairs to continue. In a stirring address to the people, the Minister for Information (Mr. Calwell) to-night fully outlined the failures of the Lyons Government and the poor effort it made to preserve for thousands of people in this country the inherent right to work for a home and security. In contrast to the Lyons Government there is in office in Australia to-day a government which, despite statements to the contrary, has brought to this country a measure of prosperity that it has never previously enjoyed. The Government’s attitude in regard to full employment and it9 solicitude for the general welfare of the people as demonstrated by its social security legislation, have received the commendation of Australia and ensure its return to office after the next elections.

I propose now to deal with some of the statements made by the honorable member for Darwin and other Opposition members about the recent rents and prices referendum. It has been claimed that the Government acted with undue haste in carrying out the direction of the electors to vacate the price fixation field and hand it back to the States. The Government would have been severely criticized by honorable members opposite had it not done immediately what the electors instructed it to do. We were told that the States had adequate administrative machinery to enable them to handle prices control. In order to refresh the memory of my friends opposite I propose to quote from the advertisements issued by them as part of their propaganda campaign to defeat the Government’s proposal at the referendum that the Commonwealth should be given permanent power to control rents and prices. My quotations will give the people an opportunity to judge how hypocritical honorable members opposite were in this matter. Here is an advertisement which appeared in the Sydney Daily Telegraph under the heading “ Chifley tries Political Blackmail “-

Misleading the Housewife:

From the platform and in the press Mr. Chifley is telling the women of Australia that a “ No “ majority will mean the end of price control.

That is false! If the present Commonwealth legislation is not extended, prices will be controlled by the State Governments - and controlled far more effectively than they are at present.

How unsound that statement has proved to be. That is the sort of false propaganda that was sent out to the people of

Australia by the honorable member for Darwin and tho.se who support her. The advertisement continues -

Misleading the Householder:

Mr. Chifley has sanctioned press and radio announcements which state that if Australia votes “ No “ rents will soar and thousands of families may be faced with eviction.

In New South Wales to-day evictions are still proceeding -

Every State in the Commonwealth has fair rrents legislation. Rents will continue to be controlled, no matter where you live.

The culminating false statement occurs in the last three lines of the advertisement which read -

Subsidies will not bc withdrawn. Price controls will not disappear. Rents controls will not be lifted. Vote “No”.

A similar advertisement was published throughout the length and breadth of Australia by the Liberal party of Australia, the Australian Constitutional League and other bodies interested in preserving for their supporters the profits that they derive from industry and in maintaining inflationary prices at the expense of wage-earners and those in receipt of fixed incomes and pensions. What Australian would deny that to-day honorable members opposite are only shedding crocodile tears over the distress that they have brought about in the community by their false statements? It is downright hypocrisy for them to tell the people that this Government is responsible for what has happened. To-day we face a rising spiral of prices which is directly attributable to the chaotic state of affairs brought about by State control of prices and the abandonment of the measures introduced by this Government to stabilize prices. I could continue at great length in a recital of the misstatements and falsities contained in the propaganda disseminated by honorable members apposite, but I shall not. do so. I shall content myself with dealing a little further with their statements relating to the removal of subsidies. The Government told the people that if the referendum proposals were defeated subsidies could not be continued for the simple reason that it would not be in a position efficiently to police the payment of subsidies unless it was able to maintain a centralized Commonwealth control of prices. In accordance with that statement, following upon the defeat of the referendum, the Government had no alternative but to lift the subsidies on many items. It continues to pay subsidies in respect of tea, butter and superphosphate. If the subsidies on butter and tea were lifted, as the honorable member for Darwin and other honorable members opposite appear to desire, the price of butter would rise by from 7d. to ls. per lb., and the price of tea would rise so high that tea would be automatically rationed to the great majority ofAustralians because they could not affordto buy it.

I have endeavoured to answer some of the statements made by honorable members opposite who have attempted to escape their responsibility for the tragic state of affairs that they have brought about in this country as the result of their advice to the people to record a “ No “ vote in connexion with the rents and prices referendum. I was impressed by some of the statements made by the Leader of the Opposition during the course of this debate. I particularly noted his comments in regard to the allimportant matter of the inherent right of all Australians, and, indeed, of all the people of the world, to work and to enjoy the benefits of full employment on which the security of their homes and the nation and the general welfare of their families depend. I was greatly interested in those comments, in view of the fact which I mentioned earlier, that under the Lyons Government 350,000 people were unemployed. At that time, for instance, 1,600 men sought a job in a circus at a wage of a few pounds a week. Bearing in mind the policy of the Government, I could not but view with trepidation the statement by the Leader of the Opposition (Mr. Menzies) that full employment is not in the best interests of the country. Quite openly he advocated that we should “ stand over “ the worker, and spur him on. In order to enable the people to understand clearly the views expressed by the Leader of the Opposition on this important subject, I take the following extracts from his speech : -

Full employment at the present time is the inevitable consequence of certain economic facts, beginning with one factor - our enormous export income for which no government in Australia can claim credit, but which world circumstances have provided - and coming down at the other end to the great internal demand for goods and services. Full employment is inevitable as long as those conditions exist. Full employment does, unless certain steps are taken, lead inevitably to reduced productive effort per head of working population. The spur to work is absent because there are plenty of jobs ahead. It is only human nature that we do not get the maximum production effort per head when the pressure on a worker to keep his job has been removed by economic circumstances.

The right honorable gentleman directly advocated a. return to conditions such as those to which I have already referred when, in one instance, 1,600 men sought a job in a circus. Dealing with incentive payments, the Leader of the Opposition urged that some spur should be applied to the workers, that such an incentive should be provided, as Professor Hytten recently advocated, by always having a pool of unemployed. That would mean a recurrence of the conditions under which hundreds of men were forced daily to stand outside factory gates clamouring for work, whilst employers had the power to give or deny to them the means of earning a bare subsistence. The Opposition parties thus advocate conditions which would degrade our manhood and womanhood. However, the Government is implementing its policy of full employment. It is applying a principle which has been written into the Charter of the United Nations largely as the result of the advocacy of Australia’s representative at the United Nations organization. That Charter provides for full employment in order to give security to the peoples of the world. I hope that the people of this country will realize fully the meaning of the economic policy advocated by the Opposition parties in the course of this debate. I am confident that the workers are in no doubt as to what they could expect if those parties were returned to office. A similar policy was enunciated by the anti-Labour candidate during the by-election campaign in the Fremantle electorate, and had the result of swinging many thousands of votes in favour of the honorable member for Fremantle (Mr. Beazley). Our people as a whole believe that every person in the community who is able and willing to work should be provided with, a job. “With respect to the provision of incentive payments, I agree with some of thestatements which have been made by honorable members opposite. A largesection of the workers remember to their sorrow that in pre-war years, when incentive payments were made available to them, they worked hard, but when they had built up surplus stocks they were thrown out of employment until those stocks had been disposed of. Thus, the benefit which they derived from incentive payments was completely nullified. Consequently, prejudice against the principle of incentive payments exists among a considerable body of workers. Something should be said about employers who virtually go on strike because they object to the present rates of taxation on their profits.. However, we never hear members of the Opposition criticizing employers who, for that reason, are operating factorial at only a percentage of their capacity.

As has been stated in this debate, many factors must be considered in dealing with the problem of shortages of goods and. the need for increasing production. That problem cannot be explained simply by saying that the workers must increase their production. Figures presented to the House reveal that in recent years the workers have substantially increased their productive output. The real cause of the problem is that the progressive and enlightened policy of the Government has resulted in high rates of wages being paid to the workers and has increased the purchasing power of the community to such a degree that sufficient man-power is not available to meet the community’s demand for goods. However, that difficulty is gradually being overcome, and I trust that ultimately it will be completely surmounted as the result of the Government’s immigration policy, under which thousands of new settlers and skilled tradesmen are being brought to this country as speedily as possible. That accretion to our man-power is being reflected in increased production. Although the progress made in that respect up to date may not be so great as we should like it to be, the fact remains that production in both primary and secondary industries to-day substantially exceeds the volume of production achieved in 393S-39. The tremendous increase of the purchasing power of the community and the consequent greater demand for goods is reflected in the cash resources held by the public. For instance, notes in the hands of the public increased from £33,000,000 in June, 1939, to £173,000,000 in June, 194S. During the same period, public deposits with the Commonwealth Bank and, ‘all trading banks increased from £334,000,000 to £772,000,000, and total savings bank deposits increased from £246,000,000 to £6S1,000,000. Those savings are now stored up and will be used by the public for the purchase of goods as soon as they are produced in adequate quantities. On the other hand, we can congratulate ourselves that to-day no person is obliged to walk the streets looking for work. All persons able and willing to work are in regular employment and are earning high wages. They already possess the wherewithal to buy the goods

I hey require when production is sufficient 10 meet the demand. To-day, any worker who has the opportunity to purchase, or rent, a home can afford to do so, whereas prior to the outbreak of the last war thousands of persons were forced to live with relatives because they could not afford to live elsewhere. Consequently, the problem confronting the community is not simply under-production but rather the inability of our limited population to produce goods in sufficient quantity to satisfy the increased purchasing power of the community.

The Opposition parties criticized the introduction of the 40-hour week. However, those .parties have never found the time opportune to reduce working hours, or to ‘provide better working conditions for the workers. When men worked for as long as 70 hours a week in this country, anti-Labour parties merely adopted the attitude that the time was not opportune to reduce it. All of us recall the struggle which the workers waged for the reduction of the working week to 48 hours and, later, to 44 hours, whilst in recent years they have had to fight strenuously for the introduction of a 40-hour week. It is only right that the workers should benefit in that way as the result of the intro- duction of modern industrial machinery. I am proud to be a member of the Australian Labour party, which has assisted greatly to bring about such a condition of affairs in Australia. I believe that there will be a continuous and progressive policy in all the matters that mean so much to our people. Although, possibly, we do not live in the ideal State and many things remain to be done, I can truthfully say, from my experience as. a representative of the Government at the meetings of the International Labour Organization at Geneva, that we have gone a long way along the road to social and economic security for the people. I look forward to a continuation of the able Government which the people enjoy today, and which will ultimately make us the greatest nation, industrially and politically, in the world.

Mr HAMILTON:
Swan

.- We are discussing the financial statement, which purports to give reductions of tax amounting to £36,500,000 to the people of Australia. Several speakers have pointed out that under these proposals, the small wage-earner with a family will receive a reduction of tax amounting to a paltry few pence a week, whereas a person in receipt of a large income will receive a substantial reduction. The Government has adopted the age-old practice of quoting reductions on a percentage basis. A reduction of a few pence or even a few shillings a week will ultimately be of no benefit whatever to the average worker, because, as honorable members on this side of the chamber have pointed out, the continual increase of the cost of living completely offsets any slight reduction of tax that he may receive. I am of opinion that this Government, which purports to represent the working man mainly, would have been more honest, and would have better served the interests of the people, had the Treasurer (Mr. Chifley) removed some of the burdens of indirect taxation that are borne by the community. If working men really got down to tin-tacks and calculated the amount that they pay weekly in indirect taxation, I am afraid that a vast, majority of them would be staggered I shall not waste the time of the House by repeating what has already been said about the proposed tax reductions. 1 desire to make some observations on comments by honorable members in the course <>f this debate. The Minister for Postwar Reconstruction (Mr. Dedman) remarked last night that the Leader of the Australian Country party (Mr. Fadden) had implied that the Treasurer was a thief. Even though the Chair called upon the Minister to withdraw that statement, he did not apologize for having made it. Therefore, I desire to assure the House and the country that the Leader of the Australian Country party made no such implication, and that no such idea had even entered his mind. Since T have been a member of this House, I have heard the Leader of the Australian Country party invariably express the highest regard for the honesty and integrity of the Treasurer. Any member of this House who states that the Lender of the Australian Country party lias referred to the right honorable gentleman as a thief, should be downright ashamed of himself. The Minister, in view of the position that he occupies in another sphere, should certainly be ashamed of himself.

The Minister for Post-war Reconstruction also dealt with the subject of farm mortgages between 1920 and 1940. He stated that 39 farms, totalling 50,000 acres, had £26,000 in registered mortgages against them in 1920 and £91,000 against them in 1940, but that since a Labour government had been in office those mortgages had been reduced to £18,000, as a. result of Labour Administration. Did any one ever hear such utter rot? The fact that such statements were made by a Minister of the Crown is proof positive to the people of the mess into which we are drifting under such an administration. I recall the time when the Minister was a member of the Australian Country party, and endeavoured to secure election to Parliament under that party’s banner. I think that, f am correct in saying that on that occasion he lost his deposit. Indeed, I am glad that he lost his deposit, because such a. man would not be of any value to the Australian Country party. The Minister claimed to possess some knowledge about farming. Of course, the increase of the mortgages to which he referred was the natural corollary of improvements to farms between 1920 and 1940 coupled with low prices. As soon as prices began to increase - and this Government cannot take any credit for that recovery, because the increases were the result of the inexorable law of supply and demand - the primary producers naturally reduced their indebtedness to an amount that would enable them to “ play safe “. As the Leader of the Australian Country party has stated, the present position whereby the Government is able to make a reduction of taxes amounting to £36,500,000, represents bad budgeting from start to finish. It is not to be wondered at, when such persons as the Minister for Post-war Reconstruction are administering the affairs of the country.

At the outset of his financial statement, the Treasurer (Mr. Chifley) said -

From the figures of revenue during the first seven months of 1948-40 which have already been published, it is clear that the budget estimate, which was £493,000,000 for the full year, will be exceeded. Collections of customs duty have been high because of the strong inflow of goods from abroad, notably from the United Kingdom. Total imports for the six months ended 31st December, 1948, were £200,000,000 as compared with £157,000,000 for the same period 1947-48. This reflects, on the one hand, the strength of demand within Australia for all types of goods and, on the other hand, a degree of recovery in industrial production overseas. It is also likely that the estimates of income tax and social services contribution will bc exceeded, this being a consequence partly of higher incomes and partly of further success in overtaking arrears of unassessed and uncollected taxation.

According to a report published in the press recently uncollected taxes amount to only 7 per cent., and, in his statement to the House, the Treasurer said that the Taxation Branch had practically caught up with uncollected taxes. To show that he has honoured his promises to the electors, the Treasurer said -

Since the war ended the Government has sought progressively to ease the burden of taxation made necessary by the war. At the same time, it has eliminated the huge gap between revenue and expenditure and has built up reserves, such as the National Welfare Fund and the War Gratuity Reserve, against future expenditures.

Here we have a Treasurer, not living just from day to day and seeing only as far as his nose, but looking ahead and planning for the future welfare of the people of Australia. He has earned the applause and commendation of world leaders for the manner in which he has conducted the economic and financial affairs of the Commonwealth.

I shall refer now to a subject that has been mentioned in almost every speech in this debate - the rents and prices referendum. In May of last year, the people of this country were asked to write into the Australian Constitution a provision conferring upon the Australian Government power to control rents, prices, and charges. The Labour Government was accused of seeking permanent powers for the Commonwealth. Of course it was. We did not disguise that fact. It is not possible to obtain constitutional power for a limited period. I have discussed this matter with lawyers, and although several of them have said that they would not like to give judgment on the matter, others have asserted that the people of the Commonwealth cannot be asked, by way of referendum, to confer upon the Commonwealth powers for a limited period only. Therefore, the intention of the Government was that power to control prices, rents and charges should be written into the Constitution permanently. But that power would not have been used permanently, and it is in that connexion that the Opposition confused and misled the Australian people. That power, if granted, would have been used only in extraordinary times such as the present. The Commonwealth had certain defence powers under the Constitution, but it does not declare war every year. That is a reserve power to be used only when the situation warrants its use. Control over prices, rents and charges would also have been a reserve power to be used in times of economic crisis such as that through which we. are now passing. As I have said, that is where the Opposition misled the people of Australia. The referendum campaign of the Opposition parties was vicious. The Australian people were told that prices control should revert to the States. Here is a typical “ No “ advertisement which appeared in the Melbourne Argus on Saturday, the 1st May, 1948-

This is still the issue - Canberra Control or State Control. Keep your controls where you can watch them - in the State.

That advertisement was sponsored by the Liberal party and authorized by Mr. J. V. McConnell, of 108 Queen-street, Melbourne. On the 12th May, in the same newspaper, the following advertisement was published : -

The Hollway Government guarantees full and efficient rent and price control in Victoria. Hollway not only promises, he acts.

On the 17th May, again in the Melbourne Argus, the following advertisement appeared : -

Don’t be fooled by Mr. Chifley. Bents and prices will not increase. Your State Government will keep rents and prices down.

That, too, was a Liberal party advertisement. Those advertisements are typical samples of the misleading information published by the Opposition parties in their endeavour to have the people of Australia believe that Commonwealth control meant regimentation, filling in forms and other inconveniences. They claimed that prices control was being exercised by Canberra dictators ; but I cannot see any difference between a Canberra dictator administering prices control, and six State dictators in the State capitals administering prices control for the States. Yet Labour’s political opponents endeavoured to convince the people of the Commonwealth that regimentation, form-filling and so on would disappear as soon as controls were taken away from Canberra. That, of course, was entirely untrue.

The defeat of the referendum was hailed as a great victory for the Liberal party and the Australian Country party. Let me give an illustration of how it worked out in Tasmania. In that State, the “ Yes “ vote was 42,779 and the “ No “ vote was 79,128. But in the elections that book place only two months after the referendum, when terrific obstacles faced Tasmania’s Labour Government which was opposed by a high-pressure campaign, some of which emanated, from Victoria and included paid “ doorknockers “ and organizers, among whom were some members of the Liberal party, and when federal issues were thrown into the ring, the vote for the Labour party’s candidates aggregated 69,000, compared with the previous “ Yes “ vote of 42,779. The vote for the Liberal party’s candidates totalled 55,000 compared with a “No” vote of 79,128. Those figures show that not all those who voted “ No “ were supporters of the Liberal party, and the sooner the Opposition realizes that fact the better for it.

After going around my electorate twice since the referendum was held, talking to people in the streets and on farms, in shops and in their homes, I have come to the conclusion that the electors now realize who it was that led them up the garden path during the referendum campaign. They are now saying that they made a mistake in voting “No”. One man, who is a member of the Liberal party, said to me, “ I should cut my first finger off for voting “No.” The people realize now that they were misled by the Opposition parties, and if another referendum on the same issue were held during the next three or four months the majority of the people would vote “ Yes “ instead of “No”.

Mr Gullett:

– Why does not the Government arrange another referendum?

Mr DUTHIE:

– I have urged the Government to hold, another referendum but the Prime Minister has decided against it. The Opposition fought the continuance of prices control on a federal basis because it knew that, by the use of its powerful propaganda machine and the expenditure of thousands of pounds, it could frighten the people into voting “No”. The Opposition, and those who control it from behind the scenes, desired to defeat the Government’s request for permanent powers to control prices, so that they could produce inflationary chaos of such seriousness that, when the next general elections were held they could blame the Government for theprice rises that resulted, from a “No” vote. Of course. that plan has. “ boomeranged “. When the referendum was held price levels showed that Australia, was the second most fortunate country in. the world. Between 1939 and 1947 prices in various countries rose as follows : - New Zealand, 34 per cent.; Australia, 36 percent. ; Great Britain, 37 per cent. ; South

Africa, 39 per cent; United States of America, 90 per cent.; Poland, 15,000. The rise in China between the years 1939 and 1945 was 3,500,000 per cent. At that stage Australia’s record in keeping price rises and inflation in check was second only to that of New Zealand, but the result of the referendum has so altered the position that to-day the prices in Australia have risen 46 per cent, above the pre-war level, an increase of 10 per cent, since the referendum was held.

The States told, the people that they could effectively control prices. That was a misleading statement. It has now been proven that six prices commissioners cannot possibly administer the great machinery of prices control more effectively than one commissioner with Commonwealthwide powers can. If prices continue to rise, as they have done in America, the Australian people’s savings, amounting to £68S,000,000 at present, will gradually be absorbed to meet higher costs. That would be a tragedy. I understand that the savings of the American people have been practically all absorbed by rising prices. That means that their reserves have gone. So far, in Australia, those reserves are untouched, but should any State abandon prices control, or even limit it unduly, the resultant inflation in the next eighteen months could absorb the great bulk of the savings of our people.

I believe that by attempting to lay on the Australian Government the blame for the price increases that have occurred since the referendum, the Opposition parties hope to evade resvonsibility for the sordid story that they used to deceive the .people during the referendum campaign.

Mr Gullett:

– Then whose fault are the price rises? Are they the fault of the Opposition?

Mr DUTHIE:

– The Government subsidized the ‘prices of consumer goods produced in Australia during the war years and up to 1947. The Prime Minister told the people quite plainly that the Government could not continue to subsidize goods over whose prices it had ceased to have control. The Government could not continue to finance the difference between consumer prices fixed by the States and the cost of production.

Had it done so it would, while having no control over consumer prices, have had to pour out millions of pounds in subsidies to finance the gap, a policy that would, of course, mean higher taxation on the whole community. That was the reason why the Prime Minister had to say that, if the Government’s proposals were defeated at the referendum, subsidies would have to be discontinued. It was just plain sound financial sense, and yet the Opposition to-day alleges that the Prime Minister, when be discontinued subsidies, acted in a fit of obstinacy. We, on this side of the House, who know him personally know that it is not in his nature to be spiteful. The discontinuance of subsidies was a rational move to safeguard the country’s finances. The purpose of the subsidies was to keep the cost of certain articles to the consumer within a reasonable limit, commensurate with the level of wages and salaries. Before the war, bounties were paid to both primary and secondary producers in Australia. There is a distinction, however, between a bounty and a subsidy. Strictly speaking, a bounty is not a price subsidy. A price subsidy i3 designed to keep the prices of certain articles down to a reasonable level, whereas a bounty is a grant to a primary or secondary producer to help him in a time of financial difficulty. Before the war, when producers were not receiving payable prices for their goods, governments gave them bounties. Sometimes those bounties took the form of a straightout grant, as for instance a drought relief grant, or a hail grant, such as is paid in Tasmania to apple-growers whose crops have been destroyed or damaged by hail. The Opposition now says that subsidies were paid long before the war. That is not so. Bounties were paid in those days.

Mr Anthony:

– What is the difference between a bounty and a subsidy?

Mr DUTHIE:

– I have explained it during the last minute, but it is probably very difficult for the honorable member for Richmond (Mr. Anthony) to understand the difference. I shall mention the actual amounts paid. From the inception of federation in 1901 until the 30th June, 1941, a few months before Labour assumed office, bounties and other assistance to primary and secondary producers totalled £46,000,000, so that over a period of 40 years the average annual payment was only a little more than £1,000,000. From the 1st July, 1941, to the 30th June, 194S. payment of price subsidies totalled £8S,500,000. That amount included payment of subsidies and assistance to the dairy industry totalling £35,000,000, bounties to the wheat industry amounting to £15,000,000, subsidies of £14,500,000 on superphosphate and other payments which amounted to £93,500,000. Altogether a total of £1S2,000,000 was paid out by way of subsidies and bounties in seven years. I invite honorable members to contrast the payment, made by Labour administrations since 1941 with the total payment made in the first forty years of federation. In view of the remarks made by the Leader of the Australian Country party (Mr. Fadden) in the course of this debate it is interesting to recall a statement that he made during the campaign which preceded the referendum on control of rents and prices. According to the Argus of the 1st May, 1948, which published a report of a meeting at Horsham, the right honorable gentleman said - lt would be a good thing if Mr. Chifley carried out his threat to withdraw subsidies if the “Yes” vote was not carried at the referendum. People did not want subsidies which were socialized, collective spending, but wanted the right to spend their own money in their own way.

Now he asks the Government to restore subsidies on potatoes, woollen goods and other commodities over which the Government has no constitutional control. Honorable members will note that he had previously stated that people did not want subsidies but preferred to spend their own money in their own way.He does not know where he is. A leading article that appeared in the Melbourne Age, which is a responsible newspaper on the 25th January, 1949, stated -

. The influence of the subsidies, though real, is being grossly exaggerated in quarters hostile to the Commonwealth Government. There has been an enormous increase in the cost of a wide range of commodities and services which were not subject to subsidies.

I agree with the opinion expressed in that, article, which points out that many increases have occurred in the prices of articles on which no subsidies have been paid. How can that fact be explained? I suggest that increases have occurred because of the failure of the people to vote “ No “ at the referendum. An article which appeared in the Melbourne Herald in October, 1948, sets out the position very clearly, and I shall read it. It is as follows : -

Bacon and cooked and pressed ham have shown the most spectacular rise among many in foods since prices were decontrolled on September 20.

Forty-one food items are listed, ranging from almonds to vinegar. The article contains details of a large number of price increases, which were as follows: -

Rabbits, fid. lb.;

Beans (Haricot), 2d. lb.:

Peas, id. to 2d. lb.:

Cocoa (some brands),1d. to 3d. a packet;

Cake mixtures, 2d. lb.;

Breakfast foods,1d. n 24-oz pkt.:

Crayfish ls. to 2s. lb.;

Oysters,1d. to 2d. doz. ;

Smoked South African cod, 2d. to 3d. lb. ;

Preserved ginger, (6d. to11d. lb.;

Junket tablets (one brand),1d. pkt.;

Boot polish (some brands)½d. to1½d. tin:

Dressed poultry (cockerels), 3d. lb.;

Salad dressing,1d. to 4d. jar;

Peanut butter (some brands) up to yd. tin:

Even ham sandwiches are up½d. to1d. each.

Pies, of course, are now id. dearer.

In the course of an electoral tour of Tasmania that I made in January last. I noticed that the prices of a number of articles, on which no subsidies were paid, had increased. Details of those increases were -

Marmite. 2s.1½d.

Kelloggs. ls. 4d. to1s.11d. - four rises in fourmonths.

Weetbix, ls. 4d. to ls.8d. - one rise in four months.

Swift lunch beef. ls. 5½d. to ls.10d. - two rises in one month.

Heinz peas, 2s. 2d. to 2s. 8d. - one vise in one month. Curry powder - 7d. to 9½d. - one rise in one month. ls. 2d. to ls6½d. - one rise in one month.

Bacon rashers, 2s.0½d. to 2s. 9½d. - a rise of 9d. in a year.

No subsidies were paid on those commodities, and we can attribute the increase of price to the fact that the referendum resulted in a “ No “ majority.

Members of the Opposition have made sneering references to the Government’s principle of full employment. Reading between the lines of the speech delivered by the Leader of the Opposition (Mr. Menzies), it was apparent that he does not believe in that principle.

Mr Gullett:

– What does the honorable member mean by the phrase “ reading between the lines “ ? Is he referring to something that does not appear in the speech?

Mr DUTHIE:

– No. In any event, spokesmen for the Opposition parties throughout the country are saying the same thing. They have let the cat out of the bag, because it is clear that if the Opposition parties ever regain the treasury bench they will ensure that the economy of this country shall return to its pre-war position.

Mr Harrison:

– I should have thought that the honorable member’s training would at least have taught him not to tell half-truths.

Mr DUTHIE:

– I can prove that my statements are perfectly correct. A member of Mr. Churchill’s former administration who visited Auckland, in February, 1947, made the following statement : -

The only sane system I know of is one in which 100 men are looking for 80 jobs.

In the course of a national debate in Hobart, in 1947, a critic of the “no work “ system stated -

Thu only way to make men work is for them to be afraid of where their next meal is to come from.

Professor Hytten, of the “ Hytten-miss “ plan, in the course of an address to a scientific congress at Hobart in January, said that we must have an unemployment rate of from 6 per cent. to 8 per cent. if our economy is to prosper. The adoption of his suggestion would mean that we should have about 320,000 unemployed to-day. I stress that that policy represents the view not only of Professor Hytten, but also of the private hanks, because Professov Hytten is economic adviser to the Bank of New South Wales, which is one of the most powerful of the private banks. In the course of a conversation I had with an economist in St. Mary’s, Tasmania, on the 20th January last, that gentleman informed me that he had just returned from the scientific congress in Hobart. He said -

Full employment is a fallacy. No system can work under full employment. We must have a pool of unemployed. The standard of living amongst the middle and lower income groups is too high.

He went on to repeat what had been said a year previously in Hobart, namely, that the only way to make men work was to make them fearful of their prospects of obtaining their next meal. My reply was that if the system needed the tragedy of unemployment to make it work there was something radically wrong with the system. He was one of those people who advise those who support the Opposition. I have here another statement from a book which honorable members opposite ought to read. It is written for them, and addressed to them. The book is in the library, and is entitled How to he Popular Though Conservative. That is mighty difficult, I know. The book was written by two men, Fred. G. Clark, and Richard Stanton Rimanoczy. On page 85, the following passage occurs : -

Disemployment for both men and machines begins when -

1 ) the customer does not want or need the things being produced or

the customer is unable or unwilling to pay the asking price.

The situation can be the fault either of the management or the Labour Union, but in both cases the greatest good for the greatest number requires that the offender be persuaded through logic or forced disemployment, to start producing things at desirable prices.

This may be an unpopular truth among those who believe life can be perfect, hut every honest student of human nature knows that without fear of loss or disemployment men will not do their best.

Disemployment, then, for both men and machines is one of the disciplines of a free economy.

In the days before the war, we became familiar with the kind of discipline mentioned in the book. It is nothing more or less than economic conscription, because it forces down working conditions until men will work for anything at all in order to support their families.

Members of the Opposition criticized the Government for bringing down budgets that show a surplus. During the last twelve months, the Leader of the Australian Country party (Mr. Fadden) has made the newspaper headlines hy talking about secret reserves, and during the last parliamentary recess he spoke much of the need to reduce taxation. A few nights ago, he criticized the country’s balanced budget, but almost in the same breath he criticized the Treasurer for being a spendthrift. How is it possible to have budget surpluses if the Treasurer is a spendthrift? Since the war ended, taxation, direct and indirect, has been reduced by £174,500,000. The Opposition has been saying that price subsidies should be restored, but how can that be done if taxation is to be reduced? Members of the Opposition cannot have it both ways, although they would like to. By reducing taxation by £174,500,000, the Government has left more spending power in the hands of the community, and assisted production in both the primary and secondary industries.

Mr DEPUTY SPEAKER:

– The honorable member’s time has expired.

Mr ANTHONY:
Richmond

– The honorable member for Wilmot (Mr. Duthie) has employed the usual technique of honorable members on his side of the House in quoting a part of a statement and concealing the rest. I must be psychic, because it so happens that I have before me on the desk the very book from which he quoted, the book entitled How to be Popular Though Conservative. He quoted only a part of the story with the intention of deceiving those who might have been listening to him. I propose to quote the relevant parts of passages on page 85, which he omitted. The book points out that there is a force which is greater than the employer - a force which determines what the employer shall pay to his employees, and determines what the output of a particular industry shall be. That force is the customer, the buyer of the product. If the buyer objects to either the price or the quality of the goods offered, and refuses to buy in sufficient quantities, organized labour will be faced with what the book calls disemployment. The honorable member read down to the fourth paragraph on page 85. I now take up the story by quoting from the fifth paragraph onwards -

One of the greatest present-day threats to uninterrupted employment is the power of organized workers to force management to demand prices that the customer is unwilling or unable to pay.

Can customers continue to pay $1,500 for a $1,000 automobile, $15,000 for a $10,000 home ?

Can any exception be taken to that? 1 now quote the last paragraph on page 85-

If America has another depression, it will start with the inability of the 35,000,000 unorganized workers to buy the products of the 15,000,000 organized workers.

That is the whole of page 85 of this book. What is said in that article has application in Australia as well as in the United States of America. Can the workers of this country continue to pay £2,000 for homes that cost only £750 or £800 before the war? A man can only purchase a home with the residue of savings left to him after payment of his living expenses and taxation commitments, and I point out that those who occupy the homes are principally workers. Throughout Australia it is being said that it is impossible for the workers to continue to pay such high prices. Largely because of the policy of the Government, it is becoming increasingly difficult for working men in this country to ever have a hope of owning their own homes. Let me examine some of the things that may be responsible for this state of affairs. The first is the lessened production of each worker, due in a large measure to the introduction of the 40-hour week. The Minister for Immigration (Mr. Calwell) claimed to-night that the. Government was partially responsible for accelerating the 40-hour week movement. He then back-pedalled and said that the Arbitration Court had decided the matter. The truth is that the hand of the Arbitration Court was forced by the fact that the Premier of New South Wales, a State which contains a little more than one-third of the population of the Commonwealth, had, prior to the determination of the Arbitration Court, announced that notwithstanding anything the Commonwealth Arbitration Court might decide, the New South Wales Government intended to move for the introduction of a 40-hour week, whilst the Premier of Queensland announced that irrespective of the economics of the situation the Queensland Government would introduce the 40-hour week.

Mr Chifley:

– In New South Wales that legislation was passed by a hostile upper house.

Mr ANTHONY:

– It was not a hostile upper house but an upper house with a majority of one; that majority of one fluctuates between the Government and the Opposition. The fact of the matter is that despite the fact that maximum production was required in the period after the war, and regardless of the economics of the situation which demanded that we should work longer hours, as are people of Great Britain, the McGirr Government in New South Wales proclaimed that notwithstanding any judgment of the Commonwealth Arbitration Court it would introduce a 40-hour week. The consequences of that action are now flowing throughout the entire community. One of the first to suffer as a result of the introduction of the shorter working week is the person who would seek to own hi9 own home.

The Tariff Board recently made a review of the effects of the 40-hour week upon industry, and its relation to costs, [n its last report the Board declared that in its opinion the 40-hour week had resulted in an increase of approximately 11 per cent, in costs. That is to say, a home which previously cost £1,800 now costs £2,000 to build.

Mr Fuller:

– Would there be a reversion to the 44-hour week if the parties now in opposition were elected to office ?

Mr ANTHONY:

– My friend the honorable member for Hume (Mr. Fuller) asks whether the parties now in opposition would reintroduce the 44-hour week if they were returned to office. The honorable member represents a country electorate. I have before me a report by the Dairying Industry Joint Advisory Committee. Some of the members of that committee were government appointees. The report shows that the return of a little over £6 a week to the dairy-farmers is based on a 56-hour week, comprised of eight hours a day for seven days a week. Give the dairy-farmers and all other farmers of thi9 country a 40-hour week and there will be some justice in the challenge made by the honorable member for Hume.

Mr Pollard:

– All that the Government which was composed of honorable members now in opposition was able to provide for the farmers of this country was poverty.

Mr ANTHONY:

– Does the Minister for Commerce and Agriculture (Mr. Pollard) deny that the price of 2s. Id. a pound for butter is based on a 56-hour week? I claim that he is not game to deny that assertion, which appears in this report. Under the present arrangements there is a 40-hour week for wharf labourers and the men who produce goods, but a 56-hour week for the dairy-farmers. On the question of reward for the dairy-farmers I point out that to-day the price that they may obtain for butter is pegged at about 2s. per lb. below the international level. If the dairy-farmers were permitted to send their butter overseas and obtain the world market price being obtained by the dairyfarmers of Denmark, Holland and other butter-producing countries, they would receive almost double the price that they are receiving to-day. They are prevented from receiving the higher price because the Government has pegged the price of butter at 2s. 1½d. per lb. What justification is there for pegging the working hours of the dairy-farmer at 56 hours a week and at the same time limiting the price that he is permitted to obtain for his butter to about half of world parity? There is no need for the honorable member for Hume to direct such an inquiry to honorable members sitting in Opposition. Although I did not intend to follow this line of argument, I stress that the Labour Government in office proclaims that it is functioning for the benefit of the workers of Australia. Every member on the Government side of the House avers that he is or was a worker. There is some merit in that. If this is in fact a workers’ government which seeks to look after the men and women of this country who are endeavouring to raise families, should it not have continued to subsidize the commodities that the workers must use?

– I remind the Minister for Post-war Reconstruction (Mr. Dedman) that our present national income of approximately £1,700,000,000 is based on the prices which we are receiving to-day for wheat, wool, meat and other exports which the Government and everybody else, know cannot be maintained indefinitely at their present high levels- What would be our position should our national income from the sale of exports decrease by from £200,000,000 to £300,000,000 annually? That could very well happen within the next few years. In that event the Government would be taking £500,000,000 annually out of a national income of from only £1,400,000,000 to £1,500,000,000. The proportion of the Government’s “ take “ from national income would be vastly increased under those conditions. Therefore, the Government, whilst urging the people to be economical, to buy only those things that they really need and to save as much as they possibly can, that is, to prune their household expenditure in every possible way, should immediately prune its own expenditure to provide against the day which will undoubtedly come, and probably before very long, when world prices for primary products fall sharply.

The Minister for Post-war Reconstruction had much to say about the United States of America. He compared the exuberant prosperity of Australia with the declining employment rate in that country. Certain similarities exist between Australia and the United States of America. Neither country was physically damaged during the war. But what contribution has Australia made in the form of manufactured goods to war-stricken countries overseas? At present, the United States of America is saving western European countries from starvation and communism by exporting great volumes of manufactured products to them. Those countries include Italy, Germany, Sweden, Norway, Latvia, Estonia and the other countries which are receiving Marshall aid. The value of American assistance to those countries during the last four years exceeds six billion dollars. Can Australia point to any comparable achievement? Our exports have consisted of practically 100 per cent, of primary products. ¥e have not exported manufactured products in any appreciable quantity.

Mr Pollard:

– The honorable member forgets that the United States of America has had 250 years start on us.

Mr ANTHONY:

– I have not forgotten anything; but the Minister for Commerce and Agriculture (Mr. Pollard) has not learned anything. Whilst he says that the United States of America has had 250 years start on us, the Minister for Post-war Reconstruction has emphasized how far that country is behind Australia, because it has so many millions of unemployed. Which story are we to believe? In addition, the United States of America is supplying a substantial proportion of our industrial requirements, such as motor vehicles, machinery and products of all kinds to the limit that the Treasurer will make available dollars to pay for such goods. To that degree the United States of America is assisting our economy. The success of the United States of America is due to the fact that it is a great free enterprise country and will not have a “ bar “ pf nationalization in any shape or form. Even such utilities as telephone services and railways are controlled by private enterprise in that country. Its prosperity is also due to the fact that American workers have every incentive to give of their best. When they work overtime they retain sufficient of their earnings to enable them to purchase motor cars, refrigerators and other household requirements. Consequently, the United States of America is witnessing an expansion of industry unprecedented in the history of any country. It is now the last bulwark of free enterprise on this globe. Instead of copying the Soviet economic system, the Australian Government should take a leaf from the book of the great democracy across the Pacific.

Much of this debate has been directed to matters pertaining to finance and banking. The Minister for Post-war Reconstruction declaimed against the private banks. He indulged in oblique propaganda in favour of certain legislation which the Government is endeavouring to foist upon the people. However, the system of private banking which the Minister condemned has been mainly responsible for the industrial expansion achieved in this country up to date. 1 do not detract from the great value of the Commonwealth Bank. That institution has done a fine job since its establishment. But, in order to praise the Commonwealth Bank, one does not need to detract from the value of the private banking system which has rendered the greatest possible service to our economy. Members of the Opposition parties do not defend the private banks because of any desire to protect them ; we do so because we desire to protect the right of the individual to manage his own financial affairs, and to decide for himself in what bank he shall deposit his money. We seek to retain the opportunity which a competitive banking system gives to the individual in obtaining financial accommodation. If, in every town, village and hamlet in Australia, individual citizens seeking funds for the purchase of a farm or a business or for the expansion of an industry were obliged to apply for financial accommodation to one bank only, the competitive banking system would be destroyed. Yet, that system has done most to make both the United States of America and Australia the countries that they are to-day.

Mr SPEAKER:

– The honorable member has exhausted his time.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

– in reply - The honorable member for Richmond (Mr. Anthony) has painted a most dreary picture of dairy-farming, but before he leaves the chamber, I should like to draw his attention to a certain matter, which may show the value that can be placed upon his other remarks. I propose to give an account of a sale of a property in the Lismore district of hi9 electorate in order to show how the dairy-farmers have been treated. A dairy farm of 98 acres situated four miles from Lismore was sold at auction for £9,506, representing £97 an acre.

Mr McEwen:

– Did the Commonwealth Treasury approve that price?

Mr CHIFLEY:

– I emphasize that the price of £97 an acre is believed to be the highest figure that has ever been paid for dairying land in that district. Land values have soared since this Government guaranteed to farmers a fixed price for butter.

There are other incidental matters to which I desire to refer. The honorable member for Indi (Mr. McEwen) complained that pay-roll tax and sales tax were added to, and thereby increased the cost of goods. The fact of the matter is that the pay-roll tax was introduced by the Menzies Government, in which the honorable member was a Minister.

Mr McEwen:

– That Government introduced the pay-roll tax as a war emergency measure.

Mr CHIFLEY:

– The Menzies Government, it is understood, entered into a contract with the employers of this country to introduce child endowment, to be financed by the pay-roll tax, in order to avoid an increase of the basic wage for the larger family units. Therefore, the pay-roll tax was the creation of a government in which the honorable member was a Minister. The honorable gentleman also referred to profit margins. When the Commonwealth controlled prices, I heard complaints about the control of profits. The States, which now control prices, can easily control profit margins if they so desire. They can reduce the margin of profit now allowed on the sale of goods and even regulate the aggregate profit of any wholesaler or retailer.

Mr McEwen:

– Why not make that suggestion to the Premier of New South Wales, Mr. McGirr?

Mr CHIFLEY:

– The Premier of South Australia, Mr. Playford, supported the idea a few days ago, and all the State Ministers who control prices have recom mended to their respective governments a reduction of the profit margin. Indeed, the profit margin may be easily controlled if the States are prepared to take the necessary action.

The Leader of the Opposition (Mr. Menzies) referred to the need for introducing incentive payments. In previous debates on the Government’s financial proposals, members of the Opposition have declared that a substantial reduction of taxes would provide a complete incentive to workers to produce to maximum capacity. Do honorable members opposite suggest that the proposed reductions of tax will not give all the incentive that they claim the workers require? I do not propose to deal with the tax schedule. It speaks for itself, not only in this House, but also throughout the country. This Government has not attempted to bribe the people with promises. During the last election campaign, we said that if returned to office, we proposed to grant remissions of taxes when the financial position of the country warranted such action. That was the only promise that we made during the last election campaign, and we have kept it. Members of the Opposition claimed in the past that high taxation was destroying the incentive to produce. That argument has now completely disappeared. A few days ago, the Sydney Morning Herald described the reductions of income tax on low wage earners as “ lavish “. The Leader of the Opposition made a most reasoned speech, and I am not complaining about the views that he expressed. The Government and the community generally are anxious that all Australians, and not only the so-called workers, shall do better than they are doing to-day. However, honorable members must not overlook the fact that when numbers of people are not pulling their weight, the remainder of the workers, who are doing their jobs conscientiously, never get any credit for their efforts. Some people other than workers may not be pulling their weight. When I passed a famous golf club at 3 o’clock one afternoon recently, I noticed a. number of luxurious motor cars there, and I gained the impression from that spectacle that quite a number of people other than workers were not pulling their weight.

As my colleagues have already dealt effectively with criticisms about rates of tax, I shall not refer to that subject, but shall pass on to the matter of subsidies. Let us be clear about it, although there has never been any misunderstanding on the part of the Government. In the first speech that I made in the referendum campaign, I told the people, on behalf of the Government, that they had to decide the issue. In the eyes of the Government it was not a political issue. I pointed out that the Commonwealth did not have power to control rents and prices effectively, and I issued a warning that such power as we possessed might disappear at any time. I asked the people to decide whether they were prepared to vest in the Commonwealth full power to control rents and prices, and said otherwise that power would pass to the States. The Government was under no illusion about the matter. I also stated in that speech that if the Commonwealth lost the power to control rents and prices, it was inevitable that subsidies payable in respect of goods the prices of which the Commonwealth would no longer control, would also cease. It is true that the right honorable member for North Sydney (Mr. Hughes) told his constituents that no government would dare to withdraw the subsidies, and that advertisements published in the press on behalf of the Australian Country party made a similar declaration, but this Government keeps its promises. On that occasion, we asserted that the Commonwealth could not continue to pay subsidies in respect of goods and commodities when the Government ceased to have direct power to regulate the prices of them. Is it suggested that the Commonwealth should pour out the money to pay the subsidies in respect of increases over which it has no control? Does any honorable member consider that there is any reason why the States should fix any prices they like and the Commonwealth pay subsidies on that basis? Does anybody think that the Government would have been justified in doing anything like that? We have retained subsidies on the things over which we have reasonable control, such as tea, which we buy, and phosphate and butter, which we can control through the boards that deal with those commodities. The situation was made perfectly clear in the first speech that I made in connexion with the referendum, and so the people could have had no illusions about it. The Leader of the Australian Country party (Mr. Fadden), indeed, was credited at that time with saying, “We had better let subsidies go and give people, particularly the farmers, tax reductions “. If that was the right honorable gentleman.’.’- view, we have at least completely implemented that wish, because >ve have removed subsidies and we have granted more in the form of tax reductions since the war ended than has been taken away in subsidies. In addition, we have given to the family man the benefit of substantial increases of child endowment and social services. There has never been any misunderstanding about the Government’s policy in relation to subsidies. I emphasize that fact. It is true that, with the object of winning a few votes for the “ No “ campaign at the referendum, the Opposition declared that no subsidies would be discontinued. But this is a responsible government, and it will not pay out money to meet price increases over which it has no control, particularly when it has no right to examine the hooks of companies which may be granted price increases. It would be an act of insane finance to become a party to any such scheme. As an illustration of the extravagant things that people will say, the honorable member for Richmond said to-night that, if the Opposition were returned to office, it would pay all of the subsidies that had been discontinued. I do not know what part of the Opposition the honorable member spoke for, of course, but I am sure that, if the Leader of the Australian Country party were able to examine all of the figures on the subject, he would repudiate the promise at once. He would not dare to go to the country with that promise at the election. If he were aware of the full facts, I know that he would not be able to go out to the electors promising a 28 per cent, reduction of taxes, with somebody else on his side promising a 20 per cent, reduction and other conflicting political programmes. Knowing what lie would be letting himself in for, he would not attempt to do so. Yet, an ordinary member of his ‘party has promised, on behalf of the joint Opposition parties, that all subsidies will be restored if the Opposition is returned to power. No more irresponsible statement was ever made, and I am sure that it will not be endorsed either by his own party or by the Liberal party.

This Government set out during the war to keep the national economy as stable as possible. It set out after the war to preserve full employment, to expand industry, to prepare a programme of public works which, in the event of a period of stress, would be ready and adequate to meet the need for employment, and to satisfy the essential and urgent needs of the community. It also set itself out to establish a social security programme during the war, and it has amplified that programme since then, so as to ensure that nobody in the community, in any circumstances, shall be destitute or deprived of some help in misfortune. Furthermore, it has had regard to what the future may hold. I speak now not only of Australia’s future, but also of the future of the rest of the world. The honorable member for Richmond talked about the possibility of the national income being reduced. That possibility may be realized in fact. That betrays the irresponsibility of the people who talk about the need for large tax reductions that might lead to a deficit in our most prosperous period. The honorable member for Indi (Mr. McEwen) had a lot to say about indirect taxes. Since the war, the Government has reduced taxation overall by £170,000,000 annually. That is a large sum. The suggestion now made by honorable members opposite is that taxes should be reduced so drastically that the Government would have no surplus, despite the fact that President Truman in the United States of America, Sir Stafford Cripps in the United Kingdom, and I think any competent economist who has given thought to the subject, would suggest that the proper time to have a surplus is when a country is prosperous and can buttress itself against the very eventualities that the honorable member for Richmond talked about. In fact, the Government may rightly take pride in the fact that it has placed Australia in a financial position that is unequalled in any other country. In 1944-45, at the end of the war, we had an annual deficit of £266,000,000. Last year we balanced the budget. That is not a bad performance. In the intervening period, we have substantially improved our system of social services, have granted very substantial reductions of taxes and have given great assistance to the States by means of largely increased tax reimbursements. By June next we shall have reduced the external debt of the country by over £100,000,000. Our contributions to the relief of stricken peoples in Europe and elsewhere have totalled £30,000,000. This does not include the grants totalling £35,000,000 that have been made to the United Kingdom. We do not begrudge those gifts because we obtain our reward from the fact that by helping the United Kingdom and the peoples of Europe we have helped ourselves. We have reduced the overseas interest bill of the States. Of course, that is to the benefit of the nation generally.

The Leader of the Australian Country party has been travelling about the country talking about the fact that the Government is preserving very substantial overseas balances. It is doing so quite deliberately, and it is well that honorable members should know the reason and that it should be recorded in Hansard. We have learned a lesson from the conduct of previous governments when there was a recession. I hope that another recession will not occur, but 1 know that there will certainly be some reduction of our returns from the sale of primary products overseas, to which the honorable member for Richmond referred. It is possible for the income of the country to fall by £100,000,000 in a year. I speak now of its external income from exports. Should that happen, the national income will be seriously reduced and the taxable capacity of the people will be much less than it is now. When the last depression started, governments had been borrowing £30,000,000 a year abroad. That is what we have been ‘paying off - the debts that were contracted in those days. Those governments were not earning enough money to pay their interest bill. In 1928-29, of course, the Commonwealth government of the day was not the government of Australia in fact. In financial matters the Government in this country then consisted of the private banks. That will never occur again. At one time it was not the Treasurer, the Australian Government or the Australian Parliament which decided how much money should be made available for public works or whether a town should have a. sewerage system, a water supply system, or he provided with electric current. Those matters were determined by persons who were not responsible to this Parliament or to the Australian people. Those days have gone. The Premiers of the States do not now come here to interview the representatives of a bank, whether it be the Commonwealth Bank or a private bank, to ascertain what money they can expend during the year on urgent and essential works. They are now asked what is their physical capacity to spend money, and that is the basis on which it is given to them. As I have said, our income from external sources could fall seriously. If it did, we should draw much less money from overseas with which to buy the things that we needed. During the last depression, we had to reduce expenditure on capital goods from overseas, and that aggravated the position.

Let us examine the reasons why we should retain substantial balances overseas. Over £150,000,000 of our overseas balances has been left in the United Kingdom at the request of the United Kingdom Government. We have been asked not to draw upon that money for current expenditure but to keep it in London as a reserve against any emergency that may occur. The United Kingdom cannot provide goods in exchange for that money. The money is not “ frozen “, but we have entered into a gentleman’s agreement not to use it except in the event of an emergency. We have an enormous public works programme in Australia. Some of our largest industries are providing for great expansion because they have faith in this country. They will require a large quantity of capital goods from overseas. That equipment cannot be delivered this year or next year. Indeed, it may be five or six years before some of it can be delivered. I think that I am at liberty to disclose the fact that representations have been made to me by the Victorian Government, which proposes to expand its brown coal electricity production scheme. That will cost approximately £19,000,000, of which £6,000,000 will be expended upon the purchase of capital goods from, overseas. If our earning capacity overseas were to decrease and we did not have money in reserve in other countries, cbe events of 1929 could easily occur again and money would not be available for the purchase of the capital goods that we need. An enormous amount of capital equipment has been ordered, from overseas, and some of it cannot be supplied within the next four or five years. If the expansion of electricity undertakings and other public works is to proceed in Australia we must ensure that we have sufficiently large balances in London to finance our needs, irrespective of the fact that our overseas earnings may have fallen. It is true that we repatriate some money from time to time, and we can do that at any time in the future when we so desire should any of the events that have been predicted, not by me but by economists and people such as the honorable member for Richmond, occur, we shall be protected against a re-occurrence of the events of 1929.

I well remember the memorable night when we brought down the National Welfare Bill. The then honorable member for Robertson, Mr. Spooner, Sir Frederick Stewart, the member for Parramatta at that time, and the honorable member for Wentworth (Mr. Harrison) denounced the whole social security scheme as “ phoney “. They said that there was no chance of accumulating a sufficient sum of money in the National Welfare Fund to meet the demands of the scheme. We have met all the financial commitments of the social security scheme and accumulated a balance of approximately £70,000,000 in the National Welfare Fund. Is there anything wrong with that? It has been said that we are meeting expenditure on public works from revenue. Is not a time when the country is experiencing prosperity a time when we should try to pay our way ? The capitalist country to which the honorable member for Richmond has referred is doing precisely the same. It is meeting its capital expenditure from revenue. Canada and the United Kingdom are also doing so. We are not doing anything very wrong by meeting our commitments as they arise in a period of prosperity and paying for them from current revenue. The United Kingdom Government has made provision for a very large surplus. Mr. Truman has stated that surpluses should be accumulated in periods of prosperity. Last year we had a surplus of over £1,000,000, and I hope that it will be increased in this coming year. I shall not be ashamed if we have a substantial surplus, because we have heavy commitments to meet, such as the payment of £S0,000,000 in respect of ex-servicemen’s gratuity. Why should we not, in times of prosperity, endeavour to accumulate a fund to meet our future commitments?

The Leader of the Opposition dealt fairly with the matters that he raised. The Leader of the Australian Country party delivered a speech, which T assume was a prepared one, covering an enormous amount of ground. I do not propose to go into that. The honorable member for Indi, referring to the entertainments tax proposals, talked of footling reductions being made. The sporting bodies of Australia are very grateful for what has been done in that connexion. Requests were made by 200 Australian athletic bodies for their meetings to he treated as live shows, but we have done something better for them than that.

This country is in a good financial position, despite the figures that may bc produced by honorable members opposite in an attempt to prove that tax reductions are offset by the increased cost of living. Nobody has a greater fear of inflation than I have. For years I have warned the people of its dangers. I have tried, in conjunction with my colleagues, to arrest rapidly rising prices by means of wage-pegging and other measures. We did not get much help from the Opposition in our task. It is interesting to note that some of the leading newspapers which now talk about rising prices were opposed to wage-pegging. They went a little further than that in some instances and broke the law, morally at any rate, by some of the agreements in breach of the wage-pegging regulations that they were prepared to make. It is interesting also to note that some judges, one of whom is now dead, told the trade unions that they had an excellent case but that they could do nothing about it because the Government prevented them from rectifying the injustice. Some honorable members opposite were very vocal about wage-pegging. Naturally, great pressure was brought to bear on the Government by the trade unions for the removal of the wage-pegging and man-power regulations. All that has been done. It was bound to have some disastrous effects. The 40-hour week was bound to increase costs in some directions, but the workers believed that the time had come when they should have something more from the great productivity of the country than they were getting. They knew that if they did not get the 40-hour week when prosperity was abroad, they would be told when times were not so good that the country could not afford it. That is what they were told about the 44-hour week. The Commonwealth Government supported the application for a 40-hour week when all the facts had been placed before the court. The 40-hour week has undoubtedly resulted in increased prices in manufacturing industries, but it is noticeable that arguments against improved conditions for working people are always aimed at sheltering one section of the community.

An economist spoke the other day about borrowing money in America. 1 was astonished indeed that anybody should have talked so foolishly. For loans raised in America to-day, we should have to pay approximately 6^ per cent, interest. To talk of borrowing money at that price in America, with British and Australian bonds at their present figure, is sheer foolishness.

The honorable member for Richmond spoke about primary producers. I read a statement the other day - not prepared by a member of the Government or even by a Labour man - which indicated that primary producers had paid off £250,000,000 of the debts owing by them when the war started. Certainly the man on the land has greater assets than ever before ; to-day he owns most of his plant and machinery, instead of buying it under the ‘hire-purchase scheme as he did before. It is true also that the workers generally have more of the amenities of life than ever before. More workers have telephones, or have submitted applications for telephones, than ever before in the history of this country. Savings bank deposits’, which include the savings of the workers, are greater than ever before. I quite agree that rising prices are bound to operate rather harshly against people on fixed incomes, but that is happening all over the world. The inflationary spiral is not peculiar to Australia. Prices are just as high in places such as Singapore and Cairo. In fact, in some other countries, the only thing that is cheap is human life. An abundance of labour will not necessarily mean that cheap goods will be available, particularly fi they have to come from overseas. The Government knows the dangers of inflation, and nobody fears them more. We have done our best and are doing our best. I urge not only the workers but every person in the community to give of his best. He owes that to the community and his fellow men. It is the honest thing to do and those who do not do it are cheats. They are not cheating me or the Government; they are cheating their fellow citizens. That is the doctrine that I propose ‘to preach at all times, and in all places. I do not think that in the over-all financial position of the country, anything can be found for which the Government can be condemned. On the contrary, there is everything of which the Government should be proud.

Question resolved in the affirmative.

Thursday,24 February, 1949. PAPER.

The following paper was presented : -

Commonwealth Public Service Act - Appointments - Department of the Treasury - T. G. Bunce, A. L. Cameron,R. J. Fraser, J. L. Miller.

House adjourned at 12.5 a.m. (Thursday).

page 641

ANSWERS TO QUESTIONS

The following answers to questions were circulated: - “ Current Notes “ - “ Digestof Decisions “.

Mr.Rankinasked the Minister for External Affairs, upon notice -

What is the present circulation of Current Notes issued by the Department of External Affairs?

What is the expenditure per issue on (a) printing and (b) distribution?

Will he inform the House what justification there is for devoting five pages of the October issue to statements by the Prime Minister, including one dealing with petrol supplies for aircraft?

Are all statements by the Prime Minister included in the Digest of Decisions and Announcements issued by the Prime Minister’s Department?

If so, why arc these statements duplicated in Current Notes?

In the interest of economy, will he exercise greater supervision over this publication to ensure that expenditure is reduced to a minimum?

Mr Hamilton:

asked the Minister in charge of the Council for Scientific and Industrial Research, upon notice -

Did Dr. J. S. Hosking, of the building research laboratory of the council recently visit overseas?
If so, when did Dr. Hosking leave Australia and when did he return?
What countries did he visit?
What was the cost of his trip?
Has Dr. Hosking submitted a report to the Government?
If so, will the Minister table the report for the information of honorable members?
What action, if any,has been taken to implement his report?
How many additional houses does the Minister expect will be built in Australia as a result of Dr. Hosking’s visit overseas?

Cite as: Australia, House of Representatives, Debates, 23 February 1949, viewed 22 October 2017, <http://historichansard.net/hofreps/1949/19490223_reps_18_201/>.

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House of Representatives23 February 1949

QUESTION

ENTERTAINMENTS TAX

Mr McLEOD:WANNON, VICTORIA

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

QUESTION

AUSTRALIAN-DUTCH RELATIONS

Mr HARRISON:WENTWORTH, NEW SOUTH WALES

Mr SPEAKER:

Mr HARRISON:

Mr Harrison:

Mr CHIFLEY:ALP

QUESTION

AGE AND INVALID PENSIONERS

Mr DUTHIE:WILMOT, TASMANIA

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

QUESTION

NORTHERN TERRITORY

Mr BLAIN:NORTHERN TERRITORY

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

Mr BLAIN:

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

QUESTION

PUBLIC SERVICE

Mrs BLACKBURN:BOURKE, VICTORIA

Mr CHIFLEY:ALP

QUESTION

NEW GUINEA TIMBER LEASE

Mr ANTHONY:RICHMOND, NEW SOUTH WALES · CP

Mr CHIFLEY:ALP

QUESTION

FISHING

Mr THOMPSON:HINDMARSH, SOUTH AUSTRALIA

Mr POLLARD:ALP

QUESTION

EGGS

Mr RYAN:FLINDERS, VICTORIA

Mr POLLARD:ALP

QUESTION

MANUS ISLAND

Mr HAYLEN:PARKES, NEW SOUTH WALES

Mr SPEAKER:

Mr HAYLEN:

Mr SPEAKER:

Mr SPEAKER:

Mr HAYLEN:

Mr SPEAKER:

Mr HAYLEN:

Mr SPEAKER:

Mr HAYLEN:

Mr CHIFLEY:ALP

QUESTION

MEAT

Mr RANKIN:BENDIGO, VICTORIA

Mr POLLARD:ALP

QUESTION

OFFICE OF EDUCATION

Mr FRASER:EDEN-MONARO, NEW SOUTH WALES

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

QUESTION

COAL

Mr HOLT:FAWKNER, VICTORIA

Mr CHIFLEY:ALP

Mr Holt:

Mr CHIFLEY:

QUESTION

WIRE, PIPING AND STEEL

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

Mr POLLARD:ALP

QUESTION

CIVIL AVIATION

Mr ADERMANN:MARANOA, QUEENSLAND

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

QUESTION

POWER PLANT

Sir EARLE PAGE:COWPER, NEW SOUTH WALES

Mr CHIFLEY:ALP

QUESTION

JAPANESE INTERNEES

Mr FALKINDER:FRANKLIN, TASMANIA

House of Representatives
23 February 1949

Mr McLEOD:
WANNON, VICTORIA

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

Mr HARRISON:
WENTWORTH, NEW SOUTH WALES

Mr CHIFLEY:
ALP

Mr DUTHIE:
WILMOT, TASMANIA

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

Mr BLAIN:
NORTHERN TERRITORY

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

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

Mrs BLACKBURN:
BOURKE, VICTORIA

Mr CHIFLEY:
ALP

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES · CP

Mr CHIFLEY:
ALP

Mr THOMPSON:
HINDMARSH, SOUTH AUSTRALIA

Mr POLLARD:
ALP

Mr RYAN:
FLINDERS, VICTORIA

Mr POLLARD:
ALP

Mr HAYLEN:
PARKES, NEW SOUTH WALES

Mr CHIFLEY:
ALP

Mr RANKIN:
BENDIGO, VICTORIA

Mr POLLARD:
ALP

Mr FRASER:
EDEN-MONARO, NEW SOUTH WALES

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

Mr HOLT:
FAWKNER, VICTORIA

Mr CHIFLEY:
ALP

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

Mr POLLARD:
ALP

Mr ADERMANN:
MARANOA, QUEENSLAND

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

Sir EARLE PAGE:
COWPER, NEW SOUTH WALES

Mr CHIFLEY:
ALP

Mr FALKINDER:
FRANKLIN, TASMANIA

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

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

Mr LEMMON:
Minister for Works and Housing · FORREST, WESTERN AUSTRALIA · ALP

Mr CHIFLEY:
ALP

Mr LEMMON:
ALP

Mr LANG:
Reid

Mr HOLT:
Fawkner

Mr DEPUTY SPEAKER (Mr Clark:
DARLING, NEW SOUTH WALES

Mr McEWEN:
Indi

Mr McLEOD:
Wannon