Mr. Deputy Speaker (Mr. C. F. Adermann) took the chair at 10.30 a.m., and read prayers.
Mr DAVIES: CUNNINGHAM, NEW SOUTH WALES
– Is the Prime Minister aware Chat the chairman of the conference of State Ministers administering prices control, Mr. Finnan, has stated that he is in favour of handing over prices control to the Australian Government because it is impossible for the States adequately to control prices since they have no power over imports or exports and cannot finance the payment of subsidies in respect of those commodities and goods which require the payment of subsidies in order to keep down prices! Is it a fact that it will be impossible for the States to take the steps to check the increase of prices that are so essential to the achievement of a stable economy in this country? Will the Prime Minister agree to have the control of prices taken over by the Australian Government, if the States are agreeable to transfer the necessary powers to the Commonwealth!
Mr MENZIES: Prime Minister · KOOYONG, VICTORIA · LP
– I have not seen a statement such as that to which the honorable member has referred, and I have no idea whether one has been made. However, I can inform the honorable gentleman that only this morning I was in communication with Mr. Finnan and we have actually arranged the date and place of a meeting at which the State Ministers will discuss’ with me the problem of making their work more effective, insofar as Commonwealth co-operation oan assist in doing so. I anticipate that the discussions will be useful.
Mr EGGINS: LYNE, NEW SOUTH WALES
– I direct to the Postmaster<General a question that arises from representations that I have made in respect of the granting of a commercial broadcasting station licence for the Manning River Valley area, which includes such important towns as Taree and Wingham. Such a facility is very urgently needed in that area, particularly for the purposes of issuing flood warnings. Can. the Minister advise the House whether progress is being made in negotiations to overcome the technical difficulties that, I understand, have delayed a decision in this matter, and whether it is yet possible to make a channel available so that the necessary licence can be granted?
Mr ANTHONY: Postmaster-General · RICHMOND, NEW SOUTH WALES · CP
– I have given a good deal of attention to representations that have been made by the honorable member for Lyne and other honorable members in connexion with the issue of commercial broadcasting licences for a number of country areas. Many of these districts are clamouring for a commercial broadcasting licence, but it has not been possible to grant them owing to the limited number of frequencies available and also owing to the fact that we must consult in respect of such matters with the broadcasting authorities in Kew Zealand, because that country’s frequencies are not very far away on the broadcasting band from those of Australia. My officers have just returned from New Zealand after having had a conference with New Zealand broadcasting officials, and it is hoped that we shall be able to straighten out a number of matters in connexion with frequencies that concern both countries. I have asked the Australian Broadcasting Control Board to examine the possibilities of granting licences for low-power commercial stations in various parts of Australia. At the present time I have about 1,500 applications for licences for commercial stations from many parts of the Commonwealth, but it is not possible to grant more, than a few of them under present conditions. However, the matter that the honorable gentleman has raised is being examined, and I hope that it will be possible to do something, not only in respect of Taree, but also in respect- of. a number of other districts.
Mr POLLARD: LALOR, VICTORIA
– Can the Minister acting for the Minister for Commerce and Agriculture inform the House of the nature .of the arrangements entered into between the United Kingdom Government and the Australian Government through the honorable member for Franklin, who has just returned from the United Kingdom, where he bad gone, I understand, for the purpose of negotiating for the sale of Australian apples, particularly from Tasmania, during the forthcoming export season?
Mr ANTHONY: CP
– The honorable member for Franklin has been discussing with interests in the United Kingdom - not necessarily the United Kingdom Government - the question of the disposal of Australian apples. He has done a very good job. I believe that the Minister for Commerce and Agriculture will himself be back in -Canberra to-day.
– Did it take two of them to do the job?
– No. The honorable member for Franklin handled the matter quite capably. The Minister for Commerce and Agriculture, I understand, will be in Canberra to-day- and I suggest that he should answer the question himself.
– I ask the Minister acting for the Minister for the Interior whether it is a fact that a considerable sum of money is being lost each year in the conduct and control of hotels and hostels in the Australian Capital Territory? Is it a fact that approximately 33 per cent, of the total cost of the conduct and control of these hotels and hostels is attributable to overhead departmental administrative charges? Is it also a fact that guests who arc staying at the hostels controlled by. the Department of “Works and Housing, whilst paying a uniform rate for accommodation, ave not enjoying a uniform type of comfort and convenience? Has it “been threatened that the “ blitz “ against guests occupying these hotels will be directed against politicians who occupy government-controlled hotels as from the 9th November, and that they will be seriously inconvenienced and suffer considerable financial loss by the proposed action? Has the department taken into consideration the effect that the proposed increase of tariff will have on the losses of the Parliamentary Refreshment Rooms? Will consideration be given to the setting up of a non-party committee composed of members of both Houses of the Parliament in order to investigate the present conduct and control of all hostels and hotels controlled by the Government in the Australian Capital Territory?
Mr ANTHONY: CP
– I have only just assumed control of the department and I am indebted to the honorable member for the information which he has supplied concerning certain aspects of that department. I shall certainly investigate the matter that he has raised.
Mr BRYSON: WILLS, VICTORIA
– Is the Minister for Works and Housing aware that certain areas of Canberra are being ‘blacked out regularly because of electricity restrictions? In common with many other people I was obliged to dine last night by candle-light. In view of the statements that the honorable gentleman made in this chamber yesterday about the efforts that he had made to provide additional electric power for the public, I ask him whether the black-outs in Canberra are the first fruits of his labours?
Mr CASEY: Minister for Works and Housing · LP
– The question could have been addressed more properly to the Minister for the Interior. However, insofar as it may be thought to affect me, I shall investigate the matter and advise the honorable member of the result of my inquiries.
COMMUNIST PARTY DISSOLUTION BILL 1950
Mr CLYDE CAMERON: HINDMARSH, SOUTH AUSTRALIA · ALP
– Does the Prime Minister believe that the Australian Labour party supports or advocates the objectives, policies, teachings, principles or practices of communism as expounded by Marx and Lenin? Does the Prime Minister believe that the policy of the Australian Labour party is influenced substantially by persons who support or advocate the objectives, policies teachings, principles or practices of communism as expounded by Marx and Lenin? If the answer to either of the foregoing questions is in the affirmative, and having regard to the subversive definition given to communism in the Communist Party Dissolution Act 1950, does .the Prime Minister intend to ask the investigating committee to consider whether the Labour party should be ‘ declared unlawful?
Mr MENZIES: LP
– It will be a great, relief to the honorable member for Hindmarsh, I am sure, to be told that the Government is not contemplating any proceedings against the Australian Labour party except, of course, in the strict way of business at an election.
Mr TURNBULL: MALLEE, VICTORIA
– My question is directed to the Minister for National Development and Minister for Works and Housing. I think that the question may be appropriate to both those portfolios. Does the Government consider it of major importance that the population of Australia should be more evenly distributed? Is it a fact that if the housing shortage in our capital cities is overcome there will be little hope of a balanced population distribution ? Is the Government pursuing a country before city housing policy, and if so with what, result?
Mr CASEY: LP
– The answer to the first part of the honorable member’s question is in the affirmative. As many houses as possible, so far as this Government is able to direct them, are being directed to country areas. About 30 per cent., or more, of the houses built under the Commonwealth and State Housing Agreement are in country areas. With war service homes & policy is being adopted which is favorable to country areas while not being to the detriment of city areas. Building outside of the metropolitan areas is subject to disabilities and difficulties greater tb.au those encountered in the metropolitan areas. However, the Government and the departments for which I am responsible, are well aware that housing in country areas must be improved as one of the principal methods of stopping the drift from country areas to the city. That has been recognized as a cardinal point in our policy. If the honorable member can suggest any means whereby our policy can be more actively pursued, I shall be grateful to hear of them.
Mr CRAMER: BENNELONG, NEW SOUTH WALES
-I ask the Minister for Works and Housing whether the Commonwealth and State Housing Agreement provides for a defined method of ascertaining the capital costs of dwelling.1; for the purpose of calculating economic rents ? Has the Auditor-General of New South Wales reported that that part of the agreement with the Commonwealth is being departed from by the New South Wales Government? Can the Minister say whether this departure is causing additions to the rentals that are paid by tenants who occupy Housing Commission homes in New South Wales ?
– The Housing Division of the Department of National Development compiles a housing index, which is published quarterly, and sets out the capital costs of houses under a great many detailed headings. The. Commonwealth and State Housing Agreement contains provisions that lay down with some precision the method of calculation of rentals to be adopted by the State governments. I have not had the advantage of seeing the report of the New South Wales AuditorGeneral, but, as the honorable gentleman has directed my attention to it, I shall have it investigated and ascertain whether it is necessary to pursue the matter any further.
Mr CLAREY: BENDIGO, VICTORIA
– Is the Prime Minister aware that as a consequence of the policy pursued by the gramophone monopoly known as E.M.I. Sales and Services Limited, Australia is practically the only country in the world which does not make recordings of its own national composers’ serious works? Will the Prime Minister endeavour to persuade E.M.I, to record serious Australian compositions, or failing this would he consider setting up a small Government agency to record worthwhile local compositions such as John Antill’s Corroboree, or Alfred Hill’s Hinemoa.
Mr MENZIES: LP
– I am not aware of the circumstances initially stated by the honorable member, although I find myself in general sympathy with his view that there should be effective recordings of Australian works such as he has mentioned. I shall certainly look into the matter.
Mr PEARCE: CAPRICORNIA, QUEENSLAND
– In view of the great amount of publicity and interest following a recent* broadcast that beef raised in central Queensland gained 100 per cent, marks in the world competition for beef in England, which record of course can never be broken, and as I understand that negatives of photographs taken at the time are available, would you, Mr. Deputy Speaker, give consideration to having the negatives printed and photographs of this prize-winning beef displayed in Parliament House.
Mr DEPUTY SPEAKER:
-I shall give consideration to the honorable member’s question and let him know the result of that consideration.
Mr MINOGUE: WEST SYDNEY, NEW SOUTH WALES
– My question is directed to the Treasurer. In 1946 the Joint Organization was set up to deal with the disposal of Australian wool and I understand that in 1946 £5,000,000 was paid into the fund of that organization. 1 also believe that in subsequent years the following amounts were paid in: - 1947, £750,000; 1948, £750,000; 1949, £500,000 ; and 1950, £500,000. Will, the Treasurer state the amount paid into the fund each year and also the total amount now in the fund.
Mr FADDEN: Treasurer · MCPHERSON, QUEENSLAND · CP
– I shall have the information prepared and supply it to the honorable member.
Mr WHEELER: MITCHELL, NEW SOUTH WALES
– By way of explanation of my question I inform the PostmasterGeneral that there are several newly developed centres in my electorate which lack telephone facilities. As a temporary expedient I have applied for the installation of public telephones, but have been informed that further action cannot be taken because of lack of materials. Will the Postmaster-General give consideration to the granting of a high priority to the installation of telephones in newly developed and rural areas where no such facilities now exist?
Mr ANTHONY: CP
– I shall certainly give consideration to the suggestion that the honorable member has made.
Mr KEON: YARRA, VICTORIA
– Can the Treasurer say whether the Government, since it assumed office, has increased the import quota of newsprint from dollar sources? If so, why has that increase been granted?
Mr FADDEN: CP
– Since the Government assumed office, the importation of most goods has been increased because of the increased dollar resources that the Government has been able to make available as a part of its general financial policy.
Mr KENT HUGHES: CHISHOLM, VICTORIA · LP
– I ask the Postmaster-General, who represents the Minister for Fuel, Shipping and Transport, whether the report is correct that the Commonwealth Railways Commissioner is purchasing diesel rail cars as distinct from diesel electric locomotives from the United .States of America ? The report to which I refer also states that these diesel rail cars are capable of travelling “at speeds of up to 85 miles an hour. If that report is correct, what portions of the road bed of the Trans- Australian Railway are safe for such speeds ? Would not diesel rail cars that are capable of speeds of up to 60 miles an hour, of which several are being purchased by the Victorian Government from the sterling area, be equally suitable for use on the Commonwealth railways, and would not the pur chase of such cars enable the Government to save dollars?
Mr ANTHONY: CP
– I shall refer the question that the honorable member has asked to the Minister for Fuel, Shipping and Transport with the object of obtaining for him a full answer.
Mr BEAZLEY: FREMANTLE, WESTERN AUSTRALIA
– I address a question to the Minister for National Development that is based on a statement that was made in the policy speech of the Treasurer, as Leader of the Australian Country party, at the last general election. That document is indexed in the National Library as No. B329 : 994. In it the right honorable gentleman stated that the sum of £250,000,000 would be raised, apart from funds for the Snowy Mountains hydroelectric power scheme, for national developmental works and that the money would be made available to State governments and local government authorities in respect of any works that fitted into the Government’s scheme for national development. He added -
No repayments of National Development loans will be required from any State or local authority for moneys received or spent under this scheme.
Has any part of that sum of £250,000,000 been raised, or is any of it being raised? If so, have any amounts been made available to local authorities on the condition that those bodies shall not be obliged to repay such moneys? If such amounts have been made available, what is the nature of the works for which they have been allocated ?
Mr CASEY: LP
– The statement from which the honorable member has quoted refers to expenditure that is to be incurred not in any one year but over a period of years. The Government’s national development programme entails the beginning of the implementation of the matters that the honorable member has mentioned. I shall obtain the details and supply him with a more specific reply.
Mr SWARTZ: DARLING DOWNS, QUEENSLAND
– Has the Minister for Defence any information regarding the reported invasion of Tibet by forces of the Chinese Communist Government? As he is aware, the United Kingdom Government has recognized the Chinese Communist Government. In view of this report, and as Tibet adjoins India and Pakistan, has he any knowledge of what effect this move is likely to have upon diplomatic relations between the United Kingdom Government and the Chinese Communist Government?
Mr McBRIDE: Minister for Defence · WAKEFIELD, SOUTH AUSTRALIA · LP
– I have no official information concerning the reported invasion of Tibet by Chinese Communist forces. I am aware that the Chinese Communist Government has been recognized by the United Kingdom Government, but I do not think that an invasion of Tibet would necessarily have any adverse effect upon the diplomatic relations between the United Kingdom Government and the Chinese Communist Government. The United Kingdom has not guaranteed the sovereignty of Tibet, and I imagine that, in the event of a Chinese Communist invasion of Tibet, the way would be open for that country to refer the matter to the United Nations for consideration and the taking of any action that might be deemed necessary in the circumstances.
Mr HAYLEN: PARKES, NEW SOUTH WALES
– Has the Prime Minister seen in this morning’s press a reportby no less an authority than an official correspondent of the London Times that the South Koreans have been guilty of atrocities as great as those that were perpetrated by the North Koreans, that they have incarcerated prisoners of war in dark dungeons for many day?> have clubbed them with rifles and have resorted to the old Chinese torture of putting lighted matches under the finger nails of their victims? In these distressing circumstances, will the Prime Minister take immediate steps to contact the United Nations Commission for Korea and Australia’s representative on the seven nations commission and repudiate such acts, which are breaches of the Geneva Convention, so as to establish in the minds of people throughout the world that, although South Korea is our ally, we and the army of the United Nations do not countenance atrocities?
Mr MENZIES: LP
– I have not seen the report that the honorable member has mentioned and I certainly have no official knowledge of any such matters. Therefore, it would be a little odd, I think, for me to offer any repudiation in the circumstances. Australia is represented on the commission that is being established by the United Nations and I have no doubt that that body will be in the best possible position to ascertain the facts and to make any report that may be necessary to the United Nations.
Mr FRANCIS: Minister for the Army and Minister for the Navy · Moreton · LP
– by leave - I desire to make a brief statement concerning further casualties in the Australian forces in Korea. Advice has been received by me that some casualties have occurred as a result of Australian troops taking part in the fighting in northern Korea. I am pleased to say, however, that no fatal casualties have been reported. Seven members of the Australian battalion have been wounded, and their nextofkin have been advised by telegram of the facts. Immediately I receive confirmation that next-of-kin have received advice, the names of the soldiers concerned and the nature of their wounds will be released for publication.
Mr WARD: EAST SYDNEY, NEW SOUTH WALES
– Can the Minister for Labour and National Service inform me whether it is a fact that the shipping hold-up in the port of Newcastle has ended with the shipowners agreeing to abide by the longestablished practice of allowing seamen to select the vessel upon which they desire to work? Will the Minister state whether that matter was the cause of the dispute in the first instance? Will he explain his statement, ‘ in reply to a question by a Government supporter some time ago, that the dispute was a part of a Communist plot to hold up production in the steel industry? Will he now admit that, if any such plot existed to hold up production in the steel industry, it was on the part of the employers and not of the men?
Mr HOLT: Minister for Immigration · HIGGINS, VICTORIA · LP
– I understand that it is a fact that work will be resumed on the vessels to which the honorable member for East Sydney has referred, and arrangements are now well in hand for the supply of crews to all the ships which were temporarily tied up in the port of Newcastle. It is not a fact that the immediate cause of the trouble was that only one ship could not get a full crew. Several ships were not able to complete their crews, and the shipowners gave notices of dismissal to the crews, with the object of awaiting the time when a full crew would be available for each of the ships.
– That is not true.
– Subsequently, calls were made for the ship in question, as it was the vessel which had been waiting longer than any other to secure a full crew. I repeat, since the honorable member challenges my statement, that when the notices of dismissal were given, several ships had been unable for some time to secure a full crew. The honorable member also asked whether it was a fact that I made a statement of belief to the effect that the hold-up of shipping, at Newcastle formed a part of an organized campaign to retard the production of steel at and the shipment of steel from Newcastle. I made that statement publicly. It was not merely my own belief, because it was confirmed by two senior Ministers of the Government of New South Wales. That belief was also shared by several members of the Opposition in this Parliament, who discussed the matter with me.
– That is not true.
– The honorable member seems to have a faculty for intuition.
– Who are they?
Mr DEPUTY SPEAKER:
– Order I The Minister is entitled to be heard in silence when he is replying to a question.
– I discussed the matter with other members of the Labour party in the Parliament, who come from the same district, and they also confirmed that view.
– I do not believe it.
– That was’ their belief. It was the view of our own industrial officer in the port of Newcastle, and of the Coal Industry Tribunal, who sent an official communication to the Government in which he asked that a special tribunal be constituted to make an inquiry into the situation. In point of fact the Government instituted inquiries in various directions. Some of the reports have already reached me, and I understand that others will reach me to-day. We shall than decide whether, in our view, any further action arising out of those reports, is deemed necessary.
– My question to the Prime Minister is prompted by the increasing deathroll from road accidents. I realize that there is a federal organization, the Road Safety Council, in existence, and that the subject of my question may be put aside on technical grounds as a State matter. I ask permission to read one paragraph from a letter written on behalf of the Swan Hill Chamber of Commerce. It is as follows : -
We are informed that there is nothing to stop a person who is debarred from holding a driving licence in one State, from obtaining a, licence from a neighbouring State and once more becoming a menace to other road users.
The next time the Premiers assemble in Canberra, will the Prime Minister endeavour to have conditions relative to State motor registrations, and the issue of drivers’ licences, made more uniform and rigid ?
Mr MENZIES: LP
– The matter referred to by the honorable member falls within the purview of the Minister for Fuel, Shipping and Transport, but I shall discuss it with my colleague.
Mr JAMES: HUNTER, NEW SOUTH WALES
– Can the Minister for Immigration say whether it is a fact that from 80,000 to 90,000 British migrants will be brought to Australia within the next twelve months, and will he also inform the House of the method of selecting migrants that is followed by the department? Because of the shortage of labour in the mining industry, will the Minister consider including mine workers in Great Britain, many thousands of whom have relatives in this country, amongst the migrants selected to come here? Is it correct that the British Government does not like to lose mine workers to Australia?
Mr HOLT: LP
– The Government hopes that next year it will attract to Australia approximately 80,000 or 90,000 British settlers. By the end of December we shall have brought to Australia nearly 80,000 British migrants this year, which will be, I understand, a record. Migrants from Great Britain are made up of different categories. Some of them are fullfare paying passengers, who come out on their own initiative; the members of another group are nominated by friends, relatives and employers; and those in a third group represent a new development that was instituted by the present Government this year, and comprise persons nominated by selection committees who are accommodated on their arrival in hostels provided by the Government. The aspect to which the honorable member has particularly referred, of attracting to Australian mine . workers to go into our coal-mining districts, has been very much under consideration by the Government, and we have advanced our plans to the stage where a decision has been taken to establish hostels in the mining districts. It is hoped that we shall obtain workers to come into those hostels and into the labour forces that will be working our coal-mines, particularly in New South Wales.
– The honorable member for Henty addressed a question to me yesterday regarding lobbying in this building and suggested that persons, other than those visiting members by appointment, should not be admitted to the lobbies. I wish to inform the honorable member that the existing rules governing the use of the lobbies, which are exhibited at the various entrances, state clearly that the lobbies are strictly private and that strangers are not permitted to remain in or about any of the passages between the chamber and the various rooms set apart for the exclusive use of members. In view of the complaints made by the honorable member for Henty, I have repeated previous- instructions to the. attendants of the House to the effect that strangers found in the lobbies must be asked to leave. It would be appreciated if members also would co-operate in this matter by ensuring that persons visiting them are not left unattended in the lobbies.
Mr CURTIN: WATSON, NEW SOUTH WALES
– Many young men in Sydney, including particularly a number who ‘are attending the technical college for the purpose of taking diploma courses in chemistry and engineering, and who use B.S.A. army model motor cycles, have tried during the last six months to obtain tyres size 350 by 19 by 14, for their motor cycles, but have been informed by the tyre distributors that such tyres are unprocurable on the Sydney market. In the interests of the young men concerned, will the Minister for Supply make arrangements to have tyres of this description made available immediately ?
Mr BEALE: Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP
– -The distribution of motor cycle tyres within Australia does not come within the purview of the Department of Supply. The department controls the export to places abroad of tyres and rubber materials, but I repeat that neither the Department of Supply nor any other Commonwealth department has any control over the0 internal distribution of tyres. However, I shall look into the matter raised by the honorable member in order to see whether anything can be done to facilitate the supply of motor cycle tyres.
POST AND TELEGRAPH RATES BILL 1950
Motion (by Mr. Anthony) agreed to -
That leave be given to bring in a bill for an act to amend the Post and Telegraph Rates Act 1902-194!).
Bill presented, and read a first time.
Mr ANTHONY: PostmasterGeneral · Richmond · CP
– hy leave - I move -
That the bill bc now road a second time.
This bill deals with an amendment of the Post and Telegraph Rates Act 1902- 1949 to enable certain postal and telegraph rates to be increased to amounts more in keeping with present-day operating costs and conditions. Before outlining the manner in which it is proposed to adjust these tariffs, and also the charges for telephone services, I shall show honorable members why it is necessary to take this action, seeing that the rates were increased by the previous Government in the middle of 1949. I feel that when honorable members are made aware of the position, they will have no hesitation in supporting the proposals.
Since 1912, in accordance with the express wish of the Parliament, the Postal Department has prepared its balance-sheets on a commercial basis, which takes- into consideration the value of services performed for other government departments, such as the transmission without charge of meteorological telegrams and the payment of pensions, for which it does not receive full cash payment.
With the exception of 1930-31, when a small loss was recorded, the commercial balance-sheets of the Postal Department showed substantial profits over a period of twenty years, particularly during the war years and the first complete postwar year when the financial results of the department’s operations were influenced by the following abnormal factors: - The transport and delivery by the armed forces without cost to the Postal Department of an ‘ enormous volume of mail matter addressed to service personnel, the curtailment of maintenance work in order to conserve materials and man-power, the effect of wage and price pegging, the virtual suspension of staff recruitment and training, and the inability of the Department to incur expenditure on normal service improvements. Evidence of this is the fact that the highest surplus ever recorded by the Postal Department was £6,674,595 in 1944-45, whereas the greatest peace-time profit was £3,625,371 in 1938-39 immediately prior to the war. Since 1944-45, despite the utmost care in administration and close supervision of expenditure, the Postal Department has been unable to avoid a very heavy increase of costs of providing essential postal and telecommunication services. Those inescapable extra costs have been due chiefly to -
Increased wages as the result of arbitration awards, the 40-hour week, higher prices of materials, sharp rises in the costs of carriage of mails by rail and road, additional maintenance resulting from deferment of much maintenance work during the war years, and recruitment and training of additional staff necessary to restore the services to a reasonable level of efficiency and to expand and develop facilities to meet essential public needs.
The financial effect of those greater operating costs inevitably converted the surplus into a deficit. In 1947-48 the profit was only £1,849,781, and in the following year there was a loss of £1,722,993, excluding a deficiency of £1,146,724 that arose from the operation of broadcasting services. The wireless branch is not a commercial undertaking, and its financial results are now omitted from the Postal Department’s balancesheets. Apart from the wireless branch, a deficit of £5,000,000 was expected in 1949-50 on the basis of the rates in force, but postal and telegraph rates were adjusted in July, 1949, following . an amendment of the Post and Telegraph Rates Act, and the charges for local and trunk-line telephone services were also varied by a revision of the relevant regulations. As a result, the loss for 1949-50 was reduced to an amount of about £1,500,000, despite the fact that inescapable increases of labour, freight and maintenance costs totalled more than that amount, an eventuality which could not be foreseen at the time that the rate adjustments were made.
Since the amendment to the act was made in June, 1949, there has been a further heavy increase of the working expenses of the Postal Department. The annual wages bill has risen by £5,250,000, including £2,000,000 in. respect of cost of living adjustments, £750,000 under arbitration awards and £2,500,000 for wagesand salaries of new staff. The cost of road, rail and air mail services has increased by more than £1,000,000, and the expenditure on maintenance materials has increased by nearly £500,000.
Honorable members will be interested to learn that in 1944-45 the department’s annual wages bill was less than £14,000,000. This financial year, even without the recent basic wage increase of £1 a week and the cost of living adjustment from the 1st November, it will exceed £33,000,000. “Wages of new staff to cope with expanded activities account for only £8,000,000 of this increase, the remaining £11,000,000 being due to higher wage rates. The basic wage judgment delivered by the Full Arbitration Court on the 12th October may add more than £4,000,000 to the department’s annual expenditure on operating and maintenance staff. I interpolate here that capital costs will be increased by an additional £2,500,000 as a result of that judgment, so that the actual new cost to the Postal Department of the £1 a week increase will be £6,500,000 or £7,000,000.
Mr KENT HUGHES: CHISHOLM, VICTORIA · LP
– What does the Minister mean by “ capital costs ? “
– I mean the expenditure on the construction of post offices and other buildings, as apart from the provision and maintenance of services.
Mr KENT HUGHES: CHISHOLM, VICTORIA · LP
– Do not the sums for such expenditure come out of Consolidated Revenue ?
– Not necessarily. Portion of them comes from loans. Each ls. a week increase in the basic wage adds £200,000 to the department’s annual wages bill, including £25,000 for men engaged on capital works. The increase of the basic wage, when operative, will also affect immediately the costs of the department’s stores and materials.
A good deal has been said and written about the effect on the national economy of the introduction in January, 1948, of the 40-hour week! I do not propose to comment on that matter other than to say that the 40-hour week reduced the effective working time of a considerable proportion of the staff of the Postal Department by at least 8 per cent., and that much additional overtime at penalty rates has since been necessary to enable the department to continue to give the desired amount of service to the public. In 1946-47 the overtime bill was £317,000; last financial year it was nearly £1,300,000. It is estimated that the immediate direct effect of the 40-hour week has been to increase the department’s labour costs by about £1,000,000 yearly. The indirect effects, on the costs of materials, freights and so on, have also inflated expenditure.
Higher prices for materials have also added greatly to the costs of operating and maintaining postal services and of the expanded capital works programme. Since the war ended prices of materials used by the department have increased to an extraordinary degree. For example, automatic exchange equipment is 60 per cent, dearer; telephones and switchboards cost 50 -per cent, more ; and materials used in trunk line construction have increased in cost by 130 per cent. Materials used in maintenance work cost £702,000 in 1944-45, £1,637,000 in 1948-49 and, even on the basis of present prices, will cost well over £2,000,000 during the current year.
Comparing the prices of materials ten years ago with present prices, the increase has been phenomenal. For example, the cost of automatic exchange equipment has risen by more than 100 per cent., that of telephones and switchboards by 150 per cent., and that of underground cable by 250 per cent. During the war years much maintenance work had to be suspended, and it is only recently that the department has been able to increase its staff to a level that has enabled it to undertake an appreciable portion of this deferred maintenance. The extra work now being carried out has further increased annual expenditure. In 1944-45 the cost of conveying mails by road, rail, sea and air was £3,440,000, but sharp increases of charges made by contractors have been so heavy that it will cost at least £5,000,000 to maintain these services during the current financial year, which represents an increase of well over £1,000,000 on expenditure for 1948-49.
In the face of all these higher costs, the Postal Department has, since 1941, /made only one increase of its charges - the 1949 variation of postal, telegraph and telephone rates, which represented an overall increase of earnings of only 16 per cent. Having regard to the rise of 70 per cent, in the average wages of the staff, without allowing for the recent basic wage increase, the cost of living adjustment of £18 a year from the 1st November, and the marked rises of prices generally, I am sure honorable members will agree that the relatively small percentage increase which has taken place in the Postal Department’s rates generally during the past ten years is a tribute to the efficient and economical manner in which the department has managed its affairs.
If wages and prices of materials and freights were still at the 1944-45 levels the department would have recorded a profit of something like £11,000,000 in its commercial accounts for 1949-50, instead of a loss of about £1,500,000. Increased rates which applied in 1949-50 gave additional revenue of little more than £5,000,000. These increases were designed to eliminate the deficit but, as I have said, this was not possible because of further unforeseen rises in wages and material costs.
Although the business of the post office has increased rapidly and will continue to grow, earnings have not kept pace with spiralling costs of labour and materials. To ‘ illustrate this, I would point out to honorable members that in 1944-45 the average cost of handling 1,000 originating postal articles was £8 2s., by 1948-49 it had risen to £10 8s., and since then it has risen to £12 6s. The cost of handling 1,000 telephone calls rose from £13 6s. in 1944-45 to £17 18s. in 1948-49, and to-day it is £22 2s. The cost of handling 1,000 originating telegrams increased from £63 8s. in 1944-45 to £114 12s. 6d. in 1948-49, and to-day it is £151 18s. These figures speak for themselves.
In the face of these extraordinary increases in costs which are due to factors beyond the control of the department, it is little wonder that the post office will record a deficit in its commercial accounts for 1950-51. In the light of known and probable extra costs during the present financial year, it is estimated that a loss of at least £8,000,000 will be sustained in the post office accounts unless Parliament approves an increase in tariffs. The ideal for a postal administration is to provide adequate and satisfactory services and at the same time be self-supporting. Unfortunately, the achievement of this ideal cannot be accomplished. In the first place, the rate increase, if approved by Parliament, will operate for only seven months of the present financial year. They will operate from the 1st December if they are passed by Parliament in time. Every month’s delay will cause a loss of a further £500,000. Secondly, the recent basic wage adjustment and cost of living increase will add greatly to post office expenditure this year. These tariffs do not take into account the £1 a week increase granted by the Arbitration Court. Therefore, despite the increases dealt with in this bill, a heavy deficit for the current year is unavoidable. The Government had decided, however, to approach the matter on an interim basis and to review it again, in the light of actual results and the precise effect of the revised tariffs, at a later date. A further statement will be made to Parliament when the effect of the new basic wage is known.
If the post office continued existing charges in the face of the sharply increasing costs, the alternative to a serious and continually rising deficit would be to reduce drastically postal, telephone and telegraph services to the public at a time when the demand is most pressing. Such action would retard national development and cause embarrassment to primary and secondary industries particularly and could not be countenanced by the Government which recognizes full well the importance to the community of an efficient and comprehensive communications system.’ For the reasons I have mentioned, the only sensible and practical course is to increase charges to a reasonable extent to enable the post office to operate on a sounder financial basis. Accordingly, proposals for higher tariffs have been developed on an equitable basis having regard to a number of factors, which are : the cost of providing services ; the comparable charges in other countries ; the need to maintain and expand efficient facilities for . the public; and the importance of providing relatively cheap service to rural areas. The Government is satisfied, after examining the position carefully, that the proposed charges are fully justified in view of the inescapable increased costs which the department has to meet. I shall now indicate briefly to honorable members the nature and extent of the proposed adjustments. In connexion with the postal charges, the bill now .before the House provides for the following revision of rates : -
Letters. - Tim existing charge of 2id. for the first ounce or part of an ounce will be increased to 3d. The charge for each additional ounce or part of an ounce will be increased from 2d. to 2£d.
Letter-cards. - The existing charge of 2£d. will be increased to 3d.
Post-cards. - The existing charge of 2d. will be increased to 2Jd.
Commercial papers, patterns, samples and merchandise. - The existing charge of lid. for the first 2 oz. or part of 2 ox. will be increased to 2d., .but the present charge of 1 1/2 d. for each additional 2 oz. or part of 2 oz. will be continued.
Printed matter, including printed papers, circulars, catalogues and books, and publications not registered for transmission as newspapers or periodicals. - The existing charge of 1-Jd. for the first 4 oz. or part of 4 oz. will bo increased to 2d., but the present charge of lid. for each additional 4 oz. or part of 4 oz. will remain the same.
Mr KENT HUGHES: CHISHOLM, VICTORIA · LP
– Will this affect the air-mail rate?
– I- shall come to that later, but it will not, in fact.
No increase has been made to the rate for letters since 1941, when it was raised from 2d. to 2£d. The present fee represents an increase of only 25 per cent, on the rate in force twenty years ago. Although an increase of £d. was made in 1949 in the charge- for each additional weight unit of commercial papers, printed matter and the like, the fee for the first weight unit has not been altered since 1941. The existing rates are inadequate under present’-day conditions. I feel sure that the honorable member for Parkes (Mr. Haylen) will welcome this announcement. No change will be made in the current rate of 1-Jd. for each 6 oz. which applies to publications registered for transmission as books and to single copies of newspapers and periodicals, as the Government recognizes the importance of encouraging Australian authors and publishers. The concession rate of ltd. for 12 oz. applicable to Commonwealth and State Hansards will also be retained. This might possibly improve the mind of the reading public. No alteration is proposed in the bulk rate of 2£d. for each 16 oz. in respect of publications registered for transmission as newspapers and periodicals. The greater proportion of these journals are published in the metropolitan areas, but many are sent to subscribers in country districts. In addition, country newspapers utilize the system for distributing copies to subscribers in outlying areas, and the concession is also beneficial to a number of non-commercial bodies, including churches, ex-servicemen’s associations and organizations of employers and employees which publish journals coming within the scope of newspapers and periodicals as defined in the Post and Telegraph Act and regulations.
Consequent on the variation in domestic postage charges, it will be necessary to make adjustments in some Empire and foreign rates, and the necessary executive action will be taken concurrently with the enactment of this legislation. The most notable variation is an increase from 3-Jd. to 5 1/2 d. for the first ounce in respect of letters addressed to foreign countries, this adjustment being necessary as a result of the devaluation of the Australian £1, to keep within the limits prescribed by the Universal Postal Convention to which the Commonwealth is a signatory. The convention lays down on a gold franc basis the minimum and maximum postage rates which shall be applied by member countries to postal articles addressed to other countries.
Amendments to the Postal Regulations are being made to increase the charges for parcels and the rentals for private boxes at post offices. It is proposed to adjust the parcels rate schedule by making some increases. For example, the minimum charges applicable to a parcel weighing up to 1 lb. will be raised in the following manner : -
For delivery within 30 miles - Increase from 6d. to 9d. ,
For delivery elsewhere -
Within State of posting - Increase from 9d. to1s.
In adjacent State - Increase from1s. to 1s. 9d.
In distant State - Increase from1s. 3d. to 2s.
Corresponding adjustments will be made in the rates for heavier parcels. The maximum increase will be from 7s. 3d. to 8s. 9d. for a parcel weighing 11 lb. addressed to a distant State. The present parcels rates were fixed in 1929 and the revenue derived falls far short of the costs incurred in their treatment, conveyance and delivery. The Postal Department loses very heavily on the handling of parcels. The rates applied are nothing like sufficient to cover the cost of the service performed. The rates are generally much lower than those charged by the railway departments. The Postal Department would be justified in imposing, purely on a cost basis, much higher rates than those now put forward.
The rentals for private boxes have been in force since 1914 and present-day costs justify a substantial increase. It is proposed to double the charges for boxes at general post offices and to increase the rates at other post offices by up to 50 per cent. Under the new scale the yearly rental for an ordinary sized box will be £2 at general post offices and 15s. at other post offices.
The bill also provides that the base rate for ordinary telegrams up to fourteen words shall be increased from1s. 3d. to1s. 9d. where the offices are not more than 15 miles apart and from1s. 6d. to 2s. in all other cases. The present practice of charging urgent telegrams at double rates will be continued. The charge for each additional word beyond fourteen has remained unchanged at1d. since federation and is far too low in the light of existing costs. It is proposed, therefore, to increase the rate to l½d.
No change is contemplated in the tariffs for lettergrams and press telegrams. Due to the greater use of aircraft for conveying surcharged airmails, the use of lettergrams is declining, and press telegrams are also decreasing in numbers as the result of the adoption of leased teleprinter services. The major users of the press telegram service are the country newspapers. The additional fee of 2d. at present charged for a phonogram, that is, a telegram telephoned to the telegraph office for onward’ despatch, is not sufficient to cover the cost of operation, and an increase to 3d. is to be made by an amendment to the Post and TelegraphRegulations. At the same time, it is proposed to increase from 2d. to 3d. the fee which is charged, in addition to the normal telegraph tariff, when a telegram is lodged at a telegraph office through a private teleprinter service.
Although the charges for telephone services are to be adjusted by an amendment of the telephone regulations, I shall outline briefly for the information of honorable members variations which are proposed in rentals, local call fees and trunk-line charges. Increases in telephone subscribers’ yearly ‘rentals will range from 7s. 6d. for subscribers in local call areas with 1,001 to 2,000 lines to £1 15s. for business services in Sydney and Melbourne. The rentals for business services will be increased by £1 12s. 6d. in Brisbane, Adelaide and Perth, and by £1 7s. 6d. in Hobart and Newcastle, while therentals for residence services will be raised by £1 5s. in Sydney and Melbourne, £1 2s.6d. in Brisbane, Adelaide and Perth, and 17s. 6d. in Hobart and Newcastle. One effect of the adjustments will be to widen the margin between rentals for business and residence services in those telephone networks where there are differential rates.
The rentals for services connected to exchanges with local call areas of 1 to 300 lines will be reduced by 5s., while no variation will be made in the rentals for areas of 301 to 1,000 lines. These exceptions to the general increase are considered to be justified in order to give effect to the policy of the Government to improve conditions in rural areas. They will also offset to some extent the increase in the ‘unit fee for local calls in these groups ‘to which I shall now refer.
At present the unit fee for a local telephone call is where the local call area is restricted to 300 lines or less, 1 3/4 d. in other country districts and 2d. in metropolitan areas and Newcastle where special network conditions apply. It is proposed to introduce a uniform unit fee of 2d. for local calls. The Postal Department makes no distinction in the charges for postal articles and telegrams, and it is desirable to extend the principle to local telephone calls. The charges for trunk line calls made between 9 a.m. and 6 p.m. will be increased by amounts varying from Id. for calls under Ti miles to 4s. 2d. for calls over 1,300 miles. Rates for calls made during night hours, that is 6 p.m. to 9 a.m., will be raised by sums varying from Id. for calls under 7£ miles to 3s. 2d. for calls over 1,300 miles.
It is also intended to increase by amounts varying from Id. to 2s., according to the direct distance between the trunk line offices concerned, the additional fees which are charged in cases where calls are made to specified persons or extension ‘telephones. Although these fees were raised in 1949, they do not compensate for the special service provided and the extra trunk line time occupied.
No increases are to be made in the extra mileage charges for telephone subscribers extending beyond a radius of 2 miles from the exchange or in the tariffs for extension telephones, switchboards, and miscellaneous apparatus.
Mr KENT HUGHES: CHISHOLM, VICTORIA · LP
– How will this affect overseas telephones?
– That is a different matter altogether. I am referring to local telephones at present. Adjustments to the charges for overseas telephone calls will be made in consultation with countries overseas. The extra mileage charges have been fixed at a nominal figure to meet the needs of outlying localities. Recently I gave in the House an outline of the more liberal conditions which have been introduced by the Government relating to the provision of telephone services in country districts.
The general effect of the proposed increases in postal, telegraph and telephone rates will be to raise the Postal Depart ment’s earnings ‘by only 16 per cent. The cumulative result of the 1949 and 1950 adjustments will be to increase the earnings of the Postal Department by about 35 per cent., which is a very moderate increase having regard to existing ‘circumstances and the much higher rises which have taken place in wages and costs generally. In general, the new tariffs will still compare favorably with those in operation in other English-speaking countries. For example, the basic letter rate of 3d. will .be less than the equivalent charges in the United States of America and the United Kingdom. A fourteen word telegram from Brisbane to Perth will cost 2s., whereas a similar message from New’ York to :San Francisco costs 16s. 2d. The charge for a trunk line call from Sydney to Melbourne will be 9s., compared with lis. in South Africa, 14s. Id. in the United States of America and 23s. lOd. in Canada for a call over a similar distance.
I have mentioned that, unless these revised charges are introduced, the Postal Department will record a loss of at least £8,000,000 for 1950-51. This is not due in any way to lack of careful and wise management. Since assuming office as the Postmaster-General, I have reviewed all main aspects of the department’s operations and I am satisfied that the administration is sparing no effort to reduce expenditure to the lowest possible level consistent with the provision of adequate services to the public and to use all modern aids, as well as to streamline procedures. The plain fact is that the increased expenditure to which I have referred is almost wholly due to inescapable extra costs that result from causes over which the Postal Department has no control. The situation that faces the Postal Department in Australia does not differ in any marked degree from that which confronts postal, telegraph and telephone administrations abroad which have met heavy losses by substantially increasing tariffs.
The Postal Department’s programme of works to restore and expand the postal, telephone and telegraph services is now in full swing, and this year considerable progress will be made in overtaking the arrears that accumulated during the recent war and early post-war years. For example, during the last six months 46,831 telephones have been installed, compared’ with the 37,263 telephones installed during the corresponding period of last year. The Government has provided appropriately for the continued development of services, and stocks of materials have been built up to enable the department to proceed with expedition and economy in the vital task of catching up with arrears of works and meeting the needs of the community for its services. The Government is solidly behind the controlling officers of the department in their aim to supply adequate and efficient services as rapidly as possible. I remind honorable members that the Postal Department not only provides postal, telegraph and telephone facilities, but also carries out a wide variety of services for other departments. In its commercial accounts the department takes credit for the value of these services, and through its agency they are performed at a lower cost to the Australian taxpayer than would be possible if other departments set up special branches to do the work.
Honorable members are fully aware of the fact that the Postal Department has a vital obligation to provide adequate and satisfactory postal and telecommunication services for all settled districts throughout the Commonwealth, and that in performing this national task it must supply and maintain a wide variety of facilities in rural areas on a basis that could not be supported on financial grounds but is fully justified from the standpoint of assisting in the development of our great resources. Take, for instance, mail services. The estimated cost of conveying mails by road during the current financial year will exceed £1,500,000, whereas the expense of despatching mails by rail will be less than £900,000. As more than 90 per cent, of the population lives in towns on the Australian railway systems, the unit cost of transporting mail to rural localities by road is at least twenty times as great as the cost of conveyance by rail, and, obviously, the expense is very much in excess of the revenue that the department receives.
As a further example of the progressive and realistic policy that has been adopted by the department, I refer to the generous conditions under which telephone services are provided to country residents. Although the capital value of the plant required to install a subscriber’s service now exceeds £100,’ and the annual charges involved in respect of maintenance, depreciation and operation have risen tremendously during recent years, the annual rentals are much less than those charged in the metropolitan networks and large country cities and townships. Furthermore, the extra mileage charges on lines extending beyond the 2-miles radius of exchanges are much less than would be justified on an economic basis, whilst the hours of service at country exchanges are increased beyond the normal business hours under the same liberal conditions. The Government is convinced that the provision of services in rural areas at rates which, in many instances, are far less than the cost incurred by the department is fully justified as a means of keeping people on the land, avoiding undue centralization and stimulating and maintaining essential primary industries.
Although it must be admitted that, due mainly to abnormal conditions that have arisen from the recent war, the services of the department are lacking in some respects, the need to remedy the deficiencies and . to build up a public communications system that will meet all reasonable demands is fully appreciated by the Government and the administration, which are sparing no efforts to achieve as quickly as possible postal) telephone and telegraph services that will compare favorably with those in any other part of the world.
In view of the facts that I have stated^ honorable members will recognize that the proposed increases of departmental charges aTe unavoidable and that they are very moderate in the light of the additional costs which the department has to meet. Honorable members will also agree that the alternatives to the adoption of the new charges would be to curtail services and maintenance work with consequent detriment to national development and depreciation of valuable public assets, dismiss large numbers of staff, throw an additional burden on taxpayers) or to stimulate the demand for departmental facilities by making them available at rates that would be much lower than those that are justified by the costs incurred or by their value to users.
In conclusion, I urge honorable members to give careful consideration to the bill, which is nonpolitical in character. I know that it will be supported by all honorable members who appreciate the vital need for a national communications service which will provide the adequate and satisfactory facilities that are so essential to the development and welfare of Australia. I again emphasize that the financial return from these proposals will go only a part of the way towards balancing the accounts of the Postal Department for 1950-51. Consideration has not yet been given to the full impact upon the department’s activities of the increase of the basic wageby £1 a week that was recently announced by theCommonwealth Arbitration Court. As I said earlier, I shall be obliged to make a statement on that matter when the department has ascertained the exact effect that that declaration will have in relation to its expenditure.
Debate (on motion by Mr. Calwell) adjourned.
WAR PENSIONS APPROPRIATION BILL 1950
Debate resumed from the 12th October (vide page 799), on motion by Mr. Fadden -
That the bill be now read a second time.
Mr CHIFLEY: Leader of the Opposition · Macquarie
.- The bill provides for the appropriation of money for the payment of war pensions during the remaining two months of the calendar year. As honorable members will have plenty of opportunities to discuss war pensions during the debates on the budget and the ‘bill that will be introduced for the purpose of increasing the rates of pension, the Opposition does not propose to delay this measure. I assume that it provides for the increases that the Government contemplates.
– That is so.
– In the circumstances, the Opposition will reserve any comments that it may wish to make upon the subject of war pensions for a later occasion so that the Government may secure the desired appropriation without delay.
Question resolved in the affirmative.
Bill read a second time, and reported from committee without amendment or debate; report adopted.
Bill - by leave - read a third time.
In Committee of Supply: Consideration resumed from the 25th October (vide page 1390), on motion by Mr. Fadden -
That the first item in the Estimates under Division No. 1 - The Senate - namely, “Salaries and allowances, £13,900”, be agreed to.
Mr DRUMMOND: New England
– The budget reflects the great difficulties of the period through which not only Australia but also other countries throughout the world are now passing. The main problems confronting the people of Australia, and through them the Government and particularly the Treasurer (Mr. Fadden), relate first to the development of Australia, secondly to the defence of Australia, thirdly to the peopling of Australia by means of immigration, and fourthly to the reconciliation of the solutions of the first three problems with an attack upon the rising living and general costs in the community. Those problems provide the background for our discussion of the budget, and any attempt to disregard them must necessarily involve an utterly unrealistic attitude to our responsibilities. Various methods have been proposed for the reconciliation of the first three tasks that I have mentioned with the job of restraining increasing costs. They have ranged from the imposition of confiscatory taxes and the appreciation of the Australian currency to a slowing down of our efforts to develop, defend and populate the country by means of immigration. I shall discuss those suggestions as briefly as possible.
The Government has decided not to appreciate the Australian £1. That decision has been criticized rather strongly in certain quarters. Is the Government’s policy .wi.se or unwise? Would appreciation, for instance, reduce the cost of living? Honorable members must answer that question. I admit that the proposal to appreciate our currency has some merit, but I do not think that appreciation could have a very favorable effect upon the high cost of living. I shall state the reasons that have influenced me in forming that opinion. My belief is that appreciation of the currency would inflict serious financial losses upon primary producers, would endanger the stability of our great secondary industries, would imperil our immigration policy, and almost certainly would cause serious damage to the structure of public finance. It could have no really effective impact upon the cost of living for the very sound reason that the true causes of high costs lie within Australia and are not external. If high costs were caused by external factors, the Government would ‘be obliged to adopt a policy that would have its impact upon those factors. However, I propose to show that the overwhelming balance of evidence proves that the cost of living depends mainly upon internal factors. I refer honorable members to the annual report of the Commonwealth Bank of Australia in which, after a review of various factors that affect the cost of living, production and so forth, the following significant statement appears : -
However, the cost of imports has only a com- iii ratiively small direct effect on items included in the cost of living index and hence on wage costs, and, after allowing for the effect, on Australian costs, of higher prices for exportable products like wool, it is still necessary to look further for an explanation of the continued increase in prices and costs generally.
The significance of that position is that neither the cost of imports nor the income that is derived from the sale abroad of primary products, even the much maligned wool, is the basic reason for the rising cost of living. That statement in the report of the Commonwealth Bank is one of the most significant that could possibly be made as a part of an impartial survey of the factors that affect the cost of living in the Australian community.
To follow up my remark upon that matter, I invite honorable members to examine some statistics regarding factory production in this country in 1948-49, and certain allied factors that bear upon what I have said. The. gross value, of; factory production in . that . year was– £1,425,000,000. The figure for the . last1 financial year was even greater than that, amount. Income from exports in-1948-49i amounted to £615,000,000, and the in*,terest on the public debt payable in Australia was £72,300,000. Each of those amounts is a factor within Australia that influences the co3t of living, and we must direct our attention to them before we light-heartedly agree with the opinion that it can be reduced by external action.It is well that we should first examine our own household.
I shall now tell the other half of the story, which is about the external factors. In 1948-49, Australia imported goods to the value of £535,000,000, and the interest payment on our overseas indebtedness was £12,300,000, making a total . of £547,300,000, compared with the sum- of the three internal factors, £2,112,300,000. Even if that external factor could be’’ reduced by 20 per cent., the result would not, in my opinion, produce a reduction of £109,400,000 and make an appreciable impact upon our economy. A great disproportion exists between the internal and the external factors, and it is not indicated that the revaluation of the Australian £1 would materially assist to reduce the cost of living in this country.. On the contrary, such action would possibly have a markedly adverse effect. I admit that the figures that I have cited are only approximate. I do not contend that they are correct to the last penny, but statistical accuracy is always a matter of doubt, even when experts work on the calculations. However, the general statements are substantially correct. In order to obtain a problematical saving of £109,000,000 by appreciating the £1, we should jeopardize the prosperity of industries in this country which are producing goods and commodities to the value of £2,040,000,000 per annum. Australia purchased £280,000,000 worth of goods from Great Britain in 1949-50. Would that country reduce the value of its sales to us by £56,000,000 per annum if this Government were to appreciate the £1? I venture to say that British exporters calculate their costs upon what they can obtain by the present rate, and shipping freights and many other charges would almost immediately be readjusted to reduce the advantage that we should expect to obtain from revaluation. During the last financial year, Australia imported £73,000,000 worth of motor vehicles. It would appear that the revaluation of the £1 would effect a saving of £14,600,000 on that item, but that would not be achieved, because a considerable proportion of those vehicles were imported from the United States of America. Is it suggested that American exporters would cheerfully accept the effects of revaluation of the £1? I do :not believe that they would. They would immediately begin to re-adjust their prices for the purpose of reducing the advantage that the importer would expect to gain from the appreciation of the £1. All honorable members are aware of the developments that followed the devaluation of the Australian £1 by the Chifley Government. Australia gained practically no advantage from that decision, because exporters to Australia immediately adjusted their costs in order that their rake-off would not be affected.
I now wish to discuss the prime factors in the cost of Jiving. If those factors are represented by imports, my argument must be seriously weakened. But if they are to be found within Australia, my argument must be strengthened. The prime factors in the cost of living are food, clothing, light, heat, housing and furniture. To what degree will action that is taken to reduce our external costs materially reduce the costs of those internal factors? First, I shall examine the position in regard to food. That the Australian consumer receives the cheapest food in the world to-day is evident from information that I have obtained from certain tables supplied to me by the Department of Commerce and Agriculture. The wholesale price of butter, which i«i paid to the producer in Australia, is 215s. lOd. per cwt., plus a subsidy of 101s. 9d., making a total of 317s. 7d. per cwt. The United Kingdom contract price is 313s. 10 1/2 d. per cwt., on a sterling basis, and the world price is 450s. per cwt. Those people who airily say that the Australian rate of exchange should be unpegged do not appear to realize the. effect that such a policy would have on living costa in Australia. If the £1 were revalued, and if the subsidy on butter were substantially increased so that the consumer would pay approximately 383s. per cwt. - the difference between the Australian price and the world price - the taxpayer would quickly realize his present “indebtedness to the dairying industry The wholesale price of cheese in Australia is 130s. 8d. per cwt., plus a subsidy of 56s. per cwt ., making the price to the consumer 180s. Sd. per cwt. The contract price with the United Kingdom is 175s. per cwt., whilst the world price is 200s. per cwt. The wholesale price of eggs in Australia is 3s. a dozen, and the United Kingdom contract price is 2s. 7d. a dozen. The world price is not cited. When I was in our island territories recently, eggs were selling at 6d. each. Egg production makes a useful contribution to the Australian economy, and that industry would be completely smashed if it were deprived of the advantage that it now derives from the exchange rate. If that protection were withdrawn, thousands of small poultry-farmers - thrifty, honest, hardworking people - would require the assistance of a substantial subsidy to enable them to remain in the industry.
Australia gets its beef at from 8$& to 9$d. per lb., and no subsidy is payable in respect of that commodity. The Australian contract price with the United Kingdom is 8£d. per lb., and the world price in indicated by a question mark. The prices are undoubtedly much higher than we pay for beef in Australia, and range up to 4s., and 5s. per lb. The price charged for lamb in Australia varies from ls. 3d. to ls. 6d. per lb., but lamb is made available to Great Britain at 11 3/4 d. per lb. under a contract with the United Kingdom which provides that payment shall be made in sterling. It is clear, therefore, that the local price of meat would not be affected by a revaluation of the currency. The free price for lamb on the world’s market is from 2s. 3d. to 2s. 6d. per lb., so honorable members will realize the loss entailed to the meat industry in supplying the local markets. Wheat is sold on the Australian market for 6s. 8d. a bushel, but if it is sold overseas, under the International Wheat Agreement, it realizes from 15s. 3d. to 16s. Id. a bushel. If it is sold on markets which are not affected by the international agreement, it realizes 18 s. a bushel and even more. Since 60,000,000 bushels are made available for home consumption, honorable members will realize that the sacrifice made by wheat-growers is very considerable. Calculating the loss on average prices, it has been estimated that it amounts to £30,000,000 annually. A similar state of affairs characterizes the dried fruits industry. The price of almost every variety of dried fruits is lower in Australia than it is abroad. Many thousands of people are engaged in the production of the various foodstuffs that I have mentioned, and the livelihood and happiness of these people and their families depend directly on the continued prosperity of those industries. Furthermore, the people engaged in those industries represent Australians of the best types, and revaluation of the currency, which would destroy the economic advantage at present enjoyed by those industries, would do incalculable harm to our primary producers. Any one who imagines that an appreciation of the currency will reduce the cost of the basic foodstuffs is misinformed, and his calculations are misleading.
I turn now to housing materials, in regard to which there does not seem to be much prospect of a reduction of prices. The greater proportion of housing materials is produced or manufactured in Australia, and the cost of many building materials could not be cheaper. Australia now produces most of the cement used in building, and its price compares very favorably with the price of that produced overseas. We also manufacture the cheapest iron and steel in the world. Housing costs very largely depend upon the prices of bricks, cement, tiles, timber, and other materials, most of which are produced comparatively cheaply in Australia. Practically all our furniture, which is an ancillary of housing, is manufactured in this country from Australian timber.
The principal sources from which power and fuel for light and heat are obtained in this country are coal, water, and to a lesser degree, diesel oil. Almost all the coal consumed is mined in this country, and huge quantities of water are dammed for the generation of hydro electric power. The cost of diesel oil fuel is not high, and it is apparent that no great reduction of the prices of power and fuel, for light and heat can be effected.
I shall deal briefly now. with clothing costs. The greater proportion of the textiles and clothing used in this country is imported. Of course* a large proportion of them are manufactured in Australia from imported raw. materials. In 1946-47’, £53,700j000 worth of textiles and. clothing attire was imported, but only £10,200,000 worth was exported. In other words, in that financial year, Australia expended £43,500,000 on its textile and clothing requirements. It is clear, therefore, that whilst a saving on clothing and textiles might be effected by appreciating our currency, the extent of the saving would not be nearly so great as some people imagine it would be.
I have already pointed out that the wheat-farmers of this country are virtually subsidizing our economy by approximately £30,000,000 a year.” The dairy-farmers are virtually subsidizing the Australian consumers of butter by approximately £8,000,000 a year. The annual loss to graziers on hides sold in Australia, when compared with the overseas price of hides, amounts to approximately £8,500,000. Obviously, an alteration of the present exchange rates would not reduce the cost of footwear, because Australians already enjoy the advantage of being able to purchase the cheapest leather in the world. Some years ago when I was a member of the Parliament of New South Wales I had occasion to investigate the prices of leather and hides, and my investigation revealed that the producers were receiving approximately 9d. per lb. The people of Australia also receive a virtual subsidy from stockraisers of approximately £5,000,000 a year in respect of tallow.
All the fruit and vegetables consumed in this country are grown in Australia. Recently we have heard prolonged outcries from the housewives of the metropolis of Sydney about the scarcity, and the price, of fruit and vegetables. What is the reason for that condition? The explanation lies in the fact that almost all the fruit and vegetables sold in Sydney early in the season come from the warm areas of the north coast of New South
Wale’s. The area between Port Macquarie arid the Queensland border, which produces nearly all our early fruit and vegetables’, was inundated by a succession of floods during the last several months, and it is obvious that no governmental action can circumvent the consequences of such seasonal disturbances.
The brief review that I have given of the basic goods and commodities which really determine the cost of living shows that the revaluation of the currency could not possibly have any material effect on those factors. Consider the attitude adopted by the Australian Labour party towards our present economic difficulties. Labour advocates the reintroduction of prices control as the panacea for all our economic troubles. Of course, from our experience of prices control, we know that it leads only to poverty, scarcity and decreased production. In response to the nation-wide cry of the people for a reduction of the cost of living, all the Labour movement has to offer is the reintroduction of prices control. In other words, it is offering the people, who are crying out for bread, a barren stone. The introduction of prices control would necessitate the re-introduction of wagepegging, profit-pegging and rationing. Who wants rationing ? Is there any member of the Opposition who will advocate the re-introduction of rationing?
– What about pegging profits?
– Let us be quite fair about that proposal. In the first place, it is intimately related to wagepegging and price-fixing. If we reintroduce prices control we shall immediately withdraw from production the services of some thousands of people who will be engaged in all the form-filling routine and checking and cross-checking associated with the cumberous structure that would be needed to enforce any effective system of prices control. Any withdrawal of labour from our present economy, which is suffering gravely from n lack of sufficient labour, would inevitably decrease production and so increase the present costs of goods and services. After all, the principal causes of scarcity are those that arise from the operations of nature, including flood, pestilence and fire, and those that are brought about by the deliberate action of monopolists and others who seek to exploit the community. I do not need to say any more about the monopolists and the exploiters, because any administration that is worthy of office can deal with them.
Another basic cause of the present inadequate production is the deplorable state of our industrial relationships. Although I consider that the introduction of the 40-hour working week must inevitably have had an unfavorable effect upon our economy, I admit at once that the 40- hour working week has never been given a fair trial because people generally have not put .forward their maximum working effort. When we appeal to the Labour movement and the trade unions to cooperate with us in order to stimulate production, which is, after all, the only factor that will increase production and reduce the cost of goods, we are met with the response that the Government should re-introduce prices control. Although the introduction of prices control may be inevitable in circumstances of emergency, it is never a desirable departure from our normal economy. Undoubtedly, the unsatisfactory state of our economy -to-day is due not only to an insufficiency of production but also to a number of other factors. For instance, the nation has decided that if it is to survive it must have a greatly increased population, and to that end we are bringing large numbers of migrants to this country. It is inevitable that those additional people must accentuate the demand for goods and services. In addition, the Government has been compelled to undertake large commitments for the proper defence of this country. That, unfortunately, is unavoidable in the present state of the world ; but does any one seriously suggest that we should reduce the allocation of money or man-power to defence projects?
In conclusion, I consider that the great problem of reducing the present inflated cost of living demands team work on the part of all sections, and of every member of each section, of the community. In the first place, we must eliminate the friction that exists in our industrial relationships, for most of which, undoubtedly, the Communists are responsible. Fortunately, the Government has already directed considerable attention to the Communists, and is now endeavouring to. deal with the purely economic factors that are aggravating our economy. The Government proposes, in this budget, to bring about a balanced economy. Of course, our troubles, which have been accumulating for years, cannot be surmounted in a day. Finally, I appeal, to the people of Australia to realize the magnitude of the difficulties that confront this country, and I appeal to honorable members on both sides of the committee to co-operate with the Government in. solving those difficulties. If any real co-operation is forthcoming, then I am sure that the time spent on this debate will not have been wasted.
The DEPUTY CHAIRMAN (Mr.
Ryan). - Order! The honorable member’s time has expired.
Mr O’CONNOR: Martin
The budget is in many ways a remarkable document. I am sure that the Treasurer (Mr. Fadden) would not wish to have repeated the experiences that he underwent while he was preparing it. After many changes it is now before the committee in a rather ingenious form. I suggest that the budget should be presented to the Parliament in a more simple form than that in which it is customarily presented. I am not an accountant and I have considerable difficulty in understanding it. There are better and more simple ways in which it could be presented so that it would be less intricate than it now is. I also believe that the Parliament should not have to wait twelve months for an opportunity to consider the financial position of the country. Interim reports containing summaries of the nation’s financial position should be presented half-yearly to the Parliament so that it would have information on, and bc able to appreciate, economic trends. The system of a yearly presentation of the budget is not peculiar to the present Government. It has been the tradition of governments since federation to present the budget annually. . Under the present system the budget deals with the financial programme for a period of twelve months, during which time circumstances might arise that are unforeseen when the budget is presented.
The budget contains a summary of estimated receipts and expenditures. Included in the estimated receipts is the sum of £103,000,000 which the Government will collect from the wool sale3 deduction. The Treasurer has taken that amount into account in order to .balance his ‘budget. If it were not for the inclusion in the budget of that sum the Treasurer would be showing an anticipated deficit of about £103,000,000 instead of an estimated surplus of about £500,000. The method that the Treasurer has adopted of showing the estimated proceeds of the wool sales deduction a3 expected receipts, in order to balance his budget, cannot be justified.
Government supporters have made great play of the alleged condition of the social services funds that were bequeathed to the Government by the previous administration. Not many governments in tha history of the Commonwealth have taken office in such favorable circumstances as those that prevailed when the present Government started its term. The Government took over a stable economy. The revenue was buoyant. It has been able, by the use of funds that were accumulated by the previous Government, to bolster its budgetary position.
– But there was no money in those funds.
– Government supporters may claim that there was no money in the funds, and that they consisted only of I 0 U’s. If that is so then the Government is using those I O U’s in order to balance the budget. The Government cannot have it both ways. As a matter of fact it was precisely because that money was in existence that the present Government has been able to provide for the extensive increases of social service payments that it has made.
I turn now to the dollar position and the dollar loan. The budget makes no provision for dealing with the effect that the dollar loan will have upon our economy. It does not provide sums to be devoted to the payment of interest on that loan. This year we shall be paying 4^ per cent, interest, in dollars, on the loan. Provision for that payment should have been made in the budget. The Government has decided that the best means of developing the economy of this country is that of borrowing. Government supporters who have spoken in defence of that policy have dealt with the advantages that we shall reap from the dollar loan, which will assist in the development of this country. They have failed to point out the possible effects of the loan on our future. I recall that in the period from 1920 to 1929, anti-Labour governments followed precisely the same policy of borrowing, and finished up by busting our economy. The same thing may happen again. We are not able to meet our dollar commitments to-day, so how shall we be able to meet them after we have saddled ourselves with an annual interest burden of 3,250,000 dollars on this loan? The loan will enable capital equipment for development to be imported, but it will not directly contribute one cent to our dollar earnings. In support of the Government’s attitude to dollar borrowing honorable members opposite have stated that if we can get dollars into the country we shall be able to compete to a greater degree in dollar markets. On the contrary, that will not be the case, because in the first place America will not permit unbridled competition by us in dollar markets. What could happen is that we might be able to compete more effectively in sterling markets. It is just too silly to think that if we develop this country to a stage where it oan compete effectively, not only with America, but also in the United Kingdom’s dollar market, those two countries will stand aside and let us continue to do so without hindrance. If we reached a stage of productive efficiency that would (suable us to compete with American produck on a cost basis, then, believe me, America would not allow that position to remain unchanged. It would take steps to see that its markets were not undermined by Australian competition, as it has done in the past in similar circumstances, by raising its tariff barriers.
I consider, therefore, that the contention that the dollar loan will enable us to earn more dollars is erroneous, and will not be proved sound in practice. Honorable members opposite seem to believe that because we shall be able to import more capital equipment through the means of the dollar loan, all our problems will be solved by the consequent increase of production. About twenty years ago we. heard that same story, but the difference then was that we were competing in a sterling market, whereas now we are trying to compete in a dollar market. Notwithstanding the fact that up to 1929 we borrowed so extensively that borrowing by the Commonwealth and the States together reached a point where it was necessary to impose controls, we had practically unlimited sterling receipts in the form of loans, and that our production was sufficient to meet our own needs, one of our greatest problems, when the crash came in 1930, was to meet our overseas sterling commitments. The necessity to pay interest on sterling loans was a factor that contributed to the retardation of our development. It is possible that that position will recur as a result of the recent dollar loan.
Nobody knows for how long that position would last. It might last for years. As everybody knows, such conditions occur in cycles. They have a habit of repeating themselves in a more intensified form. If the lessons of history are reliable, then there will be another cycle similar to that which affected us in 1930. I do not know when that will happen. If it were not to occur, then we could not trust the lessons of history. Should it happen as a result of this dollar loan one of the problems confronting us will be that of meeting our interest commitments. I have pointed out repeatedly that it is almost impossible for us to break into the dollar markets. This loan will not assist us in any way to do so, and I cannot subscribe to the idea that has been promulgated in this Parliament that we shall gain greatly from the loan. The terms of the loan leave a lot to be desired. The honorable member for Watson (Mr. Curtin) said last night that America was lending money interest free to Japan. A few years ago America lent Britain money at 2 per cent, interest, yet now we are asked to pay 3^ per cent., plus 1 per cent, commission in the first year. After the first year we shall pay 3£ per cent. I do not consider that this country has made a good bargain. As I have said before, the problem of finding dollars is fraught with difficulty, and if this loan has the effect that
Government supporters have said it will have, that result will be entirely contrary to the teachings of history.
Sitting suspended from12.45 to 2.15 p.m.
– At the suspension of the sitting I was discussing the subject of loans. There are four Australian loans falling due in New York, the interest rate on which varies from 3¼ per cent. to 5 per cent. This loan has been secured at the same rate as loans that were obtained in New York twenty years ago.
– That is not so.
– I suggest that the honorable member for Bennelong (Mr. Cramer) look at the table of loans. If he does so he will find that my statement of the position is accurate. I have before me the table of loans raised in New York and the rates of interest-
– But those loans were not raised twenty years ago.
– They were raised up to twenty years ago. They were raised before the Loan Council came into operation. A number of loans due in New York were raised at interest rates lower than 3¼ per cent. If the honorable member can refute that statement he will have refuted my contention that the Government has obtained this loan on precisely the same terms as applied to loans that were raised over twenty years ago. The Government has obtained this loan on no better terms than it could have got twenty years ago, notwithstanding the fact that interest rates throughout the world are supposed to have been considerably reduced since then. This loan will be a cause of serious inconvenience to Australia in years to come. At the moment, the Government is budgeting for a deficit of 20,000,000 dollars annually. Past deficits have been financed from the Empire pool. Australia was compelled as a result of the change that was made several years ago in the relation of sterling to dollars,to reduce its dollar expenditure from approximately 70,000,000 dollars to 50,000,000 dollars. Tinder existing conditions, Australia is incurring an annual debt of 20,000,000 dollars. It has been suggested that this loan will be the means of enabling Australia to earn dollars to meet its dollar liability. That will not be the case because it will be impossible for this country to earn dollars. It is the responsibility of the Government to provide not only for the present but also for the future. “Whilst this loan may be of some temporary value it will be a grievous burden in the future. The Government has mortgaged the future of this country and the temporary advantage which it may gain will be cancelled out in the future because it will not be able to meet dollar commitments unless there are some abnormal developments.
The Estimates make provision for approximately £103,000,000 as wool deductions. That proposal amounts in effect to a forced loan. The people who have objected to it have a legitimate grievance. At the moment, they are paying7½ per cent. into a wool stabilization scheme. It is now proposed that they should pay an additional 20 per cent. so that they are being taxed at the rate of approximately 27½ per cent.
Mr TURNBULL: MALLEE, VICTORIA · CP
– They are not.
– They are. For the current year, wool-growers will have their income reduced by 27½ per cent. Honorable members opposite may say what they will of this proposal, but it represents a forced loan. If it is equitable for the Government to discriminate in this matter there are other sections of the community who may well be affected in the same way in the future. In singling out this section of the community the Government has set a precedent which it may regret later on.
The budget is an ingenuous document. It seems to me to be the work of a surrealist. The longer one looks at it the less sense it makes. It will be impossible for this country to achieve any degree of stability, due to the ingenuous methods that have been used by the Treasurer. If the effect of his methods of finance are not felt in the next twelve months they will undoubtedly be felt in years to come. By virtue of the fact that he has included in his budget this wool tax of £103,000,000-
– It is not a tax.
– Whatever it is, it has been used by the Treasurer to balance. his budget. If the Treasurer had not included this £103,000,000 in his budget he would have been short ‘of that amount. The Treasurer has shown a surplus of approximately £500,000, but if that £103,000,000 “had been excluded from the budget he would have shown a heavy deficit. The attitude of the Government is fraught with danger and difficulty for (this country. “We have experienced what has happened when Australia has embarked, upon a policy of borrowing. Years ago this country borrowed almost up to the hilt in the sterling area, and when the crash came -it was not in a position to meet its sterling liabilities, notwithstanding the fact that it had an abundance of production and a surplus of goods. If a similar position occurs again it will not be able to meet its dollar liabilities. The fact that Australia was not able to meet its sterling commitments accentuated the effect of the depression in this country. Unless this Government can prove that the economic cycles that characterize capitalism have disappeared it must show that this country will not have commitments which it will not be able to meet.
The Government seems to imagine that the importation of capital equipment will enable industry to produce goods which will earn dollars. I submit that not one item of imported capital equipment will earn an appreciable number of dollars for Australia. The use of substantial additional capital equipment might enable Australia to sell goods iri the sterling markets, but it will not enable us to penetrate the dollar areas. It is ridiculous to think that the United States of America will supply dollars to enable Australia to cut the dollar market away from Americans who hold it now. The Government has not shown how we are going to earn dollars. “Wool and wheat are our greatest dollar earners. It is ridiculous to suggest that we should export more wool to the United States of America because the United States of America itself determines the amount of wool that it will take from Australia. Yet, unless we can boost the production of wheat and wool there will be no chance of our overcoming the dollar deficit. In what other field’ can this country compete in the dollar market with other countries? Can we compete in dollar areas with Great Britain with its huge industrial potential? Will America forgo its present markets in hard currency areas in order to enable Australia to enter them ? “We must look to the possibility of developing trade in the soft currency areas. While this loan may have some immediate advantage, in the long run it will be a burden and will not result in any substantial contribution to the development of this country.
A government has the responsibility of taking into consideration the future as well as the present. The last Government would not embark on the policy that this ‘ Government is now pursuing. It could have obtained the same accommodation that this Government is obtaining but it refused to do so because it considered that it was responsible for the future of the nation as well as for the present.
The DEPUTY CHAIRMAN”. - Order ! The honorable member’s time has expired.
Mr FAIRBAIRN: Farrer
.- The honorable member for Martin (Mr. O’Connor) has asked why no provision has been made in the budget for the payment of interest on the recently acquired dollar loan. The reason is that the effective date of the loan has not been decided and, until it is fixed, no withdrawals can be made. Interest is only payable on the amount drawn and it is payable over a period of six months. Therefore, if the effective date is after the 31st December .the interest for the ensuing six months will not come into this budget. If, on the other hand, it is before the 31st December, there will be a small amount of interest but, because the amount withdrawn will be small, no provision has been made for it in the budget. We believe that most of the interest will have to be paid next year. The honorable member also said that this loan would not assist us in any way. It is very hard to follow the honorable member’s reasoning on that point. It is hard to believe that the importation of essential equipment will not benefit us. The dollar loan will be used to import tractors, headers and other agricultural plant, as well as coal-mining machinery such as the Joy continuous miner, grab-loaders and other heavy machinery which is at present obtainable only in America. Such machinery will assist to increase the productivity of this country. About £1,000,000 worth of dollars will be spent on the Snowy Mountains hydro-electric scheme. If dollars were not available for this loan, work on that scheme would be greatly retarded, or it possibly could not be carried on at all.
The Minister for National Development (Mr. Casey), very early in his term of office, introduced into Australia. 96 of the largest earth-moving machines available anywhere in the world. They were the T.D.24 type of tractors. Twenty of those were set to work in the Snowy Mountains area. The purchase of those machines was made possible by an arrangement by the Minister which avoided the use of dollars. Still more dollars will be required if the scheme is to come into operation as quickly as is desired. Speed is of the essence of the contract, in that project. It is no use to have a scheme which will produce power in 35 years. Power is needed in Australia now. The Minister for National Development has also taken active steps to speed up the work on the project. Men engaged there now work 48 hours a week, and are paid overtime for the time worked in excess of 40 hours. That is for the purpose of getting our muchneeded electric power as quickly as possible. As a result of re-organization it is expected that within four years the first block of power will become available from the scheme. This will comprise 60,000 horse-power. Two years later a further 120,000 horse-power will become available. At that time tha harnessed water power will save 250,000 tons of black coal each year. The scheme is expected to produce finally about 3,500,000 horse-power. If this country is to be developed it is essential that that project should be pressed to a speedy and satisfactory conclusion. It cannot be so expedited unless we have dollars to purchase machinery for it. Optimists believe that fifteen years will pass, and the worst pessimists estimate that 25 years will elapse before the scheme will be completed. Therefore, we can expect it to be finished within about twenty years. In addition to the power produced, about 2,000,000 acre-feet of water will become available for irrigation along the banks of the Murray and Mumimbidgee rivers. To say in the light of those prospects that the dollar loan is not of much use is merely to make an absurd statement.
The honorable member for Martin mentioned what he called the “wool tax “. There is no wool tax in .existence, nor is any contemplated. What is proposed is a prepayment of taxes. It can be called, as the Leader of the Opposition (Mr. Chifley) has said, a forced loan, because under the proposal the wool-growers will have to pay their income taxes probably a year ahead of the time When they would normally pay them. Let us consider how the small wool-grower will be affected by the proposal. A man with 150 sheep would shear about five bales of wool. He would receive £200 a bale, so that his gross return would be about £1,000. About five years ago he would have received £150. Out of that £1,000 he will have to pay two levies, a 7-J per cent, levy and a 20 per cent. levy. The TJ per cent, levy has already been considered in this chamber, and it has been decided that a vote will be taken of all wool-growers to ascertain whether they desire such a scheme.
Arguments have been put forward on both sides. It has been said that this levy is an insurance against bad times and that when a stabilization fund of £50,000,000 has been accumulated, backed by a government guarantee, it will be possible to ensure that wool prices do not again drop to the disastrous levels to which they have sunk in the past. The arguments against the scheme are that it represents government interference, and will require a large number of people to operate it who will not be engaged in doing anything useful for a considerable time. Many wool-growers feel that they would prefer to stand on their own feet. They have always done so in the past and desire to continue to do so. The 7§ per cent, levy proposal is something upon, which every wool-grower will be able to vote. If the wool-growers accept it, well and good; if they reject it their money will be paid back immediately. The 20 per cent, scheme is one under which the wool-grower will pay income tax in advance and receive a credit. A man who receives £1,000 for his wool will have £200 deducted, for which he will be given a credit. He will use that credit to pay his income tax when his assessment is issued. If that £200 were left in his own hands, he would have it for only about twelve months, and it is most unlikely that he would be able to earn more than 2 per cent, interest with it. Therefore he will lose about £4 during the year if it is taken as a credit against his income tax. If he is working on an overdraft he may have a mortgage upon which he is paying 4^ per cent., so that he will lose £8 10s. gross if he pays the £200 to the Taxation Branch. The £8 10s. would be a deduction from income tax and actually his loss would work out again to about £4. I do not think that there is anything unreasonable in asking a farmer to forgo £4 out of his £1,000 wool cheque.
Mr GRIFFITHS: SHORTLAND, NEW SOUTH WALES
– Then why are the wool-growers protesting?
– They are objecting mainly because they do not know the full details of the scheme. Something has been said about hardship, and it has been stated that there is no hardship clause in the bill, but the Treasurer (Mr. Fadden) has stated that provision has been made to meet cases of hardship among wool-growers. I direct the attention of honorable members to clause 11 of the measure, which reads -
Where the Commissioner receives from a producer a wool deduction certificate and is satisfied that the producer has suffered such losses by reason of flood, drought or other adverse seasonal conditions, or otherwise, that the producer would suffer serious hardship in paying an amount of income tax or provisional tax payable by him but in respect of which he is not entitled under the last preceding section to a credit in respect of that certificate, the Commissioner may credit, in payment or in part payment of that income tax or provisional tax, an amount not exceeding the amount of that certificate.
There is a further provision in clause 12 under which a producer who is not satisfied with the decision of the Commissioner may appeal to the Land Valuation Board established under the Land Tax
Assessment Act 1910-1949. Therefore, it is quite certain that cases of hardship have been provided for.
An important matter raised during the debate is that although the Opposition has been particularly critical-
The DEPUTY CHAIRMAN.- Order ! There is far too much conversation in the chamber.
– The Opposition has not put forward anything in the way of constructive criticism of the budget.
The DEPUTY CHAIRMAN.- Order ! The honorable member for Watson (Mr. Curtin) is conversing too loudly.
– Honorable members opposite have put nothing forward as an alternative to the Government’s proposals except prices control. They know as well as everybody else that prices control with all its concomitants > in the way of wage-pegging and direction of man-power would be quite unacceptable to the people in peace time. They have put nothing forward to assist us to improve the budget in any way by making a better arrangement for dealing with the period of inflation through which we are passing. The Leader of the Opposition (Mr. Chifley) was very critical of the Government’s failure to reduce expenditure. Does he believe that we should reduce our expenditure on defence, which is estimated to co9t £83,000,000, or on building up a stockpile of essential stores upon which £50,000,000 is to be expended, or that we should not pay child endowment for the first child? Does he believe that we do not need more and improved postal facilities or that a free medicine scheme should not have been introduced? Doe? he believe that we should not increase pensions by the large amount which was said by the Treasurer to be the largest increase in pensions that has ever taken place? It is all very well to criticize the Government, but the Opposition has not attempted to point out how the Government’s actions could have been improved.
Mr CLYDE CAMERON: HINDMARSH, SOUTH AUSTRALIA · ALP
– It would not be hard to do that.
– I am asking for some constructive criticism, but none has yet been forthcoming from the Opposition during this debate which has been proceeding for a long time. The previous Government handed out to the States a very meagre amount of money for road construction and maintenance. The roads of this country are in a deplorable state at the present time.
– The Minister for National Development has said that the States could not spend the money which was made available to them by the previous Government.
– I have consulted the engineer of the shire in which I reside and he has informed me that he could have spent considerably more had it been forthcoming.
– If the honorable member for Port Adelaide (Mr. Thompson) charges the States with inability to spend the money allocated to them he will find that they will give him a very different answer from that which he might expect.
– The money allocated by the Australian Government for road maintenance was not spent by the States.
– Roads are in a deplorable condition and have been made worse by the widespread floods which have occurred this year. As a modern, progressive country, we used to pride ourselves upon the state of our roads, particularly the Hume Highway, which was was one of the best roads in Australia. This fine road has now deteriorated into a string of pot-holes, and near Sydney it has at times been completely impassable. In those circumstances, the Government must provide additional finance to State governments and. local government authorities for the development and maintenance of not only main roads but also access roads. If the Government were now faced with the necessity to move vast quantities of strategic materials over the roads between Melbourne and Sydney few of the vehicles employed in the task would be able to complete the journey within a week, whilst many of them would .break down completely.
– The recent heavy rains have damaged those roads.
– That _ is so; but, principally, for want of repair, they are not capable of carrying present meter traffic which is rapidly increasing because the railways of New South Wales cannot handle a large proportion of the goods that are offering to them. We are approaching a stage when road transport will outstrip the rail transport, which is coming obsolete. For instance, the New South Wales railways will not accept any goods for delivery outside a radius of 50 miles.
– Tell us something about the pot-holes in the workers’ wages.
– The Government is also incurring greatly increased expenditure under its immigration scheme. Surely, no honorable member would suggest that for the sake of saving a few million pounds we should curtail that scheme. Under it we are bringing large numbers of people to Australia who will contribute much to the development of our resources. Provided that the Government presses on with its immigration plans, we may witness in this country a. parallel to the development that took place in the United States of America in the ‘90’s, which was a groat factor in helping that country to become a leading nation to-day. I have heard considerable criticism of some of the classes of migrants that are being brought here. It is said that many of them will not prove to be satisfactory. However, even should a few migrants fail to ‘become good Australian citizens we have every reason for hoping that their children will do so. I urge the Minister for Immigration (Mr. Holt) to apply the immigration law a little more strictly than it is being applied at present. Although all migrants who are brought out under the Government scheme sign an agreement to engage for a period of two years in work to which the Government assigns them, we know that in many instances migrants have had as many as six jobs within a period of a few months, and that some of them have simply laughed in the face of departmental officials when they have been directed to certain industries. The Government should not hesitate to send back to Europe any migrants who are proved to be unsuitable. However, the great body of migrants are making a very valuable contribution to the development of this country. Recently, when I inspected some large industries at Wagga I was amazed to find so many migrants engaged in them, and those in control of those industries informed me that they would not have been able to carry on had it not been for the migrant labour that had been made available to them.
A few minutes ago the honorable member for Watson made an interjection that had reference to the problem of putting value back into the £1. The honorable member is aware of the reasons for rising posts. One is that the purchasing power of the community is excessive in relation to the supply of goods that are available. The Government is taking every action in its power to remedy that position. First, it is importing plant and goods that are urgently required by industry; and secondly, it is implementing a plan to increase local production. Whilst in 1949 we imported £139,000 worth of coal, last year we imported coal to the value of £438,000, or an increase in value of oyer 100 per cent., and, last year we imported £22,665,000 worth of iron and steel compared with imports valued at £9,335,000 in 1949. In addition, the Government has reduced import duty and sales tax on an extensive range of articles including prefabricated structures. The Prime Minister, in the series of broadcasts that he made recently, fully explained the Government’s plan to step up production generally. Every one realizes that underproduction of coal is at the root of this problem. The Government has also negotiated the dollar loan which will be used for the purpose of procuring plant and machinery and of mechanizing coal mines. Recently, the Parliament passed the Communist Party Dissolution Bill which should have the effect of reducing industrial unrest. The Government does not expect by that means to achieve that objective immediately. Indeed, it is most probable that the first .reaction to that measure will be increased unrest until the core of communism is removed from our essential industries.
The Bureau of Mineral Resources has done an enormous amount of exploratory work. In my electorate, thanks to the work of that body, what was at first thought to be a minor coal-field has been proved to be 600 square miles in area whilst drilling has disclosed a seam 62 feet in width at a depth of 200 feet! That is the only large deposit of coal in New South Wales that is conveniently situated to serve the requirements of Victoria. I do not know whether it, can better be developed by the open cut method than by deep mining. However, the deposit is so situated that the coal can be fed directly to the Victorian railways, which can convey it to any part of that .State, or it can be transported by barge on the Murray River to power houses at Mildura and Swan Hill and to meet the needs of many important industries along the Murray Valley that are now starved for coal. Whilst that coal is rated at only 10,000 British thermal units compared with a rating of 12,000 British thermal units of Maitland coal, it is of better quality than other coal found in Victoria with the exception of Wonthaggi coal. However, the Wonthaggi seam is of limited dimensions.
Mr GRIFFITHS: SHORTLAND, NEW SOUTH WALES · ALP
– Why has not the seam to which the honorable member refers been opened up?
– It would have been opened up by now, had it been situated anywhere else but in New South Wales. I could mention many other measures that the Government is taking with the object of increasing production, but I wish to deal briefly with a matter that is a bone of contention in the Parliament. I refer to the introduction of systems of incentive payments and profit sharing in industry generally. As the Government has no legislative power to implement such systems, the initiative in this matter must rest with the employers and employees. The introduction of such systems will depend upon the degree to which the workers are prepared to cooperate. Such schemes would contribute greatly towards increasing production. Ab my time has nearly expired, I shall conclude by repeating that the budget is designed to curb inflation by increasing production by reducing the purchasing power of the community and increasing the limited supplies of goods that can bc produced under present conditions.
Mr FITZGERALD: Phillip
.- The honorable member for Farrer (Mr. Fairbairn) has just made an amazing apology for the budget. Every one anticipated that the Government would introduce proposals to eliminate all forms of controls and would severely prune government expenditure, but in spite of the promises that the present Government parties made at the last general election, nothing contained in the budget is designed to achieve those objectives. On the contrary the Treasurer (Mr. Fadden)- in his budget speech said -
The Government proposes to set up a National Security Resources Board which will have the task of examining our civil and military resources and needs and making recommendations to the Government on national planning and priorities.
Furthermore, as the Prime Minister has announced, the Government will establish an organization to supervise the general allocation of key materials. It is also proposed to re-institute the Capital Issues control.
I realize, of course, that the Prime Minister (Mr. Menzies), in the numerous broadcasts that he has made in recent months has, rendered more difficult the Treasurer’s task in framing the budget. I recall that on a previous occasion when the Treasurer wa3 Prime Minister he was virtually forced out of office as the result of criticism that was levelled against him by the present Prime Minister. Perhaps I can best convey the general reaction of the community to recent speeches that were made by the Prime Minister by quoting press editorials. The following editorial was published under the heading “ Better off than ever - What’s all this hard times and inflation talk?”: -
Capital Issues Board: Proposal to revive this comes as a shock. Control of capital issues is a blow against initiative and free enterprise. Any man or woman in Australia should be allowed to start any enterprise he or she likes. If it is not a success they lose their money; but it was free enterprise that built the -primary and secondary industries of Australia without any Capital Issues control. Further, there are more brains in free enterprises than among the bureaucratic boards that are set up to strangle them. In any case, legally the suggestion does not mean anything, for it is invalid. Mr. Menzies should ignore it. . . .
Discouraging workers in unnecessary .or luxury trades: This rather savors of industrial conscription. Who is going to decide what are unnecessary and luxury trades ? Any government seeking to direct Australians in industry will find that Australians will not stand for it.
Less Government spending: Every one will agree with this. Curtail Government spending by all means, but do it and don’t talk about it.
Government finances to be conducted to avoid inflationary budgets and to avoid running into debt, will receive wide commendation. It is something that the people desire with all sincerity.
But the budget gives no promise of any reduction cif expenditure! Commonwealth revenue from individuals will increase this year from last year’s total of £95,500,000 to £157,000,000. The over-all increase of revenue for the year will exceed £172,000,000. These betrayals of the policy that was announced during the election campaign will -require a greatdeal of careful explanation when the Government and its supporters next face the voters, an occasion which, I hope, will not be long postponed.
The Government took office during the period of greatest financial prosperity in Australia’s history, and its persistent propaganda about the danger of inflation is largely humbug. All citizens should share in this prosperity. Hysteria should be discouraged and the people should be informed that there is no immediate risk of a depression. The Government’s policy was viciously criticized by the six State Premiers, both Labour and anti-Labour,’ at the recent conference of Commonwealth and State Ministers. The attitude of the Prime Minister and the Treasurer led to discord throughout the discussions at that conference. The curtailment of expenditure by the .States, of which the Government talks so freely, will lead to the obstruction of progress and the curtailment of major developmental works that are of the greatest, importance to the nation as a whole. Home building will be retarded, notwithstanding the Government’s vainglorious promises. The financial restrictions that it has imposed upon the States will hamper the construction of hospitals, the expansion of health services and the construction of muchneeded schools. Water, sewerage and electricity projects will be delayed. Some Premiers have declared that they will budget for deficits during the current financial year. They cannot do otherwise if their States are to prosper. The important work- of municipal councils will be held back because of the shortage of funds that will result from the Government’s restrictive financial policy. Many men of vision and initiative serve the community free of charge on local government bodies throughout Australia. But their efforts will be negatived unless they can obtain funds with which to finance the undertakings that they have planned. One council in the electorate that I represent, which includes the salubrious district of Bondi, has prepared a scheme to make Bondi a tourists’ paradise that will become famous throughout the world. That plan will have to be deferred indefinitely because the council will be financially starved as the result of the implementation of the Government’s policy.
Many of the speeches that have been made in this budget debate have created a false atmosphere. It is true, of course, that most of the nation’s wealth is concentrated in the hands of only a few citizens, a situation that might easily lead to inflationary chaos. However, by means of a more equitable distribution of our wealth, the Government could secure the full co-operation of the community in the task of stabilizing our economy on a permanent basis.
– Does the honorable member favour higher taxation?
– I should have no objection to the levying of higher taxes upon those people whose incomes would enable them to bear the increased load without hardship, or even discomfort. I consider that the Government should give more help to the people who are in need of assistance instead of increasing the salaries of highly placed public servants and judges, some of whom will receive as much as £100 a week when the Government’s proposals are implemented. Some members of our community are expected to live on an income of approximately £130 a year. Most supporters of the Government have no real conception of the conditions under which the masses of the people live. They speak of the magnificent liberties that are enjoyed by Australian citizens and, when members of the Opposition remind them of the sufferings of the unfortunate members of the community, they believe such equality exists under this system that the rich, as well as the poor have freedom to sleep under bridges and to starve if they want to do so. That is a very grim type of humour.
There is a great deal of poverty in our midst to-day as the result of the high cost of living. I plead for the workers with young families and the workers in the age group over 60 years whose sufferings are considerable. A few months ago the Minister for Labour and National Service (Mr. Holt) said that the average working man was then earning about £9 or £10 a week. The Prime Minister also said in a broadcast speech that, in real wages, the workers were receiving on an average about £10 or £11 a week. Those figures apply only in some instances. Many Australians are able to maintain a reasonable standard of comfort because both husbands and wives go out to work and bring money in the home. Wives should not be forced to work in order to help their husbands to keep the wolf from the door. The practice is destructive of family life and no honorable member can look upon it with favour. But many wives are unable to help their husbands because they are obliged to stay at home to look after young children. Such families suffer many hardships and discomforts because of the difficulty of making ends meet on the wages of one worker. Almost daily the newspapers publish accounts of children suffering from hunger because mothers cannot afford to buy sufficient food because of high costs. The cost of living has risen out of all proportion to the average working man’s income. I plead with the Government to give special consideration to the needs of yoting married couples with children and workers over 50 years of age. From my experience in New South Wales with the Department of Labour and National Service, I know of the difficulties that confront elderly workers. According to reports published in the newspapers to-day, over 117,000 jobs are available in Australia and only 394 people are in receipt of the un “inpayment benefit. The, number of unfortunate unemployed people is small, but their plight is serious. The benefit is £1 5s. a week for single men and £2 5.s. a week for married men. It is disgraceful that people should be expected to exist on that miserable pittance when the basic wage is about to be increased to £8 6s. a week.
Men over the age of 55 years have great difficulty in finding employment unless they are in first-class physical condition or have special skills. Employers want only men under the agc of 45 years. The Government ought to do something to lighten the’ burdens of elderly workers. In the United Kingdom recently, a bill was introduced in the House of Commons for the purpose of providing for the rehabilitation and re-establishment of disabled citizens. A project of that sort has considerable merit. I do not suggest that we should adopt any scheme that would encourage employers to secure slow workers’ permits, for that would break down established industrial conditions. However, I consider that it is imperative for industry to employ a percentage of partly disabled and aged workers. Not long ago the Minister for Social Services (Senator Spooner) appealed to pensioners to find jobs for themselves in order to help thu nation. Many people over the age of 65 years are eager to work and would tak, employment if they could find it. The Government should encourage and help them by compelling employers to allot a certain proportion of the jobs in industry to such men and women.
– Is the honorable gentleman referring to people who have retired from industry?
– Yes, and to people who are not physically capable of doing laborious work. Employers will not engage such people unless they are forced to do so, and the Government ought to enact legislation for that purpose.
The increase of pensions has been made a feature of this budget. I realize that some pensioners will be happy to receive an additional 7s. 6d. a week, but that amount will be insufficient for their needs in view of the recent increase of the basic wage. The Commonwealth Arbitration Court has increased the basic wage- by fla week, whilst an additional loading of 4s. has been allowed. Yesterday, I asked the Treasurer whether he would be prepared, in view of that increase in the basic wage, to introduce a supplementary budget to provide for an increase of all classes of pension. The right honorable gentleman evaded the principal point in my question by stating that the Government’s financial proposals would be considered by the Parliament this week. Therefore, it appears that age, invalid and widows’ pensions will be increased by only 7s. 6d. a week. In the first week in December, the basic wage in Sydney will be increased to £8 6s. a week, an increase of £2 14s. a week in the last two years. During the same period, the age pension has been increased by only 7s. 6d. a week. All classes of pensioners and the recipients of unemployment and sickness benefits will not be able to meet the higher costs of the necessaries of life that may be expected when the. full impact of the new basic wage is felt on prices.
The Government has appealed to the workers to increase production, and to co-operate generally with it in an endeavour to overcome our economic difficulties. I believe that the workers, if they were relieved of the fear of unemployment in future years, would perform their tasks with greater confidence, and meet the Government’s wishes. I am certain that any government, regardless of its political views, would receive the co-operation of the workers if they considered that they had security of employment. The Leader of the Opposition has stated that the Labour party does not support or protect loafers, profiteers and racketeers. I advise the Government to examine the conditions under which many workers live. If all workers were adequately housed, and were assured of security of employment, there would be confidence in the future and an increase of production. There is a widely held opinion, particularly among Government supporters, that every worker is in a very sound financial position. The people who hold that view will be astonished to find that, despite conditions of full employment and of so-called prosperity, only one Australian in three can afford to take an annual holiday away from his home, and one Australian family in five has never had a holiday. That information has been compiled by the Melbourne Political Research Unit.1 The facts are that, although workers have the benefit of the 40-hour week and are supposed to be receiving high wages, they are not able to take their families on an annual holiday.
The conditions under which some workers live are appalling and disgraceful. In the electorate of Phillip, which I represent, many homes are in such ‘a state of bad repair that almost every roof leaks during wet weather.
– Whom does the honorable member blame for those conditions?
– The Government is constantly expressing concern about cooperation with the workers, and I am pointing out that many of them are badly boused. If they had better accommodation and amenities with security of employment, they would co-operate with the Government and increase production. The Sydney Sun recently published the following news item under the heading of “ Alderman shocked by dwellings “ : -
Roofs of houses in Pyrmont and other industrial areas are in an appalling condition. Alderman J. C. Carroll said to-day. “ In Pyrmont the roof of practically every house needs repairing “, he added. “ About 75 per cent, of the roofs should be renewed. “ Ceilings of 50 per cent, of these houses arc either down or coming down.”
Alderman Carroll said the position in Ultimo was nearly as bad. “ Since I became an alderman nearly two years ago the roofs of only 10 houses in Pyrmont have been repaired “, said Alderman Carroll.
A few minutes ago, the honorable member for Mallee (Mr. Turnbull) asked by interjection whom I blamed for such conditions. I have the greatest pleasure in informing him that the persons whom he protects in this Parliament ‘are responsible for them. They are causing such a panic among the workers that the Government cannot possibly secure the co-operation for which it asks. It is hypocrisy to speak about co-operation when many workers live under such appalling conditions, and have no confidence in the future. The blame lies with those people who are not co-operating to provide better living conditions for the workers. It is disgraceful that such bad housing conditions should exist in this fair land of ours, which is so wealthy and which should be able to provide all theamenities the workers crave.
I now desire to refer to anomalies in the social services legislation, and I shall make particular reference to war service pensions. I hope that when the Australian Soldiers’ Repatriation Act is being reviewed, anomalies which affect exservice men and women will be rectified. One example of the anomalies which I cite is that civilian pensioners are permitted to receive an income of 30s. a week before their age or invalid pension is affected, whereas persons in receipt of war widows’ pensions or service pensions are permitted to receive additional income of only £1 a week. I understand that such an anomaly has existed for a considerable time, and I hope that it will be rectified without delay.
The DEPUT Y CHAIRMAN. - Order ! The honorable member has exhausted his time.
Mr JEFF BATE: Macarthur
– The honorable member for Phillip (Mr. Fitzgerald) has made an interesting remark to the effect that Australia is enjoying great prosperity. I hope that I am not misquoting the honorable gentleman, but that was a fair inference to draw from his statement. It is true, and it can be proved, that Australia is enjoying prosperous conditions, but that fact does not make the budget problem any easier. Prosperity is accompanied by all the problems that are caused by high prices and inflationary trends. Therefore, the Treasurer (Mr. Fadden) has been obliged to devote a considerable amount of time and effort in order to produce a budget which, in this year of almost violent change, will bring lasting good to our community. Australia is experiencing the effects of inflationary pressures and high prices. I believe that although the prices of some goods are high at the present time, the real kind of inflation, of which we should be really afraid, has not yet overtaken us. We must guard against it, and take every possible measure to cushion its effects. The Treasurer has had to draft his budget during a period when the prices for the goods that we export are rising considerably and when substantial sums of money are in circulation as a result of war-time financial measures, including loans. Our wool is bringing fantastic prices. The Division of Agricultural Economics has informed me that, at a corresponding time last year, the average price of wool in Australia was approximately 40d. per lb.. At the beginning of this year, it had risen to 80d. per lb., and to-day, it is about 120d. per- lb. That is to say, in twelve months, the average price of wool in Australia hasincreased threefold, and an amount of approximately £300,000,000 has been released into the community. The economists inform us, and their opinion appears to be sound, that high prices are caused when the demand for goods is considerably greater than the supply, or to put it another way when the supply of goods remains static and the quantity of money keeps rising. One Opposition member said last night that, in recent times, prices of many articles have risen by 100 per cent., and he used that figure as au argument in favour of the reintroduction of prices control by the Commonwealth. What are the facts about the fixation of prices? A few hours ago, I obtained from the Commonwealth Statistician some details about the “G” series index, which includes the goods which, the unions agreed in the Commonwealth Arbitration Court, are the necessaries required by the wage-earners.
– The unions did not agree to that. The honorable member does not know what he is talking about.
Mr JEFF BATE:
– I have not sa id-
– The unions have to accept the “ C “ series index.
Mr JEFF BATE:
– In fact, the index does not include fruit and vegetables. Before the honorable member for East Sydney (Mr. Ward) interjected, I was about to point out that the trade unions agreed that the fluctuations that occur throughout Australia in the prices of fruit and vegetables made it impracticable for an allowance to be made for them in the price index”. I know that at present fruit and vegetables are inordinately expensive. That . is due, of course, to the destruction of fruit and vegetable crops by the recent series of prolonged and disastrous floods in the northern parts of New South Wales. Prices control and food subsidies were discontinued by the Australian Government in September 194S, and during the preceding twelve months prices had increased by 10 per cent. In the first year of prices control by the States, the increase of prices that took place was only 9 per cent. It is clear, therefore, that prices increased less under State control than they did when the National Government was administering prices control. Leaving aside for a moment those who are dependent uponfixed incomes, it is clear that the average wage-earner is -better off by 12 per cent, than he was before the war.
– Let the honorable member try to convince an Australian housewife of that.
Mr JEFF BATE:
– The Australian housewife is better off to-day than she was before the war because the increased cost of living is more than balanced by the increased wages which come into her home. Furthermore, the average wage.earner to-day is receiving considerably more than the basic wage and, probably, more than the award rates for his particular occupation. Whilst the real wages of the average man before the war did not often exceed the award rate for his occupation, it is abundantly clear thatmany people are to-day receiving more than their award wages. Full employment also has a direct bearing on the family budget, because it is now possible for a family of three or four people and even adolescent children to receive an income in respect of each person. Many homes to-day have an aggregate income of from £30 to £40 a week, so that they are comparatively well off. I am not speaking at the moment of a married man with a young family, or of a man who cannot obtain proper housing accommodation for his family, because such people are obviously worse off than they were before the war. The fact remains, however, that the majority of people are better off now than they were before the war. In fact, we are experiencing prosperity. Of course, I do not deny that the present economic trend can lead to danger, but I do not think that we should mislead ourselves by imagining that the cost oi living to-day is exaggeratedly high, because in twelve months’ time we may be afflicted by real inflation. To prevent the onset of inflation it is obviously necessary to increase production, but that can only come about if employers and employees do their part.
The Treasurer (Mr. Fadden) is confronted with the problem of combating the approach of inflation, which is just around the corner. He has to provide nearly £100,000,000 for additional expenditure on defence, and approximately £70,000,000 for war gratuity. The war gratuity will be paid in March next year, and we can imagine the inflationary effect that the release of such a large sum in addition to millions for the sale of wool will have upon our economy. The Government has also been called upon to provide additional money for the States and, as a consequence, a strained relationship now exists between it and the State governments. The introduction of uniform tax has resulted in the emergence of a competitive spirit between the National Government and the State governments, which is obviously bad for the community. Although the National Government has control of revenue, the State governments control the Loan Council. The Government has asked the States to curtail expenditure, but unless Commonwealth and State relationships improve, the States may carry out their threat to defy the Commonwealth by borrowing excessive money on the loan market. At the last meeting of the Loan Council the States increased very considerably the amount which they are authorized to borrow, and, as a consequence of increased borrowing, more than a further £100,000,000 may be released in the community. I do not know whether the States could expend that money if they borrowed it, but the expenditure by the States of any additional money, and particularly of loan money, will undoubtedly aggravate the present shortage of goods and the general inflationary trend. I understand that the States do not want to revert to the former system of raising their own revenue from taxation, but prefer that the Australian Government should continue to play the odious part of national tax-gatherer. However, I think that a royal commission should be appointed to inquire into and report upon Commonwealth and State financial relationships. Such a commission could determine the proper spheres of the Commonwealth and the State governments in raising and expending money. A continuance of the present unsatisfactory arrangements will endanger our economic, stability.
The matters that I have mentioned touch upon only some of the difficultiesthat confront the Treasurer, who realizes the added danger occasioned to our economy by the influx of some additional hundreds of millions of pounds from the sale of wool. The original proprosal made by the Government to the wool-growers was that a compulsory levy of 7i per cent, should be imposed on all moneys received from the sale of wool. That proposal was made in consequence of the termination of the operations of the Joint Organization, and the leaders of the wool industry agreed to the imposition of that levy. Under that scheme the money deducted from the wool-growers income would remain their property and would be used to finance a wool stabilization scheme to protect their interests in less prosperous times. The next proposal put forward by the Government was that a prepayment of tax of 20 per cent, of the proceeds from the sale of wool should be made by the growers. That proposal would result in the Treasury receiving approximately £100,000,000 twelve months earlier than it would otherwise receive it, but it does not mean that the wool-growers will be treated harshly in comparison with the ordinary taxpayers, as no unfair discrimination is involved in the scheme. All that is required of the wool-growers is that they shall pay their income tax earlier than they would normally pay it, and at a time when they can well afford to do so. In any event, the incomes of wool-growers will be much higher this year than ever before, except in a comparatively few instances, where the wool clips have been spoiled by the floods or by some other exceptional cause. Special provision is made in the scheme to prevent hardship being inflicted upon persons who cannot afford to make a compulsory contribution.
Unfortunately, however, there is a widespread belief in the community that the farmers are subsidized by the Government, that they are always trying to get more from the general pool, and that, in fact, they are grossly unfair to the rest of the community. I know that that feeling is particularly strong in some metropolitan electorates. In a later part of my speech I shall cite some remarks made by Mr. Colin Clark, the Queensland Government Economist, which have, I believe, already been quoted by other honorable members, in order to disprove the contention that the farmers are receiving more than their fair share of the communal wealth and to demonstrate that the consumer is getting a fair deal. Before doing so, however, I point out the very big difference in the home-consumption price of wheat, which is 7s. Id. a bushel, and the overseas price, which is, on the average, approximately 16s. a bushel. The Australian dairying industry also provides butter for local consumption at 2s. 2d. per lb. in most parts of Australia, although the overseas price- is very much in excess of that figure. Whilst it is true that the dairy-farmers receive a government subsidy to enable them to sell butter so cheaply for local consumption, I point out to honorable members that the local price bears no relation whatever, to the price charged for butter in other parts of the world. In the United States of America butter costs as much at 8s. lid. per lb., and in the United Kingdom, it is in extremely short supply. Although Australian butter is sold to the United Kingdom at a lower price than that sold on the markets of the world, it is necessary for the United Kingdom Government to subsidize butter in order to bring its price within the reach of the British people. Because such a variety of nutritious and cheap food is available in Australia we take it for granted that a similar condition obtains in other countries. That is not so. In the United States of America margarine is in general use as a substitute for butter, and the butter ration in the United Kingdom is still only 5 oz. a week for each person.
Mr. Colin Clark, to whom I have previously referred, has made it abundantly clear that the primary producers of this country are more than pulling their weight in the national economic effort, as is shown by the following remark : -
The farm and pastoral population which now numbers only one-sixth of the labour force has increased its product per head by from 25 to 30 per cent, in spite of all the shortages and difficulties with which they are faced.
I have checked that estimate with the Division of Agricultural Economics, whose officials have informed me that the appropriate figure of production more closely approximates to 40 per cent. Mr. Clark continued -
This figure is a remarkable tribute to their hard work, skill, and courage.
Ordinary common sense will tell us that the way to enrich Australia is to attract as much labour and enterprise as possible into our productive farm and pastoral industries, and not into our unproductive manufactures.
We have been strenuously doing the exact opposite - discouraging agriculture by compelling the primary producer to sell his products below world prices, imposing exceptional taxation upon him, and keeping him short of essential supplies, while encouraging manufacture by protection, import licensing, and many other forms of governmental support.
In another article Mr. Clark wrote -
Exports of primary produce now command much better terms of trade on the world market than previously.
Instead of allowing the benefit of this transaction to accrue to the primary .producer, the wage-earner claims part of it for himself by requiring the primary producer to exchange a large part of his ouput for high-priced Australian goods and services, rather than the lower priced goods which he could have obtained on the world market.
I am putting my views before the committee because I consider that the public should be informed about the actual facts. Primary producers, including those engaged in the dairying and wheat industries, have voluntarily imposed stabilization on themselves. They did so for several reasons. They do not like famine prices, because they know that consumers find it difficult to pay high prices and that that fact will lead to a contraction of the market. They wish to have supplies of their products stored away to be released to the market during periods of scarcity. They also wish to assist to keep prices within the means of the consumers. They do not like the glut prices which operate in periods when an enormous volume of goods is thrown on to the market because nature has been particularly bountiful, and when prices fall so that some farmers, whose production might be needed later in famine times, are forced out of production. It will be recalled that in the joint policy speech of the Liberal party and the Australian Country party, the Prime Minister (Mr. Menzies) suggested the establishment of a rural industry tribunal to operate in much the same way as the Tariff Board operates, to adjust the prices of primary products over a period. We should have in operation a scheme administered hy a suitable tribunal to achieve price equilibrium. The operation of such a scheme would be accompanied by many difficulties, but it would be unwise to continue to allow the prices of primary products to be governed by the vagaries of nature. Pood, fire or drought can make prices high, whilst an exceptionally good season can make them low and put many producers out of business. I wish to see proper price equilibrium for primary products, which will not only give the producer a fair return for his labour but will also make goods available to the consumer at reasonable prices. Such equilibrium has been achieved in relation to bread, butter and sugar. I also desire to see careful storage of primary products in good seasons, for release to the markets in bad seasons.
The way in which some people talk about high prices to-day is amazing. Recently I attended a function connected with a blinded soldiers’ organization at which some women were preparing bread and butter for afternoon tea. As soon as they knew who I was they said to me. “ You come from Canberra. Canberra has been putting up the prices of goods “.
Mr CLYDE CAMERON: HINDMARSH, SOUTH AUSTRALIA · ALP
– That is correct.
Mr JEFF BATE:
– They apparently believed what the honorable member for Hindmarsh (Mr. Clyde Cameron) has been telling them. They even said that the Prime Minister (Mr. Menzies) had introduced the 40-hour week, which will indicate to honorable members the sort of talk that goes around. When they had cooled down I asked them what the price of bread was, and they said . that they did not know.
Mr CLYDE CAMERON: HINDMARSH, SOUTH AUSTRALIA · ALP
– What is it?
Mr JEFF BATE:
– The price of bread is Bid. per 2-lb. loaf, which the honorable member probably does not know. I asked those women, who had been complaining about prices what the price of butter was, and they said they did not know. For the information of the honorable member for Hindmarsh it is 2s. 2£d. per lb in Canberra and 2s. 2d. per lb. in Sydney. The prices of goods such as sugar, tea, eggs and other household commodities are as low in Australia as they are anywhere in the world. Those commodities are produced by primary producers many of whom are owner-farmers who work without the assistance of hired labour. In one part of my electorate there are 1,376 farms on which 2,200 people work. That means that about 1.6 persons work on each farm. That average number includes the farmer, his family and hired hands. Many farms are worked by only one man. Those people are doing their share in the productive effort of this country by working seven days a week. Their work begins at 5 a.m. every day. They are on the job early to produce goods that the honorable member for Hindmarsh and his colleagues find waiting on their doorsteps every morning. Even on Saturdays and Sundays people in the metropolitan area, most of whom do not rise early on those days, find their morning milk on the doorsteps. It is there because dairy farmers work hard, long hours.
There are two good features that have made themselves apparent in recent times. One is the change in the attitude of the trade union movement, which started with the visit of a team of British trade unionists to America to discover the secret of the higher real wages earned by Americans. Figures relating to real wages in America show that Americans have the highest real wage in the world. The real hourly wage in Australia, expressed in terms of the present purchasing power of our money, was 30d. in 189.1 and is now 56d., which is almost double.
Mr CLYDE CAMERON: HINDMARSH, SOUTH AUSTRALIA · ALP
Mr JEFF BATE:
– In the United States, where the real wage was also about 30d. in 1891, the level is now 109d., which is nearly twice as high as the level of the real wage in Australia. The real wage in Canada is 71d., and the real wage in Great Britain is 39d. Real wages in all other countries, including Britain, are much below the real wages in America, Canada and Australia. The only reason that I can see for the higher real wages in America is a combination of more- efficient management, more effort by the workers and a greater availability of capital equipment. The approach that we should adopt in order to increase real wages is one which will, in its effect, achieve more production. Thank heavens the trade unions of Australia are contemplating the recent £1 a week basic wage increase from that standpoint. They have said to themselves, “ “What is the use of an increase of £1 a week in wages if we will not be able to buy more goods with the higher wage? “ The president of the Australian Council of Trades Unions, Mr. A. E. Monk, said immediately after the court’s judgment was made known, that he believed the trade union movement should investigate the problems of productivity and the returns that people receive for their wages.
Mr CLYDE CAMERON: HINDMARSH, SOUTH AUSTRALIA · ALP
– He denied having made such a statement, and in any event he cannot get anybody to support him.
Mr JEFF BATE:
– We heard a deplorable statement from the honorable member for Hindmarsh only the other night in which he dissociated himself from what Mr. Monk had said.
Mr CLYDE CAMERON: HINDMARSH, SOUTH AUSTRALIA · ALP
– So did all other trade unionists.
The DEPUTY CHAIRMAN. - Order ! The honorable member for Hindmarsh is interjecting too frequently.
Mr JEFF BATE:
– The Australian Workers Union ha?, a good reputation in this community because of its efforts to increase production, and it is amazing to find the honorable member for Hindmarsh, who is associated with that trade union, dissociating himself from the statement that was made by Mr. Monk. When Mr. Monk made that statement, he was aware of the conditions under which trade unionists work in other parts of the world. He knew that trade unionists in Russia are forced to flog up production, and have very few rights. He knew also that a British team of trade unionists went to America to discover the secret of- that country’s great productivity. Now we can see signs that the trade unions, which up to the present, have directed their endeavours towards obtaining a greater share of the monetary rewards of production for their members, are realizing that the position has reached a point where the workers now receive the greatest monetary share that they can possibly obtain from production, and that any increase in wages will merely be followed by an increase of prices, which will soon offset the wage increase. So now trade unions are beginning to turn their attention to the problem of increasing production itself.
Mr CLYDE CAMERON: HINDMARSH, SOUTH AUSTRALIA · ALP
– That is what the honorable member thinks.
Mr JEFF BATE:
– The honorable member for Hindmarsh has discredited himself and the Opposition. The strength of any democratic government is measured by the strength of its Opposition. If we had a strong Opposition which tried to investigate the real nature of the problems that face us to-day, Australia might make more progress than it is now able to make. But we have a weak Opposition. It is only necessary to have been in this Parliament a few months to see the vacillating way in which the Opposition treats every problem and how it suddenly changes its mind on important issues. The Opposition has actually tried to sabotage the leadership of Mr. Monk, who really desires to do something for Australia and the workers. The honorable member for Hindmarsh attempted to sabotage him last week. If the Opposition would pull itself together and really help-
The DEPUTY CHAIRMAN- Order ! The honorable member’s time has expired.
Mr BIRD: Batman
.- Despite the favorable publicity that the press of Australia has given to the budget, the clear fact remains that its provisions have been a source of bitter disappointment to the people. Every one had hoped that, in a period of ever-increasing inflation, the budget would include some measures to correct the position, with a view to putting value back into the £1. We were told ad nauseam during the last general election campaign that it was the policy of the Government parties to restore purchasing power to the £1. The Government’s statements during that campaign were re-inforced by an article written by the Treasurer (Mr. Fadden), which appeared in the financial and business review of the Melbourne Herald on the 6th March last under the following head-lines : -
Government to put value back into the £1. Fadden details hie methods.
The article was signed, “By Mr. A. W. Fadden, Federal Treasurer “. It read, in part-, as follows : -
The Federal Government is determined to put real value back into the £1 note. Our first three months in office has been necessarily a period of review, but a taxation review and a vigorous drive to cut expenditure, are already well under way.
I stress that last sentence. The provisions of the budget certainly make that last euphemistic statement laughable. To suggest that there is a review of taxes in the budget in the way it was foreshadowed is a mere figment of the Treasurer’s imagination. It is true that some small income tax concessions are made in the budget, but they will be offset by increases of sales tax. The stated vigorous drive to cut expenditure is also amusing when we realize that the budget provides for a record peace-time expenditure. Naturally people who read the Treasurer’s article were very disappointed when the provisions contained in the budget were made known. It is the object of every Treasurer, no matter to which political party he belongs, to balance his budget. The Treasurer has only balanced the budget by taking £103,000,000 from the wool-growers ostensibly in an endeavour to halt the inflationary spiral. He has made a deliberate attempt to hoodwink the people, but has not succeeded.
Prior to the introduction of the budget, members of the Government stated that measures would be introduced to tackle this most invidious problem of inflation and that the first would concern the high price of wool. The Government has made no attempt in this budget to prevent the continuation of the infla- tionary spiral. The reverse is the case. It is by no. means certain that if this £103,000,000 remained in the hands of the wool-growers they would spend the full amount. It is possible that a lot of it would be kept in cold storage for future requirements; but when the Government get9 its hands upon it every penny will be spent. I cannot accept the Government’s decision to single out the wool-growers for discriminatory treatment as there are many other sections of industry which are in receipt of inflated incomes. This wool levy has been represented by the Government as being a mere advance payment of taxation which will be due next year. This year the wool-growers have to pay their tax in the ordinary way, the same as any manufacturer or other business person. So the argument that was advanced by the Prime Minister that this is just a form of pay-as-you-earn taxation such as’ is applied to wageearners is a sham and a delusion. I make that statement on greater authority than my own - the authority of a leading article in the Sydney Morning Herald which has taken the Prime Minister to task on that very point. The Government’s case, as submitted by the Prime Minister, will not hold water. This wool levy will compromise the revenue of the country in future years and, in my opinion, the Government cannot show a credit balance of £400,000. The real, unequivocal facts are that the Government this year will have a deficit of £103,000,000.
The pension of £2 10s. a week which is to be paid to elderly and sick people is far too meagre for their requirements. It is an insignificant sum when compared with to-day’s costs, particularly in view of the extent to which the cost of living has risen since this Government came into office. Many pensioners are forced to pay 25s. a week for rooms, and all of them, in common with other people have to pay 2s. 2£d. per lb. for butter, 3s. 3d. a dozen for eggs, and 6d. a pint for milk. Those are all stable items of diet which the pensioners must buy in order to exist. I had hoped that when the Government provided for an increase in pensions it would make some endeavour to relate pension rates to the ‘ basic wage. Apparently, no effort has been made to do that. At the 5th July, 1945, the pension rate of 32s. 6d. a week was 33.8 per cent, of the basic wage; when the pension was increased in 1948 to 42s. 6d. a week, it was 36.64 per cent, of the basic wage; in August, 1950, prior to the introduction of the latest budget, the percentage had decreased to 30.8. At the present time, with a basic wage of £8 6s. in Sydney, and with the pension at £2 10s. a week, the percentage is 30.18. That must be compared with 36 per cent, when the Labour Government gave pensioners their last increase. If the Government were not prepared to make a larger increase in pensions I should have thought that it would have related pensions to the cost of living adjustments. It would not be the first time that that had been done. Cost of living adjustments were made between 1932 and 1935 and between 1942 and 1945 when the rate was fixed at 32s. 6d. a week, but such adjustments were not made after that year. If the Government is not prepared to increase pensions by a larger amount it would be a mere act of justice to these elderly folk to fix their pensions at a percentage of the basic wage. When the basic wage went up 2s. a week on one occasion, the pension was increased by 6d. That was not much but it showed that the Government was showing practical sympathy. If the cost of living rose by 5s. a week and the pensioner’s increase was only a shilling or two, that would at least represent a practical gesture, but nothing of that kind has been attempted. I hope, even now, that if the Government introduces a supplementary budget next year it will make some practical attempt to relate pensions to a percentage of the basic wage because prices will certainly rise again as the result of the £1 a week recently granted by the Commonwealth Arbitration Court as an increase of the basic wage.
I was hoping that an endeavour would be made in this budget to modify the means test for pensioners. This is a matter of great concern to many salary and wage-earners who are at present contributing to private superannuation schemes. I know that it would be impracticable to abolish the means test overnight. Before any government can abolish the means test there must be a thorough examination of the position with a view to placing pensions on a new financial basis, but I hoped, when I read the Prime Minister’s policy speech, that some attempt would be made to lighten the means test for pensioners. The Prime Minister, in his policy speech, made the following statement: -
We are deeply conscious of the frequently unjust operation of the means test, and of the penalty it imposes in many cases upon thrift. There are also great anomalies associated with the position of persons who have contributed for their own superannuation benefits. We desire, however, to adjust the anomalies I have referred to and to make such modifications in the means test as we find possible pending a contributory scheme. This great human problem will ha.ve our urgent attention as a matter of priority.
About eleven months have elapsed since the Prime Minister uttered those words. I thought that some endeavour would have been made to put that promise into effect by increasing from 30s. to £2 the amount that a pensioner could earn. The gap has increased between the pension and the basic wage. The anomalies in the means test should be approached from a non-party aspect in an up-to-date fashion. It is bitterly disappointing to tens of thousands of pensioners that no endeavour of this kind has been made. I realize that huge financial problems are tied up with the means test, but many persons who have a little money or who have contributed to superannuation schemes are being deprived of a large part or all of the pension under the present system. A person who, over the same period of working life, has received the same wages as the person who has saved, but has lived up to his means receives the full pension. That is wrong. I was hoping, in view of the statement that the Prime Minister made last year, that the Government would face up to this problem. However, it has decided to side-step the matter
I was pleased to see that provision has been made in the budget for increased pensions for ex-service men and women. However, I think that the increases are totally inadequate in view of the excessive living costs, and if a supplementary budget is introduced if. the new year I hope that the Government will take further measures to increase these pensions. “When the Chifley Government was in office there was considerable agitation, particularly from the “War Widows’ Guild led by Mrs. Vasey, for increased war widows’ pensions. Honorable members who now support the Government, but who were in Opposition at that time, were very eloquent in their protestations that the last Government was not doing the right thing hy the war widows and that it was, consequently, letting the returned men and women down. In view of that flow of eloquence over many months, I expected to find that the Government would fix the war widow’s pensions at a rate which would be in keeping with the energy displayed on behalf of the widowers by the Opposition members of . that time, but the increase for war widows is only 10s. per week. Mrs. Vasey, the lady who was very critical of the Labour party twelve months ago, is now very critical of this Government. On the 13th October, the Melbourne Herald published reports of interviews with various people, one of which read as follows : -
Thu Federal President of the War Widows’ Guild, Airs. G. A. Vasey - The hopelessly inadequate rise nf 10s. is ti ic must tragic mistake that the .Federal Government lias ever made. In .1918 the Government, with u revenue of about ?89.000,000, paid war widows a pension nf ?2 2s. which was 90 per cent, nf the then basic wage. To-day, with a budget revenue of more ‘than ?700,000.000, a war widow’s pension is to bc ?3 10s. or 45 per cent, of the new basic wage.
A lot of people who supported the parties opposite because of the promises which they made last year are certainly not supporting them now that those promises Lave not been translated into fact. When honorable members who now support the Government were in Opposition they also spoke about the iniquitous effect of the sales tax. One can pick up hardly one volume of Hansard of former years without reading that some honorable member of the then Opposition had stated how sales tax affected the cost of living of the workers and of how it was more deadly than income tax. They also alleged that the Labour party had been guilty of gross treason against the working class in not dealing with that matter. After hearing those comments, I should have thought that the Government would have made provision to release the working class from that load which they have found it so hard to carry. Some articles have been exempted from sales tax to the amount of ?1,000,000 a year but, in respect of other items, the sales tax has been increased to the amount of ?10,000,000 a year. I read the following report in yesterday’s issue of the Melbourne Age: -
Mr. K. B. Coles, VicePresident of the Taxpayers’ Association of Victoria, stated at the animal meeting yesterday that sales tax was a major factor in reducing the purchasing power of the ?1.
The Government’s own supporters are chiding it for increasing the sales tax. The addition of ?10,000,000 to the proceeds of the sales tax will reduce the purchasing power of the ?1.
– Mr. Coles is a Labour supporter.
– No. He is a great supporter of the Institute of Economic Relations. He has always been an ardent supporter of the Taxpayers Association and I have yet to- hear of one member of the Taxpayers Association who is a supporter of the Labour party. Some of the increases in sales tax announced in the budget are open to the most cogent criticism. For instance there is a need for an explanation why the sales tax on wireless sets has been increased by 25 per cent. Clocks, fountain pens, suit-cases, shopping baskets and wireless sets are far from being luxuries, they are everyday necessaries. ‘ The list was apparently drawn up for one purpose only; that is to obtain revenue irrespective of social necessaries. The protestations that we heard in the past from the Government parties about the iniquities of the sales tax, pale into insignificance when compared with the protests that can be raised against taxing those items. Even in twenty years’ time, this action will be held against the Government. During the last general election campaign the Government parties, in an endeavour to obtain votes, stated that, if elected to office, one of the methods that they would adopt to put value back into the ?1 would be to reduce the sales tax. I shall quote from a manifesto issued by the Liberal party in the electorate of Batman. The quotation is as follows: -
To the Mothers and Fathers, Young Men and Women of Batman. . . there is a big job ahead, first of importance being that of putting value back into money. . . .
Then the author of this pamphlet cited price increases. I wish to direct the attention of the committee particularly to the next sentence, which we may be assured will never again find its way into a Liberal party manifesto. It is -
Every time a woman buys lipstick or a box of face powder, she pays tax.
That was an endeavour by the Liberal party last December to gain the votes of women because the previous Government had imposed sales tax on face powder and lipsticks. Yet this Government is increasing the rate of the tax. After reading of the iniquitous imposition of sales tax by this Government, we may be sure that such a claim will never again be advanced by the Liberal party during ah election campaign.
I shall now turn to the Prime Minister’s remarks about prices control. The right honorable gentleman attempted to deride the Labour party’s proposition that prices control should be re-introduced on a Commonwealth basis. In 1948 the Chifley Government, with rare political foresight, observed the dangerous inflationary tendency that was then developing in the nation, and whilst not contending that prices control would prevent inflation, knew that it would ameliorate our condition. Therefore, it proposed that prices control would be made a permanent feature of our economy. The electors were told by the Liberal party that the cause of inflation was not that prices were uncontrolled but that this country needed to free industry from the fetters of government control, and that once the fetters were taken off industry the demand for goods would be overtaken and prices would return to normal. When the fetters were removed it wasfound that it was prices and not production which soared. The removal of prices control did notimpose the slightest check on the upward trend of prices. The States have failed completely to exercise adequate control over prices. They all admit that, and most people realize that effective prices control is beyond the power of any one State. Australia is an economic unit, and any attempt by the States individually to control prices is sheer folly. The States adopted the method of de-controlling prices, but then realized the futility of such a course and have now decided to reimpose prices control on thousands of consumer goods. They have also requested a Commonweal th-States conference, and the Prime Minister announced to-day that such a conference had been arranged and that a date had been fixed for it. I am of the opinion that the only effective method of keeping prices within reasonable bounds is the re-imposition of Commonwealth control. That would be a prelude to other and more basic measures which are needed to meet the present emergency. The Treasurer said in his historic budget speech -
I have emphasized, as the Prime Minister has done elsewhere, the imperative need to concentrate energies and resources on those tasks which will best servo the national purposes of Australia in this critical time. Because inflation tends to scatter and waste resources, this Budget has been planned, as part of the general economic policy of the Government, to restrain inflationary pressures.
I should be very interested to know what is the “general economic, policy “ of the Government. We have been told that the wool tax is a part of that policy, and that possibly others will follow.
– It is not a tax.
– The wool-growers think differently from the honorable member for Mallee (Mr. Turnbull), and those honorable members on the Government side who represent constituencies in which wool is grown will realize that at the next general election. The Government has suggested a number of measures designed to cure inflation. I shall dispose at once of the canard that is always advanced by the Government when the subject of inflation is mentioned. The Government maintains that the main action which must be taken to combat inflation is to induce the worker to work harder. Soon after I entered this Parliament I heard honorable members on the Government side during the debate on the Address-in-Reply stress time and again the necessity for harder work to increase production. The proposition cannot be advanced too strongly that if we wish to produce in sufficient quantities to halt the inflationary spiral, our methods of production in many industries must be modernized. Owing to the circumstances that operated in this country during the war and have operated since then, there has been a high level of demand which has made it easy for manufacturers to make large profits without worrying about the efficiency of their factories. They have also had tariff protection to lull them into a state of complacency and security. Australia should follow the example of England and try to increase its production in a sensible fashion. Teams of employers and employees have been sent from England to study American methods of production. An association has been formed in England called the AngloAmerican Council on Productivity which has sponsored such visits. . It is realized in that country that it is not right to abuse the worker for lack of production, but that more modern methods should be introduced in the factories. No one has ever suggested that the Economist is anything but a conservative periodical. I shall quote from the issue of that journal dated the 20th May, 1950-
HANDLING IN INDUSTRY
Most of the teams which have visited the U.S. under the arrangements made by the Anglo-American Council on Productivity have been concerned with their particular industries alone. As their reports have shown, certain, factors which make for high productivity in the U.S. are common to many industries. The most recent reports of the productivity reports is an attempt by a specialist team to isolate one of these factors, the mechanical handling of materials.
The team visited some good progressive factories and it is not surprising that its members should have come back convinced that British industry stands to gain a great deal from a more resolute attitude towards the methods used in handling its materials.
Turnover can be increased, buildings and plant more fully utilised, quality improved, fatigue and waste of effort avoided, and the costly accumulation of work in progress can be cut down. Costs, in short, can be reduced and a better return obtained for any given expenditure of money and effort.
One great example of the success of introducing modern methods may be found in the British steel industry. [Extension of time granted.] Recently in England a report was issued by a productivity team which had previously visited the United States in connexion with the iron foundry industry. The employers in the group went back to their factories and carried out the recommendations of the team. By the utilization of the devices they had seen in America splendid results were achieved. Some firms increased production by 50 per cent. over the 1939 figures, and the total man-hours involved were reduced by 10 per cent. It was thought that a new lay-out of the factories would reduce the man-hours by 50 per cent. and eventually 75 per cent. In this industry in England prices have remained steady for the last two years whilst earnings and output have increased. The employer can contribute far more than the worker to increased output, because after all a worker cannot work faster than the speed of the machine upon which he is engaged. In this country there is not nearly the same efficiency as may be found in America. Instead of gratuitously insulting the worker on every possible occasion and saying that he should produce more, his critics should realize that any appreciable and tangible increase of production can be achieved only by striving towards greater technical efficiency. In 90 per cent. of the cases an improvement of efficiency is in the hands of the employers themselves.
– I move- [Customs Tariff Amendment (No. 3).] (1.) That the Schedule to the Customs Tariff 1933-1949, as proposed to be amended by Customs Tariff Proposals, be further amended as hereinafter set out, and that on and after the twenty-seventh day of October, One thousand nine hundred and fifty, at nine o’clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1 949 as so amended. (2.) That in this Resolution “ Customs Tariff Proposals “ mean the Customs Tariff Proposals introduced into the House of Representatives on the following dates, namely : - 11th May, 1950 ; and 8th June, 1950.