House of Representatives
20 February 1952

20th Parliament · 1st Session

Mr. Speaker (Hon. Archie Cameron) took the chair at 2.30 p.m., and read prayers.

page 98


Government Economic and Financial Policy

Debate resumed from the 19th February (vide page 92), on motion by Dr. Evatt -

That the economic and financial .policy of the Government, especially its high taxation and drastic restrictions of bank credit, is causing injury to industry and production, both primary and secondary and is undermining the established national policy of full employment. At the same time, as a result of inflated prices and the Government’s failure to restore the purchasing power of the Australian pound, special hardship is being inflicted on families dependent upon fixed incomes, such as social services and repatriation benefits, and the standard of living of wage and salary earners has fallen and is f tilling: because of its persistence in so injurious a policy the Government has lost the confidence of the country and is deserving of censure.

Minister for the Navy and Minister for Air · LOWE, NEW SOUTH WALES · LP

[2.31]. - As honorable members well know, the motion before the House is a motion of censure on the Government. Before 1 deal with- the arguments that have been advanced by the Opposition in support of it, I want to say how very much we, on this side of the House, deplore the vicious, vitriolic and nasty attack made on the Prime Minister (Mr. Menzies) by the honorable member for Eden-Monaro (Mr. Allan Fraser). Although this practice of character assassination is too frequently resorted to, we are fortunate to be able to say that in this House there are only two, or at most, three, members who engage in that miserable practice. While I listened to the honorable member for Eden-Monaro I well remembered that the. Prime Minister some time ago described him as a “ Uriah Keep “. As I listened to the honorable member yesterday I thought that a more effective description could not have been applied to him. The bile which poured out of this man’s mouth, was engendered by personal jealousy of a man of great distinction and eminence and of great capacity and fluency. The honorable member, after having made his most unchristian attack, jumped into the pulpit and read us a sermon on the failings of the Government. He reminded rae of the story, told by Woodrow Wilson, of the parson who, in delivering a sermon on sin, said that he wanted it stopped, that he did not like it, because he did not sin. In exactly the same way, the honorable member for Eden-Monaro did not like what the Prime Minister has done simply because he was not concerned in the doing of it. I am glad to say that neither the Leader of the Opposition (Dr. Evatt), nor the Deputy Leader of the Opposition (Mr. Calwell), was in the House, or stayed in the House, while the honorable member was making his speech.

Let us examine this strange concoction compounded by the Leader of the Opposition. The sorcerer’s apprentice never found himself in a more peculiar position. On second thoughts the right honorable gentleman must wonder what strange alchemy caused his formula to produce, not gold but dross, of banality and humbug. Upon examination, the motion reveals the strangest kind of inconsistency, illogical opinion and illconsidered criticism on the part of the Opposition. I invite honorable members opposite to examine the terms of the motion and to take no notice of me.

Opposition Members. - Hear, hear!

Minister for Air · LOWE, NEW SOUTH WALES · LP

– I challenge honorable members opposite to examine the terms of the motion if they are capable of thought, or if they are game to think. The Leader of the Opposition commenced by criticizing the Government because of its failure to sustain industry hy its banking and credit policy. In effect, he said, “ Let us embark upon a policy of unlimited expansion of credit, a policy of inflation and depreciate the value of the fi “. But almost in the next breath he said, in effect, “ What about the pensioners? Can we not do something to stop too much money coming into the economy and so suppress inflationary forces and save the poor pensioners ? “ The arguments of the right honorable gentleman were grossly inconsistent. He could never have imagined that his words would be turned against him as the strangest concoction of what are, after all, the simplest of economic facts.

The same inconsistency has been obvious in the Opposition’s policies since 1949. We remember the approach of honorable members opposite to the problem of communism. Every one of them was prepared to fight with blood and sweat in order to prevent the Communist Party Dissolution Bill from being placed on the statute-book. But when they met the real challenge, did they stand by their pledge? Did they stand firmly by their earlier statements ? They turned tail and voted in support of that measure. I refer now to their attitude to defence. They gave a pledge that they would support the Government in its .recruiting campaign. They declared that they would support a policy to defend Australia against aggression and to enable it to aid the cause of the United Nations. But what happened? When the Government opened its recruiting campaign not one member of the Labour party in New South Wales appeared on a recruiting platform. Honorable members opposite failed to honour the promises and pledges they had given to the Government on that matter. In fact, they deliberately dishonoured them.

This censure motion ‘reflects similar humbug and inconsistency on the part of the Opposition. The arguments that the Leader of the Opposition has advanced are neither practical nor logical. However, in an attempt to deal with them explicitly, I shall divide them into four sections. I propose to deal with, only two .of those sections, because I am sure that my colleagues will deal with the other two aspects. The paramount argument that the Opposition has put forward is that injury is being caused to industry and production, and unemployment is increasing as , the result of the restriction of bank credit and high taxation. The honorable member for Eden-, who is a born plagiarist, adopted the words of his leader and said that the Government’s policy “ amounted to conscription of labour through the financial and banking system”. The Minister for Defence (Mr. McBride) has effectively refuted that allegation, ls not conscription of labour part and parcel of Labour’s socialist philosophy? Does the Labour party believe that a man who establishes a home has a right to live in it with his wife and family? Honorable members- opposite have never believed in that philosophy. They do not hold anything sacrosanct and, consequently, in their view, no one has the right to enjoy domestic bliss and happiness. I remind the House that the former Leader of the Opposition, the late Mr. J. B. Chifley, made the following statement at a conference of trade unions in Sydney: - 5To guarantee can be given to anybody that they can stay put in a particular industry. lt is realized that there will have to be transfers of works, and in many cases transfers of whole communities to other forms of work. The most any government can do is to see there is work for everybody.

Why, then, does the Opposition criticize this Government’s policy of diversion of labour from one industry to another when it is part and parcel of the socialist platform, that every one has to accept the idea of dictation and conscription of labour ? On that score, the Opposition’s argument is completely fallacious and insincere.

I turn now to the so-called injury that is being done to industry through the banking mechanism, credit restriction and control of capital issues. I think that the House will agree that, in this matter, the Opposition stands on most insecure ground. Who is to be injured? Obviously it is not the employee, because, to-day, there are 40,000 unfilled jobs in Now South Wales. Obviously it is not the wage-earner who will suffer because an examination of the relevant statistics shows that while prices rose by 19 per cent, in 1950-51, wages rose by 37 per cent, in the same period.

Mr Ward:

– The Minister for Defence (Mr. McBride) said that there were 60,000 unfilled jobs.


– There were 40,000 vacant jobs in New South Wales in mid-January.

Mr Ward:

– A reduction of 20,000.


– The Opposition cannot logically contend that injury is being done to the wage-earner, because the known facts prove that the wageearner has not suffered and will not suffer under this Government’s policy. I do not imagine for a moment that the Opposition is at all worried about persons who are engaged in rural production, because once again, an examination of the facts reveals that agricultural activities during the nine years that Labour was in office slowly but steadily declined. The paramount task of this Government is to restore incentive to primary producers, and, indeed, to restore efficiency in industry generally. If we accept the fact that the Labour party has on no occasion worried about the primary producer and the salary earner, we are driven inevitably to the conclusion that honorable gentlemen opposite have based their arguments in this debate on one factor alone, which is that there will be a slight transfer of labour from light or non-essential industries to essential industries. In truth, that is the policy of the Government. That is precisely what the Government hopes to achieve. We believe that we shall strengthen the productive mechanism and our economy by -diverting people from non-essential industries to such basic industries as agriculture, power, transport, coal, iron and steel.

Mr James:

– Is not the textile industry a basic industry?


– In this context it is not a basic industry at the present time. What does the Government’s policy mean? If our policy succeeds, no injury will be done to industry, and the foundations of ‘a secure .and prosperous economy will be laid. By a gradual process under a great leader, the economy of this country is being strengthened in its fundamentals. I hesitate to think that h will be argued that, if we are to build a strong economy, we need not, as the first step, make its foundations secure. Surely it will not be argued that the proper way in which to build a house is to forget the foundations completely and first to construct the garret or the roof. A house cannot be built by such methods, and, in the same way, a strong economy cannot be established unless the foundations have been securely laid. If this Government is given the necessary tenure of office, the economy will be completely different from that which we inherited from- the Labour regime.

I shall now examine credit policy and capital issues control. Opposition speakers, when they deal with those matters, reach the height of absurdity and nonsense. I sometimes wonder whether those honorable gentlemen when they dabble in strange media, especially in the medium of economics, bother to examine the relevant statistics, because it has been alleged that, due somehow to the restriction of credit, industry has been slowed down. I want to make it clear that the policy of the Government has not been to contract or restrict credit, or to fix a specific limit to credit expansion with the resolution to go so far and no farther. All that it has done has been to keep a light rein on credit facilities to ensure that credit shall not be expanded too rapidly or too far. Proof of that can be found in returns of the Commonwealth Bank which show that whereas at the end of June, 1950, bank credit amounted to ?574,000,000, by December, 1951, that figure had risen to ?798,000,000. That increase of ?224,000,000 on ?574,000,000 is approximately 40 per cent. How a policy which has permitted this expansion in eighteen months can be termed restrictive, must defy the imagination of any one who is not addicted to Roget’s Thesaurus as apparently the honorable member for Eden-Monaro is. Capital issues too have increased substantially. Figures that I have obtained from the Sydney Stock Exchange recently show that whereas during the last period of Labour govern ment, capital issues totalled ?57,000,000, by 1951 the total had risen to- ?111,000,000. That is quite understandable because who would want to raisecapital during a socialist regime? Whowould be prepared to invest capital in a business knowing that through Labour mismanagement and clumsiness such capital would be jeopardized? With the advent of a government pledged to Liberal principles, confidence was restored to the investing public with the results to which I have referred.

Opposition members interjecting,


-(Hon. Archie Cameron). - Order! I ask honorable members on my left to conduct themselves in accordance with the rules of the House. There has been a constant barrage of interjections as well as loud rumblings and mumblings throughout the Minister’s speech. I expect the House to maintain order.

Mr Haylen:

Mr. Haylen interjecting,


– I call the honorable member for Parkes (Mr. Haylen) to order. This is not Wonderland and 1 am not Alice.


– The figures that 1 have cited dispose of the first part of the argument advanced by the honorable member for Eden-Monaro. I turn non to the only cogent part of his reasoning He dealt with taxation and in an attempt to show that taxes under the Labour Government were significantly lighter than those levied by the present Administration, he used certain figures, which had been cited by the Prime Minister. The figures show that whereas income tax paid to-day by a man with a wife and one child in receipt of ?500 a year, is ?14, in 1944-45, it was ?88. Similarly, a taxpayer in receipt of ?800 a year in 1944-45 paid ?207 whereas in the current year he is being called upon to pay only ?60. The honorable member for Eden-Monaro advanced the amazing argument that the basis of comparison should be not what the ?1 purchases to-day, but what it purchased in 1944-45. The idiocy of that argument is that such a basis of comparison places Labour’s taxes at double their real figure, and shows even more clearly that the taxes levied by this Government are infinitely lighter than those imposed by the Labour regime during the years that I have mentioned. Inconsistencies such as these reinforce my belief that Labour spokesmen do nol; know what they are talking about. The subject of unemployment has been freely discussed during this debate. Surely if, as the Opposition has said, the Government’s credit policy, capital issues policy, and public works policy are causing unemployment, the reverse must -also be true so that a reversal of those policies would reverse the trend. But, in fact, there is not any unemployment and there is little or no possibility of unemployment occurring except in one or two seasonal industries, such as the Queensland sugargrowing industry. .Unemployment in the technical sense in which the word is used certainly will not develop while this Government is in office.

Members of the Opposition have shown very clearly, by their evasion of argument on one point, that they do not understand the nature of the strong economic trend that exists in this country to-day. Statistics show that the unusually severe inflation in Australia last year was caused by two factors. The first was the extraordinary high wool income and the second was the tremendous amount of transferred money, and speculation money, that came into the country. The amount of money that was earned abroad last year on the international balance of payments for current account was £84,000,000. In addition, capital transfers, which represented free spending power brought into the community, amounted to £146,000,000. In the two preceding years capital transfers amounted to £259,000,000 and £148,000,000 respectively. That influx of money had a distorting effect on Australia’s economy. This trend has now been reversed and it is semi-officially expected that the balance of payments this year will disclose a deficit of £400,000,000 and that there will be no capital transfers. That is the most important financial development that has occurred in this country during the last two years. Failure to (recognize that fact exposes the ignorance of the Opposition and explains why it has not been able to support it3 motion of censure with logical argument* based on known economic facts. Australia’s position to-day is exactly comparable with that of a man who had £500 to spend last year but who is in debt to his bank to the amount of £250 this year. That comparison illustrates the nature of the change in the financial situation of Australia which is gradually transforming the character of our problem to that of financial embarrassment. Instead of having an over-supply of money, we are now in a situation in which costs are the deciding factor.

Limitation of time prevents me from discussing this subject at greater length. However, an examination of the arguments of the Opposition will snow that they have failed miserably. I have not heard one argument from the opposite side of the House that could withstand constructive criticism. In fact, the Government’s budget is succeeding. Furthermore, whenever there has been any evidence of anomalies or injustices, the Government has jumped quickly into the breach. ‘It has granted provisional tax allowances to wool-growers and others who have suffered from fires, it has increased the return to wheat-growers, and it has taken a dozen and one other measures to ensure that justice shall be done to all. There is every ground for confidence in this Government, and a radical change is taking place in the thinking of its critics. Only yesterday I asked my Caledonian friend, the honorable member for North Sydney (Mr. Jack), what he thought about the matter. He has the reputation of knowing the Christian name of every person in his constituency. He told me that he would be perfectly happy to test the opinion of the people. So too would I. Let us see whether in a year’s time the members of the Opposition will still have smirks upon their faces and an inclination to challenge this Government to go to the people. There is every ground for confidence in the Government. The motion will fail because it is illogical and inconsistent. I commend the Government’s policy to the House. At a later date I hope to have an opportunity to describe in detail the achievements of the Government in the interests of the people.

Port Adelaide

– In rebuking an interjector a few moments ago, Mr. Speaker, you said that this was not Wonderland. I am wondering whether the Minister for the Navy (Mr. McMahon) thought he was in Wonderland, for his speech was remarkable for its contradictions. He accused an honorable member on this side of the House of making a vitriolic attack on the Prime Minister and of repeating the words used by his own leader. But almost immediately afterwards, the Minister began to read a statement that the late Mr. Chifley made some time ago, obviously forgetting that he was repeating what his leader had said at great length last night. Honorable gentlemen opposite, in an attempt to justify the actions of the Government, have quoted t.he words of the late Mr. Chifley about the shifting of employment or the transferring of men from one job to another. Merely to talk economics and to say that the Government has not increased taxes will not justify the Government’s action in the eyes of the people. The Government will not dare to go to the country at the present time and find out what the people are thinking.

About three weeks ago a man came to see me in my office in Adelaide. He was not a Labour man. He came from the country. He asked me whether I thought the Government or the Treasurer (Sir Arthur Fadden) was likely to do anything in regard to taxation. He told me that he owned a couple of farms away out in the country, that he had had a pretty good year last year and that this year he was being asked to pay over £S,000 in income tax. I shall tell the honorable member for Canning (Mr. Hamilton), who is interjecting, a little about the present Government and it3 ideas about taxation and of how it is preparing its own supporters to meet their tax liabilities. The man to whom I have referred said that he had invested some of his income for the good year in Commonwealth bonds. He told me that he could not borrow money from the bank to pay his income tax this year and that he would have to cash his bonds, but he complained that for each £100 that he had invested he would now receive only £94. That reduc tion of the value of the bonds has been caused by the action of the Government in increasing the rate of interest payable on the last Commonwealth loan.

Mr Hamilton:

– What rot!


– The honorable member for Canning says “ What rot “’. If he reads the press he will know the market value of £100 Commonwealth bonds that were bought twelve months ago. The man asked me whether I enought the Government would accept his bonds at their face value in discharge of his income tax liability, so that he would not lose £6 on each £100 bond. When I told him that there was no hope of that being done, he wanted to know what he should do. Hundreds of men in the country are in a similar position. There are only two members of the Australian Country party present in the chamber at the moment. They and their colleagues who are absent know only too well that what I have said about the Government is correct. In two- years, this Government has reduced the faith of the people in the honesty of government. Two years ago, it said that it would reduce taxes. Let us consider what this Government has done in connexion with taxation. The Minister has quoted misleading figures, just as the Prime Minister (Mr. Menzies) did last night. There is an old saying that figures can be made to talk in any way that is desired. Supporters of the Government have been citing figures in a way that suits their own ends. Both the Prime Minister and the Minister for the Navy have stated that taxes payable by a married man with one child receiving £300 per annum during the war period amounted to £22 18s. a year and that he now pays only 19s. To-day, in order to meet his living expenses, that man receives au income of £600 a year, on which he pays taxes that total £27 8s. In the days of our extremity such a man received a little above the basic wage. To-day, although his living expenses have risen, he still receives little above the basic wage but is called upon to pay .higher taxes. Many men who received an income of £500 a year during the war period are to-day receiving £1,000 a year, but are no better off in consequence. The highest rate of tax payable during the war by such a man in receipt of £500 a year was £88 16s. To-day that man in receipt of £1,000 a year is called upon to pay £103 6s. in taxes. Yet the Minister has had the audacity to endeavour to hoodwink the people into believing that because taxation rates have been reduced, the Government has in fact lightened the taxation impost. Nothing of the sort!

I am quite familial1 with the Government’s technique in this matter. During the last general election campaign I warned the electors of what was in store for them if the Menzies Government were returned to office, not only in connexion with taxation, but also in connexion with industries. Yesterday, the honorable member for Bennelong (Mr. Cramer) stated that many mushroom industries had sprung up in Australia, and that the present disruption of our economy was attributable to the 40-hour week, which was causing unlimited harm because of the condition of over-employment. That is the Government’s answer to our charge. About three and a half years ago a man in South Australia told me that he had commenced the manufacture of butchers knives, pruning saws and the like from Australian steel. I subsequently visited his works and saw that he was turning our splendid articles. He told me that he wanted to obtain more capital to expand his business, and asked whether I thought that he would be protected when similar goods began to be imported from other countries. I discussed the matter with the then Treasurer (Mi-. Chifley) who told me that while Labour was in office care would be taken to see that small Australian industries were protected. To-day, however, the non-Labour Government in office does not regard the industry that I have mentioned as essential. It is more concerned about the interests of big importers than those of manufacturers and business men in a small’ way of business. The big importers are being assisted and protected in many ways. I have had considerable experience in the Parliament and can recall other periods of shortages of employment. I know of the methods that have been adopted by employers in the past to obtain contracts. I remember instances of manufacturers in the eastern States, where labour was plentiful, being able to undersell South Australian manufacturers and thereby obtain contracts in that State. Every encouragement was given to new industries during the regime of the former Labour government. In my own State cotton mills were established at places where they had never existed before, in which the manufacture of sheets, pillow slips, canvas duck and other articles that are so essential to the people was undertaken. I recall an occasion on which a leading executive in a big cotton concern called on me during the Chifley regime and asked me whether I could see to it, that the local cotton industry would not be swamped by Indian calico. He asked, “ Can we not get the assistance that we need? “ The Chifley Government assisted the local cotton industry by means of price subsidies which it continued to pay. But the position is different now. A few weeks ago I read in the press that hundreds of people in the very concern that that executive represented had been given notice of dismissal. The same newspaper contained an item that stated that Australia was bringing immense quantities of cotton goods from Japan and India. I know enough of economics and of the running of a country to- be well aware that we have to import when we export, because international trade cannot be conducted on a one way basis. I know also, however, that in these matters it is our duty to protect our own growing industries.

The ‘Government boasts about continuing the immigration policy that was established by the honorable member for Melbourne (Mr. Calwell) when he was Minister for Immigration during the Chifley regime and among the people being brought to this country from Great Britain are weavers who have been trained for the work of the textile industry, yet it intends to permit heavy importations of textiles that will reduce the amount of work available in the Australian textile industry. We do not object to a proper import licensing system or to some control of capital issues, but we do object to the mariner in which the Government is putting such controls into effect. It is of no use for honorable members opposite to offer as a defence that

Labour, when it was in office, exercised controls over capital issues and imports. A man may have a razor, which is .a valuable article for shaving purposes, but that does not mean that he wants to use it to cut somebody’s throat. The Chifley Government had the razor, but it used it for the correct purposes. What this Government is doing is to use capital issues to cut the throat of the Australian textile industry, and not to get the best results for this country. It is attempting to put out of existence industries that it considers to be non-essential. I refer to such industries as those that the honorable member for Bennelong (Mr. Cramer) described as mushroom growths. The Government has boasted about what it has done in relation to the housing problem. The honorable member for Bennelong said yesterday that he did not want the New South Wales Housing Commission to keep on building houses. He did not want money to be made available to that authority. He wants money to be made available in quarters in which there will be no power to counteract prices and control costs, so that good old private enterprise, for whose benefit the Government’s policy has been designed, will be able to develop further. I know the position. I have no illusions about it, and have never had any illusions about it. To-day the Government is ‘boasting that it is forcing people out of light industries into the railway services. But honorable members opposite do not explain that the railways and tramways services of this country have been able to augment their staff because they have been recruiting labour in Britain. The Government is falsely using that augmentation of labour in the transport services as justification for its strangling of light industries. It claims that people are leaving those industries and going into employment in heavier industries and in the transport services. I. find it absolutely ridiculous to expect chat many people who work in light industries could take up work in heavy industries.

The Government has called for more production. In my electorate mothers of families took jobs in industries and worked four-hour or six-hour shifts in textile factories in the evenings to produce more and help the family’s finances. But they are not going to be allowed to produce much more now, because- such industries are going overboard. There will be no work for them. Many members of the Government have the illusion that that is the way to run a country. The honorable member for Bennelong referred to the capital issues control exercised during the Labour Government’s regime and s attempted to compare capital advances made then with the advances made under this Government. I think that he doubled one of the sets of figures to suit himself. I say to the Minister for the Navy (Mr. McMahon), who is now in charge of the House, that it was under the controls that were exercised in a proper manner by the Chifley regime that many of our light industries were able to extend their operations. The Minister for the Navy said that the Government’s policy had not compelled businesses to reduce their staffs. Then he said that the policy had resulted in men leaving certain industries and accepting work in the railway services and in essential industries. It seems to me that the Government is hard pressed to defend its policy.

Members of the Opposition have been chided on the way in which they have spoken of honorable members opposite. Yet, last night the Prime. Minister (Mr. Menzies) sneered at and cast slurs upon the Leader of the Opposition, a man who would not try to do such’ a thing to him. The Prime Minister’s speech reminded me of the period during which Labour was in office. When a censure motion was moved against the previous Government the present PostmasterGeneral (Mr. Anthony) used the opportunity it gave to cast similar aspersions on members of the Government, but never once did I hear our then leader, the late Mr. Chifley, descend to address the then Leader of the Opposition as the Prime Minister addressed the present Leader of the Opposition last night. The Prime Minister may not have realized it, but if he had spent half as much time as he did in abusing the Leader of the Opposition he may have defended the Government better. There is an old saying, “ The lady doth protest too much, methinks “.

I think that the Prime Minister protested too much last night. He claimed that the Government had reduced taxation hut the total amount of taxation to he collected this financial year will be more than double the amount collected last year. No wonder bigger capital issues have been requested by firms that have to pay these taxes. This Government, if it continues in office, will continue to strangle industry by its taxation.

During this debate I referred, by interjection, to “ a hidden hand “ and some honorable members opposite laughed. Under the existing system of control of credit a person who has unsuccessfully endeavoured to obtain a loan from a bank does not know why his application has been refused. A hidden hand is directing certain industries to the wall and it seems to me that those that will go to the wall will be those which produce goods that can be imported from overseas by big interests which will make a huge profit on them. The Government is encouraging this development in order to secure revenue. It has budgeted for a greater expenditure than ever before and it realizes that if goods are brought from overseas instead of being made in Australia it will be able to collect duty on them.

Honorable members of the Opposition are quite justified in complaining of the policy of the Government. I know the difficulties with which the Government is faced. During the debate the honorable member for Canning (Mr. Hamilton) interjected concerning a system which the Labour Government had introduced. What is really bothering the Australian Country party to-day is that the Government has altered the system of averaging certain taxable incomes. The Government likes to pose as a long sighted administration which carefully considers the advice of its economists. Directly after the last war, men who had returned to civilian life and gone into business told me that they had only a comparatively small amount of tax to pay in their first year of business because they had only to pay tax on their previous year’s earnings in the Army, part of which was exempt from taxation. I warned them to make provision for the payment of a larger sum in the following year because they would then have to pay provisional tax on the basis of the profits made during their first year of business. I said, “ You had better be careful that you do not dispose of your profits by building up your stocks or by putting in improvements, because then you will not be in a position to pay your tax when it falls due “. The Government certainly did not warn woolgrowers in that way when the price of wool increased. It just took 20 per cent, of the proceeds. It did not explain to the farmers what would happen the following year. Although some honorable members of the Government parties may have tried to do something of that sort, the Government itself did nothing. I do not want to argue about the merits or the demerits of discontinuing certain provisions of the averaging system, because such a matter is one solely for the Government to decide. However, I do say that if this Government had half the intelligence and foresight that it claims to have, it would have acted as it did twelve months earlier. It would also have advised the farmers as I have indicated.

I should welcome a general election at the present time. Many people who used to vote for the Liberal party have recently voiced to me their doubts about the efficacy of the Government’s policy. Only last week I received two interesting letters. One was from the secretary of a tennis club, and one was from a State tennis association. Both correspondents asked me whether I could do anything about the 33^ per cent, sales tax that has been imposed on tennis rackets. It must be remembered that it is of greater benefit to young people to play tennis in their spare time than to stand around street corners, and the Government would do well to direct its attention to the sales tax on sporting goods, particularly tennis rackets. These essential sporting goods are now beyond the means of young people. When I say racket I mean the implement with which people play tennis and not the racket that the Government is engaged in. There are a lot of decent honest men among you–


– Order ! The honorable member must address me.


-There are many good honest men on the Government side, and I do not desire to import any class antipathy into the debate. However, the interests and objectives of honorable members on this side of the House lie with the country and the people in it. Honorable members on the Government side are interested in the welfare of the country, but they also make sure that a special section of the people have their interests particularly looked after. Honorable members on the Government side do not wilfully champion sectional interests. They do it by the general trend of their actions in this House. The Opposition desires that this motion be carried. Yesterday the Prime Minister (Mr. Menzies) asked what the Leader of the Opposition (Dr. Evatt) would do if by some mischance the motion were carried and the Opposition assumed office. I shall tell honorable members what he would do. He would carry out the policy of the Labour movement, and pull Australia out of the economic mess into which the Government has flung it. Every time Labour comes to office it finds it necessary to disentangle the country’s affairs from the sorry state in which non-Labour governments have left them.

Mention has been made of the Opposition attempting to cast doubts on the motives of the Government. I direct attention to the way the Government won the 1949 general elections. It did so by casting doubts on Labour’s motives, and by a campaign of sneers and slurs. You cannot keep on doing that-


-Order! The honorable member must address me.


– The Government cannot continue playing the old game of trying to fool the people all the time. The Government may be able to fool some of them all the time, but most of them have awakened to the fact that Australia again needs a Labour government. The Labour party has never made rosy promises like those made by the nonLabour parties about increased production of food and expanding primary industries. The emptiness of the Government’s promises has been shown by the published letters of wheat-farmers which have been to the effect that they do not intend to grow more wheat because of the high rate of taxation.


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


.- The timing of the censure motion that has been moved on behalf of the Opposition is not entirely unexpected. It is not a motion of censure of the Australian people or of the national economy but of the Government and it has been brought forward on the last occasion it could possibly be of any use to the Opposition’s political welfare. The Leader of the Opposition (Dr. Evatt) has stated that the time has come to assess the consequences of the Government’s policy. I suggest that this is the last time that the Opposition can secure any advantage from the disturbance in economic conditions with which the Government is grappling. The time has not yet come when honorable members can see as fully and as clearly as they will do in the next few months the result of this Government’s actions. Trends which are clearly discernible show that there is a growing appreciation among the public that great good to the Australian economy is emerging from the unpalatable actions that this Government has had to take in the teeth of fierce opposition. The Government is under censure on two main headings. The first is inflation. The second is the threat to what the Labour party has always claimed to be its own private invention - full employment. But the very essence of inflation is in the fact that too much money is drifting about in the community and too little production is being achieved. In such circumstances, money and goods reach a new equation. If goods are short, prices will rise and that ia precisely what has happened.

The two ways out of this difficulty are to reduce purchasing power and to increase the production of goods but every appeal for an increase in the production of goods that has been made by this Government has fallen on deaf ears. Inevitably the Government has found that it can no longer ignore the situation in the hope that the Australian people will see that all of them should have a personal interest in increasing production. The Government had to act and, if necessary, it had to use unpalatable methods to stop the drift in our economy. Otherwise irreparable damage would be done to the economy and almost every individual in the community would be hurt. Australia emerged from the war into a period of inflation. It was a circumstance which inevitably follows a war and it developed not only in Australia but in every country. Australia emerged from the war as a welfare state of the Labour Government’s creation. The Labour party fondly imagined that it would lead the country for a century and it believed, therefore^ that it was quite safe in using its unlimited wartime powers to introduce the basis of a welfare state. When this Government came into office, it found itself burdened with unlimited costs in the field of social services and with a staggering legacy of inefficiency and indiscipline in industry with which it is now attempting to cope. In the most important industrial State of Australia, the Labour Premier without any thought of responsibility for his action applied a 40-hour week to all State awards and then virtually intimidated the Commonwealth Arbitration Court into following suit. I am second to none in my advocacy of a shorter working week and higher pay when we can have one or both without a reduction of the standard of living, but we have gone through the five years since the end of the war having neither the one nor the other. We have the 40-hour week and wages have increased, but the standard of living has declined because production has not kept pace with demand. No one denies that full employment is desirable, but there can be a situation of over-employment such as that brought about by the introduction of the 40-hour working week when there was a war-time lag in the provision of goods and services. We have learned that overemployment is not an unmixed blessing. It has led to a situation regarding which we should not mince words. I am of the opinion that every one in the community, from the most humble worker to the most highly placed, has been busy exploiting the present economic difficulties for his own economic advantage. It has become a national sport for those in industry to talk about how little work they do for so much pay. Somebody has to pay for that in higher prices and lower living standards. We must realize that inflation can be defeated not by acts of Parliament, but only by individual action. We have reached a stage when award wages are no more than the point at which to begin bargaining. Wages have gone up and up, and because of the cumulative effect of labour shortages, power shortages and shortages of materials, production has declined in the same ratio as wages have increased. The effect of this has been to increase still further the gap between production and demand. There has been a tremendous turn-over of labour in every industry. New men are virtually valueless until they have received some kind of training. They stay in the job for anything from four to ten weeks and then, by the time they have acquired some skill and are beginning to earn the money they receive, they are off looking for a better job.

Mr Rosevear:

– Why not ?


– I do not object. I am merely pointing out the consequences of such action to honorable members opposite who, apparently, have had little experience of these matters. If a. man works for three or four weeks without producing anything useful, the money he receives for producing nothing will eventually buy nothing. Its only effect will be to water down the currency. I am not now accusing any one in particular. As I have said, the net must be widely thrown. I am merely drawing attention to a set of facts in order tn show that it was necessary for the Government to take urgent and, perhaps, unpalatable action. I do not object to any one trying to get more pay or to improve his position, but it must be done at a time and in a manner that will not adversely, affect the economy, or injure those unfortunate persons who, through lack of organization, are unable to take cave of themselves in these difficult times. The fact will not be overlooked that many of the difficulties that confront us to-day result from the implementation of Labour’s policy during the long period of the socialist reign, not excluding those caused by the fostering, or at least the overlooking, of indiscipline in industry. We now have an abundance of nonessentials but We are deplorably short of every essential that goes to make a sound economy. There is something wrong in a country if there is no twinge of national conscience when it has to import steel from Japan. Are we not ashamed of the fact that we have to import coal from India? Have we no concern for the industrial situation which compels us, in an attempt to bolster our failing transport systems, to send men abroad to buy railway rolling-stock from Belgium, the whole rail transport system of which was torn up during the war, and when we have to blot the landscape with prefabricated houses imported from Europe when we have the resources to build our own homes, and lack only the incentive to use them ? We have been told that we may even yet have to import food. All of these importations are subject to rising prices and their cost must be met by the only people who can find the money, the consumers. If the consumers demand increased wages, and produce less, they must pay the higher prices and be content to live on a lower standard.

The Labour party has raised its old standby bogy - unemployment and depression. I had some experience of the effects of the depression. Indeed, almost every honorable member experienced its effects either directly or indirectly. ITo one can seriously suggest that the Government is eager to see another depression in this country. Having regard to the tremendous shortages that exist in every aspect of our economy, I do not believe that, for as far ahead as we can see, there will be any appreciable unemployment among our people. Last night, the Prime Minister (Mr. Menzies) cited figures that related, not to last year but to last month, which indicated that, throughout the whole of Australia there were only 2,646 recipients of the unemployment benefit, and that of that total, no fewer than 2,300 were in Queensland where, due to seasonal occupation and drought conditions there must inevitably be some change of employment. Do the figures that were cited in the House to-day, showing the number of jobs that are’ still waiting for workers to fill *’ - radicate that there ‘ » large-scale unemployment in this country in the foreseeable future? Inevitably, because we have a surplus of the commodities that we do not so greatly need, and shortages of those that we need most seriously, there must be a new pattern of employment in Australia. There must inevitably be some transfers of labour from one industry .to another. The methods used by the Government to accomplish these transfers in industry are surely less painful than were, those foreshadowed by the late **Mr. Chifley, when he was Prime Minister, when he said that there would have to be transfers of whole communities. There is still preserved to the individual the choice of many jobs. If the Government, by its economic policy, has restricted the range of jobs in which a person may seek employment, it can justify its actions in so doing as being demonstrably in the public interest.

We have drifted into these difficulties as the result of Labour’s wholesale disregard of good business administration and the failure of the. average individual to honour his obligation to put in the equivalent of what he takes out of the economic system. We can get out of our difficulties only by the hard way. If the experiences of the last few years have failed to indicate to us that nothing is free, and that we can get out of the economic system only what we are prepared, to put into it, we have passed the point at which we. can learn anything, this country must wake up to the fact that we are living in a man’s world - a competitive world. The honorable member for Port Adelaide (Mr. Thompson) appealed for the protection of Australian industries. He also suggested that if we are to trade with other nations we must be prepared to import from them as well as export to them. That is fundamentally true. The honorable member went further, however, and said that by the imposition of prohibitive tariffs- we must: protect every industry established in this country. What we have to strive for is the utmost economy in the use of our restricted man-power. At this time we cannot afford to protect every inefficient or unnecessary industry that is established. The time will come when, happily, we shall be free of these restrictions, but that time has not yet arrived. The stock in trade of the Labour party is to destroy confidence. What would happen if that party should succeed in destroying the confidence of the people in the present Government’s programme of economic rehabilitation which now shows signs of reaching fruition? Honorable members opposite are prepared to go to any lengths in order to bolster up their chance of regaining control of the treasury bench. If they should succeed, would there be merely restriction of opportunity of employment under a Labour government ? No. We would revert to direction of labour within a very short time and suffer just as the people of Great Britain suffered under a socialist government in that country. Would there be merely advisory and general directional control of industry? No. A Labour government would tie industry down to a three-year or a five-year plan. Would there be merely top level direction to banks on advance policy? No. Under a Labour government we should see repeated in this country the position that faced the Australian people in 1949 when Labour sought not to direct but to nationalize and, in effect, annihilate the private banks. That would be the aim of any future Labour government. Of course, disquiet exists in industry to-day. These are uncomfortable times. There is a.n urgent need for readjustments, and whilst every one is in favour of readjustments so long as his individual interests are not thereby adversely affected, there is, nevertheless, real recognition in the community of the fact that what the Government doing is not only necessary but also wise because it is laying sound foundations for the future development of our economy.

The honorable member for Melbourne (Mr. Calwell) shed unaccustomed tears for some of those with investments on the stock market. He said that falling values on the stock market indicated loss of confidence. The stock market is a barometer, not of political, but of business conditions, and it is most strongly affected by influences that have nothing to do with politics. There is nothing more nervous than money. It responds to all kinds of in- fluences. The fact is that to-day the stock market is being affected as the result of policies that the Labour party implemented a few years ago. Honorable members opposite have not noticed that it is also being profoundly influenced by the drought that has recently occurred throughout the country and which has caused a decline of production in not only primary but also secondary industries. In recent years, owing to the absence of competition, all sorts of secondary industries sprang up like mushrooms in this country. The textile industry, after labouring for many years to catch up with shortages that occurred a3 a result of war-time conditions, has now overtaken the lag and, necessarily, it must experience a hiatus in production. That development is evidence of the fact that under a Liberal government our economy at long last is attaining a new balance. The stock market reflects all these influences. Another factor that must be considered is that when money is cheap and plentiful a new influence in the person of the speculator appears on the stock market. The reduction of values on the stock exchange to-day does not reflect any loss of assets or any deterioration of our productive ability. That development simply reveals that the stock market is getting rid of speculative influences upon which it is impossible to build a sound economy. It is a good thing that we are thus getting rid of the gambler because, this country cannot build its future on gambling.

The Government inherited from the Labour party the wicked cost-plus system which has frustrated every effort to decrease prices and to increase productive efficiency. The position in industry has been aggravated by increasing lack of discipline with the result that contractors, who are ready and willing to tender, cannot do so because costs of materials and labour are increasing and the turnover of labour is abnormally high. When prices place a contractor between a fixed ceiling and a rising floor he must inevitably be crushed. I am pleased to note that the miserable coat-plus system is now on the way out. We have learned that we cannot price ourselves out of the market and, at the same time, maintain progressive industries. All these factors are an indication not of lack of confidence but of the fact that under wise and careful handling by a progressive Government our economy is now attaining a new equation and a new balance upon which it will be enabled to build for the future. There is no cause for loss of confidence in the future of Australia. One need only look at the expansion that is being made in basic industries to realize that our economy is sound. Temporarily, it is off balance; and it is the function of the Government to enable it to regain equilibrium. All of us realize that this process involves a certain degree of temporary unhappiness. The honorable member for Port Adelaide suggests that the Government is pandering to big business. However, his colleague, the honorable member for Melbourne, does not accept that view because he claimed that the Government was not doing anything to help the Chamber of Commerce which, he said, was the Government’s friend. I make it plain that this Government is not the servant of sectional interests. It is the servant of the Australian people and if, in serving the people, it must take steps that are not popular it nevertheless realizes that if it failed to take them it would be recreant to the trust that the people reposed in it in 1949 and re-affirmed so strongly in 1951.


.- I am certain that the people would have been very disappointed if the Opposition in this House had not moved this motion of censure upon the Government. Members of the Labour party are at all times closely in touch with the people and in presenting this motion the Opposition is expressing not merely its own views but also those of the community as a whole. It is significant that the motion expresses the views that are held by many people who voted solidly for the return of the Government in the last general election. The motion reads -

That the economic and financial policy of the Government, especially its high taxation and drastic restrictions of bank credit, is causing’ injury to industry and production, hoth primary and secondary and is undermining the established national policy of full employment. At the same time, as a result of inflated prices and the Government’s failure to restore the purchasing power of the Australian £1, special hardship is being inflicted on families dependent upon fixed incomes, such as social services and repatriation benefits, and the standard of living of wage and salary earners has fallen and is falling: because of its persistence in so injurious a .policy the Government has lost the confidence of the country and is deserving of censure.

The failure of the Government to check inflation is causing great hardship to all classes of pensioners, home owners and wage and salary earners. It is clear from the White Paper which the Treasurer (Sir Arthur Fadden) tabled in the House during the preceding period of the current session that the position of those classes of persons to-day is much worse than it was in 1949 when the Labour Government went out of office. Whereas in that year their share of the national income dividend was 54 per cent., it is only 48 per cent, at present. Unfortunately, their position is becoming still worse as the result of the Government’s administration.

The statistics which the Prime Minister (Mr. Menzies) cited in the course of his speech last night and which the Minister for the Navy (Mr. McMahon) repeated this afternoon are out of date. They have no real relation to conditions that exist at present. That fact is revealed in the following report of a statement that the Postmaster-General (Mr. Anthony) made only last Friday in a press interview: -

The Postmaster-General, Mr. H. L. Anthony, ja id that there were s trong signs that price levels would stabilize considerably during the remainder of this year when the Federal Government’s counter-inflationary programme became more fully effective. “ All in all, the signs are becoming more hopeful “, he said. “ They do not, however, give cause for complacency.”

Mr. Anthony said Budget policy, which had been operating for only three months, had not yet had an opportunity to work its effects to any great extent.

From that statement it is clear that the statistics that the Prime Minister and the Minister for the Navy have cited in the course of this debate do not relate to the period that has elapsed since the budget proposals have been implemented. In the course of that interview, the PostmasterGeneral indicated that the Government is well aware of the effect of its policy. There can be no demand for goods and services from men and women who are out of work, and I propose to show that there is a greater number of people out of work than the Prime Minister admitted. Denial of the right to work is a denial of the right to live. The Government’s so-called disemployment policy is a repudiation of the promises that it made to the people in 1949 and repeated in 1951. The Prime Minister, in the policy speech of the present Government parties, in 1949, said -

The aspiration for full employment is no monopoly of the socialists. We are all human beings. Yet it is clear that full employment is to be the socialists’ election slogan. This is a false issue. We shall confidently devote ourselves to full employment and the avoidance of depression. The last depression arose from circumstances outside Australia.

The right honorable gentleman claimed that unemployment is non-existent in this country to-day and that it is the policy of the Government to maintain full employment. However, that claim is refuted by the following report which was published in the Melbourne Herald of the 7th February last: -

The Australian textile industry, employing 60,000, was facing extinction, Customs Minister O’Sullivan was told to-day. He was given the information in a statement by a deputation of textile employers and employees.

The Minister was told that unemployment in the industry had already risen to6,000 and that thousands more were working only part time while the Commonwealth was allocating contracts for military clothing to Japan.

Sydney wharfs were jammed with thousands of pounds worth of imported textiles, with more to come, employers said.

Importers had not the credit facilities to take them from the wharfs and until they were cleared and sold there would be no further orders for Australian mills.

The deputation said manufacturers could not get a contract from the Commonwealth for military supplies, despite the talk of defence preparedness.

I emphasize that those views were advanced to the Government, not by the employees, but on behalf of the employers in the textile industry. The director of the Associated Chambers of Manufactures, Mr. Latham Withall, has made the following statement in relation to the textile industry: -

Unemployment in the textile and apparel industries is increasing at the rate of about 1,000 operatives a week. In addition another 500 operatives a week in these industries are going on to part-time - 24 to 32 hours a week. Finished stocks of woollen and rayon and other textilesand clothing of all sorts arc from twice to six times the normal stocks held by producers.

Some manufacturers report that they are holding stocks equivalent to six months normal sales. If the present trends continue unchecked, it seems inevitable that many plants must be thrown out of production and that many businesses willbe forced into liquidation.

That statement was made by a representative, not of the Labour movement, but of the employers. The Victorian Chamber of Commerce has issued the following appeal, copies of which have doubtless been received by all members : -

Why Weaken Australian Industry?

What shall it profit a merchant if his store be stocked with low-priced merchandise from abroad if his customers, through local unemployment, lack the wherewithal to buy?

The Australian merchant who purchases the imported product at the expense of domestic goods is jeopardizing the Australian standard of living and imperilling his own future.

Import what we must by all means, but do not bring here a single thing that keeps a foreign workman busy and an Australian workman idle.

Australia’s first duty is to the Australians.

Unfortunately, the Government is not pursuing that policy. By permitting the importation of Japanese goods, and by purchasing even Japanese cloth for Australian military uniforms, it is not observing the golden rule of “Australia first “.

The Government’s credit restriction policy is having serious effects upon the housing programme. I direct attention to the following newspaper report on that aspect : -

The Premier, Mr. McGirr, said last night that the State Government would have to cut its home building programme by £2,800,000 before the end of June because of the Commonwealth Government’s refusal to allocate more than £8,500,000 for home building.

He said the State Government would have to cancel local contracts to enable it to pay for homes now on their way to Australia. “ The Commonwealth Government agreed, under clause6 of the Commonwealth-State housing agreement to provide money to build homes needed in the State Government’s housing programme “, Mr. McGirr said.

The anticipated Housing Commission expenditure this year was £14,000,000. Faced with this outlay, the Federal Government repudiates its agreement with the State and proposes to find only £8,500,000 for New South Wales housing.

Housing is of paramount importance, yet this Government is repudiating the Commonwealth and State housing agreement, and, consequently, the States will be compelled to modify their building programmes. I suppose that the St. George and Sutherland Master Builders Association is an organization that normally supports the Liberal party, but its secretary has written to me the following complaint about the effects of the Government’s credit restriction policy upon private home building: -

I have been directed to draw your attention to the fact that the Federal Government’s credit restriction policy has already resulted in a considerable reduction in home building, and there is no doubt that unless the restrictions are lifted, private home building will be practically brought to a full stop within three months.

If it is the intention of the Federal Government to ensure an almost complete cessation of home building then their policy will undoubtedly be successful. But it is a little difficult to reconcile this policy with the fact that at the present time the housing shortage is in the vicinity of 300,000 homes, and this deficit will continue to be increased by immigration and natural increase, while the home building programme is practically at a standstill.

Under the circumstances, I am directed to ask that you give this matter your earnest consideration with a view to having the Federal Government modify their policy to allow of a reasonable amount of finance being made available to the public through the Building Societies and Rural Bank, &c.

Approximately 300,000 houses are required, yet this Government’s credit restriction policy, in addition to causing the dismissal of employees in the textile industry, will cause unemployment in the building trade. The position is becoming most serious. Vandyke Brothers Proprietary Limited, of Villawood, New South Wales, is the largest manufacturer of prefabricated houses in the southern hemisphere. Its annual production is approximately 2,000 houses per annum. As a result of the Government’s credit restriction policy, two-thirds of the company’s staff were sacked two weeks ago. The company was simply unable to obtain credit to enable it to continue operations. Approximately 75 per cent, of the prefabricated houses which were made by Vandyke Brothers Proprietary Limited were ordered by the New South Wales Housing Commission and were allocated to coalmining and steel-producing districts with the object of encouraging additional workers to settle in those areas and increase the output of basic commodities.

Some of the prefabricated houses were also supplied to the Snowy Mountains Hydro-electric Authority, and to various rural areas. That valuable source of supply of dwellings will no longer be available. I remind the House of two important considerations - this company employs Australian workmen, and the cost of each prefabricated house that it makes is £2,000. That project is to be closed down because the Government evidently prefers to import prefabricated houses at the cost of £3,000.


– That is so. The freight charge on each imported prefabricated house is £800.

Mr Bowden:

– Is the company unable to sell its houses ?


– It is unable to sell them because people are unable to obtain credit. If the cost of a house is £3,000, a worker is not able to obtain financial accommodation unless he can pay a deposit of £1,500. Does any Government supporter believe that a worker is able to provide such a substantial sum ? The position is ridiculous !

The Government’s credit restriction policy is also having a serious effect upon the activities of local government authorities. The instance which I shall cite is the Bankstown Municipal Council, because I am more familiar with that authority than with other local governing bodies. The Bankstown Municipal Council is one of the largest municipalities in Australia. To carry on its programme of approved works during this financial year, it requires an amount of £475,000. The Australian Loan Council has already reduced that sum to £250,000. As a result of the Government’s credit restriction policy, the council is able to obtain only £50,000 from the sources from which it has usually secured money in previous years. The annual revenue of the council is £167,000. . The Local Government Acf of New South Wales provides that the authority, in order to finance its works until its rates have been collected, may obtain an overdraft equivalent to 50 percent, of the total annual revenue. That is to say it should be able to get £133,000 from a bank this year. But it is unable to secure that accommodation, and its activities are being curtailed.

The Bankstown Council buys electricity in bulk, and reticulates it to householders. In the Bankstown district at the present time, 3,000 houses and businesses have yet to be connected with power lines. The cost of each connexion is between £45 and £50. Because the council is unable to obtain financial accommodation it is unable to undertake that work, and, consequently, people are being deprived of houses. In the same district there are also important defence undertakings and other essential industries, development of which is being hampered by the Government’s credit restriction policy. I urge Government supporters to cross the floor of the House and vote with the Opposition in support of this censure motion.

Darling Downs

– Almost every Opposition speaker in this debate has endeavoured to create the impression that the inflationary conditions from which we are suffering at present are peculiar to Australia. They know quite well, of course, that inflation is rife throughout the whole of what we know as the Western World, and what is even more significant, that the remedies with which other countries are seeking to combat inflation are similar to those that this Government is now applying. In other words, this censure motion is merely political stage play. That is clear from the weak efforts that have been made by Opposition speakers to justify it. They have resorted to destructive criticism of the Government’s policy. Not one speech from the Opposition benches has been constructive, or has suggested an alternative policy. There can be no doubt that although the Government’s plans to combat inflation have been in operation for only a short time, they are beginning to take effect. Honorable members opposite have chosen this moment, when the first reactions to those plans are becoming evident throughout the community, to launch their censure motion. They hope to capitalize on those reactions before the plans have had a real chance to work. Recently a well-known economist said -

You cannot hope to change a longestablished economic trend without hurting some body. Now that the Government has heeded the urgings to “ do something and is, indeed, doing many of the things which it was pressed to do, the critics are once more vociferous. Every move which the Government has made has provoked opposition and criticism in the quarters most vitally affected. Human nature being what it is, that was only to be expected, though, after all, a government holding a recently renewed charter from the electorate is surely entitled to the full support of the community in all measures which it believes to be in the national interest.

That expression of opinion will find an echo in the heart of every man who examines our present economic problems honestly. The Leader of the Opposition (Dr. Evatt) made one extraordinary statement. He said that the Government’s action in taking money from the people by budgeting for a surplus was unprecedented. The principle of budgeting for a surplus is completely in accordance with accepted economic philosophy. In fact, it is an elementary principle of economic theory, and its soundness was acknowledged by the late Mr. Chifley himself.

The Leader of the Opposition also said that the Government had permitted the inflationary drift to continue from January, 1950, soon after it first assumed office until a few months ago when the 1951-52 budget was introduced. The right honorable gentleman knows well that, during the fifteen months of the Nineteenth Parliament, nothing positive could be done by the Government because of the hostile Labour majority in the Senate. All major measures were either delayed or rejected by the ‘Senate, and it was not until the Twentieth Parliament assembled and the present Government had a majority in both Houses that positive action could be attempted with any prospect of success. Such action was taken immediately. The first budget of the Twentieth Parliament contained effective anti-inflation proposals.

The honorable member for Bendigo (Mr. Clarey) said that the Government’s economic policy was quite unsound. He did not elaborate much on that statement, but he claimed that the Government’s policy would not curb inflation. The honorable member for Banks (Mr. Costa) quoted the Director of the Associated Chambers of Manufactures, Mr. Withall, in support of his arguments. I, too, shall quote Mr. “Withall, who, as honorable members opposite will agree, is by no means a kind critic of the Government at present. In a Canberra Letter issued towards the end of last year he expressed his belief that inflation was levelling off, and that by about October or November of this year a return to something like normal conditions could be expected. A somewhat similar opinion was expressed by Mr. C. P. Pusey, director of the Australian Industries Development Association, who forecast the return of a buyer’s market. Sir William Angliss said recently that there would be a fall of beef and mutton prices in the not-distant future. Support for certain other budget proposals have been given in the Bank of New South Wales Review, a journal which has been cited as an authority by several Opposition speakers in this debate, including the Leader of the Opposition himself. The following is an extract from that publication : -

Thu effects of these influences can be seen in a redistribution of employment which is slowly unfolding. As yet it is not possible to measure how far the change has gone or is likely to go. But there are many signs that basic industries and transport services, which have suffered from acute labour shortages for several years, are now having less difficulty in finding staff. Greater concentration of labour and equipment on these industries is an essential part of any final solution of the problem of inflation in its widest sense.

The honorable member for Burke (Mr. Peters) and the honorable member for Banks spoke of thousands of unemployed in Australia at present. There has been frequent use of the word “ disemployment “, and unemployment in more industries in the immediate future has been predicted. I shall refute those arguments by citing figures provided by the Commonwealth Employment Service. Those figures show that on the 25th January of this year, registered employment vacancies totalled 101,000 for the whole of Australia. References have been made by Opposition speakers to the transition of Labour with its resultant lack of choice. It is interesting to note that the Commonwealth Employment Service lists 6,000 jobs as being available in primary industries. That is probably a conservative estimate because the Division of Agricultural Economics recently gave the figure as 60,000. The manufacturing industries have 47,300 vacancies, the building and construction industries have 15,000 vacancies and the general transport industries have 12,000 vacancies. The last figure does not include approximately 20,000 vacancies in all railways services. The commerce and finance industries have 5,000 vacancies, all public administrations throughout Australia, including health and hospital services, have 8,000 vacancies, service, industries have 5,000 vacancies and miscellaneous services have 3,000 vacancies. The total number of registered vacancies in Australia on the 25th January, 1952, was 101,000.

The honorable member for Port Adelaide (Mr. Thompson) had much to say about the housing problem, ‘ and his remarks were supplemented by the honorable member for Banks, who produced figures relating to the activities of the McGirr Government of New South Wales, in which State, according to the honorable member, the. housing industry i3 in a state of collapse because of the lack of financial support from the Australian Government. I cannot discuss the details of the housing programme in New South Wales alone, but I have figures in relation to the overall situation in Australia. Apart from direct assistance given by this Government, the Commonwealth Bank during 1950-51 made individual loans for housing amounting to £4,S00,000 and loans to co-operative building societies amounting to £8,300,000. During the same year, this Government provided £21,600,000 under the terms of the Commonwealth and State Housing Agreement. Provision has been made in the budget for the current year for the allocation of £26,000,000 for the same purpose. The Government has agreed to subsidize, imported prefabricated houses to the amount of £300 for each unit. The budgetary provision for this purpose this year is £2,600,000. The Menzies Government has also provided, since it came to office, £41,000,000 for the construction of new houses and the purchase of existing homes under the War Service Homes scheme. It proposes to expend £9,500,000 during the. current financial year on its own housing programme. In all, it will provide approximately £60,000,000 for the purposes of house construction during the current year. This provision is distinct from advances that are made by the Commonwealth Bank as an instrument of the Government. Those facts provide a complete answer to the two honorable members who complained of a lack of effort on the part of this Government in relation to housing.

Let us consider now the overall economic situation in Australia to-day. Vague references to actions of the Government have been made by various honorable members opposite, but no suggestions for any specific programme to improve our circumstances have been made by them. It must be obvious to everybody that, during the first half of the current financial year, a considerable change has affected the extremely buoyant conditions that existed in the business world during 1950-51. The change has been caused by various forces which have resulted in a lower level of business activity. Perhaps one of the greatest factors in bringing about this change has been the anti-inflationary budget of this Government. The main purpose of the budget, notwithstanding side-issues, was to deal with the problem of inflation. It embodied plans to combat inflation according to both a short term programme and a long term programme. Its provisions- are well known to all of us. The short-term programme involved increased, taxation, both direct and indirect. The long-term programme provides for a budgetary surplus and the financing of all government works from income without recourse to the use of bank credit. The short-term plan had an immediate effect, and its results are already obvious. Notwithstanding certain hardships that may have been caused, it has tended to reduce the free purchasing power of the community so that the production of various luxury goods, which previously were being distributed in large quantities at the expense of the production of essential goods, has decreased considerably. We cannot yet foresee the final result of the Government’s long-term plan, but we know that it is sound economic theory to budget for a surplus. The Government acted courageously, but wisely, in. deciding that all developmental works and other undertakings should be- financed from revenue without having recourse to the issue of treasury-bills.

The Government’s plans are being supplemented by the activities of the National Security Resources Board, which is continuing to function effectively in the background. I am sure that no honorable member will criticize the efficiency of the board. Capital issues control, which was operating early in 1951 as a mere formality, was applied with full effect in August, 1951. It will assist the diversion of capital from non-essential industries to essential industries, principally our basic heavy industries. It is already working relatively satisfactorily. There has been considerable criticism of the advance policy that has been laid down by the central bank and implemented by means of committees that operate in the various States. Members of the Opposition have said that this policy has had an adverse effect, not only on non-essential industries, but also on essential industries. If that be so, the blame should not be laid at the door of the committees that I have mentioned. I have had some experience in connexion with these committees recently, and I consider that they should be congratulated upon the fair way in which, they’ are handling their task. If some’ essential industries have been adversely affected, as the honorable member for Banks has said, the fault probably lies, not with the committees, but with the way in which the industries and banks concerned have submitted their cases. Whenever the matter has been brought to their attention and it has been indicated that it is something that affects an essential industry, they have been quite willing to review the situation. When it has been found that the statement is correct, they have not only reviewed the situation but have also granted the extended credit. The statement of the- Prime Minister (Mr. Menzies) last night that the credit advance policy has been operating humanely and in the best interests of the community is borne out by the f acts

I do not think that anybody has any complaint to make about the special accounts system that was instituted by the Banking Act’ of 1945 and which is still in operation. I have not yet heard any adverse comment about the sums that were paid back from the. special accounts! to the trading banks to cover the adverse trade balance of the last six months.. With, the problem of trade balances’ is. wrapped up the vexed problem of a certain recession in the textile industry, to which reference has been made’ on many occasions during thisdebate. During the first, half of this financial year,, we had an adverse trade balance of £215,004,000. During that period, our imports were worth £533,672,000, and our exports were worth £31S,66S,000. That brings to’ mind the problem of the imports, particularly of textiles, that have been flooding into this country. In order to- get a true picture,, it is necessary to examine certain aspects of that matter. First, a buyer resistance that has been operating in most of the western countries has commenced to operate in Australia. There has been a. surplus of these goods overseas. Shipping has been made available and the goods have been arriving, in Australia in rather large quantities, with a resultant decrease of our funds overseas. The increased tonnage was obtained during the first six months of this financial year, and the goods came into this country during that period. As a result, large stocks of certain goods are being held in Australia. The stocks are above the normal quantities held, and in many instances, that has tended immediately to reduce prices-. That reduction has been accompanied by a buyer resistance to those goods. It is obvious that there are specific reasons for that buyer resistance. We can say, first, that it is caused by the pressure on credit resources. That is fairly obvious to all. Secondly, rising, costs of essential goods and foodstuffs have affected household budgets to such a degree that people prefer to spend the major portion of their incomes upon essential commodities and, therefore, they do not buy these imported goods. At the same time, there has been a fall in commodity prices, principally the price of wool. That has had the effect of causing people to delay making purchases of textiles. They argue that if the price of wool falls, the price of textiles will fall also, and they decide to wait until they can buy textiles more cheaply than at present. Those three factors- have given rise to a buyer resistance to textile goods in Australia, with the- result that the tremendous volume of goods that we have imported is still being held in stock in. Australia.

The fall in wool prices has an effect upon our economy. Therefore, it must be taken into account in considering the existing economic situation. We cannot expect that the present price level will” alter substantially during the next twelve months. We cannot visualize an increase, and probably there will be a further decrease. In considering the present situation, in which we have an adverse trade balance, we must remember that it is borne out by statistical records that in the season after a particularly good season, imports are high.

Ifr. SPEAKER. - Order! The honorable gentleman’s time has expired.


.- I rise to support the motion of censure. The honorable member for Darling Downs (Mr. Swartz) has adopted the policy of making- a misleading and superficial analysis of the present situation - a policy that has done so much to cloud the most important issue that confronts the people to-day. Nearly every honorable gentleman opposite who has spoken in this debate has mentioned some matter of economic importance, some rule of economic science, that is quite undoubted, and has flung it in the teeth of the Opposition, presumably in the hope that the Opposition would endeavour to deny it. Honorable gentlemen opposite have followed that by quoting the words and actions of the greatest Federal Treasurer and Prime Minister that we have ever had. They have quoted the words and actions of the late Mr. J. B. Chifley as being part of their policy, presumably in the hope that we would deny them. I say most emphatically that the Opposition has no idea of doing such a thing. Honorable gentlemen opposite on a number of occasions have stated, for example, that too much money is chasing too few goods. That is a popular theme. They have said that when too much money is chasing too few goods, prices will rise, and that to prevent prices from rising the supply of goods must be. supplemented. That is very true. It cannot be denied. There is another method of preventing prices from rising, but the Government has definitely i ejected it as part of its policy. It ha3 denied that prices control can be effective, despite the fact that it was effective for a long time during the last war. The Government has definitely refused to adopt that means of controlling prices. En the words of the Treasurer (Sir Arthur Fadden), it has resolutely turned its back upon prices control.

I agree that the method of supplementing the. volume of goods available on the market is a good method of preventing prices from rising, but I point out that it is useless to state a broad objective and then to fail to institute the controls that are necessary to ensure the. attainment of that objective. The post-war reconstruction training scheme is the best example of what I have in mind. In the change from a period of war to a period of peace, it was necessary to have a plan and a broad objective, but it was necessary also to have control of all the men and women who were leaving the Services in order to ensure that each individual could be fitted into the economy of the country in a suitable manner. That was done most effectively. That is an example of the kind of control that is absolutely necessary for the attainment of a particular objective. Labour governments always instituted such controls. It was part of their policy to do so. They were backed by Cabinets which had the administrative ability to administer the controls. The record of Labour in that connexion is without parallel. The policy of the present Government is opposed to controls and because the Government has set itself out to abolish controls it ha3 failed. For that reason, I support the motion of censure.

The problem of controls needs to be examined if we are to offer constructive criticism. The Prime Minister (Mr. Menzies), the honorable member for Darling Downs, and the honorable member for Henty (Mr. Gullett) asked what the Opposition proposed should be done in order to set matters to rights. We should look very carefully into conditions in the textile industry in this country today. I am obliged to the honorable member for Darling Downs for raising the subject, and to other honorable mem- bers who have referred to it during the debate. In the Division of Ballarat there are half a dozen big textilemills and a number of smaller knitting mills, which I have had an opportunity to see working. Until a few months ago they were proceeding merrily. However, the position is vastly different to-day. In their stores are enormous stacks of manufactured goods awaiting sale. They have been there for some time, and the quantities are much larger than those normally carried. The quantity of worsted yarns on hand is 224 per cent, greater than the quantity usually carried, while the stock of woollen and worsted piecegoods on hand is 172 per cent, greater than the quantity usually held. The stock of mantles and costumes held is 190 per cent, greater than usual. Many other items also are heavily overstocked in mill stores. The mills are unable to sell their, goods. There are very depressing sights in the workshops and mills. Many spindles are motionless, and dozens of looms are silent. A large amount of expensive machinery is lying idle, and many people are unemployed. In a number of instances the mills have almost closed down. It is undeniable that within several months this prosperous industry has deteriorated into a state of collapse, and has great piles of manufactured goods on the shelves awaiting sale. It is a most depressing and desperate situation. Only a few highly skilled tradesmen have been retained in employment. In one mill sixteen mill tuners are now employed as weavers, in order to retain their services. Three of their most experienced mill hands have been given berths to New Zealand and have accepted good jobs in that country. This is indicative of the difficulty that manufacturers are facing in trying to retain their staff in the industry. In many mills a great deal of unemployment has occurred.

In citing unemployment figures in the textile industry as at the 16th January the Prime Minister thought that he was up-to-date. However, the honorable member for Darling Downs has cited figures as at the 26th January, but even those figures are not conclusive, because of the rapidity with which the situation is deteriorating. The downward movement which commenced some months ago is .gathering momentum. I have before me reliable figures which show that in a normal pay week the mills employed 19,271 personnel, In the pay week ended the 26th January only 15,295 persons were employed in the mills. Tha t means that almost 4,000 textile workers are now unemployed.

Mr Beale:

– They are not necessarily out of work.


– There is no evidence available that they have all been absorbed in other industries. Many females occupied positions in the mills because the work was complementary to the main industry carried on in the district. Many of them have now returned to home duties because employment in the mills is not available for them. Many of the men who have lost their employment in the mills are seeking employment elsewhere so that they will be under cover for the winter. I understand that 30 men who were dismissed from one mill were offered employment by the Government in the motor trade at Geelong. I have yet to learn that the motor industry is more essential than the textile industry to the Australian community.

We need to have a very deep and penetrating look into the Australian textile industry in order to obtain a clear view of it. This industry was established in Australia over SO years ago and is very efficient. It has grown as the population of this country has increased. The mills are equipped with good machinery and their staffs have been well trained. This training has involved an expenditure of thousands of pounds. As the population of Australia has increased so has additional machinery been installed and output increased. Not at any time previously have the mills produced greater quantities of goods for the Australian market than that market could absorb. The expansion of the industry has kept pace with the increase of population, which, I think, has been a very wise and sound policy. The quality of the Australian textiles is second to none in the world. At one mill I was shown the most beautiful cloths that I have ever seen. Some of their products were sent to the United States of America, which has the most competitive and selective market in the world. They were accepted readily and sold, and so earned dollars for us. Further evidence of the quality of the Australian textiles and the efficiency of the Australian textile industry generally is contained in the Tariff Board’s Report on Woven Upholstery and Woven Furnishing Fabrics of the 15th November, 1951. An interesting experiment was carried out by the Tariff Board. It sent 35 pieces of Australian cloth to England to be examined and priced, and at the same time obtained samples from the English manufacturers, in order to establish the cost of manufacturing them in Australia. The results were most interesting. Twenty-five of the samples sent to Great Britain were priced more cheaply in Australia than in that country. If we assess the .advantages shown by the goods produced more cheaply in England, and also the advantages shown by similar goods made in Australia, we find that it results in 72 points in favour of Australian goods compared with 17 points for goods of British manufacture. Of 26 pieces of cloth obtained from Great Britain and shown to the Australian manufacturers, eleven could be produced more cheaply in this country than in Great Britain. That country could manufacture fifteen slightly cheaper than could the Australian manufacturers. If we apply the same test to these goods it will be found that the Australian goods earned 3S points compared with 34 points for goods of British manufacture. Those figures speak for themselves and demonstrate the efficiency of the Australian textile industry. The fact that Australian products sold readily in the United States of America, on the most competitive market in the world, shows conclusively that there is nothing wrong with Australian workmanship. The Australian textile industry has not been over-extended. It does not produce an inferior article, or manufacture at a high cost. It is an efficient industry which supplied Australia’s requirements of uniforms, blankets and clothing for the fighting forces during the last war as no other country could have done and also helped to meet the requirements of our allies. It is an essential industry which we must have in operation if we are to conduct a proper system of defence. The Minister for Defence (Mr. McBride) introduced the subject of defence into the debate. The Government’s policy of ruining this magnificent industry, which was so valuable to us in war time, is deserving of censure.

Mr Opperman:

– How is the Government ruining the industry?


– I shall come to that. As I have said, the Government was prepared to supplement the supply of goods by imports. That was its declared policy. It was set out in the Melbourne Argus of the 31st January last, in an article which read in part -

The Government has deliberately framed its policy to stimulate imports as a counter to inflation.

The Government is using its London funds, of between £300m. and £400m., to achieve this.

But the Government has no control over the position. It has not thoroughly examined the state of our local industries. Instead, it has applied a broad policy to achieve a broad objective, without first having examined closely the condition of established Australian industries. Its measures for increasing the supply of goods has led to the importation of millions upon millions of pounds’ worth of textiles which is destroying our Australian textile industry. At present warebouses have an enormous quantity of textile goods from overseas that they recklessly ordered at a time when supply was difficult. They made their orders for “delivery at earliest” because at the time there was a great deal of talk about slow turn-round of overseas ships. But the shippers in the United Kingdom discovered that the shipping shortage was not as great as had been believed, and found 22 ships within the space of a few months to bring textiles to Australia. Those ships unloaded on to the unsuspecting merchants of Australia enormous quantities of textile goods which are now lying on the shelves of retailers and in the warehouses. Naturally the retail trade is refusing to buy Australian textile goods while it still has the imported goods on its hands.

The House will agree with me that people who recklessly order enormous quantities of goods that are more than sufficient to fill market requirements should have their fingers burnt and pay for their folly. There is no reason why the employees in the textile industry, or for that matter the mill managers and shareholders, should suffer as the result of a reckless policy of importation. The wrong people are suffering for a policy of reckless importation, which has been encouraged by the Government. For that reason the Government should be censured. There is no doubt that this matter could easily be adjusted by the restoration of confidence in the textile industry and the country as a whole. The Prime Minister (Mr. Menzies) had a lot to say about people who talk about losing confidence and so creating the conditions conductive to depression. But he has not done anything about bolstering the people’s confidence. It is obvious that much could be done to put the textile industry into good order. The Government could place orders for materials and so keep the people in employment. It could also extend credit to enable millers to buy yarn for the workers to process. A credit policy should be used to restart languishing industries and the textile industry is now badly in need of restarting. In addition, the Government should prevent all further imports of woollen textiles and of all textiles which can be made efficiently in Australia, until such time as our Australian industry has been reestablished. I support the motion.


.- It. was interesting to hear the honorable member for Ballarat (Mr. Joshua) drag out the old story about prices control. I find it extraordinary that members of the Labour party cannot seem to remember that the Chifley Government submitted the matter of prices control to a referendum of the people, and that its proposals were overwhelmingly defeated. The people obviously do not want prices control, and, in any event, prices control is not the answer to the present situation. The motion before the House, pandering as it does to the most irresponsible elements of the community, reeks of hypocrisy. It is partisan in the extreme, and is designed merely to confuse the minds of the people. Its propaganda value, even to the supporters of the Opposition outside the House, is doubtful. Its’ distortions are numerous and are typical of the tactics that were employed in the campaign during the recent referendum on communism. I suggest that the only eulogy that the Leader of the Opposition (Dr. Evatt) will receive for his presentation of his case will probably be another honorable mention on Moscow radio. The motion is sheer political expediency, and all honorable members on this side of the House and, indeed, most of the people of Australia, are aware of the fact. Both in 1949 and in 1951 the people were informed of the nation’s most urgent requirements. I refer, of course, to defence requirements and .counterinflationary measures. The people were warned in the Prime Minister’s policy speech of 1951 that they would be required to accept their obligations. I shall refer to the relevant part of that speech, which reads -

Apart from increasing supplies by increased local production and importation, there are financial measures designed to lessen the pressure of demand upon limited resources. We have already put several such into operation. We have re-instituted capital issues control largely to discourage enterprises which are not adequately related to the vital needs of the country. The Commonwealth Bank has given directions which will make the provisions of bank credit more selective.

I have read that statement to the House in order to stress the fact that the Government’s policy is not a bolt from the blue. The people knew that we had a definite programme, and it is that programme that we are carrying out. The speech continued -

In the new Parliament we will bring down a Defence Preparations Bill to institute such needed controls as may be thought to be within the limits of the Commonwealth Constitution. We do not propose to rush into controls; we have an instinctive dislike of them.

It is obvious to any thoughtful person that some controls have become necessary. I have referred to those passages in order to remind members of the Opposition that we are merly carrying out the policy on which we were elected to office. The speech continued -

We have, as a nation, pursued a policy of increasing costs by reducing the working week, by restrictive practices, by too much inefficiency, by hot competition in wages by vastly increased social services. I do not say that these are all bad things; some of them, on the contrary, are very good. But if we want them, we must pay for them. We cannot have our cake and ea>t it too.

The passages from the Prime Minister’s policy speech that I have read dispose adequately of the Opposition’s contention that the Government’s financial policy has been developed since we came into office. Does the Leader of the Opposition expect that the patriotism and realism of the Australian people will prove to be so low that they will not respond to the necessary call for everybody to play their parts in defeating the inflationary cycle? I have considerably more faith than he has in the good sense and willingness of the people to combat the present inflationary condition.

The Leader of the Opposition referred at length to the subject of increased taxation and mentioned several reductions that the Chifley Government had made during its term of office. I should think it would have made reductions considering that it had the doubtful honour of having inflicted on the people the highest taxation ever known in this country. Of course, during that government’s term of office Australia passed through a major war; but for a considerable time in the post-war period it failed to make substantial reductions of taxation rates. Under the Chifley regime a taxpayer with two dependants and a taxable income of £400 a year paid income tax of £53. At present he pays £5 3s. A taxpayer with a taxable income of £500 a year paid income tax of £88 under the Chifley regime while at the present time he pays only £14. A man with a taxable income of £800 a year used to pay £207 in income tax as compared with £60 at present. A man with a taxable income of £1,000 a year paid £293 compared with the £103 payable under this Government’s taxation rates. The present rates of taxation in Australia are still considerably below the rates applicable in the United Kingdom and New Zealand.

If the Government had failed to take the necessary anti-inflationary measures there would have been cause to complain but there are healthy signs that its financial policy is having the desired effect. It is true that in certain circumstances it is causing some temporary hardship but this nation can take a little hardship. If it could not it would not be worthy of its araditions It was extraordinary to observe the Leader of the Opposition in the role of champion of the private hanks. He must know that credit restriction is designed to prevent people from living beyond their means. He claimed that there is substantial unemployment in Australia and made great play on the word “ disemployment “. In the circumstances, “ disemployment “ is the correct term to use because there is no real need for unemployment. The Commonwealth Employment Service has thousands of vacant jobs on its register and nobody need be unemployed. Admittedly, we are passing through a temporary transition period during which a small percentage of people may become temporarily disem ployed, but this will soon right itself.

Several Opposition members have suggested that the country is heading for a depression or a recession. The Leader of the Opposition referred to conditions in New South Wales. I visited Pork Kembla last week and went over various works including those of the Nebo coal mine owned by Broken Hill Proprietary Company Limited, Australian Iron and Steel Limited, Lysaght’s Works Proprietary Limited, and Australian Fertilizers Limited, and at each place I found that there was a great shortage of labour. The same state of affairs applies all over the Commonwealth and it is utter nonsense and arrant political humbug to suggest that anything like a state of depression exists. What I saw in Port Kembla confirmed my view that Australia faces a period of undoubted prosperity, the like of which we have never seen before. Barring a national catastrophe such as war this country will go on to a better and greater future. The organizations to which I have referred are all duplicating their present plant at Port Kembla which together with harbour and other developmental work will, it is estimated, coat approximately £50,000.000. That is an indication of their confidence in the future of Australia so let us hear no more nonsense about a depression. Australia has a limited labour force which is not sufficient to cope with its development. Would honorable members opposite suggest that in these circumstances nonessential industries should enjoy priorities equal to or higher than those enjoyed by essential industries? Of course not!

Because of the Curtin-Chifley Government’s policy of over-boosting secondary industry, Australia is faced with an acute food production problem. There is considerable imbalance between primary and secondary industry and, as a result, essential labour has been enticed away from country to city areas. The present policy of the Government was described by the Opposition as economic conscription. 1 fail to see that that term can be applied appropriately to the Government’s policy. In any case, it is extraordinary to hear Opposition members accusing the Government of practising conscription of any character in view of the fact that their late leader, Mr. J. B. Chifley, openly advocated the direction of labour and said that, if necessary, he would transfer whole communities to various sites as that was demanded by the labour position. It is a hollow sham on the part of Opposition members t,o complain about economic conscription. As recently as April of 1951 the late Mr. J. B. Chifley said that neither this nor any other government could halt the inflationary spiral. No thinking person would dispute that statement. The most effective answer to inflation would be a general increase of the output of work per man-hour by 10 per cent. Cost of living figures have vindicated the action that the Government has taken. On the 26th January, 1952, an article appeared in the Examiner, a Launceston newspaper, a part of which stated -

For the first time since the beginning of the war, the cost of living index shows that inflationary forces in Australia are really amenable to control. The Government is delighted with the first fruits of a budget which was designed, despite criticism, to achieve exactly what has and is happening. It has shown that inflation can be tackled properly and effectively by the application of bold and well based economic measures accompanied by resolute disregard to sectional protests against their impact.

Mr Haylen:

– Did the honorable men]ber for Bass (Mr. Kekwick) write that for the newspaper ?


– It was written by the newspaper’s Canberra correspondent and it is sound comment.

Increasing demands on the supply of goods have made necessary a complete overhaul of advance policy and the broad objective of the Government is to reduce the dependence of industry, commerce -and agriculture on bank finance by inducing people to seek finance outside the banking system. Labour availability “is definitely a limiting factor in the Australian economy. Let us examine the growth and distribution of the Australian population in the last 50 years. Tn 1901 there were 3,800,000 people in this country. There are now 8,300,000. In other words, the population has mere than doubled in the last 50 years. I do not have to remind most honorable members that for economic and strategic reasons it is essential that this country should build up its population. We have vast empty spaces and if we are not prepared to use them to their fullest productive capacity others will be very willing to do so. Accordingly there is an urgent necessity to increase our population to About 11,000,000 by 1960.

I desire now to refer to an excellent paper that has been written by Professor P. H. Karmel, who is Professor of Economics at the “University of Adelaide. It is entitled “ The Australian Economy”. Professor Karmel wrote -

If we achieve our target of 11,000,000 in 1960 and if we are to maintain the increase in our standard of living and our level of exports, then we must increase our production of pigmeats by 78 per Cent., mutton by 58 per cent., beef by 40 per cent., milk by 37 per cent., sugar by 28 per cent., lamb by 23 per cent., wool bv 1 1 per cent., and wheat by 7 per cent, -all by 1900.

Comparing primary and secondary development, the professor wrote -

In 1901, 17 per cent, of Australian breadwinners were engaged in secondary production as against 33 per cent, in primary production. By 1947 the figure was 27 per cent, as against 18 per cent. . . .

It may be a triumph for Australian ingenuity and workmanship to produce a certain article wholly in Australia, but if it costs twice as much here as abroad to produce it, is it a very sensible thing to do?

The article continued -

In the last decade coal production with a 20 per cent, larger labour force was up by about 50 per cent., pigiron by 45 per cent., ingot steel by 30 per cent, and electricity generation by 140 per cent.

Those figures place before us an encouraging picture of the great economic development that has taken place in Australia alongside with our very greatly increased standard of living. In material comforts we are considerably better off than we were at the beginning of the century. In 1901 there were five and a half persons to each house, and now there are only four persons. At present almost every family enjoys the use of a radio receiving set. There is a motor car to approximately every three families, and the average family has 75 per cent, greater use of goods and services than it had in 1901. All that indicates complete stability in our economy in spite of the incidence of two major wars within the last 50 years. We not only have maintained our standard of living but also have obviously improved it. However, our standard of living depends on our productivity, and if we try to do more than our economy will stand then naturally we shall fall into inflation.

The major remedy for inflation is comparatively simple. If each Australian would resolve to give a fair day’s work for a fair day’s pay, those engaged in management as well as those who make up the labour forces, then inflation would disappear almost overnight. If each Australian would accept his responsibility we should really make the 40-hour week work.

I contend that the motion before the House is completely spurious. The case put forward by the Leader of the Opposition and all those who have followed him from the opposite side of the House, has done nothing to enhance their prestige. They have obviously selected this opportunity to try to besmirch the efforts of the Government. They have attempted to pander to the pressure of sectional elements who do not form the real core of our Australian life. The motion has failed miserably because it is based on unsound premises.


– It has been most illuminating to hear every speaker on the Government side, from the Prime Minister (Mr. Menzies) down, extol economic control and suggest that the Opposition, which has advocated economic control in the past, is now opposed to it. The Labour party stands where it has always stood. We say that if economic justice is to be done to the great majority of the people there must be economic planning and a direc tion of resources. The important consideration is how those controls are to be exercised, by whom, and principally over whom. The subject matter of our motion is an accumulation of the ills of the last two years during which this Government has been in office. The Government assumed office in December, 1949, and perhaps it would be constructive in a debate such as this to recapitulate some of the promises which honorable members on the Government side Lave made in the past. These promises are conveniently summarized in an article written by Peter Davies entitled “Inflation in Australia “ published in the- September, 1951 issue of the English magazine The Banker, in which Mr. Davies gave a broad view of the picture of inflation and how it affects various sections of the people.

This Government came into office as the result of a lot of promises and because the preceding Labour government had had to do many things that were unpopular. Any government has to do unpopular things in these days. During the general election campaign in 1949 dishonest promises were made by the present Government parties. The Government now alleges that the Opposition is criticizing its policy, but is offering no alternative. The Opposition is entitled to criticize the policy of the Government because that is its function. The Government is entitled to govern, and we are entitled to be critical of what is done, particularly when it hurts the sections of the people that we represent. ‘ It seems that, as always in times of economic crisis, or disemployment, the first section to be affected is that composed of the working people. There has been much talk about economic correctives, but little attention has been given to the individuals who are primarily affected by economic dislocation.

I shall attempt .to show that the Government has not acted justly since October, 1950. As far back as that date, the Prime Minister called a conference to discuss economic ills and he then promised that his Government would take certain economic measures. Those measures included control over new capital issues. It is rather amusing to hear defence of capital issues coming from honorable members on the Government side because they removed that necessary economic control. Most of the damage to the economy that is now being felt was done during the period when those controls were not operative and many of the problems that are now facing the country are an accumulation that has arisen from that period of relaxation that was sponsored by the Government.

By October, 1950, when the Government had been in office for ten months, the position was so desperate that something had to be done and a conference of experts Was called. The Prime Minister then made certain promises which included control over capital issues, a substantial cut in public- works expenditure, an increase of indirect taxation, a production drive, a savings campaign, economies in government administrative expenditure, closer supervision over bank lending, an excess profits tax and prepayment of income tax by wool-growers. Because certain interests were affected by those proposals, nothing was done and the position deteriorated until the following year. In August, 1951, a further conference was held in Sydney. At that conference the Prime Minister called for a review of all public works programmes so that labour could be diverted to the basic industries, a reduction of private lending, restriction of hire-purchase credit and control over new capital issues. For the most part, the economic faults that the Government deemed to be needing attention in October, 1950, still awaited attention in August, 1951. Now the sins of the Government have caught up with it and drastic controls are being suddenly imposed. Because the Government is applying controls so drastically and haphazardly, intense dislocation is being caused to the economic system. That system .is extremely sensitive. It is not something with which anybody can play ducks and drakes. It is carefully geared and there is not much mobility in it. Without labour there can be no production, and labour has not much mobility either. Workers cannot be taken out of the textile industry and put into the machine tool industry because they have not the capacity or the training for the work. Neither can the capital equipment which is involved in the textile industry be removed to another factory.

Last night the Prime Minister said that the Opposition had made much of the effect of credit control restrictions when, in effect, there has been an expansion of bank credit over the last six or eight months. That is perfectly true. Bank credit has been expanded rapidly during the period that this Government has been in office. Because of that overrapid expansion and the failure of the Government to deal with economic problems at an early stage, the impact of the Government’s actions is having the marked effect on the community that is now evident. The inconsistency of the Government is shown by the way in which it has asserted, on one hand, that it is using the brake on credit while, on the other hand, it is expanding the volume of money in the community. In the issue of the Australian Financial Review dated the 14th February, 1952, a writer directed attention to that fact and stated -

Income inflation has been given a big fillip by the huge increase of £115,000,000 in Treasury Bills in the three months to the end of January.

Treasury-bills are short-term loans from the banking system to the Government to tide it over a period when its estimated revenue has not been received but it has expenditure to meet. The effect of treasury-bills is to expand the amount of money in the community. When the budget was presented to the Parliament, the Treasurer (Sir Arthur Fadden) said that there would be no further recourse by the Government to treasury-bills. The Government planned a surplus and by that means purchasing power was to be drawn from the community. The budget surplus was to be £114,500,000. Already, in the three months since the budget was presented, there has been an expansion of money in the community by the Government by the issue of £115,000,000 of new treasury-bills. That shows the inconsistency of the Government. It is being heavy-handed in the case of one or two vulnerable industries and happy-handed with its own expenditure. The writer in the Australian Financial Review to whom I have already referred asked why an expansion of £115,000,000 in treasury-bills was necessary. He accounted for £25,000,000 by pointing to the difference between revenue and expenditure in the relevant period. Expenditure had exceeded revenue by that amount. Of. the remaining £90,000,000, £45,000,000 was covered by another of the financial frauds that have been perpetrated by this Government. That was the repayment of the £45,000,000 that was collected by the 1 per cent, levy on the wool-growers. As honorable members on this side of the House have already pointed out, the Treasurer’s budgets are simply financial camouflage. He covers up to-day with an expected surplus to-morrow. When to-morrow comes he has to perform some other feat of legerdemain to get himself out of the immediate difficulty.

The problem which faces the community and which this Government has failed to meet is the problem of inflation. Inflation would not matter much in the community if everybody’s income rose as much as prices increased, but because there is a difference between the rate at which wages rise and the rate at which prices increase, tensions have arisen in the community. Certain sections of the community do not receive increases in their incomes. They include pensioners and those on fixed incomes. Every rise of prices inflicts more economic hardship on them. For most of the community wages are not increased until prices rise because of the system of wage adjustments. Immediately a wage increase is granted, a new set of price increases begins to take place, and the income of the wage-earner is always behind. Honorable members on the Government side’ suggest that all economic evils in the community are due to the vicious wagesprices spiral. The reverse -is the case because it is a prices-wages spiral, but again that is not the whole truth. Statistics show that most of the increase of money is going not to the wage-earning section the community, but to other sections.

Certain people have been chided for quoting statistics, and I know that unless care is exercised the quoting of statistics may be abused. However, the figures which I propose to cite are significant. They are taken from the 18th report of the Commonwealth Grants Commission dated 1951. The publication contains many carefully compiled tables which are called economic indicators. At page 21 of the report are certain statistics about the operation of banks. In Australia there are about 7,000,000 savings bank depositors, so that almost every man, woman and child in Australia has a savings bank account. In 1946, savings bank deposits totalled £663,600,000. We now come to the deposits in the trading banks. Of course, not every one has an account in a trading bank. Trading bank depositors probably number about one in every five of the population. In June, 1946, deposits in trading hanks amounted to £627,000,000, a figure not so very different from the amount of savings bank deposits. However, by the end of June, 1951, savings bank deposits had increased to only £837,000,000, whereas deposits in trading banks had increased to £1,237,000,000. That seems to indicate that the accumulations of those who earn profits and put money aside in reserves increased far more rapidly than did the savings of the wageearners. For the wage-earner, his weekly pay envelope is the most important single economic factor in his life. With his wages he buys all the goods and services that he requires for himself and his family. When he loses his job, as many textile workers have lost their jobs recently, his income disappears. If he is out of work for four or five weeks he may have to expend his total savings of £50 or so in order to carry on. The dislocation which has been brought about by the haphazard application of the Government’s credit policy is causing tensions within the community. I quote the following from the Warrnambool Standard of the 9th February, 1952: -

WOOLLEN Mill Reduces Staff, Hours.

The enormous increase in imports of cheap textile goods to Australia during the past year has resulted in the putting off of approximately 30 men and a reduction of working hours at the Warrnambool Woollen Mill.

On the preceding page there is an advertisement that states that all-wool English grey blankets may be bought for 69s. lid. a pair. Thus, while textile workers are being thrown out of employment, large quantities of textile goods are being brought into Australia. I do not say that there is anything wrong in importing English blankets, but there is certainly something wrong when people are losing their jobs because the product they make cannot be sold, whilst, at the same time, similar products are being imported from 13,000 miles away and sold in Australia. The present situation could very well give rise to antagonism between Australians who have been thrown out of work and the people of those countries from which goods are being imported, whether it be Great Britain or Japan or any other country.

The Government has not indicated whether it believes the textile industry to be more or less important than some others to which, presumably, it hopes to divert labour. It is easy to use such terms as “ essential “ and “ nonessential “, but we should consider the individual worker or employer who is concealed behind the facade of words. The effects of economic dislocation are felt most severely by the workers because they are least able to defend themselves. We on this side of the chamber are the defenders of the Australian standard of living. We stand for a policy of full employment. The Labour party is supporting this motion of censure because it believes that the Government has failed to do the job that it was put in power to do. It is not administering the country in the interests of the community as a whole. The Government has instituted a system of selective credit control under which private bankers will be empowered to choose between the big business and the small one, and to decide which shall he allowed to survive. If a hanker has to decide whether A or B is to obtain an overdraft he will naturally favour the undertaking which is likely to be the better customer, and if A is a small business and B a big one it is almost certain that B will obtain the overdraft. If the choice is between the small corner store and the big department store, the small store will go to the wall. When the Chifley Government was in power banking legislation was passed the purpose of which was to protect the economy of the country. Now, the way in which that legislation is being administered by the recently appointed Commonwealth Bank Board threatens to destroy the standards which were so painfully built up during the years with the help of Labour governments.


.- This debate on the motion of censure directed against the Government’s economic policy might have been of real value. Many people are worried and confused over the state of our economy to-day, and they might have been helped to a proper understanding of it had not the Opposition chosen to make of the debate a political slanging match. The attack on the Government will fail and the debate, so far as contributions from members of the Opposition are concerned, will not serve to throw any light on the situation.

It may be of some help if a member who claims no special economic knowledge states in simple terms the position as he sees it, which is what I propose to do. When the present Government came into office an economic situation of great gravity existed. There were shortages of labour and of raw materials. Imports from overseas were not obtainable in sufficient quantities and there was, consequently, a serious shortage of goods for consumption. This was accompanied by a very heavy demand for goods. The .release of vast savings that had been bottled up during the war, together with a very high national income from exports caused a great demand for consumer goods. These are exactly the conditions in which inflation occurs. They were aggravated by a wage-fixing system, which is not in any way related to productivity ; by the state of our basic industries - the deplorable and chaotic condition of the coal industry which in turn affected the steel industry so that it was working at only about 60 per cent, of its capacity - by inefficiencies and bottlenecks in our transport system, of which the conditions on the waterfront are the most notable examples, and by the unrestrained activities of Communists in our industries. That state of affairs was bad enough in itself but it was very greatly worsened when on it were superimposed three other factors, each of which is itself inflationary, but each of which is necessary and unavoidable. The first factor was the need to rearm quickly, a responsibility which had been grossly neglected by the previous Government. I need not elaborate that point. This Government took office knowing that it had but a very short time in which to prepare against the danger of a war over which ithad no control. The second factor was the need to continue the large-scale immigration policy initiated by the previous Government. We know that every immigrant who comes to Australia means an increased demand on our capital goods, and to that extent an addition to the inflationary trend, but if we are to hold this country Ave must continue our immigration policy. The third factor which added greatly to our difficulties was the need for the rapid development of our national resources through water conservation and hydro-electric projects such as the Snowy Mountains Scheme, without which this country cannot continue to increase its population or prepare itself to meet the dangers that lie ahead of the democratic world.

In these circumstances what could have any Government have done? The answer is clear. It had no option but to follow the best economic advice available to it. This Government followed the accepted economic theory of our time. Economic theories vary from age to age and from decade to decade. What is believed to be right at one time is rejected at another. There are flaws in the best of the theories, but they are discovered only by experience.. The Government adopted the orthodox means of dealing with inflation. It adopted precisely the same means which the Opposition would have had to adopt had it been in power. What is the accepted economic theory? It is, first, that the pressure of demand for goods shall be relieved through increased taxation and credit restrictions and, secondly, that our very limited resources of raw materials, labour and capital goods shall be used in the production of commodities that are essential rather than those that are non-essential. This diversion of labour and materials is achieved by capital issues control and by the limitation of bank credit in some directions and its extension in others. This afternoon the Minister for the Navy (Mr. McMahon) very logically pointed out that the Government’s economic policy is a policy not of restriction but of direction. He demonstrated to the House that both capital issues and bank credit have been greatly expanded in the last two years but that the direction of credit and capital has been altered.

I have frequently heard the argument advanced that if shortage of goods is a cause of inflation, increased production of all goods should be encouraged, or, in other words, that all restrictions of capital issues and credit should be removed so that the maximum production of goods in short supply may be achieved. In short there should be a reversion to a free economy and the removal of all controls. I -believe that such a policy could have been adopted in 1946. It was adopted in the United States of America after the war with great benefit to that nation. In 1946 it would have been possible for the Chifley Government to relax controls very considerably and to bring about a revision to a free economy, which would have given us tremendous strength when the demands for rearmament came upon us. Unfortunately that opportunity was missed. But by 1950 it was no longer possible to adopt such a policy. In the first place, the pressure of inflation was so great that it would have been possible to remove controls and revert to a free economy only at the cost of sending countless ordinary people to the wall. Secondly, there was no longer time in which to do so because reversion to a free economy would take at least two years to become effective.

The Government knew well that it had very limited time in which to prepare this country against the threat of war. What could any Government have done in these circumstances except follow the course which this Government has followed? That is why the Opposition attack yesterday and to-day has been so ineffective. The basis of its criticism involves the acceptance of theories in which it does not believe. Honorable members opposite could have followed a very different course. They could have acknowledged the necessity for the . economic policy of the Government and have examined its operation critically and constructively, pointing out its deficiencies. They could have made a constructive attempt to make it work. What did they do? Dishonestly and cynically they adopted the outlook of an eighteenth century Liberal and denounced as an interference with freedom everything that the Government has done. With their suggestion of depression they played on the people’s fear. Had I been a textile worker forced for the time being to find another job, I should have derived no comfort from the words of Opposition speakers in this debate. My natural fears would only have been aggravated by them. Had I been a primary producer compelled to pay a very heavy bill for provisional tax, instead of being helped to understand why the country is in its present position, and why the Government has had to adopt these measures, I should have been only further confused by the statements of honorable members opposite.

The Opposition has been guilty of a cynical and dishonest attempt to arouse the fears of other people for the basest of party political motives. Honorable members opposite could have examined critically the operation of this policy because, as we all know, there is room for such criticism. The times, urgent and difficult as they are, have demanded drastic remedies, and the ultimate results of some of these remedies are not yet clear to us. Many of us are naturally concerned about the present position of the textile industry. Importers’ orders, delivery of which would normally have taken up to eighteen months, arrived within six months as the result of additional shipping suddenly becoming available. Consequently, importers are experiencing difficulties in meeting payments; and they will have difficulty in disposing of the goods immediately. For this reason they have been obliged to cancel orders with Australian mills. It is obvious that for the time being the industry is in a serious position. However, its difficulties will be rapidly resolved because it will be impossible for importers to continue to import textiles at the present rate. Sufficient foreign exchange is not available for that purpose and, in any event, other factors responsible for the abnormal volume of imports recently are no longer operating. I believe that if the industry closes down to any degree the present surplus of textiles will be followed by a shortage. This oscillation of supply and demand could be dangerous. There is undoubtedly cause for concern. But what purpose does the Opposition serve by merely condemning the Government for its approach to the problem ?

All of us realize that difficulties arise in the administration of government policy in matters of this kind. The retail trades have been experiencing a difficult period from which they are now emerging. For the ‘time being the restriction of credit for housing has led to an alleviation of conditions in the building industry which has been accompanied by increased productivity within the last few months. However, in the not distant future orders will fall off for a period, and I hope the Government is giving attention to that possibility. If honorable members opposite were to address themselves to factors of the kind that I have mentioned, they would make a worthwhile contribution to this debate. They could examine with profit the position in the heavy industries which must be encouraged in the interests of our defence effort. Some of those industries have for the time experienced a falling off of orders and some of them are temporarily in difficulties. Honorable members opposite should examine matters of that kind instead of ignoring the real problems that exist in this country. rsl

Australia is not yet out of the wood. Inflationary pressures are still operating. At the same time, we are to a large degree dependent upon economic conditions abroad, over which we have no control and which vary widely and rapidly. There is an oscillation of supply and demand in Australia which must have serious results if the problem be not solved. It is inevitable that during the coming months many people will be inconvenienced and that some will suffer hardship. However, I believe that the Government is honestly and courageously following the only course that is open to it. I am certain that if it does not continue to do so with courage and vigour great hardship and even disaster will rapidly engulf us all.

This censure motion has failed. The Opposition has shown itself to be unrepentant and, indeed, unaware of the large contribution that past Labour governments have made to the present state of affairs which we deplore. Honorable members opposite have trifled with and have ignored the real problems that confront us and have shown themselves to be completely incapable of understanding or dealing with them.


.- The honorable member for Evans (Mr. Osborne) has claimed that the censure motion has failed. That is a matter of opinion. The people are best qualified to judge whether the Opposition has succeeded, or failed, in presenting this motion, because in. the final analysis every phase of governmental activity directly affects them. The honorable member for Evans suggested that the Opposition should deal with the substance of the motion in simple terms in order to help the people to understand clearly the issues that are involved. However, he merely indulged in economic shibboleths and dealt with matters that were not related to those embodied in the motion. The motion is drafted in simple terms and the primary issue that it raises is equally simple. Has the Government carried out the promises that it made to the people? Has it done certain things which in themselves have caused an uplift of the standard of living in the community? Has it kept its promises with respect to full employment ? Has it put value back into the £1 ? If any Government supporter can answer any of those questions in the affirmative, his imagination is greater than his knowledge of practical affairs. The acid test in this matter is whether the Government has justified its existence. Is it carrying out its job? My colleagues and I rightly contend that it has failed most abjectly. The people, who will eventually be called upon to pass judgment upon it, will confirm that opinion in no uncertain terms.

The honorable member for Evans said that the Opposition’s attack upon the Government had been ineffective. Honorable members on this side have confined their remarks to the motion before the Chair. Unlike supporters of the Government we have not wandered on by-paths and expounded outmoded economic theories. During the last general election the Government parties promised, first and foremost, that they would restore economic equilibrium in this country. To use their own expression, with which we are now all too familiar, they promised to put value back into the £1. Let us look at their sorry record. Has the Government honoured its promise to put value back into the £1? In this matter I shall rely upon opinions expressed not in Labour quarters, but in a document that was issued recently by the Victorian Chamber of Manufactures. The document points out that whereas in 1949 the value of the £l was 13s. 2d. and the basic wage was 125s., the basic wage to-day has increased to 210s. but the value of the £1 has decreased to 7s. 8d. That is what concerns the people. When this subject is discussed, they do not wish to be diverted by the shibboleths that have been mouthed so frequently by Government supporters during this debate. They are alarmed about the reduced purchasing power of their money. Pensioners are anxiously calculating what necessaries of life their miserable weekly moiety will buy. People who are in receipt of fixed incomes are asking - and they have not yet received a reply - what the Government is doing to restore value to the £1. During this debate, honorable members have failed even to touch upon those vital points.

Credit restrictions and the tariff policy are causing a series of diversions and recessions that will affect the productivity of the country, and strike a blow at full employment. The honorable member for Burke (Mr. Peters) and the honorable member for Melbourne (Mr. Calwell) have referred to the serious position that has developed in the textile trade. Even at the risk of indulging in repetition, I propose to support their remarks, because the Government’s policy of credit restriction is causing a depression in that industry. But before I present figures in relation to this subject, I point out that the effect of governmental policy was felt in the textile trade even before December, 1951. Indeed, monthly production totals in certain fundamental sections of it show a marked decline, which is attributable to the reduction of labour in many departments of that particularly important industry. For instance, the monthly production of towels and towelling decreased from 171,000 square yards in October, 1950, to 98,000 square yards in December, 1951. The output of ducks, drills and jeans, which are an important product of the textile trade, diminished in the same period from 1,434,000 square yards to 1,228,000 square yards. The production of woven cloth, in the manufacture of which Australia’s staple product - wool - is used, decreased from 9,670,000 square yards in the October-December quarter of 1950, to 8,140,000 square yards in the corresponding quarter of 1951.

The speech of the Prime Minister (Mr. Menzies) was a curious mixture of vituperation, insult, and evasion. He studiously avoided the word “unemployment”, and referred to workers who have been dismissed from the textile industry as the result of the Government’s credit restriction policy as “ disemployed persons “. That is a new term in the language of working people, who have always considered that a man or woman who has no job is unemployed. The Prime Minister stated that desemployed members of the textile industry were, being absorbed in more essentia] industries. Therefore, the House will be interested in a series of figures supplied to me by a competent authority in the textile trade. One textile mill in northern Tasmania has been compelled, as a result of the Government’s credit restriction policy, to reduce the number of its employees from 34 to 17. The right honorable gentleman doubtless describes the dismissed hands as desemployed persons, but he may be astonished to learn that they have not obtained employment in essential industries that are engaged upon defence work. Five women returned to their homes and three went into domestic service. Two males went to the mainland in search of work; another retired; one went to assist on a bus route; one found employment in a boot factory, one in a paper mill, one in a brewery, one in the retail trade, and one as a “ useful “ in an hotel. Not one of those seventeen so-called disemployed persons found a position in an essential industry.

Mr Bland:

– They will do so.


– When will they do so? The contention advanced by members that disemployed persons will eventually find positions in essential industries is not supported by facts.

The textile trade is decentralized, and many mills have been compelled to reduce their operations to one shift daily. When I was in Goulburn recently, I happened to be talking to the manager of a textile mill, and I asked him for information about the occupations in which disemployed mill hands had found jobs. He replied that some of them were employed in the railway refreshment rooms, some had gone to work on farms and others had drifted to already overcrowded Sydney. The policy of this Government is producing those results. The textile trade means a great deal to Australia. The root cause of the slump in that industry has not been lack of efficiency in the trade itself, but is most aptly described in the submission of a deputation from the trade that recently waited upon the Minister for Trade and Customs (Senator O’sullivan) -

We do feel, however, that the credit restrictions introduced by the Government last year as a counter to inflation are one of the main contributory causes to unemployment in the industry. While we have no quarrel with any of the efforts made to check inflation, we are of the opinion that the Government’s plans were too sudden and too harsh in their application. The result was that not only manufacturers but also the trading community was knocked completely off-balance and had no opportunity to introduce counter organizations.

The effect of the Government’s policy is evident. Men and women who have been working in textile mills are now disemployed. During the economic depression of the early 1930’s, they would have been called “ unemployed “, but the Prime Minister described them as “ disemployed “. The Government consoles itself with the thought that those men and women will eventually find jobs in essential industries. That view is immediately disproved by the facts. I propose to cite examples of what is happening in the woollen and worsted section of the textile trade in Victoria, South Australia and Tasmania. My information relates to 41 factories in those States. The total number of persons employed in that section of the trade in Victoria at the 30th June, 1951, was 11,567. By the 14th December of the same year, the number had diminished to 9,562. The figures for South Australia for the corresponding period are 868 and 644 respectively, and for Tasmania, 1,577 and 3,307 respectively.

Sitting suspended from. 6 to 8 p.m.


– I have shown that this Government’s policy has done nothing to restore economic stability. One of the main planks of the platform of the Liberal party and the Australian Country party at the 1949 and 1951 elections was the promise to restore the purchasing power of the £1. The Government has failed signally and dismally to do that. Statistics show unmistakably that the value of the £1, far from increasing, has deteriorated to a record low level. The Government’s credit restriction policy has caused unemployment in industries which provide a living for large numbers of Australians. It is all very well for the Prime Minister to speak glibly and oratorically about the “ disemployment *’ and subsequent re-employment of labour. Speakers on this side of the chamber have shown that, in most instances, employees displaced from what the Government considers to be non-essential industries have been re-employed in undertakings that are even less essential. In the woollen worsted section of the textile trade alone, employment has been reduced by 18 per cent, in Victoria, South Australia and Tasmania in the last six months. In only 41 factories from which information was received, the number of employees fell from 14,012 in June, 1951, to 11,513 in December.

I come now to a statement that was made during the debate this afternoon by a bright young member of the Liberal party - the party that was to resuscitate this country and whose members were to be distinguished by their erudition, diligence, and knowledge of things political. I refer to the honorable member for Paterson (Mr. Fairhall), who, in the course of his inspired remarks, claimed that conditions in industry to-day, including the go-slow policy and underproduction, were a legacy of the cost-plus system which had been introduced bythe Labour Government during the war years. With the greatest humility I point out to the honorable member that the cost-plus systemwas introduced in 1939, when the party of which he is such a supine follower was in office under the leadership of the present Prime Minister (Mr. Menzies). So great were the abuses of that system by members of the employing class, who, of course, are the handmaidens of the Liberal party and the Australian Country party, that a parliamentary committee known as the War Expenditure Committee was appointed to make investigations. This so frightened one organization in Sydney which was engaged in war contracts that it immediately refunded £160,000 to the Government. I repeat that the cost-plus system was introduced not by a Labour government, but by an anti-Labour administration.

A succinct summary of the damage that has been done to the great textile industry of this country by the inept policy of the Government which now disfigures the treasury bench is contained in an advertisement that has been published in most Australian daily newspapers. It is rightly headed “ Murdered “, because a great industry is being murdered by this Government. The advertisement was not inserted by the, Labour party, but by an organization known as Jersey Fabrics Proprietary Limited. At the top of the advertisement the following lines are printed : -

Taxation Specialist, L.C.P

Solicitors in Bankruptcy, L.C.P.

Undertakers & Embalmers, L.C.P

The advertisement then states -

Jersey Fabric (Australian born) put to death by the Australian Customs Tariff under by-law 449 (a) (1) about 21st June, 1951. Dearly beloved benefactor of proprietors, employers, wives and families of Australian knitting mills and dependent industries.

Then follows a table showing the growth of textile importations into this country. It shows that whereas for the year ended the 30th June, 1949, imports of textiles totalled 871,515 lb., in the quarter ended the 30th September, 1951, the total was 710,262 lb. In other words, due to this Government’s customs tariff policy and its restriction of credit, imports of textiles have increased threefold. As a consequence, good Australians are walking the streets in the electorate that I represent. Although the Prime Minister assures us that those people are merely “ disemployed”, to the unfortunate individuals concerned they are unemployed and they feel their position just as much as did the people who were unemployed in the days of the depression.

It is refreshing indeed to hear honorable members opposite referring as they have done in the course of this debate to the work and worth of the late Joseph Benedict Chifley of happy memory; but it is indeed strange that honorable members such as the Minister for Defence (Mr. McBride) and the honorable member for Henty (Mr. Gullett) should quote Mr. Chifiey’s remarks and pay tributes to the soundness of his financial administration.


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

Minister for Commerce and Agriculture · Murray · CP

– The economic position of this country is serious enough and the scope for differences of opinion on the best means of dealing with the situation are obvious enough, and I think it is quite proper that those who carry responsibility, whether they be in Government or in Opposition, should invite public discussion of the problems. Therefore, I take no umbrage at the Labour party’s adoption of the procedural device of proposing a motion of censure in order to bring our economic problems to public discussion. But I say that, when the political party which is the alternative to the present Government takes such a course and promotes a debate upon Australia’s economic problems, it is incumbent upon that party to produce a constructive alternative policy to that which it is attacking. The Opposition has notably failed to do

  1. Had the censure motion been designed to provide an opportunity for the ventilation of the grievances of the textile industry, this debate would have been on its proper basis. Labour’s case, in this debate has rested entirely upon those grievances. It is clear that the Opposition is seeking merely to board the escalator of public irritation by exploiting the troubles of particular sections of the community, notably the textile industry. It is trying to gain a little kudos for itself. Surely the responsibility of the Labour party is higher than that! Its conduct has revealed that it is engaging in pure party politics. On second thoughts I withdraw the word “ pure “. It is trading on the troubles and the irritations of sections of the people and it has disclosed its lack of good faith by failing to come forward with a constructive policy to replace that which it is attacking. It is bankrupt of ideas.

There is a serious economic problem of course, and the combined wisdom of all of us is needed if it is to be solved. But we have had no contribution to its solution from the Opposition. This problem is expressed in high prices and shortages of goods, which cause a progressive shrinking of the purchasing power of the public. Our difficulties were aggravated by the situation in which the Labour party left the affairs of the country when it went out of office. I shall not argue that all of our problems are the outcome of Labour’s administration. In fact, later I shall enumerate various circumstances for which neither the Labour party nor the parties that are represented on this side of the House have any responsibility but which have an important bearing upon our general economic problem. That problem was seriously aggravated by the emphasis that the former Labour Government placed upon its policy for the centralization of secondary industries. Driven by its trade union masters, but nevertheless willingly, it neglected the interests of our great agricultural and food industries, encouraged a rapid capital expansion and steadfastly refused to face the need for dollar borrowing in order to aid that capital expansion. Restrictions were imposed on imports in this land where our whole economic problem arises from shortages ! The Labour Government even maintained restrictions against imports from the United Kingdom and the channels of trade were freed only when this Government came to office.

How does Labour answer these charges? No attempt has been made to do so during this debate. All that honorable members opposite can talk about is the irritation in the textile industry. The Labour Government neglected Australia’s defences during its post-war term of office to such a dangerous degree that this Government has been required to concentrate much of its energy upon the rehabilitation of our defence organization. The urgency of the task of rectifying our defences has forced the Government to impose tremendous pressure upon the nation’s resources of man-power and materials. In all fields of production there was an obvious lack of drive under Labour’s administration. Yet concurrently an all-time record was established in the granting of easy credit facilities. All of these factors aggravated our economic condition and overshadowing the whole tragic situation was the Labour Government’s criminal neglect of the nation’s food and agricultural industries.

Labour’s regime was characterized by prodigality of administration and the multiplication of departments and subdepartments. There was also a steadfast refusal to fact the fact that industrial disturbances were eating into our economic structure and that, to an overwhelming degree, they were the outcome of Communist planning. That is why this Government inherited difficulties of the greatest magnitude. Because of Labour’s maladministration, we are now confronted with a situation in which the purchasing power of the volume of money available in the community far exceeds the quantity of the goods and services that are available to be purchased. Reduced to its elementary form, our situation compares with that of two men at an auction who have plenty of money in their pockets and who are determined to buy the same article. Naturally, the price of that article soars. The problem is just as simple as that. Of course costs must soar when we have 8,000,000 people, seven governments, and countless instrumentalities and companies all furnished with excess money and bidding against each other for labour and materials that are in short supply! That is the substance of our economic problem, but it has been aggravated by factors that are beyond the control of any government. I level no accusation against the Labour party on account of those factors.

There has been a carry-over into the post-war period of the tremendous injection of war-time credit that was administered to our economy in order to help to finance the most expensive war effort in history. Tremendous sums are still available for expenditure because the goods that are needed are not available. The presence of that money is exerting a constant pressure on commodity shortages which is reflected in higher prices. Are we to bury our heads in the sand and refuse to recognize the fact that a 40- hour week will produce fewer goods, either with men or machines,’ than a 44-hour week would produce and that, consequently, prices must rise? This Government did not introduce the 40-hour week. The Labour Government did not do so either, but it sent its agents before the Commonwealth Court of Conciliation and Arbitration to urge its introduction.

Mr Rosevear:

– Is the honorable gentleman opposed to the 40-hour week.


– I say that it is a factor that has contributed to our difficulties. The happy circumstance of full employment and high profit making has resulted, as every one of us knows from personal experience, in some measure of decreased diligence on the part of employers and employees and, to that degree, in a lowering of efficiency. None of us wants to correct that reduction of efficiency by altering the circumstance of full employment, but let us face the fact that full employment contributes to the problem of higher costs.

There are other factors that we cannot control. We want to buy jute, tea, rubber and oil. No Australian Government can dictate the prices of those goods. They are fixed overseas and we must pay those prices or go without jute, tea, rubber and oil. It is of no use to blame this Government for those increased costs, and I certainly do not intend to blame the Labour party for this factor in our inflationary problem. There are factors that no Australian government can deal with. To pretend otherwise will get us nowhere.

The tremendous additional subtraction from our man-power and material resources as an outcome of the Korean war and the international tension that has followed it has imposed an additional inflationary pressure upon this country. Immigration is another factor, lt is only in circumstances of calamity, and only occasionally in a century, that millions of people are brought to a state of mind in which they are willing to uproot themselves and go to the other side of the world. It is our happy opportunity in Australia to-day, availed of first by Labour, to select, from amongst those millions, hundreds of thousands of people who will add to our population. We are doing that, but we must face the fact that it is from Australian man-power and Australian resources that we first have to provide the accommodation, food, clothing and services for the new immigrants. Immigration is an element in our inflationary problem with which perhaps we could deal, but, by common national consent, we agree that it is better to suffer temporarily the consequences of immigration than to alleviate our problem to the extent that we could do so by terminating our immigration programme. I come back to the point that our problem is very largely one of the nation. Governments and governmental instrumentalities are outbidding each other for limited manpower and limited resources.

If we are not content to do nothing, there are two broad approaches to the problem. There is the direct physical approach. A. government could decide that if there is a shortage, some government instrumentality shall decide who shall have what is available. A government could say that if there h a shortage of men to fill all the available jobs, some government instrumentality shall say to which jobs men shall go.

Mr Rosevear:

– The Minister opposed that course at the last general election.


– I oppose it now, but Labour has not done so. Labour is silent upon that matter. I am saying that if we decide that we cannot allow the position to drift, there are only two approaches. One is the direct physical approach. We can say to the people, “ Fill in the form ; get in the queue ; get your permit; get your permission to produce “. It was the leader of the Labour party who propounded that policy. Dr. Evatt sought a constitutional amendment


– Order ! The Minister must not refer to an honorable member by name.


– It was the Leader of the Opposition (Dr. Evatt) who propounded that policy. The right honorable gentleman, on a famous occasion in 1944, said-

To-day, with the enormous development of industry and industrial organization, corporate control and finance, there is no longer a full right in every person to choose his own vocation in life.

That is the socialist speaking. That is the dictator speaking. The solution of Labour is to establish the dictator, the bureaucrat. Labour says that he will tell people what jobs they must go to and decide who shall have available goods. This Government, realizing that the permanence of bureaucracy and the possibilities of favoritism and corruption are inherent in direct controls, rejects that policy. Labour, which in all its previous utterances has embraced that policy, to-night is silent upon it. It has never revoked the policy. The only alternative approach to the problem is flexible physical or monetary control. That is the choice of this Government. Control of that kind lends itself to the utmost flexibility. It is impermanent, whereas bureaucracy is permanent. It can be modified overnight in the light of experience. It can be dissolved overnight when the need for it no longer exists.

T do not suggest that Labour would do nothing to attack this problem if it were in office. Labour has shown what it would do. It would establish the bureaucracy to deal with the problem. There has been a notable silence by

Labour speakers upon all these points, about which they were so voluble when Labour was in office. The Leader of the Opposition, speaking of an acknowledged shortage of labour and touching upon the question of the transfer of labour, has said that the only way in which to encourage more essential industries is to make employment- more effective by providing more attractive conditions in essential industries. What did he mean by that statement? A newspaper advertisement published by the Victorian Government offered youths of nineteen years of age employment with the Victorian railways at £15 a week, with overtime. There is a shortage of labour in the dairying industry. According to the recipe of the Leader of the Opposition, if we want to transfer labour to the dairying industry we must make conditions in that industry more attractive. Presumably he would suggest that if the Victorian railways are offering to pay £15 a week to nineteen-year old youths, the dairying industry should offer them £20. The recipe of the Leader of the Opposition would result inevitably in a doubling of the price of butter. Inherent in it is an aggravation of inflation to an unprecedented degree.

This problem cannot be solved by ignoring it. We say that it should be solved not by direct means but by flexible, impermanent monetary policies. We say that while unrestricted finance is available to the non-essential industries and the tightest form of prices control and deterrents is imposed upon essential industries there will be a shortage of essentials. The policies that we propound are policies for encouraging essential industries by credit facilities and for not giving opportunities of easy credit to nonessential industries. Those policies are already achieving some result. I am quite closely connected with the fruit canning industry. For the first time in years, there is evidence of an adequacy of labour in the canneries. Is that wrong? For years past, it has been my experience to be appealed to each year by the dried fruit industry for immigrants to harvest the crop at Mildura. Each year 1,000 immigrants are wanted in the fruit canning areas to harvest the crop, hundreds to harvest the wine crop and thousands to harvest the sugar cane in its season. In the situation that has developed, those industries became completely dependent upon directable labour. As it happens, there is directable immigrant labour available. Does not the Labour party realize that these industries face stark calamity and collapse if by chance there should be a cutting off of the availability of immigrant labour? Those who are associated with the sugar industry remember that, during the season, before last, in one area 300,000 tons of sugar cane stood uncut because of a combination of seasonal circumstances and a shortage of labour. Are we to accept that position, and do nothing about it?

We do not need these essential foodstuffs merely for our own purposes. We need them for other purposes. We need them because we have a responsibility to the world to produce food in areas where we are capable of doing so. We need these essential foodstuffs because every rubber tyre on a car or truck in this country, every gallon of petrol or oil, every lb. of tea, every cornsack, every ton of sulphur and every sheet of tinplate that we use i3 paid for by wheat, butter, wool or our other primary products. That is why we need those things. We must have them. They are produced not by money, but by policies. The essential commodities, butter, wheat, and fruit, are the basis of our money. Without them we could not maintain our modern structure of society. I know, and every one listening to the broadcast of these proceedings knows, that the shortage of seasonal labour on 100,000 farms in this country is a thousand times more acute to-day than in former years. An implement manufacturer in Melbourne is short of 1,000 men. That is why farmers are told that they may get a header in five years or a plough in four years. Are we to do nothing about that state of affairs?

Mr Rosevear:

– Why not sack some more typists?


– It is nothing new for the honorable member for Dalley (Mr. Rosevear) to try to be funny. The thing to do is what this Government is doing by its credit policy, flexibly exemplified in its various aspects, including bank credit, capital issues control, hire, purchase, some restriction of the expenditure of the Australian and State Governments, and the turning back of the flow of employment to those industries that produce commodities without which, as a country, we cannot survive. I have waited patiently for two days for an alternative policy to be suggested by the Opposition, but no honorable member opposite has attempted to make such a suggestion. I. point out that before the farmers can produce wheat they must have implements; before implements can be manufactured, we must have steel ; and a pre-requisite to the manufacture of steel is an adequate supply of coal. It is to those essential matters that we must direct our attention, for without the basic commodities there will be millions of hungry people in the world. Unless we carry our share of the responsibility to feed the hungry millions of South-East Asia, the political instability that accompanies hunger will leave wide open the opportunity for Communist indoctrination there. It is of no use for us to devote our purposes and our efforts in this country to the nonessential light industries. It is a good thing for Australia that this Government has had the courage to tackle the problem with which we are confronted, and it is a poor thing for Australia that all that can be offered by the Opposition is an attempt to incite certain sections of industry. I hope that the people of this country will note that up to date the Labour party has expounded no alternative to the policy of this Government.


– Order ! The Minister’s time has expired.


.- While the Minister for Commerce and Agriculture (Mr. McEwen) was tendering an apology to this House for the policy that is being pursued by the Government, T glanced along the Government benches and contrasted in my mind the expressions on the faces of Government supporters with their demeanour when they took their places in the House fresh from their election victory in 1949. At that time the supporters of the Government parties were full of confidence that they would be able to translate into practical effect the false promises that were made to the electors of this country during the general election campaign by the Prime Minister (Mr. Menzies), the Treasurer (Sir Arthur Fadden) and the Minister for Commerce and Agriculture. To-night Government supporters look miserable and dejected. They are conscious that they have been sadly led astray. More important, they are conscious of the fact that, two years after their having come to office, the electors of this country are completely disillusioned .and have lost faith in them. One section of the coalition Government, the Australian Country party, has sat tight throughout this debate. Only two of its supporters have addressed the House. I understand that the debate will be concluded by the closure at 11 o’clock to-night. Therefore it will .not be possible for more than one or two members of the rank and file of the Australian Country party to address the House. They are aware that their association with the Liberal party in the joint Government of this country has brought nothing but disaster to our great primary industries.

During the last twelve months the press, in its editorial and other columns, has rightly drawn attention to the progressive decline of food production in Australia, as a result of which a serious situation has developed overseas in respect of our trade balance. According to this morning’s Sydney Morning Herald, in the last eight months our overseas trade balance has diminished by more than £300,000,000 and the view is expressed that if that rate of decline is maintained we shall be in serious trouble before long. I must give credit to those members of the Liberal party who have seen fit to take their courage in their hands and offer some defence of the Government policy in connexion with the serious shortage of food in Australia. Unfortunately, however, their references contained very serious inaccuracies.

The honorable member for Bass (Mr. Kekwick) has stated that there was a progressive decline of food production in this country during the period of nine years that Labour held office prior to the advent of the present Government. I refer the honorable member to the journal of the Bureau of Agricultural Economics of October, 1951, which, at page 182, sets out statistical information in relation to primary products in this country during those years. Almost without exception, during each year in that period there was a very substantial increase of the production of almost every type of food. The fact of the matter is that the food position is now so desperate that the supporters of the Government have to rely on the broadcast of these proceedings to try to justify, in the eyes of the people, the present state of affairs. There has been a serious decline of food production since 1949. Is it any wonder that the primary producers are apparently not exerting themselves as much as they did formerly? Many theories and reasons for that situation have been advanced. We have heard various economists state many points of view. We have been told that there is not sufficient incentive for primary producers to exert themselves and produce all that their land is capable of producing. I believe personally that there is ample incentive for them to do so, but I also believe that since this Government came to office primary producers have been so startled by the grave uncertainties about their future that they are discouraged enough to go easy and not produce to the extent to which they undoubtedly could produce. That is, of course, not the full story. It is true that great difficulties exist in connexion with primary production. Let us look at the uncertainties that face primary producers and at the false promises that the Government parties made at general elections, which they have not been able to translate into effect. In the first place the primary producers have been told in no uncertain manner, with the support of the Minister for Commerce and Agriculture, who in Opposition is a raging lion and in office, after he has sold out his party for a portfolio in a Liberal administration, is an apologist, what they may expect from the Government, fie has charged the Labour party to-night with irritating the people in respect of the various problems with which they are confronted. The parties opposite promised that if they were put into office they would give the wheat-growers a very rich incentive indeed to produce more. They said, “If we become the Government we shall make up to you, the wheat-growers, in respect of stock-feed wheat sold in Australia, the difference between the home-consumption price, or the found cost of production, and the export parity price. The amount of stock-feed wheat consumed in Australia is between 35,000,000 and 40,000,000 bushels a year.

Mr Hamilton:

– That was not stated in the policy speech.


– An apologist on the other side of the House says that it was not stated in the policy speech. Let him read the Prime Minister’s policy speech, because what I have said is there stated clearly and unequivocally. It was, in my opinion, a stupid promise, and obviously I am not canvassing for votes when I say so. The Labour party did not copy that promise or attempt to outbid it. But, stupid though it was, that promise led the wheatgrowers to believe that the parties now in office would give them something. Two years and three months after that promise was made it ha.3 not been honoured. In substitution thereof we have the Minister for Commerce and Agriculture using coercive tactics against the State governments by saying to them, “ If you will increase the price of stockfeed wheat to the stock feeders by 2s. a bushel we shall give the wheat-growers a bounty of 4s. Id. a bushel from the Consolidated Revenue Fund “. A partial performance of the Government’s promise, but conditional on its being able to coerce the States! The payment of 2s. a bushel would, of course, raise the price of bacon, eggs, milk and butter.

Mr Roberton:

– The honorable member supported that proposal.


– The honorable member for Riverina (Mr. Roberton) can have a “ go “ afterwards. I supported the proposal because I wanted the wheatgrowers to receive a bounty of 4s. Id. a bushel. The honorable member for Riverina is very articulate on this matter. It is quite true that in the circumstances we supported the proposal to provide a payment of 4s. Id. a bushel, but we did not support the proposal to increase the price of feed wheat supplied to stock feeders by 2s. a bushel, because no legislation concerning it came before this Parliament. What happened ultimately was that because of the impossible situation caused by the Government’s evasion of its responsibilities, one State government left the growers in the lurch. The Government of Western Australia refused to enact legislation to increase the price of wheat for stock feed by 2s. a bushel, with the result that for the first time in the history of wheat stabilization as a post-war policy we have a crack in the plan and the impossible situation that in all the States except Western Australia 12s. a bushel is paid for stock-feed wheat whilst in Western Australia the price is 10s. a bushel. I do not know whether the Government is even paying the bounty in all States, including Western Australia, or whether, by virtue of the failure of one State to enact legislation to increase the price, the whole plan has broken down so that the wheat-growers are not even receiving the 4s. Id. a bushel.

That is one thing that has led to the disillusionment of the wheat-growers, but let us look at the matter from another angle. Everybody knows that a Labour government ratified the International Wheat Agreement. In his criticism of that ratification when he was in opposition the honorable member who is now Minister for Commerce and Agriculture pointed out that there was no method by which the International Wheat Agreement could be made legally enforceable on the parties to it. That was perfectly true, but it has eventuated during the three years of the agreement that the signatories to it have faithfully honoured their obligations, and undoubtedly will continue to do so. Under these circumstances there no longer remains any need for the Australian Government, under the control of the Prime Minister and the Treasurer, to withhold repayment to wheat-growers of the contribution tax of 2s. 2d. a bushel on the respective pools that was collected from them to be held temporarily by the Commonwealth. The unnecessary and unjust withholding of that repayment has caused dissatisfaction among growers.

I turn now to the subject of wool sales. Everybody knows that Labour governments were responsible for the participation of Australia in the great Joint Organization scheme, and also that, due to fortuitous world circumstances, the wool purchased by the Curtin and Chifley Labour Governments, which placed an obligation of £50,000,000 on the taxpayers, was ultimately sold at a profit of £84,000,000 or £85,000,000. Everybody also knows that the Curtin and Chifley Governments promised the woolgrowers that these profits would go to them. Every wool-grower knows that to all intents and purposes the whole scheme is wound up and that there is available for distribution to them an amount of £63,000,000. The growers have already had an amount of £25,000,000 distributed to them by the Chifley Government, but this Government is still withholding the balance although it is physically and legally capable of distributing it. Its refusal to distribute this money has caused disillusion and disappointment to growers. The Minister for Commerce and Agriculture has been playing a game here over the last twelve months. When asked questions about the distribution of this money he has said that due to the fact that certain people have taken legal action against the Government in respect of sales of wool through dealers, the Government is not able at this juncture to distribute the money. Fiddle-de-dee! The Minister knows full well that the amount of money involved as far as dealers in Australia were concerned does not exceed £2,000,000 and it would be possible for the Government to distribute £50,000,000 among wool-growers at any tick of the clock. Those are the things that have annoyed the wool-growers.

We have a similar state of affairs in relation to the dairying industry. Faced with the difficulties of obtaining State co-operation the Government dithered about for a long period before it dealt adequately with the industry’s problems. It mishandled those problems and not only failed the industry but also, by virtue of neglect, inflicted severe hardships on the consuming public. The Government should be severely censured for that neglect. Those are some of the causes for the dissatisfaction of primary producers. They are not simply questions of increased prices or of breaches of faith. Let us look also at the latest, and possibly the most serious, irritant that the primary producers have had to cope with. The Treasurer made provision in his last budget for a change in the tax system known as the averaging system, which applied to the primary producers. That system has applied to primary producers since 1922 when it was introduced because the incomes of primary producers varied more substantially than those of any other section of the community. Now, after a year of freak incomes, the Government has deprived primary producers in receipt of a taxable income of over £4,000 a year of the benefit of the averaging system. In that year of freak incomes men who, for twenty years, had made only the basic wage, made £5,000 and £6,000. The farmers at Barellan recently carried a resolution condemning the abolition of the averaging system. In the year preceding the year of freak incomes an advance tax of 20 per cent, was placed on the incomes of wool-growers. That is the type of action that has caused a substantial lack of confidence in the Government on the part of primary producers. If the Government discontinues such practices it will, within a measurable period of time, find that a substantial increase has taken place in primary production, even if there is no increase in prices.

The Minister for Commerce and Agriculture (Mr. McEwen) . has chided the members of the Labour party with not being constructive. One cannot be very constructive in 25 minutes. But in what way have Government members spoken or acted constructively? I have illustrated the Government’s failure to honour its policy. Has the Government formulated any concrete policy in order to increase’ production ? If the Government has a change of heart and removes some of these injustices there will be an increase in production. If this country is to continue to export substantial quantities of products the Government will have to take its courage in its hands and, with the co-operation of the State governments, put into operation a scheme similar to the soldier settlement scheme which is now half-way to completion. That scheme has been founded on sound economic lines and has been eminently successful. This country will require at least 25,000 new farmers during the next five years. The committee appointed by the Chifley Government reported that 23,000 farmers could produce sufficient food for a population of 1,000,000. I do not care whether the Government prepares a programme for 25,000 or 50,000 farmers provided that it takes some action to allow thousands of land-hungry young Australians the same access to the land as was allowed to the returned soldiers of the two world wars. The Government should abandon the stupid intention that was announced by the Minister for Immigration (Mr. Holt) to place new immigrant settlers on the land while there are thousands of landhungry Australians. Both city men and country men with the necessary aptitude are hungry for the same sort of opportunity as the returned soldiers were given under the wise policy of the Chifley Government. Surely a policy of that sort would result in a sufficient increase of production to provide for the requirements of our growing population. .

The Minister for Commerce and Agriculture has a flair for making inaccurate statements and I hope that I have a flair for assimilating facts. The Minister referred in disparaging terms to the 40- hour week. He does not like the 40-hour week, which was also referred to in disparaging terms by the honorable member for Henty (Mr. Gullett). That honorable member does not like it either. Among the members of the Australian Country party and the Liberal party there is an antipathy for the 40-hour week. The Minister said that the Chifley Government sent its agents into the Commonwealth Arbitration Court in order to support the 4.0-hou.r week. That statement is completely untrue, as the Minister knows, and I challenge him to produce evidence to support it. Personally, I would have sent officers to the court in order to support the application. But the policy of the Government was to furnish the court with factual evidence. Accordingly, I requested the then Director of the Bureau of Agricultural Economics to furnish to the court a completely factual statement on the position of farming industries in Australia. I informed him that under no circumstances should he show bias or express an opinion for or against the 40-hour week. I throw back in the teeth of the Minister the untrue statements that he made. I hope that the electoi’3 will realize that years after the 40-hour week has been established as a sound economic policy they have in this House a gang of people so hostile to progress and the interests of the workers that they still kick hard against the application of this great reform. The 40-hour week has not lessened production but has brought to the Australian people a great deal of happiness, better health, and more contentment. I advise the Government to remove the doubts and uncertainties that it has created, to distribute justly and legally the moneys owed to the primary producers, to honour its policies, and to play the game. I hope that the Government will not engage in a policy designed to encourage wheat producers to reject the continuation of a wheat stabilization plan in the same way as it discouraged acceptance of the proposed wool plan.


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

Minister for Labour and National Service and. Minister for Immigration · Higgins! · LP

– This debate has served at least one very useful purpose.. If it has done nothing else, it has demonstrated how utterly barren the Labour party is of any ability to deal with the complicated crisis that is facing this country and it has shown how utterly irresponsible honorable members of the Opposition are in their approach to national questions. They tell the people that there is a lack of confidence. They should know what it means to have confidence in their country and in its development, and undoubtedly a lack of confidence can, do great damage to the nation. They should be authorities on lack of confidence, because confidence reached its lowest ebb in Australia during a Labour regime in 1930. They talk about depressions. They should be authorities on depressions, because it was under Labour mismanagement that Australia encountered the worst depression of its history. They talk about a developing pool of unemployment. They should be authorities on unemployment, because it was due to Labour’s mismanagement in 1931 that the number of people unemployed in Australia reached the enormous total of more than 500,000.

The Labour party realizes that it has lost, 1 believe for a very long time to come, much of the support that it used to rely on from the trade union movement. The Labour party knows that this Government would not have been able to attain office had it not secured the votes of tens of thousands of trade unionists, not only at the general election of 1949, but also at the general election of 1951. In the latter general election, although the Government lost a small amount of ground in country electorates,, it more than made it up in the industrial electorates. Consequently, the Labour party, knowing that it has lost that useful support, has been trying desperately to shake the confidence of the wage-earner and the working man in this Government. The Labour party is now looking for support in other directions. It now claims to be the champion of our great primary industries. That is indeed a new-found love.

I listened carefully to the honorable member for Lalor (Mr. Pollard) who is the Labour party’s authority on our primary industries. He told us that we need 25,000 more farms. He should know something about that matter, because at the end of Labour’s last eight years of office in Australia, although there were 1,500,000 more people in Australia than at the beginning of the eight years, there were 42,000 fewer workers in our rural industries. That is the sort of situation that we found when we assumed office. We also found alongside the depletion of man-power in our rural industries a reduction of the number of workers in the basic essential industries such as coal and steel. Moreover, the basic trade unions were riddled with communism which the Labour Government had done little to combat. Then, while we were engaged with that situation along came the Korean episode. I shall not attempt to go over the ground in that connexion, because the Korean episode was ably dealt with by my colleagues. Undoubtedly, no government has ever had to face a more complex problem.

The Opposition, with an utter reckless^ ness which would be condemned in almost every other English-speaking country, h&s attempted to shatter the confidence of the Australian people not only in the Government but also in the stability of our economy. I hope to demonstrate to the Australian trade unionists and wage earners the falsity of the propaganda of the Opposition. I shall not ask them to accept my own words, I shall quote authorities that they will recognize as men who are in sympathy with them and who know something, of their problems. After we had been in office for about a year, one highly respected official in the trade union movement, Mr. Gil. Hayes, the secretary of the Boot Trades Union, returned to Australia from a visit to the United States of America. His return was reported in the Melbourne Age of the 24th August, 1950. The report reads, in part, as follows: -

Working CONDITIONS are the World’s Best.

Mr. Gil Hayes said . . .

Australian working conditions were the best in the world and far in advance of those in America.

On the 18th January, 1952, almost two and a half years after this Government took office, the Melbourne Age reported an interview with the .Secretary of the Transport Workers Union, Mr. Cheney. I quote the Melbourne Age because honorable members opposite consider it to be a respectable newspaper. Mr. Cheney had returned from a visit to Europe and Great Britain. The report reads -

Workers Here get a Par Better Deal. the standards of Australian workers are far in advance of those of workers in Britain and throughout Europe, according to the Secretary of the Transport Workers Union (Mr. W. H. Cheney).

Some considerable time after this Government assumed office, the United States Department of Labour, through its Bureau of Statistics, conducted a survey of the twenty leading industrial countries in the world to determine how the purchasing power of the hourly earnings of workers in industry could be compared in terms of food. Of the twenty countries surveyed, it was demonstrated tha1-. the Australian worker could purchase more food for one hour’s work than could a worker in any other country of the world. The United States came second, Norway third, and Canada fourth. Fox the interest of some of my opponents opposite who would be glad to have the information, I also indicate that Soviet Russia came the last of the twenty.

To-night we heard a reference to an employment drift. Almost two years after this Government assumed office the number of people registered as unemployed reached an all-time record low figure for this country. Indeed, there is no other industrial country in the free world which has ever had a lower proportion of unemployed persons than has Australia to-day.

We have been told of a housing shortage. I have analysed the statistics of other countries of the world, and I invite any honorable member opposite to point to any country where, on the basis of population, there is a better standard of housing than in Australia at the present time.

Mr Ward:

– Does the Minister think that our standard is so satisfactory?


– No. We never reach perfection, but as the Opposition is trying to hoodwink the worker, about this matter, I shall now give the facts, not windy, airy statements, and I challenge any honorable member opposite to deny them. The honorable member for Hoddle (Mr. Cremean) spoke of thousands of workers walking the streets. That is pernicious propaganda, and the sort of propaganda that has been spread about deliberately since the Government assumed office. It has been said that the Government intended to create a pool of unemployed. The fact is that by August of last year the persons unemployed in Australia had reached an alltime record low figure of .6 per cent, of the population under this Government’s administration. Some honorable members opposite were members of this Parliament, and were supporting the Labour Government of the day, when the percentage of unemployed was 27.4. When we compare the Australian situation with that of other countries we find that even in a period in which the world as a whole has enjoyed conditions of full employment, Australia has still had a very much more favorable experience than other countries. During last year the number of work vacancies registered by the Department of Labour and National Service reached an all-time record figure.

Let us now return to the claim that thousands of persons are walking the streets. If they are walking the streets looking for jobs, I do not know why they have not visited their nearest employment service office. As recently as the 15 th February there were still 92,107 vacancies throughout the States to be filled by men and women. The number of persons who are receiving unemployed benefits now is at a remarkably low level.

Mr Rosevear:

– Those figures have gone up by 30,000 since yesterday.


– If the honorable member for Dalley (Mr. Rosevear) and his colleagues are able to force a situation in which thousands of people will be unemployed, nothing would suit their political book better, and I would noi put it past them. The latest registration figures in my possession show that on the 2nd February the total number receiving unemployed benefits in Australia was 2,821. Significantly, 2,361 of that number are in Queensland. I shall refer in detail to Queensland’s position later because I believe that a special problem exists in that State. I invite honorable members to study the position in the rest of Australia where, according to honorable members opposite, there are thousands of men and women walking the streets looking for work. The total in New South Wales, which has a widespread industrial population, is 364.

Conversation being audible,


– Order ! There is too much loud conversation. I can hear it from almost all over the chamber.


– The total in Victoria is 40 and that State is also highly industrialized. If honorable members read the Melbourne press of recent weeks they would imagine that a depression had . already arrived there, but in fact the number of persons who are registered in Victoria for unemployment benefits was reduced last week by six. Those figures show that there is not any catastrophic trouble in Victorian industry. In the State of South Australia three persons are registered for unemployment benefits. Four are registered in Tasmania and 49 in Western Australia. It is time that the honorable member for Dalley and his colleagues found a sense of balance in relation to this situation. The general employment figure is being watched very carefully because I do not deny that there has been some quite significant drop in the number of work vacancies that are registered in Australia. This Government has accepted the obligation that I believe to be the proper obligation of any civilized government to ensure that there are sufficient and adequate opportunities for work available to its people, so that any man who is willing and able to work shall not be denied an opportunity to do so. I say to honorable members opposite and to any persons outside the Parliament who may try to spread the poisonous statement that thi3

Government seeks to establish a pool of unemployed that it is a wicked and malicious lie. That is proved by the policy that has been administered by this Government in two and a half years of office.

It is not possible to maintain indefinitely a situation in which there is such an overflow of employment that senseless competition arises between employers for available man-power. That point was reached last year when 140,000 work vacancies were registered with my own department and they did not represent the total for Australia. The absurd situation led to employers competing for labour and snatching bodies from each other in the hope that they would gain some commercial advantage. What was the effect in the basic industries ? Governments of the States and, in particular, the Labour governments of the States, sought to maintain a cock-eyed sort of prices control policy on a partial basis. They singled out the essential industries and essential occupations and made the price-fixing arrangement apply to them; but the rest of the field of industry, which they deemed to be unessential, was left clear of that treatment. The obvious thing happened. The industries which were subject to prices control were placed at a competitive disadvantage in bidding for labour which was attracted to the less essential industries. The result has been aptly described by Professor Sir Douglas Copland as “ a milk bar economy “. The Government had to remedy that situation which starved food-producing rural areas and basic secondary industries of labour. Throughout this debate I have waited to hear one honorable member on the Opposition side say what the Opposition would have done in those circumstances. Would they have let the country drift until it was in a depression worse than the one into which they pushed the country in 1930 ? What is the Opposition’s remedy? Let honorable members opposite tell the House and the nation what the Labour party would do to deal with a situation like that which confronted this Government in the middle of 1951. Abundant opportunities for work are still offering in Australia. I invite honorable members opposite to study one of their own white papers on full employment in Australia. Many passages make reference to this question. On page 9 of the white paper headed “ Full Employment in Australia “ - and I remind honorable members that this document is an official paper expounding the policy of the Curtin and Chifley Governments and was’ published while they were in office - there is this passage -

It is essential that a full employment economy should not run along in a groove, unresponsive to the changing wants of the people and to technical progress. Unless the economic system is flexible and responds effectively to changing circumstances, full employment can be achieved only at the cost of using resources in relatively unproductive and wasteful employment.

Earlier, at pages 5 and 6, the white paper states -

This policy for full employment will maintain such a pressure of demand on resources that, for the economy as a whole, there will be a tendency towards a shortage of men instead of a shortage of jobs. This docs not, of course, mean that at any particular time everybody will be at work; some people will be away from work because of sickness, some will be taking a spell between seasonal or periodical employment, some will be in the process of changing from one employment to another offering better prospects. . . . Once full employment has been achieved, a decision to devote additional resources to one objective of policy can be carried out only by diverting resources from other objectives.

I remind honorable members opposite that that position of full employment quite obviously had been reached in 1951. Earlier I mentioned that there was a special problem in Queensland. Honorable members from that State will know that at this time of the year in Queensland there is invariably a seasonal movement which leads to some unemployment as the sugar harvest cuts out and the meat industry in North Queensland slackens its operations. Traditionally, there is some change in employment figures at this time and although Queensland has 2,821 persons receiving unemployed benefits at present, about 1,800 of that number are in the towns of northern Queensland. There are still more than 4,000 vacancies for workers in the metropolitan area of Brisbane, and only about 400 persons are drawing unemployment benefit. Before the war there used to be between 18,000 and 20,000 persons unemployed in the meat and sugar districts during the seasonal lull. Then, as work in these industries picked up, most of them found employment. The awards issued by the industrial tribunals provided for this state of affairs by fixing high rates for seasonal work. Throughout the whole of Australia there is a remarkably small number of persons receiving unemployment benefit, and there are still more than 90,000 vacancies for workers.

I come now to a matter which has received a good deal of attention during this debate. I refer to the condition of the textile industry. Much has been said, and more could be said, about the predicament of the textile industry. The Government, when its restriction plans were put into effect early last year, did not single out the textile industry. We have never regarded it as unimportant. Indeed, the Government has done everything in its power to encourage the establishment of an efficient textile industry in Australia, and to-day that industry can produce materials the equivalent of the world’s best. The fact is that if no government action had been taken last year the textile industry would still be in the same plight. As the Prime Minister (Mr. Menzies) pointed out yesterday, there was a recession in the textile industry in the United States of America and, to. some extent, in the United Kingdom also. Some importers in Australia had letters of credit outstanding for months. As the recession developedoverseas, so a flood of materials came to Australia, and it was not surprising that importers found themselves facing credit difficulties. Any importer who receives five of ten times the quantity of goods he is expecting will find himself in difficulties. It was only natural that traders, finding themselves with a surplus of imports, reduced their orders to the Australian manufacturers. The Government’s credit policy had been in operation for months, but trade statistics show that the production of textiles in Australia nose-dived seriously only in December of last year, not because of anything the Government had done, but because of the presence of large quantities of imports. I have here a statement supplied by the Associated Chamber of Manufactures of Australia, which shows how overstocked the textile trade is. Prom the statement, which may be taken as authoritative, I quote the following : -

page 144



5 main wholesale houses in Flinders Lane.

Stock held at December, 1950 - £3,042,000.

Stock held at December, 1951 - £4,623,000.

An increase of 52 per cent.

Victorianmanufacturing industry - knitted outer wear - increase of 166% knitted underwear - increase of 91% fully fashioned hosiery - increase of 41% men’s half-hose - increase of 69% jersey piece goods - increase of 486% suitings - increase of 141% blankets - increase of 661%


– Order ! The Minister’s time has expired.

East Sydney

.- In order to decide whether a motion of censure against a government is warranted, it is necessary to examine the state of the nation to-day. I think it was the honorable member for Evans (Mr. Osborne) who said that this Government had inherited an economic crisis from the Labour Government in 1949. All I need say is that the great mass of the Australian people would like to get back to those days. There can be no doubt, despite the distortion of facts by members of the Government, that the economic position of Australia to-day is infinitely worse than it Was in 1949. The country is faced with economic collapse unless there is a change of government. Members of tie Government have chided the Opposition with changing its policy. They say that we used to believe in economic controls, and in the proper regulation of the economic life of the country. Our policy has not changed. Our complaint is against maladministration which is bringing the country to disaster. Government .supporters have spent much time talking about what happened years ago. The people of Australia are interested, not so much in what happened years ago, as in what is going to happen in the future. The Minister for Defence (Mr. McBride) admitted frankly that the Government hoped to divert resources into the defence industries, and to divert manpower into the defence forces. The Government proposes to do this, not by appealing to the patriotism of manufacturers and businessmen, or by appealing to Australian men to join the armed forces, but by a process of economic conscription. Small struggling manufactures who have established themselves in industry are to be ruined by the wrongful use of credit restriction, and they are not to be compensated. Honorable members opposite complain that the Communists would confiscate private property, but what else is it but confiscation when a government uses economic controls to destroy industries without paying compensation? Honorable members opposite say that they do not believe in the regimentation of man-power in industry, or in conscripting men into the armed forces, but the Minister for Defence is more frank than most of his colleagues. He stated openly that the Government proposes to force men out of industry because at present there are not sufficient enlistments in the defence forces. The people of Australia will be interested to learn the Government’s intention. Government supporters, in attempting to fortify their arguments, have quoted from the remarks of two men now dead, the late Mr. Chifley and the late Mr. Curtin. They have suggested that those two Labour Prime Ministers believed in economic conscription because Mr.

Chifley once said, when speaking in support of a policy of full employment, that it might not be possible always to provide a nian with employment in the district in which he was living, and that he might have to go somewhere else to get work. In a country like this it is only natural that some men must go into undeveloped districts, but it was never intended that they should be conscripted and made to go into such places. “We intended to make the conditions of employment so attractive that men would go willingly into the undeveloped areas.

I do not charge this Government with being inactive. It has been very active in the interests of those whom it represents. Members of the Government have claimed that they are faced with a grave defence problem, and that the Chifley Labour Government left the country defenceless. There has been much talk of defence in general terms, but no one has attempted to explain on behalf of the Government the expenditure of millions of pounds, most of which has been squandered on alleged defence measures. The Government has put a few eighteen-year old youths into camp, but it proposes to destroy an important defence undertaking; - the Glen Davis project for the production of oil from shale - simply because there is no profit in it for somebody. No one pretends that at Glen Davis a large proportion of our oil requirements was being produced, but the industry could have been expanded. There are other valuable shale deposits in Australia. Other countries produce oil from coal but despite the fact that we have the richest oil bearing coal in the world nothing has been done to exploit it. Did the Government develop the Glen Davis project as a vital defence industry? Not at all. It intends to dispose of that great national asset. How does it propose to go about the disposal? It is now inviting interested persons to submit offers for the plant. For months past a brother of the Minister for the Navy (Mr. McMahon) has been lobbying in this building and in Sydney in an endeavour to secure advantages over other persons who are interested in the purchase of the plant. The Honorable T. Murray, M.L.A., has also been interviewing members of the Government in an attempt to advance his own interests in the acquisition of this great asset of the people. Similar action was taken by the Government in relation to the disposal of its shares in Amalgamated Wireless (Australasia) Proprietary Limited. Are honorable members aware that Mr. Utz, who was commissioned by the Government to dispose of the Commonwealth’s interest in that company, is a member of the sharebroking firm of Horden, Utz and Bode and is also a member of a secret organization which has no responsibility to the people of Australia - the finance committee of the New South Wales branch of the Liberal party. The Government is sending out telegrams to its wealthy supporters relating to the projected sale of other assets of the people. Honorable members opposite would like to destroy TransAustralia Airlines and dispose of the Commonwealth Shipping Line, notwithstanding the fact that both of those activities are of the greatest importance to our defence structure. These are the people who talk about their great concern for the advancement of Australia.

Let us examine our internal position 30 that we may judge whether or not this Government has failed in its task. We all know how prices have soared in the last two years. What remedies has the Government proposed to cure the evils of inflation? It says to the workers in industry, “Let the workers accept wagepegging and we shall have pricepegging “. Why does it not contemplate the pegging of profits? For a long time members of the Government referred to the need for the introduction of an excess profits tax. The very fact that such a tax was contemplated by the Government is evidence that excess profits were being obtained by the great wealthy people of Australia. The Government dropped the proposal solely because of the pressure brought to bear upon it by its wealthy supporters. The workers of Australia want our economy to be restored to a stable basis. When honorable members opposite talk of wagepegging they should first be prepared to put wages on an equitable basis. They have said that basic wage increases have been largely responsible for our present difficulties. Some members of the Govern- ment and their sponsors outside the Parliament advocate the abolition of the system under which the basic wage is adjusted at quarterly periods. The last increase of 9s. in the basic wage in New South Wales astonished not only the workers but also manufacturers and businessmen who expected a very much greater increase. Despite all the statistical evidence that may be adduced to show that the basic wage increase of 9s. was intended to .compensate the workers of New South Wales for increased costs, I am still of the opinion that it was a “ doctored “ decision which bore no relationship to the actual increase of living costs during the preceding quarter. On the day following that on which the determination of the new basic wage was announced, long before the increase was received by the workers - it was announced a week before the date from which it was to apply - the newspapers stated that the price of large packets of breakfast foods was to be increased by 4d. and that the price of jam was to be increased by from 4d. to 8d. a tin. Thus, before the workers received the increase, it was being taken away from them. The Government may count upon the co-operation of trade unionists and the people generally only if it treats them fairly. One Government supporter - I think it was the honorable member for Henty (Mr. Gullett) - said recently that we had reached the limit in the provision of social services benefits and that no extensions of such benefits could . be granted. What is happening to the recipients of social services benefits in this period of mounting inflation? It is all very well for the Minister for Labour and National Service to cite statistics to show that people in Australia are better off than are those in other countries when, in fact many of our citizens are struggling to exist. The honorable gentleman has said with great pride and satisfaction that the position of the people of Soviet Russia was the worst of all. In every comparison he makes between the position of Australians end that of other peoples, he invariably says that the people of Soviet Russia are in a worse position than any other. If that is so why does he worry about the Soviet? What we are concerned about is what will happen to our people if inflation is permitted to continue unchecked. In the press to-day it is stated that on the 1st July the price of butter is to be increased to 3s. 8d. per lb. This Government has said much about putting value back into the £1, but because of its inaction, value is continually oozing out of our currency. We do not have to arouse fear in the minds of the people; it is already there. They know that anti-Labour governments are eager to see another depression hit this country. The honorable member for Paterson (Mr. Fairhall) referred to indiscipline in industry. He wants to put the workers in their places. That is the attitude of the anti-Labour forces inside this Parliament and outside it. In a newspaper article the financial editor of the Sydney Morning Herald referred to the advantages of another depression. While he admitted that a depression would bring about widespread unemployment and great misery among our people he said that it would also result in greater efficiency in industry and greater production from the workers. Mr. L. H. McLeod, president of a district council of the Country party, i3 reported to have said -

The country will not get back to normal until there are eleven men applying for one man’s job.

That is the attitude of the anti-Labour parties throughout the Commonwealth. Honorable members opposite are delighted when they hear that a man has been dismissed from employment because they realize that their policy is beginning to bear fruit.

The Minister for Labour and National Service (Mr. Holt) said that there are only 2,800 registered unemployed persons in Australia. It is obvious that the Ministers cannot agree among themselves as to how many vacant jobs exist in Australia. The Minister for Defence (Mr. McBride) said that the number of vacancies is between 50,000 and 60,000. The Minister for the Navy (Mr. McMahon) said that the number is 40,000. To-night, the Minister for Labour and National Service has told us that the number is 92,000. Ministers are bandying figures about in an attempt to delude the people. I should not be astonished to find that there are only 2,S00 registered unemployed persons in Australia. Is it not rather strange that even 2,800 persons should be unemployed at a time when, it is claimed, there are more that 90,000 vacancies? Surely, if the position has been accurately stated, opportunity exists for the absorption of the 2,800 registered unemployed. I have frequently sent men to the offices of the Commonwealth Employment Service in search of work. Many of them have told me that the employment officers have informed them that no suitable employment was offering for them. In these circumstances why should men worry about registering for employment? Despite the fact that the purchasing value of the £1 is very much lower than it was when the unemployment benefit was instituted by a Labour government, the benefit still remains at 25s. a week or 33. 7d. a day. A married recipient is paid an allowance of 3s. for his wife and 8d. for each child. An unemployed person is not entitled to benefit until he has been out of work for seven days. Under present-day conditions, the benefit is practically worthless. As the honorable member for Eden-Monaro (Mr. Allan Fraser) has said, anybody who is in touch with Australian affairs knows that unemployment is rapidly growing. The Minister for Commerce and Agriculture (Mr. McEwen) admitted that that is so to-night when he said that certain industries which were formerly unable to obtain a sufficient number of employees now have an abundance of workers offering for employment. The New South Wales Transport Department, which was understaffed for years, is now turning down applicants for employment. Only to-day I was advised by telephone that Australian Consolidated Industries Limited gave notice of dismissal to 1,000 men who are employed at its glass-works at Waterloo. In many country districts timber mills have been compelled to close down. Honorable members opposite, if they wish to do so, can ascertain the names and location of those mills. They have been forced to close down as a result of the Government’s restriction of credit for housing which has curtailed the demand for timber. Consequently, the mills cannot dispose of their products. One can see exactly what the Government is planning to do. The Prime Minister, in trying to excuse the Government, said that whatever policy the banks were pursuing it was not the responsibility of the Government. He said that the directive under- which the banks were now operating was given in 1950 and that it had not been changed in the meantime.

What has happened to the National Security Resources Board? The Parliament has not been furnished with any reports about the deliberations of that body or about what it is doing. We were told that it was constituted in order to classify essential, less essential and non-essential industries. Why does it not publish its classifications in order that those who are engaged in industry might know where they stand. The Government through the Treasurer (Sir Arthur Fadden) has arranged secret conferences with representatives of the private banks to which no representative of the Commonwealth Bank was invited. Dr. Coombs, the Governor of the bank, was excluded from those secret conferences because the Government believes, as many of its supporters have said repeatedly, that as he was appointed by a Labour government he is, therefore, a socialist.

The Prime Minister said that honorable members were hearing a lot of wicked nonsense with respect to housing. He added that private banks could advance up to £3,000 for the construction of a house and up to £3,500 for the purchase of an existing house whilst, at the same time, the Government had made advances to co-operative building societies. When I interjected that, in fact, advances were not being made for home construction the right honorable gentleman, who is responsible together with the other members of his government for the conduct of affairs in this country, said that it was the banks’ own concern whether they accepted business and made advances. While the banks are occupying a privileged position Australian families are being denied proper accommodation. How can the Government expect to make effective defence preparations unless the community is contented and the people are given the opportunity to live in their own homes and to rear their families under decent conditions? To-day, 8,300 families residing in emergency housing settlements are living in tenements and humpies which are not fit for human habitation, but the Government evidently believes that that position is satisfactory. Over 28,000 families are waiting for emergency accommodation, yet the Government is curtailing housing programmes.

All State governments, not only Labour but also anti-Labour such as the Victorian Government, are complaining about the action of this Government in cutting down their works allocations and compelling them to curtail their housing programmes. The State governments regard such action as repudiation on the part of this Government; and so it is, because the States were encouraged to undertake housing programmes and to assist industries to provide prefabricated houses. I quote as an illustration the case of Van Dyke Brothers Proprietary Limited, of Villawood, which is one of the largest companies in Australia engaged in the production of prefabricated houses, which was encouraged by both this Government and the New South Wales Government to increase production. Consequently it stepped up production to 25 prefabricated houses a week. Already ita production has been reduced to ten houses a week and it has now been asked to reduce its output to seven houses a week. That restriction has been forced upon it as the result of the policies of this Government. That company has been compelled to dispense with 200 of its 350 employees who were previously engaged on this important work. While this Government is destroying this essential industry it is talking about what it is doing to encourage the importation of prefabricated houses. It is to the lasting discredit of the Government that it is destroying an essential Australian industry whilst, at the same time, it is encouraging the importation of prefabricated houses by subsidizing such importations at the rate of £300 each and admitting such houses free of duty. The timber industry as a whole has been severely hit as the result of the policies of this Government. I repeat that many country mills nave already closed down whilst others have been compelled to reduce their staffs. At the same time, the Government has been urging, the timber millers to provide relief for those who suffered loss as a result of the recent bush fires. Those fires damaged large tracts of timber, which must be cut as soon as possible if its value is not to ‘be lost completely. The Government ha3 appealed to millers to cut and store that timber. Ye.t it is destroying the home market upon which the millers, depend.

The Prime Minister also said that the Opposition was recklessly eager to convince the people that there is an economic crisis in this country. We do not have to convince the people of that fact because they already know that such a crisis exists. The right honorable gentleman, during the whole of his speech, did not say one word about putting value back into the £1 or about the dreadful Communists who, Government supporters have been telling us for months, have been responsible, for holding up production. I wonder whether- the visit of representatives of the International Bank for Reconstruction and Development to this country has anything to do with the Government’s policy of causing a depression. It is rather interesting to recall that soon after we had a visit from overseas bankers on a previous occasion a depression occurred in Australia. The representatives of the International Bank for Reconstruction and Development are shortly to arrive in Australia and we find that the Government is now doing its best to bring about another depression. In order to ascertain the degree to which Wall-street has dominated the policies of this Government we need only recall what has happened to the film industry. ATI honorable members are aware that in the past Commonwealth and State Governments have been encouraging the establishment of the filmproducing industry because they recognize the great propaganda and advertising value of such an industry to Australia. However, after a British film company embarked upon operations in this country and the venture promised to succeed, it was destroyed by the limitations that were imposed upon it by the

Capital Issues Board. Consequently the Australian market has now been left wide open to exploitation by American film interests. The Government talks about conserving dollars when, at the same time, it is doing everything to make it difficult for Australia to obtain dollars.

Unemployment is growing and all classes of pensioners are in a desperate plight. It is significant that the Government has declared that, regardless of the degree to which the cost of living may rise, it will not adjust social services benefits to help these unfortunate people to make ends meet. The honorable member for Henty (Mr. Gullett), who occupies a very important post in the Government’s ranks, said that the Government could not go any further in that sphere.


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

Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– Honorable members have ju3t. witnessed a most extraordinary exhibition. The honorable member for East Sydney (Mr. Ward) has ployed the record of class hatred whenever he has taken up the time of this House, and, indeed, the record seems to have cracked recently as he harps on the word “ hate, hate, hate “. The honorable member has the temerity to lecture us about defence. He is the man who suggested that we should confer with Hitler during the last war. He said- -

Instead of carrying on this stupid conflict an effort should be made at the earliest moment to summon a conference of the major nations for the purpose of ending it.

When the whole of the free world was combating Nazi-ism, the honorable member for East Sydney was the man who suggested that we should confer with Hitler. When he spoke about defence, I recalled an epic occasion in this -House. We were seeking to protect the outer bastions of Australia. Tens of thousands of valuable Australian lives were lost in New Guinea. What did this great warrior, this great defender of the rights of the working man, this great man, who believes in defending our country against the capitalist, do against the enemy? hi 1938 he said-

It is amusing to hear people say, “ We will not give up New Guinea “. To these people I would say that if it should become necessary to defend our mandated territories they should defend them themselves.

Tens of thousands of valuable Australian lives were lost, and Australian blood was spilt in New Guinea in halting the southward drive of the Japanese. Yet this great warrior, this great protector of Australian standards said, “Let the people in the mandated islands defend themselves “. The only thing that the honorable member has not trotted out from his stock-in-trade is that which discredited him. I refer to his statements about “ the Brisbane line “. The honorable member was suspended from ministerial office by his own Prime Minister, and a royal commission was appointed to inquire into his allegations. He had an opportunity to give evidence. The brave honorable gentleman ran away, and claimed parliamentary privilege for his statements. Yet this man lectures us about the defence of this country. Obviously he carries on exactly the same technique as those with whom he associates - the old Communist technique of uttering the cry of “ recession “, and of engaging in character assassination. He picked out individuals, and sought to smear their character. The honorable member is surely a case for a psychiatrist. There I leave him, because he has not contributed anything of importance to this debate.

I now have something to say about the leader of this rabble Labour party (Dr. Evatt), who has moved this motion of censure. The Labour party seeks to make capital out of every little weakness that it may exploit in the people who have been brought to a sense of responsibility regarding the position in Australia. I have recently returned from London-

Opposition members interjecting,


– I am glad that Opposition members welcome me. They certainly would have experienced a sense of frustration had I not returned. In London, some of the old customs still prevail. For example, the rag-picker still wanders in the streets,, and picks up from the garbage tins bits and pieces that interest him. He may not like-

Opposition members interjecting,


– Order! I ask honorable gentlemen on my left to givethe Vice-President of the Executive Council a reasonably fair hearing. Since he has been speaking, there seems to be a concerted objection to his remarks. Opposition members perhaps are entitled to their objections, but should keep them to themselves.


– The old rag-picker may not like silk or brocade, but when he picks those materials out of a garbage tin, he makes them his stockintrade. “We have a comparable set of circumstances in this debate. The Leader of .the Opposition has become the political rag-picker in this country. Let us examine how he wanders from dustbin to dustbin, seeking what he can find to take unto himself as his stock-in-trade. First he goes to the bankers’ garbage tin, from which he picks out a piece labelled “ credit restriction “. He says, “ Ah ! Credit restriction “, and seeks to make it his stock-in-trade. Let us examine credit restriction. The right honorable gentleman certainly should have some knowledge of that subject. Did not he, while he was a member of the Chifley Government, seek not merely to restrict credit, but to nationalize credit when the Labour Government attempted to nationalize the banking system? That was not a matter of restricting credit. It was definitely nationalization of credit - complete governmental control of credit. Much play has been made upon the expression “ credit restriction “ during this debate, but the Prime Minister (Mr. Menzies) has pointed out that the average monthly advances between June, 1951, and January, 1952, have increased by the extraordinary sum of £134,000,000. The Leader of the Opposition, who sought to pin the policy of credit restriction upon the Government, found that he was up against facts which proved that he had taken into his stock-in-trade a rag which had no value. Therefore, he moved quickly to the capitalist dustbin and picked out taxation. He said, “Ah!

Taxation. Surely the Government must bear the responsibility for taxation which is pressing heavily upon the people “. Yet we find that taxation reached its highest level in our history under the ChifleyEvatt Administration.

Mr Ward:

– That was in war-time.


– The honorable gentleman will always dissemble. I am stating facts. The Prime Minister, in his excellent speech, completely destroyed the whole fabric of the motion of censure, and made the facts perfectly clear to the Opposition. The Leader of the Opposition also went to the manufacturers’ dustbin and picked out something that was labelled “Transfers in employment “. He remarked, “ Surely this is something that I can pin upon the Government “, and made it a part of his stock-in-trade. But what is the position in respect of transfers in employment? It is interesting to note that the learned right honorable gentleman himself made a statement on that subject in March, 1951. I shall refer to it later in my speech. But according to statistics compiled by the Department of Labour and National Service, there are 275 registered unemployed in New South Wales, 37 in Victoria, one in South Australia, 49 in Western Australia, 2,290 in Queensland, and four in Tasmania. Opposition members, taking their cue from the political rag merchant who is their leader, claim that thousands of unemployed are walking the streets. That statement, clearly, is not in accordance with the facts.

Opposition speakers have also attacked the Government’s legislation affecting the workers, and stated that we had interfered with their conditions. I recall that the Opposition, when the Government introduced legislation to provide for the election of union officials by secret ballot, in order to cleanse the unions of Communist infiltrators, reacted strongly against the bill. The Leader of the Opposition himself criticized the measure in March, 1951, in the following words: -

This measure is a further example of the Government’s apparent determination to bring forward legislation which is against the will of the trades union movement. The proposal in its present form can be described only as an attempt to interfere with the internal con trol of trade unions. I think it can be established that this is a provocative and pettifogging measure.

I hear Opposition members interjecting “ Hear, hear ! “ I remind them that the ‘ Labour party was divided in its opposition to that bill. For example, a statement by the honorable member for Gellibrand (Mr. Mullens), at an election meeting held at Footscray, on the 11th April, 1951, shows clearly that Labour cannot put forward a constructive policy simply because there is no harmony within its own ranks. He said -

I am in favour of the Menzies legislation for secret ballots in unions and I will do all I can to convert other members of the Labour party to this viewpoint.

I would like to see the legislation introduced by the Labour party instead of the Liberals and would be in favour of limiting it to Communist-controlled unions for obvious reasons.

So we find that the honorable member for Gellibrand and other honorable members opposite are in complete accord with that legislation. The Leader of the Opposition opposed it and we know why he did so. We have yet to see him go to the aid of the secretary of the Federated Iron Workers Association of Australia, who is seeking to cleanse his union. The right honorable gentleman is quite prepared to go into the courts to support the Communists, but not to support a union that is endeavouring to rid itself of Communist control. Mr. Short can do that work completely unaided even by the Leader of the Opposition. When we find the Federated Clerks Union seeking, with 1,100 signatures, to take advantage of this Government’s secret-ballot legislation, but receiving no support from honorable members opposite, we can form some idea of why the Opposition opposed the passage of that measure.

I come now to the Communist garbage tin, into which not only the Leader of th, Opposition, but also the honorable member for East Sydney, has been delving. They have both seized upon the piece of rag marked “ recession “. That Communist catch-cry is used to cause disruption and discontent throughout the entire free world. It was with some justification that the president of the Australasian Council of Trades Unions, Mr. Monk, reprimanded the Leader of the

Opposition and the honorable member for East Sydney, as the following newspaper report shows: -

The president of the Australasian Council of Trades Unions (Mr. A. E. Monk) yesterday criticized people who made “scare statements about a recession in Australia’’.

Mr. Monk said the development of a *’ jittery “ atmosphere was harmful and should be avoided. lt will be bad for Australia when our people let themselves be influenced by undue scare statements, inspired to bring about a recession which certain interests in this country would welcome.

What did Mr. Monk mean by “ certain interests “ ? Perhaps the honorable member for East Sydney will explain whether be alines himself with those interests. This piece of rag that the political ragpicker has taken from the garbage can also is completely worthless. I have listened to this debate for some time in an effort to understand the reasons for the submission of this censure motion. As far as I- can gather, the Opposition believes that the Government is deserving of censure because it has introduced a financial policy which is designed to arrest inflation, and the netresult of which, according to honorable members opposite, is that our economic position to-day is worse than ever it was. That is the gravamen of the Opposition’s charge. The statement that the Government’s policy is designed to arrest inflation is only partly true, and the statement that the economic position to-day is worse than it was before is wholly untrue. The Government’s financial policy is designed not merely to arrest inflation but also to place this nation in a state of defence preparedness. That is most important, but honorable members opposite have given the matter little attention in this debate. Tn brief, the Government’s financial and economic measures are designed to stabilize the Australian economy and to effect a voluntary - I emphasize that word - transfer of man-power and materials from non-essential to basic industries.

Mr Ward:

– Economic conscription !


– Labour believes in the conscription of both credit and man-power. The bank nationalization act of 1945 was nothing but an attempt to conscript credit. What is Labour’s attitude to the conscription, of man-power? Let us have a look at one or two statements that have been made by Labour leaders. The honorable member for East Sydney has tried togloss over them by saying that they referred to the war period only, but that is not so. When Mr. Chifley told a tradeunion conference at the Sydney Town Hall in 1948 that no guarantee could be given that any one could stay put in a particular industry he showed clearly what Labour had in mind and intended’ to do. He said -

No guarantee can be given to anybody that they can stay put in a particular industry. It is realized that there will have to be transfers of workers, and in many cases, transfersof whole communities to other forms of work. I am quite sure that everybody will not be able to stay at home.

The Leader of the Opposition is reported as having said at a meeting of the Summer School of Political Science at Canberra in 1944 -

The taking away in the future of the right of the individual to choose his own vocation and employer is only one of the freedoms the Australian people must be prepared to forego in the interests of the State.

Only one of the freedoms! What other freedoms did the right honorable gentleman have in mind? Clearly he was prepared to conscript labour, but apparently that was only one of the freedoms that the workers would have to sacrifice. Following up that theme, and showing that the statement of the Leader of the Opposition was no chance observation but an expression of a belief that is deeply embedded in the heart of the Labour party, the then federal president of the Australian Labour party, Mr. A. S. McAlpine said in January, 1949 -

We cannot have full employment unless we have a balanced economy. It is necessary to have man-power control in the interests of the working people especially. Employers will not release men they do not need for the time being, fearing tha/t they will not be able to get them later. If workers were directed elsewhere to continuous and greater output, national prosperity would be increased.

Thus from the mouths of Labour leaders we have heard confirmation of their belief in the conscription of credit and of man-power. We must not allow ourselves to be misled on this matter.

Labour is convinced of the need to control man-power and to direct workers as if they were mere chattels. It seeks also to control credit by making the hanking system the plaything of politicians. No economy could stand up to such interference.

Mr Fuller:

– Silly rot!


– I agree that the statements of the late Mr. Chifley, the Leader of the Opposition, and Mr. McAlpine, are silly rot. The people of Australia realized that when they threw the Labour Government out of office at the general elections of 1949.

We have discussed the inflationary trend during this debate. Honorable members must be aware that the inflationary spiral did not spring up overnight. It could not do so. The late Mr. Chifley was wall aware of its existence, because he said in the Prahran Town Hall on the 16th April, 1951-

The return of a Labour Government would not cure the inflationary evils. It would mean hard work, great political courage and perhaps fairly drastic measures with the cooperation of the trade union movement to achieve that goal.

At Cairns, on the 2nd April, 1951, he said -

To end inflation would need more than control of prices, and Labour, if elected, might have to do some unpopular things to arrest inflation.

Unpopular things such as conscription of labour and the conscription of credit! The statements that I have quoted expound the true policy of the Labour party, and that is why I have had difficulty in understanding the statements that have been made by members of the Opposition during this debate. In view of the unequivocal pronouncements that prominent members of the party have made on other occasions, I am convinced that honorable members opposite are now engaging in mere political opportunism and are using the stuff that has bean dragged from the garbage tins by the political rag-picker for his stock-in-trade. Honorable members will recall that, soon after the Menzies Government came to power, additional great responsibilities were thrust upon it as a result of the outbreak of war in Korea. It was forced to reconsider its entire financial policy because it was aware that the Korean conflict might spread and engulf the world. Every responsible government in th democratic world had to take steps to put its country in a state of preparedness. Therefore, Australia’s defence expenditure has been increased since 1949-50 by approximately £150,000,000 a year. The Opposition has not yet attempted to explain how it would obtain the money that is needed for social services and other unavoidable commitments in addition to the vast sums that must be expended to provide for the nation’s security. It has criticized taxation increases. Had it been in power, it would have had to raise additional taxation. It has criticized credit control. Had it been in power, it would have nationalized credit. It has criticized the transfer of labour. But its members would introduce conscription of man-power. Therefore, the motion of censure is mere political humbug and should be treated as such.


.- We have just heard from the Vice-President of the Executive Council (Mr. Eric J. Harrison) a violent diatribe that was typical of the speeches that earned for him the soubriquet of “ The Bucket Merchant”. The people of Australia will never place their trust in a government that has as one of its leading Ministers the present Vice-President of the Executive Council. No wonder, when the phrase “ We can’t win with Menzies “ was being spread round the country, the present Prime Minister (Mr. Menzios) was reported to have asked, “ Gould you win with Harrison ? “.


– Order ! The honorable member must not refer to honorable gentlemen by name.


– I merely quoted a statement that was made by the present Prime Minister. Obviously the Vice-President of the Executive Council is disturbed because his expectations of gaining a knighthood have been dissipated. Instead of coming before us in shining armour to-night in order to state the case for the Government, he has come encased in a garbage tin and has used to the best advantage, as he is well fitted to do, the contents of that tin. I leave him among the garbage that he has thrown about the House. He is in his element in such a setting.

The issue that is before the House is a motion that has been submitted on behalf of the Opposition declaring that the Government lacks the confidence of the Parliament. The Government has lost the confidence of the people, and therefore it deserves the censure of the Parliament. The Prime Minister has declared in a most buoyant manner that the Government will defeat the motion to-night because it has the necessary majority at its command. Rut .[ am sure that, if the people had an opportunity to vote on this motion, the result would be different from that which the right honorable gentleman has anticipated. Two factors are essential to productive activity and prosperity in the community. One is an ample supply of credit with which to finance developmental works and promote employment, and the other is public confidence. By withdrawing credit from essential business undertakings, the Government has established a fear complex that has been responsible already for unemployment and loss of public confidence and that is leading to the destruction of prosperous industries. The Government cannot regain the confidence of the people by applying its present policy. As the motion that we are debating declares, it is causing injury to industry and production, both primary and secondary. Australians remember the economic depression of the ‘thirties and they are justified in fearing the outcome of this Government’s activities. Pensioners were recently granted small increases of their social services benefits, and the Prime Minister has said in this House that he has no intention of granting any further increases until the next budget is presented to the Parliament in September. But the cost of living has continued to increase rapidly and pensioners and many other Australians in receipt of small fixed incomes are suffering great hardships. The prices of commodities generally have, risen so steeply that such citizens are unable to buy more than is essential to maintain a bare existence.

The Government’s policy has caused insecurity of employment and consequent economic fear amongst workers and housewives. Unemployment is increasing apace. As the honorable member for East Sydney (Mr. Ward) pointed out, 1,000 employees of one company alone have been given notice of dismissal. We have been told that sacrifices of this sort must be made in the interests of defence. It is sometimes said that patriotism is the refuge of the scoundrel. I do not know whether the Government is using the plea of defence necessity in order to cover its failings-

Mr Anthony:

– That is a most improper statement.


– Defence has been sorely neglected by this Government. The small arms factory at Lithgow is one of the major defence establishments in this country, but the men employed there are working now only four days a week. On one day in each week they cannot work at all because no electric power is available for the factory. That is an example of the manner in which the Government is carrying out its defence programme. Defence preparations, if they are to be undertaken, should be undertaken on a scale sufficiently great to justify the transfer of labour and the unemployment that is occurring in some industries. The Government will find it difficult to explain what is happening at Lithgow. As a result of its policy, many industries of an essential nature are closing, although they have brought much wealth and prosperity to this country. I am informed that one of the leading firms that manufactures khaki drill for servicemen’s uniforms has been endeavouring for many months to obtain orders from the Commonwealth, but without success. The Government has placed orders for khaki drill with Japanese manufacturers, and this firm has had to discharge a considerable number of its employees because it is unable to keep them fully employed. The Government is giving employment to Japanese and refusing to give employment to its own people. We are told that that is being done in the interests of defence.

Food production is an essential part of a defence programme. During the last war, Australia was called on to undertake the major task of producing food for its own population, for the American forces in this area and for the British fleet in the Pacific. It was called upon also to export vast quantities of food to Great Britain to meet the requirements of the people there. Before our defence programme can become effective, we must ensure that our food production potential is sufficiently great to enable us to meet not only our own requirements of food but also those of Allied forces and of people in other parts of the world. The Government has failed hopelessly to discharge its duty in that respect. The food production position is going from bad to worse. Unemployment in country centres is increasing. Labour is not being fully utilized for food production. The Government is solely to blame for that state of affairs, to which its lack of policy for increasing food production has given rise. Milk and butter have been rationed in New South “Wales this week. Australian housewives are faced with a further difficulty in obtaining sufficient of those commodities to meet the requirements of their families. There is talk of importing butter from New Zealand, but Australia should be able to supply all the essential foods that our people need. The position in relation to food production is even more serious than the people believe it to be. During the last two years, we have had outstandingly good seasons, but if drought conditions were to occur now we should be forced to ration bread and meat unless we ceased to export flour and meat. The Government is charged with the responsibility of making enough food available to meet the requirements of the Australian people, of continuing to export food to Great Britain and of maintaining our export trade so that we shall have a favorable trade balance and thus be able to pay for the things that we need to import from other countries. If we fail to produce sufficient quantities of food to enable us to maintain our export trade in foodstuffs, we shall be short of many articles.

The position in relation to rural production is fast deteriorating. In 1938-39 there were 253,536 rural holdings in Australia, but in 1950-51 there were only 243,626, a decrease of approximately 10,000, although during that period the area of holdings increased by about 43,000,000 acres. The point that I am attempting to establish is that the Government, instead of putting more people on the land, is acquiescing in a policy of the establishment of large estates and of fewer people being on the land. Small holdings are being acquired by large land-holders, and that is having an adverse effect upon rural production. I believe that the Postmaster-General (Mr. Anthony) himself has bought a number of holdings. Previously they were in the hands of several people, but now they are in his hands only. In 1938-39, 23,400,000 acres of land in this country were under crops of various types, but in 1950-51 the figure had fallen to 19,900,000 acres, a decrease of 3,500,000 acres. The number of persons engaged in rural industries also decreased during that period. The production of various foods has fallen. In 1947-48, when the Chifley Government was in power, there were 13,800,000 acres under wheat. In 1951-52 only 10,200.000 acres are under wheat. There has been a decrease of 3,600,000 acres. The production of wheat has fallen from 220,100,000 bushels in 1947-48 to 166,700,000 bushels this year. During the same period, exports of wheat have fallen from 131,600,000 bushels to 77,700,000.

We have heard a lot from the PostmasterGeneral (Mr. Anthony) about butter production, and about what Labour failed to do in that connexion and what should be done. During the last two years, while this Government has been in office, butter production has decreased considerably. In 1949-50, 173,000 tons of butter were produced in this country, but in 1950-51 only 164,000 tons were produced. Butter exports fell from 81,000 tons in 1949-50 to 55,000 tons in 1950-51. Supplies of butter to the Australian people have been maintained only by reducing butter exports. By reducing our exports we have lowered our trade balance by more than £200,000,000 and consequently have weakened Australia’s stability. Furthermore, we are reducing the balance of funds that we need for the purpose of buying essential commodities in other parts of the world. I have before rue figures in relation to food production for the first six months of this financial year, and a similar period in 1950. The production of butter declined from 96,500 tons in 1950 to 76,900 tons in 1951. Exports of butter decreased from 25,400 tons in 1950 to 5,700 tons in 1951. Indeed, our export of butter is rapidly becoming negligible. In addition, we are now on a rationed allowance of only 50 per cent, of normal supplies. I believe that a further decrease of production is imminent.

I shall now refer to the production of milk during a period that this Government has been in office, compared with a corresponding period in 1949 when Labour was in office. For the six months ended the 31st December, 1951, 594,200,000 gallons of milk was produced, compared with 685,600,000 gallons in the corresponding period of 1949. A considerable falling off of production has been evident also in relation to meat. There was a serious decline of meat production in 1950-51, under an antiLabour government, compared with the production in 1947-48, when Labour was in office. Exports of meat have decreased by more than 62,000 tons a year since the present Government came into office, and the position is deteriorating rapidly. Production of eggs and potatoes, also, has declined alarmingly, and the quantity of eggs exported has decreased considerably.

The Commonwealth is entirely responsible for the administration which affects the welfare of the commercial life of this country. At a later stage of my remarks I shall compare what was done by the former Labour Government with what is being done by the present Government in this connexion. The deterioration of food production has been due entirely to lack of provision of finance by this Government. It has dillydallied for two years and has done nothing to help to remedy the position. Indeed, it is not now doing anything to remedy the existing sorry state of affairs. The figures that I have cited are indicative of its failure in this regard. It has not yet put forward any feasible plan to arrest our declining food production.

There was stable production on a very sound basis under Labour’s administration during the war years. What Labour did then could be done by the present Government, upon which rests an obligation to ensure an adequate supply of food for our people and to maintain theexport of food to Great Britain. It also devolves on the Government to ensure a sound food potential in the event of war, which it forecasts might come. Through the agency of the Commonwealth Scientific and Industrial Research Organization, much could be done to improve food production in this country. Breeds of stock suited to early maturity, and with qualities that would withstand local pests and drought conditions, could be imported. Much could be done to improve our pastures and to provide for stock feeding on a major scaleIn the United States of America much has been done during the last four or five years to increase meat, production by pasture improvement and by the grain feeding of cattle and sheep. Unless the Government endeavours to promote the proper grain feeding of stock in this country it cannot hope to increase the production of meat products. The Government should assist primary producers to obtain mechanical equipment. The labour problem was much more difficult during war-time than it is to-day. The former Labour Government assisted primary producers to obtain equipment so as to save labour and to improve crop production. For instance, machines to sow and harvest the potato crop were imported. Such a machine had never before been seen in this country. The production of food could be substantially increased also by the importation of tractors and other farming equipment. Proper transport facilities should be provided in what is known as the channel country in the corner where the back portion of New South Wales adjoins the borders of western Queensland and South Australia. There is a considerable number of cattle in the channel country which cannot be brought to market because of the lack of transport facilities and good roads. If a good road were constructed from Bourke to the channel country, motor trucks could bring in the stock and thus increase the supply of meat for the people of Australia.

Additional amenities and homes should be provided in the outback country areas in order to encourage more people to live there ‘and to engage in food production. Substantial roads should be constructed in the outback. There has not been a sufficient allocation of money by the Commonwealth for the provision of roads in country areas, because of limited finance. The Commonwealth is entirely responsible for this state of affairs. I contend that all the proceeds’ of the petrol tax should be. applied to the improvement of the roads of this country. Much work requires to be done also in connexion with water supply and conservation, which are seriously languishing. At present, 1,000,000 gallons of water a day is being carted to Broken Hill. The Commonwealth is not assisting that city in any way. “Water is also being taken to Cobar by train. Application to the Commonwealth by other towns in my electorate to carry out water supply projects have been rejected, and they have had to cancel orders for pipes and other equipment. The people there are now faced with the necessity to cart water in the near future. If the production of food in this country is to be increased it will be necessary for some of the large estates to be cut up. The Government’s slogan should be “Use the land or lose it “, because, in effect, the Government is a trustee for the large estates. ‘The land should be made available to landhungry farmers who are prepared to engage in food production. Only by putting more land into production and providing proper facilities for the farmers oan the production of food be increased. “When I entered the Parliament in 1934 the cry was that public works could not “be carried out because money and credit were not available. To-day the Government maintains that public works cannot be carried out because there is too much money in the community. When is it expected that urgently needed public works will be undertaken?


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


.- While the honorable member for Darling (Mr. Clark) was speaking about a decline of production, his mistaken statements were themselves leading to a decline of the attendance of honorable members in the chamber. He ended his speech by contending that the Commonwealth should cut up large estates and so put more mcn on the land, although he knows full well, as do all his colleagues, that the Commonwealth has no power to do any such thing. He surely has not forgotten that the people tossed out of office the party of which he is a member because it wanted to obtain such power by means of the nationalization of our banking system. New South Wales has a Premier who subscribes to the same policy as that followed by the Opposition here, which is a policy of endeavouring to force people who have developed rural properties to disgorge them to the Government at prices determined by the Government. Some of the iniquitous practices adopted by the people whom the New South Wales Government employs to acquire such properties would cause any decent man to hang his head in shame, but it does not cause such a reaction in members of the Opposition. The honorable member went on to speak about the drift of people from the land and the decline of production that has resulted from it, but he knows as well as does everybody who has studied the position that one of the major causes of the decline of our rural population has been that primary producers have been unable to obtain the materials and equipment necessary for the efficient conduct of their properties. Poultrymen are still crying out for wire and other necessary materials, which they have a terrific job to obtain. Butter producers are also sorely in need of essential materials. The Government is doing its very best to acquire such materials, even if it has to import them at high prices.

It is utterly fantastic for the honorable member, who is a member of the Labour party, to criticize the Government on connexion with the butter position in New South Wales. Why did he not exhibit fairness and honesty by criticizing the Labour Premier of New South Wales ; because, not so very long ago when this Government made the first real attempt to put butter-fat producers on to a decent standard of living, the McGirr Labour Government in New South Wales and the Labour Government in Queensland refused to give to the butter-fat producers the extra consideration called for. instead, they made them wait for two months before agreeing to the position in their States being adjusted in conformity with that which then obtained in other States. In 1947, when the present Opposition party was in office, it established a committee which recommended that a certain price be paid to butter-fat producers. The committee presented a minority as well as a majority report. The majority report recommended a return i,o the producer of 2s. 2£d. per lb. but the minority report, which was drawn up mainly by government employees, recommended 2s. per lb. The government of the day, in which the honorable member for Lalor (Mr. Pollard) was Minister for Commerce and Agriculture, accepted the minority report. In 1949, when the same committee recommended that the butterfat producers should receive a further subsidy, the same government resolutely and vehemently refused to pay that subsidy, and tried to pass the onus to the State Ministers for Prices. However, its insincerity was disclosed by the fact that, about three days before the general election that was held on the 10th December, 1949, the Labour Prime Minister, Mr. Chifley, stated that 2$d. per lb. would be paid to the butter-fat producers, but only until the end of December. But that little trick did not achieve its purpose, because many supporters of the Labour Government failed to secure re-election. One of the first a;cts of the new Government was to endeavour to give a decent standard of living to butter-fat producers. We are not claiming that what we have done so far is perfect, but it at least is a move in the right direction.

The honorable member for Darling also talked about Labour’s wonderful food production plan in war-time. He omitted to say that in 1943 we had to import wheat, barley and oats from North America within three months of the then Minister for War Organization of Industry, Mr. Dedman, saying that we had sufficient wheat here to last us for another twelve months. Do we want to go back to that kind of planning?

The honorable member then went on to speak about roads in country areas, but he knows full well that since this Government has been in office it has doubled the amount of money made available to the States for road works.

Mr Luchetti:

– Does the honorable member consider that that amount is enough ?


– I do not say for one moment that it is, but at least this year it is twice the amount that the Chifley Government made available in its last year of office. This year we made £16,000,000 available compared with the £8,000,000 made available by the Labour Government in 1948-49. If the sales of petrol increase, and there is a consequent increase of petrol tax revenue, that amount could be raised.

The adverbs that the honorable member for Melbourne (Mr. Calwell) used last night could be more aptly applied to the failure of the Opposition to make out a case during this debate, because it has failed dismally, miserably and abysmally to do so. Honorable members opposite have harped on the textile industry and prices control, and the Leader of the Opposition (Dr. Evatt), when he submitted his motion of censure, referred to the Government’s credit restriction policy. I shall deal with those subjects also. The honorable member for Evans (Mr. Osborne) dealt very capably this afternoon with the subject of the quantities of textile goods now available for sale in this country. We all know why those great quantities are available now in Australia. It is an ill wind that blows nobody any good. I am certain that the housewife to-day is very happy to be able to obtain textile goods that she could not obtain before because of shortages. Certain sections of the community are making themselves heard on the subject of imported nylon stockings. I say most definitely that if the importation of nylon stockings will improve the quality of the similar product made in this country, then let us bring some in. It is an abounding disgrace that a woman may spend her money on a pair of locallymade nylon stockings and have to replace them a day or two later because of their poor quality. Sometimes, in fact, the quality of such, locally-made stockings is so poor that they do not last for longer than a few hours. A few years ago women could buy stockings knowing that they would last for at least a reasonable time.

Labour governments in the States have not been able to come to any unanimity in respect of prices control; As the Premier of Tasmania has said, prices control alone will not cure inflation. Yet no Opposition member has said that prices control and wages control must go hand in hand if we are to attack inflation by this means. The Minister in charge of prices in Queensland stated only a few months ago that his Government did not want the Australian ‘Government .to control prices. The Queensland Government preferred to exercise that control itself. If Opposition members intend to harp on the subject of prices control, they should reach some unanimity among themselves.

The Leader of .the Opposition, in introducing this matter, said that drastic restrictions had been imposed on bank credit by the Government. I propose to state, as the Prime Minister did last night, the restrictions that are applicable under the Government’s policy. Insofar as primary production is concerned, banks are permitted to advance up to £15,000 for the purchase of a property for use in the production of food and a further £5,000 may be secured in order to obtain additional land for the production of food. When requested .to make money available for the purchase of real estate on which an intending buyer does not propose to live the banks have been asked to advise the client to seek accommodation elsewhere. Apparently, because of the operation of that restriction bank managers have told their clients that Commonwealth policy is responsible for their rejection of applications for advances in all instances. As the Prime Minister said, that provides them with an easy way out. A few years ago, if they considered that a client’s security was insufficient when he asked for a loan, they would have said, “No, we cannot meet you”. But they now have an, easy way of avoiding that statement by saying that the ‘Commonwealth will not allow them to make the advance. As the Prime Minister pointed out, the Government does not instruct bank managers what to do. It has laid down the policy and the banks can carry it out if they wish to do so. The banks are permitted to advance up to £3,000 for the erection of a house, plus £500, if necessary, to purchase the land on which the house is built. They can also make additional advances if the circumstances warrant their doing so, but they have been requested to keep advances for the acquisition of houses within the £3,500 limit. A bank may make advances to people in order to pay tax after it has investigated each individual’s position. I know of cases in which money has been made available to farmers for that purpose. I have here a copy of a Queensland newspaper, which reports that bank managers have explained to the press that they are prepared to make advances to farmers to enable them to meet tax commitments. These remarks were made by bank managers in the electorate of the honorable member for Maranoa (Mr. Brimblecombe).

The Leader of the Opposition said that the Government was using credit restrictions as a means of conscripting labour. Would the people of Australia rather have that system or the system that the right honorable gentleman propounded at the Summer School of Political Science in Canberra in 1944 when he said that no person should have the right to choose his own vocation? When the Vice-President of the Executive Council (Mr. Eric J. Harrison) referred to that statement, the honorable member for Melbourne (Mr. Calwell) said that the right honorable gentleman had not made it. I have here a book entitled, Post-war Reconstruction in Australia, the preface to which states -

This volume contains the five papers, and the discussions on them, which were read before the Summer School of the Australian Institute of Political Science at Canberra from the 29th to 31st of January, 1944.

During the discussion that took place at that conference Mr. Guinane is reported to have said -

The right of a man to choose his own vocation in life is the one right that raises a man above the brute level of the animal.

When the Leader of the Opposition came to deal with that statement by Mr. Guinane he said, according to the report at page 287 of this publication -

Mr. Guinane spoke of the characteristics which distinguished man from the beast and appeared to liken his fate to the right of a man to choose his own vocation in life. There are a lot of other differences between the man and the beast. One is intelligence and common sense. To-day, with the enormous development in industry, corporate control and finance, there is no longer a full right in every person to choose his own vocation in life.

The honorable member for Port Adelaide (Mr. Thompson) claimed that this remark had been passed in war-time. But the fact that the Leader of the Opposition wanted to apply the same principle in peace was illustrated by the last sentence in his contribution to the discussion which reads as follows : -

That cannot be achieved without a Commonwealth plan and by means of Commonwealth legislation and we must have the power to do it.

The people would much rather hare the disemployment that has been referred to in this debate than the system that was propounded by the Leader of the Opposition.

The Leader of the Opposition alleged that a decrease of primary production due to the imposition of excess taxation had taken place. I remind the right honorable gentleman that taxation has decreased ever since 1948. There has also been a decrease of .production, particularly in regard to wheat, since 1947. The income tax payable by a man with taxable income of £2,000 in 1948 was £682. On the 1st June, 1951, it was £468. Farmers in receipt of taxable incomes of £4,000 in 1948 had to pay £1,837 in income tax but in 1951 they had to pay only £1,468 7s. The income tax on an income of £6,000 a year and £8,000 a year has also decreased since 1948. The income tax payable on a taxable income of £10,000 was £6,418 in 1948. In 1951 it waa £5,621. The reduction in tax rates’ was made in 1951 despite the fact that increased defence expenditure had become necessary and despite the fact that a greater amount was spent on social services during that year by the Australian Government than it had ever spent before. - Repatriation anomalies had also been corrected and there was a greater increase in the construction of homes than had ever before taken place in this country. The Australian area under wheat has decreased from 13,880,000 acres in 1947-48 to an estimated 10,550,000 acres in 1951-52. The Leader of the Opposition (Dr. Evatt) said that that decrease of acreage was due to high taxation. I point out to him that taxation is being decreased. That supports the view that has been repeatedly expressed in this House that it is not principally taxation which is reducing our wheat acreage but it is the lack of machinery and plant to make wheat production profitable. There is no- more souldestroying job than to try to produce food with worn-out and obsolete machinery under conditions of chronic shortage of materials. Honorable members opposite have deliberately tried to create in the minds of wheat-growers a fear that they will be penalized if they produce more wheat. I was amazed to read an article in the Sydney Daily Telegraph of the 15th February, which reports that Mr. Pratt, of the Wheatgrowers Union of New South Wales, said -

Causes for the reduction are high taxation, the poor price paid for wheat and the heavily increased freight charges.

I shall deal with the two latter items first. Who is to be blamed for the poor price of wheat? It is certainly not this Government. The wheat-growers themselves, and I was one of them, have to accept a certain proportion of the blame because they were goaded into voting for the stupid wheat-selling scheme that ‘ was introduced by the previous Minister for Commerce and Agriculture. They did not raise their voices against the International Wheat Agreement under which they were required to sell their wheat at certain prices but were not permitted to buy goods at comparative prices from wheat. Cornsacks are only one group of commodities that have Deen affected. They are now much dearer than they were in 1948 when the agreement was entered into. Honorable members opposite are telling the farmers to “ go into something else “. Some of the leaders of the fanners are saying the same thing. I have no objection to the farmer going in for sheep or anything else so long as he is using his land. But Mr. Pratt said that they were growing oats and wool and raising fat lambs and sheep because those products paid better than wheat. I must point out that if the farmers are going to raise fat lambs and produce barley and oats and get more for such products, then they will certainly have to pay higher taxes in the lump sum. They will be caught because of the provisional tax system.

The sole reason for the reduced acreage of wheat can be traced to the actions of the last Labour Government. That Government should have introduced the American and Canadian schemes in their entirety, but it would not ask the farmers to estimate their incomes as is done in those two overseas countries. Therefore, the farmers got the worst of the agreement. The farmers are financially embarrassed because of the operation of the system, and not because of the taxes. The averaging system affects 28,000 farmers out. of 300,000 and it must be remembered that it is a two-edged sword because when their incomes fall they will pay at a high rate on a low income.


– Order ! The honor- able member’s time has expired.

Motion (by Mr. Eric J. Harrison) put -

That the question be now put.


– As I heard no “ Ayes “, I declare the question resolved in the negative.

Mr Rosevear:

– I understood you, Mr. Speaker, to say that there were no “ Ayes “.


– I heard no “ Ayes “ called, but I am now informed that they were called. The Standing Orders provide that those whom I declare to be in a minority may call for a division.

Mr Roberton:

– I called “ Aye “ and I also called for a division.


– The House will divide.

The House divided. (Mr. Speaker - Hon. Archie Cameron.)

AYES: 62

NOES: 47




Question so resolved in the affirmative.

Question put -

That the motion (vide page 46) be agreed to.

The House divided. (Mr. Speaker - Hon. Archie Cameron.)

AYES: 47

NOES: 62

Majority . . . . 15



Question so resolved in the negative.

page 162



Motion (by Mr. Eric J. Harrison) agreed to -

That Government business shall take precedence over general ‘business to-morrow.

page 162


Motion (by Mr. Casey) agreed to -

That leave be given to bring in a bill for an act to approve the Security Treaty between Australia, New Zealand and the United States of America.

page 162


Motion (by Mr. Menzies) agreed to -

That leave be given to bring in a bill for an act to determine the number of the Ministers of State and to make provision for their salaries and allowances.

page 162


Motion (by Mr. Menzies) agreed to-

That leave be given to bring in a bill for an act relating to the allowances of members of each House of the Parliament.

page 162


Motion (by Mr. Menzies) agreed to -

That leave be given to bring in a bill for an act to amend the Parliamentary Retiring Allowances Act 1948, and for other purposes.

page 162


Motion (by Mr. Menzies) agreed to -

That leave be given to bring in a bill for an act to amend the Income Tax and Social Services Contribution Assessment Act 1936- 1951.

page 162


Sugar - Timber - Waterfront Employment

Motion (by Mr. Eric J. Harrison) proposed -

That the House do now adjourn.


. -I wish to direct the attention of the Government to the distribution of white sugar in Victoria. I understand that it is proposed to increase the price of sugar by £18 or £20 a ton, which represents an increase of 2d. per lb. to the consumer. Last year, when this matter was being discussed, it was pointed out that it was very important that Victoria should receive adequate supplies of white sugar because of the existence of a large fruit canning and processing industry in that State. The Colonial .Sugar Refining Company Limited, which refines raw sugar in Victoria as in the other States, promised that supplies would he improved, but nothing has been done, and the position has gradually become worse. In Victoria there is now an absence of white milled sugar, whereas there is more of such sugar in other States than is needed. In New South Wales, the quota is now 125 per cent, of the normal grant, but in Victoria it is impossible during the fruit processing season to get white sugar at all. This is a great embarrassment to those engaged in the canning industry, and also to housewives. Various reasons have been advanced for the failure of supplies of white sugar m Victoria. We have been told that it is due to lack of shipping. At another time the excuse has been lack of machinery, and later has been scarcity of labour. The latest excuse is the number of holidays, particularly at Christmas time. There are tremendous stocks of raw sugar in Victoria, and the Colonial Sugar Refining Company is negotiating insurance to an amount of £500,000 to cover its holdings. The company, in reply to numerous protests against the present deplorable state of affairs, has promised to increase the 1946 ration to 100 per cent., but this will not meet the needs of Victoria, because the canning industry has expanded considerably since 1946, and more sugar is now needed than the company has offered to make available. The constant scarcity of white sugar in Victoria calls for some investigation, particularly at this time when proposals for increasing the price of sugar are under consideration. If it is right that the growers should receive a higher price, it is surely right that the consumers should receive fair treatment from the growers and from the other parties to the sugar agreement. Something should be done to ensure the equitable distribution of white sugar among the States. I ask the Government to ensure that sufficient white sugar is made available to meet the needs of the canning industry in Victoria as well as those of the people generally.


.- I regret that it is necessary for me to emphasize once more the danger to the timber industry in Australia arising from the possible importation into this country of the timber pest known as the sirex wasp. At last one supporter of the Government has been impelled to give more definite information on this subject than I was able to do. I am pleased that the honorable member for New England (Mr. Drummond), who is interested in the timber industry in New South Wales, is alive to the danger represented by this imported pest. When I first raised this matter many months ago, I pointed out to the Minister concerned that the sirex wasp was considered to be the world’s worst timber pest. I said that it had already affected the cultivated forests’ in New Zealand, a fact which was causing some concern to the New Zealand Government because of the very large amount of money invested in those forests. I pointed out that there was ample evidence that timber being imported into Australia from northern Europe was infested with sirex wasp. It appears that the only persons alive to the danger were those officials in Victoria who insisted that the cargoes should be fumigated in order to prevent the pest from getting ashore in Australia as it had done in New Zealand. Besides our native forests in Australia we have vast tracts of cultivated forests. I thought that when a committee was appointed to investigate this matter it would not take long to collect the available evidence, most of which would be of a scientific nature. Little evidence of value could be collected in Australia because of the lack of knowledge, even among our forestry officials, concerning this pest, which is not native to the country. About six or eight weeks ago I was informed by the secretary of the committee that it intended to take evidence in Sydney and in centres in Queensland. Now I learn from the reply to the question asked by the honorable member for New England that the committee is at present on a jaunt to New Zealand. While the committee has been making these extensive and far-flung inquiries, the dangers that I pointed out to the House sonic time ago have become manifest. Huge cargoes of timber have arrived in Australia badly infested with .the sirex wasp. One firm alone, as the honorable member for New England (Mr. Drummond) has mentioned, received 100,000 super, feet of timber which was badly infested with this pest. If the Government did its duty, it would arrange for the infested timber to be burned. The cost of fumigating the timber on its arrival in Australia was borne, not by the importers of the pestiferous timber, but by those unfortunate persons who had bought it. Furthermore, the timber did not comply with specifications relating to size. The Government should recall the committee and instruct, it to submit an immediate report covering its investigations. No advantage could be gained by the committee from an extensive tour of Australia. Australian forestry officials cannot speak with authority regarding this pest because it is foreign to this country. What I fear is that, unless immediate remedial action is taken, our cultivated forests will become infested as the cultivated, forests of New Zealand have been infested. To permit the committee to go on a jaunt all over Australia and to extend its operations to New Zealand is to treat this very serious matter as a joke. The committee could have obtained all the information regarding the pest that is available in Australia by examining the scientific reports on it which are in the Parliamentary Library. If the committee wanted evidence of the effects of the pest in New Zealand, it could have obtained reports from the New Zealand Government without travelling to that dominion in order to obtain oral evidence. Now that the honorable member for New England has raised this matter there is a possibility that other honorable members will do so at the behest of their constituents. I trust that the Government will take immediate action to recall the members of the committee and to instruct .them to furnish a report without delay and without further expense.

Wide Bay

– In case the remarks of the honorable member for Isaacs (Mr. Haworth) may be misunderstood, I wish to make it clear that the sugar-growers of

Queensland are in no way responsible for the shortage of refined sugar in Victoria. The sugar-growers do everything possible to provide adequate supplies of the raw product. They have nothing to do with the refining process. The Queensland Government takes over the raw sugar, which is refined by the Colonial Sugar Refining Company Limited under an agreement with that Government. The company has established refineries in each State. There has been some difficulty in the company’s refinery in Victoria which has resulted from poor quality coal and the difficulty of securing adequate labour. The growers have endeavoured to meet the position by sending to Victoria a special raw sugar which is suitable for use by consumers. Samples of the special sugar were made available through me to all Ministers and to all honorable members who represent Victorian constituencies. The growers have supplied 13,000 tons of this special sugar to the company for distribution in Victoria during the shortage. Ample stocks should be available to household consumers as well as for manufacturing purposes. It is entirely wrong for any one to suggest that growers may be withholding supplies of refined sugar in anticipation of a price rise. The State Government and the Colonial Sugar Refining Company Limited handle the refining of sugar, so no sinister action can be taken by the growers. The shortage of sugar in Victoria is purely a local matter which in no way is the responsibility of the sugargrowers. I make these statements in order to clarify the position in justice to the sugar-growers of Queensland.


– I desire to make a protest on behalf of the Melbourne branch of the Waterside Workers Federation at the action of the Government in abolishing the Cargo. Clearance Committee in that port. Thecommittee has done a very good job over a long period in clearing the approachesto the wharfs and in getting rid of congestion on wharfs, which was particularly bad last year, when many ships arrived in Australian waters with large cargoes of all kinds. Whatever may be the cause of the trouble in Melbourne - and it must be largely a matter of difference of opinion between the representatives of the Melbourne Harbour Trust and the representatives of certain Commonwealth departments on the committee - the abolition of this committee will not aid in the solution of problems that arise in the port of Melbourne as the result of the arrival of large cargoes from overseas. I understand that a certain degree of congestion is arising again in Melbourne as the result of the disbandment of the committee. I was in Sydney during the Australia Day week-end and had an opportunity to see just how badly things were around the wharfs in that port because warehouses were closed and customs officials were not in attendance to deal with manifests whilst other persons who also had a part to play in clearing cargoes were absent. At the same time, the wharf labourers were working three shifts daily in order to load and unload cargoes. In Melbourne, the Cargo Clearance Committee was composed of representatives of the Melbourne Harbour Trust, the Department of Trade and Customs, the Department of Shipping, the “Waterside Workers Federation of Australia, the Transport Workers Federation of Australia and representatives of several other bodies. On the 31st January last Mr. H. E. Clarke, the secretary of the Melbourne branch of the Waterside Workers Federation, received a letter from the Minister for Shipping and Transport (Senator McLeay) in these terms -

I have been advised that the Melbourne Harbour Trust has undertaken to deal with any congestion which may arise in the future in the Port of Melbourne. I have directed, therefore, that the Cargo Clearance Committee, which previously functioned under the chairmanship of the Secretary of my Department, Mr. C. H. McFadyen, should now be dissolved.

The marked improvement in the conditions in the port brought about by the Committee was due very largely to theco-operation of the member organizations and I wish to thank you for your part in this achievement.

Mr. Clarke, believing that his union had been badly done by, replied to that letter as follows: -

Dear Sir,

I have to acknowledge receipt of your communication of 31st ultimo wherein you advise that the Cargo Clearance Committee is now dissolved.

I am completely at a loss to understand your decision to disband this Committee.

However, I do know that you attendeda secret meeting at the offices of the Melbourne Harbour Trust at which various bodies interested in waterfront affairs were represented. I have no doubt that you have allowed yourself to be influenced by decisions made at this meeting.

Your own communication condemns your very action.

For example you say this, and I quote: - “ The marked improvement in the conditions in the port brought about by the Committee was due very largely to the co-operation of the member organizations and I wish to thank you for your part in this achievement.”

How can you expect me to accept your decision to disband the Cargo Clearance Committee as being a genuine attempt to improve conditions in this port. As a matter of fact it can only result in shipping delays, slow turn-round of vessels, muddling and chaos.

Again, how is one to reconcile your attitude with that of a brother Minister, the Minister for Labour and National Services Mr. Holt.

Mr. Holt asks for closer cooperation between employer and employee, between management and industrial leaders and on the other hand you destroy an organization whose achievements in this regard are unquestioned.

How can you expect results from a committee which, for example, does not include representatives of the Australian Stevedoring Industry Board, the authority solely responsible for the allocation and dispersement of all waterfront labour requirements, the biggest single factor in the expeditious handling of shipping.

I can only conclude by condemning your action as being a retrograde step and one not worthy of the Minister for Shipping in a Federal Government.

The Cargo Clearance Committee under the guidance of its chairman, Mr.C. McFadyen, the very able secretary of the Department of Shipping and Transport, has done a remarkable job in clearing up “ bottle-necks “ in the port of Melbourne. Shed congestion was reduced to a minimum, and prior to January of this year it was many months since ships had been held up waiting for berthing accommodation. During January, 6,165 waterside workers were sent home without work because of shed congestion. That represented the handling of 52,320 tons of cargo or eleven vessels with full cargoes. Representation on the committee included everybody who has an interest in ships and shipping and co-operation was splendid, its discussions being candid and open. It would appear that a most effective authority has been sacrificed for political reasons to the detriment of the port of Melbourne and its subsequent development.

Unfortunately, there has been a clash of personalities and incompatibility of temperament between representatives of the Melbourne Harbour Trust and some Commonwealth departments, and as a result the assistance of the waterside workers and transport workers in clearing the port is no longer wanted. The Harbour Trust is to do all the work. I am afraid that it will not do it successfully. The Government should again seek the co-operation of the Victorian Government in order to see whether something cannot be done to re-establish the Cargo Clearance Committee. I have no time for State-righters regardless of where they may be found. If the Victorian Government is blameworthy in this matter, the Australian Government should place the blame on it. Any government that will not co-operate in speeding up the turn-round of ships is doing something that is detrimental to Australia. The Minister for Shipping and Transport should not allow decisions of a State body to influence him. Because the Harbour Trust refused to co-operate, the Minister should not say, in effect, “ “We cannot get any co-operation and, therefore, the committee no longer exists “. The Government should take up the matter with the Victorian Government. Wherever cargo clearance committees do not exist they should be established. We cannot afford the luxury of having ships unnecessarily idle or dawdling around the coast. We hear a lot about delays in shipping. The workers are often blamed for such delays but, invariably, they arc duc to congestion on the wharfs. In most of the main ports the waterside workers have been working three shifts on every Sunday and every holiday both unloading and loading vessels. I urge the Vice-President of the Executive Council (Mr. Eric J. Harrison) to persuade his colleagues to see the point of view of the Melbourne branch of the Waterside Workers Federation, because I am certain that if it is given effect we shall have no more reason to complain about congestion on the wharfs than we have had cause to complain during the last twelve months.

New England

– I wish to refer to the statements that the honorable member for Dalley (Mr. Rosevear) made with respect to the sirex wasp. My attention was directed to this matter by a former member of the timber trade, who, in order to oblige a friend, arranged for the importation of approximately 100,000 super, ft. of pine. The specifications in respect of that timber indicated that it had to be of certain proportions and free from infection by sirex wasp. Unfortunately when this shipment arrived it was found to be literally riddled with the pest. Apart from the fact that it did not conform to specifications, it was very poor stuff to which a good deal of bark adhered, although the specifications provided that it should have no bark. However, that was a matter for the person who imported the timber. The specimens which I saw were, I believe, and I am assured, representative of the whole. They were riddled with the pest, and the whole consignment had to be fumigated. In those circumstances, it appeared to me to be necessary that steps should be taken to protect the great timber industry of Australia from the introduction of what I have reason to believe is a most destructive pest which, so far, we have been able to avoid.

The timber industry of Australia is most important; we have valuable softwoods as well as hardwoods. When whole shipments have been sent here by apparently unscrupulous shippers, in this case from the neutral country of Sweden, it appeared to me that the matter should be brought to the notice of the Minister for Trade and Customs (Senator O’sullivan). I supplied him with a sample of the type of timber which was specified, and indicated in the consignment notes and bills of lading. I supplied him with specimens taken from this particular consignment, and I am pleased to be able to say that he assured me that he was raising the matter with the proper authorities in Sweden with a view to appropriate action being taken. I have no doubt that he will see to that matter, and that this kind of thing does not happen in future. The only appropriate action that should be taken with such a consignment is either to send it back immediately, without unloading it, to the country from which it was exported, or to make a bonfire of it, in the interests of preserving the timber industry of Australia. However, I have not the slightest doubt that the Minister for Trade and Customs will make good his promise to take action in regard to that matter.

Vice-President of the Executive Council and Minister for Defence Production · WENTWORTH, NEW SOUTH WALES · UAP; LP from 1944

– in reply - Several honorable members have addressed themselves to subjects which they consider are important

Mr Ward:

– I direct attention to the state of the House.


-Order ! I hope that the honorable member for East Sydney (Mr. Ward) does not wish to persist, because nothing can result from his action. The Minister is replying to matters that have been raised in the debate on the motion for the adjournment of the House.

Mr Ward:

– Honorable members should be in the chamber to hear this important discussion.


– I ask the Minister to continue. A division was taken not long ago.


– I have no desire to continue.

Question resolved in the affirmative.

House adjourned at 11.53 p.m.

page 167


The following answers to questions were circulated : -

Land Settle ment of EX-SERVICEMEN

Mr Daly:

y asked the Minister for the Interior, upon notice -

  1. Is it a fact that a sum of only £4,250,000 has been allotted by the Government to meet its limited commitments for war service land settlement in the principal States and the total war service land settlement commitments in the three agent States, namely, Western Australia, South Australia and Tasmania, where the Government has assumed full responsibility for soldier settlement?
  2. Is it a fact that New South Wales is expending as much money this year as the Commonwealth is spending over the whole of its soldier settlement responsibilities and, if loan funds were available, had planned to spend much more?
  3. Why has the Government allotted such a small amount for soldier settlement in comparison with that which the New South Wales Government proposes to spend?
  4. Is it a fact that New South Wales and Victoria, which act under their own legislation with finance from loan funds, have between them had to provide 75 per cent, of the soldier settlement farms so far allotted; if so, what is the reason?

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

  1. No. An allocation of £4,125.000 loan moneys has been made for the acquisition and development of lands and for the provision of credit facilities for settlers in the States of South Australia, Western Australia and Tasmania under the War Service Land Settlement Scheme during the current financial year. In addition, repayments by settlers and certain other receipts are also available > these purposes. Commonwealth contributions to other phases of settlement are provided for by the parliamentary appropriation in the Estimates of £1,000,000.
  2. The Commonwealth has not been informed as to what amount New South Wales proposes to invest in properties and advances to ex-servicemen settlers during the current financial year.
  3. In New South Wales and Victoria the State authorities have found considerable scope for War Service Land Settlement in the subdivision and closer settlement of large estates of developed lands. Similar opportunities did not exist in the States of South Australia, Western Australia and Tasmania, where it has been necessary to undertake the development of virgin lands to provide farms, and the amount of work of this nature that can bc undertaken has been limited not by the funds provided by the Commonwealth but by the availability of heavy plant for clearing, materials and labour. Commonwealth expenditure in these three States to 30th December, 1951, was £20,500,000.
  4. The number of farms allotted in the larger and more developed States of New South Wales and Victoria has naturally considerably exceeded that in the agent States for the reasons stated in (3), but I am satisfied that the State authorities in South Australia, Western Australia and Tasmania are doing a good job and the new farms which are being provided by the development in those States will make a very considerable contribution to the re-establishment of ex-servicemen and the national production. It is well-known that the population of New South Wales is about 40 per cent, of that of the Commonwealth and that New South Wales is comparatively much more settled. The percentage of farms supplied, to the number of applicants, is greater in the case of agent States than principal States.
Mr Daly:

y asked the Minister for the Interior, upon notice -

  1. Has he been approached in connexion with war service land settlement schemes by representatives of an organization known as the United Farmers Association?
  2. If so, who were the representatives, what were their qualifications, whom did they represent and what was discussed?
  3. If a discussion took place, what decisions were made and what undertakings did he give?
  4. Is it a fact that this organization is endeavouring to retard soldier settlement in New South Wales?

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

  1. I have received several letters but no deputations from persons and primary producers’ organizations in connexion with war service land settlement. One of these organizations is the United Farmers Association, who have sent copies of circulars signed by Mr. C. Chapman, secretary. 2 and 3. See 1.
  2. I have no knowledge of the relationship which exists between the organization named and the State authorities in New South Wales who are responsible for the acquisition and allotment of properties for ex-servicemen in that State.
Mr Daly:

y asked the Minister for the Interior, upon notice -

  1. Is it a fact that of a total expenditure of almost £20,000,000 in New South Wales on war service land settlement the direct Commonwealth contribution is approximately £500,000, or less than 3 per cent.?
  2. Why docs the Government demand a voice in soldier settlement matters of the State out of all proportion to its financial contribution?

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

  1. The Commonwealth contribution to war service land settlement in New South Wales to the 31st December, 1951. totalled £020,221 in addition to the cost of £300,000 for rural training in that State. These amounts represent the cost of direct benefits to ex-servicemen settlers and are not repayable. On the other hand practically all the expenditure of £20,000,000 by the State of New South Wales comprises an investment in property on which the State receives rent in repayable advances to settlers on which interest is collected.
  2. The State of New South Wales, at conferences in 1945, elected to undertake the settlement of ex-servicemen in that State under its own laws relating to land settlement. The Commonwealth has never attempted to restrict the State’s activities in this field but has properly reserved its right to confine its own contributions to only those proposals which are on terms and conditions similar to those adopted in other principal States. This right was recognized by all States and was written into the agreements executed by the Commonwealth and all States. The Commonwealth has not demanded anything. It offered certain sums of money for certain purposes. I have objected to being an indirect but involved partner with the State in methods of settlement, which are the State’s prerogative, but do not apply in any other States.


Mr Keon:

n asked the Minister for External Affairs, upon notice -

  1. Did he, when Minister for Works and Housing, urge the Victorian Government or the Housing Commission to enter into extensive overseas contracts for the purchase of prefabricated houses ?
  2. Is it a fact that as a result of the necessity of first meeting these unavoidable contractual obligations, sufficient finance has not been available to carry on the State’s normal housing programme?
  3. Will he therefore support any application by the Victorian Government for increased loan funds to enable it to carry out its normal housing programme in addition to meeting its contractual obligations entered into as n result of urgings by him?
Mr Casey:
Minister for External Affairs · LP

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

  1. It is a fact that I stressed with the Government of Victoria and of other States, the opportunity that then existed for the partial solution of the housing problem by the use of prefabricated houses. 2 and 3. The loan funds that will be available to the Government of Victoria this financial year for public works, including housing, were determined in August last by the Loan Council. The total borrowing programme approved by the Council for the States works programmes including housing amounted to £225,000,000 for the present year. Although this is less than the amount sought by the States, it is £00,000,000 greater than their approved programme last year. It is moreover very much in excess of the maximum amount obtainable from the loan market, and it was only made possible by the offer of the Commonwealth to make good from ils own resources any short-fall between loan raisings and. the approved loan programme.

Cite as: Australia, House of Representatives, Debates, 20 February 1952, viewed 22 October 2017, <>.