House of Representatives
15 September 1953

20th Parliament · 1st Session

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

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– Has the PostmasterGeneral decided, without any reference to the Postal Workers Union, to utilize the contract system , in the erection of new telephone lines? If this is so, how can v th& contractors hope to. do the work cheaper than the- trained and equipped Postal Department crews? If the Minister’s action represents a desperate attempt to hy-pass the line staff shortage which was brought about by dismissals eighteen months ago, how can the department overcome delays of over twenty months in telephone installations in rural areas without correcting the grave shortage of technicians?

Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– Consideration has been- given by the Postal Department both to speeding up the work and to haying work carried out by the most economic means. Certain contracts have been’ lotin a few areas where it has been convenient to do- so. ‘ It is not generally intended’ to displace postal workers from’their’ normal employment.

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– Is the Prime Minister aware that a technical report was recently presented to the congress of the United States of America regarding the possibility of producing’ newsprint from the residue left after the extraction of sugar from sugar cane ? If the Prima Minister is aware of the contents of this report will he have it’ examined by the Commonwealth Scientific and Indus- trial Research Organization with a view to ascertaining whether its conclusions are adaptable to Australian conditions?

Prime Minister · KOOYONG, VICTORIA · LP

– I have heard of the report to which the honorable member has referred and I shall be happy to adopt his suggestion.


– The question that I wish to ask the Prime Minister relates to his promise to the honorable member for Mackellar to investigate a report made by the Commonwealth Scientific and Industrial Research Organization. I assume that the Commonwealth Scientific and Industrial Research Organization would not make a report without furnishing all the relevant facts. I ask the Prime Minister to find out whether the report furnishes an estimate of the cost to the millers and the growers due to the loss of begasse as a fuel. I ask him to ascertain the cost to the millers of completely altering the boilers in order to use’ other forms of fuel.


– I know nothing of the contents of the report to which reference has been made. I merely know that there is such a document. I said that I would obtain it and refer it to the Commonwealth Scientific and Industrial Research Organization.- If I can secure a copy of the report and it is not confidential I shall be happy to make it available to any honorable member who is interested.

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– Does the Minister for Social Services’’ know that in the office of his department in Brisbane there is’ a long list of ex-servicemen who are: waiting to purchase existing homes’ through his’ department but are unable to do so as’ s result of tha long’ delay by the department in making- the necessary- finance available?’ Is the’ Minister aware that because’ of the department’s action in this respect, many applicants are losing their opportunity of purchasing existing homes because the owners of the homes sell to the first buyer who has the necessary finance ? In view of the unfortunate and serious position in which applicants for the purchase of existing homes find themselves, will the Minister have immediate action taken to ensure that adequate money U made available for the purchase of such homes? Will he also have a speedy inspection and valuation made of the said homes by the department so that the Ions waiting list of applicants may be reduced ?

Minister for Social Services · DENISON, TASMANIA · LP

– In Brisbane, as in other cities in other States, there is some delay in connexion with war service homes, but already we have made provision for early inspections to be made of properties in Queensland that exservicemen want to purchase. There always has been delay in connexion with war service homes, but we have done and are doing everything possible to obviate it. In Queensland, in particular, we have taken all the steps that it is possible to take to obviate delay. I regret that I cannot tell the honorable member precisely what the period of delay is, but I can inform him that during the last three years a record number of war service homes has been provided in Queensland and in every other State. Apparently exservicemen are prepared to wait for war service homes, even though there is some delay, because applications are coming in at a higher rate than ever before. Something like 2,000 applications are being received each month.


– I ask the Minister for Social Services whether the inability of the War Service Homes Division for five years to obtain tenders for the erection of up to 50 houses on the Walsh Estate at Albury is due to the fact that the division’s specifications are too difficult to comply with. What new steps does the Minister intend to take in order to obtain satisfactory tenders as soon as possible ?


– The settlement of the purchase of the Walsh Estate at Albury is in the hands of the Deputy Crown Solicitor because, in the view of the War Service Homes Division, the vendors have not complied with the terms of the contract. I hesitate to comment on that matter while it is before the courts. However, the division has proceeded with the development of the estate and, up to the present, it has communicated with thirteen applicants whose priority has been reached. It has tried to interest big contractors in Sydney and Melbourne, but it has not been able to induce any of them to undertake work at Albury. I do not know definitely why local contractors are not interested in the job, but apparently they are able to find plenty of other work, which they can carry out without supervision and which enables them to make profits that the War Service Homes Division could not countenance on behalf of ex-servicemen. The division is doing everything possible to arrange for the complete development of the estate. The thirteen applicants to whom it has written will be allowed to select allotments, and it is possible that they will be able to bring pressure to bear on builders and thus arrange for a start to be made on the building of houses.

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– Will the Minister for Commerce and Agriculture, who, I understand, met the State Ministers for Agriculture last Friday, inform the House of the present position in respect of the proposed wheat stabilization scheme ?

Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– My personal view is that there is little probability of having n wheat stabilization scheme. I base that, view upon the fact that we have been completely unable to reach a basis for agreement with respect to an orderly marketing plan for wheat, which is a much simpler business than a stabilization plan and, in point of time, must come before it. The policy of this Government, announced long ago, is that, with the States, it will legislate to establish a wheat stabilization scheme, but only if that scheme has first received the approval of wheat-growers, at a ballot. The States insist that they conduct any ballot, the delay being because they cannot agree upon the question to be submitted. It .is obvious that now there is no chance whatever- of conducting a ballot and passing legislation through seven parliaments 30 that it will become operative before wheat is delivered in the new season. Wo are concentrating upon an orderly marketing plan, with the faintly remote possibility that, after the season has commenced, we shall be able to graft a stabilization scheme on to it if a ballot is taken and approval given to the stabilization proposals submitted. Last Friday, the State Ministers for Agriculture agreed to convey a uniform suggestion to their governments. The only two governments that have reported to me have rejected that suggestion. The governments of Victoria and Queensland adhere to their original idea that the local selling price of wheat for human consumption shall be the cost of production figure, and that the local selling price of wheat for stockfeed shall be the cost of production figure plus 2s. a bushel. Up to date, I understand that no other State government is willing to agree to that proposal, but I have not received official reports from them. Because the wheat-growers’ associations have not tendered uniform advice to the respective State governments, and because that condition may have arisen because they did not know all the facts, T have invited representatives of the Australian Wheat Growers Federation to meet me in Melbourne on Friday so that we can discuss the situation thoroughly.

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– My question is addressed to the Prime Minister. In view of the fact that the Commonwealth Arbitration Court, by its decision on Saturday to abandon the system of quarterly costofliving adjustments of the basic wage, has frozen the ‘basic wage for all salary and wage earners, and in view of the additional fact that the State governments have no effective system of prices control and no uniform ideas about what items contained in the “ C “ series index should be controlled, will the right honorable gentleman take immediate action to seek a constitutional change to clothe the Commonwealth Parliament with power to re-establish effective Commonwealth prices control in this country?


– No.


– I ask the Treasurer whether the Commonwealth Court of Con ciliation and Arbitration has discontinued, after 32 years, the automatic quarterly adjustments of award wages in accordance with the cost of living? Has the court, for the last twenty years, adopted as the basis of this adjustment the “ C series index published by the Commonwealth Statistician? Will the Statistician continue to publish that index each quarter for the information of State industrial courts and of citizens generally?


– In order to be able to give an adequate reply to that question, one would require to be armed with the judgment of the court and the reasons for it.


– I ask the Prime Minister whether he once appeared in the Commonwealth Arbitration Court on behalf of a trade union in which capacity he advocated shorter hours and higher wages, and that shortly afterwards he appeared before the same tribunal as counsel for the employers on whose behalf he advocated increased hours and lower wages, and that when this anomalous position was pointed out to him he re plied, “ Oh well, I won both ways “ ?


– I am delighted that the honorable member should take such a loving interest in these remote events in my past. If he is seeking to draw from them any inference which concerns the quotations that I made a few minutes ago, I remind him that it is not the practice of reputable counsel to falsify facts, nor, in my experience of trade unions - I have appeared for many of them - do they usually put their names to statements which they believe to be untrue. Therefore, I rely on their statements of what they believe to be true and as being absolutely in the teeth of what honorable members opposite professionally deny to exist.


– Does the Prime Minister agree with the views expressed by counsel for the Australian Council of Trades Unions in his submission to the Commonwealth Arbitration Court? If the right honorable gentleman and members of his Cabinet do agree with that submission, does” it indicate that he and they disagree with the judgment, of the. court which freezes the basic wage?


– As an exercise in complete want of logic, I have never heard an improvement on the honorable member’s question. The argument which was submitted to the Commonwealth Arbitration Court by counsel for the trade unions was, in part, to defeat a claim for a reduction of the basic wage. [ was under the impression, from what E have seen of the judgment, that the submission has succeeded. Therefore, the argument which was put by Mr. Eggleston was, as it so happens in respect of the major application, a successful one. Of course, every one knows that the major application before the court was for a reduction of the basic wage and an alteration of the standard hours. Therefore, this argument has, if the honorable member for the Australian Capital Territory seeks to get anything from the matter, the additional merit of having been successful, so perhaps I should be able to say that the judges of the court reinforced the submission of Mir. Eggleston. The whole point which I! was making earlier was that that statement of fact represents the view of the trade unions as expressed by themselves to the greatest industrial tribunal of Australia. Therefore, it ought to be assumed to be a truthful statement. ] personally regard it as a remarkably accurate one.


– My question is addressed to the Prime Minister, and is supplementary to .that asked by the- honorable member for Melbourne. In view of the decision of the Commonwealth Arbitration Court to peg the basic wage, does the Government propose to take any action to peg prices and profits? If the right -honorable gentleman’s answer is in the negative, will he inform me whether the Government intends to take any action to protect the worker against rising costs of living, now that the system of quarterly adjustments in his pay has been abandoned?


– This question contains a remarkable series of assumptions. Anybody would think that the main result of this proceeding in the court was that wages were being frozen. The main result of this proceeding is that the increases previously made in the ‘basic wage, and the reduc tion previously made in working hours, are confirmed. In other words, in each of those respects, the result of this case is overwhelmingly in favour of the trad, unions’ submissions. That is the first thing about it. The second thing is that there is an admission made that there is a freezing of wages. What has happened is that the automatic quarterly adjustment is no longer to be applied, and th, court will issue an order from time to time on these matters should there be some change in the cost of living. I should have thought myself, in view of all the economic circumstances now existing, that the cessation of quarterly adjustments would be more likely to operate in favour of the trade unions during the next two years than in favour of the employers.

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– Can the Ministeracting for the Minister for Health say why the Government pays chemists for dispensing prescriptions for age pensioners at a different rate from the normal rate which, I understand, is the retail price less 8-J per cent. ? Will the Government consider applying the normal rate to prescriptions being made up for age pensioners? Can the Minister also inform the House why the Government has discontinued the wastage allowance to chemists in connexion with the sulpha drugs, and will he consider discussing thi* change of conditions with chemists?


– The flat rate system ‘ in respect of prescriptions for pensioners was arrived at some time ago by mutual agreement between the Pharmaceutical Service Guild of Australia and the Government, but it was not satisfactory. Indeed, no flat rate system of dispensing has ever proved satisfactory, and the Government freely recognize.0 that fact. For that reason, at the end of last year, discussions were held with the guild with the object of formulating some other approach to the pricing, dispensing, and so on of prescriptions prepared under, the pensioners’ medical scheme. The outcome of those discussions was that a new scheme was proposed. Briefly, it meant that as many prescriptions as possible should be pre-priced by officers of the Department of Health and that the balance, which could not be pre.priced, should be priced by the chemists themselves. On the 2nd April last the guild wrote to the Government and asked if it would put this new scheme into operation as soon as possible. The request was made for the obvious reason that chemists were losing money under the flat rate scheme. On the 17th July last we wrote to the guild stating that we were prepared to put this scheme into operation and that it could operate from the 1st September. However, at that stage the chemists indicated that they were no longer in favour of it. This matter is the subject of negotiations at the present time. It is not correct to say that there is no wastage table for sulpha drugs. Sulphadiazine and another drug, known as mixed sulphonamides, sell at a high rate. From memory, sulphadiazine represents approximately lo per cent, of all tablets that are ‘dispensed, whereas the sulphonamides represent approximately 21 per cent. For that reason, the Government is of the opinion, and I think reasonably, that as these tablets have such a high velocity, they should be subject not to the wastage table that applies to tablets sold in tens and dozens, but to a. special table. Sulphadiazine has been under that special wastage table ever since last year. The Government now proposes that, as the mixed sulphonamides have reached a velocity of approximately 20 per cent., they also should come under a special wastage table, but not the one that applies to the smaller quantities of tablets. When honorable members appreciate that 65,000,000 of these sulpha tablets are dispensed annually, they will see that it is necessary for the Government to examine the position very carefully in order to avoid unnecessary expenditure of the taxpayers’ money. The Government is willing, and always has been willing, to discuss these matters at any time with the Pharmaceutical Service Guild of Australia.


– Will the Minister acting for the Minister for Health advise the House of the reason, or reasons, that prompted the Department of Health lo refuse registration as an “approved society” to the Bankers’ Health Society? Do those reasons include an unsatisfac tory financial record, and adverse reports by State auditors-general on several occasions? Is there any administrative provision that would preclude organizationswith an unfavorable background from, soliciting premiums towards a health scheme? Will the Minister make available for the scrutiny of honorable members the file relating to the Bankers’’ Health Society?


– Some time ago, theMinister for Health himself made a full and complete statement about the former Bankers’ Health Society, or the Blue Cross Health and Insurance SocietyLimited, as it is now called. That statement is available, and I shall be pleased to give honorable members an opportunity of seeing it.

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– Will the Minister for Commerce and Agriculture inform me whether any action has been taken, or is likely to be taken, to enforce the textile labelling regulations which were introduced by the Chifley Government?


– As I am sure the honorable member for Wannon is aware, the textile labelling legislation is under the administrative control of my colleague, the Minister for Trade and Customs, to whose notice I shall bring this question.

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– I ask the Minister for the Interior whether such adequate steps as may fairly be taken are being taken by the Australian Government to influence the Queensland Government to amend its decision to abandon war service land settlement? If the Queensland Government is prepared to carry on the scheme for the ensuing twelve’ months with the moneys that it has remaining from last year’s allocation for war service land settlement, plus the amount that it receives as a result of its submissions to the Loan Council, will the Government give consideration to taking over the scheme next year on the basis that Queensland be an agent State?


– The Government Iia? done everything it can in respect of asking Queensland to carry on with its original agreement and the obligations that it entered into, not only with the Australian Government, but also with the Premiers of the other States. There seems to be some confusion of thought about this matter. Some people seem to believe that it is only the Commonwealth itself that is concerned. When the States divided into principal and agent States in respect of war service land settlement the Premiers reached an agreement, and at all meetings of the Loan Council subsequently the principal States have included in their schedules amounts for war service land settlement. Although the Commonwealth has done everything it can about asking Queensland to carry -on, so far Queensland has given every indication, since its first decision on the 27th July, that it will not carry on for this year. I am only too willing to discuss the matter of future administration with the Queensland Minister for Lands at any suitable time, and I hope that greater clarity will be brought to bear on the. subject before the next financial year begins, and before, the meeting of the Loan Council, at which allocations are made for that financial year; is held. I hope that Queensland will give an early indication of its intentions rather than do as it has done on this occasion, which was, after having included amounts for war service land .settlement in the items that it submitted to the Loan Council, to announce, on the 27th July, when all financial arrangements, both State and Federal, had been made, that it did not intend’ to carry out the agreement.

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– I ask the Minister for Commerce and Agriculture whether it is a fact that high prices have brought about a substantial decline in the consumption of butter in Australia? If so, will the Minister recommend Cabinet to increase the subsidy on butter, so that the price of that essential commodity may be considerably reduced and be brought within the reach of the lower income group, particularly pensioners, both war and civil ? If he is not prepared to comply with this request, will he state what the Government proposes to do regarding the £1,000,000 remaining unexpended in respect of last year’s vote for this purpose?


– It is a fact that last year the existing selling price of butter, which was the calculated cost of production, is considered to have caused a contraction of local consumption of butter last year. At present the selling price, due to the acceptance by the Government of the report of an investigating committee established for the purpose of submitting a recommendation on the price, is at » figure rather lower than the revealed Australian average cost of production. This policy is expected to serve the long-term interests of the dairying industry by sustaining the volume of. Australian consumption of butter. Australia happens to be the only profitable bulk market in the’ world lor Australian butter, and it is a market in which all consumers enjoy, as they have enjoyed for the past twelve months, the benefit, of purchasing butter at 10¾d. per lb. less than it would otherwise be by reason of the fact that the Commonwealth Treasury is subsidizing Australian consumers to that extent. No other product consumed in this country is so heavily subsidized in the interests of consumers as are butter and cheese, and in that connexion the Government has gone as far as it is able to go.

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– Will the Treasurer inform the House whether it is a fact that only tho’se taxpayers who lodged objections to their assessments or who objected to the inclusion’ of Joint Organization wool payments in assessments at the time of lodging their returns would be entitled to receive or be credited with tax refunds if the position is as set out in the judgment of the High Court of Australia and is not disturbed on appeal? If this is so, will the Treasurer consider submitting amending legislation to overcome this obvious technical anomaly?


– It is a fact that under the income tax law as it stands, and has always stood, only those who lodge objections within the prescribed 60 d’ay3 of the receipt of assessment notices are entitled to have their objections considered. Consequently, those who had not complied with the law in that respect would not have the legal right to have their objections considered, whatever the decision of the High Court or any other court might have been. As to the Government’s attitude to those who have not objected to the inclusion of Joint Organization profits, the matter will be considered by the Government after the decision of the Privy Council is known and has been studied.

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– Has the Treasurer given any consideration to an amendment of the Commonwealth Employees’ Compensation Act, and if so will an amending bill be introduced during this sessional period ?


– The matter is obviously one of policy and will he considered by the Government in due course.

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– Will the Prime Minister state whether it is a fact that the legal representative of the Australian Council of Trades Unions, which is affiliated with the Australian Labour party, recently stated before the Full Court of the Commonwealth Arbitration Court that the inflationary pressure had virtually disappeared in Australia and that employment was rising? In view of the constant reiteration by the Leader of the Opposition of statements to the contrary, will the Prime Minister inform the House who is correct - the representative of the Australian Labour party in the Commonwealth Arbitration Court or the Leader of the Australian Labour party in this House?


– The honorable member for Bennelong referred to this matter in the House recently and I said then Hint I would give myself the pleasure of reading what had been said. It gives me very great pleasure to read a very short passage.

Mr Ward:

– Why not read all of it ?


– I shall be quite happy to do so if the honorable member for East Sydney will move for an extension of time.


– I would be prepared to do that.


– I shall read from the formal case that was put up by the unions. This is not some accidental expression of a point of view. It is a carefully considered factual document in which the unions outlined their case to the court. They stated -

The employers’ arguments have been based to a large extent on a comparison of 1950-51 with 1951-52 and with the current situation. But as already pointed out, the correct comparison is between 1949-50 and the present time. It is submitted that the capacity of the economy to sustain a high level of real wages is better than in 1949-50. Productivity has greatly increased, not only because labour and material shortages have been almost eliminated, but also because of the high rate of capital investment in recent years. Primary production is flourishing, exports have expanded and overseas funds are rising (with a current account surplus), retail trade is improving, employment is rising, available supplies are higher and the economy is better balanced. The difference between earnings and award wages is higher than in 1940-50, and profits have continued to rise despite difficult trading conditions due to overstocking and tightness of credit. Inflationary pressure havirtually disappeared. Overseas investment in Australian industry has continued at a high level.

That is the formal statement made on behalf of the trade unions in the proceedings that recently concluded in the Commonwealth Court of Conciliation and Arbitration. It is quite clear, from what, has been said by honorable members opposite, that now there is going to be n deadly quarrel between those gentlemen and the trade unions - I don’t think.

Opposition members interjecting,


-Order ! I must ask the House to come to order. A question was asked of the Prime Minister, and he is entitled to be heard in reply.


– In case it may be thought that what appeared in the formal document is to be regarded as out of date, it is true to say that leading counsel for the unions, as recently as the 8th September this year, said -

If von make a comparison between 1949-50 and the present time, in my submission you find a better condition of the economy in every respect now. Externally we are in the position of having a higher level of exports and a very little higher level of imports, some slight increase in the import price index. From the point of view of our external operation we are in a more favorable position, in my submission, than in 1949-50.

From the point of view of our internal position, we have been relieved of the embarrassments of Iiic pressure of excess demand, which plagued industry from 1940-47 until 1951-52. We have still as high a percentage in the work force, substantially as high a percentage in the work force as we had in the conditions of over-full employment in June, 1947.

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Minister for Shipping and Transport · BOOTHBY, SOUTH AUSTRALIA · LP

– I ask the VicePresident of the Executive Council, who is Minister in charge of the Royal visit, to inform honorable members about the provision that will be made at Canberra and throughout the States of Australia for Her Majesty the Queen to meet the mothers, wives and children of those-who gave their lives in defence of this country ?


– The honorable member mentioned Canberra. Arrangements have been made in Canberra for war widows and Legacy wards to take part in the proceedings at the war memorial. Indeed, in every State of the Commonwealth arrangements have been made for war widows and Legacy wards to meet Her Majesty.


– Is the VicePresident of the Executive Council acquainted with a report that the British Broadcasting Corporation does not intend to send a cameraman to Australia to cover the forthcoming Royal tour? To offset this will the Minister take action to ensure that top-line television and newsreel cameramen shall be engaged to cover the Royal tour of Australia? I point out that the Royal tour will provide us with an unparalleled opportunity, under the most advantageous circumstances, to publicize this great country and bring its attractions to the notice of millions of people overseas, including potential tourists and prospective settlers.


– I assure the honorable member that the maximum amount of coverage by photographers will be provided for the wonderful reception that will be given to Her Majesty by the people of Australia. I hope to be able to arrange for the British Broadcasting

Corporation to send television operators to Australia to ensure that adequate publicity shall be given to the Royal tour of this country.

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– Recent reports have set a high figure for the proportion of personnel employed in government services in relation to total employment, the figure cited varying between one in four and one in five. As, in some instances, the inference has been drawn that the proportion applies to Commonwealth services only, will the Minister for Labour and National Service correct that impression by indicating the approximate proportion of Commonwealth employment in relation to employment by State governments and local government authorities? Is it also a fact that ceiling limits on the number of persons employed in Commonwealth administrative services are strictly controlled and that increases of such personnel can beta ade only on special authority?

Minister for Immigration · HIGGINS, VICTORIA · LP

– It is a fact that in thi=country employment in government services, whether they be Commonwealth. State or local authority services, is higher than that in many other countries and that, frequently, the misleading impression is conveyed that employment in Commonwealth services is the total published figure. The facts, as I understand them, are that approximately one in every four persons employed in Australia, including the salary and wage earning groups, is employed in government services and that the total figure is in the neighbourhood of 678,000, but of that total only 200,600 are in the employ of the Australian Government, the remainder being employed by State and semi-governmental authorities, including 65,000 who are employed by local government authorities. The 200,600 employed by the Australian Government include those in government factories and business undertakings so that the number actually coming within the jurisdiction of the Commonwealth Public Service Board is. approximately, 150,000, which represent? approximately 4, per cent, of the estimated working population ; and of that total approximately one-half are employed in the Postmaster-General’s Department. It is a fact that a ceiling is placed upon the size of the administrative work force under this Government. The Public Service Board is keeping a close watch in order to ensure that the number employed shall not be increased unduly.


– As the Government made it very clear during the last sessional period, when it introduced a bill to amend the provisions of the Public Service Act in relation to long service leave, that all public servants, whether temporary or permanent, whose services were dispensed with after eight years of service should be granted long service leave, or pay in lieu of leave, will the Prime Minister take action to ensure that the intentions of the Government will be carried out?


– I do not know whether the honorable member is aware of any case in which he has reason to suppose-

Mr Peters:

– I know of numerous cases.


– I shall be very grateful if the honorable member will bring them to my attention. I shall certainly have them investigated.

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– Will the Posmaster-

General have an examination made of the microphones in this chamber in order to ascertain whether they are oversensitive in picking up interruptions in the course of debates in this House? My question arises from the fact that, during the week-end, when I visited Western Australia, numerous complaints were made to me by listeners to the broadcast of proceedings when the Treasurer was making his budget speech that there were continual interruptions. It was said to me that there was a continuous fire of interruptions, whilst some mentioned that the honorable member for Melbourne, in particular, continuously interrupted the Treasurer. In addition to examining the sensitivity of the microphones, will the Minister ascertain whether it is technically possible to eliminate these most undesirable and unsatisfactory interruptions ?


– I have similarly received quite a number of complaints from the listening public that the Treasurer’s budget speech appeared to be continually interrupted. There is not much that the technical officers of my department can do about the matter, for reasons which I shall state. As honorable members know, approximately 24 microphones are distributed round this chamber, each within a few feet of a group of honorable members. When an honorable member is addressing the chamber the sensitivity of all the microphones, except that closest to him and those at the table, is reduced. The honorable member for Melbourne, who, as Deputy Leader of the Opposition, has the privilege of sitting at the table, indulges in the somewhat playful habit, I believe, of speaking in a low voice within a few inches of a table microphone.

Mr Calwell:

– I do not do so. The Minister’s statement is designedly offensive to me, Mr. Speaker, and I ask that it be withdrawn. The Prime Minister offends in that respect much more often than I do.

Honorable members interjecting,


– Order ! Whenthe House is prepared to listen, we shall proceed. We have all the rest of the dayin front of us. The honorable member for Melbourne has asked that a certain statement made about him by the PostmasterGeneral be withdrawn. I ask the PostmasterGeneral to withdraw it.


– I shall withdraw the word “ playful “.

Mr Calwell:

– I rise to order. I ask that the Minister be not allowed to add’ offence to injury. In response to your request for a withdrawal of the statement, Mr. Speaker, the Minister hasmade a partial and insulting withdrawal. I ask for a complete withdrawal of the offensive words.


– I rise to order. Is it within the power of theChair to ask a Minister to withdrawa statement of fart at the request ofa member of the Opposition ?


– Order !

Mr Calwell:

– That is not a point of order but a point of disorder.


– Order ! The honorable member for Melbourne is now doing the very thing of which the Minister has complained. A standing order prescribes that when Mr. Speaker is on his feet he shall be heard in silence. The honorable member for Melbourne is breaching that standing order. As I have understood the custom of the House during the nineteen years in which I have been here, when an honorable member takes exception to a statement made by another honorable member on the ground that it is personally offensive to him, it is the practice to ask that the statement be withdrawn. So far the House has not vested the Speaker with power to decide whether or not certain words are offensive. The test is in the mind of the honorable member concerned. That is a matter in respect of which the House may well make a decision.


– What about the withdrawal ?


– Order !

Mr Beale:

– I rise to order. You have- said, Mr. Speaker, that the House has not vested power in you to decide whether or not certain words are offensive. May I refresh your recollection of this matter. Last year, after the point had been raised bv me in the House on several occasions, if I remember correctly, it was suggested that you should consider the matter. Some time later, you gave a ruling the purport of which I understood was that, henceforth, you would decide whether a statement which was alleged to be offensive was, in your opinion, offensive. I submit that by your ruling on that occasion you took to yourself, with the approval o.f the House, power to decide whether or not a statement is offensive.


– If that is the wish of the House in this instance, I shall have to decide that the statement complained of is not offensive. Complaints of this description come to me in my correspondence too often. Some have come to me in the last two or three days in. respect of the very debate about which the honorable member for Moore has complained. So, as I have said before from this chair, the remedy lies not in examining the microphones but in examining honorable members themselves. Honorable members who have complained on this occasion could perhaps adopt that remedy and themselves cease to give similar offence.


– I should like to put a further question to you on’ this matter, Mr. Speaker. Will you take whatever action is in your power to ensure that the Prime Minister and certain other Ministers do not offend to-night when the Leader of the Opposition is speaking as they have persistently and continually done in the past. They are the worst offenders of the lot.


– I cannot take any such action because to-night, as on last Wednesday night, I shall not be in the chamber as the proceedings will be in committee.

Mr Calwell:

– You could still take some action.


– The affairs of the chamber will be under the control of the Chairman of Committees sitting in charge of the Committee of Supply. Every honorable- member who has been here for any length of time will realize that if Mr. Speaker were to take an interest in the affairs of that committee, he would very soon he told that it was none of his business.

Mr Thompson:

– I rise to order. Is it not a fact, Mr. Speaker, that the broadcast from this place is supposed to be * broadcast of the entire proceedings of the House, and not merely of the speeches of individual members. The intention, as I understand it, is to convey to the listening public exactly what is happening in this chamber.


– Parliamentary proceedings are supposed to be conducted on the principle that only one person has the right to address the House at a time. The Standing Orders clearly show that all interjections are out of order. May’s Parliamentary Practice also clearly shows that a lot of the remarks that are made by honorable members across the chamber are not protected by parliamentary privilege. They are not part of the parliamentary proceedings and consequently they should not be broadcast.


– As your correspondence shows that the mouthing of words into the microphone is regarded as offensive behaviour and cause for complaint, how can you rule that a charge by one member against another of such behaviour is not offensive?


– I am not here to enter into a dissertation on these matters. 1” have given a ruling. The House has the right to reject it if it so desires.

Mr Morgan:

– I rise to order, ls it not true, Mr. Speaker, that this entire discussion is out of order as it involves a reflection on the Chair?


– I think perhaps the discussion is just as much out of order as much as the talk complained of.

M>. Osborne. - I wish to ask a question on the same subject.


– The honorable member may only speak to the point of order.

Opposition members interjecting,


– Order ! I call the honorable member for Hunter to order.


– I ask you, Mr. Speaker, whether you will take cognizance of the fact that complaints that honorable members are receiving about the conduct of the House when proceedings were being broadcast last Wednesday night indicate quite clearly that interruptions while the Treasurer was speaking were not very apparent to honorable members of this chamber. The proceedings of the chamber appeared to be very much the same as usual, and it is quite apparent that unusual use was being made of one of the microphones to cause a grave interruption to the broadcast. Will you take that into account when you are considering the matter?


– Order! I do not propose to consider the matter at all, because what happened took place in committee, and the proper place to decide whatever is wrong is in the. committee to-night.


– I shall now resume my answer to the question asked by the honorable member for Moore. I withdraw anything that the honorable member for Melbourne may consider offensive to him, and say that an unnamed member” of the House spoke within a few inches of a microphone, so that hig action was not discerned by the Chairman of Committees, but the effect of it over the air was that words were being spoken in a- loud and interrupting voice. Many listeners have complained about the happening. It is not within the province of officers of my department or myself to rectify this position. The remedy lies in the hands of the House itself, or, more particularly, the Standing Orders Committee, Mr. Speaker, and the Chairman of Committees.

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– Is the Prime Minister aware that on the 26th September next, a meeting is to take place in Sydney under the title of “ The Australian Convention on Peace and War “ ? Is the Government aware that this convention bears a strong resemblance to other so-called peace conferences which have been held in various parts of the world, including Peking? Is it not a fact that the convention in Sydney may develop into one of the biggest Communist rallies yet seen in this country !


– The question asked by the honorable member for Mitchell deserves an answer of some precision and, therefore, I propose, as I have had some investigations made, to ask for leave after question time to-morrow to make a short, statement about the matter.

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– Will the Minister for Social Services inform the House whether workers who are unable to work due to sickness at the time of attaining the age at which they are eligible for age pensions are still eligible to receive sickness benefits?


– The answer to the honorable member’s question is .” Yes provided that their employers indicate that their job3 will be kept open for them.

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– I ask the Minister for Labour and National Service ta inform the House whether it is a fact thai the Government has decided that the troops who were recently employed on the waterfront at Bowen shall not be paid in accordance with the rates specified in the waterside workers’ award? In view of the Government’s great love of arbitration and compliance with awards, does not the Minister believe that it would be completely unjust to expect men who work in an industry covered by an award not to be paid award rates for their labour ?


– This matter has already been given some consideration. There have been precedents, as the honorable member is probably aware, of the present attitude in the course of action chat was adopted by a previous government, of which he was a supporter. I understand that in the past the practice has been to charge the stevedoring or shipping company concerned rhe rate that would have been charged had waterside federation labour been employed, and subsequently to decide on action that should be taken in relation to the service personnel. On a previous occasion the normal rate of service pay was maintained, and, as the honorable member is aware, troops are provided with food, accommodation, and other items that are not provided to members of the Waterside Workers Federation. An Amount equal to the difference between service pay and award rates was contributed to the services welfare fund. However, the Minister for the Army and I are looking into this matter and we shall probably make a recommendation to the Cabinet in the near future.

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– Has the Treasurer, or his delegate, received a subpoena to produce before a Sydney court papers that relate to an application by the publishers of the Sun newspaper under the capital issues regulations? Has counsel been briefed on behalf of the right honorable gentleman to object to the production of those papers? If so, what are the reason for the right honorable gentleman’s objection, and, in any event, will he table the papers in this House?


– I do not know much about the law, but I imagine that the matter is sub judice.

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– Is it a fact that the Minister for Commerce and Agriculture recently protested against the 7½ per cent. increase of overseas shipping freight charges on the ground that such an increase was not justified? If so, is the honorable gentleman aware that the Minister for Shipping, in correspondence with me, has confirmed the fact that the Australian Shipping Board reported that the last increase of Australian coastal freight rates was not justified but that the Government line had increased its charges as the private shipping cartel had done as a result of a direction given by the Minister for Shipping? Since that is a fact, I ask the Minister for Commerce and Agriculture whether he will use the same vigour in protesting in Cabinet against the action of his colleague as apparently he was prepared to use in protesting against the action of the overseas shi pping interests ?

Mr.McEWEN.- The honorable member. 1 think, is somewhat confused. My remarks referred to overseas freight rates, and I stand by what I said. The honorable member’s comments refer to coastal freight rates. He cannot relate that subject to my statement, no matter how hard he tries.

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

That Mr. Bryson be appointed a member of the Joint Committee on the Broadcasting of Parliamentary Proceedings, in the place of the Honorable J. S. Rosevear, deceased.

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Debate resumed from the 5th September, 1952(vide page 1053, volume No. 218), on motion by Mr. Casey -

That the following paper be printed: -

Anzus Council - First meeting, Honolulu. 4th to6th August, 1952 - Ministerial statement.


.- This item has now been on the notice-paper for about twelve months. You will recollect, Mr. Speaker, that when the Minister for External Affairs (Mr. Casey) asked for leave to have the paper incorporated in Hansard without being read you drew attention to the danger of such a course. It was an important statement on foreign affairs- and you considered that no matter how urgent other matters might have been some little time should have been utilized in reading this statement in the House. However, it was decided that the report on the first Anzus meeting which was held at Honolulu on the 4th, 5th and 6th of August, 1952, should not be read, but that it should be incorporated in Ilansard. That was a dangerous course to adopt. Although twelve months have passed since the statement was presented to the House, it is probable that not many members have read it. It is regrettable that the statement was not read by the Minister to the House even though the estimates were then about to be dealt with.

Not very much has been done to conciliate the conflicting forces among the democracies of the world in relation to the Anzus pact. This pact was a sop which was given to Australia because the Japanese Peace Treaty . was being forced upon this country with too much expedition. At the time that Mr. John Foster. Dulles visited this country the honorable member for East Sydney (Mr. Ward), the Leader of the Opposition (Dr. Evatt) and the honorable member for Fremantle (Mr. Beazley) and other Opposition members drew attention to the fact that the long-awaited treaty of peace with the Japanese should have been discussed in a better atmosphere and with more leisure. Instead, it was parcelled up and handed to us, signed, sealed and delivered, and the Government ensured that it was voted through this Parliament. Because of general unhappiness about the matter on the part of the Opposition, it was decided to have some collateral which took the form of the Anzus pact. We know that this is not a solemn treaty between the countries concerned to go to each other’s defence if any of them are assailed; it is but a loosely arranged conglomeration of words. However, it does have u security objective of which the Opposition approves, whilst emphasizing that we should have had much more time to consider the Japanese Peace Treaty in justice to this country and what *t had endured.

The Opposition accepted the proposition in the pr.ct as a half a loaf which was better than no bread. But in relation to this problem the average man, whom the Labour party represents, is worried about the position of the United Kingdom. This pact has been signed only by the United States of America, New Zealand- and Australia, and the man in the street is seeking to know why the United Kingdom has been excluded; All the sophistry and mannered answers that have been supplied to questions in this House have not clarified his view on the’ matter but have confused it. The man in the street, who manned the defence line in the Pacific, asks why the United Kingdom, with possessions in Malaya and elsewhere in the Pacific, should be excluded from a pact which has as its object the preservation of peace in the Pacific. Are high politics involved in the matter? If they are, the man in the street would like to know that that is so. Are there difficulties of organization and would the pact become too diffuse if extended to the United Kingdom? If so, the man in the street would like to know that that is the case. The United States of America has refused resolutely to consider the viewpoint of the United Kingdom in relation to this pact. The leader of the conservative forces in the United Kingdom dealt with this matter in the course of a successful election campaign and has since referred to the irritation felt by the United Kingdom at having been excluded from the pact.

Nobody would suggest that the United States of America has any ulterior motive in this matter. But this pact can only be a. poor thing if it is not signed on behalf of all those people who desire to protect the democratic way’ of life in the Pacific. The argument has been advanced that, because of certain interests, only the United States of America, Australia and New Zealand should be associated in this pact and that the United Kingdom and France, which have possessions of vast importance in the Pacific, should be excluded. If this pact is designed to assure an amelioration of the trouble in the Pacific, it is more important that it should include the United Kingdom than that it should .include ‘any other nation. Malaya and Indonesia are geographical points of irritation where a blaze may occur at any moment. I can understand that difficulties would arise if the inclusion in the pact of Indonesia and perhaps of the Philippines were raised. But would their inclusion present an insoluble problem? Was the Minister frank with us in his statement? In justice to him, I admit that it was a preliminary report on the position, but let me refer the House to some evasive remarks that he made about the vexed question of the participation or otherwise of Great Britain in the Anzus pact. It is fairly clear now, from recent statements, that Great Britain will not be permitted to join the pact, but speaking on that matter twelve months ago the Minister said -

Here we were in something of a dilemma. We all had in mind the intimate and special relationship .between Australia and New Zealand and other members of the British Commonwealth, particularly the United Kingdom. It was obvious to all of us that in view of this special relationship, which assumes tangible form in the present close cooperation among Commonwealth countries in Korea and Malaya and in military planning generally, the United Kingdom in particular must be kept in close touch with council matters.

Great Britain, with other democracies, has been engaged in the struggle in Korea. On its own, it has been involved in Malaya in the suppression of terrorism on a vast scale, almost to the point of total war. Its battle has been against the Communists. In those circumstances, what would be the difference between advising Great Britain of what the three parties to the Anzus pact had decided to do and making it an active party to the pact? How can we isolate the virus of communism by keeping ourselves in a separate compartment?

I have no particular detestation of the Anzus pact. My view, as a private member, is that it is not wide enough. If it is to be of any value at all, it must embrace the United Kingdom and France and, later other countries. Various opinions of the pact have been expressed by honorable members on the other side of the House, and doubtless various opinions will be expressed by honorable members on this side; but if we agree that pacts should not be things without teeth, not merely documents to be.

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R.- 1.7.1

discussed by the United Nations -or by authorities affiliated with it, we should agree also that there must be some realism about the Anzus pact. At present, it is, as I see it, a planning committee, ‘with military matters as side issues. If it were presented to us as one of the important measures for the protection of the Pacific in the future, we should at once have to discuss why the things to which I have referred had happened and to consider whether the difficulties that had arisen could be overcome. The Minister, who is now abroad attending deliberations on this matter, undoubtedly will have something to say about it when he returns to this country.

Recent press statements have indicated that still there is not the slightest possibility of Great Britain being invited to join the Anzus pact, but the British Conservative Government, British newspapers and other mediums of propaganda and information are still insisting that Great Britain should be included. They want to know why it has been excluded. They want to be told of the major difficulties that prevent Great Britain’s inclusion in the pact. The British think there could be an Anzam pact. I hope the. House will pardon the conglomeration of initials, but titles of that kind have become common since the United Nations began labelling everything with initials. The British proposal means that to the Anzus pact should be added the problem of Malaya. From an Australian viewpoint, is it not vital that that problem should be treated in that way ? Our troops were engaged in Malaya during the last war. Many . of them were taken prisoner there, and endured serious sufferings and injuries. During the last few years, we have sent air force units to Malaya to help to suppress terrorism there. The fact that Australia, a member of the Anzus pact, is associated with the activities of the Mother Country in Malaya suggests strongly that the pact should be widened.

For the life of me, I cannot see why it should not be so widened. Nor can the man in the street. I mention him again because it is upon him that the burden qf the future defence of this country will fall. He ought to be informed fully of the reasons for what is happening. But, unfortunately for us, although we are suffering from too much propaganda and publicity, we are kept in heathen darkness about matters that are really vital and urgent. We do not know the true inwardness of the Anzus pact or the reasons for Great Britain’s exclusion from it. Airyfairy statements have been made by foreign affairs committees and Ministers to the effect that, with more than three members, the pact would not be workable. But we had a chain of allies during the last war, and we were proud to have them. The United Nations, which consists of 52 or 53 nations, does not suffer from any disability due to its size. The United Nations organization is a vast plan for the preservation of world peace. Why, therefore, cannot there be an extension of this somewhat limited plan for the preservation of peace in the Pacific?

As the Minister for External Affairs made his statement twelve months ago, I felt that I should make some general remarks on this matter. The Anzus pact was born in trouble. The disabilities from which it suffered “at birth are still with it, after two years of operation. It appears that it is not functioning to the fullest extent possible, because the area of its activities has been purposely limited. The report presented by the Minister did not give us any fresh information about this most vital problem, but, as I have already said, it was a preliminary report. When the right honorable gentleman returns, we shall look forward to receiving more information from him, because the Anzus pact represents the hard core of the causes of irritation between the United States of America and the United Kingdom, the two greatest democracies in the world to-day. Although it may be argued that, as a temporary expedient, the pact must be kept within narrow limits, I think we shall have to throw it open. Is there a fear that, owing to Great Britain’s interests in other more vulnerable areas, our vulnerability would be increased if Great Britain were included in the pact? Is it correct to say that, for that reason, the United States of America will not agree to take the risk of extending the pact? If that is the argument, let us hear something about it.

If we can have a patchwork arrangement for Pacific peace under which three strong white units in the Pacific decide, subject to certain conditions, to protect each other, why cannot we extend the arrangement to cover the rest of the Pacific, which is the seed bed in which communism will sprout and the area in which a blaze may occur any day? It seems to me to be completely stupid to say that although we have an efficient bush fire corps, we shall keep strictly to the green timber and that any grass fire in the immediate foreground will not be our business. Surely the Anzus pact must be extended in time. We do not want a pact to which only white nations are parties. We must consider the position of Indonesia. That country is in the throes of difficulties, but I hope it will be able to resist the inroads of communism, from which all young countries in the Pacific suffer. Indonesia must have some feeling of security and some protection. Surely the Anzus pact will be extended later to a Pacific pact of a wider and more general nature. Similar remarks apply to Malaya. We know how Communists infiltrate that country by sampan and junk. We know that the people who have caused the trouble there are the native-born Chinese and the Communists from outside who entered the country after the war . to form the spearhead of resistance to the British. The problems of Burma, Indonesia and the Pacific generally are all tied up with this pact. It is footling to speak about keeping ourselves in a little compact, exclusive club which has for its agenda keeping our own house in order and taking no cognizance of the houses of our neighbours. This matter is almost a non-party one. I know from my discussions with honorable members on the other side of the House that there is a diversion of opinion about it among Government supporters. Articles which have been appearing the New Statesman and Nation and other British publications cannot be read without the reader concluding that the British have a case in this matter. On the other hand, it is not possible to be entirely unmoved by the protestations of the Americans that the time is not yet ripe to widen the membership. All of these matters may be cogent and important, but in the final analysis it is obvious that this paper provides the House with too little too late for a full dress debate of the subject. However, it has its importance!

I trust that at the earliest opportunity the difficulties in relation to the Anzus pact will be made known to the House frankly and without fear that they will be misunderstood. The nation would liketo know what its commitments are. It wishes to know why Great Britain has not been admitted to membership, and why a link which has always existed between Great Britain and Australia has suddenly been broken. Those questions heighten the conviction, which is growing in the minds of the Australian people, that we rushed into a peace treaty before we properly appreciated our commitments and that in becoming a member of the Anzus pact we undertook something that would not lead to a full development of Australian aspirations.


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

Dr. DONALD CAMERON (Oxley) [3.53 1 . - I was very pleased to hear the honorable member for Parkes (Mr. Haylen) say that this matter should not be approached in a party spirit. Of course, that is so. Very few matters’ which concern foreign policy should be approached in such a spirit. The best way in which we can approach the Anzus pact is to regard it as a beginning. It is understandable, of course, that people should express objection to the noninclusion of the United Kingdom in the pact. All of us in this country feel the closest and most intimate ties with the British people and we like to think that the United Kingdom Government will be associated with us in any commitments we may have. But, of course, that is not the whole point of a question such as this. After, all, we are living in a very different age from that of even a few years ago, when practically everything we did in the realm of external affairs was managed for us by the United Kingdom, or else we followed completely in British footsteps. The world to-day is a much more complex place than it was then. I am sure that all honorable members of this House will agree that we must carry on our own shoulders responsibility to take unaided steps in matters which affect external policy. We must be free to interpret our actions in the light of our interests, and we must have discretion and freedom to prosecute those interests in this part of the world in the manner that we consider best.

It seems to me that our objective is not so much to find cause for dissatisfaction with this pact as to find grounds on which we can make it fit in with other ideas which we may have. Surely, the task for this Parliament regarding affairs in the Pacific is to obtain the best possible settlement of outstanding issues. The last thing we should do is to introduce a note discordant with the policies of our allies, the United States of America and the United Kingdom. This pact in no way threatens our links with Britain. We should fix that point firmly in our minds. The pact contains no possible or conceivable threat to those links.

Do not let us leap to the conclusion that in forming an alliance with America and New Zealand our objective has been to settle all kinds of questions in the Pacific. The primary purposes of the pact is to safeguard the interests of the three countries concerned. Honorable members may recall that the following statement was made by the Minister for External Affairs (Mr. Casey) in his statement to the House last year : -

We felt that the first task was to concentrate on making the treaty work, with its original limited membership.

The fact that in peace-time we should have an alliance of such enormous value to us with the United States of America is a very great step forward, not only in the history of Australia but also in that of America. The Minister’s statement continued -

After all, the United States of America, Australia and New Zealand do not claim any exclusive responsibility for settling the affair* of the Pacific.

Surely, that statement provides the key to an understanding of this whole matter. It is a pact with limited objectives. It has not been designed with the object of establishing an organization to settle all the troubles of the Pacific. The United Nations organization exists for that purpose. It has been, and still is, conducting operations on a large- scale in Korea which are directed’ towards that end. The- suggestion: has been made- that the peace conference- in Korea should be expanded info an attempt to settle other Pacific differences. There is nothing in this pact to conflict with the principles of the United Nations, which has clearly recognized that regional pacts should be arranged by states and nations apart from the organization of the United Nations body itself. On. the other side of the world, Nato is a good example in this regard.

It is wrong for lis to under-estimate the difficulties which will confront us if we attempt to broaden the basis of this pact or to include other states in it too quickly. If we expand it at a rapid rate, it is inevitable that the body will have to deal with other problems in the Pacific. It does not appear to be right that the members of this alliance should consider that, by adding one or two members, they can deal with the complicated problems of the Pacific, such as that of IndoChina. As everbody knows, the IndoOhina affair has wide and spreading consequences, but I submit that it is not a matter susceptible of jurisdiction under, or settlement through, the Anzus pact. If the Anzus council is to be regarded as an instrument that should be continually adding to itself by admitting other .States, to the alliance, a situation would quickly arise in which we should have to deal with all sorts of problems that would be, in the first instance, outside the sphere for which this tripartite alliance was established. Is this alliance to concern itself with the relations of the United States of America with the Government of the Republic of the Philippines? Surely the answer is, “ No “. Is it to concern itself with Australian relations with New Guinea, or with problems in Indonesia? Again the answer must surely be “No”. Other mechanisms exist for dealing with those matters. It is easy to see from these examples that, although we may feel slightly confused or uncertain about the fact that Britain has not been included, in the membership of the Anzus Council, if we were to add nation after nation to this alliance we should soon find ourselves in deep water. A position would develop in- which we- should find i-t hard to draw the borderline between matter in which direct diplomacy should be- used, matters concerning which the United Nations writ should run, and others in which the Anzus pact itself should apply. No member of the party to which I belong disagrees with the basic conception that the Anzus pact is of enormous advantage to this country and will do a great deal to cement our ties with the United States of America. I wish to make it clear to the House that, in the last resort, the defence of this country must rest on a close understanding- and alliance with the United States of America.

Whilst the Minister, in his statement, has not excluded the possibility that in time to come other countries may be added to the alliance, he has made if clear that the first task is to make the alliance work with the three countries which are now parties to it; to ensure that the interests of those three countries are properly served,, insofar as they can be served, by this alliance; and that as time goes on the alliance may be reconciled with the desires, interests and opinions of other countries in, and concerned with, the Pacific area. Whilst I am sure that, fundamentally, every honorable member believes that the Anzus Pact is good, and whilst there may be some reservations about the limitation of its present membership, I am also sure that we all agree that nothing could be worse than haste or ill-considered action in enlarging that membership and that at present, at any rate, we are justified in feeling that we have made a great step forward in the Pacific by becoming members of this alliance. Whatever reservations we may have about the pact we can look forward to the future of the Anzus alliance, and our relations with other countries in the Pacific, with the utmost confidence as a result of it. The greatest service that this Parliament can do in relation to the Anzus Pact is not to emphasize possible difficulties and differences that may arise from it, but to realize that these can, in course of time, be overcome. We should also congratulate ourselves on the fortunate position in which we find ourselves, as partners in an important alliance with the most powerful nation in the world’ - the nation upon which our very existence in. the Pacific area may depend. That fact compels us to keep on terms of the closest mutual understanding with that nation, and to attempt, to co-ordinate our policies with it so that we can be in a position to offer to it, and receive from it, any necessary advice, and so develop this alliance into whatever form we may wish it to take in. the future. We do this with our sister dominion New Zealand. Any reservations we may have about the alliance are not matters of consequence. In substance and general effect nothing but the utmost good can accrue to this country from, its membership of the Anzus Council.


– I have a great deal of sympathetic concern for Great Britain in connexion with its exclusion from the Anzus pact, but I must not let sympathy control my attitude towards the’ pact. The most important, consideration is the defence of this country, and it isi to that, aspect that I intend to direct my remarks.. I know that in the past Great. Britain has helped us a great deal, especially during what may be termed the “infancy” of our development. Modern means of transport, however, and the uses to which an aggressor can. put them, have made Great Britain too far away to he able to render this country the same effective protection, in the event of attack;, as it did in the past. Fully fifteen years ago I said in this chamber that if ever Australia wanted, a friend in the Pacific, it would find that the United States of America would bo it* friend. On that occasion the ]louse was discussing shipping and the withdrawal of American shipping from Australia. At that time I believed, as I believe to-day even more strongly, that friendship with America is essential to us. Australia has always sent its troops to fight in Great Britain’s wars. Many wars in which Australian troops have taken part started without Australia having had any voice in the decision to fight. The late right honorable member for Bradfield, Mr. Hughes, took exception, when he was Prime Minister, to Great Britain’s entering wars without first having consulted the Dominions and colonies. The Dominions have been consulted to a degree on such matters ever since he made that, protest. I’ take my hat off to the late right honorable gentleman for his stand in that connexion. When Japan struck in the Pacific the late Mr. John Curtin appealed, as Prime Minister, to Mr. Churchill, the British Prime Minister, for the return of Australian troops from the Middle East. The reply from Mr; Churchill, made by wireless telephone, was reported accurately to a secret session of this Parliament. Secrecy need no- longer prevail in that matter. The Parliament was told that Mr. Churchill’s reply was that Great Britain had not enough ships to feed Great Britain, and to allow ships to transport Australian troops back would be impossible, because it would mean that Great Britain would starve-. Mr. Curtin’s reply was that, as the first citizen of Great Britain, Mr. Churchill was charged with the defence of that country,, but as the first citizen of Australia, he, Mr. Curtin, was charged with the defence of Australia. He told Mr. Churchill that if he could not rely on help from. Great Britain he would seek it elsewhere. Mr. Churchill asked, “ Where will you go ? “ and Mr. Curtin replied, “ I will go to America “. I say,, with all reverence: Thank God there was a John Curtin and a Franklin Delano Roosevelt to answer the call, that Mr. Curtin made. We can thank God also that the United States of American definitely saved this country from, invasion. It not only brought our troops back from the Middle East but ifr also sent its navy, army and air force to this country. I admit that the Americans used Australia as a bastion of defence for America itself, but in the process of doing so they saved Australia from invasion. I wish to refer particularly to the Coral Sea Battle, which was fought less than 100 miles’ off the coast of Queensland. The anti-Labour Government that preceded the Curtin Government proposed at one period, I am informed, to abandon the northern part of Australia, in the event of a Japanese invasion, above a line running- from Brisbane to Geraldton.. That was known as the “ Brisbane line “ policy. The United States of America came to our assistance in World War II. when Great Britain could not do so. All honorable members have a natural regard for Great Britain. Both my parents came from those islands and I have great respect for that land, but I have a far greater love and respect for Australia. Three countries - the United States of America, New Zealand and Australia - are signatories to the Anzus pact and I believe that it should not be extended to include other countries. If Great Britain were admitted to the pact, other nations would seek admittance also, and it might be difficult to refuse them. Many years ago in this House, Mr. Maurice Blackburn, who was then the honorable member for Burke, advocated a Pacific pact to include Australia and other friendly nations close to us. “We have the equivalent of that arrangement in the Anzus pact, and I believe that it should be maintained on its present basis. If one of the signatories objected to the admission of Great Britain to the pact, its inclusion in such circumstances might, well mean the end of the pact.

During World War II., Great Britain admitted that we could not expect its help. We were helpless. Our troops were overseas. Many of our young airmen were in training and large numbers took a gallant part in the Battle of Britain. What would happen if Great Britain were admitted to the pact and could not help us in another emergency? Our standing with the other signatories would be adversely affected. We have always done our best to help Great Britain in return for the assistance that was given to us in our infancy as a nation. Now we have reached nationhood and we have valuable resources to defend. The best basis for that defence is to get as many British people here as possible. We would welcome great numbers of immigrants of European descent also because Australia could support 100,000,000 people instead of its present population of 8,250,000. But circumstances have changed since the early days of Australian settlement.

One of the most tragic casualties of World War II. was the late Mr. John Curtin. When Sir Winston Churchill informed him that Great Britain had no ships to spare to escort our troops back to Australia, Mr. Curtin accepted the responsibility of bringing them home.

During the six weeks that our men were on the water on their way to Australia; Mr. Curtin hardly slept without a sedative. He suffered greatly. If one of those ships had been sunk with the loss of Australian lives, he would have been accused of murdering the sons of Australian mothers and fathers. He took the risk and he never recovered from the great strain of those days. He was a war casualty and so also was President Franklin D. Roosevelt.

Long ago, the United States of America occupied a position similar to Australia’s position to-day in relation to Great. Britain. Why Britain lost the American colonies is now a matter of history. They were exploited and were not encouraged to develop their industries, but Great Britain has allowed Australia to develop and has helped it to do so. I do not want Australia to forget our strong relationship with Great Britain, but I stand for _ Australia first because I love’ this country. .It is the country of my birth and my parents’ adoption and I will do nothing, for my part, to retard the smooth working of the Anzus pact. We should leave it as it is. I believe that in the United States of America we have a great friend able to comfort and succour us in time of need.


.- The honorable member for Parkes (Mr. Haylen) stated that ‘he did not approach the subject of the Anzus pact in a political party spirit.- I have been greatly heartened by the progress of the- debate because that was undoubtedly the guiding principle in his speech and it has been followed by the two speakers who succeeded him. I believe that it is of the first importance that honorable members of this Parliament and Australians generally should endeavour to cultivate that attitude of mind towards the nation’s external problems. This is a subject upon which it would be easy to develop party issues and attempt to profit from them. The fact that the honorable member for Parkes and the honorable member for Hunter (Mr. James) have carefully eschewed that temptation put3 an obligation upon me to do no less. I assure the House that I and, I believe, my colleagues will meet honorable members opposite more than’ half way in examining this problem free from the heat of party conflict. This pact emerged from the negotiations that took place in connexion with the Japanese peace treaty. It is well known that Australia and New Zealand had the gravest doubts about some of the terms of that treaty, and the fact that the enemy which had threatened us in the Pacific during the last war was to have its capacity to arm restored to it. ‘Consequently, the lini ted States of America accepted our request for a mutual defence agreement lo include three Pacific nations, the United States of America, New Zealand hnd Australia.

The Anzus pact means a great deal to Australia, and represents a wide departure l rom past American policy. For the first time in its history, the United States of America has assumed a legal obligation to defend other nations in the Pacific. We all know that it has been a cardinal point of past American policy to avoid entering into obligations to nations outside its own immediate political sphere, and, therefore, this pact represents a great advance in American thought. America has now shown that it is prepared to assume a binding legal obligation to take part in the defence of Australia and New Zealand in the event of a future war. We shall have the benefit of additional security through this American undertaking, because American planning for defence in a future war will also include this country and New Zealand within its defence area. Moreover, the Anna pact will ensure continuous discussion between service chiefs, and that will bring us within the service intelligence area of America and will greatly strengthen our capacity to defend ourselves.

We all regret that a controversy has arisen because the United Kingdom is not a party to the pact. I was greatly interested in the remarks on this matter made by the honorable member for Hunter, and I substantially agree with him. There is no stronger friend of the United Kingdom and no more ardent supporter of the British Commonwealth than the honorable member for Hunter, and it was very interesting to hear that he has accepted the necessity for restricting the pact, for the present time, to the United States of America, New Zealand, and Australia. As this matter has received so much attention - far more elsewhere than here - it is only fair to point out some of the incidents which led to the present membership of the pact. When a pact was first envisaged in this Parliament by Sir Percy Spender, who was then Minister for External Affairs, a clear invitation was given to Great Britain to associate itself with other nations interested . in a pact. The British government of the time was not particularly concerned about the Pacific and this pact, and took no action about the invitation. Therefore, the fact that Great Britain took no initial part in the Anzus pact is its own responsibility. Now, if the pact is to be widened, it must be greatly widened. Nobody can deny Great Britain’s enormous past influence in the Pacific, nor, indeed, its continuing interest. Moreover, we must remember Great Britain’s Pacific campaigns of the last war, its campaign that has been carried on in Malaya for years past, and its interests in Hong Kong and elsewhere in the Pacific. However, if the scope of the pact were enlarged, it would not be practicable to admit the United Kingdom alone ; it would be necessary to bring in other powers, and consequently the character of the agreement would be wholly changed. Instead of being a small, tight defensive pact, it would become a regional council concerning the whole Pacific. That is not the present intention of the pact. It may well be that in the future a pact embracing the whole Pacific, and subscribed to by all the powers in the Pacific, will become advisable and necessary, and will be established, but it is not the intention that the Anzus pact should be of such a nature. It would not be possible to enlarge the scope of the pact without destroying its effectiveness, and it would not be practicable to admit Great Britain without admitting a large number of other powers.

The United Kingdom is kept fully informed of the decisions and affairs of the Anzus powers, and, therefore, I hope that it will not be necessary to continue the controversy for much longer. Honorable members on this side of the House, no less than honorable gentlemen opposite, have no desire to be responsible for a state of affairs which could create dissension in the British Commonwealth, particularly between the United Kingdom and Australia, or which could weaken the strength and unanimity- of the British Commonwealth. For that reason the sooner that this matter is forgotten the better. The fact is that it is not practicable to admit another member to the Anzus pact without totally changing its character and turning it into something which it was never intended to ,De. and which we do not desire it to be. For those reasons I hope that the unfortunate feeling that has been engendered during the past few months will subside. The honorable member for Hunter has pointed out, and I agree with him, that it is quite possible for us Australians to remain loyal members of the British Commonwealth of Nations and devoted servants of the Crown, and yet still to acknowledge our gratitude to the United States of America for its assistance during the last war and our relative dependence on its strength in the Pacific. In conclusion, may I again say that this pact will greatly increase Australia’s security in the Pacific, and that we shall all sleep more soundly in our beds at night in the knowledge that in any future conflict in the Pacific we shall be supported by the forces of the United States of America.


.- I do not wish to touch at great length on the exclusion of the United Kingdom from the Anzus pact. From the viewpoint of the United States of America that exclusion was not wise, and from the viewpoint of Australia there is no real issue in the fact that Great Britain is not a member of the Anzus pact any more than there is an issue in the fact that Australia is not represented in the North Atlantic Treaty Organization. Both covenants are regional pacts. However, one cannot remain in England for long without becoming aware that there are elements of the press, particularly the Beaverbrook press, which, in pursuit of an absolute obsession about a great Empire tariff wall, are engaging in a considerable amount of anti-American propaganda. That propaganda is being used by other forces for their own purposes. That has been the obsession of

Beaverbrook for -50 years, but the continuance of anti-American feeling in an entirely different world context is now having a mischievious effect. If one examines the press controversy that is taking place in Great Britain, one will find that the protests against Great Britain’s exclusion from the Anzus pact emanate mainly from the Beaverbrook press in order to foster the great illusion that was first propounded in 1898 by Joseph Chamberlain, namely, the building up of a great tariff wall against the United States of America and every other country. That illusion is shared by the Bevan wing of the British Labour party which includes many journalists who were formerly employed by the Beaverbrook press. It is unfortunate that one of the decisions of the Cominform in 1948, as a part of its tactics, was to divide the United States of America from Great Britain and the United States of America from Europe. I do not make the accusation that the people in Great Britain who are helping in that direction are themselves in agreement with that decision of the Cominform. But, in fact, much of the anti-American expressions in the British press and, in particular, the Beaverbrook press, is helping to drive in that wedge.

I believe that regional pacts are inevitable. It would be a good thing, for instance, if Great Britain joined the Council of Europe. As one travels throughout Europe . and speaks with European statesmen, it is not difficult to sympathize with their point of view that the lack of clarity in British policy before 1914 and 1937 encouraged aggression. Those people no longer believe the plea now put forward that Great Britain cannot enter the Council of Europe because of the objections on the part of the Dominions to such a regional arrangement, lt would be a logical corollary that if this Parliament is prepared to sign a pact with the United States of America which excluded Great Britain, and Great Britain is prepared to accept the North Atlantic Treaty Organization which excluded Australia, we should not be an impediment to British policy in any arrangement that Great Britain might make in Europe. I emphasize that regional pacts, such as the Anzus pact, are not different, in principle from the North Atlantic Treaty Organization, and that a good deal of objection to this pact has been deliberately manufactured by persons who are concerned about detaching the United States of America from Great Britain and the United States of America from Europe.

The present Australian Government has signed the peace treaty with Japan. Members of the Opposition in this chamber voted against the ratification of that treaty. We had doubts about Japan not returning to the path of aggression. T recall that my own argument on that matter was that Japan could be atombombed from Siberia and would not be able to strike back at anything vital, to Russia; and that if Japan were struck from. Siberia it would be struck mortally. Therefore, Japan would consider carefully any plan directed against the Soviet and thus could easily be pushed into the Soviet orbit. However, the treaty with Japan has been signed, and it is binding upon this nation and upon the Opposition in this Parliament. But,, if this pact is not to be invoked in. the event of future Japanese aggression, we should see whether we can make the treaty work. If we do not desire that this Anzus pact be called into action against a renewal of Japanese aggression, we must do two things: First, we must make the peace treaty work - I have mentioned doubts a’bout its fundamental assumption - and, secondly, we must give to Japan the right to live. Australia was among the nations which discriminated against Japanese trade before the outbreak of World War II. In 1931, the Liberal Japanese Government disappeared in the face of a military coup, and leading Japanese Liberals were murdered. The Japanese Liberal Government was discredited because of its inability to cope with the depression which followed Japan’s exclusion from world markets. It was in those circum-stances that the militarists in Japan brought forward their policy. They said, in effect, “We want a realistic policy. We are going to have a compulsory market for Japan “. Thus, Japan embarked on its plan for a Greater East Asian Co-prosperity Sphere. The

Co-prosperity Sphere was a. compulsory market. The western world must help Japan to a greater degree than at present. It is useless to assume that Japan will not renew aggression when we pursue a. fiscal policy that makes it impossible for J apan to live. For instance, last. year. Japan bought goods from Australia to the value of 84,000,000 whereas, in return, we purchased from Japan goods to the value of only £4,600,000, Japan’s purchases from us were in the ratio of nineteen to one. The Japanese have indicated that their economy is becoming unworkable in such circumstances. If the Japanese economy collapses, Japan will without doubt, enter the Communist orbit. I have no doubt that in that event Communist Russia will make Japan’s economy workable. That is the Communist strategy for Japan, and should that happen the only Asian power that has a naval tradition will be thrown into the Communist orbit. It is time that we recognized that our tariffs have an international effect and that our fiscal policy ought to be co-ordinated with our foreign policy. It is not of much use making pacts which assume that Japan will not renew aggression when Ave follow an economic policy that makes it impossible for Japan to live, and which must ultimately bring about economic collapse and. the emergence of communism in Japan and Japan’s adherence to the Communist Hoc. Then, there will be no Communist objection to the re-armament of Japan, whose naval tradition will be extremely useful in an Asian bloc, the other members of which have no naval tradition. Japan is solvent only because of American aid which will not continue indefinitely. There is an economic fallacy in much of our thinking on this matter. We say that we will build a tariff wall and exclude Japanese goods. As a result of such policy, ‘we establish factories in this country, and that make3 a good argument in Australia. Japan bought £84,000,000 worth of our wool, and the wool-growing industry provides employment throughout the country. The factory put up behind the tariff wall can be seen, but the employment created when the wool-growers spending power circulates is a greater reality not often thought upon. I believe that we can fall victim to fallacious economic reasoning and, in effect, go mad on the question of tariff policy. It is futile to make political pacts with Japan on the assumption that by so doing we shall keep that country separated from the Soviet bloc if, by our economic policy, we contribute to the internal collapse of Japan. In the face of such discrimination Japan will become an enemy. If we have a treaty which assumes that Japan is trustworthy, it is unwise to contribute to a result which will make of that country an enemy.

Another difficulty that arises as a result of our signing the Anzus pact is the difference between British policy and American policy in respect of the recognition of China. In this respect, Great Britain acted on the nineteenth century doctrine of recognition which was laid down by Canning. He laid down the doctrine of recognition now followed by Britain when he accorded recognition to the South American colonies of Spain. He propounded the theory that other governments should recognize a new government if, in fact, it controlled a particular area, and there was ground for assuming that it would be prepared to pay its debts. The present Chinese Government is not prepared to pay China’s debts to Great Britain, but, apparently, that condition has been waived. That is the nineteenth century doctrine of recognition. The United States of America did not adhere to the doctrine because of the occurrence of one or two events. It is current propaganda to suggest that the United States of America was always opposed to the Communists in China; but the truth about American foreign policy is that Wedemeyer, Stilwell and Marshall, as representatives of the United States of America in China, were insistent upon Chiang Kai-shek including Communists in his government. As late as February, 1945. the United States of America, in its relations with Russia, applied a policy of generous concessions .in return for the only thing it received from Russia. For instance, it gave to Russia, Port Arthur. Dairen, the Manchurian railways and industries worth £600,000,000, the Sakhalin Island and the Sakhalin fishing right”: in return for the right to occupy

South Korea and for the right of the United Nations Electoral Commission to go into northern Korea and work out the basis for an election for the whole of Korea The second provision was never accorded. It cannot be argued that the United States of America was antiCommunist when the architects of the policy of that time are now being virtually accused of high treason because they were so sympathetic to Communist China.

We cannot edit history in the interests of propaganda in the way the Communist party does. If we look at the facts we will find that the United States of America applied a policy of great tolerance towards the Chinese Communists. I venture to say that if the Russian Minister to Australia were beaten up in the streets of Canberra, and the Australian Government made a statement sympathetic to the people’ who had beaten him up, and Russia severed diplomatic relations with Australia, liberal people would think that it had a perfect right to do so. But American diplomatic representatives were beaten up in the streets of China by Communist Chinese and the Peking Government sought to justify that act. The United States of America said, in effect, “ You do not behave like a civilized power and therefore we are not prepared to recognize you “. That was one of the factors that helped to bring about a difference of policy between Great Britain and the United States of America on the question of the recognition of Peking China.

A more important fact is that the United States of America shows greater realism than does Great Britain on the question of the recognition of Peking. It has a twentieth century outlook as distinct from a nineteenth century outlook. It knows that all Communist governments, while maintaining correct diplomatic relations with other governments at the diplomatic level, are, in fact, ‘ seeking to undermine them. Communist governments take men from the trade unions for training in the undermining of governments with which they continue to maintain correct diplomatic relations. The Peking Government has taken 1,200 students from Indonesia to Peking to be trained in methods of undermining the present Indonesian Government. “Whilst in the nineteenth century, relations between States were conducted with three arms, the military, diplomatic and economic, a fourth arm is now used in the Soviet bloc - the ideological arm. The ideological attack is designed to persuade the people of other countries of the necessity to support the ideology of the Communist bloc, to paralyse their will to resist and to penetrate their organs of government. In retaliation, the Americans are continuing the technique that we were forced to use during the war against Nazi Germany. During the war we maintained in London the Governments in exile of Czechoslovakia, Poland, Norway and other countries as rallying points for the people in occupied countries. Those Governments did not control anything in reality, but the people abroad gave them their real allegiance. They were centres for the undermining of the German occupation forces because they were centres of hope.

There is far too easy an assumption everywhere that Communist, propaganda is right. For instance, we are too ready to assume that everybody who does not agree with the present Communist regime in China is, in the words of the Tribune, a “fascist lackey a “ running dog of imperialism “, or “ corrupt “. Ninety-eight per cent, of the people of Australia did not vote for Communist candidates at the last general election, but I do not. think that 98 per cent, of Australians are “ fascist lackeys “ or “ running dogs of imperialism “. There is no reason why I should accept the Communist assumption that the people in China who do not agree with communism are “ fascist lackeys “ or “ running dogs of imperialism “. In maintaining recognition of the Government of Formosa, the United States of America is in fact providing a rallying point for all dissident elements in China, tt is in fact waging war on the Peking regime in the same way as the Peking regime is waging war on governments with which it superficially maintains correct diplomatic relations whilst, at the same time, it does its utmost 1 to undermine them. It is said that 10,000,000 Chinese or Formosa are not important. If that is so, it is astonishing that there is a Communist world campaign for recognition of Peking and against recognition of Formosa. The answer to that is that the Communists understand ideological warfare. They understand the value of the technique of maintaining correct diplomatic relations with governments and at the same time undermining them. In maintaining the Government of Formosa, the United States of America is doing exactly what the Communists have always done; it is a part of their ideological technique of undermining governments with which they maintain superficially correct diplomatic relations.

It is not true to say that Great Britain has obtained great benefits from th9 recognition of the Peking Government. I remember that there was a campaign in this country for the recognition of that Government. Communist propaganda held UP before us the wonderful possibilities which such recognition would open up for British trade with China. In fact, British trade with China was worth only £8,000,000 after recognition. That was before the imposition of restrictions in connexion with the Korean war. In the same period British trade with Australia was said to he worth £697,000,000. That argument is completely untenable, for British trade with China was insignificant.


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

Mr. LUCOCK (Lyne) ^.48].”- I refer to the statement of the honorable member for Parkes (Mr. Haylen) that the man in the street is rather confused over the Anzus pact. I recall that at the time of signing of the Japanese peace treaty a gallup poll conducted by one of the newspapers revealed that 15 per cent, of the people who had been asked questions in relation to the Japanese peace treaty did not know anything about it. Again, when the Anzus pact was signed, 25 per cent, of the people who were questioned about .it did not know that the pact had in fact been signed. The fact that Australians should show such a lack of interest in two important events that so vitally concern their country is an indictment of Australians generally. The Japanese peace treaty was of vital concern to us because so many of our men had given their lives in defence of their country against the excursions of the Japanese in the Pacific area. The argument that the man in the street is confused as ‘.to why the United Kingdom should not he admitted to this pact does not, on the face of these facts, hold very much water. The inclusion of the ‘United Kingdom in, or its exclusion from, the Anzus pact has been very well covered by other speakers in this debate. I propose to read an extract from the report of the first meeting of the Anzus Council, as follows:: -

The Council’s first task was to set up its machinery and to decide on the procedures to govern its meetings in the future. It was decided that the machinery should be as simple as possible and that maximum use should be made of existing channels and agencies.

From information we have obtained from participants in the Anzus pact talks, the central theme of those discussions has been that the machinery should be as simple as possible and that the maximum use should be made of existing channels and agencies. The pact, as has already been pointed out, was never intended to cover the full defence of the Pacific area. The United States of America is, of course, a strong factor in the defence of this region ; but America has entered into other pacts besides the Anzus pact with Australia and New Zealand and no one has queried the inclusion in, or omission from, those pacts of certain countries. J agree with other honorable members who have spoken in this debate that the cry has been raised on this occasion by our enemies in an attempt to drive a wedge between the democratic nations in the hope that, on the old principle of divide and rule, world domination may be achieved at some future date. The argument advanced by the honorable member for Fremantle (Mr. Beazley) that as Australia and New Zealand were not represented at the Nato talks, no objection can be taken to the exclusion of the United Kingdom from the Anzus pact, is very strong. I recall that Sir Winston Churchill, at his meeting with President Roosevelt at Quebec, referring to the projected discussions in which the two were to engage, said, according to his memoirs, that good reason could be advanced for inviting Australia, New Zealand and Canada to participate in the talks - -particularly Canada as the meeting was to :be held in that country - but that in order to expedite proceedings the representation would not be extended. There was a similar need to limit the scope of the Anzus talks so that decision* could be reached quickly. Clearly quick agreement would have been difficult had the matters under discussion to be referred to many quarters. The Minister for External Affairs further stated -

The House will recollect that Article 8 oi the Treaty deals with the relationship to be established between the Council and - I quote the words of the Article - “ States, regional organizations, associations of .States or other authorities in the Pacific aTea in a position to further the purposes of this ‘Treaty and to contribute to the security of that area “. Here we were in something of a dilemma. We all had in mind the intimate and special relationship between Australia and .New Zealand and other members of the British Commonwealth, particularly the United Kingdom.. It was obvious to all of us that in view of this special relationship, which assumes tangible form in the present close co-operation among Commonwealth countries in Korea and Malaya and in military planning generally, the United Kingdom in particular must be kept in close touch with Council matters.

It has been argued that as the United Kingdom is to be kept in close touch with the decisions of the council, Great Britain might as well be admitted to membership. I do not agree. It is not difficult to keep another nation informed of what is going on, but to admit that nation to membership would pave the way for similar requests from other countries. That point was covered by the honorable member for Oxley (Dr. Donald Cameron), who pointed out that if we were to admit the United Kingdom to the Anzus pact, the scope of the agreement would immediately be widened, and other problems would be introduced which might nullify the value of the pact. I believe that the pact represents a strengthening of British Commonwealth relations. It. is an indication that we in the Pacific region are facing up to our responsibilities, and are prepared to take upon our own shoulders some of the burden of the defence of this area. Further evidence of that willingness is to be found in the arrangement that has been made with Great Britain in relation to Woomera. There again we are facing up to our responsibilities and saying. “ Let us share in ;the defence of this region, and of the free world “. Our preparedness to enter into defence pacts with other countries while still remaining within the fold of the British Commonwealth of Nations, is evidence of the strength of that Commonwealth.

The -problem of United Kingdom membership is difficult, but, as the honor-able member for Ev/ans (Mr. Osborne) ‘has said, let us forget about it. It is something that our enemies can use to their own advantage. Not long ago, when it was suggested that India should participate in the Korean peace talks, the Russians sought to show that there was dissension amongst the democratic nations. They did not care one iota whether India did -or did not join in the talks, but they saw the possibility of a split between Great Britain and the United States of America on the one hand, and ‘‘Great Britain and Australia on the other. They did everything possible to cause such a split-

Already there are signs that there will be a wider agreement on the defence of the Pacific zone. Some arrangement will be made to -eliminate whatever shortcomings may exist. Did Australia not send assistance to the United Kingdom in Malaya ? Units of our Air Force were scut to Malaya immediately to assist in the defence of that country against terrorists. Wc -realize that there are problems even greater than those covered by the Anzus pact. The honorable member for Fremantle brought some of them to light. He pointed out that if we were not .prepared to assist Japan’s internal economy the Japanese people might be driven into the arms of Our -enemies, regardless of treaties and pacts.

The problem of the recognition of red China cannot “be covered by the Anzus pact. In the .last Jew years the industrial -potentialities of Asia have been developed to a remarkable degree. The greater the industrial development in Asian countries, the graver our problems become. The recognition of red China poses for us a most .difficult question. lit would ‘be. I think, unfortunate i if we were to recognize ‘the government of a country which, no matter how 1 people may seek t.n avoid the i issue, is an .enemy nation against which we have been recently engaged in an undeclared war. Until there is a final peace settlement, surely there should be no thought of recognizing the Government of red China, which has been put -on the throne by a foreign power. All these problems are outside the scope of the Anzus pact. it must be admitted, unfortunately, that the international policy of the United States of America has been inconsistent. There may have been internal political reasons for that, but, apparently, because of lack o!f experience, the United States of America nas dilly-dallied on occasions in a manner that has confused its friends and helped our common enemies. But, at last, the United States of America has taken this step, and nas refused to recognize red China for the reasons that I have outlined. I believe that the policy of America is consistent in this respect, and that we must support it-

Australia is also confronted with the problem of Indonesia and Asia. I am sure that .some of us hang our -heads in shame when we .recall certain events concerning .our friends, the Dutch, because tu a great degree, as the result of the lack -of courage and determination .of a previous Australian Government, the Dutch were left “high and dry” in Indonesia. Because of that policy, we have so weakened our position that Dutch New Guinea is the last stronghold, as it were, of The Netherlands in the East. I sincerely hope that we have learned the lesson of our .ghastly policy, and that Australia will not fail the Dutch in respect of their position in New Guinea. Should the issue of the Dutch remaining in that p’art of the world arise, I hope that the Australians will remember that we arc very close to them and that, if we fail them, we shall be failing not only -good friends of this country, but also ourselves.

Those matter.3 are of vital concern to Australia, and their scope is wider thaw the ambit of the Anzus pact. I believe that the pact provides us with a solid foundation upon which we can plan aor future. I endorse the statement of thu Minister for External Affairs that-

This treaty helps substantially to close what has .been a gap .in the regional machinery for mutual defence in an important area -of .the world. I believe that it has got off to a good start, and that the security of a large area including Australia is much enhanced.

I believe that, with the Anzus pact, we have closed the gap in the regional machinery for mutual defence in an important part of the world. This pact is of great value to Australia. Prom the experience that we gain from the association of the military leaders of the three nations, and the general organization, we shall be able to go forward and further promote the greatness of this country.


.- I greatly regret that such a long period has elapsed since the Minister for External Affairs (Mr. Casey) made his statement on the first meeting of the Anzus Council, and the time when his statement becomes the- subject of discussion by this House. It is eminently desirable at all times that statements made by Ministers on subjects of paramount importance shall be discussed by the House without delay. Actually, thirteen months have passed since the Minister made his statement on the meeting of the Anzus Council, and the House has not had an opportunity in the meantime to discuss whether or not the actions of the representative of Australia at the first assembly of the council have the approval of this Parliament. This treaty is of great importance to the people of Australia, and, naturally, we are deeply interested in the administration of the pact.

Article VII. of the Security Treaty between Australia, New Zealand and the United States of America gives us information about the way in which the three parties to the pact propose to put its terms into operation. The statement of the Minister for External Affairs relates to the first meeting of the Anzus Council, and from a perusal of his remarks, honorable members are able to obtain an idea of the lines upon which the Council proposes to act in future. That knowledge is essential for Australia.

The Minister informed us that the first task of the council was to set up its machinery and decide on the procedures to govern its meetings in the future. He stated -

The intention is that the full Council should meet once a year, with the three Foreign Ministers present.

Article VII. of the security treaty provides -

The Parties hereby establish a Council, consisting of their Foreign Ministers or their Deputies, to consider matters concerning the implementation of this Treaty . . .

The first meeting of the Anzus Council was held at Honolulu on the 4th August, 1952. I emphasize that the House is discussing that meeting in September, 1953. The Minister also said, in his statement -

In addition ‘to the regular annual meetings, provision is made for meetings of Deputies to be held in Washington as and when required.

The Minister informed the House that a secretariat was to be appointed, and that it should be confined to a working arrangement among designated officers of the State Department and of the Australian and New Zealand embassies in Washington. The Minister proceeded -

On the military side it was agreed that each country would nominate a military representative to be accredited to the Council.

Apparently, the representative of each of the three signatories to the pact may attend meetings of the council, or may meet from time to time to discuss matters that arise within their particular sphere of influence. The first meeting of the military council was to be held on the 22nd September, 1952.

I come now to the matter which seems to have dominated this discussion and is of great importance to Australia. I refer, of course, to Article VIII. of the security treaty. In order that there shall be no misunderstanding, I shall read the provisions of that article. They are as follows: -

Pending the development of a more comprehensive system of regional security in the Pacific Area and the development by the United Nations of more effective means to maintain international peace and security, the Council, established by Article VII., is authorized t to maintain a consultative relationship with States, Regional Organizations, Associations of States or other authorities in the Pacific Area in a position to further the purposes of this Treaty and to contribute to the security of that Area.

Article VIII. apparently lays down the principles that were in the minds of the representatives of the United States of America, Australia and New Zealand at the time the treaty was signed. This article indicates that the council, in addition to its own meetings, is authorized to establish certain relations with other countries with the express purpose of giving a full measure of force to the treaty. It is in regard to the actions of the council concerning the implementation of Article VIII. of the treaty that I have the greatest objection. The Minister, when he dealt with this matter, said in his statement -

At the Anzus Council meeting held in Honolulu, however, we come to the conclusion that the difficulties, including that of discriminating among the claims of various countries for some form of association with the Council, were such hs to outweigh the advantages; and that at that very early stage of the Anzus Council’s existence, when its machinery had not even begun to work, it would have been i premature to try to establish formal relationships with other States or regional organizations.

Apparently, the implementation of Article VIII. ceases at that point. The Minister has implied, in general terms, that the council will have no power to establish formal relations with other States; and we are given no idea of how the council proposes to give effect to Article VIII. In this respect I do not consider that the council, at its first meeting, grappled with the position as it should have done. Clearly, the treaty in no way suggests that other States should become parties to it. However, although the treaty is confined to three sovereign States, it is clearly recognized that consultative relationships should be maintained with other countries in the area’ covered by the pact. I consider that the council could have protected the interests of the three countries which are signatories to the pact by appointing a committee to devise ways and means by which such consultative relationships could be established. I foresee certain difficulties in consequence of action not having been taken to give effect to Article VITI. .This is a pact between the United States of America, Australia and New Zealand. The United States of America also has a pact with the Philippines and a peace treaty with Japan. Therefore the United States of America is able to maintain constant consultation with New Zealand, Australia, the Philippines and Japan, but the relationship of Australia and New Zealand is confined to the United States of America. It is true that, indirectly, Australia and New Zealand have a relationship with Great Britain, which could be utilized in a consultative manner if those countries so desired, but that relationship is not available to the third party to the treaty. It is eminently desirable that a system of consultative relationship should be established because every one of the nations in the Pacific is beset with the same fears, and if aggression occurred in the Pacific each of those nations would, within a short space of time, find itself confronted with a State of war. In my opinion consultative relationship should be established at an early date with Great Britain, Indonesia, Malaya, Burma, India, the Philippines, Japan, Dutch New Guinea, Indo-China and Thailand. Every one of those countries would be vulnerable to acts of aggression in the Pacific. I therefore suggest to the Government that Australia’s, representative at the second meeting of the council should make a positive proposal to establish the consultative relationships that are specifically provided for in Article VIII. at the earliest possible moment. I do not mean, as has been suggested in many quarters, that the pact should be extended to cover other countries, but that the parties to the pact should have an opportunity, pursuant to Article VII. and the implicit instruction given in Article VIII., to consult with countries that may be able to assist them to carry out the objectives of the pact itself. This would tend to bring about a better understanding between the nations of the Pacific and assist to maintain peace in that area.

We should endeavour in the future to obviate futile discussions in this House by debating the contents of documents of international importance immediately after the occasions giving rise to them. Some thirteen months have elapsed since the Anzus pact was concluded, and consequently the opportunity for the Parliament to discuss some of the particular problems of the moment has been lost. International agreements of this kind are of very great importance from a security point of view. Although the Minister has made it clear that the meeting of the council provided the representatives of the various States with an opportunity to conduct an unfettered survey of a. very wide range of current matters, he gave no indication to this House of the nature of the problems that were discussed, or .of the views that were expressed by the representatives of New Zealand and the United States ofAmerica. Indeed, he dealt only briefly with the views that he himself had expressed. It is clear that much of the discussion referred to the dark threat of Communist imperialism in the Pacific and elsewhere, but no information has been given to the House about the views of the United States of America and New Zealand on other important matters that were dealt with. I believe that this House should be informed of views that are expressed at meetings of the council attended, by the three Foreign Ministers, other than those in relation to security measures that may have been taken, or which it is intended to implement. The views of other countries on international problems of the day should be available to us. Effective administration of the treaty is in the best interests of all parties to the pact, and it should be pursued with the greatest vigour so that proper relationships will be established as quickly as possible. The association of Australia with other countries on a consultative basis, through the medium of such treaties as the Anzus pact, is entirely to our advantage. I sincerely hope that, when a report of the second meeting of the Anzus Council is presented to this House, discussion of its terms will be permitted much sooner than has been the case in this instance, and also that a great deal more information, will be made available to honorable members than has been made available on this occasion.

New England

– We are discussing the pact between Australia, New Zealand and the United States of America, which has been termed the Anzus pact in accordance with the modern tendency to coin short words as convenient titles for international organizations and agreements. This is a matter of prime importance to the people of Australia. One feature of the debate that has greatly impressed me is- the apparent unanimity of opinion of honorable members concerning- the wisdom of ratifying such a pact for the broad purpose of bringing Australia, our sister dominion and the United States of America into a defensive alliance. It is a matter for congratulation that we should be able to agree upon important issues of. foreign policy. The fact that we can do so indicates that we have gone a long way towards accepting the responsibility that rests upon this Parliament to think nationally and internationally upon vital topics.

One issue that has arisen in the course of the debate should not be brushed aside lightly or treated in a hush-hush manner. Rather, we should consider it calmly and dispassionately and try to state plainly to our own people and to others overseas the reasons for the exclusion of Great Britain from the Anzus pact. I remind honorable members that, towards the end of 1937, when war clouds were looming in Europe and an international storm was imminent, the then Prime Minister qf Great Britain stated in unequivocal terms that the first responsibility of Great Britain was to preserve the heartland of the Empire. Later, he said, when it had dealt with its enemies, it could take steps to regain territories that might have been lost while it pursued that policy. Although I do not cavil at that policy, the reaction in Australia at the time was swift and certain, and our Prime Minister, the late Mr. J. A. Lyons, promptly protested. Nevertheless, we had to face the fact that Australia, had reached a stage at which it must accept greater responsibilities in the international field than had fallen to its lot previously. Until that time, no thoughtful Australian could have been happy about the small part that Australia had played in the mutual defence arrangements of the British Commonwealth.

We had lived for 150 years secure behind the shield of Great Britain’s might. We had remained in peaceful possession of this continent because of the power of the Royal Navy, which was largely shattered, or at any rate considerably reduced, during World War I. Australian reaction to the policy declaration by the British Prime Minister gave no pleasure to thoughtful Australians. Many of us> probably with the best of motives, actually reviled the nation that had given to us- the magnificent protection under which our free institutions had developed. The situation previously had necessitated the administration of a shock to Australian public opinion, and I well recall the force of that shock. Even after the British Prime Minister had made the statement, many Australians failed to realize the truth that was implicit in it. The simple fact was that our national adolescence had come to an end and that we had achieved adulthood with all its attendant responsibilities. I do not suggest that, having accepted those responsibilities, we were able to discharge them to the full. As a young and small nation, we lacked the strength to do so. That is why, as the honorable member for Hunter (Mr. James) pointed out earlier in this debate, Mr. Curtin, when he was Prime Minister, appealed to the great republic of the United States of America for a guarantee of assistance. That appeal was answered, and the protection afforded to us by the United States of America saved us from the horrors of a Japanese invasion. Nobody who has considered the result of the Coral Sea battle alone, apart from other great, actions in the war against Japan, can have even the shadow of a doubt about that.

I have discussed these matters because [ believe it to be essential that, both in Australia and overseas, the Anzus pact should be presented in proper perspective. To me, it is idle for people to say that our entry into the pact has not caused considerable bewilderment amongst our kin in Great Britain. I know from my personal contacts and from my study of public opinion that the situation has been widely misunderstood. Therefore, we should not beat around the bush but should explain the situation to those who have not been properly informed on the subject. Australia has accepted the wider responsibilities of full nationhood and now expends annually on defence an ii mount per capita of its population almost equivalent to that expended by Great Britain. Therefore, as a nation, we are entitled to arrange for our defence to the best of our ability on our own initiative. We believe that the conclusion of the Anzus pact was a wise act on the part of nil partners. Therefore, we shall adhere to the pact in its present’ form.

This does not predicate any lack of loyalty to the British Commonwealth. In fact, I regard this development as- a natural result df Australia’s growth. We must act on our own behalf in this way if Australia is to develop to its full stature as a nation. We must play our part in the councils of the world, and I believe that we shall succeed if we work in association with both the Mother Country and the United. States of America.

The honorable member for Fremantle (Mr. Beazley) referred to certain aspects of the pact affecting our economic policy as well as our foreign policy. I do not think that any one would join issue with the general statement that the impact of economic policy must be considered in conjunction with any considera-tion of foreign policy. An arbitrary decision by Australia to cut off all trade with another nation would be internationally recognized as tantamount to a declaration of war. Economic policy and foreign policy are bound together. The honorable member for Fremantle seemed to suggest that Australia had a greater economic responsibility in relation to Japan than in relation to other nations. It is on that point that I am inclined to join issue with him. At present our imports from Japan are only about onetwentieth of the value of our exports to that country. But this state of affairs has not resulted from Australia’s economic policy. It has resulted from the general paralysis of international trade that ha3 affected all foreign relationships. The processes of war have destroyed the multilateral trade which used to make possible the convertibility of all currency. The multilateral trading which was possible before the war enabled one country tq export to another country far more goods than it imported from that country because that country could pay for its imports from the proceeds of its exports to several other countries. Those conditions have now ceased to exist. As a result of the last war the United States of America is in an overpowering trade position. The. economic policy of the United States of America has been extremely generous. But we are now suffering from a. lack of equilibrium between the’ nations of the world and until equilibrium is achieved it is beside the point to stress Australia’s economic policy in relation to one other country, in this case an ex-enemy _ country which has not yet recovered its own balance.

The honorable member for Bendigo (Mr. Clarey) suggested that whilst the Anzus pact was an advantage to Australia we might well look foward with greater confidence if we had a series of links with the various nations of the Pacific in addition to our existing treaties. I think that we require to bring these other nations gradually into the arena of the United Nations as they become acceptable and as they become willing to accept the principles of the United Nations Charter which guarantees every member of the United Nations against aggression. That state of affairs could be achieved by enlarging the proposals of the honorable member for Bendigo. With a growth of national conscience and national capacity these nations could come into the council of nations that we call the United Nations organization and bring about a strengthening of world order, world beliefs and world control of those factors which now appear to be uncontrollable. I have much pleasure in speaking with the warmest approval of this pact. I regret that, owing to a misunderstanding, some people may have gained the impression that Australia had not acted with courtesy to the Mother Country, from which our forefathers came and to which we are proud to belong by kin.


.- The House is debating a ministerial statement which was presented to the House on the 5th September, 1952, in respect, of the first Anzus council meeting which was held between the 4th and 6th August, 1952. The House will await with interest the report which the Minister for External Affairs (Mr. Casey), will present on his return from his latest peregrinations to the second Anzus council meeting at present being held, not in an American territory as the first was, but in the United States of America itself. It is interesting to review the workings of the Anzus pact, which was concluded in San Francisco on the 1st September, 1951. The pact has been made between throe self-governing European peoples interested in the Western Pacific. I believe that the pact, if it had to come about, was wisely limited to these three countries. There is nothing more inappropriate in the United Kingdom, which is only one of the kingdoms of the British Commonwealth of Nations, being excluded from the Anzus pact than there is in Australia and New Zealand, two other kingdoms of the British Commonwealth of Nations, being excluded from the North Atlantic Treaty Organization. There is a further reason why I applaud the exclusion from the pact, of other European peoples who may be interested in the Western Pacific. The United States of America, Australia and New Zealand are self-governing countries. The territories that they control which are not selfgoverning they hold virtually under trust from the United Nations, the exception being the Territory of Papua. That is an Australian colony. Earlier, but for the obduracy of the United Kingdom Government at the time, it would have been a colony of Queensland. After the conclusion of World War II., the Territory of Papua was virtually placed under the United Nations as a trust territory. The honorable member for East Sydney, who was then the Minister for External Territories, stated in this House that the government of which he was a member had no objection to the Trusteeship Council exercising surveillance over the Territory. Accordingly, I say that the possessions of the United States of America. Australia and New Zealand in the Pacific are held under trust from the United Nations. By contrast, the other territories that are controlled by European peoples in this area are not selfgoverning and are not held under trust. I refer to those in which the Netherlands, France and the United Kingdom itself are concerned. I almost forgot to mention Portugal. One may observe that it is possible that in the future there will be the same discontent in those territories that are at present controlled by the Netherlands and Portugal as there has been in tho.?e controlled bv the United Kingdom and France in this area.

Reference has been made to the attitude of the Chifley Government to the Dutch in Indonesia. I make no apology for that attitude. The attitude of the Chifley Government to the Dutch in

Indonesia was precisely the attitude of the Roosevelt and Truman regimes. Traditionally, the United States of America has sympathy for peoples who are seeking self-government. One regrets that at the present time it docs not seem always to show such sympathy in every part of the world. The significant feature of the Pacific area at the moment is that we European countries are witnessing the assertion by Asian countries of their political and cultural independence and self-respect. It would be an affront to peoples in the Pacific area who are not yet self-governing if we were to include in the Anzus pact countries that control them, and very often control them against their will. It is to be regretted that the French, who virtually bestowed liberty on the United States of America and Italy, should have for so long denied liberty to Indo-China.

Mr Hasluck:

– The French are defending liberty in Indo-China.


– Less than 100 years have passed since the French first took self-government from Indo-China under Napoleon III. It is just 100 years since they took self-government from New Caledonia. I suggest that it would be absurd if France, for instance, were included in a pact such as this.

Mr Hasluck:

– The honorable member is not suggesting that the red forces in Indo-China are fighting to establish liberty there?


– Order!


– I do not mind the interjection of the Minister for External Territories (Mr. Hasluck). There is a valid answer to his interjection. The French forces in Indo-China may be contending against what we classify allembracingly as red forces, but France has done more to foster discontent in Indo-China by withholding self:government from that country too long than have countries such as the Union of Soviet Socialist Republics and China by fomenting unrest there. The quarrel in Indo-China is entirely a quarrel between France and its subjects.

Mr Hasluck:

– It is part of a world struggle.


– But it has not been taken before the United Nations. I should have thought the Minister would applaud the suggestion that the Anzus pact is properly limited to those countries that govern themselves or which govern territories under trust to the United Nations.

Mr Hasluck:

– I disagree not with the honorable member’s conclusions but with his argument.


-Order ! The honorable member for Werriwa (Mr. Whitlam) has the floor.


– I thank you for your protection, Mr. Speaker. The Minister has not put me off my argument. It may be that in New Caledonia there is no discontent with the French regime, but it is probably true to say that the inhabitants of New Caledonia are observing the centenary of French rule there rather than celebrating it.

Let me turn to Indonesia. The United States of America, under its Democratic administration, in the same way as Australia under its Labour government, believed that that country should govern itself. I believe that our policy in that connexion has been justified. There is not the discontent in Indonesia that there is in those parts of the periphery of Asia where there is no self-government. The Netherlands sent from Europe to Indonesia larger forces than it had ever sent beyond its own boundaries before. In the same way, the French sent a larger expeditionary force to Indo-China than they had ever previously sent outside of Europe. But in neither case was the ruling power able to preserve its authority. By contrast. Great Britain gave self-government to India and to Pakistan, which now are more surely friends of the British Commonwealth of Nations than they have been at any time during the last 50 years. Nothing became Great Britain during its life in India like the leaving it. The countries that Great Britain settled remain associated with Great Britain, but those countries that it conquered have either severed or are doing their best to sever their connexion with Great Britain. The Commonwealth remains intact. The Empire, even with Churchill as the Crown’s first Minister, is dissolving. Accordingly, I suggest that there are, after two years of operation of the Anzus pact, good grounds for believing that we were wise to limit the pact to the self-governing countries or to those that held countries under trust.

Reading together Articles IV. and V. of the treaty, it is possible to see how we could become embroiled if American armed forces inKorea, Indo-China or Formosa were attackedby hostile forces, and how the Americans could become embroiled if our forces in Malaya were attacked by hostile forces. Our troops have no more business in Malaya under any United Nations treaty or arrangement than American forces have any business in Formosa or Indo-China under any United Nations treaty or arrangement. Lookingat the events since this statement was presented by the Minister for External Affairs over a year ago, it is quite plain that there is cause for us to review some features of the Anzus pact. W e should consider the implications of it. The terms of Article V. of the treaty are very wide. They contain the words -

An armed attack on the armed forces, public vessels or aircraft of any of the parties in the Pacific.

Are we to be embroiled on behalf of the Americans if there is an armed attack on any United States armed forces in an area where they are conducting some unilateral campaign, and is the United States of America to be embroiled on our behalf if there is any attack on our forces in, for instance, Malaya? I merely put it. without expressing any concluded opinion, that in the light of the events of last year, this matter must give us serious pause.

No one can be happy with the regime and the antics of the President of South Korea. If, after the lapse of three months or some other time which he may capriciously determine, there is an outbreak of violence in that country and American forces are involved again, are we also to be involved? Questions such as that must give us serious cause to reflect, and, perhaps, to review and limit this treaty. Hitherto, it has worked well. It has provided a security arrangement, and a means of consultation among the European self-governing countries of the Western Pacific. It gives them some unity vis-a-vis the emerging nations of Asia, but we should see that we do not, by any provocative or oppressive action, embroil ourselves in action which may incur the hatred, ridicule or contempt of those nations. They are entitled to self-rule, just as we are. Thebest way to deal with any red menace, as we soglibly term it, is to give them self-government. There is no virtue, of course, in substituting a Chinese imperialism for a French, Dutch, Portuguese or British imperialism. They are entitled to selfgovernment within the world community of nations, the United Nations, of which Australia is one.

Question resolved in the negative.

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Report of Public Accounts Committee


– As chairman, I present the following report of the PublicAccounts Committee : -

ThirdReport for year 1052-53 - Administrative Arrangements Order, together with Treasury Minute on Second Report ofCommittee 1952-53.

Ordered to be printed.

Sitting suspended from, 5.53 to 8 p.m.

page 212


page 212


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

That so much of the Standing Orders be (suspended as would prevent the leader of the Opposition (Dr.Evatt) frommaking his speech in Committee of Supply on the budget without limitation of time.

page 212


BUDGET 1953-54

In Committee of Supply: Consideration resumed from the 9th September (vide page 77), on motion by Sir Arthur Fadden -

That the first item in theEstimates, under Division No. 1 - The Senate - namely “Salaries and Allowances, £19,900”, beagreed to

Leader of the Opposition · Barton

– This is a very important budget and I propose to dealwith it under several headings. First, I shall examine the claim madeby the Treasurer (Sir ArthurFadden) about the reduction, and the extent of reduction, of taxes. I shall show thecommittee how exaggerated and, indeed, deceptive. the claims are. I think that I can convince every impartial .honorable member of that. I then propose to turn at once to an aspect of the budget provisions about which there is much concern. I refer to the provision made in the budget for social services pensioners, war pensioners and allied groups, who are entitled to a fair deal from the Government and are not getting it. Then I shall deal with what I think is, from a long-term point of view, perhaps the most important feature that this committee as a responsible body, can discuss. I refer to the voting of enormous amounts of money in the way in which we are asked to vote here, in many cases without our having any real knowledge of the purpose of the votes. I shall suggest in relation to that matter a certain course that may commend itself to honorable members. I shall then point out in that connexion that this budgetdeliberately, and again notwithstanding the warnings given to the Government last year, charges against the taxpayers of this year, capital expenditure under circumstances which would not be tolerated in any business, thus burdening the present year’s taxpayers unfairly and making adequate provision for expenditure under one head or the other almost impossible.

Having said that, .1. put it that this is really a. budget that has been born of a desperate need. Having regard to the aggregate vote of Australia against the Government in the recent Senate elections, this is the Government’s lastminute attempt to satisfy everybody. The Government is trying to bury the. horror budget of 1951-52. In the end, as always happens in such attempts, the budget will satisfy only the few. The Treasurer thinks he is back in 1949 and that he can succeed with propaganda and some more promises of the character that deceived the people in that year, when the Chifley Government was beaten. He apparently thinks that the Australian people forget quickly, and that propaganda is always successful against facts. He will find that belief mistaken when the matter is fairly analysed. He has made no real attempt to provide in this budget for a just and equal relief that can be measured finally in forms <~>f practical human needs. In the past we have heard a great deal from members of the Government about the merits of equality of sacrifice when times were hard or threatened to be hard. Nov the time has arrived when the Treasurer has been forced to make some remissions of tax. Priority, in the sense of the largest reductions, has, .however, been given to a few wealthy -companies and a few wealthy individual taxpayers, while taxpayers in the middle income and lower income groups will be little, if any. better, off this year as a result of the budget than they were last year. That fact can he demonstrated. Certainly the standards of hundreds of thousands of people will be lowered still further as a result of the budget provisions.

It is obvious that the Government is intent on suspending, or trying to suspend, at least temporarily, the policy of heavy taxation, restrictions and deflation upon which it embarked in the horror budget of two years ago. This budget, therefore, can be regarded as an admission of past ‘blundering by the Government. It is now taking off some of the repressive taxes, or at least reducing the rate of such taxes, which it imposed two years ago in violation of its pledge to the people at the 1949 general election. But it is still going only part of the way. Measured in terms of the standard of living, certainly the average person will still not be as well off as he was before the introduction of the horror budget. As a matter of fact the Government claims that the tax concessions provided for in the budget will amount to about £32,000,000 a year. I shall examine that claim shortly. Like many things in thi? budget, it is partly true and partly false. In 1951-52, the Government imposed increased burdens on the taxpayers to produce an extra £160,000,000 from taxation. So, even on his own case, the Treasurer is returning only part of the extra amount that he extracted from the taxpayers ir. that year. Honorable gentlemen opposite used to describe the Australian £1 as thi- “ Chifley £1 “ during the regime of Mr. Chifley’s Government. As a. result of the enormous increase of the ‘cost of living because of inflated prices, the MenziesFadden £1 to-day is worth much les= in purchasing power than the £1 was two years ago.

At the best, this budget represents a half-hearted reversal of form. The electors are supposed to be overwhelmed with gratitude, and to forget tho Government’s past actions. At the general elections in 1949 and 1951 the Government talked buoyancy., In 1949 it promised tax relief. It was again returned to office in 1951, and five months later the horror budget of that year was introduced, without any warning of its severity having been given. In order to clear the decks for another general election, the Government is throwing a few sops to the taxpayers. Its, need to-day is to get the elections out of the way, and if the electors were to swallow the bait the next budget would be a reversal to the basic economic philosophy of a government that fundamentally believes in all the objectives set out in the horror budget speech in 1951. The real conflict between the Opposition and the Government is one of fundamental outlook. This Government is wedded to a restrictive financial outlook on Australia’s economic future. At a time when everything in Australia is crying out for development of our resources, and when there is so little time to go ahead, the Government is imposing financial restrictions and thus affecting the whole standard of living of the people, housing, the States, the education of the young, and the great works that must be pursued, especially in tho northern part of this continent. It is even affecting the defence of Australia, because development is an absolutely integral part of our defence. “We had these new financial restrictions imposed on us, although wo had thought that financial restrictions had gone forever. They were imposed in a way that characterized the years of the depression. Such a policy is opposed to Labour policy, which is one of expansion.

The Government believes in high interest rates. I say that we can never develop Australia if that policy is pursued as the Government wishes to pursue it. The same situation arose in the United States of America during the great trek to the west, when California and other States were settled. There was a struggle between the bankers of the east, with their high interest rates, and the progressive people who wanted cheap money for development. In the long run, the progressives won. So it will be in Australia. The manifest destiny of this country is to be a great nation in this part of the world. If we deny the money necessary for development, and do not apply the accepted Keynesian doctrine of cheap money, which is vital to expansion, then it will be a poor outlook for Australia.

The difference between the Labour party and the Government applies also to the matter of unemployment. The Government is satisfied with the position. That is evident from every statement issued by the Government leaders and their supporters. More than 20,000. persons are on the dole, but that is not the Government’s measure of unemployment. The honorable member for Bendigo (Mr. Clarey) analysed the unemployment figures in Australia in a speech recently, and he showed that there had been a big fall in the number of persons employed in industry in the past eighteen months. I have no doubt that the honorable member will be able to repeat the figures for the benefit of the committee later. The matter should not be treated lightly. One school of thought is satisfied with the percentage of unemployment. During the recent Senate election campaign, the Government supporters did not claim that there was no unemployment. Their theme was, in effect, “ After all, the percentage of unemployment in Australia is not as high as it is in other countries “. That is not the test that is applied by the Australian Labour party. Full employment, for which the Labour party stands, means more jobs than men and women to fill them. The matter can be faced only from the point of view of an expanding economy. There are difficulties affecting the workers in such circumstances and we readily admit that that problem has to be solved, but the alternative involving a fall in the number of industries and consequent production is dangerous and we absolutely oppose it.

Prices are controlled in Australia not so much by State governments as by private trade associations. In the past three or four years, there has been a gradual elimination of smaller industrial units in favour of more powerful and highly capitalized monolithic structures of a totalitarian character. Is the Government sincere in announcing through its spokesmen during election campaigns that it wants to encourage small and skilled private enterprise? I do not believe that it is sincere. The Labour movement, the democratic and radical party, alone stands for that principle. The Government has not abandoned its philosophy in this budget. It has merely put it into wraps until after the next general election.

In 1951, the Government believed that most of the people were too well off. It planned to put money for the time being where it would do the least harm. The Government was afraid that the housewives would buy a new refrigerator, a new carpet or a new washing machine and so wreck the economy. It took away her savings so that she would not be tempted. The Government imposed its will with a remorseless budget, and it is still the same Government with the same policy. It is only marking time now through sheer political expediency. It called its policy counter inflationary. The Labour party called it deflationary. Actually it placed leg-irons on the economy. The Treasurer has proclaimed great benefits for the States, but in purchasing power and in terms of men and materials, the States are in a worse position than they were in formerly. Work upon education, houses, and those activities of the States that are so vital is lagging. That is one of our gravest problems. Under the federal system now there’ are two authorities - the. Commonwealth on one hand and the States on the other. The Australian Government collects all income tax. It regards itself as the owner of the money it has collected and administers that money as it thinks fit. Some new system must be evolved under which the States can once more be equal partners with the Australian Government because upon them and the local government authorities rests the responsibility for meeting the fundamental needs of the people.

I shall give the committee an illustration of the manner in which the budget will operate. Last year, one powerful company in Australia made a profit of about £8,000,000. This budget will give that company the maximum relief of 2s. in the £1 on company taxation, so it will obtain taxation relief to the extent of £800,000. My figures are based upon reports that have been published in the newspapers. At the other extreme, the pensioner is to be given a paltry 2s. 6d. a week extra, and the married man with a wife and two children on a fixed income of £14 a week will get a decrease of tax of only 2s. 6d. a week. That figure of 2s. 6d. appears so frequently in the budget and the document can be truly called “a 2s. 6d. budget”. If a married man with a wife and two children on an income of £14 a week has had an increase of his salary as a result of the Menzies-Fadden inflation, he will suffer an increase of taxation in the current financial year. From the £S2,000,000 that the Treasurer claims to be distributing, he is giving one wealthy corporation an additional £800,000 with one hand. With the other hand he is giving the pensioners, those afflicted by war and the married workers, an extra 2s. 6d. a week. In terms of current purchasing power, that is equivalent to half a pound of butter or half a dozen eggs. That is the Government’s yardstick of value as it has demonstrated throughout the budget.

I direct the attention of honorable members now to the sales tax. The Government has reduced its own exorbitant sales tax of 50 per cent, on luxury jewellery to 16$ per cent., but for the bulk of commodities which are everyday necessities for families, the sales tax is to be left at 12£ per cent. That compares with the Labour party’s general rate of S; per cent., which was in force until the horror budget was introduced by this Government in 1951. The basic rate of sales tax now is still one and a half times greater than the rate of sales tax under the Chifley Labour Government. This Government promised to reduce the rates of taxation, but it has fulfilled its promises only with the lop-sided treatment that is meted out to the taxpayers in this budget. No real attempt has boon made to distribute relief to the sections of the people who are hit hardest by inflation and high prices, heavy taxation and the credit restrictions that were introduced by this Government in 1950. Priority has been given, wherever possible to the wealthier sections. Large companies with profits running into millions of pounds get a taxation reduction of 2s. in the £1 on company tax. Smaller firms with profits below £5,000 a year get a reduction of ls. in the £1.

A fair test is to contrast the position of the basic wage earner under the Chifley budget of 1949-50, the Fadden horror budget of 1951-52 and this Fadden 2s. 6d. budget of 1953-54. The position is that the standard of living and the effective wage of such a worker remains stationary despite an increase of wages through quarterly adjustments. The quarterly adjustment was intended merely to catch up with the price of necessary commodities contained in the regimen which presumably had been paid for in the previous three months. It did not mean a higher living standard. The people of Australia will be astounded to learn that the lowest paid worker under industrial awards with a wife and two children, living according to the barest subsistence standard, is compelled now to pay more taxation than he had to pay under the Fadden horror budget of two years ago. That applies also to the person without dependants on the basic wage standard.

I have a table which. I shall summarize for the information of the committee. It contains a comparison of amounts of income tax and social services contributions payable by a person on the basic wage under the Chifley budget, the Menzies-Fadden budget for 1952 and this budget. It is well known that the annual income of the basic wage earner increases according to the quarterly adjustments of the basic wage. In 1949-50 a taxpayer with a dependent wife and two children was taxed £1 7s. under the Chifley Government, and in 1951-52 under the present Government he was required to pay £11 13s. as income tax. However, during this financial year, under the present budget, he will be expected to pay £14 5s. A taxpayer without dependants paid £16 16s. in 1949-50 and in 1951-52 he paid £43 5s., but in 1953-54 he will be required to pay £46 as income tax. The increase of taxation indicated by those figures has; been due to the fact that although the rate of tax has been reduced, we have been passing through, a period of inflation and the actual amount of tax has increased because of increased incomes.

The Treasurer- has claimed that the budget follows the Government’s policy of reducing taxes. If we examine that statement closely we shall find that it is true only in part, and that for the greater part it is misleading. The Treasurer spoke of the cost to the revenue of the changes in the rates of tax, -and he claimed that the proposed tax rate reductions would have an estimated value of so much to the taxpayer. In doing so he was merely repeating treasury jargon which is very misleading indeed, and I suggest that such jargon should be abandoned and that the facts should be clearly and frankly put to the people. Having regard to the broad, sweeping statements and promises made by the Prime Minister (Mr. Menzies) and the Treasurer at the last Senate election campaign that there would be tax reductions - promises repeated recently with more expansive adjectives in two by-election campaigns - it is essential to ascertain what this budget proposes to do about income tax on individuals. Company taxation is an important matter, but the taxation of individuals, including shareholders and all wage-earners, is of enormous importance. The Treasurer’s budget speech was broadcast to the nation, and from beginning to end his slogan was “’ reductions “. However, those with special knowledge or experience of finance perceived that the persons who drafted the budget were intent on creating an atmosphere of tremendous tax reductions. Over and over again the phrases “ 12^ per cent., cut “ and “ average reduction of 12-J cent.” were used, to convey the impression that taxes were to be greatly reduced. However, in the lengthy self-adulation of the Treasurer there was a deliberate omission to tell the people in simple language how their individual taxes would be affected. The people want to know whether less pounds, shillings and pence will be collected from them in the present year. They are very familiar with the extortionate tax burdens of the last few years and they want to know whether they will, be called on to pay less this- year than they paid last year, and,, if so, how much less. When, the people appreciate the full implications of the budget and realize that total income tax on individuals will be greater this year and not less, they will realize how they have been misled by the Treasurer and the Government.

Let us consider all the relevant factors in this matter. Despite the reduction of income tax rates, the budget-papers show quite clearly that the total income tax on individuals, which last year amounted to £387,000,000, will amount to £398,000,000 this year. In other words, there will not be a decrease, but there will be an increase of £11,000,000 in the sum to be collected’ from the people as income tax. Moreover, last year the total taxation revenue of the Commonwealth exceeded the budget estimates by about £22,000,000, so that it is quite possible, and even probable, that the estimated collection of £398,000,000 this year will be exceeded. The point is that the taxation to be collected from individual Australian taxpayers will not be reduced but will be increased. It is true that reductions have been made in the rates of tax but the inflation of prices and the inflationary increase of salaries and. wages will nullify the value of the reductions. The Government had to reduce the rates, because otherwise its reputation would have been ruined by the enormous increase of collected taxes. Could any person who listened to the Treasurer’s broadcast have gathered from it that the total income tax on individuals was to be further increased in the present financial year? His speech was couched in terms which gave the opposite impression. The Treasurer could have told the taxpayers that there would have been an increase, but he did not do so. Nevertheless, that information is contained in statements that were put before the House but which were not read. The public should have been told the truth quite frankly, but if that had been done a general impression opposite to that created by the Treasurer would have been formed.

A similar observation must be made about sales tax. Once again the Treasurer emphasized the great cost to revenue that was involved in the alteration of certain rates of sales tax. The reason the Treasurer altered those rates is that because of rising prices and increasing incomes the old rates would have brought in an enormous revenue which would have added to the unpopularity of the Government. Last year, collections from sales tax amounted to £89,000,000, as against about £30,000,000 collected from sales tax under the last budget of the Chifley Government. This year the sum to be collected from sales tax will amount to the gigantic total of £S8,000,000 which is only £1,000,000 less than last year’s collections. Yet the Government would have the people believe that it has substantially reduced the sales tax. I repeat that reduction of the collections of sales tax this year will amount to only £1,000,000.’ The 12£ per cent, general sales tax rate is the rate that people have to pay on many essential commodities, and that rate contrasts with the 8$ per cent, imposed by the last Labour Government in 1949. Before the 1949 general election the leaders of the present. Government promised the electors a reduction of the taxation imposed in the previous Labour budget. Although those leaders promised to do it then, they have not done it yet, because the rate is 50 per cent, higher than the Labour Government rate, and the total amount collected is considerably higher. From 1946 to 1949 the Treasurer condemned the Chifley Labour Government for its sales tax rates, and since that time he has made many promises to the people about reductions of those rates. Now it is quite plain that many of his promises have been broken. Broken political promises bedevil the path of the Treasurer.

The Treasurer’s condemnation of the Chifley Labour Government in relation to sales tax was ferocious, and he never let up in that attack. He said that that Government imposed taxes upon everything that a person required from the cradle to the grave. Indeed, he was very sentimental about the rate of sales tax on ice cream, although some time ago this Government raised that rate. It is now to be reduced, but the reduction is so insignificant that, in the form in which children purchase ice cream, it will not exceed one-tenth of one penny, and, therefore, they will not receive any benefit from the reduction. In 1949, the Treasurer promised reductions of indirect taxes in which, of course, sales tax is a vital element. In 1946, he and the Prime

Minister quarrelled bitterly and publicly over the amount by which the yield of taxation could and should be reduced. While the public bidding went on between them, in their policy speeches, Mr. Chifley, who was then Prime Minister, gave a general promise to review taxation regularly and to reduce it to the maximum degree that was reasonably possible. As it turned out, the Chifley Government reduced taxes between 1946 and 1949 to a degree far in excess of the reductions that were promised by either the Prime Minister or the Treasurer during that period. That is why, during the course of the general election campaign in 1949, those two right honorable gentlemen, who are the leaders in the present coalition government, made it abundantly clear in 110t only the official policy speeches of their parties, but also in signed pamphlets and advertisements that were broadcast to nearly every home in Australia that, if returned to office, they would reduce taxes still further, although the Chifley Government had effected enormous reductions of taxes during the preceding years. Advertising slogans which were circulated in millions of pamphlets by the Liberal party and the Australian Country party during the general election campaign in 1949 contained this promise -

Further reduction of taxation, including indirect taxes affecting cost of living, housing, home fittings, furniture.

Those parties made that definite promise with the intention of influencing people, as I have no- doubt it did. Everybody knows that in relation to sales tax that promise has been repudiated because, to-day, the general rate and also the yield are higher compared with the rate and the yield in 1949.

The budget now before the committee makes provision for a new exemption from pay-roll tax which is useful and acceptable. However, the outstanding fact, again, is that during the present financial year the estimated revenue from this tax will exceed the sum of £38,000,000 as compared with £40,000,000 derived from this tax last year. Furthermore, pay-roll tax collections under the budget of the Labour Government in 1949-1950 totalled only £23,000,000. The reduction of £2,000,000 which is to be effected under this budget is comparatively small. It is obvious that pay-roll tax affects the cost of living. This Government has not honoured the promise that it gave during the general election, campaign in 1949 that it would reducethe cost of living by reducing the variousclasses of taxes that affect the standard of living. ‘During the current financial year, customs duty will be increased by £12,000,000. Yet, every one who listened to the Treasurer’s budget speech must have gained the impression that this duty was to be reduced. In addition, excise duty is to be increased by £7,000,000 and estate duty, in spite of several welcome concessions in respect of statutory exemptions, will produce an even greater revenue during the current year than it. did last year.

The position is different in respect of company tax. On the rates that operated last year, there would, under the present budget proposals, be a reduction of £10,000,000, presumably because of an overall decline in the profits of a number of companies which have suffered heavily from the effects of the last two budgetsintroduced by this Government which imposed discriminatory taxes in many instances. On one occasion, the Minister for Commerce and Agriculture (Mr. McEwen) declared that, in certain instances, sales tax was levied in order to eliminate industries which the Government did not consider to he essential to tho economy. Under this budget, on the basis of the old rates, company taxation would be reduced by £10,000,000, yet the total collections, that will be made from company tax this year will be greater than the total collections derived from this tax in 1949-50 when Labour was in office. There would have been on last year’s rates a decline of £10,000,000, hut. in fact, there will be a reduced yield of an additional £24,000,000, or a total reduction of £34,000,000 compared with the revenue derived from this tax during the financial year that has just closed. I emphasize that we should not generalize too much about company taxation. Many companies have had a rather hard struggle. Account should be taken of the injurious effects that the repeal of the special allowance for initial depreciation of plant and equipment will have on companies. I repeat, as I declared in the course of the recent election campaign for the Senate, that the Labour party is pledged to restore the special allowance for initial depreciation which was first made by the Chifley Government and was repealed by this Government. Labour will, of course, review the application of this allowance in the light of the worsened position which has been caused by this Government’s action in repealing this allowance and which has, in many instances, prevented valuable industries from modernizing their equipment. Comment that has been very much to the point in respect of the special allowance for initial depreciation has been published in the press. The omission of that allowance represents an important gap in the budget from the viewpoint of production and that fact cannot be overlooked. Without elaborating that point, I declare that the most up-to-date technical equipment is essential if we are to achieve maximum production and thus provide fall employment for Australian workers.

I turn now to the subject of pensions, the social services means test and repatriation benefits, which can be conveniently discussed together. One of the prime responsibilities of government is to maintain the balance between all the various elements of income and expenditure. If a government reduces taxation, it must determine how the reductions will affect those with claims on the budget. In this instance, the Government has decided, on the one hand, to give company tax .concessions aggregating 33,000,000, which represents a reduction of’ £23,000,000, on the yield from this class of tax last year, whereas, on the other hand, the rates of age, invalid, widows’, war service and war widows’ pensions are to be increased by only 2s. 6d. a week, and this concession will cost the Government only an additional £4,500,000. The proposed company tax reductions will benefit many large firms by 2s. in the £1, that is, a benefit of £100,000 in respect of every £1,000,000 of profit. To many recipients that tax concession will be of relatively minor importance, but for hundreds of thousands of pensioners the vital consideration is their standard of subsistence. If the rate of pension is not adequate, pensioners must go without essential food and clothing and even shelter. Responsible persons, including clergymen, who have the responsibility of dealing with pensioners, have directed attention to the present plight of pensioners. The Government’s handling of pensions during the inflationary period undoubtedly reduced the pensioners’ standard of subsistence but, under this budget, it proposes to give to them only the smallest concession with the result, that their standard of living will remain dangerously low. Indeed, the Government’s approach to this problem is regarded by the great majority of Australians as an affront to the social conscience of the nation. Many people regard the proposed concession as contemptuous and miserly, and those are the mildest terms that have been used in this respect. Members of all sections of the community are perplexed and disturbed when they find that the Government places a reduction of the price of spirits on a financial par with the increase of benefit that it proposes to give to the pensioners. Even in relation to the needs basic wage, the pensioners will be worse off under this budget, than they are at present. These groups are high on the list of the groups that comprise the victims of the Government’s abject failure to redeem its promise to reduce the cost of living. The pensioners and all recipients of social services have been placed in their present .position by the inflation of prices and the enormous increase of living costs. Let us go back to the promise on which all the other election promises of the Government were founded. What was the phrase used to express the Government’s promise to the people? The Prime Minister said -

We shall put value back into the fi and restore real value to your money.

The women of Australia were told over and over again that the money they received would go further because of the reduction of the cost of living. What has happened about that promise is well known to every housekeeper. Every housewife knows that it has not been carried out. The truth is that the purchasing power of the Menzies-Fadden £1 of 1953 is less than one-half of that o£ the Chifley £1 of 1949. If the Chifley KI was worth. 20s?. in. value, the £1. of today has a purchasing, power of less Miara 10s.

The effect of the Menzies- Fadden inflation has been felt in almost every home. Not only have the recipients, of social services benefits,, war pensioners and the like suffered as a result of the failure of the Menzies Government to honour its promises, but also wage and salary earners on industrial awards have lowered standards because quarterly adjustments of the basic wage have never caught up with the increased cost of necessary commodities, especially where there are children in the home. For nearly three years most marginal allowances have been frozen. Now, the quarterly adjustments of the basic wage have been suspended, apparently to the intense satisfaction and enthusiasm of the Treasurer judging by his recent comment on the decision in the wages, and hours case. But the position of those families that are dependent upon small incomes from pensions, superannuation, rent or dividends is far worse. The price of almost every necessary’ commodity has been increased. This situation has had most serious social repercussions and has caused a feeling of frustration akin to despair. A new class of poor has come into existence which comprises some of the very best elements in Australia.

In this budget, undoubtedly, the Government has finally repudiated its further obligation to maintain social services pensions at least at the standard that prevailed before it took office in. 1949. In previous budgets the Government has used the financial emergency as an excuse for its failure in this matter; but now Lt claims that the emergency is over and that stability has been restored. I do not think that many people will accept that claim as a fact, but that is the basis upon which the budget was drafted. By these miserable increases of pension rates that I have mentioned - the basic increase in each case being only 2s. 6d. - the Government has ignored its obligation to maintain and to increase the value of social services benefits in accordance with the undertaking which it solemnly pledged itself to honour when it was seek- ing office. That is why at a later stage I propose to move that the first item in the Estimates be reduced.

The challenge contained in this budget must be accepted. The Australian Labour party here and now specifically declares its intention, at the first opportunity, to remedy the gross injustice to pensioners and others which this budget perpetuates. I refer both to the rate of payment to pensioners and to the means test. I declare that the future Labour government will take steps to restore the purchasing power of pensions and social services payments provided for when it left office in 1949. We declare, further, that, the Labour government will remove without delay the present vicious operation of the means test to the extent necessary to restore the more advantageous position for the aged, the invalid and the widows that prevailed in 1949. The exact amount of the adjustment thus required will have to be worked out at the time on the cost of living figures that then prevail. But on the present cost of living figures, as I shall show, it will involve a substantial increase of the rate of pensions and child endowment payments. It will also involve a substantial increase of the amount of permissible income and in. the amount of permissible property which a person may possess and still be fully entitled to full pension payment. That is why I give the undertaking now on behalf of the Labour party. In substance, I gave a similar undertaking during the Senate election campaign. We shall close this chapter as soon as the people place us in a position to do so, and we shall restore social justice in Australia.

The final goal will not be attained, however, while the social services means test remains. Accordingly, we shall not be satisfied merely to restore the means test provision that existed before this Government took office. We shall act energetically towards the elimination of the means test. The Curtin and Chifley Labour Governments were already taking action towards the attainment of that goal. They took successive steps which substantially ameliorated both the income and property tests. We shall pursue the objective of total abolition of the means test within the shortest space of time. I confidently believe that we can terminate all its vicious and evil features within the lifetime of a single parliament.

The figures that I shall now cite refer to the age and invalid pension in relation to the weighted average basic wage of the six capital cities. In the Chifley budget of 1948 the pension was fixed at £2 2s. 6d. The pledges of the leaders of the present Government in the general election campaign of 1949 were expressed in various ways and at various times. For present purposes it is sufficient for me to quote only one pledge, which was given by the Prime Minister himself. The right honorable gentleman said -

Existing rates of pension will, of course, be ;it least maintained. We will, much more importantly, increase their true value by increasing their purchasing power.

No doubt that promise was interwoven with the promise to restore the real value of the people’s money upon which the election was won. But, however it may be interpreted, the minimum obligation in that promise was to assure to every pensioner that the purchasing power of his pension, if not increased, would, at all events, not be reduced. I submit that no fair man could interpret that promise in any other way. I am putting the position most favorable to the Government, which solemnly promised not only to prevent reductions, but actually to increase the purchasing power of pensions. In November, 1949, when the promise was made, the basic wage had increased to £6 9s., and it was clearly the duty of the incoming government to make a further adjustment of the pension rate to meetresultant increased living costs. The Menzies Government recognized this responsibility by increasing the pension rate from £2 2s. 6d. to £2 10s. in its 1950 budget. That was substantially in accordance with the promise given to the people. By that adjustment the Government showed its realization that justice to the pensioner required at least the maintenance of the standards that had been established by the Chifley Government. Each subsequent adjustment it has made to the pension rate has reduced the pension to a smaller proportion of the basic wage.

I compare the pension rate with the basic wage because the basic wage is computed on the basis of the value of the very commodities which the pensioners must obtain. The basic regimen provided for in the basic wage is a convenient measuring-stick. In July, 1952, when the Treasurer prepared the budget for that year, the basic wage was £10 16s. He fixed the’ pension rate at £3 7s. 6d., which was 31 per cent, of the then basic wage. But by the time the right honorable gentleman had introduced his budget on the 6th August, the basic wage had taken another inflationary leap to £11 7s. and the pension percentage had dropped to 29 per cent. To-day, the basic wage is £11 16s. and the Government has fixed the pension at £3 10s., which is again 29 per cent, of the basic wage. And this is done by a budget in which the Government claims that our financial difficulties have been surmounted ! This act bears no other interpretation than that it is a decision that the living standard of all pensioners shall not be restored to that of 1949. The same purpose is to be seen in the Government’s adjustment of the means test. Having at long last made a general means test adjustment - it has not been done before except in special types of cases - the Government has deliberately set the new rates far below the standard that it inherited from the Chifley Government. The permissible income of 30s. a week fixed by the Chifley Government in 1948 was 26 per cent, of the then basic wage. The permissible income of £2 a week announced in the present budget is 17 per cent, of the basic wage. Therefore, when we say that this is a savage penalty on thrift and effort, we are stating a literal fact. It is an even severer means test than that fixed when the age pension was originally established 44 years ago, in 1909. The permissible income was then 20 per cent, of the basic wage. Now it is only 17 per cent, of the basic wage. In assessing how much pensioners have lost by the reduction of the purchasing power of pensions, it may be argued that the Government was committed only to maintaining the pension ratio to the basic wage which existed when the pledge was given, that is, in November, 1949. But even on that basis, which is the most favorable for the Government, the age and invalid pension rate to-day should be £4 a week, and the permissible income £2 15s. a week. To restore tie full equivalent of the rate set in the 1948 Chifley budget,- a further improvement would have to be made, but it is beyond doubt that fulfilment of the pledge given to pensioners would require a minimum pension rate to-day of £4 a week and a permissible income of £2 15s. a week. Labour will honour the pledge which this Government has failed to keep. By implication we are bound to that pledge because its fulfilment would merely restore the situation that existed when Labour relinquished office. “We will act immediately as a government to establish as a minimum these rates subject to any adjustment in accordance with cost of living changes in the next few months. In the light of the financial position which the outgoing Government will leave, Labour will strive to improve upon those rates. A similar adjustment of widows’ pensions is required and would be made.

The Government’s failure to liberalize child endowment shows complete indifference to family needs and is causing growing alarm. So far from increasing the 1949 purchasing value of the child endowment of 10s. a week, the Government has refused even to maintain it. In the intervening years of mounting inflation, it has failed also to increase the 5s. payment established in 1950 for the first child. The immediate task of an incoming Labour government would be to remedy this injustice which has caused such hardship. By refusing, even in this budget, to make any adjustment of child endowment rates, the Government surely shows itself to be deaf to the claims of social justice.

In principle, my remarks about the purchasing value of pensions apply also to war and service pensions, including war widows’ pensions. The Government’s obsession with 2s. 6d. a week increases when the purchasing power of 2s. 6d. ha3 become so infinitesimal is astounding. In the present financial year, the total additional expenditure on all repatriation benefits will be only £909,000 - a minute portion of another near £1,000,000,000 Fadden budget. The question of pension rates raises a very grave social problem which the Parliament cannot shirk. Recent reports reveal that the number of pensioners in every 10,000 of our population increased during the past year from 407 to 425, compared with 34.2 in 1945. As for four years the number was practically stationary, the increase appears to be an economic result of conditions in this country during the last twelve months. If the Government can afford concessions amounting to £81,500,000 this year, clearly the pension increases are grossly inadequate.

I turn now to the administration of public finance, because the budget raises this matter in a most acute way. We have been presented with the usual bulky tome containing masses of figures. We have only a few weeks to consider the document, then, probably, the “ guillotine “ will be used to rush the Estimates through the Parliament. Few members of this chamber will be fully acquainted with the purposes for which money is being provided. Surely the time has arrived for a new approach to this problem and for the adoption of improved machinery. The first task is to determine the legitimate requirements of government. In other words, let us first have a critical look at our outgoings. Is the committee satisfied that this part of the budget at least is correct? Is money being voted in accordance with sound principles? Are we satisfied that all the amounts now sought are in accordance with our real needs, or will they, in some instances cover up unnecessary waste, inefficiency and extravagance as they have done in the past? This is the time for the Parliament to establish criteria for the control of public expenditure. The work of the Public Accounts Committee in recent weeks has been noteworthy. It is a nonparty committee which includes members from both sides of the Parliament. So far, however, its function has been only to report on money that has already been expended. Here we have a budget calling for the expending of £981,000,000 this year from Consolidated Revenue. Two propositions are involved. The first is that the money should be expended on known or authorized purposes, and the second is that on a true and just accounting basis the money should be chargeable against the Commonwealth’s revenue account as distinct from its capital or loan, account.

Commonwealth expenditure was only £95,000,000 in the year immediately preceding World War II. That illustrates the enormous increase that has occurred in public expenditure. There was a time when expenditure was checked far more closely than it was during the war or has been since. There are so many authorities and agencies expending Commonwealth money to-day that the Parliament is often left in the dark about public expenditure and the need for it. Many items for which money is being provided are not readily ascertainable in the budget. Foi instance, by how much did the Government increase the issue of treasury-bills last year? That is not shown in the budget or, if it is, it is most difficult to locate. I mention that as an illustration. Round figures are tossed in without any attempt being made to analyse proposed expenditure. We find that the defence services are once again being allocated the round figure of £200,000,000. The transactions of the last month of the financial year 1952-53 in relation to last year’s budget are referred to in the statements which accompany the budget speech. Many matters of principle arise. Time does not permit me to debate them now, but I consider that a committee such as the Public Accounts Committee should examine them with a view to ascertaining whether expenditure was deliberately accelerated, and more money was spent than was necessary for the purpose. This matter is of supreme importance. Let us suppose that £15,000,000 was over-spent in that way. That money could have been used for other purposes, and many of the problems that I have already discussed would be solved.

Let us consider the round figure of £200,000,000 for defence services. How has that figure been reached? It is simply a “ shot in the dark “. What has happened is that £200,000,000 has been taken this year, because that sum was taken last year, and the amount is divided amongst the service departments. Such a figure is not a genuine pre-estimate by the departments of their financial requirements, which could not amount exactly to the sum of £200,000,000. The precise amount may be a little more or a little less than that figure. However, this illustrates the position of complete self -destructive absurdity that has been reached in the way in which the Estimates have been placed before us. There is no evidence that such a rough guess is needed, that the money is sufficient, or even that it can be spent effectively. The amount may be too much. Equally, it may be too little. We just do not know. I submit that we are entitled to more information than we have been given on these matters. The position of the federal budget to-day demands an investigation by the Parliament of the kind I have suggested.

Dealing with general examples, I need only refer to matters considered recently by the Public Accounts Committee, and to the Auditor-General’s report for 1952-53 on the Woomera project. The management of that project has not been satisfactory, and a loss has resulted that should never have been incurred. The Parliament itself is not equipped to inquire into such a matter, and a committee such as the Public Accounts Committee should examine the circumstances before the money is voted for the work. If that practice were followed, the stable door would not be locked after the horse had bolted. I have suggested a practical solution of the problem. This kind of machinery is adopted to a substantial degree in Great Britain, and almost entirely in the United States of America, where congressional committees undertake such investigations. We can arm ourselves with the same kind of machinery, and we should do so. One step would be to present the budget to the Parliament early in the financial year. That course was advocated last year by the Treasurer, but he has not been able to follow it on this occasion. The reference of departmental estimates to a committee such as the Public Accounts Committee would not delay the granting of Supply, and other legislation could be brought forward for consideration. Any concessions that the Treasurer proposed to grant could be introduced. But if budgetary control over expenditure of vital importance to the country is to be more effective, we must extend the principle of inquiry by the Public Accounts Committee.

I have already referred to the vote of £200,000,000 for defence services. For whatever amount is necessary for defence, this party will vote. But we regard this principle as applicable: that defence in this country includes vital aspects of development and communications. These are integral parts of defence, specially in the north of Australia. Such matters require closer co-operation on the part of the Commonwealth with the States. Much of the information in the budget is too generalized. We have men in this Parliament who are experienced in accountancy and public administration. They are capable of rendering enormous assistance to the Parliament when a decision on expenditure is under consideration.

How much of this budget is a legitimate charge on public revenue, and how much should be charged against loan funds ? Once again, the Government has adopted the principle of paying large sums for capital works and services -out of Consolidated Revenue. This year, the Government is openly budgeting for a total expenditure of £101,000,000 for this purpose. Other items of a capital nature are contained in the Consolidated Revenue estimates. I submit that this method is a definite infraction of proper accountancy. While it is proper to make a portion of the expenditure on capital works chargeable against revenue, the practice of paying for all capital works out of current revenue thrusts the burden of national development on to the taxpayers of a particular year, even though the benefits will accrue over a long-term period, or even in perpetuity. The PostmasterGeneral (Mr. Anthony) will expend nearly £33,000,000 out of taxation receipts to provide telephone exchanges, buildings, sites and trunk lines, all of which will become revenue-earning assets in the future. I claim that it is wrong to charge the entire cost of capital projects against the Consolidated Revenue account. However, that illustration shows how the.budget is being deliberately inflated against a particular year and why taxes are excessive. It is a completely wrong principle of accountancy. We should recognize it as such, and adopt a proper method. No business would dream of adopting this kind of procedure. The stage is being reached where the Commonwealth’s share of the national debt is practically stationary, whilst the loan indebtedness of the States is constantly rising. That situation occurs as the result of the practice of the Treasurer of charging the taxpayers of a particular year the capital cost of works. The States incur a loan obligation in connexion with their works. More than 10 per cent, of the total budget is deemed to bo expended in one year, and charged against the taxpayers of that year. A capital item exceeding £100,000,000 is taken out of the nation’s pay envelope, so to speak, instead of from its savings account.

I submit that this budget is not a frank statement of the position. I have tried to prove that statement, and I have demonstrated the truth of it in relation to taxation. The Treasurer has stated that the average expenditure over the last six years has increased by about £90,000,000 a year, but that it has not increased by such a large amount on the present occasion. That statement is true, but one important fact must be kept in mind. For four years when the Labour Government was in office, the average expenditure was £492,000,000. In the four years that the right honorable member for McPherson has been Treasurer, the average has risen to £939,000,000. That figure is conclusive evidence of the dominating economic effects of the last four years. I refer to “galloping inflation “ under an administration which, by a terrible irony, pledged itself in the general election campaign of 1949 not to allow prices and costs to get out of hand, and actually to reduce them for the benefit of the people’s wages, salaries and savings, and all monetary payments.

It is not possible for me in one speech to deal with all aspects of financial and economic policy. The Treasurer has certainly not attempted to do so on this occasion, as he ventured to do in 1951 and 1952. However, I submit- that the claims which he has made in his budget speech are not substantiated and that in relation to taxation, for the reasons I have given, the budget is a false and deceptive document. The budget means large increases of taxation in many instances, compared with last year. Some rates of tax have fallen; but even so the yield of tax will substantially increase. Hundreds of thousands of Australians will pay additional sums in tax this year compared, with the amounts they paid luring the hist financial year, largely because of the inflation of prices that has already been recorded and registered and passed into costs or wages. In those circumstances, reference to averages of tax rates is completely misleading.

For a number of years, the present Treasurer attacked a former Treasurer, the late Mr. J. B. Chifley, and advocated a complete review of the system of the double taxation of company profits. The right honorable gentleman claimed that the English system should be adopted. He has not done anything to give effect to his own proposal. Basic blunders occur in the whole accountancy of the budget, such as charging large capital investment against Consolidated Revenue. No private business would or could act in that way. The time has arrived when we should place the system on a. more satisfactory accountancy basis. No one knows the truth of that better than does the Treasurer. who is a skilled accountant.

The way in which the Parliament has been treated in relation to the vote of £200,000,000 for defence services is most unsatisfactory. Over the last three years, it would appear that approximately £’50,000,000 per annum has been expended on capital works, including buildings. If those buildings are administrative buildings in southern Australia, as I assume they are, why should those charges not he spread over approximately the life of the buildings? The Government cannot possibly take all these moneys for administrative purposes, long-term projects, or perpetual projects, and continue to charge them against the accounts of a particular year. The altered money values as a result of Menzies-Fadden inflation has robbed the people of a portion of their savings because the value of savings can be truly measured only by the quantity of commodities that they will purchase, lt is for that reason that the loan market began to weaken when the interest rate on loans was increased from 3£ per cent, to 4^ per cent. The increase of the interest rate forced down the market value of Commonwealth bonds. During the regime of the Chifley Labour Government a bondholder could always obtain the full nominal value for a £100 bond, but since this Government came to office, many small investors who have found it necessary to sell their bonds have received as low as £90 for a £100 bond.

As I have already pointed out, the yield from individual income taxation will be increased, not decreased, as a result of the budgetary proposals. Sales taxation will yield almost the same colossal amount in this financial year as it did during the last financial year. Indeed, the yield from most forms of taxation will increase rather than decrease. As I have already mentioned, the yield from individual income tax will increase by about £11,000,000 in this financial year, but the yield from company taxation will decrease in the way that I have described by about £33,000,000. A mere 3 per cent, of public companies derive about 47 per cent, of the total taxable income of companies in Australia. In this comparatively narrow, although powerful, group of companies the proposed remissions will operate at the maximum. This is further evidence of the trend towards aggregation of capital in the giant corporations, or rather their managements. It is axiomatic that the larger the corporation is the smaller is the effective control of the small shareholder.

No provision has been made in the budget for restoration of the 40 per cent, initial . depreciation allowance for plant and machinery that was initiated by the Chifley administration as a direct incentive to producers to maintain the most modern plant and equipment and increase production. Today, due to inflation, many sections of the community are fighting a losing battle. They include not only the groups that I have mentioned, but also other groups. The group that is in perhaps the worst position to-day comprises superannuitants who are not dependent on the Government for assistance. During the last four years their income has remained almost stationary, while costs have risen considerably. They have not received the benefit of quarterly adjustments of superannuation payments, and as a result they have become a class of new poor in this country. They are closely concerned with the problem of abolition- of the means test, to which I addressed myself earlier, not as a goal to be attained in the far distant future, but as a matter of practical politics to be attained over a period of years to be fixed. In many instances these people have been financially crippled by the application of the means test. Both the irony and the tragedy of the present situation are attributable to the fact that the present Government has succeeded in gulling the electors by its promises. All of the budgets of the last three or four years have been characterized by inflation. I do not know why the Treasurer claims that inflation has been arrested, because each of the three quarterly adjustments of the basic wage this year has shown increases, although certainly those increases have not been as much as were previous increases. There is no evidence that that trend has stopped. In 1949 the cry of this Government was “ We will put value back into the £1 “. That was a time of free and easy spending. The Government then stated that there would be no let or hindrance of the policy that enabled persons to purchase goods, and supporters of the Government also stated that the purchasing value of social services benefits would be increased. A few months afterwards spiralling inflation commenced, and then there was a period of extraordinary inactivity until two years later when the 1951 budget was introduced. An anti-inflation conference was held in Sydney, but nothing practical emerged from it. There were promises that excess profits taxation and other measures would bc introduced, but nothing was done until the 1951 budget was brought down. Then came panic. There were measures of control and restriction of bank credit and financial controls over almost everything. It was the idea of the bright young people entrenched in bureaucratic positions that through the banks the economy of the country could be controlled by credit restriction and in other ways, but that policy meant great danger to business and industry. Then, for the first time since 1942, elements of unemployment appeared.

This budget is necessarily based on the unhealthy inflated state of the economy. The proposals contained in it will do nothing to restore purchasing value to the £1. Indeed, the Australian £.1 has become so depreciated since the present Government has been in office that its stabilization will be a process calling for very skilled treatment. Punitive taxation is to remain, although in a slightly modified form. Galloping inflation is not going quite so quickly now as formerly, but it is moving in the same direction and is affecting adversely the sections of the community to which I. have referred. Honorable members know from the problems and troubles of their constituents how the various sections are affected. Many ex-service personnel and their dependants who have lodged claims have found that the onus of proof clause that was inserted in the repatriation legislation ostensibly for their benefit has reacted against them, and there have been many protests from such members of the community. One of the chief reasons why loan issues ceased to be successful was that the small investors found that the increase of the interest rate automatically had the effect of forcing down the market value of Commonwealth bonds. As a result of the present Government’s policy of dearer money, home purchasers found that they were burdened with two or three years’ more instalments on. their home-purchase loans. This upset housing co-operative companies throughout. Australia. It is not possible to have a happy community unless there is adequate provision for home-building, health and education. I hope that the effect of the budgetary proposals on State governments will be dealt with fully when the matter of grants to States is before honorable members. To-day, State governments and shire and municipal authorities are practically in the position of mendicants waiting on the good graces of this Government. Public and developmental works have been cut to the bone, and in some instances community life has been endangered. The Australian Government cannot divorce “itself from responsibility to help to provide schools, houses, hospitals, transport and other amenities. The immigration programme cannot be successful unless appropriate amenities are provided for both old Australians and new Australians. Supporters of the Labour party believe that this budget will do nothing towards achieving the things for which we are striving.

A penetrating and extremely pertinent criticism of the budget was published only to-day in an authoritative journal. I quote the following passage from it: -

Responsible industry and people who are truly Australian in outlook must read into the Budget a clear indication that the Commonwealth Government desires to reduce its responsibility in the sphere of national development. So urgent is our need for national development to-day and so limited are our available financial resources for undertaking such work that one reasonably may reach the conclusion that the financial policy of the present Commonwealth Government does not reflect a clear conception of its national responsibilities.

In every State of the Commonwealth hospitals are urgently required. There is a lag in housing. Schools are overcrowded. Roads are inadequate and in many cases in an unserviceable condition. Railways, still staggering as a result of past war-time service, are in urgent need of rehabilitation and money is required for sewerage, water conservation and water supply schemes. Admittedly, some of these undertakings rightly may be regarded as a State responsibility, to be financed from such resources of revenue as are available to the States, but not surely where health, education and communications are concerned. Unquestionably, such undertakings are the’ equitably spread responsibility of the whole of the taxpayers of the Commonwealth.

Why should not such undertakings be the responsibility of all taxpayers, as thi? publication of the automobile industry of Australia suggests? The Commonwealth has power in certain matters and the States have power in everything else. Both are trustees for the people. One would imagine that this Government owned the taxpayer’s money, but in fact it is merely a trustee. The time has come for a review of Commonwealth and State financial relations. We should study the problems of the States carefully instead of reducing their resources further and further, as this Government is doing. The reason advanced by the Government for cutting back the revenue of the States is that it wants to provide for its tax reductions. Originally the . reductions were to be “ substantial “. That was the first word used by the Government in its promises to the. people, but the adjectives became increasingly more glamorous as the Corangamite and Lang by-elections approached. The promises of the Liberal candidate for Lang, indeed, were positively rosy. He offered the people far more than I proposed on behalf of the Labour party. Although I should have liked to offer much more, I had regard for practical economics. That is the way these by-election campaigns were conducted by the Liberal party. The problems of the development of Australia, in which the States must play a prominent part, are of supreme importance.

The budget, being false and deceptive in its claims, and extremely harsh and cruel in its effect on pensioners and recipients of repatriation benefits’ and other social services, will arouse great indignation when its terms are properly appreciated and will cause the inevitable reaction that succeeds the over-boosting of proposals. Promises have flowed out to the people from Parliament House through a great reticulation system during the past four months.


– Order ! When does the right honorable gentleman propose to recognize the Chair instead of addressing his remarks to the audience sitting behind him?


– I beg your pardon, Mr. Chairman. Glowing forecasts of the budget provisions emanated from this building for many months. Even on the afternoon of budget day some of the newspapers published predictions that were almost identical with the terms of the budget. Those reports may have affected market operations in some of the great cities of Australia. Where did they originate? Government propaganda on the subject of this budget mounted to a crescendo. Now will come the reaction. The people will soon assess the value of the goods .that have been delivered to them and they will compare the facts with the promises that were made to them in 1949 on behalf of the present Government parties. I have mentioned only a few of those promises to-night. The reaction will be all the more severe when the taxpayers remember those golden promises. After the climax will come the anticlimax. This budget will not satisfy the people. They cannot be cheated any longer by this Government and its representatives. As a protest against the provisions of the budget, especially those that relate to pensions, repatriation benefits and other social services, I move -

That the first item be reduced by fi.

Minister for Social Services · Denison · LP

– My mother taught me as a boy that, before I criticized anybody, I should ask myself three questions. The first was, “ Is it true? “ ; the second was, “ Is it kind ? “ ; the third was, “ Will it do any good? “

Mr Pollard:

– Well, I hope the Minister will heed her advice.


– Order ! There was only one interjection during the speech of the Leader of the Opposition (Dr. Evatt), which lasted for one hour and twenty-five minutes. I shall insist on the preservation of silence while the Minister for Social Services (Mr. Townley) speaks.

Mr Daly:

– The Minister is very provocative.


– My remarks about the speech of the Leader of the Opposition (Dr. Evatt) will certainly be true, and, though he may not regard them as being kind, I am sure they will do a vast amount of good, particularly amongst Australians who, without thinking very deeply, may have been impressed by his statements. Seldom in this chamber has such a responsible man as the Leader of the Opposition replied to a Treasurer’s budget speech with statements that were so completely devoid of real substance,. so illogical, so totally contradictory, and so barren of worthwhile, realistic comment as were those of the right honorable gentleman. I have every sympathy with him. We all know that he finds himself in a dilemma. He and his followers are in utter confusion. Last week, when the Treasurer (Sir Arthur Fadden) presented the budget-

Mr Chambers:

Mr. Chambers interjecting,


– Order ! The ‘ honorable member for Adelaide (Mr.

Chambers) will have to leave the chamber if he does not behave himself.


– Undoubtedly, the Treasurer’s budget speech last week threw the Opposition into utter confusion. Many honorable members, and many other good judges outside the Parliament, freely acknowledge that the right honorable gentleman presented the best and finest budget ever introduced in this Parliament. But nobody would suggest that it is perfect.

Many of its elements provide a basis for argument. We may disagree about its merits, but at least it should be the subject of sane and reasoned discussion. The Leader of the Opposition has studiously ignored all those elements. He floundered about for nearly one and a half hours through a hazy maze of littleunderstood provisions and embarked on a flight into the realms of fantasy, possibly to impress his ever-dwindling company of followers. But he has put forward arguments that carry within themselves the seeds of their own destruction. Nothing could illustrate my remarks better than the comments of the right honorable gentleman in regard to social services in general and in regard to pensions in particular. For the time being I shall leave the subject of repatriation pensions and deal purely with’ the subject of social services pensions. The right honorable member is learned in law. I am well aware of his academic brilliance, but I am at a loss to understand why he so often under-estimates the intelligence of other people.


– He could not under-estimate 2s. 6d.


– I shall come to that matter in a few minutes. It is amazing how a man so well versed in the principles of law as is the Leader of the Opposition could be so simple in dealing with one of the elements of law, the Social Services Consolidation Act. I am reminded of the great astronomer who knew all about the sun and the moon and the stars and who, whilst thinking about these things one night as he walked along the street, fell down an open coal hole. I acknowledge the Leader of the Opposition as an authority on the broad principles of law, but in dealing with the

Social Services Consolidation Act he has gone down the coal hole. Why he should have concentrated so much of his speech on matters covered by an act about which he knows so little is beyond my knowledge. And I am at a loss to understand why he should have chosen to speak on a subject such as social services, because if there is one subj’ect that exposes the Labour party nakedly to criticism it is its record in regard to social services. If the right .honorable gentleman had sought to criticize the Government on the strongest point of its record he could not have done better than choose the subject of social services because a comparison of this Government’s social services record with the social services record of the Labour Government can only be embarrassing to the Opposition. This shows what little appreciation, he has of the record of his own party.

When pensions were first introduced in this country they were paid at the rate of 10s. a week.’ Under the provisions of the budget they will be 10s. a day. Of the pension of ?3 10s. a week which will be payable if the Government’s proposals are approved, governments consisting of the parties now in office have been responsible for granting ?2 8s. In the whole history of pensions, Labour party governments have granted increases totalling only 22s. a week. During the last four years the present Government has increased pensions by 27s. 6d. a week, which is 5s. 6d. a week more than all the increases that the Labour party has been responsible. The Leader of the Opposition reached high peaks of oratory in speaking of the intended increase of 2s. 6d. a week, but he did not mention that in its 1950 budget the Government provided for an increase in pensions of 7s. 6d. a week.


– He did mention it.


– He mentioned it in passing, but he did not emphasize tho fact. That increase was 50 per cent, greater than the largest increase that a Labour government had ever proposed. In 1951, this Government introduced a pension increase of 10s. a week, which was double , the largest increase ever proposed by a Labour government. Last year our budget provided for a further increase of 7s. 6d. a week, bringing the total pension to the record sum of ?3 7s. 6d. a week. We propose to increase that amount to ?3 10s. a week this year.

While prices were rising in the last few years, this Government fully recognized that the pensioners needed assistance and we did not hesitate to call on the taxpayers to find the money to pay for the record increases which involved the payment of over ?30,000,000 in less than four years. During that period prices were rising at the rate of about 20 per cent, a year.’ Now they are rising at a rate less than 4 per cent, a year. These facts provide what the Leader of the Opposition has called a yardstick by which the House can measure the sincerity of the right honorable gentleman. Incidentally, this is the only government in the history of the Commonwealth which has provided for increased pensions in every budget that it has introduced. While the Labour Government was in office from 1946 to 1949 it increased pensions during only two years out of those four. Now the Leader of the Opposition has the temerity to criticize the Government for proposing the payment of an extra 2s. 6d. a week. In half the budgets that the Labour Government introduced from 1946 to 1949 it provided no increase at all for pensioners. That was not because we who were in Opposition in those days failed to remind the Labour Government of its responsibilities. At page 865 of Mansard of 1949 it is reported that the honorable member for Mallee (Mr. Turnbull) asked the then Prime Minister, Mr. Chifley, the following question : -

I ask the Treasurer whether the Government intends to. increase the rate of age and invalid pensions. If so, will the increase be between 3s. and 5s. a week, as suggested in the press, or will the Government ensure that the new rate shall have some practical relation to the cost of living?

Mr. Chifley’s reply was this ;

No consideration has been given to a further increase of pension rates. The Government considered this subject not long ago . . .

I find that “ not long ago “ was October of 1948 - the year before. The then Prime Minister continued - and made a general increase, and it is unlikely that a further increase will be considered.

I repeat that this is the yardstick by which we can measure the sincerity of the leader of the Opposition when referring to pensions. He has criticized the Government, freely, but the Labour Government gave no pension increase when it was in office. It did not provide free medical treatment, or free medicine. It gave nothing.

I was amazed at the remarks of the Leader of the Opposition about child endowment, which he said should have been greatly increased. I have not been in this House a great length of time, but I remember with remarkable clarity how bitterly the right honorable gentleman fought against the proposals of this Government when it sought to introduce child endowment for the first child. Tonight, in opposition, he told us what he would do if, by some remarkable freak of circumstances, he became the leader of a government. There is another yardstick with which to measure his sincerity. I have said that the right honorable gentleman, although well versed in the law, is not conversant with the Social Services Consolidation Act about which he has talked. I would not make such a statement unless I were prepared to support it. I remind the committee that the right honorable gentleman made frequent references- to what he called the small increases of pensions to be made this year. His own words show what little understanding he lias of the subject. I shall judge him on his own words. “Under the provisions of the legislation of which he was so scornful, over 120,000 pensioners will receive increases, not of 2s. 6d. a week but of sums between 12s. 6d. and £1 12s. 6d. a week. Some pensioners are in receipt of reduced pensions. If the reduction is due to earnings, the increase of the pension in the case of a single man will be 12s. 6d. a week, and in the case of a married couple, £1 5s. a week. If the pensions are reduced also by reason of the possession of property, the increase for a single person may be 16s. 3d. a week, and for a married couple, £1 12s. 6d. a week. A single person with a reduced pension of £2 10s. a week will get an increase of 12s. 6d. a week. A married couple who are both pensioners and are receiving a reduced pension at the rate of £5 a week will have an increase of £1 5s. a week, or £2 10s. a fortnight. Let us examine the position of a married couple, only one of whom is entitled to a pension. If they have a reduced pension of £2 10s. a week, they .will get an increase of £1 a week. Yet, having listened to the Leader of the Opposition, one might believe that all that this Government is prepared to give to pensioners is an increase of 2s. 6d. a week. I repeat that the right honorable gentleman does not know the terms of the legislation about which he has talked.

In addition to the 120,000 people who will receive increases of up to £1 12s. 6d. a week, possibly another 10,000 persons, now debarred from receiving pensions, will be brought into the pensions field by the liberalization of the means test provisions. I wonder whether the right honorable gentleman knows that, under the terms of legislation shortly to be introduced, an aged . couple will be permitted to own their own house and everything in it, have a life insurance policy with a surrender value of £750, have £319 in the bank, receive free medical treatment and free medicine and have, including their pension, an income of £il a week. It is interesting to compare the position of an aged couple in Australia with that of such a couple in New Zealand, a country that is recognized as being fairly enlightened in matters of social services. Whereas in this country an aged couple could have, together with their pension, an income of £11 a week, in New Zealand their income would be limited to £8 15s. a week. In Australia, if such a couple owned their own house and had all the other possessions that I have mentioned, they could have other property to a total value of £2,500 before their entitlement to a pension ceased. I say that, under those circumstances, the provision of more assistance to pensioners cannot ‘be regarded as an urgent governmental responsibility in a country with a pension structure based essentially on need. Let us consider the position of an invalid pensioner with a wife and two children. Under our legislation, a little family of that kind could have all the things that I mentioned when dealing with aged couples, and, with pension increases, increased payments made in respect of the wife and children and the extra permissible income, could have an income of £12 lis. 6d. a week.

The right honorable gentleman conveniently failed to pay any attention to what is regarded by most thinking people as one of the most valuable social services ever to be introduced in this country. I refer to the provision of free medical benefits and free medicine for pensioners. It is when people are growing old or are suffering from some infirmity that they need most the services of a doctor, medicines and medical comforts. For that reason, I say that, by making available to pensioners free medical treatment and free medicine, this Government has introduced probably the finest social service ever to be provided in Australia. To place the matter on a monetary basis, one can say conservatively that such assistance is worth at least 5s. a week to pensioners. If pensioners were asked at a gallup poll whether they preferred to have a.n. extra 5s. a week and lose their entitlement to free medical treatment and free medicine, or receive those benefits and draw a pension of 5s. a week less than would be paid otherwise, I think at least 90 per cent, of them would settle for free medical treatment and free medicine. I make that statement after having had quite intimate contact with pensioners and pensioners’ organizations.

Having given those examples, I think it will be agreed that I am not unfair when I say that the Leader of the Opposition had not the intimate knowledge of the Social (Services Consolidation Act that he should have had. before he embarked upon a criticism of the Government in this matter. The right honorable gentleman spoke at some length about the adjustment of pensions in accordance with variations of the cost of living. If we had taken the pensions that were being paid by the Labour Government of 1949 and applied to them every one of the cost of living variations that occurred in the ensuing four years, the increase of pensions this year would be, not 2s. 6d., 2s. or ls., but a miserable 9d. a week. That is not all. There was a time in this country when pensions were tied to the cost of living. In 1940, the present Prime Minister (Mr. Menzies) introduced legislation which, we thought, tied pensions once and for all to the cost of living as determined by the “ C “ series index. As changes in the cost of living were reflected in the “ C “ series index, so the pension was to increase or decrease. There are all kinds of reasons why that system was not as satisfactory as it might have been. To-night, the Leader of the Opposition suggested that we should go back to that method. However, the interesting point is that the tying of the pension to the cost of living was discontinued by the Labour Government in April, 1944. The man who introduced in this Parliament the legislation to effect that discontinuance was none other than the present Leader of the Opposition.

Since the right honorable gentleman has raised the matter of comparisons, it might be appropriate at this stage if I briefly run through some of the social services provisions which obtained in 1949 and those which apply to-day. I shall then leave the committee to judge which government has the better record in this connexion. When the Labour Government was in office, age and invalid pensions were £2 2s. 6d. a week; to-day they are £3 10s. Under Labour, the class “ A “ widow’s pension was £2 7s. 6d., whereas now it is £3 15s. To-day, we have a means test pension for blind people. There was no pension when Labour was in office. We have a child allowance of lis. 6d. a week; the Labour Government’s allowance was only 9s. Under Labour, the rehabilitation allowance -was £2 2s. 6d. a week; this Government provides £3 10s. r- When Labour was in office the permissible income for age, invalid and . widow pensioners was £1 10s. a week, whereas legislation now before this Parliament proposes that it shall be £2 a week. The permissible income for blind people under the Labour Government was £5 17s. 6d. a week. We first increased it to £8 a week and, later, to £10 a week. The Labour Government did not consider dependent children at all, but we have allowed pensioners to earn additional income of 10s. a week for every dependent child in the family. The exemption point for all pensions, under

Labour, was £100; under this Government it is £150. The Labour Government’s property limit for all classes of pensioners was £750; to-day it is £1,250. The Labour Government’s provision in respect of surrender value of life insurance policies as a concession before assessment of pensions was £200; under this Government it is £750.

Another most valuable provision which this Government introduced is the taxation concession for people who are not pensioners but are. in the pension age group. To-day, a married couple who are not pensioners are entitled to a taxation concession of £750, a concession of which the Labour Government never thought.

Mr Fitzgerald:

– How did the basic wage in 1949 compare with the basic wage to-day?


– I thank the honorable member for Phillip (Mr. Fitzgerald) for reminding me about that matter. 1 should not expect him to know very much about it, but I would expect the Leader of the Opposition to know of it and to be honest about it.

Mr Fitzgerald:

– Has not the basic wage doubled since then ?


– The point is that the basic wage is a completely fallacious basis on which to argue. Originally, the basic wage was calculated in respect of a man with a wife and three children. It was based on a 48-hour week, then on a 44-hour week, and to-day on a 40-hour week. In recent years its application to a family unit has completely disappeared. As honorable members are aware, recently the determination of the basic wage has been on a factor which is described as “ the capacity of industry to pay “. How can it be said that, because a pension was such and such a percentage of the basic wage in 1949, it should be such and such a percentage of the basic wage to-day, when the whole basis on which the wage is fixed has been altered?

The most effective comparison between the two periods to which I have referred is to be found in the total payments from the National Welfare Fund. In the last year of office of the Labour Government £80,800,000 was provided for the various social services. This year, the Govern ment will provide £184,000,000. The speech of the Leader of the Opposition indicated that he lacks a true conception of the budget as it stands and was attempting to gain a political advantage. By concentrating his remarks on social services he left his side wide open to attack because of its demonstrable weaknesses in the past in relation to this matter. Also, he has given me the opportunity to outline briefly how, in the field of social services, the Menzies Government has a record of achievement that has never been equalled in the history of the Commonwealth.


– Order ! The Minister’s time has expired.


.- The Minister for Social Services (Mr. Townley), who leapt quickly into the breach to defend the very obvious differences between justice and imposition in the budget, has fallen into the error common to every junior Minister on the Government side. He lives in the shadow of two figures who dominate, for the time being at least, the Government of this country. One is the Prime Minister (Mr. Menzies), and the other the Treasurer (Sir Arthur Fadden). Every one else on the Government side of the committee is a pallid imitation of them. Here we have a young man who, we know, has handled with efficiency the social services side of the Government, but whose conclusions a’bout the subject are as childish as one could expect to find. He babbles about figures, as the Treasurer might, knowing that pounds have no significance as far as the inflated budgets of this Government are concerned. While he speaks about, now paying twice as much in respect of social services as previously, and refers to a percentage which is higher than ever it was, we all know, as the honorable member for Phillip (Mr. Fitzgerald) remarked by way of interjection, that there is little value in the Menzies Governments £1. The Government is still haunted by the greatest lie ever given in the political life of this country. I refer to its promise to put value back into the fi, which it has been unable to honour. That ghost still walks, first, through the horror budget and then through the to-morrow budget, its second, in which it asked the people to bide their time and assured them that things would be better to-morrow. Now it walks again and haunts this sorrow budget.

The stark fact is that social services payments to-day are a disgrace to the community. They are completely inadequate. As a result, the most vulnerable section of the community is in the direst poverty. If that statement is challenged by honorable members opposite, I ask them to come with me to my electorate, which is a worker-middle class electorate, if it can be so described, where I shall show them pensioners who, last winter, were in dire distress because of the incidence of increased rentals and the difficulty of obtaining sufficient fuel. While I was doing some work with the age pensioners’ organization, I found one old lady, suffering from arthritis,’ who had no money to provide herself with firewood. She was obliged to plunge her hands into hot water in order to keep them from freezing. Yet we speak glibly here of having done the right thing by the people ! Let us be just and say that, although the Government has attempted to achieve something, as the Leader of the Opposition (Dr. Evatt) has pointed out, its first mistake still lives with it and will go with ‘t into political oblivion - the mistake of making an extravagant promise that could not be fulfilled. Was it because he did not want to pay the pensioners an additional payment that the late Mr. Chifley, when Prime Minister and Treasurer, decided against an increase? It was.nothing of the sort! It was because he saw the storm coming, and, like the good sailor he was, he trimmed his ship. He knew the difficulties that lay ahead. The promise makers who followed him made a promise that is, as I have said before, haunting their present budget and will continue to haunt it to the end. So we have here a despicable, miserable and miserly increase of 2s. 6d. a week-


– Order ! Those words are not parliamentary.


– I think that the pensioners concerned would consider them wholly so, but if you, Mr. Chairman, think they are not, I shall withdraw them, and say instead that this increase of pensions is a princely sum, a noble sum, a sum which will be appreciated in all corners of the community. At this moment of time everybody knows that, despite all the Government’s statements to the contrary, inflation is still careering in this country. The Leader of the Opposition pointed out that in some instances it had slowed down, but that it was still a pretty strong force. By that force the pensioners, age, invalid and service, have been, and are being, swept to poverty. Surely if it was possible to give a concession to a firm like General MotorsHoldens Limited, which made twice as much profit as .its capital, in one year, it would have been valid to have given a little bit more to the pensioners. .Surely if it was valid to take 3s. 6d. excise off the price of a bottle of whisky it would have been reasonable to do something for the pensioners. All through this budget there are special privileges for special people. It is as if some little child had got into a room and had used scissors to snip serrated edges on all the various parts of furniture. The result does not make a pattern. On the one side we see vulnerable groups left with practically nothing, and on the other amazing concessions have been made, which amount to £800,000 in respect of one big company. The whole fault lies with the leadership opposite, which insists that inflation is already being controlled and that the country is on an even keel. Because of the two party leaders opposite we have the position that the Minister for Social Services has to make apologies for things in which he does not believe. He says that his Government has a proud record in respect of social services. I remind him that neither we nor the pensioners want statistics from the past. The pensioner does not want pie in the sky. He wants a just increase of pension at this moment. He does not want to be told that the statistics are in favour of the Government. The Minister has said that an amount of 48s. out of the present pension rate of 70s. represents increases made by anti-Labour governments. Does he not know that most of this total increase was merely chasing the tail of inflation and not getting close enough to see the doggie in the window. The Minister should also remember, while the Government is glibly taking the credit for these increases, that in Opposition the Labour party is a most potent force and that many of these increases which do not stand in .the name of the Labour party stand to its eternal credit because of the propaganda and political thrust that it exerted to gain them. The Minister knows that the 27s., 6d. per week that he has spoken of so glibly as having been added to pensions has little real value. The honorable member for Phillip who was following the debate most keenly, challenged him by asking what was the percentage relationship between that increase of 27s. 6d. and the increase of the basic wage in the same period. Of course, the Minister had no answer because, as the Leader of the Opposition said in his budget speech, you can pin this matter down in only one way; and that is on the percentage relationship of the pension to the basic wage and not on what money is worth to-day compared with what it was worth last week. When you discover that you have an answer that is incontrovertible. We say that the percentage has slipped in one instance from 63 per cent, to 21 per cent., and in another instance from 67 per cent, to 27 per cent. No matter how much research the Minister makes on the matter he is playing a losing game. He talks about checking inflation in this country, but the lack of value in the £1 drains the validity from his arguments. He talks about the Labour Government’s attitude in respect of pensions. He said that at one time the basic wage was the yardstick used to fix pensions. He had so many yardsticks I began to wonder whether we were going to get on a raft and float away. He said, to the cheers of Government supporters, that the present Leader of the Opposition, when he was Attorney-General in the Chifley Government, had stepped in, amended the legislation which tied pensions to the basic wage and the system ceased to operate. What is remarkable about that? At the request of age pensioners’ organizations from every State, and of every group associated, with age pensioners’ organizations, the Leader of the Opposition was asked, when the Chifley Government was in office, to step in and stop pensions from being reduced by ls. at a time when ls. was worth 12d. That is why the Leader of the Opposition took that step through the enactment to which the Minister has referred. There was nothing sinister about it. It was a piece of common sense. The Minister says that if pensions were attached to the basic wage the pensioners would be receiving an increase of only 9d. That is merely by the way, but the question of the percentages cannot be disregarded. It is obvious to everybody that the purchasing power of the pensioner is at a grievously low level, and the fact that the Minister did not even apologize for it, but made his case purely on statistics, shows that the Government actually has no case. Having paid off groups that did not deserve such a bounty the Government found it had nothing left in the exchequer to provide for those people in the community whom it tried to seduce into voting for it in order to regain power. Apparently, believing that there are other ways of regaining power at the next general election, the Government has decided to dump the pensioners. If there was ever an example of utter neglect it is reflected in this increase of 2s. 6d. a week. It represents an infinitesimal amount. Once upon a time, when pensions and the basic wage were both lower, it might have meant something, but to-day it is perilously close to being an insult. We know of the attitude towards it of ex-servicemen Who are also to have a pension increase of 2s. 6d. a week. The federal president of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, Sir George Holland, said that this increase was nothing less than a slap in the face. Representatives of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia who have approached members of Parliament and the executive on many occasions in the past about such matters have always placed their cards on the table. They have attended round table conferences with this Government and I understand that they were promised a good deal more than they have got. The service pensioners are on all fours with age and invalid pensioners in respect of this miserable increase. The service pension has been the subject of considerable promises and very poor performances.

I turn now to a contentious matter which I consider it my duty to mention.

When the 1949 general elections were held the Prime Minister (Mr. Menzies), who was then the Leader of the Opposition, said - lt will be our proud and immediate duty to apply ourselves to the Repatriation Act and to see if there are opportunities to do at once the things that should be done in regard to exservicemen’s pensions.

On the strength of that promise a higher percentage of ex-servicemen entered this House as members than had entered it for many years. I should like to say to them that they have been smothered because of the strength of their leader and deputy leader in this House. They have not been able to do the things that they thought they would be able to do, and, because they are back-benchers, they have had to acquiesce in things they do not like. One of them was the question of the 3s. a day for the former prisoners of war.

Mr Turnbull:

– Why does the honorable member bring forward that matter?


– I do so just in passing. The honorable member for Mallee (Mr. Turnbull) was a prisoner of war himself and no doubt was deeply concerned about the trend of events. Let me mention also the attitude of the Government towards section 47 of the Repatriation Act and the onus of proof. Where were the outcries then, of those who had fought so vociferously earlier for the diggers? They voted en masse. Honorable’ members on. the Opposition side were gagged. We were talked out.. We were not allowed to continue to debate the points which, concerned the ex-service pensioners- and their welfare. The last general election- was described as a khaki election* There has been no- support forthe section of the community to- whom I have referred because of the towering strength of the Prime- Minister and the Treasurer. Both- of those leaders adopt the same mode of. attack- and they are followed- by all the supporters of the Government. Having read Hansard in the past few. weeks and checked’ the speeches of the Prime Minister, I have found that that right honorable gentleman has two favourite adjectives. Everything is either gigantic or enormous. I can only come- to the conclusion that, Narcissus-like, he is- looking at his own< reflection in the highly polished table at which he sits.

The Government professes to have considered such matters as cost of production, wages and output, but it has evolved an extraordinary budget. The Treasurer has travelled from the peaks to the abyss. Concessions are made in the most extraordinarily generous way to companies at the rate of 2s. in the £1. Does the. Government expect to measure against that concession the 2s. 6d. a week that i3 to be given to the age pensioners who were the pioneers of this country and to the ex-servicemen? Does it think that that is good budgeteering? This is an election budget and as such it is not taken seriously by most of the people. They know that it is another one of those things that blow along before an election. The Government has done a great deal for those who are comfortable already. There is not a company in Australia of any size that is not doing reasonably well. Honorable members who study statistics of company profits know that very well. It is amazing how well they are doing. But if honorable members turn their’ attention to statistics relating to pensioners, they will note how badly off they are. Totally and permanently incapacitated pensioners are dying inrepatriation hospitals- in- Australia at the rate of fourteen a month. World War I. has left its mark on the veterans. Men: who were engaged in the second world conflict can see the prospect that faces them- and they are making forays uponthe Repatriation Department only to be’ thrown back by an autocracy which is warned not to let hand-outs get too high. So we find that the princely sum of 2s. 6d. a week is to be given to returned servicemen.

The Government has repudiated its promises from the first day that it took office.- All the alarums, excursions and stratagems that have attended its effortsto boost- the value of the £1 have been unsuccessful. As a’ result, it has been necessary for the Government to help itsfriends and let’ the vulnerable groups go hang. The Leader of the Opposition has declared that1 to -restore the full. equivalent of the pension rate’s prescribed in- the 1948- Chifley budget, certain things should be’ done. The right honorable gentleman went on to refer to the rate of war pensions and invalid pensions and emphasized that in comparing pension rates one must consider what money would buy for a pensioner. If a pensioner goes to the butcher and wants a lamb chop, or if he goes to a milkman and wants a pint of milk, he is not asked whether he is a pensioner. He is expected to pay the full price, and so grievous has been the loss of purchasing power that he is up against it. People are practically starving in’ the back streets because, after the value fell out of money, it was those with the least money who were hurt the most. Those who were already on a pittance, trying to live on something that has never been declared a basic wage but merely a pension, have had a greater percentage of their incomes drained from them than any other section.

If the Treasurer were correct in his assessment of the position, and if it were true that there is national stability, he should have turned first, not to those who are enjoying a measure of prosperity and seek a tax reduction that is valid enough, but to those who have felt the pinch first, last and all the time - the civilian pensioners and the service pensioners. If our economy is in equilibrium - and it is not: - the first interests to be served should be the vulnerable section of the community - the social services recipients. We know more about that section of the community than do supporters of the Government. Most of the people concerned vote for the Australian Labour party. For that reason, there was no guile, or subterfuge behind the words of the Leader of the Opposition when he said -

It is clearly beyond doubt that the pledge given to the pensioners requires as a minimum to-day a pension rate of £4 a week and’ a permissible income of £2 15s. a week.

Measure these hard facts against the whimsical references of the Minister for Social Services (Mr. Townley) to the dead statistics of 1909, 1929 and 1949. These are live figures. The Leader of the Opposition has stated points in the declared policy of the Australian Labour party. He said -

The Labour Parliament will honour the pledge which this Government has failed to keep. It will act immediately to establish as a minimum these rates subject to any adjustment in accord with cost of living changes in the next few months. In the light of the financial position as left by the outgoing Government, the Labour Government will strive to improve on. these rates. A similar adjustment is required in relation to widows pensions and will be made. Far from maintaining the 1949 purchasing value of the 10s. a week child- endowment payment, the Government has refused to increase it at all . . . It will be the immediate task of an incoming Labour Government to remedy this injustice which has caused such hardship to the mothers of young Australian families. In refusing even in this budget to make any adjustment of child endowment rates, the present Government surely shows itself to be deaf to the claims of social justice. In principle, what I have said about the purchasing value of pensions applies to war and- service pensions including war widows pensions.

This is the appropriate time to refer again to war widows. Twice on the motion for the adjournment the matter has been mentioned, on one occasion by the honorable member for Lalor (Mr. Pollard) and on another occasion by myself. On both occasions the matter Wastalked out by two or three speakers, and no decision was made. We heard that therewould be an adjustment as soon as possible, but when the Minister for Social Services spoke about persons being left out of the budget, he conveniently forgot that the war widows were left out, and that there was no sectional increase forexservicemen ; although I admit that there was an increase of social servicesallowances for the aged and infirm. Thewar widows’ pension has been theCinderella of the budget, and many Government supporters are ashamed of it. The war widows are one of the most vulnerable groups in the community. Of” course, no money can compensate for the loss of a young man in the service of his country, and the war widow, because she has lost her husband while they wereboth young persons, becomes drastically reduced in ner financial circumstances - for many years. -Legacy, that magnificent institution, and the Repatriation Department, have ameliorated somewhat theposition of war widows, but surely, in view of the tremendous reduction of the purchasing power of pensions, the Government should have shown clearly that it realized its obligations to this group of persons. This case also applies tocivilian widows.

The budget is a thing of shreds and patches, and some parts of it appear to be- reasonable until they are analysed. In that connexion I direct the attention of honorable members to the Leader of the Opposition’s analysis of the collections of taxation in relation to the reductions of rates. The budget only changes the disposition of money, especially in relation to social services payments. We must ask why in the name of sweet reasonableness the Government decided to grease the fat pig, and give to those who already have in full measure? Evidently it was because its propagandists demanded that it should take such an action. Some of the companies that will benefit under this budget do not want the reductions that have been given to them. Some of the organizations who could carry on their affairs quite effectively under the protection of the tariff wall, and by the goodwill of the Australian purchaser, did not want reductions of taxation, and if the Government has not lied about the financial position the first group to be considered should have been the pensioners.

The Minister for Social Services did not make any sort of case to-day for the Government’s budget. From the very outset of his speech it was obvious that he was making heavy weather of his defence of the Government’s actions. He is a very honorable gentleman, and has done a good job in his department; but the general policy of the Government has crushed him. Those who have the responsibility of administering the Department of Social Services for the next few months, before they face the judgment of the people, will be very unhappy about the provisions of this budget. It is quite obvious that only a few people will be better off in the next financial year. Ninety-five per cent, of the pensioners to-day - and it was 85 ner cent, a few years ago - incomes besides their pensions, and irrespective of relieving the means test, those are the people that we must deal with first. That 95 per cent, of the pensioners have been rewarded for their patience, tolerance and support of the Government in crises, by 2s. 6d. a week as a fair measure of their share of the burden of inflation. That is completely unfair, and the Government will be called upon in the next few months to answer on the hustings for its parsi mony. The worst part of this budget is that which deals with social services, no matter how the subject may be wrapped around with sweet and honeyed phrases. The Government has shown clearly that it believes that those who have much shall have more, and that those who have nothing shall feel the heaviest pressure of our difficult times. The ex-serviceman, the age pensioners, the invalid pensioners and the war widows have been let down badly. Honorable members have heard the Minister chortle about the size of the Government’s financial reserves. We on this side of the committee know that the social services trust fund has been burgled and does not exist any more.


– Order! The honorable member must not use unparliamentary language.


– That fund has become a. mere bookkeeping entry. As well as witholding from the pensioners of a reasonable increase of 10s. a week, this Government may leave no money at all in the fund to pay for social services.


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


.- The budget now before the committee can only be described as a prosperity budget. It reflects increases of production and exports, an increasing national income, increasing employment, the halting of inflation and the general economic stability of this country. We have recently passed through several dangerous years, years in which the Government had to take most drastic steps to halt inflation and prevent depression. Owing to the timely action taken by the Government, stability has been restored and we are now in a position to say to the people, “ Thank you for the way in which you have borne the burdens, now we are able to relieve you of those burdens “.

This budget will give greater concessions to the people than any other budget in the history of the Commonwealth. To-day I shall deal with the tremendous concessions given in the budget to our aged people. For the first time in the history of the Commonwealth we can really say that the means test has been substantially eased. The “budget should encourage people to earn and to save. The means test discourages both, both earning and saving, and that is why the Government has taken steps, through its budget, to lighten very considerably the burden of the means test. At present there are about S70,000 people in the Commonwealth of pensionable age. Some 520,000 of them are disqualified from the pension by the operation of the means test. As a result of this budget 100,000 additional aged people in the Commonwealth will now receive the benefit of the age pension. Honorable members opposite show their ignorance when they talk about the benefit to pensioners as a half-crown benefit. Are the 100,000 people who will now receive free medical benefits, free medicines and part pensions, to regard those benefits as flowing from a halfcrown budget?

I turn now to the position of superannuated officers than whom no section of the community has been more harshly treated in the past in respect of social services benefits. By law, they have been compelled to save for their old age and when they reached retiring age they found that as a result of the means test, as it operated under Labour and has continued to operate up to the present, the fact that they were in receipt of superannuation benefit rendered them ineligible to receive the age pension. At present, a superannuated officer and his wife, if they are of pensionable age, receive in addition to a superannuation benefit of £4 a week, which is their permissible income> an age pension at the rate of £5 15s. a week, or a total income of £9 15s. a week. Under this budget, such a couple will be eligible to receive a pension at the rate of £7 a week, and thus their total income will be increased by £1 5s. a week. When Labour was in office in 1949, persons in this class were not given an additional penny. A superannuated officer and his wife will receive, in addition to a superannuation benefit of £5 a week, an increase of age pension at the rate of 12s. 6d. a week each, or a combined increase of £1 5s. a week, making their income £11 5s. a week. A superannuated officer in receipt of superannuation benefit at the rate of £10 a week will, in respect of his wife and himself, receive an increase of age pension of £1 a week ; and in instances in which the superannuation benefit is £10 19s. a week, each will receive an age pension at the rate of ls., a week. In each of the instances in the classes that I have cited, pensioners will also be eligible to receive free medical treatment and free medicine. I repeat that under this budget an additional 100,000 persons throughout Australia will become eligible to receive a part pension together with free medical treatment and free medicine. Yet, members of the Australian Labour party resort to the cruel deception of telling these dear old people that under this budget they are to receive an additional benefit at the rate of only 2s. 6d. a week. A greater falsehood has never been disseminated in this community because under this budget these persons will be entitled to receive greater benefits than they have ever been eligible to receive in the past.

I turn to the application of the means test in respect of capital. At present, a couple who have a combined capital’ of £300, which is not a large amount of capital, receive a combined pension of £341 a year, but under this budget that pension will be increased to £364 a year, or an increase of £23 a year. A couple with a capital of £900 at present receive a pension at the rate of £2S1 a year, but under this budget that rate will be increased to £304 a year, or an increase of £23 a year. A couple who own a cottage in which they do not reside but which is valued at £2,000 now receive no pension whatsoever, but under this budget they will be eligible to receive a pension at the rate of £84 a year. In all these instances, as in the instances that I cited in respect of superannuated officers, pensioners will also be eligible to receive free medical treatment and free medicine. I repeat that the main provision of this budget in respect of aged people is that 100,000 additional persons who, at present, are not eligible to receive the age pension because of the operation of the means test, will become eligible to receive that pension. In addition, 120,000 persons who are now in receipt of a part pension will, under this budget, receive either the full rate of’ pension or increases of their present rate of pension ranging from 12s. 6d. to 32s. 6d. a week. Yet, members of the Australian Labour party are so deceptive as to claim that under this budget pensioners of all classes will be entitled to receive an additional benefit at the rate of only 2s. 6d. a week when, in fact, many pensioners will receive an additional benefit at the rate of 32s. 6d. a week. That fact shows that members of the Australian Labour party who have been putting their cruel story around either are completely ignorant of the budget proposals or are endeavouring to deceive these people. In future, any married couple in Australia, who are of pensionable age, will be entitled to a pension to make up an income of £11 a week, which, I point out, is only lis. less than the basic wage in South Australia. As cither honorable members have pointed out, the basic wage is definitely calculated as a fair income for a family unit. Having regard to the fact that the arbitration court has fixed that family income at £11 lis. a week, I do not think that any reasonable pensioner can say that an income of £11 a week for age pensioners is an unfair proportion in relation to the basic wage.

Under this budget, 45,000 Commonwealth superannuated officers will benefit provided that they have not income or capital in excess of the permissible amounts which, under this budget, have been substantially increased. In addition. 165,000 State government and local authority superannuated officers will benefit similarly provided that their family income does not exceed £11 a week, and their family capital does notexceed £2,500. Since I was elected to this House, I have battled day in and day out for the abolition of the means test, and I shall continue my crusade in that direction. However, I am delighted that under this budget the Government is taking the greatest step towards the abolition of the means test that has yet been attempted in this country. As I have said, an additional 100,000 persons will now become eligible to receive the age pension. The total abolition of the means test can now be effected at a cost much less than that which would have been involved if the conditions of eligibility for the pension had not been liberalized in this way. Under the pro posals contained in this budget for the easing of the means test, the permissible income of a married couple will be increased from £3 to £4 a week and that of a single person will be increased from £1 10s. to £2 a week, whilst the maximum permissible capital of a married couple will be increased from £2,000 to £2,500, and that of a single pensioner will be increased from £1,000 to £1,250. This budget will not only benefit aged persons who are entitled to pensions; it will also confer tremendous benefits on aged persons whose income or capital at present deprives them of the pension benefits. I shall instance some of the advantages that they will derive from it. First, aged married couples whose combined income does not exceed £750 per annum will be completely exempted from income tax. For single aged persons there is to be an exemption of £375 compared with the previous exemption of £254. Aged persons who have incomes in excess of that amount will receive an income tax reduction equivalent to 12£ per cent. In addition they will receive the benefit of an increased deduction for the spouse or housekeeper of £26, bringing the total deduction to £130, an additional deduction for medical expenses of £50 for themselves and their dependants, bringing the total deduction for that purpose from £100 to £150 and an increased deduction for dental expenses of- £10 - from £20 to £30 for each person. Aged persons who are in receipt of property income will also benefit from the abolition of the higher differential income tax rate on property. All aged persons will receive the benefit of the lower cost of living which will result from the abolition of sales tax on certain items and the reduction of tax on others. They will also receive the benefit of cheaper amusements resulting from the abolition of entertainments tax and lower living costs which will result from the abolition of the pay-roll tax on payrolls of £4,160 and under.

Mr Bird:

– What does the honorable member think they will get out of the latter concession?


– They will benefit from the resultant reduced cost of living. At present there are 90,000 pay-roll taxpayers in the Commonwealth. Under the amending legislation to be introduced, consequent upon the budget, 50,000 of those taxpayers will be exempted from the payment of pay-roll tax. That in itself should bring about a substantial reduction of the cost of living.

One of the things that has troubled pensioners and aged persons is the fact that upon their death the home in which they have resided, when passed on to their children, has hitherto been subject to the payment of estate duty. The Government has totally abolished estate duty in respect of small estates. In future, estates of a value up to £5,000 will be exempted from duty if they are passed on to the widow, children or grandchildren of a deceased person and up to £2,500 if passed on to other beneficiaries.

Another matter that should not be overlooked is the consideration that the Government has given to totally and permanently incapacitated ex-servicemen, who have nothing but their pensions upon which to live. In previous budgets the Government has granted them very substantial pension increases. Under this budget totally and permanently incapacitated ex-servicemen will receive a pension increase of 10s. a week. How wrong it is for the representatives of the Labour party to talk about a mere 23. 6d. increase in the pension rate when that is the minimum pension increase which the Government proposes to grant.

Let us now compare the increases of pensions granted by this Government during the last four years with the miserable, increases granted by the Labour Government during its last four years of office. In November, 1950, the first year of office of the present Government, pensions were increased by 7s. 6d. a week. In November, 1951, they were again increased by 10s. a week; and in October, 1952, by a further 7s. 6d. a week. This month the Government proposes to increase the pension rate by an additional 2s. 6d. a week. Thus, in four years the total increases of pensions granted by this Government to aged and invalid persons and widows amounted to £1 7s. 6d. a week. In 1946, under the administration of the Labour Government no increases of pensions were granted. In July, 1947, the Chifley Government, increased the pension rate by 5s. a week, and in October, 1948, by a similar amount. In 1949, the last year of office of the Chifley Government, and a very prosperous year in Australia’s history, the pensioners received no increase of the pension rate whatever. So, in four years under Labour’s administration, the pension rate was increased by 10s. a week, or an average yearly increase of 2s. 6d., compared with an average increase of approximately 7s. a week during the four years of office of the present Government.

Let me examine the firm and definite promise that the Leader of the Opposition (Dr. Evatt) made to the people of Australia to-night.


– It was a pledge, not a promise.


– The right honorable gentleman promised that if a Labour government came into office after the next general election it would equate the 1949 pension rate to the cost-of-living index in order to do justice to the pensioner. In 1949, the pension was £2 2s. 6d. a week and in September of that year the costofliving index number was 1,428. For September, 1953, the cost-of-living index number is 2293. If we apply the costofliving increase to the 1949 pension, we find that the pension to-day would be £3 8s. 3d. a week or ls. 9d. a week less than is proposed under this budget. So, Labour has made a marvellous promise. In dramatic tones which all honorable members will recall, the Leader of the Opposition said that Labour, if elected to office, would equate the 1949 pension to the cost-of-living index, and thereby do justice to the pensioners. What he was promising to do was to reduce the pension by ls. 9d. a week ! Also, it should not be forgotten that under the Chifley Government, pensioners did not receive free medical treatment or free medicines which to-day are amongst their greatest benefits. Labour to-day is shedding crocodile tears about the alleged inadequacy of social services. I remind honorable members opposite that when they were in office they paid a total of £SO,000,000 in social services benefits whereas this year we shall pay out £184,000,000 in social services.

In the brief time left to me I propose to deal with one or two points made by the Leader of the Opposition. The right honorable gentleman denned full employment as meaning a state of affairs in which there are more jobs than there are employees to fill them. With that definition I entirely agree. But the Commonwealth Statistician’s figures show that at present there are more jobs than there are employees to fill them. Therefore, according to the definition given by the Leader of the Opposition, we already have a condition of full employment. What humbug it is, therefore, for the right honorable gentleman to say in this chamber that if Labour is returned to office full employment will be guaranteed.

The Leader of the Opposition also stated - quite erroneously, I maintain - that since 1949 the basic wage had increased in accordance with the costofliving index. That is completely untrue because in 1950 the Commonwealth Court of Conciliation and Arbitration increased the basic. wage by £1 a week as a prosperity loading. That increase had nothing whatever to do with the costofliving index. Therefore, it is perfectly clear that the entire premises of the right honorable gentleman’s arguments about the relationship of the pension to the basic wage are false. When Labour was in office, the pension rate was tied to the cost-of-living index. If that relationship existed today, the pensions rate would be less than that proposed under this budget.

The Leader of the Opposition then tried te convince the people that the Government was not in fact reducing taxes. He said that income tax revenue would be greater in the current financial- year than it was last year. He also compared figures for 1949 with those for the present time. He entirely overlooked the fact that the population of this country has increased by almost 1,000,000 since 1949 and that there are 431,000 more taxpayers in Australia to-day than there were in that year. Obviously, if we have more people and more taxpayers, even with lower tax rates, revenue will be higher. Once again, therefore, we see the complete deception in the arguments advanced by the Leader of the Opposition. Then the right honorable gentleman questioned whether the pay-roll tax would in fact be reduced because revenue from that tax would be just as much as it was last year.

The reason for that, of course, is that more people are employed and higher wages are being paid. That is the condition that this Government has sought to bring about and intends to bring about - a condition of high employment and high real wages.

The Leader of the Opposition pledged, too, that if a Labour government were elected, the initial depreciation allowance would be restored. We also know, of course, that Labour is pledged to socialize industry, the banks, the insurance companies, radio and the airways. All those promises are on the same level.


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

Progress reported. .

page 241


Im migration - Commonwealth Hostels Limited.

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

That the House do now adjourn.

Minister for Supply · Parramatta · LP

– I wish to refer briefly to some allegations which appeared in a section of the Sydney press during the week-end about the case of Ung Chan Bunn, which also was mentioned in this chamber last week. This Chinaman was deported last July under an order signed by myself as acting Minister for Immigration. The Sydney Truth alleged that he had been hastily deported and rather suggested that this had been done by the Government to conceal something although the newspaper did not go so far as to allege that exactly. However, as a cloud of misunderstanding and indeed of falsity surrounds this matter, I wish to give the House the facts. In August, 1952, the Department of Immigration gave an entry permit to Bunn to be engaged by an authorized employer as a worker in a market garden. That was done in accordance with a longstanding departmental policy. He arrived in Australia in October, 1952, but in February, 1953, the department discovered that he had left his authorized employment and was illegally working for another employer in violation of the terms of his entry permit. He was warned to return to his employer. At that time he made no complaint about the terms of his employment or about any other matter. He did not return as ordered so, in May, 1953, I cancelled his permit and ordered his departure. The bondsman who had guaranteed his good behaviour then promised the department to make arrangements for Bunn to leave for China by Taiping on the 24th July, 1953. However, in June, between those two dates, he threatened violence to his former employer and also said that he would disappear. Thereupon we took him into custody pending his departure on Taiping. Then the matter took a new turn. Early in July a firm of solicitors approached the Department of Immigration purporting to act on behalf of Bunn and alleging that he had not been paid by his former employer. They also said that a relative had paid £500 to one of the proprietors of the market garden where Bunn was to be employed and, in the words of the solicitors, “the employer had failed to comply with the terms of his entry into Australia “. They asked that I should permit Ung Chan Bunn to be released so that action could he taken to recover the £500 which had been paid. This request was also supported by a barrister who spoke to me or my secretary by telephone. There was a good deal of activity in my office about the matter. People .had been ringing up and a caller on the telephone did claim to speak on behalf of Ung Chan Bunn alleging that the payment of £500 was connected with his entry permit.

I ordered inquiries to be made. The significant fact that emerged is that Ung Ghan Bunn himself did not claim that the £500 had been paid in connexion with a permit; nor did he allege that he had not been paid any wages. He was specifically interviewed’ on these matters, but he did not make an allegation in those terms in respect of either of them. But as there was a matter of £500 which apparently had been paid on his behalf, I thought that it was fair that if it was his money or the money of some one who was responsible for him, and he had parted with it, he should be given a chance to recover it. Accordingly, although time was running out - he was due to leave on the 24th July, and from long experience with these Chinese, if I may use an elegant colloquialism, we cannot, afford to “muck about” with them too much - in the circumstances I decided that he should be given an opportunity to get the money back if it belonged to him. Therefore, I gave instructions that the deportation order was not to be given effect for a month under the following conditions: - (1) He must undertake to commence action for the recovery of his money forthwith; (2) his writ had to be issued within a week, otherwise he would have to go; (3) if he did issue a writ he would be released if he gave security to the satisfaction of the Department of Immigration. It was expected that within a month his action should be on the way, or we should have some other satisfactory evidence that he was taking a bona fide action. I added the following words : -

It must be understood that these arrangements are not for the purpose of enabling him to avoid deportation. They are intended only to give him a chance to recover his money.

That, I suggest, disposes entirely of the quite false and outrageous suggestion of the newspaper and, indeed, of a member of this House that, in some way, the. Government was bundling this man out of the country in order to conceal something. On the contrary, he was due to go, but we gave him a last chance, although for months and months he had said nothing and made no claim with respect to either wages or money owed to him. We gave him a chance to issue a writ and recover his money. If he issued his writ and proceeded with it promptly, he would be permitted to stay until the action was disposed of. So, he was not being bundled out of the country. However, he issued his writ. The firm of solicitors who were involved in the case was quite1 reputable and took proceedings promptly in accordance with this undertaking that it had given to me. The money was, in fact, paid over.

Unfortunately, the name of the Consul-General for China has been mentioned in this matter and quite a wrong implication has been made. It has been suggested that in some way the Consul- Genera.1 was responsible for paying over this money. His only role in the matter wai that, one of his nationals having broken our deportation laws,lie gave the Government reasonable assistance to see that the law was complied with and he did, I understand, intercede to see that if any money was to be recovered, it was to be repaid to the man concerned. He did not pay the money, but I understand that it was paid in his presence to Bunn, and I imagine that that gentleman returned to China very happily with £500 in his pocket. So much for him!

There is one other thing to be said. It is true that £500 was paid. We ascertained that it was paid by his fatherinlaw, but we are told by every witness who has been interviewed - and no person who has any knowledge of the facts has ever said anything to the contrary - that it was paid in connexion with a prospective share in a market garden. The House may well ask, “Is that the true story ? “ All I can tell the House is that it is the only story that has come to light as the result of a close investigation made by the department in this matter. Bunn himself has never claimed that the payment was an. illegal one. I wrote to the honorable member for East Sydney a letter in which I said -

He then claimed lie gave £500 to his intended employer for entry permit.

I might, perhaps, have said more accurately, that it had been so claimed on his behalf; but Ting Chan Bunn himself never claimed anything of the sort, and when we interviewed him he would not make any such allegation. “We have also looked at the wages book of his employer, and found there proper records of wages having been paid to Bunn.

Mr Ward:

– Including his signature?


– I do not know. I am relying upon a departmental report, which says that the wages book contains a record of the payments to Bunn. We need not worry any more about Bunn himself. He has his money, and is happily on his way to China, if he is not already there. But it is significant that this episode has been taken up by the Communists in this country for their own deliberate and specific purposes. They issued a circular about the case of Bunn and said, in addition to other things -

We fix 9 p.m. on the 22nd July for a meeting at the Chinese Youth Club, 6Ga Dixonstreet, Sydney.

That is the head-quarters of the Chinese Communist party in Sydney. I ask everybody in the House, including the honorable member for East Sydney, who has shown a most mysterious and significant interest in this matter, to note these words that appeared in the circular -

We hope you will be here to discuss this. We want to fight with all our strength against the White Australia Policy, and achieve a final victory.

So there it is! The Bunn case is an attack on the White Australia policy.

Mr. -SPEAKER.- Order ! The Minister has exhausted his time.

East Sydney

.- I am of the opinion that the Minister for Supply (Mr. Beale) is protesting too much about this matter, and, as usual, is endeavouring to draw a red herring across the trail in an effort to distract attention from the facts. As is customary, he has referred to the fact that some organization, which he claims is a Communist body, has interested itself in the matter. I am not concerned with that aspect; I am concerned about the facts. ‘ The Ministerhas tried to explain away something that was written in his letter to me. He said that Bunn had not at any time made any allegation regarding the payment of £500 to obtain his entry permit to this country. The Minister admits that the terms of his letter of the 22nd July, addressed to me, may be misunderstood because of the way in which it is composed. He stated that Bunn had claimed ‘ that he had paid £500 to his intended employer for an entry permit. The Minister proceeded to say -

Any payments of the sort alleged by Bunn are of course illegal and improper and not to be tolerated.

Mr Beale:

– That is quite correct.


– With that statement I entirely agree.

Mr Beale:

– So do I.


– How does the Minister explain making a second error in his correspondence on this matter? The Minister will find that the second paragraph of his letter of the 24th July, which was written just two days after his first letter, contains the following phrase: -

In refund of the amount paid to Sam Hop in connexion with Ung Chan Bunn’s entry to Australia.

So the House will see that the Minister admits, in his second letter to me, that £500 was paid to secure the entry of Bunn into Australia. The Minister has said further that the excuse now advanced, that the money was sent to this country to purchase a share in a market garden is the explanation given by every witness in the matter. I note that the Minister for Immigration (Mr. Holt), who wrote to me on the matter, said -

Although there may be a doubt as to the true purpose for which the money was sent to Australia …

Evidently the Minister for Immigration was not perfectly satisfied that this was the reason why the money was sent to Australia. If the Minister cares to examine the report of what I said in relation to this matter, he will see that I did not suggest that any member of the Government would deliberately engage in this practice. The Minister himself admitted in his statement, which was published in the press, that there were certain Chinese in this country who, according to a departmental report, were here on faked permits. Of course, everybody recognizes that it is always not easy to obtain evidence of what I directed attention to, but I remind honorable members of the haste with which this man was bundled out of the country. The Minister for Supply, who was then acting for the Minister for Immigration, stated that this Chinese was now happily on his way to China. I wonder whether he is happily on his way to China ! This man who was an important and material witness, and whose evidence was needed to expose a racket in connexion with permits - and I exclude the Minister entirely from the matter - was hastily got rid of by sending him out of the country. I do not know who is engaged in the racket, but I know that the amount of money that was paid on behalf of this Chinese was not £500 Australian but £500 sterling. The Government was so eager to get Bunn out of the country that it was unaware that he had been paid the wrong amount. He was paid £500 Australian, which was £125 short of the amount that was actually paid for the permit. The Minister for Immigration has told me that this mistake has now been discovered and that this amount will be refunded to the

Chinese, if he can be found. The Minister for Supply wrote to me on the 22nd July and told me the conditions under which this man’s deportation could be deferred. He wanted a security bond of £500 lodged, and he wanted somebody to produce evidence that legal action was pending in connexion with the matter. All of these conditions were complied with but the Chinese was not released from I/ong Bay gaol. Before the execution of the Minister’s order, which would have released Bunn from Long Bay gaol, where he was being detained for deportation, the Minister revoked the order. Somebody suddenly decided to pay the money in order to keep this man quiet and prevent him from disclosing the racket in connexion with entry permits. The Minister did not depend on the ordinary postal service to deliver to me his letter of the 24th July, but sent it by special messenger, apparently to make sure that I received it in time, as that was the day this man was to sail for China on Taiping. As it had been reported in the press that. Chinese had been coming into this country on faked papers, I assumed that the Government would be anxious to secure evidence to prevent this practice from continuing. This Chinese was prepared to talk, and evidently had spoken-

Mr Beale:

– That is not true.


– The Minister’s correspondence indicated that he had. He could have been retained as a material witness. In his correspondence the Minister wrote, “ If he gets his money that is all that we are concerned about “. When I rang the Minister after receiving the second letter on the 24th July he said that he did not wish to discuss the matter. He said, “ I have now handed over to Harold. He is back, and I have done so enthusiastically “. ‘ Evidently the Minister for Supply was rather unhappy about the whole matter. I do not know what can be done at this stage because the Chinese is now out of the country^ but I consider that the Minister should make a thorough investigation into the matter. He may take the House into his confidence and tell honorable members of the information in the hands of his departmental officers which enabled him to make the statement that there are certain Chinese in this country on faked papers. He may also advise the House whether any action has been taken in the cases that have been brought to the notice of his officers; I regard it as a very serious matter. The Minister for Supply referred to a document issued by the Chinese Communist party somewhere in Sydney. He certainly has more knowledge of such organizations in this country than I have. The Minister quoted a passage from that document, which referred to a suggestion about breaking down what was known as the White Australia policy. I shall repeat my recent statement that the Labour party’s interest in this matter .concerns the immigration restrictions imposed on the entry of certain people into this country, on the basis not that we claim to be a superior race, but that we consider it essential to prevent the flooding of this country with cheap unorganized labour. We are anxious to preserve the immigration policy. If the Minister really believes in the immigration policy that has been observed in this country for many years, he should not be adopting the attitude that he is at the moment, but would undertake a thorough investigation of this matter.


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

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

– Before addressing myself to the matter that has been raised by the Minister for Supply (Mr. Beale), and to which the honorable member for East Sydney (Mr. Ward) has spoken, I want to deal briefly with what I can only regard as a most deplorable personal attack that was made on a senior officer of the Commonwealth administration by the honorable member for Watson (Mr. Curtin) on Thursday evening. I am not going to canvass the merits of the issue which gave rise to the attack, but I shall table a full statement on the matter later this week. It will set out the facts and will enable honorable members to form their own conclusions on this matter. However, I cannot allow that attack to go unanswered, and I ask honorable members opposite, who have had a very much longer experience in this chamber than has the honorable member for Watson, to form their own judgment on the statements that were made by him. Mr. Funnell was a senior officer of the New South Wales railways administration.

Mr Curtin:

– In 1917.


– He came over to the Commonwealth service during the war years in order to assist to organize the manpower of this country. In course of time he was appointed to the very responsible and senior position of head of the Department of Labour and National Service by the Labour government of the day, which is. apparently a reflection of the full confidence that that government had in him and in his capacity. It is rather unfortunate for the honorable member for Watson that he should have chosen Mr. Funnell as his victim of attempted character assassination under parliamentary privilege, because Mr. Funnell is a man for whom Mr. Chifley had great respect, and in whom he placed every confidence. It is particularly unfortunate that the honorable member for Watson should have singled him out for attack, because it was Mr. Chifley, himself, who first asked Mr. Funnell to take charge of the hostels system of this country, in his capacity as Secretary of the Department of Labour and National Service. From my own association with Mr. Funnell over the years, I have every reason to maintain the confidence in him that I originally formed. I consider that, in his dealings with the very difficult and complex problem of hostels administration, he has behaved with great competence and with every consideration for those concerned.

I do not propose to reiterate all the facts of the matter that has been raised by the honorable member for East Sydney, because they have ‘been clearly put before the House by the Minister for Supply. There are aspects of the matter which, I agree, are unsatisfactory, and my colleague and I and officers of the Department of Immigration have subjected them to the fullest possible investigation. I have very serious doubts concerning the motive for the payment of the money, and I regard with a great deal of scepticism the story that it was paid over for a share in a market garden. However, nobody lias told any other story and we can obtain no evidence that the payment was made for any purpose other than that stated. “We are not in a position, on such evidence as is before us, to enter a prosecution against any persons who may have been concerned in the matter. Other possibilities are open to us, however, and these are being explored at present.

My next comment is a defence, not of myself, but of a. highly efficient department. Attacks have been made consistently in a section of the press in recent months not so much upon me as upon the Department of Immigration. I remind the honorable member for Melbourne (Mr. Calwell) of . his statement to me when he handed the department over to my control. He said, “I hand over to you a, piece of departmental machinery in firstclass working order, and I expect to get it back in the same condition”. I think that it has been improved, if anything, as a result of the intervening administration. In any case I say, as a Minister of many years’ experience of administering various departments, that I never want to have a more efficient, enthusiastic and devoted body of men associated with me in any department that I may have the honour to administer than I now have associated with me in the Department of Immigration. The department is. constantly making checks to uncover breaches of the arrangements under which people enter this country. Almost daily it apprehends deserters from ships and ethers who have failed to conform with die conditions of their entry to Australia. Over the past three years, for example, 1.08 men have deserted from ships in New South Wales and, in the same period, 107 have been apprehended. Twenty-eight Chinese deserters have been deported since the 1st- July last. This process of checking and taking action is constantly in train.

Efforts are being made by a section of the press to engender a belief that this Government is in some way breaking down the traditional immigration policy of this country and, in effect, damaging the established immigration restriction programme that previous governments adopted. Those charges are completely baseless. I state, merely as a fact, and not as a criticism, that it was during the period of administration of the former Labour Government that the conditions under which Chinese may enter this country were somewhat liberalized. I do not challenge that action. In fact, I think that, it represented a common-sense approach to the problem at that time. However, it had the effect of increasing considerably the number of Chinese who entered the country thereafter under the landing permit and exemption provisions. 1 shall cite the figures, because they illustrate the point. From the 31st December, 1946, until the 30th June, 1950 - which was, broadly speaking, the period for which this revised policy operated during the term of the Labour Government - the number of Chinese in Australia under exemption increased from 795 to 2,184, an increase of 1,3S9. During the period of three years in which the present Government has been in power, the number has increased from 2,184 to 2,802, an increase of 618. Whatever else these figures may prove, at least they demonstrate that there has been no great flood of exemption permits under the administration of this Government. Lest honorable members, and particularly people outside this House, should have some fear that the position is becoming out of hand in any way, I point out that the non-European component of our population is three in 1,000 to-day, compared with thirteen in 1,000 at the time of federation. The proportion of Chinese” is slightly less than two in 1,000 to-day, compared with nine in 1,000 at federation. Those figures are sufficient to demonstrate that the position is well in hand.


– Order ! The Minister’s time has expired.

Mr Beale:

– I wish to make a. personal explanation. The honorable member for East Sydney (Mr. Ward), in his speech, quoted a statement that I had made in the course of what I regarded as a personal and private conversation with him by telephone. He said that I had said, “I have now handed over to Harold. He is back, and I have done so enthusiastically “.

Mr Ward:

– What is wrong with that?


– There is nothing wrong with it, except that the honorable member sought to present it as an admission on my part that I had something to hide or to run away from in this matter. I said some such words to the honorable member for East Sydney, but, as I have told the House, I thought that the conversation was a personal and friendly one. As thehonorable member apparently thanks that it is in order to quote such conversations in this House, I tell him now that, if that is the way he wants to play his politics, well and good. I try to be frank and friendly with all members of the House. However, if the honorable gentleman wants to behave as he has done to-night, he will have no further conversations with me by telephone.

Mr.CURTIN (Watson) [11.28].- In reply to the Minister for Labour and National Service(Mr. Holt), I reiterate the charges that I made previously against this ex-officer of the Department of Immigration, Mr. Funnel], First, I dissociate myself from any considered opinion about Mr. Funnell that may have been expressed by the late revered leader of the Labour party in this House, Mr. Chifley. Any opinion expressed by Mr. Chifley washis personal opinion. My opinion of Mr. Funnell dates back to 1915, 1916 and 1917, a much longer period than that covered by the Minister’s acquaintance with Mr. Funnell. Had I come to this Parliament in order to acquire worldly experience from members of the present Government, I should be a sadly disappointed man. I should have to wait a long time. My experiences are derived from actual contact with the people. As an extra item, I should like to say that Mr. Funnell himself gave orders for the eviction of the people whom I mentioned, together with their belongings, including even the underclothing of a baby three months old.

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

That the question be now put.

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

AYES: 55

NOES: 33

Majority . . . . 22



Question so resolved in the affirmative.

Original question resolved in the affirmative.

page 247


The following papers were pre sented : -

Lands Acquisition Act -

Land acquired for Commonwealth purposes - Northcote, Victoria.

Return of land disposed of under section 63.

National Debt Sinking Fund Act - National Debt Commission - Thirtieth Annual Report, for year 1952-53.

Papua and New Guinea Act - Superannuation (Papua and New Guinea) Ordinance - First Annual Report of the Papua and New Guinea Superannuation Board for period 20th September, 1951 to 30thJune 1952.

Public Service Act - Appointments - Department -

Civil Aviation - J. V. Doubleday, A. W. Garner, W. W. Hammond, R.O. Hart, N. H. O’Neill, P. Swift, G. B. Wharton.

Defence Production - J. W. McLauchlan.

Health - E. D. Docherty, J. R. Meyers, A. J. Mooney.

page 248


The following answer to a question was. circulated:-

Government Loans and Finance

What is the natureof the arrangement of co-operation between the Commonwealth Bank Board and the private trading banks in regard to subscriptions to Commonwealth loans?

The arrangement of co-operation between the Commonwealth Bank and the private trading banks in regard to subscriptions to Commonwealth loans is not a formal one but involves consultation and exchange of information relating to investment policy. The trading banks have shown a readiness to consult with the Commonwealth Bank on matters affecting the investment of their funds in Commonwealth securities; the Commonwealth Bank regards it as a normal part of its function to see that the trading banks are aware of central banking policy in that field.

House adjourned at 11.37 p.m.

Cite as: Australia, House of Representatives, Debates, 15 September 1953, viewed 22 October 2017, <>.