House of Representatives
16 September 1953

20th Parliament · 1st Session

  1. House of Representatives
  2. 20th Parliament
  3. 1953

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

page 248

GHIN A

Petition

Mr. EWERT presented a petition from certain electors of the division of Flinders praying that the House of Representatives direct the Government to refuse recognition of the Communist regime in China.

Petition received and read.

page 248

QUESTION

PAPUA AND NEW GUINEA

Mr BIRD:
BATMAN, VICTORIA

– My question is addressed to the Minister for Territories. Is it a fact that a number of plantations in New Guinea have been purchased recently by Chinese buyers, to the detriment of white planters? Is it a fact also that Australian ex-servicemen planters and workers have sent a deputation to Australia to direct attention to this disturbing state of affairs and are alleging that Chinese are entering New Guinea illegally? If those are the facts, what action does the Government propose to take to ensure that the interests of Australian citizens residing in New Guinea will be safeguarded?

Mr HASLUCK:
Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– As far as I am aware, the second question does not contain a statement of fact. The first question, by implication, states, rather incorrectly, the position with regard to the holding of land by Chinese in New Guinea. . The first point that the House has to bear in mind is that there are in New Guinea a number of . persons who are .Chinese in race but who have no status other than their status as inhabitants of the territory. They are under the protection of the Australian Government. Most of them are territory-born, and all of them have resided there for a long time. In those circumstances, we recognize that there is some obligation on us to allow these people to have a means of livelihood. Recently, some plantations have been transferred to Chinese owners. A condition upon which we have always insisted in such transfers is that the Chinese purchaser shall, in fact, work the property himself and reside upon it. The transfers being subject to the consent of the Administrator, we attempt, by administrative action, .to set some limit upon the area that a Chinese may hold. To give an indication of the difficulties - and the House will bo aware that there are difficulties of administration as well as the undoubted claim of the Chinese residents of the territory for some protection - I mention a recent case in which the Public Trustee put up a property for sale on behalf of the widow of the former owner. The difference between a tender offered by a Chinese purchaser and those offered by other tenderers was about £14,000. If we had refused to allow that purchase to go through it would have meant depriving the trustee estate, and the widow, of a sum of £14,000. That, of course,’ is a grave decision to have to make. I can assure the honorable member, and the House, that we are conscious of the objections’ that might arise from a too excessive holding of land passing to Chinese residents of New Guinea. I can also assure the House that in a report that I received by special request only last week, the Lands Department and the Administrator of the territory told me that the area of land in all forms held by the Chinese in the territory is below the area that would be proportionate to their numbers in the total population.

page 249

QUESTION

PETROL

Mr KEKWICK:
BASS, TASMANIA

– I ask the Prime Minister whether it is a fact that petrol sold in Australia is compulsorily limited to 73 octane rating, and if so, why? Is the Prime Minister aware that the United Kingdom has recognized the greater efficiency and economy of using 80 to 83 octane rating, bearing in mind that it gives a much greater mileage to the gallon and causes considerably less engine wear ? In view of the lead given by the United Kingdom, is there any reason why Australian motorists, both commercial and private, should not enjoy the benefits of better petrol?

Mr MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– -So far as I know there is no Commonwealth law, nor is there a State law, which deals with this matter. It is undoubtedly true that in the United Kingdom there is a higher octane rating, and I understand the point that has been made by the honorable member. However, the matter not being covered by any law of ours - and I doubt whether it could be so covered - or by any State law it is essentially a matter between the petrol companies and the Department of Trade and Customs and would have to be dealt with on that level.

page 249

QUESTION

COAL

Mr JAMES:
HUNTER, NEW SOUTH WALES

– Will the Prime Minister say whether it is a fact that workers in the coal-mining industry, particularly in the north of Sew South Wales, have adhered to the request made to them some time ago to produce more coal, with the result that there are now several million tons of coal at grass which has been stockpiled by the Joint Coal Board? Is it also a fact that the boa-rd has refused to stockpile more coal, and that unemployment is growing in the coal-mining industry due to the fact that the northern coal-fields of New South Wales contain two seams of coal, one of which is known as the Greta seam, which yields the best gas coal, and the other of which is known as the Borehole seam, which yields good firing coal? During the war coal from, these two seams was mixed. I have asked questions about this matter previously. Owing to the state of the industry the miners’ federation has closed its books to the admission as new members of people seeking employment in the industry because of the fear of a reduction of the number of mine workers in the lower or “Newcastle end of the coalfields. Has the Government ever attempted to find markets for the excess coal? Has it ever expressed an opinion that the Joint Coal Board should endeavour to mix Greta seam coal and coal from the Borehole seam, which is at the Newcastle end of my electorate ?

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

– I am not aware of the answer to the statement of the honorable member, but I know that the Joint Coal Board has been, and is now, operating on certain contracts that have already been procured with regard to the disposal of coal. I shall discuss the matters raised by the honorable member with the Minister for National Development, and have an answer made available to him.

page 249

QUESTION

GENERAL AGREEMENT ON TARIFFS AND TRADE

Mr GRAHAM:
ST GEORGE, NEW SOUTH WALES

– Can the Prime Minister advise the House whether there is any substance in a recent report that the Australian attitude towards the General Agreement on Tariffs and Trade has changed?

Mr MENZIES:
LP

– A statement has been reported in one of the newspapers in the last day or two to the effect that there had been some change in the Australian Government’s attitude. That is not true. When I recently made a statement about the General Agreement on Tariffs and Trade, I said this, and I shall repeat it -

The Australian Government therefore considers that a general review of the General Agreement on Tariffs and Trade is overdue, and the Australian delegation has been instructed to seek a review to be held at an appropriate date some time during 1954. The representative of Australia, the leader of the Australian delegation, will, at the Geneva meeting which is due to begin, restate that view. He will have our opinion, and will urge that a review occur next year.

That is what I said originally, and that remains unchanged in any particular.

page 250

QUESTION

SOCIAL SERVICES

Mr MINOGUE:
WEST SYDNEY, NEW SOUTH WALES

– In view of the inadequate and paltry 2s. 6d. increase to recipients of tuberculosis sufferers’, invalid, age and service pensions, will the Treasurer consider having these worthy people embraced by the fund to be raised in Australia, at the request of Her Majesty Queen Elizabeth the Second, for mothers and daughters? If this request cannot be granted, will the right honorable gentleman consider granting an extra week’s pay to such persons as I have mentioned, when Her Majesty visits Australia ?

Sir ARTHUR FADDEN:
Treasurer · MCPHERSON, QUEENSLAND · CP

– The Government’s policy with regard to this matter is outlined in the budget papers that are at present before the Parliament.

page 250

QUESTION

NORTHERN TERRITORY

Mr W M BOURKE:
FAWKNER, VICTORIA

– Is the Minister for Works aware that there is widespread dissatisfaction in the Northern Territory with the operation of the Department of Works, because of the tremendously inflated cost of all the work that it carries out, and of frustrating delays in general laxness and inefficiency of operation? Is the Minister prepared, as a step towards more efficient and economical administration, to withdraw his department completely from the Northern Territory in favour of the local administration?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– It is a rather popular sport of late to accuse the Department of Works of laxity and inefficiency. The fact that the accusations are made does not prove them true, and I remind the honorable member that it is very difficult to get sufficient workmen and materials to construct a job in an outoftheway place like the Northern Territory. Up to the present time my department has been doing practically the whole of the work in the territory, and as there has been no standard of comparison with what other people can do, it has received much criticism, which, in the main, has been grossly unfair. I do not suggest that there may not be some causes for complaint - there always are - but I do suggest that those who feel aggrieved should realize the difficulties that exist in conducting a works programme in the Northern Territory or any similar outoftheway place. First, we have to obtain efficient workmen and skilled technicians who are prepared to go there, and, secondly, we have great difficulty in providing proper living conditions in the territory for the largest group of our employees there, who may be called temporary employees. The question of whether the works programme in the Northern Territory should be handed over to the Northern Territory Administration has been discussed by me with my colleague, the Minister for Territories. I have no strong opinions about the matter. If the work could be done more efficiently by another department I should not say that the Department of Works should hang oh to it merely for the sake of saying that it must be done by the Department of Works. A good deal of ignorant criticism has been levelled at the department. Until recently it has been very difficult to get private contractors to go to the Northern Territory and therefore there has been little opportunity to call for tenders in order to obtain competitive prices. The Minister for Territories and I hope that we shall be able to improve efficiency in the Northern Territory works programme, not through ourselves, but through the excellent officers of the Department of Works and the Northern Territory Administration. Do not think for one moment that we shall be able to undertake works in the Northern Territory for the same price as we can have them done in Sydney or Melbourne. We cannot do that at the present time.

page 250

QUESTION

URANIUM

Mr OPPERMAN:
CORIO, VICTORIA

– Will the Minister for Supply comment on a query made in London on whether it is fair that Australia should be used as a rocket range while it is obliged to sell uranium at bargain prices? Is the price of 195d. a unit for this commodity, which Australia is paid by the United States of America and the United Kingdom, a bargain price ? Why is there a discrepancy between that price and the price which Canada receives for its uranium? Is Australia’s willingness to co-operate in the atomic energy programme likely to overtax its resources ? Finally, does the Minister think that Washington and London are accepting too much from Australia by way of assistance in the atomic energy programme?

Mr BEALE:
Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

– I can only say that I think somebody in London is flying a kite, and seeking by a series of questions to obtain information which will not be given to them. Speaking generally, Australia is not selling uranium at bargain prices. The prices at which uranium is sold has never been revealed, and they “ill not be revealed as a result of these questions.

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– What is wrong with letting us know the price at which it is sold?

Mr BEALE:

– Australia is not overtaxing its resources. In regard to the assistance given by Australia to Washington and London, all I can say is that, by and large, the boot is on the other foot. We are obtaining very satisfactory assistance from the United States of America and the United Kingdom.

Dr EVATT:
BARTON, NEW SOUTH WALES

– What are the grounds upon which the price and the supply to other countries of Australian uranium are treated as confidential or secret? If the price which Canada obtains for its uranium is published in the United States of America and Canada, can the Minister inform the House why the facts in relation to Australian uranium cannot be disclosed?

Mr BEALE:

– Some time ago the Australian Government entered into an arrangement with the Combined Development Agency, a body which is representative of the British and American Governments, for the sale of uranium products. Under the terms of the arrangement it was agreed that the price to be obtained for Australian uranium should not be revealed. The Government proposes to observe that arrangement.

Dr Evatt:

– Not to be revealed without the consent of the other body?

Mr BEALE:

– That is so. The Prime Minister has reminded me that to reveal prices would be to reveal quantities and perhaps also grades of ore, which Australia does not want to reveal.

page 251

QUESTION

MILK

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– Can the Minister acting for the Minister for Health inform me whether the free milk scheme for school children has been implemented in Queensland, and, in particular, whether delay has occurred in the implementation of the scheme at Ipswich, the largest town in my electorate? If the scheme has not commenced, will the Minister state the reasons for the delay? Is the delay related to the matter of price?

Mr TOWNLEY:
Minister for Social Services · DENISON, TASMANIA · LP

– So far as I am aware, the free milk scheme for school children has not yet come into operation in Ipswich. I should like to make it plain that the reasons for the delay are quite outside the control of this Government. The highly reputable company which holds the franchise for the Ipswich area has experienced great difficulty in having its plant reconditioned or converted in order to take the one-third of a pint size bottles which are needed for the supply of milk to school children. The second reason is really of a technical nature. The company overlooked the necessity to have the price of the milk determined by the local price-fixing authority. Departmental officers are now on the job, and we hope that the free milk scheme will be in operation at Ipswich in the near future.

page 251

QUESTION

EMPLOYMENT

Mr FULLER:
HUME, NEW SOUTH WALES

– My question is addressed to the Minister for Social Services. Can he inform me whether it is a fact that the district employment agencies at Tumut, Gundagai and Temora in the electorate of Hume, and at West Wyalong in the electorate of Riverina, have been closed? If that is a fact, will the Minister inform me by whose orders, and for what reason or reasons, such action was taken? Where must citizens of those districts, who have lost their employment under this Government, apply in future in order to register for employment and the unemployment benefit ?

Mr TOWNLEY:
LP

– My answer to the honorable member for Hume is that I have not got a clue. His question should have been addressed to the Minister for Labour and National Service.

Mr CURTIN:
WATSON, NEW SOUTH WALES

– I ask the Minister for Labour and National Service what progress has been made towards the establishment of a Commonwealth Employment Service office in the Watson electorate. Is the Minister aware that a period of six months has elapsed since the money for this purpose was approved ? Is he also aware that people in that electorate who are unfortunate enough to be unemployed are forced to walk distances of up to eight miles in order to register for employment?

Mr HOLT:
Minister for Immigration · HIGGINS, VICTORIA · LP

– I think that the honorable member is aware that my department has been making active efforts to secure suitable premises in that area for a Commonwealth Employment Service office and’ has, I understand, been in consultation with the honorable member himself regarding the various sites that have been under consideration. I know it is attempting to secure the facilities required. It may be some encouragement to the honorable member, in the meantime, to learn that the figures last week showed a further drop of 848 persons in receipt of unemployment benefit in his electorate.

page 252

QUESTION

WHEAT

Mr HAMILTON:
CANNING, WESTERN AUSTRALIA

– Can the Minister for Commerce and Agriculture inform me whether the Premier of Victoria has demanded that the Australian Government conduct immediately a ballot of wheat-growers in an effort to resolve the deadlock on wheat? Is this a function that should be undertaken by the Australian Government or by the State Government?

Mr McEWEN:
Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– I have received no communication from the Premier of Victoria or from the Victorian Minister for Agriculture asking the Commonwealth authorities to conduct a ballot of wheatgrowers on the matter in dispute; but I have learnt from agencies to which I am not allowed to refer that the Premier of Victoria has issued a clarion call to the effect that a ballot of wheat-growers should be taken. I can only state that the Premier of Victoria has not kept in touch with his Minister of Agriculture on this matter, because I made an offer to all the State Ministers for Agriculture in July last that the Commonwealth would conduct a ballot on wheat stabilization if the States ‘could agree upon a common question for submission to the growers. The unanimous reaction of the State Ministers was that this matter was not the Commonwealth’s business, and that if or when a ballot was to be conducted, the States would hold it. If the Premier of Victoria considers that a ballot should be taken, there is nothing on earth to prevent him from getting busy to-morrow on the matter, because that is the declared policy of his own Government. I think that the Premier of Victoria is only trying to pull the wool over the eyes of the wheat-growers. The Premier, when he was speaking a few months ago to the annual conference of the Victorian Wheat and Wool Growers Association, said, in effect -

I have been unable to get any information about the International Wheat Agreement from Mr. McEwen or the Department of Commerce and Agriculture.

I wrote next day to the Premier, and stated that he had not asked me for any information about the International Wheat Agreement, and that there was no record that he had ever asked the Department of Commerce and Agriculture for any information about it. I added in my letter that, quite unsolicited, I had kept the Victorian Minister of Agriculture fully informed about the matter, and that I had received from that Minister a week before a letter of thanks for the comprehensive manner in which I had kept ‘him informed on the whole position.

Mr LESLIE:
MOORE, WESTERN AUSTRALIA

– My question is addressed to the Minister for Commerce and Agriculture. The existing wheat stabilization scheme will terminate at the end of this month. Wheat-growers are pressing for repayment of all the money at present standing to their credit in the stabilization fund, which is reported to be about £20,000,000. When they agreed to the stabilization scheme, it was not intended that the stabilization fund should be related to any future fund. Will the Minister say when the wheatgrowers may expect a distribution to be made of the whole of the money in the stabilization fund?

Mr McEWEN:

– I cannot admit that it was understood originally that, on the termination of the present wheat stabilization scheme, all or any of the money in the stabilization fund would be returned to the wheat-growers. I do not think that any government would agree that, in a continuing wheat stabilization arrangement that involved a very large contingent Treasury liability, we should at any one point rule off the books and return to the wheat-growers all of the contributions that they had made to the stabilization fund, and assume, unsupported by any contributions from the wheat-growers, a tremendous liability on behalf of the taxpayers. That was never intended. If there is to be a continuation of the present stabilization plan, it will be on the basis of an affirmative vote by the wheat-growers. A part of the proposals put to the wheat-growers will be that, of the £20,000,000 now in the stabilization fund, £11,000,000 shall be repaid to them, and £9,000,000 retained as the nucleus of a new fund. Eventually that will be repaid, when subsequent collections have built up the fund, that is, unless the £9,000,000 is involved in meeting the commitments of the guarantee. A large section of the wheatgrowers have expressed themselves as in favour of a continuance of stabilization, but a very important section have expressed themselves as opposed to it. That matter is under discussion now. It must be brought to finality very soon. If it is brought to finality by a decision that there shall not be a continuation of stabilization, the funds now held by the Government will be repaid to the wheatgrowers, but they will not necessarily be repaid on the first Monday morning after the present stabilization scheme has ended. I am certain that every responsible person understands why repayment could not be made instantaneously. The wheat-growers demanded that they should be entitled to receive interest on funds held on their behalf. Consequently, the stabilization fund has been usefully invested, and has, in fact, been credited with interest earnings. The investment will be realized by the Government as quickly as possible when that course becomes necessary, having regard to prudent public finance and the necessity to avoid serious dislocation of the loan market. I do not mean that, there is a prospect of long delay in the repayment of the money, but I want it to be understood that there could not be ‘ an instantaneous realization of so large a sum as £20,000,000, perhaps at a time when the Government, on behalf of the States, was trying to raise a big loan of the kind now in prospect.

page 253

QUESTION

COMMONWEALTH LITERARY FUND

Mr FITZGERALD:
PHILLIP, NEW SOUTH WALES

– Will the Prime Minister give consideration to an increase of the rates of Commonwealth Literary Fund pensions and allowances? These payments are awards of merit given to outstanding Australian citizens who to-day are most adversely affected by the high cost of living.

Mr MENZIES:
LP

– The Commonwealth Literary Fund Committee has, on several occasions in recent years, adjusted these matters in the light of the circumstances mentioned by the honorable member. I have no doubt that we shall continue to watch them from time to time against the same background.

page 253

QUESTION

BROADCASTING

Mr FREETH:
FORREST, WESTERN AUSTRALIA

– Can the PostmasterGeneral explain the present position in relation to the establishment of a national regional broadcasting station at Albany in Western Australia, and can he indicate when the station is likely to be completed ?

Mr ANTHONY:
Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

– Investigations are being made by officers of the Australian Broadcasting Control Board in order to determine the best site for a station at Albany. It is desired to provide a service not only for residents of the town but also for the people who live in the surrounding farming districts. Therefore, it is important to have a site that will provide for the requirements of the whole area. I cannot say at present when the construction and installation of buildings and transmitting equipment can be proceeded with, because much depends upon the priority of Albany on the list of places to be provided with new stations and upon availability of funds for that purpose.

page 253

QUESTION

TELEVISION

Mr SHEEHAN:
COOK, NEW SOUTH WALES

– I ask the PostmasterGeneral whether it is a fact that the Government has discontinued all talks, and set aside all proposals, in relation to the introduction of television in Australia ? Have the talks been discontinued at the request of commercial radio interests? If so, will the honorable gentleman say when the Government proposes to resume the talks and whether any time has been appointed for the introduction of television in this country?

Mr ANTHONY:
CP

– As the honorable member knows, the Government some time ago appointed a royal commission of six members to inquire into and report upon the establishment of television in Australia, having regard to all aspects of the proposal. Of course, in the meantime, the honorable member for Melbourne, who is the Deputy Leader of the Opposition, has announced throughout the country that, if the Labour party is returned to power, it will not have television at any price. That promise has been made to the motion picture industry. I read with very great interest a report of the statement that the honorable gentleman made to that effect at a gathering of motion picture industry executives. However, the Government proposes to await the report of the royal commission before it, announces a policy.

page 254

QUESTION

HOUSING

Mr HOWSE:
CALARE, NEW SOUTH WALES

– The question that I wish to ask the Minister for Immigration refers to an offer that has been made by the Australian Government to the New South Wales Government for the disposal of the Orange immigrant hostel. Has the New South Wales Government yet given any indication that it intends to take over the hostel? If so, under what conditions will it take over the establishment? Can the Minister say whether the entire hostel will be used to provide emergency housing, or whether a part of it will be used for the accommodation of immigrants, who are still settling at Orange?

Mr HOLT:
LP

– The original proposal was put to the New South Wales Government last June. Under the scheme that this Government proposed, the hostel was to be converted for housing purposes, but arrangements were to be made for some immigrants to be accommodated there. A suitable portion of the establishment was to be reserved for them until they could secure alternative accommodation. Somewhat similar arrangements in respect of such hostels have been made with the Governments of Tasmania and South Australia. We have not received a reply from the New South Wales Government, although reminders were sent to the Premier by the Prime Minister’s Department on the 21st July and the 28th August. As soon as I have further information on the subject I shall convey it to the honorable member.

Mr COSTA:
BANKS, NEW SOUTH WALES

– The Prime Minister, in the policy speech that he delivered in 1949, promised to amend the Commonwealth and State Housing Agreement in such a way as to permit families to own their own houses by making finance available to would-be purchasers. Will the right honorable gentleman say whether it is still the intention of the Government to fulfil that promise and, if so, when?

Mr MENZIES:
LP

– I should like an opportunity to look at the terms of the speech.

Mr Ward:

– I will bet you are sorry that you made it.

Mr MENZIES:

– I still regard it as the finest policy speech ever delivered in this country. One of the things that infuriates honorable members opposite is that, so far, we have been able to implement at least 90 per cent, of it. However, oddly enough, I have enough caution left in me not to accept a garbled account of the speech. I prefer to refer to the document itself.

page 254

GOVERNMENT ECONOMIC AND FINANCIAL POLICY

M.r. CLARK. - In view of the importance of giving stability to the primary industries of this country in relation to both prices and marketing, will the Minister for Commerce and Agriculture make representations to the Government to hold, at an early date, a referendum for an alteration of the Constitution to give to the Commonwealth Parliament power to institute orderly marketing schemes throughout the Commonwealth on a uniform basis? Or does the Minister desire a continuation of the present arrangement, under which he can pass the buck to the States ?

Mr McEWEN:
CP

– In 1937, a government composed of the parties now on this side of the House submitted such a referendum to the people. Although the proposal enjoyed the support of the party now on the opposite side of the House, it was rejected, by the people. Later, a Labour government had another “ go “ but its proposal was rejected also. To-day, there is a complete pattern of constitutional authority in which schemes of the kind to which the honorable member has referred could be introduced by a combination of Federal and State authorities. Under those circumstances, State governments that refuse to reach agreement with other authorities on such matters cannot use the alibi that the problem could be solved by granting additional power to the Commonwealth.

page 255

QUESTION

TAXATION

Mr DRURY:
RYAN, QUEENSLAND

– On the 19th June, the Treasurer announced that three conventions had been signed by the Australian Government and the Government of the United States of America for the avoidance of double payment of income tax, estate duty and gift duty. I understood from the right honorable gentleman that the conventions were referred by the American Senate to the United States Senate Committee on Foreign Relations. In view of the importance of encouraging a greater flow of overseas capital to this country, will the Treasurer advise the House of the present position in this connexion, and say when it is expected that the conventions will be put into effect?

Sir ARTHUR FADDEN:
CP

– Legislation is being drafted now to give effect to the agreements that were entered into between this Government and the Government of the United States of America to obviate double taxation. The legislation will be very complicated, and the drafting will ta.ke a considerable time.

page 255

QUESTION

LONG-RANGE WEAPONS ESTABLISHMENT

Mr RUSSELL:
GREY, SOUTH AUSTRALIA

– Will the Minister for Supply say whether it is a fact that the Australian Government has borne the whole of the expense incurred at the Woomera long-range weapons establishment in South Australia ? Can the Minister inform the House of the approximate expenditure incurred to date?

Mr BEALE:
LP

– I do not quite know what the honorable member means by “ the whole of the expense “ incurred at Woomera. The original agreement between the two governments, entered into on behalf of Australia by the previous Administration, was tha’t the cost of the long-range weapons establishment and of research and development should be shared equally by the governments, the British Government bearing that part of the cost that was incurred in England and the Austraiian Government bearing the part incurred here. That agreement, has been in operation for some time. In pursuance of it, Australia has built the range, developed it and put in all the necessary instruments. In round figures, Australia has expended something like £30,000,000 on the range, but it would not be correct to say that Great Britain has not expended a great deal of money in connexion with it. As recently announced, there has been a re-arrangement of the incidence of expenditure. The Prime Minister has, quite properly, corrected me. When I said that the costs were to be shared equally, that was a misstatement. They were to be shared by the two governments on the basis that Great Britain bore the part of the costs incurred in England and Australia bore the part incurred here.

page 255

QUESTION

LAND SETTLEMENT OF EX-SERVICEMEN

Mr DEAN:
ROBERTSON, NEW SOUTH WALES

– My question, which is directed to the Minister for the Interior, relates to war service land settlement. I have been informed that, at a recent congress of the Returned Servicemen’s League, a Minister of the New South Wales Government, in an address to the delegates, gave a wrong impression of the part played by this Government in war service land settlement. Is the Minister aware of that address? Can he do anything to correct the wrong impression that was given to the delegates to the congress, and to inform them of the facts of the matter ?

Mi-. KENT HUGHES.- I have not seen a copy of the address. Until I do see one I cannot answer the statements made in it. If the honorable gentleman will provide me with a copy of the address I shall probably be able to give a direct answer.

page 256

QUESTION

SUPERANNUATION

Mr MORGAN:
REID, NEW SOUTH WALES

– I ask the Minister for Social Services whether, in view of the fact that many progressive-minded employers have taken advantage of income tax provisions to establish voluntary superannuation schemes for their employees, whilst others have failed to do anything in that regard, he will give consideration to the establishment of a compulsory superannuation scheme to cover persons not otherwise covered, especially people employed in industries in which there are industrial hazards that affect the health of the workers and shorten their working lives.

Mr TOWNLEY:
LP

– The question is hardly one that comes under my jurisdiction or the administration of my department. The Government has been cooperative with trade unions and other bodies in respect of funds of the kind that the honorable member has mentioned. It will be recalled that, in relation to sickness benefits last year we disregarded £2 of the taxpayer’s income. In the legislation to come before the House we intend to disregard contributions to trade union funds. I mention those matters to indicate that we have a great deal of sympathy in connexion with this matter, and will give such co-operation as we can.” I shall give consideration to the principle mentioned, by the honorable member and see that his suggestion is conveyed to the right quarters, although the whole subjectinvolves a matter of Government policy.

page 256

QUESTION

WAR GRAVES

Mr FAIRBAIRN:
FARRER, NEW SOUTH WALES

– I direct to the Minister for the Army a question that concerns the placing of permanent headstones on war graves? In explanation of my question I state that in 1946 war widows and the nearest relatives of the men killed in action were informed by the Imperial War Graves Commission that permanent headstones would be placed in position shortly. So far, however, in Singapore and possibly some other places, no move has been made by the Australian Government to replace temporary wooden crosses although such crosses on the graves of British soldiers have been replaced by the United Kingdom Government. Can the Minister inform the House when this work on the- graves of Australian soldiers will be completed?

Mr KENT HUGHES:
CHISHOLM, VICTORIA · LP

– I am astonished to learn that the headstones of British soldiers have been replaced whilst those on the graves of Australian soldiers have not been replaced, because the Australian Minister for the Interior, and Brigadier Brown, act as agents of the Imperial War Graves Commission. The whole of the work throughout the Far Eastern area is done through the Australian head-quarters. If the temporary crosses on the graves of British soldiers in Singapore have been replaced then it will be only a short time before any that have not been replaced on the graves of Australian war-dead will be replaced. A tremendous amount of work has been done in Japan, Singapore, Borneo and our own territories right throughout the whole of the Far East,. as well as in Australia, in carrying out the commission’s work, which has almost reached completion. If the honorable member’s statement is true - and I have no doubt that it is - the matter will be attended to in a short space of time. When the work that has been done, and the fact that it has almost been completed, are taken into account, I think a very great deal of credit must be given to the active members of the Imperial War Graves Commission. I repeat that the work in connexion with the Far Eastern area has been left in the hands of the Australian organization.

page 256

QUESTION

CIVIL AVIATION

Mr GALVIN:
KINGSTON, SOUTH AUSTRALIA

– Is the Minister for Civil Aviation in a position to give the House any information regarding the progress made with the construction of the new Adelaide aerodrome at West Beach? Can he indicate when this airport will he usable by aircraft, and also the general progress that has taken place on the work on the aerodrome, which is so urgently needed in South Australia ?

Mr ANTHONY:
CP

– The construction of the West Beach aerodrome to serve Adelaide is one of the major undertakings of the Department of Civil Aviation. It involves the expenditure of a large sum -of money .and has been proceeding for some years. -One runway has sheen completed and’ is ready for use, and good (progress is being made on a second runway. There is also, ‘however, the problem of work to be done in respect of electricity., drainage, sewerage and the thousand and one other things that are associated with a big building project. One hangar is well on the way to : COmpletion, ,amd I understand that a .second hangar will be completed , some time next year. In addition, he terminal and passenger buildings will have to -be constructed. Plans, drawings and specifications .are .now .being prepared, or probably have already been prepared, for these. The question of when we can get on with these buildings is one that I cannot answer -now. State governments complain that their funds wre limited, and that they have had to slow down on many of their works as a result. What applies to .the State governments applies no Jess *to ‘Commonwealth departments, which are equally limited in the amount of funds available to thiam. My department is no ‘excerption to that rule, and therefore I am not able to say when we can proceed with the work that is necessary. We are going ahead with it as fast as money and other considerations will permit.

page 257

QUESTION

ROYAL STYLE AND TITLES

Mr TURNBULL:
MALLEE, VICTORIA

– In directing a question to the Prime Minister, I explain that there is some concern in my electorate .regarding the deletion of the initials “F.D.”, meaning “Defender of the Faith from the inscription on the new Australian coinage. Will the right honorable gentleman <explain the reason for that deletion %

Mr MENZIES:
LP

– The expression “ Defender of the Faith “ is, of course, contained in the Royal Style and Titles approved by this Parliament, and so there is no question of altering the Royal Style and Titles which, in the case of Australia, is as follows : -

Elizabeth the Second, by the Grace of God, of the United Kingdom, Australia and Her other ‘Realms and Territories, Queen, Head of the ‘Commonwealth, Defender of the Faith.

No alteration has been made there, but, as other countries involved have

page 257

R.- LO]

discovered, ‘considerations of apace .must apply when -a coin, is designed. The inscription .contains two initial letters “D.G.”, meaning “By the Grace of God”, but the initials “F.D.” are not included. The non-inclusion of these initials is not peculiar to Australian coinage. It does not .for «. moment involve .any abandonment of any .element of the Royal Style and Title. When, however, we sane ‘dealing with a conventional structure like -a coin there are, as I have already said, considerations of space. After all, we could hardly reduce everything in the inscription to a mere series of initial letters that might turn out ito be meaningless. The amount of lettering on the coins has, therefore, been reduced.

page 257

COMMUNISM

Mr MENZIES:
Prime Minister · Kooyong · LP

– by leave - The so-called “peace” movement with its attendant conferences and propaganda has been a recognized instrument of Communist policy in the post-war period. Appealing to the ardent desire for peace in all of “us, it endeavours to equate the avoidance of war with the acceptance of particular Communist policies. It ds c’leaT that its propaganda and its ‘conferences in the western world serve Communist aims - and Communist aims only. They do not serve the cause of peace. No thinking person can suppose that its propaganda and its conferences have any effect on the masters of Communist policy. But they are ‘calculated to have a “ soffteningup” “ effect on the democratic world and on the unity of that world. They are calculated to sow discord between western governments - particularly between the United States of America and the rest of the western world –and between those governments and their people; and they are calculated to weaken western defence efforts. They certainly do provide additional platforms for the exposition of Communist world policy. Finally, the organization -of national ‘” peace “ conferences provides a test of the capacity of -the movement and the Communist party to organize, whether behind the scenes or openly, mass opinion -on a national scale.

It is recognized Communist technique to endeavour to ‘attract to such conf erences persons of standing who are not Communists. The association of good people with these conferences, people of standing, with not a hint of communism in them, is an end in itself. In addition, their names are used to add prestige to the individual conference, to any resolutions serving Communist ends which emerge from that conference, and to the “ peace “ movement generally. “ Peace “ propaganda and “ peace “ conferences are even more effective if the measure of Communist control or support is concealed or minimized. The less “political” such a conference can he made to appear, the more chance these is of insinuating Communist and “ peace “ propaganda into it and of making that propaganda effective.

The proposed peace convention to be held in Sydney at the end of this month is a. case in point. As presented by convention publicity, the initiative for the convention came in the first instance from a group of clergymen who met in Sydney in April, 1953. Both the Communist party and the Australian Peace Council - an organ of the world “ peace “ movement - have made strenuous efforts to avoid being identified as originating the convention. These efforts have convinced many people that the convention has no direct connexion either with the Communist party or with the “ peace “ movement. The facts, however, give good cause for believing that both the Communist party and the Australian Peace Council laid the groundwork for the convention, and that they continue to provide, behind the scenes, a considerable amount of direction and organization.

As early as August, 1952, the Central Committee of the Communist party decided to organize an Australian peace congress to take place in 1953. In March, 1953, the Australian Peace Council took up the running at a special plenary session held in Melbourne from 10th to the 1 1th March. This special meeting had been postponed until the return via Moscow, Peking and Hong Kong, of Australian delegates to the Third World Peace Congress in Vienna. Thereafter, the Australian Peace Council and the Communist party restricted their activities to behindthescenes work, so effectively that some at least of the gentlemen who thought they were initiating the convention, were unaware of its having any connexion with either the council or the Communist party. It is worth noting that of the group which took the public initiative in April, two are associated with the Australian Peace Council and one was connected with the New South Wales sponsoring committee for the Peking “ peace “ conference last year. I do not wish to overwhelm the House with a mass of detail, but I consider that some at least of the evidence available to the Government should be indicated -

  1. Two months ago, a member of the highest committee of the Communist party, when addressing a select party group, said -

The peace movement has gained such momentum that it is the greatest force in the world to-day. The peace convention which whs started in Sydney by a delegateto the Third World Peace Congress in Vienna, has given the partya weapon that will defeat the warmongers and the Menzies Government. The most important work in the party to-day is to build the peace forces,and we must concentrate on the convention. You must get lists of names of important people in your areas and send these to the regional committee for the convention. We made plans in the Central Committee for this convention some time ago, but we have had to change those plans and make different ones.

  1. The undercover influence ofthe Communist party on the organization of this convention is demonstrated by a resolution passed by a senior committee of the Communist party, which reads -

That peace agentsbe found in factories, industries, clubs, churches, shop committees and unions. These agents are not to be approached by known Communists or party members, but their names are to he submitted to section secretaries, who will ascertain agents’ addresses from Commonwealth electoral rolls, and submit them to the convention convening committee. The convening committee will then sendout letters of invitation and brochures to these persons, asking them to become agents for peace, sell buttons, raise finance, distribute literature, and become delegates to the peace convention. Party members are to receive brochures at about the same time as the agents so that unity will be achieved and so that agents will think that a non-Communist organization is in control of peace activities and the peace convention.

That the party will conduct its own campaign for peace until the Central Committee orders a linking up with the convention convening organization.

  1. Further evidence of the Communist party organization behind the convention appears from documents in the possession of the Government. One document was a draft national plan for youth participation in the peace convention. It sets out a great deal of detailed organization, and indicates that certain action is to he taken, and if the sponsoring committee of the convention fails to take the proper action, Communist party representatives will do so.
  2. Another document shows that the Communist party has set up its own working committee for the convention ; has detailed one of its members to devote the whole of his attention to the organization of the convention; and has named another member, who, from other sources, is known to be a member of the Central Committee, to bear the general political leadership and responsibility of the convention.

So long as their connexion with the convention remained hidden, the Communists could hope to benefit substantially from it and exploit it for their own purposes. Although the objects of those gentlemen who are apparently organizing the convention are quite different from those of the Communists, although, that is to say, their interest in peace is genuine and not for mere propaganda, it will be extremely difficult to distinguish this convention from other manifestations of the Communist “ peace “ movement. The name is similar and so is the emblem. There are also some close affinities between the agenda of the convention and that of other conferences openly organized by the Communist-dominated “ peace “ movement. In other words, the people who attend this conference may find themselves, unless they are very watchful, subscribing to resolutions which are “ loaded “ in favour of the Communists. The Communist hope is that the only distinction between this convention and those of the so-called “ peace “ movement will be that many distinguished non-Communists will participate. The conclusion which the Communists will blazen forth in their propaganda will be that the so-called “ peace “ movement has gained a number of prominent recruits.

It seems to me that the Communists will fail to gain these benefits if their objectives and their connexion with the convention are publicly and authoritatively known. That is why I have placed before the House facts which will make it clear to the Australian people that the Communist party is behind this convention and hopes to exploit it.

Dr EVATT:
Leader of the Opposition · Barton

– by leave - The statement made by the Prime Minister (Mr. Menzies) is of great importance. If the documents mentioned by him are properly authenticated - and I have no doubt that they are - it is perfectly clear that the Communist party is very closely associated with the proposed convention. That, at all events, is the view of the Labour party in New South Wales. Its decision to characterize the convention in that way was based, I think, on information similar to that in the hands of the Prime Minister. The point that must not be overlooked is that many people of outstanding good faith who are determined to do something in the cause of peace may become associated with a convention such as this notwithstanding that they have no connexion whatever with communism or the Communist party. We must decide between two courses of action. We must either clamp down on this convention and regard the very word “ peace “ as being synonymous with communism, which is unthinkable, or let it be widely known that there is a definite connexion between the Communist party and the proposed convention. For that reason the statement made by the Prime Minister is of great value. But we are left in the position that there are many men, some of them prominent in the churches, who have no connexion with communism, but who wish to contribute to the cause of peace.

One of the church leaders in Melbourne recently reminded us that the United Nations Association, -which has branches in every State of the Commonwealth, is pledged to the pursuit of peace. Its objective is to bring about peace through a world organization. I should like to see more support given to it by the men to whom I have alluded. , The Labour party supports it as it also supports the United Nations and its affiliated organizations. It would be tragic if the cause of. peace were worsened simply because the. Communist party became associated with the. organization, not openly, but by a. aeries of directives and instructions designed, to conceal the Communists’ part in it. I mention that matter because it may well come up for consideration in connexion with the attitude, of the Labour party in relation to the convention.

Mr. MENZIES (Kooyong- Prime Minister). - hy leave - Honorable members generally would probably like an opportunity at a convenient time to make some comments on. this matter. I accordingly lay upon the table the following paper : - *

COmmunist Party’s Connexion with Proposed Peace Convention - Ministerial statement. and move -

That, the paper be printed.

Debate (on motion by Dr. Evatt) adjourned.

page 260

SULPHUR AND SULPHURIC ACID

Tariff Board Report

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

– I lay on the table the report, of the Tariff Board on the following subject.:^- -

Sulphur and sulphuric acid.

page 260

GOVERNMENT BUSINESS

Precedence

Motion, (by Mr. ERIC J. Harbison). agreed; to=- -

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

page 260

QUESTION

BUDGET 19.53-54,

In Committee, of. Supply:- Consideration plumed from. the. J 5th September (vd&* page 341),. on motion by- Sir ARTHUR Fadden^

That the first, item in the. Estimates, under revision. Jio,, l-»-The Senate^- namely, “ Salaries and Allowances, £19,900 be agreed, to.

Upon which Dr. Evatt had moved, by way of amendment -

That the first item be reduced by £1.

Mr ANDREWS:
Darebin

.- Since the presentation of the budget there has been a suggestion of buoyancy among Government members which seems to be very far removed from the waters of reality. These waters have been artificially salted. The addition of the salt has given to the water some of the buoyant quality of sea water. As supplies of salt become exhausted undoubtedly its buoyancy will be progressively reduced and it will no longer be possible for the body politic to float and drift as it has been doing up to the present. The salt to which I refer has been provided by buyers, who have been, paying very high prices, and by exceedingly fine seasons^- the sort of seasons which have placed the Government, in a rather better position than it might otherwise have been in, and, indeed, that it ought to have, reached in normal circumstances.

To start at the beginning so that I maj be perfectly understood, I shall select two items which appear to be relevant to my consideration of this matter. On the occasion of the presentation of the last budget the Government, supposedly seized with the importance of increased primary production in Australia, offered a 20 per cent, incentive in relation to farm improvements. Another matter which disturbed the Government particularly- at that time was the unemployment which had become so grave, in New South Wales, and the agitation that arose from it, which had become somewhat alarming. It could not be said that, the 20 per- cent, incentive which the Government offered in relation to farm improvements was either generousor sufficiently adequate to bring about the desired result. But it could be claimed’ that the action taken in relation to the unemployment position was revolutionary. Every one will recall that import restrictions, were imposed and local manufacturers were given a larger- share of the local market, with the result that local” manufacture was given a boost - I say advisedly-at. a price. That policy/ is all very well in its place, so long as, we remember that o.ur exports, of manufactured, goods, comprise somewhat, lessthan 10- per cent of our total exports..

This thought brings me to the point which I consider to be material in this debate, which is that our economy is dependent to an overwhelming degree upon the export of our primary commodities.

I feel that I can state with perfect honesty that the policy of this Government in respect of primary production has not contributed to a permanent solution of the economic difficulties of this country. “When I make this statement, I am speaking seriously, and not with the object of making party political propaganda out of the matter. Production must be’ increased, for obvious reasons, if our overall economy is to benefit. To begin with, we have no guarantee of how long prices will continue at their present levels. In order to protect our economy against a sudden decline of price levels, we must increase production. We can also require an improvement of the quality of our products. Again, because of the price situation throughout the world we require a reduction of costs.

I make it clear, at the outset, in anticipation of interjections from honorable members opposite, that it is no paradox that the volume of our primary commodities has increased considerably during the last twelve months. Wool production has increased by approximately 6 per cent., and I am advised by a reliable source that such an increase is due principally to the effects of the distribution of myxomatosis. Wheat production has increased during the last twelve months by approximately 3 per cent. The reason for that improvement is a favorable season, because the sowing of wheat this year reached a record low level. Meat production has also increased, and dairy production has increased by 2 per cent, as a result of an advantageous season. But the only increases in acreage that can be recorded are in respect of barley, oats and sugar. I am bound to observe that the incentive which brought about those increases of acreages were the higher prices paid for barley, oats and sugar by Great Britain and Japan.

Consequently, it is abundantly clear that no permanent expansion of our economy has been accomplished, and Australia is in the artificial position at the present time of being dependent on the willingness of buyers to pay high prices for our export commodities, and a continuance of the favorable seasons that we have experienced for a number of years.

Mr Gullett:

– The Government, not the seasons, is responsible for the improvement of conditions.

Mr ANDREWS:

– I describe the situation as artificial because the two factors to which I have referred are completely outside the control of the Government. I hope that Government supporters will not take this matter too lightly and make smart wisecracks about it. It is possible that the United States of America and Canada can capture the whole, or a considerable portion of, our wheat market by offering to countries that have been our best customers favorable terms, such as acceptance of payment in sterling, or payment over a long term. The policy of this Government obviously has failed to encourage primary producers to increase acreages.

It is equally clear that our producers have no security. They must ultimately sell their commodities in the free markets of the world. Greater security should be given to our primary producers in the form of a reduction of the prices of their requirements, and increased- production would be a much more potent factor in the improvement of the economy than would be any artificial incentive. I am unable to discover any action taken by the Government that has effected a reduction of costs. Wages now more than ever before can have a marked bearing on a reduction of costs generally. The costs of the requirements of primary producers, upon whom we are so dependent, such as agricultural machinery, fencing and fertilizers, are significant factors in our calculations. I am unable to report any government action under that heading which has been of any significant help to primary producers. “This matter surely requires deep consideration, but to date it has failed to gain any recognition from a government which supposedly set out to offer incentives to primary producers to increase production-

Taxation is another major issue. I believe that no significant measure of relief can be given to the people unless governmental expenditure is substantially reduced. I conclude from various government announcements, including one earlier this week by the Minister for Immigration (Mr. Holt), that the cost of Commonwealth administration is regarded as a mere 4 per cent, of the total expenditure. In my opinion, this is a loose and irresponsible way in which to regard costs under this heading, because every £1,000,000, when additional incentives are required for a desirable end, must be of the greatest importance. Above all, work seems to be automatically invented when the staffing of government departments is excessive or top-heavy.

In 1942, the Curtin Labour Government set an upper limit to departmental expenditure. A similar precautionary move should have been made by the present Treasurer (Sir Arthur Fadden) during this financial year. It is interesting to note that President Eisenhower has issued a direction to agencies of the American Government to the effect that they must keep their expenditure within specific limits. No evidence has been adduced to demonstrate that a similar direction has been issued by the Australian Government to its agencies. Governmental expenditure should have been reviewed .before the Treasurer presented his budget to the Parliament. Above all, departmental functions should have been completely reviewed in order that duplications of functions, which may occur in transport, housing or agriculture, could be eliminated. The greatest possible loss can result from unnecessary employment in the governmental sphere, because man-power is withheld from employment in places where it can be used more profitably and to greater advantage. With an economy such as ours, these matters should not be overlooked. Surely the administrative costs of the Commonwealth are worthy of much closer analysis than a mere brush-off, which simply indicates that the figure is a mere 4 per cent, of total government expenditure.

Other governmental expenditure is subject, upon investigation, to similar criticism. Tax concessions can be granted without impairing efficiency, or obliging us to’ do away with what is necessary. I am convinced, for example, that the huge defence vote is very much inflated. It seems to be beyond doubt that, in order to mop up unemployment last year, vast orders were placed for military clothing which could not possibly be used. An analysis of the defence vote indicates that approximately £100,000,000 of the total of £200,000,000 is to be used for the payment of service salaries and wages. That seems to be a lot of money for the midget services that Australia has been able to provide up to the present.

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

– Does the honorable member suggest that the Government reduce rates of pay for members of the services? - Mr. ANDREWS- I suggest that departmental expenditure should have been very carefully analysed so that expenditure of one type, to which I have referred, could have been reduced in order to prevent the over-supply of materials.

I suggest also that a more careful examination should have been made of the items of expenditure in the total of £40,000,000 that Australia is expected to contribute for research on guided missiles and atomic weapons in connexion with the Woomera project. Is this a just share for Australia to contribute to a project of that nature, which is designed to serve so in any people in other countries? Our economy depends merely upon the whim of buyers, who at any time may cease to offer the high prices that have been paid for our primary products in recent years, and upon the vagaries of the weather.

Nobody expected a reduction of our social services account, of course, but it is obvious that very little attention has been paid to child endowment. Under the present child endowment scheme, too little is provided for those who are .in need and too much for others who would have sufficient without endowment. This fact is so obvious that it should not be necessary to direct the attention of the Government to it. The most notable feature of the proposed provision for social services is the paltriness of the increase of pension rates that is to be offered to recipients. Most pensioners have no other income, and they are in dire need. Apparently the Government has adopted the slogan that once was used by the Coles chain stores, “Nothing over 2s. 6d.” That will become a catchcry expressive of popular contempt for the Government’s niggardly concession. to which the electors will undoubtedly give expression in a more definite way when they have an opportunity to do so. The Government seems to have been able to find plenty of funds for all departments except the Department of Social Services. Why pension rates and other benefits should be held down at the proposed low levels while the economy of the nation is in its present condition, when other safeguards ‘could be applied as I shall indicate, is one of the mysteries of the budget.

Anybody who studies the Government’s budget plans carefully in a search for means of providing relief for the taxpayers must be forced to agree with the comments made by the Leader of the Opposition in relation to capital works programmes. There is the strongest possible case in favour of overthrowing the unaccountable practice of financing many capital works out of revenue. This practice may have served a purpose for a Government which claimed, when it first gained power, that there were inflationary tendencies in the economy. But the Government now asserts that the period of inflation has practically passed. It might reasonably have argued the wisdom of financing capital works from revenue during the worst period of inflation iii order to draw off surplus spending power in the community and thus put a brake upon inflation. However, that argument no longer applies. I remind honorable members of the finding of Mr. Colin Clark that taxation is inflationary when it accounts for more than 25 per cent, of the net national income. Taxation in Australia amounted to 30 per cent, of the national income in 1951-52, and its incidence has not been substantially reduced. The proportion is now 27 per cent. Therefore, the scale of taxation is inflationary. Had the amount of money allocated for capital works been considerably reduced, and had the programmes of various departments been carefully surveyed in order to eliminate .wasteful activities, it would have been possible to reduce taxation to such a degree that much more money would have been available for loan investment than is now the case. Such a reduction also would havefostered a psychological outlook that would have had a beneficial effect on our economy. Taxpayers would have realized that, with the economy in a healthy condition, they could safely invest in government loan programmes. In my view, it is high time that the activities of the Postal Department were conducted as a business undertaking. Those activities should be self-contained and selfsupporting.

I have yet to hear a sound argument in favour of the principle of financing capital works from revenue. The practice should cease, and the sums required for works should be obtained by loan. The relief thus afforded .to taxpayers would provide an incentive for manufacturers to reduce costs and for primary producers to increase their output. Furthermore, the saving would enable the Government to provide a more generous increase of pension rates than it proposes for those who must rely upon government aid and who are in genuinely needy circumstances to-day. I have dwelt lengthily on these matters because it appears to me that the Government has neglected a golden opportunity to prove the sincerity of its protestations that it wishes to offer incentives to primary producers and others who urgently need encouragement at present.

The measures that I have suggested would not, of course, solve the major overall problems of our economy. We must increase our exports considerably if we are to establish our economy on a safe foundation. First and foremost as a means of increasing our exports, we must extend land settlement by ex-servicemen, civilians and immigrants. In Victoria alone there are about 7,000 ex-servicemen who have been trained for primary production and who are awaiting placement on the land. Settlement has lagged in all States because of the lack of statesmanship. We cannot over-emphasize the fact that we are dependent for our economic security upon wool and wheat production in the main, and also, to a lesser degree, upon dairy, meat and sugar production. As I have said previously, there has been no appreciable increase of primary production since this Government has been in office. If we fail to produce substantial crops for export, nothing else in our economy will matter. Without large export surpluses, we can be thrown back to the conditions of the economic depression as the result of either a bad season or a sudden reduction of prices overseas. Our economy is balanced on a precarious fulcrum. The Government has a responsibility to promote, by means of clearsighted statesmanship, the progressive expansion of our economy, but it has failed to take any positive action to achieve that end.

The expansion of land settlement, of course, necessitates close Federal and State co-operation. But the Government has failed even in this field. There has been a great deal of talk about Federal and State relations from year to year, but little has been achieved. Many Australians realize the great weakness of a system under which one authority is responsible for raising funds and other authorities for expending the money without being required to render an account of their activities to those from whom it has been obtained. The relationship between the Australian Government and the State governments has never been properly federalized. In fact, there has never been any attempt to federalize it in the true sense of the word. The present Government has been too ready, in my estimation, to impose a ceiling upon expenditure by the States while, at the same time, it has failed to place a brake upon the activities of its own departments.

In connexion with loans to be raised by the States or money to be granted to the States, it was very quick to set a ceiling limit, without paying due regard to the expansion of the economy that was so necessary. I believe that that expansion should have been planned over a period of years, that the plans prepared should have been practical and capable of implementation, that priorities should have been established in co-operation with the States, and that finance should have been made available to the States and the Commonwealth in accordance with such plans. I believe that that alone would have given a guarantee of responsible expenditure by the States.

It is claimed that in a State such as Victoria anything between £10,000 and £15,000 is required to settle a soldier on the land. The price of land, like the prices of other commodities, is very much inflated at the present time, but the costs of which the responsible authorities are thinking in connexion with war service land settlement are quite unreal. To my mind, war service land settlement on the basis of an expenditure of between £10,000 and £15,000 in respect to each settler is not only impracticable but quite ridiculous. In my judgment, no one could have been successfully settled on the land at any time in our history under conditions that demanded full prior development of their properties, extensive improvements and all the amenities enjoyed by people who had been established on the land for some time. I believe that the only practical way in which to approach this problem is to urge that the pioneering spirit be retained. It seems to me that, so far from eliminating the pioneering spirit, it must be revived if the best results are to be achieved from land settlement. I believe that settlers of the proper type are available in the groups of people now awaiting settlement. I have in mind exservicemen who are earnestly awaiting the allocation of blocks and farmers’ sons who are crying out for an opportunity to establish themselves upon the land. I have in mind also groups of immigrants whom it would be more profitable to employ on the land than to keep in immigration holding centres in the cities. I believe that co-operative schemes could be established successfully. The establishment of such persons on farms would have brought about that gradual expansion of our primary production that ought to have been part and parcel of a planned development over the years. Crown lands in good rainfall areas are awaiting allocation. The allocation of such land to settlers would involve the imposition of the minimum burden upon new farmers and the governments responsible for their settlement. I believe that with real leadership and a realization of the urgent need for expansion - in other words, by the exercise of statesmanship - much could have been done, and, indeed, can still be done, in this field. This administration, having failed so far in this connexion, should prove its sincerity by doing its best to federate its requirements and those of the States.

The quality of our exports is another matter that urgently needs attention. In relation to this all-important question, there is again a need for federal leadership. It is well known that in the overseas markets with which we are concerned New Zealand mutton takes precedence over our mutton. I believe that much could be done to improve the standard of our wheat. Our handling of dairy products requires to be almost revolutionized. From reports, it appears that the presentation of our commodities on overseas markets is very poor indeed. There are poor descriptions of goods and- a general lack of salesmanship in places on the other side of the world where commodities are displayed. Quotas seem to be unnecessarily complicated. The calculation of landed costs, including customs duties and agents’ fees, and the translation of Australian currency into foreign currency, is so complicated that would-be buyers sheer off Australian products. Those faults, together with poor packaging and a lack of persuasive publicity, make the future of our export trade a melancholy one. Exports are the very lifeblood, not only of our primary industries but also of our secondary industries. It cannot be repeated too often that 70 per cent, of our export income is expended upon imports of capital equipment and raw material’s to keep our manufacturing industries going.

I have spoken of incentives in terms which leave no doubt about the inability of the- present administration. Pressure groups from minor secondary industries have received undue attention and publicity, whilst the very basis of our existence has been given scant consideration and- only incidental attention… For the great, majority of the people, the income tax relief afforded by this budget will be a bagatelle compared with the huge concessions given to companies. Ileal relief for the great masses of the people should be given by a reduction of indirect taxation. It is almost impossible to calculate the amount the average family man pays in indirect taxes. I believe that there is no reason for indirect taxation other than to shift the incidence . of taxation from the shoulders, of the “ haves “ to the- shoulders of those who, despite injustice being heaped upon them, are prepared to discharge their obligations. Let me remind the committee that the excise duty upon spirits is to be reduced but the duty upon beer is to remain at its present level.

The CHAIRMAN:

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

Mr FAILES:
Lawson

– I congratulate the honorable member for. Darebin (Mr. Andrews) upon his thoughtfulness for the rural industries of this country. It was particularly noticeable, because such thoughtfulness is so lacking in other members of his party. Last night, the Leader of the Opposition (Dr. Evatt) did not refer at all to our rural industries, which, as the honorable member for Darebin has pointed out, are very important, not only to our internal economy but also to our export trade, which is of such great value to us. It would appear that the honorable member is almost prepared to take the short step from his seat to the Australian Country party benches, but I must inform him about some matters in respect of which he appears to be singularly uninformed before be can be regarded as qualified for membership of the AuS tralian Country party. The Australian Country party is represented in this House for a very definite purpose. It is here, - if for no other reason, to act as a continual reminder to the Parliament of the importance of rural industries to the economy of Australia.

Unfortunately, the honorable- member for Darebin is under the impression that this Government has not given any assistance to our primary producers. One of the first matters to. which, he referred in his speech was the fact that wool production had increased. He attributed that increase- mainly to the destruction of rabbits by myxomatosis; Surely he knows that the Commonwealth Scientific and Industrial Research Organization was responsible for the development of the myxomatosis virus and for spreading it throughout Australia. As the honorable member has said, the virus has made a great contribution to the increase of our sheep population bydestroying rabbits-, and enabling sheepfarmers to derive the full benefit from their properties, largely freed from the rabbit pest which has been so harmful. I agree that the spread of myxomatosis lias established favorable conditions for the increase of our sheep population and for an improvement of the health of the sheep. The honorable member overlooked the consistent efforts by the Minister for Commerce and Agriculture (Mr. McEwen) in connexion with wheat. He overlooked the fight of the Minister to retain some form of orderly marketing for wheat and to bring into operation a wheat stabilization scheme that would be acceptable to the wheat-growers and would enable us to participate in the International Wheat Agreement. I agree with the honorable member that we may lose our overseas markets for wheat. If we cease to be a party to the International Wheat Agreement, there is every possibility that countries that have been good customers of ours and that subscribe to the agreement as buyers will be forced to buy their wheat from exporting nations that have subscribed to the agreement also. That is a danger with which we are faced. This Government has fought to retain our membership of the International Wheat Agreement, to retain the orderly marketing of wheat in this country and to retain a wheat stabilization scheme, but its efforts have been thwarted by a couple of States that have shown no sense of responsibility to the farmers of this country. I intend to deal with ‘that matter later. Lack of co-operation among the States themselves and between the States and the Commonwealth is the cause of some of our present troubles.

The honorable member has said that production had increased, not owing to the efforts of this Government, but owing to fortuitous circumstances. I admit that we have had some very good seasons in the last few years. In my neck of the woods, we have had eight or nine successive good seasons, during only four of which this Government has been in power. I admit that good seasons tend to make good governments, but they can make good governments only if governments are willing to co-operate with the people who are producing for the national benefit. This Government has given every encouragement to such people. The honorable member said that we had made no move to reduce costs. Did he overlook the fact that this Government, with the co-operation of the miners - to whom I give full credit - has been responsible for producing vast quantities of the coal that is so necessary for the production of iron and steel, iron and steel products and all those things that farmers need, which previously we had to import. T refer particularly to wire, wire-netting, steel posts and galvanized iron. When we came into office, those things were expensive. They could not be supplied from local sources, and it was necessary to import them. But to-day, by and large, Australian-made articles can be bought comparatively cheaply over the counter. At times, there are temporary shortages. There is a temporary shortage of galvanized iron at the present time. But, due to the efforts of this Government, such shortages occur only intermittently and are of short duration.

The honorable member referred to fertilizers. That was a foolish reference, because the Minister for Commerce and Agriculture has worked solidily to improve .the production of fertilizers in this country. He evolved a plan under which companies that were producing fertilizers from rock phosphate were provided with the money that they required to convert their plants to a different method of production. Consequently, the production of superphosphate has been increased considerably during the last couple of years, and will continue to improve. The honorable member referred to machinery but he overlooked entirely the dollar loan that was raised largely to finance the purchase of machinery from overseas for the benefit of our primary producers. Those are some of the things that this Government has done to reduce costs in this country and to assist primary producers.

By taxation concessions also we have done all that is possible to lighten the burden of men on the land and to give them a better stake in the country, because we appreciate their value. We of the Australian Country party are fighting consistently on their behalf. It is for that reason that we are in this Parliament, and will continue to remain in it.

In addition to the tax deductions that are granted, especially in relation to clearing, preparation of the land for agriculture, drainage, soil erosion, rabbitproof fencing, pest eradication and so on, there is also the 20 per cent, depreciation allowance in respect of capital expenditure on machinery, barns, workmen’s cottages, fencing &c, which allows the whole cost to be written off in a period of five years. In that respect I make a suggestion that I hope the Government will be able to adopt in its next budget, r suggest that the Government consider making this 20 per cent, depreciation allowance not a depreciation allowance, as such, but a complete deduction over five years in respect of expenditure on permanent works such as workmen’s cottages, barns and fencing. I believe it to be right that expenditure on such works should be placed on the same basis as expenditure on the other items, such as clearing and preparation of the soil, that I have mentioned. Machinery, of course, is on a different basis, because it can be traded in or sold.

I have spoken, so far, only of matters concerned in the production of crops. I turn now to the disposal of our primary products. Is any honorable member who has sat here for long not aware of the efforts of the Minister for Commerce and Agriculture on behalf of the wheat industry, or of the efforts of the honorable member for Dawson (Mr. Davidson) on behalf of the sugar industry? Is he not aware that the price of sugar has been increased by 80 per cent, in the last three years, as a result of which sugar farmers have produced a crop 30 per cent, greater than the record crop previously produced, with a value of about £50,000,000? Can honorable members who are aware of these facts still honestly contend that the Government has done nothing to help the primary producers ? Are honorable members opposite not aware of this Government’s fight on behalf of the butter producers? Are they not aware of the Minister’s action in retaining for the wool-growers that great auction system that they have had for so many years? Honorable members opposite must be entirely ignorant of these facts, or they would not dare to say that the Government has done nothing for the primary producers. The Govern ment is proud of its efforts on behalf of the community, particularly that section of it which, all honorable members will agree, is sp important to this country because of the volume of exports that it produces.

Co-operation between the Commonwealth and States has been mentioned in this debate. The honorable member for Darebin said there was need for a review of Federal-State relations. The Leader of the Opposition made the same statement last night. Many people are thinking along those lines because the co-operation between the Commonwealth and the States that was envisaged by the framers of the Constitution has been very sadly lacking in the last few years. When the Constitution came into operation it was believed that the States would co-operate with one another and with the Commonwealth and that there would be no intrusion on the authority of any of them. The powers of the States and the powers of the Commonwealth are set out. in the Constitution. ~No attempt was made to do other than to form a sort of co-operative organization of all the people of Australia. I believe that the framers of the Constitution had in view a longterm basis of co-operation, and not one designed to last for a few years only. Over the years such co-operation has been developed in bodies like the Australian Loan Council. The Minister for Health (Sir Earle Page) was the author of that great scheme, which did away with the old idea of the States competing against one another in the money market. He was also the author of the Federal Aid Roads Agreement. The Commonwealth Scientific and Industrial Research Organization, to which I have already referred as having produced a great co-operative effort for the benefit of the States as well as the Commonwealth, is another growth of recent years. The Commonwealth and the States have also entered into agreements regarding repatriation and uniform taxation, which waa introduced during the last war. Agricultural extension services and various marketing schemes have grown up in the field cif Commonwealth-State co-operation. Those are only a few of the co-operative arrangements which have been accepted by the Federal Government for the benefit pT all Australia. I should like to devote more attention to the Australian Loan Council, but I am precluded from doing so by lack of time. Honorable members know that the Australian Loan Council is formed of six State representatives, one representing each of the States, and two Commonwealth representatives, who determine the amount of money that shall be borrowed in any one year and have the responsibility of fixing the rate of interest. When the- amount has been determined by the representatives of the States and the Commonwealth, the States having a preponderance of voting power, the money is allocated to the various States. The Commonwealth, however, has accepted the responsibility, because it has the necessary machinery, of raising the money by loan in the open market. The Australian Loan Council operated smoothly for many years, but in the last few years it has largely broken down because the States have insisted that they should have more money from loans than the loan market is capable of providing. The only reason why the agreement under which the council was established has not broken down is that the Commonwealth has subsidized the amounts that the States could obtain from the loans to bring them up to the amounts they required.

I wish to refer now to a statement made by the New South Wales member for the electorate of Dubbo, which is within my division. He devoted practically the whole of a speech in the New South Wales Legislative Assembly to a criticism of the Australian Government. According to a report in the Narromine News of the 1st September, he said that -

The Commonwealth Government was to blame for the lack of schools, the bad state of the hospitals, for unemployment, the closing down of such works as the Burrendong Dam, the lack of housing, and for high taxation.

I : cannot devote more of my time to the report of his statements, but the keynote of his address was that the wicked Federal Government had withheld moneys from New South Wales. I would not take much notice of what the member for Dubbo in the New South Wales Parliament had to say on this matter, but it is serious when his statement is repeated by the Leader of the Opposition in this House. That right honorable gentleman said last night in his budget speech that the Commonwealth administered as it thought fit the money that it collected from taxes. He said further that the time had come for a review of CommonwealthState financial relations, and that this Government was reducing the resources of the States further and further. He also spoke of the Government “ cutting back” the revenues of the States. The right honorable gentleman either did not read the Treasurer’s budget speech and the appendices to it, or else he was deliberately misrepresenting the position to the people, just as the member for Dubbo in the New South Wales Parliament attempted to mislead the people. If the right honorable .gentleman examines the budget papers he will find exactly how the revenues collected by the Commonwealth are distributed among the States. He will find that, rather than the resources of the States being cut back, they have increased considerably from year to year. I refer honorable members to Item No. 10 of the printed copy of statements referred to in the Treasurer’s budget speech which deals with the tax reimbursements and supplementary grants to the States. I direct their attention to the fact that in 1949-50, the financial year in which this Government took office, tax reimbursements and supplementary grants to the States amounted to £70,537,000, whilst this year they will amount- to- £142,459,000. The formula grant, which is the amount to which the States are entitled under the formula agreed on during the regime of the Curtin Government, would amount this year to only £120,549,000 but this Government has added in this year, by way of special grants an amount of £21,9io,000. The record of supplementary payments is interesting. In the year prior to this Government’s assumption of office, the first supplementary grant made to the States amounted to only £8,000,000. It was made only because a coal strike in New South Wales had assumed national proportions. The Chifley Government was forced to make that grant in order to save its skin. In 1950-51 this Government increased the formula grant to the States by £20,000,000, in 1951-52 by £33^77,000 and in 1952-53 by a total of- £27,145,000. In other words, the actual ‘ supplementary payment’ made to the States during this Government’s term of office amount to £102,632,000 Whilst the formula grant amounted to £386,125,000. It is clear, therefore, that the supplementary payments are keeping the States going. Yet the Leader of the Opposition says that we are pushing the States further and further back, despite the fact that evidence to the contrary is contained in the budget statements, which, presumably, he has read and which show that the Government has consistently and in creasingly assisted the States, when it possibly could, from the revenue that it collects.

The same kind of increases have occurred during the Government’s term of office in the borrowing approved by the Loan Council, as is shown by a statement that I hold in my hand. I have not sufficient time to quote the whole of the statement) but as it is of great importance and is an official statement. I shall, with the permission of the committee, incorporate it in Hansard.

I direct attention to the fact that in 1949-50 the approved borrowing programme actually carried out amounted to £91,689,000. In 1950-51, which was the first complete financial year in which this Government held office it rose to £165,166,000; in 1951-52 to £225,287,000 and iri 1952-53 to £247,500,000. The amount approved for borrowing in 1953-54 was £231,000,000 but the amount actually raised will be about £200,000,000. The figures are also shown in the statements referred to in the budget speech. I direct the attention of honorable members to page 13, which refers in detail to these loan raisings. An interesting statement appears . at the bottom of that . page concerning loan raisings in 1952-53. It reads -

At a Loan Council meeting in July, 1952, the Commonwealth undertook to support Loan Council borrowing programmes amounting to £190;182,000 (including £30,000,000 for advances to the States under the Commonwealth and State Housing Agreement) and to arrange assistance in respect of those programmes up to a maximum amount df £135,000,000. As indicated above, public limn raisings available for the Loan Council programmes amounted’ to £52,008,000 whilst domestic raisings by the States amounted to £li,643,000- a total’ of £58,711,000. To meet its undertaking, the Commonwealth therefore found it necessary to arrange finance to tin: extent of £131,471,000 in order to bring the borrowings for the Loan Council programmes <o £100,1.82,000.

Yet honorable members opposite continue to say that the Government is not effectively assisting the States, and is refusing to give them enough money. It is quite apparent that every piece of authentic evidence shows that this Government has done everything possible to assist the States, through the Australian Loan Council and by subsidiary grants under the agreement reached during the regime of the Chifley Government. The Australian Government is not responsible for raising loan money, it is responsible only for the machinery for the raising of loan money. If State governments require money for works, that money can be raised only through the Australian Loan Council. It is quite futile for persons such as the member of the New South Wales Legislative Assembly for Dubbo to say that the Government is restricting State works because it will not give the States sufficient money, because the evidence and the facts show that the contrary is the case.

Yesterday the Leader of the Opposition strongly criticized the Government. Among his criticisms was the charge that it was expending money on capital works nut of revenue. It is pertinent to ask how the right honorable gentleman would finance the works himself. If loan money is not available, as apparently it is not. and revenue is not to be used for the purpose, the only means left is the issue . of bank credit. Surely the suggestion is not that bank credit should be increased ? The honorable member for Darebin (Mr. Andrews) also stated that it was wrong to finance capital works out of revenue. He paid that such a course could be followed during periods of inflation, but that during periods such as we are now passing through it was quite wrong to finance works out of revenue. In reply to him I point out that during and after the last war the Chifley Government financed all its capital works out of revenue, and not out of loan raisings. Yet, the Leader of the Opposition, who was a member of the previous Labour Government, criticized a practice that has been followed for eight or ten years. To follow the argument of the honorable member for Darebin, if capital works should be financed out of revenue only during periods of inflation, it must be accepted that inflation existed when Labour was in office, something that honorable members opposite have always denied.

The Australian Government has received no co-operation from the States in its attempt to make the federal system work. In that regard I point to the recent breaking down of our arrangements for the marketing of wheat, .because of the defection of two States who are merely seeking a sectional advantage for their own people and are ignoring the good of the Commonwealth. The States have done nothing but criticize the Australian Government, and have in no way attempted to co-operate with it for the benefit of the whole country. The States do not say much about federal aid for roads, but it should be realized that they are getting twice as much for roads from this Government as they got from the previous Labour Government. At the same time they are continually increasing freights and fares on railways and other transport systems, and thus doing everything that they can to offset the good work that this Government has done for the primary producers.

The budget at present before the committee is the result of four years of very hard work by the Government. During that time we have successfully grappled with the inflation that we inherited from the previous Labour Government, but the Treasurer (.Sir Arthur Fadden) has been the butt of every newspaper in the country, and has been criticized far and wide for his attitude towards our finances. Now at last he has produced a budget that will receive the acclaim of the people pf Australia, if not of the Labour governments of the States. Because of the reductions of taxation foreshadowed in the budget speech the country will be given n.n opportunity to proceed steadily along the road to prosperity. A’ doctor is in a difficult position when he has to prescribe unpleasant medicine to a patient in the hope of curing him. The Treasurer was in a similar position when he had to take drastic steps to cure the financial ills of this country. Now that the country has been cured, the people will be grateful to him, and will realize that his unpleasant treatment was highly necessary. Now that Australians know the true facts of this matter they will thank the Treasurer, as we thank him, for producing such a document as the 1953-54 budget for the approval of this Parliament.

Mr BIRD:
Batman

.- The budget at present before the committee is the fourth budget submitted to the Parliament since this Government assumed office in 1949. In view of the public reaction to the budgets of 1951-52 mid 1952-53, I can understand the anxiety of the Government to produce some proposals that would appease the people. I realize that public reaction to this budget is of crucial importance to the Government because of the general election which is to be held next year. From 1951 there have been a succession of State elections and by-elections in this country, all of which have shown the trend away from the Government. Naturally, the Government is now buoyed up by a hope that this budget will prove the turning point, and that it’ will again achieve some measure of popularity. In order to put the Government in a more favorable light, there has recently been a build-up campaign in the press to prepare the people for taxation concessions, and it is remarkable how extraordinarily accurate were the newspaper forecasts of the contents of the budget. T do not suggest that anything improper has occurred. I merely say that the newspaper forecasts were remarkably accurate.

Nobody wants to pay the Government any more money than he has to, and the case.” for taxation reductions is unanswerable. However, this Government has not been able to reduce taxation rates because it has placed the country in a better financial position; it has merely given the people something that it should never have taken from them. During the first ‘ two years of this Government’s regime, tax collections increased by more than £400,000,000. The budget for this year will reduce taxation by about £150,000,000, so that even with this remission it will be seen that the Government is still bound to hand much more money back to the people in consequence of its promises made during the 1949 general election campaign. At first sight the taxation reductions appear to be manna from Heaven, but on analysis a different picture is revealed. Last year, Australians paid about £8S6,000,000 in taxation, and of that sum £22,000,000 was revenue in excess of that estimated. This year the people are expected to contribute about £S75,000,000, or about £11,000,000 less than they were expected to pay last year, so it will be seen that far from receiving great reductions of taxation the people will be required to pay much the same as they were required to pay last year.

There is nothing creditable in giving the people something of which they should not have been deprived in the first place, and it was only because of the maladministration of this Government during the last few years that taxation had to be increased so heavily in comparison with the taxation of the last Labour Government. This Government has failed to present a really effective budget, because it has been concerned only “with giving handouts to the people in order to get some support at the general elections to be held next year. A budget should be used as an instrument to increase a nation’s economic welfare, but I venture to say that only secondary consideration has been given to that cardinal principle in the preparation of this budget. One of the many false optimistic statements of the Treasurer (Sir Arthur Fadden) when he was introducing his budget was -

Our economy has come through a difficult phase in which some basic clements were seriously out of balance. Equilibrium has now been restored, but in our judgment h positive stimulus is needed to promote higher levels of all-round productivity.

I disagree with that statement, because even the most cursory inspection of our economic situation will show an appalling lack of balance between our primary and secondary industries, which this budget, will do nothing to correct. As a matter of fact the1 Government expects inflation tce continue;,, because- it expects to receive the- same amount of revenue this year despite th© reduction of tax rates. The sarnie1 amount of revenue: will be received only if prices rise audi wage levels increase, awd’ consequently the Government must expect this to happen during the next twelve mont,hs. As the honorable member for Darebin (Mr. Andrews) lias; stated, the budget makes no effort to ensure that primary production will keel* pace with our increasing’ population. It is true that during the last twelve months the export value of our primary products increased, but that increase was of only a temporary nature because we had a very good season. We all hope that by I960 our population- will be about 11,000,000, but if -the present rate of prima 17 pro.duction continues, by that time we will’ not be able to feed our own people, and certainly not export food. We shall have to import beef, meal, .pigmeats and potatoes unless we have a rapid increase of primary production through- closer settlement. Whilst the index figure for prim-dry production increased from 91 in 1938-39 to 10S in 1952-53, the population increased during’ the same period by 23 per cent. The Government appears to have entirely lost sight of this salient point because it is so elated over the increase’ of the value of primary products that has” taken place during the1 last twelve months. It has completely overlooked the fact that, although the value of primary production has increased, its volume has been reduced. It is a laudable achievement to have secured higher prices for our primary products but there is a dan. ger that that very fact may create a false sense of security in the minds of people who are not prepared to analyse the position closely. There appears1 to be no attempt on the part of the Government to stimulate primary production except by the granting of a few taxation concessions which by no means touch the crux of the problem. What is needed is assistance by the Commonwealth to the States to foster large-scale migration from the cities to country areas. This budget makes no contribution to that very desirable objective. I agree with the honorable member fop Darebin (Mr. Andrews) that that job is-, outside* the capacity o£ ‘the States: to pearlform. Thos Government, Me: Pontius Pilate, virtually washes its hands of the problem. The Treasurer (Sir Arthur Fadden) is not. prepared to assist the States financially to enable them to tackle it. The day is not fair distant wheat Australians’, will rue the fact that they allowed this Government to tinker with a problem, that is striking at tike very vitals of their country.

The Government appears to be pleased! about the economic position. The Treasurer; in his’ dissertation to- the committee when lie presented the budget, made some statements that will bear close examination. Referring to the buoyant position of our overseas trade balances the right honorable gentleman said that the- favorable trade balance of £171,000,000 for the year ended the 30th June last- was better ‘than the debit balance of £585,00.0,000 for 1951-52. This result was achieved by reducing imports by £540,000,000 ; and 70 per cent, of imports are urgently needed raw materials and capital equipment required by manufacturing industries. It can be said that the favorable trade balance which he regards as so satisfactory was achieved only by cutting imports of machinery needed fo-v the expansion of our secondary production.

Another indication that the economy is not, as rosy as the Treasurer has claimed it to be can be gained from a perusal of the document, presented by the Treasurer, which relates to national income and expenditure. The perilous state of our economy is demonstrated by the sharpdiminution of private investment money coming to Australia. It was claimed by Liberal governments of the past that they encouraged private investment, that capital flowed into the country when it had a Liberal government and flowed out of it when it had a Labour government. That argument has been used for many years by the Conservative parties. In 1950-51, an amount of £110,000,000 was brought to Australia for private investment. In 195.1-52, the figure was £104,000,000. But for 1952-53 there was an outflow of private investment money of £17,000,000. In other words, overseas investors arc fighting shy of investment in this country and Australian investors are sending their money overseas because they have uo confidence: in the economic policies applied by the: Government. These figures clearly indicate the lack of confidence in the administration of this Government. Despite what may be said to the contrary, the loan market has failed badly. Not until the interest rate was raised to 43 par cent, were government loans filled. As the< Leader of the Opposition and tha honorable member for Darebin have said, the Government has- been forced, by sheer necessity to finance public works out of the proceeds of taxation to the amount of £100,000.000 because insufficient loan money was offering as a result of the lack of confidence of the investing public. Treasury-bills were also used for this purpose to an additional amount of £70,000,000 by comparison, with the preceding year. The financial policy of this Government is thus built on very flimsy foundations. All of these aspects of the nation’s finances constitute a plain warning that there are very serious cracks in its economy. Examined objectively, this budget does little to correct the very perilous position that exists. The only step that the Government has taken to correct the position is to reduce taxation. I heartily applaud its decision to do so, but we must not forget that many of the proposed remissions will be of taxes which should .never have been imposed in the first place. The Government is well aware of the defects in our economy, but it is pinning its faith on the hope that such tax remissions as it proposes will force the people to forget its sins of omission and commission of the past and that our bad economic position will automatically correct itself. If its hope is realized, this country will be the first in the world to achieve success by such means.

The Treasurer, in an attempt to bolster the budget, made the extraordinary assertion that the people now have the advantages of a stable and abundant economy. Such statements are easy to make, but they are very difficult to prove. What has this much-vaunted economy done for a very big and deserving section of the community, the thrifty savings bank depositors, the people who save their money and put it by for the rainy day? Savings banks deposits are used by tha banks for investment in government loans. It can be claimed with truth that: the depositors in the savings, banks play a very material part im promoting economic stability. In November, 1949, before the Chifley Government went out of office> savings bank deposits amounted to £729,.000-,000. In June, 1&53, they amounted to £947,000^000. In other words in a period of three and a half years savings, bank deposits increased by £218,000,000. In order to- make an assessment of the real value of those deposits, we can apply to them the “ C “ series index corrective. If that is done it will be noted that deposits of £729,000,000 in November, 1949, had an effective value of £575,000,000 on the basis of 1946 values,, but that the vastly increased deposits of £947,000,000 in June, 1953, were worth only £4S5,000,000 on the same basis. La other words, whilst deposits increased by £218,000,000 during the last three years their effective value decreased’ by £90,000,000. That is an indication of the manner in which the funds of the most thrifty section of the community have fared under the administration of this Government. Putting the matter in another way, the effective value of savings bank deposits per head of population was as follows :- 1946, £87 19s. ; 194/9, £72 5s. ; 1952, £54 17s. Thus, compared5 with. 1946, savings bank deposits fell by 18 per cent, in 1949 and by 38 per cent, in 1952. How can it be claimed that we have an abundant and sound economy when the value of the savings of the most deserving section of the community have depreciated in that way? A similar unfortunate experience has befallen the many thousands of investors in Commonwealth loans who, having invested their money at 8( per cent, find that it is now considerably depreciated. Under the administration of the present Government there has been no incentive to save. The Treasurer, in his budget speech, expressed concern at the fact that the savings are not as good as they were previously when he said that savings are still too low to sustain an adequate rate of national expansion. In answer to that comment I say that the policies applied by the present Government have given no incentive to the people to save their money. The reasons why the people cannot save are quite understandable. In present circumstances the average wage-earner is completely unable to make contributions to savings campaigns and, in addition, those with money to spare have, seen their savings depreciated. Recently, the Bank of Now South Wales, in a circulated report relating to the average wage-earner, stated amongst other things -

With all the pressures of law, necessity and temptation, there is not for most breadwinners, a wide margin left over in which voluntary choice can be exercised in the disposal of personal incomes.

The Bank of New South Wales, which is a great supporter of the Government, realized that it is not possible to implant in the mind of the average wage-earner a desire to save because, after he has met his commitments from week to week, he has nothing left to save.

The Treasurer, in his survey of the economic position conceded, after a great deal of self-congratulation, that a number of economic obstacles have still to be surmounted by the Government. He proposes to grant monetary incentives to industry which, he says, will mean stabilized prices, increased production and development of a balanced economy. Whether the budget is a stimulus to national development is open to serious question. Too many national issues have, been left to the States. Whether this Government admits it or not, the fact remains that the States have very restricted financial resources. Health, education, land settlement, railways and roads, though ostensibly the responsibility of the States, are undoubtedly the responsibility of the whole of the taxpayers of Australia. This Government has shelved its responsibility in the sphere of national development.

Let us consider the subject of immigration. The Government is deliberately side-stepping its obligations to complete the immigration programme by the implementation of a properly balanced scheme. ‘ It continues to bring to this country large numbers of immigrants every year. T heartily agree that it is sound policy to encourage immigration to Australia. As a matter of fact, the immigration policy which this Government is partly applying was formulated by a Labour Government. However, every immigrant wlm comes to this country involves it in additional capital outlay for increased community services. The additional outlay has been variously estimated. In this chamber recently, in a question which I addressed to the Minister for Immigration (Mr. Holt), I stated the figure as £1,250. The Minister disputed the accuracy of my computation. A Melbourne newspaper, the Age. stated that in its opinion the amount was £1,500. Whether it be £1,250 or £1,500, it cannot be denied that the States are involved in obligations which they willingly undertake, but which they are not able to undertake satisfactorily because they donot receive from the Commonwealth satisfactory recompense for the additional expense incurred by them on the arrival of every new immigrant in Australia. This ‘Government ha? deliberately side-stepped the issue. It should have recognized its obligations in this respect, and said to the States, “ Because you are prepared to accept so many new arrivals, we shall compensate you for all the additional demands that you must meet for schools, health and medical services, and amenities generally “. Unfortunately, no provision has been made in the budget to assist the States in that direction. The Minister for Immigration (Mr. Holt) has informed the House that representatives of the Commonwealth and the States will confer on immigration matters in the near future. It will be futile for that conference to make any recommendations, because this Government has not provided any money to enable them to be given effect.

The announcement of tax concessions by the Treasurer has been received with varying degrees of elation by the different sections of the community. I can perfectly well understand the sense of pleasure that is felt by big business interests which have received very satisfactory concessions. The Leader of the Opposition last night cited the tax deductions that have been granted to big concerns, and I realize that those interests will be very pleased with the Treasurer. The tax concessions, such as they are, will also bc received with pleasure by every taxpayer, because each of them will welcome any relief that is given from the present high rates. The preference extended by the Government to the wealthy section of the community is in marked contrast to the consideration that it has shown to other sections. Despite income tax and sales tax concessions, the average wageearner will not receive in the final analysis any appreciable relief from the high cost of living. Sales tax on luxury lines has been substantially reduced.

I suggest that the Government has made a profound mistake by not reducing the general rate of 12$ per cent, to 8-; per cent., as it was when the Chifley Labour Government was in office. In my opinion, it is more essential that the sales tax on washing machines and refrigerate) rs be reduced than that the sales tax on furs and motor cars should be reduced. Every housewife cherishes the ambition to possess labour-saving devices such as washing machines, and amenities such as refrigerators, because those articles lighten her domestic duties. This Government has not done anything to entourage the wage-earner to purchase such articles for his wife. This budget grants substantial reductions of sales tax on luxury goods which the average worker cannot afford to purchase, and little or no relief from the imposition is given on items that have a considerable effect upon the cost of living. Tangible relief from this impost should be granted to a very deserving section of the community.

Obviously, the reductions of sales tax, such as they are, are a flamboyant appeal on the part of the Government to the people whom it has antagonized in the last two or three years. Those people were supporters of the Liberal party, but were naturally up in arms when taxes wore increased, and restrictions were placed upon their businesses by the Government. In an endeavour to win back their support the Government has substantially reduced sales tax on the goods that they manufacture, and sell. Of course, the Government is not concerned about the plight of the average wageearner, because I suppose that the Treasurer and his supporters reason that the average worker does not support the Liberal party or the Australian Country party in any circumstances. Obviously, the Government, in making reductions of sales tax, has started at the wrong end of the scale.

Perhaps the most disappointing feature of this budget is the failure of the Government to make greater provision for social services. I was greatly interested last night at the fervent defence made of the Government’s pensions proposals by the Minister for Social Services (Mr. Townley) and the honorable member for Sturt (Mr. Wilson). Both honorable gentlemen concentrated their endeavours on proving that the pensioners will receive very fair treatment under this budget. My only comment is that different people have different ideas about the matter. When I examine the proposed increases, I consider that they do not make good reading. The increased provision for repatriation services is £909,000, whilst an additional £3,402,000 is allocated for social services benefits. When those increases are compared with the concessions that have been granted under this budget to the wealthy section of the community, the Government appears in a very poor light indeed.

It is true that perhaps 25 per cent, of the pensioners will receive increases of as much as 10s. or 12s. 6d. a week, but the remaining 75 per cent, will receive an increase of only 2s. 6d. a week. They cannot go to work in order to supplement their pensions. Government supporters have stated that a pensioner will be permitted to have an income of £4 a week. Are not honorable gentlemen opposite aware that the physical condition of the majority of pensioners prevents them from going to work? In any event, no employer wants to engage a person who is over the age of 65 years. The raising of the property limit from £120 to £200 will not bring much consolation to a pensioner, because an examination of his bank book will disclose that he has possibly only £20 or £30. Approximately 75 per cent, of the pensioners will receive a miserable increase of 2s. 6d. a week. The Government should be roundly condemned for this miserable hand-out. Company tax should not have been reduced so substantially, and greater returns from this source would have provided an additional amount for the pensioners. Apparently the Government is of the opinion that the war widows and service pensioners will be satisfied with an additional 2s. 6d. a week. I tell the Government that the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia and the War Widows’ Guild are up in arms about the parsimonious attitude of the Government.

The TEMPORARY CHAIRMAN (Mr McLeay:
Minister for Shipping and Transport · BOOTHBY, SOUTH AUSTRALIA · LP

– Order! The honorable gentleman has exhausted his time.

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– It must be most depressing to belong to the Australian Labour party. Members of that party are always so dreadfully gloomy. I can well imagine what a caucus meeting is like. Every one who is present at it must be in tears. We have just heard an extremely depressing speech by the honorable member for Batman (Mr. Bird), but I hope that I shall be able to present a more cheerful picture of the state of Australia than he has given. Complaints about the policy of the Government, and economic conditions in reCent months, have not been confined to the Australian Labour party. A few other people have also complained. But I remind the chamber’ that nobody complains as much as a convalescent. It is a well-known fact that when a patientis recovering from an illness, that is the time he makes all his complaints. The Australian economy is recovering from any malaise which it may have suffered, and that is probably why we have heard so many complaints about economic conditions in recent times.

When one considers the budget for this year, one should bear in mind the background against which it was framed- a background, not of one year, but of several years. Let us cast our minds back over the period the Government has been in office. What was the state of affairs when the Government assumed office late in 1949 ? Shortages of labour and materials were universal. There were rising prices. Black markets existed everywhere. The defence needs of the country were almost totally unprovided for. What is. the position to-day, after several budgets have been presented by the Treasurer (Sir Arthur Fadden j, to stabilize the economy? We should not forget that, during the time under review, the Government has had other difficulties which disturbed the currency. Honorable members opposite seem to forget that a war has raged in Korea, and that we have experienced a great wool boom. As the result of those factors, the Government has been obliged to take numerous severe and unpopular, but courageous measures, not to gain political advantage, but in the interests of Australia. The result is that we are now able to present a budget which reduces taxation by no less than £118,000,000 in this financial year.

During the years to which I refer, the Government has been under constant attack by members of the Labour party. They constantly hammered the theme that everything the Government did was wrong, but they carefully refrained from saying what should be done to correct the situation. I make one exception to that statement. Their sole remedy for every economic ill from which the country has suffered in the last few years has been bank credit. We all remember the famous method proposed by the Leader of the Opposition when he spoke on the budget last year and how the Prime Minister (Mr. Menzies) pointed out to the right honorable gentleman that he proposed “ to inflate his way out of inflation “. With the exception of that singular proposition, members of the Labour party have suggested no remedies whatsoever. They have confined their remarks to the most gloomy criticism of every action taken by the Government.

I contrast the position to-day with what Obtained a few years ago. There are no shortages. Goods are in plentiful supply. A man may buy a new suit if he -wishes to. do so. If he wants a new motor car, he does not have to put his name on the list and wait for many months before it becomes available. He can obtain the motor car off the showroom floor. Do not let any one say that people cannot afford to buy new motor cars, because record numbers of them are being sold. When. I mention new motor cars, I remind honorable members that it has been under the economic policy of this Government that an Australian car can be produced, and great numbers are now being sold in this country.

Mr Haylen:

– Did not the Chifley Government have anything to do with the establishment of that’ industry?

Dr DONALD CAMERON:
OXLEY, QUEENSLAND · LP

– Very little! During the last twelve months, we have seen evidence of stability and “.the steadying of prices, which have been reflected in the small and digestible increases of the basic wage. More motor cars, more refrigerators, more radios and more washing machines were sold in Australia in 1952 than in any previous year, and I mention the labour-saving devices particularly for the information of the honorable member for Batman, who has complained that the reductions of sales tax under this budget would not enable the average worker to provide his wife with them. Last year more money was expended on amusements and more money was spent on beer, if that is any consolation, than in any previous year. Much more money was expended on health and medical services last yeal than in any year under a Labour government. The expenditure on pharmaceutical benefits last year was approximately £7,500,000, and, speaking from memory, I think that the expenditure on medical services for pensioners was about £6,000,000.

Under the economic policy of this Government, immigration, whilst temporarily somewhat reduced, has been retained at a high level. We have been :able to avail ourselves of the basic skills of many thousands of immigrants whom we. have brought to this country and who, in the long run, will contribute to the prosperity of Australia. .During the last twelve months, under the economic management that has been so. bitterly attacked by the Leader of the Opposition, Australia’s overseas balances improved by no less than £700,000,000. The liquidity of the holdings of the banks has increased, deposits have increased, and deposits in savings banks are at a record level. The national income increased last year by about £200,000,000. Does this sound like a country in the depths of poverty and labouring under mismanagement, as honorable members opposite would have us believe? Employment remained at a high level last year. A recession .threatened us, but the measures taken by this Government, which flowed from the economic policy that honorable members opposite have criticized so severely, dealt with the situation so effectively and promptly that unemployment is virtually non-existent to-day. All these facts reflect the greatly improved economic position of Australia and a general high standard of living as a result of wise management by this Government. Our economy is healthier than it has been for many years. This is not merely a boast by the Government and its supporters in this Parliament. Our view is shared by many others, including prominent trade unionists. I remind honorable members of statements that were made in the Commonwealth Arbitration Court by a representative of the trade unions. They have heard this quotation before, but it will do no harm if I repeat it This is what he said -

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 . . . Inflationary pressure has virtually disappeared. Overseas investment in Australian industry has continued “at a high level … If you make a comparison between 1949-50 and the present time-

Honorable members opposite are fond of making comparisons with that period -

If you make a comparison between 1949-50 and the present time, in my submission you find a better condition of the economy now in every respect.

That view is strongly supported by a statement that was published to-day on behalf of the Commonwealth Bank. The bank’s statement contains the following interesting passage. -

Australia’s economy has improved steadily since the end of last year. Employment is now at healthy levels. Aggregate demand of consumers, business and governments is adequate to maintain this level of employment, and appears to be within the range of available supplies. Inflationary pressure characteristic of earlier years has been relaxed and prices are relatively stable.

The 1952-53 season was in general bountiful and nearly all rural products were benefited by good conditions. Wool production reached record heights; wheat production, though acreage was again lower, was more than maintained by a very high yield per acre. Production of oats and barley, meats, dairy products and sugar was also high.

National income for 1952-53 was nearly 10 per cent, higher than in the previous, year, mainly because of marked improvement in the value of rural production and increased wages. Total wages and salaries increased by about 8 per cent.

Does that sound as though we have a failing economy? Does it sound as r.hough the Government does not know its business? Of course not! It is nonsense to suggest that signs of economic recovery are not in evidence everywhere. Such a recovery is obviously taking place. However, as I have said, nobody complains more than a convalescent.

I now come to the attack - if it could be called an attack - that the Leader of the Opposition (Dr. Evatt) made on the budget last night. His complaints came in general under several headings. In the first place, he complained about the levels of taxation and government expenditure. He complained that revenue from excise and customs duties was greater than previously. Surely that reflects the buoyant 3tate of trade in Australia and points to a healthy economy! The right honor.Able gentleman complained also that the States were crying out for development. 1 shall say something in due course about development and what this Government has done for the States. At the same time, I shall again remind honorable members of the remedy for our economic ills that the Leader of the Opposition proposed last year. The right honorable gentleman merely advocated the release of additional bank credit. Is it not obvious that, in fact, he dislikes the truth, which is that free enterprise is restoring stability to the national economy?

I shall support my statements about the employment situation with the latest available figures, which were issued on the 29th August. At that date, 22,297 persons in Australia were in receipt of unemployment benefit. The total had been reduced by 2,406 since the beginning of the month. At the same date, 26,015 vacancies were registered with the Commonwealth Employment Service. In other words, there were more jobs than unemployed workers. I refer now to the cold facts in relation to taxation levels. T preface, my comments by pointing out that the important consideration is the amount that is left in the pocket of the taxpayer after tax has been levied. It is meaningless to say, “Last year the Government took fa; in taxation, and this year it proposes to take £x–y”. The man in the street is concerned with the amount that he has left in his possession. The honorable member for Batman (Mr. Bird) spoke of the average wage-earner, and I shall produce figures about that individual. For his benefit, however, I shall begin with the basic wage earner.

In 1949-50, the basic wage amounted to £33S annually. The tax for a single man on the basic wage was £16 16s. A man with a wife and two children paid £1 7s. Therefore, the single man had £321 4s. left and the married man had £336 13s. In 1952-53, under this Government, the basic wage amounted to £596 annually. The tax for the single man was £51 ls., and for the married man with three dependants it was £18 Ss. Thus, the single man had left, not £321, but £544 1.9s., and the married man had left, not £336, but* £577 12s. This year, the basic wage amounts to £614 annually. A single man in receipt of that wage pays tax now at the rate of £46 3s. and the married man with three dependants at the rate of £14 6s. The residue for the single man is not £321, as it was under the Labour regime, but £567 17s. The married man with three dependants retains, not £336, but £599 14s. As honorable members opposite appear to be worried about average earnings, I shall supply the relevant figures for the average wage-earner and I shall omit the odd shillings and pence. The following series of short tables makes a clear comparison between the situation of the average wage-earner in 1949^60, in 1952-53 and at the present time: -

As honorable members will see, the residue for the single man has increased from £447 under the Labour regime to £718, and for the married man with three dependants it has increased from £469 under Labour to £760. That indicates a good record of government to me, and 1 cannot understand why honorable members opposite are so gloomy about it.

Under this budget, sales tax will be reduced enormously, company tax will be cut, income tax will fall by an average of 12$ per cent., the total taxation bill will bo reduced by £118,000,000 in a single year, and the differential rate of property tax will be abolished. Incidentally, I point out to members of the committee that much of the property from which taxpayers derive income, which was formerly liable to a differential rate of tax, was acquired by means of hard work over many years. In view of the programme of tax reductions that I have mentioned, no reasonable person can doubt for a moment that the budget will make an enormous contribution to the prosperity of the country. Anybody who is dissatisfied with it ought to try living under a socialist government and find out what really happens under such an administration. I have not yet mentioned all the tax concessions for which the budget provides. Entertainments tax has been abolished and no fewer than 50,000 employers in small businesses and industries have been relieved of the obligation to pay pay-roll tax. Let us not hear any more of these nonsensical complaints that this is a budget for the rich. It is a budget for everybody. It will encourage new business and lead to greater opportunities for employment throughout the country.

The next complaint by the Leader of the Opposition referred to governmental expenditure. I simply point out to the committee that the fact that the Government is able to engage in such expenditure after heavily reducing taxes is clear evidence of sound management and a state of national prosperity. Of the expenditure to which the Leader of the Opposition objected, no less than £184,000,000 will be incurred for the provision of social services. That figure stands in marked contrast to the total of £91,000,000 a year that was being expended on social services when the Labour Government was thrown out of office. An important fact is that all the improvements to which I have referred have been achieved without, reducing defence expenditure below £200,000,000 a year. I recall vividly the bitter criticism of the Government by honorable members opposite when it first proposed to increase defence expenditure in order to provide for Australia’s safety. The attack on the national service training scheme in this chamber was led vehemently by the Leader of the Opposition. We do not hear so many complaints from him about it nowadays, although he still criticizes the scale of governmental expenditure.

This Government has an outstanding record in the field of social services. ] shall not discuss that record at length because it has been dealt with fully and adequately already by the Minister for Social Services (Mr. Townley) and the honorable member for Sturt (Mr. Wilson) and I do not want to engage in tedious repetition. Let me, however, cite a few facts to the committee to put the picture into focus. This Government, in every budget it has presented, has increased social services benefits. Expenditure upon social services has reached the figure of £184,000,000 a year. The age pension has been increased from £2 2s. 6d. a week in 1950 to £3 10s. a week in 1953. Let mc refute once more the nonsensical argument that the pension increase is only 2s. 6d. a week. In fact, 120,000 pensioners will have increases of from 12s. 6d. to £1 2s. 6d. a week. A single man in receipt of a reduced pension due to earnings will be entitled to an increase of up to 12s. 6d. a week, and a married couple in similar circumstances will be entitled to an increase of up to £1 5s. a week. In cases where a pension has been reduced due to ownership of property, a single pensioner will receive an increase of up to 16s. 3d. a week and a married couple an increase of up to £1 12s. 6d. a week. Let me remind the committee also tha: the liberalization of the means test provided for in this budget - it is not by any means the first for which this Government has been responsible! - will brins about 10,000 new people into the pension? field.

It is nonsense for the Opposition, to pretend that inadequate social services benefits have been provided by this Government. Let honorable members opposite contrast our record in the field of social services with their own paltry record. Let the public do so too. I remind the committee that the hollowness of the claim made last night by the Leader of the Opposition (Dr. Evatt) about tying the pension to the cost of living was exposed by the Minister for Social Services (Mr. Townley). The right honorable gentleman was revealed as the mover of the resolution that severed the connexion of the pension with the cost of living.

I want to say something about another branch of social services. I remind the committee that in the history of the Commonwealth no other government has made anything like the provision for health and medical services that has been made by this Government. In 1950, there was no tuberculosis allowance, but now that allowance has readied the height of £5 12s. 6d. a week for a single man and £9 2s. 6d. a week for a married man. I remind the committee of what this Government did about child endowment, which was opposed by the Opposition. I remind the committee also that in the field of medical services -the Government is spending something like £25,000,000 n year to foster the health of the Australian people, whilst all that the previous Government did was to produce a scheme that did not work.

People who should know better have claimed that this Government has retarded Australian development by making inadequate provision for the States. Let me remind the committee of what the Government,, as a result of its economic policies - which have been so much criticized - has been able. to provide for the States over and above sums raised by the Loan Council. In 1950-51, the figure was £153,000,000. Does that sound like the action of a government that does nol, have Australian development at heart? In 1951-52, the figure was £135,000,000. l t is estimated that a similarly large sum will be provided this year if the loan market is again inadequate. So much for loan finance.

Now I want to speak about tax reimbursements and I shall begin with my own State of Queensland, because if ever there were a government that cried poor mouth with little justification, it is the Labour Government of Queensland. In 1949, tax reimbursement, payments to Queensland by the Chifley Government were £S,800,000. In 1952-53, under this Government, they were £11,500,000, and an additional £4,200,000 was provided. That money was made available to a government which claims it has so little revenuethat it must abandon soldier settlement. In 1948-49, tax reimbursement payments to the States by the Chifley Government amounted to £53,500,000. No extra payments were made in that year. In 1952-53, this Government found for the States £108,800,000 in tax reimbursement payments and made an additional grant of £27,000,000. That was not only good treatment. It was generous treatment. It is nonsense for honorable members opposite to say that this Government has not done more than enough to find finance for the States.

There is no substance in any of the attacks made on this budget. Honorable members opposite are battling hard to find arguments upon which to base an attack. During the years that they have been in Opposition, they have offered no alternative to the Government’s financial policy. I can assume only that they -are prepared to remain in Opposition. The country has gone through a difficult period. It has overcome its difficulties by the courage and sound financial management of this Government, led by a very able Prime Minister and a very able Treasurer.

Mr COSTA:
Banks

.- The honorable member for Oxley (Dr. Donald Cameron) said in his opening remarks that the Opposition looked very gloomy. There was a good deal of truth in that statement, because we were made, very sad when we learned from the budget speech the mean and shabby treatment that this Government proposes to mete out. to the poor old pensioners. Last night I heard the honorable member for Sturt (Mr. “Wilson), call them “ dear old souls “. Could there be anything more hypocritical than that statement by an honorable member who supports a Government that proposes to give the pensioners a paltry increase of 2s. 6d. a week?

Mr DALY:
GRAYNDLER, NEW SOUTH WALES

– Shocking!

Mr COSTA:

– It is shocking. A budget should be not only a statement of income and expenditure for the financial year but also a national stocktaking. The Government has omitted from the budget very important matters that should have been dealt with. Will the handing back of £28,000,000 to the wealthy companies of this country solve any of the nation’s problems ? I say that it will not do so. Will the remission of a portion of the taxes previously paid by the higher income group solve any of our problems? I’ say that it will not. Will the paltry increases given to 1,200,000 poor old pensioners solve any of the pensioners’ problems ? I say that they will not. The Treasurer (Sir Arthur Fadden), in his budget speech, high-lighted the £28,000,000 that will be given to 25,000 rich companies, and the 2s. 6d. a week increase that will be given to each poor old pensioner, over whom honorable members opposite shed crocodile tears. But the right honorable gentleman omitted to deal with two urgent national problems. One was the problem of providing houses for families, as promised by this Government. I shall cite figures to show how badly off Australian families are in this connexion, due to lack of assistance from the Government. The second national problem with which the Treasurer omitted to deal was the problem of land settlement. The budget offers no solution of those important problems.

The Prime Minister (Mr. Menzies), in the policy speech that he delivered in 1949, made many promises. Let us examine those promises and consider what has been done to honour them. I have a booklet that contains a report of the right honorable gentleman’s policy speech. It has his imprimateur. Dealing with taxation, he said -

We still believe that rates of taxation must be steadily reduced.

I shall analyse this budget and other budgets produced by the Government to see what has been done to fulfill that promise. The right honorable gentleman referred also’ to housing. I directed a question to him to-day about housing, and he almost admitted that the Government had avoided its responsibilities in connexion with it. In 1949, the Prime Minister said -

The Commonwealth must accept large obligations of assistance. There is already a Commonwealth-States Housing Agreement. We will seek its amendment so as to permit and aid “ little capitalists “ to own their own homes.

I shall show later what has become of that promise. The Prime Minister also made a promise in relation to pensions. 1 do not wish to misrepresent him, so I shall use his words. He said that the Government would bring in a new scheme for social services in 1952.

Mr Hamilton:

– He did not say that. Read the speech properly.

Mr COSTA:

– His words were -

During the new Parliament we will further investigate this complicated problem, with a view to presenting to you at. the election of 1952 a scheme for your approval.

The scheme was not presented. The right honorable gentleman said also -

Meanwhile, existing rates of pension will, of course, be at least maintained. We will, much more importantly, increase their true value.

In the light of events since then, does not that make every one except the poor pensioners laugh? In 1949, the right honorable gentleman said that he would increase pensions and ensure that pensioners got ls. worth of value for every ls. by which their pensions were increased. I shall discuss what has happened in that connexion later. He said also that he would encourage and speed up war service land settlement, but he has done nothing about that matter.

The right honorable gentleman said that he would reduce taxation as the national income increased. In 1949, when Labour went out of office, the national income was £1,958,000,000. In 1950-51, it was £2,302,000,000, or 17 per cent, higher than in 1949-50. But in that year taxes were increased, not reduced. The decrease of taxation would have been 17 per cent, if the Prime

Minister had fulfilled his promise. Still, that is his form. He is a champion at breaking promises. In 1951-52 the national income increased to £3,126,000,000, an increase of 50 per cent. In 1952-53 it was still going up, as was taxation. It reached a level of £3,250,000,000, an increase of 65 per cent. It is estimated that in 1953-54 it will have risen to 13,579,000,000, representing an 82 per cent, increase. There is still no reduction of taxation, because if the Prime Minister bad carried out his promise to reduce taxes in accordance with the increase in the national income, there would have been a substantial decrease of taxes in every budget since this Government took office. Since last year the national income has increased by 10 per cent. What has happened to the promises that the Government parties made in respect of the reduction of taxes ? Nothing! They were empty. The increases shown in the successive budgets brought down by this Government are informative. In 1949, under the Chifley Government, taxes produced £504,000,000. The Prime Minister, who was then Leader of the Opposition, claimed that that figure was too high and promised the people that he would reduce it if he were fleeted to office. To-day, however, the yield from taxes is almost double that former amount. Income taxes are to yield £956,000,000 this year.

I shall show how taxation under this Government has increased compared with Taxation under the Chifley Government. In its first year of office the Government increased taxes by £234,000,000. In 1 951-52 it increased them by £453,000,000. Tn 1952-53 the increase was £409,000,000 and this financial year it is to be £452,000,000, which ‘is only £1,000,000 less than the amount levied in the 1951-52 “ horror “ budget. So much for the promises of the Menzies-Fadden coalition. I shall now compare the increases under the various headings of taxation, with the position during the Chifley regime. In this financial year sales tax, which the Government claims to be reducing, is expected to yield £87,000,000. or more than double the amount of £42,000,000 that was collected in sales r»x by the Chifley Government in its last year of office. In 1949-50 income tax produced £196,000,000. This year it is to produce £398,000,000, an increase of £202,000,000. Company tax in 1949 produced £83,000,000, this year, £133,000,000, an increase of £50,000,000 ; customs duties 1949, £77,000,000, 1953-54, £82,000,000, increase, £5,000,000; excise 1949, £66,000,000, 1953-54, £120,000,000, increase, £60,000,000. This great total of excise is derived largely from taxes on tobacco and beer. These are the small recreations that the worker looks for. The Government did not see fit to reduce excise imposts on them, but paid attention to the reduction of excise on whisky, because the members of the upper strata are whisky drinkers rather than beer drinkers. Pay-roll tax yielded £22,000,000 in 1951-52 and is to yield £38,000,000 this year, or £16,000,000 increase. Budget Statement No. 2- Estimates of revenue, 1953-54, is an interesting subject for examination because it provides more illustrations of the fact that the budget is hypocritical. This is the budget under which the Government claims to be reducing taxes. Statement No. 2 compares last year’s actual revenue with the estimated revenue this year. It gives the following details: -

Where are those reductions that the Government is talking about? Pay-roll tax shows a slight reduction, but a study of the decreases particularized in the Treasurer’s own statement shows that taxation this year is to be only £11,000,000 less than it was last year. So much for the supposed reductions.

I compare now the rates of tax to be levied under this budget with those operating during the Chifley regime. I shall base my figures on the taxes payable by a basic wage earner with a wife and two children. In 1949, of course, a basic wage earner with two children paid no taxes and had free medical and hospital treatment. Under this budget he will pay £13 ls. Again, where are these reductions that the Government brags about? The basic wage earner with a wife and two children will pay £5 15s. less in tax this year than he paid last year, but that amount will be more than absorbed by his contributions to what the Government is pleased to term a “ national health scheme “, which is really a health scheme for people who are already healthy. There is no provision in it for assistance to people with chronic illnesses. In order to gain benefit from the health scheme it is necessary to become insured and to join a hospital fund. The minimum rate is 5s. a week or £13 a year, so actually there is no reduction of taxes. The family man who is supposed to be getting benefits out of this budget is completely neglected by it. Even after he pays his health insurance lie still has medical and pOS.pital treatment to pay for, because the benefits from the scheme would not cover all his expenses, since there is no control over the amount that a doctor may charge. As a matter of fact, the £13 a year the subscriber is paying will eventually become a subsidy for the doctors, who will still charge high fees. That is what we get from a government that is supposed to be reducing taxes!

The budget is a rich man’s budget at the expense of the poor, because not only will wealthy companies have the benefit of the tax reductions amounting to £28,000,000, but the people who are shareholders in the companies will also get the benefit of reduction of taxes on their higher ranges of income. The following figures show how the budget will reduce the taxes payable for a man with a wife and two children, in the high salary ranges - Salary £1,500 a year, reduction of £33; £2,000, reduction of £53 ; £3,000, reduction of £103 ; £4,000, reduction of £162; £5,000, reduction of £230.

The people who earn such high salaries are the same people who will reap the benefit of the reduction of company taxes. It is obvious that rich people will gain, through this budget, at the expense of the poor pensioners, who are to receive only a paltry increase of 2s. 6d. a week. A man, wife and one child will have the benefit of a greater reduction of taxes than a man with a wife and two children. It is a fallacy to say that the Government is reducing taxes.

Silting suspended from 5.S7 to 8 p.m.

Mr COSTA:

– Before the suspension of the sitting I had spoken for twenty minutes about facts that proved that this Government was a government for the rich, and that it had completely neglected the poor. I had commenced to talk abou I company taxation. According to th? budget, the Government intends to reduce the taxes of about 25,000 rich companies by about £28,750,000. Each of the companies will get a share of this huge sum, whereas the pensioners, over whom the Government spills crocodile tears, will get only 2s. 6d.’ a week each. It has recently been brought to the notice of the public that one pf the wealthy companies of which I have spoken, that is, General Motors.Holdens Limited, made a profit this year of more than £4,500,000. It is companies such as this that the Government intends to assist throughout the coming year. Let us now consider another section of the community - the war pensioners, war widows, dependent mothers and burntout diggers, which this Government claims to represent. Those people will benefit only to the extent of about £1,000,000. The age and invalid pensioners and widows are to receive about £4,500,000 under the budget, and surely honorable members, in view of those facts, will realize that this is really a rich man’? budget. “We have been told by Government supporters that it is a family budget; but let us consider how it will help families generally. Maternity allowances for mothers who bring young Australiana into the community are not to be increased and there are 2,500,000 children in Australia whose parents are to he paid nothing extra in respect of child endowment. Unemployed persons and persons who are too ill to work will get nothing out of the budget, and the age pensioners, whom the honorable member for Sturt (Mr. “Wilson) has described as “poor old souls “. are to get no increase at all in respect of funeral allowances. In 1948, a Labour government established an allowance of £10 in respect of funeral benefits, and the benefit still remains at £10. It is just as costly to die as to live, but this Government has refused to recognize that. The wife of an invalid pensioner is to receive no more under the budgetary proposals. Her allowance is to remain at 85s., which is about the same sum as was allowed under the last Labour Administration. There are about 525,000 war pensioners, 17,000 burnt-out diggers and 20,000 war widows. Altogether those persons will benefit to the extent of £1,200,000 from the budget. So much for a government that pretends to be the friend of ex-servicemen. There are 40,000 civilian widows, 353,000 age pensioners and 68,000 invalid pensioners. That large group of people will receive only £5,000,000. In other words, more than 1,000,000 people will benefit by only £6,000,000 under this Government’s budget, whereas a handful of wealthy landowners benefited by that much when the Government abolished the land tax.

The present rate of the basic war pension is less than it has ever been in relation to the basic wage. My authority for that statement is a report of the federal executive of the Returned Sailors, Sol.diers and Airmen’s Imperial League of Australia, which clearly states that in 1.914 the base war pension was 37 per cent, of the basic wage. Since that time the base war pension has varied, but has drifted to a particularly low level only since this Government assumed office. To-day it is 35 per cent, of the basic wage, and after it has been increased by 2s. 6d. a week under the budget proposals, it will still be only 37 per cent., or the same as it was in 1914.* Under the regime of the Labour party it was 48 per cent, of the basic wage, and we promise that if we are returned to power we shall bring it back to that proportion. At present the age pension is 29 per cent, of the basic wage, but during the last Labour administration it was 39 per cent. If we are returned to office next year we shall restore it to the proportion of 39 per cent. Yesterday the Minister for Social Services (Mr. Townley) attempted to confound the arguments of the Opposition. For his benefit, and for the benefit

Mr. costa. of the people generally, let me put the argument this way. In 1948 the basic wage was about £6 a week and the age pension £2 2s. 6d. The difference between the pension and the basic wage was £3 17s. 6d. At present the basic wage is about £12 a week and the age pension,, after having been increased by the 2s. 6d. proposed by the Government, will bo £3 10s. The difference between the pension and the basic wage to-day is £8 10s. So much for the arguments of some Government supporters.

This Government has failed to reduce taxation in accordance with its promises. It has failed to halt inflation and to put value back into the £1. It has lost touch with the needs of pensioners, both war and civil. It has not assisted to provide homes for the people in our various States and has shown that it has no proper sense of its national responsibilities. The Government fails to realize that down through the years the prime objective of the average Australian family has been to own its own home. That has always been the first target of the young married couple, but this Government is not encouraging people to own their own homes. To own one’s own home has been regarded as the passport to independence in old age, and, for most, it has been the chief social incentive in life. It has produced more healthy, robust effort than any other factor in industry. The breadwinner who is in the process of buying a home has always been regarded as a solid citizen and a good worker, and the. ownership of a home has made for happy, contented lives in most, instances. It is quite obvious that the Government does not realize the potent force of home ownership, because if it did, instead of ignoring the requests of the States for more money to build homes, it would make every effort to help them. “When asked for £60,000,000 the Australian Government reduced the allocation to a mere £37,000,000.

Mr CRAMER:
Bennelong

.- We have just been treated to the usual dissertation that we shall have to endure for the next two or three weeks from the Opposition - a dissertation on the same old party line designed to inflame the minds of the people by stirring up class hatred. That type of action does no good to this country, and I have not yet heard, one really constructive statement from the Leader of the Opposition (Dr. Evatt) or any of his supporters. The people are not so foolish as the Opposition believes, because one has only to go amongst the people in the big cities to discover that this budget has been acclaimed as most useful and helpful by all sections in the community. Many have said that this is a good budget, and it is indeed a very good budget. It is quite, true, as the Minister for .Social Services (Mr. Townley) said yesterday, that thos is the best budget, that has, ever been put before the Parliament. It is good because it is., based on broad foundations, and will give assistance and provide stability to all sections of the community. It will give the individual an opportunity for enthusiastic effort, because he will realize that it is to his advantage to make that effort. It will give security to. the individual and to the nation. The budgetary proposals are a preparation for the orderly development of Australia, and they dispense evenhanded justice to all sections of the community notwithstanding what may be. said by honorable members opposite.

A consideration, of this, budget must not be, clouded: by sectional ideas-,, because the budget, is intended to. assist everybody. This budget is. a. reward to, the people, after three, and a half years of hard work and very great worry by those who, are responsible for it. It. stands’ greatly to the credit of the Treasurer (Sir Arthur Fadden),, who has-, withstood, more, than any other in this, country, the gibes and unfair, criticism, directed at the. Government because. of what, it has, been obliged to, do. during, the, last, two or. three, years. The- Treasurer has finally brought down a. budget, that, offers, hope for the future of. the. people,, provided that they always understand that what, is now. given can be easily taken, away from them- i£ they are foolish- enough, to, allow a Labour government, to- assume office-.. The budget, is greatly to the, credit, of the, Prime- Minister, (jM-r. Menzies.),, his. Ministers and” Government supporters, because they ha-ve stuck, to- their, guns in spite- of ill-informed. criticism^ very often from those who had, been, their staunchest supporters. This’ Government- has* had to, take unpopular action because of the conditions that it discovered in the country after the last Labour government relinquished office in 1949. It stands to the eternal discredit of the Labour party that after the war ended in 1945 it did not take proper steps to place this country on a stable financial footing. Never did a government have a greater opportunity to serve a growing young country than did the Labour Government of that time.

As the result of the war, in the immediate post-war period there were shortages, of essential basic needs for the development of Australia - of coal, steel, building materials and capital and consumer goods of all kinds. The pockets- of the people were bulging with, money as the result of war conditions,, but the Labour Government, instead of encouraging the people,, as it should have- done, to give of their best, encouraged! them to slacken, to become irresponsible and to be unmindful of the; national interest. As every one knows, it set out to establish a. socialist state. It offered to the- people free hospital treatment, free medicine and full employment. Last night,, the. Leader of the. Opposition (Dr., Evatt)) made the extraordinary statement that during Labour’s, administration it; was a part of the, Labour Governments, policy to ensure that there should be. more jobs- than men, to. fill’ them.. The. Labour party had! conditioned, the workers to acceptance q£ the belief that the- Labour- Government would, jirovi.de almost everything, free without any need foi; them, to work, and produce.

In the. meantime it was. preoccupied with its. attempt to nationalize, tha banks and the- airways, and t0, bring about, thesocialist state. No incentive, to individual effort was. offered by the. Government at that time. Oan. any one wonder that in those, circumstances, there, should, have, been. a. progressive lowering of tha production per man-hour,, that, shortages- of. commodities, of all descriptions became accentuated, and that the) imposition of artificial, controls) and the, existence) of black markets, and the like- put the* country well on. the; way to ruin,? Inflationwas added to by the: policies, applied- by the Labour Government and the. Communists, were hell- bent, on- destroying- theeconomy of Australia.. I. remind the. committee that Labour members, who., are’f now- opposing this budget were then walking hand in glove with the Communists.

Mr Pollard:

– What a cad !

Mr CRAMER:

– At that time the Communists, with the assistance, of the Labour party, controlled all the major unions of Australia.

Mr James:

– That is not true.

Mr CRAMER:

– At that time there were strikes galore and employees were encouraged to scoff at their employers. Because of the existence of those conditions the Labour Government was swept out of office and was replaced by the present Government. The Labour Government was responsible for establishing the foundation upon which internal inflation commenced. This Government faced a gigantic problem in its attempts to control Labour-made inflation, to step up production, to curb rising prices and to counter other unsatisfactory factors that were adversely affecting our economy.

Honorable members will recall that soon after this Government came into power the price of wool and other primary products rose sharply all over the world as a result of the outbreak of war in Korea. The Government was committed to prepare the country for the defence of democracy and of the free world. All of these factors are reflected in the budgets of the last two or three years, each of which contained provision for expenditure of a volume undreamed of in earlier years. In this budget alone the Government has made provision for £200,000,000 for defence preparations. With all those problems facing the Government it was forced to take drastic measures. It did not hesitate to stand up to its responsibilities and apply the drastic measures that it considered to be necessary to correct the economic position. Naturally, the people were upset by them ; but that did not deter the Government. It stands to the credit of the Government that it took the necessary remedial measures knowing well that they would affect more adversely its own supporters than the supporters of the Labour party. I am proud to be a supporter of a government that stuck to itsguns and implemented decisions however unpleasant they were. It is merely to recite history to claim that this Government was able to increase production of all kinds. To-day, the production of coal, steel and capital and consumer goods is greater than it has ever been in the past. The Government has made proper preparation to enable our defence forces to play their allotted role in any future war. Notwithstanding the cries of the Leader of the Opposition to the contrary wherever he is able to raise his voice, it has stabilized employment. The people know that this Government is essentially responsible for having restored the right of loyal trade unionists to control the major trade unions.

Mr James:

– That right existed before, the- honorable member was known.

Mr CRAMER:

– It was not until this Government passed legislation providing for secret ballots that the major unions were given a real opportunity to rid themselves of the Communists, and this they have now done. Despite the facts that I have recited, thi’ Leader of the Opposition has been stumping the country trying to deceive the people into believing that the conditions were as he has describe’! them. ‘The right honorable gentleman has turned himself inside out and outside in in an attempt to keep on side with persons and groups of persons whom he seeks to appease in return foi1 their support. If the people want lower taxation, he says, “ I am all for lower taxation “. If certain sections of the community cry out for a larger volume of imports, he says, “Why not permit a greater volume of imports ? “ “ Give the people more money “, he says, “ give those who complain anything that will appease them “. The Labour party has no positive policy in respect of these matters. It has no consideration for the national interest. It is intent on currying favour in return for support. The Leader of the Opposition warned the people of a coming depression, of soaring inflation and, as we all know, he joined hands with the irresponsible Labour State Premiers in their wasteful expenditure of public moneys. That is the picture that we must have in mind when we examine this budget. Because of all we have done to straighten out these things we are able to stand here to-day and claim that we have weathered the storm and that we are now able to offer to the people, by design and not for political advantage, an economic policy which will preserve the stability of Australia and at the same time confer great benefits upon ihe people.

It is noc the fault of this Government, because it has been grappling with the problem, that the cost of government in Australia, in both State and Commonwealth spheres, is far too high. If this country is to be properly developed means must be found’ to scale down the overall cost of government in all spheres. The high cost of government is contributed to very largely by the people themselves who want this, that or the other thing, but are not prepared to pay for it. The Government can face the people ,Ind justly claim that in many respect it has economized in its expenditure of i lie people’s money. Because of the needs and the wishes of the people we are facing astronomical costs in many fields, particularly for the provision of social services benefits and health and medical services. I have no need to go into details of expenditure under these heads, to traverse the hospital and medical benefits, the splendid schemes which the Government has adopted for the security of the people, the development programme, such m.s the Snowy Mountains scheme, and the like, and the big expansion of activities which is taking place in the PostmasterGeneral’s Department, which is obliged to provide enormously increased services as the population of this country grows All of these growing costs are reflected in the budget. The Leader of the Opposition lias launched an attack on the Government regardless of the increased national income or the added needs of our enlarged population. These things do not matter to him. As we continue to grow our budgets will become bigger and bigger. That does not matter. What matters is whether or not the budgets are well drawn, whether our activities are efficiently conducted and whether we are providing the right kind of services for the people.

During this debate spokesmen for the Australian Labour party will undoubtedly ‘ continue to place great stress upon what they consider to be the inadequate pensions provided for the aged, the invalids and widows. Let me- say at once that 1 have as much sympathy for people of that kind as have members of the Australian Labour party. I appreciate the difficulty which pensioners have to face. I am aware that there are many anomalies in our pensions scheme, but I realize that they cannot all be cured at once. Indeed, the only cure that I can offer is the provision of a national insurance scheme to cover every phase of social services. It was very gratifying to hear the Minister for Social Services (Mr. Townley) cite figures, which have not been denied by Labour spokesmen, to prove that governments of the same political complexion as the present Government have been responsible for granting £2 Ss. of the £3 10s. paid in pensions and that Labour governments have been responsible for only the remaining £1 2s. These figures indicate the insincerity of Labour spokesmen in this debate in their advocacy of the claims of pensioners. It is almost, impossible to cover the varying needs of the people for assistance by way of pensions. In certain circumstances the full rate of pension may be enjoyed by persons who have quite a reasonable amount upon which to live. On the other hand, circumstances bring about a condition in which persons are unable to obtain a pension even , though their income is much below the pension level. Although we have raised the property qualification for a husband and wife to £2,500, there are many instances in which the possession of property of that value will not return as much income as the pension itself. So these anomalies exist. I hope that one day we shall be able to introduce a scheme that will overcome all these difficulties.

The idea has spread in Australia that, pensions are intended to be sufficient to sustain the recipients. That is not so. The pension was intended to be more in the nature of assistance to old people to enable them to live; but at all times it was presupposed that the recipients of the pension would obtain additional income from relatives or from other sources. This Government and its predecessors 1,8 ve never claimed that the pension was sufficient, to sustain the recipients. Why does the La,bear party raise $hs hueandcry .a& the present ‘timeS I doubt whether honorable gentlemen opposite imagine that the people in .Australia wail be gulled by their .promise’s, ‘because they have had ample -opportunity in the past to give effect ito those political pledges. In 1949, before the present Government assumed, ^office, inflationary conditions -existed, and prices were rising, yet the “then Prime Minister, the late Mr. .J. B. Chifley, did not see fit to increase pensions. Surely pensioners will not forget that fact. They -«<re -not likely to accept “the political promise that is now made to’ them by the Labour party in .an effort ‘to gain their sympathy.

I tarn now -to the subject-of income tax. Opposition mem’bers claim ‘that this budget favours ;the -rich. Let ‘us examine whether ‘such a claim is true. I have only to cite a few figures in order to expose “the falsity of it. -Under -this budget, the highest incomes will ‘be subject to a tax reduction of ‘9.S per ‘cent.; -the middle incomes, that is to ‘say, incomes of approximately £1,’50Q ‘a year to’ a tax reduction ‘of 16.1 per cent.; incomes -of £SO0 ‘a year to a tax reduction of 22.9 per cent..; and ‘low incomes of £500 a year to a ‘tax ‘reduction of ;39.1 per cent. I “refer to -net incomes because we must ‘take into account ‘the fact ‘that deductions of various ‘kinds ‘will be increased under this budget. For example., -the deduction allowable for a dependent wife is to ‘be increased from ‘£1’04 to £130 per annum. The deduction allowed for the dental expenses of the taxpayer and. each of Ms dependants “will “be increased ‘from £20 to £30 ‘and “the maximum ‘allowance for medical ‘expenses from £1’00 to £150. In the light ‘of those figures, how can Opposition members ‘hope to substantiate their claim that this budget favours the wealthy;?

The sales tax, too, -is an instrument which was med to curb inflation. Under the ‘present budget proposals, this “imposition mall *he reduced ‘to reasonable proportions. I believe that in time to ;come, further ^reductions of sales tax “will be made by this ‘Government. The pay-roll tax is ‘an obnoxious ‘imposition and, in “my ^opinion, should be the “next tax to ** get tha .axe”. Approximately ‘50;000 employers, in cluding “many ‘small business - nien, will be relieved -of the obligation to prepare pay-roll tax returns. Encouragewent is given by the budget to people who are not “endowed with riches. One of the splendid f features a’bout this ‘budget aNd -the previous budget is the new ground that has been broken by the ‘Government in the last two years. I trust that this progressive measure will be retained for all time. I refer to the abolition of the .differential rates of tax on income from property. Why this provision was ever introduced, I am at a loss to understand, “because it lias discouraged private investment in property. One idea .that is widely held in Australia. - :and, .no doubt, it has .been fostered by the Labour party - is that there is something ‘sinister about .the ownership of property or real -estate. I cannot understand that attitude, because all citizens .should aspire to ‘property ownership. .In a -stable (community, it forms a large part of the private investment for the savings of the people. Yet the Labour party .have approached this matter in the last few years in a way that .seems to have destroyed .completely the incentive to people to invest their money in private property. This .approach, together with the activities of .’State Labour governments, has effectively destroyed any incentive to people .to invest in property, and the .stage has been .reached when people throughout the length and “breadth -of .Australia .are not prepared -to build -or to purchase .property for renting. That is a pretty poor state of .affairs. Deposits in .Australian savings thanks exceed .£1,000,000,000, and a similar sum is .held. in current .account in the .trading .banks. The .majority of the depositors .are not .accustomed -to purchasing shares in .public .companies or placing their -money in other forms of investment. Yet they .are not encouraged, for .thu -reasons .that I lave outlined, to inves’t in property, .and private investment in Australia .has “.dried .up “. -No longer do we hear of the resection of houses and the (purchase of private property for renting. Subscriptions to government loans .have declined, .because ‘the .people -have lost confidence in investments of this kind .through the activities of the Labour party. The Commonwealth is now held responsible for (housing. People who -require money for the purchase ‘of -dwellings !say that the -only source to which they can look is the Commonwealth. This state of affairs is most serious. Unless the free flow of private investment is restored we shall be heading for socialism eventually in Australia.

Another excellent principle that has been established by this Government is the exemption from the liability to pay income tax of aged persons with small incomes. A woman aged 60 years or a man aged 65 years was freed last year for the first time in our history of the liability to pay income tax, provided his or her income did not exceed £254. In this budget, the figure has been increased to £375 for a single person, and from £507 to £750 for a married couple. This relief will be most welcome to such persons as bank managers and public servants, who retired years ago, and whose superannuation payments are lower than the prevailing rates. Thousands of people in that class will bp most grateful to this Government.

Taxpayers, whose children attend private schools, will also receive welcome relief. The deduction allowable for education expenses has been increased from £50 to £75 per annum, and the payment is not to be confined to school fees. I understand that a ruling was given a few days ago that expense incurred on the purchase of school uniforms will also be an allowable deduction for income tax purposes.

The CHAIRMAN:

– Order! The honorable member has exhausted his time.

Mr TOM BURKE:
Perth

.- We have seldom listened to more romantic nonsense than that indulged in by the honorable member for Bennelong (Mr. Cramer). For the last half hour, he regaled the House with a eulogy of the Government, but, in doing so, he displayed a monumental ignorance of the conditions that prevailed when the Government assumed office at the end of 1949. At that time, the economic position of the country was the envy of the modern civilized world. Our economy was stable. The honorable member said that inflation was raging at that’ time. I remind him that prices in Australia had been controlled more effectively than they had been in any other country in the western world, including those great industrial arsenals, the United States of America and the United Kingdom. None of our partners in World War II. had an economy as stable as that of Australia.

At the end of 1949, the Menzies Government assumed office. From that time, inflation has been allowed to rage unchecked. This Government has allowed inflation to become quite uncontrollable, and by its acts of commission and omission, one would be justified in thinking that it was determined to allow inflation to rage unchecked in order to devour the savings of the people existing at the end of the war, and by that harsh means of adjustment which has been known so often in the past, bring about a return to stable conditions. The view is widely held in conservative circles that only by using up, in a burst of inflationary spending, the accumulated purchasing power of a war-time period can stability be regained. That nostrum is old and discredited but it is quite profitable to conservative forces and the people who support their political philosophies. Therefore, it would seem that this Government has pursued a. deliberate course designed to bring about inflation such as we know at the present time, with the idea of reaching an adjustment later, with all the difficulties, losses and miseries that such a policy entails.

The honorable member for Bennelong proceeded to say that the preceding Labour Government was hand in hand with the forces of communism in Australia. On this subject, the honorable gentleman displayed a staggering lack of knowledge. When the general election was held in 1949, the Chifley Government had just emerged from one of the fiercest struggles that a government had ever waged with the forces of the Communist party in Australia. The great general strike had occurred on the coalfields in New South Wales, and the Chifley Government had submitted to the Parliament punitive legislation iff order to ensure that the strike would be broken. Did the Chifley Government have the cooperation of the Liberal and the Australian Country party on that occasion? Clearly, it. did not. The Liberal party and the Australian Country party refrained from giving support to the Labour Government in its fierce fight with the

Communist leaders on the coal-fields, and actually engaged in counter activity. With the assistance of a financial source the identity of which we do not know, those two political parties published in newspapers in New South Wales statements belabouring the Labour party and indicating that, in their view, the Chifley Government was culpable for having allowed the strike situation to arise. By all means in its power the Opposition of that day helped to prolong that grim strike and to weaken the efforts of the Chifley Government to put an end to the stoppage. The honorable member for Bennelong, who has left the chamber, was by omission dishonest with the figures that he submitted to the committee.

The CHAIRMAN:

– Order ! The honorable member may not attribute improper motives to another honorable member. The honorable member for Perth must withdraw that statement.

Mr TOM BURKE:

– The honorable member, either by ignorance or by deliberate design, put a completely wrong construction upon the budget.

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

– I rise to order, Mr. Chairman. I heard you direct the honorable member for Perth to withdraw his statement. He has not done so.

Mr TOM BURKE:

– I withdraw. Either by ignorance or by deliberate de: sign, the honorable member for Bennelong put a completely wrong construction upon the budget. Tremendous percentage concessions had been granted to taxpayers on the lower and middle ranges of income, he said, and only tiny concessions to those in the higher income brackets. Translated into monetary terms, however, the benefit conferred upon a man receiving the basic wage, which provides the minimum standard of so-called frugal comfort, is the princely sum of £5 15s. a year. That is what the honorable member described as a large percentage reduction ! The allegedly low percentage reduction granted to a man in the highest income bracket detailed by the honorable member represents £905 a year. That is the real comparison, which the honorable member for Bennelong passed over lightly and upon which he placed a completely wrong construction.

In order to assess this Government’s record we should consider the state of the nation, not when it came to power and had all possible advantages within its reach, but to-day, after it has been in charge of the affairs of the country for nearly four years. When we look around Australia we find that every group is suffering hardships of an extreme kind as a result of the sharply rising cost of living. The pensioners, of whom much has been said, are in a condition that borders upon starvation.

Mr Hulme:

– Nonsense !

Mr TOM BURKE:

– The honorable member obviously is not aware of conditions that exist in our midst.

Mr Hulme:

– I know more about them than does the honorable member for Perth.

Mr TOM BURKE:

– Then the honorable gentleman should try to explain his optimism. A survey made recently in Perth, where conditions are better than those in most industrial cities, indicated that pensioners were living near starvation level. The Daily News, which conducted the survey, dealt with the facts iri a series of striking articles, and even engaged members of the Perth Junior Chamber of Commerce to establish a depot and collect charity in the city and suburbs for pensioners. This was done because the pensioners had reported that they could not exist on the miserable pittance paid to them as a pension. I pass over that situation, with all its terrible implications, because it is only one aspect of the state of economic chaos that this Government has allowed to develop. What is the position of the family man on the average income ? A man, with a wife and young children, who earns anything less than the highest wage is engaged in a constant losing fight against the rapidly rising price levels.

Australian manufacturing industries to-day are unable to meet the competition of foreign industries in markets where formerly they had a foothold. These markets are closed to them because, as a result of the inaction of this Government, Australia’s price structure has risen so rapidly that they are unable to compete against foreign manufacturers. In fact, some of our industries cannot compete on the domestic market against the products of overseas industries unless they are heavily protected. The products, not of low-wage countries, but of ordinary countries .with ordinary industrial conditions in which the economic problems of the post-war period have been reasonably handled, in contrast to the tragic maladministration that has characterized the efforts of this Government, can be marketed in Australia at prices that are competitive with those of ‘our own goods. Let us consider the position of the farming community. Dairy-farmers are clamouring for increased prices for their products so that they may enjoy a fair return for their labour. The Government says to them, “ We recognize that prices have risen so rapidly that you are unable to make profits even at the high price that rules for manufactured butter to-day, but we cannot give you a further increase because, if we did so, you would price your butter out of the market”. Thus, primary products are losing ground in both overseas and local markets.’

Every primary industry is in the same position. Wheat and wool, our great exportable primary products, still find a market in other countries, but the signs are ominous. Should a small slump occur much less an economic disaster, the overseas prices of these products would drop suddenly. The producers of wheat and wool would immediately find themselves in a precarious situation, which might lead Australia eventually to national bankruptcy. If the world’s producers of wheat were allowed free access to all markets, Australia would be placed at a serious disadvantage because of the high cost of production in this country due to the neglect and inaction of the Government. The Treasurer has boasted that the Government has restored equilibrium to Australia’s economy. No longer does inflation threaten and no longer is there a problem of rising costs, he boasts. The truth is that, because of the parlous financial plight of the States, railway fare and freights are being steadily forced upward. Such increases, of course, lead immediately to higher costs of production throughout all branches of industry, both primary and secondary. Thus, fresh spurts are given to the rising price levels.

We have suffered from creeping inflation ever since this Government came into power. At that time, even a fairly sharp increase of the basic wage failed 10 produce immediate alarming consequences. However, a 3s. increase of the average wage of £12 a week to-day would represent just about the final’ straw that, would break the back of Australia’s manufactoring industries and render hopeless ‘ the situation of men and women with families and the pioneers of the country who are existing on age pensions. Yet the Government claims that it has solved the problem of inflation and that there is no further danger from rising prices or a reaction from inflation! The late Lord Keynes pointed out that the seeds of a depression were laid in a preceding boom when the rich, out of their rising incomes, endeavoured to save more money than they could profitably invest. It is clear that, in the present situation of alarming price rises, this Government, not the former Labour administration, has sowed the seeds of a sharp downward adjustment that may lead to the worst depression that Australia has experienced. But the Government says that there is no such danger because it has checked the rising tide of inflation and restored economic equilibrium! The budget has been designed, it claims, to give new incentives to the people of Australia. What will happen, in fact, is that the budget will cause a sudden inflationary spurt. Not one of the Government’s proposals will save the situation. The entire budget is likely to force prices upward and thus bring hardships in its train. Ultimately, a severe economic adjustment will become inescapable.

One may ask what the Government should do in these circumstances. Obviously, it should take action to reduce costs or, at any rate, prevent them from rising higher than their present dangerous levels. - *

Mr Hulme:

– That is what the Government has done.

Mr TOM BURKE:

– The honorable member’s remark betrays his simplicity. The Government claims that its proposed taxation relief of £28.000,000 a year for wealthy companies will provide an incentive to increase production. But that tax relief will not reach the source of company funds. There are plenty of funds in the community in the hands of stable companies for reasonable flotations. I have quoted the words of the most eminent economist the world has known-

Mr Hulme:

– Misquoted !

Mr TOM BURKE:

– No. I have quoted them precisely. In a country where inflation exists, such as Australia to-day, certain individuals enjoy a very high level of income. The purpose of a fiscal policy might well be to skim off a substantial portion of that income. At the same time, there are in the community large and vulnerable groups to which a larger proportion of the national income might be diverted. ‘ There is no contradiction in terms in that statement of the policy that the Labour party has adopted. The return of £28,000,000 a year to companies in the present state of the share market will give a definite fillip to inflation. A comparatively small sum - the same amount could be used although much less would be necessary - if diverted to people who would spend it on the barest necessaries of life, would not make any impact on the cost of living but would merely provide normal spending on easily accessible articles. This would have a valuable effect upon the economy.

What has this Government done to the national economy since it has been in office? By a series of acts that have been reversed, policies that have been altered, decisions that have never been given effect, and firm statements succeeded by complete changes of mind, it has brought about a state of confusion in the public mind. When it first came to office, it used every available means to encourage imports. It said naively, without considering the variety of imports, that that would stem the tide of inflation. It was taken at its word, and a rush of imports came to Australia. Then suddenly it cut off the flow of imports and, by so doing, caused the greatest difficulties in this country and the United Kingdom.. A government that was alive to its responsibilities and conscious of what went on around it would have acted much more quickly and much less drastically. It would have saved the position before it deteriorated in the way in which it did in Australia. Then we heard a request by. the Government for people to expand industry and create new businesses. They . were encouraged to use. credit facilities to the fullest possible extent to do so. Then, suddenly, a capital issues control which had been abandoned was re-introduced.

Then the Government found’ itself short of money for immediate purposes. The Treasurer decided that he would take a large slice of the revenue for next year because there was a large non-recurring item in the budget for that year. He said that he would finance the non-recurring item by the exceptional method of calling on revenue for next year. But the right honorable gentleman found that, although the item did not recur, a vast array of new items pushed expenditure even higher. So he was forced again to use the expedient of calling upon next year’s income to meet expenditure in the current year. That has been the practice of this Government since it came into office. Finally, the Treasurer made a demand upon public companies in Australia. He said he had decided to make them pay 10 per cent, of their income tax in advance and, over the years, to put them upon the same basis as people who paid their income tax under the “ pay-as-you-earn “ system. He claimed that it was necessary to do that because some companies, when final accounts were rendered, had taxation liabilities running into six figures. Next, year, true to the policy of indecision and not knowing from day to clay the direction in which he was travelling, the right, honorable gentleman announced that he had decided to abandon the system of prepayment of income tax and to permit companies to off-set against current tax prepayments already made.

That is the way in which this Government has acted. The people are tired of vacillation of that kind. They have had enough of the confusion and problems that have arisen as a result of the unwillingness of the Government to face its responsibilities and recognize that in this country there are human beings who have played- their part in the development of the Australian continent, in the building of Australian industries and in the development of the Australian hinterland, and who need something more than the miserable pittance that is being handed to them. Those people have been told that that pittance is all they will get, and that it will be enough because prices will not continue to rise.

The failure of this Government in a short space of time is nothing new in Australian political history. We have had coalition governments throughout the years, but not one of them has left apositive mark on the road along which Australia has marched to nationhood. Not once in our history have we had a coalition government which, in a period of crisis, has offered us a. strong and responsible administration or given a lead to our people who, in good times or in bad times, demand from their government only a lead and a course to follow. They will follow that course willingly, whether th e path be rough or smooth. The personalities that comprise this Government arc the most tragic political personalities that have sat in our National Parliament. The honorable member for Bennelong may say that a Labour government left a legacy of inflation and confusion to its successor, but the present Government parties left the nation without a government when it was in the throes of war. They left the Labour party to take up the reins of office because they were unable to carry on. The present Treasurer was Prime Minister of this country for a short and ill-starred period. His term of office was brief and inglorious. ‘ In the post-war years, we have had two Menzies-Fadden administrations. The first was in office for a period of eighteen months, a period of vital importance in Australia’s post-war history. For eighteen months, the present Government parties paid no heed to the mounting problems of Australia, to the possibilities of the future or to the certainty of confusion, loss and retrograde movement unless firm action were taken. The previous Menzies-Fadden Administration did nothing but play politics while the national scene was transformed from a scene of stability to one of incipient inflation that was rapidly getting out of hand. Then the political strategy of the Government parties bore fruit and, after a double dissolution, they were returned with majorities in both Houses of the Parlia ment. Then we witnessed the vacillation and confusion that I have described.

Now we have an economy overloaded with costs. The country is unable to take its place among modern industrialized nations and cannot face the future with confidence on the home market, let alone on overseas markets. This Government has failed more signally, more completely, and more quickly, than any other government in the history of federation. The future of Australia demands that, at the first opportunity, the people, realizing the problems that have been caused quite unnecessarily by this Government, should return to power a party that will take action immediately, fearlessly and consistently to solve our problems, restore economic stability, ameliorate the consequences of the maladministration of recent years and enable Australia to take its proper place as a rapidly developing nation, able to compete in the markets of the world with the products, not only of its agricultural industries, but also with those of secondary industries based upon the standards of Australian workmanship and mechanical knowledge that are being sacrificed at the present time.

Mr LUCOCK:
Lyne

.- The honorable member for Perth (Mr. Tom Burke) said that the Government and the people were confused. I believe that the person most confused at the moment is the honorable member. I, too, have been a little confused by what I have heard since I entered the Parliament eighteen months ago. When I was elected, I heard honor.able members opposite refer to the terrible things that were being done by the Government to men with large incomes. I remember that the honorable member for Melbourne (Mr. Calwell) produced a paper which showed that a man was required to pay about £14,000 in income tax in one year, although he had earned only £12,000. If the Opposition believes it was right to criticize the Government then for taxing the big men, I do not see how the honorable member for Perth, if he wishes to be consistent, can say now that we are awful people because we are not taxing the big men heavily enough. Surely he does not want us to tax them to the degree of £24,000 on an income of only £12,000, but that would appear to be what lie wants us to do.

It has been said that this Government is responsible for inflation. I do not remember reading in any reports of wool sales that honorable members on this side of the House stuck pins into people who were buying wool in order to make them jump to their feet and make higher bids. Surely this Government cannot be held responsible for the fact that our wool cheque reached such a high figure in 1950-51. But it was the responsibility of the Government to do something about that state of affairs, and I do not think that any one will dispute that it did do something about it. The honorable member for Banks (Mr. Costa) criticized the Government for reducing the taxes payable by big companies. We are not giving them anything. We are not taking quite so much from them. After all, these companies are earning money. They must have certain reserves. If they did not have sufficiently large reserves and were forced to restrict their activities, many of the people who honorable members opposite believe vote for them would be out of work. By reducing the taxes payable by companies, we are bestowing a benefit, not on the companies but on the general public, which purchases the goods produced by the companies. If the expenses of these organizations are reduced, they will be able to reduce their costs of production and pass on the advantage of that reduction to the people who purchase their goods - the people this Government is trying to help.

The honorable member for Banks attacked the Government on housing. We realize that it is of great benefit to the country for people to own their homes. Last night, the Minister for Social Services (Mr. Townley), speaking in reply to the Leader of the Opposition (Dr. Evatt), said that if the Government were attacked on its social services programme it would be attacked on its strength. I say that the honorable member for Banks made the mistake of attacking this Government on housing, another source of strength for it. I do not ask the committee to accept my word on that. Let me read an article published in to-day’s Melbourne Herald. It is as follows : -

The housing shortage is being overtaken, judging by a survey just completed by the gallup poll. Conducting its annual survey of housing, the gallup poll asked the people throughout Australia, “Are there any people living in your home because of the housing shortage who would move away if they could get a place for themselves?” Only 10 per cent. said that they had an extra family or families living with them. This 10 per cent. is an improvement compared with 14 per cent. a year ago, 18 per cent.in 1950 and- horrible though this is for honorable members opposite- 20 per cent. in 1949.

I repeat, the figure is 10 per cent. to-day compared with 20 per cent. in the last year in which honorable members opposite constituted the government of this country. Members of the Opposition have shown by the speeches that they have made in this debate that they are following the technique employed by the late Adolf Hitler. I am not allowed here to use a certain phrase, so I shall say that they are following Adolf Hitler in his use of terminological inexactitude. They do it on the basis that if a falsehood is hammered in often enough it will strike home. I have no argument against membership of the Labour party. In this country we give the right to every individual to hold such political beliefs as he chooses.

Mr Tom Burke:

– The honorable member is extraordinarily generous.

Mr LUCOCK:

– I think, and I hope, that, as the honorable member for Perth (Mr. Tom Burke) has said, I am generous. In being generous I am merely conducting myself like other honorable members on this side of the House. Such generosity is not shown by honorable members opposite on any occasion. I deplore the use, by any member of any political party, of propaganda for political purposes only. I am afraid that in the last few months we have seen such conduct, to a very dangerous extent, in this country. The arguments of the Leader of the Opposition (Dr. Evatt) regarding the budget, in his speech last night, sailed very close to that danger line. I do not agree with the right honorable gentleman’s statement that the £1 is now worth only 10s., compared with the £1 in 1949. but the statement is interesting when it. is examined alongside the figures of expenditure on social services in, and since the financial year 1948-49. The figures are as follows :- 1948-49, £80,800,000; 1949-50, £92,800,000; 1950-51, £115,000,000; 1951-52, £137,600,000 1952-53, £165,500,000; 1953-54, estimated at £1S4,100,000. The Leader of the Opposition argued that we should be expending twice as much on social services as was expended in 1948-49, because of the alleged fall in the value of the £1 to 10s. If my arithmetic is correct, £184,100,000 is more than double £80,000,000. I re-emphasize, however, that I do not agree with the right honorable gentleman’s contention that the £1 of 1949 was worth twice as much as the £1 of to-day.

The fulminations of honorable gentlemen opposite about the increase of pensions provided for in the budget were completely and perfectly answered by the Minister for Social Services (Mr. Townley) last night. There is, however, one thing of which we have lost sight, i refer to the fact that the current, and unfortunate, desire to use, for political purposes, any argument that can be produced, is detrimental to the welfare of the whole country. During this Government’s term of office we have, unfortunately, far too often seen such conduct practised. We have seen the State Labour governments, because of their mismanagement and inability to fulfil programmes which, in many instances, were grandiose and impractical, excuse themselves by blaming the Commonwealth Treasurer. State governments, for political purposes, have charged the Treasurer with refusing to make money available for education and hospitals. Such issues should be above party politics, but the Labour party has not treated them as being above party political considerations. Insufficient money is being expended in New South Wales on education, not because the Commonwealth Treasurer did not give the State the money that was needed for that purpose-

Mr Francis:

– And not because the Australian Loan Council did not authorize it.

Mr LUCOCK:

– -That is so. It is not because the Australian Loan Council did not make available the money that was needed for education, but because the New South Wales Government has, in order to win political advantage, frittered money away on inessentials and has not expended the available money on works that are essential to the welfare of the community.

The honorable member for Perth said that the first Menzies Government had left the country without a government during the war. Unfortunately that canard has been used, and is .still being used, by members opposite for their own political purposes in relation to defence, even although the country is still in danger. I point out that in 1938, a long time before I became a member of this Parliament, the late Mr. J. A. Lyons prepared shadow factories and laid the foundations of various industries so that the moment ,war arrived this country was able to switch over to war production. I can remember, as an observer outside this House, that whenover defence expenditure and the expansion of the Royal Australian Air Force were discussed in this chamber criticism came from every quarter of the then Opposition, and that no assistance was given to the’ Lyons Government, even though the clouds of war were approaching.

Mr Tom Burke:

– Can the honorable gentleman support that statement with facts?

Mr LUCOCK:

– If the honorable member for Perth will read the records he will see that I am speaking the truth.

Mr Tom Burke:

– I have read them.

Mr LUCOCK:

– If the honorable member has read them and cannot distinguish the facts therein, he should wear spectacles. I shall support my statement by quoting a statement made by the former Labour leader, the late Mr. John Curtin. Some time after the efforts of the Lyons Government to prepare the country for the eventuality of war we heard a tremendous amount of balderdash about the so-called “ Brisbane line “, which we all know was complete rubbish, and was used merely for political advantage by honorable members opposite. For the benefit of th9 honorable member for Perth and hi? colleagues I shall quote from memory, and not necessarily verbatim, a statement made by Mr. Curtin, who was a man at least of courage and integrity. He publicly admitted that a great deal of the work of the Labour Government during the war had been made possible by the foundations that had been laid by the Government under the Prime Ministership of the late Joseph Lyons. If the honorable member for Perth is not prepared to accept the words of his own former leader, then I am afraid he will not be prepared to accept anything. This matter of propaganda has another aspect which concerns the press of this country. Unfortunately we have seen on many occasions that there are individuals associated with the press who are concerned only with sensationalism and not with the reporting of facts. We have seen that, by innuendo and otherwise, they give a completely incorrect impression to the public, not only in regard to matters that concern debates in this House, but also in regard to matters that concern the actions and the attitude of members on both sides of this Parliament. Yet the moment that anything is said about the attitude of the press,, the moment anybody criticizes the press, hands are thrown up in horror. We hear cries about freedom of the press, and it is asserted that we are trying to establish a totalitarian State. I do not wish to be misunderstood. I do not intend to say anything against the right of the press to criticize, or its right in this free country to report on matters of moment-

Mr McLeod:

– Then what does the honorable member intend to say?

Mr LUCOCK:

– If the honorable member will keep quiet for a moment I shall tell him. The press has the right to criticize, but, by the use of innuendo, it often leaves an incorrect impression in the minds of the public. If the honorable member cares to see me later I shall tell him w!hat the word “ innuendo “ means. The principle of the freedom of the press postulates the principle of the responsibility of the press. The press has a responsibility to the nation, to the community, and, I believe, to the Parliament. I believe that in this country there is a danger of our undermining the dignity and sense of responsibility that there should be within this House. I shall read <*) speech made to the House of Assembly at the Sessions House, Hamilton, Bermuda, on the 15th June, 1942, by Winston Churchill, the greatest exponent in this generation of our parliamentary system. He said -

Yet these ideas of parliamentary government, of the representation of the people upon franchises, which extend as time goes on, and which in our country have readied the complete limits of universal suffrage, these institutions and principles constitute at this moment one of the great causes which are being fought out in the world. They, with all their weakness and with all their strength, with all their faults, with all their virtues, with all the criticisms that may be made against them, with their many shortcomings, with lack of foresight, lack of continuity of purpose or pressure only of superficial purpose, nevertheless assert the right of the common people - the broad masses of the people - to take a conscious and effective share in the government of their country.

I believe that if we lose sight of the truth expressed in these words we shall lose one of the lights in our western democracy. I am not concerned particularly with my own-seat of Lyne, or whether or not I am returned to office, but I am concerned about the future of this country. I join with the honorable member for Bennelong (Mr. Cramer) in saying that if it is my privilege to serve in this House for only one term of less than two years, I shall be proud to have been a supporter of a government that has had the courage of its convictions and has placed the welfare of the nation before its own political advantage. We have seen how the political head of this nation, the Prime Minister, my own party leader and friend, the Treasurer (Sir Arthur Fadden), and other members of the Government and even back-benchers, have consistently worked for the welfare of this country irrespective of the abuse that was thrown at them from all quarters. In these days it is a great thing that these two leaders have placed the welfare of their country before their own political advantage. Because of sectional interests and because of the groups that made up the Government of France, which were seeking their own advancement, there has been no stable French government since the end of the war. If we were to follow .the lead of honorable members opposite that situation would obtain in Australia to-day; but fortunately there are two members of the Government who have resolutely maintained their convictions and have taken action against their own interests in what they believed to be the interests of Australia. Perhaps I can quote the words of the Treasurer in this connexion -

There is everything to show now that we acted in the best interests of the people who to-day have something they have lacked for many years - the advantages of a stable and abundant economy.

This budget is a justification of all that those two nien have done during the last four years, and it is a matter of great pride to the Treasurer. As he himself said -

It is a matter of great pride for mc to lay before the House to-night these fulfilments of our’ undertaking.

It is also a matter of pride to me, to have had some small part in supporting those two in bringing this country from the verge of chaos and disaster to stability and order. There is a long road yet to follow, and we need the co-operation of all sections of the community if we are to stabilize further the economy of this country, and if we are to enable it to take the place it can and should take in the world. I believe that honorable members opposite are rendering a disservice to the country by their criticism of this budget. I have much pleasure in being associated with the budget, and in Sup porting the proposals that have been brought forward by the Treasurer.

Mr CREAN:
MELBOURNE PORTS, VICTORIA · ALP

– The budget is a much more politically worldly document than the remarks of the honorable member for Lyne (Mr. Lucock) would indicate. If it is closely examined it will be seen that it is based on a calculated risk so far as the next twelve months are concerned. The budget does not propose to reduce the expenditure of the Commonwealth, but it indicates the hope that as a result of rising prices and inflated incomes more taxes will be collected at the supposedly reduced rates than were collected last year. Moreover, the budget will store up some difficult problems for the next budget, whether it be brought down by the present Treasurer or another treasurer. That is because it concedes taxation reductions of roughly £120,000,000, but only £80,000,000 of that sum will be allowed during the current twelve months, and the remaining £40,000,000 will have to be allowed during the next budgetary period. Salary and wageearners, and all those who are subject to weekly taxation deductions, will have to wait until at least July next year before they will receive any tangible benefit in the way of a refund of excess taxes that will have already been deducted from their salaries over a period of four months. This budget, like the two budgets that preceded it, depends on windfall circumstances to present a far more satisfactory picture than will be seen under a proper examination. I intend to probe behind the facade, or window-dressing, of the budget in order to show its real meaning for the present and the future. Ostensibly, the budget proposes to give benefits that amount to £.120,000,000, but, of course, in this particular year a benefit of only £80,000,000 will be received by the public. The Leader of the Opposition (Dr. Evatt) yesterday analysed the incidence of the taxation reductions, and showed that they will favour the more fortunate section of the community. It is true that there will be reductions of ordinary income tax rates, company tax rates, sales tax and pay-roll tax rates, but it is very easy to divide the total taxes collected by the total population and say that roughly our taxation is so much per head of the community. Such a division overlooks a very important aspect of taxation, and that is the source from which the taxes are drawn. Let us consider sales tax. The Treasurer has said that after this budget there will be only two rates of sales tax, the general rate of I2i per cent., which has not been altered, and the second rate of 16f per cent. The genera] rate was S-J per cent, during the administration of the Chifley Government, and the other rate was 16% per cent. It is most important that there has been no reduction of rate in the general category of sales tax, because about SO per cent, of the revenue from sales tax is collected on items within this category. The sales tax concessions have been made on items, many of which are luxury items, although some may be regarded as household necessities.

When weighing taxation concessions against increased social services, one must consider whether it is better to increase pensions by 5s. a week instead of 2s. 6d., which would have involved only an additional £3,000,000. To use the words of the honorable member for Lyne, is it “more moral” to withhold £3,000,000 from the pensioners, and to reduce the sales tax on motor cars and fur coats and so on to the extent of about £7,000,000? Perhaps we should like to do a lot of good things, but we must choose wisely and justly between what should be done and what can be done in order to arrive at a just social order. Everybody likes taxation relief, but most people, if the matter were put to them, would say that they preferred that the aged, the indigent, the sick and the weak should be properly looked after before taxation concessions were made. “We must strike a balance between remissions of taxation and increased social benefits. This Government has been more than just to certain sections of the community, and has been unjust to some more worthy sections, including the pensioners.

Let us now consider income tax concessions. Much valuable information can be obtained from the annual reports of the Commissioner of Taxation. The last report available is the 31st, which was tabled in this chamber on the 4th November, 1952, and which dealt with incomes for the year ended June, 1951. That report shows income distribution throughout Australia. In that year there were 3,260,000 individual income tax payers but of those, 2,929,000, or89.8 per cent., had incomes of £1,000 a year or less. Those taxpayers were responsible for only about 12 per cent. of the total income tax collected. Thirty-six thousand individual taxpayers, or 1.1 per cent. of the total number, received incomes of £5,000 or more, but that group of persons were responsible for 53.5 per cent. of the total income taxes that were collected. That is the sort of examination that must be made in order properly to evaluate the taxation remissions about which the Treasurer spoke in his budget speech. It is true that an individual taxpayer with an income of £15,000 has had 9.8 per cent. of his taxation remitted, whereas an individual receiving £800 a year has had 19.7 per cent. remitted. The individual benefit to the taxpayer in receipt of £15.000 amounts to £905 2s., but the individual benefit to the taxpayer in receipt of an income of £800 amounts to only £10 12s. A lot of individuals who benefit by £10 12s. would be needed to make up for one individual who obtains a benefit of £905 2s. By proposing to hand back a few shilling a week and claiming that that represents a 20 per cent. reduction of tax so that justice is being done,the Government is approaching its task ina most immoral way. That is a very shallow interpretation of the tax concessions proposed in this budget.

The same sort of unbalance applies to companies. If the budget be examined critically it will be found that in respect of company taxation the greatest proportionate relief will go to public companies the profits of which are in excess of £5,000 a year. An examination of the statistics published by the Commissioner of Taxation reveals the very interesting fact that in the year ended June, 1950,, there were 5,227 taxpaying public companies with taxable income aggregating £147,200,000, and that, of that number, 3,355, or 64.18 per cent. had taxable incomes of less than £5,000. Thus, the bulk of the taxpaying companies had incomes of less than £5,000. Yet it is in respect of incomes of less than £5,000 that the smallest proportionate relief is to be granted in this budget. Public companies in receipt of less than £5,000 between them received only 1.8 per cent. of the total taxable incomes of public companies. When the measure of relief granted in the budget is viewed in the light of these figures it will be seen that the greatest advantage will be derived by companies which are economically the strongest and not the weakest, as was indicated by the Leader of the Opposition (Dr. Evatt) last night. It will be recalled that the right honorable gentleman cited the example of General Motors-Holdens Limited, a branch of an American company which has been established in Australia, which will gain concessions from this budget of the order of £800,000. These concessions should be weighed in the light of the cost to the community of the provision of an additional £2,500,000 to increase the rate of age and invalid pensions by 5s. instead of 2s. 6d. a week. A critical examination should be made of the assumption on the part of the Government that its proposed tax concessions are primarily based on increasing something which is rather vaguely called incentive to the community. It may be argued that flat reductions do not provide the best method of ensuring incentive to companies. As far as companies are concerned incentives do not operate individually ; they affect only the activities of the companies. The implied argument is that if company tax is reduced companies are likely to plough back some of their profits. If that is suggested the Government should at least have granted concessions only to those companies which are prepared to plough back the additional profit resulting therefrom and not distribute it to their shareholders in the form of dividends.

Another matter which should be critically examined is the question raised on both sides of the chamber during this debate relative to the financing by the Government of capital works from the, proceeds of its ordinary revenues. There should be a flexibility of approach to this matter depending upon the circumstances that exist from time to time. It is argued that in a period of inflation it is wise policy to finance capital works out of revenue because, by that means, the money is directed into sound investment channels - into the financing of important national works - whereas if it were left in the pockets of taxpayers it might lie devoted to less desirable objectives. The budget provides that capital works of an aggregate cost of £101,000,000 are to be financed from revenue. Such a proposal must not be examined in isolation; it must be considered in relation to the whole works programme of the States. The Treasurer, in his budget speech, directed attention to the fact that the Commonwealth believes that this year it will be able to raise only £95,000,000 -or £100,000,000 on the loan market and, accordingly, it proposes to underwrite State loan programmes to a total amount of £200,000,000. In other words, works to the value of £101,000,000 will be undertaken by the .Commonwealth and financed from revenue, £100,000,000 will be raised on the loan market and an additional £100,000,000 worth of works will be financed by the issue of treasurybills. A government at any point of time may have to choose between these methods of finance. It may pay for works out of taxes, out of the proceeds of loans or by credit expansion. The policy adopted is determined by the circumstances at the time. But this Government is trying to convey the impression that our economy is buoyant and prosperous, and at the same time it is saying that in this great Commonwealth only £100,000,000 can be raised on the loan market. I suggest that that fact is no indication of confidence. Yet that choice was deliberately made by the Government. It has said that it is impossible to raise a greater amount of money on the loan market, and that to inject more than £100,000,000. into the economy by the issue of treasury-bills would be inflationary, and, therefore, the residue of the works programme must bc financed from revenue. The Government’s choice destroys to some degree the validity of the Government’s claim that, the economy is bouyant and prosperous.

The white paper “National Income and Expenditure 1952-53 “, which has been presented by the Treasurer for the information of honorable members, reveals a number of disquieting facts in relation to the Australian economy. One of the statistical tables included in it reveals that in 1952-53 the share of the national income absorbed in the payment of wages, salaries, &c, including pay of members of the forces, covered, in the aggregate, approximately 85 per cent, of the population, but that the share of the national income which went to that section of the community was only 57 per cent., or 1 per cent, less than in the preceding year. That fact should be considered in the light of the judgment delivered last Saturday by the Commonwealth Arbitration Court to freeze that section of incomes in the community for the current year, and to abandon the quarterly adjustment of the basic wage.

An examination of the budget leads to the assumption that prices will continue I” rise in the current year and that that ise will be reflected in increased incomes in every other section of the community and rising tax yields at lower rates of taxation. Following the line taken by the honorable member for Perth (Mr. Tom Burke”) * of what is known as the “ Keynesian “ approach to economics, it may be accented that when the purchasing power of the great bulk of the population begins to decline, whether absolutely in monetary terms, or relatively because prices rise more quickly than do wages, we are storing up troubles for the future. Those troubles are indicated in the white paper

I o which I have referred.

The honorable member for Watson (Mr. Curtin) has told us that the housing problem is still the most depressing problem in the Australian community. Large numbers of Australians, old and new, are still unsatisfactorily housed, not housed at all, or housed in immigrant hostels, and are seeking housing accommodation. During 1.952-53 the total expenditure on private dwelling construction dropped from £173,000,000 to £154.000.000, yet, this Government is inclined to contend that, things are better

I ban they ever were. They may be better for a very limited section of the community, but they are certainly very much worse for the most needy sections of the community. The prime reason for the decline in housing activity has been the policies applied by this Government over the last eighteen months in regard to the interest rate. The interest structure is the prime determinant on which building societies and housing authorities lend money. The Government has said, “We shall let economic forces work out the problem for themselves “. This has meant that the interest rata which for many years was held at 3$ per cent, rose to 44 per cent. If gilt-edged securities rose to that level nobody would lend money to home builders at a lower rate of interest. If the interest rate on loans for home building rose by 1 per cent., it would mean, over the life of a 20-year or 80-year mortgage, a capital increase of approximately 20 per cent, for all new housing projects. That is apparent from the information contained in the tables that, are published in the white paper to which I have referred. A similar position is found in what are called consumer goods rather than durable goods. If we study another table in the paper on national income, we find that the greatest increase in consumption, in 1952-53, took place in food items. I suggest again that the explanation was not a greater physical volume of sales. Food prices bad risen so rapidly that the ordi nary householder was paying a. biggerproportion of this limited income for food so that he and his family had less income left for other categories. Even though the population increased by approximately 200,000, the total expenditure on clothing,, footwear and drapery was the same in 1952-53 as it was in 1951-52. As the budget speech indicates, prices rose in that period by 5 per cent, to 6 per cent.

A similar condition is found when we examine the consumption of hardware,, electrical goods and furniture. The total expenditure was £253,000,000 in 1952-53, compared with £264,000,000 in the previous year. This Government has no right to be optimistic about the position, and quote the opinions of men whom it choses to select for a particular purpose. The trade union advocate, to whom reference has been made, is trying, like other legal gentlemen, to put the best complexion on his case. The Government lias no right to say that the two sides of the Labour movement, are out of step. I suggest that the Government itself is out of step with the Australian people. The truth of that statement has been proved whenever the Government has gone before the people, whether at a Senate election, a by-election for the House of Representatives, or a State election. On every occasion, the vote for the Government candidate has declined in comparison with the figure in 1949. That is an indication of the people’s opinion of this Government.

The wreckage that has been caused in the loan works programmes of the States as a result of the failure of this Government to co-operate with them in order that the resources of the community may be properly utilized, has been conveniently overlooked by Government supporters.

The TEMPORARY CHAIRMAN (Mr McLeay:

– Order ! The honorable member has exhausted his time.

Mr TURNER:
Bradfield

.- The honorable member for Melbourne Ports (Mr. Crean) has approached the budget with a much more balanced view than his colleagues have, but nevertheless, he has snug the same, sad dirge. For the most part, Opposition members have re-sung the tune set by the Leader of the Opposition (Dr. Evatt), which may be described as a concatenation of inconsistencies. The honorable member for Melbourne Ports must realize that if payments are increased for one purpose, payments must be reduced for another purpose, and that any budget must be a matter of subtractions as well as additions.

The Leader of the Opposition and most of his supporters have sought higher social services, yet they have advocated at the same time lower taxation than the Government has proposed. Opposition members have sought an expansion of the public works programme, but they claim that inflation is a great evil. Evidently, they do not realize that treasurybills would be the instrument of the Labour party’s policy, and that the decline in the value of money, which they deplore, would continue as the result of their policy. They have criticized the appropriation of tax moneys for public works, and I imagine that most of us agree with that view; yet they object to higher interest rates which alone can evoke the savings which may make it possible to dispense ultimately with the financing of public works out of receipts of taxation. They have spoken about the need for an adjustment of the financial relations between the Commonwealth and the States, but they make it perfectly clear that they are opposed to the restoration of taxing powers, and, I should say, responsibility, to the States as a means to achieve that object. Opposition members are greatly concerned with the tax relief that is given to companies, but they expect private enterprise to provide more employment.

All those things are inconsistencies. They flow from a desire to gather in votes from all the discontents in the community, and are the result of the Opposition having no policy. The only effective way open to an opposition to criticize the policy of a government is for the Opposition to have its own policy, and, from that standpoint, to criticize the Government’s policy. Quite plainly, the Opposition has no policy, and its criticism is shallow, superficial, and inconsistent and is directed to gathering in votes ‘by playing upon political susceptibilities. Of course, the budget is a most successful one. All the dirges sung by members of the Opposition will not dissuade the public otherwise. A reduction of taxation by approximately £120,000,000 is very considerable, and it will be im-“ possible for the Opposition to persuade taxpayers, when they feel the benefits of the reduction, that the position is otherwise. A return of 12-£ per cent, overall in the tax imposed upon individuals is sizable and significant, and will be appreciated by taxpayers. The reduction of company tax from 9s. to 7s. in the £1 is most substantial, as the Opposition has admitted. Indeed, Opposition members rather object to it.

Actually, the main purpose of the budget is to offer incentives. If we believe in private enterprise as an economic system, we should seek to give incentives. If you believe, as the Opposition does, that we should have a socialist system, then you will be opposed to any measures that seek to make the system of private enterprise operate effectively. That is a matter of difference in political philosophy. For my part, I belong to this side of the chamber because I believe that the march of socialism would be disastrous to this country, and would mean, in the end, the servile state, such as we have in Russia. If I do not want to reach the end of the journey, I do not set my foot upon the path. The reduction of sales tax will offer incentives, and should tend to reduce prices. The elimination of the three rates of tax, and the substitution of two rates, together with the lower rates, should be enormously advantageous to business, and reduce prices to the general consumer. I shall not pursue that matter any further.

The Treasurer (Sir Arthur Fadden) has estimated the expenditure for the current financial year at £29S,000,000, an increase of £7,000,000 on the expenditure last year. I wish to deal particularly with that matter. In 1942-43, the Commonwealth Government took 21 per cent, of the national income. Many honorable members have good reason to remember that year, because this country was fighting for its very existence. It was a time when a government might expect citizens to make the greatest possible sacrifices. I shall deal with the proportion of national income, so as to avoid the difficulties that arise if one speaks in money terms, because inflation lias altered the meaning of money, and also to avoid the further complication cf an increase in population. At any rate, 21 per cent, of the national income was taken in 1942-43 by the Commonwealth Government for its purposes. In 1947-48, the Commonwealth Government took 24 per cent, of the national income for its purposes, although the war had ended, and the critical situation no longer existed. In 1952-53, the proportion taken had risen to 25 per cent, of the national income. Well, the fact is that public expenditure has risen, is rising, and ought to be diminished. The spiral has been halted for the moment, but the trend has continued for too long after the war. I believe that some orderly reform is required.

Nobody expects expenditure to be reduced in the twinkling of an eye. No reasonable person would contemplate the hardship and dislocation that would result from the drastic cutting of public expenditure by unduly precipitate action, but nevertheless we should be moving in the right direction. I suggest that, by putting a brake upon recruitment for the Public Service, by a critical re-assessment of some parts of our works programme, and by devising the techniques that will ensure a scrupulous regard for efficiency and economy, we ought now to begin to plan at least how we can move in the right direction. My thesis to-night is that the inquiries and investigations that ought to precede effective action should now be set afoot.

I point out that no external inquiry has been conducted into the Public Service for more than 30 years - indeed, not since the end of World War I. The time has come for a complete overhaul. Two minor inquiries have been undertaken. Shortly after the end of World War II., an internal inquiry was conducted in regard to the disposal of the temporary staff in the Public Service which had resulted from the vast expansion of the administrative machine during the period of the War. So far as one can glean the results, what happened was that all the temporary staffs were put upon a permanent basis, but the report has never been published and remains secret. In any case, it was merely an internal inquiry.

In 1951, another internal inquiry was instituted, this time into the problem of the overlapping of administration between the Commonwealth and the States. The eli airmen of the Public Service Boards of the Commonwealth and the States conferred on the matter, but again, no report has been published and apparently noaction has been taken.

Up to November, 1951 - the time of this second inquiry - the Commonwealth. Public Service had grown from 12,000 to. 88,200, an increase of 600 per cent. That was from eight to fifteen times greater than the increase in any other major employment group in the community. Thewages bill for the Commonwealth Public Service was £7,000,000 in 1938-39, and had increased to £84,000,000 in 1951-52. The reasons were twofold. The first was the intrusion of the Commonwealth into State-, fields of administration. Having been a member of a State Parliament for some years, I am well aware of that fact. Offhand one can call to mind the parallelsbetween Commonwealth and State departments. For example, we have the Commonwealth Department of Commerce and Agriculture and the State Department of Agriculture, the Commonwealth Department of Labour and National Service and the State 1 Department of Labour and Industry, the Commonwealth Education! Office and the State Department of Education, and the Commonwealth Department of National Development and theState Departments of Public Works and? Mines. There is overlapping also in the fields of health, housing and immigration. The list that I have given is not exhaustive. I have mentioned only the instances that spring readily to mind. We also have such agencies as the Joint Coal Board and the Commonwealth Scientific and Industrial ResearchOrganization, which float in a sort of limbo between the two spheres. Lest it be thought that I exaggerate or overemphasize the importance of this overlapping, T quote the following two passages from the reports of the New SouthWales Public Service Board for 1951 and 1952 :-

The question of overlapping of Commonwealth and State functions was brought before a meeting of the Public Service Commissioners of the various States and the Commonwealth held in Sydney on the 27th-28tl February, 1951. The Conference was presided! over by the Chairman of the Commonwealth Public Service Board who has submitted a report on the views of the Conference to the Com mon wealth Government.

Following the Conference, considerable correspondence has taken place, but it is regrettable that very little has resulted so far as this State is concerned . . . The Board are convinced as they have always maintained that much could be achieved in this field to the ultimate benefit of the community if the matter could be fully investigated.

The second reason for the growth of Commonwealth departments is that the organization has, with ‘a kind of inexhaustible vitality, proliferated all sorts of divisions, bureaux, branches and so forth.’ One may reasonably wonder, for example, how the Departments of Defence, the Army, the Navy, Air, Supply and Defence Production all divide the field of defence. I recall that before World War II., in 1938, there were ten Commonwealth Ministers and four Assistant Ministers, whereas to-day there are nineteen Ministers and some parliamentary under-secretaries. Those figures give some indication of the tremendous growth of Commonwealth Government activities, their intrusion into State spheres, and the multiplication and expansion of Commonwealth departments and agencies. All this, of course, is the legacy of the war period. These swollen staffs were built up as a result of the needs of the war. The Commonwealth found itself at the end of the war with enormously increased revenues. No longer did it have to provide for its defence forces, and so it thought of other ways of spending the money. It had a large staff and it was “ in the money”. It is not surprising that the development that had begun during the war continued. I suggest that the time is overripe for a thorough overall of the whole structure of government, first, in relation to Commonwealth departments and agencies, and secondly, in relation to the State administrative machines. I suggest further that an external inquiry should be conducted. The Government might well look for the most knowledgeable people of the highest possible character to inquire into such important matters. They could be drawn from various sources. We have distinguished jurists and men from the commercial, industrial and business world, public administrators, and university professors. We could introduce a leavening of men from public life, and perhaps others with special knowledge of administrative systems in other countries could be brought from overseas.

The Public Service Board would not be a proper body to carry out the examination, in the first place because it is too much implicated and involved in the system, and in the second place because its own position in the whole structure of government might be in question. There is nothing very extraordinary about this proposal. Such major inquiries have been conducted in the United Kingdom by knowledgeable outsiders on half a dozen occasions since the end of World War I. It may be, of course, that we lack the courage to do in Australia what has been done in Great Britain, but let nobody suppose that my proposal is academic and without precedent. Similar investigations have been made also in the United States of America. Even during World War II., the United Kingdom instituted a select committee on national expenditure, which did magnificent work. The Assheton Committee was appointed in 1944 to give attention to other matters affecting the efficiency of the United Kingdom Public Service and the elimination of waste. In the United States of America, that very distinguished and experienced ex-president, Mr. Hoover, was commissioned in 1949 to overhaul the structure of government in that country. He was limited then to suggesting ways of performing existing functions more efficiently. There was no question of his suggesting functions that ought to be eliminated. However, he has now been commissioned by President Eisenhower to consider whether the Government ought to perform many of the functions that it is now carrying out. He is to report on this matter by June, 1955. Thus, the United States Government has instituted a prolonged and thorough inquiry by a highly competent man, who is authorized to call for all the assistance that he needs in his work. Both in the United Kingdom and in the United State? of America it has been thought to be worth while, following upon the changes brought about by war, to overhaul the national administrative machinery.

I pass now to the control of public works and capital expenditure. I know that we have a Public “Works Committee in this Parliament. I learned of it, in fact, merely by accident, but I went to the pains of looking at the last general report of the committee that I could find. The report dealt with a rather odd period of one year, from March, 1950, to March, 1951. I am sure that this committee has done very good work in the past. In the first 25 years of its existence it investigated £25,000,000 worth of works and saved the taxpayers about £5,000,000. But now there is a vital flaw in its charter. In 1936, the law was amended so that it is no longer mandatory upon the Government to refer public works to the committee. As a result, in the period of one year that I have mentioned, only about £1,300,000 worth of works were referred to the committee, although the total expenditure on public works in that period was about £100,000,000. Thus, it is clear that some amendment of the law is required so that the Parliament may have more effective supervision over the expenditure of money on public works. I suggest that there is a need to investigate some of our major works programmes more carefully than they have been investigated. I refer in particular to the Snowy Mountains Hydro-electric project. I have studied the second-reading speech made by the former Minister for Works and Housing, Mr. Lemmon, when he introduced the legislation that set up the Snowy Mountains Authority. It was a most perfunctory effort. How we could embark upon such a programme with so little thought baffles the imagination.

Since that time we have learned that the total cost of the work has been variously estimated at £125,000,000 and £550,000,000. Furthermore, although it was suggested in the early days that the cost of producing electricity from the scheme would be about half the cost of producing it from thermal stations in Sydney and Melbourne, it is now reported that the cost will be about two-thirds of the cost of the thermal method. Engineers, of course, question the bases of both computations anyhow. The scheme has been chopped and changed since its inception, and nobody has ever attempted to work out the value of the scheme as compared with other schemes for the production of electricity and for the conservation of water. To make the matter more complicated, we now have atomic energy coming into the field, and it may be that the application of atomic energy to thermal power stations will result in electricity being generated more cheaply from such sources than by the water power in the Snowy Mountains. Therefore, I suggest that the time is ripe to call in the assistance of overseas consultants of high repute in conjunction with a local firm of engineers, also of high repute, to re-assess the entire scheme and decide upon its scope, .the stages in which it should be completed, and the desirable rate of progress having regard to the needs of the economy and the inflationary pressures that must result from the expenditure of money for many years before the project can come to fruition.

The second instance that I have in mind is on a much smaller scale than the Snowy Mountains undertaking, but it will serve to illustrate my point. I refer to the development of the Australian National University. Here, again, expenditure was incurred very lightly. I have read the second-reading speech of the former Minister for Post-war Reconstruction, Mr. Dedman, when he introduced the bill to establish the university and, as far as I can tell, the institution was brought into being mainly as a result of the promptings of certain individuals in Canberra who were interested in such matters. That, I think, is a fair summary of the speech. The university has already cost about £1,500,000 to run and over £1,000,000 for buildings and equipment. It may be an excellent institution. I am not discussing that issue. My complaint is that the undertaking was begun light-heartedly without any real inquiry into its value. Does the Australian National University fit into the scheme of tertiary education in Australia? In the same light-hearted way, the State of New South Wales has established its University of Technology. In the United States of America, there are two major institutions of technology, one in the Massachussetts institute and the other in California, and in the United

Kingdom there is a proposal to establish one to cater, at a cost of about £6,000,000, for about 3,000 students. Obviously, if Australia can sustain one such university it will be doing very well. Each State cannot hope to sustain one. Thus, we Iia ve the Australian National University and the New South Wales University of Technology, both of which have been established without any real thought to decide whether they fit into our education system or to determine the extent and method of their development. Again, there is need for inquiry.

Finally, I come to the regular supervision of public expenditure. I pay a tribute to the work that has been done by the Public Accounts Committee under the vigorous chairmanship of the honorable member for Warringah (Mr. Bland). The object of the Public Accounts Committee, as it has been developed overseas, is to ensure that moneys appropriated by the Parliament for a particular purpose shall be used for that purpose and no other. This led very naturally to a scrutiny of the efficiency and economy of the means of carrying out the purpose in hand. Thus, the committee has been led on to wider investigations. During the war, the British Parliament established a National Expenditure Committee which operated through sub-committees, under the general direction of a. co-ordinating committee, with considerable secretarial assistance. It is generally admitted that that committee did magnificent work in eliminating waste, duplication and overlapping, and in improving methods and systems. The members of the committee devoted more time to their task than was usual because they regarded it as their war-time job. Patriotism and energy played their parts, and the committee was highly successful. After the end of the war, the committee went out of existence and was replaced by what is called the Estimates Committee. That committee, a new one, works on much the same principles as did the National Expenditure Committee. Tt has a more positive role than the’ old committee. It operates, perhaps, in a more haphazard fashion, but it has in mind the needs of economy and efficiency, and looks at all questions very broadly. y?. - cm

I feel that the best policy for Australia would be for the Parliament to give the fullest possible support to the Public Accounts Committee. If the committee requires additional personnel to establish sub-committees, if it needs more secretarial assistance or if its field of activity can be widened reasonably, the Government should give it every assistance.. Some people may complain that the cost of such inquiries is not. warranted. All I can say is that through not having inquiries we have already wasted millions of pounds. After all, we have already had in New South Wales the Doyle inquiry, and the liquor inquiry, as well as inquiries into the greyhound board and all kinds of far less important, matters.

The CHAIRMAN:

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

Mr WHITLAM:
Werriwa

.- So far in this debate it has been the custom for an honorable member on one side to comment on’ the efforts of honorable members on the other side who have spoken previously. I shall content myself with saying that I did not derive the spiritual comfort that I had hoped to derive from the address of the honorable member for Lyne (Mr. Lucock), or find convincing the fiscal diagnosis by the honorable member for Oxley (Dr. Donald Cameron).

After the Parliament last granted Supply to the Government and before the budget was presented last week certain features of the shape of things to come in this financial year became apparent. Without any consideration by this Parliament, the activities of the States during this financial year had already been determined by the fiat of the Government and the ipse dixit of the Treasurer (Sir Arthur Fadden). Last May, the right honorable gentleman made quite plain how much money would be available to the States for their capital works in this financial year. Last month, the Prime Minister (Mr. Menzies) made it quite plain to the Premiers how much money they would receive by way of tax reimbursements this year. It is clear that, once again, this Government intends, without any agreement with the States, to restrict the activities of the States.

In 1950-51, the first complete financial year during which this Government held office, the States had available for their public works a sum of £165,000,000. In the following year, the year of the “ horror “ budget, they had available a sum of £225,000,000. Last financial year, that was reduced to £190,000,000, although the Australian Loan Council had decided that the sum should be £247,000,000- a modest increase of the sum for the previous year in view of the decline of the value of the £1 and the increase of the population that had occurred in the meantime. That reduction was made in complete defiance of the constitutional processes of this country. The Commonwealth defied the decision of the Australian Loan Council. I know that the Treasurer says the view of his Government was that the loans sought by the Australian Loan Council could not be raised on advantageous terms, or could not be raised at all. But that is not the point at issue. The Commonwealth is only one member of the Australian Loan Council. It is hound by the decisions of the Australian Loan Council. Even if it does not agree with those decisions, it is, under the Constitution, bound to try to carry them out. In the financial year upon which we have embarked, the Commonwealth, once again, has said that, although the Australian Loan Council thinks that £231,000,000 could and should be raised for- public works in the States, only £200,000,000 will be raised.

We know that the present Government takes some credit to itself for having supplemented the loan moneys made available to the States with bank credits and surplus revenues, but even those supplementary sums have been reduced in each of the last three years. In 1951-52, the sum so provided by the Government was £152,860,000. Last year, it was £122,800,000, and this year it will be £100,000,000. Last financial year, this Government raised less money on the loan market than any government of the Commonwealth had raised since the outbreak of war. Such is the credit that the Government enjoys in the community. The reduction might have been due to the fact that two years ago the interest rate on government loans rose by 40 per cent, or 50 per cent. The immediate consequence of the increase was that previous bond issues depreciated in value and bondholders could not get all of their money back if they had to realize on their bonds. Furthermore, some people waited before investing their money, in the hope that the interest rate would rise further. But, whatever be the reason, last financial year the Go,vernment raised less money on the loan market than any other government of the Commonwealth had raised since the outbreak of World War II.

In the current financial year, the Government intends, in defiance or disregard of the decision of the Australian Loan Council, to seek £100,000,000 on the loan market. If £100,000,000 is raised, it .will be subsidized by a sum of £100,000,000. If more than £100,000,000 is raised, the subsidy will be sufficient only to bring the total sum to £200,000,000. In other words, the subsidy will be reduced by any amount by which the loan is over-subscribed. More than £200,000,000 would have to be raised in loans if more than that sum was to be found for State public works, but the Commonwealth has determined that no more than £200,000,000 shall be expended on public works. It did not try to raise more than £50,000,000 on the loan market last year, and it will not try to raise more than £100,000,000 this year. Whether they like it or not, the States and the population of this country, which the States represent at the moment more truly than does the Federal Government, will not get the money which they think should and could be raised. It is impossible for the States to honour their obligations to their contractors inside and outside the country if their appropriations vary from year to year at the caprice of the Federal Treasurer.

I pass to the tax reimbursement grants. It is true that the sum that the States have received under the uniform taxation system - which the Labour party refuses to do away with and the parties of reaction are unable to do away with - has risen each financial year. The formula under which the tax reimbursements are made provides for the payments to increase in accordance with increases of the basic wage and population. In addition to the tax reimbursement payments, supplementary grants have been made to the States in each financial year since the war by both the Chifley Administration and the MenziesFadden Administration. Despite the fact that the present Government takes credit to itself for having increased the amount of the tax reimbursement payment to the States in each of the last three years, the increase has been due to the operation of the formula. The Government had to comply with the law in that regard. But the grants it has made in addition to the tax reimbursement payments have declined in each of those years. In the same years, the subsidies in respect of loans have been reduced also. In 1951-52, the amount of the supplementary grant was £33,57,7,000. Last year, it was reduced to £27,145,000, and this year it will be reduced to £21,910,000. So the net result is that the total grant to the States under the uniform taxation system has, in fact, been reduced in value in each of the last three years.

I hold no brief for the States, but I do hold a brief for the activities that they carry on. The citizens of this country see what the States provide. Under the present outmoded distribution of power, the functions of the States are the functions which are essential for the development of this country and the welfare of its population. Hospitals, schools, housing, power, surface transport, soil and water conservation, development and the administration of justice are functions of the States, and every one of them is essential. With the population of this country growing by natural increase and immigration at a rate at which it has not grown during the last one hundred years, it is essential that those functions of the States should continue undiminished. It is a part of the political claptrap of the parties of resistance to say that the States are littered with unfinished works and that their governments are irresponsible and inefficient. Let me refer to two cases in which, first, since federation, and secondly, since the first world war, the Commonwealth has undoubtedly been responsible for public works or public expenditure. I shall show that in those cases its record is lamentable. I refer to telephones and war service homes. The provision of telephone services has not been a State function for the last 50 years. The provision of war service homes has never been a State function. Therefore, the Commonwealth cannot, by any sleight of hand or propaganda, disclaim its responsibility for those two essential functions.

I shall ask the committee to pardon me for being parochial about telephones. I represent an electorate that is not only the most populous and fastest growing in this country, but also is the worst served by telephone services. I shall cite some figures to show, not only how far behind the times telephone services are there, but also the ineptitude of the present Government and the responsible Minister. I use the term, “ responsible Minister “ in its technical sense. You will recollect, Mr. Adermann, that in the budget-

Mr Gullett:

– Of course he will.

Mr WHITLAM:

– I do not mean to flatter you, Mr. Adermann, but I do you no injustice by being civil to you in that fashion. You will recollect, if honorable members do not, that on page 224 of the Estimates it is revealed that last financial year we voted £18,300,000 for telephone services in this country. Of that sum, only £17,630,000 was expended in that financial year. For this year, . the proposed vote is only £15,975,000 - a reduction of 12^- per cent. Is that justifiable? In my electorate, under the regime of the present Government, 69 public telephones have been installed, and 58 applications are outstanding. Five of these outstanding applications were approved in 1950, twelve in 1951, fifteen in 1952, and thirteen so far this year. Since this Government took office 3,035 private telephones have been installed in the electorate and there are 2,488 outstanding applications. The lag in such installations increases every year. There are ten telephone exchanges at present operating in the electorate and five are proposed. They have been proposed in each budget that this Government has brought down and in each case they have been deferred.

I have been engaged in correspondence with the Postmaster-General (Mr. Anthony) regarding the telephone exchanges that are already there and which are inadequate. I have written to him regarding, for instance, the exchange at Liverpool, where there are 296 applications still unsatisfied. He told me in a letter dated the 11th May last -

I am unable, at this stage, to state exactly when the task will be completed.

In respect of the exchange at Cronulla, where there are 226 outstanding applications, he said on the 28th May -

The further delay which will occur in satisfying the request … is unavoidable because of the number of prior works outstanding.

In regard to the telephone exchange at Miranda, where 912 applications are unsatisfied, he said -

  1. . the amount of work involved is extensive and it is difficult to indicate when it will be completed.

In respect of the Sutherland exchange, where there are 478 unsatisfied applications, he said on the 1st June - it seems unlikely that the undertaking will be completed for some time.

In respect of the Carramar exchange, where there are 516 outstanding applications, he told me on the 29th June last -

  1. . it is difficult to estimate exactly at this stage when the work will be completed.

I thank the committee for bearing with me in my repetition of the monotonous and hackneyed language of the Minister, but I considered that I was bound, in justice to my constituents and the people of this country, to reveal his ineptitude in this regard.

I said that I would also bring before the committee the subject of war service homes. This matter should be looked at in the light of the general housing position in this country. As the honorable member for Melbourne Ports (Mr. Crean) has said, the budget statement, National Income and Expenditure, 1952-53, shows that expenditure on private dwelling construction in this country declined: from £173,000,000 in 1951-52 to £154,000,000 last financial year. If we are looking for a 12½ per cent. reduction, it is to-be found there. Is that decrease justified at a time when, in view of the. increasing population of this country, the the demand for homes by native- born citizens, as well as by the immigrants, has increased to such a degree. The honorable member for Watson (Mr. Curtin) has pungently revealed that immigrants have been shockingly neglected by the Government despite the fact that it has clear constitutional power to house them, just as it has power to subsidize them in other respects. War service homes should be considered in the light of that background. On page 219 of the Estimates it is shown that in this financial year an amount of £28,000,000 is to be expended on war service homes. That is the same amount as was expended last year and the year before. We all know that the value of money has declined in the last two years, and that sufficient homes have not been provided to meet the demand. It is admitted that a greater number of war service homes has been provided by this Government than was provided by any of its predecessors; but it is also incontrovertible that the demand for homes has never been so poorly satisfied. There is twice the demand for war service homes under this Government as there has been under any of its predecessors, the reason being that if finance from building societies, banks and insurance companies is blocked, and if it is made impossible for people to obtain loans to build homes, people who are able to get a war service home will do so and seek finance from the War Service Homes Division. As an occupant of a war service home I do not say that exservicemen should be the only ones to have that privilege. I say and I believe, and every one on this side of the committee will agree with me, that it is essential, if we are to be a happy, stable and prosperous community - and I use the word “ stable “ in the sense of “ orderly “, and not in the sense of “ static “ as it is used by the parties of resistance - every family shall be housed. It is basic in our view that every man should be able to get a house at the time of his marriage and pay for it during his working life. It is notorious that people are not able to do that now. The figures produced by the Commonwealth Statistician, under the aegis, though perhaps no longer with the encouragement, of the Treasurer, show that the number of houses commenced, the number finished and the number under construction is less than it was two years ago, and less than it was one year ago. The Treasurer’s own figures reveal a 12 per cent, reduction in that regard last year. In the face of that fact, is it anything less than monstrous that the war service homes vote should remain at the same figure as in the last two years? In 1950-51 the War Service Homes Division received 23,573 applications for assistance and 1.5,165 homes were supplied. In 1952 it received 23,338 applications and 15,3SS houses were provided, both figures being practically the same as in the previous year. In the last financial year the number of applications increased to 24,906, but there was a most marked decline in the number of houses supplied.

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

– Will the honorable gentleman give us the figures for 1948-49 ?

The CHAIRMAN:

– Order !

Mr WHITLAM:

– I do not mind the unmannerly interruption. The VicePresident of the Executive Council (Mr. Eric J. Harrison”) will have to mind his manners when he goes back to wearing the white carnation.

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

– It was a red one, not a white one.

Mr WHITLAM:

– I thought it was David Jones. Although the number of war service homes provided in 1951-52 showed an increase over the previous year, last year the number declined from 15,388 to 12,422. It will decline further this year because only the same amount of money has been provided. In that regard I crave the indulgence of the committee to read to it a most unctuous letter from, the Minister for Social Services (Mr. Townley), who has the unhappy task, under present circumstances, of administering the War Service Homes Division. I have never seen a less happy man than he was last night when he addressed the committee after the Leader of the Opposition (Dr. Evatt) had made his speech. I give the Minister for Social Services credit for having a heart, but he has been cruelly treated by the Government. One realizes that flagwaving and patriotism are the last refuge of scoundrels, and no less of honorable mem bers opposite. It will not be hard, however, to make capital, in respect of exservicemen, out of the present budget, which has left war pensions at a lower real figure than they have ever been left by any previous budget. On the 2Sth May last, the Minister sent to my colleague, the honorable member for Grayndler (Mr. Daly), a letter which stated -

The Government is fully seized with the problem of the ex-serviceman who has to wait twelve months before his application can be processed and this difficulty will be given our most earnest and sympathetic consideration in determining the amount which can be made available to the War Service Homes Division for 1953-54, but you will appreciate that the determination of that amount will have to result from an overall appreciation of the limitation of loan moneys available in Australia and the very important works which have to be completed.

For some years past, as all honorable members know, war service homes have not been provided from loan moneys. Provision is made for them out of revenue. So much for the “ most earnest and sympathetic consideration “ which was to be given. On the 9th July, the Minister wrote to me in similar terms, with one difference. The difference in the meantime was that in those six weeks the period between the date of an exserviceman’s application and the time that he gets his loan had increased from twelve months to sixteen months. The Minister said in his letter that -

Ex-servicemen will be given the most sympathetic consideration in determining the amount to be included in the budget for War Service Homes purposes in 1953-54.

That sympathetic consideration has resulted in the same amount being provided for the provision of war service homes as in each of the two previous years.

I return to the matter with which I opened my speech. I referred to war service homes and telephones as examples of public works, in which this Government has reduced expenditure in the last year and will further reduce by 12 per cent, this year. These are matters in respect of which the Government has an indubitable responsibility. The States, however, as I have pointed out, carry out most of the public works in this country. This Government, as I have also pointed out, has forced on the States an increasing reduction of these works in the last three years. The Government may have made a rod for its own back by boosting State expenditure in 1951-52, reducing it last year, and reducing it again this year. Where it nowadays, in some instances, shows a burst of generosity, it is merely carrying out its obligations. When the Commonwealth some time ago promised to make available to the Victorian Government sufficient loan funds for the building of an Olympic village, it gave no more than an undertaking that it would, at least as regards Victoria, carry out its obligations under the Commonwealth and State Housing Agreement which it has, in so many respects, disregarded for the last three years. The contest for loan and tax revenues between the Commonwealth and the States disguises a difference of opinion concerning short-term defence expenditure and long-term national development. There would be no contest if the Commonwealth were to carry out its constitutional obligations, or its obligations under the law. The greatest shortcoming of this Government is that it will neither take over the functions of the States nor let the States have the capital and revenue to carry out these functions adequately themselves. The States still have the residual powers that are necessary for developing this country and catering for its population, thus providing the means and the justification for Australia to hold so much of the earth’s surface.

Progress reported.

page 310

ADJOURNMENT

Capital Issues

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

That the House do now adjourn.

Mr. WARD (East Sydney) [11.0 J. -I am anxious to secure some information from the Treasurer (Sir Arthur Fadden) about the Capital Issues Board. Will the Treasurer inform me whether that board is open for business every day in the week, including Sundays?

Mr SPEAKER:

– What is the point of order?

Mr McMAHON:
LOWE, NEW SOUTH WALES · LP

– The matter is ml judice, and therefore out of order.

Mr SPEAKER:

– I am not able to determine what the honorable member in tends to say, and I shall not attempt to judge his intentions. I shall hear what he has to say.

Mr WARD:

– I am only anxious to secure information about the Capital Issues Board. Will the Treasurer inform me whether that board is open for business seven days a week, including Sundays, and whether Mr. Balmford is always available on Sundays to deal with applications for capital issues approval? Is the staff of the board retained on duty on Sundays, and what is the normal period of time ‘required by the board to deal with applications? Also, when does the Capital Issues Board meet to consider applications? Might an application be made on a Sunday and the approval be issued on the same day, and. am I right in believing that the . board -has met on Sundays to consider applications? How long does it normally take for applications to be dealt with by the board, and what are the principles on which applications are determined? Information about all those matters would be very interesting, because many people have difficulty in understanding the general nature of the board’s operations. I am sure that if applications can be made and disposed of in one day, that day being Sunday, the general public will change the generally expressed opinion that public servants do not work fast enough. If an appointment with the board can be made by telephone on Sunday morning, and the board’s offices can be opened up and an application dealt with on the same day, then the action of the board’s officers is most expeditious. Perhaps, in the interests of economy, and to save staff being called in on Sundays, it might be possible to have a typewriter made available so that applicants can type out approvals of their own applications. However that may be, I hope that the Treasurer will be able to give mc some of the information that I so earnestly desire to secure.

Sir ARTHUR FADDEN:
McPhersonTreasurer · CP

– Mr. Balmford is the chairman of the Capital Issues Board, which has been set up under the Defence Preparations Act, and which is controlled by regulations that are not at the moment readily available to me. Mr. Balmford is most obliging and competent, and has served this Government with honour, distinction and integrity. Moreover, he was appointed by the previous Labour Government, and I know personally that he enjoyed the confidence of the late Mr. Chifley. Mr. Balmford’s integrity cannot be doubted. Through reading a newspaper report that was brought to my attention only tonight, I understand that Mr. Balmford was requested to take some’ action in connexion with an application for approval of a capital issue sought under the Capital Issues Regulations. An appointment was sought with him on a Sunday, which is no novelty because deputations have been introduced to me by honorable members opposite on Sundays. Also, I remind honorable members that the Governor of the . Commonwealth Bank and Mr. Chifley decided to alter the exchange rate of the Australian currency early one Sunday morning, so there is nothing novel about civil servants obliging the public at their own extreme inconvenience and in their own leisure time. There is nothing sinister about what Mr. Balmford did, because the application came within his jurisdiction and within the regulations governing the Capital Issues Board. The approval of the application was quite in order, and neither Mr. Balmford nor the Government nor anybody else associated with the matter has anything to hide.

Mr CALWELL:
Melbourne

.- The. Treasurer (Sir Arthur Fadden) has said a little about this matter, but has not told the whole story. I believe that the honorable member for East Sydney (Mr. Ward) was seeking information about a certain event which took place recently, and which the Treasurer has now told us caine to his attention only to-night through reading a report in a newspaper.

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

– If the honorable member holds a brief for Frank or Ezra I shall be very upset.

Mr CALWELL:

– I am merely seeking information. The Vice-President of the Executive Council (Mr. Eric J. Harrison) is upset because he no longer has the support of the Daily Mirror and Truth. The Treasurer should have told us whether applications for capital issues come to him, as Treasurer, for approval. He shakes his head - I did not hear the rattle - and no doubt indicates thereby that the Capital Issues Board is a law unto itself and that he has nothing to do with its decisions. We now know that Mr. Balmford decides everything himself, with the assistance of the other members of the board. However, according to the newspaper report to which the Treasurer has referred, no other members of the board were present on this Sunday, and the chairman alone made the decision. Many people in Australia have been trying to get decisions from the Capital Issues Board for the issue of small amounts, which do not approach £600,000, but they have had to wait for twelve or eighteen months before permission has been given or refused. In this case somebody rings somebody on Saturday, and Mr. Balmford, who is an obliging gentleman and who did have the confidence of the last Labour Government, said that he would see this person. As a result of a decision given later by Mr. Balmford, another £600,000 has been pumped through the financial channels of this country and more inflation has been generated. Yet we have been told that the purpose of the Capital Issues Board is to refuse applications so that there will not be an increase in the inflationary spiral.

To use a colloquialism, I think that the Treasurer ought to “ come clean “ and tell us what happened in relation to this mysterious Sunday visit which, as far as I know, is the first and only case since I have been in this Parliament of public servants interviewing top business executives on a Sunday. The Treasurer endeavoured to explain the situation by saying that a former Treasurer made a decision on revaluation at midnight on a Saturday. That is so, but that action was taken on a. Saturday night and not on a Sunday. At any rate that decision concerned a matter of public interest which was decided by the Treasurer of Australia. The present Treasurer has said that he had nothing to do with this decision and only knew about it to-night. He is testing our credulity too far. He is placing too much strain upon our faith when he fails to tell us all about this particular happening which has no precedent. I should like to know when the Treasurer ever received a deputation from any member of the Opposition on a Sunday. I know of nobody on this side of the House who has introduced a deputation to him on a Sunday. We of the Labour party have a regard for the Sabbath. We do not desecrate the Sabbath. We use the Sabbath to preach the gospel of divine discontent, but we do not badger overworked Treasurers who need the week-end to rest from their labours and from the embarrassment , caused them by their colleagues. Nobody on this side of the House has worried the Treasurer on a Sunday and I suggest that he might prepare .a statement telling us the inside story of the instance to which He has referred. A lot of people want to know all about it because, according to a newspaper report, somebody said that he did not tell the whole truth about a particular incident to which the Treasurer has referred.

Mr McMAHON:
LOWE, NEW SOUTH WALES · LP

– What evidence has the honorable member of that?

Mr CALWELL:

– It was sworn to in court.

Mr SPEAKER:

-Order ! The honorable gentleman is now dealing with evidence in court. I am not concerned with courts and I want the House to understand that I shall not allow any canvassing of present court proceedings. As T understand it, the debate that was initiated by the honorable member for East Sydney was for the purpose of securing information on the workings of the Capital Issues Board. That is an appropriate matter for consideration by this House, but what is taking place in court is not an appropriate matter for this House to consider until a judgment has been given.

Mr CALWELL:

– I am referring to the report in the newspaper to which theTreasurer referred - the report in the “ Sydney Menzies Herald “. The questions asked by the honorable member for East Sydney (Mr. Ward) have not been answered to the satisfaction of anybody on this side of the House nor to the satisfaction of honorable members opposite. 1 think that the Treasurer is very sorry that that visit was made to Canberra oil. that Sunday. A lot of people in Australia consider that preferential treatment was given to a very wealthy newspaper group and they consider that it should not have been given while a lol of decent people are waiting for accomodation and cannot get it.

Mr McMAHON:
Minister for the Navy and Minister for Air · Lowe · LP

– It is perfectly obvious that, there is an implied criticism of tb<<Commonwealth Actuary, Mr. Balmford.. in the statement of the honorablemember for Melbourne (Mr. Calwell). Although the honorable member ha.claimed that the previous Government-. trusted Mr. Balmford, he has made the snide suggestion that there was some underhand action by the Commonwealth Actuary on this occasion. We on thi side of the House look upon Mr. Balmford as a man of the highest integrity who gives the maximum amount of his time to the service of the Commonwealth. If this kind of innuendo is to be made on the Public Service by Opposition members in the hope of obtaining some kind of information to. which at present they are not entitled, it would be better for them to attack the Public Service directly instead of adopting indirect tactics. The Commonwealth Actuary and the Capital Issue* Board is clothed with certain authority by regulations made under an act of this Parliament. The Commonwealth Actuary possesses authority which he legitimately exercised and it was not within the power of the Treasurer (Sir Arthur Fadden) to circumscribe hi» activities. The Treasurer does not, in practice, interfere with these technical transactions. If there is a suggestion of malefaction and if it is suggested that Mr. Balmford behaved dishonestly or that he might have received some reward, the honorable member for Melbourne should make an accusation instead of making veiled suggestions about impropriety. The Commonwealth Actuary had power under the regulations to take this action. He had a discretion and if he agreed to exercise it on a Sunday the Government considers that no real objection could be taken to that action.

The honorable member for East Sydney (Mr. Ward) has raised certain questions of public importance and interest. The Government will certainly examine them and if it considers that useful information, not of a confidential nature, can be conveyed to him it will make that information available. If a person in the position of Mr. Balmford, a civil servant trusted by this Government and the previous Government, believes that it is wise that he should take action that is within his jurisdiction on a Sunday, I can see no reason why he should not take action. Many of my colleagues in the Cabinet spend some of their week-ends working. As we work, so we expect civil servants to work. I frequently work on Sunday. There is no reason why the action of the Commonwealth Actuary or the Capital Issues Board should be called into question. We know enough about Mr. Balmford to appreciate that he acted honestly. The proof of this contention lies in the fact that he was the first to make it known that a mistake had been made. As I have said, if it is considered to be in the public interest, answers will be supplied to the questions which have been asked by the honorable member for East Sydney.

Mr POLLARD:
Lalor

.- The story that appeared in the press to-day is one of the most extraordinary-

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

That the question be now put.

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

AYES: 55

NOES: 38

Majority . . . . 1.7

AYES

NOES

Question so resolved in the affirmative.

Original question resolved in the affirmative.

page 313

PAPERS

The following papers were pre sented : -

Commonwealth Bank Act - Balance-sheets of Commonwealth Bank and Commonwealth Savings Bank as at 30th June, 1953: together with Auditor-General’s reports thereon.

Public Service Act - Appointments - PostmasterGeneral’s Department - E. Dowling. M. Fardouly, T. W. Fox. D. S. Fulton, G. T. Jansen, A. Letizia. K. H. Nicholls. A. J.Ralston, E. J. Ramsay -Matthews. D. Savage, G. B. Sharpe,R. J. Shinkfield, G. W. Taylor, J. E. Thornett, A.P. Vorpagel.

House adjourned at 11.20 p.m.

page 313

ANSWERS TO QUESTIONS

The following answers to questions were circulated: - ‘

Tin.

Government Loans and Finance

Mr Fairbairn:

n asked the Treasurer, upon notice -

  1. How many people are employed by the Commonwealth Loans Organization?
  2. What was the total reimbursement paid to these officers during the last financial year?
  3. What are the duties of these officers?
Sir Arthur Fadden:
CP

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

  1. Sixty-seven.
  2. £58,816, including travelling allowances.
  3. To assist in the raising of Commonwealth public loans by maintaining contacts with voluntary loan committees set up in towns throughout Australia, publicity work in con nexion with loans, and to assist in the formation and maintenance of savings groups in industrial and commercial establishments.

Commonwealth Encouragement to Music and the Arts.

Mr Osborne:
EVANS, NEW SOUTH WALES

e asked the Prime Minister, upon notice -

  1. Through what agencies does the Commonwealth give encouragement and assistance to the arts in Australia?
  2. How much has been spent in each of the last three years for the encouragement of - (a) literature; (b) the drama; (c) music; and (d) other arts or cultural activities?
  3. To what extent are Commonwealth activities of this sort co-ordinated with those of the State governments?
Mr Menzies:
LP

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

  1. No organization has been created by the Commonwealth for the special purpose of giving encouragement and assistance to the arts in Australia, but both encouragement and assistance are given to the arts through the Commonwealth Literary Fund, the Commonwealth Historic Memorials Committee (with which is associated the Commonwealth Art Advisory Board), and the Committee for Cultural Development in the Australian Capital Territory. The Historic Memorials Committee was created in 1911 for the purpose of securing portraits for ultimate inclusion in a national portrait gallery of Governors-General, Prime Ministers, Presidents of the Senate and Speakers of the House of Representatives and portraits of Australians famous in art, literature and science. From time to time this committee issues commissions to Australian painters who are. chosen from a panel of artists recommended by the Art Advisory Board. In this way Australian painters are encouraged and financially assisted, as well as through the purchase of works of art by Australian artists for inclusion in the National Collection of Art Treasures.
  2. Expenditure incurred by the Historic Memorials Committee is as follows: - 1950-51. £448; 1951-52, £1,767; 1952-53, £3,009. Expenditure incurred by the Commonwealth Literary Fund is as follows: - 1950-51, £5.826: 1951-52, £9,337: 1952-53, £9,808. The Committee for Cultural Development in the Australian Capital Territory fosters the development of dramatic, cultural and artistic societies generally in the Australian Capital Territory. Expenditure for the last three years is as follows:- 1950-51, £1,555; 1951-52, £1,113: 1952-53, £2,000.
  3. The Commonwealth Historic Memorials Committee, the Commonwealth Literary Fund the Art Advisory Board and the Committee for Cultural Development in the Australian Capital Territory are purely Commonwealth activities and are not co-ordinated with the cultural activities of the State governments.

Cite as: Australia, House of Representatives, Debates, 16 September 1953, viewed 22 October 2017, <http://historichansard.net/hofreps/1953/19530916_reps_20_hor1/>.

View PDF View XML View in Voyant