House of Representatives
2 September 1954

21st Parliament · 1st Session

Mr. Speaker (Hon. Archie Cameron) took the chair at 10.30 a.m., and read prayers.

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– Before I call on questions I -must again call the attention of the House to the length of many questions and to their contents, which are such *.hat in my view no Minister can be expected to have a ready answer. The notice-paper is available for those questions, and in future I shall have to put my foot on the brake in relation to the contents and the length of questions without notice.

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– As an example of the manner in which questions should be asked, I ask the Prime Minister .whether it is the Government’s intention to support the application of the Australian Council of Trade Unions before the Commonwealth Court of Conciliation and Arbitration for an early hearing of the margins case.

Prime Minister · KOOYONG, VICTORIA · LP

– The Government does not propose to appear on the application for an early hearing.

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– I desire to ask the Minister for Social Services a question in regard to the abolition of the means test for blind pensioners. Has the Minister seen a recent statement by members of the Commonwealth Blind Pensioners Association that they have been striving for more than a decade to have tho means test for blind pensioners abolished? If this is so, has the Minister any idea of the number of pensioners likely to be affected by this social relief, and will he refute the suggestion that this relief carries no medical and pharmaceutical benefits ?

Minister for Social Services · LOWE, NEW SOUTH WALES · LP

– In his budget speech the Treasurer was able to announce that the means test on blind pensioners had been completely removed. During the last few days I have received a letter from the Commonwealth Blind Pensioners Association, thanking the Government, and, in particular, the former Minister for Social Services, who is now Minister for Air and Minister- for Civil Aviation, for the efforts that he made on their behalf to have the means test on blind pensioners abolished. I cannot tell the honorable member the number of pensioners who would benefit, but I think that, all told, 4,400 blind pensioners receive a benefit of one kind or another from the Commonwealth, and a proportion of those will be relieved of the application of the means test. As to the last point, I think that all blind pensioners are now receiving free medical benefits and medicines. It is totally wrong to .suggest that they will be deprived of those benefits when the new legislation becomes effective.


– My question is addressed to the Prime Minister. The latest report on employment in Australia, published by the Commonwealth Bureau of Census and Statistics, reveals that 1,200 persons were in receipt of the unemployment benefit when the Chifley Labour Government left office in December 1949, and that 5,363 persons were in receipt of the unemployment benefit in July of this year. How, then, can the Government justify its arrogant claim -


– Order !


– How does the Government justify its claim to have stabilized the economy?


– Order! The honorable gentleman has not directed his question to a Minister responsible for the department concerned with this matter.


– Nevertheless, I do not mind throwing a little light in dark places. We shall be very happy to provide for the honorable member a complete list of the numbers of persons in receipt of the unemployment benefit periodically. He may find it fascinating to compare the position in 1949 with that in 1954.

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– Will the Minister for Health confer with the Minister for Repatriation and the Minister for Social Services with a view to the inclusion in the pensioners medical benefits scheme of war widows who are fully dependent pensioners ? Mothers of deceased servicemen may receive £4 17s. 6d. a week by way of repatriation pension but they are not entitled to treatment in repatriation hospitals. Although such persons are over the pensionable age, they are not entitled to social services benefits because their income is above the ceiling limit and, therefore, they cannot receive medical benefits under the pensioners medical benefits scheme. As only a comparatively few persons are involved in this matter, will the Minister for Health and his colleagues consider providing for the mothers of deceased servicemen to receive the benefits that I have mentioned?

Minister for Health · COWPER, NEW SOUTH WALES · CP

– My colleagues and I have given some attention to the matter that has been raised by the honorable member, and we shall continue to do so to ascertain whether the problem can be solved satisfactorily.

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– As there hae been uncertainty for some time among soldier settlers in Victoria, because of distorted statements made for party political purposes that they would never receive freehold title to their blocks, will the Minister for the Interior inform the House whether any purchase leases that form the basis of freehold in Victoria have yet been issued?

Minister for the Interior · CHISHOLM, VICTORIA · LP

– As Victoria is a principal State under the war service land settlement agreement, I have no definite knowledge of the action that has been taken in connexion with the matter that has been raised by the honorable member because the issue of purchase leases is entirely a matter for the Victorian Government. I have an idea that the purchase leases that have already been granted number about 80, but as this is a State matter, I am not sure.

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– Will the Prime Minister inform the House whether the Government has considered the introduction of legislation to provide for uniform divorce laws throughout Australia? If so, does the Government propose to introduce the bill during the current sessional period?


– The matter is one of policy. I may tell the honorable member that, as he perhaps knows, a great deal has been done in connexion with the matter that he has raised by the honorable member for Balaclava. The result of his labours has been under investigation. I can say no more than that.

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– Will the Minister for Defence consider, in consultation with the the service Ministers, a suggestion that some observers from this Parliament attend important defence exercises that are conducted by the Australian services? I refer to such exercises as the Royal Australian Air Force exercise that was held at Darwin some months ago and the proposed combined operations at Manus Island. The adoption of the course that I have suggested would enable honorable members to obtain a correct impression of the strength and efficiency of the Australian forces.

Minister for Defence · WAKEFIELD, SOUTH AUSTRALIA · LP

– I shall be prepared to consider the proposal that has been made by the honorable member that representatives of this Parliament should attend service exercises, but I point, out that such attendance would pose problems for the services that would have to. be carefully considered.


– Can the Minister for Supply state the present position regarding the procurement of strategic materials for defence? Has the proposal to stockpile strategic materials been set aside, or has the Government expended all the money that was available to it for that purpose?’

Minister for Supply · PARRAMATTA, NEW SOUTH WALES · LP

– I cannot give the honorable gentleman a detailed answer to that, question. Some strategic materials have been stockpiled. I shall see whether it is possible to give him a more detailed answer later.

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– I. ask you, Mr. Speaker,, whether you will inform the House of. the number of hours parliamentary proceedings were broadcast during the. life of the Twentieth Parliament?. If you are prepared to furnish this information, will you state the number of hours the proceedings were broadcast (a) during the day time and (£>) during the evening?


– I shall endeavour to obtain the information for which the honorable member for Macquarie has asked. If I can get it,. I shall supply it to him as early as possible.

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-Is the Minister for Commerce and Agriculture aware that much of the farm machinery which has been imported in recent years from the dollar area with the dollar loans has not been of the type most urgently required by Australian farmers? Is it a fact that some of this machinery has proved unsuitable under Australian conditions? What action does the Government take to ensure that the limited dollars available for agricultural machinery imports are used to the best advantage?

Minister for Commerce and Agriculture · MURRAY, VICTORIA · CP

– I cannot agree that the honorable member’s premises are correct. The position is that of the loans of 150,000,000 dollars, approximately 60,000,000 dollars have been allocated by the Government to the purchase of essential agricultural machinery, which is. procurable only from the dollar area. To be precise,. 59,500,000 dollars has been so allocated and expended. This machinery, in many cases, is in the form of heavy crawler tractors which are unobtainable from any source other than the dollar areas,, and the tremendous development of clearing, water conservation and soil erosion control in this country has been possible only through the, availability of this agricultural equipment purchased with dollars. Certain other categories have been imported in large numbers, such as pick-up hay balers, which have been tremendously valuable, and some novel kinds of agricultural machinery which have been imported to give Australian farmers, the opportunity to discover their .uses; A new variety of harvester is an example of that kind. The American type of combine harvesters are invaluable in some areas of Australia but may not be suitable in another area. I think that the honorable member for Gwydir has that kind of experience in mind. The truth of the matter is that the agricultural equipment upon which the dollars have been expended is machinery for which large. firm orders have been placed in the overwhelming majority of cases, by Australian farmers on their own initiative.

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– Does the Minister for Supply agree with the honorable member for McMillan that since this Government has been in office’, the shortages of steel and galvanized iron have- disappeared, particularly in the- country districts ? If he does- agree-


-Order ! The honorable gentleman must not ask a Minister for an expression of opinion. As a prospective Speaker, he should know that that is barred by the standing orders.


– I have followed the line that you took, Mr. Speaker, when you were only the honorable member for Barker. Is the Minister aware that shortages of steel and galvanized iron in the north of Australia are more acute now than at any stage during the war? Will he take steps to ensure that adequate supplies of building Steel, steel piping and galvanized iron will be made available to places in North Queensland where people are desperately in need of them?


– Being an agreeable person, naturally I should tend to agree with the honorable member for McMillan. I point out to the honorable member for Herbert that the question he has asked should be directed really to the Minister for National Development. I shall draw my colleague’s attention to it.

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– Yesterday, the Acting Minister for Immigration undertook to examine a request I made that he let a certain New Australian know that unless he gets in touch with the Cooma Municipal Council pretty quickly his land will be sold for unpaid rates. The Cooma Council cannot get in touch with the New Australian because only the Minister knows his whereabouts. I am wondering whether the Minister has had an opportunity to consider this matter. If we can do so, I think it would be a good thing to let this New Australian know his liabilities under the Australian way of life and give him an opportunity to save his asset.


– I remember the question that the honorable member asked yesterday. There is a long standing practice in the Department of Immigration that departmental records concerning New Australians and immigrants shall not be made available to the public. That still stands. However, it is not a satisfactory state of affairs that the Cooma Municipal Council, or any other authority, should have on its hands a debt that apparently cannot be satisfied or sued upon because the whereabouts of the defendant is not known. I looked at the papers and found that the department had already communicated with this immigrant and warned him about this matter, but so far no reply has been received. As the honorable gentleman has raised the matter again, I undertake that, if the Cooma Council will write either to the Department of Immigration or to this man, care of the department, I shall see that the letter is sent on to him.

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– Oan the Minister for the Interior give the House any information as to the volume of water in the Hume Dam? Is there any possibility bf restrictions on its use having to be imposed during the coming months, with a consequent curtailment of irrigation for River Murray settlers?


– At the beginning of last month - I think about the 10th, but I am not quite sure of the date - we held a ministerial conference on the Hume Dam and a meeting of the officers concerned with it. Serious fears were expressed whether there would be enough water in the dam this year for irrigation purposes, and I asked the officers concerned to contact the State Electricity Commission in Victoria and the Snowy Mountains Hydro-Electric Authority in New South Wales in order to ascertain the snow fall on the ranges, so that we could make some estimate of the run-off that could be expected in the spring. It was found that the snowfall on the ranges had been very light this year. We were just about at the stage of warning irrigators that some restrictions might be imposed but, fortunately, there were very heavy falls of rain on the ranges last week, as a result of which it was expected that the Hume Dam would be overflowing by the beginning of this month. The engineer in charge has stated that, with the changed conditions, it is not expected that restrictions will have to be imposed on irrigators during this season. I understand that more rain is falling on the ranges at the present time, and I hope that all fears of restrictions will be removed..


– Now that it has been decided to extend the capacity of the Hume reservoir, will the Minister for Works co-operate with the States concerned in expediting the building of the Marraboor weir, so that the best possible use can be made of the additional water as soon as it is available, as it is urgently required in the fertile Murray valley?


– The building of the weir to which the honorable member refers is very largely the concern of New South Wales and Victoria, and until those States are willing to supply the money for the construction of the weir the work could not even be undertaken under the supervision of the River Murray Commission. It is doubtful whether it is actually a River Murray work and it will have to be approved by both States concerned, which must agree to. find the necessary money before action can be taken. I consider that all weirs should be constructed under the supervision of the River Murray Commission, as in the past, but the Government cannot act unless the States themselves support the project.

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– I ask the Primp Minister whether the Government intends to be represented by a delegation at a meeting on the General Agreement on Tariffs and Trade to be held soon in Europe. If so, will the delegation consist exclusively of Government ‘representatives, or will Australia have the immense advantage of Opposition representation on the delegation?


– I hate to be disappointing on the matter, but the Government alone will be represented. Having regard to the importance of the matters to be discussed, it will be represented by two senior Ministers, and, of course, by officials with expert qualifications. We have under consideration also the appointment, for the facilitation of the delegation’s work, of some outside consultants.


– Will the Prime Minister inform the House whether the Government has made any representations for a review of the Ottawa agreement, with particular reference to the fact that Great Britain is now purchasing less of Australia’s production than formerly, and the invariable British stand in relation to the importation of certain commodities from other areas?


– ‘The conferences that are to occur on a revision of these trade agreements will begin with a conference of the representatives of Commonwealth countries next month. At that conference, the Ottawa agreement, as well as the General Agreement on Tariffs and Trade, will come under consideration. Therefore, the matters that have been mentioned by the honorable member will be under active consideration at that time.


– I ask the Prime Minister whether it is a fact that Australia’s overseas reserves have fallen substantially in recent months, due to a rise of the value of imports, which has been accompanied by a falling off of our export trade. If this is a fact, what action does the Government propose to take in the matter?


– I have not by me the figures from week to week of the overseas balances, but it is quite true that they have, over a period, shown a disposition to fall. To some extent, of course, that was to be expected as a result of the relaxations of the import restrictions that were made earlier this year. To some extent, it appears to be due to a somewhat unexpected volume of import buying. I can assure the honorable member that we have the whole matter under very careful scrutiny, having regard all the time to the interests of the Australian public, the Australian manufacturers and the Australian consumer.


– Does the Prime Minister intend, before the discussions on the Ottawa Agreement take place, to indicate the Government’s policy on the General Agreement on Tariffs and Trade, and will he give the House an opportunity to discuss this very important matter?


– I shall look into the possibility of that. The discussions that we are having, and the studies that we are carrying on in committees and otherwise, are as yet not very far advanced. As the honorable member realizes, there is a great mass of matter to be gone into, but I shall have his suggestion in mind.


– Will the Prime Minister, when the Government is considering the matter, of consultants in relation to the conference called to review the Ottawa Agreement and the General Agreement on Tariffs and Trade, give consider a tion to including representatives of both sides of the Parliament and representatives of secondary industries and trade unions?


– As I said earlier, the whole question of consultants is under consideration. The nature of the consultants must, of course, be determined having regard’ to the nature of the work that has to be done and the problems that have to be discussed.

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– My question is addressed to the Prime Minister as the Minister in charge of the Public Service. In view of the complaint by the chairman of the Commonwealth Scientific and Industrial Research Organization about the difficulty of obtaining and holding trained scientific staff, the complaint of the chairman of the Bureau of Mineral Resources about the loss of geologists, geophysicists and so on because of poor salaries, and finally the statement by the Minister for Supply that the salaries of such officers cannot be adjusted because of the necessity for maintaining overall relativity between departments, will the right honorable gentleman inform the Public Service Board that the development of Australia is much more important than the maintenance of a purely bureaucratic relativity between salaries in the various departments ?


– I informed the Public Service- Board of that - if it needed informing - years ago. I find that it has quite an enlightened outlook on these matters. I have no criticism to make of its approach to them. It does not follow, because a man leaves the employment of the Commonwealth to go outside, that he has been underpaid by the Commonwealth. The honorable member must recall that, in the present circumstances of some fever in the air, outside bodies find themselves able to pay very large salaries to competent people. If we had to set out to meet them on the same ground, I am afraid that the cost of government in Australia would mount enormously.

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– Would the Treasurer be prepared to consider some scheme to equate the value of Government bonds and thus obviate the loss that has been occasioned to persons who purchased earlier issues of Government bonds by the increased interest rate that has been applied to Commonwealth loans by this Government? The increased interest rate has depreciated the value of earlier bond issues. I ask the Treasurer to do something to bring the values of government securities into line.


– The honorable member might be excused for asking such a question because lie has been out of Australia for so long that he does not realize that this is a matter entirely for the decision of the Australian Loan Council, upon which the States have a. preponderance of voting power.

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– Will the Minister for the Interior inform the House whether the tenants of Government-owned houses in Canberra are required to keep the chimneys free of soot, in order to prevent their catching fire? If a fire occurs in the chimney of a governmentowned dwelling, necessitating the attendance of the Canberra Fire Brigade, what charge is made against the tenant? Is it true that a little light was shed in dark places near the Prime Minister’s lodge last night, through a chimney of that house catching fire?


– I do not think that the question is so urgent that I need answer it now. However, there have been changes made recently in regard to certain things that the tenants of Governmentowned houses should do for themselves, in accordance with normal leases all over Australia. If the honorable member wants any further information on this subject, I shall be pleased to supply it to him.

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– Is the Minister for

Supply aware of a report to the effect that members of the Opposition may decline to attend the official opening of the Rum Jungle project? As this undertaking is of national importance, and is above party political considerations, can the Minister say whether invitations to attend the opening have been extended to members of the Opposition? Has due courtesy been shown them in the matter?


– My attention was directed to some story to the effect that the Labour party might boycott the opening of the Rum Jungle treatment plant. I really cannot believe that that is true. We extended invitations to five members of the Opposition to attend the official opening.

Mr Calwell:

– The Minister said six originally, and went back on that number.


– Ah, that reveals the whole story! Apparently, somebody’s nose is out of joint, and there is going to be a boycott. I am bound to give the facts to the House. Apart from the Prime Minister and myself, and two other Ministers who are intimately concerned with this matter, the invitation was for five members of the Government side-

Mr Haylen:

– Six.


– No, five, and five members of the Labour party, plus the Leader of the Opposition. As to the so-called boycott, I point out that there was an official approach to me to enlarge the representation of the Labour party. We considered that we would be unable to comply with that request. There have also been several requests by individual members of the Labour party for the trip to be extended ; that, instead of returning by plane on Saturday morning, those members should be permitted to return by plane, at government expense, early the following week. That does not seem to me to square with this story of a boycott. I hope good sense will prevail and all parties will be represented.

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– I direct a question to the Minister for Commerce and Agri culture. Does the Government’s wheat stabilization policy provide for a guaranteed cost of production price on up to 100,000,000 bushels of wheat? In the event of overseas markets failing to take that portion of Australian wheat production which is surplus to home consumption requirements, does the guaranteed cost of production on export wheat cover payment in relation to that portion of the wheat which is surplus to home consumption requirements but is physically available for export?


– Yes, it does.



– I should like to make a supplementary reply to the question that was asked by the honorable member for Lalor.

Opposition members interjecting,


– Order ! If honorable members continue to interrupt I shall have to take action.


– I want to make it clear that the Government’s guarantee in respect of wheat stabilization is that, if the scheme is approved by wheatgrowers by ballot and if it is legislated for by State premiers, the Commonwealth guarantee will operate to ensure that in respect of 100,000,000 bushels of wheat exported in each of the five years of the proposed plan, growers will be assured of a minimum return of the cost of production.

Mr Pollard:

– If the wheat is exported ?


– Yes. I wanted to make the position quite clear to the honorable member.

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– My question is directed to the Minister for Territories. In view of the importance that the Japanese Government attaches to the pearl beds that are adjacent to the coast of the Northern Territory and the rich hauls of pearl shell that Japanese fishing fleets recover from them, will the Government have an expert investigation made of the position of Australian fleets that operate in that area with a view to assisting the operators to bring their fleets to the highest pitch of efficiency ? As the beds in the north should be yielding their wealth to Australian operators, will the Minister put his survey in hand immediately so that a flourishing industry can be established in the north, employing European labour at Australian rates of pay and on Australian conditions ?

Minister for Territories · CURTIN, WESTERN AUSTRALIA · LP

– The subject-matter of the honorable member’s question really comes under the administration of the Department of Commerce and Agriculture. I shall discuss it with my colleague and let the honorable gentleman have an answer.

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Message recommending appropriation reported.

In Committee (Consideration of Governor-General’s message) :

Motion (by Sir Eric Harrison) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the Audit Act 1901-1953.

Resolution reported.

Standing Orders suspended; resolution adopted.

Ordered -

That Sir Eric Harrison and Sir Arthur Fadden do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Sir Eric Harrison, and read a first time.

Second Beading.

Sir ERIC HARRISON ( Wentworth- -

Vice-President of the Executive Council and Minister for Defence Production) [11.10]. - I move-

That the bill be now read a second time.

The purpose of this measure is twofold. First, to provide an increase of £150 per annum in the salary of the AuditorGeneral, to take effect as from the 1st July, 1953. The present salary of the Auditor-General is £3,350 per annum.

The Government decided in 1953 that, in view of cost of living increases since salaries were reviewed in 1951, a general increase of £150 per annum as from the 1st July, 1953 should be granted to Permanent Heads and certain other full time officers, including holders of statutory offices, whose salaries are determined, by the Government. The Govern ment further decided that this adjustment should be met from the appropriation for ordinary annual services. The salaries of the holders of statutory offices were accordingly increased without amending the acts that authorize such salaries.

The Auditor-General has previously expressed the view that it is not appropriate that portion of his salary should be subject to control by the government of the day, by its inclusion in the annual Estimates, and that to preserve his independent status any increase of salary should be authorized by an amendment of the Audit Act. The increase of £150 per annum approved by the Government has not yet been received by the Auditor-General. The Government accepted the views of the AuditorGeneral, and this bill will provide the necessary statutory authority to increase the salary of the Auditor-General by £150 per annum as from the 1st July, 1953.

I should here stress that this increase, which will be effective from the 1st July, 1953, is a cost of living adjustment similar to that received by public servants, other than Permanent Heads and holders of statutory offices, in automatic salary adjustments, the last of which occurred in August, 1953. The increase of £150 has no relation to increases in margins, a matter that has been under consideration by the Commonwealth Court of Conciliation and Arbitration, and the hearing of which was adjourned on the 25th February, 1954.

The other amendment to the act relates to the retiring age of the Auditor-General. The Audit Act provides for the retirement from office of the Auditor-General upon his Teaching the age of 65 years. It is now proposed to enable the AuditorGeneral’s appointment to be continued, in certain circumstances, for a further period of up to one year. The Public Service Act 1922-1953 makes a similar provision for the normal retirement of officers at the age of 65. However, it also enables their continuance in office for a further period not exceeding one year. From time to time it is recognized to be desirable in the public interest that the services of an officer be available for a further limited period. These circumstances may also extend to the officer carrying out the duties of AuditorGeneral.

The present Auditor-General has had a life-long association with the accounting work of the Commonwealth and during his period as Auditor-General has completed a comprehensive review of the Audit Act. His suggestions for alterations in Treasury accounting procedures are now under examination, and during next year it is hoped to bring down legislation embodying substantial amendments to the Audit Act. It will be of considerable help to the Government during the consideration and drafting of this legislation, to have available the continuing services of the Auditor-General to advise on the alterations which it proposes to make. These amendments to the Audit Act will also necessitate substantial changes in the Treasury Regulations and Instructions, which are issued under the authority of the act, and deal in detail with the accounting procedures. Here, again, the advice of the present AuditorGeneral will be of considerable assistance. It is for these reasons that the Government is proposing a limited extension in the period of service of the present Auditor-General.

I commend the bill to the House, and hope that it may have a speedy passage.

Debate (on motion by Mr. Caltwell) adjourned.

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In Committee of Ways and Means:

McPhersonTreasurer · CP

– I move -


– (1.) That, in this Resolution - “ co-operative company “ have the same meaning as in Division 9 of Part III. of the Assessment Act; “ life assurance company “ have the same meaning as in Division 8 of Part III. of the Assessment Act; “ mutual income “, in relation to a life assurance company (other than a mutual life assurance company), mean -

so much of that part of the taxable income of the company which has been derived from its life assurance business as bears the same proportion to that part of the taxable in come as the amount of the profits divided for the same year of income among the life assurance policy holders of the company bears to the total profits divided among those policy holders and the shareholders of the company in respect of the company’s life assurance business for the same year of income; or

where no profits in respect of the company’s life assurance business are divided for the year of income but, by virtue of the company’s memorandum or articlesof association, any profits to be divided among the life assurance policy holders of the company arc required to be a certain proportion of the total profits to be divided - that proportion of that part of the taxable income of the company which has been derived from its life assurance business : “mutual life assurance company” have the same meaning as in Division 8 of Part III. of the Assessment Act: “ non-profit company “ mean a company which is not carried on for the purposes of profit or gain to its individual members and is, by the terms of the memorandum or articles of association, rules or other document constituting the company or governing its activities, prohibited from making any distribution, whether in money, property or otherwise, to its members ; “ private company “ have the same meaning as in Division 7 of Fart III. of the Assessment Act; “ the Assessment Act “ means the Income Tax and Social Services Contribution Assessment Act 1936-1953 as proposed to be amended by the Income Tax and Social Services Contribution Assessment Bill 1954. (2.) That a reference in this Resolution to taxable income be read as a reference to taxable income of the year of income.


That the Assessment Act be incorporated and read as one with the Act passed to give effect to this Resolution.

Imposition of Income Tax and Social Services Contribution.

– (1.) That a tax by the name of income tax and social services contribution be imposed at the rates declared in this Resolution. (2.) That, notwithstanding anything contained in this Resolution, income tax and social services contribution be not imposed upon a taxable income which does not exceed One hundred and four pounds derived by -

a person who is not a company;

a company in the capacity of a trustee; or

a non-profit company.

Kates of Income Tax and Social Services Contribution Payable by Persons other than Companies.

– (1.) That the rates of income tax and social services contribution payable by a person other than a company be as set out in the First Schedule to this Resolution. (2.) That the rates of income tax and social services contribution in respect of a taxable income to which Division 16 of Part III. of the Assessment Act applies be as set out in the Second Schedule to this Resolution. (8.) That the rate of income tax and social services contribution in respect of a taxable income in any case where section eighty-six or section one hundred and fifty-eight d of the Assessment Act applies be as set out in the ThirdSchedule to this Resolution. (4.) That the rate of income tax and social services contribution payable by a trustee be as set out in the Fourth Schedule to this Resolution.

Limitation of Tax and Contribution Payable by Aged Persons.

– (1.) That this paragraph apply to a taxpayer who-

being a man, has attained the age of sixty-five years, or. being a woman, has attained the age of sixty years, on or before the last day of the year of income; and

is a resident of Australia during the whole of the year of income, but do not apply to a taxpayer in the capacity of a trustee. (2.) That where the net income of a taxpayer to whom this paragraph applies does not exceed Four hundred and fifteen pounds, the maximum amount of income tax and social services contribution payable by him be ninetwentieths of the amount by which his net income exceeds Three hundred and seventy-five pounds, or, if his net income does not exceed Three hundred and seventy-five pounds, no income tax and social services contribution be payable by him. (3.) That where the net income of a taxpayer to whom this paragraph applies does not exceed Nine hundred and seventy-five pounds and during the year of income the taxpayer contributes to the maintenance of -

his wife, being a person who is a resident of Australia during the whole of the year of income and has attained the age of sixty years on or before the last day of that year; or

her husband, being a person who is a resident of Australia during the whole of the year of income and has attained the age of sixty-five years on or before that day, the maximum amount of income tax and social services contribution payable by the taxpayer be nine-twentieths of the amount by which the sum of the net incomes of the taxpayer and his or her spouse exceeds Seven hundred and fifty pounds, or, if the sum of those net incomes does not exceed Seven hundred and fifty pounds, no income tax and social services contribution be payable by the taxpaye r. (4.) That, for the purposes of this paragraph, the net income of a person be ascertained by deducting from the gross income of that person all expenses (not being expenses of a capital, private or domestic nature) incurred in deriving that gross income.

Minimum Tax and Contribution.

  1. That where, hut for this paragraph, the amount of income tax and social services contribution which a person would be liable to pay under the preceding provisions of this Resolution, after deducting all rebates to which he is entitled in his assessment, is less than Ten shillings, the income tax and social services contribution payable by that person be Ten shillings.

Kates of Income Tax and Social Services Contribution Payable by a Company.

  1. – (1.) That the rates of income tax and social services contribution payable by a company, other than a company in the capacity of a trustee, be as set out in the Fifth Schedule to this Resolution. (2.) That where the taxable income of a non-profit company does not exceed Two hundred and eight pounds, the maximum amount of income tax and social services contribution payable by the company be one-half of the amount by which the taxable income exceeds One hundred and four pounds.

Elimination of Pence.

  1. That where the amount of the income tax and social services contribution which a person would be liable to pay under the preceding provisions of this Resolution, before deducting any rebate or credit to which he is entitled in his assessment, is an amount of pounds’, shillings and pence or shillings and pence -

    1. if the pence do not exceed six - the amount be deemed to be reduced by the amount of the pence; and
    2. if the pence exceed six - the amount be deemed to be increased by treating the pence as One shilling.

Tax and Contribution where Amount to be Collected or Refunded would not exceed Two Shillings.

  1. – (1.) That, notwithstanding anything contained in the preceding provisions of this Resolution, where a personhas, in accordance with section two hundred and twenty-one b of the Assessment Act, forwarded to the Commissioner a tax stamps sheet or group certificateissued to him in respect of deductions made in a year from his salary or wages, and the difference between the available deductions and the income tax and social services contribution which would, but for thissubparagraph, be payable by that person in respect of the taxable income derived by him in that year is not more than Two shillings, the income tax and social services contribution payable by that person in respect of that taxable income be an amount equal to the available deductions. (2.) That the last preceding sub-paragraph do not apply -

    1. in relation to a person who is liable to pay provisional tax and contribution in respect of his income of the year immediately succeeding the year referred to in that subparagraph ; or
    2. in any case in which the amount of income tax and social services con- tribution which would, but for this paragraph, be payable is Ten shillings and the available deductions exceed Ten shillings. (3.) That, in this paragraph, “ the available deductions “ mean the sum of the amount represented by the face value of the tax stamps duly affixed to a tax stamps sheet referred to in sub-paragraph (1.) of this paragraph and the amount of the deductions specified in a group certificate so referred to.

Levy of Income Tax and Social Services Contribution.

  1. – (1.) That the income tax and social services contribution imposed in pursuance of the preceding provisions of this Resolution be levied and paid for the financial year which commenced on the first day of July, One thousand nine hundred and fifty-four. (2.) That, until the commencement of the Act for the levying and payment of income tax and social services contribution for the financial year commencing on the first day of July, One thousand nine hundred and fifty-five, the Act passed to give effect to the preceding provisions of this Resolution also apply for all financial years subsequent to that which commenced on the first day of July, One thousand nine hundred and fifty-four.

Provisional Tax and Contribution.

  1. That provisional tax and contribution be imposed and be payable, in accordance with the provisions of the Assessment Act, in respect of the income of the year of income ending on the thirtieth day of June, One thousand nine hundred and fifty-five.


First Schedule.

General Rates of Tax and Contribution Payable by Persons other than Companies.

The rate of income tax and social services contribution for every£ 1 of each part of the taxable income specified in the first column of the following table is the rate set out in the second column of that table opposite to the reference to that part of the taxable income: -

Second Schedule.

Rates of Tax and Contribution by Reference to an Average Income.

In the case of a taxpayer to whose income Division 16 of Part III. of the Assessment Act applies, the rates of income tax and social services contribution are -

  1. for every £1 of that part of the taxable income which does not exceed £4,000- (i) the rate ascertained by apply ing the rates set forth in the First Schedule to a taxable income equal to his average income and dividing the resultant amount by a number equal to the number of whole pounds in that average income; or

    1. 71.775 pence, whichever is the less; and
    2. for every £1 of the remainder (if any) of the taxable income, the rate ascertained by deducting the amount of £1,196 5s. Od. from the tax and Contribution which would be payable if the rates set forth in the First Schedule were applied to the total taxable income and dividing the resultant amount by a number equal to the number of whole pounds in that remainder.

Third Schedule.

Sate of Tax and Contribution by Reference to a National Income,

For every £1 of the taxable income of a taxpayer deriving a notional income, as specified by section eighty-six or section one hundred and fifty-eight n of the Assessment Act, the rate of income tax and social services contribution is the rate ascertained by dividing the tax and contribution which would be payable under the First Schedule upon a taxable income equal to his notional income by a number equal to the number of whole pounds in that notional income.

Fourth Schedule.

Rate of Tax and Contribution Payable by a Trustee.

For every £1 of the taxable income in respect of which a trustee is liable, in pursuance of either section ninety-eight or section ninetynine of the Assessment Act, to be assessed and to pay tax and contribution, the rate of income tax and social services contribution is the rate which would be payable under the First, Second or Third Schedule, as the case requires, if one individual were liable to be assessed and to pay tax and contribution on that taxable income.

Fifth Schedule.

Rates of Tax and Contribution Payable by a Company other than a Company in the Capacity of Trustee.

  1. In the case of a company (not being a private company, a co-operative company, a non-profit company or a life assurance company) which is a resident, the rates of income tax and social services contribution are-

    1. for every £1 of so much of the taxable income as does not exceed Five thousand pounds - Six shillings; and
    2. for every £1 of the remainder of the taxable income - Seven shillings.
  2. In the case of a company (not being a private company, a co-operative company, a non-profit company or a life assurance company) which is a non-resident, the rates of income tax and social services contribution are -

    1. for every £1 of so much of the taxable income consisting of dividends as does not exceed Five thousand pounds-Five shillings;
    1. for every £1 of so much of the taxable income not consisting of dividends as does not exceed the amount (if any) by which the taxable income consisting of dividends is less than Five thousand pounds - Six shillings; and

    2. for every £1 of the part of the taxable income to which neither of the pre ceding sub-paragraphs of this paragraph applies - Seven shillings.

  3. In the case of a company which is a private company, the rates of income tax and social services contribution are -

    1. for every £1 of so much of the taxable income as does not exceed Five thousand pounds - Four shillings;
    1. for every £1 of the remainder of the taxable income - Six shilling’s; and

    2. for every £1 of the undistributed amount in respect of which the company is liable under section one hundred and four of the Assessment Act to pay additional tax - Ten shillings.

  4. In the case of a company (not being a private company or a life assurance company) which is a co-operative company or a nonprofit company, the rates of income tax and social services contribution are -

    1. for every £1 of so much of the taxable income as does not exceed Five thousand pounds - Five shillings; and
    1. for every £1 of the remainder of the taxable income - Seven shillings.
  5. In the case of a company (not being a private company) which is a mutual life assurance company, the rates of income tax and social services contribution are -

    1. for every £1 of so much of the taxable income as does not exceed Five thousand pounds - Four shillings; and
    1. for every £1 of the remainder of the taxable income - Six shillings.
  6. In the case of a company (not being a private company) which is a life assurance company other than a mutual life assurance company, the rates of income tax and social services contribution are -

    1. for every £1 of so much of the mutual income as does not exceed Five thousand pounds - Four shillings ;
    2. for every £l of the remainder of the mutual income - Six shillings;
    3. if the company is a non-resident, for every £1 of so much of the taxable income, other than the mutual income, consisting of dividends as does not exceed the amount (if any) by which the mutual income is less than Five thousand pounds - Five shillings ;
    4. ) for every £1 of so much of the taxable income, other than the amounts of income to which the preceding subparagraphs of this paragraph apply, as does not exceed the amount (if any) by which the total of those amounts is less than Five thousand pounds - Six shillings; and
    5. for every £1 of the part of the taxable income to which none of the preceding sub-paragraphs of this paragraph applies - Seven shillings.
  7. For every £1 of interest in respect of which a company is liable, in pursuance of subsection (1.) of section one hundred and twentyfive of the Assessment Act, to pay income tax and social services contribution, the rate of income tax and social services contribution is Seven shillings.

By this resolution, effect is being given to the proposal, outlined in my budget speech, to reduce the rates at which income tax and social services contribution will be payable by individuals for the current financial year, 1954-55. Expressed in percentage terms, there will be valuable reductions at all income levels, although the heaviest percentage decreases will apply to incomes in the lower brackets. The decreases in rates range from 20 per cent. on lower incomes to a little more than 8 per cent on an income of £16,000. The maximum rate applicable to the excess of taxable income over £16,000 is being reduced from 14s. to 13s. 4d. in the £1.

No doubt, honorable members have already gathered a full appreciation of these tax reductions by examining the statements annexed to the budget papers which have been circulated. If these reductions were not made, it is estimated that the income tax which would have been collected from individual taxpayers in 1954-55 would have been £380,500,000. But under the reduced scales, the collections are estimated at £357,300,000. The relief which is being afforded, therefore, will be worth £23,200,000 to individual taxpayers in this financial year. In a full year, the cost to revenue will be £31,250,000. The benefit of the reductions will be appreciated by salary and wage-earners from the first pay-day in October next, when lower tax instalments will be deducted from their earnings. The new tax instalment schedules will be printed and circulated by that time.

Amounts of provisional tax, which will be shown in assessments to be issued on 1953-54 incomes, will also reflect the reduced rates. These taxpayers, of course, have available to them the simple processes of self assessment, if they consider that the amount of provisional tax shown in assessments is either too high or too low.

There is a feature of the resolution relating to the age allowance that I think should be noted. Under the age allowance, single women over 60 years and single men over 65 years are freefrom income tax if the income does not exceed £375. Married couples, both of pensionable age, are free from tax if their combined incomes do not exceed £750. The exemptions of £375 for a single aged person and £750 for a married couple still exceed the maximum permissible income, including pension, of an age pensioner.

On incomes above these exemption points of £375 and £750, the normal rate of income tax is not reached until the income of a single person amounts to £415, or the combined incomes of a married couple amount to £890. In some cases, the normal rate is not reached until an income of £975 is received. At present, this result is achieved by limiting the tax to not more than one-half of the excess of income over £375 or £750, as the case may be. Under this resolution, it is proposed to reduce the one-half to ninetwentieths, thereby effecting a 10 per cent. reduction, which is broadly in keeping with the overall reductions being provided for the general body of individual taxpayers.

Ithas been the consistent policy of this Government to keep taxes down to the lowest possible levels that our national and international commitments will allow. A schedule, which honorable members have before them, illustrates clearly the progressive income tax reliefs which this Government has provided since it came into office late in 1949. Some incomes of taxpayers with family responsibilities have been totally freed from tax. In the case of other taxpayers, the tax has been reduced by percentages which range from 82 per cent to 17.1 per cent. For example, at the proposed rates, a man maintaining a wife and two children, but not claiming other concessional deductions, will pay, on an income of £800, just over half the tax that would have been paid on the same income in 1949-50. A taxpayer with the same dependants will, on an income of £2,000, pay only three-quarters of the tax at 1949-50 rates. The tables that have been circulated do not take into account the substantial increases that have been granted by this Government in the amount available for concessional deductions other than for dependants. If, for example, a taxpayer on an income of £800 who has a wife and two children and who pays medical expenses of £80 on account of one child, and educational expenses totalling £50, were taxed at 1949-50 rates, the tax would be £53 15s., but the tax at the proposed rates will be only £17 7s. This represents a reduction of 67.7 per cent.

Although a taxpayer with a wife and two children, who is receiving an income of £800, and is not entitled to any other concessional deductions, will be required to pay tax of £32 2s. at the proposed rates, it should be remembered that £39 per annum by way of child endowment would be received. In fact, a taxpayer with these family responsibilities can earn up to £855 before his tax liability exceeds child endowment received. A taxpayer with a wife and five children must receive more than £1,466 before his tax exceeds the child endowment received. As mentioned in the course of my budget speech, this Government has been able to effect overall reductions in the income tax rates to the point where they are almost 30 per cent. lower than the rates in the 1949-50 budget - the last brought down by the Labour Administration. Another schedule which has been placed before honorable members compares income tax payable in Australia, in the United Kingdom and in New Zealand. An examination of that schedule shows that in every range of income from £100 to £10,000, taxpayers with or without the responsibilities of maintaining dependants pay substantially less income tax in Australia than those in either of the two other countries mentioned.

All I wish to say in conclusion is that this resolution represents one further step which the Government is taking towards its objective of encouraging individual effort, combined with an added opportunity for saving and investment and a recognition of family responsibility. 1 have pleasure in recommending to the committee the adoption of the resolution.

Progress reported.

page 883


Bill presented by Sir Arthur Fadden, and read a first time.

Second Reading


Treasurer) [11.24] . - by leave - I move -

That the bill be now read a second time.

In this year’s budget, the reductions in income tax are being made principally by reducing the rates of tax payable by individuals which I have just explained to honorable members. In the course of my budget speech, I outlined income tax concessions which were being provided in addition to those reductions, and this bill contains the provisions necessary to give effect to those additional proposals.

Among the concessions is the allowance of gifts of £1 and upwards to public funds for the construction and maintenance of school and college buildings owned by non-profit organizations. This concession will apply to gifts on and after the 1st July, 1954, and should materially assist in the raising of funds for the purpose of building and maintaining these educational establishments, including governmentowned schools and colleges. This concession, considered in conjunction with the deduction of expenses incurred by parents in the education of their children, is an earnest of the Government’s endeavour toassist in the advance- ment of learning in this country. Encouragement is also being given to the development of the arts and sciences in Australia. Gifts to the Australian Elizabethan Theatre Trust since the trust was established in the first half of this year” will be allowable deductions. Gifts to the Australian Academy of Science on and after the 1st July, 1954, will also be deductible. All told, the cost of the three concessions that I have mentioned will be about £200,000 in a full assessment year.

In Australia, in many instances, land is leased for the purpose of carrying on mining operations. At present, a freeholder who grants a lease of his land to a lessee for that purpose is subject to tax on the premium that he receives. The lessee is entitled to deduct the amount that he pays for the grant of the lease. The Same principles apply where a lease is assigned. It is thought that, at times, the taxation of the premiums has dissuaded freeholders and leaseholders from granting or assigning leases to prospective purchasers who are willing to risk the capital in mining the mineral deposits on the land. To remove this possible impediment to the extension of mining in this country, it is proposed that mining leases shall be placed outside the compass of the lease provisions of the assessment act. In other Words, the recipient of a premium for the grant or assignment of a mining lease will not be subject to income tax on the amount he receives. Correspondingly, the purchaser or assignee will not be entitled to deduct the amount that he has paid for his lease.

This proposal is coupled with a further proposal that the parties to these transactions may agree to continue the present system of taxing the recipient and allowing a deduction to the payer. No doubt, the taxation consequences which will flow from theagreement on either of the alternative bases will enter into thenegotiation of the purchase and sale price. However, the alternatives which are being provided should serve to remove the deterrent to mining development which I have outlined. The amendment to give effect to these proposal’s will apply to transactions after the date on which the bill receives the Royal assent. The cost to revenue in a full year year is estimated at £15,000.

It is proposed also to exempt dividends paid by companies wholly and exclusively out of income that is exempt under section 23 (p) of the Income Tax and Social Services Contribution Assessment Act. That provision exempts the income derived by a bona fide prospector from the sale, transfer or assignment of his rights to mine for gold and for certain other metals and minerals which are prescribed by regulation. This exemption applies not only to individual prospectors, but also to any company that has carried out the major part of prospecting in the particular area for which the right to mine has been granted. However, unlike individual prospectors, the individual shareholders of the prospecting company do not receive the benefit of the exemption in the form of exempt dividends. It is accordingly proposed that dividends paid wholly and exclusively out of the exempt income of the prospecting company shall be exempt also in the hands of the shareholders. The new exemption will apply to dividends paid after the date on which this bill receives the royal assent, even though the exempt income was earned by the company prior to that date. The exemption will extend to dividends paid by a holding company wholly and exclusively out of exempt dividends received by that company from the prospecting company. It is proposed also to extend the list of metals and minerals to which these exemptions shall apply. The Income Tax Regulations will be amended for these purposes in the near future.

Other clauses of the bill relate to pensions and annuities. The principle which governs the taxation of pensions and annuities is that the pensioner or annuitant shall not be taxed on any amount of the purchase price that he has paid for the pension or annuity. In respect of pensions, this result is obtained usually by way of deduction of the annual amounts contributed to superannuation funds by salary and w age-earners during the years of their active employment. There are cases, however, where the annual contribution exceeds the present maximum annual allowable deduction of £200. In these cases, the amount that lias not been deducted is excluded, by way of: annual allowances from the pension when; received. Where annuities have been purchased, outright, from insurance companies, no deduction is allowed at the; time of purchase. The purchase price, in these cases also,, is excluded by way of annual allowances from the annuity when received. In both types, of cases, the principle is recognized that purchased pensions and annuities comprise two elements - interest on the sum invested, and a return of the purchase, price. To the extent that a pension or an annuity represents interest, it is taxable but, to the extent that it represents purchase price in respect of which a concession has not already been allowed, it is free of tax. The method customarily adopted is to divide the purchase price by the number of years of life expectation when the pension or annuity commences. The annual allowance is the amount so calculated. However, under the present law, the annual allowances cease when the pensioner or annuitant attains his life expectation actuarially calculated at the commencement of the pension or annuity. Thereafter, the whole of the pension or annuity is subject to income tax.

The increase in tax once the expectation of life has been exceeded is regarded by many pensioners and annuitants as a serious hardship, and representations for the alleviation of this tax burden have been received by the Government. The purpose of this amendment, therefore, is to authorize the continuance of the annual allowances throughout the lifetime of the- pensioner or annuitant. Where a pensioner or an annuitant has already exceeded his life expectation and the annual allowance has ceased under existing provisions, the amendment will restore that annual allowance, commencing with assessments based on 1954-55 income. Some purchasers of existing annuities have availed themselves of an option whereby the annual allowances are calculated on the basis of actuarial certificates provided by the insurance companies from which they purchased the annuities. The bill includes a saving clause which authorizes the continuance of this method of calculation, if the annuitant so desires, until the purchase price has been allowed in full. Thereafter, in the case of annuities for life,, the annual allowances will be calculated, in accordance with the new provision.

I now invite the attention of honorable members to a provision in the bill that will have the effect of exempting, as from the 1st July, 1954, pensions received from the United Kingdom Government by widows and other dependants of deceased servicemen. Pensions received by disabled United1 Kingdom exservicemen resident in Australia are already exempt, and so also are pensions paid by the Commonwealth to widows and other dependants of Australian servicemen. In response to representations from’ many quarters, it has been decided to extend these exemptions on the lines that I have indicated. It is true that United Kingdom war widows may become liable to United Kingdom tax on these pensions, but the inclusion of the pension in Australian taxable income certainly has increased the rates of tax on other Australian income received by the widow. The exemption from Australian tax that is now being provided may be found to afford an overall tax saving to those recipients of United Kingdom -pensions.

The only other provision that it is necessary to mention is a proposed amendment to section 204 of the principal act. As now enacted, that section provides that income tax assessed shall be due and payable on a date specified in the notice of assessment, but not less than 30 days after service of that notice. By reason of credits for provisional tax paid or for tax instalments deducted from earnings, many notices of assessment show, instead of an amount payable by the taxpayer, a refund due to him. As it is inappropriate in such instances to specify in the notice a due date for payment, the proposed amendment will authorize the omission of this particular from the notice. However, the omission would affect the operation of those provisions of the principal act that authorize the amendment of assessments within three years - or, in some instances, six years - from the date on which the tax became due and payable under the assessment. I refer to both amendments that have the effect of increasing the tax in the original assessment, and those that have the effect of reducing that tax. If no date were specified in the notice of assessment, there would he no commencing point for the period within which the assessment might be amended. It is proposed, therefore, that, where no date is specified in the notice of assessment, the thirtieth day after service of the notice shall be a notional due date for payment, from which the period for amendment of the assessment may be reckoned. This amendment will effect a saving in administration without inconvenience or detriment to taxpayers.

Debate (on motion by Mr. Allan FRASER) adjourned.

page 886


BUDGET 1954-55

In Committee of Supply: Consideration resumed from the 1st September (vide page 865), on motion by Sir ARTHUR Fadden -

That the first item in the Estimates under Division No. 1 - The Senate - namely, “ Salaries and allowances £20,000 “, be agreed to.

Upon which Mr. Calwell had moved by way of amendment -

That the first item be reduced by £1.


.- In the course of this debate a number of references have been made to the high costs of Australian industry. Warnings have been given to us by private members, and indeed by the Minister for Commerce and Agriculture (Mr. McEwen) himself, of the need to keep down our industrial costs, and particularly of the need to keep down the cost of those items of production which make up our income from exports. They refer particularly, of course, to the income from the primary production of the country. There is a compelling need for the Australian economy to promote greater efficiency, particularly in relation to its export trade, and these warnings have, I believe, a specially important application to the circumstances of our sea-borne trade. The maritime industry is especially important for Australia. Honorable members will perhaps grow weary of my constant reiteration of the need for efficient and cheap shipping services for Australian development. Honorable members may grow weary of my repeated reminders that this is an island continent situated at a long distance from our markets and from the sources of supply of those items of secondary production which we do not produce ourselves. We are dependent completely for our external trade on shipping services. Our internal trade should depend far more on coastal shipping than is generally realized. In this very large continent our centres of population and of industry are widely dispersed around the coastal fringe of the continent. Sea transport should be the cheapest, the safest and the most efficient for most of our interstate trade, but it is not.

I have reminded honorable members before this of two examples of our failure to use coastal shipping - of the fact that motor bodies are carried by road from Adelaide to Sydney, to Newcastle and to Brisbane, whereas they could quite obviously be sent more cheaply and more easily by sea if cheap and efficient services existed, and of the still more striking fact that steel plates have been carried from Newcastle to Perth by road instead of by sea. What is the cause of this situation - the high freights, the high cost of sea transport, the slow turn-round of our ships, and the general delay which occurs from beginning to end of our shipping services? It is very easy to blame the shipowner for this state of affairs, and one constantly hears from the other side of the chamber complaints about the grasping shipowner who holds the country to ransom. I have no desire to defend the shipowners as a group or a class, but it is quite profitless for this committee to ignore the realities of the difficulties that they suffer and the basic causes of the position in which they find themselves. The shipping companies are not a closely organized group. They are individuals and are easy marks for picking off one by one by certain unions. That has occurred. The ships are of enormous capital value and the companies themselves stand to make heavy losses if their ships are held up and are not continuously employed. That fact has been exploited again and again by two Communist-led unions.


– Is the honorable member a solicitor for the shipping companies ?


– It is not surprising in those circumstances that the shipping companies have sometimes resorted to appeasement to get their ships moving. What are the results to them? They derive no advantage from the present state of the industry. Coastal companies have been retiring from the trade. The honorable member for Watson (Mr. Curtin), with his wellknown antipathy to the viewpoint I am putting forward, may recall the North Coast Steam Navigation Company Limited, a thriving company in the past, that not only paid good dividends to shareholders but also gave employment to many Australian seamen and stevedores - and carried goods for many Australian farmers. For many decades it gave useful, profitable* and satisfactory service to the benefit, not only of itself but also of the Australian people. The honorable member for Watson would do well to recall that the company recently gave up business. It went out of business because it was no longer able to carry on profitably.

Mr Brand:

– It was driven out of business.


– That is true. Is that the state of affairs that the honorable member for Watson wants to see perpetrated in Australia? If he does, no doubt he is wise to continue his present line of interjection. If not, he would do well to listen. The coastal companies, faced with increasing difficulties, have in many cases given up the struggle, realized capital investments and returned them to shareholders. Overseas companies find the trade attractive only at the expense of steadily rising freights. Overseas shipowners bring their ships to Australia looking for profitable trade. If they cease to find it, they will not continue to send their ships here. No doubt the honorable member for Watson would suggest that the trade be taken over by the Government.

Mr Curtin:

– Hear, hear !


– I am glad to hear the honorable member interject, “ Hear, hear ! “ It simply means that the honorable member believes the Australian Government should carry on, at the cost of the taxpayers, a service that private industry has found to be unprofitable. If that were done, another burden would be added to the Australian cost structure, another nail would be driven into the coffin of Australian industry and another burden placed on the Australian working people which would lower their standard of living. That would be the only and the inevitable result of such a course.

Mr Curtin:

– The honorable member is not sincere.


– Is the honorable member for Watson protesting that his interjection was not sincere? I would prefer to believe that.

The CHAIRMAN (Mr Adermann:

Order! If the honorable member for Watson does not cease interjecting, I shall have to take action. He has already spoken and he should permit the debate to continue without interruption.


– It is no use continuing to blame the shipowners. They enter the business hoping for profitable trade. If they cannot find it, they will retreat from the trade. In fact, overseas companies have not been fully replacing the ships they used to send here. In these conditions, there are two things that the Government can do. The Government does not control the Australian trade unions or the Australian or overseas shipowners. The sphere in which the Government can intervene in this state of affairs is limited. It can see that freight rates are fair, and it does this in the case of overseas shipping through the Australian Overseas Transport Association. That is an association, not of shipowners alone, but of shipowners, local and overseas, primary producers and Australian shippers. It was set up in 1929 by the Government at a time when the Government was threatened with heavy increase of shipping freights through a decline of the quantity of goods carried and an increase of costs. That body since has existed to negotiate contracts between Australian shippers and shipowners for the carriage of Australian goods. The first thing I suggest that the Government could do is to see that the Australian Overseas Transport Association operates successfully, so that it may see that the freight rates are reasonable and fair to all parties. The other thing that the Government can do is to see that conditions governing the control of the handling of cargoes in Australian ports are such that the industry can operate effectively and efficiently. It is plain that those conditions do not exist.

Mr Minogue:

-; - Why not carry out the recommendations of the Basten report?


– I hope that some of the recommendations of that report will be carried out. If the honorable member for West Sydney (Mr. Minogue) will bear with me, we may together reach that position. The best indicator of the efficiency of the handling of cargo at Australian ports is the turn-round of ships. The whole country was encouraged two years ago by the belief that the bottle-neck in Australian ports was at last being broken. The Australian Stevedoring Industry Board’s report at the end of 1952 referred to improved turnround, a reduction of congestion and fewer hold-ups during that year. It is now apparent to anybody who studies the situation that that apparent improvement was due to a reduction of overseas trade following the import restrictions of late 1951, and the situation now is again growing steadily worse. These are not mere generalizations. I shall support them with figures. In 1953, the average cargo handled per ship per day rose to 393 tons. The average time of trun-round of ships in Australian ports was 4.7 days. By the end of March, 1954, the cargo handled per day was 326 tons per ship and the average time of turn-round was 5.8 days. If any honorable member cares to work out, on a percentage basis, the effect of the increase in the time of turn-round and the decrease in the volume of cargo handled by each ship, he will discover the enormous cost that has been added to the Australian economy.

What are the causes ? There is nothing about the stevedoring industry that is plain or straightforward. It is an involved and complex industry and it is difficult to reach clear conclusions about it. If any honorable member wants to find out the facts to-day, he has at last a plain statement of the position by one group of people involved in the industry. I do not put it any higher than that. One organization that has felt the effect of continuous delays and disputes in Australian ports has made its position clear. That is the Australian Overseas Transport Association. I remind the committee again that this association was established in 1929 with Government approval and assistance. It consists of shipowners, primary producers and shippers. It is not solely or even predominantly a shipowners’ body. The association has recently produced a report, of which all honorable members have been given a copy, on the factors that influence stevedoring costs in Australia, and I suggest that it .merits the most careful examination. The figures given in it are drawn, in the main, from the figures of the Australian Stevedoring Industry Board.

Mr Keon:

– Why does the report not give details of the shipowners’ profits?


– The honorable member for Yarra (Mr. Keon) raises the customary clamour made by honorable members on the other side of the chamber about profits. Let us remember that profits are the criterion of efficient industry, and that without profits there will ‘be no industry. If Australian industries or overseas industries serving the Australian scene can make high profits, it indicates that they are working successfully and efficiently, provided the country is not being robbed. The Australian Overseas Transport Association was established in 3929 exactly for that purpose, to see that freight rates are fair to all concerned, and this document setting out the factors that influence stevedoring costs in Australia is a report of that body. That fact needs to be kept firmly in mind. The report begins with a comparison of labour costs in 1947 and 1954. The year 1947 is taken because that was the last year in which a similar report was made by this association. It is found that the waterside workers’ wages have risen by 153 per cent, in that period, which is not unreasonable compared to the general rise in wages.

Mr Keon:

– By how much have freights risen in that period?


– The cost of handling cargo has increased beyond the cost of waterside labour. If the honorable member for Yarra will listen to me for & moment, he will hear the facts. Employees’ wages have risen by 153 per cent., which appears to me not an unreasonable increase in the time, but the cost of stevedoring has risen far beyond the cost in labour alone. This is explainable, I believe, by the increased delays in the turn-round of ships and the handling of cargoes.

Mr Greenup:

– The shipowners still make their profits.


– I tried to point out before that the shipping companies come here in expectation of legitimate profits, and if the costs go on increasing they will be passed on to the Australian consumer and exporter. Therefore, the shipowner, the shipper, the primary producer, the worker and the taxpayer all have the same interest in making the industry efficient. That is a fact which honorable members opposite persistently fail, or appear to fail, to realise. That is why we should do well to put our minds together in common purpose for a while to consider the causes.

Going on through the consideration of wage costs, I find that waterside workers in Australia during the last year have averaged between 30 and 37.6 hours of work a week, and that the average weekly earnings have been from £17 to £20 15s. Again, judged by the standard of Australian wages, these earnings are not excessive, but nobody can say with justification that this is a sweated or a depressed industry. If we take the higher figure, the rate of £1,000 a year for an average working week of 37 hours is not to be considered evidence of sweating or underpayment. One would think that this should be an attractive industry, and that there was a strong inducement to people to enter it, hut aparently that is not so.

There is one other factor that appears from this report which I ask honorable members to consider. The cost of delay has been estimated at £800 a day for an overseas ship and £500 a day for an interstate ship. Every time a ship is delayed, all that cost is passed on to the Australian economy. “Who are the parties to this situation? First, there are the shipping companies and the stevedoring companies, which are generally associated on the Australian coast. It is customary for the Opposition to represent them as a small group of successful individual exploiters of the economy, but, in fact, there are a large number of companies. The capital of the Australian shipping companies is widely spread among Australian investors, so that it may be said that they represent the Australian investing public. The overseas shipping companies again are a large group of companies and their capital is widely spread among investors. I remind honorable members that in wartime, it is customary to refer in the most glowing terms to the British merchant service. At times like the present, it is apparently customary to hold it up to ridicule and abuse. I repeat that I am not here to defend the companies and plead their cause, but I ask the committee to remember one important matter. When the companies plead for an efficient state of affairs in which to work, their cause is Australia’s cause, because increases of costs and loss of efficiency to them mean increased costs to Australia, and another blow at our living standards.

The second party to this situation is the Waterside Workers’ Federation, a Communist-controlled and Communistled union. Mr. Healy, the federal secretary of that union, is a notorious Communist. He has an interest in disruption. He has an interest in the destruction of the Australian economy. When will it be realized by the people who consider the Australian industrial scene that the Communist leaders of unions in the few industries in which they still have control are not there to help the Australian worker? They are there to depress the industry and so to destroy the living standards of the worker, to make him unhappy and, therefore, to make him an easier prey to Communist propaganda. Two examples of Communist leaflets handed to waterside workers in Australia are given on pages eight and ten of that report. Time does not permit me to read them now, but they are most striking, and the conclusions which must be drawn from them are obvious.

The third party to this situation is the Australian Stevedoring Industry Board, which, I remind honorable members, was established as the Australian Stevedoring Industry Commission during “World War XI. to overcome wartime difficulties, and to get ships unloaded whatever the cost. The commission was given legislative backing in 1949 and set up as the Australian Stevedoring Industry Board. Unfortunately, the board which replaced the commission has not succeeded. The time taken to turn round ships is increasing, the number of delays is increasing, and cargo handled daily is decreasing. Anybody who examines the situation must realize that the board has failed. There is a continuous wrangle between the shipowners and the board as to who is responsible for this state of affairs. I have no deep knowledge of the situation. I have no understanding of the finer points of it. But one thing which is absolutely clear is that the board has failed to achieve the purposes for which it was established. That is the situation. It has been widely stated that the Government is considering at the present time amendments to the Act. Two courses are open to the Government. One is to abolish the board, and to hand over its functions to a judge and officers of the industrial arbitration court. That is the course I prefer. I do not believe in the efficacy or the validity of these separate corporations which are established as excrescences on the industrial system. In some cases, it may be found to be unavoidable, but in general it is desirable that industrial conditions should be controlled by the proper industrial machinery, which is the Commonwealth Arbitration Court. I believe that the cause of Australian industry will be better served if the board is abolished, and its functions are handed over to the Arbitration Court. If that should be found to be impossible, the board must, be reconstituted and considerably changed. It is necessary to restore the relationship of employer and employee between the stevedoring companies and the members of the Waterside Workers’

Federation. That was said by Mr. Bastin some four years ago. In my opinion, it is high time that effect was given to his recommendations.

The second thing that is needed to be done is to remove the crippling power to control labour of the Waterside Workers’ Federation. In this industry - the only one of which I am aware in Australia - the Waterside Workers’ Federation has a statutory right to restrict employment on the waterfront to members of the union. In other words, if a person is to be given employment as a stevedore on the Australian wharfs, he must first become a member of the Waterside Workers’ Federation. In most industries, the reverse applies. A man gets a job in the industry and is then required to join the union. That should be the case in this industry, because it has been proved that the Waterside Workers’ Federation, through its statutory right to restrict employment on the wharfs to members of the federation, has an absolute power to deny labour to the waterfront. In theory, the Australian Stevedoring Industry Board has power to order the federation to admit more members, but in practice that power has failed. So Mr. Healy and his fellow Communists who run the Waterside Workers’ Federation are able to control the quantity of labour available on the wharfs. That is a melancholy fact which should be altered.

The third thing that I think ought to be done if the board has to be preserved is that it should be removed from the status of a small allegedly independent and exclusive body. If the board has to be retained, it should be subjected to the direction and control of a judge of the Arbitration Court. The position, as I understand it, is that most of the wide industrial conditions which govern the industry - wages, standard hours and matters of that sort - are controlled by the Arbitration Court either by an award of the court or the decisions of a single judge appointed by the chief judge to deal with the stevedoring industry. But beneath that, there are certain particular aspects of industrial conditions, the size of gangs for all types of work, the size of sling loads and matters of that sort, which are not left to the judge and the arbitration system but are given to the Australian Stevedoring Industry Board. If the board has to be preserved, I think it could be brought within the industrial arbitration system much more closely if a general right of supervision were given to the judge. That is, I believe, one solution of this problem of bringing the Australian Stevedoring Industry Board into the general industrial arbitration system.

The other suggestion that I make is that the Australian Stevedoring Industry Board be integrated with the Australian Public Service as closely as can be done. I have given some consideration to this matter, but I have not sufficient time now to develop my argument. At present, the Australian Stevedoring Industry Board is a small exclusive body, removed from the industrial arbitration system and removed from public service control. I believe that neither of those things works in the interests of Australian industry. It is well known to me- at any rate from complaints from constituents and others that employment within the personnel of the board is in a most unhappy state. One man is against another. They are continually up against the higher management of the board. There is an atmosphere of suspicion and distrust throughout a large number of the 300 employees of the board. I believe that that state of affairs would be very much improved over a period of time if the personnel of the board were brought within the great stream of the Australian Public Service. It would obviously be necessary, to begin with, that the present personnel of the board should be employed as temporary civil servants or possibly given permanent civil service status where that was thought fit. In general, I believe that the board should be made subject to the control of the Public Service Board if it has to be continued. This is not advice which the Government will get from its departmental advisers. Let me say this quite plainly. No civil servant likes to lose any of his authority or power. No civil servant likes his influence curtailed. I do not think for a moment that the Government will get from its departmental advisers advice of the sort that I have been giving to-day. But I ask the Government most earnestly to give serious consideration to two courses. One is the abolition of the board. I do not suggest that there should be any reversion to the state of affairs that existed before the war, with casual employment and picking up at the gates. No sensible or thoughtful person desires to see a return to that state of affairs.

Mr Keon:

– That is what the honorable member is asking for.


– I am not asking for it. I am asking that the control of the supply of labour and the control of the conditions under which that labour works should be handed over to the Arbitration Court. If it is found that that cannot be done, and if it is found that the board must be retained, I ask that radical revision of its functions be carried out, that some means be found to restore the relationship of employer and employee, and that some means be found to resolve the present doubt as to where true disciplinary power lies, so that the situation in which the ship-owner blames the board, the board blames the ship-owner and neither of them gets anywhere can be ended once and for all. If the board has to be retained, the further suggestion I make is that the subjection of the board to ministerial control be ended and that it be put under the supervision of a judge of the arbitration court and its personnel under the Public Service Board.


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


.- Since this debate commenced, the committee has been forced to listen to a number of speeches by Government members directed, not to the budget, but to criticism of the Labour party, its policy and its members. We heard first the Minister for External Affairs (Mr. Casey), in his over-cultured voice, bemoaning the fact that the honorable member for Melbourne (Mr. Calwell), the Deputy Leader of the Opposition, had based his criticism of the budget upon the failure of the Government to grant an increase to age, invalid and other pensioners on the maximum pension rate. The Minister said that the budget debate was the time to discuss national problems, but not one minute of his own speech was spent on any of the important matters which he claimed should be mentioned. He was followed shortly afterwards by the new Minister for Social Services (Mr. McMahon), but as he had regressed from the more important portfolios of the Navy and Air, the committee did not expect to hear anything out of the ordinary from him. It was not disappointed. He followed the pattern set earlier in the debate and spent the greater portion of his time in talking about the supposed shortcomings of the Labour party. In view of the injustices that are being done under the act he is called upon to administer, one would have thought that he would at least inform the committee and Australia of the plans of his Government to remedy the despicable and unjust treatment suffered by the natives of Australia, the aborigines.

It is not my intention to continue my speech in this strain, because I, too, feel that we should take advantage of the opportunity offered by this debate to .suggest to the Government the need for more inspiring policies, which will demonstrate to the world at large that the Commonwealth Parliament has confidence in the people, the resources and the future of Australia. However, unlike honorable members on the Government benches, particularly the Minister for External Affairs and the Minister for Social Services, I do not believe in criticizing an individual or a party for failure to follow a certain course of action and then doing exactly the same thing. So I shall turn to matters of national importance.

I was extremely disappointed in the budget speech delivered by the Treasurer (Sir Arthur Fadden) on the 18th August. I was disappointed in it for many reasons, but chiefly because of its underlying note of pessimism. Although the Treasurer spent a great deal of his time on a sum. mary of the buoyant nature of the nation’s economy and the improvement that has occurred during the last twelve months, he kept a note of warning running through his speech. Instead of showing his and the Government’s confidence in the future of Australia, based on the improvements since 1951-52, and making a definite states ment that the Government would ensure that that would continue to be the case, he said–

Aa we turn to prospects for the coming year it is natural to ask whether we cannot do as well again, whether we cannot enjoy balanced and stable economic conditions and yet make, at least as great an advance in national development. Cannot these two great objectives of policy again be combined?

Later he said -

Good though recent times have been, there can be no mistaking the signs that stresses are again threatening to develop in our economy.

He also said -

Nor would I exclude altogether the possibility of changes in some directions during the year which may run counter to the present general trend towards expansion of demand.

In view of these statements, it seems pertinent to ask: Does the Government know where its policies will lead? Perhaps the most significant and alarming statement made by the Treasurer was -

Recent experience hae taught us that the immediate effect of large-scale immigration is to add at least as much to the demand for labour as it does to the supply of labour.

This quotation gives some indication of the warped thinking of the Government and brings to mind Professor Hytten and his 10 per cent, unemployment pool. Bearing in mind these extracts from the budget speech, it seems rather useless to offer to the present Government constructive and progressive ideas for the future development of Australia. But, taking hope from the knowledge that most progressive legislation has emanated from the ranks of the great Australian Labour party, I shall not be deterred, even if I have to wait for the return of a Labour government before witnessing the thoughts which I am about to enunciate being put into operation.

One of the major deficiencies of the budget is the failure to grant to the States an increased allowance for education. According to the report of the Harvard Committee entitled The Objectives of General Education in a Free Society, “ the supreme need of American education is for a unifying purpose and idea If such can be said of the American system, it is time we examined with a critical eye our own Australian system, which falls far short of it. This fact is perfectly obvious when we consider that only 20 per cent, of our children receive any schooling after the age of fifteen years, as compared with 75 per cent, in the United States of America. If we want a certain type of private citizen to emerge from our schools, we must demand a certain type of teacher, animated by sound ideals and adequately equipped to form that citizen. We must design s system which will enable the teachers to perform this noble function.

Our first duty, therefore, is to decide what kind of a citizen we want. I believe that the ideal citizen is one who is intelligent, independent and responsible, who renders unto Caesar the things that are Caesar’s and unto God the things that are God’s, who is responsible to and considerate of his fellow men, who will, without prejudice or bitterness, work with all men of goodwill for the national welfare, and who has been trained in the profession, trade or calling best suited to his ability. Education will enrich and develop his whole personality in one and the same process so that, in his daily life, his kindness to his fellow workers, his behaviour in. club, dance hall or sports ground, and his attitude to his neighbours,, will be an influence for light, and truth and the strengthening of the bonds of democracy. Such a man will stand up for freedom against tyrants of all kinds and tyrannical groups. But. is that the type of man we are trying to mould in our schools to-day ‘i Having decided the type of citizen wc want,, we; must provide our schools with the right type of teachers* - men and women, who will devote themselves to this superb vocation, which should be second to none in status in the community. To encourage the most able of our people to compete for the privilege of being admitted to this profession, which has been described as “the art of arts and the science, of sciences”, we must offer salaries and conditions of work which are attractive. We must train our teachers in ethical, and moral principles embodying the general attitude to life of our wisest thinkers so that they can pass them on to our children.

The next essential, if our education system is to produce the results expected, is the- provision of a variety of schools with a wide vocational training scheme, so that the pupils may receive the best possible advice and guidance in choosing suitable careers. Of course, it is of no avail to speak of these things while our schools: are overcrowded and under staffed. New schools must be built, and those already in existence must be enlarged and modernized. While we are engaged in building new schools, it would be well to bear in mind the need for local control, or, in other words, the administration of education by local boards in each natural region and large city. It seems to me that no good purpose is served by teaching in rural schools the same subjects as are taught in the cities. Most country pupils will be employed on the land, and their education should be directed towards instilling in them a love of the land rather than towards directing them into urban or industrial pursuits.

Finally, in regard to the choice of schools for children, it should be the right of every parent to choose the type of education he requires his children to have. In its Declaration of Human Rights, the United Nations specifically recognizes this fact. A parent should not be penalized if he wants his children to attend a certain type of school. It is true that this system of education will cost more money, but, if we are really concerned with the future of Australia and its citizens, we should be ready to pay the price. A country facing the onslaughts of communism, and hampered by a big proportion of unskilled workers, cannot afford to be miserly about its schools’. It, is time the Australian Government realized the need for a drastic overhaul of our present education system. As. one who feels deeply for the future of Australia, I urge the Government to consider calling a conference with the States to decide the changes and improvements necessary in our education system. Then, in co-operation with the States, it should provide the finance needed to carry the plan into effect.

Another matter which I should like to touch briefly upon to-day is the subject of housing. Whilst I recognize the excellent work performed by the State housing commissions, co-operative building societies, the War Service Homes Division and other bodies in building homes and providing the necessary finance, I cannot foresee the lag in house construction being overtaken for many years’ unless some further incentive is given to our financial institutions to increase the amount of money available for building purposes.

In order to test the feelings of the Government, I suggest that consideration be given to allowing income derived from houses built for renting to be tax free for a period of, say, five years. I know that such a plan has many pitfalls, and I do not maintain for one moment that I have fully considered it. I feel, however, that some of our large insurance companies, big businesses, and even individuals with capital to spare might well be interested in making finance available, under such conditions, for home-building purposes. In conjunction with any such scheme, it is essential to have an increased production and supply of building materials. This, too, can be accomplished by granting tax concessions, or by some other means of affording an incentive.

I now turn to our immigration policy. This land needs immigrants, and would-be immigrants need the opportunities that Australia offers to them. This is our chance, and their’s, for security. The present Government, however, is failing dismally with its immigration policy because of lack of foresight and imagination. The immigration target for this year has been increased by only 7,500 to 107,500, although the target for 1952 was 150,000. Our intake of immigrants last year was 80,000, but permanent departures reduced the net increase to 42,800. At this rate, it will be a long time before we are in a position to protect ourselves against aggression. Apart from the need for defence, we have a duty as a Christian nation to offer the surplus populations of Western Germany, Italy, Holland and other nations, which have too few resources and far too many people, a share in this under-developed country of ours. At this point, I emphasize that I deplore the attitude of supposed British statesmen to the suggested mass transfer to Australia of British people and certain industries.

During the debate on international affairs recently many honorable members contended that if the democracies are to prevent Asia from becoming Communistic, it is their duty to aid the underprivileged nations by sending them food, machines and equipment. I agree, wholeheartedly, with that contention. But how can we, with a population of only about 9,000,000 people, expect to play our part in such a scheme? We should be thinking, not in terms of hundreds or thousands, but of millions of immigrants, if we are to become a great nation in the Pacific. This Government, unless it is prepared to make a bold and forthright approach to immigration, will let Australia down. It is not yet too late for the Government to act on those lines. It should bring to Australia, as quickly as possible, the maximum number of immigrants.

Having made suggestions about national problems, I shall now mention a matter which has been exercising the minds of most members of the Opposition for a considerable time. I refer to the pegging of the basic wage and the pegging of margins for skill. The Government was quick to claim that those factors assisted to stabilize the economy. It is therefore interesting to read in the financial pages of the newspapers, week after week, balance-sheets and financial reports in relation to certain companies which are making exorbitant profits. As these appear to link wages, margins for skill, and profits, the first two of which have been pegged, the Government should transfer from the workers to the section of the community best able to bear the burden - big business - the responsibility for maintaining a stable economy, by pegging prices.


.-r-I listened with considerable interest to the remarks of the honorable member for Lang (Mr. Stewart). I should like to compliment him on his speech which was more like a speech on the budget than were many of the speeches of much older members of the Opposition. But he commenced by committing an offence, and then stating that he would not do so. It was a pity that he marred a good speech by indulging in a personal attack on the Minister for External Affairs (Mr. Casey). I do not think there can be any justification of a member of the committee reflecting on the enunciation of another honorable member, because a person’s voice may be affected by a physical disability. That is not only undesirable, but indecent of another honorable member.

I was very interested in the remarks of the honorable member for Lang about education. Apparently he overlooked the fact that he was speaking in the Australian Parliament and not in a State parliament. Had his comments been made in a State parliament they would undoubtedly have commanded very great respect. I remind the honorable member that, constitutionally, education is a perogative of the States, and that the Commonwealth has done all possible, within constitutional limits to assist them in that connexion. I should have no faith whatever in a convention between the Commonwealth and the States on educational matters. Apparently, the honorable . member does not realize that the States are jealously guarding their powers and prerogatives, and they would object most strenuously to Commonwealth interference with their responsibilities.

Mr Curtin:

– They would not refuse to accept a few million pounds.


– I cannot imagine the Premier of New South Wales or the Premier of any other State, agreeing to inform the Commonwealth of details of the expenditure of money made available by the Commonwealth. It is time that the States and other bodies ceased making requests for the Commonwealth to pay the piper without being able to call the tune.

Mr Peters:

– What about Western Australia ?


– My remarks include Western Australia. The Teachers Union, as well as various parents and citizens’ associations in the States have frequently contended that the Commonwealth should provide all the money necessary for educational purposes. But, quite wisely, the Commonwealth will not give any State a blank cheque. As the figures in the budget statements show, the Commonwealth is already making substantial contributions to education.


– That is an admission of responsibility.


– I inform the honorable member who has so ignorantly interjected, that those contributions are made within the limits of the constitutional power of the Commonwealth. The budget provides for the payment of £300,000 towards the cost of educating non-British immigrants. It is obvious, therefore, that the

Commonwealth has accepted responsibility for doing the very thing that the honorable member for Lang has suggested, in relation to raising the standard of education in this country. Provision has been made, also, for scholarships, at an estimated cost of £1,027,000, and grants for other specific purposes, including £350,000 for the education of the children of deceased and permanently incapacitated ex-servicemen. The Commonwealth expects to expend almost £2,000,000 in this financial year in the provision of educational facilities. That sum includes the very considerable amount of money that the Commonwealth pays to support the Australian National University, and the substantial amounts paid in grants to help in the upkeep of universities in the various States. .1 suggest that if the State governments considered education to be as important in the scheme of things as some honorable members and organizations that are crying for more money from the Commonwealth, seem to consider it to be, then the question of a shortage of funds for education would not exist, because the States would put the provision of finance for education on a higher priority. The problem of shortage of funds for education is a simple one for the States to overcome. If, however, education is a secondary consideration in the eyes of the State governments, and they choose to use for other purposes too large a proportion of the substantial revenue ‘ that they receive in Commonwealth grants and from State taxation, then they must realize that they cannot eat their cake and still have -it. Let us place in its proper perspective this constant cry to the Commonwealth for more financial help in a field that is entirely the responsibility of the States.

Mr Lucock:

– And which they have bungled for years.


– I agree with the honorable member for Lyne (Mr. Lucock). I suggest that if honorable members on both sides of the committee are as concerned as they appear to be about the improvement of educational standards and facilities throughout the Commonwealth they should devote their energies to advocacy in a field in which they might achieve something tangible, and that is in the States. It is so much waste of time for them to he driving at a source that cannot give any help, while, in the meantime, the problem that they want to overcome is becoming aggravated. I remind the honorable member for Lang (Mr. Stewart), whose electorate is in New South Wales- .

Mr Greenup:

– It is a good State, too.


– Yes, in somebody’s opinion. Let me remind the honorable member that the New South Wales Minister for Education, who has recently returned from a trip overseas, has, according to reports, lauded the education system and educational standards of New South Wales to the skies. So much so, that there appears to be no room for improvement or need for further financial help in that direction. Not only has the honorable member for Lang addressed his remarks in the wrong place to the wrong quarters, but he also appears to have done so at the wrong time.

Honorable members opposite appear to have lost sight of the purpose of the budget. There are two fundamentals requisite to a budget. First, a budget is a report to the nation not only of the activities of the government, but also of the economic condition of the country in the previous twelve months. The budget reviews these activities, and the economic position, as facts, and not as a matter of opinion. It is not a document which says that the Government thinks that this or that happened last year. It collates the actual, factual events of the year, and submits them, in the form of a report to this Parliament, for the information of honorable members and the nation at large. The Government also indicates its intentions, which are based on the events and the facts described in the budget. Both of those points have been completely overlooked by honorable members opposite during this debate. No honorable member opposite has challenged the truth of the statements contained in the Treasurer’s budget speech about the remarkable progress and prosperity that this country has enjoyed in the last four years. They cannot challenge those facts, because they are not truly challengeable. Moreover, none of them has questioned the stated policy of the Go vernment for the next twelve months. All they have done is to query whether the Government should or should not increase certain benefits to the community. The peculiar position that has made itself manifest during this debate is that members of the Labour party, who are supposed to be the opponents of big business, are fighting a battle for tax. concessions for big business.

Opposition members interjecting,


– I have merely stated a fact. The honorable members who have interjected should study the speeches of their own leaders, in which the Government is condemned because the tax concessions provided for in the budget are spread so that the average wage-earner and the average householder will get the benefit of them, and so that the greatest good will be done for the greatest number.


– That is all hooey.


– It is not. It is a fact. We have been condemned by honorable members opposite on the ground that we have failed to provide big business with an incentive by giving huge companies the benefit of a large depreciation allowance, and by reducing taxes on company profits. That is the only argument that honorable members opposite have advanced against the budget. They have ignored completely the two fundamentals that I have mentioned. None of them has suggested that the Government’s reading of the future outlook for the economy is based on wrong premises. Not one of them has suggested that, in face of the international situation which has been reported to this Parliament, the Government is neglecting to take the necessary steps to prepare our defences.

Mr Turnbull:

– Yes, the honorable member for Watson has done so.


– Well, the honorable member for Watson (Mr. Curtin) is utterly and completely irresponsible. No honorable member opposite has suggested that, because of the uncertainty of international markets, the Government should spend large sums in anticipation of a huge export income in the coming year. None of them has suggested that we should throw overboard our defence programme. In fact, none o£ them has made any concrete suggestion about the budget, and none of them has challenged it.. They have not indicated in what direction the Government should reduce the budget’s, impact on the taxpayers by reducing expenditure. These are matters that might have engaged their attention. A. dissection of the estimated revenue and’ expenditure in the budget shows how expenditure is divided among various activities. It is estimated that out of every £1 collected in taxes, defence services will take 3s. lid.; war and repatriation services, 2s. 4d. ; social services, 3s. lOd. ; payments to the States, 3s. lid.; business undertakings, ls. 8d. ; capital works, 2s. Id’. ; bounties and subsidies, 5d. ; territories, 3d’. ; and other items, including administration, ls. 7d. Not one member of the Opposition, whose task if is to criticize where possible the Government’s expenditure, has suggested in what , way those proportions should be altered. All they do is. claim that the Government should increase; expenditure By/ increasing pensions, hut. they do not indicate how that is to be. done’. But where is> that, money to come from? Should, expenditure on. administrative items, be reduced from ls. 7d. to. ls. 6d., in tha £1 and the remaining penny in-, the; pound spent in another way? Is it suggested that the Government should reduce the, payments to the; States in order to, make, some other expenditure possible? The Opposition has not made, a, concrete, proposal. Until, the budget, is. examined in a constructive manner by the. Opposition its presentation to. this: chamber will not accomplish the purpose for which, it is intended..

Opposition members interjecting;,


– Order ! The honorable member for Dalley, the honorable member for- “Watson and. the honorable member for Burke have been intersecting continuously. They all have spoken and have had an opportunity to state their views; I expect them to concede that right to others. If they do not do so, I shall deal with them.,


– The Opposition has ignored the- fact that this budget achieves something unusual. The- Government gave certain undertakings prior to- the Fast general’ election. The whole of the promises that the Government’ made tothe electors at that time have been fulfilled in this budget. That is. a. remarkable accomplishment for any government It is a tribute to the Government and the. Prime- Minister and those who were; associated with him in- preparing his policy speech, that they saw clearly the actual economic conditions which existedin Australia. The result of the general! election is a wonderful tribute to the people of Australia.. They had an opportunity of being bought but they rejected the idea that their vote, which is oneof the most valuable privileges that they have, should be bought, and sold on the auction room floor of a general election.. There was nothing- picturesque or spec.tacular; or even attractive, about the Government’s election promises but the voting public of Australia, with sound common sense, voted in the right way. In. view of the alternative policies that were placed before the electors, I believe that the result of the election will enhancethe reputation of the- Australian people in the eyes of the world.

I should like the Opposition in criticizing the budget, to refer to the activities of the departments. Since the establishment of this Parliament, a steady in crease has taken place each year in theexpenditure of the departments.

Mr Greenup:

– - The cost of living hasincreased, too.


– The cost of living hasno relationship whatever to this matter. There appears to be a belief that the basis upon, which we should judge an efficient administration should be its capacity tospend more money every year. I consider that the. test of efficient and effective administration is whether it gives, an. effective and an efficient service with. a< minimum of cost.

Sitting suspended from to> 2.15 p.m.,


– Before- the suspension of the sitting I was referring to the fact that the expenditure of ever-increasing amount’s of money appeared to be a criterion of” efficient and effective, administration by Commonwealth departments. Of coursethat is- a completely erroneous conception. In a country like Australia, which- is rapidly expanding, capital services must of course take an increasing amount of the money available for expenditure, but that does not connote that the ordinary administrative expenses of Commonwealth departments should be continually increasing. In fact, those departments should continue to become more efficient, and their costs of administration should accordingly be reduced. Because of growing experience and continual study, departments should be able to operate more and more economically.

There will be more time later for honorable members to discuss the Estimates, and then I hope that the Minister in charge of each department will be present to explain the items in the Estimates that affect his particular department. I have referred to this matter on several occasions in the past, and I believe that it is vitally necessary that Ministers should be here to reply to questions asked by honorable members about their departmental expenditure. Indeed, I should expect the Opposition to take great interest in a debate of that sort, instead of indulging in party political haranging across the chamber. The budget provides for an expenditure of £50,000,000 more than was expended last financial year. Of that sum £10,000,000 will be expended on capital works and services, and £40,000,000 on increased administration expenses in various departments. Honorable members require to know the reason why that large sum of money should be expended in the coming financial year, and exactly where the money is to be spent. In departments and services other than business undertakings and Commonwealth territories, we find that the salary and pay estimates are £48,000,000, or £483,834, less than last year. That is very satisfactory, but it should be pointed out that under the heading of other votes’, there is an increase of more than £8,000,000. That increase must be explained. Moreover, under the heading of miscellaneous services, there is an increase of more than £6,000,000. That vote includes salary and pay votes, and it may well be that some of the costs under the salaries and pay votes which should have been put under that heading, may have been put under the miscellaneous services heading to make that one section look a little better in the document. Those are some of the points that need to be explained by the Ministers, department by department.

Mr Daly:

– That is right.


– I am glad to hear one honorable member of the Opposition agree with me, because when a Labour government was in office most honorable members opposite did not have the intelligence or the interest to advance a similar viewpoint. After all, government is finance. The basic purpose of this Parliament is to safeguard the interests of the taxpayer. Notable increases under the heading of miscellaneous services is an increase of almost £2,000,000 in the prospective expenditure of the Department of External Affairs. I suggest that honorable members are entitled to knowwhy the Government is budgeting for an increase of that nature in that department. The Department of Shipping and Transport, which cannot claim to come under the heading of capital works and services, has also indicated that its expenditure will be greater. Will its estimated expenditure include a substantial loss suffered on Commonwealth shipping services? I am sure that honorable members opposite will not be much interested to investigate that matter too far, in case the Government should find arguments for taking some action to remove the constant burden on the taxpayer involved in maintaining Commonwealth shipping services which run at a substantial loss. Therefore, I hope that we shall see each Minister present while honorable members are discussing the Estimates of his particular department. I hope that the Opposition will take advantage of the presence of the various Ministers and deal relevantly with the items that will be brought up for discussion, instead of turning the debate into a party political discussion.

The Government has every reason to be proud of having presented this budget to the people. As my colleague, the honorable member for Wide Bay (Mr. Brand) said, the budget is a great achievement, and the policy of the Government

I aa indicated in its budget must be com- I mended. It would be easy for us to say that we are now living in happy and prosperous times; that everything is lovely, and that we are happy to go on in the same way regardless of the wind blowing up outside Australia which plainly indicates that we must be cautious. It is possible that in the coming months, because of uncertainty about overseas markets, the Government may have to come, temporarily, to the assistance of some primary producers - at any rate until they are able to dispose profitably of their surplus products overseas. We cannot expect primary producers to go into debt in order to maintain production, while the goods which represent cash for carrying on their normal operations are frozen because of the uncertain state of overseas markets.

Therefore, the Government may have to make demands on the Treasury for finance which are not envisaged at present. That is why caution should be exercised. Moreover, our international relationships are not happy, as no one can deny. In that field the Government may find that it will be forced into commitments far greater than the most pessimistic person could foresee at the present time.


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

Mr. W. M. BOURKE (Fawkner; [2.23]. - This debate on the budget gives honorable members their annual opportunity to discuss the general economic prospects of our country. There is no doubt that Australia is to-day enjoying general prosperity, but there are some dark and ominous clouds on the horizon. I fear that we shall need not only a certain amount of luck, but also some very firm action if those clouds are to be dispersed so that they will not develop into real storm clouds and have an adverse effect on our economy. At present we have an expanding economy. Our population is growing, and we have great industrial activity with a high level of employment. Our rural industries are prosperous, despite the fact that there are grave doubts now about overseas markets for some of their products. Developmental projects are proceeding, and although costs have reached Himalayan heights, some measure of stability has been achieved at those heights. In spite of those general signs of real prosperity in the community, there are strains, stresses and certain unhealthy trends apparent, which, if not arrested, will lead this country into serious trouble.

The first matter that must cause us alarm and concern is the fact that the conditions which prevailed in 1951, when inflation was at its peak, are reappearing. There are signs, not in such a marked degree at present, that those conditions which caused tremendous trouble in our economy in 1951 are re-appearing. There is a strain on the resources of the country again. For instance, our resources of skilled labour are not able to cope with all the calls upon them. We find, again, that the basic industries are short of men to carry on work which is so vital for our future, and we also find that this shortage of skilled men, together with shortages of basic materials, has caused on upthrust of prices. There is, therefore, a tendency which, unless it is checked, will certainly bring about higher costs and prices which we are in no position .to meet.

A very good illustration of the drift towards conditions of inflation is to be seen in the building industry, which is the barometer industry in this country. Last year, the building industry functioned with great efficiency. People were able to have houses built reasonably quickly, and prices were reasonably stable. In addition, it was possible to have houses erected on the basis of firm contracts. Those conditions do not prevail at the moment. During the first six months of this year, the number of dwellings completed in the community fell sharply. At the same time, the number of houses which had been commenced rose sharply. We can see, in those two developments which have taken place at the same time, a tendency to return to the disastrous conditions which prevailed in 1951. There are not enough skilled tradesmen in the building industry to carry out all the work that is offering. There are serious shortages of basic materials, such as galvanized iron and tiles. In many instances, builders have to wait up to eighteen months for deliveriesof ‘bricks. The result is that many building jobs are being commenced, but they are not being completed in a reasonable time. That, in turn, causes prices to increase. The inevitable result of that state of affairs will be that credit restrictions will come into force again. Already, warnings have been issued by some of the trading banks. Tie Bank of New South Wales, in its current review of economic conditions, made a categoricalstatement that, in view of conditions which have been developing in the building industry, it will be necessary to imposerestrictions on the amount of credit available for potential home builders. That is -another indication of the fact that weare tending to emulate those baddays,of unhappy memory, that prevailed in 1951.

Thesecondcircumstance which is cloudingthe economic horizon of this country isthe fact that therealtive stability which hasbeen achievedrecently has left our economy with a very high cost structure. As a result,Australian industries are experiencingconsiderabledifficulty in competing with industries in other countries.heconverse sideof the picture is that Australian industries which rely on export markets, arefindingthat they arenotable to compete onoverseas markets. Because of the high cost structure in Australia, oureconomy is being adverselyaffected in two ways. The productsof our internal industries cannot compete with goods imported f rom othercountries, whilst our exporting industries areunable to sell their products onoverseas markets. That set ofcircumstances gives rise toveryserious problems for the future of thisCountry.We have to face now the wholequestion of our trade policy, including ourattitude towards the General Agreementon Tariffsand Trade, the Ottawa Agreement,and trade with Japan. Those are all matters which call for very firm action by the Government. If the trends to which I have referred are not arrested, thefuture of our economy will be very bad and the outlook will be grim indeed.

The third set of circumstanceswhich is causing considerable concern in this country is the fact that our overseas reservesare imperilled because im ports are building upwhileourexport trade is declining. When we look at the reserves that have been added toour overseas funds in recent years, we find that there has been violent fluctuation.Four years ago, during the year of the wool boom, we built up big reserves.At that time we had a largesurplus ofexports over imports. In the. followingyear, there was a flood of imports, and we conducted our external trade at a severe loss. Imports considerably exceeded exports. During the next year, the position was reversed again.In the financial year just concluded we saw evidence of those two tendencies which, if not checked, betoken serious trouble for the future. Imports, on the one hand,steadily grew last year,whilst exports declined. Although the decline was not considerable, nevertheless there was asteady downward tendency. The result was that, at the conclusion of last year’s trading, Australiahadan appreciable trade balance ‘in its favour. However, when the invisible items, such asfreight and insurance were taken away from that f avorable balance, there wasnot very much of asurplus left. During the current year - and this is a matterwhich calls for strong action by the Government - those developments have continued. Imports are still tending to mount and exports to fall. Ifthose tendencies develop -and, at the moment, all theindications are that they will do so -Itseems clear that, at the end of the currentyear, Australia will have : a deficit in its overseas trading balance. that is a veryserious state of affairs, in view of the disastrous consequences which flowed from a similarstateof affairs in recent memory.

Our overseas trade balanceat the end of the lastfinancial yearwas approximately £570,000,000. Unless ‘the trends to which Ihaveref erred are checked, that reserve willbe gradually whittled away.I thinkweshould makeup our mindsto ensurethat the overseastrade reserve, whichhasbeen accumulated as the result of bountiful seasons andgood prices for our primary products, is retainedas a measure of insurance against fa rainy day, in case things do not go well f or us, or in case some of the tendencies thatI have mentioneddevelopin an adverse direction. We should not diminish those reserves at a time such as the present, when relatively boom trading conditions exist. We should not allow those reserves to be whittled away, as they will be if the Government does not take very firm and definite action to check the drift. Admittedly, it is only a drift at the moment, but if it is not checked, it will gather momentum and we shall find that our vital trade reserves have dwindled away to nothing.

In addition to those problems, as the result of recent developments we shall have to expend more money on defence commitments. Looking ahead, and facing up to this problem in a responsible way, we must say that, because of recent developments in South-East Asia and other areas which are very close to Australia, we have an urgent duty to press on as rapidly as possible, within the limits of our man-power and resources, with the development of this country. We also have an urgent duty to increase our population by promoting the flow of immigrants, so that more people will be brought into the country. By that means, we and our children will have a better chance to hold Australia in the future. Of course, all of those activities are inflationary in themselves, and if we undertake them we shall have serious and continually mounting financial and economic problems in the future.

With those facts in mind, and regarding them as the background to the future development of the country, I propose to look at one or two aspects of the budget, with particular reference to our system of social services benefits. The budget provides, this year, for an estimated revenue of £1,050,100,000 and an estimated expenditure of £1,014,849,000. I think we can be sure that, unless there is some drastic and unforeseen development, the state of affairs in which both revenue and expenditure exceed £1,000,000,000 a year has come to stay. It seems improbable that there will be any drastic or sharp decline in any important item of expenditure. As we look ahead for a few years, it seems that our annual expenditure will not drop below the figure I have quoted, but will tend to get higher. On the revenue side, the only prospect that people have of receiving further benefits from any government, in the form of either lower taxes or increased social services benefits, is in raising the national income. If national production is increased, there will be a greater yield of revenue from the current rates of taxation, and that surplus can be handed back to the people in the form of either lower taxes or greater social services payments.

I repeat that there seems to be very little prospect of further substantial reductions in taxation within the next few years. I suggest that any further tax concessions will be of only a gradual nature, and that they will be based almost entirely upon increased national production. If we wish to have substantial increases of social services benefits, it is clear that those increases can be paid only if taxation is substantially increased. If the people are to be content with gradual increases of social services benefits, or perhaps with gradual Extensions of those benefits to new fields, these can be provided from a steadily rising national income. But if the people say, “ We want greatly increased benefits “, they are entitled to those benefits, provided they know that they must pay substantially increased taxation to finance them.

I refer now to the means test, which is a topical subject of discussion amongst the people of Australia. We have established a system of social services benefits of which we have every reason to be justifiably proud. In the event of emergencies, old age, sickness, or unemployment, payments are made to tide people over those emergency conditions. We have age and invalid pensions, both of which are very necessary and desirable, and widows’ pensions. In my opinion, widows’ pensions form one of the most important aspects of our social services benefits. I think that the payment of widows’ pensions causes more happiness - or, should I say, avoids more unhappiness - among those who receive them than does any other social services payment. The only comment I wish to make in relation to the payment of widows’ pensions is that it sometimes does seem to be a little harsh that eligibility for’ that benefit is based entirely upon the marital condition. There are elderly spinsters who have reached the age of 50 years and who have found themselves, for various reasons, unable to earn a livelihood. It does seem to be harsh and unfair, and even a form of discrimination that it is impossible to justify, that pensions should be paid to widows of over 50 years of age, in certain circumstances, but not to spinsters who are placed in exactly similar circumstances. I think that aspect of our social services legislation should be reviewed. There seems to be a clear need for some extension of that benefit.

Generally speaking, social services benefits have been calculated on the basis of need. Because of inflationary conditions in recent years, people who have made provision for their old age have found that that provision has become inadequate, and the application of the means test has caused injustices. The means test has caused anomalies, and there anomalies and injustices should be rectified.


– Do not tell me that you are eating the leek?


– I did not hear the interjection. I repeat that the means test has caused injustices and anomalies, which should be rectified. Some people have suggested that, in order to rectify those anomalies, the means test should be abolished in one fell swoop. I wish to submit to the committee reasons why I think that course is not desirable. I do not think it is necessary or desirable, or even practicable, under present conditions. If we were to abolish the means test and pay a pension to every person in the community who reached a certain age, the first and most obvious effect would be that people who were dependent solely upon the pension would be penalized. If we were to pay a pension to every person over a certain age, we would have a very large bill to meet. However, that i.= not the point I am attempting to make. According to the figures I have arrived at, if we were to abolish the means test on age pensions, and if we were to reach the the stage where, as a result of increases of the cost of living, it became necessary to increase the pension by 10s. a week so that people who had no other income might live with a reasonable standard of decency, it would cost £25,000,000 per annum. More than 900,000 pensioners would receive that increase. Would not the reaction of any Treasurer be that many people would not urgently need that increase, but that those people who had no other income would urgently need it and would need more than 10s.? Those people who had other income of, say, £20 a week, who owned their own homes, and who had other property, would not need the increase. If we were to do justice to those people who were on the lower rung of the ladder and who had no income other than their pension, the logical sten would be to reintroduce the means test. That has been done in England. In that country everybody receives a. pension under the National Insurance Act, but, so that justice may be done to those people who have no income other than the pension and who are in need, a supplementary pension is paid. I suggest that that is the fatal flaw in the argument of those people who suggest the abolition of the means test, because, if it were abolished and if the Government wished to continue to do justice to those people who had no other income, it would have to reintroduce the means test as a basis for future increases. While I am dealing with that subject, I should like to mention briefly that the most urgent need of people who have nothing else but the pension is in the sphere of housing. Those who do not own a home have to pay rental for either a house or a room. Persons to whom I refer principally are elderly ladies, widows or spinsters, who rent rooms. The most effective help that can be provided for those people would be in the form of housing in order to enable them to obtain decent and proper accommodation at a nominal rental, say, 5s. a week. If time permitted, I should develop that point.

Persons in receipt of the base rate of pension with no other income are the first class of people against whose interests the abolition of the means test would react. The second class of persons against whom such a step would react is the middle income group of earners who know that if the means test were completely abolished they would be obliged to pay increased taxation. On the basis of the present rate of pension of £3 10s. a week, it is estimated that the cost of abolishing the means test for the age pension would be £100,000,000 a year. If the people desire that the means test be abolished, they must be prepared to pay that additional cost, and the only way that cost could be met would be by increasing taxation either in the form of an increase of direct taxes or by introducing a contributory scheme which, in fact, would involve taxation in another form. Those in the middle income group know that such a scheme would be against their interests’ because they would have to foot the bill in the form of increased taxes.

I have in mind, particularly, the young man with a family who is on a low wage, such as the young man who works on the railways or tramways and receives a wage of £15, or £16, a week. On that income he has to feed, clothe and educate his family. In existing circumstances, , the complete abolition of the means test would not be in the interest of a person of that type because, if an additional £100,000,000 a year was expended in order to effect its abolition, his chances in the foreseeable future of obtaining more liberal social services benefits would disappear. Young family men of the type to whom I refer, in addition to rearing and educating their children, are paying off homes and, generally, are battling. They are feeling the pinch. They should receive greater assistance under our social services legislation. In order to benefit them, child endowment, for instance, should be increased. I suggest also that payments of interest in the purchase of a home should be allowed as a deduction for income tax purposes. Perhaps, further assistance could be provided in the form of a subsidy to lower interest rates. Those benefits would involve additional expenditure from the National Welfare Fund, but if an additional £100,000,000 were to be expended for the purpose of abolishing the means test, they could not be made available to persons who are entitled to benefits of that kind.

Taking the matter a step further, if the age pension is made payable to all persons upon reaching the requisite age, regardless of their means and regardless of whether they be millionaires or in poor circumstances, what shall be done about the income tax concessions that now apply to pensioners ? An important element in our taxation legislation is that persons over pensionable age are exempt from income tax to the amount of the pension plus permissible income. That is an important concession. But, if the means test were abolished not only would that concession have to go, but the pension also would have to be taxable. I cannot see how that could bc avoided. But if the pension is to be taxable only when it is paid to those on higher levels of income and not when the recipients are in the lower ranges of income, we should have to reimpose a means test in order to get a dividing line and decide that those below the line would receive this important concession whilst those above the line would not receive it. That important matter would have to be worked out. However, such a position indicates that if the present means test were abolished, a means test in another form would have to be reintroduced.

I believe that we have already gone far in liberalizing the means test as far as a permissible income is concerned. But scope still exists for further amelioration of the means test in respect of property, and such amelioration should be effected as the state of the national economy permits. On this point, I direct the attention of the committee to the important provision in the social services legislation that was introduced in 1951 under which discretion is given to the DirectorGeneral of Social Services to disregard certain forms of property in the application of the means test. We have a duty to make that fact widely known among the people. The press could do a service to the community in helping to make this concession more widely known. In the case of a pensioner not being able to obtain possession of his or her home, the Director-General of Social Services is given a discretion to disregard the value of that property in applying the means test. That is an important concession which obviates grave injustice. The attention of charitable organizations should be directed to the fact that if persons, who possess money, or other assets, and are thereby disqualified under the means test from receiving a pension, transform those assets into income by purchasing annuities, they can thereby exclude themselves from the operation of the means test in respect of property and thus qualify to receive an age pension. If that particular scheme were more widely known and the attention of charitable organizations were directed to it, many elderely people, who have assets and money, would transform those assets into income in the way that I have indicated.


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


.- I should like to comment upon only two of the points that were made by the honorable member for Fawkner (Mr. W. M. Bourke). He said that notwithstanding, the stability of our economy at present, there were dark and ominous clouds. He dealt specifically with our overseas balances and pointed to what might appear to be a drift in relation to them; and he concluded by saying that it was the Government’s responsibility to arrest, that drift. The attitude of members of the Australian Labour party and of many people in the community that all ills must be solved by governmental action reflects a most extraordinary psychology. In matters of this kind the responsibility is not that of the Government only. Every individual and every section of the community has a responsibility. I do not believe thai, members of the Opposition, who supposedly represent the workers are, themselves, absolved from responsibility in this respect. However, although the honorable member said that it was the Government’s responsibility he did not go further and indicate the steps that the Government might take in relation to that problem. Any one who offers such a comment should also suggest a solution.

The other comment that I wish to make about the honorable member’s remarks relates to his statement that we can enjoy increased social services only if we pay for them in heavier taxation. We all remember that the policy speech of the Australian Labour party in the recent general election campaign contained a promise to abolish the means test, and there was a good deal of confusion in the ranks of the party because the honorable member, on the hustings, disagreed with his leader in this matter and made the same point that he mentioned this afternoon. I am pleased to know that the honorable member has stuck to his guns and that he retains his independence of outlook. He is one of the Opposition members who has the ability to think, in contrast with the vast majority of honorable members opposite, who can only conceive catch-cries for vote-catching purposes at election time. The honorable member referred also to the problems of high costs. Since I propose to make a few observations on that matter at a later stage, I shall leave until then any comment on the honorable member’s remarks in relation to high costs.

The Minister for External Affairs (Mr. Casey), on Wednesday of last week, made a very pertinent point when he said that the budget is the most important document that is presented to the Parliament and that the debate initiated by it should be the most important in the deliberations of the Parliament. The budget speech of the Treasurer (Sir Arthur Fadden) and the documents presented in conjunction with it - the statement of national income and expenditure, the budget papers, and the Estimates - make one realize that a tremendous fund of information and data is placed in the hands of honorable members. It is to be regretted that many members of this chamber take little interest in any of those documents and turn the debate into a discussion that has no particular significance in relation to the documents that are placed before the committee. The data and information contained in those documents give honorable members a unique opportunity to study the condition of the country, as it is revealed by the figures relative to the financial year that has just, closed, to compare and study the estimated departmental expenditures and the expected income for the ensuing financial year, and, at the same time, and this is tremendously valuable*. to> assess, the likely/ economic trends’ in the current financial, year;

If cannot be1 expected that all’ honorable members, after1 having studied1 the information, will come to the same conclusions, but they should at least be able to avoid misinterpretations’ that cause’ a good deal’ of concern in the- mind’s of their constituents. If is only to be expected that different conclusions might be based on the informa’tion that is presented to honorable- members, but the idea that any honorable member should set himself out to misrepresent the facts, or the conclusions’ to be arrived at from them, is to be seriously deprecated. Much of the information in1 the budget documents is correlated, and it is. dangerous to take some’ of it in complete isolation from the- remainder.

It is; a government’s responsibility, in the first place, to take note of the wide variety of information, in the budget documents and. to set a national economic course.. The Treasurer, in his budget speech, gave the committee a. very clear outline of the Government’s interpretation of the economic situation for the next twelve months. It is the responsibility of each individual member of this chamber to make a separate personal analysis of the available information and to offer his comments,. I do not for a moment suggest that those comments should be always commendatory or always critical. Honorable members are entitled to form their own opinions.

I have now given the committee the background to my remarks in this debate. First, I want to point out, not only to honorable members, but also to others in the community, that this budget is brought down at a time of national prosperity in Australia. The national income increased, by £177,000,000, to £3,776,000,000, between the 30th June, 1953, and the 30th June last. The last financial year was not a period of inflation. Consequently, we are entitled to say that national prosperity appears to exist. Many people do not completely understand the items that are taken into consideration in assessing the national income. How is the national income arrived- at?; Though members; of the Parliament have the opportunity clearly to ascertain its composition, many other persona do not have the opportunity to become-, familiar with it. The items of income that comprise tha national income are the wages and salaries of the community, company income, the. income, of unincorporated businesses- and professions, rents, and interest, and the surplus from public authority business undertakings. Each of these income groups- has shown a substantial’ increase in the last twelve months. This is another clear indication that Australia is prosperous: The only sign of a reduction is in the’ estimate of farm income, which shows a reduction of £47,000,000 to £549,000,0W.

I should, like to mention three items of expenditure, that are included in the national- expenditure.. The- total of the stocks of business houses and farm- stocks increased, by £207,000,000 in. 1953-54. On. the face of it that appears to be a very substantial increase, but if we take into consideration the fact that because of import restrictions in- the previous financial year there bad been a reduction of no less a sum than £520,000,000 in this item:, we can perhaps get the matter into its proper perspective and arrive at a sound appreciation of the significance of the increase of £207,000,000 in the last financial year. The1 second item of national expenditure to which I wish to refer is, private investment in fixed capital equipment. Though we have heard a good deal of criticism about the inability of businesses and individuals to obtain capital for expansion, this item reached no less a sum than £700,000,000 last financial year, or £43,000,000 more than in the previous financial year. The third item of national expenditure that I shall mention is personal consumption, which has increased by £241,000,000 to £2,793,000,000. I summarize my observations on this point by saying that the national income and the national savings in relation to these fixed assets have shown substantial improvement during the last financial year. This confirms my expressed conviction that, national prosperity exists in Australia.

At this point I want to mention a statement in relation to personal consumption that was made yesterday by the honorable member for Melbourne Ports (Mr. Crean). The honorable member said that the increase in this item was the result of higher prices. I can understand most Opposition members making a statement like that, but I cannot understand the honorable member for Melbourne Ports, with his training and intellect, falling into the trap into which he tumbled. In my opinion, the increase of the personal consumption item is due to three causes. About two years ago there was a temporary business recession. Some increase of unemployment followed and naturally the people concerned did not have the same opportunities to spend money, but there was also a fear complex in the minds of others who were in employment, and it produced in them timidity towards spending. So a considerable reduction of consumption resulted at that period but when conditions improved and the temporary recession started to move away, those people who found new employment had money to spend, those who had not lost their jobs but had become timid in spending, regained confidence, and they also had additional money to spend. I believe that that was the first contribution to the increase of personal consumption spending.

A second point that should be constantly remembered has relation to the Government’s policy in connexion with taxation in the 1952-1953 and 1953-1954 budgets. In those two years sub.stantial reductions of taxation were granted and gave the people increased spending power. I believe that much of that additional money was expended and that it forms pari of this item. The third contribution was that mentioned by the honorable member for Melbourne Ports. That was some increase of prices. I could proceed at considerable length producing facts that indicate national prosperity in Australia. I direct the attention of honorable members to the increase of bank deposits. In the case of cheque-paying banks, deposits increased by £74,000,000 in a year. The increase of deposits in savings banks was £63,000,000 in a year. The honorable member for Oxley (Dr. Donald Cameron) recently referred to motor car registrations. In twelve months, registrations of motor cars, excluding commercial vehicles, increased from 7,900 a month to 11,550 a month. In the case of commercial vehicles, registrations rose from 4,900 a month to 5,200 a month. In twelve months, 100,000 additional registrations of motor vehicles of one kind or another were recorded.

All the matters to which I have referred are evidence that the Australian economy is prosperous, but I have tried to emphasize that this is an Australian economic prosperity. Considerable dangers are associated with the future of the economy. Probably the greatest is the problem of increasing costs, which was mentioned by the honorable member for Fawkner. Farm incomes have been lower during the current year because of increasing costs added to the effect of less favorable seasonal conditions. In secondary industries, costs have continued to rise and in Australia we are finding increasing difficulty in meeting overseas competition. We have costed ourselves out of a competitive market.

Mr Greenup:

– Thanks to the Government.


– The honorable member may have a different idea if he listens to the remainder of my remarks carefully. I believe that in Australia we should become a little introspective economically, if I may use the term. We should look for the basic reasons for the higher costs, for if we understand the reasons we shall be in a position to do something towards providing a remedy: In that connexion there are several matters to which I wish to refer because they are contributory factors. Wages are a major factor in production costs and, indeed, in any costs within the community. When we talk in terms of prime costs, we talk in terms of wages and materials. That i.? important because when we talk of materials, we also talk partly in terms of wages. It is impossible to provide iron ore for steel furnaces without the expenditure of wages for the production of the ore. We cannot talk in terms of coal for powerhouses without referring to the necessity to spend a considerable sum in wages for the production of the coal. If we follow the production of goods through to a conclusion, we find that the prime cost and the direct and indirect expenses of manufacture include a substantial element of wages. If wages are high, costs must be high. Add to those costs a percentage for the profit of the manufacturer, a further percentage for the profit of the distributor and another. for the profit of the retailer, and it is obvious that a wages component of £15 a week at the point of original payment can become something considerably in excess of £20 a week by the time the goods reach the consumer. Honorable members on the Opposition side should take note of those facts. I am certain that they cannot disprove my statements.

I do not deny that good wages should be paid for work that is well or fully performed, but some other elements must be considered. In the first place, a 40-hour week is not being worked in Australia. We may speak in terms of a 40-hour week and of how desirable it is and I believe that we can get through on a 40-hour week, but as the honorable member for Evans (Mr. Osborne) has said, we cannot get through with a 30-hour week and that is all that we are getting from some of the men who work on the wharfs. Over a period of six months, the weekly hours worked by waterside workers would probably range from 30 to 38 hours. The sooner we get to grips with this problem the sooner we shall find a solution. I suggest that we should think in terms of penalty rates only after a minimum week has been worked. I am thinking in particular of the waterside workers in that connexion. It is common . knowledge that if a man works on Sunday on the waterfront, he is paid double rates, and that he can then refrain from working on Monday and not lose anything. We should not provide penalty rates until men have worked a full minimum of hours in a particular week. Otherwise, we cannot reduce costs as we should like to do.

I wish to offer now some comment with regard to the Commonwealth Court of Conciliation and Arbitration and its decisions. I do not criticize in any way the members of the court, but an examination of the arbitration system in Queens land is the most interesting. Persons who work under the awards of the Queensland Industrial Court get it coming and going. If the cost of living rises, the court says that wages should rise. If the cost of living falls, the court says that wages should not be altered. If we believe in any principle at all in relation to the fixation of wages, we must recognize that wages should be reduced when the cost of living falls, and be increased when the cost of living rises.

I also believe that we should study the problem of wage fixation in the Commonwealth jurisdiction, because the basis on which awards are made is the ability of industry to pay. I should like to discuss that matter for a few moments, because I regard it as of tremendous importance. We all accept the fact that an inflationary spiral comes about from increases of wages followed by increases cif prices, followed by increases of wages and so on, but it seems to me that we also have to face the situation that an inflationary spiral can be caused by increased wages and increased tariffs. We in Australia have adopted the system of protection of Australian industry by means of tariffs, and I entirely agree with it. But if the tariff enables an industry to become profitable, does that fact become justification for the Commonwealth Arbitration Court to say that industry has ability to pay higher wages, and, accordingly, increase wages? It seems to me that we can adopt a different attitude. Let us suppose that protection is given to an industry in the first place, and that wages and tariffs are then reduced. The community itself will be satisfied with a reasonable wage, and business will be able to make a reasonable profit. Earlier, I made the point that wages may be £15 a week basically, but are £20 a week in the hands of the consumer. Obviously, in those circumstances, a reduction in costs initially must result in an increased saving for the consumer.

There is a problem in relation to distribution costs, and State instrumentalities must accept some responsibility in that respect. In my opinion, a good deal of inefficiency occurs in State railway systems. When a parcel can be sent by air freight as cheaply as by rail in a few hours compared ‘with a few days, it is time the State railway authorities started to look into the management of their instrumentalities. Because they are inefficient, they produce extra taxation for road transport, and, therefore, costs are considerably increased. The people of Queensland also, suffer from shipping difficulties. I feel, having observed the happenings on the waterfront, that we shall have to come to the stage of considering whether the Waterside Workers Federation should be deregistered by the Commonwealth Arbitration Court. It is not a question of an interstate dispute. I believe that the only way in which we shall get rid of Communist control in the Waterside Workers Federation is by deregistering the union, and re-registering it with the moderate section of waterside employees in control.

I should not like my contribution to this’ debate ‘to cease before I make two final points very briefly. The first is that there is a good deal of inefficiency in management at the present time. If management were to increase its efficiency, costs could be reduced. Some men, perhaps, live too long in a particular business. Their ideas become static, and they are not prepared to introduce new ideas and systems which enable a speeding up of processes that will bring about lower costs. A majority of businesses which have engaged efficiency experts find that it has been considerably to their benefit.

The other point which I should like to make is that governments also have a responsibility in relation to the cost problem. I do not say, as the honorable member for Fawkner has said, that it is the full responsibility of the Government. I consider that all sections have a greater responsibility, and the Government must accept a responsibility to keep its expenditure to the absolute minimum, and should reduce taxation when it is able to do so. Let us not play round with the idea that the taxes paid by companies are not included in the price of goods delivered by the companies to the consumers. In point of fact, it is the consumer who pays the taxation for which a company is assessed by the Government. So, I believe that we, as a government, have a responsibility in our management of affairs to reduce inefficiency as far as we are able, and to return to the taxpayers all that we possibly can in an endeavour, together with the efforts of other sections of the community, to bring about a reduction in costs. This cost problem cannot be solved unless it is tackled by all sections of the community. As I have said before, it is not a matter purely for a government. It is not something which should be put entirely upon the workers or any other section of the community. If we all pull our weight, we can succeed. A responsibility devolves upon the Opposition to call upon members of the trade union movement to work a full 40-hour week. When all is said and done, 80 per cent, of the people are working people or come within the category of working people. If costs continue to rise, it is that 80 per cent, who are the sufferers. If costs are reduced, it is still the same 80 per cent, who get the benefit. I believe that if some of the matters “which I have raised are noted-


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


..- This budget is one of a sequence that members of the Labour party have had to face .since 1949. Invariably, Government supporters have praised those budgets. I was disappointed when the honorable member for Petrie (Mr. Hulme) took advantage of the Communist-controlled Waterside Workers Federation to imply that members of the Australian Labour party were sponsors of such an organization as the Communists. . Had it not been for the Australian Labour party, the Communist element in this country would be a much greater force to-day than it is. It is the Australian Labour movement which recognized the effect of the Communist element on the prestige of Australia in the early days of its history. I remember that when I was an organizer for the Australian Workers Union the captains of industry, the pastoralists and the mining magnates of this country gave preference to Communists, because in those days the Communist policy was not to join trade unions but to cause disruption in them. In my time, I have often seen an employer engage a Communist without a union ticket in preference to a member of the great Australian Workers Onion-. That was how the Communists first gained a. foothold in this country. That was how they got their power. Those honorable members opposite who charge the Labour party with fostering Communism in this country should bear those facts in mind.

Now I want to deal with, something of a constructive nature. I was very interested in the speech delivered by the honorable member for Darling. Downs (Mr. Swartz) during the debate in the Address-in-Reply. He appeared to be a new recruit to the body of people who want to develop the Northern Territory, the north of Queensland and the north of. Western Australia. He made a very interesting and sincere speech, and I felt that he meant all he said, but as I listened to him I wondered how much effect his words would have on the Government which he supports. For many years, I have advocated the development of our northern areas. They are a national inheritage, and their development is the responsibility of the National Parliament. Such development is beyond the resources of State governments. Sooner, or later, the National Parliament will be forced to recognize that it is responsible for the development of these parts of Australia.

I have no fantastic ideas about the potential wealth of the north of Western Australia, but I know the area has great possibilities, and I am confident it could support a substantial population. If dams were built on the Ord River and the Fitzroy River, the fertile river valleys could be brought into full production. I have told the Parliament previously that Mr. Dumas, an eminent engineer in Western Australia, estimated in 1947 that if the Ord River were dammed, the capacity of the storage area would be 1,250,000 acre feet greater than that provided by the Hume Dam. I say to the Parliament and the Australian people that the sooner we develop the north of this country, the better it will be, perhaps not for us, but for those who will come after us. We have a responsibility to our children and to their children. As members of this Parliament, we have the destiny of the country in our hands. We should accept our responsibility and get on with the job of developing Australia. I remind the

Government that we have an immigration policy. Why cannot we establish settlements of immigrants on the Ord River and the Fitzroy River and so help to develop our north? It is reasonable to say that if we do not take advantage of the possibilities of our country, we shall have very little to complain about if other races try to do so.

Our northern areas are not without possibilities for the production of gold, base metals and minerals. In 1949, this Government promised that continuous assistance would be given to the gold-mining industry, but although we are now in the year 1954, that promise, like so many other promises made by. the Prime Minister (Mr. Menzies), is still unfulfilled. What does the Government intend to do to assist the gold-mining industry? I believe that any scheme to assist the industry that did not provide for assistance to be given to small gold producers and to prospectors would be very unwelcome. Deposits of base metals in the north of Western Australia offer great opportunities, but unfortunately the Western Australian Government is hampered by a lack of finance. It is unable to provide the facilities’ necessary to develop the deposits- of base metals and minerals that are known to exist in the Marble Bar district’ the Pilbarra district and other districts. If a port were established and means of transport to and from the port were provided, industries in these areas would expand and attract population. In that way, ‘we should develop isolated areas about which so many people talk but for which so little is- done. Any one who is conversant, with the problems involved in developing the north’ of this country realizes1 that the most important requirement is a deep water- port in the northwest. After a survey had been made, a deep-water port at Derby was suggested. During the last Parliament, I asked the Prime Minister whether this Government would co-operate with the Western Australian Government to provide the finance necessary to establish such a port. The Prime Minister replied that the responsibility was that of the Western Australian Government. I say that if we adopt the attitude in this Parliament that the development of our northern areas is the responsibility of State governments, those areas will not be developed, because the State governments have not the necessary resources. The attitude adopted by the Prime Minister to the suggested deep-water port at Derby was consistent with his attitude to the development, not only of the north of Australia, but also of outback areas in other parts of the country.

We were told, when this Government came into office, that decentralization was one of its major policies. It undertook to attract people from the congested areas of the big cities to the outback so that our unsettled areas would be developed as the original pioneers of Australia set out to develop them. What attempt has the Government made to honour that undertaking? What policy has it enunciated that offers encouragement, even to people already in the outback let alone those who live in the closely settled areas, to press on with the development of northern Australia? In 1945, I brought before this Parliament the proposal to grant zone allowances for taxation purposes as a means of compensating people who live in the far outback for the difficulties and hardships that they experience. An allowance of £40 was granted to taxpayers in an area specified as zone A, and an allowance of £20 to those in another area specified as zone B. According to my recollection, zone A extends north beyond the 22nd parallel of latitude, and zone B extends from the 28th parallel to the 22nd parallel. That concession gave some encouragement to people in the north. In 1947, the allowance for taxpayers in zone A was raised from £40 to £120 a year. The zone B allowance remained at £20. When the allowances were introduced in 1945, the basic wage was £4 16s. a week. When the zone A allowance was adjusted, the basic wage was £5 6s. a week. To-day the basic wage is £11 16s., or more than twice as much as it was in 1947, yet the allowances remain at the 1947 level. That simply means that this Government, since it came to office in 1949, has utterly ignored the welfare of the people living in those areas.

The facts that I have stated must demonstrate to people in the outback, if they need any further demonstration, that the Government is interested only in the big manufacturers, the bankers and others who live in the congested cities.. Unfortunately, there are not enough voters in the areas I have mentioned to influence the Government. That is why it is not concerned about their welfare. I notice that the VicePresident of the Executive Council (Sir Eric Harrison) is studying a document at the table. Perhaps he is reading the balancesheet of General Motors-Holden’s Limited. I hope that he will withdraw his attention from it long enough to heed my earnest appeal on behalf of the people of our far north-west. The Government’s neglect to increase the zone allowances probably means little to most Australians, but it is of great importance to the people directly concerned, who are trying to develop those vast outback areas about which the Minister knows nothing. Unfortunately, not many members of the present Government have any first-hand knowledge of conditions in north-western Australia. I will fight for the people in that part of the continent to the utmost of my ability. There are not many votes to be won there, and therefore it must be clear to honorable members that I am not fighting selfishly for political support. I fight for them because they are stout-hearted men and women who are doing a great job for Australia. They ask this Government to give them as much help as it can. The roads and other transport facilities in the north are in a disgraceful condition. I make no excuse for the Western Australian Government other than to point out that, under the uniform taxation system, that Government gets only what the Australian Loan Council chooses to dole out to it.


– That is plain nonsense. The honorable member is spoiling an otherwise good speech. As he was a Minister in the previous Labour Government, he should know that the Western Australian Government is represented on the Australian Loan Council and receives its correct apportionment of loan moneys.


– The Vice-President of the Executive Council has not made an intelligent interjection. He knows that, at the last meeting of the Australian Loan Council, the Premier of Western Australia made out a good case for an increased allocation of loan moneys to that State.


– The honorable member should know the difference between a conference of Commonwealth and State Ministers and an Australian Loan Council meeting.


– I wish that the Minister would not try to draw a red herring across the trail. I am referring, not to the conference of Commonwealth and State Ministers, but to the Australian Loan Council. Although the Premier of Western Australia submitted a good case to justify an increased allocation of money for the development of the northwest of Western Australia, his submission received only a poor reception by the Australian Loan Council. If the Western Australian Government were given more money to improve transport facilities in that State, the development of the north could proceed more rapidly. I urge the Government to improve landing grounds for aircraft in Western Australia. An aeroplane cannot land at Marble Bar in the north, Norseman in the south, or at Wittenoom Gorge in wet weather. If the landing grounds at those places were sealed, the development of the north would be facilitated. I have made repeated requests to the Minister for Civil Aviation (Mr. Anthony) to carry out that work. I regret that he is not present in the chamber to hear my remarks. Mining is a precarious industry. When mining accidents occur during wet weather, urgently needed aircraft are unable to land on the present strips. The Government should do something about this matter.

The position in relation to the development of the northern part of Western Australia is so desperate that the Western Australian Government has appointed an all-party committee to come to Canberra to try to persuade the Australian Government to co-operate in a developmental plan. I am disappointed that the responsible Ministers are not present in the chamber to hear my remarks about these matters. Frequently, they do not even bother to read the reports of speeches made during their absence. However earnest an honorable member may be, his remarks in this chamber seldom have any effect on the Government. I emphasize that Ministers should be present in the chamber to hear, at first hand, comments in relation to matters under their control.

I shall now direct my attention to the defence of the north and north-western parts of Western Australia. No one knows of any plan for the defence of the north. The Minister for Defence (Sir Philip McBride) should be present to hear what I have to say. This budget’ is of great concern to the people of the north. The need for a defence plan has been discussed “ on many occasions in this chamber, not only by the honorable member for Melbourne (Mr. Calwell), but also by other members of the Opposition. For God’s sake, do not let us have a recurrence of the state of affairs in 1940, when the Japanese bombed Broome, Wyndham, and Darwin. When the Curtin Government came to office it took steps urgently to establish aerodromes in the north, in order to facilitate the defence of that area. But since that Government relinquished office not one additional aerodrome has been established there. After the bombing of Broome I visited that area with the honorable member for Maribyrnong (Mr. Drakeford), who was Minister for Air in the previous Labour Government. The people had appealed to him for help, after American aircraft which had landed there at night could not take off next morning and were bombed to smitherines by the Japanese. We must prevent any possibility of a recurrence of that state of affairs, by providing proper landing grounds in the north. As the VicePresident of the Executive Council is the only Minister present in the chamber, I appeal to him to direct the attention of the Minister for Civil Aviation (Mr. Townley) to this matter, with a view to the necessary aerodromes and landingstrips being provided as soon as possible, in order to give the people of the north adequate protection. As far as I know, the Minister for Defence has not gone into the matter. The only facilities of this kind that exist in the north are the aerodromes that were established by the Curtin Government after the Japanese had attacked this country. Surely to goodness the people of -the north are entitled to protection. There is considerable activity in that area at present in ‘connexion with the oil industry. Does the Government intend that the oil companies shall provide for their own defence?

I come now to the Postmaster-General’s Department. .Despite this Government’s supposed policy of decentralization many postal and telephonic facilities that existed in the back .country north of Kalgoorlie when it came to office have been dispensed with. As a result, Mount .Ida, where 400 people are employed, has to rely on the pedal wireless. At times, when urgent medical attention is needed, many hours elapse before they can make contact with other centres. This is a disgraceful state of affairs. I have made repeated representations to- the Postmaster-General (Mr. Anthony) about this matter, without success.

In 1947, the then Postmaster-General promised to provide a new post office at Geraldton. It has not yet been established, and the Postmaster-General told me yesterday, in reply to a question, that he was not responsible for honouring a promise made, by his predecessor. I point out that the previous Postmaster-General would not have promised to provide a new post office at Geraldton if it was not warranted. Geraldton is .the most progressive centre in Western Australia, outside of the metropolitan areas. It has developed rapidly during the ‘last ten years. Money has been provided by -the Western Australian Government to establish modern facilities and amenities in the town, in .keeping ‘with its increasing population, but the old, obsolete post ‘office in Marine-terrace still remains. It was probably the first building to be erected in Geraldton. I hope that the VicePresident of the Executive Council will direct the attention of the PostmasterGeneral to my remarks, and urge him to provide an up-to-date post office at Geraldton as soon as possible.

I shall conclude by commenting on the proposal to extend the Kalgoorlie electorate, which embraces an area of 900,000 square miles. It is the largest electorate in the world, and includes 22

State electorates. A few of these members, including a “.Johnnycomelately’” - a political accident - contend that federal members -do not get around the electorate as much as they should <do. ‘The Kalgoorlie -electorate extends from Esperance in the south to Wyndham in the north, and as far east as .the South Australian border. It would be wrong to extend the electorate, because it is .already physically impossible for its .representative in this .Parliament to give to all sections of it his necessary personal attention. I point out that an obligation devolves on .that honorable member to visit his constituents as often as possible, in order to keep in touch with their problems,, so that he can represent them adequately in this Parliament. Before the Government decides to extend the area of the electorate I should be glad of the -opportunity to state my views fully on the matter, and direct attention to the inadequate transport facilities in the electorate.

Bradfield j

.- 1 am .sure that all honorable members have the utmost sympathy with the honorable member for Kalgoorlie (Mr. Johnson)., if he has to contend with 22 State members. I also appreciate his attitude towards a number of the matters to which he has directed attention. The honorable member spoke, in particular, about the development of the .northern part of Western Australia, principally the Kimberleys, and the defence of the north. I .am sure that all honorable members should like to see the objectives that he mentioned attained, but he was scarcely justified in placing the full responsibility for the present state of affairs on the Australian Government. The honorable member should know that the Australian Loan Council allocates loan money for developmental work. It is true, of course, that under the uniform system of taxation, the ordinary administration of the States is paid for out of tax reimbursement grants, but he is concerned with loan moneys for development. He knows, or ought to know, that loan money is the province of the Australian Loan Council, on which the Western Australian Government has a vote, in common with every other State.’ He also knows that the amount of loan money that can be allocated by the Australian Loan Council depends on the amount of savings that the community is prepared to lend and, on some occasions, on the supplementation of that amount by treasury-bills issued by the Commonwealth. Even the honorable member would hardly suggest that this is a time when credit should be expanded, and when loan money should be supplemented beyond the amount that the market can afford. Therefore, although we are all in favour of the development of the north of Western Australia, we all agree that the responsibiltiy for it lies entirely with the Western Australian Government. If that Government chooses to allocate its available funds to uses other than development, that is a matter for the people of that State.

It is strange that honorable members opposite have always adopted the view that we should defend Australia within our own boundaries, and should not send our forces overseas to defend us in other parts of the world. I do not think that any honorable member who has seen the impact of war on civilians in other countries would wish to see anything of the sort in this country. I think they would prefer that Australia should be defended north of the Kimberleys. In any event, the location of aerodromes is a technical matter, and I do not propose to pursue it now, since this is a debate on the budget, and there is not sufficient time for me to deal with all the matters I should like to discuss. I do not propose to spend much time in commending this very excellent budget; not because it does not deserve commendation, or because there is not much that can be said along those lines, but because other honorable members have already spoken at considerable length on its merits, and I have not time to traverse ground that has already been so adequately covered. It is, pf course, a very sound budget, . and has been well received by the .country and all those who are .competent to make authoritative comment on such matters.

There is, however, one small matter in connexion with social services that I should like to deal with before passing ,on , 4.0 broader issues. The means test ‘has been , the subject pf considerable discussion. One particular problem caused by the application of the means test has been brought to my notice. That is the problem that faces companies that wish to institute superannuation schemes, and are prepared to contribute perhaps 50 per cent, of the cost of those schemes, the remainder to be provided by the employees themselves. The companies find, for instance, that where the superannuation payment involved is to be £7 a week, they are merely preventingtheir employees from qualifying for the age pension ; whereas, if an employee took out an annuity to yield him say, £3 10s. a week, he would still be entitled to the age pension when he reached the eligible age, I hope that I have made it clear tq the committee that a company in these circumstances hesitates to enter into such a scheme. Quite clearly, in present circumstances, any contribution it made towards the superannuation of its employees would merely relieve the Commonwealth of the need to pay a like amount, without giving any benefit to the employee. I direct attention to that matter in the hope that the Minister for Social Services (Mr. McMahon) will consider whether or not some exemption might be made so that the means test would not apply to such cases in future. It is, of course, too late for any such provision to be included in the legislation consequent upon this year’s budget, because the legislation has, no doubt, been already prepared.

I turn now to the objectives that lie ahead of us in economic and financial fields. Obviously, developments in South-East Asia require that the Government should attach greater importance to defence expenditure than has been necessary in the past. The budget makes such provision. The Government has available this year, for defence needs, £35,000,000 more than it had last year. This is not an occasion on which I should go into the question of how that money can best be expended. I wish merely to direct attention to the fact that, because there is a paramount need to ‘ improve our defences, the budget makes the maximum financial provision for such improvement.

Other problems that confront us are the high level pf costs with which Australian industry is faced, and the run-down condition of our overseas reserves. It is true that the Government deserves every credit for achieving economic stability. However, that stability has been achieved when costs are high, and when our primary industries find great difficulty in selling their products on the world’s markets in competition with those produced more cheaply in other countries. Finally there is the problem of development, with which I link immigration. Those, then, are the tasks that confront the Government: increased defence preparations, our high level of costs, the run-down condition of our overseas reserves, and development. Development involves bringing in increasing numbers of immigrants. Some concern has been expressed about our future economic prospects, and not without reason. It may be that at this moment we are enjoying a high degree of prosperity and stability, but there are clouds on the horizon. It is of no use to pretend that there are not. The minds of honorable members on both sides of the chamber should be bent on solving the real problems that lie ahead of us. It appears to me that the Government, so far as it can do so, and other instrumentalities such as the Commonwealth Arbitration Court and the State governments, must take steps to reduce the level of costs. Unless production costs are reduced we shall find ourselves on the edge of the precipice. That precipice is further devaluation of the Australian £1. When our reserves overseas are shrinking and our exporting industries are not able, because of high costs, to compete in the world’s markets with other exporting countries, we are on a road that leads straight to devaluation, unless we reduce costs. Those are the plain alternatives that we face. I believe that devaluation of our currency would be a major disaster. It has happened once already, and it set in motion all the forces that brought us to the chaos of a few years ago. We do not want that to happen again. We should, therefore, not allow ourselves to drift to economic disaster.


– Does the honorable member think we should put a ceiling on profits ?


– I have various suggestions to make. Obviously the Govern ment has taken a large step toward reduction of costs by lightening the load of taxation, because taxes constitute one of the burdens that industry has to carry. By reducing taxes the Government has moved, in some degree, towards a reduction of the costs of industry. Of course, the Government must also do everything it can to increase efficiency. The honorable member for Petrie (Mr. Hulme) has made reference to that matter. The Government’s trade and tariff policy has some relevancy to increased efficiency. Are we going to push tariffs higher and higher? If we do, we shall merely encourage inefficiency in industry, and as our costs rise they will become a greater burden on our exporting industries. Therefore, a mere increase of tariffs is not of itself the solution of the problem. If tariffs are not pushed up too high, competition from overseas industries with our local industries will induce local industry to become more efficient. The Government by its budgetary policy, and its restraint in relation to expenditure, is preventing the forces of inflation from gaining ground. The monetary policy of the Government can affect the situation. But when the Government has done all in its power, the main burden falls on the Commonwealth Arbitration Court. This is a most extraordinary body. Although it is called a court, it is really a legislature. A court merely interprets, in particular cases, principles of law that have been laid down, mainly by Parliament. But that is not what the Commonwealth Arbitration Court does. In effect, it makes laws itself. It is a legislative body and not a court in the ordinary meaning of the word. The court has thought fit, in recent years, to increase wages substantially, to the point that it considered industry could bear those increases, and it has reduced hours of work. As a result, Australia is in a poor competitive position in relation to the rest of the world. The people of Australia work 37i hours a week if we deduct the time that is allowed off for meals and smokos. The people of the United States of America work 41f hours a week. In Germany 48 to 52 hours a week are worked, and from 42 to 48 hours a week are worked in the United Kingdom.. Consequently, the short working week in

Australia is a heavy burden for our industries to bear.

The States also have a part to play. Among the heaviest burdens that lie on industry are the high costs of transportation and power, and the inefficient housing schemes that have been carried out by the State governments. All these burdens are loaded onto industry. Australia is in a poor competitive position in relation to transport. In a country of great distances, such as this, transport costs must enter more largely into the costs of production than they do in smaller countries. So there is every need for our transport system to be more efficient than transport systems in other parts of the world. But the position is the reverse, and the responsibility for that state of affairs lies on the shoulders of the State governments.

Finally, the attitude of the people of Australia including the leaders of the trade unions and the leaders of the Labour party to these problems is important. If those people play politics with these vital problems they cannot complain if the result should be chaos and disaster. They are responsible people who occupy an important place in the community, but they have failed to play their part in reducing the costs of production. How are we to carry the tremendous load that has been placed upon us? If Australia were a highly developed country industrially, such as the United States of America, it might be able to carry these burdens. In a book entitled Energy for a Greater Australia, Harold Rabling makes the following statement : -

The per capita consumption of fuel is an index of a nation’s standard of living1. The United States, which is generally admitted to have the greatest industrial output and the highest standard of living uses … an average of 240,000,000 B.T.U.’s, or the equivalent of 84 tons of coal per head. Canada, which has made great strides in expanding her industries in recent years, is a close second, with 210,000,000 British Thermal Units per capita . . . Australia takes its place about the middle of the scale with an average consumption per head of 90,000,000 B.T.U.’s, or the equivalent of three tons of coal for each man, woman and child every year.

In other words, the United States of America uses in energy the equivalent of 8J tons of coal a head of population each year whilst Australia uses only three. That is a measure of the industrial power that is available to the American worker and to the Australian worker. Obviously, we have not the superior industrial power to enable us to carry the burden to which I have referred. Have we such vast resources that we can afford to carry this burden with equanimity? Australian resources are very much below those of the United States of America and many other countries.

Insofar as it affects the capital equipment of industry, I believe that the budget does not do enough. It is true that the Treasurer (Sir Arthur Fadden) has proposed to appoint a committee under the chairmanship of the honorable member for Petrie (Mr. Hulme) in order to go into the whole question of an appropriate depreciation allowance for industry. The Treasurer spoke about the problem of capital erosion and. the problem of stimulating investment in new plant. However, there seeing to be some confusion in his approach to this problem. The Treasurer said that the proposals of the Government of the United Kingdom in this regard were not applicable to this country because they would place those companies which had already installed plant at a disadvantage compared with those which had not yet installed new plant and which would be able to take advantage of the more generous depreciation allowances. Then the Treasurer referred to the existing provisions of the law in Australia. I have not time to go into the details of this matter, but I do say that our industries have not the equipment that they need. We should learn from the United Kingdom in this matter. Because the industries of the United Kingdom have paid heavy taxation over a great number of years, their equipment became so obsolete that, since the war, they have had to struggle hard in order to maintain their position in the trading world. Australian industries have followed a similar course, and I am sure that it is just as essential in this country as it is in the United Kingdom to give our workers the most efficient tools possible. Therefore, generous depreciation allowances should be made, and I hope that the committee under the chairmanship of the honorable member for Petrie will be given terms of reference that will enable it to make the most generous recommendation in that regard.

The best answers to the Treasurer’s argument are these. First, that the United Kingdom has, in fact, done what the Treasurer seems to regard as impossible. Secondly, the concession has been extended to Australian rural producers, who have been permitted a 20 per cent, depreciation allowance on plant, fences, sheds and machinery. Consequently, within five years, they can write off a capital debt although the asset may last fifty years. I am not complaining about that. But if it was necessary to stimulate rural production, as I believe it was, and if that was found to be a good way of stimulating it, then it is an equally good way of providing the incentive that secondary industries require to compete under conditions of high cost. No doubt the Opposition will raise many objections to this proposal. They might say that it is a proposal to fatten up a lot of wealthy companies. I have not sufficient time to discuss the prejudices that Opposition members have expressed from time to time. Quite obviously, the more that industry can provide employment, and the greater the productivity of industry, the more goods there are to be shared by the community. Also, those who profit in this life must eventually hand over a large part o£ their wealth in death duties to the State. The alternative to a system of private- enterprise is socialism. Honorable gentlemen opposite constantly object, to private enterprise. If they contend that we should abolish the system of private enterprise and establish socialism, well and good. But there is no evidence that socialism has produced any better results. One has only to look at the New South Wales Government Railways to see the results of socialism.

Mr Calwell:

– The honorable member washes himself with socialized water every morning.


– Apparently the honorable member for Melbourne (Mr. Calwell) does not. I now pass on to the. needs of our time - development and immigration. Australia to-day is starved of population, and is facing a new danger from South-East Asia. Therefore, we must develop the country more quickly than ever before. I desire to direct attention to only one aspect of the problem of how to develop the country speedily. That is the necessity for capital. It was estimated a few years ago, I think by Professor Copland, that for each immigrant we need a capital expenditure of about £1,800 or £2,000. That is because he has to be housed, provided with hospital facilities, schooling and other social Services, as well as roads, transport, &c. In addition, he has to be provided with a corner of a factory or farm, or whatever place he might work in. At any rate, Professor Copland estimated the amount of capital required by this country in respect of each immigrant to be about £2,000. Others who have carried out a more careful survey of this matter, in more recent times,, have reached the conclusion that it costs about £3,000 in respect of each immigrant for equipment and other capital necessities.

If we have 100,000 immigrants in a year, we shall have to provide £300,000,000 of capital for them. Now the Australian Loan Council agreed a few days ago that governmental borrowing, for all public purposes, should not exceed £200,000,000 for the coming financial year. I do not have to prove in detail that we need far more capital than we can get by ordinary means, because I believe that that fact is self-apparent. During the past few years, there has been tremendous inflation in this country, because we have tried to develop the country too fast, have spent too much on capital equipment and have used up our reserves. If we are to have the capital necessary for development and for the large number of immigrants who are so necessary to us, we shall have to go overseas for it, as well as use every means of stimulating saving in this country. There is only one source from which we can get capital abroad. The United Kingdom is not in a position to help us very much, but the United States of America is. We cannot float ordinary loans on the United States market for a variety, of reasons. For example, insurance companies, which might be the largest contributors, are forbidden to invest their money outside the United States. Big private investors prefer to invest in American state and local government loans, because the income from those loans is free from taxation. The small investor in the United States of America can get from 7 per cent, to 10 per cent, on gilt-edged industrial stock, and so he is not very much attracted to our loans.

There has been a considerable amount of investment in Australia by American industrialists, and there could be more. However, there is no question about it that the American industrialist has looked for the elimination of double taxation, and that has been done by this Government during the last year. The industrialist also looks for mobility for his capital. He wants to be able to get it out of a country when he so desires, and that reason may have some force in some fields of investment m some countries. But, above all, he looks at the political climate of the country in which he proposes to invest his money. If the political climate is hostile to private enterprise, he will not invest his money. ‘ Therefore, the matter is put right up to the Labour party in this country. If it seeks development, and that growth without which Australia cannot survive, it should realize that this country must be made attractive to investment from outside - particularly from the United States of America., If Australia is to revert to a socialist system, then it is quite clear that we shall develop only through, the reserves that we have in our own country, which are so limited that development would be very slow indeed. I suggest that we are not likely to survive as a nation if we develop as slowly as that.

Now, there is an International Bank, for Reconstruction and Development, and I suggest that, up to the present, we have not to any great extent tapped the reserves of that institution. We have had some loans from the bank, but I have every reason to believe, from inquiries that I have been able to make, that we could tap that source again, and obtain more money for investment here. The method by which that bank operates is to require a country seeking a loan - a-nd the bank has made loans for the development of countries like Norway as well as undeveloped countries - to put a specific project up to it. For example, a specific project such as the Snowy Mountains scheme has been put up to the bank by this Government in the past. Perhaps the programme of development for the Northern Territory, or the northern part of Australia, could be worked out in detail and put up to the International Bank for Reconstruction and Development. It may be that such development would not be an entirely economic proposition for a number of years, and it may be that the Australian Government would be required to make some specific contribution to it. However, it would bring us to the point at which decisions would have to be made about the development of northern Australia, and at which a concrete detailed scheme that had some imaginative outlook could be put up to the international bank. I commend that to the House as one means by which we could develop this country and assist in bringing in the immigrants who are so necessary for its future safety.

There are many aspects of development and immigration, but there is not time for me to deal with them all here. However, I believe that at present Australia faces great peril from the north, but it also has great opportunities before it. If we are prepared to take up the challenge presented to us, the challenge to develop our resources so that we can protect this country and devote more and more of our resources to defence and development, if we bend our energies to the task and clearly envisage it, we can do great things.


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

Mr. GRIFFITHS (Shortland) I do not know whether the presence of the Minister for the Army (Mr. Francis) in the chamber is by accident or design, but I am gratified to see him here because I intend to deal with certain matters that concern- his department. Ordinarily, in a debate such as this I should devote my time to dealing with social services, housing, the freezing of the basic wage, margins for skill, and health and madical services, as well as1, possibly, defence. However,, because of. the attitude adopted by the Minister for the Army towards a matter of grave public importance that I have raised in the Parliament, I believe that I must deal with defence. The matter that I want to raise is the’ Stockton Bight disaster. This Government, according to the budget, will, after five years of office, have expended the unbelievable amount of £913,000,000 on its defence services. That sum did not include large expenditure associated indirectly with defence. Of this amount, the Army will have spent more than £310,000.000. Time and again, speakers on this side of the committee have directed attention to the lack of defence facilities in the northern part of Australia.. The Government has refused to proceed with the standardization of railway gauges, which is one of tha most essential of our defence measures. Roads and highways have been badly neglected. Harbour installations have been allowed to run down.

T wish to know the result of this huge spending spree by the Government. Army authorities have expressed alarm at the shortage of recruits and have stated that the current intake into the Army is less than half the wastage due to retirement and discharges from the service. Recently, I pointed out in this Parliament what I consider to be some of the reasons why our young men refuse to join the armed services, and I was attacked by the Minister for the Army for doing so. I repeat that I believe the reluctance to enlist is due to the Minister’s administration. In my opinion, there is gross dissatisfaction with Army administration and training methods. That dissatisfaction is apparent among national service trainees and members of the Australian Regular Army alike. It must ad.l considerably to the cost of Army administration.

Instead of the Minister shielding irresponsible officers, as he does whenever honorable members on this side of the chamber direct attention to matters which affect the department, he should welcome criticism and ascertain whether the problems involved can be overcome. The Minister covers up for his officers points out how good they are, describes how they have been decorated on the field of battle, and tells us how highly they are regarded by American leaders. He rants and fumes about criticism such as that which the honorable member for Newcastle (Mr. Watkins) and I directed at the officers who made such a sorry mess of the Stockton Bight manoeuvre. The Minister accused me of making irresponsible and nonsensical statements, so that I could gain some party political advantage, regardless of the effect my action might have upon the relatives of the unfortunate men who had lost their lives in the tragedy. It is a sorry state of affairs when a Minister of the Crown, who holds the important portfolio of Army and Navy, threatens certain consequences for the relatives of men who died in the service of their country, because a member of this Parliament has directed the attention of the Government to something which clearly indicates a blunder on the part of certain Army officers.

Mr Francis:

– I rise to order. The honorable member is entirely misinterpreting my remarks and is deliberately doing so. I submit that that is a breach of the Standing Orders. At no time have I threatened the relatives of the. deceased soldiers. What I have done is to point out to the honorable gentleman that he is doing a’ great disservice to those relatives.

The TEMPORARY CHAIRMAN.Order ! I am afraid the Minister is making a personal explanation. He will have an opportunity to do that at a -later stage. No point of order is involved.


– I am quoting remarks that the Minister made during a speech in this Parliament. I submit, that the circumstances of this manoeuvre clearly indicate a blunder by some officer of the Department of the Army. When I first mentioned the Stockton Bight incident to the Minister,’ I did so on behalf of hundreds of my constituents who knew of the inclement weather conditions that existed on the Sunday prior to the disaster, and who had demanded that a full and impartial inquiry should be held into all aspects of the tragedy. Five days after the disaster occurred, the Minister, in a statement from Brisbane

L think it was, said that there was no need for a public inquiry, as demanded by the honorable member for Newcastle and myself. That statement was printed in the Sydney Morning Herald of the 13th March last.

My constituents feel, as I do, that young men may be involved in a similar incident in the future, if irresponsible officers are allowed to carry out training operations that involve those taking part going to sea in the dead of night, without adequate protection, and in vehicles not capable of withstanding the elements as they may be encountered at sea. I venture to say that not one honorable member on this side of the committee would object to the expenditure of vast sums of money on defence, provided that the money were used to advantage. I believe that the millions of pounds that have been spent on national service training should have been spent on the construction of roads, railways, waterways, and general developmental projects, as well as on the Royal Australian Air Force. Had that been done, millions of additional man-power hours would have been pegged up to industry, and the country would be much wealthier. But the Minister for the Army is not interested in that aspect of our national defence. He has allowed his brass-hats to run him. He accepts their advice without a murmur. As a result, he is badly informed. If he wishes to find out how far he has been led astray, I suggest that he will not hesitate to reopen the Stockton Bight matter by ordering a full and impartial inquiry into the happenings. Such an inquiry could be conducted by a judge, and witnesses could be examined on oath.

Honorable members can gain some idea of the farcical nature of the inquiry that was conducted by the military authorities at Newcastle by the fact that after it was convened on Wendnesday, the 10th March, inspections of craft and the beach area had to be made. The inquiry was then adjourned until the funerals had taken place. It reassembled on the Thursday and finished on the Friday afternoon, after allegedly having examined more than 100 witnesses. Can any honorable member imagine 100 witnesses, most of whom were boys who had spent a terrible ordeal in the sea, being examined in approximately twelve hours? In my opinion, the witnesses must have been in and out of the witness box like sa usages going through a sausage machine. The Minister had to reconvene the court in Sydney because, apparently, somebody was not satisfied that he had got all that he wanted to get. It is my opinion that witnesses were not properly examined; otherwise positive action would have been taken by the Minister against some one. Feeling is still running high in the minds of many people. The Minister has been condemned on all sides for his inactivity and his refusal to have the matter properly ventilated.

The Army is suffering, and will continue to suffer, whilst the Minister persists in the attitude he has adopted. His statements in this Parliament indicate that he has no interest in the rank and file of the Army. Since the Minister spoke in the chamber on this affair a fortnight ago, the matter was taken on graver proportions, because statements made by the Minister show that the vehicles ‘ which were involved in the disaster are not suitable, especially on the Australian coast, for the work for which he claims they were designed. If that is so, a huge waste of public money would occur if they sank, as they might in anything from slight to heavy seas. The safety of our young men in peace-time is involved, as well as the security of the nation in time of war. I know of no nautical engineer anywhere in the world who would certify any of those vehicles as being seaworthy, and I challenge the Minister to produce an authority who would do so.

The Minister has stated, and his statement was supported by certain brass-hats, that had it not been for local squalls, this accident would never have occurred. If those vehicles are not capable of withstanding a local squall, what would happen in war-time if they were sent out on a mission? Would the loss of eight out of nineteen be put down as another of our glorious failures? The honorable member for Evans (Mr. Osborne”), who is supposed to have such a great knowledge of maritime subjects, had this to say on the matter -

Anybody who knows anything about the weather on the New South Wales coast must be aware that it is not always predictable, and is subject to gales which cannot be foreseen and which are sometimes extremely severe, lt was most unfortunate that this part of the coast should experience such a gale in the early hours of the Monday morning. The convoy had proceeded north for about 45 minutes when a southerly started to blow.

What utter rubbish the honorable member speaks ! He knows nothing about it. Does the honorable member think that a calm sea can be whipped into a boisterous sea by waving a magic wand? Does he believe that the sea rises dangerously almost instantaneously? If he does, that is all the more reason why these craft should never have been allowed tq put to sea, because they cannot withstand a rough sea.

The honorable member knows very well that it is on record that the wind did not blow at more than 25 miles an hour at any time during the previous twelve hours or during the time the craft were at sea. I state now that no sudden squall or gale occurred in that period. There was a rising sea, due, possibly, to disturbances and changes of current in other areas for some hours prior to the commencement of the manoeuvre. If the coroner had examined all those aspects of the tragedy, and if he had taken evidence from, experts and from fishermen who knew, the state of the sea for hours before the manoeuvre commenced, I feel sure there would have been a different finding. The Minister stated that he instructed his officers to assist in every possible way and to have delivered to trainees claim forms for the payment of compensation for their per?sonal losses. The Minister did not do any such thing until after I wrote to him on the 21st July.

Mr Francis:

– That is utter nonsense.


– He then caused an officer to be sent to make investigations. That officer was Captain Moir, and, to a degree, he has done a good job. But this officer went to the mother of Corporal Moran and .asked her whether she had written to .the Minister for the Army. He stood over her to such a degree that she said, “Go and see my husband at work.” The captain went to the railway depot at Broadmeadow and approached the husband. The husband was so hostile that he threatened to put the captain on the knuckle if he repeated his statement. The husband said, “I never went near the Minister for the Army.” It was I who wrote to the Minister for the Army, on the 21st July. If we go back through the file, we find to whom the parents are looking for the provision of monuments over the graves of their sons. On the 27th May, the Imperial War Graves Commission told the parents to write to the Minister for the Army. On the 20th August, the Department of the Army told them to write to the Secretary, Imperial War Graves Commission, and on the 24th August the department told them to write to the Secretary, Department for the Army. Where are they heading? The file is here for any one to examine. That is how the Department of the Army is treating these people.

Mr Francis:

– The Imperial War Graves Commission is not administered by me.


– I want to know what right any army .officer has to question people in relation to such matters. Although six months have elapsed, no progress has been made. As soon as the fatality occurred, why could not the Minister for the Army have directed that every service that was needed by the families of these lads, such as burials and memorials, should be made available? All this trouble would have been prevented.

Mr Francis:

– Memorials are not provided, and they were not provided in the honorable member’s time, either.


– Memorials should be provided, because the Imperial War Graves Commission provides them for ex-servicemen. That kind of action would have restored the confidence of people generally in the Department of the Army. While the Minister refuses to face up to his responsibilities, and while the army administrators refuse to recognize that serving personnel and their relatives are human, confidence will not be restored. As far as I am concerned, this is not a heresy hunt against the Minister or the Department of the Army. I shall now read two letters that I received only this week. The first letter, which comes from .Singleton, states -

Dear Sir,

I have read with interest your attempt to have the Stockton tragedy re-opened. If Mr. Francis only knew the real facts, he would not be so sure of himself.

Now Mr. Griffiths, I have no interests in the affair but I have in my possession 300-ft. of 16 mm. film taken between the hours of 2 p.m. and 4 p.m. on Sunday, 7th March, 1954, of the following beaches at Newcastle, Nobbys, Newcastle, Merewether and Bar Beach. I would love you to see them; I did not get to Stockton that day but would say Nobbys would cover Stockton, any one who would take the type of craft used into the sea that evening must have been mad. I also have a few 35 mm. colour slides. About 4 p.m. a fresh southerly arrived and the effects of this can be seen on the movie, rustling bushes at Bar Beach.

The writer of that letter stated that, if he thought those slides would be of any use to me, he would let me have them. If Government supporters are not prepared to look at them, possibly Opposition members, and other people who are prepared to see that justice is done to these people, will do so.

The other letter, which was written by a man whom I have never seen, bears the address, 169 Carrington-street, West Wallsend. It states -

Dear :Sir,

I would like to applaud you for demanding in Parliament an open inquiry into the Stockton Bight Army tragedy and on behalf of my family you have our full support as up till this moment we are no more wiser than we were the day this tragedy happened.

The Minister for the Army, Mr. Francis, in his statement that he was satisfied in the Coroner’s findings .does not convince us in this matter. The day of the tragedy we were notified that my .brother, Robert Allan Blackie, was missing. This was done by the Army padre who in offering us his condolence

And sympathy could not inform us how the tragedy had ‘happened and what had occurred in respect to my brother, only that he was posted missing believed drowned. That was about six months ago and until you first raised this in Parlament I had received no official word from the Army. I then received a visit from a Captain Moir who said he was going round to all the parents of the boys concerned in .this tragedy. He said that there was a sum of money in back pay concerned and in the -matter of ‘Compensation he didn’t think that we were entitled to any but by all means for us to have a go for some. He then mentioned in the matter of personal effects which my brother may have had on him to put a claim in for them. I state that this was only after you had raised the matter in the House and not as the Minister for the Army stated. We never at any time before this had any officials from the Army (except the visit of the padre) to inform us of what had happened concerning the events leading up to the tragedy and the subsequent investigation of the disappearance of my brother.

It was only after Captain Moir’s visit that I was informed that there would be no magistrate’s inquiry into my brother’s disappearance. I was informed previously that a Coroner could not deal with the matter until a part of the brother’s body was found and that a magistrate would have to deal with it after all the avenues of investigation had expired and that all the data on this would be shown at this said Magistrate’s Inquiry. I informed Captain Moir of this when he was interviewing me and he informed me that he would make inquiries and inform me when this was to take place. After a week or so I received a letter from the Captain which I have included.

I must state that I was bewildered before I received this letter from Captain Moir because despite telephone calls, visits to army camps and interviews with police, I still did not know or was told, who was on the tank, what happened to cause it to sink and what happened afterwards. I was looking forward to the Magistrate’s Inquiry to settle all the rumours I had heard about my brother being trapped underneath a refrigerator or whether he was seen in the water and being spoken te in the water and how his life jacket (Mae West) was found discarded on the beach. My brother who was a very poor swimmer would never take this jacket off in the tank because he was . terrified while he was out in one of these cumbersome death traps. He often stated to me that they would prove to be the death of a crew or some members of a crew. You can imagine how we must feel when we pick up the paper and read the ridiculous statement coming from the Minister for ‘the Army that a most thorough investigation was held into the said tragedy, because if we, the relatives, of one of the hoys who I can only state was murdered does not to this day know what happened, how in the- - does he expect the public to believe this tommy-rot.

Then I get this letter from the ‘Captain informing me that there will he no magistrate^ inquiry and that the next of kin would have to wai.t seven years to have the person “assumed dead” and finalize matters. Well, I’m more ‘bewildered than ever and T write this letter hoping you can wake up #ie rest of the public who like me are as much in the dark as ever and if this terrible tragedy is allowed to be whitewashed as it is being done at the present then I am afraid that another of these ridiculous manoeuvres will be attempted with a far greater loss of life.

On the 3rd August last, Captain Moir wrote to Mr. M. Blackie, 169 Carringtonroad, West Wallsend, a letter in which he stated -

Further to our conversation of 29th July, 1954, 1 wish to advise that the following information was obtained: -

Detective-Sergeant Duffell of Newcastle Pol ice advised that -

All avenues of investigation have been exhausted.

A magistrate’s inquiry will not be held unless -

a body is found;

anything belonging to, or part of a body, which could convince the Magistrate that it was, or had belonged to Tpr. Blackie, R. A. (Missing),

After seven years have elapsed, the next of kin may apply to have the person “ assumed dead “ to enable affairs to be finalized.

When Detective-Sergeant Duffell was looking for this boy and the latter’s lifejacket was found on the beach, he went to the home of the boy’s girl friend and asked her a lot of unthinkable questions. He said to her, “ Bring him out. Where have you got him hiding ? “ This boy went down with the vessel which, contrary to Army regulations, was full of “grog”. Yet, the Minister says that a full inquiry has been made into the matter.

I turn now to the findings of the coroner. An important point emerged from the Minister’s speech when he was quoting from the findings of the coroner of the cause of the deaths of Mornement and Moran. The coroner was alleged to have said -

The relatives might be excused for thinking there was carelessness. I do not think there was carelessness. This was a difficult case in the preparation. Detective-Sergeant Duffell was a tower of strength and I thank him. I think Lieutenant-Colonel James did all that was possible to avert this kind of thing happening and it was very bad luck it came to pass.

I ask honorable members opposite to listen carefully to this statement -

The only report which was so much talked about has nothing whatever to do with us

The Minister then stopped quoting, and said -

The reference is to the report of the Army court of inquiry.

I want to know why the coroner would make a remark of that nature. Why did the Army court of inquiry have nothing to do with the coroner’s court of inquiry? Why did the Minister inform the world at large that the Army authorities would provide every help to the coroner in getting to the bottom of this tragic affair? If the findings of the Army court of inquiry had nothing to do with the coroner, what evidence did the coroner seek from the military authorities? Did he seek any evidence at all, or was he refused access to the findings of the Army court of inquiry? The general public has a right to know the answers to those questions; but they have not been given.

It will be noted that the coroner did not go out of his way to thank the military authorities for any help that they may have given to him in this inquiry. But he did say that the relatives might be excused for thinking that there was carelessness. Why did the coroner say that, if his mind was clear that everything was above board? I am more convinced than ever that the objective of the coroner’s inquiry was only to find the cause of death and that he was not allowed to delve into matters of a military nature which had a fundamental bearing on the whole incident. The coroner has admitted that. As I see it, the witnesses were hand-picked, and many inaccurate statements were made during the inquiry. I repeat that the Minister has hidden behind a coroner’s court to cover up a colossal military blunder and to shield officers who are completely incompetent. I have reason to believe that the statement made by Lieutenant-Colonel James that a test of the sea was made and indicated that everything was likely to be satisfactory, is untrue. The statement that the vessels were regularly serviced is also untrue. I shall produce witnesses to prove my assertion, if the Minister will set up an inquiry. The same observation applies to the statement that meteorological officers had indicated that the weather and sea were quite satisfactory and safe. I am told that men associated with the Commonwealth meteorological service are greatly incensed over the statement that a forecast of the weather for the manoeuvre had been obtained from Williamtown. I understand that no forecast was given. In fact, no forecast could have been given because, when the telephone call asking for a forecast was made, the forecasters were not on duty. Those officers cease work at 7 p.m. and on this occasion there was only an observer on duty. The person who rang did not reveal his name and did not say why he wanted the forecast. I understand that many people, particularly fishermen, ring the bureau and ask about the weather. I am told that it is the usual practice for all defence services, when seeking forecasts, to give to the forecasters details of the movement that is to be undertaken and that this is done some three to seven days in advance. That practice was not followed on this occasion. Forecasters at Williamtown arc unable to give forecasts of weather at sea, and such forecasts have to be obtained from other sources. Thus, it will be seen that some one is not telling the truth so far as that aspect of the matter is concerned.

The Minister trotted out statements and leading articles from the Sydney Morning Herald, the Argus and the Age and argued that those newspapers, following the release of the coroner’s findings, had completely exonerated the military authorities from any blame for the accident. With due respect to the editors of those newspapers, I wonder whether they really know much about this tragic happening or about whether the coroner was, in fact, enabled to carry out a full and searching inquiry into every aspect of the events that led up to the disaster. I invite the editors of those newspapers to obtain that information now. They may be able to uncover information that is of great importance to the people of this country. I wonder whether they know that on the Sunday before the disaster, fishermen at Nelson Bay, Boat Harbour and Newcastle were unable to put out to sea because the sea was too rough. Are those editors aware that, at Newcastle, about 30 professional fishermen who have boats up to 50 to 60 feet in length, refused, because of the state of the sea, to put out at 4 o’clock on Monday morning, which was a little later than the hour at which this manoeuvre started?


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

Motion (by Mr. Pollard) proposed -

That the honorable member for Shortland (Mr. Griffiths) be granted an extension of time.

The bells having been rung,

The CHAIRMAN (Mr. Adermann).Lock the doors !

Honorable members continuing to enter the chamber.


– Lock the doors! Lock the doors!

Mr Curtin:

– They are coming in after the doors have been locked.


– Order ! Once honorable members are in the door they may come into the chamber.

Mr Curtin:

– They were not in the door.

Question put -

That the honorable member for Shortland (Mr. Griffiths) be granted an extension of time.

The committee divided. (The Chairman - Mr. C. F. Adermann.)

AYES: 33

NOES: 50

Majority . . . . 17

In division;



Honorable members interjecting,

Mr. Tom Burke. - Mr. Chairman-


– Order ! The result of the division is “Ayes”, 33; “ Noes “, 50.

Question so resolved in the negative.

Mr Tom Burke:

– I rise to order. My point of order deal’s with the happening that has just occurred. In pursuance of an authority that is vested in you, Mr. Chairman, after the ringing of the bells you instructed the attendants to lock the doors. The attendants attempted to carry out your instructions. They were apparently prevented from doing so by the force of Government members and supporters seeking entrance. If you do not uphold the authority vested in you, and delegated to your officers, how do you expect to maintain that authority and have your orders carried out in the future ?

Mr Wight:

– On the point of order, I should like to state that I was one of the members concerned in the incident. I think it is only fair that the committee should know what occurred. The members concerned were attending a meeting of the Government members’ defence committee in a room where no summons bells are installed. They were advised that a division had been called for, and they came to the chamber. I was one of the -members who is alleged to have come in after you, Mr. Chairman, had ordered the doors to be locked. The allegation made ‘by the honorable member for Lalor .(Mr. Pollard) was not true. I was one of the last of .that group of members to come through the door. I was inside the door behind the curtain and was about to take a seat in the chamber when you gave .the order, “ Lock the doors ! “ The members concerned were then inside the chamber. I consider the Chairman’s ruling is correct.


– Order! I have already ruled on the point of order and I .heed no clarification of the matters that .gave rise to the incident. I rule that any honorable member who is inside the locked doors .before I put the question is entitled to vote.


– I have two points to put to the committee. First, I ask honorable members on the Government side ‘to consider any criticism I may make as constructive criticism. “Secondly, I ask honorable members on the Opposition side to look upon anything that I may say as being voiced in the interests pf Australia and not to attempt !to make party capital out of it. What

I have to say has reference to a single line that appears at page 81 of the Estimates. In that line provision is made for the allocation of ?90,000 for civil defence. In reality, however, what I have to say refers to the whole of the defence vote and, indeed, to the whole structure of the budget. It is related not merely to events in Australia, but also to principles that should be applied throughout the free world in the present extremely critical situation that faces us. For the plain fact is - and many authorities have mentioned it, including Sir Winston Churchill - that the development of atomic weapons-


– Order! T cannot hear ‘the honorable member for Mackellar for the noise in the chamber. In view of the discussions that have taken place recently concerning the dignity of the chamber, and the expressions of concern that have been voiced about the maintenance of that dignity, I hope that .honorable members will maintain silence.

Mr Galvin:

– I .should like to hear the .honorable member .for Shortland (Mr. Griffiths),.


– Order ! Did the honorable member for Kingston interrupt While I was addressing the committee ?

Mr Galvin:

– I merely said that 1 should like to hear the honorable member for Shortland.


– Order! If th,honorable member interrupts again while I ;am addressing the chamber, he will be dealt with severely.


– I repeat that the development of atomic weapons, particularly the hydrogen bomb has, in the words of Churchill, made nonsense of all our defence concepts, and, indeed, of all our policy concepts. However, I shall attempt to confine myself to the angle of defence. We might as well realize that Soviet Russia -has or soon will have, saturation stocks of atomic weapons. It will have so many atomic explosives that it will need no more. That is not necessarily the position to-day, hut it will be the position in the near and predictable future if Russia continues its present. activities in that direction. For the purposes of the present argument that is a vital matter, for whatever plans of defence we may have in mind will take time to mature, and the dangers that I am talking about relate either to the present or to a future so near that it will eventuate before our plans can be brought to maturity. Therefore, even if I speak of something that is not true at the moment, I shall be referring to something that could be true before any conceivable plan that we may make to meet it can be prepared. We cannot act too soon.

These are the things that we must be ready to meet. First, we must expect to meet virtually unlimited numbers of atomic bombs and unlimited quantities of atomic explosives. We may expect bombs numbered in thousands each of a power equal to 20,000,000 tons of T.N.T. Such bombs would be capable of causing complete destruction over a circle 35 miles in diameter leaving no living thing inside that area. They would be capable of creating bad effects of considerable extent over an even wider area and leave radio-active hazards in addition. The second fact that we have to face is that unfortunately there will be facilities for the delivery of those weapons, either in the air or from a rocket which we will not be able to stop, particularly if it should be a rocket delivered from a submarine or from a sneak attack through the activities of enemy agents within our midst. I remind the committee that the weapons to which I have referred are small and easy to transport and cannot be stopped by the methods of inspection of the frontier that we now possess. Therefore, as a method of delivery, sneak attacks are, unfortunately, feasible.

The third point to which the committee must turn attention is that there would not necessarily be any warning of an attack. Russia is capable of attacking without any warning and, in fact, in the midst of the greatest protestations of friendliness. There is no guarantee that our cities would have any warning, even of a few minutes duration. The overall danger is the possibility of mass attack because with the quantities of atomic weapons that will surely be available to

Russia if the present trend develops, there is no reason why the attack should be directed against one city at a time. Indeed, there is every reason to expect the contrary, and an attack probably would be directed against all our cities simultaneously. Therefore, we have to face the possibility of the complete obliteration of our vulnerable points including the concentration points of defence, production and population and our ports. We have to face the possibility of the consequent destruction of our power and will to resist the enemy in tobe. I speak of this danger not merely as affecting Australia, but also as something that every free nation must be ready to meet. Some persons will ask whether it is worth while doing anything in the face of the situation. Can anything be done against this kind of threat? I have two points to make in reply to that question. The first is that something must be done because no country alone can choose peace. It cannot make its choice of peace valid because peace requires the consent of both sides. How can we choose peace when the power to attack lies in enemy hands? We cannot impose our choice upon him. It takes one to make a war, but it takes two to keep the peace.

The second point is that if disaster should come, we would have the power to retaliate and, I believe, to bring down upon Russia the kind of destruction that it might envisage turning against the free world. If that should happen, the outcome of the war would depend upon a slugging match between the survivors without their city organization and their vulnerable points. If Russia expects that the outcome of such a slugging match will be favorable to it, it will be the more willing to make the initial attack upon our cities at concentration points. If it could win by a knock-out blow and thus could anticipate our retaliatory blow, it would be more willing to deliver the knock-out blow. But if Russia judges, on the contrary, that we shall win the slugging match and that we shall survive, then it may be unwilling to risk the knock-out blow, or our retaliation upon its own cities.

The position, then, is that we must learn to survive as a” nation and as a fighting force without our cities, and, if we do this, and only if we do it, we may save our cities, because Russia’s expectation of the outcome of a slugging match, with cities on both sides destroyed, may affect its decision whether or not to launch that initial attack against us. But preparation is necessary beforehand. The fatal thing is to leave ourselves unorganized and unguarded for an emergency which, first, would be fatal, and, secondly, is the more likely to come in proportion as the enemy judges it will be fatal.

The .distinction between active and passive defence no longer holds. “What was once called civil defence now becomes an essential part of our defence services. It is integrated in them. Without it, our defence potential becomes virtually nil. One does not think of it as everything, but one says that without it no other defences are worthwhile. That is the situation, and I have tried to sketch it for the committee, in which we must find a plan and must act quickly. We ask ourselves: What are the practical things that we can do? What are the practical things that will enable us to survive without our cities, and insofar as they do that, make it the less likely that our cities themselves will be attacked ? Here are some matters for consideration. I do not regard the list as complete.

First, Ave should reorganize our defence services. We should decentralize them. Let us decentralize to a greater degree than at present our ordnance stores and other stores, and our head-quarters. What is the use of having defence head-quarters in Melbourne when the whole lot could be destroyed by a single bomb? It is fantastic, it is absurd, to allow the present situation to continue. It is fantastic and absurd to think that we shall necessarily have the time to cure the situation. The time for action is now. We must decentralize, particularly, our naval docks, because they are concentration points, and are vulnerable. The forms of equipment and the organization of our units may require changes, so that they can operate more efficiently, if necessary. They must be prepared to carry out for the civil population the administrative tasks of order, feeding, supplying and rescue work, and the like. They must be prepared to do those things which would obstruct, even if they cannot entirely prevent, the delivery of atomic weapons upon and against our cities. They must play their part in keeping up the retaliatory stocks which can be our best defence against the possibility of attack. We need complete reorganization of our whole defence effort to meet this new situation. It is simply not good enough to go along in the way in which we are going now. It is complete blindness to the new factors which are being brought into the situation. It is time we moved now.

Secondly, we must take precautions which will make it less likely for the atomic attack to come against us. Some of those precautions are defence measures, particularly measures against submarine.0 in our coastal waters. Some are measures against the sneak import of atomic explosives. Measures of this kind are being taken to-day in the United States of America. We must, I am afraid, re-think our whole attitude towards the diplomatic service. We can no longer allow diplomatic bags to be immune. We can no longer allow diplomatic territory in or near a city to have immunity from search, and, particularly, we must root out quite ruthlessly the enemy agent. In the past, we could disregard the single man. He could not carry enough to do much damage, but to-day enough can be put in a suitcase to destroy a city. Can we risk the enemy agent? Can we allow the Communist, who is an enemy agent, to be able to stand in the position where he could destroy us? I was interested to recall a page from Trotsky’s Life of Stalin written in 1940, before the atomic crisis, and referring to a man called Krassin who made the original explosives for the Bolsheviks in the 1901-02 period. The passage read as follows: -

A chemist by education, but still a student he dreamed of bombs the size of a nut. The year 1905 gave him an opportunity to extend his research in that direction. True, he never succeeded in making one of this ideal dimension, hut laboratories under his supervision produced bombs of great devastating force.

It was small-time stuff then, but the unhappy advance of science has made real the dream of Krassin. We must re-think our whole attitude towards the individual

Communist who may now carry with him the power to destroy a million lives.

The next thing we must do is to organize rescue and emergency services in case there should be a disaster. I should like to make myself quite clear here. There is no chance pf saving the centres of cities. In a circle 15 miles in diameter, or 74 miles -in every direction from the point of explosion, virtually every one will die, and it is possible that more than one bomb will be dropped on a large city. But large cities, as the maps of them show; have tentacles which stretch outwards. There will be survivors, and wherever the perimeter of total destruction be placed, at least there will be a perimeter of partial destruction beyond it. In that place of partial destruction, rescue efforts: will be worth while. Ambulances, medical services, and, particularly,, fire-fighting services, are necessary. The experience has been that the fires consequent, upon an atomic explosion cause nearly as many casualties as the explosion itself. To-day, in Sydney and Melbourne, for example, our fire-fighting apparatus is concentrated in the centres of those cities where it will be quite useless in the event of an atomic attack. Fire-fighting apparatus will need to be stationed on the periphery so that wherever the. survivors may be, they can be helped.

We shall have to organize detachments of mutual aid outside the cities so that there will be. an organization to rescue the survivors. We should prepare camp sites with services, such as water and sewerage, tenting and the like. We cannot tell where the destruction will be, but wherever the destruction is, we should have emergency accommodation for the survivors. Emergency transport and emergency administration are other important requirements. In this respect, the national service training scheme may help, because it may provide us with a basic organization for supply which could be necessary for the survivors.

In the next place, we must establish, away from our main cities, stores of food, vehicles; oil and all the miscellaneous things necessary for’ the survival of the people. Let us always envisage the situation that vulnerable points

Ifr. Wentworth. of concentration have been obliterated. I am not saying they will be obliterated. I. am saying they will be obliterated unless we prepare to live without them. It is only by being strong, enough to live without them that we can deter Russia’ from attacking them.. The next problem is transport. Roads and railways are less vulnerable than harbours, because an atomic explosion radiates from a centre and does not go out along a track; We shall have to prepare tolive without normal harbour installations. We need lighters, L.S.T’s and other craft with flat bottoms that can be used for landing on beaches. We need the kind of things that would, be useful if there were no: ports in operation in any main centre in Australia. Because of the comparative vulnerability of the marine concentration points,1 I think transport, will be driven on to the roads and railways. In view of. the atomic, threat, standardization, of the gauges of our trunk railways seems to me to have: a new defence, importance.

Then there is; long-term decentralisation.. I know We> cannot, do much, in a year, but’ the fact that. we. cannot doeverything at once is no excuse for not starting.. We could encourage decentralization’. For example, the Government could undertake to subsidize freight rates for industry on an entirely new basis,, so that industries would tend’ to. leave the cities and take population with them. The Government could prepare sites, on- which houses- could bebuilt in. smaller groups away from the main, centres. It could, help, by providing, finance for such buildings. It. could help, by directing: State, instumentalities towards such objectives. It could help by putting power stations in less, populous areas. It could help by putting- its own buildings and factories in places- away from the main centres* I do not think, shelters in the- cities will be of very much practical use from now on, because it is unlikely that there will be any warning of a disaster. They may havesome use, but only a very limited one; Co-operation between, the States and theCommonwealth is necessary and desirable, because many of the instrumentalities that we shall have to use. are- controlled by the States. I suggest that the situation is serious enough to warrant the establishment of a permanent council representing the Commonwealth and the States, under the chairmanship of the Commonwealth, in order to put the necessary plans into operation.

If I were asked to state the four most vital things that we must do, I should say they were, first, to re-organize our fighting forces so that they could withstand atomic warfare on their bases, because they could not do so now and would be completely impotent after an atomic attack; secondly, to establish stores and emergency organizations against the first attack in decentralized localities as soon as possible; thirdly, to smash the fifth column, which now has a function quite different from any it would have had in the past, because the power of the individual, which was very slight, has now become so great that the action of one man is capable of threatening millions of lives; and fourthly, to create the will to resist and retaliate, remembering that when Russia achieves saturation stocks of atomic weapons, a time which cannot be very far away, power to retaliate will be our only protection against attack. In these matters, we must co-operate with our allies and adapt our strategy and equipment to a common plan.

These are big changes in our financial and national life and in our attitude towards internal security. Some people will say they are too big to be made. If that be so, we shall not live either as a nation or as individuals. Costly, difficult and distasteful though these changes will be, they must be made, and made before it is * too late - and not on the scale of £90,000 which is proposed in the present budget. It is of no use to say that we shall meet the crisis when it comes. The crisis is already here. There are some who will ask, “ Why cause panic and discouragement by telling the truth ? “ I admit quite freely that the first result of learning the truth is likely to be panic and discouragement. But it is far better to face up to that now and get it over before the event than to leave it until the event, which will be mad? more likely if we refuse to face up to the truth or to put into operation a plan for our survival.

We taste now the bitter fruits of the idiotic policy of containment which has activated the democracies for the last four or five years. It was a futile policy, the results of which are now apparent. But it is no good crying over spilt milk. I have nothing to withdraw from what I have said in the past. It was a weird experience to know what was going to happen, to predict it and to warn of it, without effect until now, when the event is on us. I gained no credit. Unhappily, I commanded no credence. But what I said was true, and now it is seen to be true in the fierce atomic light that beats on the world to-day. I appeal to the Government to face up to its responsibilities in this matter, not just to shrug them off. The life and death of our people depend, not only on what we do, but also on what other peoples do. The fate of the world does not depend on these things being done only in Australia. At the best, we can merely give a lead. At the worst, we can contribute to lethargy and disaster, as we have done in past years - indeed ever since the first atomic explosion in 1945. I earnestly appeal to the Government and the Opposition not to look on this matter in any party spirit.


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


.- The statements made by the honorable member for Mackellar (Mr. Wentworth) were of such a profound nature that we cannot afford to lose sight of their significance. I believe that all honorable members who heard his speech have benefited from it, and I commend him for his efforts on these lines on this and previous occasions. He has played the part of a pioneer in leading the way in this avenue of thought. Now, I shall switch from this line in order to launch a cold, uncharitable atomic blast against the Government.

Many of my colleagues have attached descriptive names to this budget, and I follow suit by applying a term that was used in the early gold-mining days on one of the greatest gold-fields in the world - Ballarat. I describe the budget as a “ shepherd’s budget “. For those who are not familiar with the history of the gold-fields I explain that, in the early days, those who found gold were the prospectors. They discovered the wealth of the country by using their initiative. They dug for gold where they expected to find it, and their expectations were often realized. Other men who inhabited the gold-fields were known as shepherds. They worked out the old diggings and they kept a very watchful eye on the prospectors. Whenever they saw that a prospector had struck it rich, they hastened to peg out adjacent claims. This is a shepherd’s budget because the people who have really discovered the wealth of Australia and made the country’s name known throughout the world belong to the Australian Labour party. They are the men who have used their brains, initiative and energy for Australia’s good. The Liberal party and the Australian Country party are the shepherds. They have pegged out a claim beside the Labour party prospectors. In the gold-mining days, of course, the gold usually became a little thin eventually. But the shepherds stayed on and worked out the claims until no more gold was left. This shepherd’s budget shows that the Government has stayed on to work over old ground previously covered by the Labour party, without engaging in any new prospecting. Thus, we are going back instead of forward. We need a Labour government to put the country in a favorable position again.

National finance is not principally a matter of providing money. In fact, if income is not high, we know of ways to stimulate income so as to make it high. When those methods have been applied, sufficient money can be skimmed off the top by the Government in the form of taxes to provide for the needs of the nation. Therefore, money is not the most significant factor in national finance. We can always find the money that we need. The problem of finding money for the Labour party’s basic goal - the abolition of the social services means test - would have been simply solved if we had been returned to power. However, it is obvious that it would be useless to pro- vide the extra money unless we had sufficient labour with which to produce the goods and services that the people would want to buy with their increased incomes. Undeniably, one of our most urgent requirements to-day is a method of increasing our labour force. Yet the budget provides no means of achieving that end. In fact, it promotes nothing but a sense of discouragement. It is idle for the Government to make provision for the expenditure of £212,000,000 on defence this year if it was able to expend only £177,000,000 on defence last year. How does it expect to spend another £35,000,000 unless it has somebody to do the work that will be required for the extra expenditure ? It is all very well for the Government to say that it will provide so much money for this project and so much money for some other project, but the mere planning of expenditure will not achieve the desired results.

The Government proposes to increase expenditure on the war service homes programme this year by £3,000,000. It has provided for the allotment of an additional £1,000,000 for the Snowy Mountains hydro electric project. There are to be extra millions for this, that and the other thing, as well as extra millions for the public to spend as a result of reduced taxation. But where are the people whose labour will be required to produce the extra goods and services on which that money is to be expended ? One would have thought that the Treasurer would be fully seized with the importance of increasing the labour force, because that is the only method by which he can achieve his objectives. A Labour government would have regarded the enlargement of the labour force as an essential feature of its budget plans. for 1954-55. It would not have allowed the present situation to continue without doing something about it. The Government, however, with this shepherd’s budget, give.” no indication that it intends to change the situation. We urgently need some vigorous programme to build up the number of workers in Australia.

With this need clearly in our minds, let us consider what the Treasurer had to say about the labour force in his budget speech. Apparently he was well aware of the need. In fact, I have no doubt that he had been well and capably advised on the subject by Treasury officials, because he referred to the danger that any increase of the labour force might be diverted into avenues that would not be of great benefit to the community. One would have expected that, having been so well informed by Treasury officials, he would have based a vigorous policy on the idea. But he said -

Such a situation would clearly not be avoided by indiscriminate mass immigration; recent experience lias taught us that the immediate effect of large-scale immigration is to add at least as much to the demand for labour as it does to the supply of labour.

That is a regrettable and most discouraging statement. It almost seemed that the Treasurer had written off all that the Good Neighbour Council and the Minister for Immigration (Mr. Holt) had had to say about the benefits of immigration.

Mr Beale:

– The Government will spend £2,500,000 on immigration this year.


– That is only because the fares are a little dearer. The truth is that the Government has fixed high targets for immigration but has done nothing to achieve them.

Mr Hamilton:

– What are the figures ? Let us hear them.


– I shall cite them. After the Labour Government had trained and put back to work the best part of the labour force of the country after World War II., it set itself the task of increasing that force by mass immigration.

The intake rose, as everybody knows, from 2,000 a month to 8,000 a month, and then to 13,000 a month. In 1949-50, the last year in which the Labour party held office, the huge total of immigrants was 161,548. That was the peak of the immigration programme. Then came a change of government. The very first thing that this Government did was to put a check on immigration. The figure went down in 1951-52 - its first full year of office - to 132,000, and down again, in 1952-53 te 102,000. Although the target for that year was 150,000, there were brought into the country only about 58,000 immigrants. In the last financial year, the target was 100,000, but only 54,000 immigrants came to Australia. Yet, for this financial year, the Government has had the” temerity to raise the target from 100,000 to 107,000. That is ridiculous. The Government does not intend to bring in that many immigrants, and it will not do so, any more than it will expend £212,000,000 on defence.

Of course, certain supporters of the Government believe in immigration. In May last, the honorable member for Warringah (Mr. Bland) stated that it was important to bring in more immigrants. I agree with that contention. We must improve the immigrant intake. We must not be frightened out of the idea of improving the labour force, merely because of the necessity to satisfy the needs of immigrants after arrival in this country. We must provide decent conditions for them. We all know what immigrants need when they come here. We know the capital equipment that they need, in order to do their work well, and we realize that additional communications and municipal services are required. Most important of all, we know that the immigrants need houses in which to live.

Although the Treasurer’s attention has been directed to the great need for additional housing, the budget contains no provision for a scheme to provide better housing facilities. This subject has been side-stepped, on the ground that housing is a State responsibility and that the Commonwealth has nothing to do with it. However, we shall have to have a lot to do with it if we are to increase the size of our labour force. That is the Government’s responsibility. It should appoint, immediately, a number of suitable members from both sides of the committee, to consider what could be done in the matter. The Government has valuable powers, which it could use to implement a vigorous housing policy. It could do much to encourage the States, and it ought to encourage them, because they, also, have great housing responsibilities.

One of the greatest defects of the budget is that it does not make any provision to increase the work force of this country. There are ways of increasing our labour force other than by mass immigration. We should take greater advantage of the natural increase, which if. brought about not only by births, but also by the fact that people now live longer. Doubtless, many honorable members have been approached from time to time, by people of advanced years who cannot obtain work because employers consider that they are too old. Those people want to work, and are capable of working. Furthermore, they realize that, by continuing to work, they will live for many more years. The Government has ignored this valuable source of labour.

I shall refer now to the 28,000 people who want work but who cannot obtain employment. It is all very well for supporters of the Government to claim that we are enjoying a period of full employment. Those people are living in enforced idleness. Unlike the honorable member for Gippsland (Mr. Bowden), who seems to regard this matter as a joke, persons with a serious turn of mind may believe that these 28,000 people are sick or disabled, and could not be put to work. Nothing could be further from the truth. They are capable of working. The elderly people that I have mentioned, the immigrants and the 28,000 persons who are out of work, constitute a most important and fruitful source of additional labour.

Many honorable members have received a pamphlet from the Victorian Employers’ Federation, which deals with the employment of physically handicapped persons. I have read that pamphlet right through, because this is a subject in which I have taken great interest. I am sure that the sympathy of many honorable members has been aroused on behalf of physically handicapped people. This pamphlet makes an extraordinarily timely and very important contribution to this subject. It points out that the Government has failed to make provision for the immediate employment of physically handicapped persons, and that much more could be done in this direction in the futureWhile agreeing with that point of view, my approach to the matter has been different from that of the employers. I detect a note of insincerity in the pamphlet. I suspect that the federation has attempted, to divert the attention of the public from a consideration of the shortcomings of employers to the defects of the Government. While acknowledging the fact that many employers employ disabled people, I con- sider that the employers, on a whole, have not discharged their responsibility to the full in this matter. It is common knowledge that, generally speaking, after a worker has been incapacitated in an accident connected with his work, the management provides him with appropriate employment in the establishment. That is commendable. It is noteworthy that the various railway services usually provide appropriate employment for employees who have been injured in the course of their work. Of course, there are a tremendous number of accidents to employees on the railways. The Postal Department, also, has a good record in this connexion. However, the position is entirely different in relation to a man who sustains injury other than in the course of his employment. He does not receive the same consideration. The employers should have a very broad sympathy in this matter, and I hope they will open their doors wider to physically disabled persons.

A much better pamphlet on this subject was received recently from overseas by the Parliamentary Library. It deals with the subject of the disabled worker in the United Kingdom. That country is far in advance of Australia in relation to the employment of disabled persons. The United Kingdom Disabled Persons Employment Act enables a great deal to be done not only to improve the conditions of life of disabled persons, but also to increase the nation’s labour force, which is so important a factor in any country’s economy to-day. That law provides for various methods of ensuring the employment of disabled persons.’ Residential rehabilitation centres have been established where disabled persons are trained until they are in a position to earn their own living. Our social services legislation provides much the same service, and I commend the Government in that respect. The British act, however, goes much further than our legislation, because it lays down that industry shall employ a certain quota of disabled persons. At least 3 per cent, of the staff of every firm which employs twenty people or more must be registered disabled people. The existence of that provision guarantees employment for many disabled persons. Under the British law there exists an organization -which arranges for disabled persons to work in their homes. It organizes the supply of work and material for them, and the disposal of the results of their labours. One of the most interesting results of the British law is the establishment of a company, known as Remploy Limited. Remploy is a word which is derived from the word “ re-employ “. That company is run by the Government. In any area in which there are sufficient disabled people - and no analysis is made of their disabilities, just so long as there are enough of them - the company establishes a factory in which disabled persons make or assemble simple articles, or articles whose manufacture requires much patience and handicraft, but for the production of which there is no urgent need. This system provides profitable employment for people who would otherwise suffer from lowered morale. It makes use of people who have a valuable contribution to make to the economy. Such a system in this country could do much to absorb some of the waste labour that exists at present, as is evidenced by the fact that there are 28,000 people in Australia at present who are seeking employment. I have heard Government supporters say that these people are old and sick people. If they are old and sick, then let us recognize the fact and do something for them. I believe that some thought and imagination are required on the part of the Government. We need a little digging in new places. By adopting a system such as the British system and giving more attention to the improvment of our labour force. Australia might very well place itself in a better economic position than at present, and become more capable of doing some of the great things that lie ahead of it.

I turn now to the provision of housing which plays such an important part in the improvement of a country’s labour force by natural increase. It may take twelve to eighteen months before the capital needs of immigrants are provided. After that period immigrants are a complete profit to the community as members of the labour force. This budget rejectsthat view, the reason being that the Treasurer (Sir Arthur Fadden) is afraid of mass immigration because of the heavy demand that the provision of the immediate needs of the immigrants would make on the economy. He should have more courage. He should see that their immediate needs are planned for and provided. A little prospecting is necessary. It may be fifteen or twenty years before present-day youngsters provide a permanent increase to the labour force; but natural increase will not provide much of an increase for the labour force unless we have more youngsters. And we shall not have more youngsters unless we can house more potential parents. That fact stresses the importance of having plans for a proper housing programme to meet the needs of our own people.

Sitting suspended from 6 to 8 p.m.


– Before the suspension of the sitting I was referring to the importance of appreciating the pressing needs of those people who form the labour force of Australia and of the immigrants who are coming to this country. How can more immigrants be attracted here if those who. are here already write home and say that this is a great place in which to work but that there are three families living in each building and any other families that come here will add to the congestion. That kind of information is not much of an incentive to potential immigrants. The Government should provide the immigrants who are already here with housing and it should ensure that housing will be available within a reasonable time for any other immigrants who come here. This Government and the State governments have great power to acquire material and build homes and they should combine their efforts for this purpose. As I said before the suspension of the sitting, it will be necessary to dig in new places in order to discover the wealth that is in Australia.

I have already mentioned the need for imaginative enterprise on the part of the Government. The real wealth of the country is in its labour force. The Government has crowded in on the Labour party’s wealthy shaft. It has claimed that it has brought about great increases in the production of building materials, power, coal and other commodities. But who produced these things? Was it not the soldiers whom the Labour Government rehabilitated? Was it not the 300,000 immigrants that the Labour Government brought to this country? Of course it was. The real wealth of the country is in its labour force and if we want to increase that wealth we must increase the labour force. There is a need for prospectors. There is need for people who will look at the whole field and dig in new places and find out means of making use of the In bour force which is the real wealth of the country. When the Labour Government comes to office again there will be a welcome nugget for everybody.

ChisholmMinister for the Interior and Minister for Works · LP

– I agree with the honorable member for Ballarat (Mr. Joshua). But, unfortunately, the honorable member did not explain that it is team work by all sections of the community that has produced the wealth of the country. However, the budget debate always ranges over a very wide variety of subjects. This debate has been no exception to that nile although it has been exceptional in another respect. The Opposition has found a great deal of difficulty in criticizing the budget. This fact is a tribute to one of the best and one of the most hard-working Treasurers that Australia has had. The Treasurer (Sir Arthur Fadden) must have felt considerable pride in producing another budget which provided for reduced taxation and increased social services, after having brought this country through a very difficult and trying economic period. He received a great deal of criticism during that period and I hope that most of the people will now give him the praise that he deserves. This was not meant to be a spectacular budget. It was not meant to be an all-clear signal to people to take things calmly and go ahead without worrying about the future. As a matter of fact, it was framed to meet this hour of crisis in Australia’s history. It seemed to me to provide for what might be called a “ stand to “ period in the hour before the dawn because no man can foretell what is coming across no-man’s land from the economic or international areas.

The Opposition has thrown overboard entirely the reckless financial policy that it put before the electors. It has gone back to its old shibboleths in order to try to cloak the fact that it has no real financial policy. Opposition members have talked about this as a rich man’s budget, yet the business community has said that it was much too niggardly. Criticism, from such extremes is the. best evidence that the budget is soundly based and sensibly balanced and is accepted by the vast majority of the Australian people. Most of the criticism of the Opposition has been levelled at the Government’s proposals in relation to social services. The pension, the Opposition said, should have been increased in accordance with increases .in the basic wage. I suppose that when the Leader of the Opposition (Dr. Evatt) is away it is easy for Opposition members to take that line of argument because it was the Leader of the Opposition, as Minister in a Labour Cabinet in 1944, who introduced legislation which untied pensions from the federal basic wage.


– The Minister knows why.


– Yes. The Leader . of the Opposition said, at that time, that it was unfair to tie pensions to the basic wage. I know that it is very difficult for the Labour party to play Hamlet with the Prince of Denmark absent; or it might be the ghost on the ramparts that is absent, according to the point of view. However, as the Minister for Social Services (Mr. McMahon) pointed out very clearly, the reply to the Opposition’s criticism is that the pensioners are now slightly better off from the point of view of monetary value than they were in 1949, if a comparison is made on the basis of the C series costofliving index.

Mr Ward:

– What about the basic wage?


– I am aware that the basic wage has risen by about 25 per cent, more than the prices in the C series index. But that merely proves that the Government has raised the standard of living of the whole com- munity.

Mr Ward:

– Rubbish!


– It is not rubbish. It is a fact. Because free medicine and free pharmaceutical benefits to an estimated value of between 5s. and 8s. a week have been made available to pensioners, their standard of living is higher than it was in 1949. In addition, the increase in the general standard of living has meant that relatives and children are in a better position to assist old people than they were previously. The honorable member for East Sydney (Mr. Ward) said that any country that forgot its pioneers deserved the greatest condemnation. I say that children who forget their parents deserve the same condemnation. The honorable member for East Sydney attacked every one and everything. In fact, he must have been reading the Sydney Morning Herald. which reported that somebody had said that he was the lightweight champ, of Australia.

Mr Falkinder:

– Chump.


– Perhaps I need correcting. The honorable member for East Sydney, and his followers, have attacked certain public companies because they have earned high profits. But, as the Prime Minister (Mr. Menzies) has already said, if the Labour party had attained office after the last general election and had honoured its promises, by allowing 40 per cent, depreciation of factory plant, it would have still further increased the profits of those companies. This Government has decided to set up a committee under the chairmanship of the honorable member for Petrie (Mr. Hulme), to investigate further the matter of plant depreciation, so that the Government can make a proper decision on it. The honorable member for East Sydney also attacked the Colombo plan by damning it with faint praise. He is so fond of attacking rich men, that he tends to forget that Australia is a rich country in the eyes of its neighbours - the richest in Asia. Therefore, I suggest that it is unwise for him to attack the Colombo plan, when his arguments about internal affairs can be applied to external affairs and turned against him.

He attacked the Commonwealth Court of Conciliation and Arbitration because it pegged the basic wage, but he did not attack it when it raised the basic wage by £1 a week. He attacked Seato, and said that this Government should not be prepared to make defence commitments. He said that men in their fifties and sixties should not make commitments on behalf of young Australians. I have yet to learn of any time in Australia’s history when the youth of Australia wanted the youth of Britain and America to shoulder the responsibilities which belong to the youth of Australia, and which they have always been prepared to carry on their own shoulders in the past. His statement was a slur on the youth of Australia. B> said that the Government’s expenditure on defence was too high, and that we could not afford man-power. .1 say that we cannot afford not to afford man-power to carry our own responsibilities and bear our share of the burden with Great Britain, America and other countries. How can he expect other nations to take any notice of his crocodile tears when they have only to study the figures of the Commonwealth Statistician in order to see that because of their prosperity Australians can afford to spend £550,000,000 a year on gambling, lotteries, drink and tobacco. Surely that proves that we are prosperous, and we cannot plead that we cannot find the money or the man-power to take our fair share of the burden of defence in this part of the world.

The honorable member’s ideas are Edwardian ; in fact they belong to the Victorian age when this country was sheltered by the might and majesty of the British Navy and, fortunately for us. we did not have to bother much then about foreign policy and foreign affairs. But our position now is very different, and I believe that the honorable member would excite more sympathy if he put a label around his neck with the legend on it “ Please assist the blind “ - or perhaps the right word on this occasion should be “ purblind “.

I desire to devote the remainder of my time to a matter that I consider to be the most vital that faces Australia to-day. It is one about which I make an appeal to the Labour party to allow us to forget party politics and personalities.

Mr Haylen:

– Will the Minister do that?


– I certainly shall, if the Labour party will. During the course of the previous debate, some Australians, including some honorable members, must have felt very sick at heart to learn that although this nation was facing one of the greatest crises in its history, there are people here who still go on with party politics and discuss personalities. Please let us discuss this particular problem apart from party politics.


– What is it?


– I am sorry mat the honorable member for East Sydney does not understand what I am talking about. I believe that every honorable member here either thinks he is or wants to be a good Australian. Indeed, we all hope that we are good Australians. We are all vitally interested in this country, if not for our own sake then for the sake of our children and their children, for it is this land which gives us our living and provides our hopes for the future. In this rapidly moving and swiftly changing kaleidoscopic scene of world events, it is very difficult to make decisions and forecast trends in international matters. For example, in the last week France has torpedoed the European Defence Community scheme. China has been endeavouring to sow greater dissension and discord between Britain and the United States of America through the British parliamentary delegation that has recently visited that country. As an example of the difficulties in forming our opinion of the overseas scene, I direct the attention of honorable members to the diametrically opposed views expressed by two members of that delegation, and reported in the press. One of this morning’s newspapers reported Mr. Morgan Phillips, the secretary of the British Labour party, as having said -

A policy of exclusiveness can only imperil peace . . . wo believe there is an earnest desire on the part of spokesmen for revolutionary China to end this isolation. For our part we reciprocate most heartily.

However, in an evening newspaper a report appeared which read -

A member of the British Labour party delegation to China said last night he did not believe the intentions of Red China’s leaders were peaceful.

Therefore, honorable members can see how difficult it is, even for observers on the spot, to form a correct assessment of a foreign situation. I remind honorable members that those who expressed the views reported in to-night’s newspaper were not allowed to have their names published. It is very difficult to make any decisions about international affairs at this stage, but those who carry the responsibility have to make them, and we in this Parliament are all responsible. Therefore, it is necessary to keep our objectives clearly in front of us. The Prime Minister and the Minister for External Affairs (Mr. Casey), less than two weeks ago, delineated clearly in this chamber Australia’s foreign policy, and its basis. I believe that their views on that occasion were so important that they will bear repetition. We may sum them up as follows: - First, we must deal with home policy and arouse the nation to the seriousness of the crisis and its possible effects on our future. Secondly, Ave should ensure that Seato, while being non-aggressive itself, will have sufficient strength to deter any aggressor, which in this ease is China. Thirdly, having achieved strength, we should leave the door open for a longterm policy if China and the Communists show signs of being civilized and desirous of peaceful co-existence.

Let us now consider the first point, which is to arouse the nation to an awareness of the dangers and difficulties that confront it. To do that Ave need a united effort by every honorable member in this Parliament. I do not say that we shall all agree on details, but surely we can agree on the general principles involved. If only one or two parties in this Parliament, on the Government side, try to do the job, it will not be done as effectively as it would be if we could all unite, on the main task in hand, differing only on details. This is a time which requires dynamic action, not static despair or a hopeless policy of wait and see. It also requires other things. Even before Kipling died, his famous lines, “ East is East, and West is West, and never the twain shall meet “ were proved to be out of date. To-day, young America, the middle-aged West and the ancient East have mct, and never the twain, or should we say the three, will separate in the foreseeable future, as far as world politics, economic conditions and social order are concerned. This means a very great re-orientation of thought and action, particularly on the part of Australia, because it is the only Western nation in the far-eastern clime. A very great deal of study and thought is required of all of us.

As far as points two and three are concerned, the position probably can be summed up in one sentence. We must be strong enough to command respect, wise enough to work for world peace, and magnanimous enough to share, not monopolize, this world’s goods. If I remember rightly - and my memory becomes somewhat hazy at times, because ministerial duties are inclined to weave cobwebs in the attic of the mind - those words were first uttered by the headmaster of a great public school in England during the middle 1930’s. Th* fact remains, however, that they are just as true to-day as they were then. It is useless trying to be wise enough to work for world peace unless we are strong enough to command respect in the world of to-day. That is why the policy of this Government - and I believe it is also the policy of the majority of the members of this Parliaments - is that Seato must be sufficiently strong to deter an aggressor, or strong enough to get tough with an aggressor who insists on playing it that way. It is not of much use to have an organization which consists of nations joined together in a nonaggression pact to resist aggression and prevent a cold war which may result in defeat in detail unless we are prepared to do something more than that. The guarantee of independence has to be a real guarantee. It is futile to guarantee independence unless we are prepared also to give economic aid and technical know-how. The converse is also true. It is useless to give economic aid and technical know-how unless we are prepared to guarantee the independence of the recipients of those things. In that respect, the interchange of students under the Colombo plan is doing a great deal to help the Australian and Asian peoples to understand each other. I should like, in this public forum, to pay a very high tribute to the young Australians at our universities for the magnificent work they are doing in welcoming these Asian students and making them feel’ at home.

After we have become sufficiently strong to command respect, which is fundamental in any foreign policy, I hope we shall be able to test whether 4,000 years of history in China have been obliterated by four years of red rule. I was very interested to see, on the 28th August last, a statement attributed to Mao Tse-Tung, in which he made the three points that the United States Seventh Fleet should be withdrawn from the straits between Formosa and the Chinese mainland, that the re-arming of Japan and West Germany should cease, and that Great Britain should try to persuade America to adopt a more reasonable attitude towards Communist China. Those three points accord with the policy attributed to Mao Tse-Tung by Senator Knowland in America recently. Senator Knowland referred to an agreement between Peking and Moscow to divide France from Germany - a move which is apparently having some success at the moment - to sow discord between Great Britain and the United States of America, and to destroy Japan. Later in the text of the statement there was something entirely different. Mao Tse-Tung was reported to have said that China greatly feared the formation of Seato. China has no reason for such fear, since the formation of Seato has no aggressive purpose. On the contrary, the idea of Seato is to prevent aggression. Bed China need fear Seato only if it wants to continue aggression. Mao Tse-Tung’ emphasized the need for great trade expansion between the United Kingdom and China. In other words, China desperately needs more trade. He also stressed China’s desire for peace. We want some evidence of that. Then he said that, once the Formosan question was regulated, China desired only a lone period of peace for development and improvement of conditions at home. The use of the word “ regulated “ is most interesting. He did not demand the restoration of Formosa to China. He merely said that he wanted the island regulated or, perhaps, neutralized. He is also reported to have said that China wanted final peace in Korea, and to have claimed that China had never been an expansionist power but desired only to safeguard its borders from the threat of aggression. One might ask whence he thinks aggression might come.

It is quite true to say that China has never been an expansionist nation during its history. But what of the present? That is the great unanswerable question at the moment. If Mao Tse-Tung meant what he said, then I feel that there is at least a ray of light in the gathering gloom, and I am inclined to be a little more optimistic than was the honorable member for Mackellar (Mr. Wentworth), who, in the course of a very fine speech this afternoon, outlined the problems with which we are faced in regard to civil defence. The speech indicated that the honorable member had undertaken a great deal of research. His conclusions, as far as I know, are sound. However, the honorable member should not forget that the other fellow is just as afraid as we are. If we can prevent a cold war and defeat in detail, I think we have a very good chance of preventing a really hot war. I emphasize again the point that it is not of much good to sit down at an international poker table holding a pair of “ deuces “ while one’s opponent has a full hand. It is not possible to bluff China in that way. That is why I say that the policy of this Government, as enunciated by the Prime Minister is the correct one. Seato must be strong. For that to be possible, we have to accept our share of commitments and responsibilities. Australia has never yet failed to measure up to its responsibilities, and even more than its responsibilities, once it knew the nature of the crisis. On two previous occasions we had time to wake up. This is a period when nations may not be given time to wake up, and that is why I say that it is so necessary for every one of us to do what he can to bring home to the Australian people the difficulties and dangers of the existing situation.

If red China wants peace in Korea, it has to realize that it was following an expansionist policy when it went into South Korea and tried to make the Sea of Japan a red lake, as did Russia by means of the treaty of peace with Japan.

China wanted to control the hydro-electric stations in North Korea because they supply the power for its Manchurian heavy industries. If red China wants peace in Korea, it must be prepared to see that South Korea obtains its share of that hydro-electric power, so that South Korea also can develop its industries and go ahead. I am not surprised that China wanted Tongking back, because that had been a de facto part of China until 1885, but to go further south into Indo-China, and as far as Cochin China, which it apparently wishes to do, would be definitely expansionist. AH of these questions are largely matters for China itself to resolve. China must also determine whether it wishes to remain a satellite of the Kremlin or become once again a great independent nation. If it will resolve some of those questions in the right way, and if our policy is sufficiently strong to command respect, I am hopeful that, in the not far distant future, it may be possible for America to call a far eastern conference to try to settle these World War II. left-overs that are causing so much trouble.

Peace in the Far East, and indeed. I believe, the peace of the world, depend upon the answers to those questions. The President of the United States of America has said, “ We will keep the door open “. He has also said that we cannot deal with a nation that is an aggressor, and that it is difficult to talk to the Chinese dragon while it continues to breathe fire and slaughter across the Straits of Formosa and over all the countries of South-East Asia. If the Chinese dragon changes its character, and if it extinguishes that fire, perhaps the ray of hope to which I have already referred will be changed into stronger sunlight. But do not let us forget that to be strong enough to command respect is vital, and that it is the fundamental basis of any effective foreign policy in this world of to-day. To be magnanimous enough to share, not monopolize, this world’s goods, is necessary, and to be wise enough to work for world peace is the desire of every man and woman in every- free country. I feel that that was the basis on which the foreign policy that was outlined by the Prime Minister arid the Minister for External Affairs has been built, and on which it will continue to be built.

The struggle for the four freedoms of the Atlantic Charter and the attempt to improve the peace, prosperity, and friendship of all races, creeds and colours, of which we are but one on the palette of the Creater, constitute the noblest endeavour of this generation. It may bc thought that we have tried and have failed, but it is better to have tried and failed than never to have tried at all. We commit the greatest siu when we cease to try. If we go forward with determination with our allies in the Pacific and with as many Asian nations as will join us in trying to establish stability in this unstable area, we may yet have a very good chance of succeeding even though the present outlook is not bright. But we must continue to raise our right arm of defence until such time as other nations, particularly some of the strong Communist nations, agree to partial disarmament and international control of atomic weapons. Although times ire difficult, do not let us be disheartened, but let us keep our objectives clearly before us. I appeal to the Australian Labour party to join with Government supporters in as united an approach as is possible to these general principles, even though we may disagree on the details.


– This debate is one which gives honorable members an opportunity of speaking on many matters about which they would not be able to speak on other occasions. Before I deal with the budget, I desire to make a few comments upon the last general election campaign as I. and many thousands of other people in the electorate, saw it. During my long political career, I have never experienced another election campaign like it. It was one of the most poisonous and vicious campaigns that has ever been waged against the Australian Labour party, and particularly against its esteemed leader. Everything went very well until the Leader of the Opposition (Dr. Evatt) delivered his policy speech. Immediately the right honorable gentleman delivered his policy speech, the Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur Fadden) indulged in a smear campaign. They did everything possible to malign and slander, not only the Leader of the Opposition, but also the great Australian Labour party. I took exception to their attack. I say again, in all sincerity and very definitely, that never in the history of the Parliament has a party and its leader been smeared more than were the Labour party and the Leader of the Opposition during the last general election campaign. When the result of the election became known, it was proved that many thousands of the electors disagreed with the smear campaign that was conducted by the leaders of the Liberal party and the Australian Country party, and by many of their supporters. Another matter which I resented, and to which I still take exception and against which I protest, was the action of the Prime Minister as it was reported in the Brisbane press and also, I understand, in the southern press. The right honorable gentleman was reported as having hit the table or the desk that was before him, and which held his papers, and as having said, “ This is as rotten as the Labour party.”

Mr Hamilton:

– That is true.


– The honorable member says “ That is true.” The honorable member was once a member of the Labour party. He is a renegade. He made an application to join the Communist party-

Mr Brand:

– The honorable member had the good sense to leave the Labour party.


– Order ! Honorable members must not interrupt.


– Let me say, on behalf of the millions of people of Australia who voted for the Labour party, that it ill became the Prime Minister, in his high and dignified position, to make such a statement and say that Her Majesty’s Opposition was a rotten Labour party.


– The Prime Minister did not say that.


– The right honorable gentleman did. If he did not say it, why was the report published and why was it never denied? Notwithstanding those charges, the Australian Labour party which is Her Majesty’s Opposition in the Parliament, polled more votes than the combined Government parties. I have the results of the election, and I intend to quote them tonight. I have heard supporters of the Government twit the Labour party with being a minority party.

Mr Hulme:

– In which State?


– I am speaking of the overall position in Australia, because that is the only way in which we can approach this question. I shall quote the latest figures that have been prepared by the Chief Electoral Officer in Canberra. They show that the “ rotten “ Labour party, as the Prime Minister tried to describe it - Her Majesty’s Opposition, bear in mind - polled more votes than did the Liberal party and the Australian Country party combined. The Labour party polled 2,292,881 votes and the combined Government parties polled 2,150,941 votes.

Mr Osborne:

– How many seats were uncontested?


– A worthwhile comparison in this matter can be made only on the basis of votes that were actually cast. On that basis, candidates of the .Australian Labour party polled a greater number of votes than the combined total of votes that was polled by candidates of the Liberal party, the Australian Country party and the Communist party and independent candidates. Yet, the Prime Minister (Mr. Menzies) had the colossal hide to refer to the Australian Labour party, which constitutes Her Majesty’s Opposition in this chamber, as “ the rotten Labour party”.

In common with other honorable members on this side of the chamber, I voice my protest against certain proposals in the budget, particularly those in relation to social services benefits. As I havesaid in debates on previous budgets introduced by this Government, I regard its treatment of the age, invalid and widow pensioners and its treatment of those entitled to receive sickness benefit arid unemployment benefit as being utterly inconsiderate and callous. The Government completely ignores the needs of those unfortunate people. Government supporters have raised the old catchcry that it has treated pensioners and recipients of other social services benefits more liberally than the Labour Government ever treated them. I shall take the opportunity during a subsequent debate to deal more fully with this subject and to disprove that claim.

As a result of the unjust and unfair treatment that this Government has meted out to Queensland, that State, today, finds itself in a serious position. According to the latest figures published by the Statistician, the rate of increase of population in Queensland is lower than that of any other State. This trend has resulted from the fact that this Government has not made available sufficient loan moneys to the Queensland Government to enable it to undertake urgent developmental works. Dealing with this subject, the Courier-Mail, which is a tory journal and supports members of the present Government parties, stated in a recent editorial -

The latest bulletin of the State Bureau of Industry has matter of serious concern for the Government and people of Queensland. It shows that over the last eight years most of the other States have been gaining population at a faster rate than Queensland. In 1045-4.6 Queensland had the highest rate of population growth. Last year it had the lowest, excepting New South Wales, and in the previous two years its ranking was last.

In rate of natural increase of population, by excess of births over deaths, Queensland has fallen from first to third place, and since the end of the war it has gained fewer people by net migration than any other State.

Mr Hulme:

– What a rotten government must be in office in Queensland !


– The provision of loan money for developmental works is the responsibility not of the State Government but of this Government. However, this Government has always refused to make adequate funds available to Queensland for that purpose. The position that has now arisen in Queensland, as the Courier-Mail points out, is most serious. Members of the Liberal party who come from that State have no real interest in the development of it because on no occasion on which they speak in this chamber have they a good word to say for the Queensland Government or for Queensland itself. The allocations of loan moneys made by this Government to Queensland for developmental works have been so niggardly that fewer immigrants have been attracted to that State than to any of the other States in which a greater degree of employment is available to newcomers. This has been a factor in retarding the growth of population in Queensland. Another consequence of this Government’s treatment of Queensland will be that on the basis of the recent census, the number of Queensland representatives in the Parliament will be reduced by one. The future will certainly not be bright for Queensland if that State continues to be represented in this Parliament by men like the present members of the Liberal party who, as I have said, never have a good word to say for Queensland and never miss an opportunity to decry it. The reduction of Queensland’s representation in the Parliament by one will be a severe blow. That loss, of course, will be due to the fact that the population of that State is increasing at a lesser rate than that of the other States.

Furthermore, as all honorable members are aware, Queensland also suffers by comparison with the other States from the viewpoint of development. Yet, this Government is prepared to make- available to it only the minimum amount of loan money, whilst, on the other hand, it is making available hundreds of millions to other States for developmental purposes. If this Government were to undertake adequate defence works in Queensland as it always endeavours to lead the people to believe that it does, that State would be enabled to provide employment for many more thousands and thus increase its population to a corresponding degree. Queensland remains, as it was at the outbreak of World War II., the most vulnerable of the States. God forbid that it should ever again find itself in a similar position should this country be threatened by invasion in the future. However, if this Government continues to treat Queensland as it has treated it in the past, that will be its fate in the event of Australia becoming involved in another conflict.

I remember very well that prior to the outbreak of World War II., I and other honorable members asked a number of questions of a former Minister for the Army, Sir Percy Spender, as he now is, about the defence preparations that that Government had made in Queensland. The Minister’s reply was that Queensland was adequately defended. When I persisted with my questioning, he said that the Government was satisfied that adequate provision had been made for the defence of Queensland, because three shore-based guns were in position between Cowan Cowan and Cairns. The installation of three shore-based guns was the sum total of the defence preparations that were made in Queensland in 1938 and 1939 by the first Menzies-Fadden Administration. When further questions were asked, we learned that those three weapons were obsolete guns that had been purchased from Great Britain and re-rifled in Australia. Queensland is, at present, entirely without defence, as it was immediately prior to the outbreak of World War II.

I clearly recall the occasion when Labour took office in 1941. The downfall of the Menzies-Fadden coalition was caused, not by outside forces, but by dissension among its own supporters and by squabbling within the Cabinet. The Prime Minister of that time, who is our present Prime Minister, went overseas on official business, and in his absence the present Treasurer (Sir Arthur Fadden), who was leader of the United Country party, as it was then, and co-leader of the coalition administration, planned the defeat of the Prime Minister, as a result of which the Treasurer became Prime Minister for 40 days and 40 nights. When the lack of defence preparation became known, the late Mr. Alex. Wilson, who was then .member for Wimmera, and the former member for Henty, Mr. A. W. Coles, crossed the floor of the chamber and, by voting against the Fadden Government, helped to bring about its defeat. Those two gentlemen realized that Australia had been left defenceless by the Menzies-Fadden coalition. That matter has been mentioned in this chamber on a number of occasions. The Menzies-Fadden policy in 1939 was to abandon Queensland from Brisbane north. That Government originated the “ Brisbane line “. The honorable member for East Sydney (Mr. Ward) on many occasions has been twitted about references to the “ Brisbane line “, but the truth is that the policy was decided upon by the first Menzies-Fadden Government. I well remember the occasion when Mr. John Curtin, who took over the Prime Ministership after the downfall of the Fadden Government in 1941, and who did such wonderful work for Australia’s war effort, made his first public statement about the declaration of war on. Japan. He said that the Labour Government that he led would defend every inch of Australia from Cape York to the most southern point of the continent. That was the first declaration of Labour’s policy on the defence of Australia. The Labour Government led by John Curtin made a magnificent war effort.

The - defenceless position of Queensland when the Menzies-Fadden forces were in office in 1939 was confirmed by the former Governor of Queensland, Sir Leslie Wilson. There was undoubtedly a “Brisbane line” laid down by the Menzies-Fadden Administration. Members of the Liberal and Australian Country parties, sitting in Opposition in this chamber after the war, flatly denied that suggestion. After Sir Leslie Wilson retired from the position of Governor of Queensland and returned to London, he addressed a gathering of important and influential men at a reception that was tendered to him. When he was asked to give his opinion of Australia he said - and this was reported in the Brisbane press - that he was pleased to be back in England, that he had thoroughly enjoyed his stay in Australia, that he did not know very much about Australia, but that he knew a good deal about Queensland. He expressed his admiration of the magnificent all-out war effort that was inspired by the Australian Labour Government led by John Curtin, and observed that he disagreed only with the decision of the Menzies-Fadden Administration to abandon Queensland north of the “ Brisbane line “. In spite of the failure of that Government to make preparations for Australia’s defence, supporters of this second

Menzies-Fadden Administration tell the people that, before World War LT., the first Menzies-Fadden Administration laid the foundation of a great war effort. If ever any one should hang his head in shame, the persons who comprised that Government should do so, because they and their supporters know in their own hearts that they left Australia defenceless in 1941. If this Government continues its present policy Australia will bo as defenceless again in any future conflict - and let us hope that war will not break out - as it was in 1941.

This Government has treated Queensland unjustly from the financial point of view. I cannot understand the attitude of the Treasurer towards the State from which he hails. ‘He was described during the recent general election campaign as a former Queenslander. If one were to judge by his attitude to Queensland, one certainly would not conclude that he i3 still a Queenslander. The budget makes provision for increased assistance in allocations of loan moneys and reimbursements under the Financial Agreement to all the smaller States, but not to Queensland. Item number 10 in the fourth statement appended to the printed copy of the Treasurer’s budget speech contains details of Commonwealth payments to or for the States. Provision is made for additional ‘ assistance over and above loan moneys and normal reimbursements to the Western Australian Government under the Western Australian waterworks grant, to the amount of £450,000. The Commonwealth will pay £20,000 in the current financial year to the South Australian Government for the operation of the railway from Port Augusta to Port Pirie. Tasmania is to receive from capital expenditure £.1,600,000 for the aluminium project at Bell Bay. That is slightly less than the allocation last year. New South Wales and Victoria arc to receive £14,200,000 from capital expenditure for works. Provision has been made for the construction of the Stirling NorthLeigh Creek railway and other railways and all the projects that I have mentioned are to be financed from capital expenditure. Queensland, however, is to get nothing at all, from that source. If any State should be developed for defence purposes it is Queensland. Development is lagging in that State and consequently our defences are weaker than they should be. I am not complaining abo;:t the national projects that are in progress in other States. I believe that they are very important, but the Go verran en c should assist Queensland as well. It should provide money for the advancement of the projects that the Queensland Government has been carrying on over a period of years, and should enable it to complete those works. Parliament is ignoring the needs of Queensland.


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

I desire first tq pay a tribute to the Treasurer (Sir Arthur Fadden · Maranoa, “l [9.3].

, who has presented his fifth budget in this chamber. The budget that is under discussion is a moderate budget. It may also be described as a budget of consolidation. During his term of office, the Treasurer has had to do many unpopular things. He had to introduce an unpopular budget to clean up the mess and the chaos that had been left through the maladministration of the Labour Government. Honorable members have heard much about inflation, but I remind the committee that the Queensland Government Statistician has stated that the sharpest rise in inflation occurred between 1947 and 1949. In those years inflation became worse by 30 per cent. In one of his last speeches in this chamber, the Labour Prime Minister, Mr. Chifley, bore out that statement. He said, in effect, that any government that took up the reins of office would have to do something drastic to curb inflation. He said that this Government, meaning the Menzies-Fadden Government, should not he held responsible for a condition that was world-wide and that it had to be tackled courageously.

The honorable member for Brisbane (Mr. George Lawson) said to-night that honorable members on the Opposition side who represent Queensland had clone certain things. I remind the committee that there are thirteen honorable members from Queensland on the Government side and only five in the Opposition. We on the Government side believe that Queensland is the richest State of the Commonwealth and has the greatest possibilities. We do not agree with the statements that have been made by the honorable member for Brisbane about the Queensland Labour Government. It has retained office for more than twenty years by gerrymandering the electorates. The honorable member said that the Australian Government was holding office on a minority vote. I remind him that honorable members from Queensland representing the Liberal party and the Australian Country party received 80,000 more votes than the Labour party candidates in Queensland. The Queensland people have confidence in this Government as is amply demonstrated by the number of honorable members on the Government side that they have sent to this chamber to represent them.

The honorable member for Brisbane also stated that no major works were being carried on in Queensland. Before any major works can be started in any State, they must be referred to this Government. I say without fear of contradiction that the Queensland Government is devoid of any constructive ideas. The honorable member for Brisbane said that this Government was starving the Queensland Government of money, but that Government had a surplus of £10,000,000 at the end of the last financial year, and had no idea of any way in which to spend it. The Queensland Government had £1,000,000 in the main roads allocation that it could not use. The shire councils knew what to do with it, but the Queensland Government said that it could not let them have the money because the dreadful Australian Government would not allow it enough funds.

Last night, the honorable member for Dalley (Mr. Greenup) read a long screed about Australian companies that are making profits. He selected a few companies from, the thousands that are in business in Australia and referred to the profits they were making as a result of good business methods. Honorable members on this side of the House believe that private enterprise should be encouraged. If investors are prepared to risk their money in Australia, I am not concerned about the size of their profits as long as they give service to the people. What did the honorable member for Dalley mean to convey by his criticism? What were the implications of his references to company profits? Apparently he intended to indicate that there was something wrong about the profits of the companies. He was afraid to tell the people that he and his colleagues on the Opposition side intend to socialize those companies if they ever occupy the treasury bench. I challenge him to deny that that was the meaning of his speech.

Opposition members interjecting,


– Order ! Honorable members must remain silent and give the honorable member for Maranoa an opportunity to be heard.

Mr Haylen:

– The Chairman should prevent the honorable member from being so provocative.


– Sometimes it is useful to review history. Perhaps the honorable member for Dalley and other honorable members on the Opposition side have forgotten or do not know of the attempts that were made by socialist governments to socialize various enterprises throughout Australia. Let us glance at the history of the socialist enterprises. Government trading undertakings in New South Wales have made the following losses: - timber and joinery works, timber yards and sawmills, £417,000; State shipbuilding yard, Walsh Island, £1,077,000; State trawlers and fish supply, including retail shops, £317,850; State sand and lime brickworks and lime works, £51,000, making a total of £1,862,S50. Yet the socialists claim to be business people who are able to run trading undertakings successfully ! A similar situation is to be found in Western Australia. ‘ The loss on the State steamships is £1,592,572; State quarries, £41,495; State agricultural implements and engineering works, £270,886; State freezing works, Wyndham, £1,667,699, and State brickworks, £10,793, making a total of £3,583,445. What a wonderful record! In South Australia, the State-owned Parramatta and Yelta copper mines lost £30,000 and the State brickworks £2,600, a total of £32,600.

Queensland, of course, is the daddy of the lot. State butchers’ shops lost £31,410 ; State cattle stations, £2,024,302 ; State fish supply, markets, retail fishshops, Wynnum depot and State trawler, £97,442; State produce agency, £18,686, and Hamilton cold stores, £68,887. I mention, in passing, that the farmers’ co-operative society, which took over the cold stores, made a profit in the first year of its operations. The State cannery showed a loss of £136,666; the State arsenic mines, £88,840;the Chillagoe State smelters, Irvinebank treatment works and metalliferous mines, £1,749,667; State coal mines, £438,995, and the State steamer, Douglas Mawson, £34,812, a total of £4,662,707. That is a wonderful record of achievement. Yet the honorable member for Dalley has tried to convince the people that socialist enterprises of that kind, which have made such huge losses, should be re-established.

Mr Hulme:

– What about Peak Downs?


– I shall tell the committee about Peak Downs. This great socialist enterprise was established by the British Labour Government and the Queensland Labour Government. I shall not deal with it at length, other than to say that it was intended to plant 400,000 acres of grain sorghum in the Springsure-Clermont area and to fatten enough pigs to supply Great Britain. The originators of the plan were even going to socialize the pigs, but the pigs refused to be socialized and the attempt had to be abandoned. The plan called for the production of 1,000,000 bushels of grain sorghum, but only 320,000 bushels were grown. The honorable member for Dalley considers that socialist experiments of that kind should be renewed. The losses on the State enterprises that I have mentioned amount to between £9,000,000 and £10,000,000.

Mr Haylen:

– Have there been any socialist enterprises in the Maranoa electorate ?


– I thank the honorable member for Parkes (Mr. Haylen) for his helpful inquiry. As a matter of fact, four or five State cattle stations were established in Maranoa. I know a good deal about one of them. The responsible authority sent out one of its stooges, because socialists generally have stooges around them, and be was taken round and round clumps of trees and shown the same cattle over and over again. He bought 5,000 or 6,000 head of cattle which were not there.

Mr Haylen:

– Oh!


– That is the truth. The cruel part of it is that the taxpayers are still paying for those loses. Labour governments leave legacies of that kind to their successors.

I have said enough about socialist enterprises. I should now like to refer to several matters that have been discussed extensively in this debate. The first of those subjects is pensions. This Government has stabilized the cost of living in Australia and, in my opinion, the pensioner is in a better position to-day than at any time since the introduction of the pensions scheme. I offer a word of advice to Opposition members. The best turn they can do the pensioners is to advise the people generally to work a little harder so as to reduce the cost of living, because that will increase the purchasing power of pensions. The pensioner needs to be able to buy the necessaries of life at a reasonable price, but food and clothing cannot be bought at reasonable prices unless each and every one of us works a little harder to reduce costs. When costs have been reduced, we shall be much better off.

Much has been said about the development of the north. I propose to speak about the development of the inland districts of Queensland. I agree with the honorable member for Kalgoorlie (Mr. Johnson) that much of the great inland has been sadly neglected. Commissions have been appointed to make reports on the situation, and some of those reports have been excellent, but no action has been taken on them. The best way in which we can develop that country is to induce people to live there. At present, there is a floating population in most of the outback areas. The reason for the absence of substantial permanent settlement is the lack of amenities. If the position is to be remedied, a better communications system must be provided. Children who are born in those western areas will not stay there while educa tional and medical services, and various amenities, are not provided. Once those young people leave the outback areas, it is most difficult to prevail upon them to return. I realize that the development of the inland districts of Queensland is primarily a matter for the government of that State, but I believe that the Commonwealth can give a lead in the provision of educational and medical services. Let us consider for a moment the distribution of educational facilities. Seven universities, which are well endowed by the Commonwealth and the States are established in the capital cities in the coastal belt. Why should not there be a university extension to one of the places outback? I shall name one of them, and it may not meet with general approval, but I have in mind Alice Springs. The advantage of a university extension there would be that the people in that outback area would be able to get the advantage of advanced education. Consideration should be given to some scheme of that kind.

In the course of this debate, several honorable members have talked about the development of the meat industry. The western districts are pastoral areas, with big station properties. We have heard a lot about building the Dajarra line and other railways. I do not know whether the Dajarra line would provide a solution to our problem. Personally, I do not think it would provide a complete solution. It would enable graziers to shift young stock by rail from the northern breeding areas to the Channel country, one of the finest fattening areas in the world. Cattle could be fattened there quite easily, but the problem would be to get them to the killing works without loss of condition. Anybody who has had any experience of cattle knows that we cannot drive cattle for considerable distances and still expect them to yield good quality meat. The Channel country extends into the western part of my electorate. I have seen cattle on the soft country there with hooves 1 foot across. When cattle are taken out from the southern end of the Channel country on foot, they have to be walked over 60 miles of stony country in the Grey Range, and in some instances the losses are terrific. The problem is how to get the cattle out of the fattening area so that they will arrive at their destination in good condition and yield meat of good quality. Before a railway could provide a solution of the problem we should have to continue the line from Quilpie to Windorah and from Windorah to Dajarra. Then we should have connecting links with the central district and the Brisbane area.

I suggest that the Government appoint a panel of experts to consider this problem. The members of the panel should be people who know the area, not government officials. They should be asked to report on the possibilities of moving cattle by air and by road train. I read a press report the other day about the Marian Downs road train which is used to shift cattle from Alexandra Downs to Marian Downs, and from there to the railhead. It has been brought in for an overhaul. It cost about £150,000, but apparently it pays the cattlemen concerned very well, because cattle, even after having been railed 700 miles to the killing works at Townsville lull at from 60 to 100 lb. better than cattle that are walked to the railhead. I suggest that the panel be asked also to report on the possibilities of dieselelectric road trains of the kind now being built in America. They can travel over any kind of country - desert, stony ground or anything else. Each wheel is independently driven. This kind of road train may provide a means to develop these areas quickly. It would take years to build railway lines, whereas we have got to do something to develop the country quickly.

I want to say something about the neglect of war service land settlement in Queensland, although in the short time at my disposal I shall not be able to deal with the subject at length. War service land settlement in Queensland has been a dismal failure. That is a tragedy. Nearly every time I go home I am asked to receive deputations of returned servicemen who are qualified to take up land under the war service land settlement scheme. Some of them have a small amount of capital and some plant, and all of them are eager to get land. The Queensland Government has abandoned war service land settlement. It has been reported that Queensland wants to become an agent State for this purpose. I believe that at a conference held last March the Queensland representative intimated that his State was prepared to become an agent state, and I understand that the New South Wales representative said the same thing on behalf of his State.

Mr Wight:

– They were not sincere.


– I agree. They imposed all kinds of conditions, to which the Commonwealth could not agree. They wanted to be treated differently from other agent States. When the Queensland Government approached the Loan Council for an allocation of loan money recently, it did not reveal that it had abandoned war service land settlement, although it asked for money for that purpose. A few weeks after the allocation was made, it announced to the world that it had abandoned the scheme. That was dishonest. Returned servicemen in Queensland want to know whether the Commonwealth will take over war service land settlement in that State on the same basis as in Western Australia, South Australia and Tasmania. It is tragic that land is not being made available to men who are eager to acquire it, and have the ability and equipment to use it properly. Many of the men who have approached me were born and bred in the part of the country in which it was proposed to set aside land for soldier settlement, but they cannot get land there. I suggest that the Commonwealth should examine this matter immediately and make a proposal to the Queensland Government. If a scheme as good as that which is in operation in the agent States were put into operation in Queensland, the men who are waiting for land there would be settled on the land within about five years.

The Treasurer (Sir Arthur Fadden), at the conclusion of his budget speech, said -

In surveying the outlook … all in all, conditions are favorable to further sound progress “in the year ahead. The main thing is for the various elements in our economy to keep in step and not to try, each individually, to thrust itself forward at the expense of the others.

I commend that thought to the committee. Each of us must pull his weight to keep our economy on the stable basis on which it has been placed by the able management of this Government. We must do so, not only for our own benefit but also for the benefit of future generations.


.- This is the first opportunity that I have had to say a few words in the Twenty-first Parliament. The electors of Hume, in their wisdom, have returned me to the National Parliament to represent them for a fourth term. No one has represented them for a longer period. They have paid me a very great tribute. The contest for the Hume seat at the last general election was a three-cornered contest. In the subdivision of Tumbarumba, where the Liberal party candidate resided, I polled 1,126 votes and he polled 766 votes. In other words, I had a majority of 360 votes in the Liberal party’s stronghold. I come now to the subdivision of Tumut, where I have resided for the past 35 years. There I polled 1,421 votes. My nearest opponent, Lieutenant-Colonel Anderson, polled S59 votes, and so I had s. majority over him of 562 votes and an absolute majority over both opponents of over 200 votes. Next I come to the subdivision of Young, in which Lieutenant-Colonel Anderson lives.

Mr Gullett:

– Lieutenant-Colonel Anderson, V.C. !


– Lieutenant-Colonel Anderson, V,C, as my honorable friend from Henty reminds me. He is a fine gentleman, too. In this subdivision, I polled 2,161 votes, and Lieutenant-Colonel Anderson, V.C., polled 1,428 votes, which gave me a majority over him of 733 votes, and an absolute majority over both opponents of 339 votes. In the most rural part of the electorate, the northern area which was once attached to the electorate represented by the late Mr. Chifley - the conservative subdivision of Crookwell - my opponent’s joint total at the previous election was reduced by 24 votes and my total was increased by 99 votes. I express my deepest gratitude to the electors of Hume for the great faith and confidence in me that they have demonstrated through that democratic instrument, the ballot-box.

My main objective in this Parliament is to serve Australia and, in particular, the electors of Hume, irrespective of their political views. One of the virtues to which I have stuck during the nine years for which I have served the people of the electorate is that I have acted nationally at all times. As the standard bearer of the great, humanitarian Australian Labour party, I asked the electors to do two things at the poll on the 29th May last. First, I asked them to record a vote of censure on the Menzies-Fadden Government for its gross repudiation of the solemn electoral commitments made in the recklessly deceptive policy speeches delivered on its behalf in 1949 and again in 1951. Secondly, I asked the electors to give Labour a firm foundation for the restoration of a sound expanding economy by assuring it of a majority in the House of Representatives. The principal ground on which I asked for their support was the moral ground that any Go,vernment which repudiates its election pledges violates a clear contract with the electors. The essence of good democratic government, as opposed to totalitarianism, is faith, which springs from the trust between two contracting parties. This trust constitutes the moral authority conferred by the electors upon those whom they elect to govern them. A mandate is sought and a mandate is given. It represents an act of faith between those who accept the responsibility of government and the people who endorse a clearly announced policy in accordance with which the affairs of the nation are to be conducted. But once that trust is weakened or destroyed, respect for the government on the part of the governed is succeeded by frustration, disillusionment and a complete lack of confidence.

I charge the Menzies-Fadden Government with the breaking of its solemn electoral promises to the people of Australia. Because of those promises, Mr. Chifley was turned out of office in 1949 and the present Government parties were returned to power then and again in 1951. It is quite easy to understand why those parties, although they are in power to-day, received a minority vote on the 29th May, when they polled 142,000 votes fewer than did the Labour party’s candidates. The simple truth is that they have lost the confidence of a majority of the people because they have repudiated every promise that they made iia 1949 and again in 1951. When the Government introduced its horror budget to the Parliament in 1951, it was responsible for a severe setback to industrial expansion. Will anybody deny that it was responsible for a check to essential national development? Not one supporter of the Government will do so. The same Menzies-Fadden Government “was responsible for lowering the standards of living of the great bulk of the Australian people. It was responsible, too, for imposing a crushing burden of taxation on the people, for causing a reduction of the value of pensions and fixed incomes of all kinds as a result of the loss of purchasing power of the currency, and for a tremendous increase of the cost of living after 1949. For three years and three months under a Labour government, the basic wage in Australia increased by only fi 2s. 6d. Look at the amount of the basic wage to-day ! It is over £12 a week.

Notwithstanding the appalling record of broken promises, and injuries of a serious nature caused to nearly every section of the community, members and supporters of this Government continue to claim, with the aid of false propaganda, that it has stabilized the economy and greatly improved the situation that, existed when Mr. Chifley was Prime Minister in 1949. This is’ a claim, surely, which outrivals the boldest propaganda of a totalitarian dictator ! It is exactly the opposite of the truth. Despite its dishonest pledge to reduce taxation, the Menzies-Fadden coalition has issued another suicide budget calculated to yield £400,000,000 more than the former Labour Government’s £500,000,000 budget, which it promised to reduce. Do honorable members opposite deny that? Perhaps they forget tie full page advertisement that appeared in the daily newspapers. The Prime Minister (Mr. Menzies) was portrayed as a glamorouslooking man. Of course, there is no question that he is a brilliant orator. But although he has a silver tongue, he is devoid of sincerity. I believe that he is the most insincere man who has ever sat in this Parliament


– Order I The honorable member has no Tight to reflect on members of the Parliament. I ask him to withdraw that remark.


– I accept your ruling, Mr. Chairman. Did the right honorable gentleman carry out his promises to reduce the cost of living and increase living standards ? ‘ Did he put shillings back into the £1? He certainly did not. Did he abolish the means test, as he promised to do ? Did he provide £250,000,000 for the construction of roads, water conservation and irrigation schemes, and other projects? He did not do so. He repudiated all of those promises. Furthermore, the Treasurer (Sir Arthur Fadden), having scrambled back into power without a majority -vote of the people five years ago, promptly repudiated his promise to reduce taxation. When the right honorable gentleman gave birth to his first horror budget Australia, alone, encountered a depression, We all remember the sacking of 10,000 public servants. I recall that the previous Labour Government applied a decentralization policy, as a result of which small industries were established all over Australia. A factory that was established at Cootamundra during Labour’s regime was forced to close its doors after this Government came to office. That was also the fate of a factory at Junee, and another small factory in my home town of Tumut Of course, those are only ,a few of the factories that have been forced to close down since this Government came ito office. There was a great army of unemployed, and the stock exchange quotalions cascaded to disastrous depths. Unlike Labour governments - or American governments - ‘which go flat out to protect local industries, the MenziesFadden bunglers, in obedience to rich importers, skyrocketed imports from sweated countries abroad, to it-he detriment of the Australian industries which, in both -town ;and country districts, had pre*ed such sterling defence assets during World War II. Is it amy wonder that the pro-importing tall poppies of the Chamber of Commerce would give three, cheers for this tragic Treasurer, while the reverse attitude is evident in the Chamber of Manufactures, which is .the bodyguard of local factories. It is interesting to note that the 8d. a week benefit to the lower-bracket taxpayers will be more than swallowed up by the increase of the price of tea, which, in Canberra, has. jumped from 2s. 9d. a lb., during Labour’s term of office, to 5s. lOd. a lb. since this Government came to office. The Government now pretends that the Australian economy cannot afford a tax cut, instead of a tax slug. Yet, it is only a few months ago that the minority Prime Minister boasted in all States that Australia was never more prosperous. If Australia was enjoying unparalleled prosperity in May last, what has the fusion Government since done to our economy? If the Government spokesmen are now telling the truth, they must have peddled deliberate falsehoods during the general election campaign in May last. I believe that the general feeling everywhere is that the budget has given a shabby and unfair deal to, and is under fire from, all sections of the community. This niggardly attempt to please every one will satisfy no one. To the men in the street, in the stores,, on the farms, and in the factories, this horror budget Ho. 2 is. doubly tragic, in view of the fact that,, at the Government-controlled ballot-boxes in May last, they vo: 3d, by a large majority, against the authors of the first horror budget. Because ox the electoral boundaries, they now find that they are saddled with the Menzies-Fadden coalition, in spite of themselves.

Mr Downer:

– Labour decided th.3 electoral boundaries.


– Despite the intensive anti-Labour campaign in my electorate, I gained absolute majorities in most of the. subdivisions. The fact that the wrong people are dragging down ministerial salaries against the express will of the people, as expressed at the ballot-box, is serious enough in any democratic country, but the position has been aggravated by this Government implementing an anti-Australian free-trade policy, for which it did not receive a mandate from the people, either at the last general election or the Senate election last year. One of the biggest double-crosses in political history was the promise that the Prime Minister’ made to age and invalid pensioners and the recipients of social services benefits. Every member of the Parliament, as well as people outside of it, will recall that the right honorable gentleman made definite promises in that connexion. He said -

The va?ne of social services will be at least maintained; indeed it will be increased. Pensioners can rely upon us for justice. “What justice have they received in this budget ? He continued -

We propose to abolish the means test. We will introduce our plan in 1952.

Have those promises been honoured? Although the cost of living has since more than doubled, pensions- have been increased by only a little more than half. The Government should conduct, immediately, an inquiry into the position of pensioners who, because of illness*, infirmity, or age, have to live on the minimum pension of £3 10s. a week. I’ am confident that every member of the Opposition would welcome the holding of such an inquiry on a non-party basis. The attention of the public should be directed to the conditions under which the aged and infirm members of the community live, and to what they eat. The fact that the budget did not provide for an increase of basic pensions shocked the whole community. That omission was a blot on the Government, which will persist during the term of its natural life. Surely the Prime Minister and his tragic Treasurer could have agreed to grant even a small increase of pensions. The Government proposes, by means of a liberalization of the means test, to assist people who are able to augment their pensions by taking jobs. I raise no objection to that, but there are about 350,000 pensioners who are unable to take advantage of that opportunity. In the last general election campaign the Labour party promised to increase the pension rate by 10s. a week. Even that increase would have- been inadequate. Thousands of old people are living, singly and in couples, in rooms in the big cities. There are not nearly enough hostels to accommodate them. To the shame of the Government many aged pensioners to-day are dying, not of old age, but of malnutrition or causes that arise from lack of food. They cannot afford to pay rent and still buy sufficient food for themselves. Many such pathetic cases have come to the notice of honorable members on both sides of the chamber, and of social workers. A disturbingly large number of age and invalid pensioners appear to have no relatives. The plight of such people is serious, and should be ameliorated promptly. I believe that, as soon as even a minor degree of inflation became evident, the base rate of pension should have been tied in some way to the cost of living, as is -the basic wage. To-day, the base rate of pension represents only 28 per cent, of the basic wage. Under the Labour Government it represented 36 per cent. Labour was defeated before inflation became a burning issue, and has since had no opportunity to rectify the glaring injustices that have been done to pensioners. I appeal to the Government to stand by the pensioners, to give justice to the men and women who helped to make this country what it is to-day. They not only played their part in moulding this country, they also were the parents of the men and women who fought for our freedom when this country’s security was challenged not so many years ago in the dark and desperate days of war. Why, when the nation’s accounts show a surplus of £56,000,000, has not one penny of that huge accumulation been diverted to the pensioners by way of an increase for pensions? I ask the Government to redeem its promises to the aged, the infirm and the recipients of social services.

I come now to the defence vote of £200,000,000. I wish to make it crystal clear to the committee, and to the people that I raise no objection to the earmarking of this amount for Australia’s defence. I differ from the Government, however, in that I object to this money being squandered as it will be, if the pattern of expenditure is to follow the same pattern as we have seen in previous years. The Government has been in office for almost five years, but what have we to show for the £800,000,000 that it has expended on our defence? Precisely nothing! What we require in this country is a realistic defence policy which would allow a proportion of this huge amount of £200,000,000 to be used for improving Australia’s railway systems, highways, air-fields and irrigation schemes, and to provide adequate housing for the people. I link all these needs with defence. We all know how much we paid because the break of gauge prevented trains being run from New South Wales into Victoria during the war. If we are to hold this country and develop it we have to increase our population. What is the use of bringing large numbers of people here from other countries unless we are able to house them adequately? Personally, I am not satisfied that we are getting real value for the £200,000,000 that we expend each year on defence. The defence of Australia does not depend simply on the voting of a huge amount of money every year. In my opinion, what matters is how that money is expended. Improvement of our railways, highways and other essential services is the task that the Government should be tackling. Every week I travel over the Hume Highway, and so am familiar with its condition. If this country were invaded, how long would that highway stand up to the heavy traffic that it would be called upon to carry? Not long. We have no decent highways in Australia. The Government, instead of attacking the Labour Government that was called to office by the people during the threatening days of the last war, when even the supporters of the antiLabour forces had lost their confidence in anti-Labour governments and had booted the Menzies Government out of office, should be doing some of the things that I have indicated. From 1941 until 1943, the Labour Government administered the country, although it lacked a majority in the Parliament, yet honorable members opposite say that Labour cannot govern. We were able to govern during the worst period of the war and during the transitional postwar period. I venture to say that if we had gone to the country in 1949 with the old electoral boundaries unchanged the Menzies Government would not now be in charge of the destinies of this nation.

The Government will be defeated at the next general election. Make no bones about that. We shall not have to wait long before the Government suffers an electoral defeat, because the Senate has to face the people in 1956, and the Government parties have not a ghost of a chance of winning that election.


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


.- What the honorable member for Hume (Mr. Fuller) said or did not say to his electors during the recent general election campaign is not of particular interest to honorable members, or to the rest of Australia. Some of his remarks, however, call for an answer, although the facts themselves shriek back at him if he dares to examine the record and be honest with himself. He charged the Menzies Government with having scrambled into power in December, 1949. “ Scrambled into power “ were his words. The fact is that the Menzies Government was put into power by the people of Australia with a record majority, and lias been returned twice since with an emphatic vote of confidence, and any charge in regard to a minority vote does not bear analysis, because in any case the boundaries on which the last three federal elections were fought were all fixed by the Chifley Labour Government in 1948. He accused the Menzies Government of having broken its promises. Anything more fantastic in the way of a charge I cannot imagine. I have not time to reiterate for the benefit of the honorable member for Hume, who must be one of the very few people in this committee who think along those lines, the whole history of the achievements of the Menzies Government over the last four years or so, but I remind the committee that the Menzies Government was elected on four main heads. It was elected, in the first place, to stabilize our economy. That has been done. The honorable member for Hume flaunted the old tag about putting value back into the fi. If that means anything, I suggest that it means stabilizing our economy. That is what the Government has done. The fi note is not of any particular value in itself. Money is only a means of exchange. Ever since money was invented, its value has changed throughout the years and throughout the centuries.

The Menzies Government inherited from its predecessor a sea of inflation which engulfed this country and which the Chifley socialists did nothing to stem. The so-called horror budget, a term invented in the fertile brain of the honorable member for Melbourne (Mr. Calwell), was made necessary in 1951 by two main factors which were quite unforseen by anybody a year or two earlier. One was the outbreak of the Korean war which inevitably created intensified inflationary pressure. The other was the wool boom which assumed alarming proportions in the financial year 1951-52. It was in order to deal with those phenomenal conditions that the 1951 budget was introduced. If the 1951 budget had not been introduced in the form that it took, and if the economic measures which followed the 1951 budget had not been implemented, the record tax reductions of last year and the further substantial tax reductions of this year would not have been possible. The honorable member for Hume, in common with other Opposition members made an attack on the Prime Minister (Mr. Menzies). I do not propose to deal with that attack because it is merely symptomatic of the attitude of many honorable members opposite. They have such a paucity of ideas and such a poverty of argument that they have had to fall back on personal abuse of our leaders.

This debate has had two striking features. One has been the self-imposed absence of the Leader of the Opposition (Dr. Evatt) on some political adventure of his own elsewhere, instead of leading his party in this national debate. The other striking feature has been the apparent discarding by the Labour party of its election policy. We have heard little in this debate of what honorable members of the Opposition would have done had they been in office. They have failed to suggest an appropriate, alternative, fiscal policy. One would have expected from the Opposition some cohesive and concerted attack on the Government or at least a reiteration of the financial policy which the Opposition put to the people and which was handsomely rejected on the 29th May. But such a cohesive attack was not made. The most that took place was a series of disconnected sorties. Damp squibs were thrown at the treasury bench. The Opposition has failed to produce the alternative financial policy that the people of Australia expect from it. I ask Opposition members whether or not they still hold to the financial policy that they put to the people on the 29th May. Do they or do they not still believe that the means test should be abolished? There is a remarkable divergence of opinion between the reported statements by leading members of the Labour party and the statement that the federal campaign director for the Labour party made after the general election campaign was over. He said that he did not believe that the Labour party had agreed to promise the abolition of the means test and, in any case, he would be prepared to accede to that suggestion only if it could be implemented without increasing taxation and without increasing inflation.

As I have said, we have only a series of mild sorties from members of the so-called “great Australian Labour party”. Lacking any cohesion, lacking leadership and rejected at the polls, I can only assume that they have regarded discretion as the better part of valour. As their financial policy was not acceptable to the people, perhaps they have decided that it would be best conveniently to forget it and bury it. I believe that no party of any political colour is worthy of the task of governing this country unless it has the courage and honesty to come out and fight an election campaign on its real platform. That is something that honorable members opposite have never done. Invariably, they concoct a special policy to suit their immediate purposes. They failed ignominously in their purpose at the last general election, because the people of Australia saw through the recklessness of their financial policy. This budget represents a fulfilment of the election promises that were made to the people of Australia by our Prime Minister, particularly in regard to the reduction of taxation and the easing of the means test. It is a stability budget. It is a sane, sensible, balanced budget. It is designed to consolidate the position that we have won after long battles against inflation which the Labour party did nothing to fight. The battle was left entirely to this Government and. like a run-away horse, inflation could not be stopped immediately; or even in a few months. But an analysis of Commonwealth statistics for the last twelve months proves conclusively that our economy is now stable and that the inflationary spiral has been beaten.

This budget gives concessions over a wide field. It provides for reductions in income tax, sales tax, pay-roll tax, and customs and excise duties to a total value of £46,600,000 in a full financial year and to the value of £35,000,000 during this financial year. This is a tax reduction government. In his policy speech in 1949, the Prime Minister said that we were a tax reduction party. When he came to office he proved himself as good as his word. The Government has reduced income tax by 30 per cent, on 1949 rates during the last four years. It has abolished land tax, which the Labour party is pledged to restore. It has abolished entertainments tax. The people of Australia can rest assured that this Government will continue to be a tax reduction government. The test of the incidence of taxation is the amount of money that is left in the taxpayers’ pockets after taxation has been paid. The average income in Australia is between £750 and £800 a year, an increase of about £300 a year on the average income that was being earned in 1949, the last year of office of the Labour Government. In order to show how well off Australians are now, I shall give two examples. A taxpayer with a dependent wife and one child on an income of £800 a year, under the proposed rates of taxation, will pay £38 12s. a year in tax. In the United Kingdom a taxpayer who receives the same income pays £91 2s. 2d. in income tax, and in New Zealand such a taxpayer pays £95 12s. 6d. Therefore, a man with a dependent wife and one child with an income of £800 a year, pays two and a half times as much in New Zealand and the United Kingdom as he will pay in Australia during the forthcoming financial year. I know that honorable members opposite do not like hearing these facts, but I shall continue to put them before the chamber. A taxpayer with a dependent wife and two children who earns £800 a year will pay £32 2s. this financial year in Australia. In the United Kingdom, such a taxpayer will pay £62 2s. 9d., which is roughly double the Australian tax, and in New Zealand he will pay £83 2s. 6d., or more than twice as much. The budget surplus of £251,000, for which the Treasurer (Sir Arthur Fadden) has wisely provided, will help the Government to guard against any renewed inflationary pressure. As the Treasurer pointed out in his budget speech, some danger signs are re-appearing, and we must ensure that our resources of man-power, materials and productive capacity will be used to the best possible advantage for this country.

The Government’s policy of putting first things first, has paid rich dividends to the people because the production of all our basic materials has increased, the inflationary spiral has been beaten, and our economy is stable and balanced. That is a situation that has not obtained in this country for many years, and certainly would not have been possible of attainment under a Labour government. We ended the financial year 1953-54 with a surplus of £56,300,000, and the whole of that sum was diverted to support loan works programmes and assist the war service land settlement scheme. We have achieved a state of full employment, rising industrial output, a fairly high level of trade and the restoration of public confidence. The Commonwealth has expended on its own account in the year 1953-54 £14,000,000 less than it expended in 1952-53, notwithstanding a large increase of social services expenditure and a large increase of the Commonwealth payments to States. It is notable that after meeting the whole of its commitments for 1953-54, including assistance to the State loan programmes, and after making record reductions of taxes last year, the Commonwealth has been able to reduce outstanding treasury-bills by £35,000,000. That is a matter for considerable satisfaction, and reflects the sane and healthy condition to which the Government has brought our economy. The Treasurer, in particular, deserves full’ marks for the wise way in which he has handled our financial and economic policy. I pay a tribute also to the Public Accounts Committee, under the chairmanship of the honorable member for Warringah (Mr. Bland). I believe that all honorable members are aware pf the splendid work that that committee has done. The members of it have put much time and effort into assisting the Government to control its expenditure. Of course, I realize that there are some members from the Opposition on that committee. No doubt there is still room for further economy, particularly in the Public Service.

The overlapping of State and Federal departments should be examined, but that can be done only with the cooperation of the States; and unfortunately the Labour-controlled States have shown no disposition to co-operate. Most of them far from showing a national or statesmanlike approach to the vexed problem of Commonwealth-State relations, have gone out of their way to abuse and frustrate the Menzies Government and make its task as difficult as possible. Australia will be developed much more rapidly, and administered much more efficiently and economically, if we remember that we are all Australians first and that we are only secondly Queenslanders, Victorians and so on. I say that, notwithstanding the fact that each one of us is justly proud of his own State; but our vision must go beyond mere State boundaries if Australia is to develop into the great nation that we want it to become.

It is essential that we should establish as soon as possible a priority system for national works. We cannot just grow like Topsy. Ours is a young country, and we live in a world of keen competition. As the Prime Minister suggested in the policy speech that he delivered before the last general election, it is a matter of great national necessity for us to agree among ourselves on the matter of priorities for public works. However, to do that we must have the co-operation of the States if we are to get anywhere. Since it has been in office, this Government has gone out of its way to assist the States. I am sorry that the honorable member for Brisbane (Mr. George Lawson), who criticized the relationship of the Australian Government to the Queensland Government, is not present now to hear my remarks about this matter. I repeat that this Government has gone out of its way to help the States in the interest of the nation as a whole because we are a national government, and we govern nationally. The honorable member for Brisbane referred to loan allocations and tax reimbursements, but I remind him and he can discover for himself, if he cares to look at the figures, that the loan allocations and tax reimbursements to the States while this Government has been in power have been about three times as great as they were during a comparable period under the last Labour Government. The States have never been more generously treated than they have been under this Government. Some State Labour governments, unable to lift themselves above the narrow party political level, make irresponsible claims and .unfounded charges against this Government to cover up the shortcomings of their own administration and so help to undermine our whole federal system. Much of the present weakness of our federal system stems from the continuance of uniform taxation. That was a war-time measure, and should have been discontinued when the national emergency had passed. It is wrong in principle and bad in practice. It breeds irresponsibility and cuts right across the whole spirit of democratic parliamentary government.

The Prime Minister has offered to restore taxing powers to the States, and has promised to make any necessary adjustments to assist the under-populated and under-developed States such as Queensland. Of course Queensland is undeveloped only because of the long series of stultifying Labour governments that that State has endured. Some State premiers, while professing to desire the restoration of taxing powers, have adroitly sidestepped the whole issue. Others have stated categorically, and I am thinking of Tasmania and Western Australia, that they will not shoulder responsibility to levy and collect their own taxes. We on this side of the committee are federalists, and the socialists on the opposite side are unifica- tionists. That is quite clear from their platform. They want an Australia governed and taxed from Canberra. They believe in a centralized government, even though they talk continually about decentralization. We should look at their platform, rather than listen to the airy words they speak in this chamber about that matter. Uniform taxation is an essential part of the socialist doctrine just as is the abolition of the system of appointing State governors, the abolition of the Senate and the reduction of the status of the States to the role of mere provinces dependent on Canberra. That policy is diametrically opposed to the whole basis of our federal system, which has served us so well for more than half a century.

It is true that the Constitution should be altered in certain respects, and, possibly, even reconstructed ; but if we take such action, let us ensure that we preserve the rights of the States, and not allow their rights and interests to be weakened and whittled away by any process of doctrinaire socialism.

The great immediate tasks facing this country are twofold: First, the task of developing our resources and further strengthening our economy; and, secondly, the task of building up our defences to enable us to play our part effectively in the overall defence against Communist imperialism. I believe we have made much progress in the last few years. We are vastly stronger than we were four or five years ago. Our population has increased roughly by 10 per cent, over the last few years. Our. industries, both primary and secondary, have made substantial headway. Our Navy, Army and Air Force have all been greatly expanded. Reduced taxation has given encouragement to individual effort, competitive enterprise and saving. The dollar loans negotiated by the Prime Minister have played a notable part in the development of our industries and of our economy generally, but we still need a greater flow of capital, particularly in our export industries. The discovery of oil and uranium is providing some further stimulus towards national development and is encouraging further investment of overseas capital. But we must recognize that if we are to achieve the heights we wish to achieve, there must be still greater efforts, on the part of both management and labour, in industry. Our production methods need to be streamlined in order that the flow of goods shall be equal to the increased flow of spending money in the community. Our output per man-hour must be stepped up. We are faced with evergrowing competition from overseas producers and manufacturers, and only by extra effort will be able to hold our own with other countries and maintain our high standard of living. I believe that we must bring up to date our attitude of mind towards increased productivity, and I should like to see the inauguration of visiting productivity teams, representative of government, management and labour, along the lines of those operating in the United Kingdom and the United States of America.

Our future prosperity and greatness depend on our own efforts and, in particular, as has been mentioned many times on this side of the committee in this debate, our all-round cost level must be brought down. It is of first importance that we do that because we enjoy a higher basic wage, a shorter working week, and more paid holidays and leave periods than do the people of almost any other country. I think these benefits are good, but if we wish to retain them in the face of ever-growing competition from overseas, then we must be prepared to adopt the most up-to-date methods and the most up-to-date outlook throughout our industries, and improve both the quality and the quantity of our production.

I believe that incentive payments and profit-sharing schemes have much to recommend them. I want to say a word about prices control, because this Government believes in the abolition of unnecessary controls. If ever there was an unnecessary control, it is control of prices at the present time. That was a war-time measure and was effective in war-time only because it ran hand in hand with wage pegging and the direction of man-power. To-day, we live in a world of peace, and prices control, in the present circumstances, serves only to retard production and leads inevitably to black markets and shortages. I believe that we should allow the normal law of supply and demand to operate.

I want to say, in the brief remaining time I have, a word about our overseas trade. I commend the Government on its efforts to expand our overseas markets by sending trade missions abroad. There was a very successful mission to South Africa recently, and one to SouthEast Asia is contemplated in the near future. I think this is all very much to the good. We must seek greater publicity abroad for our products, because our continued national prosperity depends very greatly on a live trade policy. Our expanding economy demands that we not only maintain existing markets, but that we also seek new markets. I want to say a word, finally, about trade with Japan. Japan has again become one of our best customers. In fact, it is the second-best customer of our main export commodity, wool, and it is our’ largest customer in Asia. Naturally, there is still a good deal of prejudice against the Japanese, having regard to the atrocities they committed in the last war. But the war, in which, after all, we were the victors, has been over for just on ten years and I believe it would be gross economic stupidity for tis to believe that Japan will continue to remain one of our best customers unless we adopt a realistic attitude towards international trade with that country, on a normal peace-time basis. A gallup poll taken in Australia last April showed that the majority of people in Australia now realize this. To perpetuate the present lop-sided trade balance with that country is to court disaster. Last year, we exported to Japan wool and other goods valued at approximately £80,000,000. In return, we imported goods to a value of less than £5,000,000. I am not advocating, for one moment, a flood of imports from Japan - far from it - but I do advocate that we adopt a trade policy towards Japan more nearly in keeping with the normal flow and the normal equilibrium that exists in trade between countries in peace-time.

Let us remember that Japan is now on the side of the free world, and it is of first-class importance that we keep it there. If we continue to ostracize the

Japanese economically, then we shall not only promote hostility instead of goodwill, but by retarding their economy - and it is already fairly precarious - we may also help to drive Japan into the Communist bloc. Nothing could be more catastrophic for Australia and the whole of the free world.


– I wish to make only one or two brief references to the speech delivered by the honorable member for Ryan (Mr. Drury). First, I wish to refer to his remark to the effect that Japan is now on the side of the free world. I say to the honorable member, and to other honorable members opposite, “ Do not be so deluded “. Japan is on Japan’s side, and Japan’s side only. J Japan will turn in whichever direction it wishes to turn, no matter how this Government may seek to trade with it, and no matter what views honorable members opposite may express.

Mr Hulme:

– The honorable member is a single man and should undertand the meaning of the word “courting”.


– I may not understand some things that the honorable member for Petrie (Mr. Hulme) understands, but I do know that the view expressed by the honorable member for Ryan is not shared by all honorable members on the Government side of the chamber, nor is it held by a majority of the Australian people. Let us not delude ourselves on that subject.

My main purpose is to refer to the address which was delivered earlier in the evening by the Minister for the Interior (Mr. Kent Hughes). I found his remarks to be of considerable interest. I believe him to be a man with a great love of country, and although I may not express my views in the same way as he expresses his, I concede that his speech admirably presented the opinions he holds. It was, indeed, an interesting contribution to the debate.

During the Minister’s remarks he quoted some lines from the great soldier poet, Kipling, and also made a passing reference to men of 55 and 60 years of age. Thinking that perhaps the honorable gentleman was referring to the members of the present Cabinet, my mind was directed towards another poem ‘ byKipling, who, in his barrack room, ballads, expressed the attitude of theyoung soldier towards his elders. The following is a paraphrase of Kipling’s reference to the remarks of the young soldier : -

We were beggared about by the old men, Eavy sterned amateur old men.

I shall leave it to others to judge whether the quotation is apt. It is my duty torepresent the Australian Capital Territory in the Parliament. Because it is myduty to represent the Territory, and because it is the duty of the Parliament to. administer it, it is necessary for me, in this chamber, to refer to matters that normally would be regarded as being on a» municipal level. I ask honorable members to exercise forbearance while I discuss these matters, because it is the Parliament that must make the decisions which affect the development of the Territory-

Mr Osborne:

– Do not apologize for it.


– I am not apologizing, and I hope it will never be necessary for me to apologize to the honorable member for Evans (Mr. Osborne). The great problem with which we are confronted in the development of the. National Capital, to which reference has been made on many occasions, is that of providing housing for people who are brought into the Territory. The need for housing was recognized in the immediate post-war years when the Australian Labour party was in office. In 1947., when my colleague the honorablemember for St. George (Mr. Lemmon)was Minister for “Works and Housing, and when my colleague the honorable member for Kalgoorlie (Mr. Johnson) was Minister for the Interior, the Government embarked upon a programmeof development which had particular regard to the question of housing. That programme resulted in the attraction to the Territory of several large building firms under conditions that were outlined earlier this week by the present Minister for the Interior (Mr. Kent Hughes). That programme, which the present Government followed, reached the stage where we were building houses at the rate of 600 a year. The waiting time for homes, which had been extended to between three and a half and four years, was reduced to approximately two years. The programme was then allowed to fall off, and the waiting time has now become approximately two and a quarter years.

The figures which show the number of houses that were completed in recent years give a picture of the needs of the Australian Capital Territory. In 1949, the last year during which the Australian Labour party was in office, and when the 1947 programme was getting under way, 313 houses were completed. In 1950, with a continuation of that programme by the present Government, 530 houses were completed. However, in 1951, certain decisions were made by the Minister for the Interior which resulted in a slackening of the building programme, and only 392 houses were completed. In 1952, we reached the highest rate of all time, and 574 houses were completed. In 1953, the rate of building again dropped, and only 491 homes were completed. In the first quarter of this year, 49 homes were completed and 160 fresh applications for houses were received. In the second quarter, 116 houses were completed, which made a total of 165 for the half year, or a rate of 330 a year. To the end of last month, 215 homes had been completed in this year. The year 19541 has been the year of greatest need for the provision of housing. It is well to remind the Parliament, and in particular the Minister for the Interior, that 2,600 people are registered for, and are waiting for, homes. The number of registrations is increasing at the rate of 800 a year. I draw attention to the fact that that rate of registration for homes is much greater than the highest rate of building that was ever achieved in the National Capital. On present figures, there is no indication that even the’ normal lag in the building programme will be overtaken.

The population of Canberra is increasing at the rate of 2,500 a year. In December, 1949, the population was 22,113. By the 30th September, 1951, it had grown to 25,365. By the 31st December, 1953, it had grown to 30,983, or an increase of approximately 5,600 in a period of just over two years. I remind honorable members, and again in particular the Minister for the Interior, that that increase was almost entirely within the city area. There was an article in to-day’s Canberra Times which stated that, within the last eight months, births in the National Capital outnumbered deaths by more than six to one. To the normal population increase must be added approximately 7,000 men, women and children who will come to Canberra during the next three or four years, when Commonwealth departments are transferred. Those who are responsible for the administration of Canberra are confronted by a big problem. I repeat that 2,600 people are registered for, and are waiting for, homes; that the population is increasing at the rate of 2,500 a year; that registrations for housing are increasing at the rate of 800 a year; that the greatest rate of building that has ever been achieved was 574 homes a year; and that 7,000 people are to be brought to Canberra when Commonwealth departments are transferred during the next three or four years.

It is obvious that the problem is a huge one, and that time is rapidly slipping by. It has been estimated that at least 5,000 new housing units, which include cottages and flats, will be needed within the next five years. That envisages almost doubling the present size of Canberra. There are approximately 6,000 homes in the National Capital, and we are confronted by the problem of providing an additional 5,000 homes within the next five years. It will be necessary, not only to construct new homes, but also to extend all kinds of services and to establish new suburbs with schools, shopping services and recreation facilities. The problem has been foreseen by people who have the development of the National Capital at heart. In recent years, it has been stressed by officers of the Department of the Interior and the Department of Works; by nominated and elected members of the Australian Capital Territory Advisory Council ; by members of the Australian Capital Territory Trades and Labour Council; by the Chairman of the Public Service Board, who made quite a trenchant comment in his last report; by the Master Builders

Association of the Australian Capital Territory; and by other responsible bodies. All those people have directed the attention of the Minister for the Interior and the government of the day to this problem. In addition, I have referred to it in this chamber from time to time. The Minister has been prodded not into action, but into issuing press statements, and I have yet to learn that press statements will construct houses.

In December, 1953, just before building workers were to be stood down for the Christmas period, and at a time when responsible bodies in the Territory expressed the fear that, as there was no certainty that building work would continue, many of these workers would not return to the Territory, the Minister made the following statement to the press: - . . talk crf financial and other restrictions in the Canberra programme was not only without solid foundation, but could create fear of unemployment that was unjustified.

He went on to say -

As soon as arrangements can be completed, the construction of 300 more residential units will be authorised.

Statements of that kind will not build houses. During the first three months of this year, only 49 houses were constructed in the Territory. Shortly after the end of that period, the Minister issued another press statement, in which he said -

The prospective transfer of 2,059 Commonwealth employees and their families to Canberra and the construction of an additional 1,430 houses and hostel accommodation was being envisaged. 1^ is still being envisaged. That press statement was issued on the 27th April last. The quotations that I have made show that whilst the Minister’s attention has been directed to the problem, the only action that he has taken, so far as I can ascertain, has been to issue statements of that kind. The first of them was issued on the eve of the Christmas stand-down period, and the second was issued on the eve of the recent general election campaign in the hope, perhaps, of bolstering the chances of the Liberal party candidate for the Australian Capital Territory seat. Whether the issuance of those statements did much good is not the point. The fact is that the department is not pro- viding the houses that are obviously essential, and is not embarking upon a building programme which is essential to meet the needs of the Territory.

Several problems must be overcome in facing an undertaking of the magnitude that I have mentioned. First, if this programme is to be put in hand, there is the necessity to attract back to the Territory skilled building tradesmen who were previously engaged here. I recall that when the building programme was initiated by the Chifley Government - it was first carried on by the present Government without alteration because, after all, the contracts were firm arrangements - a number of hostels were provided, each of which housed approximately 300 men. During the last couple of years, however, the Ainslie hostel and the Turner hostel, each of which housed 300 men, have been closed, and the Capital Hill hostel and the Hillside hostel are only half occupied. The Minister himself in a recent statement indicated that a need exists in the Territory for an additional 3,300 tradesmen in order to put in hand work that is essential. How such tradesmen are to be attracted back to Canberra I do not know, and I do not think that the Minister has found a solution to that problem. To-day, skilled tradesmen can obtain, in other localities with a much more congenial climate and where better living conditions are available, rates of pay up to £5 above those paid in the Territory. Consequently, some financial attraction will have to be offered in order to induce building workers to return to the Territory. There will have to be a change of outlook with respect to the type of accommodation to be provided for skilled men in the building trade and allied trades. Skilled tradesmen to-day will not be content with hostel accommodation of the type that has hitherto been provided for’ them in the Territory. They will require accommodation of the type that is provided for what I may loosely term white-collar workers.

The second great problem that must be faced in this building programme - I emphasize that it is inevitable if governmental administration is to be carried on from Canberra and the remaining departmental staffs are to be transferred here when the administration block now’ under construction has been completed - is the provision of adequate housing and essential services, including schools, roads, electricity, sewerage and water services. The Government cannot escape its responsibility to provide these services. So ‘far, however, we have had only press announcements whilst several conferences, which have proved to be abortive, have been called to consider this problem. In addition to attracting back the skilled workmen who will be required for this essential building programme, steps must also be taken to. ensure adequate supplies of material. The basic requirement in this respect is an adequate supply of bricks. For the last 30 years, brick kilns in the Territory have been operated by the various governments that have held office during that period. Those brickworks operated successfully and over the years produced bricks of a quality not surpassed by the product of any other brick kiln in Australia. However, in recent years, these brick kilns have fallen into disrepair. They have, perhaps, come under some form of ministerial, or departmental, mismanagement. The plain fact is that, to-day, the works are completely incapable of providing anything like the number of bricks that are required in this area and, indeed, are producing a substantial percentage of faulty bricks. I do not propose to say where the blame lies in that respect.

Some years ago an effort was made to improve the brickworks by installing a tunnel kiln. Varying views are held about the efficacy of a tunnel kiln, having regard to the type of material that is available in this locality. Some people are of the opinion that the material available locally is admirably suited to treatment in a tunnel kiln. However, after the requisite machinery was imported and steps had been taken to initiate the work, it was decided not to proceed with the construction of that type of kiln. Then, a decision .was made to introduce the dry press method of making bricks. After the necessary equipment for this purpose was installed, it was found that the material available locally was not suited to treatment by that process. The result is that sometimes after the kiln has been fired for 80,000 bricks, the material is found to be transformed into a mess of burnt clay and clinkers and to be completely useless. I know that officers of the Department of the Interior have been devoting a great deal of thought to this problem. I trust that that thought will be followed by action that will rehabilitate those works in order to enable them to provide an adequate and continuing supply of bricks to meet the needs of the building programme that must inevitably be undertaken in the Territory. The Minister has authorized the construction of a new brick kiln for which some thousands of bricks will be required. They may have to be imported so that the present meagre output of the brickworks can be reserved for building contractors who are engaged on the construction of homes in Canberra. That problem is being tackled with great earnestness by men who, though they are, perhaps, not experienced in brick-making, have been given administrative charge of this undertaking and are doing their best to overcome the many problems that are still to be solved. Not only must the problems of supply be overcome, but also better working conditions generally must be provided at the brickworks. Those are some of the problems that are involved in the building programme in the Australian Capital Territory.

I have referred recently to the method by which housing contracts are negotiated by the Minister for Works. Since the Minister made his first press announcement pf the housing contracts in December last, ample time for the advertising of contracts and the calling of competitive tenders has elapsed, but the Minister has adopted the practice of negotiating contracts with selected firms, as he terms them. He has not informed me yet of the basis of selection and who, in fact, selects the firms to which these substantial contracts are let. I know, as the Minister has admitted in a written reply to a question asked by me, that the Department of Works is at present negotiating with two Sydney firms for the construction of 113 houses in Canberra. Certainly we all want those homes to be constructed, but the allocation of such a contract on the basis of negotiation with a selected firm means presumably that, as the firm is selected, it is offered the con-‘ tract on terms advantageous to it. A contract for the building of 113 homes envisages the expenditure of approximately £400,000 of public money. It is at least unwise for the Minister to embark on the project on the basis of negotiated contracts rather than of competitive tendering arrangements. The practice of negotiation is causing grave concern to local builders, particularly to those who are members of the Australian Capital Territory Master Builders Association, and to the building trades group of unions affiliated with the Australian Capital Territory Trades and Labour Council. I trust that the practice will be discontinued. The Public Accounts Committee, to which reference has been made this evening, has expressed an opinion on negotiated contracts that coincides with the view that I have just stated.

In the time that is left to me I propose to refer to another project that is being undertaken in Canberra - the installation of water meters in homes for the first time on a large scale. In my opinion the days of charging people for water should be gone forever. If cost and the return from the investment involved are taken into account, the proposal cannot be sustained. According to information with which I have been supplied by the Department of Works, water meters cost £6 7s. 6d. each. The cast-iron boxes in which it is necessary to enclose them cost £1 15s. each, and installation costs amount to £3 6s. for each meter, making the total installed cost of each meter £11 8s. 6d. I have pointed out to the committee that there are 6,000 homes in Canberra at present. We may fairly estimate that within the next few years another 4,000 dwellings should be constructed. This will make a total of 10,000 houses. At an installed cost of £11 8s. 6d. for each meter, the capital cost involved in installing meters in 10,000 homes will be £114,000. Let us estimate the interest on that amount conservatively at £5,000 annually, and the sinking fund charges at £1,250 a year. The meters, which must be de-sludged from time to time, will require maintenance. In addition, office staff must be employed to handle the accounts, and an army of inspectors will be needed to read and inspect the meters. Let us estimate expenditure on office and maintenance staff and inspectors at the conservative figure of £3,000. This makes a total annual cost of £9,250, in addition to the capital cost of £114,000.

The ordinance that governs the supply of water in the Australian Capital Territory provides that meters may be installed and that excess water may be charged for at the rate of 2s. 6d. a 1,000 gallons. But 2s. of that charge is rebated if the account is paid within one month. As homeowners will eagerly take advantage of that large rebate, we may assume that excess water will be charged for at the rate of 6d. a 1,000 gallons. The annual cost of £9,250 represents an excess water consumption of 370,000,000 gallons at 6d. a 1,000 gallons, and the department will not recover the interest and charges on the capital cost and the cost of maintenance unless this excess consumption is attained. The proposal is completely uneconomic, and it should never have been embarked upon. The Department of Works would do well to follow the example of the Brisbane City Council, which discontinued the use of water meters during the war, when they were difficult to obtain, and has never reintroduced their use. The council meters the supply of water only to commercial users, and not to homes. As the town clerk of Brisbane has told me, the council has noticed no increase in the consumption of water since the use of water meters was discontinued, and there has been no need to increase the charge for water supply. In fact, the charge has been increased only once in 30 years, and that increase was occasioned by the expansion of the suburban areas. I utterly condemn the proposal to install water meters in homes in Canberra.

Progress reported.

page 960


The following papers were presented : -

Public Service Act-Appointments - Repatriation Department– J. P. Higgin, C. Radeski.

House adjourned at 10.58 p.m.

page 961


The following answers to questions were circulated. -


Mr Hamilton:

n asked the Minister for Commerce and Agriculture, upon notice -

Does the 3d. premium for Western Australian growers on their export of wheat apply under the proposed stabilization scheme as it does under the existing orderly marketing scheme?

Mr McEwen:

– The answer to the honorable member’s question is as follows: -

The 3d. premium was an innovation which emerged in the course of negotiations to reach agreement between growers and governments for an orderly marketing scheme. These negotiations were being conducted a year ago at a time when all parties had agreed that stabilization, with the prerequisites of ballots of growers and legislation by seven governments, could not, on account of the time factor, be introduced prior to the impending 1953 harvest. In that atmosphere the Western Australian growers were disposed to a State marketing plan which would, on the high level of export values then prevailing, have given them a distinct advantage over an all-Australia orderly marketing plan. Part of their advantage is in the higher net return from exports due to lower freights from Western Australia. Grower organizations and governments in all the other States conceded this advantage, and it was written into the State orderly marketing legislation in the form of an assured premium to Western Australian growers of 3d. a bushel on wheat exported. Referring to the proposed, stabilization plan, the position is that, in broad terms, it has been stated that a stabilization plan could legislatively be grafted on to the existing orderly marketing plan - (a) by setting out in Commonwealth legislation the details of the Commonwealth guarantee and the tax to be imposed on wheat exported, and (6) by covering in State legislation the home-consumption selling price for the duration of the plan. The guarantee offer made by the Commonwealth has been made very clear in repeated declarations. The limit of the Commonwealth’s guarantee is that in each of five years the pool concerned will be assured of receiving at least cost of production for up to 100,000,000 bushels of wheat exported, by payment from the stabilization fund, and, on that being exhausted, by payment from the Commonwealth Treasury. The reciprocal aspect of this guarantee is that, when the average export price of the whole of the wheat of any season exported exceeds cost of production, a tax equal to such excess, but not exceeding ls. 6d. a bushel, will be levied for the purpose of the stabilization fund. Under the stabilization arrangements, therefore, the premium to Western Australian growers is quite separate from and is not involved in the Commonwealth’s guarantee, but would be calculated and paid after thi’ primary provisions of the stabilization plan, namely the guarantee and the tax which go with it, had operated. In other words, it is a premium which was, in the first place, related to disbursement from sale realizations and the stabilization provisions would not alter that situation.


Mr Haylen:

n asked the PostmasterGeneral, upon notice -

  1. Is it a fact that a radio station apparently owned by a Commonwealth department, defectively designed and adjusted, and failing to identify itself, is radiating for long periods daily on a mean frequency of approximately 3.S2 megacycles in circumstances causing continuous interference with services on adjacent channels?
  2. Will he give a direction to the radio branch of his department to arrange for this station te cease transmitting until it is so adjusted as not to interrupt other services?
  3. In view of the occurrence of this new source of radio interference closely following the interference which the Commonwealth Government station VNCN is admitted by the Minister to have caused recently, will he give a standing direction to the radio branch th supervise more carefully the operation of official stations to ensure that they conform to satisfactory standards of engineering and to the accepted canons of good conduct on the air?
Mr Anthony:
Postmaster-General · RICHMOND, NEW SOUTH WALES · CP

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

  1. My department has received no complaint of unsatisfactory operation resulting in interference to other services of any Australian radio station operating on the 3820 KC/S channel nor have observations revealed any such trouble.
  2. If the honorable member cares to supply details concerning any such interference I shall institute action to secure early correction nf any deficiencies.
  3. My department will continue to give close attention to the matter.
Mr Duthie:

e asked the PostmasterGeneral, upon notice -

  1. What countries in South-East Asia are reached by Radio Australia?
  2. How often each day are the broadcasts given ?
  3. What type of programme is broadcast to this area?
  4. Are there any broadcasts to South-East Asia given in the local language?
  5. If not, is the usefulness of such broadcasts greatly limited?
  6. Is there any co-operation by Radio Australia with the British Broadcasting Corporation’s1 Far-Eastern service?
Mr Anthony:

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

  1. Radio Australia’s transmission are directed to the following countries in South and South-East Asia - Indonesia, Malaya, Thailand, Indo-China, Ceylon, Burma, India and Pakistan, the forces in Korea and Japan, New Caledonia and Tahiti. The Radio Australia coverage also extends to China, Borneo, the Philippines, New Zealand and islands of the North, South and Mid Pacific areas.
  2. The service operates continuously from 9 a.m. Australian eastern time each morning until 3.30 a.m. the following morning.
  3. Programmes are carefully planned to suit the requirements of the different countries in South-East Asia and transmitted to reach each targetarea at optimum listening times. They include bulletins of the latest Australian and world news, talks on Australia by Australian and Asian visitors and commentaries on national and international political and economic development. These are supplemented by especially arranged music session and relays of home service programmes including symphony concerts, variety shows and plays.
  4. Yes. Radio Australia transmits a daily programme of one hour duration in the Indonesian language, and a 45 minute programme daily for French speaking listeners in Indo-China, New Caledonia and Tahiti. Our one-hour programme in Thai is presented each Friday.
  5. Although English is widely used by a large number of educated and influential people in the countries of South-East Asia, nevertheless it is true that the coverage of broadcast. from Radio Australia would be significantly increased with the addition of other Asian language broadcasts.
  6. The British Broadcasting Corporation’s far eastern service from London is relayed by the British fur eastern broadcasting service in Singapore. Radio Australia relaysthe British Broadcasting Corporation news to South-East Asia at 4 p.m. Australian eastern time daily, at which time direct, reception from London is unsatisfactory in Singapore. British Broadcasting Corporation news is also relayed each day at 9 p.m.

Telephone Services.

Mr Daly:

y asked the Postmaster-

General, upon notice -

  1. How many telephone applications are outstanding at this date - (a) in each State; and (5) in Australia?
  2. What is the average time for which these applications have been outstanding?
Mr Anthony:

– The answers to the honorable member’s questions are as follows : - 1. (a) New SouthWales, 33,691; Victoria, 18.051: Queensland, 1,655; South Australia, 4,452; Western Australia, 4,186; Tasmania, 2,963. (6) 64,998.

  1. The majority of these applications are less than two years old.

Mineral Resources

Mr Watkins:

s asked the Minister repre senting the Minister for National Development, upon notice -

  1. What is the total capita] invested in the “ Black Sands “ industry in Australia producing monazite, rutile, zircon, ilmenite, Ac.
  2. What was the tonnage exported and its value for each of the years 1952-53 and 1953-54?
  3. How many employees are engaged in the industry ?
  4. Has ho investigated the possibility of producing the wonder metal titanium from rutile and zircon in Australia ?
Mr Casey:
Minister for External Affairs · LP

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

  1. There are thirteen producers, companies and individuals, in the beach sands industry. Paid-up capital of two of the larger producers (Zircon Rutile Limited and Associated Minerals Consolidated Limited) totals £228,119. It is estimated that total capital of the thirteen concerns would be at least £1,500,000.
  2. Exports for the calendar years 1952 and 1953 were -
  1. Employment in the beach sand industry in 1953 averaged 680 persons, 380 in New South Wales and 300 in Queensland.
  2. Zircon is an ore of zirconium, not of titanium. Titanium therefore cannot be extracted from this mineral. Commonwealth Scientific and Industrial Research Organization and Melbourne University metallurgists have been studying the extraction of titanium from rutile and ilmenite for some years, but so far the work has not gone beyond the experimental stage. The beach sand industry has shown little interest in the production of titanium metal, probably on account of the capital costs involved, and the great power resources required. A plant to produce 1,000 tons of titanium metal ayear would cost about £2,000,000.

International Reserves

Mr Daly:

y asked the Treasurer, upon notice -

What were Australia’s international reserves for each financial year from 1941-42 to 1949-50 inclusive?

Sib Arthur Fadden. - The answer to. the honorable member’s question is asfollows : -

Australia’s gold and foreign exchange holdings at the end of June in the years named were as follows: -

Australian National Film Board

Mr Lawrence:

e asked the Minister for the Interior, upon notice -

  1. How are the members of the Australian National Film Board appointed?
  2. Who are the present members?
  3. What were the dates of all meetings of the board since the 1st January, 1052?
  4. Where are copies of colour films produced by the board obtained?
  5. Has the board been satisfied with the quality of its colour copies; if not, what steps have been taken (a) in complaints to the processors, and (b) to obtain copies from some other source?
  6. Is the standard of quality of 35-mm. colour copies any better than the 16-min. ones?
  7. Have sub-standard copies of these colour films been circulated abroad?
Mr Kent Hughes:

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

  1. Members of the Australian National Film Board are appointed by the Minister for the Interior.
  2. Messrs. W. A. McLaren (Chairman), S. S. Brown (Deputy Chairman), H. L. White,’ T. H. E. Heyes, G. P. Phillips, W. J. Weeden, T.R. M. Sloane, A. J. Baker, N. Edwards, and S. G. Hawes.
  3. 1953 - 18th February, 18th March, 21st April, 10th June, 4th August, 16th September, 12th November. At its last meeting the board finally considered a programme that - in addition to urgent work considered likely to arise as a result of requests from Commonwealth departments - it estimated would he sufficient to occupy the Commonwealth film-making units for eighteen months. The board proffered advice to the Minister that this programme should be undertaken and the Minister accepted this advice.
  4. The board is not a producer of films. It is an advisory body to the Minister for the Interior. The producer of Commonwealth films is the Film Division of the News and Information Bureau, Department of the Interior. The Film Division has 16-mm. colour prints of its productions processed by the laboratories of the manufacturers of the film-stock, Kodak (Australasia) Proprietary Limited. This is the only firm undertaking this work in Australia. In the case of 35-mm. Ferraniacolour prints, these are obtained from Denham Laboratories Limited, London. There are no facilities for producing 35-mm. colour prints in Australasia.
  5. No colour copy is ever equal to the original in colour reproduction and variations do occur as a result of the tricky processes of printing and processing. In general, the Film Division is satisfied that the laboratories turn out good copies. Where there have been causes for complaint, the processing laboratories have co-operated to try to improve the quality; sometimes to good effect and always with goodwill. The Film Division does not know of other sources which might provide better service than the makers of the film-stock.
  6. Throughout the motion picture industry it is recognized that, because of the different processes involved, 35-mm. prints, generally speaking, give better screening results than l6-mm. prints, although no exact standards have ever been laid down. This usually applies in the case of Commonwealth productions.
  7. All 16-mm. prints of colour films in circulation are of fair average quality and compare well with the l6-mm. printscirculated by other governments.


Mr Daly:

y asked the Treasurer, upon notice -

  1. What amount of subsidy was paid on butter for the year ended the 30th June, 1954?
  2. What amount is to be paid in the current year?
  3. What would the cost be by way of subsidy in order to reduce the cost of butter to 2s. per lb.?
Sir Arthur Fadden:

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

  1. The amount of subsidy paid on butter and cheese in 1953-54 was £15,400,000 (approximately). Of this amount, £12,700,000 was paid to reduce the price of these products to Australian consumers and £2,700,000 was paid on exports in accordance with the Government’s stabilization plan for the dairying industry.
  2. The amount of subsidy provided in the Estimates for 1954-55 is £15,600,000, comprising £12,700,000 expected to be paid on butter and cheese consumed locally and £2,900,000 on exports under the stabilization plan.
  3. Assuming no change in the level of - domestic consumption and distributors’ margins it is estimated that a subsidy of approximately, £44,000,000 per annum would be required to reduce the local retail price of butter to 2s. per lb. and the local retail price of cheese to a comparable figure. The subsidy payable on exports under the stabilization plan would not, of course, be affected.

Cite as: Australia, House of Representatives, Debates, 2 September 1954, viewed 22 October 2017, <>.