House of Representatives
12 April 1956

22nd Parliament · 1st Session

Mk. Deputy Speaker (Mr. C. F. Adermann) took the chair at 10.30 a.m., and read prayers.

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– I direct a question to the Treasurer, as Minister in charge of the House. On the 10th. April, the honorable member for Petrie asked the Minister for External Affairs a question about a case of extradition proceedings against an Australian citizen who had previously been a citizen of Yugoslavia. Certain facts, the details of which I a.m not aware, were given, suggesting strongly that extradition would be either inappropriate or a great hardship in this case. I ask the right honorable gentleman whether he will ascertain from the Prime Minister the circumstances under which the litigation was commenced and, in particular, whether it is not a fact that it was commenced with the direct authority of the Government, so that the House may know the full facts about the matter. I understand that the departments concerned are the Department of External A If airs and the Attorney-General’s Department. As the’ matter concerns more than one department, I should, have asked the question of the Prime Minister had he been present.


– I shall bring the question and the observations of the Leader of the Opposition under the notice of the Prime Minister for his attention.

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– I address a question to the Minister in charge of the Commonwealth Scientific and Industrial Research Organization. By way of explanation I wish to say that some years ago citrus-growers in the coastal areas of New South Wales enjoyed a profitable export market in New Zealand, but this’ was terminated by the New Zealand Government, on various pretexts, placing an import embargo on these citrus products. I now ask the right honorable gentleman whether the Commonwealth Scientific and

Industrial Research Organization has made any progress in its research and investigation into the control of fruit fly infestation of citrus fruits. What assistance and encouragement has the Commonwealth Government given the Commonwealth Scientific and Industrial Research Organization to conduct its research into this problem? Does this research raise any early hope that it will be possible to re-establish the export of coastal citrus fruit to New Zealand ?

Minister for External Affairs · LP

– Two lines, are being pursued in respect of the control of fruit fly in citrus. First, the Commonwealth Scientific and Industrial Research Organization is endeavouring to find a parasite insect. That search is being pursued mainly in the Hawaiian Islands. That is a long-term investigation, because when a suitable insect is discovered it will have to be acclimatized in Australia, and the scientists have to make quite certain that it does more good than harm. J do not think quick results are likely to be expected. It is true that New Zealand insists that all citrus from Australia should either come from fruit fly free areas, or that the affected fruit should have been subject to fumigation and refrigeration in order to destroy the disease in the fruit. In respect of that side of the matter the Commonwealth Scientific and Industrial Research Organization is collaborating with the New South Wales Department of Agriculture, and I understand the work is well ahead. It is just a matter now of the New South Wales Department of Agriculture assuring itself of the .temperature range at which the refrigeration is to be conducted and that the fumigant is effective. That work is well ahead, and I am told it is very promising. The cost of the latter side is being paid for by the Commonwealth and the States concerned on a 50-50 basis. Something like £20,000 a year is being spent in respect of the control side.

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– My question is directed to the Minister for Immigration. Is it a. fact that almost half the immigrants who have arrived in Australia since the war are now domiciled in the State of Victoria? If this is a fact, is the Government contemplating any measures to correct the position, and ensure that new arrivals are encouraged to settle more evenly in the six Australian States?


– I can assure the honorable gentleman that it is not a fact that about half of the immigrants who have come to Australia since the end of the war have settled in Victoria. I saw a statement attributed, over the weekend, to Mr. Gilmour, of the Employers Federation of Victoria, and it seems clear that Mr. Gilmour has been misled by the practice of the Statistician of registering, for statistical purposes, the first port of destination in Australia as the place to which an immigrant has come. That is probably the only practical arrangement, the Statistician can make other than at a time of the taking of a census. The fact is as regards both Melbourne and Sydney, more particularly Melbourne, that the immigrants go to those centres as a first port but subsequently move to other States. The census figures for 1954 revealed that Victoria, which has 27 per cent, of the Australian population, has received for settlement, 33 per cent, of the immigrants who have come here. It will be seen that that figure is much closer to the actual proportion of that State’s population than Mr. Gilmour’s figures would indicate. Mr. Gilmour went on to say that one person in every five in Victoria was * post-war immigrant. Our figures, on the break-up that we are able to make, suggest that the proportion is nf the order of one in ten.

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– I ask the Minister for Customs and Excise the following question : - In connexion with the recent Customs Department prosecution in Sydney, having regard to the suggestion made in this House of rumours involving other persons in the subject-matte]- of the prosecution, can the Minister say whether there is any evidence in his possession to justify those rumours?

Minister for Customs and Excise · EVANS, NEW SOUTH WALES · LP

– I am aware of these rumours, which were no doubt given additional currency by a question asked in this House yesterday. As the House realizes, the capacity of the human imagination for malicious invention knows no limit. I am glad to be able to say that no information in the possession of my department gives any support whatever for the rumours. I have not thought it my unpleasant duty to examine the photographs in question myself, but they have been most meticulously conned by two senior officers of my department. I am assured that, with one single exception, no person can be recognized in them at all. The single person who is recognizable could in no sense be described as distinguished or well known, unless a certain prominence in the police courts could confer such a distinction. I understand that the New South Wales police agree with that conclusion. I repeat that there is no information whatever in the hands of the department to give any substance to the rumours to which the honorable member has referred.

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– I address a question to the Treasurer, who is in charge of the House, in relation to the Victoria Cross centenary celebrations that will be held in London next June. Several reports have been issued, through the press and otherwise, to the effect that certain Australian Victoria Cross winners may be unable to find enough money, not only to pay their fares to London, but also to maintain themselves while in London. The Prime Minister did say recently that the Commonwealth would make certain provision for them.

Mr Falkinder:

– It has been made.


– It has been said that a certain amount of money will be allocated by the Commonwealth to meet some of the expenses of these men. But some of them have family responsibilities and, as the matter stands now, they may be unable to attend the celebrations unless some public-spirited citizens contribute money to enable them to discharge those responsibilities while they are overseas. In such circumstances, I think it is the responsibility of the Commonwealth to provide the necessary money, so that no Australian Victoria Cross winner who wants to attend the celebrations will be dependent on individual charity if he does so. Will the right honorable gentleman assure all Australian Victoria Cross winners that the Commonwealth will defray all their expenses and that, during their absence, the members of their families who remain in Australia will not have to depend on charity?


– The Prime Minister gave an assurance that any necessitous case would receive practical consideration by this Government, on the basis of the merits of the case.


– I have made representations to the Prime Minister on behalf of British Victoria Cross winners now resident in Australia, because the United Kingdom Government has refused to grant them any assistance to pay the cost of their passages to London to attend the celebrations there. Can the Treasurer say whether the Australian Government has decided to treat British holders of the Victoria Cross now resident in Australia in the same way as Australian citizens in this regard?


– I have very much pleasure in assuring the honorable gentleman that the Australian Government is giving consideration to that matter.

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– Has the attention of the Treasurer been drawn to au announcement by the president of the New South “Wales Association of Cooperative Building Societies that 90,000 members of the societies will have to pay increased charges on their mortgages as a result of the increase in bank interest rates on the societies’ overdrafts? Is this increase in conformity with the Government’s economic policy, as recently enunciated by the Prime Minister? In view of the fact that most of the homes financed by the societies were built several years ago, will the Treasurer indicate how the increase will curb inflation, or even direct more revenue to the Government’s coffers? In view of the financial difficulties being experienced by State and semi-governmental authorities in providing and maintaining essential services, such as railways, public hospitals, water and sewerage, and housing, will the right honorable consider transferring some of the surplus defence funds1 to the States for the benefit of those various undertakings?


– I am sure that the honorable member will appreciate that the question he has asked is rather involved. I have not seen any statement attributed to the president of the New South Wales Association of Cooperative Building Societies asserting that 90 per cent of borrowers will be affected. As to the diversion of funds from defence purposes to the purposes of the States, I hasten to assure the questioner that this Government has given unprecedented consideration to the States in a most practical way. Out of our resources contributed to by unpopular taxation measures, we have given to the States no less than £400,000,000 since we have been in office. That has never happened before. The States have had every practical consideration. This Government is not in favour of diverting money to the States from the defence vote. That would only aggravate the position. With regard to the building society aspect, I shall look into the matter and see what information I can furnish to the honorable member.

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– Is the Minister for External Affairs aware that, when addressing a conference of Asian students in my electorate recently, an honorable member of this House propounded a policy not only diagonally opposite to the British Commonwealth and Malayan policies, but also in line with the policy proposed by a disturbing influence in out midst ? Is i ‘:. possible for the right honorable gentleman to correct the damage done, and is there any method of preventing our friends from being indoctrinated in the future?


– Who was the member?


– He was the honorable member for Yarra.


– What would you expect ?


– Yesterday, I was asked a question on .somewhat the same lines relating to a speech made, I believe, by the same honorable member now referred to - the honorable member for Yarra. I believe that by quoting from two recent speeches of the Chief Minister of Malaya,

Tengku Abdul Rahman, I was able effectively to dispose of the myth of the antagonism of the Government of the Federation of Malaya to the presence of Australian and other British troops in Malaya. I am not aware of the precise terms of the speech to which the honorable gentleman refers, but I should be grateful to him if he would let me have a report of it so that I can give him and the people of Australia the denial that is obviously called for.

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– I think that the Treasurer has conceded that the effect of a rise in overdraft interest rates would be to increase the profits of the private banking system. However, he has belatedly stated that, as a temporary measure, there is to be a reduction of interest rates payable on special accounts. I should like to ask the right honorable gentleman a question concerning the matter of treasury-bills. Despite the fact that he avers that this method of finance is inflationary, the value of treasury-bills issued was increased by £15,000,000 during last month. First, does the Treasurer contemplate any variation of the interest rate payable on this type of security? Secondly, in view of the large amount of treasury-bills at present held by the private trading banks - £111,600,000 at the end of February, 1956, compared with £18,800,000 in July, 1955- what steps does he propose to take to alleviate the inflationary effects of the seasonal withdrawal of treasury-bills in the next few months ?


– I submit, Mr. Deputy Speaker, that the question asked by the honorable member for Melbourne Ports is out of order. By its very essence, it relates to the subject of a debate that is presently proceeding. I refer to the debate on the Australian economy.

Dr Evatt:

– I rise to order, Mr. Deputy Speaker. Do you rule that the question asked by the honorable member for Melbourne Ports is out of order, or do you rule otherwise ? I quite appreciate the Treasurer’s difficulty in answering the question, but the point is, was the question out of order?


– The question related to something that called for an answer going beyond the statement, of policy, and, therefore, I did not rule it out of order; but all questions relating to the matter of the debate on economic policy are certainly out of order.

Mr Calwell:

– But this one was in order. The Treasurer was out of order.


– Order ! I have called the honorable member for Moore.

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– My question without notice is addressed to the Minister in charge of War Service Homes.

Mr Ward:

– How are things in the west ?


– Very good, thank you.

Honorable members interjecting,


– Order ! The House will come to order.


– My question refers to the matter of second assistance to applicants for war service homes who are obliged to dispose of their homes and who subsequently apply for further assistance to buy a war service home. Are there discretionary powers under the War Service Homes Act, which may be exercised in favour of applicants for second assistance? If such discretionary powers do exist, who exercises them? Furthermore, is there any portion of the annual appropriation for war service homes specifically provided for the contingency of second applications for assistance? If there is not a portion of the vote specifically set aside for this purpose, what effect would the granting of such applications for second assistance have on the granting of applications for first assistance?

Minister for Social Services · RIVERINA, NEW SOUTH WALES · CP

– It is mostunfortunate that my friend, the gallant and honorable member for Moore, should ask me-

Opposition members interjecting,


– Order ! If questions are to continue, and if honorable members want to enjoy the privilege of asking questions and having them answered, they must remain silent while answers are being given, or I shall call on the business of the day.


– It is most unfortunate that my friend, the gallant and honorable member for Moore, should ask me such a difficult question; but, because of its great importance to so many people, may I be permitted to quote from a minute that I have just prepared on this very question? There are discretionary powers with respect to applications for second assistance in the obtaining of war service homes. They are designed to apply to an applicant, who, having received assistance to buy ot build a home, or to discharge a mortgage, and, having disposed of that home, or proposing to dispose of it, desires to make application for a second war service home. These discretionary powers, Mr. Deputy Speaker, unfortunately, are exclusive to the Minister. This matter has caused very great concern to all my illustrious predecessors, all being men of great compassion; but, because of the increasing numbers of applications for second assistance, it has caused even more concern to me. In my opinion - and my opinion would appear to be important in this instance - second assistance cannot be granted without prejudice to the 30,000 men, the 30,000 women and, probably, some 90,000 children, who are waiting for first assistance. Those figures, of course, are purely speculative. Because of the present waiting list for war service homes I cannot bring myself to give favorable consideration to applications for second assistance, except in cases of extreme urgency, so long as the War Service Homes Division cannot, for physical and/or financial reasons, meet the demand for first assistance. The matter is constantly under review, but as far as I am concerned the discretionary powers ‘.rill only be exercised in favour of applicants for second assistance when that can be done without prejudice to applicants for first assistance.

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– My question is directed to the Minister for Trade. A short time ago I made representations to the Minister concerning the shipment of butter from the port of Burnie. 1 point out that 25,000 cases of butter are being held in cold storage at that port, and that unless they can be moved, butter factories in the immediate vicinity may have to close or reduce production. Has the Minister approached the overseas shipping representatives about this matter, and can he indicate whether a ship will be made available to transport the butter?

Minister for Trade · MURRAY, VICTORIA · CP

– I know that the honorable member has interested himself in this matter, and he is aware that I also have interested myself in it. I understand that one consignment of butter was moved to the Tamar, and lifted in a ship that was taking a load of apples. We arranged the replacement of some apples with some butter, for reasons that were regarded as sufficiently important. I recall that the honorable member emphasized the fact to me that there still remained a problem, and officers of the Department of Trade who have contacted the overseas shipping company were endeavouring to resolve that problem. I regret that I am not in a position to give the honorable member any information about what was done, if anything. I have not been advised that there is any crisis circumstance there, but I shall take the matter up immediately and supply the honorable member with a statement of the position.

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– I ask the Minister for External Affairs, in his capacity as Minister in charge of the Commonwealth Scientific and Industrial Research Organization, whether he will inform the House if the disease, myxomatosis, which has been so effective in the past in reducing the rabbit population in Australia, is still proving effective, or whether recent developments confirm reports that, rabbits are developing an immunity to the existing strains of the disease.


– Up to the present time, myxomatosis is continuing to be an effective controlling agent in respect of rabbits, except in relatively small areas in Western Australia and Tasmania where the insect population is inadequate to spread the disease. However, there is disquieting evidence that rabbits in a good many parts “f Australia are developing resistance to the virus. The mortality rate in general has dropped from about, 99 per cent., or almost 100 per cent. to something like 90 per cent. That is an effective killing rate, but if it drops any mores - and there are signs that it will drop still further - myxomatosis will quite definitely begin to lose the effectiveness it has had over the last several years as a controller of rabbits in Australia. It would be a tragedy if that were to happen, and this is a critical time in respect of the control of rabbits in this country. In the past, appeals have been made by myself and others, and I now repeat them very seriously, that it is the duty of every pastoralist and farmer menaced by rabbits, to use every possible means, following on a myxomatosis drive, of killing the remaining rabbits after myxomatosis has done its task. Otherwise, we are in serious danger in the years ahead of slipping back to where we were a number of year ago in respect of rabbits. Myxomatosis has been estimated by pastoral organizations as being worth something like £50,000,000 to Australia, and I believe that it would be the height of folly for us to lose that tremendous financial advantage. I make the most serious appeal to all those on the land to use methods other than myxomatosis to wipe out the remaining rabbits in this country.

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Motion (by Sir Eric Harrison) agreed to -

That the maximum period for which the Prime Minister may speak on the amendment to the motion to print the Ministerial Statement on the National Economy shall not exceed 45 minutes.

SUPPLY. (“Grievance Day.”)

Dried Fruits - Robinvale Post Office - Petrol Tax - Banking - Visually Handicapped Persons - Waterfront Employment - Repatriation - Tasmanian Shipping Services - Apples - Portal Department - Housing - Cycle Trade and Imports - Passionfruit and Citrus Fruits

Question proposed -

That the Deputy Speaker do now leave the chair.


.- I take this opportunity to bring to the notice of the House two matters that re quire urgent attention. Ones is connected with the Australian dried fruits industry, and I am surprised to notice that some honorable members are already turning their heads away in disgust, particularly one Minister. Nevertheless, this is a very important subject, and I askthat the Treasurer (Sir Arthur Fadden) should give early attention to it. On many occasions, I have advocatedin this House that the sales tax on products containing dried fruits should be abolished. If a loaf of bread is sold, it is not subject to sales tax, but when some dried fruit is added to the bread mixture, sales tax is levied.

Honorable members interjecting,


– Order! There appears to be a cheer squad in the chamber, and the House must come to order.


– At Easter, even hot cross buns did not escape the impost to which I have referred. If the buns had a few dried fruits in them, they were subject to sales tax. There are many reasons why this tax on products containing dried fruits should be abolished. Perhaps the most urgent reason is that the dried fruits industry needs all the assistance that canbe given to it by both Commonwealth and State governments. On many occasions in this House, I have referred to the urgent need for assistance to the dried fruits industry, much to the disgust of some honorable members who considered that I was guilty of tedious repetition. The other complaints that 3 have put forward are well known, but the adjustment I am now seeking could be made by regulation and by legislative action when the next budget is presented.

Opposition members interjecting,


– Order ! The honorable member for Scullin (Mr. Peters) is too vocal. The House must come to order.


– As I have said, this matter should be rectified as soon as possible. I would say to honorable members who are interjecting that they usually interrupt when I am saying something with which they do not agree. If they agree with me now, I ask them to give me help and consideration by remaining silent. If they are interested in. my speech on behalf of the dried fruits industry, when I am finished they can stand up and cheer if they so desire.

For the sake of the dried fruits industry, we .should abolish the sales tax on products that contain dried fruits. In that connexion, I emphasize the importance of my suggestion to the people of Australia. Every one knows the health-giving qualities of dried fruits. The sales tax on these products should be removed .so that the people throughout the country can buy more cheaply raisin loaf and other goods that contain dried fruits. Dried fruits are health giving and are concentrated sunlight from the areas of Australia where dried fruits are produced. Honorable members may remember that I distributed some nibble bags of dried fruit in this House. I am sure that honorable members have noticed the heat in the debate of one honorable member since he tasted the contents of one of those packets. I have not handed any to the honorable member for East Sydney (Mr. Ward), but I have given some to many other Labour .members, including the honorable member for Brisbane (Mr. George Lawson).

Mr Calwell:

– Stop clowning.


– I am not copying the clowning of the honorable member for Melbourne (Mr. Calwell). The abolition of the sales tax, as I have suggested, would reduce the price of the product, and that would he of great benefit to the industry, and, I believe, to Australia generally. It must be ‘remembered that the settlers on the dried fruits areas comprise, chiefly, returned soldiers. Therefore, I see nothing to bar the Government from taking the action ‘that I advocate. I leave that subject, there because E have only a few more minutes of most, precious time left in which to speak. I want to mention another subject regarding a dried fruit growing area, the soldier settlement of Robinvale. It is a very important new soldier settlement. I venture to say -that it is the most important of the new so’ldier settlements in the whole of the ‘Commonwealth. If anybody thinks that ‘some other settlement is more important, let him get up and say so. Anyway, it is most important, and I am surprised that the Government has not ‘made a move before now to build for the peop’le of Robinvale a decent post office. The Minister for Social Services (Mr. Roberton) recently, visited the area as a guest speaker at the Burns night and while he was there, had an opportunity of seeing the tin shed that is the post office. I have heard the honorable member for Kingsford-Smith (Mr. Curtin), advocate the erection of a worthy post office for Maroubra, and the honorable member for Brisbane and other honorable members advocate the construction of rA new post office for Brisbane. The PostmasterGeneral (Mr. Davidson) said, in reference to the Brisbane Post Office, “ I cannot see any reason why we should interfere with this beautiful building, which is of structural excellence “, but if the Postmaster-General comes to Robinvale, he will see a tin shed.

I shall give honorable members some information about Robinvale in order to illustrate how it is growing. In 1946, before irrigation settlement commenced, the average daily attendance at the school was 37. Now, after less than ten years, the attendance at the school has increased to over 600 pupils. There is a cooperative packing shed in this area, and it is stated in the Riverlander that developments include a £75,0.00 hospital and a £36,000 post office. The post office is mentioned in anticipation. I hope it is in confident .anticipation because the post office has not appeared anywhere but on .the estimates of the PostmasterGeneral’s Department. Another development is the consolidated school. The post office has been long enough on the estimates o’f the Postal Department for some practical action to be taken. T think that the Postmaster-General who has just assumed office is doing a tremendous job. Representations that I have made to him have had quite a favorable conclusion up to date. I appeal to him on this occasion. If ‘honorable members want any further evidence concerning the importance -of Robinvale, I inform them that there is a .chamber of commerce there of which a very excellent man, Mr. Goode, is the president. The secretary, Mr. Ginn, has written to me as follows: -

We the -above chamber are alarmed- that is underlined- to learn that once again the building of a new post office in Robinvale is to be further delayed. Would you please do all in your power-


– Is that underlined?


– No. They know that I always do all in my power. There was no reason to underline that; and they know that when I speak I put a powerful case for them. Let the honorable member for East Sydney underline that one. The letter continues -

Would you please do all in your power to bring’ this very necessary undertaking to an early and complete reality ?

I think that that is a very moderate request and that the letter is couched in very conservative terms. I also think that, if I were able to persuade the Minister to go for a trip to Robinvale and if he saw the present tin shed, before very long a two-story post office costing £36,000 would grace the soldier settlement of Robinvale.


.- I desire to direct attention to the gross inequality of the disbursement that Victoria receives from the petrol tax. Under the existing legislation,- the allocation is based on two-fifths as to area and three-fifths as to population. The formula is 30 years old and, as I have already indicated, it has produced such inequality in relation to Victoria that a new formula is clearly necessary.

The existing formula tends to favour the larger States, but it completely ignores the fundamental concept that road requirements should be determined to a considerable degree by the -number of vehicles that use the roads. The maintenance and improvement of existing highways to carry the enormously increased amount of traffic has emerged as a major task for local authorities, particularly in Victoria. Areas that have a high vehicle density need more roads, and wider and better constructed roads, than do areas cf low vehicle density, but the formula does not take that fact into consideration. Therefore, maintenance costs, particularly in relation to Victorian roads, are not taken into account. The existing legislation is inequitable in that in determining an allocation to a State, it ignores the proportion of the total petrol tax that is contributed by that State. Victoria has been grossly unfairly treated, and the position is becoming worse from year to year. Victoria receives 17 per cent, of the petrol tax collections, but it has 30 per cent, of the total number of cars in Australia, pays 31 per cent, of the total amount of tax, and has 21 per cent, of the nation’s roads. I suggest, therefore, that the Parliament should make an entirely new approach to this matter. We should not be bound by principles that were laid down 30 years ago. Some honorable members seem to think that, because those principles were adopted 30 years ago and have since been followed by governments of various political colour, they are as inevitable as were the laws of the Medes and Persians and should not be altered. From year to year the Parliament amends other legislation in accordance with changing conditions, and I suggest that it is high time that the petrol tax formula, too, was changed.

When the formula was adopted in 1926, new road development was more important than was the maintenance of existing roads, and for that reason considerable weight was given to the gross area of States, but the net useful areas and the density of population likely to ensue were not taken into consideration. To-day, the position is entirely different. The maintenance of existing roads, and not the provision of new roads, is the dominating factor. If the Government were to consider action along the lines that I have suggested, the number of motor vehicles that are registered in the various States would provide a direct index of the magnitude of the maintenance problem. Roads are deteriorating especially in areas of great traffic density such as Victoria arid New South Wales.

I now wish to direct attention to the amount of tax per vehicle that is collected in the States, and the amount that is paid back for road purposes. I have obtained these figures from an authoritative source. In New South Wales, the amount of tax collected per vehicle is £14 14s. lid. The amount of tax distributed per vehicle is £6 18s. 1Od. The position is bad enough in that State, but in Victoria it is worse, where £16 2s. 6d is collected per vehicle, and £4 17s. 5d. per vehicle is received back from tax distributed. In Queensland the amount of tax collected is £13 16s., and that State receives back £10 17s. lid. In South Australia £13 7s. 4d. is collected in tax, and £8 ls. 7d. is distributed. In Western Australia the amount collected is £15 2s. Id., and the amount received back in tax distributed is £20 8s. 8d.

Those figures show the difference in the treatment of the various States, but frequently we hear honorable members from the States that receive the larger proportionate allocations of petrol tax saying that the governments of those States cannot spend the amounts that they receive. We are told by Government supporters in this House who come from Queensland and Western Australia that the Labour governments of those States have credits in their roads funds, and that they cannot spend the amounts that they have. In those circumstances, how can those governments expect to receive more ? On the other hand, Victoria could spend millions more than it does if this money were available. Because Victoria receives only 17 per cent, of the petrol tax collected, the Government of that State has been forced to raise large sums of money from other sources for road construction and maintenance. It has used three methods of raising that money - motor vehicle taxation, municipal rates and loan moneys. From those sources, Victoria provides five times as much money as it receives from the petrol tax allocation. What is the position in the other States? In New South Wales, the position is almost as bad as it is in Victoria. The New South Wales Government has had to raise only four times as much from other sources as it receives from the petrol tax. In Queensland. South Australia and Tasmania, the relevant ratio is two and A half times, while in Western Australia it is about £1 for £1. It can be seen that the allocation is most unfair, because Victoria has to raise from other sources within the State a much greater proportion of money, in relation to the petrol tax allocation, than, do the other States. It is most unjust to Victorian road-users, who appear to be singled out to pay excessively high amounts for road works in other States.

Recently, the Commonwealth-State Consultative Committee on Road Transport, which is an independent body, in assessing the requirements of the States for expenditure on roads for the next three years, said that, in its expert opinion, Victoria could use an additional amount of £10,000,000, for maintenance purposes alone, in three years, but that Western Australia could use only £1,250,000 in the same period, because Western Australia at present is receiving more money than it can use. I suggest that this Government should seriously consider making numbers of vehicles a factor in deciding the percentage of petrol tax to be allocated to the various States. If the present basis of allocation is continued, and is applied to an increasingly larger amount of petrol tax, it will be found to be completely impracticable. It has been found impracticable in the past, because while receipts from petrol tax allocations are increasing, some of the less populous States, as is admitted by Government supporters, cannot spend their tax allocations. That does not apply, of course, to Victoria and New South Wales. In order to preserve a national road outlook and give fair consideration to States involved in either heavy maintenance liabilities or new developmental projects, the basis of apportionment of the petrol tax should be reassessed, taking into account the numbers of vehicles in each State. If that is done, Victoria will receive justice and fair treatment for the first time in 30 years.


– It has been my lot to follow the honorable member for Batman (Mr. Bird), and I congratulate him on the appeal he has made in regard to the improvement of our road systems. He mentioned that some of the States have not been able to spend the money allocated to them from the petrol tax for road purposes. While I believe that that has been true in the past, I think that from now on additional resources of man-power, equipment and materials will be available, and we shall see a big improvement in roads in the future. The situation will be different from that which has obtained in the past, when so many jobs have been available that it has been, difficult to obtain good, experienced staff to work on the roads.

Mr Chambers:

– Where is this new pool of labour to come from?


– I ask honorable members opposite to rid themselves of the antagonism shown by the honorable member’s interjection, and to take a reasonable view of the situation. Until a short time ago there were 60,000 vacant jobs to choose from, and men would not go to work on the roads. I know that a lot of people cannot work on the roads, because they cannot leave their homes.

Mr Curtin:

– Would the honorable member like to swing a pick ?


– If we do not persuade’ a sufficient number of good workers to take the jobs on the roads, we will not get good roads. Evidently the honorable member for Kingsford-Smith (Mr. Curtin.) is not in sympathy with the honorable member for Batman.

I make a plea to the Government to consider amending the Banking Act and the Commonwealth Bank Act. I believe that there should be a further separation of the functions of the central bank and the Commonwealth Trading Bank. Members of the Opposition who know their political history well - and they all do - will remember that a Treasurer who was a member of the Australian Labour party endeavoured, about 24 years ago, to have the banking legislation amended to provide for a separate central bank. The Senate at the time was hostile to the Labour party, and the legislation was not amended. I now suggest that a separate central bank should be established. I have a number of reasons for making this suggestion. The most important of them is that the private trading banks, quite properly, are required to furnish confidential information to the central bank. They are diffident about doing so. Their concern springs from the fact that the central bank and the Commonwealth Trading Bank are under the one control. They know that the Commonwealth Trading Bank, which is in. most energetic competition with them, can use the information furnished by them if it so desires. In this regard I refer the House to some remarks appearing, in the book Australian Banking, by Gifford, Wood’ and Reitsma.

On page 138 of that work the authors, who are distinguished economists in the State of Queensland, say - is no doubt, however, on one point : the operation of the Commonwealth Trading Bank makes it more difficult, for the Commonwealth Bank to get the goodwill of the banks in carrying out an. anti-inflation policy, if the Commonwealth Bank-

I think they mean the Commonwealth Trading Bank - pushes ahead faster in. its lending policy than the private banks do in view of the credit restrictions forced on them.

What they mean is evident to those who study the statistical figures available. It appears to be fairly clear that the Commonwealth Trading Bank is expanding its advances and deposits at a faster rate than the private banks, on the average, are expanding theirs.

Mr Pollard:

– Hear, hear!


– The honorable member for Lalor (Mr. Pollard) who is a socialist, quite rightly says, “ Hear, hear!” because he wants to socialize the banks. The honorable member for Lalor agrees that the banks should be socialized, but we on this .side of the House, I venture to say, believe that there is a better banking situation in Australia than there is in any other country. We have here competition in the banking sphere, and that competition will foster private enterprise, without the vigour of which this country would die. We want to see a banking system which works as smoothly as does the banking system of England, where there is little compulsion. Perhaps, there has to bc some compulsion in a vigorous, rugged and developing country such as this; no doubt the need for compulsion here is greater than it is in England, where the system works on gentlemen’s agreements.

There is real operation of both the central bank and the trading bank sections. As honorable members know, the last amendment of the Commonwealth Banking Act brought about a separation in the legal sense only. There was no real separation. The Governor of the Commonwealth Bank is, I believe, in complete control of the Commonwealth Trading Bank, and he and the board are in receipt, the whole time, of confidential information from the trading banks. Even though the banks would like to believe that that information is not used in administering the Commonwealth Trading Bank, they fear that it might be so used, and in support of their fear one has only to look at the statistical bulletins to see that the Commonwealth Trading Bank is expanding much faster than arn the other banks. If that trend continues, then, of course, we shall have gradual nationalization of banks.

Mr Pollard:

– Hear, hear!


– The honorable member for Lalor again says, “Hear, hear ! “ He wants nationalization of banking and the dead hand of government control on this vigorous nation.

We have some very brilliant precedent,!) to support the Government’s views in this matter. For instance, the Prime Minister (Mr. Menzies), when speaking on the banking legislation, on the 21st March, 1945, said-

In any event, competition between the trading banks and a bank whose primary function is that of a central bank is quite inconsistent with the atmosphere of wise leadership and co-operation which ought to exist in a banking system . . .

Those were wise words spoken as brilliantly and as eloquently as only our present Prime Minister can speak. He went on to say -

The same man will be controlling both banks. The same governor is responsible for the central bank and the Commonwealth Trading Bank. To use a fashionable phrase, what sort of a split personality will this one man need if he is at one and the same time to control the central bank and a trading bank the interests of which, must on many occasions be completely opposed . . . The whole essence of the central bank is that it may have to control trading banks . . .

The Prime Minister continued, in a most compelling and lucid way, to say what ought to be clone. Another able gentleman, the present Treasurer (Sir Arthur Fadden), spoke on this subject on the following day, the 22nd March, 1945. He said -

If a central bank becomes deeply involved in commercial transactions, its central banking functions will be impaired. In an emergency the central bank must be prepared to stand by the trading banks. . . .

The matter with, which I am dealing cannot actually be found in legislation.

It is the spirit of co-operation between the private banks and the central bank, co-operation which eventually we must have. I believe that Mr. Theodore may have been ahead of his time and may have been too radical for his day, but he, as a Labour Federal Treasurer, endeavoured to bring in a separate central bank. I believe that we are reaching a stage when, if we are properly to counter inflation, we must have a separate central bank. We all know how wise and experienced bank managers are in handling affairs in their districts. If they are to help this country to .control inflation, they must, through their general managers, trust the central bank. That is most important at this stage. I submit to the House that it is very difficult indeed for them to observe the need to control inflation, and to administer wisely their advances policy and any credit restrictions which may have to be imposed for a temporary period, unless they have complete trust and complete confidence in the central bank. They must not have reason to think that the central bank is using its functions to help the Commonwealth Trading Bank.

Mr. Bowden

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


– I grieve to-day because the visually handicapped youth of our country are not being treated in a manner befitting residents in a civilized community. 1 speak for a small section of the community which seeks no special advantage. All that the visually handicapped ask is that they be given an opportunity to work and to live normal lives with their fellow citizens. I refer to young folk who come from our blind schools, and I want to make my remarks to this chamber to-day not as carping criticism of what is happening now or of what has happened in the past, but as a plea to the Minister for Labour and National Service (Mr. Harold Holt), to the Government, and to the conscience of the nation generally. More should be done than has been done in the past to enable young people whose misfortune it is to be obliged to seek special care and attention, and whose good fortune it is to have the loving care. and assistance of teachers who can give them the blessing of the very best education, in order to equip themselves, by sheer hard work and tenacity, to win exhibitions to the university and, on the completion of their studies, to be absorbed into the community.

In New South “Wales there are not a great many of these young people. Some 25 in all come from the schools each year.


– Is not this a matter for the States?


– It is a matter not for the States but for the nation. It is a question of this Government playing its part and accepting a quota of the students who come from our blind institutions, thus enabling them to enter Commonwealth employment so that they may have an opportunity to work with their fellows on equal terms and to be absorbed into the kind of employment which rightly should be theirs.

I bring to the attention of the House a valuable report provided in the United Kingdom by a special working committee which reported to the Right Honorable George Alfred Isaacs, M.P., Minister for Labour and National Service of a Labour administration. The United Kingdom Government i3 far in advance of the governments of Australia in giving attention to this important matter. I want to submit to the House now that it. is not a matter of complaining about what has happened in the past, but a question of applying ourselves to the conditions of to-day. Only recently, one of the schools found that two of its students had won exhibitions to the university. That school was St. -Edmund’s School for the Blind. at Wahroonga. Another school nearby, St. Lucy’s, also did extremely well, and a New South Wales public school also is rendering exceptional service in this field. I pay tribute to the school teachers concerned and compliment them, on the work they are doing. I recognize the value of their work, as do many citizens of New South Wales. I also

Applaud the charity of the community generally in assisting in this work.

I make no plea to-day that this Parliament should do something additional to assist those schools as such. All that I am asking of the Parliament is that it do something to ensure that these obil’dren are, educated, and that when they are adolescent they will find themselves equipped with the necessary education to enable them to play their part in the community. What are the difficulties? First there are medical examinations which restrict the range of employment for the visually handicapped. I think that is a, matter that should be investigated. We should try to fit these people in, so that they may do useful work in developing the country and attain for themselves the measure of happiness which rightly should be theirs. I direct the attention of the House to an outstanding case of a blind person, that of Miss Helen Keller, of the United States of America, who became completely blind and deaf at the age of nineteen months. In spite of those tremendous handicaps, this woman was trained to excel in many fields of culture. She has delighted the world with her musical ability and other attributes. Surely what was done in her case in the United States could also be done for blind persons in Australia. Officers dealing with employment are trying to do their best to find jobs for blind persons, but they are handicapped unless the Public Service Board interests itself and ensures that, when opportunities are available, these handicapped persons shall not be debarred from employment. I recall the splendid work done by blind people during World War II. at the Commonwealth Small Arms Factory at Lithgow.

The time has come for the Australian Government to accept this challenge. This matter ‘cannot be neglected any longer. Surely it would be appropriate for the Minister for Labour and National Service to cause an inquiry to be made into thi? subject, and enlist the support of honorable members and various organizations. Perhaps the Employers Federation and the Australia.n Council of Trades Unions could be invited to submit suggestions as to how blind persons could be employed, and. one important purpose of the inquiry would be to awaken the whole community to its responsibility. In one sense this is a small matter in view of the fact that only 25 young persons leave the blind schools each year, but the happiness and welfare of each one should be the concern of this Parliament. Parliament cannot deal with the whole question, and it is proper that State governments and local government authorities should play their part in providing employment for the visually handicapped. Nevertheless, the National Parliament represents the people of the nation, and should give a lead.

The report of the working committee appointed in the United Kingdom contains examples of work which might be engaged in by the visually handicapped. I have mentioned to honorable members that in schools such as those at Wahroonga, where blind persons are trained, amazing results are being achieved. Children come to the school from Chatswood and surrounding districts, almost unassisted, and if they are able to look after themselves to that extent, surely, after they are trained and leave school with a splendid standard of achievement, opportunities should be found for them to take their places in the industrial or commercial life of the community.

Many of these young people excel in shorthand and typing, and they are also capable of operating a telephone switchboard. I suggest to the PostmasterGeneral (Mr. Davidson) that special equipment might be installed in post offices to enable them to do useful work in that department. I cannot emphasize too strongly the importance of integrating blind people into the work force of the nation, and so ensuring their happiness, rather than that they should be sent to institutions where they will have to work with others similarly handicapped and be divorced from the society and interests of normal people in the community.

On a previous occasion, I showed to the Vice-President of the Executive Council (Sir Eric Harrison) part of a report dealing with the visually handicapped.It is not controversial, and is full of information and interest for honorable members.I ask for the permission of the House to have it incorporated in Hansard. It is a most important contribution to the subject under consideration.


-Is it lengthy?


– No.

Leave granted.


– The extract is as follows : -

With the present day high standard of training and education of blind children, has grown up the want of more suitable employment of those leaving school. A means should be found to supply this unfortunate gap in the social welfare of the blind. Some people consider this is a government responsibility; other people consider it a community responsibility. The value of employment to the blind is that it enables them to enter fully, despite their handicap, into the life of the community: to live active, happy, cultured, and contributive lives of their own. The sense of being useful in society is essential to happiness. The value of the employment of the blind to the community is that they represent a potential labour force capable, if properly used, of making a substantial contribution to the national economy. At the present time, when Australia is short of labour, it is most opportune to go thoroughly into the blind employment problem. The employment problem covers professional, commercial, industrial, rural and public service occupations.

I am grateful for the opportunity to state in the House a case for the blind youth of our country, and I thank all those who have associated themselves with the work of educating them. I plead with the Parliament to play its part in placing them in good employment.


– On last “ Grievance Day “ - now almost a month ago - I directed the attention of the House to a serious situation that was developing on the Hobart waterfront. Since that time, I am bound to say that that situation has steadily deteriorated and it is now having a most serious effect on the economy of Tasmania. There have been long delays in the shipment of export fruit, and that has had a cumulative effect on other ports in Tasmania, involving the export of products such as timber, newsprint, potatoes and other commodities.

I am not one of those who believe that the waterside workers are always wrong. There have been faults on both sides and it is true to say that in a number of arbitration court hearings relating to this matter there have been considerable delays. At the present time, however, it is clearly demonstrable that the leaders of the Waterside Workers Federation are gravely at fault. They are seriously hurting the State of Tasmania, the applegrowers and the producers of other primary products and, in the long run. they are hurting themselves. I am personally acquainted with many of the waterside workers on the Hobart waterfront, and am well aware that they are not in agreement with the course ‘their leaders are following.

What have been the causes of the present situation? They are stoppages, go-slow tactics, a shortage of the quota - instead of it being of the order of 1,150 it is 200 below that figure* - and overtime bans. I shall try to trace the sequence of events leading to the present situation. Honorable members know that earlier this year there was a general strike on the waterfront. Eventually, the Australian Council of Trades Unions withdrew its support of the strike, but it is clear now that the Waterside Workers Federation did not agree with that action. Leaders of the Waterside Workers Federation - and I emphasize the word “leaders” - have persisted in go-slow tactics and pinpricking, minor rolling strikes. ^Quorum formed.’] The original cause of the Hobart dispute was the size of the gangs using pallets for the loading of fruit - whether they should consist of 27 or 21 men. That dispute caused a number of days to be lost, but after a Board of Reference hearing it was settled in favour of the 21-man gang. The Waterside Workers Federation, however, did not accept that decision. Since that time, there have been what one might almost call frivolous disputes in relation to pallet loading. There was a refusal to proceed with work because two men were not picked up for a particular ship. There was a stoppage when it was suggested that a pallet was unsafe because a lug on one bar was bent. This was corrected. It was passed as completely safe by two independent authorities, yet the men still refused to work. A ban on work was imposed over the whole of the Easter week-end. I think this was the first time that had ever been known in the fruit industry. There was another typical dispute in which two gangway men who comprised part of the 21-man gang refused to reload a spilled pallet. Eventually, one utility man who belonged to the same gang loaded this pallet while the two gangway men looked on. I draw attention to these things to show how frivolous and needlepricking arn these disputes that are going on.

There is a very easy, very quick and very sound example of what can be done, at Port Huon, which is in the centre of the apple-growing district. There is going on, there has been going on and there will be going on at that port constant loading, by a 21-man gang. From the very beginning, there have been 21 men in the gangs at Port Huon, and the loading rate is of the order of 2,400 cases a shift as against from 1,900 to 2,000 cases a shift in Hobart. Throughout the season so far, no dispute has occurred on the waterfront at Port Huon, where the 21-man gangs have been used. Now I see that a suggestion has been made that some of these men be transferred to the Hobart waterfront to help fill the quota there. I sincerely hope that if they are transferred to Hobart, their loading rate will not be bought down to that of the Hobart waterfront worker.

It is clear that one of the most essential things to do is to send more ships to Port Huon, where there is no disputation, where the loading rate is higher, and where the facilities are so much better. The important point now is what action can be taken. Several things can be done. I simply pose them ; I do not suggest them. We could bring down special legislation to deal with the situation. We could also think in terms of deregistration, in terms of casual or free labour, or in terms of contract loading. I make one suggestion to the Minister for a shortterm solution. It is that the shipowners should call for casual labour. I understand that the Australian Stevedoring Industry Board has not the power under the act at the present time to call for casual labour, but the shipowners can do so. As I understand the position, the waterside workers are passively refusing to fill the quota of 1,150 men for the Hobart waterfront because, they suggest, as soon as the flush of the season is over, a number of men will not have jobs. That being so, does not the suggestion regarding casual labour meet that very point? “Does it not mean that those men who are casually employed on the waterfront will leave that employment, and the numbers would still be lower? 1 feel that the long-term solution of this problem is by far. the more important, and in my view there are two propositions which ought to be. “considered. The first is whether or not contract loading might be undertaken. The second, and [ believe this is the more important one. is the working of three shifts during the flush of the season - a series of shifts, say, from S a.m. till 4 p.m. at the standard rate, from 4 p.m. till 12 midnight at time and a half, and from 12 midnight till 8 a.m. at double time. Those shifts could be worked on the roster system, so that the men, if they so desired, would be able to take advantage, in their turn, of the higher rates.

What a terrible cost this trouble has meant to the Tasmanian fruit-growers ! E think this is the best crop they have ever had, and its quality on arrival at the wharf is the best, I believe, that I have ever seen.


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


– I am sure that we all sympathize with the honorable member for Franklin (Mr. Falkinder), and Tasmanians in general, in the problems he has just outlined. No doubt, the causes of those troubles are more deep-seated than would appear from a superficial examination. It is to be hoped that the Government will como forward with a solution of the problem in the very near future. Perhaps it will follow the excellent example to be found in New Zealand. There an authority has been established comprising representatives of both the employers and the employees, that is, the shipowners and the. waterside workers, under an independent chairman. It has been operating for a couple of years, and is proving very satisfactory. If that example were followed here, a better spirit, might prevail in the industry.

As I said, there are more deep-seated causes of waterfront troubles than would appear on the surface. There are many irritating factors. Many ex-servicemen arc members of the Waterside Workers Federation. Among them, is a. Victoria Cross winner from World War J. These nien are being constantly irritated not only by the conditions obtaining in their industry but also in connexion with their rights and privileges generally, and especially with respect to claims for pensions and benefits. A deplorable, indeed, an alarming situation, has developed in connexion with the claims of exservicemen and their dependants for pensions. I have not been able to refer to this matter in detail before because, while we had evidence of individual cases, we could never deal with the general situation as the reports were not before us when the last budget debate took place. One does not like dealing with individual cases for fear of prejudicing the rights of the people concerned. I now have before me the last report, and, indeed, the only report that has been tabled and printed in connexion with this matter. I refer to the report of the Repatriation Commission and the various appeals tribunals for the year 1953-54, which I have perused. It discloses a very disturbing state of affairs indeed. For instance, in the financial year 1953-54 there were 4,326 claims for pensions in respect of service in World War I. In connexion with World War II., there were 44,920 claims and, resulting from the KoreaMalaya operations, there were 1,094 claims. The total number of claims for that financial year was 50,340. Of that number, only 19,692 were allowed, the rest being either disallowed or not heard. The fact remains that 30,648, or 60 per cent., of the total claims had been rejected or had not been brought to finality.

Of the claims involving appeals or references by the Repatriation Boards to the commission, only 8,830 cases were determined, and of this number, only 12.37 per cent, of the appeals were allowed - so nearly 88 per cent, were disallowed. Of a. total of 11,178 appeals to the War Pensions Assessment Appeals Tribunals. 5.627 were allowed, and 5,551 were rejected. Those were appeals by exservicemen who were dissatisfied with the decisions of the boards or the commission. Approximately 50 per cent, of those appeals were upheld by the War Pensions Assessment Appeals Tribunals. That discloses a very disturbing state of affairs indeed. Actually, it is an indictment of the commission and the tribunals.

I do not wish to criticize the officials of the Repatriation Commission because no doubt they are endeavouring to car.ry out the Government’s policy. The Government puts only a certain amount of money into the repatriation pool each year, and the officials, doubtless, take this as ar. indication to them that only a certain percentage of claims is to be granted, irrespective of the merits of the claims submitted. 1 come now to the War Pensions Entitlement Appeals Tribunals. Of a total of 1,915 appeals heard by the No. 1 tribunal under section 64 (.1) of the Repatriation Act, only 15.93 per cent, were allowed. That means that 84.07 per cent, were disallowed. Of the appeals heard by the tribunal under subsection (7aa.) of section 64, 17.9 per cent, were allowed and 82.1 per cent, were rejected. Of 2,083 appeals heard by the No. 2 tribunal, SI per cent, were disallowed. Nine per cent, were allowed by the tribunal, 7.54 per cent, were allowed by the commission on reconsideration, and 2.59 per cent, were allowed by the commission on further review; so that 19 per cent, of the appeals heard by this tribunal were successful. The No. 3 tribunal was appointed more recently, and the number of appeals heard was much smaller, because it functioned only from the 25th April, 1954. Of 418 appeals heard by it, 95, or 23 per cent., were allowed and 77 per cent, were rejected. To summarize, approximately 17 per cent, of the appeals heard by the No. 1 tribunal, 19 per cent, of those heard by the No. 2 tribunal, and 23 per cent, of those heard by the No. 3 tribunal, were successful. These figures show a variation of as much as 6 per cent, between the appeals allowed by the three tribunals. It appears, from recent decisions, that the No. 3 tribunal is now allowing fewer appeals. Apparently, it is to be brought into line with the two earlier tribunals. Whether or not it has been given a tip that it is putting the other tribunals on the spot, the fact remains that it is coming into line and is now allowing only about 20 per cent, of appeals.

The facts that I have stated reveal a very serious condition of affairs, which calls for immediate attention by the House in order to ensure that both the spirit and the letter of the Repatriation Act are observed, and, in particular, that the interpretation of section 47 - the onus-of-proof section - given by the Attorney-General (Senator Spicer) some time ago is given effect. A Government supporter stated, during a previous debate, that the Government should not give any direction to the Repatriation Commission in this matter. But it should at least insist that the provisions of the act are observed in accordance with the stipulations made by the Parliament. The Minister for Repatriation (Senator Cooper) is charged with the general control of the commission, and he and the Government have a responsibility to ensure that the terms of the Repatriation Act are observed. The Government cannot escape this responsibility. 1 urge it to re-appoint the all-party committee that was previously in existence. That, committee brought about reform of the Repatriation Commission which resulted in considerably increased benefits for exservicemen and their dependants. The committee was presided over by the honorable member for Lalor (Mr. Pollard). It did a very fine job, and its decisions were usually unanimous.

I have no doubt that the ex-servicemen on the Government side of the House are sympathetic towards the problems of exservicemen, but, doubtless, they are hamstrung in much the same way as the commission and the tribunals are hamstrung by the Government’s general economic policy. If we must have wars in which men sacrifice their lives and their health, they and their dependants should be compensated as far as they can be compensated in money, although they can never be adequately compensated for their suffering and their loss. If tb, terms of section 47 of the Repatriation Act were given effect in the manner laid down by the Parliament, many of the applications being rejected by the commission and many of the appeals being rejected by the tribunals would be granted and some redress would be given to sick ex-servicemen and their dependants. This matter is not the subject of a protest only by Opposition members in this House. Responsible leaders of ex-servicemen’s organizations have protested about it from time to time. Mr. Yeo, the president of the New South Wales branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, stated, at a convention in Brisbane last year, that ex-servicemen were being robbed of their just rights.


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


.- I support the complaint made by the honorable member for Franklin (Mr. Falkinder) about the shipping position in Tasmania. Before I deal with that matter, however, I should like to say that I was very pleased to hear the honorable member for Reid (Mr. Morgan) advocate the deregistration of the Waterside Workers Federation of Australia. The waterside workers’ union in New Zealand was deregistered, and that is probably the reason why the position there has improved so much recently. I should like to mention also the question asked this morning by the honorable member for Bass (Mr. Barnard) in reference to the export of butter from Burnie. He asked why delay had occurred in the shipment of butter from that port. The honorable member, above all people, should know the reason. Only this week, a ship that had been listed to load 45,000 cases of apples at Hobart was diverted from that port, owing to the congestion of cargoes and the shortage of waterside labour there, to Burnie to load 25,000 cases of butter. The honorable member for Bass, who has taken such an interest in the export of buttai-, should have been aware of those facts several days ago.

Mr Timson:

– What ship was that?


– It was S ten tor. There is a huge accumulation of cargo awaiting shipment from Tasmania at the present time. The waterside workers, as the honorable member for Franklin has stated, thought they had the full support of the Australian Council of Trades Unions in their three-weeks’ strike. Like silly schoolboys, they now grieve because they had to return to work without gaining all the concessions they hoped to gain. The position on the wharfs has not improved since the end of the strike, but has deteriorated seriously during the last few weeks. Other industries, in addition to the apple industry, are being sacrificed on the altar of the Communist-controlled Waterside Workers Federation. Never have more ships been loading at the port of Hobart than at the present time, and never has there been more industrial trouble on the waterfront than there has been during this year’s apple season. There is an accumulation of 23,000 tons of cement awaiting shipment from Tasmania to the mainland. The accumulation totalled approximately 15,000 tons at the conclusion of the strike, and it has since increased by a further 8,000 tons, during a period in which the output of the Goliath Portland Cement Company Limited, at Railton, was lower than normal. One kiln has not been in operation since the beginning of the working year following the Christmas and New Year break. The customers of this works, of course, are not waiting for cement to arrive from Tasmania. They are obtaining cement elsewhere, especially from New South Wales, by road transport. Road transports galore are breaking down the roads in the process of moving cement to Victoria, where it is urgently required. The product of the Goliath works is of outstanding quality and is preferred by architects and the building industry. It is tragic that the trade should be lost to Tasmania and that customers of the Tasmanian industry should be forced to take an inferior product from elsewhere.

The timber industry also has experienced shipping troubles over a long period. The Minister for Shipping and Transport (Senator Paltridge) has done a remarkably good job in directing ships, wherever possible, to ports at which cargo has accumulated. Just prior to the end of June last year, Tasmanian ports were reasonably clear of an accumulation of timber cargoes. At the end of the three weeks’ strike, 9,500,000 super, feet of timber had accumulated. To-day, 16,000,000 super, feet has accumulated, and at the end of this month the accumulation will be 20,000,000 super, feet, unless the position is remedied. Some persons say that the labour force should be transferred to the loading of perishable cargoes of apples. High-quality dressed timber comprises 22 per cent, of Tasmania’s timber production, and that is a perishable article. These delays have the effect of forcing out of business the small man. who has not large financial means, while allowing bigger companies to remain in operation, and this is not in the interests of the trade or of Tasmania. The Boyer newsprint mill, in the south of the State, has an accumulation of 10,000 tons of paper. The management is at its wits’ end to find storage space. This paper should not be held in Hobart, but should be in the stores of newspaper offices and printing establishments on the mainland* The paper industry at Burnie, which employs 2,500 workers, and produces 1,000 tons of writing paper and some hundreds of tons df cardboard weekly, is embarrassed by accumulated production and has no storage space for further output.

Tasmanian workers are becoming unemployed, mainly because of lack of co-operation and unwillingness to work on the part of the waterfront labour force. The position is worse there than in mainland ports. To cite an example, 22 men loading paper at Hobart handle at a time one roll weighing from 15 cwt. to IS cwt. In the ports of Sydney and Melbourne, waterside workers handle two such rolls to each sling, with seventeen men in a gang as compared with 22. In Tasmania, the number of men in a gang has been gradually increased, and the output has been lowered. Only recently, a cargo of logs for the plywood mills at Somerset arrived from Borneo. The Burnie waterside workers, after working in the ship for a short time, refused to continue because the furry bark on the logs tickled their legs. That is the sort of silly behaviour which prevails in many instances. I believe that the problemcould be overcome by industry paying a great number of the waterside workers £20 each to remain at home, and then employing men who would be able and willing to increase the speed of handling ships’ cargoes. Such a course would not cost any more than does the present method, because, after all, only a few years ago, fifteen men handled double the quantity of cargo that 22 men are handling to-day, in spite of the fact that there has been a vast improvement in mechanical aids on the waterfront. As the honorable member for Franklin has said, not all of the waterside workers are of the same ilk, but their leaders are definitely Communist.


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


– I desire to make a personal explanation. I have been misrepresented by the honorable member for Braddon (Mr. Luck), who said that I had advocated the deregistering of the “Waterside “Workers Federation of Australia. I said no such thing. On the contrary, I did advocate the establishment by the Government of a port control body, with representation of both the Waterside Workers Federation and the employers, under an independent chairmain. I said nothing at all about deregistering the union.


.- I am very concerned at the contents of a statement made in the House yesterday by the Postmaster-General (Mr. Davidson).

Mr Hamilton:

– What about apples?


– I shall be dealing with that subject shortly. I am just adopting a change of front for a while. The PostmasterGeneral said that there had been a big reduction in expenditure by the Postal Department in the last few months. This policy is now catching up with us in the non-acceptance of tenders called for the erection of post offices. I should like the Minister to inform the Parliament of the exact present position with regard to the provision of new buildings for the department. I am given to understand that although tenders have been invited for the erection of certain urgently required post offices in Tasmania, the tenders cannot be accepted. I should like the Minister to state the effect of the present restrictions on projects which are listed for execution in the next financial year. It is appalling that this Government’s efforts to stabilize our economy should strike such a blow at an enterprise like the Postal Department, which in every country is the biggest Government undertaking, controlling services which extend to every corner of the earth A study of the wide variety of work done by our Postal Department can be most fascinating. Its operations affect the lives of all people in every State every day in some way or another, yet the Government is restricting expenditure on this great public utility. I condemn the

Government for the attitude it is adopting towards this great industry. We need not fewer but more cables to enable more people to be linked by telephone. We need not fewer but more trunk lines, not fewer but more post offices. Three new post offices are listed for completion in way electorate, in the towns of Swansea, Railton, and Campbelltown, and it seems that these projects will be deferred until next year, or possibly the year after. The existing offices are architectural monstrosities. They are not fit to be used as post offices in this modern age. If they :are not too small, they are in some other way inadequate and cause great inconvenience to the staff. Yet the Government is to restrict the expenditure of this great department. We need not fewer but more automatic exchanges, which are the ;answer to our problem of rural co]nmunication.

The next matter with which I wish to deal is the curb on building which has resulted from the Government’s credit restrictions. -Mr. Luck. - What about the ships?


– I’ shall come to them in a moment. In Tasmania are several building societies whose primary function has been to build homes for the people. I have ascertained that they will not take any more business as a result of the Government’s credit restrictions. As a result, many young, recently married people in that State are not to have homes. Throughout the Commonwealth their numbers are multiplied, and one can appreciate the great effect which these restrictions will have in preventing home building for young people. That lias happened as the result of credit restriction in this great industry of homebuilding which affects so many ancillary industries. Once the Government interferes with the building industry it is “heading for trouble because that industry employs more people than does any other industry in this country. We should have not less but more money for homes because of the increases in population and in immigration. How can homes be built without finance ? We can bring thousands more immigrants into the country but what is the use of doing so if no finance ls available to put them to work on con structive enterprise in this country? I have heard it suggested - I have nothing really definite on the matter - that some building societies are lending money at 8 per cent, to hire-purchase firms. If that is so credit is being drawn off that could otherwise be used for home building.

I now turn to the subject of shipping for Tasmania. Honorable members opposite have no monopoly of concern for Tasmania, even though at times they try to give that impression. I have been in this Parliament for nine and a half years, and during that time, along with my friend, the honorable member for Franklin (Mr. Falkinder), and more recently the honorable member for Braddon (Mr. Luck), I have been fighting for more and better ships for Tasmania. Lack of shipping is causing the trouble that exists in Tasmania to-day. At last irregular shipping in the months and years that have passed has caught up with us and we now have a pile-up of various types of cargoes as a result of the neglect of Tasmania by this Government. For a long time now there has been talk about selling the Commonwealth ships. The Government has definitely neglected my State, which has increased its population and production, whereas no commensurate increase in shipping has been provided by the private shipping interests. A serious situation has been reached - I am not speaking specifically of Hobarts - in regard to cargoes of butter, timber, paper and cement, not as a result of any sudden slowing-down on the part of waterside workers handling such cargoes, but because of lack of shipping over many months. I- agree that in Hobart the situation is absolutely chaotic, because a record crop of apples is awaiting shipment in an unusually large number of ships, and I believe there are 150 waterside workers short. Why does not the Australian Stevedoring Industry Board try to obtain more transferees from the mainland during the next few months when these apples will have to be moved? I do not blame the Australian Waterside Workers Federation for not putting on extra men because it knows that as soon as the apples are moved the men will have to be put off. I can quite understand its attitude in that respect. More men should be transferred from the mainland. More waterside workers were taken from the mainland to Tasmania for the apple season last year than has been the case this year, although this year we have more apples to move than ever before; we have a record crop. The present weakness in the set-up could be rectified without much trouble. The waterside workers in Hobart would be quite prepared to accept more transferees from the mainland in order to move these apples. Through sheer neglect of Tasmanian shipping the Government has sown the wind and is now reaping the whirlwind. Good relations exist between shipping interests and waterside workers in virtually every port in Tasmania except Hobart. There, I agree, the situation calls for more tolerance on both sides. Both sides are at fault.

Mr Hasluck:

– It is good for the honorable member to confess his faults.


– Apportioning of blame is not the solution. I know both sides are to blame and we have to try to find where the real trouble lies in Hobart. If it means a little give and take on the part of both sides, that should be done in the interests of the apple industry, one of Tasmania’s biggest producers. Personalities and pettiness must not stand in the way of getting this fruit lifted.


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

Minister for Labour and National Service and Minister for Immigration · HIGGINS, VICTORIA · LP

– I would not intrude into this debate, having regard to the limited time available to private members on “ Grievance Day “, if it were not for the importance and urgency of the matter raised by the honorable member for Franklin (Mr. Falkinder) and supported by the honorable member for Braddon (Mr. Luck). As to the contribution of the honorable member for Wilmot (Mr. Duthie), if that is, in his view, a realistic approach to the problem that exists in Tasmania to-day, T am beginning to understand why the State Labour Government there has apparently also failed to face up to the situation in a practical way. I mention that specifically because I understand -a resolution was passed yesterday in the Tasmanian Parliament drawing the attention of this Government to the concern felt in Tasmania about the unsatisfactory situation which had developed. This Government does not require any intimation from the Tasmanian Parliament on that issue. Fortunately, Tasmania is well represented in this Parliament, as to certain electorates anyhow, by men who do not hesitate to make known to the appropriate Ministers what is going on in their :State. Also, my colleague, the Minister for Air (Mr. Townley), over recent weeks, has been keeping me posted on the trend of developments there and has been making known the wishes of those who are directly concerned in this current difficulty. But. the plain fact of the matter is that for years now the people of Tasmania, an island vitally dependent on an adequate shipping service and satisfactory turnround of ships, have been badly served by the members of the Australian Waterside Workers Federation in that State. I make that statement with a full sense of responsibility and with some considerable knowledge of the facts as they apply to the ports of Tasmania. The people of that State, as a whole, not just the shipowners who may be in conflict from time to time with a branch of the Australian Waterside Workers Federation, have been badly served by their fellow citizens who are members of the federation.

Here is another example of the manner in which they have been let, down at a time- which is of the utmost importance to the economic welfare of a State so dependent upon a seasonal crop as Tasmania is in relation to its fruit production. The honorable member for Wilmot says, “ Why not transfer people from the mainland ? “ If he has been following events in this industry at all, he will know that as a result of the three-weeks waterfront strike, so much cargo has banked up in the ports of the mainland that labour is not available to be transferred from those ports. Nor are the men willing to go from those ports. The obvious practical solution in this matter would have been for the Hobart branch, and other branches directly involved, to have admitted on a casual basis people to supplement the work force in the port in order to assist it through the peak season. I can quite understand the federation’s reluctance to take on permanent members who, after the peak of the fruit season, might be redundant to the needs of the port; but there is no justification for refusing to bring in, on -a casual basis, those who could see it through this situation. “What is even more to be condemned is that there is no justification - indeed it is a matter for indictment - that at ‘.the heart of the season, at a time when this large crop has to be exported, not only have the waterside workers failed to maintain a reasonable rate of loading, but also they have allowed the rate of loading which had existed previously in Hobart to be substantially reduced. The loading rate for apples in Port Huon is of the order of eighteen to twenty sling loads an hour - a. not unreasonable rate. It was of that order in the port of Hobart, but in recent times, despite the fact that pressure has been at its peak, the waterside workers there have reduced the rate to thirteen sling loads an hour. I say that that is a wilful act of sabotage of the economic welfare of the people of Tasmania. It is not directed only at the shipowners, because the shipowners and their families are not involved in this matter in the same personal degree. The well-being of the State of Tasmania is involved, but not to anything like the same degree as the well-being of the orchardists and all the people who are dependent upon a state of prosperity flowing from well-conducted industries in that State.

So when the Tasmanian Government draws our attention to these matters, I say: Let it usefully do what it can do closer to home. One of the senior members of the Tasmanian Government, the Chief Secretary, is the president of the Trades and Labour Council in that State. He should know these facts. If he does know them, why does he let a union linked with the Trades and Labour Council continue to do this disservice to the Tasmanian people? The members of the union are not even carrying on at their usual rate, which is unsatisfactory in ordinary circumstances - the honorable member for Braddon has given instances of what is happening in other ports, and I do not think they will be contradicted - . but they have actually reduced that rate at ‘a time when the. need is at its peak.

We, as a Government, have been doing what we can, but we have not .an unlimited “capacity in this matter. As the honorable member for Franklin has explained already, under the present legislation the Australian Stevedoring Industry Board has no power itself to recruit labour and add to the work force. The committee of inquiry which went into this problem thoroughly during recent months has recommended that the board be given that power. That is one of the matters which is now being dealt with in drafting the legislation that I hope to bring before the House in a very short time.

Mr Curtin:

– The present board? “ Mr. HAROLD HOLT.- It has no such power at the present time.

Mr Curtin:

– Is the Government proposing to give that power to the present board ?


– I have only a few minutes left now. I shall deal with that matter in extenso on a more suitable occasion. The honorable member for Kingsford-Smith (Mr. Curtin) need not worry. I shall quickly bring an effective piece of legislation before the Parliament. The board does not have that power, but the shipowners can call for additional labour, if they wish to do so. They can ask the consent of the board for that purpose. So far, no such request has been received. We have been applying such proper pressure as we have been able to apply to Mr. Healy, the general secretary of the Waterside Workers Federation, and also to the Australian Council of Trades Unions. The federation was a party to an agreement with the shipowners to bring port quotas up to the strength prescribed by the Australian. Stevedoring Industry Board. That agreement was underwritten by the Australian Council of Trades Unions, with this Government participating also. The quota prescribed for Hobart is over 1.100 men, but at the moment the strength is about 200 less than the quota. The names of 59 men have been put forward, so there will be a shortage of about 150. That is the figure mentioned by the honorable member for Wilmot. Those men will be medically examined to-morrow. As a further-result of efforts that we have made, there is a proposal to bring three gangs from Port Huon to supplement the work force at Hobart. They will work on night shifts.

Mr Falkinder:

– They are needed in Port Huon.


– 1 agree that they will be needed in Port Huon for the next couple of weeks, so it will be some time before use can be made of their services in Hobart. I do not put that proposal forward as a satisfactory answer to the difficulty. There is an arrangement to bring two gangs from Strahan to build up the strength in Hobart, but the situation in Hobart is still entirely unsatisfactory. The federation has refused or, to put the position at its best, failed to bring the work force up to the prescribed strength and, what is worse - anyhow in my eyes - it has failed to maintain a satisfactory loading rate at a time when the need of Hobart in particular and of Tasmania in general is greatest.

I assure my colleagues who have raised this matter that, as a government, we shall do what we can to improve the position in Hobart, both immediately and in the long run. We shall introduce legislation which wo believe will give us a much more effective control of the work force on the waterfront. I feel that the remarks that’ th’ey have made and our experiences during recent months will be of considerable assistance when we come to draft the provisions of that legislation.


.- As the Minister for Trade (Mr. McEwen) is not in the House, I ask the Minister for Labour and National Service (Mr. Harold Holt), who is at the table,, to direct the attention of his colleague to the matter with which I shall deal. There is in Victoria a young returned soldier who has been for ten years a motor cycle and cycle dealer. In recent months, this young man has been endeavouring to obtain supplies of cycles’ and cycle parts f from wholesalers, but he has struck a very definite difficulty. When he orders goods from wholesale importers of cycles and cycle parts, they ascertain that he is not a member of an organization known as the Retail Cycle Traders Association. Consequently, they will not supply .him. Apparently, the wholesalers will not supply cycles or cycle parts to any retailer who is not a member of the Retail CycleTraders Association. The position would not be so bad if this young man could gain admission to the association, but I have been informed that when he writesto the association to apply for membership, he cannot obtain either a definiterefusal or acceptance of his application.. When he telephones to the organization, lie cannot obtain, over the telephone, a. definite assurance that he will be admitted: to membership.

We have listened this morning to a long: tirade of abuse, directed against the members of the Waterside Workers Federation in Tasmania, and to allegations that they are not giving a fair return for their wages. Allegations havebeen made of communism in that organization. But what are we to say about a situation existing, at least in. Victoria, in the cycle trade? The greatwholesale importers of cycles and cycleparts enjoy a privilege as a result of 1hisGovernment’s import restriction policy.. They know that they -are in the happy position that they alone are permitted* to import cycles and cycle parts. Noother persons can obtain import licences for that purpose. This young man, who runs a small cycle dealer’s shop, who sellscycles and cycle parts, and who doescycle repair work, has no hope of obtaining a licence to import directly thearticles that he requires. He desires a licence to import goods of the modest value of £1,000. I have spoken to the Minister for Trade, but he has told me that there is no hope that a licence will be issued to this man. The only persons who are permitted to import goods on the restricted list are those persons whoformerly were importers of such goods.

In those circumstances, what can this man do? He has served his country in war. He has established a business. His reputation is beyond reproach. Incidentally, I can furnish his name, if necessary. He is a man who plays a prominent part in civic affairs. But, simply because an association which he desires to join will not give a definite reply to his applications for membership, the great wholesale distributors of motor cycles, cycles and cycle parts in the City of Melbourne will not supply him with the goods that he requires. I can give the names of the wholesale distributors, if necessary. The honorable member for Corio (Mr. Opperman) might be able to make some contribution on this subject. The wholesalers are not prepared to supply this man, despite the fact - this can be confirmed - that they are not in the unfortunate position of not having the goods in stock. The goods are in their warehouses, ready for dispersal, but they are available for dispersal only to people who are members of a certain organization.

I take it that it will not be alleged that these wholesalers are Communists. I assume there will be no allegations that the members of the Retail Cycle Traders Association are Communists. Yet here is a state of affairs which ultimately must deprive this man, who has been established in business for ten years, of his right to earn a livelihood. I hope the honorable member for Corio will be able to give some explanation of this situation. I hope, too, that he will support me in my appeal to the Minister to approach the wholesalers and ask them to supply to people who are in the cycle trade the cycles and the cycle parts that they want, on one condition only - that they come up with the cash. In this particular- case, there is no question of money being available. I am prepared to furnish the name of the man to whom I “have referred, if that is necessary. I hope the Minister will make an approach to these people who have an exclusive privilege as well as to other people who are engaged in the import trade. It is “true that import quotas have been reduced, but that is no justification for penalizing people who have served their country well.

Mr Opperman:

– Have they been supplying him?


– Yes. He has been in the trade for ten years, and he is prepared to name the people who have turned him down. I know the practice that is going on, and I also know the attitude of the Retail Cycle Traders Association. It works in co-operation with the wholesalers, who believe that it is better for one or two retailers in a suburb to make a good living than for half a dozen to make only a scant living.

That is probably the purpose behind the present practice. I see the honorable member for Corio nodding assent, which indicates to me that he is fully aware of the existence of this restrictive practice. It is noteworthy that when the waterside workers indulge in similar tactics, in regard to the sale of their labour, they are accused of being Communist dominated and of rendering a disservice to this country.

I ask the Minister to have a look at this matter and endeavour by persuasion, reasoning, and an appeal to the decency of the importers of cycles and cycle parts to distribute their admittedly restricted quotas equitably. If necessary, the Minister should say to them, “ Unless you are prepared to serve all-comers who have the cash to pay for their requirements, perhaps by the introduction of a rationing system, no more import licences will be issued to you “. This would not be an exceptional practice. There is written into licences issued to meat works to export processed meat a condition that they shall accept for processing such quantities of lamb, mutton and other meat as the growers choose to send them. If this condition can be attached to export licences surely a condition such as I have mentioned could be attached to import licences. A startling state of affairs exists in the cycle and cycle parts industry. I know the basis of the present practice. I am sorry if I have wrongly attributed to the honorable member for Corio assent to my charges in relation to the co-operation between an established association of retailers and the wholesalers to see that the cycle and cycle parts trade is restricted to a few distributors. I know of another specific case, and in both cases I can give names, addresses and other facts. I challenge contradiction of my information.

I conclude by saying that I was very interested in the remarks of the honorable member for Franklin (Mr. Falkinder), the honorable member for Braddon (Mr. Luck), and the Minister for Labour and National Service in relation to the current waterside trouble in Tasmania. I am sure’ that every member of this House agrees that the apple-growers and other primary producers, as well as secondary producers such, as paper manufacturers, should be enabled to ship their products readily. It is strange that, when anything goes wrong with the arrangements for the transport of Tasmanian produce to mainland and overseas markets, certain supporters of the Government invariably assert that 99 per cent, of the responsibility lies at the door of the waterside workers. It is strange that there is a hoodoo on this industry..

Mr Opperman:

– I wish to make a personal explanation. The honorable member for Lalor (Mr. Pollard) misinterpreted the nodding of my head to indicate that I was aware of the ramifications of the cycle and cycle parts trade that he was outlining. I was very interested in his remarks, but these days, due to my political affiliations and wholehearted devotion to the interests of my electorate, I am completely out of touch with the structure of the cycle trade. However, I assure the honorable member for Lalor that I shall discuss this matter with the Minister for Trade (Mr. McEwen). It seems to me that the best thing to do would be to raise cycle and cycle parts import quotas, if the present restricted quotas are imposing such a great strain in the community.


.- I support the request by the honorable member for Macarthur (Mr. Jeff Bate) for the introduction of further amendments to the Banking Act. I shall not state my reasons why this should be done, bt-cause they are already well known. Suffice it- for me to say that responsibility in this connexion lies upon the present Government. As we all know, an objective of the Labour socialist party is to nationalize the trading banks of Australia. We know full well that, under the present banking law, should Labour again form a government, it could by administrative action through the central bank squeeze the trading banks out of business. If we needed to be reminded of this fact, we were so reminded by the interjections and “ Hear, hears ! “ of the honorable member for Lalor (Mr. Pollard) and the honorable member for East Sydney (Mr. Ward) during a’ previous speech. Therefore, I say that the responsibility to amend the banking legis lation rests upon this Government, and:, that now is the time to bring down amending legislation. The first necessary amendment of the banking legislation was madeby this Government in an earlier Parliament, lt should now introduce further amendments in order to divorce the Commonwealth Trading Bank from thecentral bank, To-day these banks haveone board chairman and Governor. I make it quite clear that supporters of theGovernment in no way desire to limit the activities of the Commonwealth TradingBank; we think that they should continue, but we believe the best service can bc given to the community as a whole by strong and healthy competition between! the banks in our banking system. ‘

The second matter that I wish to mention relates to the inquiry that was conducted by the Tariff Board into the importation of passionfruit pulp and juice,, mainly from Africa. I shall addressthe House only briefly on this matter,, because I spoke at length about it on the last “Grievance Day”, and I have not yet had a reply. I said then that, following representations made during thehearing by the growers, the chairman of the board thought that it would bepossible for him to hand down his report before the 31st December last so that the information contained in it would be available to all sections of the industry before the harvesting of the summer crop and the prices being determined. The report has not yet ‘been received and made public. Harvesting has concluded, and prices have been determined. I should like the Minister for Trade (Mr. McEwen) to inform me when it is now expected the report will be available, and the reason for the long delay in making it public.

The third matter that I wish to raise concerns the Minister for Health (Dr. Donald Cameron). Recently, the New South Wales metropolitan and country press gave quite a lot of publicity to the decision by the New South Wales Citrus Growers Council to make representations to the Government to have the distribution of free milk to school children supplemented by the distribution of free fruit juice or fruit. I should like the Minister to inform me whether he has received such representations, and whether he will be good enough to discuss the matter with the honorable member for Mitchell (Mr. Wheeler), myself, and other honorable members who have been making representations about it for a considerable period. This matter is of great importance to the industry. Up to date, the department has not, apparently, considered it possible to implement the suggestion. I am sure that the honorable members concerned could supply the department with information which would assist it to reach a favorable decision.

Debate, interrupted under Standing Order 291.

Question resolved in the negative.

Sitting suspended from 12.U5 to 2.15 p.m.

page 1271



Debate resumed from the 11th April (vide page 1245), on motion by Mr. Menzies -

That the following paper be printed: -

National Economy - Economic Measures - Ministerial Statement

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

That all words after “ paper “ be omitted with a view to inserting the following words in place thereof: - “so far as it discloses a policy of increasing interest rates on bank overdrafts is injurious to the large majority of tile people of Australia and should be rejected “.


.- The contributions that have emanated from the Opposition during this debate have been very disjointed. Honorable members opposite have attacked the Government’s proposals from many angles. Their attacks remind me of a pertinent remark that was made some years ago following a conference which considered the then economic position of Australia, which was not dissimilar from the existing economic position. The remark was that every one appeared to have the solution of the problem, but that each solution offered did not affect the interests of the individual who offered it. So we find to-day that criticism of the Government’s proposals stems mainly from those who consider that their constituents may be embarrassed by the implementation of the

Government’s proposals. It is easy to understand such a reaction because, after all, it is only human for people to react in that way. At the same time, however, if we are to attack this national economic problem resolutely, we must face up to it fairly and squarely with a thorough realization that, however individuals may be affected by the implementation of the proposals, in the interests of the nation and its people as a whole some things have to be done which are better done voluntarily than as a result of any form of compulsion, and are better done early than late.

The Prime Minister (Mr. Menzies) put considerable thought into his detailing of the problems that he and the Cabinet consider the country to be suffering from. He followed his detailed analysis of those problems by outlining a number of measures that would be placed before the Parliament in order to lead to a. cure of the economic evils that he had mentioned. He listed our problems under two main headings - our unfavorable balance overseas and the internal inflation associated with the high cost of most of the commodities that we use today. In addition, he referred to the shortage of subscriptions to public loans. None of those items can be regarded separately, because they are all interrelated. It follows, therefore, that the remedial measures to be taken must have application to all of them. The remedies suggested were: That our adverse overseas balances be corrected by a regulation of imports, including an extension of import controls already existing; that sales tax on motor vehicles and petrol be increased because of the high overseas currency content in the cost of those articles in Australia; that an additional tax be applied to less essential consumer goods in order to offset to some degree our internal inflation; that company tax be increased in order to prevent companies from embarking on too ambitious capital expansion, which would involve their making greater use of accumulated capital; and that bank interest rates be increased in order to diminish borrowing for capital expansion and for uneconomic enterprises and enterprises producing unessential goods. Honorable members will recollect that it was distinctly understood that the increase of hank interest rates was not to bear heavily on enterprises producing essential goods.

The Opposition has attacked the Government’s proposals, first, by claiming that the country was not warned of the measures that the Government proposed to take. In common with other honorable members on this side of the House [ refute that claim by pointing out that the Treasurer (“.Sir Arthur Fadden) gave a very clear warning in the budget speech regarding the possible results of the trend that was apparent at that time. Last September, the Prime Minister told us in a statement to this House of the measures that were then being taken, and warned us that further measures would be taken if necessary. It is also a fact that at the time of the last general election no doubt was left in the mind of anybody that if the measures that the Government was already taking did not prove to he successful in correcting the economic drift and that if, by the end of next June, we had not been able to correct our adverse balance of payments position, further corrective measures would be taken.

The next point of attack by the Opposition, particularly by the Leader of the Opposition (Dr. Evatt), has been that the present state of inflation is not a natural state, but has been caused by the profiteering of big companies. Lt seems that the members of the Opposition, like to refer continually to big companies in derogatory terms. They would like the public to look on big companies as big bogies. They are trying to persuade the people that there are big banks, big companies, big interests, big everything, which are setting out to attack the interests of the small man. They raise that issue continually, and talk about how the capitalist is grinding the other fellow under his heel. In passing, I should like to quote from a small article titled Who’s a Capitalist?, which I came across in my reading recently. It reads -

There are millions of them in this country, for a capitalist is . . . every man and woman who has a savings account, a life insurance policy, or a share of stock. . . .

. the families that are seeking to set aside something for their old age, the people who are looking beyond the desire for a shorter work week to the hope of providing a shorter working life for themselves,, a better future for their children . . . themillions of people, in a word, who deny themselves the luxuries of to-day in order toprovide the necessities of to-morrow.

That is a very good summing-up of what acapitalist is. And the people whom that article defines as being capitalists are the people we are attempting to protect by our economic measures. We are not setting out, as suggested by the Opposition,, to protect the big banking institutions,, the big company, or anything else of that nature. We are intent on protectingthe men and women of Australia, anc? their savings, in order that they may beable to enjoy the necessaries of to-morrow by denying themselves the luxuries of to-day.

Tt is noteworthy that the amendment, moved by the honorable member for Melbourne Ports (Mr. Crean) to the motion that the Prime Minister’s statement beprinted relates only to the increase of interest rates on bank overdrafts, although) the condemnation of the Government’sproposals that we have heard from theOpposition during this debate has been directed to other aspects of the proposalsthan the increased interest rates. So, it is difficult to believe that the Oppositionis really sincere, that it is not staging a sham fight regarding all the other matters that honorable members oppositehave mentioned in the debate.

Mr Ian Allan:

– It certainly is a sham fight.


– Of course it is ! Now honorable members opposite are sayingthat the banks will make big profits as a result of the increased rates. The honorable member for Melbourne Ports hasput the figure at £1,250,000. But theTreasurer, in his speech to the House last night, in which he referred to the interest rates that the banks will pay on their fixed deposits, blew the argument of the honorable member for Melbourne Portsto bits. Like other arguments that haveemanated from the Opposition during thisdebate, the argument of the honorablemember for Melbourne Ports had no real! substance. Honorable members oppositesay that the States should be asked toassist. Of course the States should beasked to assist ! The lack of provision for such, assistance in the Government’s proposals is the one weakness that I find in them. We have pin-pointed the cause of many of our problems as lying in the States themselves, but the States, which are a component part of our federation, do nothing to assist in the solution of the problem, nor have they ever shown any inclination to help the Federal Government.

Some of the criticism that we are getting from outside the House regarding Commonwealth loans is to the effect that we are not considering the people at all, but that we are increasing rates of interest purely for our own purposes. Of course, there is no suggestion as yet that the Government will increase rates of interest on loans; but we have been criticized to the effect that we are increasing taxation for our own benefit and are not attempting to reduce government expenditure. The noisy honorable members at the back of this chamber, who will not sit in their right places, know very well that the money that this Government receives by means of taxation, including the additional taxes, is received in order to keep faith with the States and to provide them with the loan money that they are not able to raise in any other way. Of course, the Federal Government will be blamed for that. Indeed, it has been blamed for it.

In order to illustrate that point I shall quote from a statement which has appeared in a paper circulating throughout the House to the effect that very few will remember the Prime Minister’s injunction for greater productivity after a day or two, but that taxation measures will be constantly remembered. This Government has always been subject to criticism, because it is trying to do something for the State governments. In spite of all its efforts in that direction, it never receives any credit. The first part of the statement that I have just mentioned refers to productivity. The Prime Minister mentioned that subject in his speech on our economic position, and, as this article states, his injunction about productivity will soon be forgotten. In fact, not one member of the Opposition has made any reference to productivity in this debate, and yet comparatively low productivity is the basis of half our troubles.

Mr Luchetti:

– The cost of production is our trouble.


– I am not speaking of the cost of production. I am speaking of productivity itself. It may be that the cost of production could be reduced, but I am now speaking about methods of getting the greatest production from the productive sources that we have. We need increased production, but can we increase productivity unless we approach the matter from the right angle ? A very excellent article has been prepared by a sub-committee of the Ministry of Labour Advisory Council, and I refer to page 25 of that article. I advise honorable members opposite to obtain this very informative publication and to read it.

Mr Davis:

– They cannot read.


– I hope that they can read, if for no other reason than that they should read this article. I bring to the notice of the Opposition the fact that the president and the secretary of the Australian Council of Trades’ Unions are members of the Ministry of Labour Advisory Council, together with five other members of the Australian Council of Trades Unions. The report to which I have already referred mentions a matter which I consider strikes at the very root of our troubles. The report reads, inter alia -

Higher productivity would contribute towards the solution of Australia’s more immediate economic problems through its effects in reducing costs of production. Lower costs of production would assist the sale of Australia’s exports in overseas markets and reduce the demands for imports, thereby casing our balance of payments problems. Increasing productivity would also make a contribution towards stability of prices.

As I said before, that statement strikes at the very root of the troubles that face us to-day. Nevertheless, at the present time one of our greatest export industries, the wool industry, is being held to ransom by an executive member of the Australian Workers Union. I do not blame the shearers for the trouble, because I know enough about them and see enough of them to know that individual shearers would willingly work at the prescribed award rates, but because there has been dictation by the executive of the Australian Workers Union they are not allowed to work under the new award. rate& and are deprived of earning £35 to £40 a week. Worse .than that, our greatest export industry is being thrown to the wolves and sabotaged. Moreover, the stock that provide the wool for export are also being sabotaged. During the excellent season that we are enjoying at present, we have had bountiful rains which have brought about bountiful pastures and also bountiful blowflies. These blowflies are destroying both wool and sheep because shearing and crutching cannot proceed. It is a pity that a couple of these blowflies could not get into the right place and do enough damage to prevent what is happening in the shearing industry. In Tasmania there is a similar state of affairs, because a certain set of men have some sort of grievance which they are venting on another of our important export industries - the apple’ industry.

Mr Bowden:

– It is all part ‘of a plan.


– Yes, it may be part of a plan, because rolling strikes in the waterfront industry are going on all the time, and instead of productivity cil that we arc getting are strikes and the dictation of strikes by men who should know their responsibilities better than to take the action that they are taking. I could speak at length on that matter, but I shall content myself by saying that the answer to the problem can be found in proper consultation between labour and management. I do not blame the men - the individual shearers - who are willing to work at the proper award rates, but I blame their union for not getting together with the employers to ensure that the wheels of industry are kept turning.

The honorable member for Fremantle (Mr. Beazley) said that the restriction of imports would correct inflation, and that unrestricted imports would cause inflation, but he overlooked completely the part played in our economy by the production of local goods. If productivity in our secondary industries had reached the stage that it should have reached, we should not have to solve the problem that lies before us to-day. We would be producing goods in Australia to supplement those that we are importing, and would be saving some of the cost of our present imports from overseas. Honorable members opposite made several suggestions about how to correct our balance of payments, one of them being made by the Leader of the Opposition himself. He suggested that instead of issuing bonds as we have been doing, we should issue documents like those issued in the United States of America and known as savings bonds. He said that such bonds are not callable or transferable, and that they are registered. However, he did not tell the House that those bonds are subject to normal incometax and federal tax and that our bonds not only carry an ordinary rate of return but also attract taxation concessions. I have studied the bonds mentioned by the Leader of the Opposition, and I have discovered that they are not all that they could be thought to be. Although they are issued at 75 per cent, of the maturity value, if they are held until they mature, they return 3 per cent. If they are returned earlier than their maturity date, there is no yield for the first six months, and for the second six months there is a yield of only 1.07 per cent, and for the third six months a yield of 1.59 per cent. Therefore, it will be seen that those bonds are not such a good proposition. It is all very well to say that the bonds would serve a good purpose and would avoid borrowing, but who wants to have such bonds if they find that when they want to cash them after six months they will get no interest, and even if they cash them after holding them for eighteen months they will get only 1-J per cent, interest? All in all they are not a very favorable proposition.

The real crux of the opposition to the Government’s proposals was mentioned by the honorable member for Melbourne Ports, who was supported by the honorable member for Yarra (Mr. Cairns). They made no bones about the fact that they were not in favour of the Government’s proposals, and stated that if they were in the position of the Government they would increase taxes. They said that they would, increase personal income tax, and generally increase direct taxes. They would increase company taxation. The honorable member for Melbourne Ports suggested, further, that he would increase the rate of tax on higher incomes, because higher incomeearners were best able to bear increased taxes.

Opposition Members. - Hear, hear !


– I am glad to hear honorable members opposite say “ Hear, hear ! “ because it indicates that they are in favour of the proposition thai instead of selective taxes being applied according to the Government’s policy, taxes should be socked on to the higher incomes. I hope that the electors throughout, Australia understand the position of the Opposition, which would increase direct taxation on everybody and increase the rates of taxation on higher income earners. I shall not refer to Commonwealth bonds, beyond repeating, as. the honorable member for Canning (Mr, Hamilton) said this morning, that this Government has provided £500,000,000 for the support of the States over the last few years. The reason why we have to correct the monetary position in this country at the present time is that we must obtain sufficient money to enable the States to carry on their work.


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

West Sydney

– The honorable member for Lawson (Mr. Failes), who has just resumed his seat, has presented a very bad case on behalf of the Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur Fadden). Both of those right honorable gentlemen could be excused for making a serious mistake about the Australian economy for th». first time; but, for the second time in the past two years, they have made the same blunder.

Three years ago, men and women who were employed in the textile industries and many other industries in Sydney, were walking the streets looking for a job, and I fear that some of them will be doing the same thing again in the near future. The Treasurer told the House that he was submitting shortterm taxation proposals, but the next speaker on the Government side, the honorable member for Angas (Mr. Downer), said that this was the first instalment of what we could expect. When supporters of the Government speak along those lines, the Australian Labour party is vindicated in the stand it has taken during this debate.

Six years ago, the Government was handed a safe and sound economy from the Labour Government Prime Minister and Treasurer, Mr. Chifley, but this Government has undermined the economy year by year. I ask any businessman on the Government side of the chamber : Would you not do something about it if your business management failed you? During the past four or five years, Australia has experienced good seasons, yet this Government has decided to take between £50,000,000 and £60,000,000 from the poorest classes in the community. Certainly, the Government has increased company tax by ls. in the £1, but that impost will be added to the prices paid by the workers and consumers generally. When the Prime Minister went on to the hustings last December, he did not utter one word about his economic plans.’ He fought that election on hearsay, but three months later he brought ‘ down a supplementary budget. In his statement to this House, the right honorable gentleman said -

In my September statement, I discussed in some detail the problem of the balance of payments and of our international reserves, and endeavoured to explain the importance of achieving a balance by the end of June, 1956. As I then pointed out, our international reserves, which stood at £570,000,000, in June, 1954, had fallen, by June, 1955, to £428,000,000. Notwithstanding import restrictions, the fall continued during the next six months, so that, by the end of December last, the reserves stood at about £370,000,000. The main reason for this fall was, of course, that we were still importing too much.

The Prime Minister was right in saying that we were importing too many nonessential goods. He allowed them into the country to help his friends with vested interests, but eventually the man in the street had to suffer, just as he did in 1953. The Prime Minister also said in his economic statement -

We have had good seasons, and it is almost certainly true that in this current financial year 1955-50, we have had a greater tonnage of goods available for export than ever before in our history. We also have had a quite substantial amount of capital inflow.

The Prime Minister then told us how he had dissipated our London funds from the high level they had reached when Mr. Chifley was leader of the Labour Government. Mr. Chifley rehabilitated ‘ the soldiers, and got them back into civilian life after World War II. The exservicemen were entitled to rehabilitation, but this Government is not prepared to house the people or give them social justice. A man who toils all day in the sun is entitled to a drink in the afternoon, but this Government is taxing the working man’s beer, as well as his cigarettes, tobacco and petrol. Is it right that a nation as rich as Australia is should deprive the workers of their just entitlements? The wages of the workers were pegged three or four years ago, but this Government taxes first those who are least able to pay.

Much has been said about interest rates. The Australian Labour party is not alone in its opposition to this supplementary budget. Half, a dozen supporters of the Government have spoken against it. The honorable member for Canning (Mr. Hamilton) said that the time would come when he would have to vote against the Government on the issue of the price of Commonwealth bonds. Most members on the Government side will say the same thing outside the chamber even though they will not express that view on the floor of the House. We have seen 4 per cent, bonds selling at £86, and yet this Government claims that it is a people’s government.

The Australian Labour party and the Liberal party are unanimous on the subject of immigration generally, but at a time when many people have no homes and many are bound to be out of work, is it right for the Government to bring to Australia 130,000 immigrants a year? Day after day, returned soldiers come into my office in West Sydney to inquire about housing. When I ask them if they are returned servicemen, they tell me that they have not worn the badge for a long time. With or without a badge, they have tried in vain to buy or rent a home.

In 1945, the New South Wales Government entered into an agreement with the Commonwealth Government to build homes for the people. That should be a national matter, and a start should have been made by the Australian Government immediately after World War II. As I have said, the New South Wales Government entered into an agreement with the Commonwealth Government, but no sooner had the Chifley Labour Government left office than this Governmentfailed to meet its obligations to the States under the agreement. In fact, the Premier of South Australia, Mr. Playford, who is not a Labour party supporter, protested, and demanded justice for the States.

To-day, the Australian Government takes 15s. of every £1 that is collected in taxes in New South Wales, yet this Government claims that it is the responsibility of the State government to build homes for the people. The Government expects it to build homes and roads for the people and to do all those things on that 5s. which is left after the Federal Government has taken 15s. in the £1.


– The Minister for the Army explained that long ago.


– The Minister for the Army (Mr. Cramer) was at one time anxious to be a housing Minister. God forbid that he should ever be in that job because all that he would do would be to pack people in houses, one in the front room and one in the back room. That is the way in which he would have housed the people of New South Wales.

Then we have young men and women who are eager to get married, as they should, in order to populate this country. It takes £2,000 to bring an immigrant to this country and settle him here. Surely if we spend £2,000 on an immigrant, we can spend something on the Australian soldiers, who have gone to the war and fought for the homes of other honorable members and myself, instead of ridiculing them when they are walking the streets looking for homes. The position in relation to war service homes is a disgrace to this Parliament. Exservicemen are waiting at least two years for homes. It would not be so bad if an ex-serviceman went to the War Service Homes Division, asked for finance, and was told that he would have to wait for two years. But the War Service Homes Division promises these men that if they get their plans prepared, and find a contractor, the money will be ready for them in six months. T have spoken to dozens of such men in my office, and I have their names. They have £400 or £500 to use as a deposit on a home.

Last December, I wrote a letter to the previous Minister for Social Services, (Mr. McMahon), and I have here his answer to it. He told me that the bert thing that I could do when one of these ex-servicemen came to my office would be to tell him to see an insurance company or his private banker. Fancy telling a returned soldier who has between £500 and £700 in bis pocket to see a bank manager or an insurance company ! That is nothing short of insanity, and the man who said it is not fit to be a Minister in this Parliament. It would be akin to sending the ex-serviceman to a pawnshop. The Minister also said that in eighteen months’ time the ex-serviceman would be provided by the Government with funds with which he could repay the amount borrowed from the bank or insurance company. But the Government knows very well that the ex-serviceman cannot borrow money from the banks or insurance companies. Why does it not be frank about the position, and tell him so? After all, it is bad enough when the returned soldier is not to get a home. He should not be fooled all the way.

A Mr. White came to me last week. He worked for the Sydney City Council, and was earning about £1S a week. He said to me, “I want to buy a home. I have found one at Bexley, about three minutes’ walk from the station. I have been refused a loan of £1,000 on it, although it is fenced and has sewerage and all the other services “. I asked, “ Have you any cash ?” He replied, “ I have £800”. I sent him to the Rural Bank of New South Wales. I sent him to the Commonwealth Bank. I sent him to half a dozen places. He came back. “ Well “, he sa’d, “ I was using your time when I came I o see you. I have lost my own time ever since. Nobody would listen to me in banks when I said I wanted to borrow money.” There was a man in a good job with a wife and two children. He had no home and was paying £4 10s. a week for a room. Although he had £800 or £900 he could not raise another £1,000. Yet the Government calls itself the National Government of Australia. It ought to be ashamed of itself.

Mr Anderson:

– What did the Labour Government do?


– The honorable member is cruel. He should be satisfied to be here. He should make the best of the three years he will be here, and try to be happy about it.

The Government takes over in the City of Sydney any property that it likes and pays no rates to the council. The Government walks in and commandeers places. The other day, the honorable member for Boothby (Mr. McLeay) said that he was going to lay down the law to the Government concerning such a matter in South Australia. The Government takes the best sites in the cities. The city council is then deprived of rates on that land. The Commonwealth Government is the worst landlord in Sydney. ‘The Postal Department has property in Ambercrombiestreet, in Woolloomooloo and in many other places. Asking the postal authorities to go and see what is wrong with the property is like asking them for a fiver. The rain is pouring in to these houses, but’ the authorities say, “In a couple of years we intend to extend the post office, and we do not feel like doing anything with the present property “.

I understand that a new housing agreement is to be drawn up between the Commonwealth and the States. I do not believe much in agreements unless something will come from them. When a meeting of the Australian Loan Council is held in Canberra, the State Premiers will probably be given approval for approximately the amount for which they ask, but the Treasurer (Sir Arthur Fadden) will then say, “ Oh, you can’t have all that money”. That is what he said on the last occasion. He said, “ I cannot give you all that money “. How is it possible for the New South Wales Government to provide homes for the 30,000 people who are waiting for them in that State? I have yet to hear the Minister for the Army raise his voice on behalf of the people. Nobody knows better than he who the people are who want homes. He could make a name for himself if he stood up in his place and told his colleagues that homes must be provided for the people. Men went to the war to protect the homes of other honorable members and myself. Surely it is not too much to ask that this country give them homes to live in. Before the men went off to fight, a guarantee should have been written for them in indelible ink that once they came back to this country, they would have homes. The Government is too eager to support private enterprise. It is too much in favour of 100 per cent, profits for private enterprise, so there is no hope for these people while this Government remains in office. Yet honorable members opposite boast of what the Menzies Government has done. The Menzies Government has had four elections in the last six years. It hoodwinked the people in the last two elections. But never again will it be able to hoodwink them. Next time - and perhaps that will not be long distant - the people will put the Government out of office and, what is more, they will keep it out because it has failed them


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


.- Although it is somewhat belated, I am very pleased to have this opportunity to make a few comments about the subjectmatter before the House. I am delighted to have the opportunity also of speaking after the honorable member for West Sydney (Mr. Minogue). When I have obtained a translation of his remarks, I shall be able to consider them more fully. I feel that every honorable member is fully aware of the great problems with which Australia is confronted, and realizes that they are not peculiar to Australia but are world-wide. That being so, I think that a more definite, more positive and more co-operative approach should be made to finding a solution. If an issue of this kind were being discussed in South Australia, I suggest that the’ State Premier and the State Leader of the Opposition would place the matter above party politics, and that the interests and welfare of the community would be placed before the political ideologies of the groups that those men represent. Unfortunately, we are not in that balanced, sound and solid State, which is the envy of every other State. On the contrary, we are surrounded by Commonwealth issues, and I think it would be very dangerous for me to suggest that the Prime Minister (Mr. Menzies) and the Leader of the Opposi tion (Dr. Evatt) should drop their court manners and consider this problem together.

In view of the fact that the economic squeeze is being felt throughout the free world, we in Australia are facing a problem that is far more serious than we think. I believe, therefore, that each honorable member, who is charged with the responsibility of representing his electors, should ascertain whether any savings can be effected. The Government has asked the people to save more and to spend less. I think that that is a very good slogan, but, if the people are to be expected to tighten their belts and to make sacrifices, the members of ibis Parliament and of the State parliaments should set an example. From time to time since I was elected to the Parliament in 1949 I have seen reports of the Auditor-General laid on the table of the House. I should like to know whether his criticisms and recommendations in relation to budgeting, administration and the economies that should be practised by the various departments have been carefully studied. I should like to be able to assure the people of Australia that supporters of the Government and members of the Opposition have diligently studied such documents, and that they have done everything possible to follow the advice that has been given.

I have great respect for the PublicAccounts Committee of this Parliament, which is under the chairmanship of th honorable member for Warringah (Mr. Bland). It consists of honorable members drawn from both sides of the House and political ideologies do not enter into its deliberations or decisions. I feel that it has done an excellent job and that it has submitted to the House much constructive criticism in relation to budgeting, administration, and departmental procedures. I should like to think that its reports and recommendations have been adequately studied by all Ministers and that they in turn have instructed departmental heads to ensure that the advice and suggestions offered are carefully considered. If the reports and recommendations of the Auditor-General and the Public Accounts Committee are followed, I have no doubt that a great deal of saving will be effected. 1 think that staff problems should be examined also. If there is any redundant staff in the Commonwealth departments, it should be dispensed with and not hidden away where it cannot be seen or found. The Public Service Board should crack down and, if necessary, although in some cases it may be at very great risk, divert that.staff to private enterprise. The position should be reviewed from time to time to ensure that there is no overlapping within a department as a result of certain decisions that may have been made. I should like to feel that I could assure the electors of Boothby at least that we were giving every consideration to such Issues. If we were able to convince the electors that we were genuine in our efforts to save, we would be able to make a very good start in the campaign that has been launched to save the Australian economy.

The Commonwealth should be prudent, too, in its contracting procedures. A decision to erect a certain building should be made only after it is agreed that the structure is necessary. Having made that decision, we should examine the availability of man-power, material, and money. If they are available, a contract should be entered into, and the project completed. Contracts should be let only after calling public tenders. A system of selective tendering, which is not in the best interests of government financing, is creeping into practice. Certain jobs are deemed “to be urgent and, unfortunately, the Commonwealth is pirating skilled tradesmen from private enterprise by paying them more than the award rates. In order to retain staff, private enterprise is compelled to pay wages that are beyond the capacity of industry to pay. The Government has an obligation in this matter, and if it takes the action that I have suggested, it will win the confidence of the people.

The Commonwealth should also become firm with the States. There is no doubt that the ‘Commonwealth is the quartermaster controlling public money. Wo have heard references to the fact that the Commonwealth has had to advance to the States the sum of £369,000,000 - I have even heard the figure £500,000,000 mentioned to-day - because that money was not available on the loan market, lt is claimed that this Government has advanced to the States three times as much money as did the Australian Labour party when it was in office. Such comments are all right from a political point of view, but it is my opinion, bearing in mind the interests of the taxpayers who have to provide the money, that they do not constitute good drill. If we are to restore a degree of stability to the economy, we must ensure that the States adjust their spending to the availability of money, man-power and materials. The competition that exists between the State governments, this Government, and private industry, particularly in relation to building, should be examined, and a more realistic approach should be made to the problems with which all are confronted. If the Government were to take such action, the people generally would have an indication that it was watching its finances and that it was prudent in its spending.

We do not like to refer to many personal matters affecting honorable members. I do not agree generally with the remarks of persons who reflect upon the use of transport by Ministers and their staffs and heads of departments, but I am bound to say, having noted the number of cars that are provided and the enormous amount of money that is expended on the use of taxi-cabs, that such privileges should not be abused. I suggest that care should be exercised in the use of cars, telephones, telegrams and cables. Any honorable member who cares to examine these items of expenditure would be staggered by the sum that is spent on telephones, telegrams, cables, and advertising for labour. These may seem petty things, but in the aggregate they are important, because they are the things that come under the scrutiny of the public. If we are to succeed in our efforts, and if we are to make the people of Australia conscious of the problems that face the country, it is up to this Government, and every member of it, and also the State governments, to play their parts, and not to make unreasonable demands. In that way we can co-operate on an equitable basis, and I feel sure that nothing but good can result from it.

I wish now to make a few remarks about the import licensing. I have been rather disturbed because I had said that, in South Australia at any rate, the measures that are being debated at present would not interfere with import restrictions then in force. The accuracy of my statement was challenged in the press by a very prominent businessman ii South Australia, and I now agree that ne was right. What I am disturbed about is that there is a possibility that a change in import licensing arrangements in regard to certain items might result in an overlapping of the functions of the Department of Customs and Excise and the Tariff Board. If the importation of a certain item is subject to an inquiry by the Tariff Board, in which evidence can be given by all interested parties and a just decision arrived at in the best interests of the Commonwealth, that arrangement should be retained. I regret to say, however, that I have perused an instruction that was issued by the Department of Customs and Excise on the 4th April, and I find that there has been a drastic, alteration in import licensing arrangements. Although I am a member of the Parliament, one of the Ministers of which controls import licensing, I had to learn about this, matter from one of my own electors. I find, as one instance, that sheeting has now been transferred to the administrative category. The same applies to certain other lines, such as woven art silk piece-goods, cellulose wadding and other goods. There is another line, known as flannelette, which is used in the making of napkins, which is similarly affected. In this connexion I speak for the benefit of the honorable member for Bruce (Mr. Snedden), because we are all sympathetic with the great problem that will confront him in this regard as the result of certain recent happenings in his domestic sphere. There is another group of materials, covering a very wide field, including floor coverings, galvanized iron, corrugated iron, iron and steel pipes, wire netting, and very many other commodities, which is similarly affected. All those lines, I expected, would have been treated in the way that they have been treated in the past, some being in group A and some in Group B, but all subject to licences that a trader has to fight hard to obtain. I had not expected that those goods would be affected by the measures that we have been debating.

We must remember that, in 1951-52, traders were overstocked, because of their inability to handle their buying. What happened then? Import restrictions were imposed, and that action saved us from bankruptcy. We must bear in mind that a different position obtains to-day. Traders now are understocked, and if these measures are imposed too drastically no doubt a very great problem will be created for people who deal in these goods, which are of great importance to the people of Australia. The people whose businesses are affected by the alteration in licensing procedures that I have mentioned are interested not only in their own businesses; they are also particularly interested in the trade union movement and in the members of trade unions who work for them. It is my contention that in South Australia, the excellent employer-employee relationship is an example to the rest of Australia. Employers and employees in that State study the interests of one another. The employers do not subscribe to the outmoded view that the employee is a horse or a mule to be driven; they realize that he is a reliable component part of the business. There are men in the trading community who are gravely concerned that these goods have been placed in the administrative category, because our past experience tells us what delays can occur in dealing with the Department of Customs and Excise in regard to goods in that category. In saying that, I offer no criticism of Mr. Meere, the permanent head of the department. I do not like to mention his name, but I do not know his exact title. I am sure that he enjoys the confidence and goodwill of every member of the House. He is known for the justice, tolerance and ability that he has displayed in dealing with import licences. However, there has been no press statement about the changes that. I have mentioned, and no announcement of them in any other way. Having made a statement on the matter and then, having been challenged on it, found that I was wrong, I begin to think that the honorable member for Farrer (Mr.

Fairbairn) was correct when he contended that the rights and functions of the Parliament are being usurped by the Executive. If an alteration in the import licensing procedure regarding sheeting, galvanized iron, pipes, wire netting and these other commodities makes their importation subject to inquiry by the Tariff Board, well and good; but I am very disturbed at the overlapping between the functions of the import licensing authorities and the Tariff Board.

We all know that power to deal with hire purchase is vested solely in the States, but my own view is that that is only a minor matter. Speaking of goods of which I have personal knowledge, I can say that the hire-purchase system has replaced the old time-payment system, and I contend that any trader selling goods under hire-purchase agreements is providing to the public goods at cheaper rates than were available under the old time-payment system. In South Australia at least, the prices control authority decides the margin of profit and mark-up on goods. Under hire.purchase agreements the hirer buys at a net cash price, and there is no price loading of an extra 10 per cent, as is the case in time-payment purchases. Although I agree that some hire-purchase companies deserve criticism because of their procedures, the hire-purchase system is a necessary part of the community’s economy.

I believe that we should give greater attention to the measures that have been taken regarding bank overdrafts, because many small and reputable traders who have been trying to live within their capital and finance their own hire agreements, in many cases paying as much as 10 per cent, for their loan moneys, are being driven under the control of the big hire-purchase companies. It has been suggested that the big hire-purchase companies are not prepared to play their part in this economic squeeze. If they are not, I think that the Commonwealth Bank should consider recommencing its activities in the hire-purchase field, and competing with the hire-purchase companies by offering loans at fair and reasonable rates. The Government should, at the same time, demand that common sense should be used in hire-purchase trading, that people shall not buy beyond their capacity to pay, that deposits should be made moi-e substantial, and that the length of time for repayments shall be carefully reviewed. If that were done, it is my view - and I may be very indiscreet in saying so - that the hire-purchase companies which are not willing to assist the Government -could be made to fold up overnight. The measures that the Government has decided to adopt have the result merely of denying a trader his overdraft, increasing his interest charges, and restricting his imports in regard to a great many of the commodities in which he is interested. The sales tax provisions that the Government has adopted have created grave problems for the trader. They have increased huyer resistance, because people do not know whether the new rates will remain in force for a month, three months or six months. These financial provisions generally have upset the organizations that axe trying to supply the essential needs of the community. What is needed in the commercial and trading world is a greater degree of stability. We do not want continual interference with sales tax rates, and w? do not want constant changes in import licensing arrangements. The businessman wants to know how to plan his business for twelve months or two years ahead. He wants to be able to adopt the best methods over the longest foreseeable period.

The most important problem facing the Commonwealth at present appears to be that involving production. In my own limited field I have had an opportunity to come into contact with certain of these sections on both sides of the employment field. In any move that must be made, we have to instil into the minds of the people that there is, in the Commonwealth sphere, a tolerant and a just government.


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


– The honorable member for Boothby (Mr. McLeay) has made a most valuable contribution to this debate, and I find myself in agreement with him in. many fields, particularly in relation to the need to check wasteful government expenditure and the need for the Commonwealth Rank to enter more actively into the hire-purchase field. I take issue with the honorable member when he claims that the measures presented to this Parliament call for a sacrifice from all the people of the Commonwealth. I hope to show that the sacrifice is selective.

It has become abundantly clear from the debate on the Prime Minister’s financial statement that this Government, when once again faced with the need to act, has lacked the courage to take the right and proper action. It has also become evident that there is serious division even in the ranks of Cabinet itself concerning the reasons for the imposition of increased taxation. The Prime Minister (Mr. Menzies), in his statement, spoke once again of the country’s abounding prosperity and of the need to conserve that prosperity. He saw the problem as one of excess spending power in the hands of the people, and he spoke of the reasons why it wai necessary to draw off, as it were, that excess. In the course of his statement, when referring to the overseas balance of payments position, he said -

To the extent to which we can increase om exports, we will relieve the consequential effect upon our balance of payments. But the truth is that, in the short run, the most effective immediate way to relieve the pressure is to reduce the volume of purchasing, power which creates it.

The Treasurer (Sir Arthur Fadden), on the other hand, has said, quite frankly - not in this place, but elsewhere - that the Government needs the money to meet its commitments, that the measures are purely and simply revenue-raising ones. We are entitled to ask why the financial statement, which should have been the prerogative of the Treasurer to present to the Parliament, was presented by the Prime Minister. Why has the Treasurer come so belatedly into the debate, only a few hours before it closes? Does he feel that he has been snubbed by the Cabinet ? Is it a fact that his advice has been overridden? At least in his contribution to the debate last night the right honorable gentleman made one admis sion, countering the denials that had been made by other members of the Cabinet. He admitted, quite frankly, that the Opposition had been correct in claiming that the increased interest charges would make large profits for the private trading banks. He has now informed the House that the interest paid on funds deposited by the trading banks with the central bank will be reduced from 15s. per cent, to 5s. per cent, in order to offset the increased profit to be made by the private trading banks from the increased overdraft charges.

That admission by the Treasurer is, of course, completely contrary to the statements made by other Ministers in the course of this debate, and it is interesting that that statement should have come from the Treasurer some 27 days after the economic statement was presented to the House. However, since it is the Prime Minister’s statement that we are debating, I shall take the Prime Minister’s assurance that the increased taxation is aimed at reducing excess spending power. If there is any excess spending power in the community - and the Prime Minister claims that there is - then I contend that the Government’s measures should have been directed towards that excess spending power. -They should have been aimed at excess incomes. Admittedly, there are excess incomes - many of them - in the community. There is excess spending power, but it is not in, the hands of the ordinary average wage and salary earners of this country.

The measures of the Government are not directed at excess spending power. The sales tax increases, t suggest, bear most heavily on the wage and salary earners, and most heavily of all on wage and salary earners with families. The measures proposed by the Government are to increase sales tax and other imposts on motor cars, petrol, beer, spirits, tobacco, cigarettes and cigars. Admitting that there are people in this community with excess income, that there are men who can take a £100 ticket in the Tasmanian lottery and throw £100 away in that manner, does such a man smoke - if he is a moderate smoker - any more than the man who is earning an average wage? If he is a drinker, does he drink more beer than the average man drinks? The answer, of course, is that he could not do so. The moderate drinker and smoker on £700 a year drinks and smokes approximately the same amount as does the moderate drinker and smoker on £7,000 a year. In that light, it is perfectly clear that the measures of this Government are not directed at excess incomes. The people most affected are those who have no excess spending power at all, as can be shown from the Statistician’s figures of savings in the community. It is a sad fact that the value of savings has fallen consistently over the past seven years. lt has been a recognized procedure In taxation that the family man should secure a benefit, but in the proposals now being debated there is no concession at all for the family man. I suggest that the family man, particularly the man with a large family of young children, needs a motor car more than a single man needs one. I also suggest that he needs a radio or a radiogram more than does the single man. Yet each is called upon to pay exactly the same. Whether a man be married with a family, whether he be single, rich or poor, he is called upon to pay exactly the same so that, indeed, the impost falls most heavily on the man on a wage or salary, and particularly on the family man in that category.

I suppose it is true to say that the man who is able to buy a highly-priced motor car and replace it every twelve months will not find the increased sales tax on that vehicle a particularly heavy burden, but the family man who has been saving to buy himself a ‘ medium-priced motor car and whose wife, perhaps, has been doing part-time work in order to assist in the purchase of that vehicle, has to find an additional £115 to £150 to purchase the vehicle that he needs. There, C suggest, the impost falls very heavily. I believe that it may encourage that man to say, “Well, what is the use? I have tried for years to save to get myself a car. I find now that I have to wait months longer to save more “. Is he not inclined to spend that money in other ways?

The increased imposts on petrol and motor cars are reflected in costs throughout the community. It was shown in this debate last night how the additional transport costs will affect the price of homes in Victoria. Indeed, moves already have been made in several of the States for increased freights on materials of all kinds and for increased fares for motor vehicle transportation. I believe that the proper way to have levied taxation would have been to direct that taxation at the excess incomes in the country. The proper and honest way would have been to levy increased income taxation, following the proper principle that a man should be taxed according to his means, according to his ability to pay. If we accept, as J think every party accepts, the welfare state to-day, and if we also accept that the purpose of taxation is to redistribute the national wealth, the corollary is that we take from each according to his means and provide to each according to his needs. I have not the slightest doubt that the proposal for increased income taxation was before the Cabinet when these measures were being discussed. It is perfectly clear that the group of professors of economics, about whom so much has been said in recent weeks, who advocated this course, realized that the Government lacked the courage to accept that advice. They knew that the Government would not increase direct taxation, because it would bear immediately on the income of those in the community from whom the Government parties derive their support. Probably three or four plans were before the Government, and the one for an increase of income tax was among them. The proposals placed before Parliament are a hotch-potch of ideas taken from various plans, and it will fail in its declared purpose of checking inflation. Rather, it will add to the inflationary trend, and that view has been expressed both in this Parliament and in reputable journals outside of it.

The increased interest charges will have a very severe effect on the cost of living. It is axiomatic that high interest charges and full employment cannot go hand in hand. Admittedly, there must be a dividend for those who invest in industry, whether the investment be in money or in work, either of hands or head. The man who invests his money in industry is entitled to a fair return on that money as also is the man who uses his labour or his brains in the course of industrial production. If the return on a monetary investment is to be so increased as to become inordinate, it is perfectly obvious that there must be less to share among those who provide the work and skill, either by hand or brain.

The increase of interest charges must be reflected in costs and prices. It will be reflected most obviously in housing, which is the country’s greatest need. What man to-day, apart from the really wealthy person, can, at his marriage, or shortly after it, afford to build or buy a home and pay cash for it? Very few are in such a position. Consequently, the home purchaser must have assistance either from the banks or some other financial institution. The higher the rate of interest charged on the money he borrows, the higher will be the repayments for the purchase of his home. In the case of a rented house, the higher the interest rate on the money borrowed to build it, the higher will be the rent. Since rent is an item in the C series index, it is immediately reflected in the cost of living. Since the basic wage has been frozen, the average wage or salary earner will be denied the increase that he should be receiving for the labour he provides. In addition, he will be called on to pay more for his everyday requirements-, including fares, and it is obvious that once again there will be the spectacle of wages chasing prices. A just wage cannot much longer be denied to the workers. The present Government, in partnership with the Arbitration Court-

Mr Anderson:

– Hot air !


– I say again that the present Government, in partnership with the Arbitration Court, must review the wage structure and see that justice is done. I am speaking of the future, and when justice is done, it must be reflected in the pay envelopes of the wage and salary earners. Something has been said in this debate about the problem of hire purchase, and the extortionate practices of hire-purchase finance companies. The Prime Minister in his statement deplored the fact that the Commonwealth had no control over this matter because it was one entirely for the States. That view has been supported by the honorable member for Boothby. But the test of the Government’s sincerity - if it believes that there is need to control extortionate practices under hire-purchase agreements - is what it does in a territory which it controls. The Australian Government has complete and unfettered power in the Australian Capital Territory, but it has taken no action to control or limit the extortionate practices of hirepurchase finance companies in this area. The machinery exists, in an ordinance of the Australian Capital Territory, to apply a measure of control, and it is natural to ask why the Government has failed to take action in an area where it has power to act, and do what it says the State governments should do in their own areas.

Mr Turnbull:

– The answer is that control cannot be exercised here if it is not exercised in other places.


– The honorable member for Mallee (Mr. Turnbull) suggests that control cannot be exercised here if it is not exercised somewhere else. The honorable member knows a good deal more about dried fruits and tin sheds than he does about hire-purchase agreements. The Australian Government has the power to act in the Australian Capital Territory. Hire-purchase finance companies which have their head-quarters here are engaging in extensive operations throughout the Territory, but the Government is lacking in its responsibility to the public by not taking action to control them. The honorable member for Boothby suggested that one means by which the Commonwealth could act to control hire-purchase usury was for the Commonwealth Bank to resume or extend its activities in the hire-purchase field.. The tragic fact is that the Commonwealth Bank has successively restricted its activities in that field, and has given practically an “ open go “ to the hire-purchase companies, in which private trading banks have substantial investments. Members of the Australian Country party know that as from the 1st March last the Commonwealth Bank ceased to operate the plan known as the “ farmers’ plan “, under which a farmer could obtain assistance to purchase a motor car. I admit that farmers will still be aided by the bank to buy tractors and farm machinery, but no longer will they be helped to buy motor cars. Under that plan the farmer, whose income was seasonable, could arrange to purchase his vehicle and to pay instalments for it when his wool or wheat cheque came to hand. Now, that plan has been discontinued.

Instead of following the sound advice of the honorable member for Boothby in extending its operations in the hirepurchase field, the Commonwealth Bank, at somebody’s direction, is limiting its activities in that sphere, instead of extending them. It is certain that hire purchase is an essential feature in our community. It is the poor man’s means of saving, and it is the middle-class worker’s means of getting an overdraft. Tt is the only means by which many people can secure essential requirements for their homes.

Mr Griffiths:

– We all use hire purchase. We have to.


– That is true. lt will be another eighteen months before T own my Morris Oxford.


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


.- The honorable member for the Australian Capital Territory (Mr. J. R. Fraser”) has based most of his remarks on the suggestion that this Government lacks the courage to deal with the present situation. I can assure him and other honorable members of the Opposition who have this mistaken idea that this basis is entirely erroneous. This Government has courageously hit even its own supporters in the past when that was thought necessary.

Mr Curtin:

– When?


– One of those times, if the honorable member for KingsfordSmith (Mr. Curtin) wants to know when, was just before the Flinders byelection in 1953. This Government even had the courage to go to the polls last December saying that it. would take every step that it considered necessary to deal with the situation. However,

I hope to point out that the Opposition, apart from giving lip-service to what has been done, has perhaps even been fostering this situation, which is growing worse.

Some excellent speeches putting forward reasons for this temporary difficulty in which we find ourselves have been delivered from this side of the House. Many and varied remedies which could perhaps have been applied, have been suggested. I point out that in 1952 we had exactly the same symptoms as have been evident since some time in 1955. Temporary restrictions were imposed upon imports then, and were so effective that by 1955, our prosperity had risen to heights never dreamed of before. Every one will agree that this prosperity, this spending boom, has caused a greater demand for goods and at the same time, therefore, a demand for imports greater than is merited by our exports. That naturally brought about a drop in our overseas balances. During the life _ o£ the Twenty-first Parliament, those import restrictions were re-imposed when things were not so good, and it was lionel that by the 30th June of this year the position might have straightened itself out; but, as I have mentioned, we said before the election that should further steps be necessary, they would be taken. Those steps have been taken.

Between 1952 and 1956, we have had three elections. We had a Senate election in 1953, a House of Representatives election in 1954, and a combined Senate and House of Representatives election in 1955. At all three elections, one of the main cries of Opposition members was that a depression was looming. That, of course, was merely wishful thinking on their part. I think they realize that, as things stands at the moment, a depression is their only chance of regaining power. Should they happen to regain power during a time of depression, with all the machinery that we have supplied for factories, and all the other things we have provided, together with a necessary lowering of wages which a crisis would cause, they would gain kudos for capturing the world’s market with our goods at the right prices.

By the same token, with this unity ticket, the Opposition could be vitally interested in engineering a depression.

In the first place, one partner would gain power, and in the second place the other partner would be presented with an excellent breeding-ground for its propaganda.

The import restrictions last year did not prove so fruitful as they should have done. In fact, last month our reserves were down again. The waterside strike could have been a considerable factor in this deterioration. If goods are not exported, we can hardly expect to be paid for them. No doubt, this certainly was not a matter of deep concern to the Opposition, although it might even be said that in the eyes of the shipping lines, it justified the increases in freights, which were so vociferously denounced on the other side of the House. If ships that come here are not unloaded or are delayed, or are sent back to their ports of origin with their cargoes still in their holds, these things cannot be clone for nothing. All this has an inflationary influence, and must hurt, most of all, the supporters of Opposition members who, they tell us every election, despite their dwindling number of seats, constitute the great majority of Australians.

Further measures had to be taken again this session. Despite the moans of the Opposition, I do not believe that beer, cigarettes, motor cars and luxury goods are the sole prerogative of the working man. So far, I have endeavoured to show that Opposition members really have not done very much towards rectifying the present situation, or even towards staving off inflation. Their sole effort has been futile criticism. They have been lending themselves to the attainment of their phantom depression. “We must look to what the future holds for us. “We are all agreed that in order to keep our exchange rate at present levels, in order to encourage capital to flow into this country as it has done in the past, and in order to pay for our own raw materials and necessary imports, our exports must more than balance our imports, and we must increase our overseas reserves. This can be influenced very greatly by our wool cheque. “Wool, of course, is the greatest single commodity that we have. It is one commodity over which we have almost a monopoly, and in great quantities. During the next two years, wool should bring in approximately £600,000,000 with which we can pay for what we want to purchase; but this may be jeopardized by the shearers’ strike, which has been proceeding for three months in defiance of a court award. If all the sheep are not shorn, the result is obvious. If all the sheep are to be shorn, but shorn late, then we shall feel the repercussions not only this season but also next season, when we have to start shearing again before the wool is fully grown. If this happens, we shall have an even greater loss. We must consider the reaction of those who buy and use our wool. We all have heard about synthetic fibres from time to time. It is quite possible that synthetic fibres will be used in order to keep the loom’s going, and that our regular customers will not buy as much wool in the future as they have bought in the past. Should the sales of wool decline and more drastic measures have to be introduced in the next budget, it will be of no use for the people of Australia to shed crocodile tears over the Opposition’s criticisms of the Government’s policy. Rather should the people condemn Opposition members for encouraging a strike in order to further the ambitions of themselves and their fellow-travellers on the unity tickets. Many Opposition members hold, or have held, union positions, and it cannot be denied that they are fostering this strike. The honorable member for Hindmarsh (Mr. Clyde Cameron), in reply to the Minister for Labour and National Service (Mr. Harold Holt), on the 15th March last, said -

I repeat that the graziers cannot possibly win this strike, because the union-

The honorable member was referring to the Australian Workers Union, in which he is president of the South Australian branch, so he should know - will empty every single penny of its nearly £2,000,000 worth of assets into this strike before we will give up the fight. We tell the Minister, moreover, that the members of the Waterside Workers Federation of Australia are not likely to handle one single bale of wool put on to the wharfs to be sent away, that has been shorn by scab labour, and that the Transport Workers Union are not likely to handle one single bale of wool produced by scab labour.

The honorable member was prevented from making further revelations by the expiry of his time. If that statement does not prove that he, for one, is all in favour of striking at the finances of Australia for his own ends, I do not know what it does. In conclusion, I should like to suggest to the decent Opposition members-

Mr Curtin:

– Hear, hear !


– The honorable member for Kingsford-Smith is one. No doubt those honorable members are sad that they have to sit behind the Leader of the Opposition (Dr. Evatt). Possibly, they have a chance to discourage a policy that will hurt not only the Australian nation but also their own individual supporters, and I suggest to them that patriotism is surely greater than power.


– In debates such as this, honorable members should have more time for discussion than the twenty minutes now allowed to them. This debate covers the most important and most contentious issues that the Parliament is ever likely to deal with. Those issues affect the lives and the future of the whole population. The measures taken by the Government mean poverty for the great majority of the Australian people and increased wealth for a few. The Prime Minister (Mr. Menzies), during the general election campaign last year, cleverly concealed from the people the measures he proposed to take to balance Australia’s overseas payments. Then, in the very first sessional period of the Twenty-second Parliament, he makes the economic statement that we are now discussing. History will ultimately record the people’s disgust at the way this Liberal party-Australian Country party Administration has manoeuvred to hold office. No one, in his wildest flights of imagination, would have thought the Government would make an onslaught on the living standards of the people immediately the Twenty-second Parliament met.

I suggest that the problems of to-day are of the Government’s own making, and are due entirely to its policy. They are problems of mismanagement, the responsibility for which rests fairly and squarely on the Government. I do not subscribe to the view that there is any form of consumer inflation, because there is ample production of consumer goods to satisfy the needs of all who have sufficient money to purchase those goods. Can any honorable member name for me one bad requirement of family life that is in short supply? If there is inflation, it is, in the words of the honorable member for Parkes (Mr. Haylen), a profiteers’ inflation, caused by the removal of Commonwealth prices control. Prices’ are certainly far too high, and producers, wholesalers and retailers are reaping colossal harvests at the expense of the consumers.

Much has been said, during this debate, about people not saving, and about the need to produce more and to invest more in government bonds. I believe that the inability of the people to save is due to the Government’s handling of the economy. In the past ten years, more than 2,000,000 people have been added to the population. Hundreds of thousands of immigrants have received financial assistance to enable them to come to, and settle in, Australia. But what financial provision has the Government made to help absorb them into the community? The Government has made it more difficult for the State governments, local governing bodies and . the public alike to get finance. Local authorities and the State governments need a great deal of money for the construction and maintenance of public institutions, the construction of roads, schools and homes, and the reticulation of water, sewerage and electric power. Although hundreds of cities and towns are largely without sewerage, Canberra is always well provided with this most hygienic amenity. “Why should this city be more favoured than others? The Government’s antiquated financial policy is responsible for our present difficulties.

The Government’s need for funds is due to its mismanagement, which is evidenced by its failure to explore properly the potentialities of the home market, and by the freezing of the basic wage, which has kept millions of pounds out of the pockets of wage and salary earners and has deprived hundreds of thousands of pensioners of much of the food they need. The increased excise on beer, cigarettes, tobacco and petrol will hit hardest at the family man, the- employee in heavy industry, the miner, the railway man, the steel worker, and the like. The Prime Minister knows that come what may the average worker looks to his glass of beer at knock-off. time, and to a cigarette to soothe his nerves. In order to buy his beer and cigarettes now, he will have to reduce the amount he spends on his wife and children. The effect of the reduced expenditure on the needs of families will be felt by primary producers and manufacturers alike. It is well known that the dairying industry already is unable to sell its products. In fact, hundreds of dairy-farmers have to send their milk to factories that process it into powdered milk. If housewives have not enough money to buy milk, cheese and other dairy products, the dairy-farmers find they are unable to sell their milk on three or four “ block “ days a week. Can the inability of the people to buy food produced in Australia - an inability due to the lack of money - be called inflation ? I claim it is a direct result of the Government’s mismanagement.

The freezing of the basic wage has caused great poverty among, the lowerpaid workers. Since the basic wage was frozen, the workers have been compelled to subscribe to medical and hospital benefit funds. This form of conscription has played havoc with the living standards of the 1,750,000 people who receive less than £10 a week. Many of them pay up to £20 a year to these funds. To married couples whose only income is the basic wage the cost of having, children is enormous. Hundreds of families are refusing to have more children because they are unable to provide for them. Only last week a lady came to see me and asked could I do anything about a hospital account that she had received. She explained that late last year she had entered hospital to give birth prematurely to a child, but instead of one child being born two were born. They were kept in hospital for 69 and 78 days respectively. The account rendered by the hospital authorities to the mother’, who already had four or five other children, amounted to £215 16s., or £1 16s. a day for each of the new-born children. How can persons on . low wages meet . such accounts ? Is it any wonder that they are unable to save and have families? No other government since federation has had such opportunities to do something of a lasting and tangible character for these persons, and no government has failed more ingloriously in its efforts than has the present Government. In six years, the Government has been blessed with bumper seasons at home and high export prices abroad. The dairying industry has produced a record output, wool prices have reached record proportions and will remain high, secondary industry has been over-producing, and heavy industries particularly have had record production. The steel industry while producing a record output has not yet been able to overcome the lag in production, but generally speaking all sections of industry have had a record output.

It is worth mentioning that production in the. coal-mining, industry has been so- great that miners have worked themselves out of jobs,, in spite of a promise by the Prime Minister that they should have no fear for their future employment in that industry. The Government has enjoyed record prices for export commodities, and had it used restraint in the matter of imports, instead of removing Labour’s import restrictions, prices and capital issues controls, there would have been no need for the present attack on the people’s living standards. In this House it has been said often that the average weekly earnings of workers in industry are at a record level. The Minister for Labour and National Service (Mr. Harold Holt), during the course of this debate, said that this average was £17 3s. 4d. In estimating the average, does he include his salary of approximately £6,000 a year, or the salaries of high public servants and persons in private industry who receive an equivalent amount? If he does include those salaries, he does a grave injustice to the workers in this country. I ask the Minister also whether he is aware that there are approximately 985,000 wage earners who receive less than £500 a year, and 750,000 who receive between £500 and £700. Does he know that 2,250,000 persons receive less than £750 a year? If he does know that, how does he reconcile his figure of £17 3s. 4d. as the average wage with the meagre income of such, a vast number of persons who receive much less than the average of which he boasts? The Minister says that taxation is much lighter than in 1949. As one who has experienced the payment of taxes then and now, I assure him that taxes are much more severe to-day than previously. A child in primary school will know that if a taxpayer paid £26 5s. in tax on earnings of £600 when the basic wage was £290 per annum in 1949. he would be much better off financially than if he were paying £11 5s. from the same earnings with the basic wage frozen at £626 per annum. Taxes are applied on a graduated scale to all incomes roughly in equal proportions, and they are considerably higher now than they were in the worst years of the war.

Much confusion exists amongst bankers and financiers on the future effect of the increased interest rates on the national economy. The Labour party knows that the welfare of the people and the economy of the country will be quickly affected, and therefore I support the amendment moved by the honorable member for Melbourne Ports (Mr. Crean) in opposition to those increased rates. I believe that the Prime Minister deliberately refrained from disclosing the real reasons for introducing his supplementary budget. I do not think that it was introduced because of a shortage of consumer goods, because export production was lagging, or even because the overseas balances were “ in the red “ or at a dangerous level. There can be no doubt that our reserves, at £370,000,000, were_ still healthy, although possibly not as high as was desirable. The Government’s failure to balance its overseas commitments is due to .its own mismanagement. It must be remembered that in 1950 the Prime Minister set out to abolish Labour’s import and capital issues controls. He did abolish them, only to re-impose them in 1952. At that time, or a little prior thereto, on his return from the Commonwealth Prime Ministers’ conference, he forecast that there would be war within three years. In fact, he said that three years was the outside limit of time before war would be waged. Since 1952. the Government has played about with import controls. Licences were issued to almost all of the Government’s friends. Every class of luxury goods produced overseas was allowed to enter the country. Many millions of pounds worth of goods, which we could well have done without, were allowed into the country. Bond stores are chock full of fancy goods, materials and merchandise which could well have been produced in Australia. It .is no wonder that our overseas reserves have declined.

It is really interesting to examine the manner in which the Government has fooled about with import controls. Following the easing of import restriction? in 1952, on the Prime Minister’s own admission, imports were allowed to come here virtually unchecked and in unlimited quantities. Allow me to cite a passage from the Governor-General’s Speech on the 4th August, 1954, when he opened the Twenty-first Parliament. His Excellency said -

My advisers report a general and continuing state of prosperity throughout the Australian economy. The number in civilian employment is the highest ever recorded in this country; and the output of goods and services is correspondingly high. Prices have remained remarkably steady. At 30th June, 1954, Australia’s international reserves stood at £570,000,000, an increase of £9,000,000 over the previous twelve months. During this period my Government progressively relaxed its emergency import restrictions, and now, for the greater part of Australian imports, no limitations are imposed on the quantity that may be admitted.

Is it not clear from those remarks that goods were brought here from abroad in almost unlimited quantities? Is it any wonder that warehouses and shops are chock full of fancy goods and merchandise that ordinary workers would never require?

However, let us examine the GovernorGeneral’s Speech when he opened the Twenty-second Parliament some eighteen months later, on the 15th February, 1956. His Excellency then said -

The truth is that the decline in our overseas balances is primarily the result of inflation at home. Private incomes and total purchasing power arc at record levels. Our local production falls far short of satisfying the demands so established. There is, therefore, a call for imports and, in recent times, at a level which we cannot as a nation pay for out of our current earnings. We have, therefore, been drawing upon our reserves. It needs no economist to tell us that such a process cannot go on for long. As an immediate measure my Government imposed further import restrictions. But such restrictions are not in themselves a complete cure.

On this occasion the Prime Minister blames inflation at home for the shrinkage of our resources, because too much purchasing power is in the hands of the Australian people. He said that because we were unable to produce enough at home we called for additional imports from abroad and that was the primary reason for the decline in our overseas balances. I ask the Prime Minister whether he considers it to be good management for a country to admit, almost without control, unlimited quantities of goods one year, the very next year to close the door against further imports, after the damage to the economy has been done, and then to make the people pay for his foolishness by a savage increase in indirect taxation. Much of the imports brought here have comprised machinery of a capital equipment type. I suggest, that this Government is guilty of waste and extravagance in the use and placement of that machinery. One has only to look round at almost every place where work is being carried out. to see great masses of machinery lying idle. Williamtown aerodrome is an example. I contend that greater use and better placement of that class of machinery could be made if it were farmed out to local government bodies which would then be able to cut. down the cost of many of their undertakings.

Great waste can be seen in many other directions. The building of the explosives filling factory at S’t. Mary’s is a typical example, as is also the renovation of H.M.A.S. Hobart, which will cost nearly £2.000,000. After all that money had been spent on that ship it had to be towed from Newcastle to Sydney and was left to rot at some anchorage in Sydney Harbour. The building of the St. Mary’s factory will probably cost some £30,000,000, although it is now estimated to cost only about £23,000,000. Seeing that there is a world shortage of good steel, I ask the Government, in order to overcome our own shortage and also for the purposes of earning much-needed dollars and build ‘lip sterling reserves, to consider investing all that money, and possibly some that is being wasted in other directions such as on defence and in reserves and trust funds which the Government has created, in a new modern steel industry. In that way it would do a much better job for future generations of Australians than by wasting money at present.

I said earlier that I was of the opinion that the Prime Minister did not truthfully disclose the real reasons for his supplementary budget, and that the Government’s fiscal policy has much to do with creating our present problem. I elaborate that view by saying that the real worry of the Government is not so much our overseas balances but our bond market and national debt. It is well known that some £66,500,000 has to be obtained for the conversion of domestic loans this year and £10,700,000 for the conversion of oversea loans. Next year, more than £200,000,000 will have to be found, in 1958 another £300,000,000. in 1959 more than £300,000,000, in 1960 more than £300,000,000 and between 1961 and 1968 bonds worth more than £1,000,000,000 will have to be converted. Added to that, large sums will be necessary for the conversion of overseas loans. It is natural to expect that many millions of pounds of new money will have to be found for this purpose, because as the loans become due for redemption many people, because of necessity, will want to redeem their investments, and other investments forming part of deceased estates will also have to be redeemed. As I see it, the Government’s real worry will be how to provide new money to replace the funds that bondholders, desiring to invest in hire-purchase business.- will withdraw from government securities. There is no doubt that thi* form of financial business has grown during the last three or four years. At the present time more than £200,000.000 is invested in it. Looking at hirepurchase finance, is it not reasonable to assume that many persons; who live by their investments, will withdraw from Government investment and will invest in business that is paying 10 per cent.. 12 per cent., 15 per cent., or more on the money invested? I believe that the problem of hire purchase should be controlled by the Commonwealth Government. I likewise believe that the control of interest rates should be the responsibility of the Federal Government, and the sooner it takes action to obtain this control the better it will be for all concerned. I suggest that before long there must be a new approach to the problem of internal finance in this country.

Mr. Timson

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


.- The honorable member for Shortland (Mr. Griffiths), who has just spoken, has reiterated the falsehood which other honorable members on his side of the House have expressed, no doubt _ acting on the Hitlerite contention that’ if one repeats a falsehood often enough, eventually people will believe that it is a truth. The falsehood to which I refer is that the Prime Minister (Mr. Menzies), during the recent general election campaign, concealed his Government’s intention to introduce measures of the kind which ari? being discussed in this supplementary budget. The Prime Minister told the people, clearly, that his Government, during the days to come, would be required to bring down unpalatable legislation, and he asked for a mandate from the people for that purpose. As he had the courage to do this in the past, he has had the courage to do it again; and, in view of the changed circumstances of our economy, he asked for this mandate. It is quite untrue to say that the Prime Minister attempted to conceal the real issues during the last general election campaign or to say that what is being done now is entirely unexpected.

Another completely erroneous picture which the honorable member for Shortland portrayed is implicit in his remark that it is no wonder the people are unable to say-

Mr Curtin:

– Hear, hear !


– “ Hear, hear!” says the honorable member for KingsfordSmith (Mr. Curtin), showing how utterly ill-informed the Opposition is of the facts. For the edification of honorable members opposite, I shall quote some figures from an official document issued by the Commonwealth Bureau of Census and Statistics for the year 1953-54, the latest figures 1 could obtain. In 1949. the total amount of money deposited with the banks, including the Commonwealth Trading Bank, was £866,411,000. Five years later, the total deposits amounted to £1,486,435,000, nearly double the previous figure. Despite that, honorable members opposite say that people are short of money.

Mr Chambers:

– The population of Australia has increased by 1,500,000 during that period.


– That argument does not carry much weight because, if 7,000,000 or 8,000,000 people had only £866,000,000 to their credit in 3.949’, surely the honorable member for Adelaide (Mr. Chambers) does not suggest that 1,500,000 immigrants were capable of adding £600,000,000 to the bank deposit.” during that period. A true picture of the people’s prosperity is shown by their actual savings. Let us have a look at those figures. In 1949, when this Government came into office - I am not worried about that fact, I am merely quoting the years - the total amount of money in the savings banks of Australia was £714,232,000. Five years later, the savings of the people of Australia, deposited in the savings banks, had risen to £1,010,129,000.

Mr Curtin:

– What about the number of people?


– I am able to give the numbers. They considerably increased since 1949. The amount on deposit per operative account for 1949 was £121 5s. Id. In 1954, five years later, that figure had risen to £149 10s. 6d., a substantial increase in view of the fact, that in the preceding decade each operative account increased on the average by only £10. The amount per head of population in 1949 - and this covers the point raised by the honorable member for Adelaide and the honorable member for Kingsford-Smith - was £90 5s. 6d. The amount per head of population in 1954 was £112 Ss. lid. That takes into account the 1,500,000 new arrivals in this country who, according to the honorable member for Adelaide, have been responsible for increasing our national deposits by £600,000,000. What an argument! I Lave shown that the suggestion constantly made by the Opposition, the suggestion that the people have not enough money to enable them to save, is entirely false. That propaganda has a purpose. That purpose is to undermine the economy of this country. Honorable members opposite think that if they cry stinking fish loudly enough, they will be able to do so.

Let me go back to the years of the Curtin Government and the Chifley Government. I respected and honoured Ben Chifley as deeply as did any mau on the Opposition benches. Although 1 was

  1. member of the Opposition at that time, I stumped the country on behalf of Ben Chifley and John Curtin, appealing to the people to invest their money in government loans. Other people did the same, irrespective of their party allegiance. We wanted to assist the National Government, so party politics went by the board. I have at home to-day eight or nine very nice framed documents, signed by Mr. Chifley and by Mr. Curtin, praising and commending me for my efforts in supporting those loans. Many other people have similar documents. Remember that I was a member of the Opposition parties then. Not one member of the present Opposition has accepted his national responsibility by doing the same thing for this Government as we did for a Labour government. The honorable member for Melbourne (Mr. Calwell) got up and indicted - the damned cheek of him! - this Government on a number of counts. I indict the honorable member for Melbourne. What has he done in the national interest? He has joined with the rest of .his people in the Labour party’s classic attempt to sabotage the economy of this country, to cause discontent and uO bring about a state of chaos.

That is the whole purpose of the speeches that honorable members opposite have made in this debate. Despite the figures that I have cited. Opposition members constantly repeat their story of the people being unable to do this and that. .Not one thing will they do to support government loans, although they have. the example set by myself - I mention that only because it is within my personal knowledge - and many other people on our side of politics. We sacrificed our time, money and energy to promote the national welfare by supporting the appeals of the government of the day, regardless of whether it was the Chifley Government, the Curtin Government, the Menzies Government or any other government. We were concerned only with the national interest. All those who are concerned with the welfare of this country should do their best to see that the economy is put on an even keel now, so that it will be able to weather the storms that lie ahead.

What is required? The country is not short of money, but the money is not being diverted to those purposes that are in the best interests of Australia. Let us try to see what the future holds for us. Neither the Treasurer (Sir Arthur Fadden) nor the Prime Minister will deny that one of the reasons for the introduction of this supplementary budget, little budget or whatever we like to call it, is the Government’s concern about the future of the loan market. In 1.956-57, Australia will be required to raise £258,544,S90 to redeem loans. Of that sum, £58,082,420 was raised for war purposes and £200,462,470 for other purposes. Those loans were not raised by this Government. In 1957-58, £7S,971,290 will be required to redeem bonds which will fall due for redemption then. Of that sum, £43,479,490 was raised for war purposes and £35,491,800 for other purposes. In 1958-59, £266,377,045 worth of bonds will be required to be redeemed. Of that sum, £233,236,700 was raised for war purposes and only £33,140,345 for other purposes. So the position is that during the next three financial years we shall be required to redeem bonds to the value of £603,893,225. Of that sum, £334,798,610 was raised for war purposes and £269,094,615 for other purposes.

Members of the Australian Labour party were keen and energetic in their support of the efforts of a Labour government to raise that £334,798,610 for war purposes. They should be just as keen and energetic in supporting the efforts of this Government at least to secure the conversion of bonds to that value, or to raise enough money to redeem them. Surely that is not too much to expect. But what shall we see? 1 forecast now that they will use the same methods of sabotage and destruction that they are using at this time. “Mr. Curtin. - I rise to order. I should like your ruling, Mr. Acting Deputy Speaker. Is the word “ sabotage “ an unparliamentary expression ?


– The word was not objectionable in the manner in which it was used by the honorable member for Moore.

Mr Curtin:

– ls the word “sabotage” unparliamentary? Is it in the list of unparliamentary words? If it is, I demand n withdrawal.


– Order ! I shall not order a withdrawal.

Mr Curtin:

– Is it on the list of unparliamentary words ? I should like your ruling on that.


– Order! I am not required to give a ruling on that point.


– Is it on the list?


– Order! The honorable member for Kingsford-Smith will resume his seat. There is no point of order involved.


– Obviously, the honorable member for Kingsford-Smith cannot take it. He and his colleagues know that I am stating undeniable facts. May I say, just as an aside_. that it is rather interesting to note that the Labour Government disposed of war goods to the tune of £135,000,000? One would have thought tha.t, as that Government had raised loans to buy those goods, it would have paid the proceeds of the sale into the National Debt Sinking Fund so that the money could be used to redeem loans. Instead, the money was paid into Consolidated Revenue and, as a result, a very generous and beneficent government was able to reduce taxation and give greater social services benefits. That is something which would justify any member of the Labour party who has the national welfare at heart in saying, “Let us try to make good the wrong that we did at that time

As the honorable member for Boothby (Mr. McLeay) has said this afternoon, the situation demands the earnest cooperation of every section of the community and of all parties in this Parliament. The people should understand - so should my friends of the Labour party, if one can educate them - that whatever action this Government is compelled to take in order to induce, invite or direct people to put their money in government loans, that action is taken in the national interest, not in the interest only of the Commonwealth Parliament and the Commonwealth Government. Therefore, I suggest that the title “ Commonwealth Loan “ is a misnomer. I suggest to the Treasurer that the next loan he floats should be described as a national loan, and that all future loans should be described in the same way. For the last six years at least, the loans which thi3 Government has raised have not been Commonwealth loans. They have been raised for the benefit of the States. They have been national loans. The honorable member for Kingsford-Smith, who is interjecting, again reveals a lamentable ignorance of the facts. I feel really sorry for his constituents. I repeat, for his benefit, that if we were to call all future loans national loans, not Commonwealth loans, -we should make clear the purposes for which the loans were being raised. Here again, when the Government asks the country for money to meet its tremendous responsibilities and loan redemption liabilities, it should do so under the national name. Loans should be “ national loans “, and the purpose for which the money is required should be stated. It can hardly be argued that the £330,000,000 raised for war was spent on “Commonwealth” purposes. In view of the financial position of the country today, the Opposition’s attitude towards the Government’s proposals presents » vb thu,sorry spectacle. Not only our overseas credits but also local borrowing is involved. Indeed, the whole financial structure is involved. There is a need for the Government to persuade the people to devote their money to purposes which will establish our prosperity on a firm footing and ensure its continuance. That is the purpose of the recently introduced economic measures. Of course, I am not happy about them. I do not like them any’more than does the honorable member for Kingsford-Smith. I accept them as 1 would a dose of castor oil or a bitter pill. These things have to be done ; but J doubt whether the people will answer the call of this Government to accept their national responsibilities until they are really hurt. I believe that the Government is trying, in as kind a way as possible, to make the people realize the national responsibility that rests upon them. If the people do not respond, then, inevitably, the States, which possess unlimited power, will have to come into the picture in their own interests. In view of the fact that £258,544,890 is required by the Commonwealth next year to redeem loans, how can the States hope to obtain any loan money unless they say, in effect, to the Commonwealth, “ We will assist you instead of resisting you all the time. We will take appropriate action against the irresponsible commercial section of the community “ - and there is an irresponsible commercial section, which is adopting practices that are not in the best interests of the country. T shall not traverse the hire-purchase field except, to say that, investment that is going into that field could be applied to more worthwhile purpose? without interfering with production, the needs -of the consuming public or our internal nconomy. Of course, a full discussion of this broad question would need more time than T have at my disposal at present. I conclude by saying that the States will have to help, no matter how much they may want to kick this Government to death because of its political colour.

Mr. ACTING DEPUTY SPEAKER (Mr. Lawrence). - Order! The honorable member’s time has expired.

Mr. GEORGE LAWSON (Brisbane) [4.29”. - I am glad, even at this relatively late stage of the debate, to have an opportunity to express my views on the economic measures outlined by the Prime Minister (Mr. Menzies). I am one of those who believe that this debate has afforded members of the Opposition an opportunity to criticize the right honorable gentleman’s economic statement and to show that this Government is incapable of efficiently governing Australia. I am sure that supporters of the Government have been as impressed as I have been by the criticism that has been made of the Government’s economic measures by honorable members on this side, particularly the Leader of the Opposition (Dr. Evatt), the honorable member for Melbourne Ports (Mr. Crean), the honorable member for Yarra (Mr. Cairns), and the honorable member for Darebin (Mr. R. W. Holt). Certain supporters of the Government, including the honorable member for Moore (Mr. Leslie), who has just concluded his speech, have claimed that the Government received a mandate from the people to introduce the financial measures contained in this supplementary budget. I support the opinion that has been expressed by other members of the Opposition, that this Government received no such mandate from the people. It is true that the Prime Minister mentioned casually in his policy speech during the last general election campaign that the Government was mindful of the economic difficulties with which Australia was confronted. It is likewise true that, in his statement on the financial position last year, the right honorable gentleman said that, from time to time, he would survey the economic structure and present to the Parliament a review of the state of the economy. But not one elector in this country expected in December last that if this Government were returned to office measures such as we are now debating would be introduced so soon, after the election.

Mr Chambers:

– There, was no need for the election.


– That is so. If, during the general election campaign the Prime Minister had told the people of the Government’s intention to introduce these financial measures if returned to office, I am sure that they would have registered their resentment, at the polling booths. This is borne out by the fact that, at the Western Australian elections held last week, when the people of the State had their first opportunity to show their hostility to this Government’s economic measures, they re-elected the State Labour Government with a vastly increased majority. Notwithstanding that the Prime Minister participated in the Western Australian election campaign, at the invitation of the Liberal party and Australian Country party in that State, Labour won the day. The fact that the Labour Government was returned to office with an overwhelming majority was tantamount to administering a’ slap in the face, not only to the Prime Minister, but to every member of this Government.

During the recent recess, I had an opportunity to discuss with many hundreds of my constituents - business people as well as supporters of Labour - the economic measures that we are now debating. They displayed more hostility towards the Government in this connexion than they did following the introduction of the horror budget of 1951. I understand that the Prime Minister has been invited to visit Queensland to participate in the State election campaign. I understand that he has received, and has accepted, an invitation to help the antiLabour forces in Queensland during the election campaign. I sincerely hope that he will go to Queensland, because, knowing as I do the Queensland Labour Government which has been in office for about 35 years, I know that the right honorable gentleman’s participation in the election campaign will assist that Government materially, for the reason that, as I have said, no legislation ever introduced into this or any other Australian Parliament has caused so much hostility among electors throughout the Commonwealth as has this Government’s economic programme. So, the intervention of the Prime Minister in the campaign will be the best thing for thi’ Labour Government in Queensland, and will produce the same result as was produced by his participation in the recent general election campaign in Western Australia - the election of a Labour Government.

The proposals we are debating form, in my opinion, the most vicious and pernicious programme ever’ introduced, because they are designed to hit one section of the community, and one section only - the working section of the community. Let us see just what the Government intends by its increases of excise and other forms of indirect taxation. First, let me deal briefly with increased interest rates on bank overdrafts. T have listened very attentively to the debate, and 1 think that every honorable member on the Government side whom I have heard speak, particularly members of the Australian Country party, has claimed that the increase of interest rates on bank overdrafts will . not adversely affect the primary producer to any great degree. 1 am one of those who believe that the primary producer is the person who will be most heavily hit by the increased interest rate on overdrafts and on fixed deposits. ‘ One honorable member opposite endeavoured last night to convince us of the falsity of our claim that the increase of interest rates on overdrafts and fixed deposits will give the private banks an additional rake-off of about £1,250,000. He argued speciously that, in effect, the increase of interest on fixed deposits would almost counteract the effect on the profits of the banks of the increase of interest rates on overdrafts. But that is not so, because the additional amount paid out by the banks as a result of the increase of interest rates on fixed deposits will be infinitesimal compared with the extra amount of money that the banks will rake in as a result of the increase in interest rates on overdrafts, which will operate particularly against the primary producers and people who wish to finance the building or buying of homes. I wonder how the members of the Australian Country party really feel in their hearts about this matter, because only four or five months ago primary producers in the Fisher division, which is represented in this Parliament by the present Deputy Speaker (Mr. Adermann) held a meeting to protest against the action of the private banks in not only restricting credit but also in not permitting them to increase their overdrafts. That meeting was held before the Government’s economic proposals were announced. T regret that the Deputy Speaker is not in the chair at the moment, because that is a matter which affects his own. electorate and himself also. The primary producers of the Fisher division told their honorable member very plainly that, if something were not done, many people in that district would, as a result of adverse seasonal conditions, be compelled to walk off their holdings because the banks would not increase their overdrafts, and thereby grant them additional credit.

The honorable member for Fisher told the primary producers that he agreed with them, ‘that he was satisfied that the action of the banks was wrong, and that he would take the opportunity of making a protest to the Prime Minister on thE matter. Whether or not he did so, I do not know. I wonder how those unfortunate people feel now, when they find that, instead of the banks refusing to increase their overdrafts’, the interest rate that they will have to pay on overdrafts to carry them through has been increased. There is no doubt that the Government’s proposals will hit the primary producers very hard indeed.

I turn now to the argument advanced by the honorable member for Melbourne Ports, whom we regard as being one of the most capable men in this Parliament in respect of financial matters. I know that a number of members of the House who are accountants claim to be economists, but they fail miserably in that particular profession compared with the honorable member for Melbourne Ports. I am convinced that the honorable member for Melbourne Ports was correct in his statement in this House that the additional amount of money that would be raked in by the banks as a result of the increase of interest rates on overdrafts would be in the vicinity of £1,250,000. His estimate has been borne out not only by honorable members on this side of the House but also by people outside this House who have no connexion with the Parliament. One of those people is no less an authority than the finance editor of the Brisbane Courier-Mail. I think that everybody will agree with me that the Brisbane Courier-Mail cannot be regarded as a supporter of the Labour party. It is an organ that supports the anti-Labour parties, one of the barrackers for, and supporters of, vested interests. The finance editor of the Courier-Mail is a very capable man from that newspaper’s point of view. His duties are to analyse financial matters and submit his analyses to the Courier-Mail for publication. I shall read to the House now what he had to say in the Courier-Mail of the 22nd March, soon after the Prime Minister had made his famous statement on economic policy. The finance editor of the Courier-Mail said that, as . the result of the increased interest rates on overdrafts, the banks would be completely reimbursed for the increased company taxation they would have to pay. He said that, on the latest figures, the average increase of per cent, on overdraft interest rates and the increase of 1 per cent. on the interest rates for fixed deposits would add a net £1,500,000 to the yearly incomes of the private banks. So the claim that the banks will make large gains from the increase of interest rates does not - emanate merely from honorable members on this side of the House. It is a claim that is also made by the finance editor of the Brisbane Courier-Mail, which is an anti-Labour newspaper.


– He was probably joking.


– The statement that I have read was by that newspaper’s finance editor, and I am satisfied that it is accurate, because I regard the estimate of £1,250,000 given by the honorable member for Melbourne Ports as being conservative. He goes much higher than that to about £1,750,000. However, that is the position.

Throughout this debate supporters of the Government have claimed that Australia is in a very, very prosperous economic position. We admit that, but we say God help the people of Australia if the country were not prosperous. Let us consider among what sections of the community this prosperity that we have enjoyed over the past two or three years has been greatest.. We find that the prosperity has not been distributed equally among the people, because for about three years the system of quarterly adjustment of the basic wage has not been followed, and the wage itself has been frozen. That action was taken by the Commonwealth Court of Conciliation and Arbitration because it believed that by doing so it would be helping the Government to curb inflation.

Instead of curbing inflation, the freezing of the basic wage has had the opposite effect, and the cost of all commodities - and consequently the cost of living - has increased beyond expectation. The result of all that has been that the worker has suffered in comparison with the rest of the population, and his wages have never caught up with prices. In the face of that situation it is quite clear that this Government has done nothing to remedy the position. This Government promised in 1949, in 1951, in 1954 and again in 1956 that it had the interests of all sections of the community at heart; but it is quite clear it has the interests of only one section of the community at heart, that is the vested interests who pour out millions of pounds in support of the Government at general elections in order to keep the Labour party out of office.

If the Government had done the correct thing, instead of increasing direct and indirect taxation, as well as increasing excise, it would have carried out the promises that it has made to the electors throughout the years that it would introduce an excess profits tax. Everybody who has followed political and financial affairs in this country during the last two or three years knows very well that every industry in Australia has made higher profits than ever before. Companies which under normally favorable conditions earned 7i per cent, to 10 per cent, profit, have paid dividends during the last two years of 25 per cent, and 35’ per cent. Those are the sections of the community which have been enjoying the prosperity of this country, while the workers have received very little benefit.


– -Order ! The honorable member’s time has expired. [Quorum formed. ]


.- In a -debate of this nature it is perhaps profitable to start from a point at which there is some degree of unanimity in the House. That point is that there is some threat of inflation at present in the Australian economy. Beyond that small degree of unanimity, we find that members of the Opposition are emphatic, quite loudly emphatic, that the proposals of the Government to meet this threat are all wrong. While these points have emerged from the welter of theories, economic and otherwise, heard in the course of the debate, when we consider the alternative proposed by individual members opposite, confusion becomes heaped upon confusion. There has been talk of gloom, depression and calamity, and, indeed, when it is all boiled down it is the same sort of talk that we have heard from the Opposition ever since 1949. That fact shows the complete inadequacy of the Opposition to find any sound solution of our economic problems. I remind honorable members that the Liberal party has a creed, and in that creed appear the words, “ We believe in Australia, her courage, her capacity and her future”. I ask this House: What measure of faith in those ideals have we perceived in honorable members opposite during the course of this debate ? I hope to show that there has been absolutely none. If we are agreed that inflationary pressures are present in our economy, and if we are agreed that stability is desirable, then it surely is obvious that, some discipline and restraint is needed to curb those inflationary pressures and to bring stability to the economy, because within all the range of economic theory we cannot find any suggestion that inflation can be combated without some discipline and some restraint. Again, if we are talking in terms of discipline and restraint, surely the less necessary items of personal expenditure should be first and hardest hit if discipline and restraint must be imposed. When the proposals made by honorable members opposite are analysed, we find that one or two honorable members with some claims to economic knowledge have advanced propositions about taxation which differ from the Government’s proposals. In general, however, honorable members opposite have been trying to delude the Australian public into thinking that nothing need be done, that we need not tax this or that, and that interest rates can be left as they are. That is deluding the Australian people in a way which I believe is criminal.

When we analyse the more thoughtful contributions, such as those of the honorable member for Melbourne Ports (Mr. Crean), the honorable member for Yarra (Mr. Cairns) and others who have some understanding of the position, we find that in order to propose some satisfactory alternative to the Government’s proposals they suggest that indirect taxation is all wrong and that there should be a review of the income tax and the company tax, and that, above all, an excess profits tax should be imposed. Let me examine briefly those proposals in the light of the target at which this Government is aiming and with which honorable members opposite have no very serious dispute. I refer to their proposal that we should raise £115,000,000 of revenue in a full year.

I invite honorable members to conaider the budget figures for income tax and company tax for this financial year. The total estimated yield of income tax is £390,000,000, and of company tax, £187,000,000, giving a total of £577,000,000. If we were to collect £115,000,000 more by direct taxation, the increase in the average rate of income and company taxes would be 19.9 per cent, or near enough to 20 per cent. Do honorable members opposite, who have put forward that proposition, seriously suggest that the Australian economy should take an increase of 20 per cent, in overall taxation?

Lot us examine the proposal from another point of view. If honorable members opposite suggest that the new impost should be loaded on to personal income tax, which is expected to yield £390.000,000, that would involve an average increase in personal income tax of :j0 per cent. If we accept their solicitude for the lower income groups, we must believe that they would not dare to impose any higher rate of taxation on lower income-earners. Therefore, we nan. assume that the rate of increase in the higher income groups could well be greatly in excess of 30 per cent.

Honorable members opposite seem to assume that all the revenue we require could be drawn off in the form of an excess profits tax on companies. The yield from company taxation in this financial year is estimated to total 187,000,000. The raising of £115,000,000 in a full year, over and above that amount, would involve a percentage increase of no less than 62 per cent. I ask honorable members on the Opposition aide to face the realities of the situation. Does any one imagine that the business structure of Australia could stand a taxation increase of the order of 62 per cent. ? The whole structure would collapse. We would have complete financial chaos if such proposals were put into effect, yet they are the only concrete proposals that have been advanced by the Opposition as a. solution of our immediate problem of avoiding a budget deficit. I do not believe that any honorable member would have the temerity to suggest that, if there is a threat of inflation and a budget deficit, the situation could be met surely by issuing treasury-bills, yet that is the only alternative we have heard from honorable members opposite. That is one further proof of the complete bankruptcy of ideas in the Opposition in connexion with the Australian economy.

An amendment with regard to the bond market and the bank rate of interest has been moved on behalf of the Opposition. Those matters are incidental to inflation. Fluctuations of the bond market do not cause inflation, nor can inflation be cured solely by adjustments of the rate of bank interest. Honorable members opposite have failed to realize that the effective interest return on bonds is not necessarily the rate at which the bonds were issued, nor is it the equivalent of the hanh rate. It is governed by the competition for loan money. The interest rate on bonds and the bank rate have had to be adjusted in response to pressures arising out of that competition.

The Leader of the Opposition (Dr. Evatt) dealt at some length with the wonderful record of the Chifley Labour Government in connexion with cheap money, which is apparently a particular fetish of honorable members opposite. The right honorable gentleman appears to have overlooked the fact that, in those days, everything was controlled. Goods were rationed. Prices and capital issues were controlled, and there was no competition for money on the loan market. It was easy, therefore, for the Government to impose a cheap rate of interest for government bonds. If it is suggested to-day that the remedy is to reimpose all those controls, the obvious answer, in the short term, is that we have not power to do so. Even if we had power, all will agree that it is quite undesirable to return to black markets, rationing, and all the evils that arose from those controls.

I share with other honorable members their regret for the inevitable hardships that must be imposed on some bondholders by the withdrawal of support from the bond market. That is not a consequence of government action, lt is a consequence of the inflationary pressure in the community. Nobody will be encouraged to invest in long-term securities at a comparatively low rate of interest when, in times of inflation, they can buy something to-day for fid. and sell it to-morrow for 2s. That is, simply, what inflation means. There! are all sorts of competition for new capital for businesses which, in times o’: stability, would hardly be called efficient. In times of inflation, they can easily operate at a profit and, often, at a big profit.

When we consider the plight of those investors in bonds who are suffering because of the fall in the bond market, the first and obvious solution is to restore stability to the economy. It is no solution to suggest - as I have heard some honorable members advocate - that the rate of interest should be raised, and made variable from time to time. That would simply destroy the whole market for short-term investment. In effect, it would raise the interest rate for shortterm investment to the long-term rate, because nobody would put money into short-term loans if be could get variable rates of interest, and always cash his bonds at par at the higher rate. That is a point which honorable members on the Opposition side have overlooked in trying to find some alleviation of the position of bondholders.

Nor would it be a solution to resort to such a partial remedy as to provide that Commonwealth bonds should be acceptable in payment of Commonwealth estate duty. Even in this year’s budget, Commonwealth estate duty is expected to yield only £10,000.000. “ When it is remembered, that the States are seeking something like £200,000,000 of loan money each year for public works - and there seems very little prospect of reducing the amount - honorable members will understand that the Commonwealth estate duty is a negligible factor in stabilizing the bond market. Again, we are faced with the situation that any action that would prove effective in artificially maintaining the price of bonds at par would necessarily destroy the short-term bond market. So we arrive at the obvious conclusion that in reducing the inflationary demand for capital, we have the only short-term and long-term solution which will restore stability to the bond market and preserve the investments of the bondholder.

I do not believe that the raising of interest rates will induce, to any great extent, increased investments in Government bonds, because in times of inflation, if value is departing from money, there is not much inducement to a man to invest if, at the maturity of his investment, the capital that he receives back will be worth less than when he originally invested it. Again, we return to the proposition that stability in the bond market is part of our overall objective in reaching a stable economy. When we consider the means available to the Government to meet these inflationary pressures, we must at all times bear in mind that there are constitutional limitations to the authority of this Parliament. Suggestions have been made in many quarters that the problem of hire purchase should be tackled. With those suggestions, I heartily agree. One of the biggest single factors in this inflationary pressure is the enormous increase in hire purchase over recent years. When all is said and clone, when a man buys an article on hire purchase, his action is just as inflationary as if he had purchased that article with paper money created for that purpose.

It is a grave -reflection on the national thinking of the State governments that they have refused to face up to this fact. It may not be politically popular to increase the deposits required and to limit interest rates charged on hire-purchase goods but. at any rate, it would be the greatest single contribution that could be made to the stability of this economy. Nobody will suggest that hire purchase should be cut out altogether. That would be restriction of credit, which would be as disastrous as the unlimited expansion that we now have. But, at any rate, it should be kept within reasonable bounds, and members of the community should be given some encouragement to exercise discipline and restraint in regard to their expenditure on hire-purchase goods.

I believe that all the things that the Government has done will, in time, be acceptable to the Australian people. In ten years’ time no great damage will have been done to any person or the nation because we have heavily taxed the things that we propose to tax. Indeed, if we have taxed people to the point of their being deprived of the power to purchase beer and cigarettes, no great damage will have been done. But in ten years’ time, we- would suffer irreparable harm if we could not now build schools, hospitals and private housing and provide all the necessary services for Australia. I say that this budget is a stimulus and a challenge to the morale, the spirit and the discipline of the Australian nation, and I am confident that it will be recognized and accepted as such.


.- The Prime Minister (Mr. Menzies), in his usual inimitable style, recently presented to members of this House a statement on economic measures. Whatever we may think of the contents of that statement, we must admit that it was well presented. The Prime Minister used his public speaking ability to the full. He demonstrated, once again, that he is an excellent and plausible talker. But then, when we come to consider, we are forced to admit that most confidence men have the same distinction. This supplementary budget, which has been introduced soon after a general election, must be placed high on the list of political confidence tricks in the history of federation. Permit me to enlarge on that statement. In September, 1955, when there was no sign of a general election in the immediate future, the Prime Minister made an appeal, not only to the public generally, but also to many sections of industry, for restraint, in expenditure - a restraint which, he claimed, could do more to preserve the value of earnings by counteracting inflation than any other single factor. The softening-up process had begun.

At this stage, the only election which had to be held within twelve months was the election for half the members of the Senate. That election need not have been held until approximately May of this year. Within one month of the PrimeMinister’s statement on the economicaffairs of the nation, he had decided, not only to have an election for the Senatesix months before it was due, but also todissolve the Twenty-first Parliament of the Commonwealth of Australia eighteenmonths before its term had expired. He claimed that this step was necessary in’ order to co-ordinate the Senate and Houseof Representatives elections. If this step had been absolutely necessary, it could quite easily have been taken in May of this year. Being advised, however, that it might be necessary to introduce unpopular economic measures within a short period, the Prime Minister decided to use this fictitious excuse to hold a general election many months before its due date.

Perhaps that action, in the light of the political circumstances, was excusable. But, to make a policy speech in which no mention was made of the measures likely to be introduced and to deny on a number of occasions during the election campaign that he intended to increase taxation in line with the horror budget of 1951, were completely dishonest acts, both politically and morally. His denials and evasions during the election campaign were not his last.

Mr Turnbull:

– Who wrote that speech for the honorable member?


– He asked me not to tell, unless pressed. Now that I have been pressed, I will tell the honorable member that it was the Treasurer (Sir Arthur Fadden)

We find, in the course of the Speech of His Excellency the Governor-General, at the opening of the Twenty-second Parliament - a. speech which, is prepared by the Government - the following statement : -

The Prime Minister recently made an appeal’ not only to the public generally but to representatives of many sections of industry foi restraint in expenditure; a restraint which’ would do more to preserve the value of earnings, by counteracting inflation, than any other single factor. lib is not yet clear how far these appeals have been successful. But. my advisers want to make it clear that, limited as their powers may be, they will beprepared to use them to the full to counteract an inflation which threatens to inflict deepinjury upon our true prosperity.

That statement was made on the 15th February. On the 14th March, four weeks later, the Prime Minister introduced the supplementary budget into this House. In other words, it took only four weeks for the result of his original plea for restraint to become clear, for the necessary decisions to be made, and for the preparation of the supplementary budget and amending bills. It is painfully clear that every action of the Prime Minister and the Government since September last year was designed to hoodwink the Australian community. I must admit that such actions were successful, much to the regret and anger of the Australian people, as demonstrated by the result of the election in Western Australia last Saturday.

One peculiar feature of the situation has not yet been explained by any Government speaker. Why has the Prime Minister, and not the Treasurer, introduced the supplementary budget? Normally, the Treasurer would make a statement about the economic situation of the nation. What caused the change on this occasion? Was it because the Treasurer, who in the wildest nights of imagination could not be accused of possessing a political conscience, decided that it was too blatant even for him? I think that that could be the answer. Last night, when he spoke in support of the statement, he used only approximately 30 minutes of the extended time of 45 minutes that was allotted to him. His heart was not in his task.

I should like to take advantage of this opportunity to discuss a number of points contained in the statement. I refer, first, to the increase of interest rates, particularly in the light of the announcement that money on loan to building societies would be affected. In 1952 - this Government was then in office - the interest rate on loans to building societies was raised from 3& per cent, to 4^ per cent., an increase of £ per cent. After consultation, the building societies decided to endeavour to carry the increase by charging it to surplus funds and the interest account. Consequently, the repayments of most members of building societies were not increased, but the stage had been reached where action was needed io alleviate the position of some of the societies. However, as interest rates on those loans have now been raised from 4^ per cent, to 5 per cent., steps must be taken to increase the repayments. A society member who has borrowed £2,800 from a society repays the loan at the rate of £196 3s. a year. Looking at thu brighter side of the picture, and taking it for granted that the societies will increase repayments only to the degree of the rise of one-half per cent, in the interest rate, repayments will now rise by £14 a year, making the total annual repayment £210. That member is now paying instalments of £16 6s. lid. a month, but they will be increased to £17 10s. 3d., a rise of £1 3s. 4d. For many families who arc purchasing their homes, that extra charge could easily be the straw that broke the camel’s back. The point to be borne in mind is that homes are being purchased mainly by men who have wives and children to support. With the high cost of living, increases in the price of essential commodities, and the pegging of the basic wage, these people are being hit hardest all the time.

On previous occasions, I have mentioned the need to give consideration to parents by increasing child endowment payments. In passing, I again suggest that the time has arrived when this subject can no longer be neglected.

It is generally conceded that most of our present difficulties are caused by our adverse overseas trade balances. The Government’s approach to the solution of this problem has been haphazard, to say the least. Our volume of imports has been reduced on several occasions. Each time the same plan has been followed - an overall percentage decrease of all commodities, irrespective of whether they are essential or non-essential. Expensive furs, jewellery, toys and other nonessential items continue to be brought into the country. As far as I am concerned, there is no need to allow such goods into Australia while our overseas trade balances are in an unhealthy state. The problem confronting Australia will not be solved unless we place an embargo on all nonessential goods and allow the import of only machinery, equipment and goods that are needed to increase production or lower costs, or which cannot be procured in this country.

I shall quote two examples of stupid and unnecessary overseas buying. Recently, the Queensland Government required carpets and floor coverings. It called for tenders locally and overseas, and decided to accept a tender from an overseas firm although floor coverings of similar quality could have been obtained from a local manufacturer at a slightly higher price. In the other case, cement was required for use on construction work at Darwin’. A local manufacturer could have supplied the necessary quantity, ‘ and he had reserved space on a ship that was going to Darwin, but it was decided to obtain the cement from Japan because there was a slight difference in price. Many such examples could be quoted. “While State governments and the Federal Government needlessly spend money outside Australia, we cannot expect private individuals to refrain from doing likewise.

Another practice that is having an adverse effect on our overseas balances is the trafficking in category B import licences. A loop-hole in the administration of category B licences allows the licence to be switched to other goods within. the category, for example, from refrigerators to toys. Some flexibility must be allowed, but use of a licence to import an entirely different kind of goods should he banned. I understand that, because of trafficking in category B licences, the import of toys from Japan and elsewhere has increased tremendously over the last two years, even though the quota of toys has been severely restricted.

If the Government were determined to correct our present difficulties, it should have made a positive and not a negative approach to the problem. Surely its panel of advisers has learned something from the experience of Great Britain. Last year, Great Britain raised taxation for the express purpose of reducing the demand on resources and rectifying its balance of payments position. The result of the British Government’s action is now clear. There has been a falling off of the volume of personal savings, stock and share values have declined seriously, costs have risen, the trade balance has worsened, and the value of securities has dropped. On the other hand, Holland, which in 1955 reduced taxes to solve a similar problem, has now reached the stage where it can assert that its balance of payments is nolonger a cause of concern. A prominent Queensland economist, Mr. Herbert Nowotny, recently made a strong statement against the attitude of the Government. He said -

By draining the trading banks of necessary funds by excessive and disincentive forms »f taxation, our authorities have succeeded in slowing down the economy to such an extent that any additional cutting down of purchasing power or further inroads into bank fundsin whatever form of disguise - could be dangerous indeed.

An economy cannot be stable or static, lt is dynamic - even in the process of fluctuation. . . . lt is a mistake to speak of Australians having too much purchasing power - millions of them complain that they have far from enough - for this would simply moan that. Australians as a whole are enjoying living standards which are too high.

Such an assertion is just plain nonsense.

Mr. Colin Clark, an Australian economist who is now Director of the Bureau of Agricultural Economics at the Oxford University, has also criticized the Government’s proposals. The two gentlemen to whom I have referred have been joined, in their criticisms, by many businessmen and manufacturers. The Government’s policy has been condemned from all sides as being negative and unimaginative.

One other point that deserves mention is the promise of the Prime Minister to examine, later in the year, the defence vote and immigration expenditure. It is to be. hoped that, when the Government considers the defence vote, which, because of the failure of the services to spend their allocations, seems likely to be reduced, the significance of good roads as a defence measure will not be overlooked. If the vote is to be reduced, portion of the money should be allocated to the States for road purposes. The sum of £4,000.000 that is to be allocated to the States from the increased petrol tax revenue is not nearly sufficient to meet the requirements of local authorities for road purposes. Immigration is so important to the development of our great land that it deserves some sacrifices, and I sincerely trust that immigration will be maintained at its present level.

The Minister for Primary Industry (Mr. McMahon), in his speech last night, discussed the theory of demand inflation. The Governor-General, in his Speech at the opening of this Parliament, made mention of the same topic, when he said-

The truth is that the decline in our overseas balances is primarily the result of inflation at home. ‘ Private incomes and total purchasing power are at record levels. Our local production falls far short of satisfying the demands so established.

This theory seems rather strange when, day after day, we can read in the newspapers advertisements offering refrigerators, stoves, electrical equipment, furniture and furnishings on hire purchase without deposit. Surely this suggests that production of these commodities is exceeding demand, and that the manufacturers and retailers are searching for buyers. In discussions that I have had with various manufacturers, I have been assured that they are continually looking for new markets and have generally overtaken demand.

This Government is afraid of prosperity. It took action in 1951-52 to curb what it called inflation. It has taken similar action now. It adopts the policy that Australians must not have surplus money to spend. If this happens Government supporters cry inflation, and the Government takes immediate action to draw off excess spending power. Such an attitude is absurd, and the Government will need to review its policy if our nation is to continue to expand. [Quorum formed.’]

Minister for Customs and Excise · Evans · LP

– I wish, at the outset, to traverse some of the argu- ments of the honorable member for Lang (Mr. Stewart), who preceded me in this debate. First, I deny the charge that there was no mention of our economic difficulties in the Prime Minister’s policy speech delivered before the election on the 10th December, 1955. The subject was referred to quite definitely, and it was clearly stated that the Government would be obliged to take effective economic measures to deal with the problems that face the country. Indeed, this policy was made one of the issues of the election.

The second point to which I wish to refer is perhaps too insignificant to bother about. It concerns the mystery that the honorable member has tried to build around the fact that the economic statement was made by the Prime Minister (Mr. Menzies) instead of by the Treasurer (Sir Arthur Fadden). It is not unusual in this country’s history for important statements of this nature to be made by the Leader of the Government, as this one has been. Indeed, I recall other occasions in the past when the Prime Minister of the day has dealt with Treasury matters of this nature. To suggest that the Treasurer does not support these measures is nonsense, as .is quite apparent to any one who has had the duty of working with him and others on the preparation of these economic provisions. I can assure the House that the Treasurer’s contribution to these solutions has been second to nobody’s and in advance of that of most.

The third argument of the honorable member for Lang was that in a time of import licensing no luxury goods should be admitted to the country at all. When I had ministerial responsibility for import licensing, until the end of the March quarter, I tried to deal with these problems as effectively as I could. In two statements that I made -to the House I pointed out that the importation of less essential luxury goods had been cut by about 70 per cent, already, and that to cut them out altogether would deprive of their livelihood a lot of people who depend on the import of luxury goods. Nevertheless, the honorable member for Lang, who cries out about any interference with people’s prosperity, would suggest that these people, who do a legitimate trade in less essential goods, should be wiped out. Of course, one can make statements and give explanations, but one cannot force people to listen to or read them. Had the honorable member listened to the statements that I made on those subjects, he would have known the answers before making his speech to-night. However, I shall proceed with what I had intended to say.

In a long debate such as this, it is sometimes an advantage to re-state the issues of the debate, and I propose to do so. The issues, to my mind, are plainly these : First, what are the economic problems that face the country? Secondly, what are the steps that the Government has taken to deal with them; are they the most effective steps to take, and will they he successful? Those, I think, are the issues of the debate. As to the first issue, I think that the problems can be isolated and defined. As I see them they are as follows: - First, there is a trend to inflation, arising principally from our growing purchasing power, which, as the Prime Minister has pointed out, exceeds the capacity of Australian industry and production to satisfy at present. Secondly, associated with that, is a rising level of wages and costs, aggravated by the heavy demand for labour, amounting to a state of over-employment. The third problem is that the conditions of our external trade have become less favorable to us. We sell abroad more and more every month in a buyers’ market, and the prices that our products bring on the markets of the world have declined. Fourthly, at home we have a consumer boom accompanied by a strong tendency to invest in non-essential industries which give the investor high immediate returns. That fact is inflationary in itself, and it has tended to depress the bond market. Fifthly, all these factors in combination, and particularly the decline in our export income, have in less than six months increased the adverse balance of our foreign trade to serious proportions. The sixth problem is that, at the same time, Federal and State governments have acute budgetary problems. Under the present complexities of our federal system, this Government carries the responsibility to support the loan programmes of the States. At the same time, we face the need next year to redeem or reconvert the staggering total of £253,000,000 of war-time loans. Hence the serious budgetary problem that lies ahead, and the need to raise further revenue.

As the Prime Minister has pointed out, these are the problems of prosperity. In the long-term view, there is nothing in the Australian economy that is fundamentally unsound. There is nothing to suggest that, provided we are spared the scourge of war, our country cannot develop greatly in the years that lie ahead, to the increasing credit and prosperity of our citizens. We are a fortunate people.. We are the lucky inheritors of a bountiful and friendly land. We are a united and happy people. Even the … which divide government from opposition pale into insignificance when compared with the divisions that exist in other lands. Nevertheless, we must face our problems and deal with them. So far as the answers lie within our power, the Government can justly claim that it is doing so. But I ask the House to recall that the powers of the Parliament to deal with economic problems are very limited. Governments cannot, create prosperity; government action is no substitute for work. All that we can do is’ to try tocreate conditions in which people can work profitably and effectively. But even in. this task the powers of the Federal Government are very limited. For example, we cannot dictate to the States what we believe to be the true priority of publicworks. We can only ask them to confer and co-operate, a request which, in the past, has too often fallen on deaf ears. And while we carry the responsibility for the tight controls under which the banking system operates, we can do nothing about that quasi-banking field of hirepurchase finance. The law of hire purchase is solely a matter for the States, and they have proved, in my opinion, singularly unheedful of their responsibility..

If my review of the problems is correct, what we have to do is to aim, at the same time, to stop inflation, to check the rise in costs, to stimulate primary production to curb the consumer demand and dampens the excessive rate of investment, to restrict our imports until their cost is. balanced by our export earnings and, at the same time, to re-establish the bondi market and to raise considerably more revenue. There is no single answer te these problems. Indeed, the cure for some of them militates against the cure for the others. For example, import restrictions in themselves are inflationary,, as one must concede. Yet they have to be faced when we have a balance of payments problem which is immediate and! urgent, or else the value of our currency will go down the drain.

What the Government has done is to face each of these problems in turn and deal with them in the best way possible by means which least aggravate the others, or which may solve the problems as a whole. These are the steps we have taken : We have increased taxation on the non-essential consumption goods - beer, spirits, tobacco, jewellery and the like. These measures have been opposed by the Opposition on the ground that, as they increase the price of these goods, they are therefore inflationary. But that is not the case. As the higher prices tend to reduce consumption of these goods, more materials and labour will be available for more essential things. The price increases on these goods will have quite different effects from increases resulting from higher wages or higher costs of raw materials in industry. These tax increases are, I claim, deflationary.

Beer, spirits, cigarettes, and things of that sort may or may not be called luxuries according to one’s taste, but they cannot by any stretch of the imagination be called basic necessities of life. As incomes increase so does the proportion of income spent on these goods. The claim that increased taxation on these goods is an injustice to the people on lower incomes does not stand up to examination, ft is hardly a social injustice to increase the tax on the beer of a people whose consumption of that commodity - essential or otherwise, according to the way one looks at it - has doubled since before the war.

Perhaps more logical objections can be made to increases of tax on petrol and motor cars. They are undoubtedly antiinflationary, but at the same time they have some effect on transport and industrial costs. But I remind the House that the taxes on petrol and motor cars were designed to have a dual effect: To help reduce inflation and, at the same time, to dampen imports of all the components of motor cars and fuels which make up a very important proportion of our total import bill. One concedes that they will involve some small increase of the cost to industry, but there is no fiscal measure yet designed which ever had a single clearcut effect. Notwithstanding the importance of motor transport in industry, th” overwhelming bulk of motor vehicles in

Australia is used either for pleasure or in industries of a non-essential nature. Any resulting increase in the cost to the basic primary and secondary industries through these increases in taxation on petrol and motor cars will be much less than the increased cost of unrestrained inflation of which they are such an important element.

It has been said that these measures will affect the man on the land. Other Government speakers have described the very important assistance given by this Government to our rural industries, assistance which far outweighs this relatively minor additional charge. As to the motor industry itself, the most important single factor in the increased pressure on our balance of payments abroad and the inflationary consumer demand at home has been the rising demand for motor cars. As the Prime Minister has said, we are not in any sense hostile to the motor industry. Indeed, the reverse is the case. As I know very well from my short experience of import licensing, this Government has given very generous treatment to the motor industry. Every encouragement has been given to help to develop the industry in this country. The extent to which Australia now manufactures its own motor cars proves the success of this policy. However, we can no longer afford to maintain such a rapid rate of expansion in this huge industry when our needs are so varied. A period of more gradual growth and consolidation is really necessary.

The next of the measures to which I direct attention is the flat rate of increase of company taxation which is designed to restrain, for the time being, the excessive rate of business expansion. Business expansion itself is highly desirable and has a definite relation to national development, but the rate of expansion has exceeded the resources available and is definitely adding to inflation. The main criticism from the Opposition about the flat rate of increase of company tax has been that it falls on all companies alike. I have heard suggestions from honorable members opposite during this debate that company tax should be based on ability to pay. But company taxation is a complicated field. I direct the attention of the Opposition to the fact that the ownership of most hig companies in this country is spread widely over the whole population. The big companies are very widely held. It is the smaller companies whose ownership is more often dominated by a single family or a single wealthy individual. A steeper rate of company tax on the large companies might have the very opposite effect to that suggested by members of the Opposition who, apparently, are the champions of progressive taxation.

The next of the Government measures has been to permit a selective increase of bank interest rates, and this *is the most technical and controversial of them all. The measure has two main objectives. First, it aims at reducing inflation by making it more expensive to borrow, and secondly, it aims at diverting the credit resources of the community towards export and other basic industries and away from less essential purposes. I have no time now to go into this argument about bank interest rates at any length, but I point out that it is necessary to encourage investment of companies’ own capital instead of enabling them to rely on the relatively cheap money that they have been able to get from banks. Indeed, the country has had the examples before it in months gone by of companies whose capital was mostly raised abroad depending upon Australian bank finance instead of finding their capital abroad and remitting it to this country.

I have tried to examine these measures individually in the light of the purposes for which they were designed. I am confident that they are justified and will be effective. They are in the right direction and their effect on all sections of the economy can be closely watched and reduced or supplemented as it proves necessary. The Parliament and the people can rest assured that the Government will do those things.

Before I close, I want to say something on the special characteristics of the Australian economy. As a nation, we depend far more than most countries upon the marketing of our primary products abroad. The old saw that we live on the sheep’s back still retains a very great element of truth. In spite of the development of ou.r secondary industries, which help to balance our economy, we still depend greatly on market prices abroad. This always has been so, but circumstances have changed since before the war and new methods of dealing with this factor of our economy must be worked out. The Government is determined to maintain full employment and, at the same time, we must keep going our vast programme of national development in which is included the annual intake of thousands of immigrants. These things mean that Australia will inevitably live right up to the limits of its external income for so long ahead as we can see. On the other hand, our external income is bound to vary from time to time, so that it is hard to avoid the conclusion that difficulties with our balance of payments are bound to recur from time to time in the years ahead.

Thus, the problem confronting the Government results directly from the need to reconcile the objectives desired by all sections of the Australian community with the reality of our economic resources. The course must be to pursue these objectives as far as possible without unrestrained inflation, and this calls for constant attention and constant review of th, economy. At times in the past, the Government has been criticized for not acting quickly enough. In 1952, I made such criticisms myself, but since then the Government has kept abreast of events. When necessary, it has imposed restraints. Unpopular measures have been taken without regard to sectional interest and only in the interests of the welfare of the community. When possible, restraints have been relaxed, as import restrictions were relaxed in 1954. This is true of all aspects of Government economic policy, particularly of import licensing.

The Government has tried to make adjustments gradually so as to reduce to a minimum any disturbance in the business community. It is for that reason that the measures under discussion to-day were introduced at this stage, rather than that we should wait for the budget. I have referred to the expenditure on immigration and defence. At times like the present, the easy way out would be to cut one or other or both, and small voices are heard saying that therein lies the cure. But that would be the selfish and the unimaginative way out. If we are true descendants of our pioneering forebears, surely we can stand the passing discomfort of necessary restraint rather than abandon plans for our future to which our faith and imagination alike tell us we should hold.


.- The speech of the Minister for Customs and Excise (M.r. Osborne) was very wed read, but members on this side of the House do not agree with much of it. The Minister suggested that the powers of the Parliament to deal with economic problems were limited, but I hope to demonstrate in my remarks that when the Commonwealth, some years ago, had the opportunity to grasp those powers, or at least some of them, it failed to do so.

I begin by referring to the financial statement of the Prime Minister (Mr. Menzies), which he asked honorable members to accept as a comprehensive survey of Australia’s economic position. The Prime Minister, however, did not intimate that it was unusual, just before the close of. the financial year, to present a document dealing with the Government’s fiscal proposals for the new financial year. Obviously, he had arrived at certain conclusions, no doubt with- the assistance of expert advisers, and it is not for me to say that the calculations made, presumably by Treasury experts, are completely wrong. In view of the nature of these proposals it is the duty <f this Parliament, and particularly of the Opposition, to consider carefully the principles upon which they are based, and their effect generally on the Australian community. It is reasonable to assume that, long before this financial statement was presented to Parliament, the Government had some knowledge of the action it proposed to take. I suggest that some members of the Cabinet knew about it during the closing months of 1955. but the Government decided, for political rather than economic reasons, to engage in the fifth federal election in six years, and at no time during that campaign to acquaint the electors with its proposals to increase company taxation as well as to increase the vicious sales tax.

Mr Whitlam:

– And increase interest rates.


– That is so. Honorable members are becoming accustomed to financial statements from the Prime Minister from time to time, each one telling of a new economic crisis or giving a further description of other crises that have plagued Australia since the Liberal party-Australian Country party Government came into office. In the six years that the Government has occupied the treasury bench it has approached the economic problems of Australia from every possible ‘ angle - how to deal with the balance of payments overseas, the possibility of overseas borrowing, the effects of import restrictions, bank credit restrictions, and capital issues control. All these measures, with the exception of the last, which the Government abolished when it assumed office in 1949 but then re-imposed even if for only a brief period, have done nothing to remedy the economic ills which to-day are the concern of all Australians. The Government frequently boasted that it would resist the return of oppressive controls of all kinds, but it has become remarkably adept at instituting them. The Government has failed to honour its promises. In actual fact, its actions have been precisely the reverse of what it’ has promised. Were there ever more repressive controls than those now operating ? Even in war-time controls were not enforced with such rigid severity.

The Prime Minister defends the increases of indirect taxation on the basis that they are designed, as far as possible - and I use his own words - “ to reduce inflation”. Within only a few days of the Prime Minister’s speech, consumers had learned by unpleasant experience that the immediate result was to increase the price of a wide range of commodities that came within the categories which had been selected for a higher rate of sales tax. For example, the prices of tobacco and cigarettes have been substantially increased by the manufacturers, with the inevitable result that the inflation is being increased and not retarded - a fact which must be well known to Government supporters.

Australia is passing through a period of severe economic crisis. That- fact was made plain in the speech delivered by the Federal Treasurer (Sir Arthur Fadden) last evening. Among other things, he said -

But no one has sought to deny that “there is a real and serious problem abroad. No responsible critic has denied either that this problem is due mainly to excessive levels of demand within Australia.

There are several other facets to the situation, the most important of which is internal inflation, which is inflicting, and will continue to inflict, hardship upon pensioners, as well as upon other persons in receipt of fixed incomes. It will aggravate the feeling of hopelessness and insecurity among members of that by no means small section of the Austraiian community. A second factor is that the Australian loan market is in a hopeless position and, as a result, is disrupting the whole of our developmental programme and causing Austra]oan bondholders who, unfortunately, had placed their faith in this Government, losses of tens of millions of pounds. A third factor is the fall in Australia’s overseas trade balance. Between June, 1954, and December, 1955, this balance fell from £570,000,000 to £370,000,000. A fourth factor, of equal importance, is the continuation in Australia - twelve years after the conclusion of “World “War II. - of drastic bank credit and import restrictions.

I shall revert to the first of these elements, internal inflation. It is the basis of the Prime Minister’s economic statement, and naturally the most serious. I shall not attempt to suggest who is to blame, and I shall not ignore the fact that there have been some contributing factors; but even during the war the Labour party clearly foresaw the dangers of internal inflation in the immediate post-war years and asked the people to agree to necessary powers to control, even if for only a limited period, many of the factors which are the primary cause of our present economic problems. The political parties which now constitute this Government, in their lack of wisdom, advised the people to refuse to grant those powers. Now, of course, they most bitterly regret the advice which was given on that occasion for purely party political reasons, as we in this Parliament know only too well. Ministers naturally must regret the advice which was given on that occasion, because they must know that if the referendum had been carried they would not be absorbed to-day, for instance, with the problem of rising costs and prices, and would not even be faced with the problem of the extent to which the Commonwealth might go, within the limits of the Constitution, in controlling the manufacture of non-essential luxury commodities in our community.

Let me revert now to the second of the factors to which I referred - the- Australian loan market. I suggested earlier that the loan market is now in a hopeless position. Circumstances have caused the loss of tens of millions of pounds to Australian investors who placed their faith in this Government. The Australian loan market has collapsed for three reasons. The first of those reasons is the inability of this Government, during its six years of office, to halt inflation.

The second of those reasons is the lack of confidence which is apparent throughout Australia to-day. The third reason, I suggest, is the ‘ Government’s mishandling of the loan market generally. If the people had faith in it, they would be prepared to invest. They certainly have money to lend, and this Government should be able to fill its loans without difficulty. But earlier this year, the central bank withdrew its support by withdrawing from the bond market, with the inevitable result that long-term 3- per cent. £100 bonds fell to as low as £S5. That, in my opinion, was no more than a repetition of conditions in 1951, and again in 1952, when £100 bonds reached the all-time low of £82. The Labour Government never had any difficulty in persuading investors to subscribe to loans. All the loans floated by the Curtin and Chifley Governments were filled; many of them were over-subscribed. That position also applied on the loan market for a time after the present Government assumed office. The ruling rate was 3$ per cent. Then early in 1951, for some obscure reason, this Government decided to increase the interest rate from 3£ per cent, to 3’f per cent, and, thereafter, the whole position in connexion with government loans changed drastically. Naturally, all previous issues of bends began to lose money on the stock exchanges of Australia. I suggest that the real reason for the present position is not that our country is bankrupt; it is merely this Government which is at fault. Deposits in savings banks are at an alltime high level. They are available for investment. All that is required is a restoration of public confidence, but unfortunately, those savings will never be available while the present Treasurer continues to manipulate interest rates under pressure from this Government and its financial friends.

Sitting suspended from 5.59 to 8 p.m.


– Prior to the suspension of the sitting for dinner, I dealt with the Australian loan market generally. I pass now to the real reasons for the Government’s hasty measures, by which it expects to obtain an additional £57,000,000 of revenue during the current financial year and a further £115,000,000 during the next financial year. Every one acknowledges that the need to increase revenue substantially is due entirely to the collapse of “the Australian loan market. The Government proposes, in the first instance, to increase collections of the sales tax by increasing the sales tax on non-commercial vehicles from 16ff per cent, to 30 per cent., and on commercial vehicles from 12^ per cent, to 16$ per cent., with a general increase to 25 per cent, for many important basic consumer commodities. No one believes, as the Prime Minister seriously contends, that increased sales taxes on motor cars additional excise duties on beer, spirits and tobacco, and an increase of the petrol tax will make any notable contribution to the halting of inflation. Inflation cannot be cured by increasing costs and prices. Such action merely aggravates the position by increasing costs and prices.

I have always taken the view that this Government could be expected, in view of its election pledges, to remove immediately what the Australian people regard as a completely unjust form of taxation - the indirect taxation levied in the form of the sales tax. The total collections from the sales tax now amount to £108,000,000 annually, an increase of £70,000,000 since this Government took office. As I remarked earlier, Mr. Deputy Speaker, this is indeed a remarkable record for a government that was elected to office a little more than six years ago on a pledge to reduce taxation. The Government must realize that inflation, which to-day affects all sections of the Australian community, cannot be held in check by increasing prices. The Australian Labour party has always approached this question on the basis that taxation should be levied according to ability to pay. That is the basis adopted in all democratic countries.

I pass now to another proposal outlined in the Prime Minister’s economic statement - the proposal to increase company taxation. I suggest that, if the Prime Minister had been prepared to develop to its logical conclusion his argument in relation to company taxation, he would have admitted that, in the light of the substantial prosperity that companies have enjoyed in recent years, the excess profits tax that he undertook to introduce in 1950 is now long overdue. Instead of imposing an excess profits tax, the Government proposes merely to increase company taxation by ls. in the £1 for all companies, without proper regard for the nature of the company or for the fact that the excess profits to which I have referred are confined to no more than 30 per cent, of companies. In point of fact, approximately 25 per cent of companies have been able to make more than ‘half of the total profits. I suggest that these monopolies will have little difficulty in passing the additional taxation on to the consumers.

I do not intend to traverse all of the matters mentioned in the Prime Minister’s statement. In any event, the limited time available would not permit me to do so. I should like to say, at this juncture, that the Opposition’s attitude to the Government’s proposal to increase the bank overdraft rate from 5 per cent, to a maximum of 6 per cent., with an average of 5$ per cent., has already been clearly defined. The Leader of the Opposition (Dr. Evatt) has effectively shown that this proposal will benefit no one except the banks. In my opinion, it will undoubtedly place one more burden upon the primary producers, who have suffered in the past from increased taxation, bank credit restrictions and the general contraction of purchasing power.

In conclusion, I should like to say that this debate began on the assumption that the Government’s fiscal proposals were intended to halt inflation. That pretence lasted no longer than it took the Prime Minister to make his statement, and Government supporters who spoke subsequently admitted frankly that the real purpose of these proposals is to provide a supplementary revenue fund that will bring into the Treasury an additional £57,000,000 in the current financial year - the very financial year in which, only a few months ago, the Treasurer brought down a budget that supposedly guaranteed for the nation a revenue surplus of £48,500,000. The Government has failed (to honour its obligations to both the Parliament and the people, and, if the recent general elections in Western Australia can be taken as a guide, it no longer enjoys the confidence of the people.

Prime Minister · Kooyong · LP

Mr. Deputy Speaker, I do not propose to reply to the general debate. It would be wrong for me to do bo, because I should conclude the discussion. Therefore, I propose to take the opportunity to speak to the amendment, upon which my remarks will be concentrated. The amendment refers to the increasing of interest rates on bank overdrafts. In other words, the Opposition has selected interest rates as the field of battle for this purpose. As I think many things might well be said on that matter, I take this opportunity to say, not all of those things, but some of them.

The first thing I want to say is that the question of interest rates is not abstract. It is not to be resolved by reference to text-books. It can be determined from time to time only in the light of the existing circumstances. If any one of us in this House had put to him an abstract question about interest rates, the reply would be, “ T should like cheap money “. Who does not ? Whether money is to continue to be cheap or whether it will become dear depends entirely upon the circumstances of the nation at the time. I mention that point, sir, because, in other countries, notably the United Kingdom, the interest rate has been regarded as a powerful antiinflationary weapon. Only in January of last year, the bank rate in the United Kingdom was increased from 3 per cent, to 3 per cent. The bank rate is the bank discount rate. It is a very appropriate instrument in a country where there is a large short-term money market. We have not the same thing in Australia. We have to deal with overdraft rates, deposit rates and the long-term bond rate. Only two months after the bank rate in the United Kingdom had been increased from 3 per cent, to 3J per cent, as a counterinflationary measure, it was raised again to 4-J per cent, while I was in London. More recently, it was increased from 4$ per cent, to 5£ per cent. In other words, in a period of fourteen or fifteen months, the bank rate in the United Kingdom wag increased from 3 per cent, to 5£ per cent. I do not imagine that any one will suppose that the authorities in London are innocent of financial theory and practice. The increase of the . bank rate in the United Kingdom was designed as a definite counter-inflationary measure, because the United Kingdom has its own difficulties with the balance of trade and internal inflation. I mention that, sir, because it ought to be understood as widely as possible that the price of money, which is the interest rate for money, must, like other prices, be affected by the general economic position. The idea that the price of money can remain constant when every other price in the price structure of the country does not remain still is one which does not bear any examination.

The other night my colleague, the Minister for Primary Industry (Mr. McMahon) made a speech - I did not have the fortune to hear it, but I have read it - a lucid and convincing speech on these matters, and if I speak to-night it is not merely to endeavour to better, if that were possible, what somebody else has done, but because I believe that at this stage in this debate the head of the Government should offer some considered view on the matters raised by the amendment. Now, sir, . whatever we do about interest rates, whatever we do about taxation, whatever we do about any of those other matters which were dealt with in my statement to this House and to the country, we must endeavour to fit them all into one pattern. I have endeavoured from first to last to make it clear that we cannot solve inflation by one blow from one weapon. “We must adopt a series of processess, all designed to produce the desired end, and therefore the over-demand for capital which has been referred to in this debate is only one of the over-demands, that is to say demands exceeding supply, which have caused the present inflationary movement.

Let us take the demands made by governments. One speaks about these with some diffidence, because rarely does the full picture reach the public, but let me try to say something about demands by governments. In the financial year 1954-55, the last concluded financial year, the loan programme on government account, that is to say Commonwealth and State, or State plus the Commonwealth housing allocation, because all the programme otherwise goes to the States, was £180,000,000. We had a pretty successful year on the loan market. We succeeded in raising on the loan market £127,000,000. The States themselves had domestic raisings of a little over £8,000,000 and in the result the Commonwealth contributed from Commonwealth sources between £44,000,000 and £45,000,000. In the same year, semigovernment borrowings or local government borrowings, which had been set at a target of £90,000,000, in fact brought in £83,000,000, so that they fell short of their programme by £7,000,000. Now, sir, it is quite true that that meant that there was a deficiency in terms of cash, if the works programmes were to be carried out, of something like £50,000,000, but on the whole, and having regard to our experience, it was not a very bad year. But in this current financial year he would be an absurd optimist who supposed cither that the loan raisings by government and semi-government or local government would be so large, or that the Commonwealth contribution to the deficiency would be so relatively small as it was last year. I say relatively ato all, because after all, between the two things it was of the order of £50,000,000.

Now, sir, there are other aspects of this matter. The demand for capital - and this is the problem that has the most intimate bearing on the interest rate - is not only in the government area but in the private area. I have indicated that in terms of governments, “Federal and State, the demand made for capital on the market has been £1S0,000,000 last year and £190,000,000 this year. These are not violently extravagant figures when we compare them with what the programme was three, four or five years ago. But while all that has been going on, there has been, for reasons that are mostly highly satisfactory, an enormous increase in the demand for capital in the private sector. I do not want to weary the House with figures, but in the field of private investment it is proper to say that what we would rightly regard as capital expenditure in the year before last was of the order of £725,000,000, and in the last concluded year £833,000,000. These figures are difficult to carry, and they may not on the face of them convey very much. Therefore, perhaps, I should put the position more graphically to the House by saying that in the last year or two we have been endeavouring to raise and spend for capital purposes in Australia twice as much as we have been currently saving. That, I think, is not an unfair way in which to put it, and that means, of course, that the demand for capital, the demand for money, has so far exceeded the availability of capital that the whole pressure in all this period has been an upward pressure on the cost of money, and therefore, an upward pressure on the interest rate.

It is, I believe, perfectly clear to anybody who studies these matters that the price of money would have risen very, very sharply in the last year or two if it had not been for two circumstances which have tended to hold the interest rate down. I repeat that, because I believe it is not sufficiently understood that this is not a time, this is not a set of circumstances, in which a government decides to force up the interest rate. It is a question of whether we can any longer hold it down to the level that it has been at for the last few years. What has held the interest rate down ? The two major matters have been these: First, the Commonwealth Bank, pursuing its functions as a central bank, which are great and important functions in any modern community, has gone into the bond market and it has bought and occasionally sold bonds. I think it is a misfortune that the function of a central bank is not more generally understood. Why do we have a central bank ? We have a central bank, not just as a clearing house, but as an instrument by which we may exercise control over the general credit and monetary structure of the country, not an absolute control but a powerful influence. If, for example, it turned out that monetary purchasing power was too low in circumstances of depression, it would be correct central bank practice to go into the market and buy, and thereby inject additional purchasing power into the market. Correspondingly, if the circumstances were inflationary, then any competent central bank in the world would feel that the right course was not to be a buyer creating new money, but a seller withdrawing money.

The Commonwealth Bank has, I venture to say, behaved with great spirit and decency in this matter. It has, over the last twelve months, been a substantial buyer of bonds on the market, so substantial that until quite recently its buying was quite abnormal in quantity. In fact, it reached the stage where the Treasurer (Sir Arthur Fadden) and I, discussing this matter, began to wonder whether the market was genuinely going to produce more than it was receiving through central bank action. I do not need to say to honorable members who are responsibly placed in this country, that no central bank worth its salt could continue such a process, because the central bank knows just as well as any of us that there is an inflationary pressure on. Therefore, it has acted on that knowledge during the last few weeks. It knew, as honorable members know, that if it proceeded to pour new money created out of central bank credit into a community which already has more money supply than it has goods to buy, all it will do will be to increase the inflation, or, as I said somewhere quite recently, to pour petrol on the fire.

Now, I have dealt with the central bank. The central bank bought in the market; it kept the bond market, largely by its own efforts, at roughly a 44 per cut, level. It came to the conclusion finally - and I heartily agree with it - that it could not go on doing that with out pursuing an inflationary policy which was in the teeth of the proper policy of the country. In the result, with a normal volume of buying, the effective bond rate on the market has risen from per cent, to something of the order of 5 per cent.

The second thing which held the interest rate down was the agreement between the central bank and the trading banks that deposit and advance rates should be held. They have been held for a long time, advance rates broadly at 5 per cent, and the deposit rates, as they are now, at 1 per cent, less having regard to recent changes. I wonder if we might have been expected to say to the trading banks, “ Look ! Whatever happens to the bond rate, you must keep your deposit rates and your advance rates where they are “. I wonder if anybody supposes that that could be done ! After all, we begin with this: The abnormal buying of the central bank, which is in a broad sense, though not a slavish sense, the instrument of government in the country, obviously could not continue for the reasons I have stated, because it would be grossly inflationary. What about the trading banks ? Well, the bank rate, the overdraft rate, has for many years past ‘had some relationship to the bond rate, and it has usually. had a differential between it and the bond rate. It would be absurd to think that the long-term bond rate and the overdraft rate ought to be exactly the same because we are dwelling in two entirely different worlds of security. Theref ore, the banks, in my opinion, have had a powerful case to support the view that, as the long-term bond rate on the market effectively tends to rise, their overdraft rates should also rise.

There has been another factor, and I mention this because it ought to be well understood. The banks themselves have said that not only should their overdraft rates rise - with which we entirely agree - but that their deposit rates - what they pay for their money - should rise in proper degree. Not only because otherwise it would be merely presenting new profits to the banks, but, much more importantly, because they cannot compete to-day with the people who are inviting deposits for hire purchase, if the bank deposit rates are kept down to an absurd and artificial level. Therefore, this is something that bore upon a great competitor for government funds, or for what otherwise would be government funds, and also on the sound structure of the banking system in Australia. I do not want to repeat what I have previously said, but I shall permit myself to say, by way of an aside, that the Opposition has had me completely puzzled in this matter because it appears to have the somewhat naive belief that the cure for inflation is more money, whereas I say, m the most naked possible terms, that one of the cures for inflation - not the total cure, but one of them - is less money, unless you can get so many more goods that the full supply of money that you have will find immediate use at uninflated prices.

There are one or two other things I ought to say about bank overdraft interest. I do not suppose we are to be blamed for it, but we do rather tend to regard ourselves as a small and isolated community immune from what happens in the rest of the world. Therefore, matters like this interest rate change, which are the very commonplace of national economies in great countries overseas, come to be whipped up in Australia as something novel and disastrous. Therefore, I should say this: Cheap bank accommodation - and I repeat the word “ cheap “ because the overdraft rate in Australia has meant cheap overdraft money in Australia for years - means several things. “First of all, it means that we have - and we know this from experience - a gross over-demand for overdraft accommodation in private business capital expenditure. If honorable members look back over some of the great business expansions, or even “ takeovers “, that have occurred in the last few years, they would be interested to see to what extent the banks have been looked to to provide part of the capital, part of the purchase money, on overdraft. The pressure on overdraft accommodation in the trading banks has been enormous, as any chief manager of any trading bank could tell us. In the second place, there has been another matter which has exhibited itself. We have, I am happy to say, received into Australia a substantial amount of overseas capital for private investment. I am not talking now about public borrowings, but an inflow of capital which I hope and believe will continue, provided we arrest inflation. But there has been quite a marked tendency on the part of the people bringing money into Australia to invest here, to transfer their profits overseas because they could get a higher effective interest rate on them. That has been quite a marked tendency. In other words, for practical purposes, our interest levels have been lower than the levels in other countries and, therefore, it pays, handsomely to move funds into other countries in order to get the benefit of shortterm or long-term interest rates.

The third matter to which I have referred is the low interest rate on bank deposits; that is to say, the interest rate that the banks pay to the people who deposit money with them. Those low interest rates have been entirely noncompetitive with hire-purchase business. In the result, as I hope honorable members will recall, money has been flowing into hire-purchase finance transactions, in which there is no risk worth talking about, at the rate of something of the order of £50,000,000 a year. If honorable members will compare that with the paramount and legitimate requirements of governments and great semigovernment organizations for urgently needed public works, they will see how imperative it was that there should be some restoration of a competitive position between the trading banks and the hire-purchase companies.

The fourth factor that I mention - I merely mention it - is this : The Australian trading banks have had their problems in the last few years. One of their problems has been to maintain a proper degree of liquidity in their financial position. You cannot have money draining out on advances and perhaps only a quiet movement in deposits without the banks ultimately coming to the conclusion that they are not liquid enough, and that they must, by some device or other, increase their deposits or, by more painful devices, reduce their overdraft advances. The raising of the deposit rate for the banks will, in fact, go a long way towards correcting that position and ensuring a greater stability in the advances policy that they can pursue.

I am sorry to be tedious about that. These are supposed to be technical matters. I hope that honorable members do nOt think they are, because they are matters that we all ought to understand in the broad sense and be able to explain to the people of Australia. The moment they are understood in that fashion, what do we find? We find that we have a choice. We can allow interest to rise, or we can keep it down by inflationary means. That is the choice. We can keep it down by the central bank printing millions and millions of pounds of new currency every year to keep the bond market in what was alleged to be a state of health at 4£ per cent. - an inflationary process - or we can say that we will allow the interest rate to rise, because what follows the course of nature will, in the long run, be rather healthier than battening down nature until an explosion occurs.

On that matter, I venture to say that the Government has adopted a policy which is so reasonable that I could have understood it if we had been attacked for not being severe enough. But I cannot understand how we can be attacked for doing too much. The overdraft rate was 5 per cent. What is it now? It is a maximum of 6 per cent., with an average of 5-£ per cent. We have taken all the precautions in the world. Honorable members need not worry. As the Treasurer explained in his speech last night, all these steps have been taken. If you have an average of 5^ per cent., it is quite clear that you will have some transactions at 5f per cent., some at 5i per cent., some at 6 per cent., and perhaps some at 5 per cent. - the general principle being that the more favorable rates of interest, should be available to the productive and export industries of the country.

I cannot imagine that any serious critic would say that an increase of the average overdraft rate of i per cent, was something disastrous to any section of the community. I said that we had a choice. We could have let it go. During the last few weeks. I have sometimes been tempted to think that some of our more acidulous critics would have been happy if we had let it go. “ Popularity at all costs. boys, Let it go ! “ If we had let it go, by the find of June of this year we could be pro perly condemned for having allowed the whole financial structure of Australia to get into difficulties. The whole purpose of this exercise is to avoid difficulties. That is the whole object of this thing, in my own mind. My own confirmed and strenuous belief is that by doing these things we will preserve the prosperity of this country. We could, of course, have continued the over-demand for bank credits. By our inaction, we could have encouraged the inflationary creation of new money. We could have witnessed, calmly, rising costs and prices. We could have gone on, I suppose, seeing a growing pressure of demand for imports into Australia.

There is one point about imports which bears on this interest problem and which deserves emphasis. I am speaking entirely to the amendment, as my duty is. We have, by various artificial orders, excluded from Australia - what? - perhaps £200,000,000 or £300,000,000 of imports in any one year. But I hope that nobody in Australia believes that that has got rid of £200,000,000 or £300,000,000 of purchasing power. It has done exactly the opposite. It has prevented that volume of purchasing power from reaching out to imports, but it has diverted the whole volume of that purchasing power to goods and services available in Australia. In other words - I say this quite frankly - import restrictions are in themselves inflationary, because they reduce the supply of goods available to be bought. My Government would never have dreamed of going in for import restrictions if it were not for the stern necessity to preserve our overseas funds and avoid a forced depreciation of the Australian currency on the international money market. These are things you must do. You do not like them, but you must do them. The main thing for us to remember is that, much as they do to save our international reserves, they have a correspondingly adverse effect internally by transferring so much more purchasing power to what is available to be bought in our own country. In other words, import restrictions do not destroy demand ; they merely divert demand.

That emphasizes - it does not subtract from - the problem of inflation with which we have to deal. I am not going to occupy the time of the House - indeed, I should be out of order if I did so - by referring to the other- steps we have been taking. I am confining my remarks to the subject of the amendment - the interest rate. You cannot consider the interest rate just in the light of what you would like it to be. We have been compelled to consider the interest rate as one of those matters which, used in conjunction with others, may tend to damp down inflationary demand and, therefore, tend to stabilize prices and costs in Australia. 1 do not think anybody could reasonably say that monetary policy in Australia in recent years has been illiberal. The plain fact is that in the last two years bank advances in Australia have increased by £260,000,000. Our object is not to cut back, but to stabilize and level off, because we believe that a period of stability in these matters will be of profound and permanent importance to Australia.

There is one other matter that I should like to mention and then I shall have done. The most vocal criticisms of any policy often turn out to be the most superficial. I have been disappointed in this case at the non-appearance of profound and penetrating observations on these matters. It is so much easier to play around on the surface, and of course one of the superficial observations that is made about interest rates makes an instant appeal to a great many hundreds of thousands of people in Australia who want to live in homes. An appeal is made to them by saying, “ This is forcing up the cost of that house that you want to build “. It is so superficial as to be absurd. It is quite true that the interest rate will rise by some small fraction - a very small fraction indeed, having regard to the policy that we have announced. It will either rise not at all, or by perhaps a quarter of one per cent. Certainly it will be well below 5-J per cent. What is the purpose of this policy?

What is the purpose of the whole policy that we have announced? It is to arrest inflation. It is to get to the root of these matters - over-demand for labour, overdemand for material, and the demand on one side far exceeding supply on the other.

Honorable members all know perfectly well that there is nothing that steps up the cost of building a house half as much as a gross over-demand for labour which cannot be got ; a bidding up for it on every market, and a shortage of material supply which tends to push up the price of the materials going into the house. Every practical man in this House knows that perfectly well, and he will agree with me when I say that if as the result of, not only interest changes, but also all the other unpalatable measures that we have taken, we arrest this inflation as I firmly believe it will be arrested, we hold our oversea.-“ reserves, we restore our balance of trade, we get back from this momentary disturbance onto what I am sure will be the even keel of prosperity, the theoretical additional cost of interest on a home will fall far short of the net reduction in the cost of building it in a community in which inflation is ended and ridiculous competition at fancy rates for labour and materials has been brought to a halt. These are the great matters that concern the minds of people. I do not believe for an instant that my electors or the electors of any other honorable member will sit up at nights studying the pure economics of this matter. I have had to do a great deal of that myself during the last 25 years. But what I believe they will understand is that we are not speaking out of theory; that we have long experience of these matters. We have not confined ourselves to one stroke. We have produced fifteen different strokes in order to chastise and defeat inflation, and if they succeed, as I believe they will succeed, the only comment that will be made in Australia in a year’s time will be that the Government was extraordinarily moderate in its outlook on interest; that in point of fact, what appeared to be a burden turned out to be one of the chosen means of lifting a great bur-den from all the people.

Motion (by Mr. Harold Holt) - by leave - agreed to -

That the maximum period for which the Leader of the Opposition (Dr. Evatt) may speak on the amendment shall not exceed 45 minutes.

Leader of the Opposition · Barton

– The speech of the Prime Minister (Mr. Menzies) is in form limited to the question of the increase in interest rates, but quite correctly in dealing with it he has covered all the fields in which interest operates. In particular, he dealt with the position of the bond market. As the bond market - the market for securities issued by the Commonwealth - was the place in which the first move occurred which foreshadowed an imminent increase in interest rates generally, including the overdraft rate, the Prime Minister attempted to justify action taken by the Commonwealth Bank and by the Government in withdrawing sufficient support of the bond market to result in the position that the yield to persons purchasing on the bond market increased from 4i per cent, to 5 per cent. That meant, of course, a further fall in the price of gilt-edged securities, some of which fell to an amount below £90 per £100 bond. When the right honorable gentleman speaks of the home builder, of the little man to whom he claims this increase in the rate of interest will be of some ultimate advantage, I cannot see the point of his argument. The right honorable gentleman should know that the Government’s failure to support the bond market has resulted in a fall of the market value of bonds issued on the security of the credit of the Commonwealth to hundreds of thousands of investors. This means that the ordinary person, whether he is an exserviceman or not, who wants to get a home is unable to put in his bonds at anything like their face value as a deposit. As for the idea, that the increase in the overdraft rate, which is the direct subject of the amendment, will help the home builder, the Prime Minister admits in fact that it will not do so. The honorable member for Reid (Mr. Morgan) mentioned in a question to-day a statement made by a representative of the co-operative building societies to the effect that increases are already imminent. What it will mean is that it will be so many years more before a home becomes the property of the Australian citizen who wants a home for his family. In many instances a prospective purchaser may not be able to go on with the matter at all. The Prime Minister should consider these human factors when he talks about the rate of interest and calls to aid - just imagine it in 1956- the discarded and discredited quantity theory of money - more credit and that affects the interest rate ; put up the interest rate and that will have an automatic effect upon credit. The right honorable gentleman has referred correctly to certain facts, but they lead to the opposite conclusion from that which he wants the House and the country to draw.

The right honorable gentleman was quite correct in saying that the question of the interest rate depends on the circumstances. They may change. But that is not a matter for guessing and trying out on the people. Is there not a principle te be applied in this developing country, which is not necessarily the same as that applicable to Great Britain or the United States of America, because in Australia development must take place if we are toprogress? Australia cannot mark time. It must go ahead, or else it will go back. I say that the cheap money policy which the Labour party introduced into this country has been a success. It has been deliberately changed, not because it was failing, but because it was succeeding. It is true also - and the Prime Minister makes this point - that the pressure by great concerns for overdraft accommodation has been enormous in the past two years. In the past two years, since the 1953 amendments of the Banking Act, the power of the Commonwealth Bank, the central bank, to control the position has diminished. Dr. Coombs, the Governor of the bank, has complained of the failure of the private trading banks to observe a request to restrict credit. That is absolutely correct. Consider the position of these concerns. Why, of course the pressure is enormous ! But it does not matter to them, Mr. Deputy Speaker, if the interest rate goes up 1 per cent, or 2 per cent. They will still pay it. They will deduct the payments from their assessable income for tax purposes, and continue to profit at the expense of the people of Australia. That is undoubtedly the position. The Government will not face the question of profiteering. Almost all honorable members on this side of the House have referred to the Prime Minister’s pledge to introduce an excess profits tax - not a uniform tax on every company. Every company, whether it be powerful or weak, or whether successful to a great extent or hardly successful at all, has to bear the burden under the Government’s proposal.

Sir Arthur Fadden:

Sir Arthur Fadden interjecting,


– I am dealing with the question of profiteering in relation to the interest rate, and I say that it will not matter a fig to those concerns that the interest rate goes up by 1 per cent. What kind of way have we been treated by the Treasurer, who could not contain himself a moment ago? He came down, and because he knew that my statement that the increased profits of the trading banks would be £1,250,000 as a result of the increase of overdraft rates was true, at the last moment, and because of public objection he said “ We will reduce the rates on the statutory deposits “. That is a perfectly good thing to do, and I am not criticizing it, but the Treasurer never intended to do it until he realized he was forced to do it. Then the Minister for Primary Industry (Mr. McMahon), when I quoted the figures at the beginning of my speech-

Honorable members interjecting,


-Order! The House will come to order.


– I say, Mr. Deputy Speaker, that at the very commencement of my speech I asserted that they were correct figures, and that the private trading banks would, as a result of the increase of the overdraft rate, make an additional profit of approximately £1,250,000 ; then the Minister for Primary Industry, whose speech has been praised by the Prime Minister to-night-


– Hear, hear!


– I wonder if the right honorable gentleman read it at all.

Mr Menzies:

– I read it all.


– The Minister for Primary Industry said that the figure was not correct, but it is now proved to be correct, because the financial writers, in discussing it, have all admitted that it is an understatement. Then, of course, the Government, realizing that the people, not liking its proposals, and liking, least of all, the increase of interest rates, have a strong objection to the private trading banks adding to the already enormous profits that they have made in the last few years - greater profits than have ever been made in the history of Australian banking - has said, “ Let us see. Can we have some temporary measure that will make it look better ? “ I ask the country and the House to watch closely what is done in the future in relation to that.

I come now to the Prime Minister’s next point. He said, in effect,. “ We must do something “ - he was very emphatic on this - “ to have competition between the private banks and hire-purchase investment “. Why, the interest rate charged by these investing companies in relation to hire purchase: - and I am not speaking, for the moment, of the hirepurchase transactions themselves, between a hire-purchase company and the public, but of the- financing of hire purchase - has led to this kind of business becoming one of the most profitable trades, or sub-trades, of the private banks.

Sir Arthur Fadden:

Sir Arthur Fadden interjecting,


– Order ! The House must maintain order.


– The Prime Minister was heard in silence.


– I shall rebuke the Treasurer, but I must also rebuke honorable members on my left.


– The hire-purchase transaction is a fair test of the Government’s sincerity in this matter. The Prime Minister, in his statement last September, rebuked the hire-purchase concerns for charging such huge rates of interest. What has been done since then ? It was said, first, that some action would be taken in conjunction with the States. Our proposal was to give the Commonwealth Parliament legislative power to deal, not only with interest in relation to banking, but also with interest in relation to hire purchase or any other transactions. It will come to that. The Government has no plan for dealing with inflation. Is that not the truth of it? Look at the situation three years ago! The Government got rid of all controls, as it called them. Having no power to deal with the economy of Australia as a whole, the parties now in office were successful, as an opposition, in defeating the Labour Government’s proposal that this Parliament should have the power to fix prices and charges throughout Australia. The defeat of that proposal at the referendum was a decision obtained by the grossest misrepresentation to the people by the parties which (then constituted the Opposition, because they said that if the power was> not resident in the Commonwealth then, owing to the fact of further supplies, prices would fall. That is the period from which the great inflation commenced. It dates from the refusal of the people now constituting the Government to let this Parliament have the right, whatever government happened to be in power, to (take direct action to control prices in this country. The idea that the increase of interest rates is a counter-inflationary move is, in my view, and, I believe, in the view of everybody who has studied the matter, absolute nonsense and, in many respects, it will have very evil effects, lt stems from the recommendation of eight economists - I am not sure whether they were leading economists as some say, but at least they issued the original statement. One of the proposals was a rise of interest rates. In order to permit monetary policy to become effective, the bond market, they said, should be unpegged. In other words, without any regard to the moral duty of the Government in relation to the small investor who made his contribution to the war effort or the post-war effort of this country by purchasing bonds, these people made the cold-blooded proposal that support of the market should be withdrawn. I entirely deny the assertion of the Prime Minister in relation to this matter. Tt is not a question of purchasing commodities that are unnecessary, but of supporting a market of marginal operation at all times because, if the Commonwealth Bank, as it should have done, had continued to support the market, there would have been no more speculation, the people would have held on to their bonds, and there would have been nothing to purchase. But the Government withdrew support from the bond market. If it did not manipulate the market, in my opinion it was a party to the manipulation of the market. ‘The whole story is told in the account, by the Governor of the Commonwealth Bank in his lecture on the development of monetary policy in Australia, in 1954, in relation to the previous proceedings which took place in 1 952, when exactly the same thing happened - gradual withdrawal of support. But who was to know that that would happen? If the Government had said that it would stand by the bondholder so that he could retain his bonds, and could rely on the Government, there would have been no call for bondholders to rush to get rid of their securities because they wanted to be sure that they would get something for them. There would have been no need for the bondholder to sell his securities as a result of propaganda. The bondholder began to take fright. If he wanted money to build a home or for some other purpose, he was eager to sell his bonds before their value further declined. What happened, in fact, was a scandalous thing which should not be allowed to happen in this country.

I shall put before the House again the proposal I outlined in the earlier part of ‘this debate, which is that there must be & united attempt, a non-party attempt, to build up the loan market again, to restore the confidence, not of the Government in the small investor, but of the small investor in the Government. It is the confidence of the small investor in the Government that has been lost. It can be restored if we adopt the system which has been enormously successful in the United States of America, and which was very successful during the war in connexion with war savings certificates’ - that is to make it clear that every contributor to bonds will be entitled to the full value of his bonds under the conditions of the bonds, and that the value of bonds will be quite safe from market juggling. I believe that the manipulations of this market, if examined properly, would show that arrangements exist which axe now almost regular, under which, at a certain time, the Commonwealth Bank makes up its mind that it will support the market no longer, with the result that there is a rush on the market and great losses are suffered, amounting to millions of pounds, by the ordinary Australian who has been patriotic enough to invest in bonds. I do not think, judging by his speech to the House last September, that the Prime Minister could have the slightest confidence that that proposal will have any counter-inflationary effect. The Opposition put its proposal forward not because we regarded the matter of rates of interest as being the only point on which the Government was vulnerable - and at a later stage my colleagues the honorable member for Darling (Mr. Clark) and the honorable member for Kingston (Mr. Galvin) will put forward a broader amendment which will sum up the points of view put by the Opposition in the debate - but we put it forward to concentrate attention on the vital matter of interest because we believe that on a policy of cheap interest rests the future of this country.

The Minister for Primary Industry (Mr. McMahon) twice during the debate had the impertinence to claim that Lord Beveridge’s work on full employment, which I quoted, was written during the thirties with the matter of the economic depression in mind. Indeed, the Minister said that I had not read the book. I inform him, and the House, that I have read it often because it was the basis of the Chifley Government’s white paper on full employment ; and full employment was only introduced into this country under the Labour Government of the late Mr. Curtin and was successfully continued during the post-war period by the Labour Government under the late Mr. Chifley. I shall not weary the House with a full quotation of the relevant parts of Lord Beveridge’s book, but there are two or three sentences that I desire to read. It will be news to the dogmatic Minister for Primary Industry, who knows something about everything, including economics, now to learn that contrary to what he stated, the publication which I mentioned was not written in the 1930’s, but was written in 1944 as a preliminary to a post-war plan of full employment. Beveridge said -

An integral part of a policy of full employment is a “ cheap money “ policy.

He followed that by saying: -

The rate of interest used to be looked upon as ii price which adjusted the demand for savings to the supply.

The Prime Minister talks about money and interest as though the old quantity theory of money still applied; but Beveridge also said -

It was thought that whenever business men desired to increase their outlay on new investment, the rate of interest would rise, and that such a rise would have the double effect, first, of inducing people to save more and, second, of discouraging the business man who was at the margin of doubt whether he should invest or not. In this way, the rate of interest waa thought to adjust the supply of savings to the demand for savings. But this view has been exploded by modern economic research. The rate of interest cannot fulfil this function, . . .

Then Beveridge continued with a statement that bears on the very point of the Prime Minister’s argument about the private sector of the economy by saying -

  1. . because capital expenditure itself brings into existence the very savings necessary to finance it.

Those opinions are held by Keynes as well as by Beveridge, and also by other modern economists. If honorable members look back to what the eight economists said when the Chifley Government was in office, they will find that their opinions were exactly the same as those of Beveridge and Keynes. So much for the validity of their opinions. A small increase in the overdraft rate might be considered an innocuous measure; but one has to look at it very carefully. I have pointed out that it would have meant an increase in the profits of the private trading banks by £1,250,000. The fact is that during the last two years the private banks have made profits, measured in the official statistical report, by refer*ence not to their invested contributed capital, but to what is called shareholders’ funds, which is a means of putting accounts in a way which completely conceals the truth that large profits have been made. The Opposition desires to see at some time details of the exact profits made by these banking institutions put before the House.

We shall accept what the Treasurer did by way of concession made through repentance at the last moment when it was discovered that a profit of £1,250,000 would be made by the private banks, and watch the position. However, the Opposition still says that what the Treasurer has done is not sufficient. Last night, he conceded, in effect - without making any open confession - that what was said by the honorable member for Melbourne Ports (Mr. Crean) and other honorable members on this side of the House was the truth.

I come to the next point of my argument. Is it a counter-inflationary measure that is now proposed by the Government? The argument, as the Prime Minister put it to-night, is as follows: - Bond prices have fallen, therefore interest rates are too low ; therefore we shall raise the bank overdraft rate and the Treasurer will get busy and the State Premiers will have to accept an increase of the rate for government securities to 1*ing it into line with the realities of the money market. But bond prices have fallen. How did that happen? It was part of the plan of increasing interest rates generally that they should fall. The bond market is not an open, free market ; that is a fallacy in the Prime Minister’s argument. It is a controlled market, and can always be controlled by the Commonwealth Bank and by the Government directing or advising the Commonwealth Bank - and it always should be controlled. What has happened is this: they want to be in a position to say that the yield has gone up on the stock exchange to 5 per cent., and, therefore, the overdraft rate must go up. But how did the yield go up to 5 per cent, and stay there? That happened because there was a deliberate withdrawal of support by the Commonwealth Bank ; and that is admitted.

Mr Calwell:

– And a withdrawal of support by the Treasury.


– Yes, and by the Treasury, which acts as a trustee of the sinking fund, for the purpose of having the yield at about 5 per cent.

Mr Menzies:

– Does the right honorable member believe that the Government should have gone on pouring millions of new money into the market?


– The Prime Minister, apparently, admits the substance of my charge.

Mr Menzies:

– The right honorable member says, that the Government should have continued to pour millions of pounds into the market. Why, a child would be ashamed of that statement.


– The Prime Minister has asked a fair question, and I will give him a fair answer. I have pointed out what the Prime Minister has done.

Mr Menzies:

– I have stated what was done and I agree with the action that was taken.


– The Prime Minister agrees with it, and he, therefore, agrees that the Government controls the market to a certain point. He has asked what we should have done in this respect. I shall tell the House what the Opposition would have done. We should have told the people that their securities were sacrosanct whatever the legal obligation of the Commonwealth might be, and we would have seen that bond prices were supported and that if the people were in need of money for, say, home building, we would have seen that they got it. An announcement of that kind would have prevented the run on the market; and everybody knows that.

The whole story is set out in the Coombs lecture of 1954. In 1954, Dr. Coombs certainly put forward arguments which are very odd when it is remembered that they came from one of the authors of the White Paper on Full Employment which was published in 1946. But after all, 1954 is eight years after 1946, and times change and people change with them. I have put forward the Government’s ‘ argument in any event, and I suggest that it is fallacious because bond prices did not fall; they were fixed by the careful manipulation of the market. It must have been extremely careful. What has happened since then? The bond yields are at a steady 5 per cent. That is exactly what happened three years ago. The yield went up and the overdraft rate also advanced. Not only did that happen; we have also the advocates of the leaders of the private banks attacking the Government. They say , “ We are against inflation, but you will not put up the rate of interest “. Therefore, I suggest that the whole thing was, in effect, a ramp on the people on the part of those interested in having the rate of interest increased. That can be proved; and it is not denied to-night by the Prime Minister.

The two arguments put in favour of the interest rate proposal of the Government are, first, that the Government’s action will operate in a way which will amount to anti-inflation. We dispute that, and say that is not correct. We look at the actual amounts and classifications of bank advances within Australia. Altogether £893,000,000 has been, advanced; and of that sum £212,000,000 was advanced in respect of primary production, upon which it is not Government policy to make any additional impost. They include £179,000,000 or 20 per cent, of the total on manufacturing, and £155,000,000 or 17 per cent, on advances for commercial operations, wholesale and retail. Those two categories are enormous. They total £334,000,000 of advances in all, and they will be affected, of course, by the increased rate of interest.

In those cases, it is certain that the increased interest charge will be passed on fully. Not only that, in many cases where the interest has to be paid, it will be allowed by way of deduction in connexion with the profit accounts of the companies, so there is nothing anti-inflationary there at all. The prices will simply be passed on from the companies concerned to the middle men. Then they will be passed on to the consumers. One possible view is that if there is an enormous increase of the. rate of interest, something that would be destructive to the economy, companies might be stopped from getting the money for which a little extra charge is made, but this is not that type of operation.

Municipal bodies, which are responsible for £22,000,000, will be adversely affected by the increase of interest rates. They cannot pass on the new impost. Advances for building and for home purchase total about £100,000,000. The honorable member for Reid ( (Mr. Morgan) referred to that matter this morning. Persons concerned with that category cannot insulate or protect themselves against the higher interest rate, and probably will not be able to get recoupment in one case in a hundred. The charge will fall directly on them. It will add to prices and will be inflationary in effect.

The Prime Minister and his officers, with their outdated philosophy of the quantity theory of money, believe that, by some means not disclosed, an increase of the interest rate will correct the lack of balance in the community, lt will have no such effect at all. The experience in other countries’, including the United States of America, has proved that. The experience in that country proves beyond doubt the truth of the conclusion of Gross and Lumer in their work on hard currencies. Referring to high interest rates, they made this comment on such a policy -

Applied in small doses, it has had little at no effect in preventing or curbing inflation. Applied in large doses, it has had such a dangerous effect as almost to kill the patient and the historical tendency has been to prescribe these dangerous doses at the wrong time.

This had led a British monetary theorist, R. S. Sayers, to state in his publication -

Bitter experience has taught us that the*interest rate, far from being the “ delicate and beautiful instrument “ it was once called, is ft . blunt instrument. It works too slowly^ in encouraging or discouraging in the right directions, and has its quick effects rather in the wrong directions. So we have moved towards the idea that the interest rate should be held pretty stable,, and on the low side.

That is largely the view adopted by tue” previous Labour Government, and it is more applicable in Australia because of the vital need for the physical development of this country. That is my reply to the first argument that the Government’s proposal will be counterinflationary.

The second suggestion is that the interest rate proposal is related to the recent proceedings in connexion with the bond market. I have dealt with that matter briefly. The fact is that any government of Australia has an enormously difficult task before it in connexion with the maturing of loans in the next twelve months. They total about £253,000,000. Owing to the deliberate policy of the Government in pushing up the interest rate and reducing the market price of bonds to the small investors, confidence in the bond market has been completely destroyed. The position to be expected next year is so serious that some new means will have to be adopted to raise money. The Australian Labour party has put forward proposals on many occasions, and some of them have been repeated by honorable members on. the Government side during this debate. We would associate ourselves, of course, with, any proposals designed to restore the confidence of the small investors in Commonwealth bonds.

In the United States of America, as I pointed out earlier, a system has been adopted by which, under certain conditions, money can always be obtained from the small investors. The bonds there are called “ Series E Savings Bonds “, and are similar to war saving certificates formerly used in this country. The features of the American bonds are -

  1. They are non-negotiable; that is, they cannot be transferred from one person to another, but they may be redeemed by the owner at any time after 60 days after issue.
  2. They pay no periodical interest, but interest accumulates progressively over the ten-year term of the bond.
  3. They are sold at an issue price of 75 and mature ten years later at 100 (equivalent to nearly 3 per cent, over the life of the bond).
  4. They are redeemable at the option of the holder (but not the Government) at any time 60 days or more after issue, at redemption prices fixed in advance and printed on each bond.
  5. They are, consequently, not subject to any risk of price fluctuation.
  6. During the first year after issue date, no interest at all is paid; thereafter the rate rises gradually.
  7. These bonds may only be purchased by individuals and not more than 10,000 dollars can be purchased by one individual in a year.
  8. They are issued in denominations as low as 25 dollars.
  9. They are readily replaced if lost.

I sum up by stating that the case of the Government has broken down. It is laughable to suggest that its measures are counter-inflationary. It proposes to put up interest rates generally in Australia, and although the banks have, for the moment, withdrawn their offensive in the sense that they are prepared, for the present, not to claim the profit? that this proposal would have given to them, we must look at the position to ascertain whether the private banks are making profits equivalent to those that have been made in industry in the past two or three years. That has been a period of profiteering. The Labour party’s theme is that the inflation from which Australia is suffering is, in the main, profit intiation. The basic wage has been frozen. The workers have not been able to maintain their standard of living or their margins. Prices have not been effectively controlled or fixed, and the burden rests upon the smaller people. The burden of the new budget is also to be cast upon them.

The most serious part of this proposal has been the deliberately designed and successful attempts, to which the Commonwealth Bank and the Government were parties, to force down the price of securities belonging to the ordinary people, and to force up the interest yield. No wonder the Government is anxious and speaks with two or three voices. Last night, the Treasurer read, in this chamber, a speech of which he could not have seen much before he spoke, because the night before he was in Queensland. Does he think that the people of Australia will trust him again after his statement there on the £253,000,000 loan? Anything is possible, but we do not often see the position where the people are told during an election campaign - in effect although not by direct statement: “We are in a state of booming prosperity. You can go ahead and enjoy it so long as you vote for us “. That was the Government’s point. The people of Western Australia undeceived it on Saturday last, and the people of Western Australia, on this occasion, represent the people of all Australia.

Sir ARTHUR Fadden:

– Speaking to the amendment–


-Order! The Treasurer has spoken to the amendment.

Sir Arthur Fadden:

– I only wanted the opportunity-

Opposition Members. - Sit down !

Dr Evatt:

– I rise to order. The Treasurer made his main speech after the amendment bad been moved. I made my speech in the House before my colleague, the honorable member for Melbourne Ports (Mr. Crean) moved the amendment. I am in the same position as the Prime Minister. I submit that the Treasurer will not be in order in speaking to the amendment.


– Order ! I have already ruled to that effect.

Sir Arthur Fadden:

– With respect to your ruling–

Opposition Members. - Sit down!


.- The only comment that I have to make on the speech of the Leader of the Opposition (Dr. Evatt) is, to use a borrowed phrase, that he protested too much; and he protested with a vigour which leads me to believe that he knows that he is flogging a dead- horse. I find there is something exhilarating in a vigorous defence where we have a vigorous attack; but when we are faced with an attack which could only muster a few old rusty guns and fire a few intermittent shots with dud ammunition then, I think, to maintain the pretence that it is necessary to defend ourselves is bordering on foolishness.

A little summing-up may now be in order. I think it will be agreed that all that can be said for or against these proposals of the Prime Minister (Mr. Menzies) has already been said. Therefore, not only is it stale news, but I think that the hopes that might have been held on the one hand and the fears that may have been held on the other have been set at naught by the sound, common-sense approach of the general mass of the Australian people.

It is quite true that there have been murmurs from certain sections of the community. These murmurs have come, first, from the type of person who believes that this is the best of all good worlds as long gis the other fellow takes all the hard knocks. His motives, I think, are actuated more by irritation than by sound conviction. Then we have the other group in which I include Opposition members. This is the group which believe that they have a vested interest in political unrest and disruption. These are the people who go out and organize what they call protest meetings. They do the talking themselves. They take prepared resolutions with them, have them passed at these meetings, bring them up here and misrepresent them as the considered view of the people. So let me say that in any national crisis, whether it be a major crisis or a minor crisis, we have a responsible element in the community and we have an irresponsible element. The former are interested only in a secure national economy; and the latter are completely selfish and have no regard whatever to the cost to the nation or to the cost to any other individual, provided that they can achieve their own ambition. The plain fact is that any government worthy of the name will, at appropriate times, take steps to protect the people from themselves.

I do not regard the nation, as the Opposition regards it, as an entity altogether separate from the people who constitute the nation. The nation means the people, and I say that any government that will not take action to protect the people from themselves in appropriate circumstances is not worthy of the name of a government. So I support these proposals, not because I believe that they are necessarily the best that could have been devised, but largely because I have listened, and listened in vain, for some acceptable alternative from the critics. I possibly know just as little or just as much as most people in this chamber about finance, which has world-wide implications. But I place myself in the position of a juryman. Having heard the experts - or the alleged experts - for and against, I make up my own mind whether the Government is guilty or not guilty. Some members of the Labour party advanced some good criticisms, but there it ends. If I may use a book phrase, they had neither storehouse nor bani from which to pluck out some acceptable alternative. They preferred, in fact, to hide their own ineptitude between a welter of futile words, thereby leaving an expectant nation not only frustrated but in a similar position to Mother Hubbard’s dog, waiting for the bone that was not there. That is the genesis of the opposition in this case.

The Leader of the Opposition essayed the responsibility of enlightening the nation on these proposals. He was going to analyse them for the people. Honorable members will remember that he waltzed on to the stage here in an atmosphere that would have been the envy of any star in a first night theatrical performance. He got stage-fright immediately, and gave us the impression that he was most unhappy in the role that he had to play. I shall tell honorable members why he was unhappy. It was because he really expected to receive more ammunition from the Prime Ministier’s statement than he did receive. For two weeks prior to the announcement, be had been working himself into a fury in the House and out of it over what he believed would be a vicious increase in interest rates. He undoubtedly envisaged & rise in interest rates of lj per cent, or 2 per cent.; and when he discovered that the increase in the interest rate would be only a i per cent., accompanied by a- 1 per cent, increase in deposit rates, and when he learned that it was designed not to bear heavily on exporting industries, he found himself in the position of ‘having to create his own Aunt Sallys for the pleasure of knocking them down again.

He has kept true to form. He has proved himself a better knocker-down than he ever was a builder. In the first few minutes of his original speech- and that is what I criticize, not the fury of to-night - he made a statement which has since been proved to be completely misleading and false and untrue. That statement has been dutifully parroted by practically every one of his followers in this House, although they know that the statement is completely untrue. This was his statement -

If these proposals hud been mentioned earlier, at the time of .the Prime Minister’s speech in September, following the budget speech in August, there would have been a very different reaction from the Australian public.

The .right honorable gentleman further said that the people knew that they had been let down and had been deceived by these false assertions and promises. My reply is that., if anything is false, it is the inference that be ‘hoped would be drawn from his remarks. There is no truth whatever in his statement. If they were proven to be false, he would not be prepared to rise later and admit it.

The Prime Minister clearly stated in his policy speech, and in the statement that he made in September last, that, in the absence of voluntary co-operation in adjusting Australia’s financial position, he would not hesitate to take any means that were necessary to achieve the Govern ment’s objective. Did that indicate that the right honorable gentleman was running away from the problem? Even if the proposed remedies were twice as bad, I guarantee that to-night the public still would not say that they never expected anything of the kind. But still clutching at straws, the right honorable gentleman tried to place the mantle of infallibility upon the embarrassed honorable member for Melbourne Ports (Mr. Crean). That honorable member, who is ever ready to oblige his leader, particularly when he is in a jam, plucked from the air the figure of £1,250,000 as being the profits that the banks would make following the implementation of the Government’s proposals. He arrived at that figure by simple arithmetic. He took the figure of four, subtracted two from it, and to his astonishment had two left, so he said, “ They will make a profit of £1.250,000 “. The right honorable member for Barton was so delighted with this figure that he almost wept when somebody challenged its accuracy. He knew nothing whatever about any arrangement with the banks, or of any acceptance by the banks of a proposal under which they would not make any profit. He has made a false prophecy that he is not prepared to stand up to. His approach is reminiscent of events in 1952, when we were experiencing another minor crisis, and when the Opposition set out to exploit the nation’s distress for its own political advantage. Sensing a spirit of unrest amongst the public, honorable members opposite, instead of cooperating with the Government to overcome the difficulty, set out to fan the flames of unrest so that the light on the hill, about which they spoke so much, might blaze a little more brightly in their favour.

In spite of a continuance of the greatest prosperity that this country has ever known, the Government is confronted by two major problems. First, within the next few years it must arrange for the raising of hundreds of millions of pounds to liquidate maturing war loan bonds. Secondly, it must take steps to arrest the rapid decline of our overseas funds. Let me say in passing that our overseas trading arrangements have been very heavily in our favour for very many years, and still are. The fact that within the last week or two other nations, particularly the United Kingdom, have become restive about the position and have threatened to take action to make it more favorable to themselves, perhaps has passed unnoticed. If we adopt too selfish an attitude, we may find that, except in relation to wool, we are not as indispensable to the world’s markets as we have imagined. Trade is a twoway traffic, and no nation is content to be always on the losing end while others are on the winning end. In that respect, I agree with the honorable member for Fremantle (Mr.Beazley). [Quorum formed.]

One of the Government’s proposals is that sales tax on luxury or non-essential goods should be increased steeply. That will either increase our internal revenues or preserve our overseas balances, or partly do both. The Australian Labour party suggests, on the other hand, an increase of income or direct taxes. Strangely enough, that proposal is supported by the honorable member for Yarra (Mr. Cairns). I use the word “ strangely “, because we acknowledge him to be an economist of some note; but he is not a free economist. As long as he subscribes to an extremist political philosophy, his deductions must be held to be suspect. His views are completely at variance with those of Professor Swan, who is Professor of Economics at the Australian National University and who has said, in effect, that, if we want to encourage the people to save money, we must impose a tax on spending and not on income. There is a lot of common sense in that. Professor Swan has also stated that, no matter which political party had been in power, some sort of taxation increases would have been announced. He is also reported as having said -

It might have been better, at the present time, if we could have taxed additional spending rather than additional taxation on income.


At present we are not arguing about Australia’s bread but about the thickness of the jam. What I am afraid of is that if we are too greedy, we may spoil the whole party.

The Government takes the same view, but the Opposition has set out to promote the state of affairs about which Professor Swan has warned us.

If the people still want to buy expensive furs, jewellery and motor cars, they will pay the additional tax. If they do not wish to continue buying those goods, it will not be necessary for us to import them, and so our balance of payments must improve. If, on the other hand, the people pay the additional tax, the revenue will be used for State developmental works, and it will not be necessary to release central bank credit of up to £100,000,000. To that degree, the Government’s proposals must be deflationary. To increase income tax according to ability to pay, as the Opposition has suggested, would not be a deterrent to spending, because people would ask why they should cease to buy such goods if everybody had to pay for them. The suggestion is, in my opinion, another illustration of the oblique way in which the Labour party comes down heavily on the side of the wealthy at the expenseof those less fortunately placed.

I would like to refer to the utter nonsense that has been talked on the Opposition side about Commonwealth bonds. Opposition members have been vociferous in their condemnation of the modification of the central bank’s extensive activities in the purchase of bonds. Members of the Labour party would have us believe that if a government borrows £100,000,000 this week it should pay it back next week if the people who had lent the money require it to do so. It is just as much nonsense to submit that proposition as it is to say that the Government has wrecked the bond market, or that the people have no confidence in government loans. The people have complete confidence in the Government’s ability to fulfil its contract. I would put bondholders into three groups. The first comprises the large number of people holding the 3 per cent. bonds, and who would like to liquidate them in order to invest their money in other fields where higher interest is available. The second group comprises the unfortunate people who invested in long-term loans in the belief that they could leave their money in those loans until the expiry of the terms of the loans, but who have found since that they need their money again. They are not so naive as to believe that any investor would purchase those bonds. from them at their full value with money for which he could get 5 per cent, by investing elsewhere. I should like to be able to do something for this group. The third group comprises the people who, at any time, could really afford to invest only in short-term loans, but who invested in long-term bonds because the interest was greater, and now expect to recover their money in full before the expiration of the term of the loan. That, of course, simply cannot be done. I repeat that the assertions of the Opposition members on this matter, which have been made purely for purposes of political propaganda, are nothing but utter nonsense.


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

Northern Territory

– Quite a deal of criticism has been levelled by Opposition members at the Government’s economic proposals, and quite a few members on the Government side of the House have had difficulty in justifying those proposals. My criticism is levelled at the Government for its failure to consider all the implications of the proposed measures, which the Prime Minister (Mr. Menzies) went to great lengths to justify. The Government’s proposals, of course, cover measures which will apply in all parts of Australia, but the effect of the proposed measures will vary in different parts of the country. I am most concerned at present about the effect of these measures upon the Northern Territory.

Conditions in the Northern Territory are far different from those prevailing in the more populated southern States. The proposed measures must have a crippling effect on the development of the Northern Territory. The increases in interest rates, in petrol tax, in sales tax on commercial vehicles, private cars and spare parts, all have a direct bearing on the day-to-day life of the community in the Northern Territory, where the people rely chiefly on motor vehicles for transportation. The Northern Territory is not blessed with adequate rail communications, or with adequate shipping services, as are the southern States, and the products of the Territory, and the supplies that it needs, have to be transported mainly by motor vehicles. Although a lot of them ‘ are heavy, diesel-powered vehicles, there are many others that use petrol. Between the railheads at Alice Springs and Birdum, a distance of about 650 miles, there are communities along the road that rely completely upon road transportation for their supplies. There are the mining centres at Tennant Creek, Harts Range, Rum Jungle and Alligator Creek, all of which rely solely on road transportation for goods and services. Any increase in petrol tax, or in the capital cost of vehicles, whether petrolor diesel-powered, must result in added costs to the producer, and must add to the cost of development in the field of mining and in the agricultural and pastoral industries. Any increase in those costs must cause sharp increases in the cost of living in Darwin, Tennant Creek and Alice Springs. When the Government brought forward these economic proposals it evidently did not consider their effect upon development in that part of the country. In the Northern Territory there is no alternative transportation. In the southern States, if the price of petrol becomes a little dearer than one can afford to pay, recourse may be had to alternative methods of transportation. There are trams, buses, trains, aeroplanes and shipping. Those alternative methods are not available to people in the Northern Territory.

I know that in the southern States of Australia motor cars are, in many cases, considered luxuries, but nobody could classify motor cars as luxuries in the Northern Territory.


– They are necessaries.


– That is so. They provide the only means by which people can move from place to place, unless we are to be forced back to camel transport, as the Government appears to be trying to do. It may be that in the southern States a motor car is considered to be a luxury - that is open to doubt - but it is certainly not a luxury in the Northern Territory. I speak now, of course, of the medium-priced vehicle, and not of the high-priced cars which can justly be classified as luxuries or as non-essentials. We must ‘have cheap transportation in the Northern Territory if we are to keep out costs down to a level comparable to those prevailing in the south. The cheapest petrol that can be bought in the “Northern Territory at present costs 5s. a gallon. The cost of petrol in parts of the “Northern Territory is nearly 6s. a gallon, and in many places in the outback petrol costs Ss. a gallon. How any Government can expect the country to develop under conditions such as those, particularly when development depends on the use of petrol to such a degree as it does in the Northern Territory, is beyond the comprehension of any reasonable person. I say quite frankly that before the Government introduced these measures it should have considered all of these aspects. In my opinion, it should have done what it has done in the past in relation to many other commodities and exempted from additional petrol tax certain zones in which reliance is placed almost solely on motor transportation.

I pass now to the increase of interest rates. The Prime Minister (Mr. Menzies) in his speech to-night made light of the fact that increased interest rates would affect the cost of home building. He brushed the increases aside as trivial and of no moment. Let me tell the House that in the Northern Territory, where the cost of construction of homes already is some hundreds of pounds greater than is the prevailing rate in the southern States, the increased interest rates will add to the inflated costs of house construction. The Government is going the right way about crippling home building in the Northern Territory, and if it does that, naturally development will be crippled as well. The people of the Territory are crying out for homes because of the destruction of houses during the bombing raids of World War II. Many houses were razed then : indeed, the township of Darwin was virtually wiped off the map. The housing position in Darwin has not recovered from the effects of those raids. Yet we now have an additional impost which will have the effect of putting back the clock still further.

In such an isolated outpost of Australia as the Northern Territory, strenuous methods should be taken to assist development bv every reasonable means. Yet we find that the outposts of Australia’ have to bear the same crippling effects of taxation as have the more favoured parts of Australia. The people of the Northern Territory, therefore, are handicapped wherever they turn. They are handicapped by their isolation and also by the normal high transportation costs. Now they are to have an additional burden of taxes on top or their inflated costs, and that will have the effect of virtually bringing development to a standstill.

We of the Northern Territory are trying to develop our mining, pastoral and agricultural industries. All of these industries rely on advances and financial arrangements, and they are all vitally concerned with, interest rates and overdrafts. If this Government cuts off access to overdrafts and makes interest rates too high, naturally money will be forced back into the southern States and we in the north will see very little of it. Within the last eighteen months the Government brought into this House a measure known as the Northern Territory (Lessees’ Loans Guarantee) Bill. That legislation was introduced in 1954 for the purpose of assisting the agricultural and pastoral industries of the Northern Territory. The introduction of the recent economic proposals will completely nullify any beneficial effects which that legislation may have had, so that we are back to where we started in that respect.

If we had cheap money available, the kind of money that was referred to this evening by the Leader of the Opposition (Dr. Evatt), we could do all the things we want to do in the Northern Territory instead of having to wait upon this Government for it to hand out very small sums to keep us” going from day to day. It is a fact that the financial policy of this Government has brought to a standstill many public works in the Territory, such as the additions to the Darwin wharf, work that was absolutely necessary for the development of the Territory. Subsequently, of course, the Government found the necessary money to proceed with that project, but the far-t remains that for a time the continuation of that vital work was in the balance. In addition, building projects have been closed down. It is true that contractor? sufficiently fortunate to have contracts signed have been able to proceed. but no further work is being undertaken. In the south, work on nurses’ quarters at Alice Springs which, five years ago, were considered to be essential, has been halted despite the fact that the contractor had started on the job. There has been a complete shut-down of roadmaking and road maintenance in the Territory because of the lack of funds. In Alice Springs, there has been a shutdown of home-building as well.

The position is much the same at Tennant Creek. Money was sought, and at one stage granted, for the establishment and reconditioning of a battery to assist mining at that centre. My information is that approval for such expenditure has been withdrawn. A water supply was being provided at Tennant Creek, that being essential to the continued existence of the township as a gold-mining centre. In order to show how vital the prosperity of Tennant Creek is to the Northern Territory, I point out that last year the Tennant Creek gold-field produced £2,000,000 worth of gold and copper, and it is estimated that in another twelve months that sum may be exceeded by 50 per cent, or even 100 per cent. Great ventures such as this are being strangled for the want of a few hundred thousand pounds. It would seem that a glorious opportunity to develop, the Territory is going to bc lost, because once you shut down on public works and restrict the advancement of public funds in an area such as the Territory, the skilled artisans who are employed on developmental projects disperse and it takes years to assemble them again and get the work under way once more. .

This Government must do two things if it really wants to continue to develop the Northern Territory, and I suggest that such development is vital to the nation not only from an economic point of view but also from a defence point of view. That is something for which the Government must provide money, even if it is done only by way of insurance for the security of the rest of Australia. Let the Government set aside some hundred* of thousands of pounds, or even some millions Of pounds, a year, and let it I raw up ‘ n programme of works and development.’ ‘ If it does so, the people of the Northern Territory will be able to say, “We can rely on this money being available from year to year. We know where we stand. We have a programme. Let us go to it “. If the Government is prepared to do that, it will do something to aid the development of the Territory, but if it continues on the basis of a hand-out every so often, and shut-down whenever finance becomes stringent, I say that we may as well hand the Northern Territory back to the natives and forget all about it.

I ask again, Mr. Acting Deputy Speaker, that the Government reconsider the effect of its financial measures on the Northern Territory and also on the northwest of Western Australia and the western parts of Queensland. Let it consider the effect of its measures on those parts of Australia, and do something about remedying it in the interests of the nation. [Quorum formed.”]


.- The debate on this motion has been long, and many honorable members have participated in it. The importance of the discussion is generally acknowledged. I doubt whether any honorable member will disagree with me when I say that it was pleasing to see the right honorable the Prime Minister (Mr. Menzies) take his place at the table again this evening and participate in the debate. On the 14th March last, when the right honorable gentleman concluded his speech, in which he announced the measures that are now under consideration, he said that, due to his experience in matters of this kind, he knew that these measures would be the subject of some controversy. In his opinion, however, most people would realize, upon reflection, that the Government’s programme was a moderate and balanced one. He added that to do more would be dangerous and create fears, but to do less, or nothing, would have exposed the well-being of millions of people of our nation to a growing inflation. This evening, in a very lucid manner, the Prime Minister, without emotion, has given his opinion on the amendment of the Opposition, but the right honorable the Leader of the Opposition (Dr. Evatt), in a violent and destructive fashion, has tried to raise suspicion concerning the Government’s policy and actions. I am satisfied that the Australian people will again judge overwhelmingly in favour of the Government and its esteemed leader.

Turning now to the economic measures which have disturbed some of the population, I wish to make a most earnest and sincere plea for big vision on the part of big Australians. Like other countries, Australia has its share of small people who live selfishly - such as the legalized starting price bookmakers in my own State of Western Australia. In recent weeks, they have thrown aside all thought of sane government and improved State finances to save themselves from increased turnover tax on betting operations. This increased turnover tax on betting operations in Western Australia is significant. A turnover of more than £1,000,000 was registered in twelve months’ operations in this form of legalized betting in that State. Australians should think beyond themselves, and I sincerely believe that the vast majority of people of this nation are in the category of those who do that.

The prosperity of Australia is probably the envy of all other countries. We enjoy comfort, an ample supply of excellent food, plenty of opportunities for leisure, a glorious climate and the housing which has been provided. These things are ours because in recent, years wise government has been available to shepherd the providential gifts which this nation has received.

Protests have been, voiced concerning proposed tax increases, and specifically those on beer and tobacco. I wish to compare figures concerning beer and tobacco under these new measures in Australia with those which apply in the United Kingdom, A packet of twenty cigarettes in the United Kingdom is sold for the equivalent of 4s. lOd. or 5s. in Australian money, whereas the price in Australia, even under the new proposals, is 3s. Id. The alcoholic content of beer in the United Kingdom - T say this on authority although -T have no personal knowledge of it - is not as high as that in Australia, yet a pint of beer in the United Kingdom costs 25d. But in Australia even under the recently announced increase, the price is only 27d. for a pint of a considerably more potent brew.

Although we have much to learn in Australia regarding production and competitive costs, our national bill for liquor, tobacco and gambling is truly astronomical. In 1951-52, the consumption of beer in Australia was 172,900,000 gallons, and the estimated consumption for the current year is 223,300,000 gallons. The Prime Minister pointed out in his speech that in Australia the consumption of beer per head of population has doubled since 1938-39, and there has been a similar upward trend in the consumption of tobacco.

What about gambling? I direct specific attention to this activity in our national life. The statistics appearing in the Commonwealth Year Book are not as complete as one would like, but they show that in 1939 the turnover of three State lotteries was £4,400,000, but by 1953 that figure had leaped to £16,900,000. Totalisator investments in 1939 were £7,000,000, but by 1953 they had risen to £33,500,000. Surely beer and tobacco are luxury . areas in which the Government has been justified in seeking increased contributions to adjust a cash deficit and protect each State’s finances. Personally, I am disappointed that the Commonwealth has not been able to devise a method of curtailing the operations of all persons associated with gambling concerns throughout Australia and reducing their incomes as a contribution to the national economy. A few days ago, the honorable member for Dalley (Mr. O’Connor), speaking in this debate, said at one stage -

So in effect, the Government proposes to take from the people of Australia no less than £111.000.000. I think that the action can be described as nothing more or less than a grab from the people of this country on the part of the Government.

This attitude, to me, reveals either a deplorable lack of knowledge of government finance and the use to which this increased revenue from the current economic measures is to be put, or an unjustifiable attempt to discredit the Government which has acted in the best interests of the nation. Surely it is abundantly clear to us that without the Government’s courageous action in calling for this additional revenue, the various State governments, some of which have already overspent heavily in the current financial year, would have had to cut their public works programmes substantially, and that would have necessitated the laying off of labour before the 30th June next.

The Prime Minister’s statement in this connexion was positive in its reference to a shortage of some £67,000,000 which would represent State works approved by the Loan Council. To-night, in this, probably the final contribution to the debate, I say emphatically that this young and developing nation of ours could not, afford to prune its capital works expenditure. Rather, with our increased population and amazing development, we should forge ahead as soon as possible with an expansion of capital works, ls it not true that we members of this Parliament are being constantly reminded by our electors of the need for more telegraphic, telephonic and postal facilities? If we cut our works programme, no more post office facilities would be provided in the current financial year. It is interesting to note that communications absorb some £25,000,000 to £30,000,000 a year in the works programme. Transport, which includes the provision of new roads and so on, calls for an expenditure of £130,000,000, whilst electrical power and fuel requires the provision of £100,000,000. We say, therefore, that the Government has pointed out how dependent we are upon the continuance of such projects and public utilities, lt should be apparent to all that there is no room for large savings in this particular field. Expansion, not contraction, should be our objective.

I did want to say something about productivity, but I am reminded .that only yesterday the honorable member for Bruce (Mr. Snedden), made a splendid speech in which he defined most accurately this term “ productivity “. I want to suggest that all facets of productivity need our attention. The sound use of capital is part of this problem. Improved welfare for employees, who are so vital when we are seeking production, is also involved, as is a more effective arbitration system, which, we are pleased to know, will be before us in a new piece of legislation to be brought down by the Government. A greater will to work is also a prerequisite to productivity. A further requirement is the expansion of the training of technicians.

I have referred to the development of industries in this country under the leadership of the present Government. Let us look for a moment at manufacturing industries. From the latest issue of the Commonwealth Year-Book, we can compare the position in 1949 with the position in 1954. In 1949, factories in this country totalled 40,070. Bv 1954, the number had moved up to 49,576. The number of persons employed in factories showed a similar trend from 890,000 in 1949 to 989,542 in 1954. Salaries and wages virtually doubled, the figures moving up to £705,137,000 in 1954, while the value of output definitely did double, reaching the figure of £3,095,476,000 by that year. In a young nation with an amazing potential, this type of development must be maintained; but, in addition, productivity must be constantly studied, and our objective to produce our goods at competitive prices so that they may compete in overseas markets, should never be forgotten.

I should like to say something specific - and I think this may be a point which has not yet been mentioned in the current debate - on the subject of road transportation. I am in receipt of correspondence from the West Australian Road Transport Association, written on behalf of 900 member operators. Like other honorable members, I am aware that these economic measures have had an immediate effect on transportation costs. The correspondence that is in my possession reminds me that everything manufactured, grown, eaten and used by the community bears, in its ultimate price to the consumer, a large proportion of road transport costs. Therefore, this item of transportation cannot be overtaxed if prices are to remain stable. We understand this position. We appreciate the problem.

I have some helpful recommendations on this important subject of transportation. First, let me say that commercial vehicles, which, of course, come to the forefront of the thinking of people engaged in road transportation, suffered in the recent economic measures only a slight increase in sales tax compared with passenger cars. It will be remembered that for commercial vehicles the figure moved from 12½ per cent. to only 16 per cent. Secondly, many road transport operators are using diesel fuel which, fortunately, has not been affected by the petrol tax.

Then we have this problem of petrol. It is recognized that petrol involves a large imported component, and it could not be overlooked when deficit finance bad to be adjusted under these economic measures. There is also no import restriction on petrol, and we have seen an amazing increase in its consumption in recent years. Unfortunately, the exemption of certain groups would not be practicable and consequently, the Government must ask all who are affected by this increase in the petrol tax, to cushion the effect of that increase. I believe that the people with broad vision, the people who are prepared to make some sacrifice, some contribution, in the interests of this country’s development, will be prepared to do so. I support the Government’s measures, I believe that the Opposition has advanced no betetr scheme. However, I am of the opinion that our Government should concentrate attention in the near future on the proportion of costs in Australia attributable to transport.

I draw attention to the fact that we may, with profit, look to the achievements of modern Germany in this field of transport. In that country, concentration of effort has achieved outstanding results in the economy of transport. Imagination is apparent in highway construction. Facilities have been provided for transport operators. Rail, road and canal transport keenly compete, each seeking higher efficiency. I, therefore, submit to this House, and to the Government in particular, that we have much to learn from modern Germany as we see it. I conclude by reminding the House that the Opposition has not advanced any constructive suggestions for proposals to take the place of the economic measures that it condemns. It has talked about the taxation of profits and about prices controls. These are by no means a satisfactory substitute for the measures announced by the Prime Minister on behalf of the Government on the 14th March last.

Question put -

That the words proposed to be omitted (Mr. Crean’s amendment) stand part of the question.

The House divided. (Mr. Deputy Speaker - Mr. C. F. Adermann.)

AYES: 53

NOES: 38

Majority . . . . 15



Question so resolved in the affirmative.

Amendment negatived.


.- I move -

That the following words be added to the motion: - “(1) In the opinion of this House the taxation measures proposed in the paper are unfair in principle and unjust in application;

The measures will fail in their stated purpose of halting inflation, and in fact they will add to costs of production, stimulate inflation, worsen the overseas trading position, and reduce the spending power of wage earners and those on fixed incomes, particularly pensioners ;

In particular the taxation proposals on transport aids will add to the cost of essential commodities;

The paper fails to deal with fundamentals in that it does not propose to apply or seek adequate economic and constitutional powers to effectively save the Australian economy from calamitous inflation;

The proposals in the paper were not disclosed at the federal elections in December, and the people were consequently misled;

Finally, the proposals are opposed by the great majority of the people and this resentment was clearly and convincingly illustrated in the result of the general election in the State of Western Australia “.

The amendment adequately states a case against the Government’s proposals. It will receive the wholehearted support of the Australian people, because it states that the Government’s taxation proposals are unfair in principle and unjust in application, as has been amply demonstrated by Opposition speakers during the debate. The other matters are adequately dealt with in the amendment, and I do not propose to elaborate upon them.


– Is the amendment seconded ?


– I second the amendment, which clearly should receive the support of the House-

Motion (by Mr. Harold Holt) put -

That the question he now put.

The House divided. (Mb. Deputy Speaker - Mr. C. F. Adermann.)

AYES: 52

NOES: 38

Majority . . . . 14

In division:



Question so resolved in the affirmative.

Question put -

That the paper be printed.

The House divided. (Mr. Deputy Speaker - Mr. C.F. Adermann.)

AYES: 51

NOES: 38

Majority…. . . 13



Question so resolved in the affirmative.

page 1333


Visit of Russian Leaders to United Kingdom - Communism - Extradition Treaties

Motion (by Mr. Harold Holt) proposed -

That the House do now adjourn.


– This month the two leaders of the Soviet Republic, Marshal Bulganin and Mr. Khrushchev will pay an official visit to the United Kingdom. It may not be proper for this House, or for any honorable member in this House to express an opinion as such on the visit; but I feel that the House and the country is entitled to draw a few conclusions about some of the consequences of this visit. We all, I suppose, have our own views on the visit. If I may be permitted the luxury of expressing my opinion about the visit of those two selfimposed and self-elected leaders of the Union of Soviet Socialist Republics, I am bound to describe it as the greatest diplomatic folly of this century. That is my own opinion; I do not force it upon any one, but I express it. One aspect of the visit that disturbs me is the fact that Her Majesty the Queen will receive these two visitors. It is a simple truth, but one which is disturbing, that criminality has been the constant companion of Marshal Rulganin and Mr. Khrushchev for more than a quarter of a century; and Iregard it as one of the greatest insults ever afforded the British Monarchy that these two leaders should have asked to call upon Her Majesty.

Beyond those few comments, what really disturbs me about the visit of these two men is that there is developing in this country and throughout the world - and it will rise to a crescendo on the occasion of their visit - the claim that, after all, whatever the Soviet Union may have done in the past it is now making amends, having now changed its ways. Only the other day a distinguished Britisher, and one who has made a notable contribution to the security of civilized mankind, Lord Vansittart, described the current visit of Mr. Malenkov to the United Kingdom as a “ suckers’ chorus “ ; and he added -

Democracy has needed two miracles to survive, and at this rate will need a third.

The point I put to the House and to the country to-night is that it would be the height of folly for any person to imagine that because of the visit of Marshal Bulganin and Mr. Khrushchev to the United Kingdom the Soviet Union has changed its intentions. I shall quote from a resolution passed at the twentieth congress of the Communist party of the Soviet Union on the report of the central committee of the party, and which was adopted unanimously on the 24th February of this year. The resolution, in part, reads -

The Leninist principle of peaceful coexistence of countries with different social systems was and remains the general line of the foreign policy of the Soviet Union.

To the unsophisticated observer in these matters that may seem to be a somewhat innocuous observation, but to any person who has even a nodding acquaintance with Marxist-Leninist theory, the description of co-existence as the Leninist principle immediately identifies what is behind it. I cite to the House the following observation of Lenin, contained in volume 10 of The Selected Works of Lenin -

To carry on a war for the overthrow of the international bourgeoisie, a war which is a hundred times more difficult, prolonged and complicated than the most stubborn of ordinary wars between States, and to refuse beforehand to manoeuvre, to utilize the conflict of interests (even though temporary) among one’s enemies, to refuse to temporize and compromise with possible (even though transient, unstable, vacillating and conditional) allies - is not this ridiculous in the extreme? Is it not as though, in the difficult ascent of an unexplored and heretofore inaccessible mountain, we were to renounce beforehand the idea that at times we might have to go in zigzags, sometimes retracing our steps, sometimes abandoning the course once selected and trying various others?

The world to-day is witnessing the greatest sham in history. The hard core of Marxist-Leninist doctrine is world domination. “We are seeing what Lenin described as a zigzag. The Soviet Union is retracing its steps. It is hoping that the democratic countries of the world will relax their defence efforts and regard the cold war as a mere exercise in academics and as something of no consequence. That would be the height of folly. Lenin, himself, in volume 24 of his selected works observes - and this is the Leninist principle of co-existence -

We live not only in a state but in a system of states and the existence of the Soviet Republic next to a number of imperialistic countries is unthinkable. In the end either the one or the other will have the better of it. l 1: i 1 that end comes, a series of most terrible conflicts between the Soviet Republic and the bourgeoisie states is inevitable.

Marshal Bulganin and Mr. Khrushchev have stated that on their visit to the United Kingdom they want to meet the common people. I put it to the House that behind the iron curtain to-day there are millions of common people suffering in concentration camps and slave camps. If Marshal Bulganin and Mr. Khrushchev want to meet the common people, let them let down the iron curtain, open up the slave camps and release the millions of people who are suffering in concentration camps to-day, and to whom death will otherwise be a happy release. If they are genuine in their renunciation, and this is not an attempt to deceive the world, let them clearly renounce the whole of the Marxist-Leninist doctrine. Let them release the countries that to-day are groaning under Soviet dictatorships.

Mr Ward:

– They would all be Communists if everybody spoke like the honorable member.


– I realize that what I am saying is distressing to some honorable members opposite. Let the Soviet leaders see that the mechanism is established for free elections to be held in the whole of unified Germany. That will be a test of their sincerity. I say, in conclusion, that if this House, thi3 country and the “Western world falls for this gross deception, we shall enter voluntarily the gates of slavery and shall do ourselves and future generations of Australians the gravest disservice.

Leader of the Opposition · Barton

– In the House of Commons it is not permissible for any honorable member to question the decision of a government of one of Her Majesty’* self-governing dominions, but the honorable member for Moreton (Mr. Killen), who is trying to be a junior McCarthy in this House, wants to make a little cheap political capital out of a decision, not of this Government or of this Parliament, but of the Conservative Government of the United Kingdom, led by Sir Anthony Eden, and agreed to by the central parliament of the British Commonwealth. I agree that the honorable member for Moreton is entitled to his opinion on these matters, but I do not think that the time of this Parliament should be taken up with a discussion whether the United Kingdom Governmnent is right at the present time in inviting representatives of great powers to visit that country. I have heard members of the party to which the honorable member for Moreton belongs support in this House proposals to send delegations from this Parliament to countries in Asia, including China. If I have read the newspapers correctly, a very distinguished Australian trade commissioner, Mr. Menzies–

Mr Curtin:

– He is the cousin of our Prime Minister.


– It does not matter whether he is the cousin of our Prime Minister. As a representative of Australia, he is going behind the iron curtain. The curtain between Hong Kong and China is just as much made of ferrous material as is the curtain between us and any other Communist-controlled country. I do not wish to interfere with the right of the honorable member for Moreton to express his opinions, but I think it is impertinent and impudent to criticize a decision of the United Kingdom Government.

If I were asked to express my opinion, I should say that we should encourage more visits which would help to lift the iron curtain - not only visits by political leaders, but also visits by ordinary people. That is happening in the case of the United Kingdom and Russia. A United Kingdom parliamentary delegation, led by a member of the Conservative party, has visited Russia, as also have trade and business delegations. That is the beginning of an attempt to establish communication between the two countries. But the honorable member for Moreton, who says that the iron curtain should be lifted, makes his complaint at the stage when it seems that it may be lifted. The action of the United Kingdom follows on from the. summit conference called by Sir Winston Churchill.

Although this matter, perhaps, was not worthy of elaboration, I could not let it pass without comment. We listened to a speech of a kind which would not be permitted in the Parliament of the United Kingdom. However, it was permitted here, and the honorable member for

Moreton had his say. I do not think that what he said will appeal to one in a hundred of the people of Australia, who want to see peace firmly established in the world on a basis of justice and freedom. I entirely agree with one point made by the honorable member, namely, that there should be complete communication between all countries of the world and the peoples living in them.


– I suppose I should have lost my capacity for surprise, but I never cease to be astonished at the way in which the words of the Leader of the Opposition (Dr. Evatt) follow the line which is of advantage to the Soviet. In this case, he has endeavoured to besmirch and belittle the honorable member for Moreton (Mr. Killen), who has done a service in bringing to the attention of the House and of the Australian people the significance of Russian manoeuvres and the new line in Russian policy, which is perhaps as dangerous as the old line. The Russian objective has not been changed, although the methods may have been changed. It may be that the main Russian line now is to achieve control inside the United Nations organization itself. I believe that by putting the world on guard - every one of us in this Parliament has a duty to do his small bit towards that - we shall lessen the chance that these Soviet manoeuvres will succeed. The cold war is fought on the floors of parliaments such as this. The right honorable member for Barton does a disservice to his party and his country by endeavouring to besmirch and belittle any one who brings up these major matters.

I want to deal with a related matter - one in which I think I may have a certain measure of support, perhaps not from the right honorable member for Barton, but from a number of members of his party. The House listened with approval to the firm statements of the Minister for External Affairs (Mr. Casey) and the Minister for Immigration (Mr. Harold Holt) in regard to the request for the extradition of a certain Yugoslav, which is at present in question. I believe that the House will be pleased that the Government has taken the firm line of stating that this man has nothing to fear. But is that enough? This one case may be satisfactorily resolved, but if there is a reign of terror against all immigrants, that is more important. We know that justice does not exist behind the iron curtain. For that, we have the words of Mr. Khrushchev and Mr. Malenkov, who have said that they themselves were murderers and were concerned, as accomplices of Stalin, in unjust accusations which brought death to many of their fellow countrymen. We have that on their own statements. We know that enemies of communism who are taken behind the iron curtain have no chance.

But I do not think we can just leave the matter there. At the present moment, we have extradition treaties in existence with certain iron curtain countries - Poland, Roumania, Yugoslavia, Albania, Czechoslovakia, and Hungary. I put it to the Government that we should consider the effects of those treaties, and consider also whether they might profitably be renounced, so that we can remove from the minds of immigrants to Australia any fear, whether justified or unjustified, that forces behind the iron curtain will seize them and drag them back to death because they dared to oppose communism. We owe protection to the strangers within our gates.

In this case, the man is naturalized. I shall refer to the extradition treaty with Yugoslavia, although the terms of the various treaties differ. Under that treaty, the Australian Government has an absolute discretion in regard to the extradition of naturalized Australians, but in i regard to a person who is not a naturalized Australian - a new Australian, for example - it does not have an absolute discretion. Under the terms of the treaty as it exists, the case must come before a court. The person in question bears the onus of proving that the request for his extradition is a political affair. That simply is not good enough. In the absence of witnesses - because the witnesses may be thousands of miles away - wo should not ask a man to discharge the onus of proving that the request for his extradition is a political affair.

I suggest to the Government that it should take steps immediately to review those six treaties. After all, at the pre sent moment our extradition treaty network is by no means complete. We have no extradition treaties with Sweden, Germany or Turkey. In Asia, we have extradition treaties only with Iraq and Thailand. Even in the cases of India and Pakistan, there are no longer any formal treaties in existence, although I have no doubt that there would be co-operation in these matters. So if we denounced these treaties with the iron curtain countries, we would not make holes in an otherwise complete network. I think something less than a half of the peoples of the world have such treaties with us to-day. I believe that we owe it to all new Australians to give to them,, not only the real security which this Government will give to them, but also a feeling of security. We have to remove not only the cause of fear but also fear which may exist in their minds, perhaps baselessly. At the present time, Soviet imperialism is reaching out in an endeavour to punish people who have find to our protection from behind the iron curtain. Do not let us leave a legal loop-hole through which an lin-naturalized refugee can be extradited.

East Sydney

.- I believe that there could not have been two speeches more damaging to the interests of this country than those made by . the honorable member for Moreton (Mr. Killen) and the honorable member for Mackellar (Mr. Wentworth) to-night. Probably they are the only two members on either side of this Parliament who would be capable of making such speeches. What would be the situation of the people of the world if men like the honorable member for Moreton and the honorable member for Mackellar were in charge of world affairs, or even of the Government of this country? They seem to be just hungering for a war against Russia, and they regret very much the changed attitude of the Soviet leaders, who are now beginning to make contact with the Western world. The honorable member for Moreton quoted passages from books and referred to statements made by Russian leaders of the past, trying to imply, in effect, that that attitude is one which could never be varied or altered. If the Russian attitude is not to change’, the destruction of this world is inevitable. What right have the honorable member for Moreton and the honorable member for Mackellar to question a decision of the British Government? These Russian leaders are going to Great Britain at the invitation of the Conservative Government of that country, and they will be received by Her Majesty the Queen. Tn my opinion, the decision of the British Government and of Her Majesty should not be questioned by a couple of no-hopers in this Parliament. The honorable member for Mackellar has referred to the atom bomb in his book. His solution of the world’s problems is a preventive war. He wanted to drop an atomic bomb on Russia before that country knew that it was coming, and before it was ready to defend itself. That was his solution. Now his apprentice, young “ Adolf “. advances a similar line of argument. He says that the Russian leaders cannot be trusted, and that therefore we ought not to have any contact or talks with them at all. Fortunately, the British people, who know the real danger of an atomic war, do not share the attitude and opinion of either of the honorable gentlemen opposite who have spoken on this matter, because when Malenkov recently visited Great Britain, the British press reported the enthusiastic reception that he received from the workers of Britain. I think that if honorable members opposite “were taking their responsibility as elected members of this Parliament seriously instead of regretting the visit of the Russian leaders to Great Britain and the fact that they have changed their attitude and are now prepared to talk matters over and confer, they would be welcoming that change of attitude. What does it matter what Lenin or some other Russian leader said? If we are looking for reversals of form and changes of mind, we need not go outside this Parliament. I remember the late William Morris Hughes saying here, when somebody quoted what he had said twenty years before, “ What does it matter what I said then? What is important is what I say to-day “. That is exactly the situation in regard to the Russian leaders. As a representative of the Labour party, I am very happy to see the Russian leaders beginning to talk with the leaders of the

Western world, because only by having conferences, talks, and fraternal visits we can get some basis of understanding by which we can avoid an atomic war.

Let me say to the honorable member for Mackellar, as I have told him repeatedly in this House, that if there is one member who should sit quietly and say nothing about communism and Communist policy, he is the honorable member for Mackellar himself. He has never yet been able in this Parliament to explain away his activities on the south coast of New South Wales before he was a member of the Parliament, in connexion with the Illawarra Star cup. In those days, he ran a little obscure newspaper, the Illawarra Star, on the south coast of New South Wales. The paper was having some difficulty round about the period when the Prime Minister (Mr. Menzies) earned the title “ Pig-iron Bob “. There was a dispute on the waterfront and the honorable gentleman had originally backed the Government. His newspaper was beginning to lose heavily so what did he do? He visited the local Communist chief at his home and discussed the problem with him.


– What was his name?


– He was a chap by the name of Roach. They discussed in Roach’s home the question of what they could do to lift the black ban on the Illawarra Star, and I shall tell the House what happened. Before the honorable member for Mackellar left Roach’s home, he had donated £10 10s. to the strike fund, and had got on so well with Mr. Roach that he had decided also to present a cup, to be known as the Illawarra Star cup. to go to the trade union team which gave the best marching display in the six-hour procession at Woollongong. In the first year the cup was won by the Port Kembla branch of the Waterside Workers Federation, and the honorable member for Mackellar presented it to none other than Mr. Jim Healy, the general secretary of the Waterside Workers Federation.

Now let me turn to some other of the honorable gentleman’s activities. Here again he proved to be irresponsible and it is that irresponsibility that I want to stress this evening in order to show the type of individual who raises these matters in this Parliament. He was put out of the Australian Army because of his irresponsibility. He wanted to prove to the late Field Marshal Blarney, who was the Commander-in-Chief of the Australian Military Forces at the time, that the defence strategy that was being employed on the south coast of New South Wales was wrong, and that our defences were vulnerable. He was always trying to impress upon the Australian military authorities that a small Japanese force would have no difficulty in landing on the south coast of New South Wales. In those days, the honorable member was, I think, an officer in the Volunteer Defence Corps and was in charge of the defences south of Sydney, [n order to prove to the military chiefs, particularly General Blarney as he then was, that the defences on the south coast of New South Wales were vulnerable, he decided to stage a raid himself. He issued live cartridges to members of his unit and, I understand, they also had explosives. In order to prove to the military authorities that his theory was correct - he has a theory on everything and a plan to settle everything - they blew up one of the culverts, took charge of the local police station, and fouled up the electric train signalling system. After they had taken charge of the area, the honorable member decided to ring up General Blainey, who was staying at the Hotel Australia in Sydney, but the Standing Orders prevent me from relating what General Blarney said to the honorable member over the telephone when he reported his great victory. Such conduct is typical of the behaviour of those who raise these matters in the National Parliament and it is about time that the people of Australia knew that. I suggest to the honorable member for Mackellar that when he proposes to talk about people changing their opinions, he should recall a certain occasion in the Sydney stadium during a referendum campaign when a debate was arranged between the honorable member and myself. During the course of the debate T quoted certain things that the honorable gentleman had said about his present leader, the Prime Minister - very discourteous things, I think he will agree. He did not deny them. His answer to the audience at the stadium was, “Yes, I said them, but I have changed my opinion “. Well, so have the Russian, leaders changed their opinions.


– Order I The honorable gentleman’s time hasexpired.

Minister for External Affairs · La Trobe · LP

.- The honorable member for Moreton (Mr. Killen) has made a thoughtful and intelligent contribution to the debate this eveningin an analysis of an important part of thegreat world ideological struggle that has been going on for the last generation between democracy and communism. He made the sort of speech that entails a great deal of thought and a great deal of reading, and, if I may venture to say so with respect, the sort of speech we could do with a lot more of in this Parliament, because there could be no more important subject to any human being than the question of who is going to run the world in the future, whether we are to continue under the democratic system or whether the world is going to be communized, as is the Communist aim. But although there could be no more important matter in the world than that, there is no matter that is less discussed on an intelligent, as distinct from a ranting, basis than this subject on which the honorable member for Moreton has delivered himself this evening. As part of his analysis of the matter at issue he referred to the impending visit of Messrs. Bulganin and Khrushchev to Great Britain in the relatively nearfuture. I do not wish to pursue that matter at any length. It is one which, I am sure my honorable friend would agree, is essentially for the British Government. The visit is a little hard to swallow, any one of us can admit straight away, but I think that the honorable member will admit that in those matters of great international concern the question of personalities has to be sunk for the time being, and. whether or not we admire the two individuals concerned, or like their records, our feelings in that respect have to be set aside. If this visit contributes in even a small degree to the preservation of peace in the world as we know it, then we must wipe away all considerations of our objections to those persons as individuals. But that opinion does not mean for one moment that I am contesting the general thesis of the honorable member for Moreton. We could do very well in this Australian National Parliament with a great many more speeches, from both sides of the House, of the thoughtful nature of the speech made by the honorable gentleman. Therefore, I welcome what the honorable gentleman said, although, as I say, the question of this visit is one on which I cannot express an opinion. Indeed, we have heard to-night what one might call the anachronism to end all anachronisms - the honorable member for East Sydney (Mr. Ward) defending the Conservative Government of Great Britain. I can think of no greater anachronism than that.

Now I wish to say a few words about the remarks of the honorable member for Mackellar (Mr. Wentworth) in relation to extradition treaties. I am glad to be able to correct him in one particular, that is, touching the discretion that lies with the Australian Government in respect of not only naturalized Australians, new and old, but also nonnaturalized immigrants who are now in Australia. I have obtained from my department some details concerning the position, but I have not committed them to paper, soI am not giving them now as the final word on this subject. Of course, it would have been wrong had I not made such inquiries. I inquired about the position to-day, under our extradition treaty with Yugoslavia, in respect of the extradition of immigrants who are not yet naturalized Australians. I still have to check the advice I have been given, and come to a final view on the matter, which is really one which, I think, comes within the province of the Minister for Immigration. However, I am advised that the Australian Government has final discretion whether or not an individual whose extradition is applied for is a naturalized Australian or an immigrant who has not yet been naturalized. In other words, the Australian Government has the final say on whether or not an individual shall be extradited to his country of origin.

The honorable member for Mackellar spoke of the extradition treaties that exist between Australia and other iron cur tain countries - Poland, Czechoslovakia, Rumania and the rest. I am having those treaties examined, actually this day, to see the conditions that exist in them in respect of the Australian Government’s position, and whether we have discretion, under those treaties, similar to that which we have under the treaty with Yugoslavia. I think I can forecast that, based on the result of that examination, the Government would take the necessary action to protect Australian citizens. I shall say no more about that matter.

The matter which was raised in the first place by the honorable member for Moreton deserves very much fuller treatment than one is able to give it at this late hour in the debate on the motion for the adjournment of the House at the end of a long day and a long week. I hope very much that the matter initiated by the honorable gentleman, which is one that has been very little discussed in this House, will be discussed at greater length at a more appropriate time than the present, and I welcomehis speech to-night on it as perhaps a pipe-opener for a more formal discussion of the subject in the future.


Mr. Deputy Speaker, I wish to-

Motion (by Mr. Harold Holt) put -

That the question be now put.

The House divided. (Mr. Deputy Speaker - Mr. C. F. Adermann.)

AYES: 47

NOES: 26

Majority . . . . 21



Question so resolved in the affirmative.

Original question resolved in the affirmative.

House adjourned at 11.23 p.m.

page 1340


The following answers to questions were circulated: -


Mr Falkinder:

r asked the Minister representing the Minister for Shipping and Transport, upon notice -

  1. What moneys were allocated to Tasmanian lighthouses for the years 1947 to 1956?
  2. What are the details of improvements, repairs, and additions during those yeaTs?
  3. In each year, how many of these works were incomplete, were not carried out, or were reduced!
Mr Townley:
Minister for Air · DENISON, TASMANIA · LP

– The following answer has been supplied by the Minister for Shipping and Transport : -

The questions asked by the honorable member cannot readily he answered categorically, but three statements are attached showing -

Expenditure on Tasmanian lighthouses each year from 1946-47 to 1955-56, indicating the moneys provided for new works and for repairs and maintenance, and the amount expended under those headings.

Details of new works, and repairs and maintenance jobs requisitioned for each year, for Tasmanian lighthouses, showing the years in which some were completed, with the cost of completed works, and indicating works deferred or not yet completed.

Expenditure on miscellaneous small works, furnishings, &c, each year, 1946-47 to 1954-55.

War Service Homes

Mr Bryant:

t asked the Minister for Social Services, upon notice -

  1. What steps are taken to make builders of war service homes bring work up to standard where valid complaints about the work are made after completion?
  2. Does the department accept responsibility for all work done under its supervision?
  3. What authority has the department to spend money on houses which are not up to specification ?
  4. Does the department finance any extra work required pending recovery from the builder or does it require an extra payment from the owner?

Mr.Roberton. - The answers to the honorable member’s questions are as follows : -

  1. The reply to this question relates to those homes which are built under contract with the division and with the division’s supervision and not to the contracts where the applicant engages his own architect. Where an investigation of the complaints by the division’s technical officers shows that an unauthorized departure has been made from the plans or specifications or accepted building standards the builder is given notice under the warranty provisions of the general conditions of contract to rectify the fault. If he fails to comply the necessary notices are given to enable the work to be completed by another contractor at the builder’s expense, and if the builder does not pay on demand, legal action for recovery of the cost is instituted.
  2. The division accepts responsibility for faulty construction as indicated in 1.
  3. The Directorhas power under the act and under a delegation by the right honorable the Treasurer to rectify faulty construction with out cost to the applicant, hut the Director in these eases takes action to recover the cost of the remedial work from the contractor as indicated in the reply to the previous questions.
  4. The applicant is not required to pay additional amounts to cover the cost of work necessary to remedy faulty construction.

ZILlmere Housing Project.

Mr Wight:

asked the Minister representing the Minister for National Development, upon notice -

  1. Did the Queensland Minister for Housing, Mr. Hilton, in a statement published in Brisbane on the 10th March, indicate that there were in fact only 812 French houses atZillmere and not 886 French houses?
  2. Is this statement in accordance with the original subsidy claim submitted by the Queensland Government?
  3. Did Mr. Hilton previously assert that the Queensland Government had paid for 880

French pre-cut houses and that the freight on these houses had also been paid by the Queensland Government ?

  1. If there is a shortage of French building materials at Zillmere to the value of approximately £250,000 which has been replaced by Australian material, and this loss is not otherwise recoverable, would rents paid by tenants of the Queensland Housing Commission require to be correspondingly increased so that the Government may be reimbursed to the full extent of the increased capital cost involved in completing a project?
  2. If, as a result of the loss of 74 houses, those erected in their stead do not qualify for subsidy under the act, would the rental of tenants of Housing Commission homes be further increased in proportion to the loss of subsidy so incurred?
  3. Is the statement attributed to Mr. Hilton completely false insofar as the Minister is alleged to have claimed that the substitutions referred to by him as having taken placein the remaining 74 houses were approved by the Commonwealth prior to abandonment of the contract ?
  4. What was the full extent of the substitutions which were approved by the Commonwealth ?
  5. Do the substitutions approved by the Commonwealth correspond with the wholesale substitutions referred to by Mr. Hilton in his statement?
Mr Fairhall:
Minister for the Interior · PATERSON, NEW SOUTH WALES · LP

l. - The Minister for National Development has furnished the following reply: -

  1. I am aware that a report in the CourierMail published in Brisbane on the 10th March, 1950, attributes to the Queensland Minister for Housing (the Honorable P. J. B. Hilton) a statement that 812 houses were built of imported timbers as provided in the contract for the building of imported French houses at Zillmere and Chermside: and that the remaining 74 houses contain some local materials. The observations of Commonwealth officers who inspected a sample of the houses referred to were that the quantity of local materials used in a number of houses was substantial and that some houses appeared to be completely built of materials of local origin.
  2. No, the statement is not in accordance with the original claim. The Queensland Government has claimed subsidy amounting to £300 per house on886 houses in the Zillmere and Chermside project.
  3. In a letter dated the 27th February, 1958, addressed to the Secretary of the Department of National Development by the Commissioner of the Queensland Housing Commission it is stated that the f.o.b. price of the houses together with freight and insurance had been paid by the Commission. Mr. Hilton wrote to me on the 12th March, . 1950, endorsing the views of the Commissioner as set out in the letter referred to above.
  4. Under the, terms of the Commonwealth and State Housing Agreement an economic rent is charged to tenants of houses built with moneys advanced under the agreement; this economic rent includes an element to cover repayment of the capital cost of each project. If any loss is not otherwise recoverable and is met by the Housing Commission from Housing Agreement advances the economic rent charged would be affected.
  5. Loss of subsidy would increase the capital costs of the houses concerned and this increased cost, if charged to Housing Agreement houses, would be reflected in increased rents.
  6. The Commonwealth Government has not given approval which would cover the building of 74 houses cither wholly or substantially of Australian materials. The only approvals which were given are listed in the answers to question 7.
  7. Commonwealth approval for substitution of Australian materials was limited to the following items: -

    1. 19th February, 1952 - Substitution of Australian hardwood for imported timbers for steps, sills, plates and bearers.
    2. 5th December, 1952 - Replacement by local asbestos cement of 875 sheets of imported corrugated asbestos cement damaged by fire.
    3. 4th March, 1953 - Substitution of imported asbestos cement for imported weatherboards in the external sheeting of 40 houses more than the terms of the contract provided for.
    4. 16th March, 1953 - For approximately 80 houses, substitution of3-in. by 2-in. and 2-in. by 2-in. local hardwood studs for imported softwood in the external and internal walls respectively.
  8. See answer to6.

National Service in the United Kingdom.

Mr.Ward asked the Minister for Labour and National Service, upon notice -

  1. Is he able to say whether a body in the United Kingdom known as the Economic Research Council has conducted an investigation into the effect of national service training in that country, and has reported to the United Kingdom Government that - “National ser vice is to blame for a staggering increase in crime, sex offences, drunkenness and hooliganism amongst youths in the last few years. Convictions for violence amongst youngsters aged seventeen to twenty years rose more than 50 percent. between 1949 and 1954. Sex offences and convictions for disorderly conduct soared during the period almost to the same degree. Drink offences grew by 167 per cent. while suicide rate among boys is now four times the 1938 figures”?
  2. Is the Economic Research Council an organization of high standing in the United Kingdom, and is it recognized as such throughout the world?
  3. If he has not already done so, will he obtain and study a copy of this report and, in due course, make a statement, particularly in regard to any relationship which the report and the findings of the Council may have to the operation of national service training in this country?

– The answers to the honorable member’s questions are as follows: - 1, 2 and 3. I am aware of a report in the London Times that a private organization in the United Kingdom known as the Economic Research Council published a pamphlet in January of this year criticizing a government White Paper on the results of an official inquiry into the resettlement of national service men into civilian employment. I have not seen this pamphlet and do not know whether it contains the passages quoted by the honorable member. Neither do I have any information about the reputation enjoyed in the United Kingdom or elsewhere by the Economic Research Council. While I have seen reports alleging that increases in juvenile delinquency have occurred in many countries in recent years they have by no means been confined to countries in which national service schemes are in operation. I would also point out that a connexion between national service and juvenile crime in Great Britain, even if its existence could be demonstrated, would not necessarily have any bearing on the situation in Australia. Finally, I have no reason to believe that the national service scheme in this country has had other than a valuable and useful effect on those young men who have been trained under it.

Cite as: Australia, House of Representatives, Debates, 12 April 1956, viewed 22 October 2017, <>.