House of Representatives
6 September 1956

22nd Parliament · 1st Session

Mr, SPEAKER (Hon. John McLeay) took the chair at 10.30 a.m., and read prayers.

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– I desire to ask the Acting Prime Minister, in his capacity as Treasurer, a question relating to a matter of some importance and urgency. I refer to a statement made in the Senate yesterday evening by my colleague, Senator McKenna, the Leader of the Opposition there, which, on the face of it, appeared to indicate, in respect of the budget changes in relation to insurance premiums, a leakage of information from Government sources. All that I ask the right honorable gentleman to do at present is to look into the matter and, after inquiries have been made, to make a statement to the House at the earliest possible moment.


– 1 was very disturbed when I heard this morning of the allegation made by Senator McKenna in another place. Obviously, I have instituted an immediate investigation of the matter.

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– I address a question to the Acting Prime Minister. Does it appear from discussions with the Queensland Premier that at long last he and his Government have come to realize the disastrous economic effects that have resulted and could further result from his Government’s lack of action in relation to the shearers’ strike in that State? Can the Acting Prime Minister inform the House whether the Queensland Government will now take resolute action against any individual or group that is interfering with the production, sale and transport of the State’s wool clip? Can the Acting Prime Minister inform the House of the action proposed by the Queensland Government in this connexion?


– I suggest respectfully that the question be answered by the Minister for Labour and National Service, who has this matter well in hand.


– The Government has been closely watching the position in Queensland since the announcement of the postponement of the wool sales in that State. Indeed, we had been in touch with the wool buyers’ association before that time as the result of a communication from that organization asking whether there could be any assurance that wool purchased in Brisbane would be promptly loaded and shipped. We pointed out that certain limitations were imposed upon our capacity because some aspects of that operation clearly came within the jurisdiction of the State Government. We also said that the Commonwealth Government would, subject to the rights that any party might have before appropriate industrial tribunals, do what it could to ensure that the wool was duly despatched. Since the cancellation of the wool sales in Queensland, the Premier of that State has been active, I gather, in pressing the wool buyers to resume the postponed sale, and has given them certain assurances in regard to the matter. He has pointed out that such action as can be taken by his government would not extend to the wharf area, which, he says, is controlled by Commonwealth awards. The Acting Prime Minister received a telegram from the New South Wales and Queensland Wool Buyers Association, in which it was pointed out that certain assurances had been received from the Queensland government, and in which we were asked to give some assurances in relation to the despatch of cargoes from the wharf. The Acting Prime Minister replied by telegram to the wool buyers association in the following terms: -

Have noted contents your telegram relating to proposed resumption of postponed Brisbane wool sales stop Commonwealth Government will if necessary use its best efforts to ensure that wool shorn stored and transported in accordance with conditions prescribed by appropriate industrial tribunal is promptly loaded after delivery at wharf.

We have no information to suggest that if wool reaches the wharf it will not be handled in the normal way, but, recognizing the importance not only to the economy of Queensland but, indeed, to the whole national economy of the prompt despatch of this valuable export commodity, we are willing to ensure, as far as it is within our power to do so, that industrial awards are observed.

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– I direct my question to the Minister for Labour and National Service. As thousands of coal miners have lost employment at mines that have been closed down because of over-production, which has been greatly contributed to by the importation of slush diesel oil which competes with coal as fuel for railway locomotives and other engines, will the Government consider the possibility of extracting oil from Australian coal? Other countries have adopted this practice, using coal with a lesser oil content than that which is found in Australia. I may mention that the coal from the Greta seam has the highest oil content of any coal in the world.


– We are conscious, of course, of the problems that have arisen in the coal industry, and I have told the House on other occasions of the arrangements that the Government has made in an endeavour to solve them. A committee fully representative of all sections of the coal industry has been established. This Government is directly represented on that committee, which has been examining the problems of the industry and taking such action as it has believed desirable. In conjunction with a special re-employment committee that has been established, it has endeavoured to ensure that any miners displaced because of changes that have occurred in coal producing areas are placed in as suitable employment as practicable with the least possible delay. I appreciate the concern which the honorable member for Hunter shows in relation to these matters, and his regard for the welfare of his constituents, but I do not think he does them any service by unnecessary exaggeration of the situation. Indeed, the future prosperity of the coal industry will depend, to no small degree, upon the confidence that industry generally has in its ability to obtain regular supplies of good quality coal. That is more likely to be the case to-day than it has been at any earlier point of time in recent years. As to the general employment situation, the honorable member will be interested to know that, during recent months, there has been some increase of employment in the coal industry. Figures which have been supplied to me show that, whereas at the end of May there were 17,784 people employed in the coal industry, at the end of August there were 18,109; so that does not suggest any tragic or seriously depressed position in the industry. There will be, of course, from time to time, adjustments arising either from new developments in particular coal mines or increased mechanization and matters of that character. There is, I gather, a temporary problem arising out of difficulties which have cropped up at the Bellbird mine, but the whole picture, while it reveals need on the part of the industry to conduct itself as efficiently as possible, certainly does not give cause for despair for the future of the industry.

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– I desire to ask the Minister for Health what progress has been made with the poliomyelitis vaccination campaign. Have the supplies of Australian vaccine been continuous? Are the vaccinations being conducted without incident and are all the State health authorities cooperating? What age groups are expected to be vaccinated this year?


– Very good progress is being made with the poliomyelitis immunization campaign. Only Australianproduced vaccine is being used, but supplies are adequate at present for all requirements and it is probable that they will become more than adequate in the very near future. The campaign started in July, and now. less than two months later, approximately 550,000 doses have been given. They have been supplied to the State governments, who are actively co-operating in the administrative arrangements, at a rate in excess of the rate at which they can be used, so we do not anticipate any shortage of vaccine, or any inability to keep up supplies. By the end of the first year, the whole of the age group from none to fourteen, in the country, or at any rate all of those whose parents have consented, which will be a very high proportion of that age group, will have had two inoculations with the vaccine, and though we are not quite sure yet, it is probable that many of them will have received their third inoculation. In that age group there are, in Australia, about 2,500,000 children, so that it will be seen that the rate of inoculation in Australia, in proportion to the population, is very high. In fact, it is higher than it is in any other country of the world. I think it is fair to say that we can be very satisfied with the progress of the immunization campaign in

Australia, and I should like to say, too, that this House and the country owe a debt of gratitude to the right honorable gentleman who asked the question and who was responsible for initiating the campaign.

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– My question, Mr. Speaker, is to the Minister for Immigration. By way of explanation, I refer to recent statements attributed to officers of the Department of Immigration that single women are being brought to Australia in the guise of domestic workers, but principally as future spouses for bachelor new Australians who complain of feeling lonely. Can the Minister say whether this, in fact, is the true object? Is the right honorable gentleman aware that lack of domestic service in hospitals, hotels and people’s homes is one of the minor social problems of the time? ls it the intention of the Government to try to remedy this and thereby help harassed housewives and mothers through the encouragement of domestic workers who otherwise might be unemployed in Europe? Or does he secretly aim at establishing within the department an international matrimonial agency of a most unusual kind?


– Dealing with the last part of the honorable gentleman’s question first, 1 mention that we have tackled many things inside the Department of Immigration on this varied and considerable programme over the years, but neither my predecessor nor I has aspired to set up a matrimonial agency. I think there was a Holt’s Matrimonial Agency functioning in Victoria at one time, but I assure the honorable gentleman that it had no connexion with me or any known member of my family. I have referred in the Parliament before to this problem of the ratio of males to females, particularly as it relates to the immigrant intake. The position is not quite as serious as some honorable members imagine, because the overall balance between the sexes in the Australian population can be regarded as generally satisfactory. At 31st March of this year, the ratio was 102.7 males to 100 females, and that compares favorably with the ratio in other rapidly developing countries. But problems do exist in individual localities. For example, in the Northern Territory, the ratio is 153 males to 100 females. In

Queensland it is 105.4 to 100, whilst in New South Wales and Victoria the ratios are 101 to 100 and 101.8 to 100 respectively. Again, differences exist between city and country areas. For example, the 1954 census showed that the ratio in metropolitan areas was only 96 males to 100 females. The ladies would appear to be not in such great demand there. In country areas, the ratio was 121.1 males to 100 females. It will be seen that there is a very considerable differential in country areas, which is quite apart from the problem of the national group.

Dr Evatt:

– This question took the Minister by surprise?


– No, a similar question was asked the other day by an honorable member on the right honorable gentleman’s side of the House, lt is the sort of question that 1 know will interest many members of Parliament and their constituents. None of us likes to feel more lonely than he must. We have consciously tried to do what we can to meet the problem as it exists. It is true, as the honorable gentleman puts it, that we have sought to introduce a certain number of people for domestic work and for work in our various institutions. In the last year, some 4,000 persons came to Australia for that class of work either under the assisted passage schemes or as full fare paying passengers. As the honorable member is only too well aware, and as I am sure many of us in the Parliament are, the rate of turnover is considerably higher than perhaps we would wish. The other point is that under our assisted passage scheme we provide opportunities for men in Australia to nominate their sisters and fiancees to come to this country and thereby assist in meeting the problem to which he has referred. Generally speaking, we think the answer can best be provided by the introduction of family groups, so that, as the boys and girls approach marriageable age, the ratio of males to females throughout the whole of Australia is more likely than not to be in balance.

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– In view of the increases which have occurred in hospital and medical fees during the last few months, will the Minister for Health give immediate consideration to granting -a substantial increase in the Commonwealth subsidy to hospital and medical fund payments? Will he also give immediate consideration to increasing the Commonwealth grant to public hospitals?


– The financial arrangements for the assistance of public hospitals are the subject of an agreement between the Commonwealth and the States. I think that the current agreement has about eighteen months to run and there is no present intention of making, and in fact we have received no requests from the States so far for, any review of the agreement.

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– Has the attention of the Acting Prime Minister been directed to published remarks by the Premier of South Australia, who is reported to have said in the South Australian Parliament that the committee on constitutional change is approaching its duties in a haphazard fashion and all that it is concerned with is making some arrangements to correct the Senate position? Would it be proper to inform the Premier of South Australia that his comments are based on wrong premises? Is it not a fact that this committee was appointed to review such aspects of the working of the Constitution as the committee considers it can most profitably consider, and to make recommendations for such amendments of the Constitution as the committee thinks necessary in the light of experience? In plain terms I think that means that the committee will review the Constitution and its working over the past 50-odd years and that if it thinks proper to recommend any amendments it will do so.


– I have not seen the report to which the honorable member refers, but I agree with him that the intent and scope of the functions of the committee are such that Mr. Playford or any one else will be given an opportunity to present his views before the committee, which is an all-party committee appointed by this Parliament.

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– I direct the attention of the Acting Prime Minister to two statements recently made in the Parliament. One was made in this House by the Minister for the Interior, who said -

The melancholy fact emerges that in the whole of Australia there is not available sufficient data about rainfall, run-off, soil absorption, evaporation, river flows, and matters of a like nature, on which adequate schemes of flood mitigation can be developed.

The other was made in another place by the Minister for National Development, who said that the States -

  1. . have all the knowledge and information concerning river flows, of the general state of the river and of the works that might be erected to assist the position in the future.

In view of these apparently conflicting statements, the need for adequate knowledge to prevent great national losses in the Murray River valley, and the extent of research in other countries into these matters, will the Acting Prime Minister take steps to ascertain whether adequate knowledge is available in Australia and, if not, to obtain it from overseas as soon as possible?


– I fail to see where there is any confusion between the two statements. They are statements from different angles on different aspects of a problem, and I should be very surprised to know that Australia is not up to date in comparison with any other country in respect of such information, data and research. The Commonwealth Scientific and Industrial Research Organization is one of the most notable and distinguished organizations in the world and it has conducted important research. As a matter of fact, quite recently it has developed what might easily be a revolutionary system of rain precipitation. However, I shall look into the matter and ascertain whether the organization’s activities can be extended. I agree that the gathering of such data is very important.

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– I direct a question to the Minister for Labour and National Service. In a recent broadcast, the honorable member for Oakleigh in the Victorian Legislative Assembly stated that the figure of 9,000 unemployed released by the Minister did not tell the true story, and that figures supplied by the trade union movement showed the total as being closer to 40,000. Will the Minister inform the House whether the statement of the Victorian member, who is also secretary of the Victorian State Parliamentary Labour party, told the true story?

Mr Peters:

– He is a very capable man, too.


– He may be a very capable man in some matters, but he has either not taken the trouble to examine the facts released by me or wilfully distorted the position so far as I have presented it to the public. As I have told this House on more than one occasion, each month we release a series of figures designed to show trends in the employment situation in Australia. No one figure, whether it relates to unemployment benefits, to. the number of those who register themselves as unemployed and seeking work, or the movement in factory employment, can of itself be taken as a reliable indicator of the degree of unemployment existing at any one time, or even of the employment opportunities indicated by the vacancies registered with the Commonwealth Employment Service. But I believe that, taken together, they give a reliable and useful picture of the trend at any time. The figure of 9,000 to which Mr. Doube referred was the current figure for persons in receipt of the unemployment benefit. As honorable members know, those are people who have been out of work sufficiently long to qualify for the benefit.

Mr Ward:

– Provided they can pass the means test.


– Order!


– The number of 40,000 to which Mr. Doube referred was, in point of fact, since his figures could have come only from Commonwealth sources. 35,000 and some few hundreds, representing people who, at a given time, had registered themselves as being available for employment. That group may have changed in composition within the next day or two. Each week a certain turnover of labour occurs. Some people are placed in new jobs, and others come onto the labour market. So the complete picture throughout Australia at the time when Mr. Doube made his statement showed that fewer than 10,000 people were receiving unemployment benefits and some 35,000, including these, were seeking work. T believe it is time this Parliament got a realistic picture of the employment situation and what we should be aiming at, because we in Australia have enjoyed full employment, in the real sense of the term, over the last six years. It is quite absurd for Opposition members to try to cause panic or inspire depression talk the moment it is revealed that we have a number of people who are available for work - and who are regularly placed in work. Before World War II., we were accustomed to periods in which unemployment in this country averaged upwards of 10 per cent. In the year before the war, it was more than 10 per cent.


– Which government was in office then?


– It was the same government that was in office in 1937 when the union of which the honorable gentleman was a distinguished official applied to the court for a prosperity loading on the basic wage. That was the government which had been steadily clearing up the mess which developed during Labour’s term of office in the early years of depression. It was in the period when we were accustomed to an average of 10 per cent, of unemployment that the honorable member for Parkes, who is a leading member of the Australian Labour party and one of its current shadow cabinet, went on record as saying in this Parliament -

I realize that there cannot be total employment, but if we can get down to 5 per cent, of unemployment, for all practical purposes that can be regarded as total employment.

Mr Haylen:

– That was on a repatriation measure.


– I am not putting that critically to the honorable gentleman but, having regard to the employment level of those days, it seemed to be a pretty realistic approach. Indeed, as honorable members opposite should know, the standard text-book on “ Full Employment in a Free Society “, by Beveridge, which was quoted with loud approval by honorable gentlemen opposite at that time, stated that 3 per cent, “of frictional unemployment was about the minimum that could be reached in a free society under conditions of full employment. So we have done very much better than that and we intend to go on doing better than that. But it is quite absurd to attempt to present a picture of unemployment to the people of this country when, in point of fact, the numbers on unemployment benefit amount to less than one-third of 1 per cent, of the work force of this country. Far from the employment position even starting to gallop out of hand, I find that, in the last week’s figures which have just been supplied to me, for 25th August, there has actually been a further drop of 239 in the number of people in receipt of the unemployment benefit in this country.

Mr Haylen:

Mr. Speaker, I should like to make a personal explanation - not that 1 care very much about the statement of the Minister for Labour and National Service, but because of the fact that the quotation from a speech of mine made, I think, in 1945, is completely out of context, and is misleading. If the figures quoted about the current employment position are in the same tenor the whole statement is wrong. The speech that 1 made was relative to the re-establishment of servicemen in this country, and the matter referred to was the employability of sick men in hospital at the time. It is in “ Hansard “ and the Minister can find it there.


– I read the speech last week.

Mr Haylen:

– Read it again. The quotation is completely out of context. If the Minister reads the speech again, he will find that it has no reference to full employment but relates to the employment of ex-servicemen.

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– Will the PostmasterGeneral inform me whether there is any shortage of telephone instruments or other equipment needed to complete installation of telephones after wiring has been connected to business houses or dwellings? Can the Minister explain why rentals should be collected from intending subscribers up to twelve months prior to the work proceeding, or why instruments should not be connected for indefinite periods after wiring has been completed? Is it a fact that delays in telephone installations over recent months have been deliberately designed to enable the Postmaster-General’s Department to collect the installing fee of £10 provided for in this budget? If there is no shortage of instruments and if the recent delays have not been deliberate, will the Minister take action to see that more technicians are employed by his department to ensure a more satisfactory installation of telephone services?

Postmaster-General · DAWSON, QUEENSLAND · CP

– I shall refer, first of all, to the suggestion contained in the honorable member’s question that there has been some deliberate delay in the installation of telephones with the object of holding those installations over until the installation fee became operative. I must confess that I am surprised that such a suggestion should come from the honorable member for Shortland. In actual fact, the department had no idea whatsoever as to what would be the policy of the Government in this matter and, in any case, a suggestion that the department would involve itself in any such matter is quite unfair in view of the service that the department has established. The department does not deal in such matters at all. The honorable member also asked for particulars regarding the shortage of telephone instruments for installation. There is no overall shortage. From time to time, in any particular area, there may be a short period in which telephone instruments are not available, but that is made up. lt does not arise from any overall shortage. It arises from little difficulties which occur from time to time in actual distribution. I did not take notes of all the points raised by the honorable member for Shortland, and if there are any that 1 have not dealt with in my answer I shall give him a written reply.

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– In directing a question to the Minister for the Army I refer to a large area of land, which the Army has taken over, to the north of Lancelin, in Western Australia, for training purposes. Access to that land would involve the use, by the Army, of a considerable stretch of a public road. The nature of that road and of the country through which it passes is such that severe damage is likely to result from its use by heavy and numerous Army vehicles. In view of the very happy relationship that exists in Western Australia between local governing authorities and the Western Command, will the Minister encourage the continuance of that amicable relationship by giving an assurance that the

Army will assist in maintaining such roads as it uses for access purposes to its establishments to the extent of seeing that they are available for public use in a good trafficable condition?

Minister for the Army · BENNELONG, NEW SOUTH WALES · LP

– I can appreciate the importance of the matter that the honorable member for Moore raises in connexion with that particular area in Western Australia. For his information, the area taken over by the Army is for the purpose of Citizen Military Forces training - that is, for the 13th Infantry Brigade and a head-quarters group of Western Command. It is intended only for their annual camps. The approval of the Governor-General was obtained only last month for those annual camps to be held this year from 9th to 14th September and from 1st to 6th October. The Army is, in fact, building an internal road in the area. That work, I understand, has been favorably commented on in Perth, because the road will be of considerable value to some of the local people, particularly, I am given to understand, to fishermen. The movement of vehicles in connexion with these annual camps is not expected to be more than normal movement, and, therefore, is not expected to damage the road. If, of course, Army vehicles did damage the road as a result of their movements in connexion with these annual camps I certainly would look into the matter, but at the moment I can give no assurance on the point because it is not expected that there will be any undue damage to the road.

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– I desire to make a personal explanation, Mr. Speaker.

Dr Evatt:

– Has the Minister been misrepresented?


– I have, quite seriously. The honorable member for Parkes (Mr. Haylen) in making a personal explanation, in effect accused me of wilfully distorting, and tearing from its context, a statement made by him. He implied that I had done so in order to produce a significance that suited my own purposes, but did not accurately represent his own attitude of mind. That is quite a serious charge. I do not make a practice of misquoting statements made by honorable gentlemen opposite and I desire, therefore, to place on record now the actual statement made by the honorable member for Parkes to which I referred, as it appears in “ Hansard “, in order that the matter may be fairly resolved. I quote from volume 182 of “Hansard”, at page 1697, from a speech made on 15th May, 1945, by the honorable member for Parkes when he was speaking to the Re-establishment and Employment Bill 1945. The relevant passage, which I shall quote fully, runs as follows: -

Mr Ward:

– lt related to servicemen.


– Let me read it. Then honorable members will be able to form their own conclusions. In making my earlier reply, I took advantage of that occasion to say that I was not being critical of what the honorable member for Parkes had said. From what we know as a result of our pre-war experience, he might quite fairly have regarded that view as a realistic assessment of what might be expected in a reasonably prosperous society after the war. This is what he said -

When this war ends, we shall be faced with a problem of re-establishing 1,500,000 men and women in normal occupations. If one were to approach the first ex-serviceman whom one met in the street in Canberra to-day, and to ask him whether he would rather have the preference which was granted to returned soldiers after the last war, or the preference proposed by this measure, for seven years, with a high-pressure policy of reconstruction behind it, the unhesitating answer would be in favour of the latter. The preference scheme introduced after the last war was not a serious attempt to solve the problem and it received its final blow when the depression struck Australia. The ex-soldier was decanted from his job just as surely as the man who had no preference lost his employment. It is an empty gesture to tell men who have fought for us that we shall give them preference in employment unless we also say that we shall create, so far as possible, total employment. I realize that there cannot be total employment-

There was no qualification about sick people, invalids or such persons - but if we get down to 5 per cent, of unemployment, for all practical purposes that can be regarded as total employment. If we say to exservice men and women, “There will be jobs abounding and we shall give you preference so that you may advance your career in consonance with your efforts” we shall be doing a good job. If, on the other hand, we listen to the sophistry of the Opposition, we shall be giving to the ex-service men and women only a Kathleen Mavourneen promise of preference, “ It may be for years and it may be forever “, and, assuredly, it will not work. Their lives will be unplanned and their future unpredictable, because they will be subject to the vagaries of commercial enterprise and the sequences of boom and “ bust “.

The fairest thing we can do for the ex-serviceman is to ensure that there shall be jobs for all, and that within the compass of “ jobs for all “ the ex-serviceman shall have a preferred position.

In stating the passage at length, 1 think I have been fair to the honorable gentleman. I believe it is evident from what I have said that he was referring to the employment situation generally, not to an invalid, incompetent or incapacitated section of the community. In the sense that the honorable gentleman understood the term “ total employment “, this Government has given “ total employment “ throughout its term of office. May I wind up by saying that in 1 947, when Labour was in office, the census, taken that year, recorded unemployment to the extent of 83,000 people?


– Order! The Minister for Immigration is out of order in arguing.

Mr Haylen:

Mr. Speaker-


– Does the honorable member claim that he has been misrepresented?

Mr Haylen:

– Am I enabled, under the Standing Orders, to reply to the Minister’s allegation?


– No.

Mr Haylen:

– I am not? I have made a personal explanation. Am I allowed to reply to what the Minister has said.


– No.

Mr Haylen:

– All I can say is that it was a splendid statement.


– Order! That is out of order.

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– I lay on the table the following paper: -

Nationality and Citizenship Act - Return for year 1955-56.

I point out that, in addition to the 24,015 certificates of naturalization indicated in the paper, there also was included in tm total of naturalizations for the period 5,092 children, whose names would not appear.

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BUDGET 1956-57

In Committee of Supply: Consideration resumed from 5th September (vide page 256), on motion by Sir Arthur Fadden -

That the first item in the Estimates under Division No. 1 - The Senate - namely, “ Salaries and allowances, £26,500”, be agreed to.

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

That the first item be reduced by £1.


.- The subject before the committee is the budget. People have tried to describe this budget. Many of them have referred to it as a “ gloomy budget “ and a “ barren budget “. Even the newspapers could find no better name for it than the “ barren budget “. If the newspaper proprietors could shield this Government in any way, they would certainly do so, but those are the best words that they have been able to find to describe the budget.

The Treasurer (Sir Arthur Fadden), in his budget speech, spoke of the high cost of living and of inflation. He emphasized the menace of inflation. The Leader of the Opposition (Dr. Evatt) has said that the budget does not contain any remedies or any plan to deal with the economic crisis that is apparent to all. We remember that during the last twelve months the Prime Minister (Mr. Menzies) has made three statements about Australia’s economic position. He made one statement on 27th September, 1955. Before making that statement, he invited to Canberra a whole lot of people- - mostly leading monopolists, private bankers, representatives of the Associated Chambers of Manufactures, representatives of the Employers Federation and representatives of Australian Consolidated Industries. He invited all those people who, 1 claim, are responsible for the inflation that exists in Australia to-day.

When the Prime Minister met them in Canberra, he said, in effect, “ In view of the fact that we have taken steps to freeze the wages of workers in Australia, if you people play ball, do not make the game too hot, try to refrain from high profiteering and make some attempt to stabilize the economy, things will be all right”. After those deliberations, the Prime Minister made a statement on the economy on 27th September, 1955. He made another such statement on 14th March, 1956, and yet another on 20th June, 1956, just before he went to England. On each occasion he referred to the serious position of our national economy.- He referred to both our external position and our internal position. He made splendid statements in relation to those matters. They were, as usual, full of high-sounding words. But we know that it is action, not words, that is needed to overcome the economic crisis.

The crisis reveals itself externally in our overseas funds. Those funds have declined from over f 800,000,000 in 1949, when a Labour government was in office, to less than £400,000,000. Honorable members will recall that the Prime Minister said that if our overseas funds fell below that figure, it would be very serious for us. The great increase that has occurred in the cost of living is affecting every home and every person in the community. It is especially severe in the case of pensioners.

The budget was full of emptiness. If it had made even some slight concession to pensioners we might have said, “Thank goodness at least for that”. But it had nothing for the pensioners. It made no increase in child endowment, and we must remember that the value of the child endowment has decreased to a marked degree. Social services have been neglected by this Government. In 1949 the basic wage was £6 9s. a week. It is now £13 a week, indicating that the cost of living has more than doubled in the six and a half years that this Government has occupied the treasury bench. What has the Government done about it? Each statement that the Prime Minister has made regarding our economic position has been accompanied by action on the part of the Government and the Treasurer. The steps that the Government has taken have been hailed by all its members, and by its supporters who blindly follow them, as being capable of stabilizing our economy, .guaranteeing a higher standard of living and ensuring our future prosperity. The Prime Minister made those promises when he decided to take the remedial action that has been taken. He painted a bright picture, but his promises have not been fulfilled.

Let us examine the measures adopted by the Government, and which it has described as remedies. It has increased taxes in every direction, saying that although this may not have been very palatable, it was one of the measures necessary to put the economy right. It increased individual taxes and indirect taxes in many fields, such as those of sales tax and excise. The Government has doubled its taxation revenue, just as it has doubled the cost of living. The last budget brought down by a Labour government provided for £500,000,000 revenue from taxes. The budget now before the committee includes an amount of £1,100,000,000 for revenue from this source.

As the cost of living continued to rise, quarter after quarter, the Government said that if wages were pegged and automatic adjustments of the basic wage were abolished, inflation would be halted. Notwithstanding that such action was taken, the cost of living continued to rise. On the last occasion when the basic wage was increased by an automatic quarterly adjustment, it stood at £11 16s. a week. To-day it is £13 a week, showing an increase of 10 per cent., even though the automatic quarterly adjustments were abolished.

I now wish to make a few remarks about our overseas trade balance, lt will be remembered that the Prime Minister, in September’ of last year, became very alarmed about the position of our overseas balances. He made a statement on the matter, and then imposed restrictions which reduced our imports by £81,000,000. This action, he said, would correct the adverse trends that were appearing in our trade balance. Before six months had elapsed it was found that £81,000,000 was not sufficient. The Prime Minister made another economic statement on 14th March, 1956, and further restrictions were imposed, as a result of which our imports were reduced by another £75,000,000. Shortly before the Prime Minister left this country in June to attend the Prime Ministers conference in London, he made another statement regarding Australia’s serious economic position, which was followed by a further increase in import restrictions, reducing our imports by another £40,000,000. In the last twelve months imports have been reduced by £200,000,000, but the budget showed that our overseas balances are now down to £355,000,000, and honorable members will remember that the Prime Minister said it would be disastrous for Australia if our overseas balances fell to that figure.

I should like to summarize the performance of the Government in the economic field since 1949, bearing in mind that it was elected on a policy of maintaining prosperity and restoring value to the £1. Since 1949 it has doubled taxation revenue, although it was elected to reduce taxes. It has more than halved what was a very creditable overseas balance. It has cancelled quarterly adjustments to the basic wage and has restricted credit in every direction. This policy of credit restriction has prevented development. It has caused a contraction rather than an expansion of our development programme. Interest rates have increased by from 50 per cent, to 100 per cent. The Government has sold out many of our valuable national assets at bargain prices. It sold shares in Amalgamated Wireless (Australasia) Limited at much less than their value. Those shares are now worth a very great deal more than the amount for which they were sold, and I remind the committee that the electronics industry is very important in our community life. The Government held the majority of shares in the Commonwealth Oil Refineries Limited, but it disposed of those shares to the overseas oil cartels. We are now paying the piper in dearer petrol. Last, but not least, the Government disposed of the assets of the Australian Whaling Commission, which were valued at £4,000,000, and were making excellent profits for the nation. Besides selling out those national assets, the Government has entered into agreements, in the airlines and shipping industries, with its competitors, which will eventually result in the strangulation of the government airline and its own shipping line. The Government has interfered with the country’s conciliation and arbitration machinery to the extent that relationships between employer and employee have become very strained. The Government has shackled the Commonwealth Bank by dividing its functions, although it was working very satisfactorily. It has allowed private banks to enter the savings field.

Mr Duthie:

– One of the worst things it could have done.


– lt could not have done worse. That was one of the Government’s moves in its plan eventually to destroy the Commonwealth Bank. The function of a savings bank is not a trading or a business function. The Commonwealth Savings Bank was established as the caretaker of the people’s savings. It was performing that task very well, and it had plenty of facilities to continue to do so. There are nearly 500 branches of the Commonwealth Savings Bank in Australia, and over 6,000 agencies. There is no part of Australia where the

Commonwealth Bank is not in a position to look after the savings of the people. I hope that when the Labour party conies to power, as it surely will, it will withdraw the permits for trading banks to enter the savings field. It must be remembered that any profit made by the Commonwealth Bank in its savings bank business, or from its other functions, is returned to the people of Australia. The profits made by the private banks go to private shareholders, many of whom do not even live in Australia. This Government has allowed excessive profits to be made in many directions.

The matters to which I am referring would, according to the Prime Minister (Mr. Menzies), act as a buffer against inflation and put value back into the £1. With great pretence and eloquence, the right honorable gentleman assured us that his Government would develop Australia, strengthen its economy, and guarantee social and national security. But what is happening to-day? Instead of security, the community is faced with insecurity. The policy that is being pursued is making the rich richer and the poor poorer. Of course, that is typical tory policy. Monopolistic capitalism finally must fail. Security under such a system is impossible. It is boom or bust, up to-day and down to-morrow.

Recently, I read an article in the Sydney “ Sun “ newspaper under the heading “ Going Up! “ The writer asked -

Who were the lunatics who said that once price control went, competition would make prices drop?

The answer to that question is very simple. We on this side of the House know who the lunatics were. They were the Prime Minister and the people who stand behind this Government. It has tried all the remedies it has in stock, but sole responsibility for the present unsatisfactory condition of the economy rests on the Menzies Government and its supporters and planners. It was due to the opposition of the Liberal party and the Australian Country party that the prices control proposals advanced by the Labour Government at the 1948 referendum were defeated. They were the lunatics then. The defeat of those proposals is the main cause of our economic troubles to-day. Prices have been rising ever since that time. As I have pointed out, they have increased by more than 100 per cent. lt is obvious that the Menzies Government is unable to solve the problems of the nation. All its tricks have been tried and have failed. The national economy, far from steadily getting into difficulties, is deteriorating speedily. If the position is to be improved, the Government will have to apply controls such as those suggested by the Leader of the Opposition (Dr. Evatt), including control of capital issues, prices, costs, profits and interest rates. If the Commonwealth Parliament is found to lack power to exercise those functions, the Australian Labour party readily will support a move to amend the Constitution with a view to obtaining the necessary powers by referendum at the earliest possible moment. The Labour party is convinced that the effective exercise of such economic controls will stabilize all sections of the economy.

The bungling and maladministration of the Government has thrown the whole burden of economic recovery on the shoulders of wage and salary earners and, most tragically of all, those on fixed incomes, including the poor old pensioners and all who depend on social services and superannuation. Just fancy! Although this is the biggest budget ever presented in this Parliament, providing for expenditure of almost £1,200.000,000, there is not one penny more for the pensioners. Although the yield from taxation will be the greatest in the history of this Parliament, it is a sorry fact that there will not be an additional penny for the pensioners. The Government has broken its promises to the pensioners and has sadly betrayed them.

The experience of the war years showed that national control of capital issues, interest rates, costs and prices proved reasonably effective. I say, “reasonably effective “ because we all know that when the regulations applied during the war years it was not easy to police them properly. We all remember that black markets existed and black marketeers operated; but in peace time, it should be possible to police such regulations more effectively. The history of the basic wage since the war years proves that controls were reasonably effective. From 1941 to 1948, a period which covered most of the war years, the Commonwealth basic wage increased from £4 7s. to £5 14s. a week. Those are the figures shown in the Commonwealth “ Year-

Book,” and they represent an increase of 32 per cent, in seven years, or an average of 4.4 per cent, per annum. Then we lost control of prices and the difference became apparent immediately. During 1948-49, after the Commonwealth lost the power to control prices under war-time regulations, the basic wage, which of course is an indication of the cost of living, increased from £5 14s. to £6 9s. a week, or 13 per cent. So the rate of increase exceeded 200 per cent, immediately controls were removed. Since 1949, the Commonwealth basic wage has increased from £6 9s. a week to its present level of £13 a week. I understand that the next release of information concerning the C series index will indicate that the basic wage should be anything up to 15s. a week more than it is at present.

The average wage for the six capital cities, which at present is £13 a week, represents an increase in the cost of living of 102 per cent, since 1949, or since this Government came to power, so that the average increase during its period of office has been 17 per cent, per annum. There is an old saying that the proof of the pudding is in the eating, and the figures that I have given illustrate it clearly. During the period 1941-48, with fairly effective prices control, the cost of living increased by 32 per cent., whereas during the period 1948 to 1956, without prices control, it increased by 128 per cent. I believe that the answer to our economic difficulties is to return to a system of controls, instead of leaving the fixation of prices to those with selfish interests.

Mr Cramer:

– So the honorable member thinks that the cure is prices control?


– I think that there is a solution of our economic problems. To think otherwise would render me unworthy of my place in this Parliament. The power that is held and exercised over our national economy by monopolists here in Australia must be taken from them and placed in the hands of the elected representatives of the people. This Parliament has not complete power to govern because Australia adheres to an antiquated written Constitution which is 56 years old. It is a complete riddle and is full of errors and omissions. The National Parliament should be supreme. The only time when it should be subordinate is when writs are issued at election time every three years, when we place our destiny in the hands of the electors.

When a political party, at election time, puts its policy to the electors and obtains their approval of it by majority vote, nothing should prevent that party, whether it be a Labour party or a non-Labour party, from implementing its mandate. Our obsolete Constitution prevents that from being done. We boast about our democratic form of government, but I am certain that we in Australia do not enjoy full democracy. The right to vote does not mean that democracy exists. I believe that the Australian system of government is the worst in the democratic world. Australia has eleven State Houses of Parliament, consisting of six Houses of Assembly and five Upper Houses. Let us consider how the members of the five Upper Houses are chosen. The Upper House in New South Wales is elected by the vote of members of the Legislative Assembly. The people do not vote for the election of its members at all. The Upper House in Tasmania is elected on a very restricted franchise. Before he can vote, an elector must have a title or a certain amount of property or wealth. No one could claim that that is democracy. A similar position exists in South Australia and Western Australia. These Houses of Parliament are elected on a restricted franchise-

Mr Mackinnon:

– That is not the position in Victoria.


– In addition to the eleven State Houses, we have the Senate and the House of Representatives. I think that the members of the Legislative Council of Victoria are elected on a restricted franchise.

Mr Mackinnon:

– No. it is universal franchise.


– The method of electing the Upper House in Victoria may be better than elsewhere. Nevertheless Australia has thirteen parliaments, and all of them are potential law-makers. Then, for good measure, the High Court, which has the final word in the interpretation of the written Constitution, is not elected by the people. The justices of that court are not infallible. Unanimous decisions are rarely given on the various matters that are referred to the High Court, lt is not infallible; if it were, a unanimous decision would be given in every case. Further, if a constituent is not satisfied with the judgment and applies for an injunction restraining the law-makers, that application can be taken to the Privy Council in the United Kingdom. Any legislation enacted by elected representatives can be vetoed by unelected bodies. Nothing could be more ridiculous. If what I have described means democracy, then our dictionaries should be altered.

The economic crisis threatening Australia will remain until power is given to the National Parliament to correct it. That power would have to reside in this Parliament for the Labour party to carry out its policy. In 1949, the Prime Minister promised constitutional reform, and he has made the same promise several times since. I feel that he is insincere. As things are, the power in Australia is in the hands of the monopolists, the private banks and the wealthy classes.

The House of Representatives was supposed to be patterned on the system of government in the United Kingdom, but it is obvious from the description that I have given that there is no comparison between the two systems. In the United Kingdom, the House of Commons is elected on the full franchise of the people. The Upper House is the House of Lords. But the House of Lords is not a law-making body. It can only delay legislation, and then for not more than twelve months. I believe that some action has been suggested to shorten even that period. I say that democracy exists there, but there is no democracy in Australia. We are labouring here under what I term “ mock democracy

I believe in democracy; I do not believe in communism. But if our Constitution is not put in order, if a democracy is not formed and the people made to feel that they are really represented here, then Australia could become one of the countries that could be eventually dominated by communism. If the Prime Minister and the Government sincerely want to stabilize the economy and put value back into the £1, the steps that 1 have suggested are the remedies - this Parliament, and not private monopolists, should control the economy.

Mr. CHANEY (Perth) [11.45). - Before proceeding as I intended, I should like to take the opportunity of making a few comments on the speech of the honorable member for Banks (Mr. Costa). He feels that democracy is failing. Yet he declares that he is a champion of democracy - a statement that I believe to be fundamentally true. The greatest advertisement for democracy and our system of government is that a member of any political party can, in any House of Parliament, criticize the very system under which he works and lives. It is always good to know that democracy, even though it may have its faults, is much better than some systems that may be alternatives to it. Democracy, as it is constituted to-day and as we practise it, is the result of the freedom of people to express their opinions and to elect their representatives to Parliament.

The belief that democracy really exists in the House of Commons but not in this House of Representatives perhaps springs from the fact that in England electors are enrolled compulsorily but have a freedom of choice whether to vote or not. In Australia every one over the age of 21 years, who is an Australian or a naturalized Australian, is forced to go to the poll whether he likes it or not, and some of the results that arise from those conditions must be expected. The main fault of democracy as practised in Australia is that most people are not at all interested in politics and have, only a slight interest in politics during an election. Even then, a fairly high percentage of electors would not know whether representatives were being elected to the local fire brigade or the presidency of parents and citizens? associations. If we want to be champions of democracy or express a wish that democracy will survive in Australia, we must educate the general public to realize that the right to. vote is not a right given to them so that they can be fined if they do not exercise it, but that it is a privilege extended to them, and a privilege that many people in the world to-day would give life itself to be able to exercise. When the majority of the people in Australia realize that they are exercising a privilege and are not being forced to do something against their will, then perhaps, democracy in this very House will improve.

The honorable member for Banks spoke earlier of the rise in the. basic wage and the rise in revenue and- expenditure over a period of seven years. He mentioned that each had almost doubled. If one set of figures is taken and a principle established from it, then one must be prepared to have that principle established by the other set of figures. It is no good criticizing the rise in one and blaming some organization or government for it and then pointing to another and saying, “They do that and that is their fault, too “. Either they are not to blame and one has followed the other or they are to blame, but they cannot be blameworthy in both places.

Those people who listen to the broadcasts of parliamentary proceedings or read “ Hansard “ could get the impression that anything that originates from this side of the chamber is right in the opinion of 76 members and wrong in the opinion of 47 Opposition members. They could also get the impression that if anything is suggested on the other side, it is immediately right for 47 members and wrong for 76 members. That is not the pure exercise of democratic rights. No one could convince me that some question suggested by a member on this side could not be torn to pieces logically by a member of the Opposition and, similarly, that a question proposed on the other side could not be either accepted or torn to pieces by the members on this side. In the debate on the motion for the printing of a paper relating to the Northern Territory, something occurred which so rarely occurs in this chamber.. I think it was the honorable member for Adelaide (Mr. Chambers.) who, sitting on the Opposition side of the centre table,, voluntarily moved that an extension of time be granted to the Minister for Territories. (Mr. Hasluck), a member of the Government. That seemed to me to be an exercise of democratic rights and it was refreshing. The honorable member for Adelaide acted naturally, because- the: Minister was. expounding something that was of vital importance to every honorable member and probably of great interest to many persons who happened to be listening to the broadcast of the debate. Action of that kim! is taken, evidently, only when the matter has not a great political value. 1 do not say that- in any desire to detract from the motives of the honorable member for Adelaide, because his was a spontaneous action, but if that same spirit were to- infiltrate through the chamber debates would reach a higher standard and some of the problems before the country could be much more easily resolved, and the decisions eventually arrived at would find agreement amongst a far greater number of people.

I forgot to mention earlier that the honorable member for Banks (Mr. Costa) said that the Liberals defeated the referendum on prices in Australia. I think that that was his statement, in effect. I honestly believe that the people of Australia defeated the referendum. I understand that a referendum was conducted, and that the people voted as they thought fit. The Australian people, since the days of federation, have always been a little wary of voting in the affirmative on constitutional questions submitted to them in referendums, because they would rather keep the Constitution as it is. Furthermore, as I said earlier, so few of the people understand fully the question before them, even when arguments on both sides are presented, and they show a little caution in their voting. I believe that a far greater number of people than will so admit honestly think that prices control is not the cure for all our ills. Professor Arndt said, “ You cannot pluck from the medicine chest prices and wages control as a cure for your ills “. T proceed with a few of the points that emerge from this debate. It has been said repeatedly from the opposite side of the chamber that one can look back with great pride on the success made of loans during the war period, and on the trade that has been developed between Australia and other countries, and that it is the Government’s fault that the position is now deteriorating. Unfortunately, since the cessation of hostilities some eleven years have passed and an almost new generation has come forward in Australia. Unfortunately too, even the generation which was then well and truly of an age which could think for itself, has now become eleven years older and has forgotten some of the conditions which were rife in this country. Those conditions were rife because they were imposed by the exigencies of war and not because the government of the day wanted to impose them. It was obviously impossible to manufacture refrigerators, washing machines, and other articles, and therefore everybody who was in employ ment on fairly high wages, with prices as they were in those days, had a tremendous amount of spare money with which they had nothing to do but to invest in loans. An investigation of loan investments shows that a great percentage of the money came from persons not in the higher but in the middle income group, who normally would have been buying the things that they needed in their own homes. It is foolish to-day to expect the same response from the people, because their money has been used to purchase the things they would have purchased had the opportunity existed in time of war. That brings me to this point: To talk today of controlling everything is to talk of killing the very things which will make this nation progress. So many of us cannot look forward and look back at the same time, ff the people who first came to Australia, who hewed a living out of the jungle and faced shocking conditions and odds, had had the same spirit as is shown by some of the people to-day who wish to tie everything down with controls, the development of this nation would never have progressed beyond a few acres round Sydney Cove. We need to do a little thinking. There are difficulties in front of us, but they are difficulties which do not nearly measure up to those faced by the early settlers of Australia. We must encourage such a spirit that people are prepared to take risks and go into undertakings with a certainty of risk but with a chance of profit and of improving themselves. When one looks at the community to-day, one notes that many persons, whose early life may have been one of hardship, have now reached the stage where, by initiative, courage and determination, they have made the world the better for themselves and have obviously put themselves in a position where their children can be given far greater opportunities. We must think about that when we talk about controlling and putting restrictions on everything, which would kill the very things that will make this country great.

One theme of this debate has been the old people. I sometimes think that it is a pity that the persons for whom most of us have the greatest respect, and in some cases pity, should be made political footballs. Not one member on this side, or I venture to say on the other side, would not like to see every elderly person housed under the best possible conditions, but it is quite unfair to pluck a section from a budget which covers the expenditure of so many millions of pounds and which has so many ramifications, and to criticize the Government which has such tremendous responsibility, using one small section as the ram to drive home one’s argument. It is time that we in Australia took a lead from America and made a very close investigation of the position of old people. Many of us, I believe, would be surprised at the small number who are actually in dire straits, in comparison with the total numbers of persons over the age of 65, in the case of males, and 60 in the case of females. The figures for this group are much higher in Australia than in America. Persons who by age alone, omitting consideration of the means test, could qualify for social services, constitute 1 1 per cent, of our population. In America there is alarm that the corresponding percentage is 8 per cent. This constitutes a great argument for the maintenance of a vigorous immigration policy, because only by adopting such a policy and increasing the number of persons in the age groups of 30 and 40 years can we reduce the proportion of persons who are dependent on somebody for their existence. If we take this course, we shall find it much easier in the long run to meet our responsibilities towards the persons who are most in need.

Two surveys have been conducted in America, where it was found that 8 per cent, of the total population came into the high age group. Of a total of about 9,000,000 people shown by the 1954 census, 944,000 people in Australia had reached the age at which they would become eligible for social services benefits. Of that number, some 446,000 are receiving those benefits, which shows that the Government’s responsibility to the aged is a responsibility to half of the total number. If one could investigate the lives of every one of those 446,000 in the manner in which the American surveys were made, one would find that the degree of want varies greatly. The honorable member for Indi (Mr. Bostock) was severely criticized last Tuesday evening because he had remarked, during a previous debate, that the Government had gone as far as it could go in financing social services, f think that, in the same debate, he went on to mention the responsibility of children towards their parents. One of the gravest features of the problem of the aged in Australia is that far too many children forget their responsibility to their parents and, because we are building, or moving towards, a welfare state, they think the sole responsibility for the care of the aged rests with the Government. This constitutes a breaking down of the family as the focal point of society. No government can, by legislation, compel children to care for their aged parents. That care must come from the heart. It cannot be provided by means of the statute-book.

As I have said, the problem is not as bad as it is made out to be for political gain. I venture to say that any party would state the problem as a serious one if it thought it could gain political advantage by so doing. But that sort of thing does not assist the relatively small group of people who most need help. The Leader of the Opposition (Dr. Evatt) said that we all listened to the budget speech made by the Treasurer (Sir Arthur Fadden) waiting to hear not whether something had been done for the aged, but how much relief they had been given. That is my recollection of his words, and I think it is substantially correct. It is obvious that, if pensions had been increased by 5s. or 10s. a week, the Opposition would not have accepted the increase graciously but would have attacked it as being parsimonious and an insult to the pensioners. If we could get away from the political attacks that permeate the consideration of budget issues, and get down to a discussion of the basic problems, aged people would find themselves in far better circumstances in a much shorter time than will be the case if the present party-political lines of discussion are continued by the Opposition.

I have mentioned the American scene. Until recently, little up-to-date information on the problems of the aged in the United States of America was available. There had not been a single comprehensive analysis of the status of America’s older people since the New York State Commission on Old Age Security published its report in 1930. A new study has just been completed by John J. Corson, management consultant and former United States director of the Bureau of Old-age and Survivors Insurance, and John W. McConnell, a professor at the New York School of lad us trial and Labor Relations at Cornell University. The results of this study, entitled “ Economic Needs of Older People “, were published in January of this year by The Twentieth Century Fund. Some of the findings are amazing. They are summarized under headings such as “ Who are the aged? “, “ What do they do? “, and “ How is their health? “, and they reveal what percentage prefer to carry on in some occupation rather than receive social service benefits. In Australia, under our rigid legislation with respect to the retiring age, we sometimes condemn to the grave men who would be highly valuable in industry or commerce because of their wide and long experience in a particular field. We have accepted legislative provision for the retirement of all individuals at a given age when it is obvious, and a scientifically proved fact, that no two individuals are alike. One man might benefit by retiring at 55, and another by retiring at 75, but we have subjected the community to a blanket provision which is detrimental to the individuals concerned and to Australia generally.

We should make a factual investigation of the problems of the aged to ascertain how and where they live, and what proportion of them are in dire need. Under the Aged Persons Homes Act 1954, this Government has taken the kind of action that is best calculated to provide for the care of elderly people. That act stipulates that financial assistance shall be given to charitable organizations which can provide accommodation under something akin to home conditions in homes for elderly people. That is a far better way of tackling the problem than giving financial assistance direct to aged people and allowing them to continue to live in rooms and lodging houses when their own families have sometimes apparently forgotten them. I do not think the Government needs to apologize for anything that has happened. This is not to say that some of these things will not recur in the future. Criticism of what the Government has done and failure to acknowledge that it has acted in the best interests of aged people, can serve only to damage the future development of the aged persons homes scheme.

I turn now to a subject that received little mention in the budget, although it is a topical question in most States - Com monwealth aid in education. Since the introduction of the uniform taxation system, the Commonwealth has been looked upon as a source from which one can obtain all the money one wants for all the things one wants to do, regardless of the responsibilities of the Commonwealth itself. Strangely enough, the only argument that has not been advanced in an endeavour to obtain more Commonwealth assistance in education is the proposition that education is a defence matter. I have seen everything from the bridge over the Burdekin River in Queensland to the Narrows Bridge in Western Australia described as being vital to defence in an effort to obtain Commonwealth assistance. But, strangely enough, no one has claimed that education is vital to Australia’s defence. I suppose Russia and the United States of America think differently. With the development of science, and the advent of automation, skilled technicians have become so vital to the community that a country lacking sufficient numbers of them cannot hope to progress. The American education system is based on the endowment of colleges and other institutions by foundations. In Australia, we - I do not refer particularly to myself, because I have never been in a position to endow any one - do not endow educational institutions as the Americans do. Trusts such as the Ford Foundation in the United States have lifted the education system there to such heights that the Americans are well able to compete in the race to provide technical training for persons of skill and ability.

We talk much of the atomic age, but we often think of it only as an age in which we all are likely to be obliterated. It is obvious that, in the future, we need be afraid of only one thing - fear itself. There is a danger that the fear of obliteration will prevent us from doing the very things that will save us from obliteration. That statement may sound a little Irish, but it is logically correct. The Americans believe that, as an American magazine states -

The atomic age has served two urgent demands upon the American academic system: first, to create the scientists and technicians who will keep us in the forefront of military and peaceful technological achievement; second, to generate the understanding of human behaviour that will enable us to prevent the suicide of civilization.

The need, in either case, is for bold, young, free-ranging minds, and the place to stimulate such minds to such activity is, obviously, the college campus. The private university and college hold no exclusive franchise for this kind of stimulation, but the private school is the essential counterpart to the State-subsidized institution. If there were no private colleges - if every university in the land were beholden to a set of political godparents for its keep - the hazard of a politically imposed intellectual straitjacket would be very great indeed; the private college is the principal custodian of free, independent thought.

A little further on they say that people -will not accept this, like most things, but will dismiss it with a curt nod. However -

One statistic will give it point. As prospects stand, the United States will school 900,000 scientists and engineers within the next ten years. The Soviet Union will school 1,200,000 and be ready to export technical assistance.

So it will be seen that the problem is not only a race for arms, not only a race for atomic power, but also a race for technological skill and experience. We, in Australia, are far behind in any of our educational efforts in this respect. Our universities are crammed to capacity but we are not turning out a sufficient number of scientists to serve the everyday demands of science in the community. There must be a re-orientation of thinking about higher education. fi have just enough time to allow me to make one point in this respect. The Commonwealth has made one move in its granting of Commonwealth scholarships. Allied to these scholarships, which are granted on the skill of the individual, there is a living allowance, subject to a means test. The gross income allowed a person if his dependent child is to be eligible to receive the living allowance is £600, which is less than the basic wage. I think, speaking from memory, that the allowance drops by £1 for every £10 by which the income exceeds £600 until the living allowance cuts out at £1,100.

As I was associated with education for a long time, I think any system of help with living allowances must give the opportunity to those who are capable of proceeding through the course, but it must also give cognizance to the fact that the wage level is so high to-day that it is ridiculous to put a means test on the allowance. It is far better to say that the living allowances shall be decided on an upward scale so that it may be assured that those on the <very low incomes get them and that as the income goes up the allowances will cut out in the higher income group. At present, living allowances are not available to many students in Western Australia because they are disqualified by this means test. The means test, in itself, is quite foolish. I think that we should look into that matter in order to ensure that the scholarships will be used to the greatest advantage. We have to be careful. Government aid to education is one of those things of which the article in this magazine states -

Government could, doubtless provide the same funds to the same purpose-

The article had been referring to endowments from big companies or institutions. It continued -

  1. . if it chose, but not without the dangers that always attend the doling out of government subsidies. A measure of independence is always forfeited in exchange for government help;

I think that that quotation could be applied, not only to the granting of moneys for schools and universities but to every activity throughout the community and to every individual who is a citizen of this nation.


.- The budget statement of a Treasurer gives the “ state of a nation “ in regard to its financial, economic and social well-being. Therefore, it is one of the more important statements delivered to this Parliament every twelve months. In regard to the statement that has been made by the Treasurer (Sir Arthur Fadden) on this occasion, I find that certain very important facts should be emphasized to the Australian community. They deal with our indebtedness and the general trend of our financial position both externally and internally.

I find that, according to papers that have been distributed to honorable members, the Australian public debt stood at £3,888,000,000 at 30th June. That figure represents an increase of £139,000,000 in the twelve-month period since the last declaration by the Treasurer. Upon this amount a considerable interest bill requires to be paid, and that amount is £127,238,000 this year. That is the tremendous figure which to-day is levied upon the resources of this country in order to undertake the servicing of, and the future development of, this country.

Of course, I am afraid that we are not at the end of charges of that description. I find that, according to the statement of the Treasurer, our overseas trade balance was adverse to the extent of £221,000,000 in the last twelve months. The international reserves fell by £73,000,000 and the balance to our credit now stands at £355,000,000.

When this Government took office in 1949 our international balances were in credit by the amount of £850,000,000, but this has been reduced by £495,000,000 in the interval and to-day the balance is £355,000,000. I feel that that is a deplorable state of affairs, particularly when one realizes how great have been the external borrowings of this Government during that period. The Government has used every medium possible to get financial accommodation, and has exhausted all the avenues open to it to secure whatever loans it could. This year a certain amount of the loans that were raised in earlier periods are maturing. I find that the amount of loans maturing within Australia is £189,000,000. Our loans maturing in London amount to £7,000,000, and those maturing in the United States of America to 18,000,000 dollars. Some provision has to be made to meet the repayment of so much of these loans as is not converted. I have no doubt that there are many people who have invested in our government securities who may not desire to continue that contract with this country and convert their holdings. The Government has to have finance ready to meet that contingency.

The Treasurer has announced that he expects the current year’s financial operations to produce a surplus of £108,000,000, and no doubt the intention is to use that amount to meet commitments in respect of maturing loans, as well as other commitments. However, I consider that the budget, as a statement of the financial state of health of this country, offers us no promising prospect. I invite the Australian people to realize that this country at present faces a very grave situation as a result of the policy of drift followed by the Government, and of the fact that it has no plan to restore economic stability to the nation and do something about putting a brake on the constant increase of the already excessive charges that the community has to meet. The Treasurer has advanced no plan to deal with the evil of ever-increasing charges.

During the Government’s term of office ot seven years, our internal indebtedness has increased by £939,000,000 - a colossal amount! And what has the country gained from that huge increase in its debt? lt has certainly not gained much credit standing, because if we see a person constantly going to the loan office to secure financial accommodation, we would take a rather poor view of his ability to manage his own affairs. In short, we would not regard him as a man of financial stability. As it is with individuals, so it is with nations, and unless some plan is produced whereby we shall be safeguarded against the deleterious results of excessive borrowing we shall find that our people will have to bear even more burdens. We shall, in fact, find that an economic depression is inevitable if we do not take the necessary steps to remedy our economic ills. 1 agree with the Leader of the Opposition (Dr. Evatt), who rightly has pointed out to the committee, and the country, the inadequacies of the budget and the unrealistic attitude of the Government to the ever-mounting economic difficulties of Australia. The Government is deserving of censure for the way in which it has allowed our finances to drift, and for its lack of an adequate plan to deal with the position. A surprising feature of the budget speech was the absence of any mention of the devastating nature of the bush fire effect of inflation. Practically nothing was said by the Treasurer on that very important matter, although the dreadful effects of inflation are known to every household in the nation. The purse of every Australian housewife is lighter, so far as the purchasing value of its contents is concerned, than it was before the Government came into office. The Government is denying wages the purchasing power they should have. The housewives of Australia know that, the difficulties they face in making ends meet are continually increasing as a result of this Government’s policy. Inflation has already consumed more than one-half of the financial assets of our people because of the depreciation of currency and the increase of commodity prices which have occurred since the Government gained office. This is not a factor which has been injected into our economic affairs only recently. It is a growth that has been going on ever since the Government was given the responsibility of governing this nation.

Mr Turnbull:

– And before that!


– Before the present Government gained office the country had a government which was successfully fulfilling its obligations by maintaining price levels, lt was able to check effectively price increases and profiteering. It was able also to maintain a wage standard that was capable of buying the things essential for the maintenance of homes and of family life. It was even able to finance a world war effort, on an unprecedented scale, out of the nation’s own resources. It did not have to borrow from abroad one single penny. No one halfpenny of external debt was incurred by this Commonwealth by reason of any of the activities of the Labour Government, either in the war period or in the post-war period. So the honorable member for Mallee (Mr. Turnbull) gains no advantage from the interjection that he made.

In the absence of any serious attempt by it to control inflation the Government cannot satisfactorily answer the people for the ruin that has been imposed on our economy as a result of its policy of, stealthily and cunningly, over the years, deliberately relieving the wealthy of tax responsibilities and adding to the burdens borne by wage earners and the recipients of social services benefits. It has given to the wealthy freedom to exploit through increased prices and profits, but to the community generally it has given a reduced standard of living. There is always a willingness on the part of. the Government to attack wages, but to make never a single effort to bring prices and profits under control. If one thing more than another has been exploded during the Government’s term of office it is the Government’s credo that open competition, lauded so much by honorable members opposite, leads to the maintenance of low and normal price levels. One of the principal pillars of the Government’s policy is based on that assertion. But nowadays unlimited freedom does not produce the satisfactory economic results that the Government claims. As the Leader of the Opposition pointed out, we are subject to-day to control of prices by big wholesale businesses. In every instance the Government has resisted any suggestion that it take the necessary action to protect the community from rising prices. The wealthy are becoming more wealthy, and ordinary people are facing ever increasing difficulties in making their earnings meet increasing costs.

This Treasurer has the worst record of any holder of that office. One of his predecessors, who also belonged to the Australian Country party, was known as the “ Tragic Treasurer “. I have no doubt that the Australian people will find an expression to describe the present Treasurer that will not be even as kindly as that. The right honorable gentleman has presented nine budgets, each of which has been a story of gloom and difficulty. There have been no bright, promising features. It has been impossible to derive from them the reasonable satisfaction that one should be able to feel with the work of the government in charge of a country such as Australia, with vast, rich resources, adequate to provide its citizens with the highest standard of living. The budgets presented by the Treasurer have been described as “ Fadden’s failures “. That is a very mild description of them, but it is indicative of the direction in which the Treasurer has been veering.

At the recent Premiers conference, it was evident that the right honorable gentleman was not willing to undertake control of prices and that he had his mind set on Australia-wide control of wages. Prices were of little concern to him. He wanted to secure an opportunity to lower the standard of life for many of the wageearners of this country. This Government does not like the idea of the State governments protecting workers under their jurisdiction from the ever-increasing cost of living by making corresponding adjustments of their wages. Under a Labour government, a system of prices control and subsidies proved to be an effective means to stabilize the economy. At that time, no country in the world had a better economy than that of Australia. One felt a sense of pride at the accomplishments of the government of those days. Its control of capital issues kept the flow of investment moving in directions essential to the basic needs and the development of the nation.

But this Government lacks such vision and courage. Only a small section of the community derives benefit from its policy. It is the section consisting of the great monopolists in industry and commerce.

They have been highly favoured. In addition, the Government has tried to meet the demands of the banking and financial corporations for ever-wider avenues of trade. 1 suggest to the citizens who comprise the middle class of this country - the wage and salary earners and the people on pensions and1 superannuation payments - that this Government has been responsible for reducing the value of their incomes by at least one-half. It has reduced the value of the savings of the people. The realizable value of government securities bearing interest at 3* per cent, or 3i per cent, has depreciated by from 10 per cent, to- 12 per cent. Wherever the Government has touched the people, it has lowered values and standards.

If it were not for the help given by community and religious bodies, the pensioners would suffer appalling hardships. Many of them,, unfortunately, are suffering. In South Australia, we have established a service that has been the means of solving a very serious problem that confronts many aged people to-day. The service provides pensioners with hot meals at mid-day, for which they are required to pay only a nominal charge - very much below what they would be required to pay in a restaurant. The cost is largely borne by the community. The “ Meals on Wheels “ service in South Australia has helped many aged people in their difficulties. Without it, many old people would not have survived. In addition, religious societies and pensioners’ organizations, as well as charitable bodies, have been very helpful and active in helping the old people. It is not a good advertisement for Australia that our aged people should have to depend upon charity, to such a large extent. That being so, I suggest that we endeavour to improve our social services scheme, so that the old people will be protected from the hardships that many of them are suffering to-day.

I believe that, in order to cover operalions designed to serve wealthy interests, high-pressure publicity methods have been used, and issues entirely foreign to the principles involved have been raised in order to falsify the purposes and ideals of those who have dared to challenge the claims of the menacing, mercenary groups which are tearing the soul out of the country in order to advantage profit plundering agencies- many of which have their hierarchies abroad. Honorable members on the Government side of the chamber dis close that they are bankrupt of ideas whenthey demand incessantly that Labour shall, put forward an alternative plan. What right have they to make such a demand? They are the people who were elected to govern the country. They are the people charged with the responsibility of ensuring that there shall be submitted to this Parliament and to the nation a plan adequate to meet situations of the kind that havearisen.

They may suggest that the Parliament cannot deal with the present situation adequately because it has no power in relation, to prices control, and possibly in relation’ to subsidies. I do not think the payment of subsidies would present any difficulty. The Leader of the Opposition (Dr. Evatt) has made it clear that, if there is any doubt about our constitutional power in relation, to prices control, honorable members on. this side would support warmly a proposal for an alteration of the Constitution to transfer the necessary powers to the Commonwealth. That, surely, would be desirable. It would give this Government the powers that it needs to halt certain trends in our economy that are creating great difficulties for the people of Australia. it has been said that we wish to control all prices. That is not so. We believe that controls should be placed on prices, that show inflationary trends, and on the prices of commodities that our people must’ buy. We have no desire to impose complete and universal prices control, but only to correct the evils that are inherent in our economy to-day. The small businessman and the wage or salary earner are seeking some method by which our future may be assured. The Australian people are nervous of the policies being followed by the Government and of its lack of constructive thinking. The expert advice that has been followed by the Government, and the views expressed by its members in this chamber have caused grave disquiet in the community. The country is not ready to meet an emergency, either in peace or in war. This Government is a callous and calamitous team of incompetents, and the sooner a change can be made the better it will be for the welfare of our citizens and for our credit and good name abroad.

Mr Anderson:

– What is the alternative offered by the Opposition?


– What is the Government’s policy? That is what we wish to know. The Government is utterly incapable of expressing any objective view at all. What right have honorable members opposite to ask for an alternative plan? lt rs for them to conceive a plan and to work out its details. I shall warmly support the motion of the Leader of the Opposition censuring this Government for its failure to maintain the economy of the country in anything like a healthy and desirable condition.

Sitting suspended from 12.44 to 2.15 p.m.


– Before I deal with the budget, I wish to join my colleagues in congratulating our leader, the Acting Prime Minister and Treasurer (Sir Arthur Fadden), on the presentation of his ninth budget. I understand that that is a record for any Treasurer since federation, and I believe that it is a record that will stand for some years to come.

Mr Turnbull:

– It certainly will!


– I am sure that if honorable members opposite were honest in their approach to economic questions they would pay further tribute to the Treasurer, because he is a man who never looks for party political advantage in presenting the budget. Since he has been here he has had to present some budgets which, I admit, were unpopular to the people, but although they were unpopular, they were good medicine for the people and were presented because of the Treasurer’s -appreciation of the economic affairs of the country.

It has been said by the Leader of the Opposition (Dr. Evatt) that this Government has no plan for the future. My answer to that statement is that all that the right honorable gentleman needs to do to see the plan is to read the policy of the parties that comprise the Government. He will see there a very well defined plan.

Mr Edmonds:

– Tell us what it is.


– If the honorable gentleman can read, I shall present him with a copy of the policy. In connexion with planning, I think the committee will remember that, in 1952, at a meeting of the Australian Loan Council here in Canberra, the Prime Minister (Mr. Menzies) outlined the economic situation of the country and indicated the difficulties that it was facing. He said to the Premiers that, in order to get down to a solid basis and to face the problems as they should be faced, the States should present to the Loan Council a list of priorities for public works.

Mr George Lawson:

– Which they have always done.


– They refused to do so. As a matter of fact, they said, “ What has that to do with the Commonwealth Government? That is our concern.”

Mr Edmonds:

– That is right. So it is.


– I agree, but it cannot be denied that the States will not face their responsibility to try to get the country on a sound economic basis. During the whole of this debate honorable members opposite have moaned because, they contend, we are facing an economic crisis. I do not subscribe to that view. They have not presented any concrete proposals, but apparently rely on the socialization programme in their party’s platform. They have not sufficient courage to get up and say to the committee, “ That is our policy. That is what we believe in “. They do not say that at election time, nor do they say it when the budget is being debated.

I turn now to some of the matters referred to in the budget papers. The first matter that I wish to bring to the notice of the committee concerns the residents of isolated areas and the incidence of taxation zone allowances. Some relief has been provided in this budget by the alteration of zone boundaries, and although I have no doubt that the people concerned appreciate this concession and will welcome it, in my opinion it does not go far enough. In connexion with the zone boundaries, if honorable members look at the map of Australia they will see that the 26th parallel of latitude passes through the centre of Australia. I suggest that they then look at the 141st meridian. It appears to me that some one in the Treasury has said, “ To make things easy, we shall draw this line along the 141st meridian “, which is on the border of my electorate and South Australia. 1 point out that people who live in the south-west part of Queensland and the Channel country are even worse off to-day than most of the people who are being given the benefit of this most recent zone allowance. I contend that the zone boundary should be the 144th meridian. It will be seen that that meridian passes through the centre of Queensland, almost on the border of the Channel country, and approximately 100 miles from each of the railway terminals. All the goods for the people who live beyond Cunnamulla, Quilpie, Yaraka, Longreach and other rail terminals in that area have to be carried over bad roads or transported by air.

I suggest that the Government have another look at. this matter. Although the area that I represent, and the far west of the Channel country, are among the richest areas in the world, the holdings are big and it is difficult to get people to go there to work. The difficulty is not due to low wages. As a matter of fact, many people would not go to live in those areas for love or money. Some people who do go there earn big money and then go away and spend it in the towns. They will not stay there long enough, with the result that the residents of the areas have to work harder than do people in more thickly populated areas. Sufficient population does not exist to make the carriage of goods to the areas economic. In my opinion, they are therefore entitled to greater zone allowances.

The next matter with which 1 propose to deal concerns the taxation allowance for education expenses. This, again, is something that the present Government introduced a few years ago and for which it deserves credit. The allowable deduction was increased last year, and it has been further increased in the budget now before the Parliament. However, 1 do not think that the allowance is large enough, particularly for people in the lower wage groups in remote areas. I may get into trouble with some of my colleagues for saying this, but I believe that this allowance should not be paid to anybody who sends his children beyond a school that can accommodate them. If the allowance were restricted in that way, it might be possible to increase it to £200, instead of £100, and it would give a wider spread of the benefit. To-day, in most of our country towns, the Country Women’s Association and church organizations are building hostels to accommodate students from rural areas. I want to see students kept in country towns because, speaking from experience, I know that if children go from the towns to the cities very few of them come back again, lt would be worth while if we could keep the children in the country areas, by accommodating them in hostels and allowing a greater deduction for education expenses. To a considerable degree, the benefit of the allowance goes to the privileged classes, but if my suggestion were adopted, a greater proportion of the lower income groups would be able to take advantage of it.

I turn now to the Postal Department. The Government proposes to increase the rates throughout the Postmaster-General’s Department. Frankly, I expected an increase in some directions, but I did not expect the big increase of 10 per cent, overall for telephone calls. The Telephone Branch of the department has made a profit; it has not operated at a loss. In country areas telephones are not installed merely for social purposes; they are installed tor business reasons. I shall debate this point only from the stand-point of country areas. That may sound parochial, but it is my duty to put the case of the people I represent. The increase in telephone charges is huge. If the Telephone Branch is paying, why should it be penalized to pay for some other branch in the department that is not?

You, Mr. Chairman, have represented a big western electorate and know that there are many private telephone lines built in the country. I know that people have paid £1,000 or more out of their own pockets to build a line to connect with the main telephone line of the Postmaster-General’s Department. They have been using the line for many years. Nobody could argue that they would pay £1,000 for a telephone line just to make social calls. That line is put there for business reasons. It is a capital expenditure and it is time that this Government allowed depreciation on private telephone lines built in country areas. It has not done so but it should be allowed because it is a capital expenditure for business reasons.

To-day the Government is making money available to the various States. I refer particularly to the supplementary grants to enable the States to carry out certain works and services. As a result, the facilities that should be provided by this Government cannot be provided. One of them is post office facilities in country areas. Three years ago I made a proposal to the Government. When application was made for an improvement to a post office or residence in the country, I was advised by the PostmasterGeneral’s Department that it agreed that such work was desirable and necessary. In some instances I was told that the work was on the Estimates for the next year. That was four or five years ago. It was probably on the Estimates before I represented the area. I felt that something could be done to allow the local people to help the Government.

I mention one instance in particular, in a small but rich pastoral area with a population of 400 or 500 people. The residents could not get an adequate postal service. They told me that they were willing to find the money and spread it as widely as possible over the residents of the district. They would build the post office and residence to the specifications of the PostmasterGeneral’s Department. I am glad that the Postmaster-General (Mr. Davidson) is present. He agreed that the proposal was a good one and everybody concerned in the department said it was a good proposal. The people in the district were quite happy to go ahead with it, but when it was submitted to Cabinet it was not approved. These people were not asking the Government for any money; all they wanted was a moderate rate of interest over three, five or ten years. The department said the post office was necessary and desirable and that it would build it when finance was available. The money was not available only because we have been hand-feeding the State governments with money to dissipate in other directions. No reasons were given to me for the rejection of the proposal, but I assume that the reason was that, if such a proposal were accepted, a precedent would be created which would cut across the loan policy of the Federal and State governments. If the Government ever had any chance of obtaining any subscriptions for its loans from that district, it has lost that chance now. Normally, the money that would be put into this proposal would not have been money that would be subscribed to government loans.

Mr Thompson:

– Have they a staff to put into it?


– Yes. 1 suggest to the Government that it again consider this proposal. In view of its generosity to the States in making money available to them for their works and services, and at the same time starving itself, the Government should reconsider this proposal, instead of continuing to give money to the States in the way that it has. Every body that puts forward a proposal to assist itself and at the same time the country, the Government and every one else should receive every encouragement. I do not want to receive any more letters from any Minister to say it would create a precedent and the money is not available. The money is available from private sources, if they are given encouragement.

Another matter, which I have raised before, concerns a more liberal system of credit to those industries producing our national income and, in the main, our export income. I refer not only to primary industries; I include every one who makes a contribution towards our export income. They should receive more liberal assistance. Dealing with the rural section, I point out that we are told continually that we must increase production and reduce costs. But we are getting a little sick and tired of that. Everybody knows that costs are rising; that is an old story. We are finding it more difficult to get reasonable returns for our produce. That is proved by the Government’s White Paper, which shows that for the third year in succession the income of primary producers is steadily falling. That is a very serious outlook. We could increase our overseas balances, with the assistance of the people, if they received more liberal encouragement, particularly by way of advances, to take advantage of the new techniques which have been made available to primary producers as a result of scientific research. Our reserves are being depleted more and more every day, and if we want to take advantage of these improved techniques we must do something about it. If this credit system is adopted, even though there may be some failures, the overall extra return would more than compensate for the failures. Many more young people would go on to the land if they could get what I call easy finance. Why should we not think along these lines?

Mr Daly:

– What does the Government intend to do about it?


– I suggest that the Government have a look at the position.

If the prevailing conditions continue, and incomes of primary producers continue to fall, the Government will be forced to examine this aspect. I have advanced a few proposals, and I submit that they are practical proposals which will not cost the Government very much money. I would not chastise the Government with one hand and put out the other hand for a lot of money. 1 ask the Government to give consideration to practical proposals. I must congratulate the Government for its decision to establish the Export Payments Insurance Corporation. The idea is to guarantee exporters against losses incurred. This is a very good provision and it will help us to market our produce, but I believe that if it is good enough to guarantee an exporter against loss it is good enough to give some assistance to the person who is producing the goods for export. The provision is good, so far as it goes, but we are starting at the wrong end, and this is another matter which should receive consideration.

The final matter I desire to raise is in regard to roads and transportation. This is a matter which will eventually have to be tackled on a combined CommonwealthState basis. The address delivered by the right honorable member for Cowper (Sir Earle Page), and his proposal for the financing of road communications, were excellent. His suggestion should be adopted without delay. The honorable member for Gwydir (Mr. Ian Allan) suggested an investigation of the possibilities of diesel-electric road trains, which have proved themselves in America. Twelve months ago I mentioned the matter briefly here. Since then I have made myself familiar, as far as possible, with what has been done with this form of transport in the United States. I believe that diesel-electric road trains provide the answer to the problems of some of our far western areas, particularly in the transportation of stock from the Northern Territory to the great fattening areas of the Channel country in the far west. We have heard much about what can be done with the Northern Territory, in the fattening and transportation of stock. The fact remains that most of the stock in the far north have to come south or to the coast to be fattened. Most of them go to the Channel country, where they cannot be taken until they are about two years of age. If they could be taken into that country as yearlings, a great advantage would be obtained. They could be transported only by road or rail, and I believe that the system of road transport which I advocate would be ideal. After cattle are fattened in that area, they must be taken and placed on the market. I suggest that honorable members examine some of the country over which stock are travelled to railhead, particularly in the southern and south-eastern end of the Channel country. A study of the map shows the Grey Range running south-west at the southern end of the Channel country. For about 60 miles there is nothing but stones and gibbers. It is almost impossible to get stock out of that country in a good condition. Some time ago in this chamber I was laughed at when I said that cattle fattened on the soft Channel country cannot travel over the stony country and come out in good condition. As a matter of fact, many of them are left there to die, because they swell to their shoulders owing to their soft feet, which often become as big as a frying pan and a foot across.

Mr Pearce:

– Hear, hear!


– I hear the honorable member for Capricornia (Mr. Pearce), saying “ Hear, hear! “. He laughed very loudly when I mentioned this matter once before. I suggest that consideration be given to sending a parliamentary delegation through the southern end of that country to the Barkly Tableland, to let its members see conditions for themselves. They would realize that what I suggest is practicable. It is not just some theory advanced by somebody who takes a trip through this country and has everything provided for him. If I had my way, I would dump the members of the delegation at Quilpie, put them in a truck, and not advise anybody that we were going through. We could then talk to the people as we met them, without having everything nicely arranged on station homesteads. I know the country’s people so well as torealize that if we proceeded like that and met somebody on the road, such as a drover or a dogger, and he did not know we were there in an official capacity, we would get more information than we would obtain if everything were set out on a plate for us. I hope that the Government will give consideration to the few simple proposals I have advanced. If it does, it will be doing: a service to those people with big hearts who live in those areas. I shall not call them the backbone of the country; 1 know that they are, and they themselves know it.


matters to which we must direct our attention. Everything else will be of no account unless we defend Australia adequately. But, at the present time, we are sending overseas the raw materials from which essential defence materials are obtained, and we are not obtaining for our own use as much of them as we should have.

The Minister for Labour and National Service (Mr, Harold Holt) claimed last Tuesday evening that the success of the mining industry in north Queensland and the Northern Territory was due to this

Government’s policy. No more fantastic or ridiculous claim has been made during this debate. The Minister’s statement shows that he and his colleagues have no knowledge of the development of the mining industry in north Queensland and the Northern Territory.

Mr Anderson:

– What about the geologists?


– The geologists went to Tennant Creek and said, “ Owing to the geological strata here, you will not find gold “. But the prospectors persevered, and the field has now produced £4,000,000 or £5,000,000 worth of gold which has added materially to our economic well-being. Had the advice of the geologists been accepted, we should not have found that wealth. The discovery of deposits of uranium - then a comparatively new ore - at Rum Jungle also was due to the efforts of prospectors. The only act of the Government with respect to the Rum Jungle uranium field has been to sell the treated ore overseas as quickly as possible at an undisclosed price, apparently with no thought of maintaining reserves of uranium for the defence of Australia or for peaceful uses. Uranium and titanium are essential to our defence, but the ore from which they are extracted is being sent overseas, and nothing is being done to treat it in this country and to obtain sufficient of these metals for our defence needs.

I turn now to the history of mining in the Cloncurry area. Under tory governments in both Commonwealth and State spheres, large gaps remained in the railway line between Brisbane and Townsville. These gaps had been left deliberately to give the coastal shipping companies the benefit of freight traffic between those centres. That was the good old tory system. A Labour government took office in Queensland in 1915 and completed the missing rail links. In 1908, again under a tory government, a railway was being constructed across hundreds of miles of black soil plains to serve the Cloncurry mining area. At that time, there was what a tory government so dearly loves - a pool of unemployed. The men working on the new railway received 6s. a day. They provided their own tents and were charged for the use of the tools provided for them. When the Labour government took office in 1915, it immediately raised the wages of the construction workers to 14s. a day, and provided them with tents and proper supplies of bread and meat, which they had been unable to obtain under the administration of the tory government. That is something of the background to the mining activities in the Cloncurry district.

Eventually, the railway was extended from Cloncurry to Selwyn, where the Mount Elliot mine was located and a smelter was established. On the railway line between Cloncurry and Selwyn was a town called Frieseland, where a smelter was established by the Hampden company. Approximately 6,000 miners were working in this district in 1910, but many people seem to think that mining began there only recently. This body of miners supported a large population which catered for their wants. Later, a branch railway was constructed to Cuthbert, where the Mount Cuthbert mining company constructed a smelter for the treatment of ore. The three smelters in the area treated ore from the Duchess, Labour Victory, Hampden Consuls, Dobbyn, Mount Oxide, Great Australian and other mines. These operations were conducted with machinery that was much more primitive than the modern equipment used to-day, and the price of copper at the time was only £45 a ton. But the mines were profitable. After World War I., sufficient copper was stock-piled to meet domestic requirements for a number of years, the bottom fell out of the market, and mining activities at Cloncurry died away. In 1920, 6,000 people left the Cloncurry district, and only a few hundred men and women remained. The price of copper later improved, and another prospector - again not a geologist - discovered the Mount Isa deposits, which are fantastically rich and will produce great wealth for many years to come. Modern boring and earthmoving machinery and other equipment have enabled the mines I have, mentioned to exploit their excellent bodies of ore.

Lime is a highly important commodity, and large deposits’ have been discovered in northern Queensland. A Labour government, many years ago, constructed the railway line between Bowen and Collinsville, which is a rich coal-mining centre; and established a coke-making plant there to produce coke for smelting. Coal and coke from Collinsville are available to all the mining companies in the Cloncurry area as a result of the foresight of that Labour government. The Labour Government, when the Mount Isa deposit was discovered, continued the line on from the Duchess to the mine and guaranteed £500,000 to assist in the flotation of the mine. Actually, the Government was not called on to make that contribution, but when the company floated the loan to finance its operations, the fact that the State had faith in it assisted the flotation and after granting these leases the Mount Isa company was formed.

Later, prospectors discovered the Mary Kathleen uranium deposits, which are the richest uranium deposits yet discovered in Australia. They have been taken up by the Rio Tinto company. No assistance has been given to that company to date by the present Government.

I have tried to find out how the policy of the Government was responsible for the prosperity of the mining industry. In order to indicate the wealth of this area, it may be a good idea to examine the budgets of these two mining companies. We can compare them with the Treasurer’s later on. The Mount Isa company is building an electrolytic smelter outside Townsville which is estimated to cost approximately £4,000,000. I should like to stress particularly this activity as it means that nol only will the company win the ore from the mines, but also will manufacture and make available to the people of Australia sheet copper to make piping and copper in all the other essential forms in which that material is required. There we have one activity in which raw material is being produced, and labour will be used for the production of copper in manufactured form. That is what I advocate, to a certain extent, with other classes of mining.

The Mount Isa company is producing 25,000 tons of copper a year and it also produces lead, silver and zinc, lt has a separate process for handling zinc, and it has found it necessary to duplicate the whole of its smelting works at a cost approximating another £3,000,000. This, presumably, will mean a rise in output of copper to 50,000 tons instead of 25,000 tons. A dam is also being built on the Leichhardt River for which I was unable to get the estimate. It is being built by a big muck-shifting company. The whole of Mount Isa is worked by electricity. The method of boring the faces in the mine in the early days was one of the reasons why the men contracted miners’ phthisis. Dust was caused by the old boring machines, which have been done away with, and all holes in the face are now bored by diamond drills.

A large proportion of the work is done automatically. Big diesel pumps, worked from the No. 3 level, spray the whole of the face of the mine whether it is being used or otherwise, in order to keep down any dust that may arise from the explosion when the ore is shot down. At one level, there is a complete fitter’s shop. At another level, there is a dining-room. A hot and cold water service is available for the men to use before they take their meals. That dining-room is better than the dining-rooms in a large number of hotels in Australia, and it is equal to most dining-rooms in the better hotels. The mining company itself builds homes for married couples and barracks for single men. It supplies tennis courts and bowling greens. There are two olympic pools, not so-called olympic pools, but pools which are right up to olympic standard, for the use of the workers and other people in the Mount Isa area. The company has no difficulty in retaining labour because of the amenities that it provides for the people. 1 mention that an expenditure of £7,500,000 is required at Mary Kathleen to put in the necessary machinery to mine and handle the ore which has already been proved by the process of boring. A road will be required between Mary Kathleen, which is controlled by the Rio Tinto Company, and the railroad at Cloncurry. The Queensland Government is in negotiation now with the Rio Tinto Company in regard to the building of this road and the necessary preparations have been made for the beginning of the first 10 miles.

There is a bigger problem. In order to convey supplies of foodstuffs and machinery to this area, with its immensely increased activity - for it is always growing, never static - it will be necessary to build a new railroad from Townsville to Cloncurry. Heavier rails and heavier ballast will be required, and probably loops, in the first place, to enable trains to pass one another, going up and down, and that will cost an enormous amount of money. As return freight, the trains will have the metal from the mines. In addition, they annually carry cattle for the two big works in Townsville. They will also carry wool from the sheep area which lies between Townsville and the cattle and mining areas further west. As I have said, it will be necessary completely to relay this line. Much heavier rail and heavier ballast will be required. As a preliminary, loops will be required at various points to enable traffic to flow freely both ways. It will be found that, with greater development, a double line will be necessary.

Now I have some very cheerful information. No! The Treasurer has not promised me anything. I want to say this: Two representatives of the International Bank for Reconstruction and Development who apparently did not want to have anything to do with the Commonwealth and its form of finance, visited this area and saw the Queensland Government on the question of supplying money to build this railway line.

Mr Hulme:

– The honorable member is kidding himself.


– 1 am not kidding myself. The gentlemen were there and they have gone back, very favorably impressed, to report to their organization. That is better than any promise by the Treasurer or the tory Government. Honorable members opposite do not know what is going on in that country, but we are getting ahead with the business. The International Bank for Reconstruction and Development sent two of its representatives to Queensland, who consulted the Queensland Government. They have inspected the potential wealth of the Cloncurry district and will shortly be leaving Australia to report to the bank. The men in control of that bank, and its representatives, are among the world’s best financiers and apparently they are not interested in the Commonwealth’s haphazard and piecemeal method of financing activities in this country. I venture to say that the known mineral-bearing areas which have been discovered by boring in north Queensland and the Northern Territory will be among the richest mineral fields in the world. Incidentally, there is no reason why an imaginary line should be drawn between the Northern Territory and Western Australia in respect of mineral discoveries, because mineral fields do not stop at any imaginary line drawn by a cartographer.

The requirements for the production of steel are also available in north Queensland, and there is little doubt that when the companies to which I have referred are fully developed in relation to their present activities they will turn their energies to the establishment of steel works. This enormous mineral wealth, which has been scientifically located and pinpointed on plans, and not merely discovered by local prospectors and mining speculators, will undoubtedly bring terrific wealth to north Queensland, the Northern Territory and the north of Western Australia. It is undoubted that people in other parts of the world will turn envious eyes on that wealth. I do not suppose that there is a country in the world poorer in population and richer in natural wealth than is Australia, and there is no doubt that the eyes of the world - even if not the eyes of this Government - are on this rich area at the present time. We shall have to be very careful that we retain that area for the people of Australia.

I turn now to another aspect of this matter which is apropos of a question that I asked the Minister for Immigration (Mr. Harold Holt) recently. In Australia as a whole there is a fairly balanced proportion between men and women, but in the area of which I have been speaking the ratio between the sexes is exceedingly disproportionate. There are some thousands of men, but only a few hundreds of women. Married couples can get homes at the Rio Tinto company’s town at Mary Kathleen if the man gets a job there, because the company is building homes for couples and providing drive-in picture theatres and many of the other amenities available in cities and towns in Australia. But most of the people working in that area are immigrants from Europe - single male immigrants. There is no reason why the immigration intake should not be so altered as to include a larger proportion of single women, who would probably be very willing to go to that area and marry there, because there they would have the opportunity to enjoy much better conditions than they could ever possibly enjoy in their countries of origin, conditions that they would find almost unbelievable. From the social and economic point of view it is absolutely necessary to maintain a balance between the sexes in our immigrants.

I requested the Minister for Immigration only recently to see whether the number of single women immigrants of marriageable age could be increased in order to maintain the balance between the sexes among immigrants. Our great hope is that immigration will build up our population and thereby place us in a better position to defend this country. From my knowledge of immigration over the past 33 years, in the northern parts of Australia, I can say that the children born here of immigrant parents are real Australian citizens; but we will not have children born here of immigrant parents if we continue to bring in tremendous numbers of single men without a proportionate number of women. The present position in that respect presents a serious social problem. I should not like to tell here some of the things that happen under those conditions, but I am willing to tell any honorable member privately of the social evils that result from the disproportion of the sexes among immigrants. In fact, the preponderance of males over females among immigrants is one of the worst social evils that Australia is ever likely to experience. The Minister for Immigration, who is a man of the world, knows this position quite well. If he is anxious to build up a population of young people born in Australia, who will help to defend and develop this nation, and if he wants to ensure that social evils do not become general in Australia, surely he will take some steps to rectify the position. I should think that it would be a simple matter to adjust the balance between the sexes among immigrants.

Whatever our political views, all of us in this chamber are keen to do the best for Australia. I know that some honorable members, in trying to do their best, actually do the worst they could for Australia; but, still, we are all trying to do the best. Problems such as the one I have just mentioned do not depend for their solution on any particular political policy. They require common sense, and common sense alone. They need only the consideration of the average common-sense man. They are problems that should definitely be rectified.

To-day we are being treated by the United States of America and Great Britain as the milch cow of the world. We are exporting now metals which are the most vital metals in the world’s history.

I plead for the keeping in this country of a reserve of those metals for our own defence purposes. We hear a great deal about experiments conducted in Australia in connexion with atomic bombs, other forms of atomic energy and of weapons of modern warfare. But have we any assurance that anything is being done to provide Australia with the fruits of those experiments, for the purposes of our own defence? It would indeed be something to marvel at if we in Australia are allowing this land to be a testing ground for modern British and American weapons, and arc left without any of the advantages that possession of such weapons would give us. Frankly, I am of the opinion that our defences to-day are, compared with those of some other countries, still in the horseandbuggy stages. To-day, irrespective of whether we like it or not, the atom bomb has been so developed by other nations that it will be the only major weapon of war in the future. Therefore, we should have reserves of all these materials. We should have assistance from the people who are experimenting, so that we can play our part-

The CHAIRMAN (Mr Adermann:

Order! The honorable gentleman’s time has expired.


.- A refreshing feature of the budget debate so far is that the Opposition, at long last, has revealed a degree of consistency, in that every speaker on behalf of Her Majesty’s Opposition has taken an extraordinarily gloomy view of the present condition and the future prospects of this country. The honorable member for Scullin (Mr. Peters), along with the honorable member for Yarra (Mr. Cairns), is no exception. They took a gloomy and sombre view of conditions in this country. Of course, such a gloomy and sombre view is consistent with their outlook and with the policy that they propound in this Parliament.

The Labour party, with its various sections, can, I think, properly be described as a 3D party. It is party of despair, depression and despondency. Every speaker for the Opposition, including the honorable member for Leichhardt (Mr. Bruce), who preceded me, struck an anaesthetizing and sombre note. In striking a sombre and gloomy note, Her Majesty’s Opposition, which I describe as a very gloomy Opposition, is revealing again an affinity with the political thought of the left wing element and with the Communist party of this country. The members of the Opposition preach despondency and despair and hope for a depression because they realize that only by creating conditions of economic despair and despondency in this country have they a ghost of a chance of becoming Her Majesty’s Government.

On Tuesday evening, honorable members opposite called on the Leader of the Opposition (Dr. Evatt) to make a diagnosis of Australia’s economy. The right honorable and learned gentleman made a’ diagnosis of the national economy - a diagnosis extraordinary for the fact that it was so much in error. Then, not content with having made a wrong diagnosis of the country’s economy, the right honorable gentleman said, in effect, “ There is only one thing that we can do; that is, to propound the idea that euthanasia should be performed “. If we took the right honorable gentleman’s speech and summarized it into one argument, that argument would be that the solution of the problems and ills that beset the country is to be found in more controls, a more specifically bureaucratic state and the creation of a quasi-socialist or a totally socialist society. I say to the honorable member for Brisbane (Mr. George Lawson), who is interjecting, that that is one of the inferences that I drew from the right honorable gentleman’s speech. It is one of the inferences that other simple-minded people drew.

One of the singular facts of history is that socialism has been successful only where there has been tyranny. Honorable members opposite may point to the Union of Soviet Socialist Republics - which, as 1 have said before, is the spiritual home of the socialist soul of the honorable member for East Sydney (Mr. Ward) - and say that socialism has been successful there. 1 would agree with them instantly. But I put it to you, Mr. Chairman, that socialism has been successful only when the State has reigned supreme - when there has been complete concentration of power in the hands of the State.

I have dealt with a part of the argument presented to the committee by the right honorable member for Barton (Dr. Evatt).

He said, in addition, that this Parliament must have more power, or, in other words, that there must be a gradual weakening of the federal system in this country. I put it to the committee that what may appear on occasions to be a change of heart and a change of policy on the part of the various sections of the Labour party is, in fact, not a change. On occasions, they make a more pronouncedly Fabian approach to their problems, but their objective is still fundamentally the same - the creation of a completely socialist state in Australia.

I suggest that the anti-Liberals are living in a world of unreality. They preach doom, despair, depression and despondency, but the needs of this young nation call, not for those manifestations of human thought and human imagination, but for drive, vision, energy and capacity to get things done. I have often thought how odd it would have been if Blaxland, Lawson and Wentworth, the trio that first crossed the Blue Mountains, had set out on their journey with a formula prepared by a Fabian economist as their guide in their attempt to find a way across the mountains. It strikes me as interesting to speculate on what we should have had to show after 160 years of settlement in this country if our pioneers had had the outlook, drive and enterprise of the honorable member for East Sydney. What would have been the position if the early pioneers had insisted on government support and government protection in everything they did? What would be the position of this country now if the pioneers had been inspired by a philosophy or a policy produced, say,” in the London School of Economics?

That is an interesting speculation, which leads me to the point that there has developed in this country what I call a cult of caution. People say, “ We cannot do this because we may get hurt “. There is an unwillingness to take risks. There is an unawareness of the problems that face Australia as a nation and of the responsibility that rests upon this Parliament and upon each and every Australian. This country will never attain true greatness until we rid ourselves of the complex compounded of the sentiments, “ I couldn’t care less “, “ Let us not do this because we may get hurt “, and “ What is there in this for me? “ Unless we are prepared, not only to think in terms of greatness, but also to act in terms of greatness, I agree with most of the members of the Opposition that our prospects will be very gloomy.

Mr Haylen:

– Cheer up!


– I am not as gloomy as the honorable member for Parkes. If 1 were, that would indeed be something. Some years ago, a distinguished Britisher, Sir Guy Garrod, a former chief of the Royal Air Force, propounded a scheme which struck me as being at once imaginative and worthy of support. He suggested that his scheme would result in a richer and stronger British Commonwealth. Briefly, the basis of Sir Guy Garrod’s scheme was this: He suggested that there should be a change in the industrial and physical strength of the British Commonwealth of Nations, which I describe as the Empire without any apologies to any person in this chamber or outside. Sir Guy Garrod suggested that a mass migration of British people to the various Commonwealth and Empire countries should take place. I suggest to the committee and to the Government that it is not too late in the day to examine the idea of mass migration of British industry and population to Australia.

Mr Haylen:

– The British conservative Government decided against that scheme a long time ago.


– I remind the honorable member for Parkes that only twelve months ago the British Government produced a White Paper dealing with the effects of thermo-nuclear warfare, in which it was stated that ten nuclear fission bombs dropped on the United Kingdom would virtually destroy all the strength of those islands. I am not, however, considering only the physical survival of British people. It strikes me as being an eminently sensible proposition, not only from a strategic viewpoint but also for political and physical reasons, that a mass migration of British people and a mass transfer of British’ industry to this country should be contemplated.

Mr Haylen:

Sir Winston Churchill turned that suggestion down years ago, when it was put up to him.


– In the same year that Sir Guv Garrod outlined his scheme, which

I have suggested might be applied to this country, the Migration Council in London had this to say -

Should there be a war with the Communist powers, their aim would clearly be to defeat Britain, the Western democracies’ chief base: and this either by bombing or by the method that has most nearly succeeded twice before - the method of starvation by blockade.

And if Britain fell, not one of the Commonwealth countries overseas would possess the man-power or the industrial capacity for selfdefence. As things now stand, to knock out Britain would be perilously to weaken the British Commonwealth.

How greatly the picture would change in favour of the British peoples everywhere it, before the war began, large numbers of them and a substantial armament industry had, in full security and in a well planned manner, migrated from the British Isles to Australia, Canada, Africa and New Zealand.

This view has the authority of the Chiefs of Staff. On the 26th April, 1946, they advised ihe Commonwealth Prime Ministers’ Conference that dispersal of population and plant from the United Kingdom should be put in hand, on the grounds that Britain is the most vulnerable of nil Great Powers, and that it was essentia] that some considerable portion of Commonwealth industries then in the United Kingdom should be nearer the sources of raw materials.

Once such a migration had gathered momentum, the Commonwealth countries overseas would obviously be stronger to defend themselves. They would have more men to do the fighting, and an industry capable of supplying them with the necessary weapons. 1 realize, together, 1 suppose, with most honorable members in this chamber, that migration to this country has produced its difficulties. The scheme that Sir Guy Garrod suggested some years ago, which I put forward this afternoon for adoption at least in this country, would, of course, produce great difficulties, but to be confronted by difficulties does not mean that we have to be consumed by them. If I were to presume to make a single criticism of the immigration scheme that has operated in this country so far, it would be that we have not attracted an inflow of capital consistent with the number of immigrants, and also that the number of rural workers who have come to Australia has been out of proportion to the number of skilled, semiskilled and secondary industry workers. I recognize that figures are misleading, but in substantiation of my argument 1 present to the committee some relevant figures, not in any partisan fashion, but rather in the interest of historical accuracy. In 1954-55 the volume of our imports was 85 per cent, greater than it was in pre-war times, but the volume of our exports had increased by only 20 per cent. If we are to extricate ourselves from our balance of payments difficulties and establish ourselves as a solvent country, we must promptly face up to the fact that the only, way to achieve those desirable objectives is by increasing our exports, or, alternatively, by reducing our imports. If honorable members will look at the last Treasury “ Information Bulletin ‘”, they will find that during the last twelve months about £100,000,000 worth of textiles, yarn and woollen goods was brought into Australia. It has always seemed to me a peculiar arrangement that we produce the wool in this country, sell it here, ship it to the United Kingdom, and then bring back to Australia the various fabricated articles.

One could canvass many topics during the course of this budget debate, but time permits one merely to sketch and adumbrate only a few points of view. I now propose to present, no doubt in total inadequacy so far as explanation and argument are concerned, a number of points which I invite the committee and the Government to consider. The first one is this: I believe that it is of the utmost importance that a committee of this Parliament should be established to examine the nature and consequences of the economic war declared by the Soviet Union.

Mr Bryant:

– The honorable member does not recognize its existence.


– I realize that a few people may consider my suggestion an odd one, but I assure the honorable member for Wills that I undoubtedly recognize the declaration of economic warfare by the Soviet Union. In effect, there has been a gigantic swing of the pendulum, from the idea of open aggrandizement to the more Fabian approach, which involves doing things gradually and trying to destroy internally the various democracies of the Western Powers. I think that this is a matter of urgency which invites consideration by every honorable member in this chamber. What is the real nature and what are the consequences of the economic war that has been declared by the Soviet Union?

The second point I wish to make is this: I believe that it is high time that this Parliament set out to revive the federalist system of government. Either we believe in that system of government or we do not. I think it is high time that we made up our minds.

Mr Bryant:

– 1 do not believe in it.


– I know perfectly well that the honorable member for Wills (Mr. Bryant) does not believe in it. Like all other socialists, he believes in the complete centralization of power. But I submit that the federalist system of government should be not only revived but also extended. I am a great believer in decentralization of legislative and administrative power, and I hope, during the course of the Estimates debates, to put forward to the Parliament a scheme for the establishment of twelve States in the Commonwealth.

The third proposition and suggestion 1 make to the committee this afternoon is that Commonwealth administrative activities should be examined with a view to eliminating duplication of State activities in similar fields. We have the undesirable situation to-day in which a number of the activities carried on under the auspices of this Parliament are identical with activities carried on by various State parliaments - a clear duplication of work, a waste of money and a great waste of effort.

Mr Davis:

– But the honorable gentleman would not give Mr. Gair greater power, would he?


– No. I am afraid that the Standing Orders of this chamber and my own inadequate command of the English language prevent me from describing the Premier of Queensland in appropriate terms.

The fourth suggestion that I make to the committee, and which I also made during the economic debate earlier this year, is that it is high time that developmental works throughout the Commonwealth and the States were put in some order of priority. As we have the situation to-day - I speak particularly of my own State of Queensland - a great number of the works are carried on with regard to political advantage, not State advantage.

My fifth suggestion is that this Parliament would do well to consider the establishment of an authority with a roving commission, charged to secure overseas capital investment in Australia. I suppose few honorable members on either side of the chamber would find themselves ill at ease with the proposition that we need capital investment in this country; but while we admire such sentiments and approve of such arguments and ideas, it seems to me to be useless and purposeless to do so unless we are prepared to develop them. The suggestion I make is that there should be a roving commission to go to various countries overseas to encourage capital investment in this country. For my part, no doubt revealing a degree of reaction, for which I make no apology, I should prefer to see British capital invested in thicountry.

The sixth suggestion that I advance to the committee this afternoon–

Mr Cairns:

– Is this the last?


– If I were the honorable member for Yarra (Mr. Cairns) I should remain silent, because that would be the most effective way of signifying to the committee that he has learnt the lesson that crime does not pay. My sixth suggestion is that the position of the Public Accounts Committee might well be looked at to determine the most satisfactory means of taking action following its conclusions. Since I have been in this Parliament I have seen a number of the reports of the Public Accounts Committee presented, and it has seemed to me that there has been something in the nature of a disposition by Ministers to try to skate out from the findings of the committee and to cover up the various faults disclosed. It seems rather an odd business that, if this Parliament appoints a committee to make recommendations in the interest of better and finer administration, the conclusions and recommendations of the committee should bc ignored.

The seventh - and for the benefit of the honorable member for Yarra, not the last - suggestion that I make is that, with a view to reducing overheads, industrial and trade union leaders may find it of value to consider an agreement to work additional shifts. To-day, in many thousands of factories in Australia, for sixteen hours of the day machinery is lying idle. As all honorable members will agree, that adds noticeably to overheads and ultimately makes for greater costs.

The eighth suggestion I advance is that provision should be made to accept Commonwealth bonds at face value in payment of estate duty, provided that the bonds were issued originally to the deceased. That touches no particular nerve of novelty in this chamber; the suggestion has been advanced before, but I am greatly attracted to the idea and I fail to see why the proposition does not .appeal to the Government.

Mr Peters:

– The Opposition has often made that suggestion.


– No doubt, and so have honorable members on this side of the chamber. My ninth suggestion is that the efficiency drive in the Public Service must be stepped up. I believe that the Public Service overtime bill can be reduced, lt seems reasonable to me that public servants should be expected to work the number of hours laid down by the courts for other sections of the community. My tenth and final suggestion is that Ministers should table a quarterly report to the Parliament accounting for staff appointments, other than staff replacements, within their departments. That would provide this Parliament and the various critics of parliamentary institutions, particularly critics of the Public Service, with a means whereby they could gauge the change in the Public Service from one time to another.

No doubt some of the ideas that I have presented to the Parliament this afternoon appear to be odd, and no doubt honorable gentlemen, exhibiting a degree of patience and tolerance, may say, “ Well, of course the oddity is consistent with the honorable member’s youthfulness “. I should be the last person to apologize for my youthfulness. I regard it as an honour that I sit in this Parliament, and that I am one of the youngest members of the Parliament. But I am quite convinced that we live in a country well blessed by God and by nature, and I further believe that if we are to develop this country, and if it is to attain its true greatness, the partisan attitude to many of our problems must be submerged. We have a continent to conquer. If caution be our guide, then mediocrity will be our attainment.


.- I think that it is necessary for this debate to be brought back to a consideration of the budget papers and the statements concern ing the affairs of the nation submitted by the Treasurer (Sir Arthur Fadden). The honorable member for Moreton (Mr. Killen), in his concluding comments, submitted a number of suggestions to the Government of which he is a supporter. Prior to doing so, he dealt with a variety of subjects, most of which were not related in any sense to the business before the committee. For instance, he referred to the crossing of the Blue Mountains. I suggest that there is one important lesson to be learned from the crossing of the Blue Mountains: It is that those who performed that feat had a plan and a purpose. They knew where they were going. This Government, on the other hand, apparently has no plan and no purpose. The budget presented by the Treasurer this year, both in words and details, differs only slightly from the budget submitted to the Parliament last year and, indeed, differs only slightly from all the other budgets that the Treasurer has presented. When he mentioned the crossing of the Blue Mountains, the honorable member for Moreton said that people should be prepared to take risks. Many people in this land are taking risks at present. We would be less than decent and less than fair if we did not pay a tribute to those who are taking risks, paying their taxes, developing this country and making it possible for us to vote about £1,000,000,000 for expenditure in this financial year.

The talk of taking a risk reminds me of the crossing of the Blue Mountains. It was not only the three intrepid explorers who crossed the Blue Mountains, although we seem to hear only the names of Blaxland, Wentworth and Lawson. There were other people who crossed the Blue Mountains. Their names are not mentioned, and if they are ever mentioned, they are forgotten. On occasions such as this we should try to bring into the scope of our consideration the forgotten people. If we are to consider the forgotten people, perhaps it is appropriate right now, though I did not intend to do so when I rose to speak, to refer to the shameful treatment of the pensioners by this Administration.

Who are the pensioners? They are the people who have worked for this country, who, in the main, have fought for this country and who were the victims of a world-wide depression. That depression was engineered in this country, for there was no reason for it. These are the people who to-day find it necessary, after having made their contribution to this nation, having given their all in a variety of ways, having paid their social services tax, to seek no more from the country than their right - not a pittance - to live out their last few days in reasonable happiness and comfort.

What has this Government done? Promises are made from time to time and great concern expressed for the pensioners. Government supporters are ever ready at election-time to make some little paltry gesture to the senior citizens and the invalids. When we think of all those things, this is a shocking budget. The Government is undoubtedly playing politics with the aged and infirm. If an election were to be held in the course of the next few months, does any one think that this would be the type of budget submitted to the people or that this would be the manner in which the aged and infirm would be left and neglected? It would not! The pensioners would be considered, lt is a great tragedy that we have to consider this matter on the basis of party, for Labour is the only party really concerning itself with the plight of these people.

The problem of living on £4 a week must be an impossible one to-day. The honorable member for Moreton talks about taking risks, but people in this country are asked to live on £4 a week. I am most concerned for the aged or invalid person who lives alone without a companion, who is obliged to pay rent, and to pay for heating, food, clothing, medicine and everything else out of a miserable £4. Surely something can be done for these people. Surely it is not too late now for us to become really alive and for the conscience of the Government to exert itself in such a measure that something will be done, even belatedly, for the pensioners. I concede that a case has been made out. The Government is well aware of that. But when it comes along with a budget that provides for a surplus of £108,000,000, and fails to give even 2s. or 3s. a week to pensioners, then it deserves the censure that is intended in the amendment moved by the Leader of the Opposition (Dr. Evatt). He used the forms of this chamber and moved that the first item be reduced by £1 so that we on this side, at least, can show our contempt for this Government, our resentment of its treatment of the aged and infirm and for their failure to deal with the economic problems of this country.

First things first! As 1 said at the outset, this Government produces its budget to deal with the economic problems of the nation. It is a mixture of Keynesian philosophy and the heavy hands of the bureaucrat, of big business on one side and the planner on the other side; and this document is . supposed to cure the ills of the people and to procure a measure of economic stability. If there is any need to do so, I remind honorable members that it was the members of this Government who solemnly told the electors, in 1949, that the £1 had lost 2s. of its purchasing power - that the £1 was no longer worth 20s., but was worth only 18s. They said that necessary changes would have to be made and that it would be necessary to remove from office my predecessor, the late Mr. J. B. Chifley, and his Government. That would leave the way clear for the oracles of finance, these people who are tied to big business, to allow free enterprise to play its hand, and laisser-faire capitalism would be the order of the day. They said that prosperity would return and that the full purchasing power of the £1 would be restored. What has happened since then? lt is necessary, at the outset, that we should consider one or two matters. First, let us take the measuring-stick for prices in this country. Let us take the C series index as a guide to prices and let us turn back to 1949, when Labour was in power. The wage fixed on the C series index for the six capital cities then was £6 7s. a week. There was no evasion by the Government; it was not trying to postpone quarterly adjustments, but was ever ready to face the realities of the situation. The Labour Government realized that if costs increased and if the dignity of man was to be preserved, wages must also be increased. We could not depend upon a person working in General Motors-Holden’s Limited getting a big wage because that company was making good profits, and a person on a farm receiving less. The wage was to be fixed, and it was agreed that the C series index would be the guide.

In 1949, the basic wage was £6 7s. a week. At that time, supporters of the Government said to the people, “We will put purchasing power back into the £1 “. What happened? If the C series index applied, the basic rate to-day would be £13 3s. Those figures are prepared not by partisans, but by people who have a job of work to do to measure the cost of certain basic items, and they do not include all items. Those figures prove conclusively how money has lost its value. Yet the people who sit behind the Prime Minister (Mr. Menzies) and the Treasurer tell us how they have restored the position and how necessary it is for us to endure this situation year after year, as the result of budgets of this kind. The people have become shock-proofed to this Government. When the first and second of these budgets were produced, there was an outcry from all sections of the people. They looked to Labour to cure these problems. So heartily disgusted at, and yet inured to, the problems created by this Government have the people of Australia become that no longer do these protests emerge. They are more or less accepting the position, with the exception, of course, of a few people here and there who direct attention to some minor matters.

Let us look at a few other conditions. We recall the stability of the country under a Labour administration. When Labour was going out of office, after its record term in the service of the people, overseas balances were about £629,500,000. A short time ago they had fallen to an alltime record low level of £269,000,000. Despite all the measures which have been taken by this Government, at present overseas balances are only £355,000,000. These figures speak for themselves, and indicate quite clearly that the Government has failed the people and that it has not put value back into the £1. It has dissipated our overseas balances. Despite import restrictions and all the other measures which it has applied in an effort to remedy the situation, these conditions prevail. When budgets of this type were first presented by the Government, attention was directed by the press, as well as by honorable members, to the fallacious policy being applied by this Administration. Concerning the 1951 budget, headings appeared in the press such as that in the “ Sydney Morning Herald “. which read, “ Speedier drop in living standards “. The article that followed read: -

A 20th century Rip Van Winkle who fell asleep in 1939 and woke up in 1951, might fairly be staggered to see about him so many signs of decline in the living standards of the people.

An article in the “ Daily Telegraph “ of 28th September, 1951, carried the heading “ Federal tax plans will lead to economic muddle “. We have been saying that all the time. The article read -

The budget will start price spiral again.

And it was supposed to be an antiinflationary budget! A headline in the “ Sydney Morning Herald “ of 27th September, 1951, read, “ Budget hits initiative and incomes ‘*. All of these statements are most interesting to-day as an indication that what the press suggested at that time has come to pass, and that beyond doubt the forecast made by the Australian Labour party following its defeat in 1949 has proved to be true. If the Government were honest, it would say to us, “ You were right about this matter. We have not handled the economy in the best interests of the people “. The Government believes that the right course is to draw surplus spending power from the people and that that is the only way of curing inflation. It also believes, as shown in the papers submitted by the Treasurer, that spending power must be curtailed. The Government has set about achieving that one objective by means of heavier taxation and restrictions on imports. In this manner it has sought to stop the people from purchasing. The imposition of increased taxes, instead of reducing costs, on every occasion increases costs. It has been abundantly proved that if an industry is taxed the tax must be passed on, which makes it more difficult for the industry to carry on. If people are taxed, they have greater difficulty in meeting their obligations, and consequently it is necessary for them to go to the Arbitration Court or elsewhere in search of justice in the form of wage increases.

These matters are worthy of consideration. The decline of overseas funds is most alarming. One of the most disturbing features is the fall in farm income over the last three years. The Government has not set about doing anything to remedy the position. Certainly, it sent its Minister for Trade (Mr. McEwen) overseas, but in its efforts to help the man on the land and boost production, all it has done has been to restrict the finance necessary to the man on the land making it more difficult for him to improve his pastures, to put in more crops, or to instal machinery he would like to buy. The Government has appropriated vast sums collected in the form of petrol tax, which ought to be devoted to building better country roads. At the same time as the Government has done these things, it has talked about boosting production. This is a great sop to members of the Australian Country party, but it is hardly satisfactory to the people in country districts. I have a letter from a constituent of mine who lives in close proximity to the electorate of the honorable member for Hume (Mr. Anderson). When given the opportunity, the honorable gentleman might speak with equal purpose and try to make a case for people in country districts. This letter, written to me from a lady in the Oberon district, reads -

The mailman cannot get through for weeks at a time as well as now. He has been bogged for 24 hours to-day and is still there as I write, a young man with wife and baby waiting at home. There are many mothers to be in the area - hence this letter. Pleases give it your earnest attention.

Although the Government is collecting additional amounts in petrol tax, it is not prepared to apply them to the building of roads. It is well known that for the purpose of constructing the roads needed by country people some hundreds of millions of pounds are required. I have not come into this place to lend my voice, as some persons might lend their voices for propaganda value, to advocacy of a national roads plan which envisages great highways from city to city. I am concerned only with a national highway plan, first with the provision of suitable roads for the people who are producing the wealth of this country in mining settlements, on farms, and elsewhere. That is where we need roads first. We need good roads to the nearest town, to the bigger cities, and to railheads. When these roads have been provided I should like to see an integrated national roads system to give the people an opportunity of developing trade throughout the whole length and breadth of the country. First and foremost, it is necessary to concern ourselves with the plight of such persons as the lady from whose letter I have read an extract, who has been denied the opportunity of obtaining her mail. This matter and others of a similar kind have been brought to the attention of the Postmaster-General (Mr.

Davidson). He knows, from correspondence with me, of persons who have been unable even to receive mail because of the deplorable condition of country roads. These matters require attention. It is unnecessary surely to roam the globe to acquire ideas. Surely our real problems start in Australia, and in my view, in the main they end in Australia. There are parrot cries about Mr. Cahill, Mr. Gair, and other State Premiers, and their obligations. Every responsible honorable member knows that if the Commonwealth were to pay to the States ali the moneys raised by means of the petrol tax they would be totally inadequate to finance the construction of necessary roads. We have to go much further than that. I can only hope that, arising from this debate and consideration of this budget, there will be an awareness among honorable members and that they will insist upon the provision of adequate funds for this special purpose.

In discussing our present economic problems. Government supporters invariably reach only one stage in their consideration of costs. They reach the matter of wages, and, having reached that point, they believe they have finished their examination of the matter of costs. Every responsible person in this chamber should be concerned with this problem. As the Treasurer rightly said in his budget speech, the question of costs is a most important and challenging one to us all. It is particularly challenging to pensioners and other people on fixed incomes. It is a most important problem for those engaged in local government activities and others who feel that they have exhausted every opportunity of obtaining additional money. I should like the Government to consider also the effects of taxation on the cost structure and on freights and fares. These problems are considerable, but the Government seems to burke all these issues. I can only hope that it will give consideration to the problems of inflated land and goodwill values, and to other factors contributing to the present high cost structure. Excess profit margins in the retail trade also warrant its consideration. If retail profits were not excessive, we should not see the main merchandising enterprises swallowing up smaller establishments one other the other in their octopuslike growth. These matters are important and the Government should give them attention. If it did so, perhaps it would be able to solve many of our problems.

I now wish to deal briefly with some of the weakness in the budget. One of the outstanding weaknesses is seen in the Government’s handling of the defence votes, which merits the criticism and censure expressed by the Auditor-General. His remarks should be taken to heart by every Government supporter who wishes to discharge his responsibilities to the 40,000 or so voters whom he represents. The waste of government money on expenditure in many fields is an utter scandal. The Auditor-General’s observations about pilfering, thefts of money, H.M.A.S. “ Melbourne “, and other matters, are worthy of earnest consideration, and 1 can only hope that those in authority will act upon them. 1 wish to direct the attention of the committee now to the manufacture of the FN .30 rifle at the Lithgow Small Arms Factory, which I mentioned in this chamber some two years ago. During the consideration of the estimates for the financial year 1954-55 I directed attention to the delay in putting the new rifle into production. My remarks were interrupted by the VicePresident of the Executive Council (Sir Eric Harrison), who is also Minister for Defence Production. He said, as reported in “Hansard” for 16th September, 1954, at page 1328 -

In order to obviate the necessity to rise later to reply to the honorable gentleman in respect of one matter, I now inform him that we have already placed orders for the new standard service rifles, which will be manufactured at Lithgow. lt is now 6th September, 1956, almost two years later, and the Department of Defence Production is still preparing plans for the production of the new service rifle. I want the committee to think over this matter seriously. If I remember rightly, away back in 1951, the Prime Minister (Mr. Menzies) declared that there was likely to be war within three years. Since that time, approximately £1,000,000,000 has been spent on defence. Despite this vast expenditure, we now find that the new service rifle, which is essential to Australia’s defence, is still only in the plan stage after two years of preparation. I am pleased to say that a prominent person in Lithgow, Alderman Heffernan, of the Lithgow City Council, who is an executive of the Commonwealth Small Arms Factory at Lithgow, and who was chosen to attend the Duke of Edinburgh’s Study Conference at Oxford, in England, has been given the task of investigating this matter thoroughly. He is at present in Europe completing his work. It is disgraceful and shameful that two years have been wasted in preparing plans and tooling up for the production of a new service rifle which is essential to our defence. Surely this sort of delay should not be tolerated.

Mr Chambers:

– The new rifle will be out of date by the time it is in production.


– The committee should demand that something be done. As the honorable member for Adelaide (Mr. Chambers) has said, unless the production of the rifle is expedited, it will be out of date before it comes off the production line. 1 urge the Government to act speedily in this matter and not to Coast along without any fixed purpose, taking a casual attitude and carelessly spending the defence vote. Sir Frederick Shedden*s statement to the Public Accounts Committee that we are not ready for mobilization must have stunned and shocked most people in view of the money that has been spent to defend Australia and secure our survival.

The various reports of the Public Accounts Committee have been most valuable and helpful in their way, and I congratulate the committee on its splendid work. The report of the Auditor-General also has been most helpful and beneficial to the Parliament and to the people. But something more is needed. We require an active watch dog, such as a defence expenditure committee, which could function fulltime, with power to investigate defence works and take evidence on oath, and generally to ensure that money is properly spent. The Public Accounts Committee, under the distinguished leadership of the honorable member for Warringah (Mr. Bland), is doing excellent work, but often its efforts amount to shutting the door of the stable after the steed has gone, because its inquiries are made after money has been wasted and mis-spent, and after those in authority have failed to do their job. But a defence expenditure committee such as I propose could make sure that expenditure was kept within the estimate. I am sure it would save the country a great deal of money and, as a result, we would have a better defence organization than we have at present.

It has been said that Labour is not concerned about defence. 1 have not the slightest hesitation in saying that the Australian Labour party is deeply concerned about defence. Indeed, the only worthwhile defence plans Australia has ever had were put into operation under the distinguished leadership of the late Right Honorable John Curtin.


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


– 1 hope to be able, later, to discuss some of the remarks that have just been addressed to us by the honorable member for Macquarie (Mr. Luchetti), but I should like to answer two of his observations immediately. He mentioned the cash balance foreshadowed by the Treasurer (Sir Arthur Fadden) in this budget. 1 remind the honorable member that merely stating that that money can be used for the purposes suggested by him does not solve our problems. In fact, as the Treasurer himself pointed out, the money will be needed to assist in financing the State works programme.

The second thing to which 1 wish to refer is the statement by the honorable member for Macquarie regarding the money being made available by the Commonwealth to the States for roads. I remind him, in the first place, that last year several of the States were unable to spend the money that was allocated to them. No doubt, the committee will remember that in June of last year this Government introduced further legislation which provided for the increase, from 7d. to 8d. a gallon, of the amount granted to the States from the proceeds of the customs and excise duties levied on petrol for road purposes. This increase means about £4,000,000 a year, bringing the amount paid to the States for road purposes from £27,500,000 to £32,000.000 a year.

Having said that, I should like now to discuss points of the budget in general. First, I consider the budget in any year to be a very important document - one of the most important documents that we consider in this place, lt is a delicately balanced document to which a great deal of research, study and time has been given. Those responsible for its compilation are subject to a great number of pressures both from inside this place and from outside. Private members themselves are on the receiving end of a number of requests from interested persons. In my own experience, which I have no doubt is similar to the experience of many honorable members on both sides of the chamber, the primary producers of the district put their case from their point of view, as is their entire right. The commercial interests from the cities and towns put their points of view. Those who are in receipt of social services benefits properly put their case.

It is the Government’s duty to balance these requests and bring down a budget which is for the good of the whole nation, rather than grant any benefits which are designed for one particular section of the community only. In saying that, I do not refer in particular to the benefits that are given to the community by way of social services, as 1 hope to discuss that later under its own heading. But I mention this in general because, after having listened to the speech of the Leader of the Opposition (Dr. Evatt) on Tuesday night, one could be excused for thinking that he himself had had no experience in the making of a budget. He is the alternative Prime Minister. In the event of this country having an antiLiberal government in the future he would assume office. Therefore, one looks for his policy more than for mere criticism of the Government’s budget. Consequently, 1 think that not only the Parliament, but also the country, must have been disappointed that we got mainly criticism from the right honorable gentleman, and very few suggestions.

I find it hard to see the reason he had for saying one thing. He said -

Prices have risen because the profit-making motive has prevailed.

That seemed to be his first and main criticism of the economic measures that the Government has found it necessary to take. It is quite true that, prices have risen during past years. There are many reasons for that. As the Treasurer pointed out in the opening statement of his budget speech, the reasons have been many, and some of them have come from inside Australia and some of them have come from outside Australia. But in order to meet these problems. as far as they are capable of being met by governmental action, the Government has developed measures which are designed, on the one hand, to restrain demand and so mitigate pressure on resources and, on the other hand, to promote high levels of production and exports. The Treasurer said -

In broader terms, our aim has been to strike a balance between the long-term objectives of development and population growth and the more immediate requirements of preserving the prosperity and stability of the growing community.

That is what this budget seeks to do. I believe that the further responsibility of a good government is to create the right atmosphere within the country so that it will obtain the co-operation of all sections of the community towards attaining those objectives which I have just mentioned. The type of criticism to which we have been listening, not only from the Leader of the Opposition, but also from his supporters, in no way assists the attainment of those objectives. That fact was ably pointed out earlier this afternoon by my colleague, the honorable member for Moreton (Mr. Killen).

Another suggestion was made by the Leader of the Opposition when he informed the committee and the country that the Opposition would be willing to support the transfer of certain powers from the States to the Commonwealth. No doubt that is a socialist objective - the policy of unification, with all power centered in Canberra - but it is not the philosophy of the Liberal party. I know quite well that the Australian Labour party, the socialist party, at the present time, is having great difficulty in deciding where it is going and what its own objectives are. In recent months we have seen the widening of the split in the Labour party. Those who would go towards what is commonly known as the Left have been under the leadership of the right honorable member for Barton, and those who would go to the Right at present seem to be losing ground in the struggle. But the fact remains that it is time for Australians as a whole to make up their minds whether they want a continuation of the federal system, in which we in the Government parties believe, or whether they want to go along the road to unification, which has been mapped out for them by the socialist Labour party.

Having mentioned that, I think it would be only right for me to say that 1 think there is some confusion in the public mind on these matters. On many occasions we in this House receive requests from outside organizations and individuals asking for the Commonwealth to do certain things. In many cases these matters are entirely the responsibility of the States concerned. One example is the responsibility of maintaining and constructing new roads within State boundaries. Certainly, as I pointed out earlier in my remarks, we in the Commonwealth accept quite a large responsibility for the provision of certain funds towards that purpose. Education is another matter on which federal members have had many representations in recent months from parents and citizens’ organizations. The matter of education, except in the Territories of the Commonwealth, is entirely the responsibility of the State governments. I shall give an illustration of this by reading to the committee a letter that I have received from a parents and citizens’ association which brings certain disabilities at a local school to my attention. This letter is typical of many such letters written to members of Parliament by parents and citizens’ associations. The letter reads -

Our unanimous conclusion is that the needs of the educational system for our children are not being adequately provided for. Our school alone has the following poor conditions: Large classes of pupils; inadequate classroom accommodation; insufficient washing and toilet facilities; insufficient storage space, staff rooms and office space; grounds badly in need of a further allocation of money for their improvement.

That letter is, in itself, an indictment of the New South Wales Government. Since the Menzies Government has been in office more and more money has been made available to the States for their own purposes. It is well known that the Commonwealth now acts as the collecting agency in respect of income tax and, under an agreed formula, makes reimbursements to the States of the proceeds of income tax. The Government has gone beyond that formula, and has increased the reimbursements to the States to a level higher than is required by the formula. In addition, it has entirely vacated the loan market, leaving it for exploitation by the States, Commonwealth public works being financed entirely from revenue. Time and time again the Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur

Fadden) have asked the States to establish a system of priorities in relation to their public works, so that the community generally may have the benefit of additional services, complete and in operation, instead of having a lot of unfinished public works which at present dot the countryside.

So that the committee may have some idea of the amounts provided in the Estimates for the current year, and of what we intend to do, 1 shall quote a few of the items of proposed expenditure. Tax reimbursements to the States, provided for in Part IV. of the Estimates, are to account for £140,800,000. Special financial assistance to the States will account for £16,200,000; Commonwealth aid roads grants to the States are expected to take £25,555,000; roads and road safety will account for £950,000; grants to universities will take £1,600,000; grants to the States in respect of imported houses will take £13,000; the National Welfare Fund and public hospital benefits will account for £6,190,000; the dairy industry extension grant will take £240,000; and flood and bush fire relief will account for £375,000.

I have quoted only a few of the items, but the total amount of assistance to the States is estimated at £235,844,000. Therefore, the remarks addressed to the committee by the honorable member for Macquarie (Mr. Luchetti) and other Opposition members are not based on firm foundations, because this Government, certainly more than any other government that preceded it, has shown that it has a full sense of its responsibilities to the States, as the figures and example that are given prove. The fact that it has done more than any other government in this direction may not, of course, be an argument in itself, but the figures and examples are such an argument.

I believe that the time has come for the Commonwealth to return to the States their previously held powers in the income tax field, because until we do that the State governments will not measure up to their true responsibilities. They will not conduct themselves in the manner in which a government should conduct itself in financing its works and projects. As I have said, the States have ignored Commonwealth pleas that they institute a system of priorities for public works. The Labour-socialist party wants all financial power centred here in Canberra, but that is no part of the

Liberal policy. That it is no part of Liberal policy is nothing new, because we have been giving expression to that principle right from the inception of our party. To support that claim I shall quote a statement by the parliamentary leader of the party, the Prime Minister, in this chamber in 1946. He said -

I want to emphasize, so long as we have a federal system, we must aim at getting back to a state of affairs in which independent resources will be available to the States, because 1 believe any government that exercises real authority will exercise that authority wisely only if it accepts in the face of its electors complete responsibility for the raising of the money it proposes to spend.

That is an announcement of Liberal party policy, and I hope that the Government will continue its approaches to the States and make more forceful representations in an endeavour to get the States to accept the return of their income taxing powers.

I shall deal, in the time that remains to me, with a few individual items in the budget. I am very disappointed that the Government did not find that it could make provision for any further assistance to pensioners. I am also disappointed that no further liberalization of the means test is proposed at this stage. I have spoken on this matter in the budget debate last year and on several other occasions in the House, and have received no answer to my request for an adjustment of the means test. The Ettalong branch of the Business and Professional Women’s Clubs in New South Wales, I am glad to see, will bring the matter that I have been sponsoring in regard to the adjustment of a means test to the conference of such clubs which is being held in Melbourne this week. The adjustment of the means test that I have in mind specifically refers to the present provision under which a person who has some savings has the capital value of those assets taken into consideration and suffers a pro rata reduction of pension. For example, a married pensioner who has £500 has his pension reduced by £5. Under the liberalization of the means test which was effected last year we have exempted from the application of the means test the income earned from such property, but I think that the committee will appreciate the need to go further and I hope that the Minister for Social Services (Mr. Roberton) will be able to take some action in that direction, because there are very few people who are able to save sufficient to bring them in an income of £7 a week, which is allowed to pensioners by way of superannuation. I trust that this anomaly in the means test will be removed during the current financial year.

The committee may remember that last week it was announced that in six hours 22 persons were injured in road accidents on a 22-mile stretch of the Pacific Highway in my electorate. That stretch of. road is becoming notorious for the number of road accidents that occur on it. I think that this vear there have been fourteen fatal accidents on that stretch alone. The Minister for Shipping and Transport (Senator Paltridge) broadcast a plea for greater care to be taken on the roads. In supporting his plea may I suggest to him that he bring before the Australian Transport Advisory Council, of which he is chairman, my suggestion that drivers of private vehicles be prohibited from smoking while driving. I make that suggestion in no desire to limit the freedom of action of the individual, but for the good of the community. I think members of the committee know that for many years drivers of public vehicles - trains, trams, buses and so on - have been forbidden by law to smoke while driving their vehicles. That law was not brought into force with the object of interfering with the freedom of the drivers. The object was to contribute to the safety of the travelling public. I think it should be extended to cover the drivers of private vehicles.

You drive a great deal, Mr. Chairman, and doubtless you have noticed the way in which other people drive. I suggest that if a driver lights a cigarette while his car is in motion, his attention is distracted from the driving of his vehicle and from the course it is taking on the road for at least live seconds. If his cigarette lighter does not work at the first flick, or if he has to fumble to get a box of matches out of his pocket, his attention may be diverted from the driving of the vehicle for ten or twelve seconds. There is one other consideration. The design of modern cars is such that when cigarette ash or a cigarette butt is flicked from the driver’s window, very often the ash or the butt flies back into the car, mainly into the rear seat. That causes a disturbance and distracts the attention of the driver. Therefore, I suggest that the Minister be requested to make that suggestion to the council.

The last matter with which 1 shall deal has been referred to by the honorable member for Macquarie and by most honorable members who have spoken. 1 refer to the problem of costs. It is quite obvious that, especially in the field of primary production, we are pricing ourselves out of a number of the world’s markets. Fortunately, we still produce the cheapest steel in the world. It is among the world’s best steel. It appears that we may be able to export more of our steel during the coming few months, but, because of production costs and freight charges, several of our other secondary products are being priced out of the world markets. If this budget is successful, as 1 think it will be, the Government will be able to assist and give a lead to the community by reducing some taxes next year. I refer particularly to the pay-roll tax, which, I believe, could very well be either reduced or abolished. That would make a great contribution to the reduction of costs.

I do not agree with the honorable member for Macquarie that this is a simple matter, and that the solution of the problem is the control of prices and wages. It is a complex problem, and assistance in finding a solution will have to come, not only from governments, but from all sections of the community. I believe the Government could give a lead by reducing taxation, by suggesting more efficient methods to managements, and by seeking the cooperation of industry. In that way, we shall be able to achieve our objectives.


.- 1 should like to draw the attention of the committee to what is probably the most important statement in all the budget papers which have been presented to us. It is a statement which shows the basic trend of the Australian economy. The honorable member for Moreton (Mr. Killen) spoke about some people being gloomy and about others being optimistic. If we are to have a debate that is worthwhile, the first thing to do is to try to see all the facts, and to see them steadily. It is important to see the most essential fact. The most essential fact is that stated in the paper on national income and expenditure for 1955-56, presented to us by the Treasurer (Sir Arthur Fadden), wherein he states -

Gross domestic expenditure at £5,334,000.000 was again greater than the gross national product of £5,194,000,000. This excess contributed to the continued substantial deficit on current account in the balance of payments which amounted to £221,000,000 in 1955-56 compared with £257,000,000 in 1954-55. Receipts from overseas on current account (mainly for exports) changed very little despite the fall in export prices, and amounted to £907,000,000 in 1955-56. Payments to overseas (mainly for imports, freight, insurance, and interest and dividends) amounted to £1,128,000,000 compared with £1,145,000,000 in 1954-55. There were other receipts of a capital nature. International reserves fell by a further £73,000,000 in 1955-56 following the fall of £142,000,000 in 1954-55.

Gross domestic expenditure is the sum total of all our demands, of all we ask for. The gross national product is the sum total of all that we give. The Treasurer has defined a situation in which, as a community, we are trying to get more than we give. The consequence is that our reserves have fallen, although the real extent of the unbalanced nature of our relationship with the rest of the world is concealed because there has been borrowing. In his budget speech, the Treasurer said -

The fact is that we cannot afford a reasonably satisfactory How of imports unless and until our export earnings rise much higher. We need an export income more like £1,000,000,000 a year than £800,000,000.

But the fact is that the rise of £200,000,000 which he mentions is an under-estimate. We were £257,000,000 down the year before last and £221,000,000 down last year. The fact that in one year £115,000,000 of borrowing reduced the deficit and that in another year £148,000,000 of borrowing reduced the deficit does not conceal the very disadvantageous trade position of this country. I am not going to place the full responsibility for that on the Government. Every person with an overdraft has been, in effect, spending more than he has earned. If there are a large number of people in that position - I have been in that position myself - we are creating in the community demands and expenditures which ultimately produce the picture that the Treasurer painted.

When one of my colleagues was speaking about our sterling reserves in London, the honorable member for Hume (Mr. Anderson), by way of interjection, said that those reserves had accumulated under Mr. Chifley because there was nothing to buy. To an extent, that is true. Those colossal sterling reserves were built up partly because of war conditions and partly because of disciplines which the community was prepared to accept during the war and, for a time, after the war. There were the disciplines, for instance, of petrol rationing, of butter rationing - which enabled more butter to be exported to the United Kingdom and helped us to build up our reserves -and of meat rationing. 1 think we all recognize that in dealing with the alleged science of economics we come very close to the science of psychology. A community can have many things if it is prepared to discipline itself. I do not subscribe altogether to the philosophy that if something can be done in war-time, it can be done also in peacetime. When we wanted to undertake great public works in the Northern Territory during the war, the power to compel people to go there was as much an important part of the war-time economic situation as was the power to appropriate money to pa> them. In peace-time, the community is not prepared to accept such a discipline. Consequently, in peace-time we cannot carry out great public works in remote areas to which people will nol go - areas to which, in war-time, they go under compulsion.

When all is said and done, I believe there has been a basic unwisdom in the Treasurer’s handling of the sterling balance. To me, the borrowing situation that has evolved in Australia and the loss of international reserves is a tragedy. It is particularly tragic because of the circumstances in which it took place. I remember clearly the first budgets of the Treasurer when we had a satisfactory sterling balance in London and he declared himself in favour of absolutely free importation. I do not dispute for a minute that the sudden increase of imports was in response, to some extent, to community demand. There was a colossal increase of expenditure on petrol the moment petrol rationing was lifted.

In our community there is a large number of persons who simply know that they want something. Businessmen come to me about the Government’s present import restrictions. All they know is that they want to import something. They are not interested in the community situation, or in attempts to explain how the Government cannot permit importation of much more than we actually earn by our sales abroad. They only know what they want, and politically, in this Parliament, we often pander to them, as was done in the interests of pleasure motoring and non-essential things in the world as it was in 1949 and 1950 during the political campaigns of those times. However, the Government believed that, by allowing a tremendous volume of imports, it was going to do something about inflation. There would be a vast volume of goods circulating against the spending power in the community, it believed, and the presence of those goods would arrest inflation, lt was fallacious reasoning because goods were being imported from inflated economies. They were at the same degree of inflation as Australia was in 1949, as will be seen if one looks at the “ Monthly Review of Business Statistics “ for May, 1956. At page 23 of that issue, there are the wholesale price index and the retail price index. In 1950-51, Australia was at much the same level as Canada, New Zealand, South Africa, Sweden, the United Kingdom and the United States of America. Now, however, while the index figure in Australia is 350, in New Zealand it is 256, in the United States of America, 216, and in Canada, 217. We have had runaway inflation since then, and inflation has run faster here than in the rest of the world. That is precisely what honorable gentlemen on the Government side mean when they say we are pricing ourselves out of competition.

If there had been a real conviction, both in the community and in the Government, that the great wool boom of 1950 was not going to last, and if there had been a conception in the mind of the Treasurer of counter cyclical budgeting, we would have had to-day a larger reserve against this day, which has inevitably come when our export prices have fallen. But the Government, both in its borrowing, and in allowing its reserves to be depleted, acted with the trade cycle and not against it. We were borrowing and we were drawing on reserves at the point of time when our export prices were at record levels. Any person who thinks of this in a businesslike manner must recognize that if we are borrowing at the high peak of our income, we shall be in trouble when we have to pay back out of a reduced income.

I am not presenting this as a simple problem. I believe that this Parliament has a responsibility at all times to discuss real issues with the Australian community, notwithstanding the fact that very often right policies are unpopular. If the Government comes to grips with the way in which I spend my money, it is coming to grips with my will at an intimate point, because my spending is an expression of my demands, and my demands are an expression of my will. By and large, the Australian community has not been prepared to tolerate governments which have stood in the way of their demands.

Now we are coming to the fact that we cannot go on with our gross domestic expenditure exceeding our gross national production. We cannot go on depleting our reserves, and we cannot go on borrowing. Immediately the question is raised: Who is going to pay the piper? The Treasurer told us, very frankly, in his budget speech who is paying the piper now. At page 5 of the speech, speaking of costs, he said -

There are. however, always some who cannot pass cost and price increases on - people on fixed incomes . . .

He might have said “ pensioners “ in that context, because they are particularly vulnerable, but the right honorable gentleman continued - firms who sell in highly competitive markets, exporters whose prices are determined by overseas conditions-

That is, the whole farming community - and upon these groups the full brunt of the movement falls.

This is no piece of abstract theory; it is a strict account of what has happened in Australia and is happening to-day. Costs and prices have been rising in a cumulative fashion and have now become a crucial problem for many branches of industry. As usual, the movement is tending to weigh with concentrated force on export producers, some of whom have already been hit by falls in world prices for their products and most of whom face the fact that world trade is becoming more and more competitive.

The Treasurer might have added that we are nol in a position to face that situation very well because of the way we have used our international reserves. If honorable members consider the Treasurer’s budget speech closely, they will find the positive suggestion - almost a direct statement - that one section of the community will bear this burden if the amount of money in circulation does not fluctuate freely to correspond with prices. Then that section of the community whose income is not going up with prices is bearing the cost of inflation. One section at whom the Treasurer seems to be hinting is the wage-earner; hence the controversy between the Commonwealth and the States about the quarterly adjustment of wages. Undoubtedly, the other section is formed by the pensioners.

I am not going to speak at great length on the age pension. There has been great argument in this chamber as to who is the more humane of the two sides. 1 do not pretend that I am more humane than are honorable gentlemen opposite, but I say, as an objective fact, that we in this Parliament, because of increasing costs, have adjusted our own wages and allowances. If that action was valid, we were recognizing that a trend had taken place in the community, and we have taken steps to protect ourselves against it. If protection is not given to the whole category of pensioners also, it is a flat, objective fact that they, who are most vulnerable, are bearing the cost of inflation. That seems to be inescapable. If inflation continues, and pensions are not adjusted, the simple fact is that the pensioners, vulnerable as they are, must continue to be one of the sections that are bearing the adjustments that we have to make because of our increasingly unfavorable trade situation.

In 1954-55, when our gross national expenditure was not out-running our gross national production, the Treasurer referred in his speech to the possibility of that situation developing. It did not exist at the time, but he commented on what the position would be if it did exist. This is what he said -

If we keep a balance between available resources and the demand for those resources, we will generally have not only stability of prices and costs but rising output, improving efficiency and sound progress and development. Allow demand for resources to outrun supply and we will almost certainly have dislocation, waste and a cutting-back of real output and the rate of development.

That dislocation, to which the Treasurer referred as a possibility two years ago, is now a fact. I believe that his statement of two years ago was valid, and we are beginning now to have the dislocation which he said would take place if demands outran the supply, and if our gross national expenditure outran our gross national production. I am quite honest in saying that I cannot see any philosophic consistency in opposition to control of investment in Australia, or, in other words, to capital issues control. The Government at present imposes import restrictions, and an import restriction is in fact a capital issues control. We may import an earth-moving machine - that is, wc may invest our money in an earthmoving machine - but we may not import an Espresso coffee machine. Such a restriction constitutes a capital issues control, applied to a very small segment of the economy.

How unscientific it is to wish to concentrate such a control on a minor part of our economy and not on the major pari of home production, which really determines the state of our economy. It is quite illogical to hold up our hands in holy horror about capital issues control, which would enable us to say to investors, “ You shall invest your money in a steel factory and not in an ice cream factory “, while concealing from ourselves the fact that we are doing precisely the same thing with a less important section of the economy, namely the importation of capital equipment. It is time that we got down to root thinking on this basic question, rather than thinking in terms of political abstraction, saying, “ If you do that it is socialism “, or. “ If you do this it is free enterprise “. What we should ask is, “ If you do that is i; sense? Will it do any good for the community? “ That is the test.

The unreality, in some respects, of our internal economy has been forced on us At the moment we still have some international reserves on which to draw, and we are still successfully borrowing; but as soon as the reserves run out, or borrowing is no longer possible, then these controls must become stricter and stricter. The Government is, in fact, making them progressively tighter. The Treasurer says - and it is an under-estimate - that we must earn another £200,000,000 a year with our exports, but we cannot find anywhere in his budget speech a suggestion as to how we are to do that. How are we going to find this extra £200,000,000 a year? If we do not find it, we must continue to draw on reserves, the Treasurer says. He <s not gloomy about it, but he does not suggest any specific method whereby we may be able to rectify the position. 1 suggest that we must try to increase our mineral exports. As long as the United States of America will give real goods in exchange for gold, it may be worthwhile subsidizing even further the production of gold, in order to obtain an international currency. I suggest that we have been sadly remiss in not sufficiently publicizing our exports. Publicity for Australian foodstuffs in London is pathetic by comparison with the publicity given to foodstuffs from New Zealand. When rationing was in force in Australia, we increased the volume of meat and other foodstuffs that were available for export. I cannot understand why we do not develop our production of high-class proteins in the form of poultry. Can any one tell me why poultry in the United States of America is onethird the price of steak, while in Australia steak is one-third the price of poultry? I know that overseas experts who have studied our poultry industry regard it as inefficient. It seems strange that in a country that has unexportable surpluses of wheat we cannot increase our protein production by extending the poultry industry, and thus make more meat available for export. Meat is a commodity for which there is a strong possibility of increased demand in the United Kingdom.

Then I come to the matter of grain for Asia. People in Pakistan are very conscious of the fact that Australian wheat has a very high vitamin content but a very low protein content. Pakistanis can live on wheat produced with the use of their own natural fertilizers, but they cannot live on wheat produced with our artificial fertilizers. ls there any reason why we cannot apply scientific research to our wheat industry in the way that it has been applied to the wool industry to improve the quality of our wools, in order to develop a type of grain that will not only sell in Europe but also have a good chance of selling in Asia? Asia’s capacity to buy is vitally important to this country, and for this reason I disagree with any honorable member, irrespective of whether he belongs to the Labour party or the Government parties, who is opposed to the Colombo plan. I believe very strongly in the Colombo plan. I do not see how locomotives for Pakistan can be balanced against old age pensions. If we produce diesel locomotives for Pakistan we may decrease the capacity of

New South Wales or Victoria to obtain diesel locomotives, but the gift of a diesel locomotive competes only with the purchase of that diesel locomotive by another authority. I cannot see very much validity in the argument that pensions are depressed because we send capital goods to backward Asian countries, which ultimately translate those goods into an increased capacity to buy, a matter vitally important to Australia. If the Indian standard of living increased by only 2 per cent., the standard of living of a great many other countries would be revolutionized. If India’s capacity to buy brought it to a position in which it could guarantee subsistence for all its people, its demand for foodstuffs from Australia would be greatly increased. If we are to economize, it seems to me to be the falsest economy to restrict the Colombo plan, which represents a small step” towards helping Asia to become a purchaser.

I wish to speak briefly on the subject of altering the incidence of taxation in Australia to-day. In a table appended to the Treasurer’s budget speech of two years ago the right honorable gentleman gave figures showing a comparison of interest rates in Australia, New Zealand and the United Kingdom. Those figures showed how much lower is income tax in Australia. I am concerned at present not so much about comparisons of taxation rates in different countries, as in a comparison between the tax paid by a man without dependants and that paid by a man with dependants. I ask the committee whether the system in operation in Australia is really a scientific or just graduation of tax burdens on the community. As an instance, a single man earning a taxable income of £1,000 a year pays £106 5s. in Australia. In the United Kingdom he pays £232. A married man without children pays £81 17s. The difference, for the expense of a wife, is less than £25. If a man has one child he pays £68 6s., which is £13 less than the amount paid by a married man without children. If we add to that another £13 for child endowment for the first child, we see that he receives a concession of £26 for the maintenance of a child for a year. We can go further down the list and find that there is a difference of £8 in the amount of tax paid if a man has two children instead of one. I suppose that bachelors will object to what I am saying in this regard, but while I would not advocate that a single man should pay as much tax as his counterpart in the United Kingdom, I suggest that his burden could properly be increased.

I suggest that the rebate of £130 allowed for a wife is quite insufficient. Maybe some honorable members can support their wives on £2 10s. a week, but if they are able to do so they must have extremely docile wives. It would be much more realistic if the rebate for a wife were increased to £260, and that for a child to £156. The rates of tax might then be increased, not to the extent that taxation for a married man would be increased, but so that the single people would carry an added burden. It is impossible to prove the generalization that I am about to make, but I have a strong suspicion that the £130.000.000- collected in sales tax falls primarily on families, and not on single people. Every concentration on indirect taxation, even through customs duties, tends to fall primarily on families. Australia is a country with a low level of direct taxation and a high level of indirect taxation, and I suggest that the time has come to ask ourselves whether this form of taxation is not one of the contributing factors to the inflation and the excess expenditure about which the Treasurer complains to-day. He is tending, by this form of taxation, to leave purchasing power in the hands of those who have not dependants and to add to the burdens of those who have dependants. That leads to irresponsible expenditure in one part of our society and to economic difficulties in the other. This matter should be looked at very carefully to ascertain whether the differences in taxes paid by different classes of taxpayers cannot bear more relation to the actual costs of a dependant which have to be borne by the taxpayer.


.- This committee, and the Government, should feel indebted to the honorable member for Fremantle (Mr. Beazley) for the very able, thoughtful and constructive speech that he has just made. It was a treat to listen to a closely reasoned argument delivered by a member of the Opposition. Unfortunately, it is the type of speech that we hear all too rarely in this place. In these days, when great economic difficulties face the country, Her Majesty’s Opposition should be able and willing to shoulder more than it is at present carrying of the task of assisting and guiding the Government by thoughtful and constructive criticism. That is what the honorable member for Fremantle, among very few of his party, has attempted to do, and I greatly appreciated listening to him.

I shall not attempt to follow him through the labyrinth of thought which he gave to us in relation to our overseas trade position. It is obvious that he has given a great deal of attention to this matter as, indeed, the Government itself has done. The Treasurer (Sir Arthur Fadden) would be the last to claim that everything he has done as Treasurer during the last few years, or, indeed everything that he has suggested in the present budget, is impeccable and without fault. I do not think that the Treasurer himself would make that claim; but I think that we on the Government side can justifiably claim that as a Government we have, during the last six years, honestly and sincerely attempted to grapple with the economic problems that have confronted us. It may well be, as the honorable member for Fremantle has argued, that the gap of £200,000,000, which we have to bridge to balance our imports-exports position, is on the low side. I am prepared to concede that point. Possibly the Treasurer mentioned that sum as a minimum amount, and probably that is the case. What the figure should be to-day is not necessarily the figure that will fill the gap in six months’, or three months’, time, because, as the honorable member knows, our economic position changes quite considerably even in very short periods.

We should place on record our appreciation of the fact that the honorable member for Fremantle has attempted to lift this debate, particularly the part of it that has reference to our overseas trade balance, to a non-party level. I should like to hear more debates in this place on a non-party basis. I do not conceive it to be the duty of the Opposition to oppose everything that the Government might put forward. Nobody is right all the time, and the Government is not right all the time. Any government that claimed that it was right all the time would put itself in a most invidious and embarrassing position. Nor is the Opposition completely right all the time. As we attempt to do with other like-minded nations on the international plane, where there are many difficult and touchy problems, let us pool our ideas and adopt the best of them in the interests of the nation. As was suggested by the honorable member for Fremantle, our approach to matters of fundamental importance that touch everybody in the country, such as our overseas trade balance, should be made on a commonsense, analytical basis and not on the basis of whether something is good liberal philosophy or good socialist philosophy. I am completely at one with the honorable member in his approach to that matter.

The honorable member referred to trade generally, and the Colombo plan in particular, and I was very pleased to hear him say that he supported what the Government is doing under that plan. All honorable members on this side of the chamber feel very strongly about this matter. The suggestions that the Colombo plan has overreached itself from the Australian viewpoint, that Australia is attempting to do too much under it, or that our contribution to (he overall scheme is not worth while, have come mainly from the Opposition. It may be that there is some logic in that from certain view-points, but looking at the position as a whole I find myself in complete agreement with the honorable member for Fremantle that the Colombo plan must be supported to the hilt. We believe that we must give all the assistance that we can give to our near neighbours and build up all the goodwill we can with those countries with which we live in geographical proximity. The honorable member also dealt with the incidence of taxation. It may well be that our present system of taxation contributes to inflation in the way that he put forward. I am not prepared to refute his suggestion, but I believe that it is a constructive thought and one which the Treasurer will be quite willing to consider. [ join with the right honorable member for Cowper (Sir Earle Page) and other honorable members in congratulating the Treasurer on the fact that he has presented a record number of budgets to this Parliament. The fact that he has presented to the National Parliament a greater number of budgets than any other Treasurer in our history is a considerable achievement, and [ add my voice to those congratulations. Whether one agrees entirely with what has been put forward by the Treasurer in his budget speech - and 1 have no doubt that the honorable member for Fremantle will agree with me in this - we all believe that he has handled the nation’s finances with great sincerity of purpose and with considerable skill. ‘ lt has not been by any means easy to be the Treasurer of Australia during the last six years, because we have been faced with international crises which have had repercussions on us and our economy, and the task that has fallen to the lot of the Treasurer has been a very unenviable one. Nevertheless, he has carried out his duties with singular ability and devotion.

Notwithstanding the various economic difficulties with which this country is faced in the current year, the Treasurer has found it possible to make various concessions, notably in the field of taxation. He has increased the maximum of concessional deductions for life insurance premiums and hospital and medical benefits fund payments. He has increased the deductions for residents in isolated areas. He has increased the maximum of concessional deductions for educational expenses. Here again, I come back momentarily to the point made by the honorable member for Fremantle in relation to assistance to the family man. When speaking of the incidence of taxation, the honorable member referred to the need to lighten the burden on the family man, and with that we entirely agree. The need for it is recognized by the Treasurer in this budget, as, indeed, it has been recognized in various other budgets that he has introduced in this place. He has provided in the current year for additional deductions for gifts. I shall not enumerate all of the concessions; they are set out in the budget speech.. But I think it is useful at this stage, when the debate has gone on tor some days, to make particular reference to some of the individual items that are provided for.

The Treasurer has also provided increased allowances for the timber industry, as well as allowances for the costs of patent rights and so on, and allowances for debts paid by discharged bankrupts, all of which total, in a full year, just under £2,000,000. That is, very briefly, the total of the taxation concessions in this present budget. In this period of inflation, I suggest that the concessions are reasonably generous and all that could be expected. They are not, of course, all that we would like to give, by any means, but I think that they are fair and reasonable at this present juncture of our economy.

A matter on which I wish particularly to compliment the Treasurer is the fact that he has again provided for a surplus in the budget. There has been some argument on this point and on the question of the amount of the surplus. I do not intend to embark on a discussion of that matter, but I point to the fact that once again the Treasurer has adopted the very wise antiinflationary course of providing for a substantial surplus in the current income and expenditure account of the nation. Not only has the Treasurer provided for various taxation concessions, but he also has increased pensions to widows and invalids. Here again, it may be felt by many that pensions should have been handed out on a more liberal scale, but I think that the more thoughtful people in the community will realize and agree that the fund is not completely inexhaustible. The National Welfare Fund, from which these moneys come, must be built up from money which comes, by way of taxation, from the pockets of the taxpayers. We are not a large nation numerically. The taxpaying population is only a comparatively small proportion of the total population, and I believe that we must be rather cautious in our approach to this whole question of building a national welfare fund which is too heavy for our resources. In other words, the total of the National Welt’ar Fund has to bear some relation to the ability of the taxpayers to provide those moneys.

Looking back over the record of this Government, over six years - and I am not going to enter into a party political controversy on the matter - I put forward the thought that we have administered the national finances very well. In successive budgets, during the last six or seven years, the Government has been well and truly aware of the position of the pensioners and has, wherever it considered that it could possibly do so, made some increased allowance for them. I come back again to the question of the size of our National Welfare Fund. I, for one, feel that the sky is not the limit. We have to set a limit somewhere in relation to our overall economy and our overall ability to pay. I think that the time is rapidly approaching when this nation will have to introduce some form of national insurance scheme.

My third point in relation to the budget concessions and allowances concerns the States. It will be noted that the Treasurer has found it possible to provide for £20,000,000 additional tax reimbursement to the States in this current year over and above the amount that would be payable to them under the formula which was devised by the Chifley Government. The country, at the present time, is facing two major economic problems. Both of them already have been discussed considerably in this debate, and many useful and constructive thoughts and suggestions have been put forward. It is an unfortunate fact that our Australian economy is balanced on a razor edge. We seem, from time to time, to move from one crisis to another. When one is solved, another looms on the horizon. There appears to be a very thin dividing line between real national prosperity and real economic difficulty. I come back to the thought that, on such great issues as this, we should welcome thoughtful and constructive suggestions from the Opposition.

These two major economic problems, of course, are, first, the problem of inflation, about which much has already been said; in other words, excessive spending in relation to the level of goods and services available in the community; and secondly, our reducing overseas trade balance. It is notable, I think, when reading various journals issued by the banks and other financial institutions, suggestions in letters to the newspapers, and ideas put forward by professors of economics at universities, and so on, that there is no real degree of unanimity amongst all the experts on the questions of either inflation or our overseas trade balance. I do not pose as an economist, although I have tried to study the subject, but there seems to be an almost lim i ties?, field of argument on so many of these big economic questions that I do not think that any one could claim to be completely right on any one of them at any point of time. One thing seems to be pretty obvious, though, and that is that in Australia wc have been wanting, for some time, to have our cake and eat it too. Realising that, the Treasurer recently called a conference of the various State Premiers. I do not intend to traverse all the details of that conference, but it was obvious that some of the Premiers came to play party politics. That was unfortunate. There were some who could not see any further than the need, as they argued, to impose further controls, and to impose an excess profits tax. That, in the main, has been the argument put forward by Opposition members, notably by the Leader of the Opposition, in the course of this debate. The general theme of their contribution has been that what we need are controls, controls and still more controls, on a national basis. Not satisfied with more and more controls, they also argue in favour of extra taxation on profits.

That is a negative approach and a great deal more thought and energy should be directed towards the really basic problem of increasing productivity, because however we look at these economic problems I think we come back inevitably to this question of increasing our productivity as a nation. It is that on which our standard of living ultimately will depend. We all, in this chamber and in the country, are anxious to maintain our standard of living. We would like it to rise; we certainly do not want it to fall. But I, for one, feel that it is in danger of falling unless, as a nation, we adopt a more constructive and positive approach to the question of increasing productivity.

It is disappointing that the recent Premiers conference did not make greater progress towards the solution of the wages problem. This is not a political matter and I hope that, in my lifetime, I shall never see the day when the question of wages and hours is brought under political control. The Government firmly believes in maintaining independent tribunals to arbitrate on these matters. It would be tragic for this country, for industry, and for everybody concerned if wages and hours ever became a political football. An intelligent and cooperative approach to this problem is needed, as it is to many other problems with which we have to cope.

The Treasurer (Sir Arthur Fadden), in his opening speech to the Premiers conference, pointed out that the remedy for rising costs was twofold. He discussed at some length the problem of stimulating production and of restraining excessive demand. Here, again, I have not time to traverse those two fields of thought, but I put to the House an interesting proposition which emerged from the Treasurer’s speech. It was the simple assertion that a rise of 1 per cent, in Australia’s productivity would equal, approximately, the output of 25,000 additional members of the nation’s work force. That is an interesting observation which should be driven home to the country as a means of helping employers and employees to realize how much our standard of living and our real prosperity are bound up with increasing productivity, to be achieved by working co-operatively in industry and eliminating antagonism and distrust among various sections. Industrial unrest is not the way to reach national greatness, to improve the standard of living or to enjoy real and continuous prosperity. The Treasurer said -

The Government has no confidence in the efficacy of direct controls over prices and profits.

I have quoted his words verbatim because honorable members opposite in this debate have argued in favour of these things. The Treasurer went on to say -

We have all had experience of these measures and know their shortcomings. Apart altogether from the question of constitutional power and administrative difficulty, we believe that such controls do no more than mask the problem, which is essentially one of supply and demand.

He conceded that there was a possible role for selective price control, and pointed out that that was essentially a matter for the various States. Obviously, inflation cannot be remedied by government action alone. Even allowing for the great population increase in Australia in the last twelve months, and the rises in costs and prices, there is no doubt in my mind - and clearly there was none in the mind of the right honorable member for Cowper (Sir Earle Page) and some others who have spoken in this debate - that there is room for more government economy. I was interested to read an article which appeared at page 21 of the June issue of the “Taxpayers Bulletin”, entitled “How to cut costs of Government”. It urged that the Commonwealth Government should make more serious efforts to curb the growth of public expenditure. It suggested that fact-finding investigation was needed, similar to the Hoover commission which was appointed in the United States. I agree with that suggestion, but it has one shortcoming: It mentions only the Commonwealth Government. The field for economizing exists in the State spheres as well, lt is adopting a one-eyed approach to this problem of government economy to say that the Federal Government is spending too much, without making reference to the State governments. At least some of the State Premiers appreciate the need for exercising greater economy.

Perhaps it might justifiably be argued that the Federal Government, being the National Government, should set an example, and with that I agree, lt is up to any federal government, whatever its political complexion, to set an example to the rest of the nation. I was interested to hear my colleague from Queensland, the honorable member for Petrie (Mr. Hulme), point out that, although government administration expenses have increased in the federal sphere in recent years, the percentage increase of administrative expenses in the States has been considerably more. That observation gives great strength to my earlier argument that economy must be practised in the States as well as in the Federal field.

This afternoon, some of my colleagues, particularly the honorable member for Moreton (Mr. Killen), referred to the need for a national priority of public works. I have spoken on this matter several times previously in budget debates. So far, no system of priority has been achieved and public works, like Topsy, have just been allowed to grow. That is not in the interests of economy or progress. There is far too much State consciousness and emphasis on State boundaries and divisions. I always feel that, first and foremost, we are Australians. I agreed wholeheartedly with one point in the speech of the right honorable Leader of the Opposition (Dr. Evatt), when he reminded us that Australia is one nation - although I did not agree with the context in which his remark was made. We are one nation,, and we shall advance or recede or stagnate as one nation. I believe that we will advance, but an intelligent and co-operative effort will be needed to do so. Let us have more co-operation in the matter of public works, and less emphasis on State boundaries and petty State jealousies.

I agree entirely with the argument in favour of the abolition of uniform taxa tion. I feel strongly on this matter, and have dealt with it on several previous occasions in this chamber, but the day seems no nearer when the Commonwealth will return taxing powers to the States. The Prime Minister (Mr. Menzies), on at least one, and probably more than one, occasion at Premiers conferences has offered to return to the States their taxing powers which some of them, up to that point, had been clamouring for. But when he made the offer, some of the Premiers almost fainted with fright. Obviously, it is an easy way out of some State economic problems for the Premiers to come to Canberra once a year and, like Oliver Twist, to ask for more and still more. They are never satisfied. In recent years, they have been given bigger and better handouts and still complain that it is not enough. Under this socialist system of uniform taxation, which was introduced as a war-time measure, I agree with the honorable member for Moreton that the federal system is being undermined. If the federal system is to be maintained, action must be taken to restore taxing powers to where they belong.

A good deal has been said from time to time on the subject of immigration. 1 am not one of those who thinks that this problem should be approached with timidity. We are a young and growing nation, and inevitably we are suffering from growing pains. These would be far less acute if we worked as a united nation instead of a heterogeneous group of people branded with various State labels. This problem must be dealt with on a national basis. Many economists consider that our immigration programme should be reduced. It is being reduced to some extent, and I think that that is proper at this juncture. But 1 do not want the programme to be cut down too much, because I feel that that would retard our development, that we would lose a certain amount of goodwill in the nations from which we want to obtain immigrants and that in the long run a savagely reduced immigration programme, as advocated in some quarters, would not be in our longterm interests. It might be in our shortterm interests in helping to solve the problem of inflation, but it would not be in the long-term interests of a young and growing nation.

One should place on record appreciation of the efforts of the Minister for Trade (Mr. McEwen). He holds a key portfolio at the present time, and much depends on his efforts whether or not we will emerge successfully from the battle that we are waging with the reducing overseas balance. He has been most vigorous and energetic in his approach to this problem, and he is to be warmly commended. He has inaugurated trade promotion campaigns in the United Kingdom and has been instrumental in sending trade missions to South Africa and South-East Asia.


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


.- It would be very difficult for me, and would take up too much time, to follow through and attempt to reply to the observations made by the honorable member for Ryan (Mr. Drury). However, there are one or two matters to which he has referred that I propose to mention very briefly. In his opening remarks, he congratulated the honorable member for Fremantle (Mr. Beazley) on what he considered to be a most excellent and very rational speech. He went on to say that that is the sort of thing supporters of the Government expect to hear from all members of the Opposition. 1 suppose that what is a good speech and what is not is a matter of opinion. I heard the Treasurer (Sir Arthur Fadden) say recently that a cricket team cannot have all spin bowlers. I agree with the Treasurer in that contention. I suppose I am touching on very dangerous ground in mentioning spin bowlers in Australia; but at the risk of that I suggest to the honorable member for Ryan, who is always most tolerant in his attitude, that because he or even all members of the Government are not pleased with speeches delivered by members of the Opposition, it does not mean that members of the Opposition are not as sincere as he and the honorable member for Fremantle in their endeavours.

Anybody who wanted to be reasonable in this matter would admit at once that the speech of the Leader of the Opposition (Dr. Evatt), on Tuesday night was a most excellent one. Admittedly, it was critical, but, after all, what sort of an Opposition do supporters of the Government want?

Will they never be satisfied until they have a lot of sycophants on this side of the chamber who are prepared to receive all that the Government delivers and not offer any criticism at any time?

Mr Hulme:

– No, we do not want thai.


– The honorable member does not want that! What was wrong with the speech delivered by the Leader of the Opposition? It was a most excellent speech and the people of this community should be very grateful to him for exposing the weaknesses and the ineptitude of the followers of the Government. The honorable member for Ryan, with others, congratulated the Treasurer on presenting to the Parliament more budgets than had any of his predecessors. I also congratulate the right honorable gentleman, not on the number of budgets that he has produced, but on the fact that the more budgets he has produced, the more chaotic our economy has become. No assertions of mine are necessary to prove that. His own statement, and the statements made by the Prime Minister (Mr. Menzies) on the two “ little budgets “ that he introduced, prove quite conclusively that that is so. I hope the right honorable gentleman lives tor a long time, but does not introduce any more budgets.

I listened with great interest last night to the speech of the honorable member for Kingston (Mr. Galvin). He said that supporters of the Government referred to the States as if they were something to be hated and despised. The honorable member for Canning (Mr. Hamilton) took the bit in his teeth and his courage in his hand and said, “ I shall cast my remarks not only towards Labour Premiers and States with Labour governments, but also towards Mr. Bolte, the Premier of Victoria, and Mr. Playford, the Premier of South Australia “. That was not because the honorable member for Canning had any great desire to say something about Mr. Bolte and Mr. Playford; it was a defence, because Mr. Bolte and Mr. Playford have joined forces with the Labour Premiers in condemning this Government for its treatment of the States. The honorable member for Ryan said, “ What do we get? We get the States wanting more, and when they get more they want still more “. ls the honorable member for Ryan, the

Treasurer or any member on the Government side prepared to be bold enough to say that the States are receiving sufficient money to enable them to carry on the works and services that are their responsibility? We would be dishonest if we forgot that the Commonwealth has the responsibility of collecting the finance but that the States have the more unsavoury responsibility of spending it.

What position do we reach when we admit that truth? The States have works to complete. That is their responsibility to the people who reside in them. They have all their works and services. I do not need to enumerate them; we all know them. But this is the only place where the States can get the money for those works. 1 put it to the committee that some degree of unemployment exists in every State. In some States it is much worse than in others. I read a newspaper article recently which said that the Premier of Queensland had warned members of his own party that sooner or later - and unfortunately the indications were that it would be sooner rather than later - the Government would have to do an unpopular thing - put people out of work. Does anybody suggest that any State government would deliberately put people out of work if it could be avoided? Why are men being put out of work in various States? They are becoming unemployed because the States cannot get sufficient finance to enable them to carry on the works programmes that they have determined or would like to determine. The attacks which some honorable members make on the States are so much humbug and poppycock. When Labour was in government, members of the Liberal party and the Australian Country party suggested that the Labour party wanted to abolish all the rights of the States. I do not know how often I heard the late Mr. Chifley, the present Leader of the Opposition and others accused of attempting to deprive the States of their sovereign rights. Let us stop these childish, stupid, humbugging attacks on the States. The moment one mentions anything, honorable members opposite say, “That is a State responsibility. If the States cannot face up to their responsibility, why should we be expected to carry on for them? “ The Treasurer (Sir Arthur Fadden), who introduced this budget - one of the many he has introduced - and the Prime Minister (Mr. Menzies), when introducing the “ little budget “, referred to the dangers ahead of the Australian people. We can go back seven years, and on each occasion the people of Australia were given a warning. Let the honorable member for Petrie (Mr. Hulme) interject and say that that is not correct. On each occasion the people of Australia have been warned of the economic dangers confronting them, and on this occasion they have been told of the position so far as our trade balance is concerned.

Mr Turnbull:

– What is wrong with that?


– This is what is wrong with it: The people last week, when they listened to the right honorable gentleman, were anxiously waiting for him, at long last, to provide some semblance of a solution to the dangers he has been warning them of for the past seven years; but once again they were disappointed. It is all very well for Government members to tell the Opposition that it is not submitting any proposals, or making any suggestions that will assist us in the dilemma in which we find ourselves. But why can we not get a lead from this Government? Why cannot the Australian people get a lead from this Government? I do not know what the Minister for Trade (Mr. McEwen) is going to tell us. I know he will have a long statement to make. Every honorable member in the Parliament thought that after the visit overseas of the Minister for National Development (Senator Spooner) and the Minister for the Navy (Senator O’sullivan), ostensibly to try to find markets for our exportable goods, we would hear something positive. Let us face up to the undeniable fact that not only is the value of some of our exportable good deteriorating but also we have lost markets for them. Obviously, there must be an adverse trade balance.

When those two gentlemen went overseas everybody expected they would be able to tell us on their return of the markets they had discovered for our exportable goods. They came back empty-handed; or at least we do not know what they discovered, because it appears to be a secret. We know nothing about it. After the great expense of the visit overseas of those two Ministers, which must be borne by the taxpayers of this country, the Minister for Trade went abroad to do precisely the same job that they obviously failed to do. We want to know now what the overall result of the visit overseas of the Minister for Trade has been. I read in a newspaper this morning that he had made a speech to members of the Associated Chambers of Manufactures. Three hundred people were present last night and he said to them, “ I am right in the middle of one of the greatest negotiations ever entered into between two nations, with the greatest customer that Australia could ever find, the United Kingdom “. He is only in the middle of it!

Mr Turnbull:

– The honorable member does not expect miracles.


– I have long since ceased to expect anything of this Government. The Government is rotten; it is insincere and has no intention and no plan to do anything. That is the fact. Let us face up to the stark reality.

Mr Turnbull:

– I rise to order.


– I did not say the honorable member was rotten; I said that the Government was.

Mr Turnbull:

Mr. Temporary Chairman, I ask that the honorable member be asked to withdraw the remark “ rotten government “, as it is unparliamentary.


The remark “ rotten government “ is unparliamentary, and I ask the honorable member to withdraw it.


– I have no choice; I withdraw it. 1 suppose I had better leave it at that. I come back to the old cry from honorable members opposite that all the responsibility associated with this matter rests on either the States or on the Opposition in this Parliament. I direct the thoughts of honorable members to the conference of Commonwealth and State Ministers which has been referred to not only by the honorable member for Ryan (Mr. Drury) but also by other honorable members who preceded him in this debate. That conference was a “ phoney “. It was never intended to be anything else, because the Acting Prime Minister, the maestro who presented the budget, called the Premiers together, and the only thing he wanted to talk about was ways and means of arriving at a uniform system of arbitration and wages. What is the obvious inference to be drawn? He wanted uniform wage rates to apply throughout the length and breadth of Australia. That is, in effect, what he asked for. He demanded of the States that wages and conditions to apply in the States should be determined by the Commonwealth Arbitration Court. At the moment, there is a difference between Commonwealth and State awards. With the exception of one State, the quarterly adjustment system has not been departed from in the States and the basic wage has been adjusted according to the movement in the C series index, whereas all persons covered by federal awards had their wages frozen on 3rd September, 1953. In effect, the Treasurer said to the Premier, “ If you accept my proposal this is what will take place: The wages of workers under State awards will be reduced to conform to wages under federal awards, and no more quarterly adjustments will be made “.

Mr Hulme:

– The honorable member believes in quarterly adjustments upward, but never downward.


– If the movement is downward, we have to accept it.

Mr Hulme:

– The Queensland Government does not.


– The honorable member is stupid when he says that, because he knows it is not the truth.

Mr Hulme:

– It is the truth.


– In any event, we will not have to worry about a downward quarterly adjustment for a long while, or at least while this Government is in office. The Government wants wages, which at present are determined by State arbitration courts in accordance with the movement of the C series index quarterly figure, to be reduced to conform to the lower rate brought about because of the freezing of wages by the Commonwealth Arbitration Court. Honorable members opposite keep talking about that, and right through the Treasurer’s speech reference was made to the fact that wage increases and high wages are the cause of inflation.

Mr Hulme:

– Among a few other things.


– Amongst other things! Honorable members opposite forget to mention the other things. They always remember wages but never profits and dividends. The honorable member for Ryan (Mr.

Drury) said that to talk about controlling profits and dividends is to make a negative approach.

Mr Davis:

– Hear, hear!


– The honorable member says “ Hear, hear! “ He agrees that that is a negative approach. We must not touch profits and dividends; we must concentrate on wages. There is nothing negative about attacking wages, is there?

Mr Davis:

– Who said that we attacked wages?


– I did. The fact of the matter is that you have attacked them.

Mr Freeth:

– Do not be so silly.


Order! If the honorable member addresses the Chair, we shall make better progress.


– 1 shall cite some figures compiled by the Commonwealth Statistician to give some indication of the effect that wage increases have had on inflation. I hope that the mental giant from Forrest, the legal maestro who knows everything about everything, does not tell me not to be silly when I cite these figures. On 3rd September, 1953, the Commonwealth Court of Conciliation and Arbitration pegged wages under all federal awards. In Queensland, the State Industrial Court ignored the action of the federal court and continued to increase the State basic wage in accordance with quarterly rises in the C series index figure. In order to show what has taken place, let me compare cost of living rises in South Australia and Queensland. In South Australia there was no increase whatsoever in the basic wage from September 1953 until June of this year, when there was an increase of 10s. In Queensland during that same period the basic wage for males was increased by 18s. and for females by 10s. Queensland workers under State awards got all the basic wage increases consequent upon quarterly rises in the index, and the workers of South Australia got none. Let us see the effect upon the cost of living. During that period, in five Queensland towns the cost of living increased by 8.7 per cent. In South Australia, where no increases were made in the basic wage, the cost of living rose by 9.6 per cent. There was an increase of 18s. in the Queensland State basic wage, and no increase in the basic wage in South Australia, but the cost of living rose by .9 per cent more in South Australia than in Queensland.

Mr Hulme:

– Who worked these figures out for the honorable member?


– The Commonwealth Statistician worked them out. Surely to goodness even the honorable member for Petrie (Mr. Hulme) would not suggest that the Statistician would not give correct figures.

Mr Hulme:

– I only asked who worked out the figures.


– I told the honorable member, and those are the figures. What will honorable members opposite do now about the cry that increased wages are the cause of inflation?

Mr Hulme:

– The honorable member has picked only one period.


Order! There are altogether too many interjections.


– I admit that I have provoked some of them, but I am quite capable of taking it. So long as I can be heard, I do not mind. In reference to the demand by the Leader of the Opposition (Dr. Evatt) that the States be consulted in order to have a central prices control system restored to operation, and that prices and dividends be controlled, the honorable member for Ryan said that this was a negative approach. There must be something radically wrong with an economy and a government that will allow dividends and profits to reach the highest point ever reached in the history of the country at a time when men are not able to feed their wives and children. I do not refer to persons on fixed incomes; I am referring to men on the basic wage who have wives and families. Such men are finding it very difficult now to supply the food necessary to keep their wives and children alive.

Sitting suspended from 6 to 8 p.m.


– During the calm and peaceful moments before the suspension of the sitting for dinner, I endeavoured to quote some figures in order to dispel, or explode once and for all the theory that basic wage increases have been responsible for the inflationary trend that has become such a burden on the economy of this nation. In the few minutes of my time that remain, I intend to repeat those figures, because they are so important and so relevant. Before the suspension I directed attention to the fact that the Treasurer (Sir Arthur Fadden) throughout his budget speech kept on repeating that increased wages had been responsible for the inflation which has been such a problem to the Government of this country for many years, and which is again showing its head, with probably greater force than ever before. As I endeavoured to show, that is not correct. I have before me figures obtained from the Commonwealth Statistician which prove that my submission is sound and truthful.

As I said before, on the 3rd September, 1953, the Commonwealth Arbitration Court decided to peg wages. That is to say, it abolished the quarterly adjustments. Some of the States, including Queensland, the State from which 1 come, decided to ignore that decision of the court, and they continued with the quarterly adjustment of wages in accordance with the C series index figure. It is most interesting and, I think, most relevant that we should have another look at this matter. For comparative purposes, I shall confine my remarks to the position in Queensland and South Australia. In South Australia there were no increases at all until June of this year, when a 10s. increase was granted. Between 1953 and 23rd July this year, the basic wage of males in Queensland rose by 18s. a week and the adult female rate was increased by 10s. a week. As I have said, in South Australia it was left religiously alone; there was no increase at all. I now come to the increases in the cost of living. Over the period when there were increases in the basic wage in Queensland but no increase in South Australia, the cost of living in five Queensland towns increased by 8.7 per cent., whereas the figure for South Australia was 9.6 per cent.

Mr Turnbull:

– What about Brisbane?


– In Brisbane the increase was 8.7 per cent, and in Adelaide 9.6 per cent. - precisely the same figures. Therefore, in the dying moments of the time allotted to me, I suggest to the committee that this theory about wages, and only wages, being responsible for inflation has been, once and for all, dispelled by figures supplied by the Commonwealth Statistician. Until this Government can see its way clear not only to peg wages, but also to deal with profits and dividends and all the things that flow as income to the master classes, it cannot ever hope to succeed in curbing the inflation that is upon us to-day. For that reason, the motion that has been moved by the Leader of the Opposition (Dr. Evatt) that the first item of the Estimates be reduced by £1, although a formality in accordance with the Standing Orders, is not only a formality as far as the Labour party is concerned. It is a deeply sincere and determined motion of censure against the. Government.


.- My friend, the honorable member for Herbert (Mr. Edmonds), who has just resumed his seat, illustrated, I think, one of the difficulties facing the Government and the Parliament at the present time, because the budget is popularly understood to perform certain functions. The first and most obvious function, and one that was defined some years ago, is to present to the Parliament - the representatives of the people - an accounting of how moneys will be raised for the provision of certain services to the people, and the manner in which that money will be expended. That still remains a major function of the budget. It is, however, at present over-shadowed by the effects of the Government’s financial proposals on the economic life of the community. There is a further aspect, which is increasingly important in the world to-day. That is, the amount of money that the Government raises for social services, and the manner in which it expends that money to provide benefits to the less fortunate sections of the community. But in this Parliament, and outside it, in both private and public discussions, it is too often assumed that budgetary actions taken by a government dominate the economy and either restrict, or, alternatively, expand it. If that is true, it is true to a degree only, and the budget that we are at present discussing, as well as, to a certain extent, other budgets of the recent past, has been limited by three very important factors. The first is the Constitution, to which there has been frequent reference. The second, and in the short term probably the most important, is the fact that as long as uniform taxation continues in this country we will have in theory a federal form of government, while in fact we will have a unificationist organization. We have the demerits of both systems and the virtues of neither. The third factor, and in the public sense the most important, is the distortion, deliberately or unconsciously added to the discussions on this budget by the Opposition in this chamber. My friend from Herbert, for whom personally, I might say, I have nothing but high regard, illustrated by his speech the fallacies in the case presented by the Opposition because, if I understood that honorable gentleman correctly, he spent something like half of the time allotted to him in discussing Commonwealth and State relations. He said that the States are not receiving enough money to enable them to carry out the works and services for which they must be responsible.

Mr Edmonds:

– That is quite correct.


– That, in a limited sense, may well be true, but in the sense of endeavouring to arrive at some solution to the problem that confronts us, it is only a part of the picture. So long as the Commonwealth says that the States are wasteful, improvident, inefficient and grasping, and the States in turn say that the Commonwealth suffers from similar demerits - and I have heard all these things said - no solution of this problem is likely. At one time or another, we all have discussed increased productivity, which is essential to a sound national economy. But to discuss it before we have satisfactorily resolved the differences between the Commonwealth and the States is to ignore the basic realities of the situation, lt seems to me that any sound approach to the broad national questions involved in the budget must first deal with this fundamental question.

Neither this Parliament nor any other, however sincere and objective in its approach, can arrive at a solution until the uniform taxation system is abolished, because, bluntly, in the post-war years, the workings of this system have created irresponsibility in government. If we claim to have responsible government to-day, we ignore the realities of the situation. Financially responsible government, as I interpret the meaning of the term, means that a government is responsible to the people tor raising the money it spends. If we divorce the responsibility for spending money from the responsibility for raising it, as we have done in recent years, we negate the fundamental principles of federation. It has been said that the Commonwealth lacks adequate powers, and, in considering the economic effects of the budget, we must consider also the constitutional limitations imposed upon the Commonwealth. It is generally recognized, although the truth is sometimes stated only in part by Opposition members, that the Commonwealth has not power to control wages and investment, and that, in consequence, it has not adequate power to control hire purchase, which has been mentioned frequently during this debate, and which accounts for the expenditure of a great deal more than £200,000,000 a year. Until the representatives of the various State governments and the Commonwealth meet as delegates of independent governments, speaking in their own right, without the fear of reprisals by the Commonwealth against the States, and without the States attempting to blackmail the Commonwealth, these problems will not be considered honestly and objectively at the government level. Until the situation is honestly and objectively appraised, those who suggest that the States should hand to the Commonwealth power to control this, that and the other thing fly in the face of the realities of the situation. I am sure no one who is interested in these problems and approaches them honestly will deny the truth of that statement.

My understanding of the remarks of the Leader of the Opposition (Dr. Evatt) is that in the main it was confined to two matters. In the early part of his speech, as I understood it, he stated the policy of the Australian Labour party, which could be summed up briefly as one of control, and he offered to co-operate with this Government in obtaining the necessary powers by referendum. He stated that if the Commonwealth controlled all the activities of daily life that he mentioned, our problems would be solved. I point out to the committee that there is an error in logic in that approach. Even if it be true that, under the present system, there are inequalities and dissatisfaction, it does not necessarily follow, even if one accepts the argument of the Leader of the Opposition, that controls are the solution. Nevertheless, the policy stated by the right honorable gentleman logically implies that they are. To say that we on this side of the chamber do not favour controls is merely to state an attitude. The fundamental considerations go deeper. The Leader of the Opposition proved only that he and members of the Australian Labour party consider that wide powers of control should be handed to this Government, or, preferably, to a government led by the right honorable gentleman. I think that the honorable member for Bonython (Mr. Makin) said it was not suggested that all activities should be controlled.

Mr Duthie:

– That is true. It was not suggested.


– It was not suggested. But the honorable member for Bonython, nevertheless, suggested that power to control everything should be given to the Commonwealth. lt is a matter of opinion whether all the powers would be exercised.

Mr Duthie:

– They would not.


– My friend the honorable member for Wilmot (Mr. Duthie) holds one opinion. If, by some strange combination of circumstances, Labour gained the treasury bench, and had all those powers, the pressure from the honorable member and his colleagues to exercise those powers would be almost irresistible. We have learned that lesson in recorded history time after time, and I think it is logical to assume that the same sort of thing is likely to happen again. 1 turn now to a practical suggestion for ridding ourselves of the incubus of uniform taxation. This is the second proposal which 1 want to discuss at some length. I understand that it is an accepted principle of economics that, in times when inflationary forces are operating - to use what I believe to be the current economic jargon - government spending is reduced, and that, in times when deflationary forces are operating, government spending is increased. I think few will quarrel with that principle. The Treasurer (Sir Arthur Fadden), in his budget speech last Thursday evening, concluded his reference to financial policy with the following words, which should not be quoted out of context: - lt may well be, indeed, that we are only now reaching the most difficult stage of the long struggle to control inflation. Certainly, the recent behaviour of costs and prices suggests that strongly.

I think it is admitted that very real inflationary forces are operating in the Australian economy. Yet expenditure by the

Commonwealth and State governments is increasing. I believe it is increasing, in the main, because it is recognized throughout the country that there is a very real need for development and for a bigger population, and because there is widespread faith in the future of Australia. It may well be that the time has come when we need to examine a little more closely those propositions which appear to be conflicting at this stage. I remind the committee that we will raise by way of taxation something like £108,000,000 to spend on capital works, that we will raise by taxation another £108,000,000 to spend either on capital works or loan redemptions, that the Commonwealth is committed to supporting loan programmes of the States to the extent of £190,000,000, a great proportion of which will come out of revenue. Is ii not time that we looked to see if perhaps we are straining the resources of the country too far at the moment? As the Treasurer (Sir Arthur Fadden) has pointed out. the problem is to decide just how many immigrants we can take without putting too great a strain upon our resources at any given time.

Of the capital works expenditure of this Government, £30,000,000 is allocated to war service homes, £18,000,000 is devoted to necessary maintenance, a further £30,000,000 is allocated to the PostmasterGeneral’s Department and about £38,000,000 will be expended on all the other services. It is our responsibility to examine all items to see whether they are in fact justified. We might well ask ourselves whether another £131,000 for capital works expenditure on the National University is justified at this stage. Here I am afraid I must clash with the honorable member for the Australian Capital Territory (Mr. J. R. Fraser), but I also think we might well ask whether at this stage we are justified in spending something like £5,000,000 in the Australian Capital Territory or in spending £1,850,000 on capital works in the interior or £369,000 on capital works for the Attorney-General’s Department. On the other hand, we might well ask whether this is the inevitable consequence of the policy of expansion and development carried beyond reality. They are the two alternatives. There has been a great deal of discussion on this question.

There are those who say and write in the press that government expenditure should be reduced and, at the same time, suggest that this, that and the other service should be expanded. We have there a contradiction in terms which is a dilemma which this House must resolve.

Another factor in the economy that cannot be disregarded with safety to the future of the country is the fact that new motor vehicle registrations run into something like 20,000 a month throughout the Commonwealth while, at the same time, because of constitutional and financial problems confronting us, our roads system is deteriorating day by day. That is another dilemma that we have to resolve. We must ask ourselves whether we are justified in permitting the deterioration of roads to continue with consequential continuous drain on the economy in the form of added costs of transport or whether we should divert money from some other project for road purposes. That, too, is a matter that can only be resolved here.

Then, we may ask whether the £30,000,000 which the budget provides for war service homes is sufficient. I do not believe that any honorable member is satisfied that it is. I do not think there is any honorable member who does not know of several cases in which people have had to wait for anything from twelve to eighteen months before getting a home. This is an admitted obligation of the Government and of the Parliament, but it cannot be discharged to the full because of the other responsibilities which the Parliament and the Government have accepted.

In his opening remarks concerning this problem, the Treasurer said that underlying our whole economic problem has been the conflict between our efforts to enlarge our country for the future and our efforts to achieve higher levels of consumption in the present. I do not think any person who approaches the problem honestly will deny that because of this Government’s policy the people have achieved higher levels of consumption in the present, but it is equally true that there is a considerable section of the community to whom that objective has not been realized at least for this year. Every one on fixed incomes in Australia will be worse off this year than they were last year because of rising costs. Pensioners of all classes, people on superannuation, people who have invested in Government bonds, people who have invested in houses, the return from which is limited by rent controls in various States, will all be denied the increased prosperity which I believe is common to the rest of the community. It is shown in the papers which we have issued to us that the return from farms in the last year decreased in comparison with the previous year’s figures.

Mr Edmonds:

– What is the cause of that?


– I believe it is due to the fact that despite all our hopes, vision and confidence in the future, we are so straining our economy that we have reached the stage at which it is essential that we examine the position thoroughly again in order to guard against doing that which would destroy our chances of building up a glorious future for Australia.

I make no reflection upon the present Minister for Immigration (Mr. Harold Holt). We all know he has done a magnificent job. It is well known that he has carried out his duties efficiently, and in saying these things I cast no reflection on his predecessor; in fact, I am confident that we can speak of him in similar terms. But I do say this: That one can follow a dream too far, and if we follow a dream too far in planning for the future we cause suffering to the unfortunate, the primary producers, on whom the economy of this country rests. Then we are committing a grave disservice to the very cause in which wc believe.

I refer you again, Mr. Chairman, to the capital works expenditure from revenue. 1 remind the committee again that, for one purpose or another, it amounts to £216,000,000. I remind the committee that on the other side of the budget appears an item of sales tax for £130,000,000 and pay-roll tax of £48,000,000 which, in themselves, are basically inflationary. Here, conflicting elements are displayed in the economy, as I see it. I believe that only by a very careful stocktaking, only by a very real pruning of our immigration programme, can we reduce the expenditure on government works to a level that will enable this or any other government to reduce inflation and thus make a real contribution to eliminating the inflationary forces that mount to-day.

I now return to where I started, and that is in reference to the problem of the States. The Treasurer, in the last few words of his speech, said this -

Certainly those who are directly responsible for providing public facilities - power supplies, water and sewerage, roads, railways, telephones, airfields and the like - do not think the volume of works is too high. They protest on the contrary that they are barely keeping up with the basic requirements of the community.

Any one who has had the unfortunate experience of listening to a State Premier discuss his negotiations with the Commonwealth will agree with me when I say that that is something of an understatement.

All these things may be traced back to two or three basic factors in our economy. The first basic factor is uniform taxation which, in fact, destroys responsible government. The second is the fact that, because of uniform taxation, very largely, the Commonwealth and the States have been unable to agree among themselves on joint and common action, not by force exercised by one dictator, or by pressure exercised by one government on the other, but by common agreement. The third factor about which this Parliament should do something is the release of the economy from that incessant strain which, at the moment, our policy of expansion and development is causing. I believe that there is no other way out.

To talk in terms of reducing government expenditure in the Commonwealth by any considerable amount is to ignore reality. To talk in terms of reducing State capital works or expenditure by any considerable amount is equally to ignore the realities ot the situation, because the very force of the expansion and development that this country is going through is compelling governments to expand and develop then departments and works. I am sure that there is not a member in this chamber to-night who has not received from his electors numerous requests for this or that form of government activity in his electorate even if it only be the incessant call for finance. There are those who, as I have said, follow a dream. They are not confined to one party. It is a magnificent dream of a magnificent future. I say that unless we realize the actual facts of the situation to-day, those who dreamt those dreams may well destroy that future to which we all, with the exception of the honorable member for East Sydney, look forward.


– The honorable member for Melbourne Ports (Mr. Crean) who is the next speaker from our side of the chamber is much better fitted than I am to deal with the very interesting issues so moderately raised in the speech that we have just heard from the honorable member for Deakin (Mr. Davis). I wish, to-night, to concentrate my remarks solely on the question of social services and to begin by stating a few matters which I think are matters of common ground between all members of this committee.

Social services to-day are an essential and important part of any budget from whatever government it may come. Every one in the chamber, in the first place, will agree on the importance of social service provisions. Indeed, the discussion which has already taken place in this Committee of Supply bears witness to that fact. The second fact which I think will be common ground to every one in this chamber is that, since the previous budget was discussed, the value of all social service payments in Australia has fallen substantially. Every member of this committee must recognize that to be so. During the twelve months every pensioner, every widow, every mother of small children, has steadily been able to buy less of the necessaries of life from social service payments. That, I take it, is the second ground of common agreement to all members of this committee. The Commonwealth Statistician’s figures prove it to be so. They have recorded a sharp increase in prices in many commodities. Every member of this committee is aware of it from his personal experience.

We know that the meagre purchasing power of social service payments has been further reduced in this country in the last twelve months. It is also common ground. I hope, that the budget which we are now discussing provides the appropriate time to adjust the rate of social service payments. Every honorable member who, during the last twelve months, has placed representations before either the Treasurer (Sir Arthur Fadden) or the Minister for Social Services (Mr. Roberton) on behalf of pensioner organizations has received the same reply.

The reply has always been that this is a matter for the budget; that it must wait until the budget has been framed and discussed. That time, of course, Mr. Chairman, is now.

These things, then, are common ground, [ imagine among all of us: First, that social services are an essential part of any modern society; second, the pensioner, the widow, and the family have to exist to-day on less food, less clothing and less other necessaries than they did a year ago; third, this is the effect of a sharp rise in prices which is still continuing; fourth, the presentation of the budget which we are considering now is the appropriate time to make any necessary adjustments. There is one further ground which I think is commonly a matter of agreement amongst us and that is that the responsibility for this adjustment rests upon this Parliament and every member of this Parliament and upon nobody else. Cabinet makes the proposal, but this Parliament makes the decision.

There are so many matters in relation to which Parliament can, and does, quite properly in some cases, divest itself of all responsibility. Parliament can say, “ That is a matter for the Public Service Board “, or “ That is a matter for the Commonwealth Conciliation and Arbitration Commission “, or “ That is a matter for the High Court of Australia “; or we can say, “ Unfortunately, that is a matter that is outside our constitutional powers “. There are so many matters in relation to which this Parliament can completely divest itself of responsibility - but social services are different. Parliament fixes the rates of social services benefits. Every member of this committee takes responsibility for the social services rates that will apply in Australia in the next twelve months.

The first news that the Government proposed to make no adjustment of social services rates in this budget was scarcely credible. As the Leader of the Opposition (Dr. Evatt) has said, we were not waiting to see whether there would be some relief for pensioners - we were waiting to see how much relief would be given to them. I imagine that that was generally the attitude of the Australian people. Every one knows the increasingly difficult position of folk receiving only £4 a week on which to exist, and the even more desperate position of widows with young children. The need to restore the value of social services payments was obvious to the man in the street, even if it was not obvious to the senior Ministers who form the Government in this country. It was obvious to every reader of the newspapers. It was obvious to everybody who walked among the poor. There could have been no doubt in the minds of the rank and file of Government supporters about it, and I venture to suggest that many private members among the Government’s supporters were appalled when they discovered that their leaders proposed to make no adjustment in social services rates in this budget.

Mr Ward:

– But they will - do nothing about it, just the same.


– That we shall see! But I hope that they will do something about it because, as I propose to show, they are all bound by very solemn pledges in this respect, and I believe that among them are honorable men who have a feeling for their duty and for the responsibility that they owe to the weak and the helpless in this community, and that they will yet do something about it.

The case for this adjustment does not rest, Mr. Chairman, on mathematical calculations. It rests on facts too grim to be ignored, which stare one in the face whichever way one turns in this country to-day. How then, the proposal to make no adjustment of social services rates got through Cabinet seems impossible to imagine. The case for adjustment was overwhelming, and is overwhelming. On all the facts and figures it seems that Cabinet made at least a grave mistake. If it did, it is not too late to rectify it, for, if Ministers were oblivious of considerations obvious to the ordinary people of this country, Ministers have, and Ministers will have, if they care to use it, access to the official figures that demonstrate so clearly the need for the adjustment of social services payments, and the fact that that adjustment is overdue. Those are the figures that I propose to submit to this committee to-night. It is to be hoped that supporters of the Government will examine them and then act strongly to bring about an adjustment of social services payments in the enabling bill which has still to be presented to the Parliament. I imagine that that bill has not yet been framed. I imagine that it is not too late for Government supporters to exercise their power, if they will, in the party room or, if necessary, in this chamber, to ensure that the things that ought to be done shall be done in the interests of the weak and helpless of this country. The opportunity for correcting an injustice, for honouring a pledge,, and for mitigating suffering, is therefore still open at this moment.

The pledge to which I refer was given, first, by the leaders of the Liberal party and the Australian Country party at the 1949 general election. It was reiterated at every subsequent election. It appeared in every newspaper in the land. Very frequently it was accompanied by the signature “ R. G. Menzies “. Very frequently it was accompanied by a photograph of that gentleman. In the form in which it appeared in the press and was broadcast over every radio station in Australia. It was this -

We will maintain, and indeed increase the true value of all social service payments. Pensioners can rely upon us for justice.

And every Government supporter in this chamber has been elected to this chamber on that pledge.

Now, I say that, whatever measuring rod is taken, the true value of each and every social services payment is now below the value at the time of the last adjustment made by the Labour Government, which was late in 1948. I do not make that as a mere assertion. I shall, produce the figures both for the relationship to the basic wage of social services payments and their relationship to the C series index, as officially computed for me, and leave it to the committee to judge.

In relation to the basic wage, the age and invalid pensions should now be £4 15s. 3d. instead of £4. Child endowment for second and subsequent, children, on the same basis, should now be £1 2s. 6d. instead of 12s. The class A widow’s pension should now be £5 6s. 6d. instead of £4 5s., and the class B widow’s pension £4 3s. instead of £3 7s. 6d. It is true that the Government proposes to do something, though very little indeed, for the class A widow with several children, but that is all that the Government does propose to do in connexion with the rates that I have mentioned. Unemployment and sickness benefit should be to-day £2 16s. for a single adult instead of £2 10s., if the Government merely honoured the minimum terms of the pledge its members and supporters gave to the electors. Maternity allowance, first grade, should now be £3.3 12s. 6d. instead of £15, if the pledge were honoured, and if the measuring-stick applied is the relationship to the basic wage. Funeral benefit has remained unaltered at £10 since 1943. That is a matter of extreme importance and extreme concern to many old people and many invalids in this country. It would not cost the Government very much to make ar, adjustment. I have not the exact figure, but it is clear that, in order to restore its value, it should be increased to something, at lent*, over £25.

The accuracy of the calculations I have given has been verified from official sources, and I am very grateful for information obtained and provided by the honorable member for Stirling (Mr. Webb) in this respect. The basis on which they were made is that the basic wage was £5 16s. in August, 1948 - that is the weighted average six capital cities rate, the figure most favorable to the Government - and that the corresponding wage, including cost of living variations, is £13 in August, 1956 - £5 16s. in August, 1948, £13 to-day. If we simply take that relationship and apply it to social services payments, they should, according to the official calculations made for me, be the rates I have given to the committee to-night. So that if the Government merely honoured the minimum terms of its promise, the rates for social services benefits incorporated in this”’ budget should be those that I have given. But, Mr. Chairman, as prices are continuing to rise, and price increases are certain to be reflected in sharp rises in the next quarterly figures on which the unpegged basic wage is computed, there is, further, a strong case for a loading on those rates to cushion the effect of the further inevitable increase of living costs in Australia.

Some Government supporters have urged, from time to time, that the correct comparison to be taken in relation to the pledge by means of which they gained office is a comparison between the position in 1949 and now instead of between the position in 1948 and now, because the Chifley Labour Government did not alter social services rates in the election year 1949. It announced that it would leave that matter until after the election. However, I believe, it is unlikely that many Government members will choose to rely on that type of argument, because it is so obviously false. If, Mr. Chairman, you wish to use the argument that the correct comparison is with 1949, not with 1948, you are compelled, in order to support it, to argue that the rates fixed in 1948 were too high. Not one Government member argued in 1949 that they were too high, not one Government candidate proclaimed in 1949 that he considered the 1948 adjustment to be too high. Indeed, many Liberal and Australian Country party members and candidates argued, as they had a right to do, that the 1948 adjustment was too low and that the rates should have been further increased.

The other contention on which some Government members have relied in the past is that the correct basis of comparison is with the C series index, not with the basic wage. By the use of that argument they have been able to claim that the pensioners actually are getting 8d., 9d. or Hd. more than they should be getting, although they have never been able to argue that widows or recipients of child endowment have come within shillings of the rates adjusted in accordance with the C series index. But today they can no longer claim, even on the C series index basis, that they are honouring their pledge. The position has become so bad and so desperate that, even on the C series index figures, the pension rate should be higher, than that which the Government is going to allow to continue, unless the members of the Government force it into action.

Mr Duthie:

– Till the next election.


– I do not want to be unfair. 1 hope that in this speech I shall be entirely reasonable and logical, but perhaps it is pertinent to remind the committee and the nation that in an election year this Government increased the pension rate by 10s., but after the election, despite a much steeper rise of the cost of living, it proposes to make no adjustment.

Let me return to the C series index. The latest figures available are those for the June quarter, so they are somewhat out of date. Comparing those figures with the “C series index figures for June, 1948, we see that the age and invalid pension rate should be at least £4 5s. a week to give a corresponding purchasing power. But that is only up to June. Very sharp rises in basic commodity prices have occurred since then. So, even on the C series index basis, the purchasing power of the pension to-day is very much below that of 1948. If we take the C series index figures, which Government members have been so fond of quoting in the past, and apply them to child endowment rates, we see that child endowment for second and subsequent children should be 19s. 9d., instead of 10s. That is taking it only up to the end of the June quarter.

So, even on the Government’s own yardstick, its solemn pledge will be broken if the Treasurer’s budget is put into effect. That is why 1 say that the responsibility now rests squarely on every Government member who accepted election to the Parliament on the basis of that pledge. Government members, of course, are honorable men. There is not one of them who would not. claim that his word was his bond. There is not one of them whose word would not be accepted by his fellow club members for the payment pf a debt: or the discharge of an obligation into which he entered. But the pledge which Government members have given in this case is not to the strong and powerful - not to their equals, who would have power to retaliate if they repudiated a pledge. The pledge that they are now dishonouring, or will dishonour if they allow these budget proposals to be put into effect, is a pledge given to the aged people of Australia, to the invalid people of .Australia, to the mothers of ‘ large families, of young children - to a section of the community which has no redress except such redress as this Parliament chooses to give to them. lt is appropriate also to remind the committee of the Government’s means test promises, because the Government seems completely to have forgotten them. The present Government was elected to office on a pledge to bring about the abolition of the means test. The undertaking given by the present Prime Minister was that a plan for the abolition of the means test .would be ready by 1953. Well. 1953 came along, but no means test plan was ready. However, the Minister for Social Services and other members of the Government at that time were still glib with their promises of means test abolition. The Minister for Social Services at that time. Mr. Townley, declared his confidence that the means test would be completely abolished while he held that portfolio. He has long departed from that office, but the means test promise is still dishonoured.

Mr Bowden:

– The means test should stay.


– The honorable member for Gippsland (Mr. Bowden) accepted election to this Parliament on a pledge which, I will guarantee, he did not repudiate by one word that he uttered throughout the whole of his election campaign or in the Parliament. Having secured election he callously and cynically declares that, as far as he is concerned, the pledge is not worth the paper that it is written on. I am reminding those honorable members opposite who do care about these things of the pledges that were given in their name. Mr. McMahon, who succeeded Mr. Townley as Minister for Social Services, was only slightly less voluble in his references to the subject.

The CHAIRMAN (Mr Adermann:

Order! The honorable member should refer to Ministers by their designations, not by name.


– He took credit for the fact that the Government had taken the first step towards abolishing the means test by abolishing the means test for blind pensioners. If that was the first step, it was a very short and halting one, because it affected only a few thousand people in Australia and cost the Government only a few thousand pounds. No succeeding step has been taken. Now, with the advent of the new Minister for Social Services, the honorable member for Riverina (Mr. Roberton), there is complete silence in the budget speech on the subject of the means test. No step to ameliorate it by Id. is proposed. If Government members say, “We have already ameliorated the means test; we have already done a great deal in that respect “, let me remind them that they have done no more than maintain the means test values which were established by the Chifley Government. In 1948, a pensioner couple, adding their pensions and permissible income, could have £7 5s. a week, at a time when the basic wage was £5 16s. a week. To-day, when the unpegged basic wage is £13 a week, they can have £15 a week. So, in fact, this Government has taken no further step forward towards the amelioration of the means test.

It is true that social services have become the most substantial and important factor in the national budget. I think the Treasurer’s speech shows a contemplated expenditure this year of £220,000,000. Surely that is a good reason why social services provision should be placed on a planned and secure foundation. The Chifley Government established such a foundation with the National Welfare Fund and with the social services contribution, graduated according ito the ability to pay of each income earner. The Chifley Government,, by those means, sought to ensure that never again in this country would social services rates be slashed at the dictation of banks or outside institutions in a time of recession.

This Government has destroyed the National Welfare Fund. To-day, the fund exists only in name. The Government has retained the National Welfare Fund simply as a book-keeping device. The £180,000,000 which stood to the credit of the fund when the Chifley Labour Government left office was frozen by this Government, which specifically provided that it should no longer be available for social services purposes, Instead, the Government now pays into the fund only the exact amount which it pro. poses to draw out of it each year to meet social services payments. So it has destroyed that means of making social services provision in this country secure, planned, effective and guaranteed.

Similarly, the Government destroyed the social services contribution. It did so deliberately, because Government members disliked the graduated system. They do not like any system under which people are called upon to contribute according to their means. They prefer a flat-rate system, and they think that by destroying the social services contributions built up by the Chifley Government they can pave the way for the introduction of a flat-rate system of social services payments. But even this Government has not so far dared to put that proposal before the Australian people.

The result is that social services finance to-day is completely haphazard. No measures are taken to ensure that the purchasing power of payments keeps pace with inflationary tendencies, and there is every fear that with mounting unemployment and the deepening economic crisis, the Government may again turn to the ready expedient of further reducing social services rates.

The extraordinary paradox is that, while hundreds of thousands of good Australians, including the aged, invalids and children, are going hungry and cold and insufficiently clad, Australia is over-flowing with all the products they need to give them modest comfort. It is not beyond the resources of this nation to cater adequately for the needs of the aged and invalids, the widows and those with large families. It is merely beyond the will of this Government to do so. The reason is that such a proposal is anathema to monopoly capitalism and to these champions of free enterprise and the devil take the hindmost.

The Leader of the Opposition set out” fully the Labour party’s proposals on social services and the means test in the policy speech that he delivered before the general election last December. With adjustments now necessary to meet the effect of continuing inflation since that date, those remain the proposals of the Australian Labour party. In this debate, however, we are emphasizing to the Government the pledges that it made, and are reminding the nation of the extent to which those pledges have been dishonoured. This, of course, is not expected to be an election year. The Government may feel that it has nothing to fear at this stage by dishonouring its election pledges, but surely there are many supporters of the Government who look at the matter in a different light, who recognize the grave hardships which failure to adjust the rates is imposing, and who will insist, either in the party room or in the Parliament, that the Government honour its pledges and adjust the rates accordingly.

I am certain that the Opposition will give to every honorable member who supports the Government a clear opportunity to define his attitude on this question when the social services measures are before them. They will have an earlier opportunity in the debate on the censure motion which the Leader of the Opposition has moved. I believe the nation will watch eagerly what action this Government and its supporters will take, and a very grave responsibility now rests with them.


.- The honorable member for Eden-Monaro (Mr. Allan Fraser) is a very eloquent speaker, and we shall always give audience to his words. The main part of his speech contained statistical information which he based on what he described as a certain measuring rod. His measuring rod was the basic wage, and he asked honorable members to make certain assumptions from the fact that, by using the basic wage as a measure, certain results would flow. The whole difficulty with the argument of the honorable member is that the basic wage is not, in any sense, a measure of the cost of living. The basic wage is determined according to the capacity of industry to pay, and has little or no relation to the cost of living. That, of course, makes the whole argument of the honorable member for Eden-Monaro specious and misleading.

Realizing how specious his argument was because he had used a totally inaccurate measuring rod, the honorable member proceeded in the last portion of his speech to speak of the only measuring rod which measures the cost of living in Australia - the C series index. When he did that, he took the wrong year, and made his calculations from 1948 instead of from the year when the Labour Government went out of office, which was December, 1949. During the year 1949, under the Labour Government, the cost of living under the C series index rose by 10 per cent., and had the honorable member taken the figure for December, 1949, instead of 1948, an entirely different conclusion would have been reached.

So far as the age and invalid pensions are concerned, the undertaking in the policy speech of the Prime Minister (Mr. Menzies) in 1949 in relation to their purchasing power has been honoured. No one has worked harder for the pensioners than I have done, but it will be realized that, simply because we use the measuring rod of the cost of living index, that does not mean necessarily that a particular rate of pension so arrived at is sufficient. I do not propose to deal with pension rates, because that matter will be referred to at the proper time when the legislation providing for pensions is before the Parliament. I propose to deal with the matter before the committee, and that is the budget which is related to the economic situation of Australia.

No one by any flight of imagination could say that this budget is popular, but anybody who fully understands the position of Australia to-day will admit that it is a courageous budget. It would have been easy for the Treasurer (Sir Arthur Fadden) to make a good fellow of himself in spite of rising costs and inflation. He could have offered reductions of taxes and increases of pensions. He could have offered bribes or assistance to every section of the community, but he looked to the welfare of all the people of Australia. He understood fully that inflationary forces are at work. It is not necessary for me to say to honorable members or to the people of Australia that inflation will rob the workers of their wages and the pensioners of their pensions. It robs the thrifty of their capital. The attitude of the Government, and the Treasurer, has been that they must do the right thing for Australia, notwithstanding the unpopularity that they must incur. The Government is prepared to take the steps that are necessary to curb the inflationary forces that are at work. Does the honorable member for Eden-Monaro want this Government to do what the Scullin Labour Government did in 1931, when it reduced the pension rate because it had allowed the economic situation to deteriorate?

Mr Edmonds:

– Because who allowed that position to arise?


– The Labour government that was in power, because Labour governments have not the courage to do what the Treasurer has done in this budget, in adopting stern measures to restore the country’s economy. All thinking people know that inflationary forces are at work in Australia to-day, but that does not mean for one moment that there is a depression or that one is impending. On the contrary, this inflation is a corollary of prosperity. It is occurring in a time of the country’s highest prosperity, and the big test of any government is whether it is prepared to take the unpopular steps that are necessary to curb inflation.

So that there shall be no misunderstanding, and no suggestion that I am implying that the country is not prosperous, I shall cite some figures which will show that Aus tralia has never been more prosperous than it is to-day. I deal first with the building industry, which is a good barometer of a country’s prosperity. In March of 1956, there were 120,000 persons engaged in the building industry, compared with 116,000 in the same month last year. Retail sales for the March quarter of 1956 were 6.9 per cent, higher than for the same quarter of the previous year. Retail sales of motor cars, parts and petrol for the March quarter of 1955-56 were 15 per cent, higher than for the, March quarter of the previous year. Exports in 1955-56 were worth £12,000,000 more than in 1954-55. Wool production for 1955-56 was worth £1,414,000,000, compared with £1,244,000,000 in the previous year. Butter exports in 1955-56 reached the record figure of £29,000,000. During last year we saw an all-time record of production in Australia, an all-time record in volume of exports, and, except for the year of the great wool boom, an all-time record in value of exports.

I think I have made it quite clear that Australia is experiencing its greatest prosperity. However, notwithstanding that we are producing a record volume of commodities of record value, and exporting a record volume of goods of almost record value, we are consuming more than our total production. Therein lies the weakness of our economy. The trouble is that the people of Australia are saving too little and spending too much.

I shall deal now with the subject of the savings of the people. In 1953-54 the personal savings of the Australian people amounted to £357,000,000. In 1954-55, notwithstanding an increase of £184,000,000 in personal incomes, savings decreased to £305,000,000, representing a drop of £52,000,000. Although incomes in 1955-56 increased by £252,000,000, savings in that year fell to £280,000,000, a further drop of £25,000,000. During the last two years, notwithstanding the fact that personal incomes have been higher than ever before, and production figures higher than ever before, the people’s savings have decreased by £75,000,000, although incomes have increased by about £400,000,000. There we have the basic cause of Australia’s economic troubles. I shall refer now to an article by Professor Downing, Professor of Economics of the University of Melbourne, which appeared in the May issue of the “ Economic Record “. A table prepared by the professor shows that the personal savings of the Australian people in the year 1952-53 represented 12.1 per cent, of the gross national product. In 1953-54 the proportion was 8.1 per cent. In 1954-55 it fell to 5.5 per cent., and in 1955-56 it again decreased. It is perfectly obvious from those figures that the people are spending too much and saving too little. They cannot have their cake and eat it, too. During 1955-56 personal incomes increased by 7 per cent. The expenditure on personal consumption increased by 8 per cent. The consumption of tobacco and cigarettes increased by 1 per cent., and of beer by 2 per cent., while the people’s savings have been steadily decreasing.

In the time remaining to me I wish to suggest the remedies that are available and should be taken in order to cure what I believe to be our basic economic weakness. The first suggestion is one that 1 have frequently made in this chamber. The penalty on thrift should be removed by the abolition of the means test. I shall deal with that matter in more detail when we are considering the social services legislation that is to be brought down. My second suggestion for curing the weakness of insufficient savings is the establishment of a contributory national retiring allowance. My next suggestion is that we should provide prizes for thrift by means of tax allowances for those who are prepared to play their part at the present time and save in order to expedite the development of Australia. Another suggestion is that the utmost encouragement should be given to people to make assurance contributions. The really bright provision of the budget is that which indicates that the Government will increase the allowable deductions in respect of contributions towards assurance in order to encourage further savings by the people through assurance policies. A further suggestion is that we should provide that a portion of the pay of the younger section of the community should be treated, as it was in war-time, as deferred pay and made payable to the persons who earn it on their marriage or at some prescribed age. There is not the slightest doubt that the money in the hands of the younger sections of the community is one of the main contributory causes to the inflationary pressure that exists in Australia to-day.

In proof of my assertion that means can be provided for raising substantial capital funds per medium of national insurance or retiring allowances, I want to refer to two systems of superannuation which are wellknown to all of us. However, before I do that I point out to honorable members what the position would be to-day if the Government were able to get all the capital that it needs. Under the budget now before the committee, £220,000,000 of revenue has been set aside for capital works. If that money could be obtained through Commonwealth loans and if capital works could be paid for in the normal way, that is, out of loan funds, the Government, instead of having to come to the Parliament with a harsh budget as it has now done, would be able to come to us with a surplus of more than £220,000,000 and would be able to say, “ Now we are able to give additional concessions to the pensioners, we are able to reduce taxes and adopt anti-inflationary measures by using some of our surplus to pay off treasury-bills “. The dilemma that the Government is now in is this: Although its revenue is more than adequate for its normal expenditure, there is an estimated deficiency in cash on loan account of some £200,000,000. Therefore, the Government has considered it necessary to retain its surplus revenue in order to meet this deficiency on loan account. If it did not do that, it would have to issue treasury-bills for loan purposes, which, of course, would be the most inflationary thing that the Government could do. The real remedy for a shortage of loan funds, is to take the necessary steps to ensure that we shall secure more loan funds. The suggestions that I have put forward are means whereby the Government should be able to get substantially increased funds for capital works.

I shall now deal with a small superannuation scheme, one that is known to every honorable member in this chamber. It is the parliamentary retiring allowances scheme. I do not think that one honorable member objects to paying his £4 10s. a week into the parliamentary retiring allowances fund, because we all believe that that superannuation system gives security to himself and his wife. If a member should be defeated he will receive a pension, and if he dies his widow will receive a pension. There is a common belief that the Government and the taxpayers are doing something rather magnificent for honorable members in providing these funds, and 1 believe that most honorable members are under the impression that some substantial governmental contribution comes along. The facts about the fund are that it is really a compulsory savings scheme and that the members of the Parliament are making a substantial contribution towards the carrying out of the capital works of this country. 1 am proud to be doing that. During the eight years that this fund has been in operation, members of this chamber and of another place have paid into it £219,258, and ex-members and the widows of ex-members have drawn £134,897 out of it. Therefore, the Commonwealth and the people have benefited by members’ contributions to the extent of about £80,000 during the time that the scheme has been in operation. Moreover, in every year since the fund was established payments made to it by the members of the scheme have exceeded the payments made from it. As a result of those contributions, and of the contributions made by the Treasury, the balance in the fund at the present time is £207,000 and the whole of that sum is invested in Commonwealth bonds. Therefore, the whole of the balance in the fund is available to the Government for the development of Australia. I venture to say that if that scheme continues for another 100 years, in every year of its existence more money will be paid into it by honorable members than is drawn out of it. I am not criticizing the fund at all, because 1 believe that it is a magnificent thing; 1 am simply using it as an example to prove that by means of superannuation funds governments are able to get capital funds for expenditure on capital works which are designed to develop the country.

As it can be said that this fund has not been in operation long enough for it to be used as a true test of superannuation systems, let us consider the Commonwealth superannuated officers fund. That fund has been in operation for at least 33 years, and I venture to say that during the time that compulsory superannuation scheme for public servants has been in operation, in every year the payments in by Commonwealth officers have exceeded the payments out. This year, Commonwealth public servants contributed £5,461,000 to the fund and drew out £4,903,000. Therefore, this year the Commonwealth had nearly £600,000 available to it as a result of the savings of Commonwealth public servants. To-day, that fund has investments worth about £44,000,000.

I have mentioned the members’ retiring allowance fund, with about 200 members and I have also mentioned the Commonwealth Superannuation Fund. 1 suggest that if a similar scheme were extended to every adult in the community, to the 4,000,000 or 5,000,000 able-bodied people in Australia, and they paid a small contribution to the fund, by that means we could provide a means test-free retiring allowance and we would have all the money we needed for Commonwealth loans to provide essential capital works.

I plead with the Minister for Social Services (Mr. Roberton) and the Government to give careful consideration to this problem of savings in Australia. I really believe that if we could cure the problem of savings, if we could get even the proportion of savings that we had three years ago, and that if we were saving only 12 per cent, of the gross national product, instead of the Government having to present the people with a budget which provides for the expenditure of a large amount of revenue on capital works we should arrive at a position where the Government had all the loan money it required for the capital works of the Commonwealth, and we could then present a budget which would give relief to those sections of the community which needed them.

Mr. CREAN (Melbourne Ports) [9.32J. - To-night we are discussing a budget that imposes taxes amounting to £1,230,000,000, or, as the honorable member for Petrie (Mr. Hulme) pointed out recently, more than one-quarter of the total national income of Australia. I direct the attention of the committee to some words that were spoken by the Treasurer (Sir Arthur Fadden) when he was introducing the budget of 1951-52, approximately five years ago, because this is one respect in which T agree with the right honorable gentleman. He said: -

In a modern economy every individual and every organization is affected to a considerable degree by what governments do in the way of raising and spending money. For this reason the financial operations of governments can, if appropriately, directed, do a great .deal Uo redress unstable conditions . . 1 think it might be well asked what this budget does to redress the unstable conditions that exist in the Australian economy to-day. To see the position in its proper perspective - and it is somewhat wider, I suggest, than the parliamentary pension fund - we need to have a look at a document that is presented with the budget, the White Paper on National Income, because it contains a considerable amount of information which throws some light on the problems that face the country to-day.

Really, the budget that we are considering to-night is only an extension, for the coming financial year, of what has been called the “little budget” - the measures introduced as a supplementary budget by the Government in March last. It will be remembered that those measures imposed additional taxes on petrol, beer and cigarettes, increased sales tax on motor cars, and for the coming financial year imposed an additional tax of ls. in the £1 on companies. Those measures were designed to yield, in a full financial year, something like £ 1 15,000,000. The budget that we are now considering is really a continuation of those measures.

When the taxation measures were introduced in March last, honorable members on this side of the chamber were critical of them, because the purpose of the little budget was not a puritanical desire to reduce the consumption of tobacco, cigarettes and beer, but to obtain additional revenue for the Government, based on the assumption that the consumption of those commodities would continue at existing levels. Honorable members on this side of the chamber chided the Government, which claims to believe in an inexorable law that it calls the law of supply and demand. We said that it did not seem to be common sense to expect consumption to continue at the same rate, and it is obvious that events between March and the present time have substantiated, to a considerable degree, our criticism of the measures. ! Invite the attention of the committee to one of the documents now being published regularly by the Government, the “ Treasury Bulletin No. 3 “, which was issued in July of this year. It contains some rather alarming portents in relation to the assumptions on which the financial policy of the Government is based. It shows that, during the last quarter for which statistics are available, the consumption of beer declined and so did the sales of tobacco and cigarettes. It shows, further, that there has been a considerable falling-off in sales of motor cars. Those things do not seem to be surprising, in the circumstances. Nevertheless, the Government is still proceeding on the assumption that the rate of consumption and sale of those things will remain the same. In fact, I think that the Treasurer used words to the effect that he thought that they would continue at about their present level. I suggest that he is going to be disappointed with the consequences of those measures.

As we know, already considerable pockets of unemployment are beginning to appear. It is all very well for the honorable member for Sturt (Mr. Wilson) to speak about the great prosperity which the country is enjoying. It may be that some people in the community are experiencing considerable prosperity, but there are others who are finding it exceedingly difficult to balance the family budget from week to week. The . honorable member seemed to be amazed that saving in Australia is falling off. He said that the trouble in our community is that we are spending too much and saving too little. I ask how he expects the average man on a wage of £16 or £17 a week, with a family to support, to save. How does he expect those on fixed incomes, particularly pensioners, to have any capacity to save? I suggest that one of the greatest ironies in this budget is the provision which increases the allowable deduction for life assurance payments from £200 per annum, or approximately £4 a week, to £300 per annum, exclusive of hospital and medical benefit payments. In other words, the concession encourages people who were able to save £4 a week in the past to save £6 a week. What section of the community does that concession concern? I ask the Government, in all seriousness, how many people does it think will come within the majesty of that provision. How many people are there who can afford to save £6 a week in the form of life assurance payments? At what level of income does that kind of saving take place?

In this community, fewer than one in eight of the people are in receipt of more than £900 per annum. The Parliament must bear in mind, when it is considering budgetary measures, that seven out of eight Australians are working people who depend for their sustenance on a weekly wage derived from industry. There is no gainsaying that the greatest single item in the community is expenditure on wages. Why should it not be the greatest single item, since it affects the destiny of seven out of eight of the Australian population? But this document shows that out of the total national income of £4,312,000,000 in this financial year, the amount going in wages and salaries - unfortunately no separate amount for wages is shown as against salaries - totals £2,562,000,000, or nearly 60 per cent, of the total national income. That 60 per cent, is shared among 87 per cent, of the population, and that fact shows that in this great country there is a considerable disparity in the way that incomes are shared. If there is prosperity, it is not equally shared. It may be, also, that beneath the margins, there are some people who are not prosperous at all, and are living on the verge of poverty. That is a condition which is creeping into the Australian community to-day.

After the last war, we believed that something which we called “ full employment “ had come to stay, meaning that any person, if he wanted work, could obtain employment and earn sufficient to provide the standard of living to which he considered that he and his family were entitled. That kind of thing is now being whittled away because, although workers may be in employment, they are finding it difficult, on the standard wage, to maintain a decent level of existence. The Minister for Labour and National Service (Mr. Harold Holt) does not talk any more about the standard wage, but about the average wage. The average wage does not represent what is earned in a 40-hour week, but what is added as the result of working four or six hours’ overtime, something that workers find it necessary to do in order to meet the cost of living.

It seems that the Government, in looking for a glib solution of the problems which beset it, says, “ Wages are the greatest single item in the economy; therefore all we need to control is wages, and everything will fall into its place “. Members oh this side of the chamber claim that that is a false analysis of the situation, because, whether we like it or not, the wage-fixing systems of

Australia impose a rigorous control upon the weekly wage going to most of the people in the community. Instead of wages affecting prices, the reverse is the case, because as prices rise, wages fall behind in their purchasing power. The quarterly automatic wage adjustments, as we knew them, were the only medium available to the wageearner to maintain his standard of living; but if prices are allowed to go uncontrolled, there is now no way by which he can maintain his standard of living, which was not easily won. The Government’s analysis of the situation is wrong, and to show how shallow it is, 1 direct attention again to the section of the Treasurer’s speech which he has entitled “ Costs and Prices “. If that portion is read objectively it seems that, in his opinion, once wages are controlled everything else must fall into its place. When the honorable gentleman talks about costs, he means, for the main part, the cost of the products of secondary industries and the cost of services.

I direct the attention of the committee to the table appearing in the White Paper dealing with the receipts and outlay of trading enterprises. It shows the income and expenditure associated with those activities that come within the province of private enterprise, and it includes, also, government undertakings of a public utility type, such as railways and power .houses. It does not include, however, government administration as such. It relates to more than fourfifths of the Australian economy, and that portion dealing with the outlay of trading enterprises reveals that out of a total expenditure of £4,638,000,000 less than half is represented by wages - £2,009,000,000. There are several other important categories, however, which contribute to the cost of trading. One big item is company profits, £550,000,000, another is farm income £414,000,000, the profits from unincorporated businesses £520,000,000, net rent and interest paid on businesses £232,000,000, indirect taxes £542,000 000. and allowances for depreciation £337,000,000. Out of the total of £4,638,000,000, setting aside for the time being farm income, items other than wages appear to be more important in the final analysis than are wages.

These are the sort of things which might be brought under government control. For more than two years, the Opposition has contended that the besetting sin of the Australian economy is high prices, and they are reflected ultimately in large, inflated profits. It is these large, inflated profits which have distorted the whole of the price structure in Australia, and the wage-earner has used the only method at his disposal to improve his living standards - that is, rank-and-file agitation through his union, and the machinery of the courts to obtain quarterly wage adjustments. But access to that machinery was denied him nearly three years ago. So far as the section entitled to margins is concerned, more than half of the workers of Australia have not had marginal adjustments.

In face of rising prices, the workers, who number seven out of eight of the Australian population, have not been able to insulate themselves against the ravages of inflation. The attitude taken by this Government is an insult to the community. The Government called the Premiers of the various States together, and impudently suggested that they should abolish the quarterly wage adjustments because anomalies are creeping into the wage situation. As the honorable member for East Sydney (Mr. Ward) said the other night, the Commonwealth Government should have brought its wage rates into line with those of the States, and then justice would have been done to large sections of the Australian community.

Something more is required of this Government than the kind of measures proposed in the budget. A more realistic approach is needed, and the Opposition has suggested that profits and capital issues should be controlled. Because they are not controlled now the economy of the country has got out of gear, and we have reached the stage where things which ought to have been done first are being neglected. A conflict is going on between the States and the Commonwealth as to how much public development should take place. It is impertinent for Government members to suggest that the fault lies with the States. Rather is the reverse the case; this Government is at fault because of its unco-operative attitude. Because of the gravitation to it of financial power, it controls the pursestrings. We on this side believe that is where the control of the purse-strings should reside. But that does not solve the very real problem that exists. The States must be given, in the form of grants and assistance, the amounts needed for their development. The Commonwealth is able to say, “ We can pay for our capital works out of revenue “. I, for one, believe that that is the correct policy to follow regarding capital works, but if it is the correct policy for the Commonwealth, it is also the correct policy for the States. However, the States have not that luxurious choice. The Commonwealth should not say, “ We will pay for all our capital works out of revenue and you can get what you can out of the loan market with our assistance”. Everything should be put into the pool. As the Leader of the Opposition has suggested, a national plan should be evolved for public works so that those things that need to be done first will be done first.

I invite the attention of honorable members to the expenditure on public works. This expenditure is analysed in the White Paper on national income. In 1954-55. £423,000,000 was spent on public works, including State, Commonwealth, local government and semi-government activities. The analysis shows, for instance, that £26.000,000 was spent on post office construction. By contrast, the total expenditure on schools in the six States was only £18,000,000. The honorable member for Perth (Mr. Chaney) made some suggestions this morning about our failure to train enough technicians to deal with the problems of the age. Is it right that more money should be spent on post offices than on schools? The only reason for this, I suggest, is that the Commonwealth can pay for its post offices out of revenue. The States have to make provision for all their works from the miserly amount they receive for their loan programmes, and, in. fact, have to reduce them. If a rational national planning programme were formulated, post offices, schools, health and everything else would be thrown into the ring together and we could say, perhaps, “ it is better to have a shortage of post offices than a shortage of schools. After all, children are in schools for five days of the week; people are only in the post offices for perhaps ten minutes or a quarter of an hour at a time “.

Mr Hulme:

– The States will not come to this party.


– The States will not come to a party if the table has been taken away before they get there. Why should they? Everything has been grabbed and they are met with arrogance from the Commonwealth. Whose money is it? It is not Victoria’s money or New South Wales’s money. It is money that should be disbursed for the general welfare of the people of Australia, whether they be residents in a local community or in a given State. The broad national outlook should be taken. How can anything be considered on a national basis through the wranglings of the Australian Loan Council? Even the emphasis is wrong, because the emphasis is not on what needs to be done but on how much money can be obtained from a loan market which has been destroyed by the Commonwealth.

There is another matter to be considered in regard to State and Federal allocations of loan moneys. The budget papers show that the national debt, which is the debt of the States and the Commonwealth, has risen by more than £800,000,000 in the past six or seven years. But in that period the amount owed by the Commonwealth has declined. In other words, all the debt has been incurred by the States because the Commonwealth has chosen to pay for its works out of revenue. That choice is not open to the States. In consequence of the policy of increasing interest rates, the total payments for interest in the last financial year had risen to £131,000,000, whereas in 1948-49 they were £91,000,000.

Let us examine the constitution of that £91,000,000 of interest paid in 1948. I find that £48,000,000 was paid by the Commonwealth and £43,000,000 by the States. In 1955-56, when the total had risen to £131,000,000, the amount paid by the Commonwealth had fallen from £48,000,000 to £32,000,000, and the amount payable by the States had risen from £43,000,000 to £99,000,000. Government supporters ask, “ Why are the States in financial difficulties? Why are they coming to the Commonwealth each year for greater income tax reimbursements and more money through the Australian Loan Council? “ There is one reason! The barren field of interest for which the States are liable has increased in the space of seven years from £43,000,000 to £99,000,000. Next year the figure will probably rise to £140,000,000, and the States, instead of wanting £56,000,000 for interest, will require £65,000,000. Yet members on the Government side say that the States are being extravagant in their administration!

The Commonwealth is callous in its approach to national problems. It is grabbing what it can and saying, “ We are all right; our budget is balanced; and this year we even have a surplus of £108,000,000 “. Why is there a surplus of £108,000,000? Because the Government has wrecked the loan market and destroyed the confidence of the people to re-convert the loans in which they patriotically invested ten or fifteen years ago. In consequence, the Government has to hold in hand about £50,000,000 to repay loans that people will no longer hold.

The estimated surplus for this year is £108,000,000 compared with a surplus last year of £61,000,000. The addition of nearly £50,000,000, I suggest, is due to the lack of confidence which the Treasurer knows exists in the community. How often do we hear to-day the small man, whom the honorable member for Sturt (Mr. Wilson) mentioned, say, “If I had £100, Commonwealth loans would be the last place in which I would put it “. How tragic that is for national development!

There should be a realistic approach in an effort to restore confidence, but this Government subscribes to the theory of dear money. It wants to let the monetary system regulate the flow of goods and services in the community. What has that meant? It has meant an increase in the gilt-edged rate of interest from 3i per cent., as it existed for a number of years, to nearly 5i per cent. That would not be so bad if it affected only Government activities, but it affects everything else in the community. If interest at the rate of 5£ per cent, is paid on Government loans, who would lend money on house mortgages at a lower rate? The result is competition for money. It is mentioned every day in the press. Luxury undertakings are offering 7 per cent, on unsecured notes for two years or thereabouts. It is only natural that people who have accumulated savings to invest ask, “Am I not entitled to seek the highest interest possible? “ Whilst that is happening, the things that need to be done in this great country of ours are being neglected. Therefore, I say that this Government should be indicted upon its national policy. It is a policy that has thrown the community into confusion.

In his budget speech, the Treasurer prided himself on the fact that the national income had risen last year. He said -

In 1955-56 national income, in money terms, is estimated to have been £4,312,000,000. This was a rise of £265,000,000 or 6.5 per cent., as compared with 1954-55.

His Treasury Information Bulletin issued a day or two earlier showed that in the same year prices had risen by 6.5 per cent, and that the population had increased by 3 per cent. In other words, even though the national income has risen by 6.5 per cent, measured in money terms, in terms of prices it has been cancelled out and is spread over an increased population. Honorable members opposite wonder why savings have fallen, why they amount to less per head than previously. Is it any great wonder to any one who knows the plight of the individuals in the community, the sort of people whom we represent? All this talk in aggregates is bunkum and nonsense in the face of reality.

A couple of people came to see me the week before I left for Canberra. They were age pensioners, decent people, who lived in the housing commission area in Port Melbourne. One was a returned soldier of the British Army, apparently not entitled to pension rights out here. They were paying an amount of 16s. a week rent, which the Bolte Government in Victoria recently increased to 21s. Out of a total income of £8 a week they had to clothe and feed themselves, entertain themselves if they could, and pay fares. To go from Port Melbourne to the city and back would cost the two of them 4s. How are those people to exist on the pension that is being paid? It is easy for people to say that the pension to-day is so much percentage of the basic wage. The question that ought to be asked is: Can a person who is entirely dependent on the pension for his sustenance, that is to pay rent and everything out of it, manage to do so on £4 a week? Pensioners cannot afford to buy new clothes in winter time.


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

Minister for Social Services · Riverina · CP

– Fortune has favoured me, as it sometimes does, in thai

I have the opportunity to follow the honorable member for Melbourne Ports (Mr. Crean). It is always a pleasure to sit and listen to what the honorable member has to say. Although his criticisms are levelled against the Government, they are reasoned and reasonable criticisms, and no member of the Government would ever take the slightest exception to that procedure. I am informed that before the honorable member for Melbourne Ports addressed himself to the budget, the previous Opposition speaker was the honorable member for Eden-Monaro (Mr. Allan Fraser). I know what the honorable member for EdenMonaro would have to say in this debate. I know what he has had to say in all budget debates during the last six years. But I have also the most vivid recollection of what he left unsaid during all the years that he sat in this House prior to 1949.

In 1949, after nearly nine years of socialist rule, the total social services expenditure by a socialist government was confined within the limits, in round figures, of £80,000,000. There was never a cheep or murmur out of the honorable member for Eden-Monaro. He was perfectly satisfied that the total expenditure to discharge the social services responsibility of this national government should be confined within the limits of £80,000,000. There were no hospital benefits, no medical benefits, no pharmaceutical benefits and no tuberculosis assistance of any kind within the limit of that £80,000,000. No sooner was this Government elected in 1949 than the attitude of the honorable member for Eden-Monaro changed, and he became vocal. He demanded increases in social services benefits, increases that he decried when he had an opportunity to exert some influence on the previous government. When it was suggested in 1949 that the age and invalid pension of £2 2s. 6d. be increased by 2s. 6d. a week the honorable member for EdenMonaro was against it. One could not get 30d. out of him then.

But he saw, as did every intelligent member of the Opposition, a progressive increase in the appropriation for social services from 1949 onwards, year after year and budget after budget, until it progressed from £80,000,000 in 1949 to £215,000,000 this year. Not only that; the means test was liberalized with respect both to income and property. Not only was the means test liberalized but also a complete scheme for age and invalid pensioners in relation to hospital benefits, medical services, pharmaceutical services and ancillary services was introduced. To-night, the honorable member for Eden-Monaro said that social services have been neglected. If social services can be measured in terms of pounds, shillings and pence, then the measure is approximately £200,000,000 in the space of the last two years. What the honorable member had to say to-night was designed to divert me, the Minister responsible for social services, from the budget debate, but I do not propose to be so diverted. f am privileged, as 1 said when I began to speak, to follow the honorable member for Melbourne Ports. I was also privileged this afternoon to be in charge of the House when the honorable member for Fremantle > (Mr. Beazley) was speaking. There are honorable members opposite whose contributions to these debates are of the very greatest value to me and, I have no doubt, to other members of the Government; but the contribution of honorable members like the honorable member for EdenMonaro can be described only as a shabby subterfuge. No one knows better than he that if the expenditure on social services benefits is not confined within the limits of the capacity of the people to pay it will visit ruin on those who are in receipt of such benefits, it will visit ruin on every wage and salary earner in our country and will bring our economy down. That is his intention. He has no other purpose, because people of that kind hope to gain from the complete destruction of our democratic state of society. I did not want to speak about these things at this juncture; and already I have spoken too long about them.

Opposition members. - Hear, hear!


– I appreciate the applause from the honorable members of the Opposition. As has been said by so many speakers on both sides of the committee, this is the ninth budget introduced by the Acting Prime Minister (Sir Arthur Fadden) who, lest any one might be tempted to forget, is the leader of the party to which I belong, lt is a great achievement and a great record to introduce nine budgets in the House of Representatives, lt is a record, of course, that was closely challenged by that most amiable man, the late Joseph Benedict Chifley, who was both Prime Minister and Treasurer of our country. A very remarkable thing is that the Acting Prime Minister and the late Joseph Benedict Chifley had the same kind of beginning, the same kind of experience and the same kind of end so far as their political lives are concerned. Both of them came from ordinary middle-class homes and both applied themselves to the task of improving their equipment to meet the normal hazards and the normal engagements of life and living. Each in his respective sphere became Prime Minister and Treasurer, but their political beliefs were entirely different. The late Joseph Benedict Chifley believed that because he had had to work with his hands for his living he had been subjected to some grave social injustice. The Acting Prime Minister, having had the same kind of beginning, had no such beliefs, nor had the only other person who is likely to challenge the record of either of those two right honorable gentlemen in bringing down a number of budgets, the right honorable member for Cowper (Sir Earle Page). He. too, had the same kind of beginning. He, too, worked with his hands for his living, but he, too, believed in different things, and those of us who were privileged to hear what he had to say in the budget debate only yesterday must have deplored the fact that time and circumstances caused him to relinquish a very distinguished career as a Minister of State in this Parliament and that he is now a private member. I have no doubt that there are other men who have made the same kind of sacrifices, but I suggest that there are very few of them.

The suggestion has been made that I should address myself in strict terms to the budget. I have noticed, in listening to this debate, that no superlatives were used in describing the budget. No one on either side of the chamber said that this is a splendid budget or a magnificent budget, because there is indeed, and in fact, no such thing, except in paradoxical terms. There is no such thing as a splendid budget so far as political opinions are concerned. For Government members, a perfect budget would be a budget that reduced taxes to a minimum and simultaneously increased expenditure to a maximum. That would be a state of perfection in the view of every member of the Government. Similarly, of course, in the opinion of the traditional Opposition, the perfect budget would be a budget that increased taxes to a savage rate and reduced the entire community to comparative poverty, and at the same time reduced expenditure and refused to discharge its democratic responsibility. But we have no traditional Opposition, if we except one or two individual and living men, in this Parliament to-day. We have what might be described, if I might be permitted to use the expression, as the Evatt Opposition, and the perfect budget, in the view of the present Opposition, is a budget that would be designed, because of the stress of economic circumstances, or for some other reason, to visit ruin on all our democratic systems and institutions. That would make the Leader of the Opposition, and the honorable member for Eden Monaro, supremely happy. But this budget is designed to meet a situation in which the high level of our prosperity, with a national income that exceeds £4,312,000,000, is threatened by the high level of our own cost structures. It is not the size of the national income that counts; what really matters is what a nation does with it. If the nation allows itself to drift into a position where every penny it earns is needed to meet the bare costs of production, it naturally follows that all expenditure, both private and public, government, local government, and of every other kind not directly associated with production, would require to be reduced. But there is no suggestion in this budget that our expenditure should be reduced. Superimposed on the problem of rising costs is the problem of our balance of payments. With an export income of £773,000,000 in 1955-56, we had an export expenditure of £819,000.000 on imports and, for the year, an adverse trade balance of £46,000,000. But freight and other charges enumerated in the budget papers aggravated that position, and our international reserves fell by £73,000.000 to £355,000,000 on 30th June this year. Of course, most of that favorable trade balance of £355,000,000, as it is now, was earned by the primary industries of our country.

The economic measures that have been taken in this budget and in the previous budgets presented by this Government are designed to correct that position, to correct the dissipation of our overseas balances. This budget provides for the discharge in full of all our governmental responsibilities, no matter what they are. It provides for the rising costs that are at present so stupidly beyond the constitution and competence of this Government or any other federal government to avoid, for all the multiplications that are inseparable from an expanding economy and an increasing population, and for the contingencies which inevitably arise from the mendicancy of the States under uniform taxation. So we are faced with a total expenditure of £1,230,153,000. It is a fabulous sum of money. That, of course, is an increase of £99,457,947 over the expenditure last year, and I confess that it calls for some detailed reference to the budget papers through statement No. 2, Consolidated Revenue Fund Estimates. I direct the attention of the committee to only four items in that statement dealing with expenditure. I refer to the payments to the National Wel- fare Fundi that are up by £11,754,329, or nearly £12,000,000. I refer also to the payment to the Postmaster-General’s Department, payments other than expenditure on capital works and buildings, of £5,304,790. There are payments to the States in excess of all the prearranged payments to the States aggregating £23,228,128. There are capital works and services, greater than last year, amounting to £7,838,070, and the last item to which I refer is loan consolidation, aggregating £46,887.048. These five items alone aggregate no less a sum than £95,012,365, and they account for the substantial increase of the proposed expenditure this year compared with actual expenditure last year. Only a courageous government could stand up to responsibilities like that without increasing taxation. Only a courageous government could meet that situation without reducing all the social services and ancillary services that are available to our people. One would naturally expect some sense of appreciation from members of the Opposition, but except for a few isolated instances, there is no sign. There is no known way to meet an expenditure of that magnitude except from revenue, and revenue comes exclusively from the people. That is constantly forgotten, particularly by those who sit opposite. I know that there are those who are encour- aged to believe that there are tricks and devices which can be resorted to; but these tricks and devices - call them what you will - can only be described as myths, or bubbles floating in the air which the stupid and credulous grasp. They burst and leave them empty-handed in the end. The time has come when we have to recognize that every penny that this Government proposes to expend must come out of the pockets of the people. There are no tricks and no devices available to a responsible government. The cold fact remains that we will have to find no less than £1,230,153 in this financial year to measure up against an expenditure of that magnitude. Because of that, there can, regretfully, be no substantial reductions in taxation.

The budget provides for additional taxation concessions aggregating no less than £1,995,000 in a full year. Consistent with the policy of this Government, most of these taxation deductions are designed to assist the family man. This budget also provides for the children - in the plural sense of the term - of widows and invalids who have never been provided for before by any other government. Surely that is something to be proud of. This budget also provides for those widows between their forty-fifth and fiftieth birthdays, who have discharged all their family responsibilities to their children, and who have never been provided for before by any other government. This matter has never been mentioned by honorable members opposite. They adopted the attitude, and I regret to say that it has been followed in the last six years by the present Government, that a widow, having been devoted to her family throughout the whole of her adult life, could, at 45 years of age, and upon her youngest child reaching the age of sixteen years, go to work to support herself. She was told that there was no social service benefit available to her, and for the subsequent five years until she was 50. she had to subject herself to the indignity of competing with her children in our community for some form of employment. These widows have been provided for in this budget, as honorable members opposite will find out when a bill for that purpose is brought down.

This is a budget wHich should give satisfaction to those of us who are anxious that we should hold our position as one of the most socially advanced countries in the free world, and to those of us who want to preserve our conception of human liberty and human dignity. These are the important features of this budget, and it has no other purpose. The Leader of the Opposition, supported by those who sit behind him, has - or had, if I might choose the past tense - two alternatives. The first alternative proposed to meet the situation that confronts this, or any other reputable government is savage price control, which could only recreate all the miseries of chronic scarcities, reduce every dependent man, woman and child to ruin, and reduce the wage and salary structure of the community to the point of desperation. That is the purpose of price control. In a free society, there is no known way, as the Leader of the Opposition knows from his own experience and from the experience of other socialist governments, to compel people to produce goods for unprofitable sale, except by bringing out the troops. Even when the troops are brought out, as they have been in a great many countries of the world, they cannot provide the goods and the services that are necessary to the people. This is not just idle speculation. It is our experience in modern history that wherever there has been savage price control, either here or anywhere else, it has always inflicted on the people the most grievous, chronic scarcities. It has given all sorts of privileges to those who have, and subjected those who have not to all sorts of intolerable indignities of penury and squalor.

His second barrel - and I must try to deal with it very rapidly - was savage profit control. There are profitable commercial enterprises, and there are unprofitable commercial enterprises. But whenever the honorable members of the Opposition have to refer to commercial enterprises of any kind - and I quote their own words - they do so in terms of the big wealthy companies, the big wealthy banks, the big wealthy organizations, holding society up to ransom. For a number of debates, I have had in my notes appropriate references to such a specious argument. I have taken as an example, one of the largest and most profitable companies that we have in this part of the world or any other part of the world - one of the hated private banks; an institution with total assets of £283,523,924; a commercial enterprise that earned during its last financial year no less a sum than £8,613,969- nearly £9,000,000. This is how every penny of that amount was spent: Eleven and ten pence out of every 20s. went to pay the wages and salaries of the employees of the institution - the people who made it all possible. Three and eight pence halfpenny in the £1 was absorbed by the normal managerial costs of an enterprise of that magnitude. Taxation, for which every member of this chamber must accept some responsibility, accounted for 2s. 5d. in the £1. The shareholders of the company, who provided the sinews of war in the first place, and who have maintained them throughout the years, received1s. 9d. out of every £1, and only 3½d. was left to be placed in reserves. Yet the best that the Leader of the Opposition (Dr. Evatt) could say was, “ We will savagely control profits “. If ever there was a man beggared for ideas, surely it is the Leader of the Opposition. If ever there was a man bereft of any conception of responsibility in politics, surely it is this danger in our midst. The time has come when the people should recognize the purposes of a budget designed to hold our most favoured place in the community of nations.

Progress reported.

page 342


The following bills were returned from the Senate, without requests: -

Customs Tariff Bill (No. 2) 1956.

Excise Tariff Bill (No. 2) 1956.

Customs Tariff (Canadian Preference) Bill 1956.

Customs Tariff (Federation of Rhodesia and Nyasaland Preference) Bill 1956.

Customs Tariff Bill (No. 3) 1956.

page 342



Motion (by Mr. Roberton) proposed - That the House do now adjourn.

East Sydney

.- Having heard the Minister for Social Services (Mr. Roberton) addressing honorable members in what appeared to be a generous mood, I think this is an appropriate time to mention again the hardship of an exserviceman whose case I have discussed previously. My purpose in raising the matter again is not only to appeal once more to the Government to do something for him instead of merely talking so much about what it is doing for disabled exservicemen, but also to direct attention to a complete and deliberate misstatement in correspondence which I have received from the Minister for Repatriation (Senator Cooper) in connexion with this case. The ex-serviceman in question is Mr. Lawrence Atkins, who is at present in the Home for Incurables, as I think it is termed, at the Royal Ryde Homes, Morrisonroad, Ryde, in New South Wales. I remind honorable members of this man’s condition, which I have stated previously, Both his legs are crippled and his hands have become calcified. His eyes were affected, and one was removed in 1951 and the other in 1953. If one can take any notice of the speech of the Minister for Social Services, the Minister regards this Government as a most generous one. Yet, in spite of the exserviceman’s disabilities, it pays him only a 25 per cent. pension of £1 3s. 9d. a week. Mr. Atkins’s aged parents, both of whom are pensioners, live in the country, and cannot care for him; so he must remain in the Home for the Incurables where he can be cared for, and where he will have to remain for a considerable time. The people who conduct the home are doing their very best for him, but is this Government doing its best for him?

Various ex-servicemen’s organizations have tried to get justice for Mr. Atkins, but the Government has remained unmoved. The Minister for Repatriation, in the last letter that I received from him, dated 13th August of this year, said, referring to this ex-serviceman -

Actually his service outside Australia was a period of five months on Thursday Island.

The member is suffering from Rheumathoid Arthritis, loss of both eyes, and synovitis of the right knee. The Repatriation Commission has accepted synovitis of the right knee as being attributable to war service; but has determined that the Rheumathoid Arthritis and eye conditions are not attributable to, or aggravated by, his war service. (The eye condition is a sequel of the Rheumathoid Arthritis).

Mr. Atkins enlisted on 9th December, 1941. He was medically examined on 8th December, 1941 and was posted as Class 1. However, he concealed a history of prior-to-enlistment rheumatism.

On 20th April, 1942 the member stated that he was suffering from sciatica and synovitis; he also said that the incapacities began at Boggabri twelve years ago and he attributed them to sitting on wet ground.

Needless to say, Mr. Atkins denies ever having made such a statement. However, assuming, for the sake of argument, that he had admitted such a pre-enlistment disability, one would imagine that the doctors who examined him would have detected his physical disability. Assuming even that we exonerate the doctors from responsibility, can it not be argued at least that this unfortunate ex-serviceman’s condition certainly would have been aggravated by his five months’ service on Thursday Island where, according to his own statement, which has never been contradicted, he was obliged on many occasions to work in mud and slush up to his waist? If the Minister reviewed the case sympathetically, no doubt he would agree that the man’s service on Thursday Island did aggravate his condition, if it existed previously. But what did the Minister do? He tried to belittle Mr. Atkins’s service. When all is said and done, Australians who have shown enough patriotism to enlist in the armed forces should not be ridiculed because, owing to circumstances beyond their control, their service was not as lengthy as was that of other members of the forces, or took place in other areas. The Minister’s letters continued -

I, as Minister for Repatriation, am not empowered to vary the decisions of Appeal Tribunals, and nothing further can be done in the case unless further evidence, which is material to, and has a substantial bearing upon, the claim is submitted.

I can prove that that is not true. I previously submitted to the Government for reconsideration the case of a man whose appeal had been rejected by an appeal tribunal, and I am pleased to say that I. received from the Minister a letter dated 5th August, 1953, in which he stated - 1 referred the case to the Repatriation Commission with a request that it be given further consideration.

I am pleased to state that the Commission has reviewed the case under the provisions of Section 31 of the Repatriation Act 1920-1952 and has accepted the conditions of osteoarthritis of spine, right hip and left knee as being due to war service and has directed that pension be restored as from 21st January, 1953.

That was done although the appeal tribunal had previously rejected his appeal against the refusal of his claim for a pension. The pension was duly restored. Sub-section (1.) of section 31 of the Repatriation Act provides -

Whenever it appears to the Commission that, under this Act, sufficient reason exists for reviewing any assessment, decision or determination in relation to pension under this Division the Commission may review the assessment, decision or determination.

Although an appeal tribunal had rejected that man’s appeal, the Government could not escape its responsibility. It has often sought a way out by saying that it cannot vary the decision of the appeal tribunal, but I have mentioned a case in which the Minister got round the decision of the appeal tribunal; and I am prepared to state the name of the person concerned in that case, if my word is doubted. In that case, regardless of the appeal tribunal’s decision, the pension paid to the exserviceman concerned was restored to the full rate. I ask that the same be done for Atkins. He has lost both eyes, both his legs are affected, and he will be bedridden for the rest of his life. He is simply waiting for the end. Yet this Government says, “ We can only give you £1 3s. 9d. a week “.

Let the Government display in this instance some of the generosity about which it has been talking so much during the budget debate so far as it has gone. Let the Minister do what he did in a previous case. Let him send the matter back to the commission for review. Let him keep sending it back for review, time and again, if necessary, until this man obtains that to which he is justly entitled - a rate of pension sufficient to give him an opportunity to live as an ordinary citizen in the community. I believe this is a case in which a pension for total and permanent incapacity should be granted. There may be others of the same kind, but this particular case has been brought to my notice and I am not satisfied with the attitude of either the Government or the Minister in the matter. I appeal to the Minister for Labour and National Service (Mr. Harold Holt), who is in charge of the House at the moment, to bring this matter, together with my remarks, to the notice of the responsible Minister with a request that the case be sent back to the commission for further consideration and review.


.- The case referred to by the honorable member for East Sydney (Mr. Ward) is not unknown to me. As a matter of fact, I have been working on it for a number of years. It is probably one of the most pathetic cases that I have known during my long experience. The honorable member for East Sydney does not help this ex-serviceman’s case at all because some of the things he said are not according to fact. He said that this ex-serviceman was receiving a pension of only £1 3s. 9d., a 25 per cent, pension. The honorable member would have us believe that this pension is paid in. respect of the disability of arthritis. The fact is that it is being received by this ex-serviceman in respect of synovitis, which was aggravated at the time of his discharge. He made no application for a pension for arthritis until some considerable time after he had been discharged. The honorable member for East Sydney seeks to blame the Minister for Repatriation (Senator Cooper) for the decision arrived at in this case. He is quite entitled to blame the Minister if he has some grounds for doing so; but in my opinion the Minister has given every possible sympathetic consideration to this case. It is one of those unfortunate cases in which tribunal after tribunal has determined upon appeal after appeal that this man’s disability is not due to war service.

The honorable member for East Sydney says that this ex-serviceman’s parents are both age pensioners. That is not so. I made inquiries in order to ascertain whether they had become pensioners within the last few months, and I could find no record of their having done so. However, I admit that they are not in a position to look after this ex-serviceman in the manner in which he deserves to be cared for. Because of that, and as a result of the co-operation of the State Minister for Health, the Leader of the Country party in New South Wales and this man’s very good friends in Sydney, he was eventually moved from Liverpool hospital to the home at Ryde. Both he and his parents have written to me recently pointing out that he is as happy as one could expect to be with the disabilities from which he is suffering.

As to whether his war service may have aggravated his disability, I point out that the disability of rheumatism, backaches and so on was not disclosed at the time of his original enlistment. Had it been disclosed, it is quite possible that aggravation might have been proved as a result of war service. Admittedly, he was working at Thursday Island for some months as a member of a watercraft workshops unit. The honorable member for East Sydney said that he worked up to his waist in mud and slush. That is an exaggeration and quite contrary to the representations made to me. I was told that he worked in water up to his waist, and, for the benefit of those honorable members who are not aware of what the watercraft work was, I point out that he was working in salt water, and that the salt water at Thursday Island is of very moderate temperature. I should not expect that it would be likely to contribute to any arthritic condition that might have been experienced before. I repeat what I said at the beginning. I have every sympathy for this man. It is one of the most pathetic cases ever to come under my notice.

Mr Ward:

– Why does not the honorable member help him?


– If the honorable member for East Sydney will keep quiet, I shall continue my remarks. In the circumstances, I cannot agree that anything but the greatest possible consideration has been given to this case by the Minister for Repatriation. The reason why the pension has not been granted is simply that it has not been found that the ex-serviceman’s condition can be attributed to war service or that it has been aggravated by war service.

There are certain unfortunate aspects of the matter. One is that this man enlisted twice. The first time was in the Citizen Military Force. He was discharged at his own request in order that he might go back to his property. Later, he enlisted in the Australian Imperial Force, and it seems to me that there should have been some record of his early enlistment because his early discharge was facilitated by his complaint that he was suffering from backaches. Then, there is another unfortunate fact. It had nothing whatever to do with this Government. If one wished to be party political, perhaps one might say that it is due to the fault of the Government that was in office during the war; but that would hardly be fair because it was purely an Army matter. There was a recommendation from the Army medical officer that as this serviceman had spent so much time in hospital while a member of the forces he was a liability to the service and it would be much better if he were discharged. Had he been discharged at that time, this situation would never have arisen. However, he was kept on in the Army. Some time after he was discharged, this disability arose. He was taken to Concord, and it was while he was there, still with no admission by the department that it was a war-caused disability, that one of his eyes was removed. The other was taken out later. I join with the honorable member for East Sydney in asking that this matter be reviewed again, despite the fact that there have been many appeals already. The case should be reviewed again, and, if possible, this man should be given a pension together with the right to be admitted to Concord Hospital among his mates where he will have an opportunity to chat over war experiences with them.


.- I shall take a few moments over this matter. I might say, first of all, that if the gentlemanly behaviour of the honorable member for Lawson (Mr. Failes) is a sample of how members of the Government deal with their repatriation problems, then God save the diggers from their friends. I do not say that in any personal way. I know that the honorable member for Lawson is an exserviceman; but he spoke in a derogatory manner of this ex-soldier’s claim. I ask honorable members to remember that this ex-serviceman is getting £1 3s. 9d. a week. He is in a home for incurables, and the onus of proof provision has been twisted against him. There are three frightful things in the Repatriation Act, and two of them relate to material and substantial evidence. The other is the way in which section 47 has been flouted by the bureaucrats both during the term of this Government and in the terms of preceding governments. This brings the matter back to the frustrations represented by tribunals, appeals, commissions and Ministers. Every honorable member’s file is full of these unresolved cases. We all feel that these cases should have been resolved, perhaps in the way in which social services cases can be resolved, with an act of grace pension. Surely these pension cases are getting more difficult to assess, yet we have the same old rigid approach.

In my view, the honorable member for East Sydney (Mr. Ward) made out a good case. It was a case such as 1, or any other honorable member, would make on representations. The honorable member for Lawson explained the case and showed it in a different light, but with great sympathy. However, it still leaves in our minds, as we go home to-night, the thought of a man who has lost the sight of two eyes, who is in a very sick - perhaps a dying - condition as the honorable member has said, and who has been repaid for his services by a grateful country with £1 3s. 6d. The barrier to his getting any additional pension is a tribunal which says his condition is not caused by war. Who is to say it is not caused by his war service? First of all, there is an unsympathetic reference to the fact that he was out of Australia for only seven months. There is another unsympathetic reference by the medical officers to the fact that when he was in the Army he was always on his back and would have been better out of it. Does not the onus rest on the doctors who passed him for service? When we were perilously short of men, not only in this war but in the 1914-18 war, did not they intend that very thing - that the man who could just get through was accepted? In the circumstances, why this change of thinking? Why do we suddenly become very niggardly and miserable and cold-hearted about these things?

I’ know nothing about this case except what has been said here to-night, but I think that it highlights the dangers of rigid bureaucratic rule under section 47 of the act. Against that rigid bureaucratic approach and the awful futilities of the commission and appeals, is it not about time that section 47 was administered in accordance with the intentions of Parliament? Every honorable member in this House knows what has been done. A review of the Repatriation Act was made so that we could make an unpalatable act, unworkably rigid, more smooth and clear in order to state what we intended to do for our servicemen. But on every occasion the government of the day has been outwitted and outflanked by the bureaucrats who administer the act.

I do not know why that is so. They are human when you talk to them. I have attended appeals, made representations and taken a great interest in this matter as have most other honorable members. But honorable gentlemen must admit that I am cor- rect in saying that, in most cases, one does not win. The Minister for Repatriation (Senator Cooper), himself a limbless soldier, is a sympathetic man, but he runs into this solid bloc of opposition and at a certain stage he gives the correspondence away. I challenge any honorable member to turn up his files to-morrow and see how much unfinished business returns from attempts to get pensions for what you and I would consider to be worthy cases in relation to the returned soldiers of World War II. and World War I.

This is a particularly shocking case. A payment of £1 3s. 9d.! A home for incurables! An unsympathetic department that has said, “ Yes, we will give you a pension for your synovitis, for water on the knee, but blinded eyes and arthritic conditions, which could, or could not, be due to war service are another matter “. That is the subject of section 47.


– Why is he not entitled to a civilian pension for blindness?


– I cannot understand that aspect, but there it is. This is the case as presented to-night and as vouched for by a Government supporter. The total pension that the man receives is £1 3s. 9d. 1 ask the same question: What about a “ burnt-out “ pension? Apparently he is over 65.

Mr Failes:

– No, he is about 35.


– A younger man? Then the whole thing seems to be completely wrong. But getting back to the point I am asking-


– He should get a pension as a blind man.


– He does not, apparently.

Mr Failes:

– He gets a pension in respect of his blindness. We are now discussing a repatriation matter.

Mr SPEAKER (Hon John McLeay:

– Order! I think the discussion is getting too general.


– Whatever the pension is - and that does not alter the situation - the justice that should be meted out to this man as a serviceman is being denied to him by the unsympathetic interpretation of section 47. Both the Government and the Opposition parties have fought the bureaucratic approach under this act and have been thrown back, worsted, because section 47, despite the decision of both sides of the House, is not invariably used with sympathy to the soldier concerned.

Leader of the Opposition · Barton

– I shall not delay the House more than a few moments, but I should like to point out two things. The intervention of the honorable member for Lawson (Mr. Failes) and his reasons support, broadly, the case for the applicant; and the statements of my colleague, the honorable member for East Sydney (Mr. Ward), have not been countered in any way by the honorable member for Lawson. Whether the water in which the exserviceman worked contained slush or other ingredients in addition to the main element would not be really relevant and it does not show any change in the nature of the representation.

Mr Ward:

– He said that the water was warm.


– Well, I suppose that it is not warm always. I suppose it varies. I do not think that the honorable member for Lawson meant to imply that the representations made by the honorable member for East Sydney were substantially incorrect. The honorable member for Lawson wanted to assist, and these minor things disappear. What is the real point? It arises every time such cases come up. - One is left in grave uncertainty about it. Is the Repatriation Department applying the statutory rule? Section 47 is intended for the very type of case that we have been examining. Doubt is there. The doubt is in the mind of the honorable member for Lawson.

Mr Leslie:

– The doubt has to be in the mind of the tribunal, and nobody else. The right honorable member knows that.


– Of course it has to be in the mind of the tribunal. It was not until last year that the department itself got an advising from the then Attorney-General concerning the meaning of the section. That advising corresponded to the advising which I gave years ago, and which is correct. But this is only the first point. Is it applied? If the blindness could have been due to these things - not if it is proved to have been - the soldier must recover, and there is no check on it. In the British courts there is an appeal to a judge who sees that the onus-of-proof provision is applied. He draws attention to that question. It seems to me, without knowing the details that the honorable member for East Sydney and the honorable member for Lawson know, that this is the very case to which the onus-of-proof section should be applied by the tribunal. lt is perfectly true that there is no appeal from the tribunal. Last year the Opposition tried to have an appeal provision included in the legislation so that it could be applied, but that was rejected. I hope it will be reconsidered, because if a tribunal is asked to apply the rule of law and if it consists of people who may not apply the rule according to legal strictness intended for the benefit of the soldier, the spirit and letter of the act are broken. So I suggest that the case be looked at again and that it be reviewed along the lines that I have mentioned. I also suggest that the Government consider again some review by a legal authority - a judge of one of the superior courts - of this case to see that the onusofproof section is applied. The honorable member for Shortland (Mr. Griffiths) has brought case after case to the notice of the Government. I know that section 47 of the act is a difficult section to apply, but I support the intervention of my colleagues, the honorable members for East Sydney and Parkes, and although the hour is late I think it very important that those matters be discussed. 1 hope that this case will be examined again, and more broadly, and that the desirability, of having the section applied as it should be will be favorably considered by the Government.

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

– The remarks of honorable members on this matter will be brought to the attention of my colleague, the Minister for Repatriation (Senator Cooper). As has already been fittingly said by more than one honorable member speaking to the matter, the Minister for Repatriation is himself a man of warm sympathy in relation to those cases. He has his own personal experiences which, I believe, qualifies him more fittingly than anybody in this chamber to deal, with understanding and appreciation, with cases of disabilities that have been sustained by ex-servicemen as a result of war service.

We have had put before us to-night some facts, but it is difficult to believe that we have been given all the relevant facts. It may be true that so far as a claim for war disability is concerned the pension allotted is of a minor order, as has been put to the House. But if this man has had the misfortune to be as completely disabled as the statements made by the honorable member for East Sydney (Mr. Ward) would suggest, one would certainly imagine that he would be entitled to the invalid pension. If he is blinded, as we have been given to understand, one would certainly imagine that he would be entiled to the very much more considerable pension that can be obtained by a blinded person. So I feel that a review by the Minister for Repatriation will at least be of advantage, to himself, as indeed to any honorable member who takes the interest that an honorable member could be expected to take in this case, because we shall at least know what, as a government and as a community, we are doing to meet the unfortunate situation in which this ex-serviceman finds himself.

Question resolved in the affirmative.

House adjourned at 11.2 p.m.

page 347


The following answers to questions were circulated: -

Dollar Loans

Mr Duthie:

e asked the Treasurer, upon notice -

  1. What is the total borrowing from the World Bank since 19S0?
  2. How much has Australia paid in interest, and is this repaid in dollars from our meagre dollar earnings?
  3. What is the current rate of interest?
Sir Arthur Fadden:

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

  1. Australia has signed four loan agreements totalling 258,500,000 dollars with the Internationa) Bank. As at the 30th June, 1956, total drawings under these loan agreements amounted to 247,000,000 dollars.
  2. Up to 30th June, 1956, interest payments and commitment charges had amounted to £12,286,000. The interest liability is mainly in United States dollars but smaller payments have been made in Canadian dollars and Swiss francs.

Dollars required to meet the Canadian and United States dollar payments have been drawn from the sterling area dollar pool.

  1. The four loan agreements provide for payment of interest at the following rates: - First loan, 4_ per cent, per annum; second loan, 4) per cent, per annum; third loan, 4) per cent, per annum; fourth loan, 4 per cent, per annum. These interest rates include 1 per cent, commission which the bank is required to levy by the articles of agreement for the purpose of building up a special reserve. Australia is, of course, a shareholder in the bank. It should also be noted that in respect of some portions of the loans totalling 24,800,000 dollars the rate of interest payable by Australia has been as much as 1 per cent, less than the figures quoted above. This has followed bank sales to investors of some portions of the Australian loans maturing before 1958.

Cite as: Australia, House of Representatives, Debates, 6 September 1956, viewed 22 October 2017, <>.