22nd Parliament · 1st Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.
– 1 desire to ask the Minister for External Affairs a question in relation to the visit of General de Gaulle to the Pacific and subsequently, I understand, to Madagascar and other French possessions. I know what the Minister feels about the contribution to victory that General de Gaulle made during the last great war, through Admiral d’ Argenlieu in New Caledonia, and in the critical times in Europe and North Africa. Would it be possible for the Government, on the general’s return to Australia - which, I understand, will be on Thursday or Friday - to make an attempt to give the Parliament or the people an opportunity to express their gratitude to him for his magnificent contribution to victory?
– I appreciate what the Leader of the Opposition has said. As soon as I heard that General de Gaulle was to visit the New Hebrides, on behalf of the Government I sent a message to him - I have the privilege of knowing him personally - and also to the French Government, saying that the Australian Government would appreciate very much an opportunity to do honour to him if he found he was able to stop in Australia, in Sydney or, preferably, in Canberra. We received a reply saying that, unfortunately, General de Gaulle’s plans would not permit him to do that, because he would be moving in accordance with a very tight schedule. I entirely agree with what the Leader of the Opposition has said about the very distinguished part that General de Gaulle played, on behalf of his country, at a very critical period of the war. If we could have done honour to him and extended to him all the governmental courtesies of which we are capable, I assure the right honorable gentleman that we should have been only too pleased to do so.
– I ask the right honorable the Treasurer whether his attention has been drawn to a statement in the New South
Wales Legislative Assembly last week by the Minister for Housing, Mr. Landa, to the effect that instructions issued by the Commonwealth Government to banks to limit loans to home builders had caused the housing lag. Will he give the House the details of the instructions to which Mr. Landa referred?
– No instruction of that kind has emanated from this Government to the banking system of Australia. The arrangements with regard to banking policy, including advances, were agreed upon between the central bank and the trading banks without any interference, direction or control on the part of the Commonwealth Government.
– Will the PostmasterGeneral, before it is too late,’ give consideration to the proposed increase in radio listening fees, and exempt from it listeners in areas in which, because of his department’s failure to provide adequate broadcasting strength, the reception is not even reasonable? These areas take in the eastern and Murchison gold-fields, and the whole of the north-west of Western Australia, including Geraldton.
– The matter ~e increased licence-fees will be discusser shortly during the budget debate, and I shall reserve any comment upon it until then. The Australian Broadcasting Control Board has for some time been giving attention to the poor reception in certain areas of the north-west, and the gold-fields, of Western Australia, and is developing plans for effecting certain improvements. J have not the details of those plans in my mind now, but I shall obtain them and give them to the honorable member.
– My question to the Minister for the Interior is based on a report which, I understand, was issued from the Department of the Interior, to the effect that satisfactory experiments have been carried out in the control of mistletoe in eucalypts. Has the department investigated the control of mistletoe in that very valuable fodder tree in New South Wales, the kurrajong, and can it be controlled as effectively as in the eucalypt?
– It is quite true that in conjunction with the Commonwealth Scientific and Industrial Research Organization, the Forestry and Timber Bureau has been carrying on experiments in the eradication of mistletoe, but the fodder tree to which the honorable gentleman refers is to be found mostly in New South Wales. In order to avoid duplication of effort, and therefore waste of money in overlapping research, the task of eradicating mistletoe from the kurrajong is being dealt with exclusively by the New South Wales Forestry Commission. 1 am advised that the experiments have not gone far enough, or long enough, to indicate what chance of success there may be.
– I ask the Acting Prime Minister whether any steps have been taken to fill the vacancy on the all-party constitution committee caused by the resignation of Mr. Justice Spicer. Will he give an assurance that, if delay in filling the vacancy is likely to delay the committee meeting and getting on with the job, the vacancy will be filled promptly?
– The matter is under consideration. I. assure him that there will be no undue delay and that his wishes will be met as far as possible.
– I ask the Minister for External Affairs whether any arrangement has been made to hold another meeting of the Anzus Council before the end of the year.
– Tentative arrangements have been made for an Anzus Council meeting to be held in Washington about the middle of November of this year. I say that the arrangements are tentative, because the proposed date is still a long way ahead, and also because the American presidential election will be held on 6th November. Nevertheless, I hope that those tentative arrangements will become firm.
– I ask the Minister for Defence Production whether the Government contemplates dismissing skilled engineers from the Commonwealth establish ments at Maribyrnong, Victoria. If so, will the policy of “ last on, first off “ apply when retrenchments are being made? Is it true that, irrespective of the length of service of single men, married men who derive income from other sources are being given preference over them?
– As the honorable member obviously has some case in mind, I suggest that he should put his question on the notice-paper, and I shall then give him a full reply.
– Is the Acting Prime Minister aware that a statement has been made that for the present financial year it is estimated that £30,000,000 will be spent on post offices in Australia, but only about £18,000,000 on schools? While listening to a broadcast from the Melbourne Trades Hall on Sunday last, I heard the Leader of the Opposition make great play on these points in an attempt to build up a case against the Australian Government. Will the Acting Prime Minister state the views of the Government in this connexion?
– In the first place, £30,000,000 is not allocated for post office buildings in Australia. The amount of £30,000,000 that appears in the budgetpapers is an estimate of the overall capital expenditure incidental to the Postal Department, including telephone equipment, wireless equipment, cables, trunk-line extensions and the like. As to a comparison of that £30,000,000 with an amount of £18,000,000 that is being expended by the State governments on schools, the amount that the State governments allocate for expenditure on schools or anything else within the ambit of their responsibility is entirely for themselves. An amount is allocated to each State by the Australian Loan Council, upon which the State governments exercise a preponderance of influence, and it is for each State to decide the. distribution of the money allocated to it.
– Can the Minister for Territories inform the House whether the Government intends to hold a by-election to fill a vacancy on the Northern Territory
Legislative Council caused by the resignation some months ago of one of the elected members for Darwin? If it does not, does it intend to bring forward the date of the general election for the council, which is due to be held in May next year, so that it will not be necessary to hold a by-election?
– The matters to which the honorable member’s question refers are under consideration. I am awaiting the result of further discussions with the Administrator on these matters.
– My question, which is directed to the Minister for Supply, deals with tenders lodged for the supply of various items required by the Department of Supply. In Western Australia there are a number of well-established factories which are quite capable of supplying goods, for which they have submitted tenders, at competitive prices. These factories would be greatly assisted and the present temporary unemployment reduced if some substantial contracts were let to Western Australian firms. Can the Minister indicate whether due consideration may be given to the points which I have made, and some priority be approved for tenders emanating from Western Australia for the supply of Commonwealth requirements?
– The honorable member will understand, I am sure, that the system of public tenders which operates with respect to government requirements is essentially a competitive one in which the dominant factors are, of course, lowness of price and high quality of goods. It is essential to public confidence that we maintain those elements in any tendering system. At the same time, I well remember that some years ago, when there was some temporary recession, we did our best to adjust our tendering system to assist industry during a difficult period. 1 cannot speak in regard to Western Australia without examining the situation in more detail, but I assure the honorable member that I will ask my officers to examine tenders that come from Western Australia to see whether, within the principles I have enunciated, we can do something which may assist the situation in which some Western Australian firms find themselves at present.
– My question is directed to the Minister for Immigration. At the annual meeting of the Victorian Scottish Union, delegates said that they had received complaints that potential Scottish immigrants had difficulty in migrating. Will the Minister extend to British immigrants the same facilities to migrate as are granted to European immigrants?
– The Government not only extends the same facilities to British immigrants as it extends to European immigrants, but indeed goes very much further, lt provides 85 per cent, of the fare of British immigrants who desire to come to Australia. There has never been any limit placed on the number of immigrants from the British Isles coming to this country and, to the extent that shipping is available, the Government books all available passages over and above those required by full-fare paying passengers.
– There is a special boat.
– Yes, we have our own ship, “ New Australia “, which is exclusively reserved for the carriage of immigrants from the British Isles. Unfortunately, that ship has been taken off the run in recent months because of the trouble over the Suez Canal. However, the honorable gentleman, whose interest in the increase in the number of British immigrants to this country is appreciated, will be glad to know that Australia has been successful in attracting more British immigrants than have New Zealand, Canada and South Africa over recent months.
– The honorable member wants to know whether the Minister is anti-Scottish.
– No, I am nol, nor am I anti-Irish. 1 think we could find a place for all of them in this country. If the honorable gentleman wishes to increase the number of British immigrants over the number that the Government is able to bring here under its auspices, 1 am sure he will use his best efforts to encourage people to sponsor British immigrants. That is the only requirement we make for immigrants over and above the number we can cope wilh under our own governmentnominated scheme.
– I ask the Minister for Civil Aviation whether his attention has been drawn to the report of an accident in Melbourne when the pilot of a commercial aircraft died at the controls of an aeroplane. In view of this most unfortunate incident, 1 ask the Minister whether he is quite satisfied that the Department of Civil Aviation takes adequate precautions to ensure that pilots of commercial, aircraft are physically fit.
– 1 am sure that all honorable members will be disturbed to know of the unfortunate death last night of a pilot in command of an airline aircraft at Essendon. In reply to the question of the honorable member regarding medical standards, every airline pilot is required to pass a very strict medical examination every six months. The examination is carried out by doctors who have a singular knowledge of the requirements of aviation, and the standards are those set by the International Civil Aviation Organization, which is a world-wide body. In addition to the regular six-monthly checks, there are interim checks. For instance, if a man is away for seven days he must get a doctor’s certificate before he is allowed to fly again. All the major companies have their own medical officers who superintend these things, but in addition, the Medical Director of the Department of Civil Aviation, Dr. Lane, checks every medical certificate that is issued by a doctor anywhere for a pilot. Having made an examination of this case as quickly as I could to-day, I am assured by medical men that this kind of thing just cannot be guarded against. A man may go through a strict medical examination and display nothing wrong at all. Yet, an hour later, he may pass away. The captain who died last night was, of course, accompanied by a first officer. In every case on the airlines the first officer is quite competent and is endorsed on the type of aircraft being flown. The late Captain Ray had had about 1 1,000 hours flying. His co-pilot, the first officer, Mr. Cole, has had some 7,500 hours, including 1,000 hours on the DC-6 in which he was flying. It has been suggested that had the captain collapsed twenty minutes or half an hour later there might have been trouble, but even had that been so, the first officer could have taken over control of the aircraft. He is fully licensed and capable of landing the aircraft. That is why he is carried. It is an added safety precaution. I think that the honorable member may rest assured that every possible eventuality is covered by the requirements of the medical standards of the department.
– Can the Minister for Defence Production say whether it is a fact that a dismissal policy is to apply at the naval dockyard at Williamstown, Victoria, the Commonwealth ordnance factories and the Commonwealth aircraft factories? If it is a fact, will the Minister give an assurance that the Commonwealth Employment Service will be so utilized that no man will be dismissed until the Commonwealth Employment Service is able to place him at some other factory, private or governmental, where he will receive a wage equivalent to that being paid at the government institution from which he is dismissed?
– I have no knowledge of the Williamstown dockyard, which is outside my jurisdiction. With regard to the Commonwealth ordnance factories, I can give no such assurance as that requested by the honorable member.
– Has the attention of the Minister for Primary Industry been drawn to the mounting economic cost of the noogoora burr infestation, particularly in Queensland and New South Wales? Was biological control of the burr discussed at the recent conference of the Australian Agricultural Council? If so, was any recommendation made from the council to the Australian Government concerning the release of two insects that will attack and destroy this pest?
– Many people have made representations to me relating to the control of the noogoora burr, particularly the honorable member who has just asked this question. Therefore, the Department of Primary Industry and the Commonwealth Scientific and Industrial Research Organization have been examining ways and means by which the noogoora burr could be attacked and ultimately destroyed. It was discovered that there were two stem beetles, one in India and the other, I think, m South America that probably could attack the burr and destroy it. Accordingly, the problem was raised at the recent meeting of the Australian Agricultural Council, but due to the fact that some of the Ministers for Agriculture thought that if the beetles were let loose they probably could attack other animal and plant life, certain precautions were asked for before the Commonwealth Scientific and Industrial Research Organization would be permitted to enter into full-scale operations. The director of the organization has given an assurance that the beetles will be kept in quarantine and used only when it is found, first, that they will attack only noogoora burr and, secondly, that the danger to other plant and animal life is not great or is negligible. I do assure the honorable gentleman that the economic implications of this matter are well understood and that his representations have received the most thorough consideration.
– I direct a question to the Acting Prime Minister. Is it a fact that to the other records associated with record occupancy by the right honorable member for Kooyong of the position of Prime Minister he has now added that of having made the longest and most leisurely overseas journey, in time absent from Australia, distance travelled and countries visited, and one that has been easily the most costly and the least productive?
– It is quite true that the right honorable member for Kooyong, the Prime Minister of this country, has added another record to his long and meritorious career. Every Australian who has an appreciative outlook realizes that, and recognizes that our Prime Minister has been particularly selected on account of his outstanding statesmanship, leadership, advocacy and ability, to lead a mission on the most delicate subject that has confronted the world for many a day. He has carried out that mission with distinction to the eighteen nations which selected him, and to Australia in particular.
– For some considerable time I have been requesting the PostmasterGeneral’s predecessors to provide a decent post office for Huonville, which is the centre of the famous apple-growing area of the Huon valley in Tasmania. Will the Minister give consideration to enabling a proper post office to be erected in this town, in conformity with its importance, as the existing structure is totally inadequate?
– The Postal Department is at present engaged on the task of preparing its capital works programme for this year. That preparation will be finalized, of course, when the allocations are finally determined in the forthcoming debate on the Estimates. Offhand, I cannot tell the honorable member the position regarding Huonville, but I shall make inquiries and let him know
– I direct a question to the Minister for Labour and National Service, as the Minister in charge of the Commonwealth Employment Service. The right honorable gentleman would have noted that Victorian members have expressed concern at the impending dismissals from the defence production establishments at Maribyrnong and Essendon. Will he take steps to alert the Commonwealth Employment Service to ensure that the persons -who are displaced have employment on offer before they are released from the Commonwealth service?
– A somewhat similar, in fact almost precisely identical, question was put to my colleague, the Minister for Defence Production, a moment ago. While we are doing what we can, in any case where it appears that some retrenchment is inevitable, to ensure that those persons who are being displaced from these establishments will be found most suitable employment, I point to the answer given by my colleague, in which he said that the Government, having regard to its financial obligations in these matters, is not in a position to give any guarantee that persons can be retained unless alternative employment is found for them. Indeed, when one listens to these questions, one wonders what the Opposition must have in mind in periodically advocating a drastic cut in defence expenditure. Even the task of retaining defence expenditure at the same figure as last year has required, inevitably, some retrenchment in government defence establishments. However, the Government’ has been able to maintain a general level of prosperity and buoyancy throughout the economy and, as a result, there would appear to be little difficulty in having any persons displaced from a government establishment suitably and promptly employed in alternative work elsewhere.
– By way of preface to a question which I address to the Minister for External Affairs in his capacity as Minister in charge of the Commonwealth Scientific and Industrial Research Organization, I should like to draw the right honorable member’s attention to the increase in efficiency in agricultural and pastoral industries, due in many cases to intensive development of the land. This development has brought with it new problems which, at times, hinder further progress. In view of the shortage of veterinary officers and of the difficulty of State departments of agriculture in attracting sufficient men, would the Minister recommend that the advantages of a veterinary school at Australia’s premier university - Melbourne - be investigated since, at the moment, any one wishing to take this course must live in Sydney?
– I have not heard any proposal lately for the starting of a veterinary school at Melbourne University. I understand that such a school was established there in the past and faded out of existence about twenty years ago. I think there are veterinary schools at Brisbane and Sydney universities, but 1 believe that they are the only two in Australia. I also believe it is a fact that there is a very considerable shortage of veterinarians in Australia which, bearing in mind the very large animal population of Australia, would seem to be wrong. I do not claim any specific or professional knowledge of this matter, but I have always understood that there is not a great pressure of people to enter veterinary courses at universities. I have heard that the reason for that is the rela tively inadequate recompense that veterinarians get compared with other professional men when they get out into the world. So I think it is not merely a matter of re-starting a new veterinary school in Melbourne. It would be a question of whether sufficient people would propose themselves for the veterinary course to make such a course worth while. I have no doubt that, if there were sufficient applications, Melbourne University would give consideration to starting such a course again. I think that the same position exists, although in a different degree, in respect of engineering. We are very short of engineers in Australia - again, I believe, because the recompense for engineers in practice does not prove to be adequate in comparison with the recompense in other professions.
– We have plenty of political engineers.
– Not enough. However. I think that that is all the information I can give to the honorable member for Wannon.
– I desire to ask the Treasurer a question which arises out of the answer that he gave to the honorable member for Phillip. I ask the right honorable gentleman whether he disapproves of the policy of restricting loans for the erection and purchase of homes upon which, as he just told the honorable member for Phillip, the central bank and the trading banks have mutually agreed. If so, will be exercise the powers reposed in him by the Banking Act 1945 and the Commonwealth Bank Act to ask the Commonwealth Bank to alter the policy and, if the bank refuses to alter it, will he direct the bank to alter it?
– I shall answer the last part of the honorable member’s question with the answer to the first part. The answer is, “ No “.
– I desire to ask the Minister for Defence Production a question. In view of the reported statement that unemployment exists in the Commonwealth munitions factories of Victoria and in view of the urgency of obtaining skilled tradesmen for the purpose of proceeding with the tooling up for the production of the new service rifle, the FN .30, will the Minister use the services of his department and those of his colleagues to see to it that those skilled people in Victoria whom it may be possible to use for the purpose of accelerating production of this weapon, which has been delayed for approximately two years, will be transferred to Lithgow with that object in view?
– The honorable member should be well aware that the FN .30 rifle cannot be manufactured by any organization in Australia that we could use at the present time. I have explained to him time and again that we cannot put the rifle into production until we get the sealed drawings. The drawings of the rifle, which was conceived in Belgium, are being altered from the metric system to the British system in Canada, and until the changes are approved the drawings will not be sealed. The sealed drawings have been awaited for a much longer time than we originally expected we should have to wait. We have purchased a number of the rifles, and we have hand-fabricated certain parts at Lithgow. We have placed on order, and are in process of installing, certain machines, and the programme will be given added impetus when the drawings are available. At the present time, we are equally as far advanced as, if not further advanced than, the United Kingdom Government is in the establishment of an organization for the production of the FN .30 rifle. I have explained this to the honorable member often, and I hope he will now take notice of what I have said. With respect to the skilled workers of whom he speaks, we shall do our best to retain in employment those we have, keeping in mind the reduced defence expenditure.
– I direct to the Minister for the Army a question concerning the drill hall which the Department of the Army proposes to build at Gosford, in New South Wales, lt has been suggested that, owing to the commitments of the Department of Works, tenders for the construction of the drill hall should be called locally. Has a decision to call tenders locally yet been made? If not, will the Minister give sympathetic consideration to the suggestion?
– The honorable member has been pressing this little matter for quite a long time. 1 admire his persistence. This item was placed on the current Estimates, but I am not yet in a position to say that tenders have actually been called. However, I shall follow the matter up and do my best to ensure that, ultimately, the honorable member gets his wish.
– I address a question to the Minister for Immigration. In view of the intimation given to the House that the immigrant ship “ New Australia “ has been taken off the run between the United Kingdom and Australia, will the Minister inform me what use is being made of the ship and when it is expected that it will be restored to the purpose for which it was originally acquired?
– The ship was made available at the request of the United Kingdom Government for the transport of troops. It is not expected that it will be off the run between England and Australia indefinitely, but I cannot say precisely how soon it will be returned for immigration purposes.
– ls the Minister for Territories aware that a group of schoolchildren is at present in the Territory of Papua and New Guinea on a visit sponsored by a Melbourne newspaper? Will the Minister consider extending these visits of secondary school students in order to popularize and bring to the knowledge of the younger generation the potentialities of the territories, and at the same time, encourage young people to take up the numerous cadetships available in the service of the Territory?
– This particular tour of the Territory of Papua and New Guinea by a group of school children was organized and sponsored by a Melbourne newspaper which, to my mind, showed very commendable enterprise in doing so. We, governmentally, were very happy to accord all the facilities we could and to give the project our blessing. I do not think that at this stage, when we have so many demands on the money available to us, we would ourselves finance a project for school children’s tours of the Territory, but if any organiza tion, following the example of that Melbourne newspaper, were to undertake the organization and expense of such tours, we would certainly accord all the facilities we could and do everything we could to help it to promote such visits to the Territory.
– Is the Acting Prime Minister aware that the Premier of Western Australia has tabled correspondence that has passed between his Government and the Commonwealth relative to the unemployment position in Western Australia, and that the Premier has no objection to that correspondence being tabled in this Parliament? In view of this, will the Acting Prime Minister arrange to table the correspondence? Is the right honorable gentleman also aware that, unless financial assistance is provided, unemployment relief works will stop in Western Australia? Will he take immediate steps to make financial assistance available in accordance with the decision of the Premiers conference or, alternatively, will he arrange for Commonwealth public works in Western Australia sufficient to employ 3,000 men, which was suggested as an alternative by the Premier of Western Australia?
– On the assumption that the honorable member for Stirling is speaking on behalf of the Premier of Western Australia, I shall give the House a few facts in connexion with this matter. This is a case, if ever there was one, of looking a gift horse in the mouth, of biting the hand that feeds you, or even of kicking a policeman on the shins and asking him to show you the way home. It is regrettable that the honorable gentleman has been selected as the representative of Mr. Hawke, the Premier of Western Australia, in this matter. The position is that, quite voluntarily, at the last Premiers conference, during consideration of income tax reimbursements to the States, I was so impressed with the case advanced by Mr. Hawke, on behalf of Western Australia, that I obtained the- permission of the other Premiers for the- Commonwealth to give special financial consideration to the financial disabilities of Western Australia - many of them brought about by the Western Australian Government itself - and for the Commonwealth to do so out of its own resources without interfering with the existing general allocation of finances, or inhibiting in any way that allocation between the States. The position was left at that. The Premiers agreed that? special consideration could be given along the lines 1 have mentioned. No assurance was given as to the nature of the assistance or, indeed, as to the amount of assistance. The Premier of Western Australia was requested to put his case before the Government in order that 1 could put it before my Cabinet. Certain matters were received, and certain provisions have been carried out by the Cabinet, but we are a responsible government, and there is a responsibility on the Western Austraiian Government with regard to its own financial position. As I expected to be asked such a question as this. Mr. Speaker, I have prepared a note on the subject. 1 say that my colleagues in the Government are not unwilling to assist Western Australia, but they insist that the primary responsibility is on the State Government itself to use some means of remedying its own financial situation. Further, Cabinet will not decide the amount, or form, of help it will give until it knows what the Western Australian Government proposes to do. I have requested the Western Australian Government to supply me with information about what it intends to do itself with regard to its own budgetary position. Until we receive that information, we shall reserve our decision. We are noi here to dole out the money of the Australian taxpayers in an irresponsible way.
– I address a question to the Minister for Immigration. As the Minister probably is aware, the Barwon River is at present in flood. The immigrant hostel situated on Belmont Common at Geelong is threatened by the flood. As this threat occurs each time the Barwon River floods, and as the occupants of the hostel have had to be moved on at least one previous occasion, will the Minister give serious consideration to arranging for the hostel to be moved to a more suitable site, so that its usefulness will not be continually impaired?
– I appreciate the importance of the question put to me by the honorable gentleman. I shall make inquiries- immediately to see whether it would be practicable to adopt the suggestion that he has made.
– Has the Acting Prime Minister seen a statement by the Commonwealth Statistician that, compared with 1947, twice the number of married women are employed in industry to-day? Does he consider this to be a desirable social trend? Does he consider that it is due to the fact that, in the present condition of the economy of the country, both husband and wife must work if they want to preserve a frugal standard of comfort?
– I did see the figures on that subject that emanated from the Commonwealth Statistisian. I think they prove that, under this Government, encouragement has been given to laboursaving devices for the home that have enabled housewives to go into industry.
– Has the Minister for the Interior had an opportunity to visit and inspect the Olympic Village, at Heidelberg, in Victoria, where athletes who come here for the Olympic Games will be housed? Can he say whether, particularly in the siting of the homes in that village, in the mingling of homes of different types and styles of construction, in the design of the homes themselves, in the fittings that are provided and in the wise use of colour, there are lessons to be learned which, if applied to the Australian Capital Territory, might obviate a repetition of the drab types of construction which are to be seen in some of the suburbs here? If the Minister does think that there are such lessons to bc learned, will he arrange for those responsible for the planning and development of the National Capital, particularly those responsible for the design and siting of homes, to have an opportunity to inspect the Olympic Village?
-Unfortunately, I have not had an opportunity yet to inspect the Heidelberg settlement, but I hope to do so in the course of the next few weeks. It may well be, as the honorable member has said, that there are lessons to be learned there in the construction and siting of homes, as weil as in the avoidance of monotony - which, unfortunately, has become all too common in the Australian Capital Territory. I assure the honorable gentleman that the problem that is weighing on his mind is weighing on mine a little more heavily, and that I am working on it very seriously at the moment.
– My question is addressed to the Minister for Trade. Is it a fact that, in an address to the Chamber of Manufactures at its annual dinner last week, the Minister made the main theme of his talk the need for the increased export of the products of secondary industries and declared that in some instances he would ask manufacturers to export without any profit? If so, will the Minister give to the House more precise details of his proposal and state at approximately what time during the evening’s proceedings he was invited to speak? Finally, will the Minister state whether he seriously believes that an appeal to manufacturers will result in their acceptance of such a plan?
– lt is true that 1 was invited to be the principal speaker - therefore, I spoke first - at the annual dinner .of the New South Wales Chamber of Manufactures last week. 1 pointed out then, as I have been pointing out to manufacturers at other gatherings over a period, that manufacturers are to-day the principal importers into Australia; that they, more than any other section of the community, are embarrassed by the balance of payments problem, which requires import restrictions; and that they must now assume a greater responsibility for earning export income. J have put it to manufacturers at open meetings as well as at private conferences that, in my judgment, there is opportunity for manufacturers, moved both by the national interest and by self-interest, to earn a greater export income - in some cases, even on a bare cost basis. T am delighted to inform the House that T have received nothing but approval of that approach to manufacturers. At least one great manufacturing company in this country has undertaken, with Government assistance in negotiations, to explore further export avenues. That company informed my officers that, over the telephone, it was able to arrange with the producers of at least one-half of the components of its final product to supply components for export on a no-profit basis. 1 compliment the Australian manufacturers upon their public spirit in this matter.
– Has the Acting Prime Minister noticed that question No. 1 on the notice-paper, appearing in my name and directed to the Minister for Supply, has remained unanswered for four months? As the Minister for Supply, apparently, is having some difficulty in answering this question, will the Acting Prime Minister confer with his colleague and see whether, between them, they can furnish the information sought?
– I will answer the question. I am delighted to be able to tell the honorable member for East Sydney that the answers to his questions are “ Yes “, “ Yes “ and “ No “.
– by leave - Last week, the Leader of the Opposition (Dr. Evatt) asked me to make a statement to the House as a result of allegations made in the Senate by Senator McKenna. Honorable members will be aware that Senator McKenna asserted that there had been “ a disgraceful leakage of the contents of the budget “. He gave as proof of his assertion an advertisement that appeared in the “Sydney Morning Herald “ of 31st August, 1956 - the day after the budget had been presented - which referred to the Government’s decision to increase the amount deductible for taxation purposes in respect of life assurance premiums to £300 per annum. As I said in my reply to the right honorable gentleman last Thursday, I was very disturbed at this allegation. I approached the general manager of the “ Sydney Morning Herald “ for information about the advertisement in question. The general manager, in a letter dated the 7th September, 1956, advised me as follows: -
About 12.45 p.m. on Thursday, August 30, Rodney H. Evans Advertising Pty. Ltd., who are advertising agents for the Legal and General Assurance Society Limited, supplied us with alternative advertisements. In one advertisement there was no reference to the Government’s decision to increase the personal tax allowance for life assurance premiums. The second advertisement included a paragraph commencing “ The Government’s decision to increase the personal tax allowance for life assurance premiums to £250 per annum . . .”
The Agency informed us that one or other of the advertisements supplied would be used and that they would instruct us which was to be used later in the evening. Our Advertising Department asked to be informed by 8.30 p.m. or as soon as possible afterwards.
Shortly after 9 p.m. an executive of the agency called a; our office and made a correction to the proof containing the reference to £250. He altered this to read £300. He then instructed us that, of the two advertisements, this was the one to be used.
I would also refer the House to a statement published in the “ Sydney Morning Herald” of the 8th September, 1956, by the manager of the Legal and General Assurance Society Limited, Mr. C. D. Sharp. I quote from that statement -
Mr. Sharp said last night that for some months representations had been made by many people for an increase in life assurance relief and for taxation concessions for the self-employed.
Naturally we hoped for a favourable change, and decided to reserve space in “ The Sydney Morning Herald “ for a suitable announcement should our anticipations prove correct he said.
Our original intention was to insert an advertisement in Saturday morning’s “ Herald “ but our advertising agents suggested that we should produce alternative advertisements for Friday’s newspaper which could quickly be modified in accordance with the Budget.
The announcement on the taxation concessions for life assurance was broadcast at approximately 9.15 p.m. on Thursday, and the advertisement was selected and the wording appropriately modified.
The society had no knowledge of the actual form it would take beforehand, and there was no leakage from any source whatever.
If there had not been any announcement affecting life assurance, an advertisement had been prepared to publicise our new building in Bligh Street, Sydney.
While we naturally regret the suggestion that a leakage may have occurred, this sequence of even.s was strictly adhered to, and we have proofs of the advertisements on file for further verification if this is required. lt will surely be obvious to all honorable members that the Legal and General Assurance Society Limited has in this instance shown some initiative in the preparation of its advertisement. There is absolutely no evidence of the disgraceful allegation to which Senator McKenna referred. He has reflected on not only the members of the
Government, but also a few trusted officers in whom the Government has every confidence. I hope he will prepare himself more adequately before making such serious charges again.
– by leave - From the very statement of the right honorable the Treasurer (Sir Arthur Fadden) it is reasonably clear that a further concession in respect of insurance premiums was anticipated by the company in question. It is clear that the company drew up its advertisement provisionally, on the basis that the concession would be extended to £250, and that when the amount turned out to be £300 the company issued instructions that it was to be changed accordingly. The company’s advertisement appeared on the morning after the presentation of the budget and so the company obtained that advantage over every other insurance company in Australia. The right honorable gentleman has criticized Senator McKenna quite unfairly. Senator McKenna made a perfectly fair comment on the matter and I ask the Treasurer to look into the other two pieces of evidence given by the honorable senator regarding budget leakages. That should be done.
Sir ARTHUR FADDEN (McPhersonActing Prime Minister and Treasurer). - by leave - The right honorable gentleman knows, as does every one else who has ever been in government, that before a budget is brought down all kinds of speculation, anticipation, preparation, deputations and conferences are indulged in. The newspapers are invariably full of predictions of what the pensioners will get, or will not get, by how much the pay-roll tax will be reduced, and so on. There has been enormous pressure on me, as Treasurer, from all sections of the Australian community, seeking alleviation in every possible avenue of taxation. I could show the Leader of the Opposition a compendium of the representations that have been made on this subject. Surely to goodness a person cannot be accused of obtaining information because he anticipates what might happen and has the initiative to prepare something that will be useful in the event of his being correct.
– What about the postal charges?
– Did the honorable member not read in the metropolitan newspapers leading articles advocating an increase of postal charges?
– They did not do that.
– One has not to be a clairvoyant to guess some of these things. As for the making of inquiries into leakages,I may say that there are always alleged leakages, and that they worry the federal Treasurer more than they worry any one else. I know that they have worried Labour Treasurers just as much. These anticipations cannot be avoided. Human nature is human nature and inevitably there is all sorts of speculation, pressure and anticipation. Only the final document proves whether they are right or wrong.
-I have to inform the House thatI have this day issued a writ in connexion with the by-election for the Barker Division, and that the dates fixed were those announced to the House on 4th September.
Motion (by Mr. Davidson) agreed to -
That leave be given to bring in a bill for an act to amend the Post and Telegraph Rates Act
Bill presented, and read a first time.
– by leave - I move -
That the bill be now read a second time. The purpose of this bill is to amend the Post and Telegraph Rates Act 1902-1951 as from 1st October, 1956, in order to adjust certain postal and telegraph rates and provide for the additional revenue required to offset the inescapable, higher costs incurred by the post office in the provision, operation and maintenance of its services.
As honorable members will recall, it is now more than five years since Parliament approved a variation in the charges. During this period there have been progressive increases in costs due to factors which lie entirely outside the department’s control.
Nevertheless, the tariffs have not been raised, except that in 1955 the public telephone fee of 2d., which had been in force for many years, was increased to 3d.
Cost of living adjustments alone have since July, 1951, when the present rates were fixed, added almost £12,000,000 annually to the wages bill of the post office. Marginal adjustments in 1954 and 1955 and the recent basic wage increase have added a further £6,000,000 a year. These levels of expenditure were increased still more by consequent higher costs of materials which the department uses in enormous quantities. Stores, freights, motor vehicles, canvas and the hundred and one items needed to operate the largest business in Australia all rose in price over the period. In addition, the post office has had to pay more to those contractors who carry its mails by road, rail, air and sea.
All these factors had their inevitable effect and, in the aggregate, have added more than £21,000,000 to current yearly costs. This, of course, is an experience which the post office has shared with many other businesses, both public and private, but there has been, in the case of most of these bodies, a continuous process of price revision to keep pace with costs.
As 1 have already indicated in my annual report for L954-55, the inescapable upward movement, in costs must have resulted in extremely heavy deficits but for the operation of two major factors. The first has been a marked growth in business with consequent expansion of revenue. The second has been the constant and unremitting, attention given by officers at all levels to- efficiency and maximum output. Staff loading is carefully determined in relation to the volume of traffic offering and the assets to be maintained; techniques, developed’ as the result of experience here and overseas, are applied to ensure that no excess staff provision is made, procedures are streamlined and mechanical aids are used over a wide field of activities.
As a result of the initiative of post office engineers great improvements have been made in letter sorting methods and in other mail-handling plant. Extensive use has’ been made of modern earth-moving equipment, including some specially designed and developed by post office staff. These areexamples of the manner in which economies have been made and work expedited. Output has definitely improved as the result of these positive measures, and standards of. service have also risen. On the staff side, the number of employees in the post office has increased by 10 per cent, in the past four years, whereas actual business has increased by 34 per cent, in the same period, and. in addition greatly accelerated capital works programmes have been carried out.
I am satisfied from my observations and discussions since I assumed control of the department that every endeavour is being made to ensure economical and effective operation, that there is a close alinement between staff levels and work loads, and that expenditure is kept at a minimum consistent with the provision of service to the public. However, Mr. Speaker, I am also convinced that there are limits to the capacity of any great public utility to absorb substantially increased costs without adjusting its charges, unless it is to operate at a heavy loss or seriously curtail the provision of its necessary and vital services.
Honorable members will be aware that, during the period when, post office charges were more or less static, public utility and practically all other charges have risen. For example, electricity and gas charges over the Commonwealth as a whole have increased on the average by nearly 40 per cent., while tram and rail fares and rail freights have, in practically all States, gone up by a substantially higher percentage. The proposals envisaged in this bill, coupled with the higher telephone charges to be made by regulation, will, overall, involve an increase of only 9 per cent., even allowing for the adjustment in the’ public telephone fee last year.
In the light of the foregoing, Mr. Speaker, the Government has reluctantly reached the conclusion that the users of post office facilities should be required to bear a larger proportion of these increased costs, rather than allow the burden to fall’ on the general taxpayer. Due regard has been paid in the drafting of the proposals which I now put before the House to the accepted principles upon which past charges have been based. The bill, therefore, continues generally the policy which has been in force over many years of providing communication services in country areas on favorable terms to aid decentralization of industry and of population. lt must also be borne in mind that there has to be continued expansion of the services of the department, entailing substantial capital expenditure each year. The Government, in addition to bridging the gap between increased costs and revenue by a moderate rise in charges, will continue with a soundly based programme of new postal, telephone and telegraph works, with due regard to the need for a balanced use of national resources over all sectors of the economy.
The bill, Mr. Speaker, provides for the following revision of rates: -
Letters and lettercards: The existing rate of 3½d. for the first ounce will be increased to 4d. The charge for each additional ounce will remain at 2½d.
Postcards: The existing charge of 3d. will be increased to 4d.
Commercial papers, patterns, samples and merchandise: The existing rate of 3d. for the first 2 oz. will be increased to 3½d. The charge for each additional 2 oz. will remain at 2d.
Printed matter (including printed papers, circulars, catalogues, and books, periodicals and newspapers not registered at a general post office): The existing rate of 3d. for the first 4 ounces will be increased to 3½d. The charge for each additional 4 ounces will remain at 2d.
Telegrams: The base rate for ordinary telegrams not exceeding twelve words will be increased from 2s. 3d. to 2s. 9d. where the offices are not more than 15 miles apart, and from 2s. 6d. to 3s. in other cases. The charge for each additional word will be raised from 2d. to 3d. Urgent telegrams will continue to be charged double the rates for ordinary messages.
The act which this bill is to amend covers the principal postal and telegraph charges. The machinery for revising tariffs for other services provided by the post office is partly by regulation and partly by executive action. So that honorable members may be acquainted of the directions in which it is proposed to alter certain telephone and other charges, I have circulated statements for their information. As these proposals are not covered by the bill, I do not propose to refer to them in detail now but will make any detailed explanations honorable members may consider necessary during the general budget debate. I also do not propose; Mr. Speaker, to comment at length on the proposals in the bill, which are self-explanatory.
The overall postal proposals are, I feel, quite reasonable in the light of movements in costs. They amount broadly to an extra ½d. on letters, commercial papers and printed matter, irrespective of their weight, but the postage on registered newspapers, periodicals and books will not be increased. The telegraph service has been equally affected by inescapable higher costs. When rates were raised in 1951, the PostmasterGeneral, the honorable member for Richmond (Mr. Anthony) made it clear that the increase in tariffs then proposed would be insufficient to meet the full operating costs but that the Government had paid regard to the value of the service and its wide use by the general public. The same policy is being applied on this occasion. I would also like to emphasize, Mr. Speaker, the complete necessity of the proposed increase in the charges. Despite every effort on the part of the administration, the department has no possible chance of balancing its budget without raising some rates unless it evaded its real and definite obligations to the community to provide services of reasonably adequate scope and quality.
The proposals, including those which will be brought into force by regulation or executive action, are estimated to bring in £5,500,000 extra revenue in the current financial year. Of this amount, postal services are expected to provide £2,100,000. telephone services £3,150,000 and telegraph services £250,000. For a full year the total yield would be £7,250,000. I commend the bill to honorable members.
Debate (on motion by Mr. Calwell) adjourned.
Motion (by Mr. Davidson) agreed to -
That leave be given to bring in a bill for an act to amend the Broadcasting Act 1942-1954, as amended by the Broadcasting and Television Act 1956, and for other purposes.
Bill presented, and read a first time.
– by leave - I move -
That the bill be now read a second time.
The purpose of this bill is to increase the ordinary fee for broadcast listeners’ licences from £2 to £2 15s. a year in order to bring revenue more into line with expenditure. When the fee was raised from £1 to £2 on 1st January, 1952, an important alteration was made in the conditions. Previously, a separate fee of 10s. had to be paid for each additional broadcast receiver, but provision was made in the Broadcasting Act to provide for a single licence to cover any number of sets in the one family circle, including portable receivers and those installed in motor vehicles. It is not proposed to disturb these conditions.
Of the total of just over 2,000,000 licences now in force, a small number - about 12,500 - relate to receivers in areas which are more than 250 miles distant from a national broadcasting station. The range of selection of programmes in these outlying localities is very limited, and it is for this reason that a reduced fee of £1 8s. is now charged. It is not intended to increase this. Certain classes of pensioners, as already specified in the Broadcasting and Television Act, enjoy a concessional fee of 10s. in areas within 250 miles of a broadcasting station and 7s. elsewhere. Altogether, there are approximately 171,000 such licences. No increase in the current fees will be made. As is the case at present, free licences will continue to be issued to blind persons over the age of sixteen years and to persons or authorities conducting schools.
As I have said, the reason tor raising the main licence-fee is to bring revenue from broadcast listeners’ licences and miscellaneous charges closer to the expenditure incurred by the Government in connexion with the overall control of broadcasting generally and the maintenance and operation of the national broadcasting service. This margin is substantial, the estimated expenditure in the current financial year - £5.766,000- being £1,721,000 more than the total revenue anticipated.
Since the present fees were introduced nearly five years ago, there has been a progressive expansion and improvement of the national broadcasting service, with the result that there are now 69 national stations to-day, including short-wave service, compared with 57 at the beginning of 1952. There has also been a marked improvement in programmes, particularly those of bene fit to the community from the educational and cultural stand-points. Special attention has also been given to programmes for primary producers and their families. The provision of additional transmitters and associated studios in country centres, coupled with improved programmes and rising costs, has had an inevitable effect on working expenses, and the estimated expenditure by the Australian Broadcasting Commission in the present financial year on sound broadcasting alone is £3,812,000.
On the technical side, for which the department is responsible, the working costs have also grown appreciably through inescapable causes, and it is expected that the expenditure this year will be of the order of £1,826,000. The Australian Broadcasting Control Board has an overall interest in broadcasting activities. Its functions are laid down in the Broadcasting and Television Act. This year the expenditure of the board on broadcasting activities will be about £99,000. In addition, an amount of £29.000 will be spent during 1956-57 on repairs and maintenance of buildings and audit of accounts.
Despite the introduction in Sydney and Melbourne of national and commercial television services, all of which should bc operating in some form or other in the early part of November, it is anticipated that there will be an overall increase in broadcast listeners’ licences of more than 35,000 throughout the Commonwealth before the end of June, 1957. Therefore, it is estimated that the application of the extra 15s. on the full licence, as is now proposed, will produce additional revenue for the nine months commencing on 1st October ot about £1,100,000. The new fee of £2 15s., which works out at a little more than ls. a week, will still be low in relation to the listening facilities available and should not impose any hardship on listeners generally. For the reasons mentioned, I commend the bill to honorable members.
Debate (on motion by Mr. Calwell) adjourned.
In Committee of Supply: Consideration resumed from 6th September (vide page 342), 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.
.- During the financial year just concluded, this chamber was asked to consider two budgets. The first was in August, 1955, and was obviously a pre-election budget in which increases were made in the amounts payable to age pensioners and other recipients of social services benefits. In March of this year, a post-election budget was introduced and in it sales tax, income tax, petrol tax and excise charges were heavily increased to provide an additional £115,000,000 each year for the Treasurer (Sir Arthur Fadden).
In the budget now before the committee, we are asked to reimpose the savage charges levied on the people in March last, and in addition the Treasurer proposes to increase postal charges considerably. The budget is expected to show a surplus in cash of not less than £108,000,000, which will be paid to a Loan Consolidation Reserve Fund to be used as the Treasurer may wish to redeem loans or to finance loans to various State governments. I have no doubt that, in view of the buoyancy of the loan market and in view of the fact that the last loan raised by the Treasurer was slightly over-subscribed, that £108,000,000 will simply lie in the Treasurer’s coffers and will be used to boost still further this large reserve fund which is being built up by over-taxing the Australian producers in a very harsh way.
The “ little budget “ of March last was introduced by the Prime Minister (Mr. Menzies) in the presence of the Treasurer. I suggest that when the Prime Minister returns from the Commonwealth Prime Ministers conference held in London in lune last and other conferences and excursions in which he has been indulging since then, we shall be asked to consider other matters of an economic nature, which, in true Liberal policy form, will fall heavily on one, section of the people - the working class. An unbiased observer must admit that the Government not only has failed to arrest the inflationary spiral in which all Australians are caught but has only one idea in its mind to bring stability into the Australian economy, and that is forcing a reduction in wages.
That is borne out by the approach of the Acting Prime Minister to the conference with the State Premiers recently. Reports of this conference show that the Acting Prime Minister went to that conference with three thoughts in his mind. They were: Firstly, that all State basic wages be reduced to the level of the Commonwealth basic wage; secondly, that States wages tribunals abandon quarterly cost of living adjustments in the basic wages; and thirdly, that no controls of any description be introduced on prices, profits and capital issues. That is a strange reversal of form by the Acting Prime Minister, who, at the Australian Loan Council meeting held prior to the Premiers conference only a few months ago, offered an increased amount of money to the States in return for the States handing to the Commonwealth power to control capital issues. In short, it meant that, if the States were prepared to hand to the Commonwealth power over capital issues, thi Commonwealth would, in effect, buy them out and give an additional grant to the States. This suggestion was rejected by the States at the conference. Apart from wanting to be the wage dictator of all Australian workers so that a reduction in wages can be achieved, this Government has no firm economic policy. In his budget speech, the Treasurer said -
It may well be, indeed, that we are only now reaching the most difficult stage of the long struggle to control inflation.
Australia has been struggling against inflation for a long time - in fact, since 1949 - but the Government has not taken any effective measures to defeat this evil thing which has gripped so many Australians in its coils. A survey of the profits made by trading and manufacturing companies suggests that this is the bonanza period for these companies. Dividends are mounting, and the watering of stock by issuing bonus shares on which no taxation is payable is the order of the day. “ No controls “, says the Treasurer, and shows the green light to all profiteers who are making hay while the light shows green. Only recently, in the Brisbane “ Courier-Mail “, information appeared to the effect that Brisbane’s leading brewery proposed to make a bonus share issue to its shareholders, amounting to £900,000, on which no taxation will be paid. The worker pays on every penn that he earns by means of a system of taxation known as “ pay as you earn “. The tax is taken from his pay envelope before he gets it; but with the watering of stock and the granting of bonus shares to shareholders, wealthy companies and their shareholder. may escape responsibility to pay their just dues to the nation.
The pressure groups which control the coalition Commonwealth Government have sufficient power to ensure that it does not deviate from the policy of no controls and no limit to profits. It has been said that interest charges are the wages of capital. That being so, it can truly be said that this Government believes in the highest possible wage being paid, but only to capital. In 1948. the Labour Government asked the people to vest in the Commonwealth Parliament power to control rents and prices. Supporters of the Liberal party and the Australian Country party stumped the country pleading with the people to refuse to give to the Commonwealth Parliament the power being sought. As that was the period immediately after the conclusion of World War II., the people were most receptive of the voice and policy of the Liberal party and the Australian Country party :md were reluctant to accept more controls. They were told by supporters of ‘the political parties who were opposing the referendum proposals that if power were given to the Commonwealth Parliament to control those matters it would mean greater centralization of power in Canberra. The cry of the Liberal party and the Australian Country party was, “Without prices control, prices will find their own level “. That was the food they fed to the Australian public during the referendum campaign in 1948. We now know how false was the profiteers’ doctrine they expounded.
Unfortunately for the Australian people, the referendum proposals were defeated. Every State rejected the proposition advanced by the Labour party. From the moment that the referendum was defeated in 1948, inflation commenced to grip the country, and we have been gradually squeezed tighter and tighter by its grip. Despite the fact that the effects of intiation have grown more serious each year, the Government has refused to use the obvious remedy. The present Government parties promised the electors, in 1949, that if they were elected to office they would introduce an excess profits tax. We all know that the Commonwealth Parliament has no power to control prices and rents, but it has power to tax, on a higher scale, profits which accrue as the result of profiteering. By honouring its solemn promise to the people to introduce an excess profits tax, the Government would give to the profiteer the choice of reducing prices or maintaining high prices and returning some of the excess profits to the Treasury. If such a tax were imposed, I think that those who are making excessive profits to-day would reduce their prices quickly and thereby avoid having to return to the Commonwealth Treasury moneys taken through unreasonably high prices and being branded publicly as profiteers. The Government has repudiated its promise to the people, as it has repudiated many others. This promise, however, is becoming a ghost to haunt honorable members opposite.
The recent economic conference, to which all thinking Australians looked for the first effective moves to defeat inflation, was a failure. It was not, in the true sense, a conference, but a gathering of Premiers who were to be told what to do by the Acting Prime Minister (Sir Arthur Fadden) The right honorable gentleman went along to the conference with a three-point plan designed to bring about a reduction of the State basic wage to the level of the Commonwealth basic wage, abandonment of the quarterly cost of living adjustments of the basic wage, and the rejection of any proposition involving the imposition of controls in any form. The sovereign State governments, which are democratically elected on the same basis as is the Federal Government, refused to be dictated to by the Acting Prime Minister. The State governments considered that they had a responsibility to the citizens of their States to carry out the policy on which they had been elected to office. The various State Premiers had their own ideas about Australia’s economy, but the Commonwealth said, in effect, “ Take our plan or nothing at all “. The Commonwealth believes that wage justice, which half of the Australian workers are denied by the policy of this Government and that of the Commonwealth Arbitration Court, but which workers in
Labour-governed States’ enjoy, is the sole cause of inflation. In fact, the Acting Prime Minister stated, on 28th June last -
The Federal Arbitration Court, by judgment in 1933, discontinued automatic adjustments of the federal basic wage and in its recent judgment it has reaffirmed that decision. The Commonwealth Government believes that the court acted wisely in doing this - it believes that the court’s reasons were sound - and it has publicly said so. ft sees no reason to alter its views. If the Commonwealth believes that on national grounds the Court’s attitude is the right one. and it was a decision reached on national grounds, then’ the Commonwealth cannot speak wilh two oices in this field.
An examination of wages and prices in Queensland and South Australia disproves ihe contention that the automatic, cost of living adjustment is even a minor factor in the cost structure in Australia. In Queensland, where we have had a Labour government since 1915, with the exception of three years, we enjoy a very wellenforced system of prices control. The Queensland Industrial Court has never ceased to adjust, every quarter, the basic wage in accordance with the increase of the cost of living. On 3rd August, 1953. the basic wage in Queensland was £10 19s. a week, and it had risen to only £11 17s. by 23rd July last. In South Australia, where there are no automatic increases, the basic wage has remained static. In Queensland, where both prices control and automatic increases in the basic wage operate, the increase in the cost of living has been 8.7 per cent. In South Australia, where there is no automatic adjustment of the basic wage, which has remained static since 1953, the increase in the cost of living has been 9.6 per cent. So, on those figures, which are from the office of the Commonwealth Statistician, the contention advanced by so many Ministers of the Government, particularly the Acting Prime Minister and the Minister for Labour and National Service (Mr. Holt), that the automatic adjustment of the basic wage in accordance with variations in the cost of living is responsible for the inflationary spiral and the increased cost of living, is completely blasted out. These figures cannot be doubted, because they are supplied by a Commonwealth officer and are subject to investigation by any honorable member. In Queensland, where increases in the basic wage are made while the cost of living is rising, the increase in the cost of living has been less than it has been in the tory-governed State of South Australia, where wages have remained static since 1953.
It would appear from press statements that on the return of the Prime Minister another economic conference will be called. If the Commonwealth Government enters this conference with the idea of imposing its will on the State governments, this conference also is doomed to failure. I propose to quote one or two observations made by the Minister for Labour and National Service to show that he hoped to strike terror into the hearts of the State Premiers at the economic conference, which he attended in company with the Acting Prime Minister. A report in the “ Courier-Mail “ of Saturday, 18th August, 1956, reads -
The Labour Minister (Mr. Holt) said very grave consequences to employment could follow the failure of the Premiers to agree on a wage policy.
The wage policy was, of course, that the State basic wages be brought into line with the Commonwealth basic wage and that State wages tribunals abandon the making of automatic wage adjustments in accordance with the cost of living. The report continues -
Speaking in the closing minutes of the conference, Mr. Holt said there was a very real threat to employment from the wage-cost structure. “ We have practically priced ourselves out of overseas markets, even some of those for primary products “, he said. Our capacity to export is being affected.
This was the role adopted by the Minister for Labour and National Service in his attempt to frighten the Premiers of the States into accepting the proposition which the Acting Prime Minister and he were advancing at that economic conference. It has been suggested that a new conference will be called but, as I say, this will be doomed to failure if the same line is followed by the Acting Prime Minister, or by the Prime Minister on his return.
The Premier of Victoria has stated that he is not prepared to hand over any further powers to the Commonwealth. I suggest that the next conference be called with the idea of forming a joint CommonwealthStates plan to combat inflation, and that the ideas of the State governments be given consideration and not rudely brushed aside, as they were previously. The action taken by the Government during the past twelve months to restrict the importation of goods into this country with a view to effecting a balance in the values of our exports and imports has failed to achieve its purpose. In the year just concluded we failed to balance our trade by £46,000,000, and this is a disastrous state of affairs from Australia’s point of view. After bringing freight payments and other net invisible transactions into account, we had a deficiency of £221,000,000. There were certain credits from loans and capital transactions, and the net result of our overseas transactions will be that our reserves fell by £73,000,000, leaving them on 30th June at £355,000,000. The Treasurer admits that this is a most unsatisfactory state of affairs, and suggests that our export income should be increased by £200,000,000. This will be extremely difficult to do because of severe competition in the overseas markets for our primary production. The restriction of imports, while having the effect of stopping goods coming into the country, has not provided goods for the money which people have available and which they previously spent on imported goods. This means that considerably more money is available for the purchase of a lesser quantity of goods, which is a major contributing factor to greater inflation. I believe that a major effort should be made to expand our basic industries.
The Australian iron and steel industry is capable of great development and should be expanded at the earliest possible moment. This country produces the cheapest steel in the world.
– And makes the best.
– And makes the best, but it is unable to satisfy the internal market, let alone take advantage of the export market which, because of the price, must be available to the Australian manufacturer. The cost of a ton of steel imported into Australia is twice the cost of a ton of steel manufactured in Australia, lt has been estimated that for the last five years steel imported into Australia cost approximately £200,000,000. For the most part, the prices of imported steel during this period averaged 1 00 per cent, above those for Australian steel. It will be seen, therefore, that the premium paid as a consequence of a shortage of Australian-manufactured steel over this period was approximately £100,000,000. The existing steel works, whilst highly efficient and expanding, cannot hope in the years ahead to meet the Australian demand for steel, which because of governmental developmental projects and advances in industry, will be ever-expanding. The need for an additional steel works in Australia is urgent. A statement issued by the South Australian Mines Department presents a case for the establishment of a steel works in South Australia. I would not presume to suggest where any steel works should be established. Rather should I say that it is important that another steel works be established in Australia. We are producing about 2,000,000 tons of steel ingots a year, a quantity insufficient to meet the demand. It is reliably estimated that Australia needs at the present time in excess of 3,000,000 tons of steel ingots a year to supply its own demand. With the population increasing, the demand for steel will also increase. It has been reliably estimated, in view of steel consumption in the United States of America and the United Kingdom, that the use of steel in Australia is 10 cwt. per capita per annum and that in 1960 we shall have a population in excess of 10,000,000 people, so it can be seen that merely to meet our own basic requirements, we need a production of 5,000,000 tons of steel a year.
Steel is also the basis of defence, and in the defence interests of this country, the Government should be doing all it can to encourage authorities, builders, investors and even the governments of other countries to establish steel works in this country. I seriously suggest that the Government should endeavour to establish another steel works equal in size to the one at Port Kembla on the same financial basis as that on which Amalgamated Wireless (Australasia) Limited was established or on which the Commonwealth Oil Refineries Limited was established. On that basis, Australia would get the steel that it requires; a great blow would be struck against the adverse trade balances that we are suffering; and a really mortal body blow would be delivered to inflation.
I feel that it would be of greater value to the defence of this country if the Government were to allocate to the construction of a steel works the £25,000,000 that it proposes to spend on the white elephant of the Vice-President of the Executive Council (Sir Eric Harrison) at St. Mary’s. That money is to be spent in three years to build a shell-filling factory. I suggest that it would be a much sounder policy, either from the defence stand-point or the industrial stand-point, to spend that money on the construction of a steel works in some part of Australia - anywhere, as long as it is constructed - so that Australia may become self-sufficient in steel. I commend this proposition to the Government. It is a reasonable one, and 1 hope that some notice will be taken of it.
– Taking advantage of the opportunity that this budget debate provides, I wish to give a brief summary of what has been achieved for the expenditure of the defence vote since the Government assumed office in December, 1949. At that date, defence was based on the five-year programme of the previous Government. Since then, there has been a succession of programmes, and the present financial year is the last year of the current three years’ programme.
I desire to explain that the purpose of working to a programme is to achieve continuity in those projects, particularly of a capital nature, such as the construction of ships or works, which extend over a period of years. On this basis, departments are able to plan and carry out their programmes on a provisional annual vote, which is finally determined each year when the budget is considered.
The size of a programme and the amount of the defence vote are determined by the Government in the light of several considerations which are constantly under review. The first is the international outlook, and the degree of preparedness necessary, the strength and composition of the forces being governed by the related strategic plans which determine Australia’s role. Then there is the state of the national economy and its capacity to sustain the defence vote, while at the same time maintaining economic stability. Linked with the defence vote, is the amount required for national development, including immigration, which is really long-term defence in the shape of greater man-power and resources.
What a country can devote to defence is, therefore, a matter of judgment, in the light of its own particular circumstances. In view of suggestions which have been made that too much is being spent on defence, I draw the attention of the committee to what we are doing in comparison with others, with whom we co-operate, and from whom we would expect aid in any threat to this country. The following figures indicate the extent of defence expenditure in the countries mentioned: -
The chief features of the defence outlook, since the Government came into power, have been in sequence - firstly, the intensification of the cold war and the inherent danger of global war; secondly, the subsequent recession of the threat of global war; thirdly, the effect on the pattern of future defence preparations of the existence of the deterrent weapon, and the development of other new weapons, and their means of delivery.
In 1950, with the intensification of the cold war, the Communist aggression in Korea, and the general deterioration in the international situation with the risk of global war, the emphasis was on preparedness by 1953. In harmony with the measures of other democratic nations, the Government stepped up the tempo of preparedness and defence expenditure rose from £54,000.000 in 1949-50 to a peak of £215,000,000 in 1952-53.
In 1954, the threat of global war had receded, and the basis of defence policy had been transformed from preparedness by a critical date, to maintaining it at a level that could reasonably be sustained for a “ long haul “. Accordingly, in February. 1954, the Government approved a series of measures for rebalancing the defence programme with a vote not exceeding £200,000,000. In August, 1954, a threeyear programme extending from 1954-55 to 1956-57 was adopted. The vote, which was first fixed at £200,000,000, in 1952-53, was maintained at that level in 1953-54 and 1954-55. It was reduced to £190,000,000 in 1955-56. and this amount is again being provided in the current financial year.
There has been public reference to the under-expenditure in 1953-54 and 1954-55 of £44,000,000, of which £20,000,000 was credited to the Defence Equipment Trust Account. This under-expenditure was due to economic causes, both at home and abroad. It indicated the short-fall in the physical achievement of the objectives of the programme, and was more than offset by the amount of outstanding commitments, which represent projects still to be completed. In 1948-49, the financial year prior to the present Government’s election to office, defence expenditure was £61,000,000, and the amount of outstanding commitments at the end of that year was £35,000,000. As a consequence of the higher defence vote over a period of years, the corresponding figures at 30th June, 1956, were expenditure £190,000,000, and outstanding: commitments £150,000,000. These outstanding commitments relate to objectives authorized in earlier years. When completed,, they will provide an even higher degree of preparedness. With the build-up of the forces, about £134,000.000 of the total defence vote of £190,000,000 is absorbed in maintenance expenditure. This leaves £56,000,000 for capital items such as equipment and works. Outstanding commitments falling due in the financial year have to be met from these amounts in addition to current expenditure.
The effect of rising costs on the programmes has resulted in a decreasing value of the annual defence vote. During this period, there have been a number of increases in the pay of the forces and in the salaries and wages of civilian staffs. In the current financial year alone, the estimated increased cost of the services and associated departments on this account is approximately £3,000,000. There have also been substantial rises in the costs of equipment, supplies and. works. The increasing complexity and cost of modern weapons and equipment is illustrated by the fact that the average cost of the Sabre fighter is £255,000, compared with £40,000 for the Mustang. Similarly, the average cost of the Canberra is £475,000, as against £160,000 for the Lincoln. The new Centurion tanks cost £48,000 each, compared with £ 1 7,000 for the earlier types purchased during the war. The two aircraft carriers were originally estimated to cost Australia £5,000,000. Actually, “Sydney” cost £3,400,000 and “Melbourne” £7,300,000. though the latter had a number of improvements incorporated.
The total expenditure over the six year!> from 1950-51 to 1955-56 has been £1,031,000,000, including £20,000;000 paid to the Defence Equipment Trust Account, which, I remind the committee, has not yet been expended. Three hundred and twenty four millions pounds, or 32 per cent., has gone into increased capital assets, and £707,000,000, or 68 per cent., has been required for maintenance costs. Of the total capital expenditure of £324,000,000. £226,000.000 has been devoted to the provision of new equipment for the services ot the modernization of existing, equipment. Eighty-four million pounds has been spent on buildings, works and the acquisition of sites, and £14,000,000 on machinery, plant and equipment for the departments of Defence Production, Supply and Defence. The £707,000,000 spent on maintenance included £124,000,000 for maintenance equipment, replacement stores, ammunition and general stores of all kinds. The balance of £583,000,000 has been spent on pay, rations and general maintenance, including the maintenance of buildings and works.
In December, 1949, there were 34,000 members of the permanent forces. They now total 52,000. The strength of Hie Citizen Military Forces, including national service trainees, has risen from 22,000 to approximately 100,000. In addition, there are 78.000 national service reservists who have completed their training. Since the national service training scheme wis introduced by the Government in 1951, a total of over 180,000 youths have been called up for training. The cost of the scheme to 30th June, 1956, amounted to £103.000.000. The women’s, services have been reintroduced in the Navy, Army and Air Force, and their employment on certain administrative tasks in replacement of male personnel enables the latter to be allotted to other service duties.
I shall now outline the Australian contribution in cold-war operations in overseas theatres.
Operations in Korea: On the outbreak of hostilities in Korea, Australian forces were placed at the disposal of the United Nations. I ask honorable members to note the following summary of the Australian contribution. because I do not think people realize how many Australian servicemen served in Korea: -
Navy - Two destroyers or frigates were maintained in Korean waters until the armistice in 1953. In addition, H.M.A.S. “Sydney” carried out two tours of operational duty in the area. After the armistice, one destroyer or frigate was maintained full-time until September, 1955. Over the whole period of the war some 6,000 Royal Australian Navy personnel were engaged.
Army - One infantry battalion was provided initially, and later built up to two infantry battalions. During the last two years, there has been a progressive run-down of Australian Army forces in the area and the future contribution will be approximately 90 personnel. Altogether 12,500 Army personnel served in Korea and Japan.
Air Force - No. 77 (Fighter) Squadron was maintained in Korea from the outbreak of hostilities until December, 1954. It was the first British Commonwealth Air Force unit to operate jet aircraft in the Korean- theatre. In addition, a transport unit served there between March, 1951, and June, 1956. Some 2,000 Air Force personnel served in the Korean theatre.
Other Overseas Forces: A bomber squadron and a transport squadron were despatched to Malaya in 1950 to support other British forces in the anti-terrorist operations. The transport squadron has been withdrawn, but the bomber squadron is still operating in this theatre. In addition, a wing of two fighter squadrons, with supporting units, was maintained in the Middle East from July, 1952, to January. 1955.
The Strategic Reserve in Malaya: Australia is actively participating with the United Kingdom and New Zealand in the British Commonwealth. Strategic Reserve in Malaya. The Australian component comprises -
Navy - Two destroyers or two fast frigates, with- a total complement of over 500 personnel, an aircraft carrier on an annual visit and additional ships in an emergency.
Army - An infantry battalion group at ;i strength of approximately 1,400 personnel, with reinforcements in Australia.
Air Force - A bomber wing of one squadron, which will replace the one at present engaged in anti-terrorist operations, and an airfield construction squadron. In addition, a fighter wing of two squadrons will be provided later. The total personnel at present in the area is 600.
The estimated cost to Australia of the programme of capital works for the strategic reserve in Malaya is approximately £2,400,000.
The provision of these forces has involved Australia in heavy additional expenditure of many millions of pounds over what would have been entailed in maintaining the forces in Australia. The value of this expenditure in the international sphere is the goodwill generated by the way in which we honour our obligations in combating cold-war aggression. In the military sphere, considerable benefits accrue to the services in the experience that they acquire.
It is fruitless to train man-power without providing it with the requisite equipment, and modern equipment has been an important feature of the defence programmes. I mentioned earlier its increasing complexity and cost, and stated that 22 per cent, of the total defence expenditure over the pas six years had been devoted to capital equipment. The following are some details of what has been .done in this direction: -
Navy. - The Navy has in commission one operational aircraft carrier, a second carrier as a training ship, four destroyers, six frigates, and four ocean minesweepers. Also, a substantial reserve fleet is being maintained in good condition against any future emergency. Some 213 aircraft have been delivered to the Fleet Air Arm since June, 1950, including modern Sea Venom jet fighters and Gannet turboprop anti-submarine aircraft. H.M.A.S. “ Melbourne “, which is one of the most modern light fleet carriers in the world, is equipped with these types of aircraft. The Naval air station at Nowra provides the shore base for the Fleet Air Arm and the necessary schools and training facilities to keep the
Fleet Air Arm efficient and up to date. A fast fleet tanker to provide floating support lor the Royal Australian Navy has been built in the United Kingdom, and is at present operating on lease to the Admiralty.
Local naval construction includes the following: - Three Daring class ships - super-destroyers - are under construction, the first of which will commission early in 1957 and the remaining two in 1958; two Battle class destroyers have been completed and in service since 1950 and 1951 respectively, while two Tribal class destroyers have been modernized with greatly improved anti-submarine capabilities; four new fast anti-submarine frigates have been started, and these ships will join the fleet on completion between 1960 and 1963; three Q class destroyers have been converted to modern fast frigates. A fourth will be completed in 1957; the modernization of ten ocean minesweepers out of a total of eleven has been completed, and a new boom working vessel has been built.
Army. - The policy since 1949 has been to purchase new and more modern capital equipment to replace outmoded war-time types. For example, the Armoured Corps has been largely re-equipped with modern armoured vehicles. In 1954-55 the Government approved a mobilization programme designed to purchase mobilization equipment required to equip the first component of an expeditionary force. Generally, the equipment ordered under this programme is that which would be difficult to obtain quickly on mobilization. The total amount spent on capital equipment since 1950 is £52,000,000, some of the major items being - 119 Centurion tanks and twenty trailers and recovery vehicles; 294 scout cars and armoured personnel vehicles; 5,000 transport vehicles; 170 120-mm. anti-tank guns; 1,272 3.5-in. rocket launchers; twelve 5.5-in. guns; 36 conversion kits for 40-mm. light anti-aircraft guns; 89 4.2-in. mortars. In addition, substantial quantities of ammunition,’ telecommunications and engineering equipment, clothing and general stores, and other miscellaneous items have been acquired or are on order. The adoption of the new FN .30 rifle has been approved, ‘and plans are in hand for its production in Australia, together with the necessary ammunition.
Air Force. - A total of 385 aircraft has been delivered to the Royal Australian Air
Force since June, 1950. The Government has supported a policy of development of the Australian aircraft industry, and the following orders have been placed with it since 1949: - 30 Vampire jet fighters - all delivered; 90 Avon-Sabre jet fighters - 42 delivered; 104 Vampire jet trainers - 36 delivered; 62 Winjeel basic trainers - 32 delivered; 48 Canberra jet bombers - 33 delivered.
The following aircraft have also been procured from overseas: - 101 Meteor twinengined jet fighters; four Canberra jet bombers; twelve Neptune maritime reconnaissance aircraft; two Metropolitan transport aircraft - one delivered.
In parallel with the introduction of modern types of aircraft there has been a continuous development of the ground organization of the Air Force to keep pace with the development of modern aircraft and the changing techniques in their operation. This development has involved a heavy demand on the resources of the service, particularly in the provision of airfields. Those at Momote, Williamtown, Richmond, Amberley, East Sale and Pearce have been completely rebuilt since 1949.
I turn now to defence production. Since 1st July, 1950, an amount of £14,000,000 has been spent on the expansion of defence production capacity, and the replacement and modernization of existing facilities. In addition, the new filling factory at St. Mary’s, which is estimated to cost £23,000,000, was commenced last financial year, and is expected to be completed by December, 1957. It is vital to our preparedness that we have the requisite filling capacity for bombs, shells and other projectiles. During 1955-56 the Department of Defence Production produced in its factories, or procured from industries, goods to the value of over £34,000,000. In the two previous financial years the figures were £30,000,000 and £27,000.000 respectively. Some work was also done for other governments, such as the United Kingdom and New Zealand.
In the field of local aircraft production I have already mentioned the progress that has been made in modern aircraft for the Royal Australian Air Force. In addition, the government aircraft factories have continued the production of Jindivik radiocontrolled target aircraft, and have carried out experimental work on other projects. A further important project has been the establishment of the airfield at Avalon, near Geelong, at a cost of approximately £2,400,000, for the testing of jet aircraft.
In defence research and development, the major item is the joint United KingdomAustralia long-range weapons project for the testing and development of guided weapons. An extensive programme of trials has been carried out, and further trials are being undertaken. The total expenditure by Australia on this project up to 30th June, 1955, exceeded £54,000,000, including £43,000,000 since June, 1950. The vote this year is for £9,500,000. Australian support has been provided for atomic weapons tests carried out in Australia by the United Kingdom at Monte Bello Islands and Emu Field, and in the construction by the United Kingdom of a testing range at Maralinga. Additional research laboratory units which have been established in the Department of Supply since 1950 represent a significant development in the Australian defence scientific resources.
Since 1950 approximately £81,000,000 has been spent on defence works, such as barrack accommodation, married quarters, stores, workshops and other technical buildings, camps, training depots and schools, development of airfields, defence production buildings, and works for the joint AustraliaUnited Kingdom long-range weapons project. Over 3,300 houses have been constructed or acquired for service married quarters since 1950. In the current financial year additional houses will be provided under the new Commonwealth and State Housing Agreement, as well as by the services.
Other activities of the services include a continuous patrol of waters north of Australia and the surveillance of fishing activities, with particular regard to the Japanese pearling and tuna fishing, which have been undertaken by the Navy since 1951. The Royal Australian Air Force maintains search and rescue aircraft to meet commitments, as a member of the International Civil Aviation Organization. A considerable number of students has been accepted by the services from Burma. Canada, India, New Zealand. Pakistan. South Africa, the United States of America and the United Kingdom for training at Australian service establishments. The services have also participated on a major scale in atomic tests carried .out in Australia, involving some fifteen ships and small craft and many thousands of personnel.
I would fail to do justice to the services if I did not mention what is done, in addition to normal activities, for the civil community at large by the assistance rendered in emergencies, such as floods, bush fires and grasshopper plagues. Assistance has also been given to polar exploration parties, including the provision of aircrew and maintenance personnel. The people of this country have been well served by the services in the emergencies that have arisen. I am sure they appreciate the efficient manner in which the assistance has been given by service personnel.
The Government can claim an impressive record of progress in increased defence preparations arising from defence expenditure over the past six years, and the further improvement that will accrue from the completion of objectives covered by outstanding commitments, lt can be confidently said that, in peace, Australian defence preparedness has never been at a higher level. It has been no mean achievement for the services to build up their permanent forces for participation in the cold war, and at the same time to introduce National Service in such an effective manner.
Strategically, our plans and defence measures are closely co-ordinated, on the basis of regional defence, with others having common security interests in the same area, In Anzam we collaborate with the United Kingdom and New Zealand. In Anzus we co-operate with the United States and New Zealand. In Seato, our affiliation is with all of those three countries, as well as with France, Pakistan, Thailand and the Philippines. The meeting of the Seato military advisers this month in the Philippines is the culmination of a series of planning studies which should enable the Government to review Australia’s defence role in the light of Seato plans for the defence of the treaty area. This will have a bearing on the organization, strength and balance of the services. A further important influence on these is the changing pattern of warfare as a result of the development of new weapons and their means of delivery, and the improvement of existing weapons. The services are keeping abreast of new techniques and methods. When these strategic and technical reviews have been ‘ completed and decisions have been reached by the Government, an announcement of them will be made. [Extension of time granted.]
– Does the Minister’s statement cover the civil defence vote?
– There is no mention of the civil defence vote in the statement that I am making. I assure honorable members that strategic conditions are constantly under review. As conditions change, and as tensions ease or increase, the programme of the Government is adjusted accordingly. If any changes are made - I have suggested that they may be made as a result of the Seato conference - a statement will be made to the Parliament about them, so that honorable members may have a full knowledge of what is taking place and of why it is taking place.
.- I remind the Minister for Defence (Sir Philip McBride) that the measure of the capacity of this country to provide for its defence is the production of its primary and secondary industries. Weaken the economy of the country and you weaken our capacity to provide for our defence and protection in time of peace or war.
Nature has been very kind to Australia since 10th December, 1949. We have had a series of particularly bountiful seasons. The prices received for our products overseas have been exceptionally high. The value of our mineral production has been added to by vast finds of uranium. On the occasion of the opening of the Nineteenth Parliament on 22nd February, 1950, His Excellency the Governor-General said -
Australia’s external financial position is strong. With the continuance of good seasons and high prices our export income has reached record levels. As ‘a result, substantial sterling balances have been built up in London and, as overseas availability improves, these balances will be useful to our developmental programme.
The seasons and the prices improved considerably. Since 1950, the value of our primary production has increased. The quantity of our manufactures has risen immensely. The value of our manufactured goods has reached a record high level. During this time, the Menzies-Fadden Administration has helped itself to a big proportion of the increase of the national income.
Surely that should have been a time when prosperity was widespread and solidly based. Surely that was a time when preparations should have been made for the lean years that inevitably follow the fat years. Surely that was a time when our overseas funds should have been conserved so that money would be available overseas to meet the needs of the country when the prices or the quantities, or both, of our exports were reduced. Surely that was a time when loans should have been repaid or borrowings reduced to a minimum so that we would not have to make heavy interest payments in times not so good as that. But what happened? Were our funds conserved? Was prosperity in the country widespread? Were our borrowings reduced? Of course not! Our overseas funds were depleted. The age pensioners and other sections of the community suffered considerably. Borrowings were not reduced. As a nation, we borrowed overseas £600,000,000 extra. Our overseas funds were depreciated by £600,000,000.
That was the position that existed. Why did it exist? Let me take the minds of honorable members back to the budgets of previous years - the budgets which show how the golden opportunities that existed then for this country were all neglected. In 1950, as I have pointed out, the GovernorGeneral made a statement in connexion with our overseas funds. In his speech, His Excellency said also -
An intense review is at present being made by my Government of the present price trends with a view to determining the most effective measures which can be taken to remedy the current inflationary situation.
That was in February, 1950, more than six years ago, but one would think that it was an extract from the speech delivered by the Federal Treasurer the other evening In October, 1950. that gentleman paid glowing tribute to the soundness of Australia’s economy and said, in effect, “ We are faced only with one problem. That is the problem of inflation, and this budget that I introduce is designed to rid this country of inflation “.
In 1951 he introduced another budget and said, “ Inflation is worse than ever “. The Prime Minister said that the contemplation of that budget filled him with horror. The horror budget of 1951 provided for increased taxation of all kinds, and the encouragement of imports, in order to rid this country of inflation. However, in March, 1.952, before the next budget was due, the Prime Minister made a broadcast to the nation, in which he said, “ We are in danger of international insolvency “. He announced panic import restrictions which, he said, must be imposed to preserve the credit of this country overseas. In the 1952 budget the Treasurer endorsed the idea of restricting overseas imports and pointed out that inflation was still with us.
Then came 1953. When the budget was introduced, in August or September, the Treasurer said, “ Inflation has been arrested “. The Arbitration Court, however, then determined that the basic wage should be frozen as from the December quarter! and the hearing of the margins case then before it, suspended, in order to arrest the inflation which, in September of the same year, the Treasurer had solemnly described as having already been arrested. The year 1953 was important because during it amendments to the banking legislation1 were introduced. These gave back to the private banking institutions the right to- make unlimited advances - without restriction by the Commonwealth Bank. lt gave them, once more, control over their total deposits.
In .1954 the Treasurer made another speech, in which -he said, “ There are all the signs of incipient inflation existing in this country “. Then, in the budget speech of 1 955, he said, “ Inflation is as vigorous or more vigorous than ever “. Towards the end of 1955 the Prime Minister supplicated the representatives of the private banking institutions and the hire-purchase organizations to come to Canberra so that he might confer with them and receive their suggestions for the voluntary implementation of measures which would counter the inflationary trend.
In the early part of this year the Prime Minister presented to the Parliament a long economic statement reiterating that the Government was bending all its efforts, and using all its brain power, to solve the problem of inflation. Now, of course, we have before us the 1956 budget, in respect of which the Treasurer has said -
The fact is, we cannot afford a reasonably satisfactory flow of imports unless and until our export earnings rise much higher.
He points out, of course, that, as in 1952 our exports were at a dangerously low level, so too are they to-day. Since his budget speech, of course, they have been dissipated by another £17,000,000. I agree with this comment of the Melbourne “ Herald “ - .
The more you look at the Federal Government’s latest chapter of budget horrors the worse the picture becomes.
The budgets of recent years have not, of course, overcome the inflation which was the most important problem of 1949. Instead, they have added such other problems as overseas insolvency, incipient unemployment, and more difficult living conditions for a vast number of the members of this community. Such budgets are, of course, horror budgets because the real victims are the pensioners, who receive inadequate sustenance as a result of the miserable pittance that is doled out to them. The victims of these budgets are the thousands of aged pensioners who are being refused admission to institutions, though they can no longer care for themselves. In every capital city thousands await entry to every institution for the aged or infirm. As a result of this neglect, many of these people are dying untimely deaths. These budgets are a series of horror budgets because they deprive the young married man and woman of the opportunity to obtain a home. Young people are unable to pay the fantastic prices that are being asked, not merely for homes, but for blocks of land also. Again, these budgets have prevented development because those anxious to enter upon rural occupations cannot obtain the finance that they need to pay the exorbitant prices that are being asked for land.
I have1 heard honorable members on the opposite side say, “ Of course, inflation has one cause. The cause is the price of labour “. But what labour is involved in producing a block of land? What labour factor is involved in the price of the dilapidated homes in Sydney and Melbourne that are being sold to-day for 20 to 30 times the amount for which they were purchased new between 50 and 100 years ago? Of course labour costs have no influence on those prices. But just as there are victims of inflation in Australia, there are also those who gain from it. They are the- ones who are making vast profits from industrial enterprises, of which T shall mention only a few. The profits of Australian Consolidated Industries Limited in 1949 were £542,000, and in 1955 they amounted to £2,327,000. Australian Papers Manufacturers Limited in 1949 made a profit of £260,000, and in 1955 the profit of that company was £1,700,000. Associated Pulp and Paper Mills Limited made a profit in 1949 amounting to £99,000, whilst in 1955 the company’s profit was £845,000. In 1949, Australian Iron and Steel Limited made a profit of £210,000, and in 1954 a profit of £1,587,000. David Jones Limited made a profit of £221,000 in 1949, and one of .£704,000 in 1955. The Myer Emporium, in 1952, made a profit of £227,000, and in 1955 that company made a profit of £790,000. General MotorsHolden’s Limited made a profit of £479,000 in 1949, and in 1955 the profit of that company amounted to £12,000,000. lt must be clear to every one that the immense profits that are being made because of the extortionate prices that members of the community are called upon to pay are the cause of inflation, and the Government, of course, should attack that cause directly. No action, however, is taken against those profiteering industrialists. When it is suggested that prices should be fixed or excess profits taxed, the Government replies that price fixing is unnecessary. The Leader of the Opposition, the right honorable member for Barton (Dr. Evatt), pointed out in this House that whilst the Government did not control prices or profits, private organizations do fix prices at a high level and determine that profits shall be excessive. Those organizations are preventing free enterprise. I have before me a copy of a reciprocal trading agreement, dated 9th December, 1954, between the Furnishers Society of New South Wales Limited and the Furniture Guild (New South Wales) Limited. This is an agreement that results in the fixing of the price of furniture to householders. It provides that if the retail sellers of furniture in New South Wales do not sell their goods as determined and at the prices set out in the agreement, they shall be boycotted out of the trade altogether. We contend, of course, that the Government should fix prices, and that predatory capitalist organizations should not have the right to exploit the Australian people, or to destroy that free enterprise that honorable members opposite claim to represent.
Under the heading, “ The Freedom of Enterprise is Dwindling “, the “ Sydney Morning Herald “, of 6th July, 1955, had this to say -
The report of the Monopolies Commission in Britain on restrictive trade practices shows to what remarkable lengths free enterprise in Britain - as in Australia - has been anxious to limit its own freedom for the sake of avoiding the inconveniences of competition. The Commission examined collective agreements designed to enforce price maintenance or other trade practices by means of exclusive dealings or boycotts.
That statement, of course, is correct. In this country monopolies, cartels and understandings operate to maintain commodity prices at exorbitant levels.
– Supported by this Government!
– Supported, of course, by this Government, because the millionaire members of this Government are shareholders in the organizations that are exploiting the community. After all, where do these excessive profits come from? They are taken from the plates of the age pensioners. They are made possible because the housing available for age pensioners is kept at a low standard, and they result in young married couples being unable to provide homes for their future families. 1 directed the attention of the Minister to-day to the fact that since this Government came to power the number of married women in industry has more than doubled. Why has that happened? It has happened because the exorbitant prices demanded for the necessaries of life make it essential that a family should have two breadwinners instead of one.
These, of course, are the injustices against which the Labour movement fights, so that the economy of our nation should not be completely destroyed. We suggest that price fixation should be reintroduced. If the Government does not accept that suggestion, at least it should fix an upper limit for profits. If the Government said to industrialists, “ Any profits that you make above 10 per cent, and disburse in dividends will be taken by taxation “, prices would be reduced, and the maximum dividend declared in Australia would be 10 per cent. After all, 10 per cent, is an ample reward for moneylenders; in fact in my opinion, an interest rate of 10 per cent. is usurious. But the Government will not go even that far to protect the people of Australia. The Government should tell the banking institutions that are financing hirepurchase organizations that charge exorbitant interest rates that it will revive the practice that was discontinued in 1953 or thereabouts by the present Treasurer. I refer to the control over deposits of private banking institutions, which was in operation when this country was at war, and when it was obvious that without such control prices would have increased immeasurably, and exploitation would have been intense.
The measures that were taken during the war to protect this nation against the destruction of its’ economy should be taken to-day. Private banking institutions should not be allowed to infuse their cheque currency into the economy to a unlimited extent and to determine the purpose for which that cheque currency is to be used. In doing so, they promote the luxury industries that provide big profits to the disadvantage of those industries, rural or manufacturing, that do not provide big profits. They divert their money and finances not into housing but into the provision of vast edifices and new fronts for emporiums. That was done by Myer Emporium Limited in Melbourne and Foy and Gibson Limited, in Bourkestreet, Melbourne. Between £250,000 and £500,000 was spent by one firm in the provision of a more attractive front to its shop. That is to the detriment of those who want to build homes and raise families and of those new Australians who have been brought here by the Government andhave to find accommodation in slum areas at exorbitant rentals.
I have very little more to say on this subject. There is much more that I could say, but 1 have only two minutes left. It must be apparent to every one other than supporters of the Government that the way to attack prices is to reduce and not to increase them. Costs will rise because of increased postal and telephone charges and so on in this budget and have risen because of increases in petrol, interest and indirect taxation in the “ little horror “ budget of a few months ago. In that way all the costs of industry are increased. Yet the Government says, “ By these means we reduce prices and curb inflation “. That is utterly and absolutely absurd. Every one realizes that predatory interests in the community are doing those things that are destroying the conditions of the people. The policy of the Government will create such an economic cataclysm by the destruction of our overseas funds and the dislocation of our internal economy that not only pensioners and workers but also primary producers and manufacturers will be overwhelmed by the destruction that will be brought about by this Government.
– The remarks of the honorable member for Scullin (Mr. Peters) would be perhaps of more significance if they bore more relation to the truth. The exaggerations he submitted to the committee should be analysed. I do not propose to deal with them in detail, but I should like to mention two points that occurred to me immediately. One is housing. The remarks of the honorable gentleman suggest that the situation of housing in Australia is as bad as anywhere in the world. But an analysis of the figures proves that the Australian people as a whole are better housed in respect of the number of houses to the population than is the case anywhere else in the world.
His other remarks concerned the giant profits of companies. I have some figures here which compare the profits of Australian companies in various sections of industry with similar organizations in the United States of America and the United Kingdom, These figures show the percentage of profits on shareholders’ funds before the payment of taxation. In Australia, the minimum taxation at the moment is 7s. in the £1. The figures are -
Those figures represent the actual profits on shareholders’ funds before the payment of taxation; they are the amount returned to the company and to the shareholders.
During the course of this debate, a number of honorable members have referred to the extraordinary record of the Treasurer (Sir Arthur Fadden) in presenting his ninth budget. I, for one, congratulate him on this wonderful feat. At the same time, I think we all accept the fact that there must be some measure of sympathy extended to him in having to present what is called a “ stayput “ or “ consolidation “ budget without any vastly spectacular features which might appeal to various sections of the community. When the points behind the “ consolidation “ budget are considered, coming as it does so soon after the fiscal measures adopted in March in what is called the “ little budget “, it is quite obvious that no vital changes in fiscal policy in the national finances could be expected.
In case there may be a number of pessimists in this place and in the community at large, 1 remind them that around us every moment we can see the evidence of the extraordinary progress made in Australia during the term of office of this Government. Advances have been made in both the public and private sectors of the economy. The evidence is clear wherever we look. We see a vast expansion of secondary industry. We see primary industry increasing production to a greater extent. We see a terrifically spectacular increase in the production of power. In a more detailed manner, we see vast increases in oil refineries. All these things mean progress and large capital investment.
The main feature of this budget is that it is designed to produce a large surplus of £108,000,000 to cover anticipated shortages in loan funds from the investment market, mainly for State projects. A certain school of thought, not only in this place, but also in other parts of Australia, holds the opinion that the future should play some part in the capital requirements of the present. I personally subscribe to that view in normal times. It is an accepted practice that capital works should be shared by the present and the future; but we are not in ordinary times. That is why I accept the principle of budgeting for a surplus, if by so doing the progress of the country will continue by providing out of taxation money that is not available either by private investment in this country or by the provision of capital from overseas. That is, I believe, the vital feature of the budget. As could be expected, this consolidation budget has drawn a fairly wide range of criticism. The representatives of secondary industries criticize public spending on State developmental projects. The State Premiers, in their turn, say that they are being reduced to penury by the limitation of capital moneys for State developmental programmes.
The taxpayers would like to see taxation reduced, and a certain quantity of shot and shell has been aimed at the pay-roll tax particularly. The taxpayers would like to see that tax abolished. The service chiefs are inclined to express the view that any reduction of funds would mean that the efficiency of their services would be adversely affected. The unfortunate people who are in receipt of social service benefits are bitterly disappointed that they have not been recognized in the budget, except in a minor way. The people who live in the territories of the Commonwealth, and who we must consider in this place, probably are expressing the view that not sufficient funds are being provided for the development of the areas in which they reside. All of these criticisms reduce themselves to the simple mathematical proposition that expenditure would have to be considerably increased and revenue from taxation substantially reduced. I repeat, therefore, that I sympathize with the Treasurer in his task of trying to produce the answer to the almost insoluble problem of how to eat your cake and keep it too.
Similarly, there has been a considerable degree of criticism of the Government’s import-export policy. No one objects more strongly than I do to the continuance of import restrictions, but although the Leader of the Opposition (Dr. Evatt) made great play with this subject, particularly in regard to bringing our overseas trade into balance, neither he nor any one else has so far produced a satisfactory or a realistic formula for the relation of our widely fluctuating export income to the import requirements of our capital works and our consumer demand. I, for one, would be prepared to accept any good suggestion that did not range into the realm of fantasy in that regard. .
I bring to the notice of the committee the fact that the problems confronting Australia are not entirely unique. I propose to refer to two countries particularly and to read passages from recent copies of the “Economist”. On 4th August last reference was made to Eire, a country that could hardly be described as being governed in tory interests. The “ Economist “ stated -
The deterioration in the balance of payments continues to be the main topic of Irish politics. The fall in -exports reflects the fall in cattle prices.
That is rather interesting. The fall in our exports is reflected in wool prices. The article continued -
Capital investment policies of the last few years now far outrun current earning and saving.
How true those words are when applied to our own conditions. I turn now to another passage from the same publication of the 21st July last, in reference to Norway, a country which also is governed by a Labour government. The “ Economist “ stated -
Yet investment remains at an uncomfortably high rate, while increases in productivity have been disappointing. The cost of living has continued to rise despite a plethora of economic controls.
So it is not quite so easy as it seems when we say, “ We shall deal with this problem by means of controls “. I propose to refer later in my remarks to my observations on this subject. At the same time, I wish to say that I believe that in the present economic condition of Australia, with a rapidly expanding economy, we do not want to become over-obsessed with the so-called temperature chart of our overseas balance. It is obvious that we have that balance for the purpose of operating our credit overseas. It is something that we can draw upon, provided that the drawing process is used to increase the production of our export commodities or to cut down our import requirements. It is in this connexion that probably we have been rather overindulgent with ourselves since the war. We have taken part in a spending spree on imports, but at the same -time J think it is reasonable to assume that that was a direct reaction to the war years, when so many commodities were rationed or in short supply for other reasons.
I was particularly interested in the attempt of the Leader of the Opposition to swing responsibility for the main pressure of our internal costs away from wage inflation, which has been operating and is continuing to operate in Australia, and to fasten it on what he calls “ profit inflation “. I remember .the right honorable gentleman sitting at the table when the honorable member for Yarra (Mr. Cairns), that wizard of finance, made his maiden speech. The Leader of the Opposition seized on the phrase “ profit inflation “ and has been giving it a lot of work ever since. As a solution of -our problems, he submitted that federal control of prices should be reintroduced, together with other control measures, such as capital issues control and an excess profits tax. I feel, however, that he told only half the story and that it would be far better for the public to understand what these various controls mean and to appreciate that other qualifying controls would be necessary. The proposition may be attractive, at first sight, to many people who have short memories of the incidence of prices control in the past, but the right honorable gentleman also should point out the conditions necessary for .prices control to be even partially effective. In this connexion, I should like to refer to the remarks of Professor Arndt, who apparently has incurred the displeasure of his Labour friends because of a recent speech he made, on the occasion of the Chifley Memorial Lecture, regarding the economy of the country and Labour policy generally. The thought flashed through my mind that if Professor Arndt were in the political wing of the party the axe would fall on his neck as it has fallen on certain people in New South Wales recently. In referring to the question of controls and our overseas trade balance, immigration and capital investment, Professor Arndt said -
This, too, is a problem which cannot be cured with the old liver pills from Labour’s medical chest - profit control, price control, excess profits tax.
In other words, he appreciates that the country requires something more dynamic than just sitting back and applying a lot of controls to try to turn the stop valve on our internal pressures.
As I mentioned before, there is a recurring tendency amongst the public to look to internal prices control as a panacea to cure the ills of inflation which are ever-present in the kind of economy that Australia’s current rapid rate of development imposes. There is also a tendency to assume that what will be accepted by the public as a necessary evil in the struggle for survival during a war will be, or should be, also accepted by them during time of peace.
Similarly, there are those who, from time to time, claim that because finance can be made available for huge expenditure in time of war, when the nation is threatened, equally it should be possible to make finance available for capital development during time of peace. If we analyse this proposition we shall realize that a lot of the economic trouble with which Australia and other countries are faced to-day springs directly from our expansion of credit during the war years to assist in financing the manpower and the materials of war which, economically, in almost all cases were entirely unproductive. I suggest that only by the husbanding of our economic resources during times of peace can the strain of wartime credit and monetary expansion be sustained, although invariably it leaves deep scars on our national credit structure through the huge increase of government borrowing and is permanently reflected, I believe, in the depreciated value of money.
I suggest that prices control can have a semblance of efficacy only if it is accompanied by various other necessary controls, such as of man-power, wages, capital issues, of materials allocation, and above all, rationing. This implies a return to the restrictive practices enforced during the war, which I suggest would be a political impossibility in time of peace. Many people fail to realize that it is also a feature of prices control that during the war period the success of the scheme rested squarely on the acceptance of the principle of rationing, and that stable prices were preserved only by the provision of huge subsidies from Consolidated Revenue. It would be a fantastic proposition for a responsible Treasurer today to accept the task of providing a consumer subsidy on a commodity in fairly general use to keep the price constant in face of rising world prices if there were no restriction on the quantity of the article being consumed. At a time of rising prices, the burden of subsidies could easily get out of control if they were not limited.
I sometimes think that Mr. Chifley, who had the responsibility of administering Australia’s finances during the immediate post-war period, must have heaved a sigh of relief when the public of Australia turned down the 1948 prices control proposal, because he, as Treasurer, knew the tremendous financial obligations that would be involved in maintaining prices at a reasonable level in the face of the general upsurge of world prices, which must also apply to Australia. Having prepared the 1947-48 budget, the budget immediately preceding the referendum on prices control, he knew that the taxpayer provided some £49,000,000 in direct consumer subsidies, without any reference to the amount provided by the various primary industries, such as the wheat, dairy farming, and meat industries, which were providing their commodities for consumption by the Australian public at prices very considerably under world parity. If we assess the various expenses involved in that policy, we realize that the actual cash portion of the subsidy, £49,000,000 in 1947-48, was only part of the whole liability. When the prices control proposal was defeated, Mr. Chifley’s immediate reaction to the return to the States of the responsibility for prices control was to reduce federal subsidies. This is a point of great interest in a study of prices control and the effect that rising costs have had on the C series index. He reduced the subsidy grant in the next budget to £23,000,000. In that year, although admittedly there was another factor in the introduction of the 40-hour week, the C series index rose by 9 per cent. It must also be remembered that this rise took place prior to the tremendous pressures that were placed on the world economy by the commencement of the Korean conflict. When we consider, apart from metals, one item alone, namely wool, which had been subsidized in 1947-48 to the Australian consumer to the extent of over £9,000,000, and remember that when the Korean conflict forced up the price, the value of the Australian clip rose from £158,000,000 in 1947-48 to £652,000,000 in 1950-51, it is not a conjecture to suggest that the taxpayers of Australia would have been required to provide, at a conservative estimate, well over £100,000,000, and possibly £150,000,000, in consumer subsidies, in order to stabilize prices under a system of prices control. Further, this immense sum would have had to come out of a revenue which, at that stage, had not yet been swollen by the effects of the current inflation.
In common with many other persons, I believe that a country’s internal standard of living must, in the long run, be related directly to the productivity of its industries and indirectly - this is important - to the energy and industry of its people. It may be possible to carry on for a few years with a high level of spending money internally and a decreasing level of exports; but, as has been found in Australia, and in a number of other highly developed countries, there comes a time when the purchasing power of public and private bodies exceeds the value of the internal production, and recourse must be had to imports in increasing quantities. This, as I said before, is true of Ireland and Norway, but the same applies to Sweden, probably one of the most socialistic non-Communist countries of the world, which, being neutral, did not have to suffer the effects of war-time inflation, but is to-day faced with a huge problem in respect of balance of trade and rising inflationary pressures. As imports increase, so does the necessity for greater export production, or, alternatively, the necessity to curtail spending power in the community, which indirectly means lowering the standard of living, lt, therefore, seems axiomatic - and we at present are learning the lesson the hard way - that the rising costs internally and the decreasing overseas balances are a direct result of higher standards of living which are not founded on increased national production.
I should like to refer again to remarks of a gentleman who probably will be incurring considerable Opposition displeasure for his forthright statements on economic policy. I refer to Professor Arndt, the well-known Labour supporter and publicist. He said -
The way towards high living standards for the ordinary people is not through a redistribution of the cake-
Honorable members will notice the accent on that cake theme - but through increasing the size of the cake. The problem has been bedevilled in Labour thinking by the conflict between worker and boss and by socialist opposition to capitalism. Fearful lest, by helping to improve productivity, it might also improve profits and prop up the capitalist system, Labour has been sullenly content to cut off its nose to spite its face. Fear of overproduction, of working oneself out of a job, has reinforced this attitude. It is an untenable attitude for a democratic Labour party.
The learned Professor Arndt, one of the leading Labour publicists, economic advisers and experts on social studies, is well versed both in Labour doctrine and Labour propaganda. I will say of the learned professor that he is, in my opinion, realistic in facing the problem.
I do not think any honorable member desires other than to see Australia advance on its course towards the fulfilment of its destiny. 1 believe that the difficulties that are imposed on us are largely man-made. We try to give ourselves a standard of living which is almost incomparable, and we try to do it by putting shackles on our legs and tying our hands behind our backs. In other words, 1 think that on both sides of industry there is a lot to be learned. There is an obligation on the employer to devote himself more to the scientific study of production. There is also an obligation, 1 believe, to bring about better employeremployee relationships. There is also a very important obligation on those who have some direction of the work force throughout the community to be realistic as to what is to the advantage of that work force and to try to dismiss from mind the opportunism that might be involved in u little bit of publicity.
To reduce the thing to more practical terms, we have recently had probably one of the most dangerous strikes that could have affected our national economy. We. as a country, rely vastly on the export of our wool, a commodity which probably is grown better in Australia than in any other part of the world. Yet, in the time of our direst necessity for export income, we have permitted ourselves the luxury of a complete holdup in that industry and, unfortunately, in one of the major producing States, Queensland, that situation still prevails. The thing that alarms me, on my analysis of the situation, is that it is far more a personal matter than it is a really genuine industrial dispute.
So I say that if we, members of this place, who have some direction of affairs throughout the nation, are not going to take a stand and advise those who follow our advice of the way we are going, and particularly to relate our efforts to increasing the productivity of this country, only one thing can result; and I suggest that that result will be that we will definitely have a lowering and lower standard of living.
A responsibility rests just as much on this party while in government to ensure that public funds are spent wisely and that money is devoted to expansion and development projects throughout the country. There is also a tremendous obligation on honorable members opposite to play their part in ensuring, even though at some slight disadvantage at the time politically, that the general welfare of the nation is studied so that the community prospers through industrial peace.
Sitting suspended from 5.48 to 8 p.m.
.- It is not the responsibility of the Opposition to provide a budget alternative to that presented by the Government. It is enough for the Opposition to direct the public’s attention to the policy statement made by the Leader of the Opposition (Dr. Evatt) on the occasion of the last federal general elections. In December, 1955, the Leader of the Opposition submitted to the Australian people a series of proposals that were fundamentally sound and financially practicable. Because the Australian people had been led astray by the siren voices of a break-away splinter group, and by the actions and propaganda of the Government parties, the Opposition was not elected to office and was unable to put its proposals into effect. But what we said then, we will do.
We believe that the people of Australia are entitled to a new and better deal than they have received at any time since this Government took office. We believe that there is a great deal of unnecessary and undeserved suffering among the most defenceless sections of the community. We believe that this Government should have increased age and invalid pensions in this budget as much as Labour would have increased them had it been in government. We disagree with the Government’s treatment of wage and salary earners. We think that the basic wage should be adjusted in accordance with changes of the cost of living, and we do not agree with those economists who say that the trouble afflicting our community to-day is cost inflation. We say that we are. afflicted by demand inflation, and that the evils of our society are due to the profiteering that has taken place throughout the country; not to the fact that men and women receive wages which, only after a delay of three months, are adjusted to give them the. same purchasing power that they would have had if the cost of living had not increased.
– Will the honorable member prove it?
– Let the honorable member for Petrie (Mr. Hulme) ask any wage-earner, or, indeed, any person in the community to prove it. The increasing number of married women in industry, which was the subject of a question that’ the Acting Prime Minister and Treasurer (Sir Arthur Fadden) evaded answering this afternoon, shows how many wives of wageearners have to go out to work in order to maintain their standards at the level they enjoyed when the Chifley Government was in office.
– How does the honorable member explain the high level of savings bank deposits?
– I explain them by observing that the people will not take their money out of the savings banks to lend it to this Government. That is why its loans are failing. In any event, the Opposition does not agree with Government supporters, who stand for the maintenance of monopoly capitalism. The system of society that the Australian Labour party has always desired to introduce, and ultimately will introduce, in this country is that of democratic socialism.
– What is that?
– Democratic socialism is founded upon production for use, not for profit. It is a system which gives to society the greatest good for the greatest number. It operated very successfully in England during the war years. Under it, we in Australia were able to achieve revolution by evolution. By denying to those who had too much something they ought not to have had, and by giving to those who had not enough something they ought to have had, the Labour Government lifted the standards of the Australian people. By persuading the community to increase the powers of the Federal Parliament, Labour brought about a state of prosperity which was damaged and dinted only when the present Government took office.
Just before the recent conference of Commonwealth and State Ministers, the Australian Labour party, through the Leader of the Opposition, stated its views about the situation that confronts Australia. AlthoughLabour does not believe in capitalism, and. did not come into existence to reform capitalism or make it work, it wants to establish a. better system of society, and1 it pointed out to this Government that, if it, as a government, wishes to control the evil forces operating in the community and causing inflation to-day, it must seek additional powers from the Australian people. Whoever holds office in this Parliament, the national government must be clothed with sufficient powers to enable it to govern nationally and to protect the community as a whole. We are one people, not six distinct groups of people. If the Japanese hadlanded on our shores, they would have made no distinction between those who live to the north and those who live to the south of the Murray River. The people’s fate would not have been determined according to whether they lived north or south of the McPherson Range and the Tweed River. The people of Western Australia, South Australia and Tasmania all would have been dealt with in the same way as any other Australians living anywhere else in Australia. We have one postal system, one banking system and one set of customs laws. Yet the National Parliament, in a moment of economic crisis, has no power to control capital issues, profits, prices or interest rates! Some federal authority must control those things. If they are not controlled, we shall go from one evil to another.
It was a complete waste of time of the Acting Prime Minister to bring the Premiers to a conference in this chamber. The Premiers cannot agree among themselves on a plan to oppose the Commonwealth. Even four Labour Premiers cannot agree on a common plan. They all have their own ideas. Any one who thinks that anything can be gained by consultations between the States and the Commonwealth on constitutional issues deludes himself. Our federation is the very best that could have been achieved at the time it was formed in the light of the jealousies and rivalries of the colonial Premiers of the day. The Australian Constitution is not a perfect document. It has been altered because of amendments to the Constitution and because of interpretations by the High Court of Australia arising out of war, and to meet needs arising out of the events of war. It is now different from the original document, but it must be made a really national document. It is up to this Government - and the Opposition offers its wholehearted support in undertaking its task - to obtain the powers it needs to deal with our present problems. If it does not seek to obtain those powers, it will certainly lead Australia into a morass even worse than that in which we find ourselves to-day.
– Does not the honorable member like the federal system?
– I like it, and I want to make it better than it is. 1 am amazed that a young man like the honorable member for Fawkner (Mr. Howson) should have such a horse-and-buggy outlook. The Government and its supporters have proclaimed from time to time that Australia is prosperous. They know very well that there is no real prosperity in the country to-day. As far back as 11th November, 1952, the Vice-President of the Executive Council (Sir Eric Harrison), who next month will leave for Mayfair-
– I hope.
– So do we. The right honorable gentleman said -
Inflation has been arrested.
Not just halted or brought to a dead stop, but arrested, so that it could not proceed any further. The right honorable gentleman’s remark is typical of what other Government supporters have said. Only a few months ago, the Minister for Labour and National Service (Mr. Harold Holt) said that Australia was enjoying permanent prosperity. The Prime Minister (Mr. Menzies) himself said, in quite recent times, that we are enjoying unparalleled prosperity. He even had the temerity to utter the falsehood that Australia is now more prosperous than ever before in its history.
– Hear, hear!
– The Minister for Defence (Sir Philip McBride) may delude himself if he likes, but he will not fool the people much longer on this matter. Everybody knows that the Government is nearly dead or, if it is not dead, it is breathing awfully hard. If we consider what the Treasurer said in the 1955-56 budget and the doleful stuff he pours out to-day we will see how fundamentally dishonest this Government is in presenting the facts of the economic position to the people. Here is what the Treasurer had to say last year -
For several years past, Australia has enjoyed substantial and increasing prosperity. I emphasize that it has been substantial prosperity and not the illusory kind that goes with mere abundance of money.
The one thing that the Government does not want to do is to test that dictum with the Australian people at a general election.
– We had one only last year.
– Of course we had a general election last year, but the Government will not get away with what it is doing for much longer. Of course, there will possibly not be an election in the next two years, and the Government may get away with what it is doing for that time, but the day of reckoning will come and there will be an awful mess for a Labour government to clean up when it does come to power. The Prime Minister (Mr. Menzies) in the double talk for which he is notorious, said - lt is a real and genuine prosperity …. but is there in fact any country with higher general living standards or greater opportunities for a secure and spacious life than ours? . . . . The Government is happy to think that in its term of office such a state of general well-being has been achieved.
Ask any age pensioner about his general state of well being. It is all right for the friends of the Minister for Primary Industry (Mr. McMahon) in the Union Club in Sydney, and all the other tycoons with whom he and the rest of the Government ate associated, but it is not all right for the great mass of the people. They are suffering as they should not have to suffer.
– They will not suffer the honorable member.
– If they will not, it is because honorable members opposite fooled them with their propaganda. The Prime Minister went on -
All around are signs of prosperity. Admittedly prices are high and have been tending to rise. There are, it is true, restrictions on imports; but imported articles still appear to be fairly plentiful.
And so on and so on! All this nauseating nonsense about’ prosperity is merely irritating and aggravating the feelings of the Australian people who, in many instances, have not enough to live on, as they should have in a land that produces as much as this great country. All we can get from honorable members opposite is this pearl of wisdom which the honorable member for Canning (Mr. Hamilton) casts before - I shall not say it - I shall say, casts before Government members. He said, “ The great thing we have got to see is that we do not go backwards “. Really, the great thing we have to see is that we do not go downwards. This country is in a very parlous position, and all the protestations by the Prime Minister and the Treasurer that there will be no devaluation of our currency, and all the rest of it, are so much nonsense unless the Government can balance its trade, can export enough to pay foi our imports, and can convince the people it is governing intelligently.
In Great Britain itself, where they talk so much about depreciation, and the fear of depreciation, these days, I find that the present British Government has 1,120,000,000 fewer dollars in its gold and dollar reserves than the British Labour Government had when it went out of office. Its reserves have fallen by 30 per cent. It does not need much to disturb a nation’s affairs before a Chancellor of the Exchequer is forced to devalue, and if things go on in this country as they are going on now Australia may be forced to devalue. If that happens this Government will be responsible for the position which its own incompetence has created.
The Government has a fatalistic belief that it can always get along somehow. It does not seem to care what happens providing, no matter how harsh, how unreasonable, how cruel it is, it can, prior to an election, announce some tax reductions and then proclaim itself as a tax reducing Government. That suits dishonest-minded people, and may suit members of the Liberal and the Australian Country parties for the time being, but ultimately, when this Government comes to a reckoning with the people, Liberalism and Australian Country partyism and all the rest of it will go completely into the discard. Monopoly capitalism, by taking so much profit out of the proceeds of the labour of the Australian people to-day will ultimately destroy the Government. Company profits -are tremendously high. Banking profits are tremendously high.
– What do they do with them?
– What do they do with them? In the case of General MotorsHolden’s Limited most of them are sent out of the country. In order to pay the 10,000.003 dollars worth of dividends sent overseas by General Motors-Holden’s
Limited last year the Treasurer had to borrow 10,000,000 dollars abroad. And so, we shall have to go round the world borrowing dollars to pay for the dollars sent out of the country under this Government’s mismanagement. 1 have a very great respect for General Motors-Holden’s Limited because the Labour Government helped to establish that company, but I believe that some things have to be done in this country. One is that companies established in Australia with foreign capital ought to allow Australians to have a percentage of their shares, because Australians are entitled to an equity in whatever is produced in their own country. Australians are entitled to say to General Motors-Holden’s Limited or any other company, and to the banking institutions also, “ You have to plough back a certain percentage of your profits into the economy “.
– Would the honorable member allow them to make a profit?
– Of course, I do not mind encouraging the making of reasonable profits but I want to see this country treated as a partner in the great Western bloc and not be exploited by a new form of financial colonialism. What 1 should like to see, too, is a move by General Motors-Holden’s Limited to charge a reasonable price for its Australian product, which to-day is said to cost the people £120 more than it ought to. Paradoxically enough, it is still £200 cheaper than an equivalent imported British car, which shows how many people outside Australia arc ready to exploit us for their own benefit. We have to exist as a people, and if this Government allows these conditions to continue we will be in the same parlous position economically and financially in a few years as we were when the Bruce-Page Government brought Australia to disaster in the 1930’s. I think it is true to say that the Government is mentally sterile. It has not even the capacity of producing one single idea for grappling with our financial and economic problem. 1 think it is also true to say that the Prime Minister and the Treasurer and their buddies have done nothing in the past six years to solve our problems except talk and talk and talk. They have killed the Australian economy with tautological strangulation. Powerful interests are dominating this Government. These industrial groups are making more and more profits and going from strength to strength; but the 9,000,000 people of Australia are merely going to the wall. The honorable member for Hume (Mr. Anderson) interjected a moment ago. I honour him by sometimes reading his speeches, because occasionally I discover marked intelligence in quite unexpected places. Here is something that the honorable member had to say -
The Australian worker has two and a half times less equipment at his disposal than has the American worker . . . The more we increase production the higher our living standards will be.
That is completely right. If this Government wants to increase production let it mechanize the whole of Australian industry as American industry has been mechanized. Why does not the Government bring in machines and materials and encourage the use of more and more machinery in industry? Again, in one of his rare bursts of wisdom the honorable member for Hume said -
American companies plough back into their businesses 60 per cent, of their profits, but Australia ploughs back only 25 per cent.
If the Government is interested in maintaining the capitalist system it should see that the people who run it act as intelligently as the Americans do, and they certainly believe in rugged individualism. Profits made in this country are either sent out of the country or used for luxury buildings or other purposes not in the public interest. The oil companies are establishing service stations at every third corner of every street in every city and every country town of Australia. Is that promoting the well-being of the Australian community? Look at the waste of money that is occurring over television sets and all the rest of the things connected with television, which we could well do without for the time being! Look at all the arguments that are being used by Ministers in New South Wales, by Ministers in Victoria, by the Lord Mayor of Sydney and by the Lord Mayor of Melbourne in favour of building luxury hotels worth £3,000,000 or £4,000,000 in those areas. Look at the arguments that are being used in favour of building luxury hotels at Southport, in Queensland, tpo! If labour, materials, land and money are available to build service stations and luxury hotels, they are available also to provide homes for the Australian people who need them. The Australian people do need homes. A £3,000,000 hotel in Melbourne and a £3,000,000 hotel in Sydney but only a miserable additional £5,000,000 provided by this Government for war service homes this year!
Anybody who walks round any parts of Australia to-day knows that many men - some of them too young to serve in the last war and some of them veterans - cannot find the money with which to provide themselves with homes. The Minister for Labour and National Service (Mr. Harold Holt), providing a set of figures, has said that there is one house for every four people in Australia. Of course, Mr. Chairman, if you like to work it out in that way, you can say, “ There is one house for every four people, so there should be no housing shortage “. But, quite recently, in Victoria, a royal commission on housing reported that about 35 per cent, of the houses in Australia are occupied by only one or two persons.
– Because some people want to live alone. If the Government believes in free enterprise, it ought to be prepared to allow those people to live alone. The argument of the Government is that because the statistics show that there is one house for every four people, there are houses for everybody. t took the trouble during the week-end to ask the Sydney water board some pertinent questions about the number of houses in Sydney which the board supplies with water and sewerage. In the Sydney area, there are 531,000 houses supplied with water, but only 344,000 of them are supplied with sewerage. So there are 190,000 houses in Sydney with no sewerage. There is plenty of money available for a lot of other things, but this Government will not help the States, with loans or with anything else, to provide this almost indispensable requirement of modern civilization. The total number of persons served with water in Sydney is 2,000,000, but the total number served with sewerage connexions is only 1,425,000. So there are 600,000 people living in the City of Sydney in homes which are not sewered. Yet we hear about our abounding prosperity and about spending money on luxury hotels and the like.
– Yet we are asked to support the Colombo plan.
– I do not mind supporting the Colombo plan. I think we have a duty to the Asian peoples, but I think our primary duty is to our own people. Believing in democratic socialism, I believe in catering for the needs of the people first. The wealthy interests can always look after themselves. They do not need to be provided with the assistance which this Government is giving to them. 1 find from the Melbourne and Metropolitan Board of Works that in Melbourne there are 41.6,000 houses with water and only 356,000 with sewerage. I find that 1,500,000 people in Melbourne have water supplied to them, but that only 1,283,000 are able to use sewers. How can honorable members opposite talk of a great and an expanding prosperity when to-day, in Sydney, Melbourne and the other capital cities of Australia, young people are often asked to live in areas where there is neither water nor sewerage? This Government ought to provide the money for those services, particularly at a time when we have a record budget.
– Do you want to nationalize the sewers?
– That is the sort of banal remark that 1 would expect from a lot of giggling goats who have got into a cabbage patch. What I am saying is that it is the responsibility of the Government to provide the things that the people need and the things that the people want. This Government is not doing that. This Government is creating a situation such that, in a very short time, we shall see the growth of one form of totalitarianism or another. We shall see communism or we shall see fascism. It was governments of the Menzies type which created the conditions in Europe that resulted eventually in the establishment of dictatorships. This Government, which filched an electoral victory with its fraudulent promises, dishonestly and cynically made, has brought the country to its present perilous plight.
There are people outside the Parliament who do the work of the Government. They are to be found, not only in the ranks of the Australian Country party and the Liberal party, but also in the ranks of the breakaway section of the Labour party - the splinter group. These stooges, accomplices and agents of capitalism outside the Parliament tell the people of Australia all sorts of stories about the Labour party. But we are not worried about that. Our propaganda will eventually sink through to the people.
We believe, with Keir Hardie, that ultimately the truth will prevail and Keir Hardie was a very distinguished member of the British Labour party. As a matter of fact, he was its founder. He had to withstand the criticism of his enemies. Some of our critics may be ignorant of the fact when they attack us, but most of those who indulge in criticism of the Australian Labour party outside this Parliament display all the attributes of character assassins and they behave as the accomplished liars they really are. They say things about us which are completely unjustified, and sometimes honorable members opposite aid and abet them in the Parliament with their charges. The Labour party has never been ashamed of its record. In the war years, the Labour party not only successfully mobilized all the physical and material resources of the nation necessary for victory-
– It did not.
– It did. Nobody can deny that. We all know that 1,000,000 Australian servicemen served in the forces during the war. At any one period from 1942 to 1945 there were 500,000 men and women wearing the uniform of one or other of the three arms of our forces. Yet, while the war was on, the Curtin Government and the Chifley Government laid the foundations of the welfare State more broadly than ever before. We also built the superstructure to the point at which this Government had no need to add anything to it. We made the Australian people so prosperous during the war period that in 1949 Australia was the most prosperous country in the world. If honorable members opposite do not accept that statement from me, let them ask their own economists - the people who are advising them to-day.
But at the moment Australia is a byword amongst the nations. The Australian currency has the lowest value of any currency inside the British Commonwealth. Honorable gentlemen opposite can find that out, too, from their economists. They will find it in a monthly review of Melbourne’s Bourke-street traders. They will find it in the statement that we of the Labour party issued the other day. This Government cannot fool the Australian people for much longer on that point. The much-derided Chifley £1 was worth 13s. in 1949, because of Australia’s participation in the war. To-day, the Menzies £1 is worth scarcely 5s., and it has not yet reached its nadir. The value of the Australian £1 now is as low as it ever was at any time of crisis from 1870 and 1890, through to 1929. But the end is not yet.
Honorable members opposite may cheer. They have the numbers to-day, but the time is coming when Nemesis will catch up with them and they will be required to give an account of their stewardship. We shall find that the arguments they put forward then will be no better than those they are putting forward now. Their job is to put value back into the £1. They promised to do that, but they have not done it. They have allowed the value to ooze out of the £1. The people who are suffering because of their failure are the war pensioners, the civil pensioners, people with fixed incomes and people working under federal awards, who are being denied wage justice because of the operation of an Arbitration Court judgment. My view is that what the State Premiers ought to do if ever they come here again on the question of wage fixation is to stand by what they have done and maintain the cost of living adjustments.
– I have listened for 30 long minutes to the shrieks of the honorable member for Melbourne (Mr. Calwell) and, during the time that he has been shrieking, I have been able to find only two arguments that can be debated. The first is the somewhat extraordinary statement that it is not the responsibility of the Opposition to put up an alternative budget. He said that the Opposition had no responsibility to show that if it were in government it would offer alternative plans for the betterment of the Australian people, but he went on to say, “ I refer you to the policy speech of my devoted and beloved leader, the right honorable member for Barton “. The right honorable gentleman may be the beloved and devoted friend of the honorable member for Melbourne but if he wishes to find some one whom we on this side of the House could respect, he must look around a little further.
Once we ascertain what was promised during the last election campaign we may be certain that there was a good reason why the Australian people would not elect Labour to the government benches. Airyfairy theories and promises were made to win a few votes. Those promises would have cost the Australian people in the vicinity of £188,000,000 of which, on the arguments put forward by both the honorable member for Melbourne and the Leader of the Opposition (Dr. Evatt), something like £95,000,000 would have had to come out of company profits. There you have the cost- £188,000,000 which would have to be found by a Labour government if it were to honour its promises at the elections in December, 1955. Where would that money have come from? It would have been obtained by imposing swingeing extra taxation, or by issuing treasury-bills. In other words, one section of the people would have been asked to bear the additional burden. If they had not been asked to do it, we would have had inflationary courses of a kind that Australia’s history had never known. Therefore, one need not ask why these people on the left hand side of the House were summarily rejected by the Australian electors on 10th December, or why they would be summarily rejected again if they were put to the test in the immediate future.
The second point that I would like to make in the debate concerns this claim of the Opposition that the time has come when this Government should ask for controls, or that the States should be requested to put extra controls in the hands of the CommonWealth. 1 am not one of those who believe in controls because usually there is a tendency to control effects - which is never beneficial or really helpful - whereas what one should do is control the causes and see that incentives are sufficiently strong to permit the development of a healthy and prosperous economy. Let us look at some of the controls that were mentioned by the honorable member for Melbourne and let us also inject one or two facts into the discussion. The honorable member did not mention a solitary fact.
What of the question of hire purchase? Would we, at the present time, be justified in controlling it? I doubt it, because in September of last year, when the Prime
Minister (Mr. Menzies) had a conference with the hire-purchase companies, he said, “ If your outstandings do not extend beyond £216,000,000 at the 30th June next we will think you have done a pretty good job “. As a matter of fact, their outstandings were £209,000,000, so they did better than the Prime Minister or the Government asked them to do. They did not extend their advances to the degree that some people thought they might. Secondly, on the question of capital issues control, do we want it at the present moment? I have my doubts. As a matter of fact, in terms of equity capital, the amount issued on the market last year was smaller than that for the preceding year, although there was some increase in mortgage capital.
Now I come to this very contentious question of the company profits on which the Opposition is so anxious to get its hand - these vast amounts that are earned by companies and put back into the fat pockets of the shareholders. Well, where are they? Last year, company profits amounted to £550,000,000. Of that amount £220,000,000 was taken in company taxation, leaving £330,000,000. A total of £110,000,000 was kept as undistributed profits to provide the very investment that was mentioned by the honorable member for Melbourne. Therefore, we find that something like £120,000,000 was distributed to shareholders. As taxation on shareholders’ profits is about 5s. in the £1 they had left in their pockets £90,000,000 after taxation had been levied and provision had been made for undistributed profits. What would the Opposition do with this extra £90,000,000? lt was prepared to spend £188,000,000 in providing extra benefits but, plainly, it could not have been obtained from the £90,000,000 that went to the shareholders.
When I tell honorable members that out of a total national income of £4,300.000,000 something like £2,600,000,000 was made up of wages and salaries, they will see that there is not at the moment a great deal of scope for either exercising controls or imposing very much heavier taxation. Therefore, I say to honorable members, “ Let us look at the facts. Let us look at the arguments put forward by the honorable member for Melbourne and ask ourselves whether he has made a real contribution to this debate “. I say, immediately, “ No On his first point, as to whether or not an alternative budget should be provided, I say without reservation that it is the responsibility of an Opposition to show what it could do, and to permit the people to judge its capacity, instead of merely being critical of the Government and trying to find a few harsh things to say to those who may be on the treasury bench. Secondly, I argue - and will continue to argue - that controls can never be the way out of Australia’s problems. The only way is to ask how we can increase production and productivity; how we can make certain that every one gets a bigger slice, rather than compound the slice and ensure that one section gets a bigger share? I hope that that disposes of the arguments put forward by the honorable member for Melbourne who, I might say, has not had the normal courtesy to sit in the proper place in the House and listen to this debate as it proceeds. He has not bothered to listen to the reply that is being given to the argument that he has put to the Australian people. 1 come now to the budget itself. No one with an ounce of decency in his system will deny that the performances of Australia during the time that this Government has been in office have ‘been spectacular. No one can deny that this Government has consistently presented all the economic and financial facts to the Australian people, whether through the quarterly Treasury summaries, the national income and expenditure statements, or other Government documents. The facts are there for all to see. Secondly, having some litle knowledge of these things, I am prepared to say that, in terms of economic analysis of trends, the last three budgetspeeches of the Treasurer, and the Prime Minister’s two recent economic statements, have presented a complete picture of what is happening, and of the trends in Australia’s economy. Therefore, no one can deny two things: One is the advances that have taken place while the Menzies Government has been in office and the second is the fact that Australians have been able to make up their own minds, from the documents presented to them, what the trends might be.
No government wants to look back continuously at the past, thinking in terms of what it had achieved and relying on its achievement to win future elections; but I am prepared to say that if one looks at this Government’s performance, whether in. terms of population growth, of rural production, of the supply of power or fuel, of the 75,000 homes that are being provided per annum, of the postal and telegraph facilities, or of anything else, one is forced to the conclusion that there have been exceptional performances during the time that this Government has been in office. We find in those achievements not the appearance, as the honorable member for Melbourne suggested, but the realization of prosperity. We, as a government, believe that our problem to-day is to ensure that prosperity continues, for we have unbounded confidence in the future, provided only that the people show moderation. We are certain that if this Government stays in power, and if we can induce the people of the country to show moderation, prosperity will remain and will have a better chance of increasing.
The real problem facing the Australian people to-day is that of an energetic people trying to push ahead just a little too rapidly. The influences that were noticeable two years ago have been proceeding at a pretty fast pace, and now we have to ensure that they do not break into a full gallop and allow something untoward to happen to our economy in the future. The Government does not look at the position in a lugubrious way, or in the downcast and forlorn fashion of the honorable member for Melbourne. We think in terms of continuing prosperity and of making our contribution to the welfare of Australia.
As I have said, do not let us look at the past and concern ourselves only with our achievements. There are one or two problems that the Government seems to think should be highlighted, and which have been highlighted in the speeches made by the Prime Minister and the Treasurer. First, we have the problem of increasing consumption demand; that is, an increasing amount of our national income going into consumption. Secondly, we have a potential for inflation of prices and costs. Thirdly, we have what I would regard as indifferent expenditure by the State governments - that is, the money given to them by the Commonwealth being indifferently spent. Finally, there is the problem of transport. There is the other side of the picture - we have two problems, one being to increase savings and the other to increase production and productivity.
If the Prime Minister were here, I think he would admit that 1 have given a crystallization of the views that he has put before the Parliament on at least two occasions. Let us look at the first problem, that of increasing consumption expenditure. 1 have mentioned that our national income this year will be about £4,300,000,000, and of that amount something like £2,600,000,000 will be taken up by wage and salary earners. From those facts we arrive at four conclusions. This Government does not, and will not, argue that wage and salary earners should not receive increased earnings. However, we wish to direct attention to the consequences that can flow from a situation in which such a substantial proportion of the national income is taken up in salaries and wages. What are the four conclusions? 1 have said that the national income has increased by about £265,000,000, or 61 per cent. Wages have increased by £209,000,000, or 9 per cent. In other words, wage and salary earners should be grateful to the Menzies Government, because the percentage increase of wages taken by them is greater than the percentage increase in the national income. I argue, therefore, that if ever there was an occasion when a government should be congratulated by wage and salary earners, this is the occasion and here is the opportunity to do it. Two other facts emerge from this consideration. The first is that consumption demand, or the amount of income that goes to the consumer, is now so extraordinarily high as to dominate the national accounts and, therefore, the trend of events. If we are looking for a way to make some sensible change we must look to that amount to see what can be done. We must ask ourselves whether we can induce wage and salary earners to save a little more, to be a little more thrifty and put their money away for the future, for investment in the development of Australia.
I should emphasize one other fact when considering the immense proportion of our national income going into consumption. A community like ours needs an intensive developmental programme. We need money that can be put into investment, and the more money that is saved the more is available for investment for the develop ment of the country. It follows that if wages and salaries take an increasing percentage of our national income, a drive must be made to induce wage and salary earners to save their money and put something away for a rainy day.
On the question of inflation I say nothing other than that the causes change so frequently in Australia that we have to change our ideas about inflation from month to month, or at any rate, from six-monthly period to six-monthly period. The last quarterly cost of living adjustment showed’ that the price of potatoes and onions was a major cause of inflation. I felt some responsibility for it, because, although I do not eat either of those vegetables, I thought that, as Minister for Primary Industry, I might have done just a little to increase production at the right time. On another occasion the inflationary trend might be most apparent in increased charges by government instrumentalities, such as for electric power. At another time the inflation might be accelerated by central import licensing, resulting in removal of the competitive influence of overseas goods. I mention these matters to show some of the main influences affecting the Australian community. I mention only one other as one of our real difficulties. I refer to “the problem of transport. This is not a matter wholly or exclusively within the province of the Australian Government, but 1 believe that governments must pay increasingly greater attention to transport, because transport costs are gradually becoming a real factor influencing increases in costs.
Let me now turn to the other side of the picture. I have mentioned some of the difficulties. I now turn to the need, first, to increase savings, and secondly, to increase production and productivity. We know that if we are to progress, and progress rapidly, if we do not borrow overseas, or the amounts we receive for the sale of our primary commodities overseas do not increase rapidly, then we must save in order to invest. The amount of investment has been gradually increasing during the last few years. The amount of money from the national income put back into investment has been continually increasing, but the amount actually saved has been gradually diminishing. ‘ Personal savings have fallen from £357,000,000 in 1953-54 to £305,000,000 in 1954-55 and £280,000,000 in 1955-56. As I have said, there are two ways in which we can increase our production and productivity. First, we must make the 40-hour week a little more effective, and, secondly, we need more capital development, which can only come out of savings. Therefore, the Government has accepted responsibility for trying to increase the savings of the community. One very sensible and, I think, splendid way in which it has given an incentive to increase savings is by allowing trading banks to enter the savings bank field. Already, over a period of a few months, the three new savings banks that have commenced operations have received deposits of about £54,000,000. That is an extraordinarily large amount, considering the short period of time in which the banks have been operating. I believe that in time it will be proved that one of the most sensible innovations that this Government has agreed to in the last eighteen months has been the granting of permission to trading banks to conduct separate savings banks. I have great hopes for that course of action. I hope that in time it will be one of the means by which working sections of the community can be induced to save money - to put it on fixed deposit and to receive a fair return for it. That is one of the means by which we can hope that in the future there will be considerable benefits to the Australian people.
Now, sir, can 1 come to a point which 1 wish to make? I started to make it at the beginning of my speech and I wish to complete it now. As I said, one does not want to speak too much of the performances of a government to which one is proud and happy to belong. However, I think that, for the record, some of the performances of this Government should be stated. I mention, first, employment, which has risen during the twelve months to May, 1956, by 56,000 or 2 per cent., bringing the total employment in this country to 2,000,000 males and 761,000 females.
In the field of primary production, the record has been outstanding. The production goals that were set in 1952 have in all but a few branches of industry been realized. Primary industries to-day are doing better than was expected, although faced with the problem of increased costs and, to some extent, lower returns. The percentage increase in industrial production in the eleven months from July, 1955, to May, 1956, is -
I could paint exactly the same picture with industrial expansion and new buildings. In terms of industrial buildings, greater numbers are being provided than ever before, and I mention that new factories commenced in the March quarter of 1956 were valued at £15,000,000. That is to be contrasted with the March quarter of 1955 when the value of new factories commenced was £7,800,000. The record in housing is exceptional. Whilst there has been a little tailing off at present, only yesterday the Minister for National Development (Senator Spooner) pointed out that from this moment we can expect that the number of new buildings commenced will start to increase and that part of the funds to be provided for these homes will come out of the deposits now being made with the savings bank sections of the trading banks. Therefore, sir, I say to you quite emphatically and quite clearly that here is a government dedicated to prosperity. Its achievements have been substantial. I venture to say that with moderation - and I repeat the words “ with moderation “ - its performances will be just as good in the future as they have been in the past.
Now let me come to the Labour party. I do not agree with the honorable member for Melbourne that it is not the responsibility of the Opposition to say something sensible. I do not think that it is right that Opposition members can go to the Australian people and create the impression that they think those people are slightly moronic or lacking in intelligence and therefore that anything the Labour party says to them will be accepted. I want to point to two things. First, I want to ask this simple question: Where is the Labour party heading to-day? Does it mean anything significant that members of the Opposition, with one voice, talk in terms of control - price control, profit control, capital issues control and interest control? That is their only suggestion and their only remedy for our economic troubles, small as they might be.
What do they think? The first thing they says is, “ Let us fleece the fellow who has made a little bit of money; let us drag every bit out of him that we can possibly get from him and if we cannot get it from him, let us use the printing press and print a few notes “. Secondly, they say, “ Let us not worry too much about causes, but let us control the effects and put the whole of the Australian economy in a strait-jacket “. Finally - and this is the point that 1 want to emphasize - when the first two points are woven into their idea of controls and the suppression of democracy, the picture of where the Labour party is heading to-day becomes clear. The picture is that they are heading for a dictatorship as surely as there is a dictatorship in the iron curtain countries in other parts of the world.
Let us go back to the New South Wales executive of the Labour party, lt is suppressing democracy and free speech by any person who may want to show some intellectual talent and ability, lt has dismissed from the Labour party people dedicated to the true Labour ideals of liberty and fraternity. The federal executive of the Australian Labour party is abolishing and reconstituting branches that do not conform to present Labour party thinking. And we know that the Labour party wants to control the Australian economy.
I put but one other point to show the direction in which the Labour party is heading. In the last couple of weeks, a little pamphlet has been published. It is called “ The Light Glows Brighter “, by Dr. John Burton, heralded by Mr. F. E. Chamberlain and by the Right Honorable H. V. Evatt. This document has running through it only one trend, only one line, and that is that the socialists or the Labour party should find common cause with the Communists. It does not matter what the federal executive of the Australian Labour party might think about this matter; the facts are too clear, that if Labour gets the opportunity to benefit by association with the Communists, of course it will associate with them.
Therefore, Mr. Chairman, you sec in this argument the bringing together of statements and facts which can lead a sensible person only to these conclusions: Firstly, that the Labour party wants to control the private sector of the economy. Secondly, it has no resentment or resistance to common cause with the Communists. Thirdly, in the Australian Labour party branches and in the executives normal democratic instincts are to be suppressed. The Labour party has developed a barren, defeatist attitude that will bode no good to the Australian people. If Labour happened to be in government, it could mean only that the Australian people would be the ones to suffer. There is no evidence anywhere of intellectual capacity on the other side of the chamber. There has not been one sensible suggestion made and not one worth-while conclusion to which I would listen.
I return to the question of control. I suggest to the Leader of the Opposition that he listen to the .warning given by the Duchess in one of Lewis Carroll’s famous books. She said -
If every one minded their own business the world would go round a deal faster than it does. 1 say to the Opposition that if it kept its nose out of other people’s business, we would have a real chance of prosperity and the world would go round a great deal faster than it does at present.
As members of the Government, we are proud of our achievements. We are confident that, given reasonable conditions and without any great fall in overseas prices, the prosperity that the Australian people now have can be kept going. It can be kept going only if the Labour party accepts the idea that it must not foster the spirit of class conflict. It must have some responsibility to see that it does not place the brake on future development, and that it does not create a feeling of hostility throughout the community which can work only to its advantage.
.- I am always very interested to hear a speech by the Minister for Primary Industry (Mr. McMahon). He reminds me of a leprechaun. They are the little fellows from Irish mythology who are always looking for the crock of gold at the end of the rainbow. The Government, when it is being attacked from this side of the chamber, always trots the little Minister up to give his leprechaun act, to say that there is prosperity and there is light, even the light that glows brighter, which he objects to; that everything is the best in the best of all possible worlds. In that role he is eminently worth listening to because he is an optimist; but when he gets into the more complicated machinery of how the Government has failed to maintain prosperity, and when he gets completely bogged in questions concerning the future of Labour, of course the time goes very slowly.
– Alice in Wonderland!
– Yes, of course. He reminds me of Alice when she did not know which bottle to drink from - the one that would make her larger and larger, or the one that would make her smaller and smaller. That, of course, is the problem of the Government to-day, in an economic sense. It does not know whether- it can get through the crack in the wall, or whether it should stand by and get a kind of economic elephantiasis, and bluff the game through.
There is one point in the Minister’s statement, however, that must be contested. He talks the glib old-fashioned nonsense about production. You can save everything by production. He does not look at the causes of the terrific economic agonies that we suffer to-day. He speaks of production, but was it not production that resulted in the Brazilians burning their coffee and the North Americans ploughing in their cotton, the oil not being sold, the potatoes not being grown, and the milk being poured down the drain? If you do not have some control of production by some people somewhere, you get the wrong kind of production. Is the Minister suggesting that everybody should start making things in the electronics industry, to the neglect of others? It is a childish idea, but the Liberals are in the habit of getting some sort of a nostrum or prescription for prosperity and ladling it out like the free medicine that they no longer purvey.
The honorable member for Melbourne Ports (Mr. Crean), the honorable member for Stirling (Mr. Webb), the honorable member for Eden-Monaro (Mr. Allan Fraser) and many others on this side of the House have made some truly brilliant contributions about what is the matter with this economy.
Government supporters interjecting,
– Of course they did, and I congratulate them. It is a happy thing for the Labour party that they are on this side of the House, because that is the modern trend of thinking and they are prepared to make an answer to this meagre budget, with -which I shall deal later. They have already answered what the Minister has said, and if he cared to read “ Hansard “, or if he had been in the House to hear them, he would know that. The proposition that they make, and which he cannot deny, is that we are searching and probing for the causes of this inflation, and that we have proven - and I think clearly, on analysis - that inflation is not caused by the worker getting enough money to live. There used to be an old story, retailed by every Liberal on the hustings, about the glorious adventure of private enterprise. We all started from the same mark, according to them, and with a bit of luck and a rich relative, any one could make £10,000 a year and get a seat in the sun at the Union Club. Of course, the Vice-President of the Executive Council (Sir Eric Harrison), who is shortly leaving us, will go to even more lush pastures. He will get a seat in the clubs of Mayfair, where he can sit at the window and watch the traffic go by. The worries of the people will no longer touch him.
Let me get back to my point about the real cause of inflation: Labour members who spoke before me took the budget as one piece and analysed it. They proved to the satisfaction of fair-minded people, at least, that there was an inflation and that it was a profit inflation; furthermore, that it was a profiteering inflation. We know that the making of statistics knows no end. But statistics have to be sifted and sifted to find the elemental grain of truth in the mass of figures. I shall attempt, without any great ability with regard to the statistics field, to support what has been said very brilliantly by honorable members on this side of the House, by going back to the time when inflation really became troublesome. In the second or third year of the life of the present Government inflation was rolling up, and this depression was becoming obvious to all. We need only look at the figures for as late as 1955 to see just where the inflation is and what has caused it, as has been pointed out by honorable members on this side of the chamber. There are three simple figures. Even the Vice-President of the Executive Council should be able to understand them and absorb them.
– Provided that the honorable member can read them in an interesting way.
– I shall read them with elan and eclat. The Australian national income increased, in money terms, from £3,558,000 in 1952-53 to1 £4,033,000 in 1954-55, or by approximately 12 per cent. However, the share of that income which was received by various sections of the community underwent considerable change in distribution. The income of farmers, for instance, declined from £592,000,000 to £480,000,000, a fall of £112,000,000, or 19 per cent. The main factors accounting for this decrease in farm income was a fall of more than £40,000,000 in the value of wool produced, despite an increase in the quantity of wool sent overseas; a fall of 30,000,000 bushels in the wheat harvest, accounting for approximately £20,000,000; and an increase of farm costs of £30,000,000, a large part of which was accounted for by depreciation, and the construction of houses and provision of amenities for farm employees. So obviously, the farmer did not cause the inflation, because his income had fallen, although it was still very substantial.
Now we come to the worker, the third of the constituents of the economy that we can take and analyse. The same authority which supplies the previous figures I have cited says that wages and salaries increased in the same period from £2,039,000 in 1952-53 to £2,321,000,000 in 1954-55- the last period to which we can go for standard figures - or an increase of 13 per cent. But over that increase of 13 per cent, that the Liberals and their economists babble about, employment increased by approximately 6 per cent, and would, therefore, account for approximately half the increase. The basic wage was pegged from August, 1 953, but marginal increases based upon the metal trades formula accounted for a 2 per cent, increase of award rates. The balance of the increase of wages and salaries was, in the main, due to increased overtime, incentive payments, and payments in excess of award rates. So the workers’ new money was partly absorbed by more consumption, and at the most it was 6 per cent.
But here are the really significant figures, which bring home to us the sober facts about where the inflation is. I refer to the figures concerning companies, which show that company income, during the same period, increased from £378,000,000 to £505,000,000, an increase of £127,000,000, or more than 33 per cent. Every honorable member must realize the impact of that increase of 33 per cent. What was it? It was not money for the farmer to develop his land and to sell his products overseas and so assist us in our balance of payments problem. Good luck to the farmer if he could get a little more! It was not for the worker who had, by means of incentives, sending his wife to work, and going for overtime, to try to catch up with the cost of living because adjustments were denied to him by a reluctant arbitration court. This was money for jam; because all the new money created by these profits fed on the inflation and created more profits.
As I have said, company income increased by £505,000,000, an increase of £127,000,000 on the previous figures, or more than 33 per cent. Included in the company income of £505,000,000 was an amount of £187,000,000 in undistributed profits and money used for further expansion or added to reserves.
You do not need. to be an economist to understand the significance of those figures. You simply need to be able to read basic English to appreciate that if the income of the countryman, the farmer, went down by 19 per cent., despite an increase of population and some increase of the cost of living, which went up by 6 per cent., the ravening inflation was created by the 33 per cent, increase of income made by the companies which have made such a big thing out of the boom. That is where the inflation has come from. If you accept that - and who can deny it on these facts - you must accept the statement of the Leader of the Opposition (Dr. Evatt) that there has to be some control. Who is to apply the control - the combines or the Commonwealth? I ask the Government to answer that question, because as surely as night follows day there is a control, an inner control of prices in this country, and everybody knows it. Whoever heard of that old-fashioned theme, the law of supply and demand. It is as extinct as the dodo.
– It is a fairytale.
– It is one of the fairytales of the economists and the businessmen to-day. If somebody is fixing the price we will pay, why should it not be the elected Parliament of the Commonwealth?
Why should it not be the supreme authoritative boss of the people in the federation rather than a group here, a cartel there, and a miserable little collection of retailers or wholesalers here and there? Any honorable member can tell you from experience in his electorate the story of the chap who says, “ I can sell more cheaply, but I dare not because I belong to the group, and if I do I will be out “. When he is asked why he will be out, he says, “ I will get no more supplies “. Only the other day a furniture manufacturer in my electorate told me he was selling at least 12 per cent, higher than it would suit him to sell and get a living out of his enterprise, because of the boys on top. The Government says, “ This is a free economy. We cannot have controls”, when in the face of that deliberate lie this country is in the grip of one master control, the control of credit. You do not need to shackle a donkey by the foot and by the neck, as long as you have a grip on him, as the Government has a grip on the country with credit control. To-day, the Treasurer made some evasive references to credit, and he knows very well that he and the Government have dictated how the economy will be run, and how the Government will feed money and resources into the economy. If this glowing picture which the leprechaun from Lowe gives us about the country is true, if there is a crock of gold at the foot of the rainbow, if everything is so wonderful in this best of all possible worlds, if he, like Alice, must look at himself in the looking glass and get only a delightful picture, let me ask him why the workers cannot get homes. The economy allows piracy by overseas investors. We have heard for years the nonsense about getting money from overseas. Of course we must get money from overseas, but at what price? Investors ask, “ Are there any rube countries in the world? Are there any corny colonials? “ and if they will let them in and, in an industrial sense, rape those countries of their money. There is only one such country left, and that is Australia under a Liberal government. In Nehru’s India, the government says that 51 per cent, of the capital in the country must be Indian money or one does not operate. Every one knows what happened when we tried to do the same thing to Egypt. We did not get away with it, because Egypt, too, wants to look after its own ventures.
We are a free economy, the corny colonials who used to be different but who to-day have slipped back because of the Government’s policy. We say, ‘ You can come in “, and of course there is exploitation. Where, overseas, is the money coming from for housing? Where is this money that we used to get from overseas, in limited quantities perhaps, for long-range investment? It is coming here on what the boys call the “ grouter “. One can get 20 per cent, and 30 per cent, in Australia if he forces things a bit. Look at what General Motors-Holden’s Limited has done to the economy! It may produce a good car, and it may be a good company, but standing above all that are the shocking profits, and they all go out of the country. So it is with other companies. They come in, but they are not looking for long-range investment. Nobody is helping us to build dams or houses. No one wants to invest his money at 6 per cent, for 45 years. He wants to borrow at 5 per cent., or even 6 per cent., rake off a profit of 30 per cent., and take it all away and have it spent in another country. One of the causes of inflation in this country is this money, anil the banditry that is going on with overseas capital. It is all very well to talk in general terms of investments from overseas, but if overseas investors are not prepared to take their chance with the rest of the economy, because they are geared from the other combines and monopolies of the world to produce something and then fix their own price, it is high time that we, the Australian people, reconsidered their place in our future. Government supporters speciously say that there are no controls. Whenever they want a control, they impose one. They preach the faith, and then deny it. In practice, so far as controls are concerned, Government supporters go to church every Sunday and then live the life of a libertine for the rest of the week. They say, “ Our earning power overseas is in jeopardy; our balance of payments is in trouble “; and they impose most severe import controls to the restriction of industry and. indeed, of full employment. How successful have they been? Their import target is £54,000,000 a month. This month it is £70,000,000, and the month before it was £65,000,000. There is a control, a drastic control, and their own people arc writhing in anguish under it. Let them come here and glibly say, as the honorable leprechaun from Lowe said before, “ Everything is all right in the best of all possible worlds “. It cannot be all right.
I did not want to develop my criticism of the Minister for Primary Industry so closely, so I return to the budget. The last budget presented here was known as the little budget. It was presented by the Prime Minister in person. Unhappily, he is not here to-day. He has an assignment in Egypt, which unfortunately has not come off. Antony and Cleopatra also tried to conclude a romance on the banks of the Nile, with equal ardour, and probably much more success. Shakespeare, who has a word for everything, said -
The foul Egyptian hath betrayed me;
My fleet hath yielded to the foe; and yonder
They cast their caps up, and carouse together. . . .
It almost sounds like a victory for the Australian Labour party at the next election. The previous budget was known as the little budget, and it was well described. It was little in content, but very wide in implication. The loyal servant of the Prime Minister, his deputy, did not want to outshine his leader in his absence, so he outdid himself. He produced what I shall call the pygmy budget. If I may so describe it, it is littler than the little budge; and everybody looks down on it. Even members of the Liberal party look down their noses on it. 1 shall prove that by the remarks of some of the Liberals themselves. In the “Argus” of 31st August, 1956, a few days prior to the presentation of the budget, and perhaps with some knowledge of what the Treasurer was going to do, Liberal-Country party delegates had some very pertinent remarks to make. Mr. J. Murray Smith, of Geelong East, said -
Sir Arthur says we must control wages, but he has no interest in controlling prices. Never at any time have wages been ahead of the cost of living. Bread goes up id., but a sandwich then goes up1d.
This was said by followers at a conference sworn to support the Liberal party, come weal or come woe. Mr. A. J. Sinclair, of Elsternwick South, also had something to say. This is pertinent, because these are their people, their own bosses, telling them where to get off.
– We should expel them, should we not?
– Of course, it might come to that. Mr. Sinclair said -
I do not like price control, but I do not like people being exploited either. I am a dairyfarmer at Chelsea, but do not tell me milk would not be dearer if it was not controlled.
That is right back into the cowyard of the Australian Country party member for Hume, who said something about expelling somebody! Does he agree that if milk was not controlled it would be dearer? That is a thing he knows something about, andI advise him, in making comments, to mix the milk of human kindness with his sarcasm. This intelligent, human, dairyfarmer from Chelsea said -
If the last two applications for rises had not been knocked back, the price would have gone up considerably.
The Minister for Defence Production (Sir Eric Harrison) and his Liberals, should think about that.
In a wide discussion on the budget, there are so many things one would like to say but which cannot be said because of the limited time. We contest the Government’s view that full employment and prosperity cannot live together.If the Government wants to inhabit the treasury bench for another six years, for the sake of the Australian nation it had better get used to the idea that full employment can prevail. The line that the Liberal party and the Government take to-day is that everything is wrong because the worker has a “ quid “. That futile and nonsensical conclusion is completely blown out by the statistics I have quoted. I see that the Minister at the table is the Minister for Defence Preparations - a glorious word!
– The honorable member has even got that wrong.
– I should have said the Minister for Defence Production. Yet he is a sort of precursor, a John the Baptist - he comes before the real master - and for that reason I presume that he will be interested in the Army as well as the project at St. Mary’s where there is so much shocking waste. But I am sure that as an ex-serviceman of distinction, he has not missed in the Estimates - and there are so many diverting things to talk about in the time available to us - the item at page 213 relative to the strength of the Army. It was Henry Lawson who said, “ My army, oh my army, they are marching four abreast “. Let honorable members look at this item on page 213 of the Estimates.
The Regular Army, according to the Estimates, is 26,000 strong. There are 12,000 troops, that is privates, sappers, gunners and drivers. Exclusive of the Chief of the General Staff, there are eleven generals to every 1,000 men. There are 250 colonels and lieutenant-colonels. Therefore, there is one colonel, or, if he is unlucky, one lieutenantcolonel, to 50 troops. There are 2,800 majors, captains, lieutenants, and - I hate to say it - sub-loots. That means one officer to every five men. Will the right honorable member say that the Australian Army is all chiefs and no Indians? I think that he would have to agree with me and say that it was.
I say this as a lead in because the criticism levelled at the Leader of the Opposition to the effect that he advocated cutting the defence vote is not valid. The Government could economize on the defence vote and not lose one whit of the efficiency that it has to-day. It could improve on the defence vote by cutting it by £50,000,000.
The Government has this awful St. Mary’s project for which the bell tolls every day because of inflated costs, incentive payments and the contract system. When the architects are paid £1,500,000 to put the thing in, one begins to wonder. The Government talks about general defence, but we find that, after all these years in office, the best it can do is to borrow Labour’s plan on aerial defence as propounded by the late John Curtin during World War II. I refer to the arc of islands defence, from Cocos to Manus, having our troops up north and putting our armies in the field near the jungle, and generally disposing the forces in accordance with the Curtin plan. After all this time, the Government is thinking of it. It has been waiting for eighteen months, as Sir Frederick Shedden has said, to re-equip the Air Force, and over this there is the pale gloss of patriotism.
Members of the Government always claim to be forward thinkers. They use such slogans as, “ Defence is our first line of offence “. But when we examine them, we see the things they have done in regard to defence, and we despair of their having any nous in regard to anything.
So it is on the economic side. The Government accuses the worker of creating trouble in the economy, although it is it which should be controlling prices. This Government - and this party believes in the principle, too - should have a right to say whether the people are being exploited, and to take appropriate preventive measures. When we are told lies about defence and are hoodwinked into defence contracts of a nature such as that at St. Mary’s, we begin to wonder just were we are going.
In this debate, I am forced to slip from side to side, from subject to subject. There is another point in the budget that does distress me. 1 see, among the smaller items of the Estimates, an allowance of £6,000 for the Petrovs - that is for Petrov himself and Madame Petrova, his wife. So £6,000 is provided for their upkeep for the next twelve months. An amount of £400,000 is provided for the security service which has not caught a spy to our knowledge, except the two that are its permanent guests and are to be its permanent guests apparently for all time.
What an expensive proposition that is! Of course, they have the Petrovs! They have caught tartars, and have to be with them. But measure £6,000 a year for their upkeep against the amount provided for the pensioners in my electorate! Let us be fair! Pioneers come before Petrovs, in my set-up, anyway. When an old lady tells me that she has enough money for lunch but not enough for dinner, when an old lady tells me that she has enough money for breakfast, but not enough for lunch; when I am ashamed to see her come out of a shop after buying one sausage because the local butcher does not ask whether one is a pensioner or not when one is buying food, the contrast is too wicked to be overlooked. I do not know what is going to be done with the Petrovs, but surely this is a splendid payment when measured against the Government’s cold-hearted decision not to help the pensioners.
Was the Government impressed by the pensioners sleeping on the steps of Parliament House, and when the kindly Treasurer said, “ Well, I will ask a member of the anti-Communist Labour party to tell them I will see them in the morning “? Members of the Government will not even give Opposition members the privilege of talking to their own people. They must be delighted that Petrov can write up £6,000. Plenty of caviare on their bread and butter! Not even hundreds and thousands on the poor old pensioners slice! And that position cannot be rectified without an increase of the pension. An increase is coming, all right! It will come when the Government gets close to its masters. It will come when Nemesis, the black cloud, settles over the Government. It will come when the Prime Minister and his’ party have to face the country. It will come as a final bribe to those poor, old people to vote for them again, and get sucked in again, and starve again.
The leprechaun from Lowe has told us that there is abounding prosperity. If everything is so good, why has not the Government given some of this abounding prosperity to the pensioners? Why has it not been fair enough to look after the pioneers of this country? Many of us in this House are their descendants, and they have got very little out of this country except the right to work hard for it, and they never had any opportunities to save for their future. This subject is paramount in this country. Pensions will come up for debate in every budget, and I am always pleased that they do come up for debate, because the Opposition can then answer the contention made by the Minister for Primary Industry who said that we had not given the Government any alternative proposal.
We gave the Government an alternative in relation to pensions. If members of the Government will read the policy speech of the Leader of the Opposition on the scale of pensions and implement that proposal, the Opposition will vote with the Government on that matter. But the Government will not do anything of the sort. There is no question of any justice in this. It is just a piece of political blackmail. The slogan of the Government is, “ Hold everybody off whom we have to placate at election time, then give them the bunce just before the election “.
I have said that this is a pygmy budget. lt is a pygmy budget because everybody looks down on people who present a budget that does not consider the needs of the nation. Australia is not a little pinch-penny island, starving to death. We have 3,000,000 square miles of country, and just under 10,000,000 people, and either we have a destiny or we have not. We have no destiny under the Liberal party and the Australian Country party coalition because they think in tight commercial phraseology, which they translate into finance in this Parliament by saying, “ We have to cut our cloth “. W. S. Robertson, the great entrepreneur in the zinc industry, said, “ I do not believe in any of these things. If you are a young country, go out and get what you want. If you are not able to pay for it, your sons or daughters, or posterity, will pay for it”. This meagre budget, this pygmy budget, this misshapen thing has been brought down to hold a situation until the Leader of the Government returns. The budget has answered no questions. It has answered no question in regard to inflation; it has answered no question in regard to homes; it has answered no question in regard to pensioners; it has answered no questions in regard to prosperity. But it does put a huge question mark against employment and against our future.
Order! The honorable member’s time has expired.
– One of the penalties of being a member of this chamber and a Minister for a long period is that, on the occasion of every budget debate 1 have to listen to the honorable member for Parkes (Mr. Haylen) wending his way through a labyrinth of foolishness and conjecture. I used to think, in his early days as a member of this chamber, that if by any chance he were defeated in his electorate, he could go back to his profession of journalism and eventually become a good editor, but I am now firmly convinced, after listening to him for a number of years, that he is fitted to do no better than sub-edit some comic strip in a third or fourth rate publication.
I do not intend this evening to deal with the budget as I usually do. Since the honorable member, by talking about the St. Mary’s ammunition filling factory, has given me an opportunity to direct my remarks to that project, for which I, as Minister for Defence Production, happen to be responsible, I propose to devote my remarks to it.’ It is rather strange, in view of the criticism published outside this chamber, that there has been no sustained criticism of the St. Mary’s project here. I propose to deal with the outside criticism, and, at the same time, to state clearly the reasons why the Government decided to undertake the project, and the great value it will be to Australia.
A little while ago, the Public Accounts Committee made some observations about evidence taken from the permanent head of the Department of Defence which indicated that we were not in a position to mobilize our forces at a given time. The shrieks from sources outside this chamber rose to high heaven following the publication of reports about that evidence, and the Opposition had something to say about it. At the same time that the Government’s critics criticized it because Australia could not reach, and had not reached, a stage of mobilization - something that no country with the possible exception of the iron curtain countries has ever reached in peacetime - they criticized it for establishing something that is the essence of mobilization - a factory for the manufacture of arms and, particularly, munitions, which are essential to the use of conventional weapons. The other day, I told a leading executive of one of Australia’s great journals that I could not understand the criticism directed at the Government over the St. Mary’s project, I pointed out that it is the essence of mobilization, because a country cannot be brought to a stage of preparedness if it has no ammunition for its conventional weapons. I pointed out that there have always been scandals associated with munitions production in time of war. The executive replied, in the plainest terms, “You know, old chap, you just cannot win at this game “. I asked what he meant by the words “ cannot win “. He answered, “ If a war breaks out, and the country is not prepared and has not the necessary ammunitionfilling capacity, your skin will be on the first row of the barbed wire fence outside your home. If, in time of peace, you spend £23,500,000 to establish an essential filling factory, you will be criticized if the project interferes with the county’s economy. You will be criticized if war breaks out and the country is not prepared, and you will be criticized if you seek to prepare the country for war in time of peace “. That may be the basts of the criticisms and scan dals associated with deficiencies in munitions in every war. Such deficiencies occurred in World War I., in World War II. and in the Korean war. Governments at those times were not prepared to accept the responsibility of establishing essential munitions plants in time of peace in order to prepare for war.
When this Government undertook commitments in the Middle East, it could have relied on British supply lines. However, when it adopted the concept of the importance of South-East Asia, it could not allow Australia’s deficiencies to continue, because it could not have relied on British supply lines in operations in that area. Therefore, it had to accept responsibility for making good Australia’s deficiency in munitions production capacity. The’ recently published war history which gives details of the 30,000 rifles, shells, equipment and antiaircraft guns supplied to the United Kingdom by Australia shows clearly that even the United Kingdom can be pressed for supplies of essential arms, munitions and equipment in a crisis. The United Kingdom capacity to produce these requirements was inadequate, and it had to rely on Australia’s reserves.
I am completely surprised by the accusations of silence and lack of understanding about the St. Mary’s project. Immediately after the Government had decided to construct the factory, I took some pains to inform the Parliament about it. The Prime Minister (Mr. Menzies) made a statement on 16th May, 1955. On 1st June, I told the House of the initiation of the project. On 7th June, I issued a series of explanatory notes covering the entire project, including the method of approach, the terms of the contract, the engineering process study, the establishment of a control section, and the like. During the consideration of the Estimates last year, I stated in this chamber quite clearly and in detail the circumstances surrounding the project. On 21st July, I made another statement on the matter. Each of those statements was comprehensive and stated the situation clearly and at some length. Yet I am told to-day that no clear explanation of the project has been given and that it has been shrouded in mystery! The Government has been quite frank about the reasons for its decision, and I should have thought that the new factory would have indicated that it was energetically tackling the problem of defence preparations in the most vital field of ammunition supplies. Other countries experienced critical shortages of ammunition in World War I. and in the early years of World War II., as I have mentioned. The tilling and assembly of ammunition is the key process in ammunition production, and it requires specialized capacity, which must be provided by the Government as part of its defence scheme. In Australia, there is limited private industrial experience on which to draw, and very little peace-time commercial equipment to serve as a nucleus.
In view of published comments, and the general lack of understanding of this project, I shall recapitulate to honorable members some essential facts. In the immediate post-war reconstruction period, the government of the day disposed of assets worth approximately £100,000,000. They included two filling factories, as well as other factories, anexes, machine tools, plant and equipment in every State, in every capital city, and in most of the important provincial towns. Factories were so disposed of to help meet the pressing post-war needs of industry. 1 do not wish to discuss the extent to which factories were leased or sold. However, their very alienation to industry left serious deficiencies in specialized munition capacity if Australia was again to undertake war production similar to that of the years from 1939 to 1945. Former munitions factories not now available to the Department of Defence included establishments for the production of small arms, cartridge cases and small arms ammunition, and particularly filling factories and explosives factories. Perhaps the most important of these, in terms of replacement, technical planning and cost, were the filling factories and high-explosives capacity.
When this Government took office in 1950. a first appreciation of physical assets which should be provided to make good munitions production capacity was prepared. The first estimate was of the order of £110,000,000. It included many of the items which had been alienated to industry in the immediate post-war period, and particularly filling capacity. There were severe limits to that part of the defence vote which, in the years 1950 to 1955, could be made available to the Department of Defence
Production. There were other pressing claims by the services. These have been referred to by my colleague, the Minister for Defence.
The moneys available to the Department of Defence Production during the period 1951-55 for new capital expenditures averaged approximately £2,800,000 per annum. With these financial resources, new facilities were developed. The most important were: - New test airfield at Avalon, Victoria; Avon engine production capacity; picrite explosives plant, first stages; R.D.X. explosives factory; specialized plant provided for toolroom use; new type fuzes production capacity; and additions and modifications to existing government munitions and aircraft establishments. The balance of the moneys available to the department in that period were spent on maintenance or related to production.
In the last three years the department has produced in government factories, or arranged production in industry, goods and equipment to the value of £27,500,000 in 1953-54; £31,000,000 in 1954-55 and £34,500,000 in 1955-56. Meanwhile, under the chairmanship of the late Sir John Storey, the Joint War Production Committee had arranged the preparation of forecasts of service requirements for mobilization, and the first year of war, on a “ basis of inquiry “ approved by the Minister for Defence. The whole of the services’ equipment needs were progressively so surveyed. In turn, the Department of Defence Production analysed the forecasts of munitions requirements in terms of capacities needed, capacities available, and deficiencies. That, as you will appreciate, Mr. Chairman, is a continuing task.
Early in 1955 the department concluded its overall assessment of ammunition capacities and deficiencies. The estimated cost of establishing the required capacities for ammunition categories only was £42,000,000. It covered all the components for ammunition, additional explosives and the filling capacity. The central major deficiency was in respect of filling capacity. The only filling capacity plant we have at the present moment is the general purpose plant at Maribyrnong which had a capacity of approximately 4,000 tons before the safety distances were altered, and now its capacity is considerably less than that. It is only a fraction of that, because the safety distances between the plant and the closely surrounding residential districts were increased. That left a deficiency, up to the point of mobilization, of approximately 6.000 tons to 8,000 tons of filling capacity, and we had no capacity for the filling of bombs of 500 lb. or more. That was the position we were in, and it is a simple matter 10 know that if we cannot supply the services with the necessary munitions they cannot be prepared for war.
For the first year of war we would have had a deficiency of from 13,000 tons to 14,000 tons and no capacity to fill bombs of 500 lb. or over. That was a sorry enough story. But we had, as I pointed out, our commitments in the Middle East, and we hoped to be able to draw on British supplies. So we were doing first things first.
The list I read out a few moments ago will give some indication of the problems we faced with a deficiency of 13,000 to 14.000 tons and no capacity to fill bombs of 500 lb. or over. The capacity to be established itself will bring us only to mobilization and first year of war standard. If we get into a war it means that we must have another factory of the same capacity as St. Mary’s if we are to supply the services with the necessary equipment.
The war-time situation in respect of filling factories was briefly that at the outset of World War II. our sole filling factory was at Maribyrnong, and was of limited capacity. Indeed, as a factory it was developed before World War I. It was essentially a developmental unit, not mechanized. It was what one might term a jug and bottle operation. The capacity for filling bombs, owing to increased sizes and the new table of safety distances, has been reduced to nil.
During the period 1939-45 major filling factories were established at Salisbury in South Australia and at St. Mary’s in New South Wales. After the war the former was made available to the joint United Kingdom-Australia long range weapons project. The war-time St. Mary’s factory, other than the pyrotechnic section, which is being rehabilitated, was made available to industry. The Government gave consider able thought to the question of repossessing this latter factory, but decided against what would have been a major dislocation of industry in that area.
From a detailed examination of the services’ expected ammunition needs for war, it was clear that the Maribyrnong factory (a) could fill and assemble less than onequarter of the minimum war requirements at full capacity; and (b) could use. for filling, only about one-third of the explosives which can be produced in Australia. There was no capacity at Maribyrnong for filling heavy aircraft bombs of from 500 lb. to 5,000 lb. The Government determined substantially to make good this critical deficiency and to construct a new filling factory. It was recognized that even so, the ammunition group would not be in complete balance. With the building of the filling factory there would be some deficiencies for necessary ammunition production, for example, empty cartridge cases, shells, fuse, aircraft and mortar bombs capacity, T.N.T., picrite, and R.D.X., and basic supporting chemicals - hexamine, nitric acid and aluminium powder.
The question was: Should the Government provide the filling factory progressively over a long period of time - the long haul concept; or tackle it immediately as a major project and have it established as quickly as economically practicable? Then the complementary capacities could be developed subsequently in support of it within the minimum practical time, consistent with available funds. The Government was aware that the cost would be of the order of £23,000,000 if tackled as a planned two and a half years project. In any case, it is almost certain that it would cost more as a long-term project with limited finances made available annually for the purpose. Moreover, in the event of an emergency, it would be impracticable to consider the overnight construction of a factory of this size and type. The filling and assembly of ammunition are specialized operations which can only be undertaken in a factory specially designed for the purpose. Therefore, it would be out of the question to consider postponing the construction of a factory of this type and size until an emergency arose. Consequently, this Government decided to tackle the project immediately and complete it as soon as practicable.
I do not propose to discuss the detailed nature of the factory under construction. Suffice to say it will be highly mechanized and the foremost of its kind in the allied world, and sufficiently flexible in layout not only to cope with conventional filling needs but also to fill warheads for guided missiles if required. The reasons for the choice of site have been previously canvassed as have the arguments against decentralization of this filling activity. As to progress of construction, I am informed by the architect and the contractor that construction is to schedule. I believe the target construction date will be achieved.
Who will argue that this project should not have proceeded? Certainly no rational Australian conscious of national needs will do so. It may be argued that the factory should have been provided earlier. 1 have already dealt with that. But that is not an argument for condemning ils commencement at all, nor against its earliest practicable completion. It is useless contribution to debate to argue that no tangible contribution is being made to our defence needs and to criticize out of hand a resolute effort to repair a major deficiency in production capacity. It is equally shortsighted to suggest that in an era of sophisticated weapon development, conventional weapons are outmoded and unnecessary. There is plenty of support which I do not propose to elaborate specifically here, for the view that, for the foreseeable future and in a limited conflict concept, provision for conventional weapons production should be made. Given an assured peace, for which we pray, this factory, and other munitions establishments, will not be needed. But having regard to the lesson of history, the frailty of mankind and the accepted need to provide for defence, this factory should exist. In the unhappy event of war, even a limited war wherein Australia may be thrown completely, substantially or perhaps even partially, on its own resources, Australian troops will have reason to be thankful for its existence. I make no apology therefore for the Government’s action in pressing vigorously the construction of this critical munitions unit. It is unchallengeable.
I have in my hand an editorial written by some irresponsible person with practically no knowledge of the subject. The only thing clear is that, for some reason or another, the writer does not happen to like me. The editorial is headed, “ St. Mary’s lives up to Expectations “, and reads -
Early predictions that the St. Mary’s munitions project will cost about £46,000,000, or twice the Government’s estimate, seem likely to be fulfilled.
That is a completely wild and irresponsible statement.
– When was this published.
– On 6th September, 1956, in the “Daily Telegraph”, the paper of my old friend, Mr. Packer. Only a little while ago he had jacked the amount up to £50,000,000. He has come down £4,000,000 in the meantime. I hope that before the munitions factory is completed he will have seen the light and that all his bias against me personally and against this project will be satisfactorily resolved. The cost of the project is estimated to be £23,200,000. Sir Arthur Stephenson, in a conference with the Prime Minister only a few weeks ago, gave an assurance that St. Mary’s was proceeding to schedule and would cost - barring extraordinary and unforeseen circumstances - the quoted sum of £23,200,000. The editorial in the “Daily Telegraph “ continues -
The Commonwealth Auditor-General’s report has reinforced the worst fears about the amount of public money this wildly inflationary project will send down the drain.
Australia learned - or should have learned - during the last war about the way cost-plus deals run away with the cash.
And St. Mary’s, despite anything the Minister for Defence Production (Sir Eric Harrison) and his friends might say, is a cost-plus deal.
It is not a cost-plus deal. As I understand it, a cost-plus deal is one under which the contractor is paid a fee based on the total cost of the project. The contractor, in this case, is paid a fixed fee. Therefore, would it not suit him much better to get this project out of his hair in fifteen months rather than carry it on for five years? He will get no more money if it takes that long. Even if the cost is trebled he will still get no more, so it. is not a cost-plus project. By delaying he would be wasting his time and denying himself jobs that he could obtain elsewhere. The editorial continues -
Australia is up for the cost of the project - whatever that cost might finish up being - phis the contracting firms’ fee of £615,000.
One thing we can be pretty sure of is that its mention this year will certainly not be the last St. Mary’s gets in Auditor-General’s reports.
I am perfectly certain that it will not be the last time that it will be mentioned in the Auditor-General’s report and that, subsequently, that gentleman will say that the project has been carried out on time and at the estimated cost. The editorial goes on -
The report’s revelation that the cost of building staff residences on the project substantially exceeds the estimates is symptomatic.
The reason for this increase, Parliament was told was: “. . . The use of more expensive materials and a higher standard of fittings, &c, than are normally used in Commonwealth residences “.
This kind of happening, even with the most reputable contractors, is a sure characteristic of cost-plus building.
The ‘ architect has assured me that the houses - which my department was the first to realize were costing more than was reasonable - were built in accordance with the building regulations of Victoria and the materials and standards do no more than meet the requirements of that State. The contractor assures me that the cost of the homes will be contained in the over-all cost of £23,200,000. If that is so, can any one deny that what we may lose on the swings we can pick up on the roundabouts. I read further from the editorial -
It will be highly surprising if it is not ultimately discovered to apply throughout the entire white elephant.
Of course, it is still not clear who stampeded the Government into St. Mary’s and how.
The House will recall that the Prime Minister in reply to a question by the then honorable member for Hume, Mr. Fuller, pointed out that the services and the Defence Department had said that this factory was an Al priority. Therefore, there was no question of our being stampeded into it. It was a demand by the services to meet a certain deficiency, and we were prepared to comply with that demand. There was no question of our being stampeded. The editorial continues -
And neither he nor any other Government spokesman has satisfactorily explained why existing sources of supply of outmoded ammunition Are not adequate.
On the question of “ outmoded ammunition “, I have in my hand a letter from my permanent head, Mr. Breen, who is at present overseas. He says -
The Manchester Guardian of Tuesday, August 21st, quotes Dr. Adenauer as saying, “ Since, in my view, atomic weapons represent the greatest danger for all humanity, I believe that it is precisely here that we should press for controlled - disarmament.” He maintains that it is possible to localize smaller conflicts and that, therefore, we need divisions of conventional weapons. “ Their number must be sufficient to prevent a small war immediately setting off a rocket war from continent to continent.”
Speaking of Mr. Homewood and Mr. Bennett, two officers of my department, he says -
Homewood sails for Australia after a pretty exhausting tour of explosives and filling factories in Canada, the U.S.A. and the U.K.. In none of the factories did he observe any sign that they were to be closed up and put into moth balls. He also informs me that in all the discussions he has had with officials in the three countries he has never heard any one of them suggest that there is any possibility in the future of any of these factories being abandoned because of the advent of the guided weapon atomic era.
Bennett, who did a separate tour, and is already on his way back to Australia, told me the same thing.
I had a week in Germany and spent a good deal of time in discussions with officials of the German Ministry of Defence and wilh service and other attaches at the British Embassy in Bonn. I was particularly struck with the emphasis which the German officials were giving lo conventional armament.
It is essential that we should have conventional armaments and maintain the necessary services to the troops. In contra-distinction to what has been stated by the “ Daily Telegraph “, a representative of the “ SunHerald “ went out and had a look at what was happening. His report included the comment that the way the job was being hustled on was economical in the long run.
– Order! The Minister’s time has expired.
– Despite the impassioned defence of the St. Mary’s project by the Vice-President of the Executive Council (Sir Eric Harrison) a number of questions that the country is asking have still not been answered. As a matter of fact the Minister and the Department of Defence Production have been criticized by friend and foe alike regarding this project. If I remember correctly, the initial criticism was made by a journal that is politically friendly to the Government. While the Labour party has, during the whole period that this project has been under construction, criticized the project itself and its associated problems, it is now clear that many supporters of the Government are by no means happy about this gigantic waste of money. The Government’s own supporters have been its own trenchant critics, because they realize, as do the Australian people, that despite the Minister’s protestations tonight that the project will cost only £23,200,000, there is not the slightest doubt that the ultimate cost will be found to be considerably in excess of that amount. As a matter of fact the Auditor-General made many caustic comments in his last report, which was dated 30th June, 1956, regarding this project. He stated -
Difficulties were experienced by the contractor in the maintenance of cost accounts in conformity with the initial job instructions. Numerous factors, including delays in design and planning, contributed to that situation.
In other words, it was a case of departmental bungling. The Auditor-General also said -
The position is, therefore, that complete cost accounting over the hundreds of buildings and the various services of the project has not been and will not be established. The ultimate value of the individual assets will have to be determined at the completion of the project by an allocation of final expenditure on the basis of arbitrary assessments.
In other words, no one has the slightest idea what the project has cost and what it will ultimately cost. That is the basis of our criticism. We claim that this Government, which is supposed to be a businessman’s government and to conduct the affairs of government upon a business-like basis, has shown in this connexion the very essence of inefficiency. The Minister, who claims that he has the last word to say in every aspect of the administration of his department, is responsible for this bungling. I suggest that the Minister does not know very much about the St. Mary’s project. It is quite clear that he has been stung to retaliation by the criticism that has been heaped on his head, not by members of the Labour party, but by journals that support his Government in season and out, and particularly at election time. When we hear widespread criticism by the Government’s own friends in regard to this matter, it seems to me that there must be some good reason for it.
I submit that the Minister will have to do a lot better than he did to-night if he is to persuade the Australian people that this project has been carried out on the businesslike lines that the Australian people expect this Government to follow. Astronomical sums of money have been expended on the job, and when the final cost is put before this Parliament I am sure that everybody, including the Minister himself, who will then, no doubt, be occupying his Mayfair mansion, will be staggered at the extent of it.
I wish to direct my attention to some comments about the budget, which is a most extraordinary one. When any budget comes before the Parliament there is usually a substantial section of the community that praises it, and there is also another section that criticizes it. That does not apply, however, to this budget. The words that have been uttered in praise of the budget by members of this Parliament have been few and far between. By the general public it has been described as cruel, callous, barren, heart-breaking and scandalous, and I suggest that every description along those lines is accurate. As usual, the Treasurer, when presenting the budget to the Parliament, commenced by giving a dissertation of the state of the economy. He told us, for example, about certain tendencies that are apparent in the economy, and added that, in the main, they are due to pressures created by our own efforts. With that statement there will be general agreement, because the pressures have been created by the efforts of the Government in a direction adverse to the well-being of the Australian people. He made a further statement, which was greeted with hilarity by the Parliament and by the people. He said that, so far as they are capable of being met by governmental action, the Government has developed policy measures designed to do certain things. All I can say is that if this is the shape of things to come as far as the Government’s policy for checking inflation is concerned, then we have tangible evidence that the Government is bankrupt of effective ideas for dealing with our economic difficulties.
The Treasurer also said that the public has noted with mounting concern the everincreasing price level. I would not be exaggerating the position if I said that we are. in the throes of galloping inflation. After seven years of office, the Government should surely give a definite lead as to how we should effectively grapple with the problem of inflation, but it has failed dismally to do so, and has shown us no effective method of dealing with inflation and associated problems. I am sure that I speak for some members of the Liberal and Australian Country parties, as well as for honorable members on this side of the committee, when I say that we have waited in vain to hear that the Government intends to take strong and positive measures to deal with the situation. Unfortunately, the Treasurer has nothing new to suggest. He has said that we are only now reaching the most difficult stage of the long struggle to control inflation. In view of that admission by the Treasurer, we could have expected a courageous policy to be put forward by the Government, but all we got was a collection of words which, in effect, means that the Government proposes to do very little. It says that it does not believe in freezing wages, prices, profits or anything else. Apparently it is content to stick inexorably to the financial policy that has proved quite inadequate to deal with the situation.
After listening to the Treasurer’s apologetic statement, and to the speeches of Government supporters, it would appear that the basic philosophy behind the Government’s policy, which it has followed for seven years, is the belief that the dearer it makes commodities, by direct and indirect taxation, the more it will stem inflation and curb increases in living costs. The Labour party has always opposed this quaint idea, but the Government has persisted with it despite the obvious fact that the application of this policy year after year has resulted in continual price increases. After seven years of experience of a policy directed in the wrong direction, and after convincing proof that that policy has resulted in continued price increases, one would have thought that the Government would have forsaken it and tried something else. Apparently its contention is that because that has been its policy for seven years it must continue with it, even though it is obvious that the policy has completely failed.
The concessions granted in the budget are very small. They are, in fact, almost microscopic. The increase in the deduction for education expenses, while welcome, will affect only a very small section of the community, and will not affect .the average worker at all. With regard to the increase in the allowable deduction for superannuation and insurance to £300, there are very few members of the working class who can afford to pay more than £4 a week for superannuation or insurance. The average worker will gain nothing from that con cession. The pension increases for widows and invalids with two or more children are welcome, but they make little contribution to the general well-being of the great mass of people. In fact, they are almost unworthy of mention, because they will apply to only a very few people.
The most trenchant criticism of the budget must be directed not to what it contained but to what was left out of it. 1 suggest that not only members of the Labour party but also Government supporters thought it incredible that no provision was made for a general increase in pension rates. I am satisfied that if the Government said to members of its parties, “ You can say what you like about our pension propositions “, it would be literally blasted from office by the criticism from its own supporters in this chamber. Not one member on the Government side has told us why the Government will not increase pensions. It is high time there was a re-assessment by the Government of the allowance to this group of Australian citizens.
The pensioner group has struggled in recent years to exist on an allowance that is less than one-third of the basic wage in Melbourne and Sydney. The upward leap in food, clothing and fuel left them in a most unfortunate position, despite the 10s. increase granted to them. Apparently the Government has decided that pensioners will have to bear the principal burden of the suffering caused by inflation. It apparently takes the view that pensioners are in the minority and that they are peculiarly defenceless. But the Government’s view does not take the edge off the suffering of the pensioners and exclude them from the sympathy of a humane public. Both their years and their lack of resources make elderly pensioners an easy mark in times of inflation, and common humanity should have entitled these people who cannot fend for themselves to some special consideration in this budget.
It is all very well to say that this is a stay-put or economy budget. But the need for national economy springs from the same source as the pensioners’ special hardships, and that is the fall in the value of money. The pensioners have been singled out by this Government to set an example of selfdenial to the more fortunate of us, including members of Parliament. I say in all seriousness that the feeling of 95 per cent, of Australian citizens, including supporters of the Liberal party, was summed up by Sir Frank Richardson, the president of the Australian Council of Retailers. Every one in this chamber has a very warm regard for Sir Frank- Richardson, who so ably acted as an arbitrator in a recent important industrial matter. What did he say about the Government’s decision on pensioners? He said that in his opinion it was unbelievably cruel. No truer words have ever been uttered by a leading Australian citizen.
That sentiment is expressed not only by Sir Frank Richardson but by another great section of the Australian community, which has decided that it can no longer endure the sufferings of the pensioners. I refer to the Christian churches. In “ The Age “ yesterday, in the Churches column, under the heading “ Sermons Stress Needs of the Aged “, the following article appeared: -
Leading preachers yesterday commented on the plight of old age pensioners and criticized the failure of the Government and the community to seek solutions to the problems of the aged.
The first leading churchman mentioned was the president of the Methodist Conference, the Reverend Professor N. Lade. He said that the recent budget showed an inexcusable and incomprehensible disregard of the needs of the aged pensioners. He continued -
Whatever merits the budget may have, this failure to increase pensions is a blot upon the Government escutcheon.
The callousness of the Government’s attitude is underlined by the fact that the Treasurer did not even defend it.
His silence on this matter is unworthy, if not cruel, to the many folk who simply cannot exist under present conditions.
The President of the Congregational Union of Australia, the Reverend Lyall Dixon, at Independent Church, said -
As far as old age is concerned we face the unhappy accusation that we have let the old folks down.
Old age and death have been left as things to be endured.
The Moderator of the Presbyterian Church of Victoria, the Right Reverend C. T. F. Goy, speaking at East Malvern, said that the great mass of church people were urgent in their desire to see the conditions for pensioners improved. He continued -
I feel it is wrong to try to solve part of our economic problems by withholding from needy people additional assistance.
They are statements made by leading churchmen of three of the greatest denominations in Australia. They are united in their condemnation of the Government’s action. I repeat what I said earlier, that if the Government allowed its members to say what they thought of this action, it would be surprised at the reaction.
I turn now to the family man. Australia was never more in need of population than at this moment. But this budget does nothing for the family man. Child endowment has not been increased, and indeed it has not been increased since 1948, except that an allowance of 5s. for the first child has been granted. Taxation allowances have not been increased; yet the case for better taxation concessions for the family man who is bringing up children is unanswerable. The honorable member for Fremantle (Mr. Beazley) mentioned this matter, and I wish to develop his theme. At present the taxation allowances are £130 for a wife, £78 for the first child and £52 foi each additional child. The assertion that the position of the married man has deteriorated under this Government is incontrovertible. When the Chifley Government was in office in 1949, a man on the basic wage, which was then £320, paid £21 19s. in income tax if he were single and nothing if he had a wife and three children. The basic wage-earner to-day who has a wife and three children pays £8 8s. in tax.
– And he pays for hospital treatment, too.
– That is so. The family man who to-day receives £1,000 a year, which would be comparable to £600 in 1949, is now paying £47 in taxation, but under the Chifley Government he paid only £32. In other words, taxation rates have increased by 50 per cent, for a married man with three children, if he is receiving £1,000 a year. The single man on £1,000 a year to-day pays £106 in taxation instead of £74 under the Chifley Government. That is an increase of 40 per cent. Even before the war when taxation was relatively trifling a straight-out deduction of £50 a year was allowed for a wife and each child, and that was not regarded as being particularly generous. Before the war, a man with a wife and three children had taxation deductions of £200. To-day, he receives only £312 in allowances. When the decrease in the value of money is considered, it can be seen that £312 is by no means sufficient. If the Government is so solicitous of family life, as from time to time it says it is, it has a bounden duty to recast the budget immediately and increase the allowances for the family man.
I turn now to pay-roll tax. I should have thought that the Government would recognize the serious plight of the municipalities. Everywhere the local government system is rapidly breaking down. In the circumstances, the Government should have provided further pay-roll tax remissions for municipalities. But nothing at all has been done. I suggest that the Government grant some taxation relief to municipalities.
Many statements have been made by Government supporters about the generous way in which this Government has handled petrol tax. I want to say something about that matter because it is time the Australian people were told the truth about the present tax formula. The Treasurer (Sir Arthur Fadden) stated in his budget speech that the States were receiving £5,000,000 more than they received last year, and he cited that as evidence of the generosity of the Commonwealth to the States. It is high time this statement was debunked, and I hope to be able to do so to-night.
Before the introduction of the little budget, there was a tax of lOd. a gallon on imported petrol and 8id. a gallon on locally refined petrol. The States received 7d. of the 10d., or 70 per cent., and also 7d. of the 8£d. for the locally refined petrol, or 82.3 per cent. When the tax was increased by 3d. a gallon, the tax on imported petrol went up to ls. Id. a gallon, whilst that on the locally refined petrol went up to Hid. a gallon. This generous Government, actuated by a spirit of benevolence and munificence and a desire to improve the road systems of the States, laid great stress on the fact that it was increasing the States’ share by Id., to 8d. a gallon, so that the States would receive 8d. of the ls. Id. in respect of imported petrol, or 61.5 per cent., as against 70 per cent, previously, and 8d. of the 11½d. in respect of locally refined petrol, or 70 per cent., as against 82.3 per cent, previously.
I took the trouble to get from the Department of Customs and Excise figures relating to the expected revenue from petrol tax this year. The anticipated revenue from customs in respect of imported petrol is £15,000,000, whilst the excise duty on locally refined petrol is expected to be £33,000,000. If the States received the old percentage of 70 per cent, of the tax on imported petrol, and 82.3 per cent, on locally refined petrol, they would get £10,500,000 and £27,120,000 respectively, or a total of £37,620,000.
– The honorable member should read what Mr. Chifley said about this matter.
– According to these new percentages, taking 61.5 per cent, of £15,000,000 and 70 per cent, of £33,000,000, the States will receive a total of £32,300,000. In other words, by the alteration of the formula, the States have been robbed - if I may use that word - of £5,000,000 a year. This Government is unlawfully depriving the States of that sum. It is idle for the honorable member for Canning (Mr. Hamilton) to speak of what the Labour Government did in 1945 or 1946. The Australian Labour party is a progressive party, and when conditions change it alters its policy in conformity with those changed conditions. If the Government wants us to.be bound by something that was said in 1947, I suggest that it should be bound by something that was said in 1905. If we referred back to that year, we would see what the progenitors of the supporters of the present Government said about the trade union movement and the improvement of social services for the people. They would have a lot to explain. When the Labour party, under Mr. Lang, first suggested child endowment in the New South Wales Parliament, the proposal was viciously opposed by the Nationalist party, as it was then. But we do not hold that against this Government. We say that political parties should move with the times.
The policy of the Labour party at the last general election was quite specific and unambiguous on the subject of petrol tax. It was that the full proceeds of the petrol tax should be allotted to the States for road purposes. I know that the honorable member for Mallee (Mr. Turnbull) is very interested in this subject, because he is trying to get as much of the petrol tax devoted to the country roads of Victoria as he can.
– But the honorable member did not support me.
– I supported the honorable gentleman on every occasion that it was suggested that the petrol tax should go to the States. Every time there has been a suggestion in this chamber that the total proceeds of the petrol tax should go to the States I have been a most enthusiastic supporter of the proposal, and the honorable member for Mallee knows that that is so. If he is as sincere as I think he is, he should immediately take this matter up with the Government and try to see that this £5,000,000 which has been filched from the States because ot the alteration of the formula is given back to them. Not even the supporters of the Australian Country party could justify such action, and I therefore suggest that the Government should do something to remedy the position.
There are several other matters with which I intended to deal, but unfortunately I shall not have sufficient time to do so. The Treasurer made a very halting approach to the question of securing additional export markets. From the point of view of the Labour party, as well as from many other points of view, Asia offers the best opportunity for us to acquire new markets. Australian export to Asia last year amounted to £141,000,000 or 16.7 per cent, of our total exports. Of this, Japan took £58,000,000, or 6.9 per cent, of the total. Other Asian countries took £82,000,000, which seems to me to be a particularly low proportion and capable of vast improvement. Every nerve should be strained by the Government to trade with all Asian countries, irrespective of their political pholisophies or economic systems. We should not worry at all because their systems of government do not conform with ours. T suggest that we should make every endeavour to increase our trade with China, because if China were to follow the pattern of Japanese industrial development, for instance, with a large-scale expansion of the textile industry, it could become a very big buyer of Australian wool. The volume of our trade with China in 1939 was much greater than is the volume of our present trade with that country, and I hope that the Government will do something to improve the position.
It is palpable that the Government has failed miserably in the last six and a half years to deal with costs and prices. Time is running out for it to get down to earth and halt inflation. Thorough rethinking by the Government on its economic policy is essential. I suggest that controls, which may be anathema to the basic philosophy of the Liberal party, offer to the Australian people the only hope of countering the continual drag of inflation on the economy. In view of the calamitous failure of the anti-control policy, the obstinate and adamant stand of the Treasurer against controls should cease forthwith. In some instances, the Government has been forced by events to impose controls in various forms, such as import controls. It should appreciate that the present economic conditions are abnormal, and that it is self-delusion to suggest that the rapid fall in the value of money is either healthy or equitable.
Profit making has been excessive, and whilst that condition exists there is no hope of slowing down rising wages, because wages must follow prices. These are unhealthy trends which cannot be cured by the medicine prescribed in the long-winded dissertation we have received from the Treasurer. The question one asks oneself is, “ How are the necessary correctives to be applied? “ This budget gives not the slightest glimmer of hope that the Government will have the political courage to somersault on its convictions of a lifetime.
Order! The honorable member’s time has expired.
House adjourned at 10.31 p.m.
The following answers to questions were circulated: -
r asked the Acting Prime Minister, upon notice -
– The answer to the honorable member’s questions is as follows: - 1 and 2. The intention of the Commonwealth Government in relation to the International Labour Organization Equal Remuneration Convention and Recommendation are set out in a statement presented to the Parliament by the Minister for Labour and National Service in October, 1953. As indicated on that occasion, the Government regards the main Commonwealth wage-fixing tribunal, now the Commonwealth Conciliation and Arbitration Commission, as the body empowered to deal with such issues.
b asked the Acting Prime Minister, upon notice -
– The answers to the honorable member’s questions are as follows: -
There is already in existence machinery through which the Government of the Commonwealth is advised on mattersof education which concern it.
y asked the Treasurer, upon notice -
From what countries and in what amounts were loans raised overseas in each of the years 1949-50 to 1955-56, inclusive?
– The answer to the honorable member’s question is as follows: -
The following loans were raised overseas by the Commonwealth between 1949-50 and 1955-56, inclusive: - 1949-50.- Nil. 1950- 51. - International Bank for Reconstruction and Development, 100,000,000 United States dollars. 1951- 52.- Nil. 1952- 53. - International Bank for Reconstruction and Development, 50,000,000 United States dollars. 1953- 54. - Switzerland, 60,000,000 Swiss francs; International Bank for Reconstruction and Development, 54,000,000 United States dollars. 1954- 55.- United States of America, 25,000,000 United States dollars refinancing loan; Switzerland, 60,000,000 Swiss francs; International Bank, for Reconstruction and Development, 54,500,000 United States dollars. 1955- 56.- Canada, 15,000,000 Canadian dollars; United States of America, 25,000,000 United States dollars refinancing (18,028,000 dollars) and cash loan.
In addition, the State of South Australia made arrangements in 1952-53 to borrow 5,800,000 United States dollars from the Export-Import Bank of Washington and £A.1,294,333 (in sterling) from the United Kingdom Ministry of Supply under the provisions of clause 4 (2) of the financial agreement under which State governments may borrow moneys overseas in the name of the State if the unanimous approval of the Loan Council is obtained. Moneys so borrowed are deemed to be moneys borrowed by the Commonwealth for and on behalf of the State concerned.
Land Settlement of Ex-servicemen.
s asked the Minister for Primary Industry, upon notice -
– The answer to the honorable member’s question is as follows: -
b asked the Minister for Health, upon notice -
– The answers to the honorable member’s questions are as follows: -
b asked the Minister for Health, upon notice -
– The answers to the honorable member’s questions are as follows: -
a asked the Postmaster-General, upon notice -
What was the financial profit or loss result for the year 1955-56 of the following services: - (a) Postal; (b) telegraph; and (c) telephone?
– The answer to the honorable member’s question is as follows: -
The trading results for the postal, telegraph and telephone services for 1955-56 are not yet known, lt will be appreciated that in an undertaking operating on so vast a scale, many end of the year adjustments to cash transactions, including many involving overseas countries are necessary before the accounts can be finalized and this inevitably occupies some weeks. The honorable member may be assured that the trading . results for 1955-56 will be made known as early as possible.
a asked the Postmaster-General, upon notice -
– The answers to the honorable member’s questions are as follows: -
d asked the Minister for Supply, upon notice -
– The answers to the honorable member’s questions are as follows: -
n asked the Minister for Supply, upon notice -
– The answers to the honorable member’s questions are as follows: -
b asked the Minister acting for the Minister for Civil Aviation, upon notice -
– The answers to the honorable member’s questions are as follows: -
Cite as: Australia, House of Representatives, Debates, 11 September 1956, viewed 6 July 2017, <http://historichansard.net/hofreps/1956/19560911_reps_22_hor12/>.