House of Representatives
30 October 1956

22nd Parliament · 1st Session

Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.

page 1873


Australian Economy

Leader of the Opposition · Barton

. -I move -

That this House censures the Government for its failure to establisha national economic plan to halt inflation and to ensure full and continuous employment; for its persistent neglect to bring in measures to prevent profiteering and for its refusal to accept national responsibility by seeking from the respective States, or from the people, adequate constitutional power to regulate prices, interest rates and capital issues: while, at the same time, denying to the States sufficient funds to meet their basic needs, especially in relation to homes, schools, hospitals and transport. Such failures of the Government have resulted in soaring prices and serious reductions of the living standards of the Australian people, particularly wage and salary earners, pensioners andall those dependent on small fixed incomes.

Mr Calwell:

– I second the motion.


– The motion, which has been seconded by my colleague, the honorable member for Melbourne (Mr. Calwell), is aimed at bringing to the attention of the Parliament and the people the existing economic situation, not merely because of the past activities of the Government- its past neglect, some of which is specified in broad terms in the motion, and past activities which, as we shall show, have been injurious to the economy - but also because of the present intention of the Government to exercise all its power and influence to force wage standards in Australia to an even lower level. It is perfectly clear that that is the present intention of the Government, and twice, through meetings with the Premiers of the States, it has attempted to give effect to that intention, although on neither occasion did it wholly succeed. I shall refer to this matter later, but I suggest that that is clearly the policy of the Government, as the statements of the Treasurer (Sir Arthur Fadden) and the Minister for Labour and National Service (Mr. Harold Holt) bear out.

Because of the economic predominance of the Commonwealth, the Government is endeavouring to bring financial pressures to bear on the Governments of the States, so that those State governments which can be affected and which have a basic wage higher than the federal basic wage, will be forced to agree to pass legislation or to take appropriate action so that the State basic wage will be gradually, or immediately, forced down to the level of the federal basic wage which was pegged in September, 1953- more than three years ago. That wage has been the subject of only one change since it was pegged, and that was an increase of 10s. a week in May last. Incidentally, that increase of 10s. given in May, after a break of nearly three years, has already been swallowed by the 6s. increase of the cost of living assessed by the Acting Commonwealth Statistician on the six cities basis, and by the subsequent 9s. re-assessment by him, making an increase of 15s . in the Commonwealth basic wage, if the quarterly adjustments had continued.

For these reasons, I say that the increase of 10s., which was granted after a wait of three long years, has been already swallowed up. I base that statement on the declarations made by the Acting Commonwealth Statistician, particularly those of July and September of this year. But for the decision of the Commonwealth court to abandon quarterly adjustments in September of 1953, the present federal basic wage, on the six capitial cities basis, would have been £13 9s. a week, whereas, even taking into account the 10s. increase granted in May last, it remains to-day at only £12 6s. It is, therefore, £1 3s. less than it would have been had not the quarterly adjustments been abandoned. This means, in effect, that from September, 1953, employees working under federal awards, and under many State awards which follow federal awards, have been deprived of a vast amount of money, amounting, in the aggregate, to many millions of pounds. They have been deprived of this money because of the application of a theory that we contest, and which we intend to denounce by means of the motion thatI have proposed. The theory is that propounded by the court when it said that basic wage pegging would play a vital part in halting inflation, or, to use its own words when it made the order, that the prices of commodities, particularly consumer commodities, would at least tend to be stabilized. We know that this has not happened, and, in fact, the reverse has happened, and a standard which, by every accepted principle, was thought fit and proper for the basic wage earner has been reduced. There has been a reduction, not only in the figures that make up the wage, but also in the actual standard of living that has been enjoyed by those working under federal awards.

It was to be expected, of course, as our motion indicates, that definite consequences would follow the abolition of quarterly adjustments, and those consequences can be ascertained. If one looks at what the Acting Commonwealth Statistician calls the “ real “ wage, which he determines by a consideration of the basic wage and the index that measures the cost of living, one finds that the federal real wage in June, 1955, stood at the figure of 1226, then fell to 1213, and to 1206 in the June quarter of this year, and that, following the latest announcement of the index figure, it has dropped to 1183. These figures provide a measurement not of actual payments made but of what the wage will purchase. In other words, the standard of living of wage earners has been gradually and definitely reduced. It is true to say, therefore, that the wage earner’s capacity to purchase commodities is not as great as it was before the wage was pegged.

Of course, the truth is that the cost of commodities has increased, but the Government will not make any attempt to deal with that situation in the normal way, by devising a plan for fixing prices on an Australia-wide basis, not necessarily for all commodities, but perhaps for only selected commodities. The Government will not do this, It allows prices to rise constantly and does nothing to prevent excess profits or to institute a scheme of control of capital issues. The Treasurer (Sir Arthur Fadden), in his last but one budget speech, referred to the enormous expenditure in the private or business sector of the economy and pointed out that that was where the profits were being made and that that was the direction in which all investment was tending - to the prejudice, I say, of all members of the community except the very few people who derive a direct benefit from profiteering.

Further, it is now admitted by the Government - in fact, it was the cause of the recent Premiers conference - that the expectation that the pegging of the federal basic wage would tend to stabilize the prices of commodities, particularly consumer commodities, has not been realized. Let me give a striking illustration of what has happened. The Liberal party-Australian Country party Government of South Australia welcomed the freezing of the federal basic wage with great enthusiasm and applied that principle to wages paid under State awards. What happened? Taking the period of three years from the June quarter of 1953 to the June quarter of 1956, I find that the increase in the C series index figure in Adelaide, where there had been strict wage pegging, was no less than 10 per cent., but in Brisbane and Sydney, where there had been no wage pegging by the State governments, the increases were only 9 per cent, and 8 per cent, respectively.

At the recent conference of Commonwealth and State Ministers, those facts were stated by the Labour Premiers. It was added that the New South Wales Cabinet had come to the conclusion, upon the report of an expert committee, that the system of automatic adjustments of the basic wage was really intended - we all know this to be the position - to compensate the workers for price increases which had already occurred. It was intended that adjustments should be made periodically to compensate the workers for higher prices which they had been paying, perhaps for as long as four months before some adjustments. A quarterly adjustment of the basic wage is not a gift to the workers. It is an attempt to assess what the workers have lost as a result of higher costs of commodities in the preceding quarter. As I have pointed out, the federal basic wage has been pegged or frozen by the federal authority, subject only to the one adjustment that I have mentioned.

Although the New South Wales Government adopted a federal recommendation to accept the basic wage decision of 1953. it was not unnatural that the’ people ot New South Wales became restless, as the Premier of the State pointed out, when the cost of living there increased at a rate not less than, and sometimes higher than, the increase in States where there had been no freezing of the State basic wage.

We support the view expressed by the Labour Premiers at the recent conference of Commonwealth and State Ministers that this Government should give up the attempt in which it is engaged to impose the burden of inflation, not upon the shoulders of those who should bear it - I refer to the people who are making excess profits - by setting up systematically an Australia-wide pricefixing system, but upon the shoulders of the wage and salary earners of Australia, who, with one exception, are least able to bear it. There is a group of people which is even less able to bear the burden than the wage and salary earners. It is the group consisting of people dependent upon small pensions, small superannuation payments and small fixed incomes. The workers can, at least, try to improve their position through their trade unions. Those groups are the most vulnerable groups in the community, but they are the groups upon which the Government, so far as it can, is imposing the burden, instead of facing up to the fact that inflation is the great enemy of the people of Australia.

In our view, this Government has never really tackled the problem of inflation of prices and costs. There is no need for me to read out the pledges made by the Government parties, not merely to maintain prices at the level they had reached then, but to reduce prices and so increase the value of the Australian £1.

Those who have been subjected to attack in that way include not only basic wage earners, but also workers who receive margins for their skills or special aptitudes, which have always been recognized by the federal industrial tribunal by additions to the basic wage. In our industrialized economy it is vital that workers with a margin of skill should be adequately remunerated for the exercise of their skill and aptitudes. But what do we find? It is not a question of the sole responsibility of the court, because on all these occasions the court was influenced by either the direct assistance and persuasion of the Commonwealth Government by intervention of some kind in proceedings before it, or the Government’s failure to intervene and put the case it should have argued. All through the period during which the court’s main decisions have been given these interventions and failures to intervene have been of great importance, and it is not true to say that the Commonwealth Government does not bear responsibility for what has happened. Indeed, to take one illustration, when the basic wage was pegged in 1953 the first person to acclaim the decision of the Commonwealth Court of Conciliation and Arbitration was the present Treasurer, who said that if the court’s decision was that the basic wage should be pegged it was the correct decision, and it would have an enormous influence in reducing costs in this country.

I want to give several illustrations in relation to margins. From the time of the second Mooney award in 1947 until the full bench of the court gave its judgment on margins in November, 1954, margins under federal awards remained absolutely pegged. People talk more frequently about the basic wage than they do about margins, which are really just as important because they are the portion of the wage added to the base rate as a remuneration for the exercise of skills or special aptitudes. Throughout the seven-year period of steadily rising prices between 1947 and 1954 margins remained unaltered. In December, 1954. the court, in its judgment in a test case, awarded to metal trades fitters 23s. a week in addition to the 52s. a week margin already paid, making the new margin 75s. a week. That is the only occasion on which a change has been made since 1947. But the court refused to lift the margins of workers whose margins had been pegged at 23s. a week or less for seven years. in effect, their margins remained pegged notwithstanding the acceptance of a general principle of increasing margins to two and a half times the 1937 margin which was applied to fitters and others who received increases.

Let us take the case of process workers under the same award. In 1937 they received a margin of 8s. a week. Under the second Mooney award made in 1947 their margin was increased to 22s. a week, but they did not receive one penny extra under the December, 1954, judgment of the full bench of the Commonwealth Arbitration Court. The employers actually argued in favour of a reduction of the margins paid to workers of lesser skill. They did not achieve that objective directly, but the combined freezing of the basic wage and margins for skill has reduced the status of process workers under federal awards and under many State awards which conform to federal principles, as measured in terms of pay, to that of a basic wage-earner who receives no margin. Yet in 1947, nearly ten years earlier, the second Mooney award had fixed a margin of 22s. a week, which would, then have been worth’ two or even more times as much as it is worth to-day in view of the lower cost of living in 1947.

I submit, Mr. Speaker, that in. the whole of our industrial jurisprudence, of which Australia is rightly proud, there has been no case of wage injustice so glaringly bad. The vested rights and hopes of promotion and increased status of skilled workers whose skill was not equal to that of a fully qualified tradesman have been sacrificed. That is what has happened to the position: of those who did not receive the increase of 23s., and upwards, or who did not get the benefit of an adjustment which was limited to that group of workers. That, of course, has meant that the standard of every worker has been affected, because the pegging of the basic wage means the pegging of wages higher than the basic wage, whose level formerly varied along with the basic wage. The result is harshness and hurt to the worker, which cannot be measured by individual distress or resentment. The enormous number of process workers in Australia feel the effect of the blow, which is not only injuring their status as workers, but also deleteriously affecting the standard of living of themselves and their families. As the honorable member for Blaxland (Mr. E. James Harrison) said recently, the same position applies to the postal officers who were awarded a margin of £1 a week, which vanished in increased living costs so that, in effect, they received no margin at all. This was a direct result of the pegging of the basic wage. After having ostensibly been awarded a wage margin of £1 a week these men have been swept down to the bare basic wage group from which they were supposed to have been promoted when they were given the margin.

There is the position briefly. As I said before, had quarterly adjustments of the basic wage continued, that wage would be now £13 9s. It is, in fact, £12 6s. . or 23s. less. So the workers are 23s. worse off. The process workers, who have received no marginal increase since 1947, in addition to that loss, therefore suffer the loss of 23s.. in common with other workers. There you have one case which I have selected, as. I could; select many others, where the standard of the worker has been directly attacked. With: the fulL support and connivance of the Federal Government, the standard- of living has been altered - and that at a time when- profits have reached record heights- in the whole history of this, country. It is plain that- the gravest possible mischief has been: done- by the proceedings of the Federal Government in its relations with the Commonwealth Arbitration Court as affecting the federal basic wage and margins for skill. Since this Government, gave a pledge to make a full-scale attack on inflation we find that, with the clear approval of the Government, the court has really - I speak with the greatest respect for the justices - completely failed to face up to the fact that in Australia we cannot achieve an economic basis of justice unless the Commonwealth Parliament sees that wages are only one aspect of a. bigger problem. The burden has been put on those who should not be singled out as this Government has singled them out in connexion with bearing the effects of inflationary pressures in this country. The attitude of the Government and the court means that wage-earners and salary-earners are being penalized. I say that these authorities are still engaged in an attempt to keep wages down. They see in New South Wales, and elsewhere, provision being made to mitigate to some degree the injustice done under federal awards. They want to alter these provisions. They say that they do not want to reduce wages, but want to have uniformity. But what kind of uniformity do they want? They want a uniformity which will bring the level of wages under State awards down to the level of the federal basic wage. In other words, they are not satisfied with what has been done in the federal sphere but, under the guise crf asking for uniformity, are really attempting to push down further the standard of living of salary-earners and wage-earners under awards. That is a most serious position, and it is very important that the attention of the country should be drawn to exactly what is happening to-day. Of course, the Minister for Labour and National Service keeps repeating that the basic wage has to be fixed on what industry can afford to pay, and that therefore needs should not be taken into account. 1 know that there are some dicta of the court to that effect; but that is not the intention of the section in the Conciliation and Arbitration Act defining the basic wage. I do not propose to read it all now, but that section was deliberately drafted so that in fixing the basic wage the court would look at the worker and would not look at the industry in which he was employed. The court was to look upon him as a citizen of Australia, entitled, so far as the law could ensure it, to a standard which would put him outside the ebb and flow of the market. Those are the principles which have been applied to the basic wage earner, male and female.

How the court has reached this other conclusion, tentative as it is, it is difficult to see. I say that the needs of the worker must be taken into account. Mr. Justice Higgins pointed out that the word “ basic “ was meaningless except in relation to something higher. He, with Mr. Justice Heydon, pointed out that the living wage, or the basic wage as they regarded it, was based not on the value of the work done, but of the requirements of a man, living in a civilized community. Therefore, “ needs “ must be taken into account. What is the good of saying, “ That is irrelevant “, when a man has a wife and family to support and his children must have their proper food?

Now the theory is going about that certain elements in the recognized index, such as potatoes, are not necessities. Let them say that to the mothers! No medical man in Australia would support such an absurd and ridiculous proposition. The truth is that the definition in the act is based on the fundamental principle of “ needs “. Despite that fact, the principle has been honoured more in the breach than in the observance. But it is implicitly there, and it ought to dispose forever of the tragic argument that, in a period of soaring inflation, the needs of the wage and salary earner are irrelevant in the fixing, not of the whole wage or salary, but of that part of the wage which is called the basic wage, because on it the foundation of the wage is laid. The question of individuals’ needs is not only relevant, but, in many cases, it is decisive.

What is the Government’s position? The Government cannot deny what I have said. 1 have referred to the decline in the value of real wages, according to the Statistician’s figures. A similar position exists in relation to the nutrients consumed in this country, based on an average consumption per head of the people. Taking the figures in the official publication of the Commonwealth Statistician, one finds that there has been a decline in consumption per head of population of every important nutrient from years such as 1949, 1950, or 1948. That is the direct result, not merely of the fall in wages, but of the fact that the goods cannot be obtained. Therefore, the standard of living of the father, the mother and the children cannot be maintained. This has happened at a time at which the claim - and it is apparently true - has been made that there is a period of abounding prosperity. Prosperity for whom? Prosperity for those who make their enormous profits. I. say that the Government stands condemned because its policy in relation to wages is not interwoven with a policy of price fixation - of profit restriction on charges and investments. Those are vital matters in tackling inflation.

No attempt has been made to tackle inflation except in the miserable way that I have tried to describe in which the standards of all salary and wage earners and pensioners and all on fixed incomes have gone down and down. It is possible to fix prices on a just basis throughout Australia and to limit profits. Why does not the Government seek the power to lake that action? The States have offered to give the Government power, but there has been no readiness to accept the responsibility. It is a heavy responsibility, but it is useless for the Treasurer to say, as he said at the conference with the Premiers, that selective prices control might be effective, but the States must undertake it themselves. In Australia, where goods move freely from State to State, the operation of price fixation by a number of States cannot succeed. The only way in which it can succeed is under the system in vogue in war-time, when prices were fixed under Commonwealth authority, and were applicable throughout Australia, subject to any necessary local adjustments.

The Government’s policy is a hopeless and helpless policy of endorsing and supporting uncontrolled profits. This has resulted in profiteering which, in turn, is the primary factor in the skyrocketing of prices. That has reduced the standards of the groups to whom i have referred and who comprise 90 per cent, of the people of this country. The position of the pensioner is even worse than that of employees throughout Australia. It is perfectly clear that the Government is making no real attempt to put forward a policy. As each quarter passes, and prices become higher, its first thought is whether wages can be fixed at an even lower level. The people of Australia, if given an opportunity to voice their opinion, would protest strongly. 1 have referred to the systematic reduction of wages, because such it is. It has happened to both the basic wage and the margins and virtually every one working under a federal award - the majority of Australia’s workers are in this category - is affected. Only the tradesman’s margin has improved, and even he suffers from the deterioration in the basic wage position.

The reasoning of the Arbitration Court judges is affected by government policy. One can see that from the frequent quotations in judgments of statements made, in a ministerial capacity, by members of the present Government. It is not necessary to elaborate that and I mention it simply to point out that the responsibility is the Government’s. Who can deny it? The Treasurer acclaimed the court’s decision when the basic wage was pegged in 1953. The Government has frequently intervened in the test cases.

I want now to elaborate my earlier point about profits. I shall deal with a few companies only, for it is impossible to deal with them all. These are all recent figures. David Jones Limited, the Sydney departmental store, which made a profit of £812.000 in 1954-55, made £939,000 in 1955-56.

Mr Hulme:

– What about the companies that David Jones Limited has taken over?


– The figures include, for the first time, those of Finney Isles Company Limited. The consolidated net profit of the two companies for 1954-55 would have been £899,000. As is pointed out, from the point of view of the company, the result is satisfactory, and was made possible by increased turnover. I draw attention to the enormous area of these profits. Commonwealth Engineering Company Limited had an increased consolidated profit ot £126,000, and earned 24.8 per cent, on a capital of £630,000. The Myer Emporium (South Australia) Limited’s profit rose by a further 13 per cent, to the record figure of £441,000 - a rise for the thirteenth successive year. Honorable members will notice that, though there is pegging of wages, profits can go as high as “the traffic will permit “. That was the phrase used the other day in connexion with the enormous profits of the overseas shipping combine which were revealed by the report on stevedoring.

The consolidated profit of Concrete Industries (Australia) Limited was 34 per cen Ampol Petroleum Limited plans a bonusissue in the ratio of 1 to 5 and, on that subject, the financial editor of the “ Sydney Morning Herald “ had this to say -

This is a remarkable bonus issue, coming afta the March petrol tax, company lux, and other special slugs on motoring - and only a yea after Ampol Petroleum’s previous bonus capitalization of share premiums, lt will have the effect of raising the company’s capital above £7,000,000, while the remaining reserves will apparently be less than £1,500,000. In five years, while Ampol’s capital has trebled, its scale of annual profits has more than trebled and thiearning rate has been more than held.

Honorable members speak of General Motors-Holden’s Limited as if the profits of that company were an isolated instance, but the example can be multiplied. The details have been supplied to me by my colleagues, the honorable member for Melbourne Ports (Mr. Crean) and the honorable member for Yarra (Mr. Cairns), who have been making a very close study of thi-, subject.

The consolidated net profit of Gilbert Lodge (Holdings) Limited for the year ended 30th June, 1956, rose to £65,000 Although the chairman said that trading conditions during the . year were “ by no means easy “ profit is equal to an earning rate of 28.6 per cent, on capital. Illustration after illustration of this sort of thing could be provided. The net profit for the year foi Broken Hill Proprietary Company Limited was £4.519,000. Its capital is now £28,000.000, and since the war this haN increased by more than £14.000.000. bringing in more than £7,000,000 in premium* as well. It is not now simply a monopoly but a group, whose combined capital ha- been increased from £29,000,000 to £105,000,000. This remarkable growth in group assets has been financed not from direct subscriptions but from undistributed profits.

The truth is that big business has found inflation to be very profitable. At the end of the year these businesses have found that the value of their stock in trade has increased and that, therefore, their profits can be shown at a higher figure without calling on the shareholders - indeed, without giving the shareholders an opportunity to say whether or not the profits will be distributed. That has been the pattern throughout. The profits of Custom Credit Corporation Limited, in which I think one bank holds 40 per cent, of the share capital, have increased from £441,000 to £632,000. Gordon and Gotch (Australasia) Limited has made the same sort of enormous profit. General Motors-Holden’s Limited is, of course, a well-known illustration. One could go through the list of companies for practically every industry. One would think that big business would be hit very hard by import restrictions, but that is not true.

The position in regard to profits is this: Most of the benefit of increased production in recent years, especially in the year since wages were pegged, has gone in increased profits. The Commonwealth Bank’s figures show a rise from 8.7 per cent, on shareholders’ funds in 1951-52 to 10.7 per cent, in 1954-55. There is no doubt that the figures for 1955-56 will be even higher. But that is not the proper measure of the increase in profits. The bank figures show that funds invested in 1951-52 are still earning 8.7 per cent., while new funds are earning nearly 20 per cent., and more than 30 per cent, before provision is made for taxation. To put it another way, if we allow the new funds to earn 6 per cent., the 1951-52 funds were earning over 12 per cent, in 1954 and. more last year. That is an increase of 50 per cent, in profits without any increase in capital employed.

That is only part of the story. The figures I have given are the profits revealed by the companies after deductions for all sorts of secret reserves. Because of inflation, the whole tenor is to build up the capital structure of a company, not in the normal way by asking shareholders to subscribe, but by using the accretion of funds. In that way, working capital is increased. The White

Paper shows a comparatively modest increase in company profits of about 5 per cent, in 1955-56. But that figure can only be a guess, and past figures have nearly always been revised upwards. The increase in total national income looks small. It is only 7 per cent., despite rises of 8 per cent, in farm production, 3 per cent, in employment and 5 per cent, to 6 per cent, in prices. But even the figures published in the White Paper show that company profits at £550,000,000 are nearly 50 per cent, above 1951-52 and 15 per cent, above 1953-54.

Some people might approve of that position. Very often it indicates successful business management, but we have a simple problem. We have a problem of inflation and of increased costs affecting all sections of the community. The question is: How can those costs be stabilized? They can be stabilized only by a system of prices fixation on a just basis throughout Australia. The problem of wage adjustments will then solve itself. If prices are fixed for necessary commodities, it follows inevitably that the quarterly basic wage adjustments will be unnecessary. But that proposition assumes that the Government means business and will endeavour to obtain from the States - or if the States will not co-operate, from the people - power to take over these controls. It is of prime importance that no further time be lost. It is of no use the Commonwealth going to the States, which are trying to protect their workers, and saying, “ Well, we think that there should be uniformity in wages, so will you either give the power that you have to the courts to do what they think fit, or repeal the act of Parliament which guarantees to the basic wage-earner his quarterly adjustments? “ That is the demand that is being made, and it is no wonder that the States have been stubborn and have said, in effect, to the Commonwealth that there can be no stability unless it is based on justice all round. The problem of wages is only one section of a great problem.

The Treasurer, of course, indicated the whole point when he told the August conference of Commonwealth and State Ministers, “ We have no confidence in the efficacy of direct control of prices and profits “. He has not sufficient courage to control prices and profits, and that will not be done by this Government unless there is a change of policy. I think that the States would be willing to give to the Common.wealth power to control prices, That being so, why will not the. Commonwealth accept such power? Why should it not do so? The only reason that we can see for its refusal is that inflation suits the profiteers of this country, and the profiteers depend on this Government for the continuance of their profits and for the continuance of inflation. The Minister for Labour and National Service denied that he and the Treasurer had gone to the Premiers conference with a “wage freezing proposi-tion “. Literally, no doubt, that is true, but the Minister did not say that what he really wanted was uniformity on the basis of the federal system and the federal declaration.

If my point has been understood, the view of the Labour party is that there must be one national plan, including price-fixing, restriction of excessive profits, control of capital investment, and control of interest rates. I claim that it is this Government’s objective, even at this moment, to get the States to do what it wants them to do. lt has been defeated twice in that attempt, with the exception that it has been successful with Mr. Bolte, the Premier of Victoria. But Mr. Bolte did not tell the people of Victoria at the last election that if he won the election he intended to do away with quarterly adjustments of the basic wage. If he had put that question to the people of Victoria he would have been overwhelmingly defeated, and every one in Victoria knows that that is so. I say that it is simply tricking the people of Victoria for him to come along at this stage of the life of the Parliament and alter the law, as he did recently, to the prejudice of 500,000 Victorian wage-earners. I say that it is scandalous that he should be able to do that without the clear approval of the people expressed specifically at a referendum or a general election. However, Mr. Speaker, I say that he has had only a temporary success and that he and his party will have to pay for that action at the next election.

With New South Wales, the Commonwealth has had two failures. After two innings, a batsman generally has had enough for the one match, but in respect of New South Wales, this Government is proceeding to a third innings. It wants to persuade the Labour Government of that State to accept uniformity - the alias for reduction of the basic wage. Surely, it must be understood by the Government that the proper plan is not to bring the wage level downwards from the State to the federal standard, but to apply openly to the federal court, to admit that a mistake has been made, that the wage-earners pf Australia have had a raw deal through the Pegging of the basic wage and margins, and to see whether better” conditions cannot be obtained. But that is not the final objective, because it is quite clear that under this present system of profit inflation, the primary cause pf inflation pf costs is profits. The re-investment of profits in similar avenues adds further to inflation by once more increasing profits. That being the position, there must be a plan in order that wages may be fixed throughout Aus.tralia on a just and reasonable basis.

Part of our proposal is that the House should censure the Government for ils failure to establish a national economic plan to halt inflation and to ensure full and continuous employment. The Government has not held inflation, which has become worse and worse. I have referred to employment, although that matter will be dealt with by the honorable member for Stirling (Mr. Webb), particularly in relation to Western Australia. In my opinion, the truth is that in this democratic community, unfortunately, there must be a degree of either unemployment or inflation unless there are the necessary regulations and control of the economy such as the Labour party exercised during the war, when prices here were the lowest, comparatively, in the British Commonwealth. The job of price control can be done, as mentioned in the motion. It should be done. It needs only the will to do it. We shall co-operate with the present Federal Government if it is prepared to do that, in an effort to tackle inflation in that way, instead of hitting only at the workers and also at the defenceless sections of the community, who depend on a mere pittance, and whose condition is becoming so much worse from day to day that leading members of the churches have pointed out their tragic and desperate position.

Prime Minister · Kooyong · LP

– The Leader of the Opposition (Dr. Evatt) rather gave the whole show away, I fear, in the last three minutes of his speech, because he found himself driven by considerations of logic - which had not troubled him to that time, into a position in which he realized that to do the things that he said ought to be done we should have to return to the good old days of the war and have controls all round. In fact, he spoke with a certain degree of nostalgia about those controls. But to adopt his own test, I wonder whether the people of Australia, in time of peace, would be so anxious to go back to the controls of war.

Opposition members interjecting,


– I am very grateful to honorable members opposite, because obviously they are listening to me, and 1 am the first person to whom they have listened for 45 minutes. So, sir, encouraged by their interjections, I proceed. The right honorable gentleman spoke about the controls of war. Does he recollect, and does his audience recollect, that the controls of war did not involve, in the case of the wage earner, the fixing of a minimum wage, but the fixing of a maximum wage? Do his listeners realize, or remember, that the controls of war involved the allocation of employees to the jobs in which they were allowed to work? Do they remember that everything was controlled - and rightly so - in time of war? Do the people want to go back to those controls? Do they want to return to the whole issue? There is nothing more foolish than to think that we can deal with a few things and speak whimsically about others if we are to have a controlled community and a controlled economy. Let them say quite plainly that they want the lot, ranging from prices control at one end, to the murkiest of black-markets at the other. Honorable members opposite say that we ought to ask for constitutional power to do these things. All I can say is, “ Not while we are here “. I thought that the right honorable gentleman would have had some recollection of having asked the people of Australia to authorize the Commonwealth to perpetuate these controls after the war, with no success.

Let me make one other preliminary rema’rk. When I read the terms of this motion, embracing as it does - if that is the right word- sixteen different matters, each of them no doubt calculated to appeal to somebody, I thought, in a most deplorable Way, “as I how admit, that they were propaganda directed to the State Premiers; but it turned out that I was wrong. They were obviously much-needed propaganda directed to the right honorable gentleman’s supporters, because it will not have escaped the notice of the House that, from first to last, he did not address this side of the House or the Country party section of the House. Indeed, 1 thought that he was making rather a point of addressing my friend, the honorable member for Lalor (Mr. Pollard). I should be sorry to find that the honorable member for Lalor had become rather broad in his views, and that he had to be persuaded to toe the line. But, whether directed to the Premiers or to wavering supporters, they were still propaganda, and, like a great deal of propaganda, they relied very heavily upon misrepresentations of very material facts. I shall take just one or two examples from the right honorable gentleman’s own speech. He attacked the Commonwealth Arbitration Court for its decision on quarterly adjustments, and dismissed in ah airy way the idea that the court should ever have adopted a rule that the minimum basic wage was to be calculated not on the basis of family needs, as in the old days, but on the basis of what industry can pay. No one knows better than the right honorable gentleman that the old rule which was laid down first by Mr. Justice Higgins when he spoke of a civilized person living in a civilized community, and with family needs, and which operated for many years, was abandoned years ago by the court, and was so abandoned in the interests of the basic wage earner. That is the point that is so easy to forget. The moment that the court said, “ W« -adopt as our test what industry can pay “, the effect was to increase the real wages earned by the basic wage earner.

Mr Cairns:

– That is not so.


– I am not convinced that the honorable member knows much about it, but if he will give a little study to this problem he will find that what I am saying is completely correct.


– Order! The honorable member for Yarra will refrain (wm interjecting.


– What has happened since? As ‘l would have ‘thought even the most untutored student df economic history would know.* what “has happened is ‘that the

Arbitration Court has dealt with the wage in the light of the general state of industry and its capacity to pay, and has said from first to last that it should prescribe the highest possible wage having regard to the general state of industry and of the national economy. Small wonder, in those circumstances, that the Arbitration Court said, “ But how do you lie on to a wage calculated in that fashion some ideas of changing costs of living which are based upon family needs? The two things are entirely different “. And, in the case that came before it in 1953, the court said, after hearing prolonged and close argument on both sides, We will not have quarterly adjustments. These things are, in effect, out of date, having regard to the way in which the wage is now calculated. But we will look at the wage periodically and we will again decide whether it is in need of revision, and whether it may be increased, having regard to the general position of industry and the general prosperity of the country “. I venture to say that any fair-minded person who carefully considers these matters will have no doubt that that was a sensible decision, and one that was badly needed, because a spiralling operation was in progress which, I think I remember the Premier of New South Wales himself saying, tended only to react on the worker who earned the wages and had to pay the prices.

One other matter upon which the right honorable gentleman got going is one that is rather an old favourite of his, at least for political purposes. He complained about the profits made by companies. He has always seemed to me to have the most naive outlook on company profits. I should hardly have expected to hear a man of his intelligence saying to people, so that they may believe it, “ Here is a company that made a profit of £850,000 “. People listen to that and say, “ ls that not scandalous? A profit of £850,000 “ ! What he omits to say, of course, is upon what total body of funds, and in relation to what total turnover of business, this profit was achieved. Here again he always say, “ I will take the capital “.

Mr Pollard:

– The dividend rate was given


– Even I know thatbecause a dividend rate, if I may agree with mv distinguished friend from Lalor, is always calculated on capital, but a profit rate, if it is to be seen in proper proportion, should be calculated on the total funds al risk in the transaction. Honorable member on the other side of the House will bc hard put to it to persuade any one thai that is not essentially true. But, at any rate, the right honorable gentleman succeeds in whipping up a’ certain amount of envy, and a certain amount of malice. If the Leader of the Opposition had his way, and all the companies in Australia were brought back to a profit rate, on their shareholders’ funds, of 4 per cent, or 5 per cent., I wonder what would happen in Australia I wonder how many people would be better off. I wonder how many people would be employed in businesses existing in such a precarious situation. After all, we on thi> side of the House have accustomed ourselves of trying to take a comprehensive view of these matters, and, at any rate, we are sufficiently radical to have discovered that the best thing for the Australian wageearner is to be employed by a prosperous enterprise.

Opposition members interjecting,


– Oh, no, Opposition members do not want that. In their queer, obfuscated fashion, they seem to think that one can destroy the profit element in business and, at the same time, guarantee full employment, at rising wages, to every one in the country.

Mr Curtin:

– Rubbish!


– Of course, it is rubbish. I acknowledge that. 1 think that is the most perfect description of it that I have ever heard.

Let me turn away from those somewhat temperate comments on the speech that has fallen from the right honorable gentleman on what, I believe, is called a motion of censure, and let me say something about what underlies this argument directed against the Government.

Mr Cairns:

– Are you noi going to deal with it at all?


– Yes, I am. That is exactly what I was proposing to do now. The honorable member, has an excellent opportunity of remaining awake for the next half hour. As I know that he is an earnest seeker after the truth, here is his chance to find it. I ask him, therefore. what is the policy which the Leader of the Opposition oilers in substitution for the policy of the Government. That, after all, is trie crucial test. He has made it abundantly clear that he wants to raise wages. That is a good, popular policy, and, therefore, he starts off with it. He says, “ 1 am going to raise wages “. Then he says that he is going to peg prices, or, at least, that he intends by some abracadabra to persuade the States to give an Evatt government in the Commonwealth sphere power to peg prices. He says, therefore, that he intends to raise wages and to peg prices, and, while doing these things, although he said nothing about it in his actual speech, to increase extensively the amount of money now provided for the States for housing, hospitals, schools and all their other requirements.

Mr Pollard:

– I think you are losing your punch.


– My friend may be right. There is nothing so softening as never to have an opponent worth fighting. Let me say something about pegging prices and unpegging wages. I remind the House that the basic wage is a minimum wage. Except in the merest nominal fraction of the total number of cases, it does not represent the actual wage paid to a man. We all know that there has been for years now in Australia a competitive wage level and that the pure basic wage-earner either is a rare bird or is non-existent. Therefore, wages are not pegged at this moment and were not pegged by the recent decision of the Commonwealth Arbitration Court. The fact is that the judges of the court said, “ We will not continue to make quarterly adjustments of the minimum wage. What people will pay above the minimum will depend entirely on the circumstances of each case “.

When we fix prices, we do not fix minimum prices; we fix maximum prices. Therefore, what the right honorable gentleman is seriously proposing is that the maximum price that may be charged for a commodity shall be fixed, but that wages, which are an element in the cost of that commodity, shall be allowed to run completely free. If he wanted to get rid of profits in business, that would be a very effective way to do so. Never have I heard anything more fantastic. If he had said, is he did at the finish, “ I am so keen on pegging prices that 1 am prepared to peg wages, profits and all the other elements of prices that would have been another thing. That would be a war-time economy. It would involve a controlled community from top to bottom. But to begin, as he began and as, no doubt, he will continue during the next few days, by saying that he really believes that we could hold the price level and, at the same time, allow all the factors affecting prices to run free is as silly as a man can imagine.

Let us consider the other factor that I referred to - the States. We, as a government, have provided more millions of pounds for the States from Commonwealth resources than have all the previous governments in the history of the Commonwealth put together. In fact, as a rule - practically an unbroken rule - all the previous governments controlled the States by allowing them to take their share of the loan raisings and no more. What we have done, as a government, has been to give the States the whole of the proceeds of the loan market. Under some criticism from our opponents in this place, we have borrowed large sums of money from overseas and the counterpart funds obtained in Australia from the sale of the proceeds of those loans have all been used to support the States’ work programmes. Over and above that, we have, at the best, had to draw upon trust funds and similar funds to support the States’ programmes and, at the worst, to levy vastly increased taxation in order to make up the difference between loan raisings and the money required for the States’ works programmes. Except when the money was raised by taxation, that support of the States’ works programmes contained some inflationary elements.

But what does the right honorable gentleman say? He says, “ I do not complain at you for doing so much; I attack you for not doing more. It is monstrous that the State governments should not have all the money that they require for all the things that they want to do” - many of which, I agree, are of great importance and of great social significance. He says, “You, the Government of the Commonwealth, ought to provide that money “. It is very easy to say that this Government ought to provide £100,000,000 or £200,000,000 a year for the States in addition to what is being provided now, but it is not a bad idea to ask, as any ordinary householder would have to do, “ Where is the money coming from? “ i know that that is a strange and unpopular question. 1 do not think for a moment that the money would come from those honorable members opposite who are interjecting now, or from me, except as members of the community.

Where is the money coming from? That is a question that the right honorable gentleman never faces. He has tried this one on the electors two or three times already, without conspicuous success. Does he propose a heavy increase of taxes, so that the money to be paid to the States would be drawn from the purchasing power of ordinary citizens? If he does, let him say so. If he said, “ I believe that the States should have another £100,000,000 a year and I propose to levy additional taxes to the extent of £100,000,000 a year so that they can have the money *’, the people would be able to understand what he proposed, although their reaction might not be all that he desired.

Mr Bryant:

– You levied an additional £115,000,000 in March and did not tell the people about it beforehand.


– How right you are! We levied another £115,000,000, having got from the people at the general election, in the teeth of all your pleasing promises, a clear mandate to take whatever steps were necessary to deal with inflation. I love to hear the pack yelping. I face my opposition when I am arguing a case. Honorable members opposite know perfectly well that during the last general election campaign they were all drooling at the mouth. They said, “ Nobody could resist these marvellous promises of hundreds of millions of pounds for nothing “. There they were, calculating their majorities. But we came out in a somewhat arid fashion and said, “ We propose to attack inflation. We stand on our record. We ask you to give us authority to take whatever steps need to be taken to cope with inflation.” The people preferred our request for a general mandate to all the attractive promises of the Opposition.

If I were honorable members opposite, I would not excite myself too much. I know I am exciting them, but I do not want them to excite themselves. They appear to believe that at the next time of asking the people will toss us out. Believe me, they will not, except, perhaps, on one condition, which the Opposition is not game to face up to. These interjections are a good sign. They indicate that this analysis is a little too much for some of my friends on the other side.

Mr Duthie:

– You do love yourself!


– It is perfect love in the case of the honorable member for Wilmor (Mr. Duthie), or is it absolute love? I always forget. Whatever it is, let him face up to the problem. He is a great politician Is he prepared to say to all the ladies in Wilmot over cups of tea, “ We are going to increase taxes by £100,000,000 a year so that the States can have more money Of course he is not! If honorable members opposite are not prepared to accept that additional revenue would have to be raised in order to make great additional payments to the States, what is their scheme? They are opposed to overseas borrowing. They do not believe that we should have raised the interest rate to meet the local loan market, and so they do noi really expect that we shall obtain from the loan market the money we require. How would they get it? It is obvious how they would get it. In the crudest terms, they propose to inflate the currency in order to produce an additional £100,000,000.

Mr Bryant:

– That is what the Government has done.


– The honorable member may laugh, and as far as I am concerned, he may be as hollow as a drum while he laughs.

Mr Cairns:

Mr. Cairns interjecting,


– Order! The honorable member for Yarra will refrain from interjecting.


– Nothing can get rid of the Opposition’s necessity for once to face up to a choice in this mattter. It would obtain the money by taxing the people, by borrowing from other countries, or by inflating central bank credit and thereby adding fuel to the fires of inflation on the greatest possible scale. Let the Opposition, abysmally ignorant as it is of these problems, for once face up to an issue genuinely. These are simple, plain choices, and if the next Opposition speaker has in .mind some other way .of raising the wind no doubt we shall hear about it. But I maintain that, in the absence of some better suggestion, the Opposition’s proposal is .ppe .to cure inflation .by adding .to inflation..

Mr Cope:

– Will the right honorable gentleman tell us bow “he put value ‘back into the £1?


– The honorable member has not been .a member pf this Parliament very long, but he has been in i.t long enough now to know that .under the administration of the present Government Australia is in a state s>t unparalleled prosperity

Mr Cope:

– What about the right honorable gentleman?


– I know that .there arc some Opposition members whos.e stockintrade is misery and who would’ die of frustration if they could not find an .unemployed worker. They devote .themselves .all the time to howling calamity. But such people constitute a very small percentage of the people of Australia. The fact is that the best and most sensible Australians in all walks, of life are satisfied that the country has never been more prosperous. During a recent by-election campaign the -Leader .of the Opposition and ,my -friend, the honorable member for Lalor (Mr. Pollard), .tried to explain to farmers that they were povertystricken and living in misery. I am credibly informed, .Mr. Speaker, that gusts of laughter swept the halls in which the right honorable gentleman and his colleague spoke; well, two gusts of laughter, one from pf th.e two -persons who usually comprised .the audience..

Mr Pollard:

– And bang -went the “Liberal party’s former majority.


– Yes. It always does at a by-election

Mr Cope:

Mr. Cope interjecting,


– Order! I call the honorable member for Watson to order.


– The honorable member for Lalor and T are old .friends. He may feed the poppycock he has just uttered to the beginners, but .it will not do .for me. :1 would not insult him .by feeding such poppycock to him.

Mr Pollard:

Mr. Pollard interjecting,


– Order! 1 call the honorable member for Lalor to order.

Mr Cairns:

-Why does the Prime Minister -not deal with the motion?


-. Order! If the honorable member for Yarra interjects again 1 :shall name him.


– I pause to repeat the observation that if one looks at what has been said in the motion one must conclude that once again the Leader pf the Opposition is out to add to inflation under the pretence of countering it. His one positive proposal about inflation from first to last has been that .prices should be pegged. I ,defy any one to discover anything in the right honorable gentleman’s proposal that does not involve increased costs and increased expenditure without any increase of production, but with a consequent enormous pressure on price levels. Having proposed to create all the conditions that will impose enormous pressure on price levels, he says.

Increased prices are the cause of inflation, and 1 shall peg them “. Does he not realize that in the main the increase of price levels is the product .of inflation and that it arises from a state At affairs in which the capacity to pay exceeds the capacity to provide, and in which .the .purchasing power of the country begins to overwhelm .the supply of goods and services? Does he not realize that in those .circumstances i.t is folly to increase the purchasing power unless be is prepared to do all the things needed to stimulate production .and .increase the supply of goods available for purchase? Th.ese are elementary economic facts. y,et they all are .ignored or denied by what the right honorable gentleman has said.

I have said that the cause of inflation is, by and large, the enormous pressure of the monetary capacity to buy an inadequate supply of things available for purchase, and I apologize for saying anything quite so elementary. There are, pf course, special circumstances, and the Leader of the Opposition reminded us of one which J think ought .to be mentioned, because it is a superb illustration of one .of the follies which the Commonwealth COUr.t of Conciliation and Arbitration sought to remove when it decided to suspend automatic quarterly adjustments of the basic wage. Let us take the celebrated example of potatoes and onions. When the Acting Commonwealth Statistician announced the last quarterly figures showing the movement of the C series index, he pointed out, in language that perhaps has not been sufficiently observed yet, that if potatoes and onions were included and given their normal weight in the calculation of the index the increase would be substantial, and would range up to lis. a week. But he said that reports from representative vendors indicated that retail sales of potatoes had recently been in the vicinity of one-third of the customary level in many places, and that the available information was insufficient to calculate an index with current weights.

Let us just explain that matter a little. The Acting Commonwealth Statistician was saying, “ One cannot tell what weight one should give to potatoes and onions unless one can discover whether their high prices were in fact caused by a scarcity that resulted in a consumption lower than usual, and if they have been so caused obviously the high prices have not entered into the cost of living and they ought not to be given the weight that they have been given in the past “. Of course, it is perfectly true - we do not need to be told - that if the people do not eat potatoes they will eat something else. But the point is that the prices of these two commodities have been at extravagant famine levels, and to take them into account in assessing quarterly cost of living adjustments in those circumstances seems to me to be amazing, and it seemed to the Acting Commonwealth Statistician to be so remarkable that for the first time he produced, in effect, two figures showing the movement of the index, with a warning that the first one might not be right. But the Leader of the Opposition says, “ That does not matter a scrap. It all must pass into wages “. If he had his way it would pass into wages all over Australia, because every State and the Commonwealth would adjust wages quarterly, and this accident caused by potatoes and onions would end up by loading scores of millions of pounds onto production costs generally in Australia. The Commonwealth Arbitration Court, if I may say so. did well to say, “ That sort of thing is not reasonable. We propose to examine the basic wage from time to time in order to see whether, having regard to the overall economy and the state of industry, some changes ought to be made in it.”

I do not want to pursue that, because J want to- conclude as soon as I can; and I conclude by saying this: Our objectives, as a government, are in sharp contrast with those embodied, or implicit, in the motion. We have aimed, in the whole of our policies, at a balance between the demand for labour and the supply of labour. Occasionally, we have had to do some things which were unpopular. In our April provision, which has become known as the “ little budget “, what we did do had a very direct bearing on, for example, the motor industry, a very great demander of labour and capital and, indeed, a very great demander of imported goods in a rather inflated import situation. What we said to the people was, “ We want to produce some balance in these matters. It is true that we may, to some extent, restrain you, but if. as a result, we can have a state of affairs in which demand for labour is satisfield by the supply of labour so that everybody has a job, but without the obvious evils of over-full employment or the more obvious evils of unemployment, and that position of balance can be maintained, that is a very good thing for the country and. in itself, will have a very significant counterinflationary effect.”

In the second place, we have aimed at a balance between the demand for goods and services and the supply of goods and services. We have, all along, emphasized that it is production that counts, that it is production that is the most active element in a counter-inflationary policy; and we have pursued policies of which many representatives of country and other districts could speak, which have been eminently calculated to improve productive effort and result in Australia - and not without effect if one looks at the indices of production in this country over the last six years.

In the third place, we have aimed at a balance between the demand for capital and the supply of capital. The over-demand for capital in Australia has had significant results because, if there is an over-demand for money the price of money will go up just as certainly as the price of labour and of goods will go up if there is an overdemand for these things, with a resultant increase of costs. In order to produce a balance between the demand for capital and the supply of capital we have gone to great trouble to assert, and maintain, the credit position of this country. It is all right to have calamity-howling here, but I want to say to honorable members that one of the things that gave me more pleasure than anything else on my recent visit abroad was my discovery of how the credit rating of Australia had grown, and how high and strong it was. Of course, if it were not for that high credit rating we should hardly have been in a position to obtain from overseas sources, as we have, such substantial sums of money, particularly in dollars, so urgently needed, as they were and are. to break bottle-necks and enable the development of Australia to proceed.

The fourth thing I want to say before I sit down is associated with all these others. The countering of inflation is not merely some academic notion. It has, of course, the most tremendous bearing on a lot of people inside Australia - on most people inside Australia. It is the one protection that can be afforded some of the groups of people who get a mention in the Leader of the Opposition’s motion. But it is also intimately associated with our overseas credit and our capacity to get overseas investment, both public and private. I just want to emphasize that to honorable members. When we were discussing what has been called the “ collective approach “ on the question of securing convertibility of sterling with dollars - a matter which has attracted a great deal of attention and with which my colleague, the Treasurer, has had so much to do of late - it was agreed by every Finance Minister from every British Commonwealth country that to achieve convertibility abroad it was necessary to arrest inflation at home. It was agreed that we must secure financial stability in our own countries because, without financial stability we could never attract the investment from overseas that was so badly needed to encourage production and develop exports, and thereby to improve our balances in the sterling-dollar pool. This is all a completely integrated affair, and therefore the attack on inflation is, at the very same time as it is conducted, a blow for increased credit abroad and an increased flow of capital investment into the country.

We do not underestimate it, but we have long since faced up to the idea - and we have done some unpopular things in pursuit of the idea - that what we must aim at is a state of balance in all those factors so that with stability our financial problems will enable us to pursue development on a greater scale, that with stability we will attract people into this country with their skills and also with their funds, and that stability will itself, therefore, be the foundation on which the whole active development of Australia will proceed.

On behalf of my colleagues, Mr. Speaker, 1 must say that we may have made mistakes. In fact, undoubtedly, we have made mistakes, and undoubtedly we shall; but for the broad line of our policy we have no apology. We can only say that if the policy, if it can be called such, implicit in the Opposition’s motion, ever comes into operation, all the work of recent years will be undone.

East Sydney

.- The House and the people of Australia have just listened to an extraordinary speech. ] think they will agree with me that it was a speech unfitted for this occasion. If Australia were looking for a comedian the speech would have been very fitting, and the Prime Minister (Mr. Menzies) would have been fully qualified to make it. Anybody who has heard the Prime Minister to-day would imagine that the Australian economy, . after seven years of mismanagement by this Government, was in such a sound position that it did not require any defending. What is the situation? During the whole of the Prime Minister’s speech the right honorable gentleman did not deal with the vexed questions of import controls and the effect that they are having on our economy. What has happened to our balance of payments problem, to which our attention has been so often directed? As a matter of fact, it is an important point to keep in mind that the Government-

Mr Peters:

– The Prime Minister is leaving the chamber. He is running away.


– lust as he always runs away from every issue. It is important to keep in mind that the Government intends to close the Parliament, at the end of this week, for five months so that the voice of the people in the Labour Opposition will be stilled at a time when, we are facing a critical situation in this country. The Government cannot escape that fact. Let us consider what’ the Prime Minister had to say in reply to the Leader of the Opposition (Dr. Evatt), leaving out all the stale jokes that the Prime- Minister cracks from time to time. The Prime Minister said that the. Labour Opposition wanted a return to. wartime controls. That is untrue. There were many controls’ which were found necessary in war-time that no Labour man would ever think of imposing in peace-time. But what we do ask is that some controls should be applied to those people who to-day are exploiting, the Australian community by making excess profits. It is. rather interesting to note that the Prime Minister tries to imply that the particular type of control for. which, the Labour Opposition is asking is. a control that will prove irksome to the worker.

I remember that the right honorable gentleman himself, in 1951, talked about excess profits. In comparison with what is being achieved to-day by these various monopolistic concerns, the profits of 1951’ could’ be regarded as being at a moderate level. In 1951 the Prime Minister was himself talking about imposing controls on excess profits and the Treasurer (Sir Arthur Fadden) was in agreement that there should be controls on excess profits, lt was only after they had fooled a section of the people into believing that they intended to take some effective action, and were returned at the head of a government, that they repudiated those speeches, just as they have repudiated many other promises to the Australian community. The Aus- tralian Labour party wants control of profiteering. We want control of profiteers, and we make no apology for asking for that control, to be imposed.

Let us examine the Prime Minister’s speech. He talked about the relationshipof profits and dividends to the capital employed in the industry. The Labour party prefers to approach this question from, the: viewpoint of the profits made and the dividends paid’ upon the actual” capital subscribed and invested’, in the industry. aid’ that is an. entirely different matter. Trie shareholders’’ funds to which Government- supporters frequently refer include undistributed profits and watered capital accu mulated’ by means- of bonus’ shares for- which shareholders do not- contribute a penny, to that way, Government supporters keep the true picture from the Australian community. Why did not the; Prime Minister tell us whether he thought that General MotorsHolden’s Limited had been unduly exploiting the Australian community? On one year’s operation, that company- made a profit equivalent to. 550- per cent, on its ordinary capital. That fact was not mentioned in the Prime Minister’s speech. It was referred to by the Leader of the Opposition, but not one word came in reply from the. Prime Minister.

Let us examine the question of whether this is a low-wage government. The Prime Minister said that it is, to the advantage of the workers to have their basic wage determined, not according to the needs of the worker, but according- to the capacity of industry to pay. If the workers were receiving a wage commensurate with the labour that they contributed to industry and commensurate with what the industry could afford to pay, it might be a horse of a different colour. But upon what evidence does the Commonwealth Arbitration Court determine the ability of an industry to pay’ Can the wage that an industry can afford to pay be determined without taking into account the dividends that the industry can afford to pay? The Prime Minister said that the workers of Australia should be thankful to those great monopolies, irrespective of what profit they earned, because they provided employment for the workers. I submit to any honorable member who wants to approach this question fairly that if the profiteers were to disappear overnight, as long, as the workers remained in industry, we- would not notice the disappearance of a profiteer; but if the. worker, ceased to work in the factory and man- the machines the whole economy of the nation would come to a standstill. It is the workers in industry- who produce the wealth of a nation - the wealth that is of so much benefit to many sections of the community. Therefore, the Labour party makes no apology for attacking the Government on the present unsatisfactory state of affairs.

The Prime Minister actually spoke for nearly three quarters of an hour and did not blame the Communists for anything

It: must be. an historic occasion because, in the past, everything that happened in the country, was. due to the- Communists and their activities. But this time the Prime Minister has not submitted that as a defence. He has probably realized that that explanation has worn a little: threadbare; What is- the economic situation of- this nation? I have a copy of a- statement made by the Treasurer, who ought to know the state of affairs in Australia. Last year, we had. an adverse: trade balance, and- our overseas reserves, were reduced- by £73,000,000. They would have been reduced by an even greater figure had. the Government, not been able, to raise a-, number of loans overseas and attract the investment- of overseas capital in this country. If the Government had. not done that, we would, have been in a much more, serious position. But borrowing overseas, or inviting foreign investors to invest their capital, in- Australian industries, is, only a way of staving off the evil day; because, annual interest payments have to be made and dividends have, to go overseas to. foreign, shareholders. It is generally recognized that if foreign borrowings are carried too far they can result in serious difficulties and embarrassment for the people of this country.

What does the. Treasurer say is the present situation? The Leader of the Opposition presented an excellent case to show exactly what the situation was in Australia. But grave as the situation has been painted, it has not been, stated to be as grave as. the Treasurer himself has stated the position to be. The. Prime Minister declared not long ago that it was the. determination of the Government to. achieve. trade balance by 30th June of this year. There is no doubt in the world that honorable: members must- be. alarmed, at the. situation as now disclosed, by the Treasurer’s statement. The Treasurer; whose- words are on record’ in “Hansard”, said that we need an- export income of £1,000,000,000 a.year: The sum of £1,000,000,000 a year is £227,000,000 more than we were able to obtain from our exports last year. The Treasurer also said that we must achieve our target in respect to imports. And the target is £650,000,000 per year, which is £169,0.00,000 less than we imported last year.

AU; those Australian industries: that are struggling to-day and’ are having difficulties because’ of a. shortage* of raw. materials and which have been- forced to dismiss hands, should recognize that they have not yet reached the end of the road because, according to the Treasurer, imports again must be cut to the extent of £169,000,000 a year.. The Treasurer also said that after exports- had been increased by £227,000,000 and imports reduced by £169,000,000, it would be necessary to have a steady flow of capital intake in both public and private accounts. Everybody is aware that the Government is- doing its best to secure overseas loans. The Labour party is opposed to that policy. We believe that overseas borrowing should be kept to a minimum and that the Government should only borrow in order to get essentials, for the. development of the country, which cannot be produced inside Australia. But the Government is not doing that. It is raising overseas loans and is using the proceeds of those borrowings, not to bring in essential goods, but to permit the importation of luxuries and newsprint to suit its political friends.

The Treasurer has admitted that there is a very important item in our national balance-sheet which is referred to as- “ invisibles “: “ Invisibles “ include freight, dividends, interest, insurance, and’ overseas commitments in respect of travel by Australians abroad. The Treasurer said -

It is hardly likely to be much less in the current year.

He knows that it will almost certainly be more because, already, the. overseas shipping combine, over which this Government- exercises no control whatever, has indicated that it will further increase freights. The Government has said that the only, determining factor as to what freights are. charged our export industries is what the trade will bear, meaning what the shipping combines can extract from the Australian community. Therefore, it is quite evident that this country is in a difficult situation.

It might be. that the Government has a plan which it has not announced to the community for the purpose of overcoming our balance of payments difficulties. But according to the “ Review “ for the AprilJune quarter, published in Victoria, the Institute of Public Affairs- is fully aware of the Government’s plan. Let me tell the House what’ the institute suggests is the only way to> overcome our- balance of payments problem. This is the unannounced policy of the Government. The “Review” had this to say -

Australia can no longer look to its traditional exports of primary products to pay for the imports required to support accepted standards of living, employment, rapid and large-scale development . . A reduction in Australian living standards, or in employment would of course lower the demand for imports.

Of course it would, and that is just what the Government proposes, lt is creating unemployment by restricting imports and putting on a bank credit squeeze. It is forcing people out of work so that they will be unable to continue imposing a strain on this country’s imports.

Did any one ever hear a more ridiculous argument than was advanced by the Prime Minister (Mr. Menzies) and the Federal Treasurer (Sir Arthur Fadden) on the need to regulate the basic wage? As every one knows, for many years the basic wage has been adjusted quarterly. These adjustments have been calculated on the C series index figures. This index includes potatoes and onions but, according to the Prime Minister and the Treasurer, because the prices of these commodities have now reached “ famine “ heights, and the workers cannot buy them, they ought to be excluded from the regimen, and so have no effect on the basic wage, lt is indeed peculiar to use the expression “ famine “ when there has in fact been no famine in the production of these commodities. If one carried this ridiculous argument further one could say that if the prices of other items in the regimen were forced up so that the workers could not buy them, a reduction in the basic wage would be justified. That is the stupid argument that has been advanced by Government supporters.

What other methods has the Government adopted to deal with this important and serious balance of payments situation? According to the Prime Minister he has always hankered to build up an export trade in manufactured goods. He said -

But it is quite clear that we can enter the great markets that are waiting for us only if we can do so at competitive prices. “ Competitive prices “ means, of course, not lower profits but lower wages for the workers. That is how the Government hopes to build up our export income.

I turn now to the question of overseas borrowing. If the Treasurer cares to look up the statement by Dr. Coombs, the Governor of the Commonwealth Bank, he will agree that that gentleman has directed attention to the seriousness of the present policy of increasing our overseas indebtedness. The Treasurer admits that world trade is becoming more and more competitive and that, therefore, we cannot hope that higher prices for our commodities will get us out of our difficulties. To the contrary, internal inflationary tendencies which this Government, time after time, has undertaken to cure, are making it increasingly difficult for producers to export successfully. We shall not always be blessed with good seasons; we shall have droughts and floods, which will affect our primary production. The Government has been very fortunate. During its term of office Australia has enjoyed bountiful seasons and good markets overseas. That is the only reason why we did not reach this crisis in our economy some years ago.

I should like to make brief reference to immigration, in order to show honorable members what an illogical policy this peculiar Government is following. It tells us that we have to increase our export income either by getting higher prices - which it says are unobtainable - or by increasing production. But, if we increase our population, either by immigration or natural gain, without also expanding our export industries, we shall only accentuate the position. Therefore, immigration does not help us out of our present difficulties. The more immigrants that we have, without a corresponding increase in export production, the less production we shall have available for sale on the world market. In addition, the Government is following a policy of cutting down on Federal and State works. How can we hope for expanded industry, and production, if the Government curtails development?

As a result of this Government’s mismanagement and bungling, our economy is crumbling, and falling to pieces. I invite honorable members to consider the state of our roads. Every honorable member knows that half an inch of rain on certain sections of the Hume Highway - the main road between Sydney and Melbourne - makes it impassable. The Government says, “We have not the funds or the resources ‘’. It proposes to make only £32,500,000 available to deal with a problem which the Minister for Shipping and Transport (Senator Paltridge) has said requires the expenditure of approximately £1,000,000,000. Dr. Coombs used a good argument when he said that £50,000,000 ought to be taken out of the defence vote and allocated to road construction and maintenance. Unless we have m efficient transport system, how can we ever have proper development?

As honorable members know, the Standing Orders preclude me from speaking for more rhan 25 minutes, so 1 shall be able to deal with only one or two more points. Let us examine what is happening to our economy. Public health is a very important matter. Dr. Lilley, the chairman of directors of the Royal Prince Alfred Hospital, declared, quite recently, that £100,000,000 was urgently required to meet the immediate needs of hospitals. He said that there was a big waiting list and that even some urgent cases could not be given a bed. The Commonwealth Minister for Health (Dr. Donald Cameron) appealed to the hospitals to hold tuberculosis patients until their complaint was no longer infectious. But, we find that, of 5,600 cases receiving the Commonwealth tuberculosis allowance, and deemed to bc infectious, 3,000 are not in hospital because there are not enough beds. Yet, we hear all this talk about unparalleled prosperity in the land! The Prime Minister, having spoken about our unparalleled prosperity, admitted that the Australian worker could not afford to buy potatoes and onions.

The Prime Minister promised, in his policy speech of 1955 -

A new housing agreement, with more money for the States at a favourable interest rate . . .

He then brought forward a new agreement which compelled the States to pay 4 per cent., instead of the existing rate of 3 per cent. That, of course, forced up rentals for government homes. Moreover, the Commonwealth has insisted that the States abolish the rental rebate system. This means that even workers on low incomes have to pay the full economic rental. As this is beyond the means of some of them, their single remaining chance to obtain a home has now gone. According to the Commonwealth Statistician, home construction is at the second lowest figure for the past six years. The number of commencements is the lowest for the past seven years. Despite all this, a Government senator said that the end of the housing shortage was in sight in Australia. In his 1955 budget speech, the Treasurer said -

Steadily but surely we are making up the leeway in social requirements, such as hospitals, schools and civic amenities.

In New South Wales alone, 24,800 garages and huts are being used for living purposes. There are 106,000 families sharing accommodation, and the police forces of the various States would advise the Government, if it cared to make the inquiry, that any one who wanted to sleep on a railway station would need to be there early to get a place to put his head. Our railway stations and parks to-day are filled with unfortunate people who have been abandoned by this Government.

Let me deal briefly with war service homes. If ever an obligation rested on any government to care for one section of the community in respect of homes, it is the obligation to ex-servicemen. The Government cannot argue that that responsibility belongs to the States. It is fairly and squarely the obligation of this Government. But it has not increased the allocation for war service homes for a number of years and applicants have to wait two years for finance, even after their applications for loans have been approved. That shows the sorry state of affairs that exists to-day.

This Government promised that it would arrest inflation. But to-day the £1, compared with its pre-war value, is worth only 6s. As the Leader of the Opposition said, one section of the community is hit harder than any other section - and that is the unfortunate pensioners. What does the Government do? When we press for some alleviation of their distress, the honorable member for Indi (Mr. Bostock) says, “We have gone to the end of the road in respect of what we can do financially to help this deserving section of the community “. This party is dissatisfied with the way affairs in this country have been run. We realize that we are poised on the brink of economic disaster and that once again only Labour can save the Australian community.


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

Treasurer · McPhersonTreasurer · CP

– I rise, not to defend the Government against the censure motion but, La the light of speeches that have been delivered, to give some information to the House and to the people. The Government’s financial record and its ^uncial position to-day do not require any elaboration or defence. The evidence of the effectiveness of its policy is to be seen all around us. Consequently, I shall take the points raised in the motion of the Leader of the Opposition (Dr. Evatt) and deal with them, as far as lies within my power, on a factual basis.

The Leader of the Opposition said that we have failed to ensure full and continuous employment. I shall take that as the first of his objections to the policy of the Government. Time and time again, members of the Opposition have predicted depression and unemployment and have been disappointed when neither has eventuated. There is no doubt about that. In season and out of season they have ranged up and down the country predicting depression and, as a consequence of depression, unemployment. They have been very sadly disillusioned and disappointed because of the effectiveness of this Government’s proposals. At no stage in the past seven years has unemployment reached 1 per cent, of the labour force and during most of that time unemployment has been virtually nonexistent.

Mr Cairns:

– Not so!


– That fact -cannot be denied in any unbiased criticism or after any examination.

I shall pass from that point. The employment situation is the basic ground for the censure motion. Year after year, the level of employment generally has continued to rise. Our population has grown by well over 1,000,000 people in the seven years this Government has been in office. Yet virtually everybody seeking a job has been able to find one.

Mr Cairns:

– No.


– To-day, the number of people in civilian employment, excluding the defence forces, is approximately 300.000 more than it was when we came into office, despite the .increase in population and the vigorous immigration programme that we Iia ve carried out very effectively.

The tempo of business and industrial activity has necessarily fluctuated, but a strong and continuous development has prevailed, in line with the requirements of a balanced economy. Population has increased, industrial output has increased and rural production is rising quite remarkably. The provision of basic facilities has vastly improved. We have made great headway in housing and in the enlargement of hospitals, schools and similar facilities. Thai assertion can be proved by facts. In brief, we .have provided a guarantee of full employment by our efforts and our policy to keep the economy expanding at a reasonable rate in all the circumstances. Had we not pursued this steady aim, we .would never have been able to absorb all the people who have come to this country as a result of our encouragement, nor would we have been able to provide continuous full employment for the people who were already here. The fact is that we have succeeded in doing these things. Much as we dislike it, we have had to do unpleasant things, but the Opposition, in all the circumstances, must admit that we .have succeeded in our policy.

I come now to another factor in the right honorable gentleman’s motion. He said that we have failed to prevent -profiteering, that we have refused to obtain power either from the people or from the States to regulate prices, interest rates and capital issues’. Let us consider prices control and its history. The Leader of the Opposition keeps urging that the Commonwealth should seek powers to control prices and, having obtained them, apply price controls, presumably on the same all-embracing standard that existed during the war. That is the only overall method of which Australia has had any experience. He proposed this despite all the experience we have had in recent years of the ineffectiveness of price control as a means to deal with inflation, particularly under peace-time conditions. We came out of the war with a full-scale system of prices control established, and it was continued until the Labour Government abandoned it in 1948.

Dr Evatt:

– ;It was defeated at ,1 referendum.


– By that time, the :great majority of people were heartily sick of it and were -glad to see the end ‘of it. That is why it was defeated at a referendum. The people were sick of the constant arbitrary interference with business which the system entailed and with the general bungling and muddling that are inherent in the system. Having had that experience - and experience is not a bad guide - the people refused the request of the then government for constitutional authority to continue prices control under war-time conditions in a peace-time era. The people were also sick of paying large administrative costs. The Opposition would return to the humbug of prices control although, in spite of everything that the system was supposed to do, it did not restrain prices. Those aTe the facts for every one to see. lt was bad, it was cumbersome, it was expensive, and it was interfering. Between June, 1945, and June, 1948, the approximate date of the abandonment of the system, retail prices rose by 14 per cent, and wholesale prices by 18 per cent. The people realized that the system was nothing but a mostly piece of humbug, interference and nonsense, and they expressed that opinion at referendums, first in 1944 and again in 1948, when they rejected the request of the government for constitutional power to control prices.

That leads me to recall what the Labour government of that time did in this matter . “If Labour had the faith in that system then, that it is asking us to have now, why did it do what it did? To-day, the Labour party in opposition is asking the Government to seek constitutional power to control prices, and to establish a Commonwealth prices control system. But what did it do when it was in office, when it had the opportunity to do the same thing and when, according to what honorable members opposite -say now, it believed in the effectiveness of prices control? We know that the Labour government tried to get constitutional power to control prices, and failed. But although it failed constitutionally, honorable members opposite know - and nobody “knows better than does the Leader of the Opposition (Dr. Evatt), who was then Attorney-General - that Labour had every opportunity to test the effectiveness of what it had failed to do constitutionally by continuing prices control under the defence power. But what did it do? As the House knows, it could not hand over the control of prices to the States quickly enough, i: did not try to retain control in the Commonwealth sphere, or even to test the power resident - I admit, doubtfully resident - in the Commonwealth; instead, it could noi get rid of prices control quickly enough, once the people of Australia had rejected the referendum. That leads us to believe that the members of the Labour party were “ running dead “ when they asked the people of Australia to give them power to control prices. They did not really want thai power because they knew how ineffective such control really was. “Now, they are asking us to go to the States and request the transfer of powers for which they themselves did not ask when they had the opportunity to do so. I make that point emphatically, and I repeat thai if they are sincere to-day, on the basis of their past experience, and having regard to the conditions that existed at the time thai they handed the control of prices to the States, why did they not ask the Stales to do exactly what they suggest that we should ask them to do? The answer, of course, is that they knew that prices control was a failure. They wanted the people of Australia to turn down control by the Commonwealth. They wanted to pass the buck to the States and to be able to make the excuse to those who were not discerning that, although they had tried to get power to control prices, the people of Australia would not give them the constitutional power to do so, and, that being so. they had no alternative but to hand the matter to the States. As I have said, if they had been sincere and had really believed in the effectiveness of prices control, as they pretend to believe in it to-day, they could have asked the States to transfer the necessary power to the Commonwealth, and had they done so I have little doubt that the States would have agreed, because they did not want the prices control baby placed on their knees. Thai is the position, and it cannot be denied.

The Labour government abandoned prices control at a time when prices were rising at the rate of 9 per cent, per annum, a very much higher rate of increase than that of recent years. In other words, if ever there was a time when every effective means should have been used to control prices, it was at the time that these people who profess to believe in the effectiveness of the control handed it over to the States. We, of course, have discussed this matter with the States, and we know that they are not in favour of looking after this very ugly infant. They realize that unless prices control is handled on an Australia-wide basis it is ineffective. I suggest that sufficient answer to the claim that we have failed to deal with control of prices lies in the evidence that I have given of the actions of Labour when it was in office and had the opportunity to do what it suggests we should do now.

Mr Cairns:

Mr. Cairns interjecting,


– I should like to know, Mr. Speaker, whether I am making this speech or whether the honorable member for Yarra (Mr. Cairns) is doing so. 1 take it that he will have an opportunity to speak in due course. Living standards and rising prices are, of course, the concern of all of us. We are asked to believe that this Government is responsible for reduced living standards and increased prices, and that it has done nothing to arrest those trends. Let us look at the facts. Prices, it is true, have risen to some extent-

Mr Daly:

– Ha, ha!


– Yes, but wages and salaries have risen still more. During 1955-56, retail prices rose, on the average, by 5 per cent. During the same period, wages and salaries rose by 9 per cent. That is an effective answer to the allegation that rising prices have meant declining standards for wage and salary earners. But of course attention cannot be limited to wages and salaries; there are other supplements to income which have to be considered in the overall picture of living standards and living costs. Cash social benefits paid by Australian governments increased between 1954-55 and 1955-56 by nearly £30,000,000, or by 11 per cent. These benefits have operated very significantly to improve the real living standards of wage and salary earners.

It is not true that people who depend wholly or partly on fixed incomes have suffered a net loss from rising prices. Total payments by the Commonwealth to age and invalid pensioners increased during 1955-56 by £13,600,000, or by 15 per cent., although the average number receiving such pensions was only 6 per cent, greater than it was in the year before. In point of fact, these processes have continued all the time that the present Government has held office. Social services benefits provided by the Commonwealth are approximately two and a half times greater to-day than they were in the year that the Government was returned to office. That is to say, they are two and a half times greater than they were under the previous Labour government, although the supporters of that government claim to be the only people who are vigilant on behalf of pensioners.

In 1949-50, expenditure from the National Welfare Fund was £101,000,000. Provision for such expenditure in the current financial year amounts to £226,000,000, or more than twice as much as it was then. Increased expenditure is necessary to meet very large increases in the rates of benefits compared with those that existed previously, in addition to expenditure in respect of services, such as the medical benefits scheme, which simply did not exist when this Government took office.

We do not, of course, defend rising prices. We believe, on the contrary, that they must, in the long run, operate against the best interests of the wage and salary earners and of persons whose incomes are limited. However, the fact is undeniable that the position of such people has been more than safeguarded, either by the increased rate of their earnings, or by increases of pensions and other Commonwealth benefits. In other words, those who are most directly affected have “received the greatest degree of consideration, in the way of social services benefits, from this Government.

Mr Cairns:

– That is quite the opposite of the truth.


– I do not know how conversant the honorable member is with the truth, but if he looks at the facts he must see that my contention is correct.


– Order! Die honorable member for Yarra has been interjecting in almost every passage of the Treasurer’s speech. If he does not cease interjecting I shall name him.


– I might suggest, Mr. Deputy Speaker, that you put him in a cage. Now I come to the question of the control of profits. We hear a great deal about excess profits and the desirability of legislation to control them. The honorable member for East Sydney (Mr. Ward) lakes me to task at every opportunity on this question - and not without warrant, I admit, because I did promise, on behalf of the Government, to introduce legislation dealing with excess profits. One of the very first steps that 1 took as Treasurer was to constitute an expert committee of taxation accountants. That committee was composed of the best available brains on the subject. The committee was asked, among other things, to comment upon the desirability of excess profits legislation for the purpose of restraining companies from making inordinately high profits. That committee produced several reports, all of which have been tabled in this House, and it came to the conclusion that such legislation was impracticable.

Mr Curtin:

– Why?


– lt decided that the basis of such legislation was inequitable, and the experience of other countries since that time has proved that the committee was right. Honorable members opposite invariably quote the late Mr. Chifley as the highest authority on economic matters, and I remind them that when his Government came to power an excess profits tax was in operation, having been introduced by none other than myself when I was Treasurer in the previous government. After some time had elapsed, the experience of the late Mr. Chifley induced him to abolish that tax. He pointed out that it was ineffective, that it did not deal with the position as it should have done, that it was most complicated and difficult of administration, and that the revenue received from it did not make it worth while. I have a note here of his exact words. In announcing the abolition of the war-time company tax, Mr. Chifley said that while it had been imposed during the war period as a levy upon exceptionally high profits made by some companies under war-time conditions, it had fufilled its purpose and should, therefore, be continued no longer. In other words, he considered that it had no longer any application to peace-time conditions, and was really a deterrent to company development. I might point out that in the year before it was discontinued the tax produced a revenue of only £3,500,000. This fact shows how little scope there was for a levy of this kind, and how it could not have the result that might have been desired.

I cannot, in the time available to me, do more than briefly outline the experience of other countries of excess profits legislation. The Government of the United States ot America has repealed the legislation that was in force in that country dealing with excess profits, as has the Government of the United Kingdom. I think that the New Zealand Government abandoned its legislation before it became effective. The Opposition is always astray, in my humble opinion, in arguing that company profits have been excessive in recent times. There was a period some years ago when a lot of companies did exceptionally well, but in more recent times they have not been so favorably situated. According to the latest figures contained in the White Paper on National Income and Expenditure, company incomes increased by 5 per cent, between 1954-55 and 1955-56. In the same period, however, wages and salaries increased by 9 per cent. I have said previously - and it is as well to repeat the statement - that in the period between 1945-46 and 1949-50, when the Opposition was in government, company incomes increased far more rapidly than did wage and salary incomes. In that period company incomes increased by 98 per cent., and wages and salaries by 52 per cent. While the present Government has been in office, the increases in the two types of income have been proportionately about the same, being about 96 per cent, in each case.

We have used other methods of dealing with this problem, rather than introduce an ineffective and unworkable excess profits tax. When the “ little budget “ was brought down we increased company taxes by ls. in the £1, and there were some honorable gentlemen opposite who strenuously opposed that increase.


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


.- The Treasurer (Sir Arthur Fadden) referred to babies several times during his speech. He referred to price control as the unwanted child which some honorable members had suggested should be placed on the knees of the

The Prime Minister also suggested that the price of potatoes should not be taken into account in determining the C series index figures, because of the fact that the price of potatoes has increased to an exceptionally marked- degree. The Prime Minister should bear in mind that the C series index is merely a guide used to measure fluctuations in the cost of living, and the index shows the movements in prices of only those goods that are included in the regimen. Potatoes and onions are the only two vegetables that are included in the regimen, and their price fluctuations must suffice to cover the movements in prices of all other vegetables, and also fruit. If the prices of other items not included in the regimen rise excessively, the consumer must pay those increased prices.

Dr Evatt:

– And when, the prices, of potatoes and onions fall, causing a consequent decline in the C series index figures, consumers still have to pay the higher prices for other vegetables.


– - That is so. The price ofbeans, in Western Australia, increased recently from. ls. 6d. .per lb. to over 3s. per lb:, but that increase was not reflected in the basic wage in any way. Increases: of the. prices of fruit and vegetables, generally, are measured by increases , of .the, prices of potatoes and onions, the only, two such commodities in the regimen.

What about the rent element of the basic wage?- Will any one say that the sum that

There is no doubt that Australia’s economic ills are becoming worse as time goes on. The blame for that lies fairly and squarely on the shoulders of the Government parties. They were responsible for inflation running riot in the first place, because it was due to their efforts and the efforts of their cohorts in the States that the Commonwealth prices referendum of 1948 was defeated. They told the people that the States could control prices just as effectively as could the Commonwealth. We knew that the States could not do so, and we told the people that they could not, but the people were misled by our opponents. Finally, prices control collapsed because of separate and individual systems of control.. As a result of the loss of the prices referendum of 1948, Australia, which then had the most stable economy in the world, now has. the most unstable economy in the world.

There is no doubt that, under this Government, our economic position has worsened. If honorable members will look at the “ World Economic Report “ for 1950-53 - I take that period because it - represents the first three years of office of this- Government-they will see that, in European countries and in the- United : States of America, prices rose by an average of 15.6 per cent, during that period, but, in Australia they rose1 by 48 per’ cent. That - is”an indictment of this Government.’ That report indicates what happened in this country in the first three years of office of this Government, but things have become considerably worse since then. In September, 1948,” the G series index- figure was 1278, but, in September of this year it was 2570- over 100 per cent, greater.

Prime Minister says, now, that he does not want prices control or any - other form of control, but that was not what he said in 1946. On 20th August, 1946, speaking of prices control, he said -

We shall unhesitatingly maintain it as a means of preventing inflation.

This Government, after it came into office, abolished capital issues control, reintroduced it and later abolished it again. That is indicative of the attitude of the Government. It has followed a policy of drift and change and of attempt and failure throughout its history. We do not know at any moment whether import restrictions are on or whether they have been taken off. The old song, “ Off again, on again, gone again Finnegan “, is quite appropriate to the Government’s policy.

The fact is, as I think many honorable members opposite appreciate, that the only way in which we can stabilize the Australian economy is by re-introducing economic controls. Unless we do so, we shall not get anywhere. We could get the necessary powers, either from the State Premiers, who are in the mood to do something in that direction, or by means of a referendum, if the case were put properly to the people and if both sides of the Parliament were prepared to support the referendum. At the last Premiers conference, the majority of the Premiers present wanted some form of control, but this Government went to the conference only with a plan to deal with wages. It said that it did not want to peg wages - and, of course, it did not want to do so. It wants to reduce wages, so that the basic wage for all workers will be that applicable to the 50 per cent, of the workers who are unfortunate enough to be covered by federal awards. The federal basic wage now is £12 6s. a week. If it had not been pegged, it would be £13 9s. a week. So 50 per cent, of the workers are losing 23s. a week, or £59 16s. a year. By the end of this month, the accumulated losses of workers operating under federal awards will be £42 14s. in Sydney, £48 8s. in Melbourne, £56 16s. in Brisbane, £56 3s. in Adelaide, £154 15s. in Perth and £86 in Hobart. Those are the sums that, by the end of this month, the workers will have lost since the federal basic wage was pegged. That is the workers’ contribution to an economy which is not recovering, but is deteriorating.

Dr Evatt:

– It is the workers’ contribution to profits.


– Of course it is. The Government wants to force reductions of wages on all workers in accordance with decisions of the Commonwealth Arbitration Court. The Government blames the restoration of quarterly cost of living adjustments for recent inflationary trends. b.ut the president of the Western Australian Arbitration Court does not believe that it is responsible. In July, delivering a judgment on the basic wage, he said -

It is perhaps worthy of note that this rise over the last quarter does not seem to have reflected the recent rise in the federal basic wage as, in general, it can be said that the rises have taken place in commodities that are not greatly influenced by increases in labour costs. It could be said to be more particularly influenced by recent decreases in subsidies or increases in excise or customs duties.

Those remarks by the President of the Western Australian Arbitration Court indicate that this Government is doing the very things that cause inflation, lt reduced the subsidy on butter, which caused the price of butter to the consumer to increase - an increase which is reflected, or should be reflected, in the basic wage. In the “ little horror “ budget, the Government placed an additional tax on petrol of 3d. a gallon and increased the sales tax on motor vehicles from 12+ per cent, to 16$ per cent. Those increases led to an increase of the cost of transport. Fares and freight rose, and those rises have been reflected in the cost of living. The index figure for the miscellaneous group of items increased by 3.56. That is the group containing cigarettes, tobacco and fuel, all of which were subjected to increased sales tax when the supplementary budget was presented. The effects of those increases are being felt now, and will be felt more as time goes on.

The suspension of quarterly adjustments of the basic wage in September, 1953, should have been accompanied, if this Government had any sense of responsibility at all, by adequate measures to control prices and profits. But, since the pegging of the basic wage, prices have continued to rise and profits have continued to increase. The Commonwealth Bank Bulletin for

June, 1956, covering 831 companies, showed that profits as a percentage of shareholders’ funds increased between 1954 and 1955 by 1 1 per cent., while the workers’ wages were pegged. The stevedoring report that was tabled last week by the Minister for Labour and National Service (Mr. Harold Holt) shows that profits in that industry jumped by 433 per cent, between 1947-48 and 1953-54, although the hourly rate of pay for the waterside workers increased by only 1 1 4 per cent, in the same period. Mr. Justice Barry, of the Queensland Arbitration Court, said something of importance about the pegging of the basic wage. He stated -

Everyone is agreed on the desirability of halting the inflationary trend resulting in the “ cost price spiral “, but the real issue is the method by which this desirable state of affairs can be attained. The quarterly adjusted wage always lagged behind spiralling prices to the wage-earner’s disadvantage. Why should the wage-earner now be asked to pioneer the way back to stability, when those better able to make the necessary sacrifice do not make, or offer to make, a corresponding contribution by pegging prices?

So we see that the Presidents of two State Arbitration Courts are critical of this Government’s handling of our economic problems.

Since 1949 successive Menzies-Fadden Administrations have been returned to office on promises to maintain full employment. The Government has panicked. It has not one progressive idea on this matter. In recent months it has merely repeated the measures that were taken during the panic clays of the depression. The little horror budget of March last, for instance, helped to create unemployment. There is no need for me to discuss it in detail. I have already mentioned the decline of the production of tobacco and cigarettes that occurred as a consequence. Michelides Limited, a Western Australian tobacco and cigarette firm, employed 162 workers before the little budget was introduced in March. It now employs only 35. This shows the devastating effects of the little budget on that small industry. The credit restrictions that were imposed by this Government in September, 1955, also helped to create unemployment. I have no doubt that that was their purpose. The Government wanted some unemployment - not a great deal, but just sufficient to enable it to bring pressure to bear upon factory workers. It wanted to have a few unemployed available to take their places if they did not play the game according to the Government’s rules.

Mr Freeth:

– Even in Western Australia


– Be quiet! This Government has no real solution to offer except the old tory one of making the ordinary Australian bear the burden. Many big businessmen, most of whom support this Government, say bluntly that a policy of deliberately promoting unemployment is the only solution to our present economic problems. Of course, they expect to reap profits as a consequence of unemployment. I have previously quoted the remarks made by the present Prime Minister in 1945 in the byelection campaign at Fremantle. He said there should be a pool of unemployed in order to discipline the workers, and that observation was recorded in the “ Wheatgrower “ of 24th April, 1946.

What is happening? Families that have pinched and saved for years are being forced to draw on their meagre savings in order to keep out of debt. Those that have no savings are in an even worse plight because they are forced to rely on inadequate unemployment benefits. A man with a wife and one or more children cannot receive more than £5 15s. a week unemployment benefit and permissible income. This Government has not increased the limit of permissible income, which still remains at £1 a week. The permissible amount of benefit in respect of the first child still remains at the 1948 level of 5s. a week. The Government should give urgent attention to this matter.

I am quite convinced that the official unemployment figures do not reveal the true position. For instance, the September returns show that there are now 9,614 persons throughout Australia receiving benefit and 33,796 registered for employment. They show also that there are 27,045 registered vacanies for positions. But we should realize that the vacancies registered are for many kinds of jobs, quite a number of which are for boys and girls. Some employers want young boys and girls who are just leaving school. Other registered vacancies are for specialized jobs. An unskilled worker cannot do specialized work. It is of no use to tell a labourer that there is a vacancy for a fitter or some other tradesmen, because he cannot take advantage of it. I know for a fact that many building tradesmen in Western Australia and elsewhere have suffered a severe setback and are now obtaining only two or three days’ work a week. They cannot register for unemployment benefit because they are doing some work, although it is barely enough to keep them going.

The latest figures for Western Australia show that since the September returns came in unemployment has increased slightly. 1 Jo not make any point of it because it is a matter of only 30 or 40 more unemployed workers. But the mere fact that the number has increased indicates that unemployment is not being reduced, as it should be. The Timber Workers Union reports that 350 of its 2,000 members in Western Australia are unemployed, and 540 of 4,500 carpenters also are out of work. The Building Labourers’ Union is similarly affected. Although the motor industry in Western Australia is not very large, 100 motor workers are unemployed, and that is a big proportion of the workers in the industry there. Import restrictions have hit the clothing trade hard, and as a consequence many workers have been dismissed or put on part-time work. The building industry in Western Australia has been hit rather badly by the credit restrictions, and the Western Australian State Housing Commission can plan to build this financial year only a small proportion of the number of homes it built last financial year. The Acting Commonwealth Statistician has already indicated that at 30th June last there were 61,170 houses being built throughout Australia compared with 65,359 a year earlier. In Western Australia the number has fallen from 2,700 at 30th June, 1955, to 600 at 30th J une, 1956.

It is true, of course, that this Government has made an additional £2,000,000 available to Western Australia to relieve unemployment, but that sum is sufficient only to keep in employment the people who are already working. Credit restrictions and the like have forced private industry to put workers off, and the Western Australian Government is taking on as many as it can employ with the available funds. The number still unemployed clearly indicates that the Commonwealth allocation of £2,030,000 is not nearly enough to relieve unemployment and can only help to keep in work those who are already employed, lt should have been made available weeks before it was. If it had not been for the political bias of some Government supporters from Western Australia it would have been made available earlier. There is no question about that. I am sorry to see that the honorable member for Forrest (Mr. Freeth) has left the chamber. He was one of those who strongly opposed additional financial assistance to the Western Australian Labour Government. Indeed, his opposition was so strong that the tory newspaper, the “ West Australian “, took him to task. Referring to the Treasurer (Sir Arthur Fadden) it stated -

It is the duty of his West Australian impress this obligation on him. They should tell him that his stiff-necked attitude is endangering the Federal Government’s goodwill in Western Australia. Surely they are not indifferent to the unemployment situation here. Yet nothing: has been heard from them about it, except an unhelpful piece of straight party propaganda from Mr. Freeth.

In Western Australia we have had to institute some form of relief for the unemployed. We are obtaining funds from sympathetic people and the unions for this purpose. Unfortunately, we can give real assistance only to those who are eligible foi help from the Western Australian Child Welfare Department. If we assisted others we should merely prevent them from obtaining social services benefits. The Western Australian State executive of the Australian Labour party supplements the assistance given to unemployed workers with families by the Child Welfare Department as much as it can, without affecting their social services benefits, by giving them orders for food, groceries, and the like. In Fremantle, free meals are provided for the unemployed. That is a sorry state of affairs. Indeed, it is tragic, and this Government stands condemned for allowing it to occur.

Mr George Lawson:

– How many workers are unemployed in Western Australia?


– I have the exact figures, but I do not want to waste time reading them. I think the number is about 1,800 The present situation would not have been allowed to occur under a Labour government in the Commonwealth sphere. Mr.

Chifley visualized what would happen to Australia’s economy if the prices of wheat and wool fell, and he prepared plans for public works to take up. the slack and prevent unemployment. Of course, all that has been shelved, and is now out of date. What is needed now is some bold action on the part of the Government. There is much to be done. Schools and hospitals are waiting to be built with the financial help of the Commonwealth Government. Commonwealth financial assistance is also required to take up the slack in housing programmes throughout Australia. Nobody can tell me that the housing problem has been satisfactorily settled. Developmental works are waiting to be undertaken. The gravity of the position in respect of rail services is exhibited in the fact that we have had before us a report by a committee of members of both sides of the Parliament recommending the standardization of rail gauges in Australia. That report clearly indicates that here is a job of national importance that should be done. The labour to carry out that work is available, and the job should be begun immediately, so as to take up the slack in employment. It is not good enough to give a man the dole. Every man is entitled to a job, and until every man has a job the Government cannot claim that we are living in a society which has decent standards.

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

– The Opposition has waited until the last week of the present sessional period to launch a sort of omnibus motion of censure against the Government and, by implication, put itself forward as the alternative government of this country. Apparently, the Opposition has come to believe, at this stage of the parliamentary proceedings, that the Government is open to attack in all the directions included in this compendious motion of censure. The fact of the matter quite obviously is that, in order to restore to some partial degree the flagging political fortunes of the Labour party, honorable gentlemen opposite have taken this opportunity, on the eve of the forthcoming conference of Commonwealth and State Ministers, to produce some propaganda which, they think, will give a little encouragement to those whom they claim to represent here.

The fact, is that honorable, members opposite have, undertaken what is* admit,tedly, a difficult and unenviable, task. They have set out to try to persuade the average Australian wage-earner and family man that he is having a terrible time under the present Government. They are trying to tell the people of Australia who are, almost without exception, and have been for many years past, fully employed, and who have been earning the highest wages in their personal histories, and enjoying the most prosperous standard of living for years, that this Government has brought depressed standards to them as a result of the policies it has applied. We do not envy honorable gentlemen opposite that task, and it is not surprising that the arguments they advance make little impact indeed on the general run of wage-earner.

The Opposition’s present line of attack is not novel. It goes right back to 1949. when the electors, who gave their verdict in favour of the present Government on 10th December of that year, were told that the Liberal party was out to depress the standards of the workers of Australia, was out to create a pool of unemployed labour, was out to attain a low-wage structure. Unfortunately for honorable gentlemen opposite, the record of the last seven years throws their propaganda back in their own teeth, because in those seven years the Menzies Government, in co-operation with its colleagues of the Australian Country party, has been able to give Australia a most remarkable record of employment, accompanied by a buoyant economy. In that time we have restored prosperity, given employment, and improved the living standards of the Australian people; yet now, at the end of seven of the most prosperous years Australia has known, we are faced with a motion of censure from honorable gentlemen opposite, which is designed to convince the general run of wage-earners that they have suffered under the present Administration.

I shall try to analyse, briefly, some of the elements of the charge now levelled. I shall start with the employment factor. We admit the obligation on governments, in this day and age, to provide opportunities of employment for the people, and we can claim with full justice that we have discharged our responsibility in that connexion in a manner that might well be the envy of any other country in the free world to-day. We have sustained a full employment situation that is without parallel in Australia’s history, that is without compare in the history of any other highly industrialized country in the world to-day.

Mr Cairns:

– That always happens in times of inflation.


– The honorable member for Yarra (Mr. Cairns), has been very vocal, and he tries to make a speech composed of interjections. He says that there is always full employment in times of inflation. I thought he was a better economist than that, because he should know that inflation in most countries has caused tragic unemployment when it has been allowed to get out of hand. It has been the determination of this Government to see that inflationary pressures are not allowed to get to the stage that unemployment will result from them. I say that the inevitable consequence of the alternative policy put forward this afternoon by the Leader of the Opposition (Dr. Evatt) would be mass unemployment in this country as our cost levels rose, making our goods unable to compete in export markets with, similar goods produced in other parts of the world.

Let me give some practical comparisons between the position in Australia and the position in other countries which are admittedly prosperous at the present time. The countries I shall take for my comparisons are Great Britain, the United States of America and Canada, each of which is enjoying a high level of prosperity, each of which would claim it has provided full employment for its people. There is only a minor degree of unemployment in some parts of Australia at this time. The unemployment benefit statistics show that unemployment in Australia is about one-third of 1 per cent. of. the work force of this country. The ratio of unemployment in the United Kingdom is three times that percentage. The ratio in Canada is five times that percentage, and the ratio in the United States of America is nine times that percentage. Yet Great Britain, the United States of America and Canada are all prosperous countries where people are enjoying better standards of living than they have known for many years.

Now I turn to the wage level, reference to which has been made by honorable gentlemen opposite. They completely mis* interpret the Government’s approach to the wage structure of this country and maintain, by constant reference to the basic wage level, the illusion that most of the people of Australia have incomes related solely tothe basic wage. The fact of the matter is, of course, that the average weekly earnings of the general run of Australian wage-earner are very much higher than the basic wage level would suggest. The average wage in June, 1955, was £17. In June 1956, it was £18, a very much higher wage than the nominal basic wage rate would indicate. When one associates that with the fact that nowadays so many members of families are employed it is easy to realize that the income coming into the average Australian home to-day has never been higher nor had greater purchasing power.

High wages associated with full employment have produced a situation in which the number of motor cars on the roads has more than doubled in the life of this Government. In addition, there has been a phenomenal increase in the use of laboursaving devices in the home, such as refrigerators and washing machines. Even the honorable member for East Sydney (Mr. Ward), who works himself up into a fever of indignation on the housing situation, has obviously not taken the trouble to study the figures revealed in the last census. Had he done so he would have found a most significant increase in the number of people who now occupy their own homes, which they have either paid for in full or are in process of acquiring on time payment. The 1947 census showed that 52.6 per cent, of home occupiers in Australia were homeowners or were buying their homes. When the 1954 census was taken, this proportion had risen to 63 per cent. This was really a remarkable and significant increase which revealed the improved prosperity of the average Australian wage earner.

I do not want anybody outside this House - there need not be any room for doubt inside - to be in any doubt as to the general economic objective of this Government. Our objective is, as it has been throughout our term of office, to sustain prosperity - maintaining full employment, giving the highest effective wage that it is within the capacity of industry to pay, producing improved standards of living, and enabling Australia to develop at a rapid rate in terms of industry and population growth. That, in essence, has been the policy of this Government, and it has been productive of the results which I have already indicated, lt is because of our very determination to maintain those standards that we have adopted the policies which have been indicated by the Prime Minister (Mr. Menzies) and the Treasurer (Sir Arthur Fadden) in the earlier part of this debate.

Our approach to present economic difficulties has had two main aspects. We are not denying the existence of difficulties. In any period of rapid expansion and in any period in which a government is seeking to maintain full employment for its people, and a high rate of development and industrial growth, there are certain to be economic difficulties. That is peculiarly the case in Australia, because of the nature of our economy. We do not live in a closed economy. We are, per capita, one of the most considerable trading peoples in the world. Consequently, we cannot be regardless of the level of our own cost structure if we are to maintain our economy in a state of healthy balance. We must maintain policies, internally, which will enable us to produce our export goods at a price level which will be competitive with those in the world around us. Therefore, we have had to take abnormal measures, from time to time, in order to preserve that balance.

The two main matters that have concerned us have been, firstly, the protection of our balance of payments, and secondly, the removal of excess demand inside Australia. In protecting our balance of payments we have been driven to the restriction of imports, to the encouragement of overseas investment, to efforts to encourage further exports. In order to remove excess demand we have, by way of reducing the pull on prices and reducing the demands for imports, imposed credit restrictions, imposed higher taxes, kept defence expenditure at an earlier level, held immigration to a lower level of intake than that which existed last year, held our Commonwealth works to the nominal level of last year, and limited State loan expenditure. In addition, State works, for which loans could not have been raised in any other way, have been financed, as the Prime Minister and Treasurer have pointed out, from Commonwealth revenue instead of by means of credit creation which, perhaps, would have been permissible if there had been less pressure on our resources than there has been in recent months.

I stress those measures because honorable members opposite and some of the spokesmen for the trades union movement have tried to make out a case to show that we, as a government, have concentrated on the wage factor only as being the element which had to be restricted in order to preserve a balance in the economy. That, of course, is quite untrue. Our measures go back, first of all, to the so-called “ horror “ budget of 1951. Those who charge us with encouraging profiteering have, apparently, overlooked the fact that, in that budget, we increased the charge on companies from 7s. to 9s. in the £1. More recently, in the autumn of this year, we took certain measures which were designed to reduce the pressure on the economy. Again, we did not hesitate to impose taxes on companies, and we did not hesitate to impose other taxes which were politically unpalatable to many people inside Australia. But we did that in the national interest, and we think that the results are being demonstrated in the greater degree of stability that is to be found in the Australian economy at this time. The supply of, and the demand for. labour have been brought” much more into balance. Credit has been related to the needs of the community, without promoting excessive pressures. The fact that all these things have been done shows that the Government has not concentrated, as the Opposition has accused it of concentrating, on the place which the wage element occupies in the economy of this country.

I said, earlier, that our approach to the wage level was entirely realistic in contrast to the theoretical and dogmatic approach of honorable members opposite, who seem to regard higher wages as necessarily being the best wages. The Government believes in the highest effective wage, because the real test of the wage is what it will procure. The highest effective wage must be related, quite obviously, to the capacity of industry to pay the wage. If the wage level is allowed to reach a point at which industry cannot compete with overseas industries, and if we are unable to finance the imports of materials and equipment which are essential for the successful conduct of Australian industry, unemployment will be the inevitable result.

Honorable members opposite, who claim to be spokesmen for the trade unionists and wage-earners of this country, will lead those wage-earners into a situation of peril if they allow the cost structure of this country to become out of line with competitive overseas price levels. The Government has been very mindful of that fact. Before the Commonwealth Arbitration Court, we have quite consistently adopted the attitude that the wage that the court should award is the highest effective wage that is within the capacity of industry to pay.

Mr Curtin:

– That is an old one.


– It is an old one. lt is an old truth which many people on the Opposition benches have apparently yet to learn. Yet, I find among responsible trade union officials an acceptance of that truth. I find amongst them a recognition of the fact that it is to higher productivity that they must look in the future for better standards. The same realism is not to be noticed either in the Leader of ihe Opposition or in those who sit behind him in this House. It is time that the lesson was well and truly learned. Unless it is learned, honorable members opposite, if they find themselves in government, will assuredly lead those who have put them there in the mistaken belief that they will represent their interests into the disaster which inevitably will flow from the kind of policy that we have had put before us by honorable gentlemen opposite at this time.

Those who argue that the logical course to follow is to fix the highest wage that it is within the capacity of industry to pay should realize that if that were done it would be absurd to tie the wage to an entirely unrelated movement in the C series index. One of the mistakes that is often made is to assume that the C series index is a cost of living index. It is nothing of the sort. It has never set out to be a cost of living index. It has been presented as revealing movements in the prices of a number of specified items in the Australian economy. It has never been a cost of living index. If any proof were needed, the recent illustration provided by potatoes and onions gives ample demonstration of it. The price of potatoes and onions is high on account of the scarcity of those commodities. If they are scarce, then, quite obviously, people are not consuming as much of those items as they have consumed in earlier periods. And, if they are not consuming as much of them, how absurd it is to award a wage which purports to give the purchasing power necessary to consume those items in the same quantity as that in which they were formerly consumed.


– Would that not apply to every increase?


– No, but, to give another illustration, it does apply to increases of power and transport charges made by State governments. They do noi proceed from increased capacity of industry to pay. Indeed, mostly they reflect a decreased capacity to pay, but they enter the C series index and affect the wage structure in those States which at present tie wages to the C series index. The absurdity of the position should be readily apparent, and one would hope that the dangers would be equally apparent.

If time had permitted I should have liked to examine the situation with regard to profits. We have already demonstrated that, where the necessity arises, we will step in and tax company incomes in order to reduce inflationary pressures. Too often people disregard the fact that movements in nominal profit must be related to movements in the number of companies, and to the purchasing value of money at any particular time. For example, it is quite fallacious, to compare company incomes to-day with those of, say, 1948-49, the last year in which honorable gentlemen opposite were in government.


– The right honorable member has just made that comparison in regard to wages.


– I have not. The wage movement between 1948-49 and the present is to be found in the Commonwealth Statistician’s figures, and the honorable member will see that in the interim wages have approximately trebled. In 1948-49 19,892 companies were assessed for tax, but such has been the rate of industrial development in Australia, especially since this Government took office, that by 1954-55 the number had grown to 27,978. If we relate the movements in the C series index to the income earned by companies in that year, and take into account the increased number of companies, we find a remarkable parity between the rate of income and dividend distribution for the year 1954-55 - the last for which I have figures -and the year 1948-49.

Strong competition helps to keep prices down. I recommend honorable members opposite to examine the C series index. They will find that in recent years the smallest movement has occurred in the clothing item. That industry has been the most competitive, and, over a significant period, the movement in prices has been only about 1 per cent. Obviously, that is because a stronger degree of competition is found in the clothing industry than in almost any other. As earlier speakers have pointed out, while it is our function as a government to ensure that the pressure of company earnings does not become an expansive factor and increase inflationary forces, we also recognize that the reinvestment of company income sustains employment and enables industry to operate at a reasonable degree of efficiency.

I would conclude on this note: The Government has acted in the national interest as it set out to do when it took office. It has not sought support by yielding to pressure from any particular section. From time to time we have had to do the unpopular thing, in the economic sense. We had to do it in 1951 and again in the autumn of this year. It was necessary in order to restore balance to the economy and to ensure that our objectives of sustained prosperity, sustained employment, improving living standards, and a rapid rate of industrial and national growth could be attained. Honorable members should examine the terms of the motion of censure in the light of this Government’s record of the last seven years.


– Order! The Minister’s time has expired.


– We have heard from the right honorable gentleman-

Motion (by Mr. Harold Holt) put -

That the question be now put.

The House divided. (Mr. Speaker - Hon. John McLeay.)

AYES: 58

NOES: 42

Majority . … 16



Question so resolved in the affirmative.

Question put -

That the motion (vide page 1873) be agreed to.

The House divided. (Mr. Speaker - Hon. John McLeay.)

AYES: 42

NOES: 58

Majority . . . . 16



Question so resolved in the negative.

page 1905



– I lay on the table the following paper: -

Audit Act - Finance - Supplementary Report of the Auditor-General upon other accounts for the year 1955-56.

Ordered to be printed.

page 1905




– I lay on the table the following paper: -

International Labour Organization - Thirty-fifth (1952), Thirty-sixth (1953) and Thirtyseventh (1954) Sessions - Statement of action taken or proposed to be taken by the Government to implement the conventions and recommendations adopted.

I take this action in pursuance of the undertakings which I gave to honorable members when I tabled the report of the Australian delegates to the sessions in question. In the interests of economy, I do not propose to move that the statements be printed, but copies will be available to honorable members from the Parliamentary officers.

page 1905


Report of Public Accounts Committee


– As Chairman,I present the following report of the Public Accounts Committee: -

Twenty-ninth Report - Defence Services and Estimates together with Minutes of Evidence.

Since this is the first time that the committee has presented minutes of evidence with its report, perhaps I should say a word or two concerning this development. When the committee was holding its public meetings, a great deal of interest was displayed, and rightly so. In addition, it seemed that there was much speculation concerning the powers of the committee. As the discussions at the proceedings of the committee ranged over a field which extended far beyond its jurisdiction and powers, the committee felt that, in order to remove misapprehensions and misconceptions about its powers, the best thing to do would be to present the evidence with the report.

Ordered to be printed.

page 1905


The following bills were returned from the Senate: -

Without requests -

Appropriation Bill 1956-57.

Without amendment -

Appropriation (Works and Services) Bill 1956-57.

page 1905


Assent to the following bills reported: -

War Pensions Appropriation Bill 1956. Appropriation Bill 1956-57. Appropriation (Works and Services) Bill 1956-57.

Sitting suspended from 5.53 to 8 p.m.

page 1906


Prime Minister · Kooyong · LP

– by leave - The revolt in Hungary appears to be essentially a popular protest against Soviet domination. The facts are as yet confused, but certain elements appear to be established. 1 think it would assist the House if I endeavoured to state them as objectively as possible.

Under the Hungarian peace treaty, executed in February, 1947, to which the Soviet Union, the United Kingdom, the United States and the other allied and associated powers were parties, the Soviet Union was required to withdraw her troops from Hungary when Soviet occupation forces had been withdrawn from Austria. The Soviet forces in fact withdrew from Austria last year. Article 2 of the political clauses of the Hungarian peace treaty to which Australia was a party, provided that -

  1. Hungary shall take all measures necessary to secure to all persons under Hungarian jurisdiction, without distinction as to race, sex, language or religion, the enjoyment of human rights and of the fundamental freedoms, including freedom of expression, of press and publications, of religious worship, of political opinion and of public meeting.
  2. Hungary further undertakes that the laws in force in Hungary shall not, either in their content or in their application, discriminate or entail any discrimination between persons of Hungarian nationality on the ground of their race, sex, language or religion, whether in reference to their persons, property, business, professional or financial interests, status, political or civil rights or any other matter.

These provisions were, of course, plainly inserted for the protection of the Hungarian people who had and have a perfect right to require that they should be honoured. It is quite clear that in fact they have, over the years, been substantially disregarded. In order to circumvent the provision about the withdrawal of her forces, the Soviet Union entered into a pact with the satellite countries, including Hungary. The Warsaw pact of May, 1955, provided for the use of Soviet forces to repel foreign aggression against the satellites. That this represented an intention to disregard the provisions of the peace treaty is now made clear, for it is the Warsaw pact which the Hungarian Communist leaders have purported to invoke in calling into Hungary Soviet forces to suppress the present rebellion.

I mention these facts because, as honorable members know, the United Nations is excluded by the Charter from dealing with matters which are of purely domestic jurisdiction. It is, in our opinion, quite impossible to contend that so clear a violation of a treaty as is constituted by the use of foreign forces to repress rights established by that treaty could be regarded as of no concern to the other nations parties to the treaty. In other words, the setting at naught of a treaty provision does not become a domestic matter simply because the conflicts so engendered take place within the boundaries of one nation. What has. in fact, happened appears to be as follows: The writing down of Stalin by the twentieth congress of the Russian Communist party, at the beginning of this year, resulted in some measure of liberalization in Hungary and released forces which had previously been held in subjection, although never entirely subdued. in the face of rising public opinion, the Hungarian politburo saw danger to its own position and tried to reverse the trend. Rioting was finally touched off on 23rd October by the action of the police in firing into a peaceful demonstration of university students. This in itself was, of course, a violation of the treaty, which guaranteed freedom of political opinion and of public meeting. What had begun as a breakaway by elements within the Hungarian Communist party quickly developed into a popular uprising to a material extent against communism itself, but certainly against Soviet domination. The call by the Hungarian Prime Minister, Mr. Nagy, for Soviet forces to assist in putting down the movement not only kindled the flames of resistance, but also was clear evidence of join action to deny to the Hungarian people the benefits of the Hungarian peace treaty. No official estimates have been given of the numbers killed, but all the reports indicate a considerable loss of life and many other casualties.

The Security Council held an emergency meeting on 28th October, on the initiative of the United Kingdom, the United States and France. Australia, also a party to the Hungarian peace treaty, was consulted about the course of action and supported this initiative, believing that the United Nations should ventilate and investigate the serious situation that had developed, with a view to preventing further bloodshed.

Of the eleven members of the Security Council, only the Soviet Union voted against discussion of the situation, maintaining that it is a purely domestic affair, an argument the invalidity of which clearly appears from what I have already stated to honorable members. The Soviet representative also made the clearly false claim that the rebellion had been provoked by the Western Powers. The Security Council has now heard all its members and the representative of Hungary. It has adjourned, and urgent consultations are proceeding on the next steps to be taken.

The Australian representative on the Security Council expressed, in strong terms, Australia’s sympathy with the Hungarian people in their present ordeal, and also expressed the hope that the Soviet Union would arrest military operations and leave Hungary to deal with her problems by purely democratic processes. 1 should add, on behalf of the Government, and, I am sure, on behalf of all honorable members, that we would welcome any steps which would lead to the establishment of Hungary as a truly independent nation which would guarantee democratic and human rights to her people and which would remove any shadow of foreign domination from a people who have made such a notable contribution to the history and culture of the free world.

Leader of the Opposition · Barton

– by leave - The Prime Minister (Mr. Menzies) was good enough to hand to me, a minute or two before the House met, a copy of the document that he has read. It might be of some help to the House if I add a word or two to what he has said.

I do not accept for a moment the view that what has happened in Hungary is outside the jurisdiction of the United Nations on the ground that it is essentially a domestic matter. As a matter of fact, the clauses of the peace treaty with Hungary were, to a substantial extent, prepared by Australian representatives during the period of office of Mr. Chifley’s Government. I was present at the making of this treaty. Australia took the lead in securing the insertion of the clause which provides that Hungary shall take all measures necessary to enable persons within Hungary to enjoy human rights and liberties. That clause was intended, not merely for the benefit of Hungarians, but for the benefit of all people in Hungary.

I remind honorable members that Hungary had been a satellite of Hitler. The peace treaty with Hungary was one of what were called the satellite treaties, concluded in Paris in 1946. Hungary, Italy, Austria, Finland and Roumania all entered into similar treaties. If a dispute arises about an obligation under one of the treaties, it cannot be essentially a domestic matter, subject only to domestic jurisdiction, because the source of the obligation is an international treaty.

That is only a part of the story. Underlying it is the deep tragedy of the Hungarian people, who, almost continually since World War I., have been under tyrannical, totalitarian governments, sometimes of the right and sometimes of the left. The Hungarian people have not had a chance. They are the people whom the great Kossuth led in a struggle for freedom in the early portion of the last century. Even in those days, men like Gladstone and Palmerston knew that the Hungarian people were rightly struggling to be free.

Mr Calwell:

– That was in 1848.


– Yes. Kossuth ultimately found refuge in Great Britain. This dispute or situation, whatever it is called, is before the Security Council. The Security Council has decided to take cognisance of the dispute, as it is clearly entitled to do. I agree with the Prime Minister that the contention that the dispute is outside the jurisdiction of the United Nations is not tenable. In fact, there are very few disputes of this kind which are matters purely for domestic jurisdiction. If they involve obligations under a treaty or rights such as those for which provision is made in the Declaration of Human Rights, they involve so important an international principle that trie United Nations must take them up, at - the level of either the Security Council or the General Assembly, in order to prevent bloodshed, stop fighting or ensure that rights shall be preserved.

During the period of office of the Chifley Government, I was deputed by that Government to put before the United Nations a case in favour of some people in central Europe. A group of people in Bulgaria and a well-known church leader in Hungary were being denied their rights under treaties. The group was composed of Lutheran pastors and the well-known church leader was Cardinal Mindszenty. We fought the cases on the basis of provisions in the treaties - one of them was the very treaty we are considering now - and the United Nations decided that they were not cases of purely domestic jurisdiction. In other words, they were recognized as being of international concern.

In my opinion, this matter should go before the Security Council and, if a veto is exercised there, it should go before the General Assembly, where no veto can be exercised. I should like to see a thorough investigation made to ascertain the facts of the case. All that we have at the moment are newspaper reports. Whatever delays might be involved in ascertaining the facts, that course would hold out great hopes to people who are struggling for freedom and for a better world, according to their own consciences and their own views of what is right for their country.

I say, first, that the United Nations clearly has jurisdiction in this matter; secondly, that although the Security Council has decided to exercise that jurisdiction, it could be exercised by the General Assembly; and thirdly, that it is vital to have a full knowledge of the facts which have led up to these events, because such know.lege is necessary before the United Nations can pass judgment.

Mr Osborne:

– What could the United Nations do, having passed judgment?


– That is a rather frivolous observation. I think that the verdict of the United Nations in matters such as these is respected throughout the world. To take the opposite view is to deny the worth of what the Government is doing. The Government is actually putting this matter before the United Nations and is voting for it. In that respect, it has done the right thing.

Mr Killen:

– I ask the House for leave to address a question, without notice, to the Prime Minister relevant to the statement made by him.


– Order! The honorable member is out of order.

page 1908


Bill received from the Senate and (on motion by Dr. Donald Cameron) read a first time.

Second Reading


.- by leave - 1 move -

That the bill be now read a second time.

Stated briefly, the purpose of this bill is to provide for a scheme of pensions and other associated repatriation benefits in respect of members of the Australian forces who are serving in Malaya as part of, or in connexion with, the British Commonwealth Far East Strategic Reserve, and who suffer an incapacity or die during or as a result of that service. The basis of eligibility for pension and the classes of persons who will be eligible for pension as dependants of a member are broadly the same as those found in the Repatriation Act, but some variations have been made having regard to the nature of the service these members of the forces are performing and their present conditions of service. The bill deals with members of the Commonwealth defence forces who serve in Malaya or Singapore as part of the Australian contingent of the British Commonwealth Far East Strategic Reserve or who are serving in those areas in connexion with that Strategic Reserve. It makes provision for the payment of pensions and, by way of regulation, for other benefits to members of the defence forces who serve in Malaya. The conditions of service which will qualify a member and his dependants for these benefits follow closely those which were inserted in the Repatriation Act in 1950 in respect of service in the Korea and Malaya operations. This means that the service which will qualify a member, or his dependants, will be his period of service with, or in connexion with, the Strategic Reserve, commencing from the time he leaves the last port of call in Australia, if he was in Australia when allotted for that service, or from the time he was so allotted if he happened to be outside Australia at the time of the allotment, and terminating when he returns to Australia, or arrives in some area outside Australia, after having been allotted from service in Malaya to service in that area outside Australia. The rates of pension which will apply in cases of death and incapacity will be the rates of war pension applicable to a “ member of the Forces “ or a dependant, as the case may be, under the Repatriation Act.

The provisions of the Repatriation Act were designed to meet the conditions of service in a full-scale war where most of the serving members of the forces were volunteers who had volunteered to serve in connexion with that particular war only. The circumstances under which the members of the forces dealt with in this bill are serving are entirely different. Ail personnel serving with, or in connexion with, the Strategic Reserve are members of the permanent forces. They are persons who have chosen service in the forces as a career, and who have enlisted for various terms of years. Normally, their service is performed under peace-time conditions, including rates of pay and general conditions which are comparable with those offering in civilian occupations. In the case of the Strategic Reserve, however, its members have, in their antibandit operations in Malaya, been exposed to an additional operational risk. Although that risk is not so great as it was in either of the two world wars, or in Korea, the Government felt that it merited the provision of a scheme of pensions based on that for war pensions under the Repatriation Act. Accordingly, clause 6 of this bill provides that, with certain minor exceptions which I will explain later, the provisions relating to the payment of war pensions under the Repatriation Act will, with such modifications as to time and place of service as’ are necessary, apply to the members of the Australian contingent of the strategic reserve.

At this juncture I should like to point out that these members already have the cover of the provisions of the Commonwealth Employees’ Compensation Act. The basic principle of this bill is therefore that eligibility for pension should stem from an occurrence, including the contracting of a disease, that happened during a member’s Malayan service. Accordingly, the provisions of sub-sections (3.) and (4.) of section 37 of the Repatriation Act, which gave to members who had served in a theatre of war an entitlement for pulmonary tuberculosis not attributable to their war service, are not being extended in respect of service with the strategic reserve. In respect of Malayan service, incapacity or death from tuberculosis will, of course, be pensionable if it is attributable to that service. In relation to pensions payable to de facto wives, responsibility will be accepted only where the relationship upon which the claim is based subsisted at the time the member commenced his Malayan service. Likewise, a pension will be paid to the illegitimate child of a male member of the forces only if the child was born before or within nine months of the commencement of the member’s Malayan service. The procedures for determining claims for pensions under this bill will be exactly the same as those which apply under the Repatriation Act. The Repatriation Commission will administer the new act and the repatriation boards and the entitlement and assessment appeal tribunals will have jurisdiction in determining claims. Division 5 of Part III. of the Repatriation Act is not being extended in this bill and, accordingly, service pensions will not be payable in respect of Malayan service. The bill contains a provision in clause 13 enabling the Governor-General to make regulations, including regulations for the granting of assistance and benefits to members of the forces and their dependants. Regulations will be made covering such matters as the provision of medical treatment, the payment of medical sustenance, the provision of benefits under the soldiers’ children education scheme and under the disabled members and widows training scheme. Such provisions will follow the similar ones already in operation under the repatriation regulations.

To sum up, this bill provides that members of the Australian forces who serve with, or in connexion with, the strategic reserve in Malaya, and the dependants of these members, will receive pensions in respect of death or incapacity attributable to that service at rates equivalent to those payable to war pensioners under the Repatriation Act. It also provides for the making of regulations to confer such other benefits as are appropriate. Any further information which may be required concerning the details of the bill can be given at the committee stage.

The passage of this measure calls for a number of consequential amendments to be made to other acts. Bills which are to follow this measure will amend the Broad- casting and Television Act, the Commonwealth Employees’ Compensation Act, the Estate Duty Assessment Act. the National Health Act, the Re-establishment and Employment Act, the Repatriation Act, and the

Social Services Act. A consequential amendment of the Income Tax and Social Services Contribution Assessment Act is to be dealt with separately. The Broadcasting and Television Bill (No. 3) 1956 will amend the Broadcasting and Television Act to provide for a broadcast listener’s licence or a television viewer’s licence to be available to certain pensioners under the proposed Repatriation (Far East Strategic Reserve) Act at the same concession rates as apply to similar classes of war pensioners under the Repatriation Act. The Commonwealth Employees’ Compensation Act is to be amended to provide that compensation will not be payable under that act in respect of injuries or disease for which pensions will be payable under the proposed Repatriation (Far East Strategic Reserve) Act. A similar provision already exists in the compensation act in relation to war pensions payable under the Repatriation Act. The Estate Duty Assessment Bill 1956 will amend section nine of the Estate Duty Assessment Act to extend the concessional deduction applicable to members of the forces who died as a result of service in the 1939-45 war or the Korea or Malaya warlike operations to which the Repatriation Act applies to members who die as a result of “ Malayan Service “ to which this bill applies. The National Health Bill 1956 will amend the National Health Act to provide that Commonwealth benefit under that act for medical expenses will not be payable where medical services are rendered free of charge under the provisions of this bill.

So that a pension payable under the provisions of this bill will not be taken into account as income in determining the rate of a business re-establishment allowance under section 101 of the Re-establishment and Employment Act, the Re-establishment and Employment Bill 1956 will amend that section to include a reference to a pension payable under this bill.

There are three consequential amendments to the Repatriation Act. The Repatriation Bill (No. 2) 1956 will amend sections 50. 83, and 86 of the Repatriation Act. Section 50 provides that where a child is in receipt of a pension by virtue of being a child of a member of the forces, and also becomes eligible for a pension by virtue of being a child of another member of the forces, fct example, by adoption, only one pension is payable. The proposed amend ment of that section is to ensure that it will apply in relation to a member of the Forces as defined in the proposed Repatriation (Far East Strategic Reserve) Act.

The proposed amendment of section 83 will exclude from income, for the purpose of the provisions of the Repatriation Act relating to service pensions, an attendant’s allowance payable to a member of the forces under the Repatriation (Far East Strategic Reserve) legislation.

Section 86 includes a provision disentitling a widow to receive both a war pension in respect of her husband’s death and a service pension. The proposed amendment of that section will provide that a pension under the Repatriation (Far Eas Strategic Reserve) Act will be treated as a war pension for the purposes of thai provision.

Finally, the Social Services Bill (No. 2.i will amend sections 6, 28, 81, 106 and 143a of the Social Services Act. The general effect of these amendments is to extend the meaning of the expressions. “ member of the Forces “, “ Repatriation Act “, and “ war pension “ wherever occurring in the Social Services Act, to include respectively members of the forces as defined in this bill, the Repatriation (Far East Strategic Reserve) Act 1956, and pensions to be granted under the last-mentioned act.

Any further details of this bill or the consequential bills which may be required can be explained during the committee stage This bill confers substantial benefits on members of the forces, and I commend ii to the House.

Debate (on motion by Mr. Pollard) adjourned.

page 1910


Bill received from the Senate and (on motion by Dr. Donald Cameron) read a first time.

Bill (on motion by Dr. Donald Cameron) - by leave - read a second time, and reported from committee without amendment or debate; report adopted.

Bill - by leave - read a third time.

page 1911


Bill received from the Senate and (on motion by Dr. Donald Cameron) read a first time.

Second Reading

Motion (by Dr. Donald Cameron) - by leave - proposed -

Thai the hill be now read a second time.

Debate (on motion by Mr. Pollard) adjourned.

page 1911


Bill received from the Senate and (on motion by Dr. Donald Cameron) read a first time.

Second Reading

Motion (by Dr. Donald Cameron) - by leave - proposed -

That the bill be now read a second time.

Debate (on motion by Mr. Pollard) adjourned.

page 1911


Bill received from the Senate and (on motion by Dr. Donald Cameron) read a first time.

Second Reading

Motion (by Dr. Donald Cameron) - by leave - proposed -

That the bill be now read a second time.

Debate (on motion by Mr. Pollard) adjourned.

page 1911


Bill received from the Senate and (on motion by Dr. Donald Cameron) read a first time.

Second Reading

Motion (by Dr. Donald Cameron) - by leave - proposed -

That the bill bc now read a second time.

Debate (on motion by Mr. Pollard) adjourned.

page 1911


Bill received from the Senate and (on motion by Dr. Donald Cameron) read a first time.

Second Reading

Motion (by Dr. Donald Cameron) - by leave - proposed -

That the bill be now read a second time.

Debate (on motion by Mr. Pollard) adjourned.

page 1911


Bill received from the Senate and (on motion by Dr. Donald Cameron) read a first time.

Second Reading

Motion (by Dr. Donald Cameron) - by leave - proposed -

That the bill be now read a second time.

Debate (on motion by Mr. Pollard) adjourned.

page 1911


Bill received from the Senate and (on motion by Mr. Roberton) read a first time.

Second Reading

Minister for Social Services · Riverina · CP

, - by leave - I move -

That the bill be now read a second time.

This bill seeks to revise certain eligibility provisions of the War Service Homes Act consistent with the Government’s decision and duty to adjust repatriation and other contingent benefits arising out of service in both Korea and Malaya. It has been rendered necessary by the changes which have taken place in the organization of Australian defence units serving overseas in Malaya and Korea. In addition, this bill affords an opportunity to adjust the eligibility provisions of the act to include those who, during the 1939-45 war, served on the high seas in various types of ships, but have been excluded by strict legal technicalities and interpretations from the existing eligibility provisions of the act.

Subsequent to the despatch of Australian forces to engage in the war-like operations in Korea and Malaya, the War Service Homes Act was amended in December, 1 95 1 , to include service personnel who were posted for duty in connection with those operations and who actually proceeded overseas. When hostilities ceased in Korea, following the signing of the armistice on 27th July, 1953, the great majority of the

Australian forces was withdrawn. As operational areas, in fact, no longer exist in Korea, the provision in the act concerning service in that area is no longer applicable and this amending bill is designed to omit service in an operational area in Korea as a qualification for war service homes.

The Government’s decision to re-organize the forces serving in Malaya as the Australian component of what is called the Strategic Reserve in Malaya made it necessary for special conditions to be drawn up covering operational service of this kind and repatriation benefits arising from such service will now be governed by the provisions of the Repatriation (Far East Strategic Reserve) Act 1956. To clarify the position and to establish a uniform policy for all classes of service benefits available to qualified persons, the Government decided to amend the War Service Homes Act.

The amendment provides that eligibility for war service homes will be available to those who become entitled to a repatriation benefit in consequence of an incapacity, or to their dependants in case of death. This is the main purpose of the bill. There are other minor amendments. The act, as it stands at present, provides that, in addition to members of the forces, members of the crews of ships who had sea-going service in vessels trading between ports on the Australian coast, or between Australian ports and any other ports during World War II. are eligible persons within the meaning of the act.

Applications have been received from a small number of persons who served in various types of ships during World War II. who could not qualify for war service homes under the act because they did not legally fall within the definition of “ eligible persons “ in the strict terms of the act. They include members of the crews of troop transport ships, hospital ships and canteen workers on ships of the Royal Australian Navy. When these applications were examined, it became obvious to the Government that the nature of the service of the applicants justified their inclusion to receive the benefits of the act precisely in the same way as members of the mercantile marine and other seafaring personnel who are already provided for under the act, and the amendments in this billare designed to correct these anomalies.

It is my duty to emphasize that, in effect, these amendments do not extend the provisions of the War Service Homes Act to new categories of persons, but merely overcome technical discrepancies affecting those who served on the high seas under conditions equally as hazardous as those of seagoing personnel who are already covered by the act. Indeed,I am bound to say that some of the categories of persons who will now be included served at battle stations on Royal Australian Naval ships and, in several instances, served in ships that were sunk by enemy action. The bill has no other purposes, and it is my pleasure to commend it to the House.

Debate (on motion by Mr. Pollard) adjourned.

page 1912


Bill received from the Senate and (on motion by Mr. Cramer) read a first time.

Second Reading

Minister for the Army · Bennelong · LP

– by leave - I move -

That the bill be now read a second time.

The purpose of this bill is to amend the Commonwealth Railways Act 1917-1955 to empower the Commissioner, with the approval of the Governor-General, to close any railway or part of a railway which is no longer required as a railway, and to empower the Commissioner -

  1. to dispose of the railway or part of a railway on such terms and conditions as the Commissioner thinks fit; or to lift, take up, dismantle and remove the same or any part; and
  2. to sell or otherwise dispose of the land or any of the land appur tenant thereto.

The Commonwealth Railways Commissioner has been given legislative authority for the construction in the State of South Australia of a standard-gauge railway from Stirling North to the Leigh Creek North Coal-field, and for its extension to Marree. This authority is contained in the Stirling North to Brachina Railway Act 1952-1954; the Brachina to Leigh Creek North Coalfield Railway Act 1950-1952: and the Leigh Creek North Coal-field to Marree (Conversion to Standard Gauge) Railway Act 1954.

The construction of this railway has reached the stage where the section from Stirling North to the Leigh Creek Coal-field has been opened for traffic and coal is now being conveyed direct to the power station at Stirling North in standard-gauge vehicles. To provide for the transfer of general goods and live-stock coming from or consigned to stations on the narrowgauge line north of the coald-field, temporary transfer facilities have been established at Copley, 12 miles south of the Leigh Creek North Coal-field. Arrangements are also in hand for passenger traffic between Port Augusta and Alice Springs to be transferred at this point. These facilities are only temporary as it is intended to transfer them to Marree when the construction of the standard-gauge railway reaches that place. As a result of this progress, that section of the 3-ft. 6-in. gauge Central Australia Railway which lies between Hawker and Brachina, a distance of approximately 41 miles, has now become redundant, and the principal reason for this bill is to provide the means for its closure.

So that honorable members may understand why it is now proposed to close this section of the Central Australia Railway, 1 shall briefly outline the history of the legislation which has governed this railway. The -Northern Territory Acceptance Act 1910 approved and ratified an agreement made on 7th December, 1907, between the Commonwealth and the State of South Australia in which are set out the terms under which the State surrendered the Northern Territory” to the Commonwealth. Under this agreement, the Commonwealth undertook to - give and continue to give to the State and its citizens equal facilities at least in transport of goods and passengers on the Port Augusta Railway to those provided by the State Government at the present time and at rates not exceeding those for the time being in force on the railways of the State for similar services.

In the 1907 agreement the Port Augusta Railway was defined as the then existing railway between Port Augusta and Oodnadatta, of which the 3-ft. 6-in. gauge line between Hawker and Brachina formed a pa rt. In 1949, the Commonwealth undertook to convert to standard gauge the existing 3-ft. 6-in. gauge line from Port Augusta to Alice Springs. The agreement embodying this undertaking was authorized by the Railway Standardization (South Australia Agreement) Act 1949. There was a difference of opinion as to which was the most suitable route for the Stirling North to Brachina section of the standard gauge railway, and this matter was referred to a royal commission, the form of which was agreed to by the State of South Australia. Section 3 of the Northern Railway (Alteration of Route) Act 1950 of South Australia, reads -

  1. The recommendation of the Commission o» the question referred to it shall be binding uponthe State, and the construction of a standardgauge line of railway between Stirling North andi Brachina on the route recommended by the Commission shall be deemed to be a discharge of the. obligation of the Commonwealth under the Agreement to convert to standard-gauge that part of the Port Augusta to Alice Springs railway which lies between Stirling North and Brachina.

The route adopted was that recommended by the royal commission. This route, which skirts the Flinders Ranges to the westward, by-passing Quorn and other stations on the narrow-gauge line, is the route on which the standard-gauge line to Brachina has been constructed. It follows from this, Mr. Speaker, that the State has by legislation freed the Commonwealth of its obligation to run trains on the narrow-gauge line Stirling North-Quorn-Brachina. The section of the 3-ft. 6-in. gauge railway between Hawker and Brachina which it is now proposed should be closed, serves only three intermediate sidings - Hookina, Mern Merna and Edeowie, all of which are less than 10 miles by direct route from the nearest station on the new standard-gauge railway. The redundancy of this section of the narrowgauge railway is clearly evidenced by the following statistics which relate to the period of twelve months ended 31st March, 1956:-

lt will be seen that most of the traffic to and from the three sidings on the line is in livestock, a proportion of which in any case would be more conveniently served by the new standard-gauge railway; and that the cost of maintaining the track and structures alone for the year was £13,000 in excess of earnings. Fifteen station properties are at present served by this section of the railway, five to the east of the line and ten to the west. The small inconvenience that would be suffered by the few settlers in the area if the section were closed would be more than outweighed by the advantages gained by others who are more conveniently served by the new railway, and by the benefits of faster and more frequent services on the new line.

When the findings of the royal commission were made public, the town clerk of Quorn addressed a letter to the Prime Minister requesting, inter alia, that the narrow-gauge line between Stirling North and Brachina be kept open. The reply contained the following -

In its conclusions the Commission recommended that the route proposed by the Commonwealth Railways Commissioner, i.e. construction of a railway west of the Flinders Ranges between Stirling north and Brachina, should be adopted. As a consequence, it has been decided that on completion of this railway, the existing 3’ 6” gauge railway between Quorn and Hawker will be maintained and a service conducted in keeping with the requirements of business offering. However, the section between Hawker and Brachina (41 miles) should be closed as there is no justification for the expenditure of public funds to retain this portion of the railway which passes through an area in which very few persons are resident and who will still be provided with a service within a reasonable distance.

The request made by the townspeople of Quorn through their town clerk was in the hope that “ through “ railway traffic might continue to flow on the narrow-gauge line through that town. However, whether or not the line were closed as recommended, “ through “ traffic would be routed over the new line via Stirling North. lt could be argued, Mr. Speaker, that if the section of railway were distant from any transport services, it should remain open as a government contribution to the development of the country, but I wish to emphasize to honorable members that this section is parallel to, and for most of its length not more than 10 miles away from, the new standard-gauge railway. Another important consideration is that if this section of line were closed, valuable materials could be released for use elsewhere on the railway. For example, immediate use could be made of materials in the tracks, particularly rails, for re-laying in other sections, for telephone poles, stock yards, culverts and storage sidings.

I am confident, Mr. Speaker, that honorable members will agree that no reasonable objection could be raised to the proposal to close this section of the railway, but as under section 36 of the Commonwealth Railways Act the Commissioner is bound to maintain the railways and all works in connexion therewith in a state of efficiency, it is necessary that legislative authority be obtained for the dismantling and removal of the line.

Provisions such as are sought in this bill are not new to railway legislation. Foi example, under section 84 of the South Australian Railways Commissioner’s Act 1936-J950, it is provided that if any land or other property of any kind vested in the commissioner for railway purposes, or for the purposes of any railway, is not required for the said purpose, the commissioner may. with the consent of the Governor, sell, exchange or dispose of such land or other property, “ for such price or other consideration as he deems proper “. Similar provisions also exist in the legislation governing railways in the States of Queensland and Tasmania.

I submit to honorable members that the powers it is proposed to confer on the Commonwealth Railways Commission under this bill are, particularly in view of existing circumstances, essential to the efficient and economic operation of the railways under his administration, and I commend the bill to their favorable consideration.

Debate (on motion by Mr. E. . laine, Harrison) adjourned.

page 1914


The following bills were returned from the Senate: -

Without amendment -

International Wheat Agreement Bill 1956

Without requests - ,- <i-i q-v-;.-,! Services Contribution (Individuals) Bill 19S6.

page 1915


Second Reading

Debate resumed from 25th October (vide page 1870). on motion by Sir Arthur Fadden -

That the bill be now read a second time.


.- The honorable member for Melbourne Ports (Mr. Crean) opened the debate for the Opposition on this bill last Thursday. It is one of many measures which go through this Parliament without opposition, but on which we like to state our views, even though we may agree with the general principles. About 85 per cent, of the measures introduced’ in this Parliament are passed without a division. We may differ on details, but the measures are passed. This hill comes within that category.

When the Treasurer (Sir Arthur Fadden; introduced this measure, he said that the grants recommended for Tasmania, South Australia and Western Australia - the three claimant States, or the poorer States in the financial sense - for this year totalled £18,500,000, and were made up of £5,800,000 for South Australia, £9,200,000 for Western Australia and £3,500,000 to Tasmania. He said that the totals were exactly the same as those for last year, but added that the reimbursements of taxation to the three claimant States, for this year, had risen by £3,711,000. The total revenue grants to the three claimant States will rise by that amount. South Australia will receive £2,077,000, Western Australia £1,627,000, and Tasmania the tiny sum of £7,000. That is all we Tasmanians can expect by way of an increase this financial year, but the Premier said recently that he has learnt to be thankful for small mercies and small blessings. The amount is inadequate to help meet some of the major increased costs of our State administration. 1 feel, therefore, that Tasmania has a right to protest at the paucity of the increase for this year.

Measures of this kind have been before the Parliament for over 40 years. The first was introduced in 1910. The principle of these measures is laid down in section 96 of the Constitution, which reads as follows: -

During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Par liament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit.

In 1933, the Commonwealth Grants Commission was formed, lt tidied up this legislation and has been a major part of what might be called extra-parliamentary work since 1933. The commission has met in the three claimant States every year since 1933. The principle on which it works is a simple one. It is -

Special grants are justified when a State through financial stress from any cause is unable efficiently to discharge its functions as a member of the Federation and should be determined by the amount of help found necessary to make it possible for that State by reasonable effort to function at a standard not appreciably below that of the other States.

It means, in effect, that the Commonwealth Grants Commission is empowered by this Parliament to make sure each year that Tasmania, South Australia and Western Australia, the three claimant States, do not suffer financially through any disadvantage of population, geography or for any other reason. It tries to balance the budgets of those three States and to give their people a standard of living equivalent to that enjoyed by the residents of the major and wealthier States of the Commonwealth - Queensland, New South Wales and Victoria. For that reason, £18,500,000 will be paid by the Treasury this year to the three claimant States to balance our economy and to give it pep and strength where it is weaker, so that our standard of living will not be impaired.

I wish to refer to the twenty-third report of the Commonwealth Grants Commission. It is an excellent document. I am always amazed at the detail of the commission’s reports, the mass of data and the detailed information on the economy of the six States in its various phases. The following statement appears on page 19 of the report -

It might well be asked, however, why the need for special grants persists so strongly when other Commonwealth payments to the States have increased greatly, and when there is evidence of economic expansion in the claimant States at least equal to that which has occurred in the non-claimant States. In general terms, the reason is that costs of expansion of State services, of development of undertakings such as railways and water supply, and of general administration are relatively heavy in the States of smaller populations.

At the same time, benefits to revenue arising from economic expansion do not flow directly to the State governments.

The commission is the champion of the three smaller States and must be commended for its attitude, as expressed in this report, lt has even been tackled by the Commonwealth Treasury, and on this occasion it was obliged to answer three suggestions from Treasury officials, the top financial men of the Commonwealth. They are the hierarchy, so far as finance is concerned, and the States dance to their tune. I admire the Commonwealth Grants Commission for standing up to the Treasury and saying, in effect, “ We are not going to be brow-beaten on these three matters. We have our own opinions concerning them “. It is good to see that there is in Australia a group of men powerful enough to stand up to the Commonwealth Treasury officials. The three instances in which the commission has stood up to the Treasury during the last twelve months are recorded in this dramatic document.

At page 24 of the report, the commission states that the Commonwealth Treasury suggested that, in the future, the commission should devote a greater part of its attention than was the case hitherto to the calculation of the second part of a grant. I might perhaps explain that there are two sections of these grants, the first part being designed to adjust the previous budgets of the States, and the second part to balance their budgets in the coming twelve months. As I say, the Treasury suggested that the commission should give greater attention to the calculation of the second part, and it also suggested special hearings each year in camera, in other words, secret sessions. The commission considered this matter and the three humble men replied in the following heroic words: -

The commission does not agree with the contention that the second part of a special grant is more important than the first part.

In other words, it said to the Treasury, “ Keep out of our field. This is our domain “. However, it agreed to meet Treasury officials early in 1957 for the purpose of considering the Treasury proposal in greater detail. That consideration will relate to future occasions, but, for the time being, the proposal has been rejected.

The second occasion on which this brave group of three men stood up to the Commonwealth Treasury is referred to on page 28 of the report. The Treasury had pointed out that the value of the allowances made by the commission had reached £2,600,000 for the year under review, 1954-55. What are known as percentage allowances are made to meet special difficulties in providing social services in the three smaller States. The percentage allowance had been doubled in only one State, Tasmania, the allowance having been increased from 6 per cent, to 12 per cent. The Treasury endeavoured to establish that the commission had increased the allowances in respect of all three States, which was not so! The commission decided that the allowances should remain as they were, and stated its decision in the following words: -

The commission has decided to make the same percentage allowance in this Report as in the 22nd Report.

So, the Treasury lost the second battle in the war.

On the third occasion, the Commonwealth Treasury expressed doubt concerning the validity of the commission’s calculations regarding the severity of State nonincome taxes and suggested that they be reviewed. From the commission’s calculations, the Treasury derived figures concerning the relative taxable capacity of the States. Taking the simple average of the non-claimant States as 100, the relative capacity of South Australia to pay nonincome taxes was 86, whilst that of Western Australia was 82, and that of Tasmania 70. The commission replied, in respect of this matter, that it would not alter the basis, and it claimed that there was no point in the criticism advanced by the Treasury. The Treasury, therefore, lost all three battles*

Mr Curtin:

– It was knocked right out of the ring!


– Yes, to put it in simple language. 1 commend the commission for the strength of character that its members showed on those three occasions.

It is interesting to note that the railways of Australia, of all the instrumentalities under the control of the State governments, add most to State indebtedness. Of course, the Commonwealth has been able to make a profit on its railways, and is to be congratulated. The day may well come when all the railways of this country wlil become a national responsibility. I do not think that that would worry the States unduly, because the deficits of the State railway systems have assumed enormous proportions. At the moment, the total indebtedness of the railways of the six States amounts to £69,000,000. Their position is becoming hopeless. One rarely hears of a State railway making a profit. We appreciate, of course, that one of the main reasons for their construction is to develop the country, and we know, too, that they provide cheap freight rates for big companies, primary producers and others. In addition, they help to reduce transportation costs; but, of course, they do those things at the expense of the budget. The deficits of the State railways are increasing year by vear.

The Commonwealth Grants Commission has devoted a considerable portion of its report to this matter. At page 48, it indicates that railway revenue for 1954-55 throughout the six States amounted to £169,786,000, but. as usual, expenditure exceeded revenue, with the result that South Australia, Western Australia and Tasmania had deficits totalling approximately £5,000,000. New South Wales, Victoria and Queensland achieved the miracle of surpluses of approximately £6,000,000. We know, however, that their total indebtedness, in respect of capital and interest, is huge. New South Wales has not yet paid for its railways, which cost approximately £28,000,000 originally. In Tasmania, from 2nd May, 1955, it was necessary to increase rail charges by an average of approximately 7 per cent. In South Australia, suburban fares were increased by 15 per cent, from 1st April, 1955. It will be seen, therefore, that, in an endeavour to overtake railway deficits, the States have had to increase freight charges, to the disadvantage of the general economy. I mention this matter to indicate one of the major difficulties of the States.

At page 45 of the report, the commission sets out comparative expenditures throughout the Commonwealth on education, health, hospitals, law and order, and so on, for the year 1954-55. In respect of education, Western Australia led the field with expenditure per head of 201s.; Tasmania came next with expenditure of 197s.; and New South Wales was third with expenditure of 179s. Id. Queensland, as most honorable members know, spent most on health, hospitals and charities. Tt spent 146s. lid. per head, while Tasmania was next with 137s. 6d., and Western Australia third with 131s. 7d. Tasmania spends more than any other State on law and order and public safety. The expenditure per capita in that State is 55s. 4d. In Queensland the amount spent per capita under this heading is 50s. 5d. Tasmania is the only State that spends more than Queensland op these services.


– The Liberal governments are well down the list.


– That is so. The Liberal governments are well down the list in expenditure on health, hospitals, charities, law and order and public safety, and I think that it is to the credit of Tasmania and Western Australia, two of the claimant States, that they spend so much a head on these very vital services. Tasmania has the most ambitious education system in Australia, including 40 area schools. It is costing the Tasmanian Government £250,000 a year to transport the children to the schools. Hardly a child who lives within 8 miles of an area school is not provided with transport to and from that school, and that service has become very costly. The increase in building costs has caused a substantial increase in the cost of education services in Tasmania.

The grants made by the Commonwealth Grants Commission enable the States of South Australia, Western Australia and Tasmania to carry on and to maintain their high level of educational facilities. A country is judged, surely, on its standards of education, health, law and order, and its provisions for charities. Those matters must be the touchstones of a government’s attitude towards its people, and I think that the claimant States are to be congratulated on the high standards that they have maintained in respect of these services.

I wish now to refer to the matter of uniform income tax, and taxation generally. The States have their own avenues of revenue. Since 1942, as we all know, the uniform income tax system has been in operation, and it has proved to be the best taxation method ever devised. Whatever the Vicorians may think of it, I believe that the people generally would be loath to return to the system of double taxation, under which they were compelled to complete two income tax returns and pay more in taxes, per capita, than they pay under the uniform tax scheme. One result of the system, however, is that the States have been left with very limited fields of taxation, and 1 shall indicate briefly the kinds of tax that, the States have to impose in an endeavour to raise enough revenue to meet their expenses in providing the services to which I have referred. The States now impose estate duty, stamp duty, land tax, motor tax, liquor tax, racing tax, entertainments tax and lotteries tax. They are the main fields of taxation that have been left to the States. In several of these directions Tasmania has been compelled to increase the rates of taxation. As honorable members know, the attitude of the Commonwealth Grants Commission is that it will not help a State that is not prepared to help itself. The commission says, “ We will not make a grant to a State that is imposing too low a rate of tax in one of these fields, or a rate that is appreciably lower than that being charged in any other State of the Commonwealth “. The result is that the claimant States must make it clear that they have not lowered their rates of internal tax to what the commission may consider an unfair extent. This helps to keep the States up to scratch, because they cannot obtain Commonwealth help unless they are prepared to help themselves, and to raise just and reasonable taxes from the sources to which I have referred.


– What is the commission’s attitude to entertainments tax?


– The commission’s attitude to entertainments tax has altered very little since the days when the Commonwealth was imposing that tax. The Commonwealth has left the field in the last two years, and now the States impose entertainments tax only on admissions to motion picture theatres and to horse and dog race meetings. I think that those are the only three kinds of entertainment that are now taxed. The limitation of the tax to those classes of entertainment has been a great help to such sporting bodies as football clubs and cricket clubs, which do not have to pay entertainments tax.


– What is the position in regard to motor registration?


– The Tasmanian Government had to increase the tax on motor registrations last year, more or less to meet the wishes of the Commonwealth Grants Commission. Motorists in Tasmania paid £100,644 more in tax for the year ended 30th June, 1956, than they did in the previous year. The total revenue for last year was £623,782, compared with £523,138 in the previous year. This increase was due mainly to the increased rate of tax imposed last year, and the motorists of Tasmania, like motorists everywhere, complain from time to time of the great inroads being made on their purses foi the privilege of driving motor cars. That is a problem for the State governments to work out, and it is difficult for us in the federal sphere to advise them on it. The Tasmanian Government, when it felt that it was right and proper to do so, increased this tax to a certain extent last year, in order to bring in extra revenue. Tasmania is trying to play its part in raising as much revenue as possible, in accordance with the principles laid down by the Commonwealth Grants Commission.

In the field of housing Tasmania has struck some trouble. Because the full economic rents were not charged on homes built through the Agricultural Bank, Tasmania suffered a loss of nearly £30,000 on its State homes last year. This has caused the Tasmanian Government a great deal of concern. The economic rents paid in Tasmania range from £1 12s. 6d. to £4 18s. a week. A report that was tabled in the Tasmanian Parliament yesterday stated that the most typical rents being paid are in the vicinity of £2 10s. a week. My own opinion is that the average would be a bit higher than that. The Commonwealth Grants Commission would say, however, that we are not charging the full economic rents for our homes to-day. The State Government has in mind the economic plight of the lower wage groups and it has done its best to help them b> keeping rents down. Rents constitute a major item of the ordinary man’s expenditure these days, if he is fortunate enough to have a house to live in. I do not know how the Tasmanian Government will solve the problem. If it raises the rents by 5’ or 10s. a week it will receive a strong protest from all the lower income wageearners. It is obvious, however, that Tasmania cannot continue, year after year, to suffer a deficit of £30,000 on State homes lt would be fair for people on higher incomes to pay a little more than those on lower incomes for comparable homes. That is the only way in which the problem can be satisfactorily solved, if a flat rate of increase is not to be imposed.

While I am on the subject of State homes, I might mention that Tasmania had completed 4,494 homes to 30th June last, of which 554 had been completed in the last financial year under the State housing plan. In addition, 226 were under construction, and about 1,454 were the subject of purchase contracts during the year. That knocks out the argument of the Liberal party that we do not believe in homeownership. That has been one of our opponents’ catch-cries for a long time. I point out that in Tasmania there is in operation a rent-purchase system under which the ordinary man can buy his home. You may be interested to know, Mr. Speaker, that no deposit is required on any home built by State authorities in Tasmania. After a man has been in a government house for two years, he can, if he likes, take advantage of the rent-purchase system, without being required to pay a deposit.

In conclusion, 1 want to refer to the difficulties that our coal-miners are experiencing at present, due to disposal difficulties in the coal-mining industry. The Jubilee mine, in my electorate, is to dismiss 42 men - its entire staff: The latest information that I have is that it will be closed. That would be a tragedy, because the men concerned, who live in St. Mary’s could not get employment anywhere else in the district. The closing of the mine would bring impoverishment of the worst kind to them. Either to-day or to-morrow, the Tasmanian Attorney-General will confer with the management of the mine to see whether a solution of the problem can be found. To-day, the honorable member for Bass (Mr. Barnard) and I interviewed the Minister for Supply (Mr. Beale). We suggested that the management of the Bell Bay aluminium undertaking should, have a look at the quality of coal being produced by two Tasmanian coal mines which have been opened since the Bell Bay project was first mooted and Tasmanian coal was tested to ascertain its suitability for use at Bell Bay. If greater quantities of Tasmanian coal could be used in the aluminium works there, the 42 men who will be dismissed from the Jubilee mine could be absorbed into the two new mines. The Minister asked us to put our request in writing and promised to give it sympathetic consideration. The two new mines near Fingal are producing the best coal so far mined in Tasmania. I agree that, generally speaking, Tasmanian coal has very poor gasification qualities. Incidentally, if the Bell Bay works could use some of the gas generated in Parliament House here, it would not have to use coal at all! We have made what is, I think, a practicable suggestion to the Minister. Tasmanian coal has not been tested for suitability for use in the Bell Bay works since the 1940’s when the project was first put on the drawing boards. It is about time that the Government tested the coal produced by these two new mines to see whether it is of better quality than the coal that was tested previously. We hope that the Minister will arrange for that to be done and that subsequently a greater quantity of Tasmanian coal will be used at the Bell Bay works, which, at present, is taking 60,000 tons of Cornwall coal and 200 tons of Jubilee coal each year.

Like all other States, Tasmania has water schemes under way and needs money for them. Money is required also for the expansion of forestry projects, for the construction of roads to timber-producing areas and for the extension of health services.


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

Mr. THOMPSON (Port Adelaide) [9.33J. - I was interested in the resume that the honorable member for Wilmot (Mr. Duthie) gave of the domestic difficulties of Tasmania, but I do not desire to deal with thai phase of the matter at the moment. We are considering a bill to authorize the making of special grants to South Australia. Western Australia and Tasmania. This system has been in operation for many years, but, at times, it creates difficulties for the claimant States, as they are called. Even year, each claimant State has to present to the Commonwealth Grants Commission an estimate of its expenditure for the coming year. The commission examines the estimate and decides whether’ the State will require a special grant to enable it to provide services reasonably comparable with those provided by the major States - that is. New South Wales, Victoria and Queensland. On that basis, a grant is made to the claimant State, subject to variation in a later year.

That is where the difficulties arise. Some years ago, I spoke on a bill similar to this one on the same night as the Premier of South Australia delivered his budget speech to the South Australian Parliament. I explained then that I thought conditions would become difficult for South Australia if certain circumstances arose. The next day, when I read in my newspaper what the Premier of South Australia had said - 1 was unaware of it when I spoke - I discovered that the very thing that I had said might occur had occurred. According to the Commonwealth Grants Commission, South Australia had been overpaid two years previously and the amount of the overpayment had been deducted from the grant that was to be made in respect of the then current period.

Some people say that unification, although it is a part of the platform of the Labour party, is only a Labour dream and that it is not practicable. I point out that the special grants that have been made over the years under measures such as this have tended to bring about a certain degree of unification. A claimant State makes a claim for a special grant to enable it to carry on. but if it is not able to prove to the Commonwealth Grants Commission that the charges it is making for railway services, water services and other services are comparable with the charges made by the major States for similar services, it docs not get all that it asks for. In order to qualify for special grants, the claimant States are compelled to impose extra taxation and demand extra payments from the people. This brings about a certain degree of uniformity between the States in relation to railway charges and other charges. I admit that the system does not bring the charges made by all States to the same level, but it does tend towards uniformity. 1 have been looking at the twenty-third report of the Commonwealth Grants Commission, which we obtained only a week or so ago. The table on page 40 of the report shows the budget results of the claimant States, lt shows the amount of revenue raised by taxation under various headings in 1953-54 and in 1954-55, and then it gives the difference between the two amounts There is almost an obligation on a claimant State to increase its charges and taxes each year if it wants to qualify for special grants In 1953-54 South Australia collected £2,367,000 in motor taxation and in 1954-55 the amount went up to £3,150,000 - an increase in one year of £783,000. I admit that the number of motor vehicle registrations increased, but that increase was not sufficiently great to account for the increase in revenue that I have mentioned. I find from the report that the revenue from other State taxation in 1953-54 was £4,170,000 and that in the next year the figure jumped to £4,396,000- an increase of £226,000 Debt-charges recoveries rose by £592,000 from £2,933,000 to £3,525,000. Territorial revenue increased from £309,000 in 1953- 54 to £459,000 in 1954-55, an increase of £150,000. Railway revenues increased from £12,806,000 in 1953-54 to £13,107,000 in 1954-55. Revenue from business undertakings increased from £3,942,000 in 1953-54 to £4,716,000 in 1954- 55, an increase of £774,000.

The figures for 1955-56 are not included in this table. I have no doubt that if they were available we should find that the increases were even greater. For example, any one who runs a motor car knows that it costs him more in 1955-56 than it did in 1954-55. We can take it that the people have paid for the water supply service provided by the State, the cost of which has increased greatly, because unless the charges paid by the people for the service were increased to a level comparable with that of charges in other States for similar services the Commonwealth Grants Commission would not look kindly upon the water supply grant. So charges for all services provided by the States gradually increase. 1 have given only the figures for South Australia, but if honorable members examined the figures for Western Australia and Tasmania they would find they were much the same.

The honorable member for Wilmot cited the figures relative to expenditure on education in the various States, and showed that the per capita expenditure is highest in

Tasmania. The figure for South Australia is one of the lowest in Australia. The per capita figure for hospital expenditure in South Australia also was low compared with the figure for the other States. I cannot quite understand why, because until several months ago the public wards of the Royal Adelaide Hospital, which has about 700 beds and is the biggest in the State, were free to all patients. However, as a result of pressure brought to bear by this Government as a condition of assistance in financing hospitals charges ranging up to £3 a day in certain circumstances have been imposed. Although the Commonwealth may be giving the claimant States something under this bill, it is also forcing them to make charges for various State services which are more comparable with those in other States.

The honorable member for Wilmot also referred to the tax reimbursements paid to the States under the uniform taxation scheme. The table at page 40 of the report, to which I have already referred, shows that South Australia received taxation reimbursements amounting to £12,241,000 in 1953-54, and £13,160,000, or £919,000 more, in 1954-55. In 1953-54 it received a special grant of £6,100,000 also, and its total receipts from the Commonwealth amounted to £19,045,000. As we have seen, the States require more money every year as expenditure increases. But because a grant made by the Commonwealth some two years before had proved to be greater than was actually necessary South Australia received in 1954-55 a special grant of only £2,250,000, or £3,850,000 less than in 1953-54, and its total receipts from the Commonwealth in that financial year were only £16,114,000, or £2,931,000 less than in 1953-54. I know that the Minister for Primary Industry (Mr. McMahon), who is now at the table, is an economist. He may know a lot more about these things than I do. I do not question his knowledge, but I think he will agree with me that it makes things very difficult for a State to reduce the total grants made to it by the Commonwealth by £2,931,000 under this system of rectifying something done two years before when a grant was larger than proved necessary. What I have said about South Australia could apply equally well to Western Australia.

The summary of recommendations at page 57 of the report states -

If it is found in several years’ time that the estimates were not correct, Western Australia could get it in the neck and be subjected to a deduction, as it were. A repayment is not actually made, but any amount by which a grant exceeded the amount actually needed is deducted from the amount of a later grant. So it amounts to a repayment. I see the honorable member for Swan (Mr. Cleaver) nodding his head to show that he follows my argument. I do not propose a system different from the present one, but I suggest that it would be far better if the States were not prejudiced in this way by the denial of funds that they need very much.

I agree with the honorable member for Wilmot that the Commonwealth Grants Commission is a very fine body indeed. It does a great deal of detailed work in these matters. I agree with him also in his observations about the commission having to stand up to the Treasury and convince it that its recommendations in relation to grants are proper and should be given effect. I was a member of the South Australian Parliament for some years before I entered this Parliament, and I remember well the difficult years experienced by South Australia during the depression. I have some understanding of the difficulties experienced by the smaller States in carrying out their functions. Those difficulties would be even greater if the claimant States were not assisted by these special grants to keep their valuable public servants. South Australia, like other States, has highly qualified men in its Department of Mines, its Department of Agriculture, and other departments. The South Australian Government used to find that it was unable to pay those men salaries in any way commensurate with those that they could command from private industry or the Commonwealth. I think that nearly all the States have suffered very severely indeed at the hands of the Commonwealth, which has taken over many of their most highly qualified officers because it was able to offer them larger salaries than the States could offer.

When 1 was speaking last week on the measure providing for income tax reimbursements to the States I referred to the necessity for the revenue of the smaller States to be increased, if necessary at the expense of the larger States, in order to give the smaller States as nearly as possible equal economic status with the larger States. We must have such a principle. I believe that past measures similar to that with which we are now dealing, and the annual measures dealing with income tax reimbursements to the States, have enabled a greater increase of Australia’s population than would otherwise have been possible. We in South Australia now feel that, in respect of education, to mention one activity, we are now on a basis reasonably close to that in the more highly prosperous States. We feel, also, that our people can look upon themselves not just as South Australians dependent on the will and the help of the South Australian Parliament, but as Australians dependent on the National Parliament for assistance given to them in the belief that every man, woman and child, in Australia, wherever he or she may live, has an equal claim to an equal standard of living. These things have been brought about by the grants system and the tax reimbursement system.

Although the thought may not be palatable to the Government, in my opinion the advantages deriving from these systems are the result of Labour policy, because the Government is really giving effect to Labour’s policy in these matters. To a great degree it is now putting into operation what we of the Labour party have been advocating through the years. To-night, as I speak here, I am proud of the fact that the policy that I have known ever since I was a child, ever since the days when the old original Labour stalwarts were in the field, is now bearing fruit. I am proud of the fact that my own father was one of the old originals way back in 1 890 who fought in the struggle for proper parliamentary representation for the people and for legislation designed to serve the true needs of the people. Labour policy is not just something that I have read in a book; it is not something that is new to me. It is something that has been part of my life ever since I was a child, because my father was one of the Labour stalwarts in the old formative days of the Labour party. When I hear honorable members opposite say that the Labour party is not what it used to be, I feel a little sorry for them.

Mr Turnbull:

– Well, it is not what it used to be.


– Our friend from Mallee says the Labour party is not what it used to be. I say that the Labour party has not altered - does not alter. It moves with the times, but its basic policy is the same. Just as in 1890 we claimed the best we could get for the people, we still claim the best that we can get for the people. I heard my father, who is now dead, tell of what happened when Labour men went to the government of the day in South Australia, at a time when there were no Labour members in the South Australian Parliament, and asked for effective legislation to protect the workers in industry. He told me that the reply received from the Minister of the day was, “ If you want that, put your own men into Parliament and get it for yourselves “. Those days saw the beginning of Labour representation of the workers in the parliaments of this country. Knowing what these early Labour men fought for, and knowing what I have fought for in the political and industrial spheres, I am proud of the fact that after 60-odd years the aim of the Labour party stands unchanged. What we fought for in the past we fight for now.

I went to work in one particular industry in 1906 at a time when the workers in that industry laboured from 6 a.m. to 6 p.nL, Monday to Friday, and from 6 a.m. to 4 p.m. on Saturdays.

Mr Turnbull:

– That was when you were a farmer.


– No, my dear man, that was when I was working in a flour mill. The honorable member would know what long hours of work mean if he had to run big bags of wheat, containing 44 bushels, for twelve hours a day for the princely sum of 15s. a week. Later, after years engaged in farming, I revisited the flour mill in which I had worked, and found the conditions of the workers there vastly different from those that had obtained in my day in its service. In the meantime, a trade union had been formed to protect the workers - a trade union of the type that honorable members opposite always condemn, claiming that trade unions are leading the people by the nose. I found that, instead of working from 6 a.m. to 6 p.m., with the man on the bran packer and the top man working hard right throughout the day, able to snatch only a little time for breakfast and lunch, the men were working d regular eight-hour day. They were working three shifts instead of two in order to- do the same amount of work. Why? Because of the fact that a trade union had obtained better conditions for them. Honorable members may say that that matter has not much to do with this measure. It has everything to do with it, because the kind of industrial conditions that I have described led to the necessity for measures of this kind. lt was those conditions which made the Labour party fight for this kind of measure, and it is the continuance, in some degree, of those conditions which make it fight now for a better deal for the workers. There are members of the Labour party, as there are of the Liberal-Australian Country parties, who are in the party just for what they can get out of it, but the great majority of the members of the Labour party are earnest men and women who know that they are entitled to an equal share of the country’s wealth and to equal treatment from the country’s rulers. I am pleased that a measure such as we are now debating will help the less populous States to obtain lorne of the equal treatment to which their people are entitled.

I shall not go into all the intricacies of this measure, because such a discussion would be so complicated that people listening would not understand it. But they understand that this bill will give a measure of justice to the less populous States. Apart from what I had to say to the Minister for Primary Industry (Mr. McMahon) a little while ago about altering the system of grants so that a State will know exactly what expenditures it may incur without having its grant cut down in the following year, I support the bill. I hope that we shall continue to help the smaller States, and so demonstrate that we are big Australians and not merely little State-righters

Minister foi Primary Industry · Lowe · LP

– It has been a pleasure to sit in this chamber and listen to the contributions to this debate made by two members of the Opposition. It it pleasing to know that they have read, and thoroughly understood the latest report of the Commonwealth Grants Commission. I have learned quite a lot by listening to the remarks of the honorable’ member foi Wilmot (Mr. Duthie) and the honorable member for Port Adelaide (Mr. Thompson) lt is to be regretted that the latter perhaps brought his remarks a little more into the political arena than was necessary but. forgiving him for that somewhat mild indiscretion, I compliment him on his contribution to the debate.

Two points which require an answer were made in the debate. The first is the question raised by the honorable member for Port Adelaide about the possibility of a State’s having to reimburse the Commonwealth because a prior allocation had proved to be in excess of its needs. 1 believe that this matter can be looked into, although I do not think it raises a problem that is deserving of continuous attention

The figures appearing on page 2 of the roneoed copy of the speech made by the Treasurer (Sir Arthur Fadden) show thai this year, by way of adjustment to grants paid in 1954-55, an extra sum of £40,000 is due to South Australia and an extra sum of £98,000 is due to Western Australia, whereas the grant to Tasmania is to be reduced by £157,000. I mention those figures because they indicate that the amounts involved are not great. Therefore, I do not think it is a problem that need cause the States any embarrassment. I do not think that it will cause them difficulties of a kind which are insurmountable. Nonetheless, I give the honorable gentleman my assurance that I will find out whether something can be done, and thai if the Commonwealth Grants Commission can recommend any changes to the Government, they will be thoroughly considered. T am terribly sorry to say that I have forgotten the point that was raised by the honorable member for Wilmot (Mr. Duthie). Nonetheless, I shall have a look at it in “ Hansard “ and give him a reply in writing. I had it in mind, but the honorable gentleman from Port Adelaide has driven it out.

I got to my feet because 1 thought it would be wise to mention the extent to which the Commonwealth has increased the contributions to the various State governments. 1 mention it because 1 see my colleague and friend from Swan (Mr. Cleaver) sitting in a pensive mood, looking at me and wondering what Western Australia will get out of this feast. It was a Liberal government - The Lyons Government of 1933 - that put this scheme on a permanent basis. Its efforts were directed to seeing that when an applicant State’s requirements were looked at, they were put on a basis which would permit it to sustain its economy at a standard not lower than that which was sustained in the major States. In other words, it was intended to see that the three applicant States, Tasmania, South Australia and Western Australia, were at no great disadvantage, in terms of what the Government could contribute, compared with the major States of Victoria and New South Wales.

This year, the contribution to be made by the Commonwealth to South Australia amounts to £5,800,000. That is the amount after taking into consideration the adjustments. The contribution to Western Australia, which I mention for the benefit of the honorable member for Swan, will be £9,200,000. The contribution to Tasmania Will be £3,500,000. The point that I wanted to make was the extent to which the contributions have increased since the financial year 1938-39. In that year, the amount granted to South Australia was £1,000,000. As I have said, for the present financial year it is £5,800,000. The amount granted to Western Australia in 1938-39 was £570,000. It did not even amount to £1,000.000. This year, the amount is £9,200.000. The grant to Tasmania in 1938-39 was £410,000, as contrasted with the present amount of £3,500,000.

The total amount granted in 1938-39 was £2,000.000. The amount for the current financial year is £18,500.000. I suggest that that indicates that a magnificent contribution has been made by the Common wealth in order to sustain the standards of the minor States. I think it shows - and 1 use the words of the gentleman from Port Adelaide - that we are Australians one and all and that the Commonwealth Government has a real desire to see that, as far as it is practicable, the governments of the Commonwealth, whether they be Federal or State, make an equal contribution to sustaining the welfare of each and every person in the community. I should mention that, besides the amount of £18,500,000, an additional amount will be paid to the States this year of £3,700,000 by way of taxation reimbursements. I think that these amounts, added together, make a substantial contribution by the Commonwealth to the welfare of the State governments. I repeat what I said at the beginning of my speech: I am very pleased to be able to come here and listen to some intelligent contributions such as have been made to-night without any real provocation.

At long last I have remembered the matter that the honorable gentleman from Wilmot raised. He made some mild, not highly critical comments, about the Commonwealth Treasury. Listening to him, I thought that his remarks showed two things. First, his comments indicated the way in which the Treasury is careful always to examine the accounts of the Commonwealth in order to ensure that money is well spent. In the second place, it indicated that when the Commonwealth is looking to the problems of tax reimbursement or State grants, it endeavours to ensure justice between the various States and to see that the States manage their accounts in accordance with the highest qualities needed in the profession of accountancy. Therefore, J would not have taken strong exception to what the honorable gentleman said. Again, his remarks show the high degree of independence on the part of the Commonwealth Grants Commission because it said, in answer to the Commonwealth Treasury’s criticism, “ We do not quite agree with you. We shall have another look at this business and discuss it with you in the future “. So I take what the honorable gentleman has said, not as severe criticism, but as something deserving of passing comment.

I leave the subject on this note. That this debate about ends the debate relating to the 1956-57 budget, and I think that those who are in the House to-night will agree that, by and large, it can be said with positive satisfaction to the Government that the state of the economy is healthy, lt does show some signs - not great signs - of a possibility of pressures developing or continuing to develop. The Government is watching those pressures carefully, but if we can control costs we can all look forward to the future with a great deal of confidence. I think I can make one comment about this debate: The Opposition has not offered a great deal of criticism of an effective kind. I think we can all say that the Government itself has cause for confidence. It has tried to give due weight to and assess the merit of the suggestions made by the Opposition and, if they can be adopted, it will adopt them. By and large, this House has not offered criticism of a kind which would lead the Government to change its policies. This House has not offered criticism of a kind which would lead the Government to think that it would constitute a great contribution to the policies that will be pursued by the Government in the future.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 1925


Second Reading

Debate resumed from 25th October (vide page 1807), on motion by Mr. Harold Holt-

That the bill be now read a second time.


.- The bill before us is the Conciliation and Arbitration Bill (No. 2) 1956. With it are bracketed, for purposes of discussion, the Public Service Arbitration Bill, the Australian National Airlines Bill, and the Aluminium Industry Bill. The provisions in the three associated bills flow from the amendment which it is proposed to make to the principal act.

The Minister for Labour (Mr. Harold Holt) has pointed out that as many of the provisions in the principal bill are of a purely, technical or drafting nature, very little opposition to them could be expected. That is true of most of the amendments, but at least one provision is something more than a mere drafting alteration, and calls for further information from the Minister. I refer in particular to clause 6, which contains this very brief provision -

  1. Section fifty-four of the Principal Act is repealed.

Section 54 of the Conciliation and Arbitration Act 1956 reads -

  1. The Commission shall not include in an award a provision requiring a person claiming the benefit of an award to notify his employe! that he is a member of an organization bound by the award.

That provision was inserted in the amending act which was brought down earlier this year. It was acceptable to the unions, who objected to the practice, adopted by many employers of requiring employees to inform them if they belonged to an organization. That requirement had, at one time, been contained in awards of the court. The proposed amendment seems to go beyond the adjustment of a mere technicality. We oppose the bill because we believe that clauses 3 and 14 are detrimental to the interests of the trade union movement. Clause 3 makes provision for an additional division - “ Industrial Matters - Commonwealth Projects “ - in section 3 of the principal act. The insertion of this division is not in the best industrial interests of the trade union movement. Clause 14 gives the details of proposed new division 5, and also an interpretation of “ industrial dispute “ - “ industrial dispute “ means a dispute (including a threatened, impending or probable dispute) as to industrial matters, whether or nol the dispute extends beyond the limits of any one State …

It is not desirable to place in the hands of a commission, created to deal with disputes extending beyond the limits of one State, the power to deal with disputes which do not extend beyond the limits of one State


– These are only Commonwealth projects!


– I realize that. Later 1 shall give the reasons why the Public Service Arbitrator’s court was created to deal with Commonwealth employees. These disputes within a State may not be with the Commonwealth itself, the contractor, or the

Mib-contractor. ls this the best way of deal ing with matters that affect the Commonwealth itself? Sooner or later this question of a court which has been set up to resolve interstate disputes, undertaking also the settlement of disputes within a State, will have to be decided.

Proposed new section 88b contains a provision which is extremely objectionable to the trade union movement. I refer to the very wide power that is to be conferred upon the Minister in respect of declarations of work being carried out or undertaken by or for the Commonwealth. A similar provision was inserted in the Stevedoring Industry Bill earlier this year. The Minister is empowered to declare a state of emergency. Though proposed section 88b does not go so far as to say that the Minister may declare a state of emergency, it does give him power to “ declare “ an undertaking merely by placing a notice in the “ Gazette “. Sub-section (1.) reads -

The Minister may, by notice published in the Gazette “, delare a work or undertaking which is to be, or is being, carried out or undertaken by or for the Commonwealth or an authority of the Commonwealth to be a Commonwealth project for the purposes of this Division.

We feel that this proposed section goes too far and that it could be used by the Commonwealth to depress the wages and working conditions of persons employed in Commonwealth projects. One finds it most difficult to understand why Commonwealth employees of any description should be divorced from the Public Service Arbitrator’s Court, which was created for the express purpose of dealing with Commonwealth employees. This provision effectually’ destroys all rights that employees on Commonwealth projects may have to get the advantage of a court which was created specifically to protect their industrial conditions.

The Minister, in his second-reading speech, said that until 1911 Commonwealth employees had no right of approach to the Arbitration Court. That is correct. Between 1911 and 1920, following an amendment of the Commonwealth Conciliation and Arbitration Act, they had the right of admission to the Arbitration Court, and awards of the court were made in respect of quite a number of Common wealth public servants. But in 1920, a government of the same complexion as the present Government passed what is known as the Public Service Arbitration Act. The idea was to enable Crown employees to be dealt with by an authority that understood the conditions of employment that were generally observed for Crown employees. Before the amendment* of a most sweeping and drastic character were made recently to the arbitration legislation, the Public Service Arbitrator’s Court was able to deal very capably with Commonwealth employees and to make decisions in respect of them.

Then, for some unknown reason, this Government determined that the Public Service Arbitrator’s Court was to be wrecked as an instrument for Commonwealth Public Service employees who used the court. By a system of appeals, the Public Service Arbitrator was deprived of powers which he had previously exercised and which had never been challenged in this Parliament. Although the Public Service Arbitration Act provides that every determination must be laid upon the table of this House and although the Parliament had the right to disallow any such determination, at no time was a determination of the Public Service Arbitrator disallowed until 1953, when a regulation regarding the adjustment of Public Service salaries was challenged in this House. On that occasion, the Government by a majority vote, obtained a decision to the effect that the adjustment of public servant’s salaries should no longer take place automatically, as provided in the award.

From 1920 to 1953, there existed * court which gave satisfaction to Commonwealth employees and which apparently gave satisfaction to the Parliament, because at no time had a determination beet rejected by Parliament. It seems rathe; strange that the Government is now determined that the Public Service Arbitrator’s powers are to be further whittled away and that persons who are now using that court and have secured determinations for work which is covered by the four measures now before the House, are to be deprived of the right to use that court in the future.

At this stage, I shall point out the position of some employees of the various authorities concerned in the four bills now being considered. Determinations have been made by the Public Service Arbitrator in respect of clerks. That was done in determination No. 35 of 1942. A determination, No. 97 of 1953, was made by him in respect of the association of professional engineers. In regard to Trans-Australia Airlines, the Arbitrator has made determinations for clerks, the Foremen’s Association and for draftsmen’s assistants, the last being No. 119 of 1947. The pilots lodged a memorial with the Public Service Arbitrator and secured a determination, against which an appeal was lodged through the Chamber of Manufactures. Subsequently a court award was made. The physical staff is covered by an industrial agreement made between the union and Trans-Australia Airlines. In respect of the Australian Aluminium Production Commission, the Public Service Arbitrator has made a determination for clerks, No. 8 of 1954. What is even more important, on the general question of wages and working conditions of employees at the commission’s establishment, an agreement has been reached but has not yet been registered. The unions feel - and I think they have good cause - that the passage of this bill will be used to prevent that agreement being registered and to deprive them of conditions to which they believe they are justly entitled.

I turn now to munitions establishments. From 1916 until 1951, agreements on wages and working conditions were made between the various departments handling or controlling munitions factories and the various trade unions. Finally, by determination No. 39 of 1951, the Public Service Arbitrator made a determination which covers all employees in munitions factories.

I point out to the Minister, therefore, that the Public Service Arbitrator’s Court has very deeply considered the question of Crown employees and by either agreements or determinations has covered employees of the various authorities mentioned in the amending bills or has had some cognizance of what has been done. These proposals mean that the Public Service Arbitrator may no longer do what he has been doing. It is true that the determinations will remain in operation, but any application for a varia tion of those determinations or for a new determination must go to the Industrial Commission and not to the Public Service Arbitrator. It may be said that the last body which the employees in the various munitions factories in Victoria and elsewhere desire to have dealing with their awards and working conditions is the Industrial Commission. From 1916 until the determination was made in 1951, an agreement was always reached and when difficulties arose during the consideration of an agreement, the unions were willing to put their case to the Public Service Arbitrator. But they were not prepared to put it to the then Commonwealth Court of Conciliation and Arbitration. I think that the Minister will agree that the record of industrial relations in respect of Commonwealth munitions factories has been a very happy one, and that management and men have associated in such a way as to bring bout the very best results for all concerned. That wonderful system, which has been developed over a period of time is, by the simple amendments contained in the bill before the House, to be completely destroyed. The employees are to be forced into a jurisdiction to which they have no desire to go.

I wish now to deal with a matter that was referred to twice by the Minister in his second-reading speech. The right honorable gentleman, on two occasions, endeavoured to justify the introduction of this legislation by saying that similar legislation had been passed by a Labour government. For instance, he said -

The Opposition, when in government, recognized the desirability of Commonwealth tribunals dealing with such projects. For example, it conferred jurisdiction on the Commonwealth tribunal in relation to the Snowy Mountains scheme.

Later, he said -

The exclusion of particular classes of Crown employees from the jurisdiction of the Public Service Arbitrator is not novel. Labour, when in government, excluded employees of the Snowy Mountains Authority.

In 1949, when the Snowy Mountains Hydro-electric Power Act was passed by the Parliament, two amending arbitration bills also were passed. They dealt with subjects altogether different from the employment of persons by the Snowy Mountains Authority. The first bill dealt with trade union ballots, whilst the object of the second was to place exclusively in the hands of the Commonwealth Arbitration Court power to fix the adult female basic wage. The Snowy Mountains Hydro-electric Power Act, which was passed at that time, contains only one section which deals with wages and working conditions. That is section 24, which I shall read so that the Minister may know exactly what it provides. It is as follows: -

Nothing in this acf shall prevent the making of an industrial award, order, determination or agreement under any act in relation to officers or employees appointed or employed under this act or affect the operation of any such award, order, determination or agreement in relation to any such officer or employee.

I hope that the Minister has noted the use of the words “award”, “order”, “determination “, and “ agreement under any act”. The words “award” and “order” are used by the Commonwealth Court of Conciliation and Arbitration. The word “ determination “ is used exclusively in connexion with awards of the Public Service Arbitrator, while the word “ agreement “ may be ‘used by both the Commonwealth Arbitration Court and the Public Service Arbitrator. Section 24, in effect, gave to employees of the authority the right to take advantage of any Commonwealth act, in relation to wages or working conditions, in respect of applications to either the Public Service Arbitrator or the Commonwealth Arbitration Court.

Legislation subsequently introduced by this Government and passed by the Parliament placed the employees of the Snowy Mountains Authority within the jurisdiction of the Commonwealth Arbitration Court, with the result that the court appointed Mr. Justice Wright to deal with all matters affecting the employees of the Snowy Mountains scheme. The employees refused to accept the determination of awards by the Commonwealth Arbitration Court, and, if I remember correctly, the Australian Workers Union then issued a writ in the High Court of Australia challenging the validity of the legislation and also of the attempt to force them into the Commonwealth Arbitration Court. I understand that that writ is still before the court, and has not been dealt with. As a consequence, Mr. Justice Wright has not made any decisions or determinations regarding employees of the Snowy- Mountains scheme. Matters in relation to their wages and working conditions are being determined solely by the New South Wales Industrial Commission, and agreements have been reached between the Snowy Mountains authority and the unions. Whether the Minister believes that, by the mere passage of this legislation, it is possible to overcome the difficulties that are being experienced in respect of the Snowy Mountains scheme, I do not know. I simply point out these matters to indicate that the passage of this legislation will not have the effect for which the Minister hopes. I believe that it will give rise to hostility on the part of the employees concerned, and that it will not improve industrial relations.

As I have pointed out, it is possible that this legislation will result in depressed conditions being forced upon employees working on Government projects. According to clause 14 of the bill, for instance, the Minister may declare a project in Victoria to be a Commonwealth undertaking. No doubt, many of the employees engaged on the project would be building workers and subject to the determinations of the State wages boards. Until recently, quarterly adjustments of the basic wage have been made in Victoria. Does the Minister think that, by the mere declaration that the project is a Commonwealth project, and by forcing the employees to accept lower wages, he will be able to attract employees to such projects and improve industrial relations? If he does, I think that he is in for a good deal of enlightenment.

The conditions relating to annual leave and sick leave in the Commonwealth Public Service are entirely different from those of many workers in industry. For instance, employees under the jurisdiction of the Public Service Arbitrator working at projects which will be affected by this legislation, will be entitled to three weeks’ annual leave, whereas awards of the Commonwealth Arbitration Court provide for only two weeks. Employees of the Commonwealth Public Service receive much more generous sick pay than do employees who are subject to awards of the Commonwealth Conciliation Commissioners or of the Presidential Commission. Therefore, great difficulty will be experienced in respect of three matters. They are a lower rate of wages in the Commonwealth sphere and inferior conditions in regard to annual leave and sick pay. Therefore, any attempt to force these people into the court will cause untold difficulties for the Commonwealth. For those reasons we point out that the passing of this legislation, instead of making working conditions and industrial disputes on Commonwealth projects easy to settle, will create a number of difficulties that have not been fully appreciated by the Government.

Some of the projects mentioned by the Minister in his second-reading speech, such as the establishments at Woomera and Maralinga, the atomic reactor and so on, presumably will be declared Commonwealth projects. They are not places where people will work for only six or seven months; they will last for a very long time to come. They will be long-term projects just as the Australian Aluminium Production Commission, Trans-Australia Airlines and the Snowy Mountains Hydro-electric Authority are long-term jobs. They will all be with the Commonwealth for many years. To deprive employees on such projects, where they have constant employment and a degree of permanency, of the right of appearing before the Public Service Arbitrator is unjust and unfair. As Crown employees, they should not have conditions which are inferior to those granted by the Arbitrator to persons similiarly employed by the Crown, and doing a similarly good job for the Commonwealth.

For those reasons these bills, like similar bills introduced by the Government in regard to conciliation and arbitration, will make industrial relations more complicated than ever. The dragooning of Commonwealth projects before the Industrial Commission has already been successfully resisted on the Snowy Mountains project and is bound to be resented on other projects. The provisions of the bill are totally unnecessary; they are bound to create illwill and friction; and they will serve no good purpose. For those reasons, the Opposition rejects the measures.

Debate (on motion by Mr. Snedden) adjourned.

page 1929


Bill returned from the Senate without amendment.

page 1929


Immigrant Hostels

Motion (by Mr. Harold Holt) proposed -

That the House do now adjourn.


.- I wish to direct the attention of the Minister for Immigration (Mr. Townley) to the Altona immigrant hostel. During the last two years, I have made several visits to this hostel and I have been appalled by the conditions that exist there. The place is most unattractive, and the buildings badly need painting. The hostel is unattractive enough to live in, but it is worse if those who have to live there are obliged to reside in buildings that require painting both internally and externally. The accommodation is severely cramped and, generally speaking, the situation there is so bad that numerous complaints have been directed to me. The Ministers Fraternal at Williamstown - a most reputable and responsible body - has communicated with me and informed me that in its opinion conditions are so unsatisfactory that action is badly needed. The ministers themselves have visited the hostel and have suggested thatI should accompany them to confirm their complaints. Although there is no need for me to go to the hostel, as I have already been there on a number of occasions and know that what they have said is correct, I shall visit the place again.

The Altona hostel is worse than the one at Brooklyn, to which I have referred on a number of occasions in this House. The Minister might tell me that there is an immigrants’ advisory committee, and that it can consider these matters, and so on, but I do ask him to make this subject a matter for urgent and immediate inquiry. The ministers fraternal that I have already mentioned, is composed of representatives of all the Christian churches, and they have made direct representations to me. I ask the Minister to take appropriate action and ascertain whether improvements can be made to the hostel as a matter of urgency.


– I shall have inquiries made into the matter raised by the honorable member.

Question resolved in the affirmative.

House adjourned at 10.46 p.m.

page 1930


The following answers to questions were circulated: -

International Labour Organization

Mr Whitlam:

m asked the Minister for Labour and National Service, upon notice -

  1. What conventions and recommendations have been adopted at International Labour Organization conferences to which Australia sent delegates?
  2. Which of these conventions and recommendations were supported by Australia’s government delegates?
  3. Which of these conventions and recommendations has Australia ratified, and when did it ratify them?
  4. Which of the unratified conventions and recommendations does the Government regard as appropriate for federal action and which does it regard as inappropriate?
  5. What action has the Government taken or does it propose to take in respect of the unratified conventions and recommendations?

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

  1. The Australian Government has been represented at 35 of the 39 sessions of the International Labour Conference which have been held between 1919 and 1956. (The Australian Government was not represented at the first (1919), fourth (1922), fifteenth (1931) and sixteenth (1932) sessions of the conference.) These 35 sessions of the conference have adopted 95 of the total 104 conventions to date and 93 of the 102 recommendations. For the list of these conventions and recommendations, see 2 below.
  2. Of these 95 conventions, the Australian Government delegates voted in favour of 67, opposed eight, formally abstained on two and did not record an affirmative or negative vote on the remaining eighteen. (Until recent years formal abstentions were not recorded and it is likely that some, possibly all, of the eighteen were, in effect, abstentions. Of the 93 recommendations, the Australian Government delegates voted in favour of 72, opposed two, formally abstained on one and did not record an affirmative or negative vote on the remaining eighteen. The detailed position is as follows: -

Convention No. 7- Ratified 28th June, 1935

Convention No. 8- Ratified 28th June, 1935

Convention No. 9- Ratified 3rd August, 1925

Convention No. 15- Ratified 28th June, 1935

Convention No. 16- Ratified 28th June, 1935

Convention No. 21- Ratified 18th April, 1931

Convention No. 22- Ratified 1st April, 1935

Convention No. 26- Ratified 9th March, 1931

Convention No. 27 - Ratified 9th March, 1931

Convention No. 29 - Ratified 2nd January, 1932

Convention No. 45- Ratified 7th October, 1953

Convention No. 57 - Ratified 24th September, 1938

Convention No. 63 - Ratified 5th September,1939

Convention No. 76 - Ratified 25th January, 1949

Convention No. 80 - Ratified 24th January, 1949

Convention No. 85 - Ratified 30th September, 1954

Convention No. 88 - Ratified 24th December, 1949

Convention No. 93 - Ratified 3rd March, 1954

As their name implies recommendations are only a guide to governments and are not open to ratification.

  1. Of the 86 conventions which have not been ratified by Australia, six (Nos. 28, 33, 34, 41, 66 and 75) have been revised by subsequent conventions and are no longer open to ratification. There appear to be only sixteen (Nos. 23, 24, 25, 35, 36, 37, 38, 39, 40, 44, 48, 56, 82, 83, 84 and 97) of these unratified conventions which can be regarded as appropriate solely for federal action. Of these, eleven (Nos. 24, 25, 35-40, 44, 48 and 56) relate to various aspects of social security based on the insurance principle while three more (Nos. 82, 83 and 84) are confined in their application to external territories. In addition, two conventions (Nos. 94 and 102); although concerning both Commonwealth and the States, are in such terms that ratification could take place solely on the basis of Commonwealth law and practice. The remaining 62 unratified conventions primarily concern the States.
  2. The Commonwealth Government has been advised by the International Labour Office that the ratification of the eleven conventions relating to aspects of social security based on the insurance principle is not possible on the basis of the Australian social security system. The three conventions applying to our external Territories have all been closely examined but as the provisions prescribed differ in some respects from the law and practice operating in the Territories, ratification is not possible. It has been decided not to ratify one of the two remaining conventions (No. 97 - Migration for Employment), while the other (No. 23 - Repatriation of Seamen) is currently being examined. The two unratified conventions which concern both the Commonwealth and the States, but could be ratified solely on the basis of Commonwealth law and pratice, are being considered by the appropriate Commonweallh authorities at the present time. As regards the 62 unratified conventions which primarily concern the States, the statement which was presented to the House in October, 1953, dealing with action taken or being taken on the conventions and recommendations adopted at the 34th (1951) session of the conference indicates some of the problems. In many cases, provisions of the convention are in advance of the standards existing in one or more of the States, even if only in minor respects, and until these standards are amended by the States in question, ratification is not possible. Moreover, in some instances, the subject-matter of the conventions is the responsibility of various industrial tribunals and there can be no certainty that the standards which the tribunals may fix will be or remain consistent with the terms of the convention. However, continuous consultation takes place between the Comonwealth and the States on the possibility of ratifying further conventions and currently six are being actively considered.

Commonwealth Conciliation and Arbitration Commission Gold Passes


on asked the Minister for Labour and National Service, upon notice -

  1. Have gold passes been issued to commissioners of the Commonwealth Conciliation and Arbitration Commission, as distinct from the president and deputy presidents?
  2. To what authorities is payment made in respect of the gold passes held by all members of the commission, and how much is paid in respect of each gold pass?

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

  1. Not by the Commonwealth.
  2. No payments are made by the Commonwealth.


Mr Ward:

d asked the Minister representing the Minister for Repatriation, upon notice -

  1. In each of the years since the termination of World War I. - (a) what has been the (i) number and (ii) total cost of pensions paid for warcaused disabilities; (b) what has been the (i) number and (ii) cost of dependants’ pensions; (c) what number of applicants for the grant of war pensions has been unsuccessful: (d) what percentage of the total number of applicants has been rejected; and (e) what has been the total cost of repatriation, including payment of war pensions?
  2. What is the present number of ex-servicemen receiving a totally and permanently incapacitated rate pension?

– I am advised as follows by the Minister for Repatriation: -

Although the honorable member asked for certain figures since the termination of World War I., it has been thought advisable to supply all figures available in relation to war pensions since the commencement of war pensions in respect of that war. The figures include pensions under the War Pensions Act (now repealed) and the Repatriation Act, and all benefits, assistance, allowances and treatment under the Repatriation Act and Regulations, and benefits administered by the Repatriation Commission under the Reestablishment and Employment Act. The figures do not include such matters as servicemen’s settlement, employment, vocational training - World WarII. - and war service homes. Figures relating to such items are not available to the Minister for Repatriation. The replies to 1. and 2. of the question have been tabulated and are: -

Social Services Booklet


r asked the Minister for Social Services, upon notice -

When will a revised edition of the social services booklet be available?

Mr Roberton:

– Arrangements are being made for the printing of a new edition of the booklet “ Social Services of the Commonwealth “. It is expected that this will be available early in the New Year.

Mental Illness

Mr Cleaver:

r asked the Minister for Health, upon notice -

  1. Are the various State governments still concerned with the problem of caring for the mentally ill?
  2. What special grants or subsidies have been made by the Commonwealth to the States during the last five years to assist in the treatment of the mentally ill?
  3. What are the latest statistics for patients in mental hospitals throughout Australia and the comparative figures for the last five years?
  4. What would be the relative strengths of the total nursing service in mental institutions in the same period?
  5. Has the Commonwealth any scheme under consideration for the training of psychiatric nurses to assist State governments?

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

  1. Yes.
  2. Payments to the States under the Mental Institutions Benefits Act 1948 were as follows: -

Payments to the States during 1955-56 under the StateGrants (Mental Institutions) Act 1955 totalled £773,149. 3 and 4. The following information, which has been furnished by the Commonwealth Statistician, is the latest available: -

  1. No.

National Fitness Council

Mr Cleaver:

r asked the Minister for Health, upon notice -

  1. Has any progress been made by the National Fitness Council in its liaison with the Office of Education with a view to setting up an advisory youth committee to provide a basis for affiliation with the World Assembly of Youth?
  2. When will the annual report of the National Fitness Council for the year 1955 be tabled?
  3. Will he explore the possibility of transferring the administration of the National Fitness Act 1941 to the Office of Education, as recommended recently by me?
  4. Pending consideration of the transfer of the National Fitness Division to the Prime Minister’s Department, will he discuss with the Government the substantial increase in the vote for the National Fitness Council which was also recommended?

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

  1. As a result of discussions with the Office of Education, steps are being taken through the Office of Education to set up a Youth Advisory Panel which will function in an advisory capacity to the Australian Unesco Committee for Education on all matters concerning overseas youth affilia tions Certain selected Australian youth organizations having national and international affiliations are being invited as members of the proposed Youth Advisory Panel.
  2. The annual report of activities of the Commonwealth National Fitness Council for the year 1955 is at present being printed, and will be tabled as soon as it is available. 3 and 4. It is not customary to make a statement on policy in reply to a question.


Mr Ward:

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

  1. How many orders for the construction of merchant ships required by Australian shipping companies have been placed overseas in each of the last ten years?
  2. In what countries were the orders placed, and what was the tonnage in each instance?
  3. Did Australian shipbuilding yards have the capacity to undertake this work?
  4. Have all Australian shipbuilding yards been fully employed during the period when the ship construction referred to was undertaken?
  5. What was the reason, in each instance since the Government came to office in 1949, for the granting of approval to permit these orders being placed overseas?
Mr Townley:
Minister for Immigration · DENISON, TASMANIA · LP

– The Minister for Shipping and Transport has furnished the following replies: - 1 and 2. The vessels ordered overseas since 1946 by Australian shipping companies engaged in the coastal trade are - 3 and 4. In the period under review 47 merchant vessels were completed in Australian shipyards in addition to naval construction, ship repair work and other building such as dredges, barges, &c. In most cases the major yards worked to capacity insofar as this was possible with the skilled labour force available. From time to time some surplus capacity was available for forward ordering but owing to the higher cost and longer period of construction in Australia the yards concerned were not able to compete with quotations received by shipowners from overseas. It is anticipated that the recent decision by the Government to increase the maximum subsidy on Australian-built ships from 25 per cent, to 33i per cent, of the building costs will enable Australian shipbuilders to compete successfully for orders with their overseas counterpart and increase the efficiency and capacity of their establishments to produce more than the 25,000 deadweight tons annually which has been the average annual output from 1942 to the present.

  1. Consideration was given by the Minister for Shipping and Transport to each application for approval to construct vessels overseas. In all cases the price or delivery quoted by overseas shipbuilders was better than that given by Australian yards (even allowing for subsidy) and in some cases had construction been undertaken in suitable Australian yards it would have caused delay to the bulk carrier programme which the Government considers of paramount importance.

Mortgage Bank Loans

Mr Barnard:

d asked the Treasurer, upon notice -

  1. What is the total number of holdings in all States in connexion with which long-term finance to primary producers has been made available through the Mortgage Bank Department of the Commonwealth Bank of Australia?
  2. What is the reason for a decline in the loans from 227 in the year 1954-55 to 153 during 1955-56?
  3. How many properties have been compulsorily offered for re-sale by the mortgagee or by the department during the last two years in order to discharge the mortgage held by the Mortgage Bank Department?
Sir Arthur Fadden:

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

  1. From the time it commenced business on 27th September, 1943, up to 30th September, 1956, the Mortgage Bank Department of the Commonwealth Bank of Australia has approved a total of 4,505 loans, amounting to £11,831,787. The spread of these loans between the States was -
  2. I am advised by the bank that the decline in loans approved, from 227 in the year 1954-55 to 153 in 1955-56, followed a decline in the number of suitable applications coming forward. Id recent years the Mortgage Bank Department’s policy has been to direct its funds primarily into those projects where a substantial proportion of the loan is to be used to effect a definite and worthwhile increase in primary production or where the loan is to be used specifically for developmental purposes. Over the two-year period 1954-56, every application which conformed to this policy, and also to the statutory requirements of the act, was approved.
  3. During the past two years the bank has had occasion to offer for sale as mortgagee only one property of a Mortgage Bank Department borrower.

Cite as: Australia, House of Representatives, Debates, 30 October 1956, viewed 22 October 2017, <>.