23rd Parliament · 1st Session
Mr. SPEAKER (Hon. John McLeay) took the chair at 2.30 p.m., and read prayers.
– Will the Minister acting for the Minister for External Affairs inform the House of the present position regarding United Nations intervention in Laos, and state whether this Government contemplates taking any action in the matter?
– I can inform the right honorable gentleman, and the House, that a representative of the Laotian Government has reached New York but, as far as I am informed, no proposal has been put forward by the Laotian Government for intervention by the United Nations. Consequently, respecting the integrity and sovereignty of Laos, this Government does not propose to intervene at this stage.
– I ask the Minister for Trade a question. As Australia’s efforts to promote sales to South-East Asian countries are being hampered by their shortage of foreign exchange, will the Minister indicate whether the recent relaxation of Australian import controls will enable those countries to add to their foreign balances by increasing exports to Australia?
– It is correct that most South-East Asian countries have serious balance of payments problems. It is also true that under Australia’s import licensing system, particularly as recently adjusted, a very good opportunity exists for the nations of South-East Asia to sell more of thengoods to us. However, that will not occur automatically. As in the case of Australia when she wishes to sell on overseas markets, a job of salesmanship must be done. But many of the raw materials that are the standard export products of the Asian /countries are now either exempt from import licensing, or placed in the category of sales replacement, which means that <there is no effective limitation to the amount that can be imported. At present items exempt from import licensing include tea, raw jute, hessian and raw cotton. Items that are on an import replacement basis include coconut and copra, manila hemp, .coir fibre, kapok and spices, including nutmeg. I am sure that our friends in South-East Asia will be able to sell a great deal more to Australia if they devote themselves to aggressive salesmanship.
– I ask the PostmasterGeneral: Will .he ascertain from his officers in Canberra whether they have recently received numerous complaints of faulty telephone service, relating to the automatic dialling system and not to the trunk-line system? Will the Minister ascertain whether these faults have included an extremely high proportion of wrong numbers, of instances of noise on the line, and of crossed lines which enable conversations to be overheard? Will he ascertain whether these faults are due to defective equipment or to difficulties associated with the expansion of Canberra and the extension of services in new areas?
– I shall have the matters brought up by the honorable member for the Australian Capital Territory thoroughly investigated, and shall give him a .complete reply.
Me. TIMSON. - My question is directed to the Minister for Trade. I ask the Minister whether he will inform the House of the extent to which our export trade in coal has been re-established.
– What was a traditional, important export trade, as the honorable member knows, fell away, but there has been a very substantial revival in the last few years. Speaking from memory, I think that we have exported pretty close to £9,000,000 worth of coal in the last three years. Probably more than half of that has gone to Japan, and the rest has gone to a variety of other countries ranging from the Argentine to, I think, ‘Korea. I shall obtain more precise information from my colleague, the Minister for National Development, who has a specialized knowledge of the details of this matter, and I shall pass it on to the honorable member.
– I address to the Minister for Health a question the first part of which relates to Rastinon tablets, which are used, in place of the usual injections, for the treatment of diabetes. I know that a request has been made to the Minister that these tablets be placed on the free list of drugs. If this were not possible for the public generally, has it been found possible to allow pensioners for whom these tablets are prescribed by their doctors to obtain them free? I am sure the Minister will agree that these tablets are used for treatment only under prescription by doctors, and under their supervision, and that it would not be a case of an ordinary proprietary line taking the place of the injections. I should like to know whether any decision has been made.
Also, I ask the Minister to make it clear, if it is so, that, under the proposed alterations of the pharmaceutical benefits scheme, pensioners will not be called upon to pay for any medicines that have been prescribed free in the past.
– The answer to the first of the honorable gentleman’s questions is that, on the advice of the Pharmaceutical Benefits Advisory Committee, Rastinon has now been placed on the list under the pensioner medical scheme; so that it is now available free to pensioners. It is not at present a general benefit.
– Is it available to all pensioners or only to those with a medical card?
– To those with a medical card. The answer to the second question is that the new proposals announced by the Treasurer in his Budget speech leave the present position of pensioners unaffected.
– I wish to ask a question of the Minister for Primary Industry.
Can the Minister say whether there is any truth in reports that an embargo may be placed on the export of cattle from northern Australia to South-East Asia?
– 1 know of no proposal to place an embargo on the export of live-stock to the Eastern countries near Australia. The export trade to Hong Kong in live cattle for slaughter purposes developed in December last, and shipments to date have totalled 5,400 head.
– From what document is the Minister reading?
– 1 am answering the question, and I shall do so in my own way, with Mr. Speaker’s permission. A statement has been made that there is a likelihood that 100,000 head of cattle will be exported to Hong Kong, so I am giving figures to counter that statement. Shipments to date have totalled 5,400 head. Five shipments, totalling 2,800 head, have been made from Darwin and the remainder has been shipped f:om Derby. The cattle are shipped to a small island off Hong Kong and slaughtered. Reports from the Australian Government’s Trade Commissioner in Hong Kong have indicated that, with the exception of a small quantity exported to Macao, all the processed meat has been consumed on the mainland, chiefly by the Chinese section of the community.
– I raise a point of order, Mr. Speaker. I direct attention to the practice that has grown up under which a member asks a question without notice, and a Minister, particularly the Minister who is now answering the question, reads a written statement in reply. I have nothing against a good memory, but the Minister for Primary Industry regularly offends Standing Orders by reading these replies. I suggest that you ask the questioners in such cases to place their questions on the notice-paper.
– Order! The Minister is in order.
– I noticed a statement, Mr. Speaker, that there is likely to be damage done to the very valuable cattle export trade to Eastern ports, such as Hong Kong. Anticipating that I might receive a question on the subject, I had my figures and facts ready. If honorable members opposite are not interested in this trade and its beneficial effect on the economy of Australia, I can quite understand their attitude, because it is the unions that are threatening to try to stop the trade. Their representatives have made extravagant statements to the effect that 100,000 head of cattle are being exported in this way. Perhaps it would be better for Australia if this were true, but I am giving the figures to show that only 5,400 head have been exported to date. I only hope that we can increase this trade, rather than have an embargo placed upon it.
– I address a question to the Postmaster-General concerning the procedure adopted by the Australian Broadcasting Control Board in considering applications for additional television licences, particularly for country areas. First, does the Minister not agree that a change in procedure could eliminate a large proportion of the legalism which seems to have crept into proceedings, involving heavy expenses which are often crippling to small independent groups? Secondly, could not proceedings be simplified by asking the board to hear principally evidence from those actually making the applications, together with their technical advisers? Thirdly, should not applicants be confined to arguing the merits of their own cases and not the demerits of others, leaving the board to make its own examinations of the claims of the various applicants?
– The procedure followed by the Australian Broadcasting Control Board in hearing applicants for television licences is that laid down in the Broadcasting and Television Act. Those provisions are designed to ensure that all such inquiries are completely open, and that all applicants, or any persons who are in any way interested in particular matters, have a fair chance to present their views to the board. It is true that the last inquiry was rather protracted, but nevertheless the principle behind the procedure is, I believe, quite sound and the board can be relied upon, following such an inquiry, to present to the Government a report that will give valuable guidance in determining the final allocation of licences.
– My question, which is directed to the Minister for Social Services, concerns a pensioner constituent of mine who has occasionally to take his wife, also a pensioner, to Melbourne for medical treatment. Is it a fact that, because his pension is paid at a post office in New South Wales, he is entitled to a half fare train ticket but-
– I rise on a point of order, Mr. Speaker. I claim that the honorable member is giving information and not asking a question.
– Order! I have listened attentively to the honorable member for Farrer. He is in order and is setting a good example for some others to follow.
– This constituent of mine is entitled to a half fare train ticket, if he goes to Sydney, which is over 400 miles away.
– 1 was ruled out the other day.
– Order! You will be ruled out again if you are not careful.
– But he is not entitled to this concession to go to Melbourne, which is only 160 miles away. Will the Minister discuss this obvious anomaly with the Victorian Government in an effort to change its parochial attitude? Alternatively, will he arrange for my constituent to receive his pension 2 miles away over the river so that he can obtain this concession?
– I am indebted to honorable members for the comparative immunity from questions I have enjoyed in the last few weeks. It is most unfortunate that immunity has to be broken by the honorable member for Farrer, who is my own member in this House. I would like to say in reply to his question that some of the State governments provide travel concessions to those who are in receipt of age and invalid pensions. These travel concessions are exclusive to and within the States granting them. It would not be competent for me to interfere with any of the State governments in regard to them. Both in New South Wales and in Victoria, these travel concessions apply only to the transport systems within the respective State.
– Is the Prime Minister aware that the Liberal Minister for Transport in Victoria, Sir Arthur Warner, said that he was compelled to dispose of interests that he bad in Australian industry because of the preferential treatment given by the Commonwealth Government to overseas investors? Is it the policy of the Prime Minister and of the Government to give such preference to overseas absentee investors that ultimately they will have a stranglehold on Australian industry?
– Perhaps it is a little difficult to answer this question, having regard to the fact that Sir Arthur Warner is, as I understand, ill. However, I direct the honorable member’s attention to the fact that this is only one of a series of statements made by that gentleman which have amounted to attacks on the policy of this Government. Whether he was speaking for himself or for the Victorian Government, I would not know; but let me assume that he was speaking for the Victorian Government. I find it very hard indeed to accept a statement made on behalf of the Victorian Government attacking the investment of overseas funds in Australia while at the same time the head of that Government has devoted a good deal of his time and energy to producing that very result, and claiming some credit for it.
– I ask the PostmasterGeneral whether, in view of the very welcome decision to extend the radius of local calls in rural areas, his department has taken into account the effect that the consequent loss of units counted for trunk line calls will have on the salaries of both official and non-official postmasters.
– Yes, this, is a matter to which the department has given attention because it is thought that, as a result of the extended telephone services which will be available for rural areas under our new telephone policy, the number of work units passing through the offices will be affected. However, there is no intention whatsoever in the department to allow that to affect, adversely, either the grading, which determines salary, of official post offices or the salary of those who are conducting non- official post offices. I am not able to tell the honorable member what actual changes will be made in the determination of these matters as yet, because they have not been finalized; but the matter is being taken care of.
– In the light of the Treasurer’s statement of the principles which are to prevail in relation to the Post Office financial system in the future, I ask him: Which system does he propose to apply - the one which the Government applies in respect of airlines by supplying facilities without charge, or the one which it applies to the railway systems under which Commonwealth money is lent to State governments for use in the State systems at a high rate of interest, resulting in the strangulation of those systems?
– My colleague the Postmaster-General will be explaining, in much more detail than was possible in the Budget speech, the Government’s policy in relation to postal charges. I have no doubt that the principles which apply in that respect as a result of Government policy could, with equal good sense, be expanded in other directions.
– I ask the Prime Minister whether the Government, which has recently been called a “ no risk Administration “ and lacking in imagination in its approach to the development of the northwest of Australia, has had a change of heart. Will the Government adopt the Commonwealth-State partnership proposal advocated in this House by Western Australian members during the past two years and agree to the Ord River diversion dam scheme put forward by the Western Australian Government last week?
– On Thursday last a Western Australian Minister, Mr. Court, came to Canberra at our invitation so that we might discuss in a direct fashion the Ord River proposal in particular. I met him, with a number of my senior Cabinet colleagues, and we had. an interesting discussion. I told him, subsequently, that I would write to his Premier, which is the normal method of communication, setting out our views on the subject of the Ord River diversion and on the proposed committee or authority, and that I would put it in course of post by last evening. I did that. As the honorable member will appreciate, I do not think it would be proper for me to publish the terms of my letter until it has been received and considered by the Premier of Western Australia.
– My question, addressed to the Minister for Works, is further to a question I asked him recently relating to dismissals from the Department of Works in New South Wales. In his reply to that question the Minister stated that some reduction of staff was occasioned by the various client departments now handling their own minor maintenance work. I now ask the Minister. Is it a fact that in many cases client departments have not the facilities, equipment or trained personnel to carry out such repairs? As a consequence of this, are the client departments required to get the work done by private contract? Is it a fact that much of this contract work is done on a doandcharge basis, no tenders being called? Finally, is he aware that the substantial arbitrary dismissals from the works department have resulted in a state of low morale and insecurity among the technical staff in the department?
– The method by which departments carry out their own maintenance up to the value of £25 is a matter largely for determination by the departments concerned. In most cases the work probably would be done by contract if sufficient departmental staff were not available. The honorable member has referred to substantial dismissals. I think that he exaggerates the position. As far as I am aware, there have been few or no dismissals up to this time.
– The number employed has been reduced from 2,300 in 1955 to 1,450 at present.
– The honorable member’s figures are slightly astray. Although 1 am not aware of the precise figures, those that have been quoted by the honorable member are incorrect. Irrespective of whether or not work is done by private contract, it will still require the same number of men if it is to be done efficiently.
– Can the Minister for Trade say whether the discussions which have been taking place between seven countries, including the United Kingdom and Scandinavian countries, are aimed at the formation of a free trade area or something approximating such an area? Have the implications of these discussions for Australia been studied by the Department of Trade, and if so-
– I rise to order, Mr. Speaker. I think you will find an identical question standing in my name on the notice-paper.
– Is the question being asked by the honorable member for Barker identical with a question on the noticepaper?
– I have since studied the question on the notice-paper by the honorable member for East Sydney and I find that, as usual, he has misinformed the House.
-Order!. The honorable gentleman will ask his question.
– Can the Minister for Trade inform the House whether the implications for Australia of the discussions which have been taking place between seven countries - not six, as the honorable member has suggested - including the United Kingdom and Scandinavian countries for the formation of a free trade area, or something approximating such an area, have been studied by the Department of Trade? If so, will the Minister state what those implications are?
– The discussions to which the honorable member for Barker has referred are spoken of as the discussions between the seven countries. Seven countries outside the existing common market area have been negotiating on the initiative of Sweden. The United Kingdom has joined these negotiations, and the object is to discover whether it is possible to establish a free trade area among the seven countries in industrial goods, with some limited arrangements for consultation upon certain agricultural products of particular concern to any or all the members of the seven. This matter is under discussion. A draft possible agreement has, I understand, been reached between the officials of the countries. It has not yet been ratified by Ministers representing the governments concerned. I think a ministerial meeting is to take place soon.
The Australian Government has been concerning itself quite closely with this matter to see whether it can contribute towards its general policy of solidifying political cohesion in Europe without detriment to Australian trade opportunities. I had discussions only last week with the Minister of the United Kingdom Board of Trade, Mr. Vaughan-Morgan, and interested Australian industries. We are keeping in close touch with this matter.
– I direct my question to the Minister for Immigration. Can the Minister inform the House how his plan to allow invalid parents and near relatives of European migrants to come to Australia is proceeding? Is the first shipment of these people on its way to Australia? Will British migrants be permitted to enjoy the same privileges?
– As the honorable member has suggested, these plans have been formulated, and at this stage I can only say that the processes which he has in mind are in the course of being carried out.
– I address my question to the Minister for Health. Is it correct that a worth-while rejuvenating drug has been developed overseas? Is the Commonwealth making tests of this drug? Is it correct that Opposition members have indicated to the Minister that they are anxious to offer themselves for rejuvenation treatment?
– I do not know whether a rejuvenating drug has been discovered overseas. I hope that it has. If it has, I hope that my advisory committee will consider whether or not the drug should be placed on the restricted list.
– I ask the PostmasterGeneral whether he has been informed of, and has approved, the purchase by a foreign company of the controlling interest in a company which already owns 79 per cent, of the shares in the organization which operates television station GTV, having regard to the provisions of the Broadcasting and Television Act that not less than 80 per cent of the shares shall be owned by persons or companies resident in Australia, and that more than 15 per cent of the shares shall not be owned by persons resident outside Australia, or by companies controlled by persons resident outside Australia.
– We know all that.
– In the light of the honorable gentleman’s knowledge, will he say whether he has been informed of and has approved this very large sale of shares to a foreign company?
– In view of the general knowledge that the honorable member for Werriwa has indicated that he has of the provisions of the Broadcasting and Television Act, he will know that before any such transaction can be approved it must be referred to the PostmasterGeneral. No application has yet been made to me in this matter. If, as he states, a foreign company is proposing to obtain general control of this station, GTV, of course, in the terms of the act, approval will not be given.
– Can the Minister for Primary Industry give any reason for the substantial fall in the export price of Australian honey this year, compared to that of last year? Will he advise the House whether Australian honey is still blended in the United Kingdom or whether we have succeeded in marketing our Australian honey, with its distinctive eucalyptus flavour, as the best honey in the world?
– I would say that the reason for the fall in the overseas price of honey is the increased competition, particularly in South America and the eastern countries near Australia. Australia depends for about 50 per cent, of its honey market on exports. The price on the British market has decreased from about £140 sterling, c.i.f., two years ago to about £88 sterling a ton. to-day. Last year, the United Kingdom took 56 per cent, of our exports. West Germany has also been a fairly good market for our honey but only about H per cent, of her imports of honey come from Australia. As to blending, I think it must be recognized that buyers, in the main, demand a particular class of honey and Australian honey is blended to try to meet the conditions of the buyers of that product.
– I ask the AttorneyGeneral whether it is a fact that the effect of the High Court decision in the case Wickham versus the Illawarra County Council was to declare the Commonwealth Re-establishment and Employment Act to be invalid. Is the Attorney-General aware that the New South Wales Branch of the Returned Sailors’ Soldiers’ and Airmen’s Imperial League of Australia backed the action taken by Mr. Wickham on the advice of Barwick, Q.C., and, as a result, incurred expenses of approximately £1,000? Is he also aware that, at the time, Barwick, Q.C., expressed the opinion that it was the duty of the Federal Government to defend its legislation against challenge? Is it a fact that the Attorney-General has refused to discuss with representatives of the R.S.S. & A.I.L.A. an application for reimbursement by the Government of expenditure in which the league became involved on the advice of Barwick, Q.C.? If So, will the AttorneyGeneral reconsider his decision in this matter after he has discussed the circumstances with Barwick, Q.C.?
– I find I have one quality in common with the honorable member for East Sydney: People do not always agree with me.
– I desire to ask you, Mr. Speaker, a question which is prompted by proceedings in the House today. I ask whether you have authority under the Standing Orders and, if so, whether you will exercise that authority, to order that Ministers answering questions without notice shall remove their spectacles.
– Order! The question is frivolous.
– Has the attention of the Minister for Territories been drawn to a report by an Administration employment officer in Port Moresby that a high incidence of native unemployment has resulted from the implementation of new taxation arrangements in the Territory of Papua and New Guinea? ls it a fact that approximately 1,500 natives have recently lost employment in Port Moresby? If so, is the Minister able to say whether any plans are in hand to stimulate employment opportunities?
– I saw a newspaper statement to the general effect of the honorable member’s question. I doubt very much the accuracy of the report, and I would doubt very much whether an officer of the Administration, being a public servant, would make public statements on a subject under current examination.
– I ask the Minister for Primary Industry: Has the honorable gentleman been officially advised of a sharp increase in wool values at yesterday’s Brisbane wool auctions? If so, has the Department of Primary Industry investigated the likelihood of such a rise continuing and, if it has done so, can he give the House the view reached as a result of such departmental investigation?
– I cannot say that I was officially advised. Actually, I was present at the Brisbane wool sheds yesterday, and I suppose that that could be taken to mean that I was officially informed. Generally speaking, the tone of the market was very fair and future prospects are good when considered in combination with the statistics of consumption. In the first quarter of this year consumption overseas in all the main consuming countries increased by 15 per cent.; in the second quarter it increased by 21 per cent. That, plus the fact that last year’s surplus stocks have been dissipated, really portends a fair market for the future.
– My question is addressed to the Attorney-General. In the course of answers to questions over the last week or so the Minister for Territories appears to have indicated that tribal marriages of aborigines sometimes do not have the force of law. Will the AttorneyGeneral examine the whole question, using his constitutional power in relation to marriage, in order to see that the marriages of aborigines are treated as having the same strength of contract as those of other Australians?
– I have not considered whether it would be appropriate to investigate the customs in relation to aboriginal marriages in order to decide whether they should have the same force in law as the marriages of other Australian citizens, but I shall certainly consult with my colleague along the lines that the honorable member has suggested.
– I desire to ask the Prime Minister a question without notice. Is the Prime Minister aware that a candidate for election in the Malayan elections recently visited the village kampong where he submitted himself to the traditional test of bathing in the local stream, which is crocodile-infested, the belief being that good people go unharmed through such a test whilst others are eaten by the crocodiles? In view of the varying opinions in this country of the Prime Minister’s own qualities, is he agreeable to my proposal that he submit himself to the crocodile test?
– I shall give this important question the most earnest consideration. However, I should like to say, in case the honorable member is thinking of some reciprocal test, that he could go into a crocodile-infested stream with complete safety. The crocodiles would run away.
– My question without notice is addressed to the Minister for Immigration. As there are now many European immigrants who speak English well and who have a sound knowledge of their adopted country, will the honorable gentleman consider employing some of them in Australian immigration posts in their countries of origin? Does he not consider that such people, imbued with enthusiasm for their adopted country, could play an important part in attracting their former countrymen to Australia, and that their appointment to these posts should not, therefore, be obstructed by public service regulations?
– The honorable member’s idea, like so many of his suggestions, is thoughtful, and a good one. The honorable gentleman may be interested to know that the principle he has suggested has been in operation for some time. During my recent investigations of our posts abroad, I noticed with great satisfaction that in both Athens and Cologne there were examples of what my honorable friend has in mind, and the people concerned were performing their tasks not only with great credit to themselves, but also with advantage to the cause of Australian immigration.
– Will the Minister acting for the Minister for External Affairs indicate to the House the policy of the Department of External Affairs regarding the flying of the Australian flag over all Australian embassies and offices of Australian High Commissioners overseas? Is it a fact that no national flags are supplied by his department to those establishments with the result that Australian tourists are at a loss to understand the absence of our national flag over such buildings and offices in many countries? Is the Minister aware that the office of the Australian Commissioner is the only foreign office in Singapore that does not fly its national flag? Will the Minister give immediate instructions that our national flag is to be flown over all our offices in foreign countries thereby showing this Government’s determination to advance Australia fair?
Australian flag is flown from all Australian official residences and offices except where the office is in a large building and it is not possible to fly a flag. Stocks of flags are made available to all posts and instructions do exist covering the flying of them.
– I wish to make a personal explanation concerning misrepresentation by a Sydney newspaper. I refer to a report in the “ Sydney Morning Herald “ of Friday last, under the headlines “Ease Payroll, Not Income Tax, Says Lib.”. The report reads -
Payroll-tax should have been cut or abolished instead of income-tax being reduced, Mr. E. N. Drury (Lib., Qld.) said in the Budget debate in the House of Representatives to-day.
Mr. Speaker, that report is completely incorrect. It is the type of reporting that we in this House have come to expect from the “ Sydney Morning Herald “. My friend and colleague, the honorable member for Ryan (Mr. Drury), has not yet spoken in the Budget debate. I was responsible for the speech that is referred to by the “ Sydney Morning Herald “. While I may feel that I have been misrepresented by the report, the honorable member for Ryan may feel that he has been more grossly misrepresented.
The report in the “ Sydney Morning Herald “, referring to the problem of rising costs, states that I had said - . . the problem should be tackled before a great deal of money was spent seeking new overseas markets.
I will read to the House from “ Hansard “ what I did say in this regard. When I have done so it will be obvious to honorable members that I have been misreported by the “ Sydney Morning Herald “. As reported in “ Hansard “ of Thursday last, I said -
We are spending a great deal of energy on trade research and on establishing trade posts and advertising our goods overseas. I believe that we should be spending a similar amount of energy in our country in an effort to solve the problem of getting our costs down. Because of an unfortunate trend of thought that has developed in Australia we are not concerning ourselves sufficiently with this great problem.
If I may borrow the phrase used by the Prime Minister (Mr. Menzies), what I meant was that those things should go hand in hand. Perhaps the “ Sydney Morning Herald “ will feel disposed to correct the report that I have referred to, and will have the grace to place the correction in a sufficiently prominent position to ensure that readers will know that my remarks were wrongly credited, or debited, to my friend the honorable member for Ryan. I made the speech, and I accept full responsibility for it.
– I confirm the fact that I did not speak in the chamber last Thursday. In fact, I have not spoken in relation to the current year’s Budget, either in the chamber or outside it. In the circumstances I support the wish expressed by my colleague, the honorable member for Lyne (Mr. Lucock), that the newspaper concerned will see fit to publish some appropriate correction.
In Committee of Supply: Consideration resumed from 20th August (vide page 478), on motion by Mr. Harold Holt -
That the first item in the Estimates under Division No. 101 - The Senate - namely, “Salaries and allowances, £29,600 “, be agreed to.
Upon which Dr. Evatt had moved by way of amendment -
That the first item be reduced by £1.
.- Mr. Chairman, may I first take this opportunity to congratulate the honorable member for Griffith (Mr. Chresby) on successfully surviving the ordeal of his maiden speech last Thursday night. His speech was in keeping with the general standard that has been set by other newly elected members, both from this side of the House and from the Government side.
This Budget has been very aptly called by the “ Sydney Morning Herald “ a giveandtake Budget. In the first place, it proceeds to give tax relief to the extent of £25,130,000 a year, of which £20,000,000 is represented by income tax reductions. But then the Budget proceeds to take back £21,800,000, of which £17,800,000 will be derived from increased postal, telegraph and telephone charges and £4,000,000 from a charge of 5s. for each prescription issued under the pharmaceutical benefits scheme.
The previous Treasurer, Sir Arthur Fadden, introduced many dismal and barren Budgets, but when compared with the present Budget they could be described as exciting and progressive.
It is interesting to note that the Treasurer (Mr. Harold Holt), in his Budget speech, spoke more than 10,000 words; but to such urgent problems as housing and employment he devoted a total of 1 8 words and 23 words respectively. The age and invalid pensioners are very disappointed and disillusioned with the increase of 7s. 6d. in their pensions. With regard to housing the Treasurer said -
Construction of houses and flats ran along somewhere about 80,000 a year, which is a very high figure.
Looking at that statement broadly one would imagine that the figure of 80,000 houses would be sufficient to meet current requirements and rapidly to catch up with the backlog. Unfortunately such is not the case, as evidenced by the fact that waiting lists for Housing Commission homes and loans from co-operative building societies, particularly in New South Wales, are increasing week by week.
If we look at the housing problem realistically we are forced to the conclusion that it should be tackled on a national basis. I suggest that the Government set a target of 100,000 homes each year for the next five years. That this task is well within the capacity of Australia to accomplish is indicated by the fact that 82,000 dwellings were erected in Australia in 1952. At that time our population was 8,750,000 people, whereas to-day the population is in excess of 10,000,000. That is an increase of 1,250,000 over the last seven years, but in that time our yearly rate of home construction has dropped by 2,000. It is well within this country’s capacity to erect 100,000 homes a year for the next five years. Nobody could argue convincingly that such a plan, if it were put into operation, would lead to inflation. On the contrary, the present inflationary spiral can be attributed to the shortage of houses in Australia. We all know how in the last few years the price of homes and land has sky-rocketed.
Three things are essential for homebuilding - man-power, materials and money. We have ample man-power and materials available. What is lacking is money. There are no constitutional difficulties which would prevent this Government from increasing allocations to State housing authorities or to the War Service Homes Division. Nor is there any impediment to deter the Commonwealth Government from instructing the Commonwealth Bank to make more money available for these purposes.
– And at lower interest rates.
– That is correct. There are many thousands of frustrated, desperate home-seekers who are forced to pay substantial deposits on homes and are being bled white by some rapacious financiers who force them to pay exorbitant rates of interest. The housing problem is a m. joi social problem, Mr. Chairman, because home life influences people from childhood to old age. There is no doubt that lack of housing is a main cause of child delinquency, because parents cannot be expected to create a proper home atmosphere without reasonably normal living conditions.
Many church organizations are alarmed and concerned at the increasing divorce rate in Australia. The increase can be attributed partly to the lack of housing. At the present time, 72,000 marriages are celebrated in Australia each year, and the divorce rate is approximately 7,000 a year - almost 10 per cent, of the marriage rate. In order to substantiate the claim that the divorce rate can be attributed partly to the lack of housing, I should like to read to the committee an extract from “ Pix “ magazine of 21st December, 1957, which quoted the views of a leading authority on divorce. The extract reads -
In Australia to-day more than 60,000 young married couples are trying to cope with a national problem - how to live with their in-laws and still stay happily married. And the tragic experience of barristers, psychiatrists and divorce judges gives them no better than a hazardous chance of succeeding.
Giving judgment in the New South Wales Courts recently, Mr. Justice Dovey, one of Australia’s most widely experienced jurists in divorce, said: “ It is a sad thing to have to say, but of all young couples whose marriages break up in the first three to five years, sooner in some cases, the fact that they have been living with one or another of their in-laws is responsible in the great majority of cases “.
The tragedy lies in the fact that, in most cases, neither party is directly to blame. Both the host parents and the newlyweds are forced to cope with economic circumstances, accommodation problems and psychological developments with which neither, generally, is emotionally . . .: schooled to cope. The result is frustration, pinpricking incidents, mounting tension that almost inevitably ends in a breakdown of what, under normal conditions of marriage, would have been an affectionate . . . relationship.
I know that statement of the position to be substantially true, Mr. Chairman, from my experience in interviewing constituents. In my electorate, I am inundated with requests from people who are placed in circumstances similar to those outlined by Mr. Justice Dovey, and who plead with me to find them a home. Many young married people, some of them with two or three children, are endeavouring to raise their families in one room. Only recently, a young married woman came to see me about this very problem. She had two children and was expecting another shortly. The family was living in one room, with two single beds. The young woman broke down and cried as she pleaded with me to do something about her situation.
Mr. Justice Dovey’s observations are of great significance in relation to the Matrimonial Causes Bill 1959 - the divorce bill, as it is usually termed - and I commend them to the Attorney-General (Sir Garfield Barwick), as Minister in charge of that bill, for his careful consideration. I sincerely believe that it is the earnest desire of all honorable members, irrespective of their party affiliations, to reduce the divorce rate, and the first step is to provide proper housing.
I turn now to the unemployment problem, Mr. Chairman. It is abundantly obvious that, in conformity with Liberal policy, the Government has achieved its goal of creating a permanent army of unemployed. This is indicated by the fact that between 60,000 and 80,000 people have been unemployed for the last three years, with a total of between 25,000 and 30,000 in receipt of the dole. But the position is more serious than is admitted by the Government, particularly in the rural centres and the large country towns. It is interesting to note that, despite the increase in the cost of living over the last two years, the unemployment benefit has not been adjusted. At the present time, a single man receives £3 5s. a week and a married man £6 2s. 6d. a week. Is there any honorable member in this chamber who would suggest that £6 2s. 6d. a week, which is only 44 per cent, of the average basic wage of £13 16s. a week, is sufficient to maintain a man and his wife, with the record high prices now being paid for our essential com modities? Yet, if Australia were to be involved in a war, we should be waving flags at these people, Mr. Chairman, and telling them that they were needed by their country and that they should serve her. Is it not only right that in peace-time the country should come to their aid? This Government denies such people the right to work - their inherent right.
I should like now to deal with age and invalid pensions. I believe that no useful purpose can be served by any member of this place saying what one government paid many years ago or what this Government is paying to-day in the form of age and invalid pensions. Rather, it would be better if we were to ask ourselves two questions. The first is: Is £4 15s. a week enough? The second question is: Can the economy afford more? Those are two essential questions that are relevant. What was paid years ago and what is being paid to-day are not relevant. I suggest, Mr. Chairman, that nobody would consider that £4 15s. a week was enough to keep any person in reasonable comfort in conformity with our standard of living in Australia at the high prices at present being paid for essential commodities. We have only to consider the prices of meat, groceries, clothing and other essentials in order to see this. Age and invalid pensioners have to pay just as much for these items as do persons receiving £10,000, £20,000, £30,000, £40,000 or even £50,000 a year. So I suggest that the first essential thing to consider is whether £4 15s. a week is enough.
Secondly, we should ask whether the economy can afford more. I submit that if the Treasurer can make tax concessions totalling £25,130,000 a year, the economy can afford more for the pensioners. Some Government supporters have repeatedly claimed in this chamber that pensioners can own their own home and a motor car, can have £400 in the bank, and can receive an income of £16 10s. a week, including £9 10s. in pension. The Opposition is well aware that that is so, Mr. Chairman. It is aware also, that that applies to only a very small percentage of pensioners. We often hear various Government supporters talking about the supplementary rent allowance of 10s. a week which was introduced in the Budget for 1958-59. That, also, applies to only a small percentage of pensioners! - 14 per cent., to be exact. This is because of the very stringent means test applied to that allowance.
I should like now to discuss tax reductions, Mr. Chairman. As I stated earlier, the tax concessions made in this Budget total £25,130,000 a year, of which £20,000,000 is due to reductions in income tax. In my opinion this is one of the most unjust proposals ever to have emanated from any Australian government since federation. I consider it is a social injustice.
Let us analyse the position. It can be seen that the rich will get the best part of the loaf, the middle classes will get the crust, while those in the lower class will get the crumbs. Let us consider, for purposes of illustration, a table that was printed recently in the “ Sydney Morning Herald “. I have checked the figures contained in this table and have found them to be correct. In the case of a person receiving an income of £600 a year, the tax reduction will amount to £2 a year, or 9d. a week - just about enough to buy an all-day sucker. For higher incomes the table gives the following figures: -
A person receiving £1,000 a year as income now pays £106 5s. in income tax, leaving a balance of £893 15s. His net income is £17 3s. 6d. a week. The income tax reduction would increase his weekly earnings by 2s. a week. A person with an income of £5,000 a year pays £1,701 in tax, leaving a balance of £3,299, or about £63 9s. a week. The Government will give him another £1 12s. a week to prevent malnutrition! A person receiving £10,000 a year pays £4,618 as income tax, leaving a balance of £5,382, or £103 10s. a week. The Government is aware of the hardships that have to be suffered in order to exist on £103 a week, so this man will receive an extra £4 9s. a week, making £108. The- person who has an income of £20,000 pays £11,085 in tax, leaving a balance of £8,915, or £171 9s. a week. He is certainly having a struggle to get by on that wage! In fact, the battle for survival has become desperate, because the Government will give him another £10 13s. a week, making a total of £182.
This is what the Treasurer calls social justice, but I submit that the vast majority of the Australian people have another name for it. Finally, the table shows that a person with an income of £50,000 pays £31,084 in tax, leaving a balance of £18,916, or £363 a week. The 5 per cent, reduction in income tax will give him another £30 a week, bringing his weekly remuneration to £393 - and, of course, we realize that he is greatly in need of this extra amount.
It has been said by some Government supporters that taxpayers in the high income bracket pay a large share of income tax. The Opposition does not dispute this point. Of our 4,000,000 taxpayers, 172,000, or about 4.3 per cent., have incomes of more than £2,000. They will contribute £184,000,000 of the estimated income tax of £431,000,000 for 1959-60. But when referring to tax, one must include all indirect taxes, such as customs, excise and sales tax. These are estimated to yield £472,000,000 in 1959-60. Even the age and invalid pensioners, even the children buying their ice creams and confectionery, pay these indirect taxes. Of the £472,000,000 to be derived from indirect taxes in the coming year, the 172,000 taxpayers with incomes over £2,000 a year will contribute only £20,300,000, because the burden of these indirect taxes is distributed evenly amongst the various members of the community. Out of a total amount of £903,000,000 which will be derived from income tax, customs and excise and sales tax, the people with incomes of less than £2,000 a year will contribute £700,000,000. I agree with the Leader of the Opposition (Dr. Evatt) that this is a social injustice.
In conclusion, I wish to refer to the rapid growth of monopolies in Australia over the last few years. This is evident from the many take-over propositions by big business which have now become almost a daily occurrence. This practice is detrimental to the interests of the consuming public. Small business people and retailers are a dying race. There is very little competition in Australian business to-day. Retailers and vendors generally are not permitted to charge their own prices in order to compete for custom. Big business instructs the retailers to charge certain prices. This applies to many consumer goods, such as clothing, shoes, groceries, beer, spirits, tobacco and cigarettes, medicines and other goods sold in chemists’ shops. It applies also to petrol, lubricating oils, kerosene, paints and many other items too numerous to mention. Once upon a time a housewife could go shopping and have a chance of buying goods more cheaply in one shop than another. Those days are practically finished. Big business to-day has got the retail trade completely sewn up. The retailer who dares to buck the monopoly price-fixing system will find himself unable to secure further supplies. 1 suggest that in the interests of the future development of Australia it is essential for the Commonwealth to control capital issues, hire purchase interest rates, prices and other charges. I am looking forward to the day when the Constitution Review Committee brings down its recommendations for consideration ‘by this Parliament. I hope and trust that the committee will recommend that the Commonwealth be granted power to control these things. I am sure that such recommendations would be given earnest consideration by the Parliament, and I hope that proposals along these lines will be submitted to the people by way of referendum.
.- All members of this Parliament share the concern expressed by the honorable member for Watson (Mr. Cope) about a number of social .problems, .particularly that of housing. There is nothing pleasant .about being without a house, and housing remains a serious problem, particularly in Sydney, and, to a lesser .extent, in Melbourne. .On the .other hand, .the extent of the progress that has been made is quite notable. We have just .completed a -record quarter for housing construction. -Considering the black-lag remaining after the war, .and allowing for the extensive immigration programme, Australia’s record in the field of housing is a very creditable one. In any case, the responsibility for housing does not by any means rest solely on the Commonwealth Government. In fact, the Commonwealth’s responsibility is only minor.
In Sydney, where the housing shortage is most acute, a great deal of the blame for it may be attributed to the effects, direct and indirect, of the landlord and tenant legislation. If the honorable member for Watson wishes to find a solution of the housing problem, I suggest that he address himself very carefully to the matter of reforming the landlord and tenant legislation in New South Wales.
We all share the honorable member’s feelings on the question of unemployment. Unemployment is always unpleasant, but we must get these matters in perspective. A total of between 60,000 and 80,000 persons unemployed is extraordinarily small for a country of the size of Australia. Currently, only about 1.6 per cent, of the work force is unemployed, and not all of these persons could possibly come within the compass of the Commonwealth Government’s activities. Special problems add to unemployment in certain places. General measures adopted by the Commonwealth do not relieve unemployment on the coal-fields, and a particular problem also arises in Western Australia. Other pockets of unemployment are unfortunately almost inevitable. In any industrial progressive society, a degree of unemployment is almost inevitable, and it would be interesting to know what number of employable people have been out of work for a considerable time, because that is a serious problem that we would .have to worry about if it were shown to exist.
– What about the 70,000 persons who registered?
Mr. -BURY.- That number is spread over the whole of Australia. In fact, it is a smaller proportion than that of any other country in the western world. This .does not make unemployment any more pleasant, but it is essential to get the matter in perspective and to realize how small is Australia’s .unemployment problem when compared ;to that of other countries.
– It is not small to the fellow who is out of work.
– I am glad that the honorable member has chosen to repeat my remarks. I entirely agree with him, and I have already made the same comment twice.
The honorable member for Watson referred to social service rates. It would be nice to make these payments higher, but unfortunately most honorable members opposite are concerned not with increasing productivity or increasing national wealth but only with splitting up the cake. If over the years we are to improve the rates of social services, the fundamental problem to tackle is that of becoming a more prosperous country and of increasing general productivity and living standards. Only from those circumstances will higher social service payments eventually flow. The honorable member referred also to the reduction of 5 per cent, in income tax. Labour has a curious notion that whereas increases of income tax should be on a progressive scale, reductions should be on a flat basis. The fact is that, within the general context of taxation concessions when justifiable, a reduction in the general rate of income tax is long overdue.
Monopolies and take-overs were mentioned by the honorable member for Watson. In many cases, these take-overs do not result in the creation of a monopoly or in higher prices. They result in larger scale operations and greater efficiency. However, information on this facet of our economy is lacking, and in any event this Parliament has no effective power with which to act. Whatever views honorable members may have on this subject, therefore, it is entirely irrelevant to expound at great length on them here.
The main feature of the Budget is not so much that it is a Budget for expansion or stability, as has been alleged by the Treasurer (Mr. Harold Holt), but that it reflects a further enormous increase in Government expenditure. Last year’s figure is increased by almost £100,000,000. and this determines the rest of the Budget. It limits tax concessions and action in almost every direction. It should be noted that these matters fall within the control of the Treasurer only to a very limited extent. The Budget is very largely the reflection of every activity of government, but what ever the Treasurer or the Government may do, they have no control over a number of very potent factors. One, of course, is the basic wage, and a very large part of the increase in expenditure this year, directly and indirectly, is due to the increase in the basic wage.
When the basic wage is determined, the court indulges in long and elaborate procedures which we cloak with a sort of phoney legal aura. We suggest that the result is reached after careful sifting of the facts by very grave and weighty authority. One has only to read the judgments that emerge after the long deliberations to realize that fundamentally the decision is just a rough stab. But that rough stab finds its way around the whole of our economic life. In these circumstances, I personally feel that from the viewpoint of stability the cash deficit of £60,000,000, which has been lightly mentioned, may be a very mistaken prediction of events to come.
This margin engenders many other changes in the economic system. If in fact the Government does pump a further £60,000,000 into the system and perhaps raises some of its loans in an expansionary fashion, this indeed will not really prove to be a Budget for stability. It certainly is not a Budget for retaining value in the pound, and if we scrutinize the Treasurer’s speech we find that he makes no such claim. In fact, there is at the moment no possible political basis of support for the kind of measures that would be necessary to maintain the value of the pound. It is indeed a sobering thought that if any person who takes one of the bonds, which no doubt the Government plans to sei! in the immediate future, adds the current rate of interest to the value of the bond, at the end of another year he will be very lucky if his purchasing power represented by this total amount has even stood still.
Assuming that tax cuts are in order, it would seem that the Treasurer has chosen some very good ones from the point of view of the future development of the economy. The provision for private and small companies to place more of their profits to reserve before being subject to penal rates of taxation is a good one, and I hope that the committee which is about to review taxation generally will look further at this problem. This is the one way in which the small companies can grow and thus help to keep our economy dynamic. The withholding tax measure is surely long overdue. Since the policy of this Government - and it is a wise policy - is to add to the resources that are available for investment so that our economic structure will improve, it is obvious common sense to have the form of taxation that is the simplest and thus in many ways the most attractive to a foreign investor. The fact that a choice between withholding tax at a simple rate of 15 per cent, or 30 per cent, is now available to the foreign investor, as well as the old system alongside it, will undoubtedly attract to Australia a good deal of investment which is now deterred by the complexities of meeting our taxation requirements.
The honorable member for East Sydney (Mr. Ward) read a most impressive list of successes of company after company in Australia whose profits are increasing year by year. I hope that overseas investors will take note of that part of the honorable member’s speech in which he advertised the successes of Australian companies in a way which few could do. He might have added, though it would not have suited his purpose, that these companies pay the highest wages in the world outside North America. We can only hope that some of the people who live in his area and work for some of these companies may draw conclusions different from those expressed by the honorable member for East Sydney.
He referred, in particular, to the old chestnut of General Motors-Holden’s Limited. It is a curious thing to recall that the establishment and operation of this company, which is one of the outstanding industrial successes in Australia, should be so shied at by members of the Australian Labour Party, because it is their own child. It was they who made the arrangements and eventually induced General MotorsHolden’s to come here. I daresay that a number of honorable members now sitting opposite would not, at the time, have had General Motors here in any event. But the fact is that the General Motors-Holden’s arrangements which prevail to-day are, in fact, the child of the last Labour Government. One would think this could be viewed with pride because it has been so successful. Year by year profits have been ploughed back to build a much bigger industrial organization in Australia and provide more employment for Australians. Apparently because it is so successful it is being marked out for abuse and dragged down. Whether or not honorable members opposite prefer the arrangement of keeping all the equity in American hands, the policy of this Government is to encourage foreign capital here to take Australian directors and invite Australian capital, and people who grumble at this arrangement should be prepared to say what else they would do about it. It is no good bleating about the profit situation unless you say what measures you propose to take, and if you take measures which interfere with the course of foreign investment in Australia you will retard the economic growth of this country and cause a considerable declension in future investment and industrial standards which would otherwise be attained.
The Treasurer referred also to the increase in import ceilings, which is another excellent piece of good news, and we hope that this will be reinforced by lifting wool prices. But it is peculiar in one effect. We have now lifted unlicensed imports from dollar areas to 90 per cent., 10 per cent, still being subject to discrimination. The Minister for Trade (Mr. McEwen) has frequently asserted on the floor of this chamber that these restrictions are not imposed for other than financial reasons. It will be interesting to know, since the United States of America has suffered a dollar deficit with the rest of the world apart from a flicker at the time of the Suez affair over the past five years, why there should be a discrimination against importing from the dollar area items such as cricket bats and cricket balls. Apparently these goods cannot be imported from the United States of America with the same freedom as from the rest of the world. I should hope that the Minister for Trade might consult with the Prime Minister (Mr. Menzies) on this particular item and also the item of Cuban cigars which also appears in the list of goods from the dollar area against which it is necessary to continue to discriminate.
I now turn to’ Post Office charges about which the Leader of the Opposition (Dr. Evatt)’ said some rather curious things. 1 have been doing my best to follow his arithmetic. Apparently he seems to think thai with1 the new dispensation the Government might achieve a profit of 30 per cent, on Post Office turnover. That would be a magnificent result if ft Were possible. The political history of the Post Office is one of some declension in financial respects. From federation to 1945 the Post Office balanced its accounts, all its services were recouped in the charges made and it not only paid interest on capital provided for it but also repaid nearly all that capital. As at 1945, the amount of capital used by the Post Office still not amortized was a very small figure. Bat since 1945 there has been an’ unfortunate reluctance on the part of governments to increase charges comparable with the cost of providing services. As an example, since 1945 the first-class letter rate has increased by 60 per cent., the rate on commercial papers by 133 per cent., the local metropolitan telephone charge by 100 per cent, and the trunk-line telephone charge by from 110 per cent, to 140 per cent. As against this, the average weekly earnings in the last quarter of 1959 were 190 per cent, higher, and over the same period wage rates for postal and telephone employees rose by from 175 per cent, to 250 per cent.
If it comes as a severe shock to some people that these charges are now brought more into line with current realities, surely the principle should be accepted that Government business ought to be business and not a social hand-out. The PostmasterGeneral (Mr. Davidson) and the Treasurer are to be congratulated on their political courage-whatever temporary mistakes may have been made in imposing charges on some sections before they could adjust themselves. It can at least be said for those people that for a very great number of years they have been enjoying services and privileges well below cost. Surely, if we are to run this country properly we ought to put it on a businesslike basis. The telephone section of the Post Office, as at the middle of last year, 30th June, 1958, was paying less than £800,000 interest on a capital sum of £330,000,000. Can any honorable member imagine any business in this country - other than a completely hopeless business - which could not make a huge profit on an investment of that amount? It is to be hoped that the committee which is to investigate this matter will bring out the present weaknesses in the’ Post Office accounting system and point to those sectors of the organization in which a greater degree of efficiency is possible. Undoubtedly the people would accept increased charges with a> better grace if they were assured that the operations of the Post Office, particularly those spectacular operations performed by linemen, were being conducted on the most economical basis possible. The Postmaster-General and the Treasurer, who no doubt were the main parties in this exercise, are to be congratulated on trying to- bring the Australian people face to face with the reality of the situation.
A committee will be appointed shortly to review taxation. I hope that the committee, in its deliberations, will give very close attention to the importance of encouraging saving, which is essential if this country is to increase its immigration programme and provide the public and private facilities so necessary in the absorption of a growing population.
The Government should look closely at the possibility of establishing a national superannuation scheme which will pay pensions without regard to a means test after having first collected the funds necessary to implement the scheme, having regard to our steadily increasing population. The money collected could be invested and, over the years, it would enlarge the basis of the economy through the ordinary process of investment. Thus a fund would be established capable of meeting the calls upon it in future years. The means test has become more anomalous and more harmful to savings each year, and regularly we see the ignominious picture of tremendous agitation for increased social service hand-outs. The means test also leads to a great deal of subterfuge and evasion of various kinds. If the community is to become reconciled to a growing pension bill, surely a progressively greater proportion of the pension should be provided without the means test being applied. The only way to do this is to establish a separate, large-scale fund which will increase the economic apparatus of the country m the process, and thus make possible eventually greater superannuation payments.
This year we seem to be at the beginning of another boom period. Let us hope that our wool prices continue to rise, and that the small degree of laxity displayed this year in public finance will not make our tasks in the future more difficult. If there is one easy mistake that a government can make in economic affairs, it is to be afraid to seize the nettle soon enough.
.- The hopes and fears of the nation were centred on the Budget speech of the Treasurer (Mr. Harold Holt), and the presentation of the Budget and the accompanying documents. In his speech the Treasurer confirmed the fears of those who possess elementary political judgment, and disheartened and dismayed a great number of people who had awaited the presentation of the Budget in the hope that relief would be given to the many needy sections of the community. The blow delivered by the Treasurer was particularly cruel and unjust in the case of the age and invalid pensioners, people in receipt of other pensions and those poor unfortunates who are unable to find employment even though they are anxious and willing to work. It is a great tragedy that unemployment should exist in Australia, a country which has so many challenging tasks awaiting a government worthy of the name.
The Government has given no thought or consideration to the needs of the family man - the man who is in fact building the nation. It is true that we are playing a significant part in bringing to Australia people from other parts of the world. A vigorous, developing and expanding migration programme appeals to me because I believe that in the 3,000,000 square miles of our land we have abundant opportunities for those people willing to accept the challenge. However, in extending opportunities and facilities to induce people in other parts of the world to come to Australia, our own people should not be neglected. The people who should be given the greatest consideration are those who pioneered the trail - the pensioners; those who won for us a heritage and a way of life which we enjoy in this land; those who developed our industries; those who participated in two world wars; and those who suffered the agonies and terrors of an awful depression. They are the people who are entitled to just treatment by this Government. Many people thought that this year, at least, having regard to increases in the basic wage and in the salaries and allowances of members of Parliament, those in such dire distress would have been given a reasonable deal. But they were not.
Not one penny piece has been added to the family income in the form of child endowment; nothing has been done to reduce sales tax on items that affect the family man; nothing has been done to alleviate the distress of those people who are building up this nation and providing our bulwarks of the future; and nothing has been done about the pay-roll tax which has such an effect on local government and the mass of the people. However, a charge of 5s. will be made for all medical prescriptions. The Government at least has been honest in this matter, because it has retreated from the pretence of free medical and hospital treatment. It now compels the people to pay for their prescriptions and to make their contribution to the Government coffers.
When we were in office not so long ago, we pioneered the concept of a welfare state which would provide free medical and hospital treatment and pharmaceutical benefits. The Opposition of that time which had the same politics as the Government of to-day incessantly complained that certain preparations had not been included in the formulary of free medicines.
Several matters were mentioned by the honorable member for Wentworth (Mr. Bury), who, having concluded his speech, apparently has now left the chamber. I shall not attempt to deal with his dirge of dismal and unenthusiastic support of the present Administration. He spoke of capital inflow into this country and complained that there was no effective power in the land to tackle this problem. If it is true that we lack effective control over the inflow of capital into Australia, and if we are surrendering to overseas companies, controlled and managed from abroad, the industrial enterprises that are the very economic heart and life of this country, is it not about time that legislation was drafted to protect the Australian economy and to ensure that Australian industry will be controlled by the people of Australia for the advancement of this nation?
I would suggest that, amongst other things there is one form of control - capital issues control - which this Government has abandoned and which, if the Government were courageous and prepared to act on behalf of the people, could once again be introduced for the purpose of protecting those who require protection.
It is not such a Iona time ago since the honorable member for Mackellar (Mr. Wentworth), apparently with the blessing of the Government, sought legislation providing that 51 per cent, of the shareholding of companies engaged in radio and television should be held by people domiciled in this country. It seems to me that this principle could well be applied to the whole of the economic life of this country in order to ensure that Australian industry shall function in the interests of the people of this country.
The outflow of money from Australia is a serious matter. I suggest that the time may come when this nation will be sorely pressed to find the money necessary for expatriation from this country to pay shareholders overseas. The honorable member for Wentworth referred to General MotorsHolden’s Limited. The Australian Labour Party makes no excuse for having made it possible for General Motors-Holden’s Limited to develop its fine industrial organization here and to provide an Australian car - a people’s car. Unfortunately, the car is not being sold at the people’s price, although we were led to believe that it would be.
There is probably not one industrial undertaking in this country which does not owe its beginnings to Labour’s protectionist policy. Earlier, the anti-Labour forces had pursued a free trade policy. They had always favoured free trade. It was the Labour Party’s protectionist policy that made possible the development of Australian industry.
Under the international income tax agreement of 1953-58, ordinary dividends of £ 5,500,000 in 1957-58 and of £7,500,000 in 1958-59 were paid to the American shareholders of General MotorsHolden’s Limited. A total of £13,000.000 in two years! While the country is being bled in this way, the Treasurer, the Prime Minister (Mr. Menzies) and other Ministers and representatives of the Government tour the world in search of new loans which would further increase our overseas indebtedness. This is an extraordinary state of affairs.
General Motors-Holden’s Limited was pleased to commence operations in this country when the company tax payable was about 7s. in the £1. To-day, under the international agreement, it is only 3s. in the £1. As General Motors-Holden’s Limited was apparently prepared originally to pay 7s. in the £1. 1 think that there should be a review of the matter. The proposal of the honorable member for Mackellar that 51 per cent, of shares in radio and television companies should be held in Australia, could well be applied to other companies.
Before the 1953 agreement, the tax payable by shareholders of General MotorsHolden’s Limited on the £13,000,000 paid in dividends in the last two years would have been a little over £4.500,000. As the company now pays only 3s. in the £1 the amount of tax payable is only £2,000,000, so that the Government has, in effect, given away £2,500,000.
I do not wish to take up very much of my time in canvassing that matter at this time. There are other matters to be considered. The Budget has won faint praise from the press and scorn from the electorate and from all responsible people. Read the columns of the daily press! Industrialists, the Chamber of Manufactures, employers’ organizations, the Australian Council of Trade Unions, Mr. Ricketts of the Australian Automobile Association, and leaders of a variety of other interests in the community have all declared their opposition to the type of legerdemain which constitutes this give and take, misleading Budget. It will undoubtedly profit some cartels, monopolies and combines, but it will certainly leave the mass of the people worse off, in the final analysis, than they are at the present time. This legerdemain of concessions and charges is a cruel blow to those on small incomes. Taxation benefits have not been given to the extent indicated by the Treasurer.
This has been a lucky Government. To-day, the Minister for Primary Industry (Mr. Adermann) preened his political feathers because there has been an increase in the price of wool. But that has not been due to the administration of the Government. The Government has made no contribution at all to that circumstance. Indeed, if the price of wool has been affected at all by the actions of this Government it has been depressed, not enhanced. Despite maladministration and the horror Budgets of the past few years, the Government has been able to come through unscathed because, as the price of one commodity has fallen, the price of another has risen.
– What about increased production?
– By all means, let us pay tribute to those engaged in primary production who have increased their output. Many farmers have increased production despite direct opposition by this Administration which refused to find them adequate finance to fence their land, improve their pastures, or otherwise develop their properties as they would have liked to develop them. The fact that many farmers have increased production is to their own credit, not to the credit of this Administration.
What sort of Budget is it that has been presented to the Parliament on this occasion? Surely it was never carefully checked! Surely it was never closely examined! In the matter of defence, we find the usual pattern - a proposed vote of about £192,800,000. Over a period of years, approximately £200,000,000 a year has been voted for defence whether we were at war in Korea, whether there was a threat of war in the Middle East with Nasser, whether there was a possibility of conflict in South-East Asia, whether some new international situation was likely to arise, or whether we anticipated peace for the next ten years. The pattern of defence spending of this Government is to provide £190,000.000 or £200,000,000 annually whether it intends to buy one Centurion tank or 100 Centurion tanks, one aircraft carrier or five, one nuclear submarine or none. It does not matter whether the Go vernment proposes to have intercontinental missiles and the most modern aircraft or those of the Wirraway type for air defence; it still persists in finding a defence vote of £190,000,000 or £200,000,000. Surely there should be some flexibility in our expenditure for defence. Surely the pattern is not so rigid and so cast-iron that the vote is to be around £200,000,000 a year whether we have a full-scale defence plan or are tinkering with some makeshift arrangement. Surely it matters whether we have birthday ballots for national service trainees or take all our eligible youths into the forces, and whether we have a brigade group or are actually engaged in war. It is about time this Parliament took action to ensure that positive steps are taken to bring the Budget figures into proper relation with existing circumstances and conditions.
The Postmaster-General’s Department is a classic case of carelessness in Budget preparation. I want to attack the Government most vigorously on this score but before doing so, I remind the committee that no words of mine can express fully the resentment of the people of Australia at the outrageous increases in postal, telegraph and telephone charges which are to be imposed. These increases are particularly obnoxious to people who live in country districts and to the provincial press, sporting bodies, church organizations and cultural organizations. Everybody who uses the facilities of the PostmasterGeneral’s Department is to be slugged so that additional money can be found for this Government, despite the fact that that department has been earning large profits, is giving additional services for all sorts of other departments and, particularly in the telephone branch, has consistently refused to give services to great numbers of people who have been anxious and willing to get them. This is an amazing situation. Here we have the only governmental business in Australia which is making a profit out of its sales of service, and yet it refuses to expand its services to the community.
However, that is not the point I want to develop. I wish to refer specifically to bad budgetary practices. Ten days after the presentation of the Budget papers by the Treasurer and the reading of his Budget speech, the Prime Minister rose in this chamber to make this admission -
The proposal had been to increase this charge to 5d. for each 8 oz. with a minimum of 2d. for each article. We have been convinced by the evidence put before us - and I think we were all a little in the dark on this matter until these representations were made very broadly - that many of the small publications produced by a large number of community organizations would be seriously disadvantaged by the retention of the minimum charge of 2d. per article.
Despite that admission of faulty preparation of the Budget and a complete disregard of the public welfare, the Prime Minister is not going to correct this discrepancy permanently. Oh, no! He will simply ease the burden on those who will be adversely affected until March next year. Then they will have to submit to the full application of these new and increased charges which have been proved beyond a shadow of doubt to be quite unnecessary and unwarranted and against the best interests of the people. Many country newspapers will disappear. How can some of them, which are sold for only 3d. a copy, be circulated throughout the country districts if these new charges are continued? I say to the members of the Australian Country Party in particular: If there is no movement or animation in the Liberal Party section of the Government, it is up to them to speak for rural interests and do something about these charges. The worst feature of these proposals is the failure of the Government to examine the situation carefully and take action to correct it. The ill-considered nature of the Budget is best illustrated by the proposals to which I have referred. Serious hardship will be inflicted by these increased rates. It is not enough simply to defer these crippling charges until March. Positive action should be taken to ensure that the proposals are defeated. The PostmasterGeneral’s Department must be instructed through its Australian Country Party Postmaster-General, to put its house in order and, if necessary, raise the funds to run the organization and give the services that are expected by the people. The department is not expected to make substantial profits for the Government. It is expected to render a service to the people and to develop its services.
Ministers have boasted about the inflow of capital. This matter of overseas funds requires further consideration by the committee and the Parliament. The Prime Minister and the Treasurer have made great play on the fact that there has been a substantial inflow of money into Australia. But what sort of inflow has it been? It has been hot money for take-overs of old established businesses in Australia such as merchandising houses, Mount Isa, Mary Kathleen, Weipa bauxite deposits, hire purchase, debentures and such like. But what is the story when it comes to money for the basic development of Australia? The Prime Minister himself, as well as other members of his Government, sought money overseas from the World Bank for Reconstruction and Development and other sources to raise funds for the reconstruction of the Mount Isa-Townsville railway. May I say at once that I reject the view that we need to go out of Australia to find finance to build a railway in Australia. All the things that are necessary for work of that sort - food, clothing, material, sleepers, rails and everything conceivable - can be won from the soil of this country.
We should not be seeking funds overseas; but that is not the view of the Government, the Prime Minister or the Treasurer. They went in search of money for this railway, but although they have proclaimed from the housetops that money is flowing into Australia because of great con. fidence in it, no funds were available overseas from the World Bank or any other authority for the Mount Isa-Townsville raiU way line. On this matter, the financial editor of the “ Sydney Morning Herald “ wrote in May last -
Mr Isa is national development, the very essence of it. If the company can get better rail transport and enough staff, it can double its output of exportable metals in a few years.
If I choose to set up a factory to make sugar floss candy here in Sydney, contributing nothing to development, there will be no problem about houses for the staff, water supply, power or transport. These things will be laid on, mostly by Government authorities, and large amounts of tax revenue will be applied to smooth the way.
But when it comes to developing our nation and building an important rail link like that, the Government wanders round the world seeking an overseas loan, instead of getting on with the job as Andrew Fisher, a Prime Minister of other days, did by completing the trans-continental line to link the east and the west of this nation. This Government will not get on with the job. The right thing would be to get on with the work of constructing a standard gauge line to run right through from Mr lsa to the Northern Territory, linking Darwin with the east, jiving the people in industry in Darwin an opportunity to use either Darwin or Townsville as a port, and making available to many parts of our north the materials to be had in Queensland, which are so necessary for developing complementary industries. It is most important that that should be done.
The Government’s sale of public assets is another matter that should be discussed on some future occasion. For instance, the Government recently sold publicly-owned ships that could have been used in the development of this country.
Before concluding my speech I should like to deal with the position of the pensioners, and with the needs of Australian families in general, both of which subjects require further consideration. The Government has not done sufficient for either of those classes of people. The Australian public has been badly let down by this administration. I am thinking particularly of the matter of scholarships, and the need to assist our young people with the kind of education that they require. Many of our young people have little hope of getting a full education unless their families have an income large enough to enable them to keep the children at school. No system of education, however good, Mr. Chairman, can meet the situation adequately unless there is in the hands of parents sufficient money to enable them to keep their children at school. Good schools, good teachers, good teaching aids, are all required and are most necessary; but what is necessary above all, is enough money in the hands of the parents to enable their children to avail themselves of opportunities for education. Many a brilliant young boy or girl is obliged to leave school and go to work in order to supplement the family income. That is a tragic and terrible state of affairs. But we can expect little from this Government to help to alleviate that condition.
At the end of the Budget speech the Treasurer said that the nation was strong because of the success of the Government during the ten years it had held office. I submit to the committee that the nation is too strong “even for this bad Government to wreck it. The Government has imposed financial restraints. It gave us the horror Budget and the little horror Budget, and it has instituted many forms of controls and restrictions. It has imposed heavy taxes. But the people of Australia have been stronger than the Government, and the people of Australia will win through.
I am concerned, not for those who have the vigour and the capacity and the flush of youth; I am concerned for those who have done their job for this country and are now entitled, in the declining years of their lives, to help, support and consideration from the rest of us. The time allotted for a speech on the Budget is too short to permit reference to be made to all aspects of the case for these people, and I can only hope that when the social services measures come before the Parliament more reasonable, careful and just consideration will be given to all sections of the people, especially those who need the protection of the Parliament and the assistance of a government that is, supposedly at least, functioning on behalf of all of the people.
There are many other matters that I want to discuss now, but time is against me. So I conclude by saying that the Budget is a great disappointment. Little hope is to be found in it for the mass of the people. There is much disappointment and disillusionment and this, in the foreseeable future, will leave the way open for the Labour Party, with its traditional character, its leadership and courage, its placing of the Australian people first, to strike a blow fairly and evenly for all sections of the community.
.- I do not share the concern of the honorable member for Macquarie (Mr. Luchetti) regarding the attraction to this country of overseas investments, because I can recollect that Queensland started off, just 100 years ago, with 7id. in the safe, which was stolen over night, and Queensland had to rely on overseas capital to start it on its way again. However, as a country member I am most concerned with the additional postage charges forced on the Postmaster-General’s Department by this Government, which are outlined in the Budget. I feel that, apart from the way in which these increased charges will affect country people - and they will affect them more than any other section of the community - a rather serious factor is the departure from a principle, in that a government utility is to be used to produce revenue to the amount foreshadowed in this Budget. I believe that in the circumstances it would have been far better not to have provided for income tax reductions and to have left postal charges at the current level. After all, 1 understand that the Treasurer (Mr. Harold Holt) expects the revenue to lose £20,000,000 as a result of the proposed tax concessions, and to gain £17,000,000 from the proposed increases in postal and telephone charges. Unfortunately, these increases of postal charges will rest very heavily on people in the lower income groups. The few shillings which they will gain each year from income tax concessions will soon be taken away from them in increased postal and telephone charges, whereas the people in the higher income brackets will be able to offset these new commitments, to a great degree, with increased deductions shown on their tax returns.
The most obnoxious of all the proposed increases, from the point of view of country people, is the increase proposed in bulk postage rates, which will almost spell disaster for most of our country press and for periodicals which serve the primary producers’ organizations. They will be able to continue in existence only by passing the increased charges on to their subscribers. I think that any one who is a primary producer realizes that primary industry cannot accept any further charge.
However, 1 think the Budget is a very good one, spoiled only by the two matters that I have mentioned. During the ten years in which the Government has been in office Australia has seen the greatest development in its history. Half a million people have been added to its work force. There has been a tremendous increase in public and private investment, and I am pleased to see that overseas investment in Australia is continuing. Our very future depends on the amount of capital which we can attract, because, after all, we ourselves have not all the money needed to develop our tremendous resources.
Honorable members opposite seem to be greatly concerned about the profits taken by some of the great companies, in particular General Motors-Holden’s Limited and Broken Hill Proprietary Company Limited. But nobody on the Opposition side seems to mention the contributions of those companies to the Australian economy. I have figures here from General Motors-Holden’s Limited. That company spent £63,399,000 on materials, parts, components and services. That money was distributed in the community. The company paid £21,717,000 in wages to a little more than 18,000 employees. It paid £12,684,000 in taxes and dues to the Commonwealth Government. It retained £7,766,000 for further development, which will mean more jobs for Australians. A total of £7,471,000 was paid to shareholders.
– Where were those shareholders?
– Probably in America, but for every £1 that they made out of us, we made £10 out of them. On that basis we did very well indeed. It has been suggested that General Motors-Holden’s Limited is charging too much for the car that it produces. But I submit to honorable members that if the price of the Holden car were reduced, the rest of the motor industry would be faced with disaster and widespread unemployment would prevail. We need these other people who are producing cars in Australia. We need competition. General Motors-Holden’s Limited is a wonderful example of a company able efficiently to produce an article that can be exported overseas. Unfortunately, our secondary industries are in the main very inefficient. We have two great companies in this country that can compete on overseas markets - General Motors-Holden’s Limited and Broken Hill Proprietary Company Limited. Broken Hill Proprietary Company Limited produces the cheapest and best steel in the world. But for that steel, our secondary industries would fall flat on their faces. If we continue to encourage overseas companies to invest in this country we will progress. That is the only way that we will progress.
I am pleased that the Prime Minister (Mr. Menzies) has recognized the importance of attracting overseas capital to Australia so that we may develop and expand.
In his speech on the Budget the Prime Minister said - . . without great public works for the development of power, water supply and transport there could not be the private expansion, the investment of private capital, that we have seen going on over the last ten years.
We need ail that capital to develop undertakings such as the railway line from Mount lsa to Townsville. When that line is completed it will enable the Mount lsa company to produce sufficient lead, zinc and copper to earn more export income than our wheat industry earns at present.
– Could the Commonwealth Bank not have financed the building of that line?
– No. An electrolytic copper refining plant has been established in Townsville and is now refining copper rods and drawn copper wire. It is good to see this development of secondary industries, particularly in the northern parts of Australia where population is so vital. We have a tremendous bauxite deposit at Weipa on the northern tip of Cape York Peninsula. Millions of pounds are needed to develop that deposit, which is probably the most extensive in the world. The refining of this deposit will require more electricity than is at present developed in the whole of Queensland. We need roads and railways to develop our north, and to enable us to bring our store cattle from the breeding areas of the far north to the fattening areas further south, which include the 10,000,000 acres of naturally irrigated land in the Channel country of western Queensland. If transport were available, those store cattle could be brought from the breeding stations at an optimum age to enable the best quality beef to be marketed. Suitable transport would also enable cattle to be removed from drought-stricken areas. In western Queensland alone in the last year or so millions of pounds have been lost, including the loss of natural increase. The drought is still continuing. Suitable transport would mean a tremendous change in the economy of the breeding areas of the far north. By removing cattle at, say, one year old, a greater percentage of breeders could be run on those properties and thereby the annual turnover of store cattle would be increased. The present practice is to keep them until they are two to three years old so that they can cope with the difficult droving routes to the south. Increased investment from overseas could help to bring about this very worth while change.
Australia, because of her stable government and her healthy investment climate, has an excellent opportunity of attracting the tremendous funds that exist in Europe and America. South Africa probably has greater resources than Australia, but owing to the unfortunate increasing racial tensions in that country it is very doubtful if overseas capital will be attracted there. The same applies to South America, which is a country of tremendous potential but which, unfortunately, has unstable government. But while we have stable and able government in this country we stand a chance of attracting overseas investment, and we will be able to support the greater population that is so necessary for our prosperity and security.
So far. primary producers have borne the burden of Australia’s development. For many years we have subsidized our secondary industries, and we will continue to do so. As mentioned by the honorable member for Macquarie, tariffs were imposed to protect our infant industries, but I do not think that the Labour Party was alone in imposing those tariffs. I am sure that all primary producers will agree that Australia needs more industries in order to build up her population, because after all the home market is the best market that we can have. But I believe that most of our secondary industries have been given too much shelter from tariffs. Cold competition is needed to bring about efficiency. That is just what we have in our primary industries to-day. In many cases the costs of the primary producer have risen far more than market prices. The small farmers are in a very difficult position. Many of them have remained on their farms only at the expense of their standard of living. Those with sufficient capital have been able to improve their properties, increase their efficiency and remain on the land. But the cost spiral is still rising. The primary producer must pay for spare parts, new machinery and transport, as well as meet his rates and taxes. Those are costs over which he has no control and they are continually rising.
The quarterly review published by the Division of Agricultural Economics takes 1950 as a base year with an index figure of 100. It shows that up to September last, prices for primary products had increased on an average to an index figure of 163, which was an increase of 63 per cent. However, costs, which include supplies, wages, services, marketing expenses, living expenses and other overheads, had increased to an index figure of 220 - an increase of 120 per cent. The review gives a figure of 74 for the ratio of prices received to prices paid in the quarter ended in September of last year. This is just under three-quarters of the figure for the same quarter of 1950. I maintain, Mr. Temporary Chairman, that these figures indicate that our primary industries are dying, and something must be done to rectify the position.
– The Budget does not help you much.
– The Budget will help us greatly by maintaining confidence in Australia. The great help which the Government can give in rectifying this position is bv assisting us to reduce our costs. In respect of primary producers’ costs, transport is the greatest offender. It is very hard to fix the true cost of transport. Official figures put it variously at from 20 per cent, to 30 per cent, of the total cost. Here again, the further one goes from the seaboard, the higher is the ratio of transport costs. In Barcaldine, which is almost in the centre of Queensland, the freight from Brisbane on a bag of cement which costs 10s. in Brisbane is 16s. 6d. When one sees figures like that, one realizes what a burden the whole of the primary producing community bears. The primary producer pays both ways - on the goods he buys and on the goods he sells - and any reduction in transport costs would be a tremendous help to him.
As I have already mentioned, the tariff situation is another aspect of the problem which could be attacked. After all, if wc look at the balance-sheets of most of our manufacturing companies we see very healthy figures. We feel that the tariff position should be inquired into and that tariffs should be scaled down where necessary, particularly in respect of those indus tries which affect the primary producer. As I pointed out before, our entire standard of living is based on our primary industries, which are responsible for 87 per cent, of our export income, whereas secondary industries earn only 9 per cent, of it. It is said that our primary industries are in a very satisfactory state and that our gross farm output is worth £425,000,000 a year. I remind’ honorable members that a very great proportion of farm output is produced under uneconomic conditions. If we had in Australia a firm as efficient as General MotorsHolden’s Limited or Broken Hill Proprietary Company Limited to manufacture farm machinery and parts, many of our problems would disappear.
In this country, the primary producer is in an unfortunate position. He depends on markets which are very erratic. Except for wool, which is bought by most countries of the world, the primary producer depends almost entirely for the marketing of his products on one free market - the United Kingdom market. Most countries other than the United Kingdom have raised various barriers in order to bar our primary products. We cannot blame European countries for doing this, because two world wars have taught them the importance of primary industries. Both Germany and England found great difficulty in feeding their own people in the two world wars. They are fortunate now in having vast secondary industries, which are most efficient, and which provide the bulk of their export income. As a result, they are in the happy position of being able to tax those secondary industries in order to subsidize their primary industries. But here, in Australia, the boot is on the other foot. We are not in a position to subsidize our primary industries to any great extent. If we did subsidize them to any considerable degree the farmer would have to pay his own subsidies.
We recognize the great contribution that the Minister for Trade (Mr. McEwen) and the Department of Trade have made in endeavouring to find new markets for our primary products. The Minister has found £1,000,000 or £500,000 here and there, and it has all helped the economy. It is said that we should not object to the United States of America making huge gifts to the less fortunate people of the world. I quite agree with those sentiments but the disposal of enormous quantities of food by the United States takes markets from us. For example, we have seen the spectacle of the United States selling wheat to Greece at a very low price, upon which the Greeks have sold their locally produced wheat to Ceylon, thereby taking one of our markets from us.
I think that honorable members will agree that, all in all, our primary industries are in a very difficult position. It is a timeworn saying that Australia lives on the sheep’s back, but I am afraid that that is still the position. We must build up secondary industries in order to be in a safe position economically, but we cannot afford to build them up any further at the expense of the primary producers.
.- Mr. Temporary Chairman, I cannot agree with everything that the honorable member for Mcpherson (Mr. Barnes) said. He strongly approves - in this, I disagree with him - of attracting overseas investment to Australia. I do not mind investors coming here, staying here and spending their money here, but I strenuously object to overseas investment such as that in General MotorsHolden’s Limited, which reaps a rich harvest in this country and takes the proceeds overseas and away from the people of Australia. 1 do not mind attracting overseas spenders, but I object to attracting overseas investors of the kind that we have in General Motors-Holden’s Limited. I believe that we should develop our Australian resources in Australia by the investment of Australian capital, and by the employment of Australian workers, for the benefit of all the Australian people.
Another thing to which the honorable member for McPherson referred was tariff protection for our secondary and manufacturing industries. He was not pleased about this. He thinks that these industries should not be propped up - that they should stand on their own feet. He said that they should be able to compete against all comers. I disagree with him about that. If we require secondary industries to stand on their own feet why should we not require primary industries also to stand on their own feet? Does the honorable gentleman, as a member of the Australian Country Party, complain about the Government paying £13,500,000 a year to prop up the dairying industry - something which it has been doing for a long time? If it is good to do this for a primary industry - and I think it is - it is good to do it also for secondary industries. I approve of this Government’s extending tariff protection to secondary and manufacturing industries and subsidizing the dairying industry. The Labour government did it, and we should do it again if we were to take office.
The first Budget brought down by the present Treasurer (Mr. Harold Holt) is stirring, Mr. Temporary Chairman, not for the approval that it has received, but for the condemnation that it has earned. It has stirred up a lot of trouble for the Government. I suggest that if the Treasurer and the Government desire to correct the wrongs that this Budget will do they should withdraw it and redraft it. They could improve it in the redrafting by eliminating the tax reductions, which have been made at the expense of the ordinary people. I believe that it would be fairer to refrain from making these tax reductions. As the honorable member for McPherson has said, the Government proposes, on the one hand, to reduce direct taxes, and, on the other, to recoup itself by making the Post Office a taxing machine, because it intends to increase postal, telephone and other charges to the tune of £17,000,000. It would have been better if the Government had made no income tax concessions and had refrained from increasing postal charges.
The increase in bulk postage charges will drive many printing concerns out of business. It will close up a lot of small newspapers and other businesses. Of course, it might be a good thing if certain newspapers did go out of business, because they exist only to criticize the Labour Party. Nevertheless, I would be sorry to see them forced out of existence, because this would adversely affect the workers employed in their production. I believe that the Government should ensure that any legislation it brings down will not have the effect of depriving a person of his job.
Let me say something now about the increases in telephone charges. I believe that the Government is making the telephone a luxury, when it should be a necessity in a home. How is an invalid pensioner who needs a line of communication to his home, to afford these telephone charges which, in my opinion, are already too high? The rental for a domestic telephone will be increased from £12 12s. 6d. to £14 12s. 6d. per annum, and let us not forget that in another Budget not so long ago this Government introduced a telephone installation fee of £10. A person who applies for a telephone will have to find £17 6s. 3d. to cover the installation fee and the first half-year’s rental. This is too much, and the new charges will put the telephone out of reach of the poorer people in the community, sick persons and pensioners, who need this amenity. It will be impossible for them to afford a telephone.
In Sydney recently the Treasurer addressed a meeting of, I think, the Millions Club - in any case, that would be the kind of gathering that he would address. He said that in order to be a successful Treasurer one would have to be either a sadist or a man with a heart of stone. I disagree with him on this point. If he is in either of those categories, that is his business. What we want for a Treasurer is a practical man. If the Treasurer wants advice on how to draw up a Budget, he can do better than consult some of the experts whom he calls upon at present; he can ask some of our housewives to give him advice. They will tell him the best kind of Budget to bring down.
Last Thursday night the Prime Minister (Mr. Menzies) made a strong attempt to justify the Treasurer’s first Budget, but I think he failed miserably. Admittedly, he scored a few points off interjectors, but he did not by any means justify this very bad Budget. In my opinion, a Budget should forecast future legislation. It should point to some necessary developmental ventures, and it should offer something more stimulating and inspiring than this Budget does. We are living in a new world, but one would not think so to look at this orthodox Budget.
The Budget before us, in my opinion, represents just another repudiation of the many promises that have been made from time to time by this Government. Let me take honorable members back to 1949. I have to do this, because the promises that were made in 1949 by the Prime Minister are still outstanding. First, the Government said that it would reduce taxation. The Prime Minister said he would look at the incidence of taxation in every field and would reduce taxation as the national income increased. We know that the national income has increased - it has doubled. Taxation, however, instead of having been reduced, has trebled.
The Prime Minister also promised to pui value back into the £1. This has not been done. The £1 is worth less and less as time goes on. The Prime Minister also promised homes for every family. This is another promise that has not been fulfilled. He promised full employment, and we know that there is not full employment in Australia to-day. I could repeat many more of the promises made by the Prime Minister, but I shall content myself with mentioning the more important ones. In the last election campaign the slogan of the Liberal Party was announced by the Prime Minister - Australia Unlimited. We know how inappropriate this is. It should be Australia Limited - limited to a few favoured people who are sharing in the prosperity that this Government boasts so much about. The situation should be reversed, and more of the fruits of this prosperity should be given to those who need assistance most.
A Budget, of course, should be not only a statement of receipts and expenditure; it should also be a re-statement of Government policy. However, we know that the Government was unable to enunciate any policy during the last election campaign, and the Governor-General’s Speech at the opening of this Parliament did not indicate any Government policy with regard to future development. The Budget before us is simply a re-statement of this lack of policy.
There are many notable omissions in this Treasurer’s statement, and I will mention just a few of them. Many important matters affecting the people of Australia have not been attended to in the Budget. When the Treasurer was elevated to his present exalted position, many persons with financial axes to grind, such as big business spokesmen, financiers and newspaper proprietors said that he would go all out to please. I believe that these people were playing on his vanity. In any case, he has not succeeded in doing so. It was said that he would strain every point to please, even if this meant a restricted Budget on the next occasion, and that he would try to make a good impression in order to enhance his own future prospects. I feel that those prophets have been badly let down, and I shall direct attention to some omissions from the Budget.
First, there is no pointer to any future national development. The only national project in progress at present is the Snowy Mountains scheme, which was started by a Labour government. This scheme has a time limit, and I understand that it will be completed by 1975, only fifteen years hence. As portions of this great project are completed, the organizations engaged on them are dispersing. I believe that the Government should have made plans to use the considerable labour forces that have been built up. We have had blueprints for the Burdekin Valley scheme for a long time. The potential of this project is almost as great as that of the Snowy Mountains scheme. The Eucumbene Dam is the biggest in Australia at present, but an even bigger dam can be built on the Burdekin River. I believe the Government should be working on such developmental projects at this moment.
There is another omission with respect to housing, which is still a burning problem in the community. It is impossible at the moment to find sufficient finance for home construction. The only money made available by this Government for housing is £35,000,000 through the War Service Homes Division and £30,000.000 under the Commonwealth and State Housing Agreement, making £65,000,000 in all. However, we need about £300,000,000 to provide all the homes required in Australia to-day. No provision has been made, however, for the ordinary person to obtain finance for homebuilding. I know that certain provision has been made for ex-servicemen - and rightly so - and that certain other opportunities exist as a result of the Commonwealth and State Housing Agreement, but I believe that every young couple embarking on married life should be able to obtain the finance to start a home.
Then we have the important matter of automation, which is being developed in almost every industry. No mention of that is made in the Budget. I have here the last statement made by the Government on this subject and if time permits I shall comment on it. Automation is affecting employment, and the Government has not said much about employment. No mention is made of the fact that we have a permanent force of 70,000 to 80,000 people unemployed. We have had this number of unemployed for the last three years, but no specific statement has been made by the Government about it. Then there is the matter of equal pay for the sexes. The Government is again silent. The female worker in Australia is entitled to this measure, and the Government has in its services many females who work alongside male employees in the departments for 75 per cent, of the male rate. It is time that the Government made a statement setting out its policy on the question of equal pay for the sexes. After all, the Charter of the United Nations’ Organization provides for this benefit.
In the fields of social services and repatriation benefits, we find many serious omissions. The Treasurer’s speech does not refer to child endowment, which has stood at the present rate since 1948. The maternity allowance has not altered since 1943 and the important wife’s allowance has not been increased for many years. It still stands at 35s. a week and it is time that something was done about it. The funeral benefit was £10 when it was introduced by the Labour Government in 1941; it still stands at £10. Nothing much is said in the Budget about Commonwealth employees’ superannuation benefits. Some improvements in the widows’ pension are contemplated, but nothing is said about the present value of the superannuation unit. Quite a number of other matters also are omitted.
I should like to concentrate for a moment on taxation. As I said previously, in 1949 the Government promised that it would review all the fields of taxation and reduce the rates. When the Prime Minister (Mr. Menzies) made that statement, taxation collections totalled £471,000,000. Contained in this Budget is the statement that the Government expects - I feel that its expectation will be exceeded - to receive £1,204,000,000 by the end of the financial year. The taxation concessions of £25,000,000 are offset by further increases in postal charges and by the charge that will be imposed on pharmaceutical prescriptions. The concessions now granted will be offset by other increased charges, and in fact taxation will not be reduced this year. In my opinion, expected taxation collections will be exceeded before the end of the financial year.
A flat percentage reduction of income tax is absolutely inequitable. If the Government feels that it has some money to give back to taxpayers, it should do so in a way that effects some social justice. Reductions should have been on a graduated scale, varying from, say, 1 per cent, on the higher incomes to 20 per cent, on the lower incomes. To illustrate my point, I shall give figures to show what would have been the result if this had been done. With the present reduction of a flat 5 per cent., an employee with a taxable income of £600, which would be about the level of the basic wage at present, pays £39 12s. per annum and will be given a reduction of about £3 5s. or ls. 4d. a week. That is not really the cost of a packet of cigarettes; it is hardly worth while having. A person with a taxable income of £2,000 now pays £376 per annum and will receive a reduction of £31 7s. 4d. or 12s. 2d. a week. The graduated scale that I have suggested would mean that the person with a taxable income of £600 would be given a reduction of 20 per cent, and would receive £13 per annum or 5s. a week, which is really worth having, and the person with a taxable income of £2,000 would be given a reduction of 2 per cent., which would amount to £12 lis. per annum or 4s. 9d. a week. There is something equitable about this method, but if the Government wishes to favour its friends it deserves the wide condemnation now coming from the people.
I said at the beginning of my speech that I thought that there should not have been any reduction in taxation. I said that because I believe that any money available to the Government should be given wholly to the pensioners. If that had been done, the pensioners would have received an increase not of 7s. 6d. a week but of £1 2s. 6d. a week, which would have raised their pension not to £4 15s. but to £5 10s. a week for the aged and invalid and to £5 15s. a week for the civilian widows. They would have been able to do something for themselves with such an amount! Any further money available to the Government should have been used to increase the rate of child endowment and the unemployment and sickness benefits. As I say, the wife’s allowance, which now stands at 35s. a week, is a disgrace to any government. In some instances, a wife is really a nurse to an invalid pensioner, who receives £4 7s. 6d. a week. The wife, who is unable to go out to work, receives 35s., making a total weekly income of £6 2s. 6d. The Government is most ungenerous to the wife who is nursing a sick husband. I pointed out also that the maternity allowance still stands at the amount fixed by the Labour Government when it increased the rate to the present level in 1943.
If the Government did not want to grant the increases that I have mentioned, it should have looked to the field of indirect taxation, particularly sales tax, to relieve the cost burden on the housewife and the family man. A reduction in sales tax would have been more effective than a reduction in individual taxes. Individual taxes are claimed to be the fairest taxes. If this is so, why does the Government reduce them and not sales tax? A reduction of £25,000,000 in sales tax would have helped everyone, including pensioners. Sales tax collections have increased since this Government took office. In 1949, sales tax raised £38,000,000 and this Budget provides for sales tax revenue of £150,000,000. That is an increase of 400 per cent. In the same period, excise duty has increased by about 390 per cent, from £62,000,000 in 1949 to £246,000,000 in this Budget. That is a tremendous increase. I shall deal with one field to which excise duty applies. Beer can be regarded as the workers’ drink, and the workers pay £106.500.000 a year on it in excise duty. This tax represents half the price of a glass of beer. Every time a worker pays ls. for a glass of beer, more than 6d. of it goes in excise duty. The figures show that in the past year a further £8,600,000 was paid in excise duty on spirits. This field of taxation has increased tremendously and it hits the worker most, because he is the man whose principal drink is beer. The excise duty imposed on beer and spirits has doubled Australia’s drink bill. Last financial year the total drink bill was £230,000,000. If there were more thinking and less drinking, the people would put this Government out of office for inflicting such extortionate indirect taxation.
When this Government came into office, the return from individual taxation was £109,000,000. This year, it is shown at £431,000,000. This increase has occurred during the regime of a government which pledged itself to reduce taxation. It stands condemned for its failure to carry out that promise. When it took office, the national income was £1,966,000,000; to-day, it is £5,021,000,000. Therefore, it can be seen that the area from which this tax can be raised has increased very considerably.
I wish to deal with other matters, but my time is almost expired. I should like, however, to mention one subject to which the Prime Minister referred in his policy speech of 1949. Dealing with women’s special problems, he said: -
We have never accepted the view that men and women have an entirely distinct interest in politics, or that only some of its problems are proper for the consideration of women. The truth is that all the great questions of policy and administration effect men and women in equal degree. Indeed, we venture to say that though economics and public finance have been commonly regarded as the special preserve of men, the people- here who have paid the greatest price for the false economic and financial doctrines and practices of the past few years have been our wives.
As it was my privilege to say to yon in the Policy Speech of 1946, the women of Australia “have established an unanswerable claim to economic, legal, industrial and political equality”. I hope that the time will speedily come when we can say truthfully that there is no sex discrimination in public or private office, in political or industrial opportunity.
Although that statement was made by the Prime Minister in 1949, not a word has been said about it in this Budget of 1959. The principle of equal, pay for the sexes is contained in the United Nations Charter to which this Government is a signatory. It is contained in all the important conventions of the world. It is to be found in the Charter of the International Labour Organization,, which this Government is pledged to observe. The only government which has so far taken any action to implement this principle is the New South. Wales Labour Government. It has. brought down legislation to provide equal pay for equal work, thus abolishing a discrimination. It is the usual thing that a Labour government initiates action to recognize the rights of workers. Although the New South Wales legislation is not as perfect as it could be, nevertheless it will be amended from time to time to give women workers the wage to which they are entitled. In circumstances where women can do a job equally well as men, it is a threat to the breadwinner’s wage rates if women receive only 75 per cent, of the male rate. It is not in the best interests of the community or of the womenfolk themselves to allow this kind of condition to prevail.
Mr. Chairman, during the 30 minutes allotted to me-
Order! The honorable member’s time has expired.
.- The salient features of the Budget were widely canvassed in last week’s debate and I do not propose to fight tediously over the same ground. I intend to deal, rather, with a continuing problem of economic and social policy which has not engaged the attention of Treasurers as it should in this country, and, indeed, in other countries.
The new economics and inflation must be recognized for what they are - the very heart and core of the economic and social revolution in our time. The increasing taxation demands of governments to finance public works and the growing exactions of companies to finance expansion through undistributed profits, are impairing the capacity of the citizen to save and invest sufficient to keep him in decency during his declining years. Furthermore, it is almost impossible for the citizen to find investments that are not subject to erosion through continuous inflation. This affects even superannuation schemes. Inflation in Australia is now so far out of line with that of competitor and customer countries that devaluation could be forced upon us and cause a further catastrophic decline in the value of money.
I shall suggest that the Government should do these things: First, examine whether it has power to control hire purchase interest rates; secondly, examine the English and United’ States of America legist lation designed to control monopolistic and restrictive practices that are contrary to the public interest; thirdly, declare a national dividend by instituting an age pension of £2 a week, free of means test and available to all on attaining the age of 70 years, at a cost of approximately £13,000,000 per annum, while retaining the present age pension subject to means test; fourthly, liberalize the present means test requirements; fifthly, examine the Danish scheme under which endowment policies can be taken out with approved assurance companies up to a certain limit and under which benefits are payable in accordance with a cost of living index, any loss being
Underwritten by the government; and, sixthly, examine the schemes operating in some French professions under which inflation is by-passed.
I have said that, together with the scientific revolution, the new economics and inflation are the dynamic of change - economic, social and political. Almost unperceived, they have transformed and are radically transforming the whole structure of our society and they pose profound moral questions. In the immediate post-war years, inflation was regarded by most people as simply a passing phase. Now, after the experience of a decade and for reasons which are becoming apparent, most people realize that it is likely to be with us as far as we can see ahead.
Before considering some of the major consequences and the corrective action open to governments, it may be well to list briefly some of the powerful forces which move the apparently resistless tide that, rising higher and higher, threatens to submerge and engulf the security of many people in our community. First, inflation, is supported, by and large, by businessmen - whether they are manufacturers of newspapers, shoes or lipstick - because of the continuing appreciation of their assets. Secondly, it is supported by the workers who, during the past decade, have had the advantage of full employment and the strong bargaining power which has followed, enabling them to increase their real wages and to improve their conditions. Thirdly, it is approved by speculators - whether in land, shares or any other property - because whatever they buy to-day, they can sell for more to-morrow. Fourthly, the Treasury has a vested interest in inflation because taxpayers move automatically into higher tax brackets and a higher proportion of their incomes can be taken from them without any change in the tax rate being necessary, although their income in real terms remains either relatively stable or increases very slightly. In these circumstances, tax reductions are apt to be apparent rather than real. Fifthly, the economists, almost unanimously, I think, have lent their support to the idea that creeping inflation at the rate of 2 per cent, or 3 per cent, a year is not a bad thing.
It is an understatement to say that this array of forces is formidable. It is, indeed, irresistible, and in some respects it may well be salutary, but I shall suggest certain compensatory action that should be taken to assist those who do not benefit from inflation. However, it is necessary, first, to inquire why and to what extent inflation must be resisted by general policies. Broadly, I think it may be said that we cannot permit our cost structure to get out of line with that of our trading competitors, or with the income levels of our customer countries, without diminishing our exports and, consequently, finding ourselves unable to import the machinery and the raw materials necessary to keep our people employed.
I have before me a table which shows the alarming extent to which we have suffered, relatively, through the impact of inflation. Looking at the retail price index numbers covering food, rent, clothing and miscellaneous household expenditure in various countries, I find that between 1948 and 1957 prices in Australia rose by 98 per cent., in the United Kingdom by 50 per cent., in Canada by 26 per cent., in New Zealand by 52 per cent., in South Africa by 43 per cent., and in the United States by 18 per cent.
The position seems even more sombre when you look at the graph on page 6 of the White Paper on National Income and Expenditure 1958-59 and observe that farm income is at its lowest level since, 1 think, 1948-49, while, as we all know, wages and salaries, and company and business incomes, have soared. Unless substantial general measures are taken to curb the inflationary trend in the Australian economy, we must tread one of two paths: Either we must devalue our currency visavis other currencies, or we must erect a whole battery of complex controls, probably including bounties provided out of taxes, for all export industries. The April, 1959, issue of the “ Economic Record “ indicates that sober economists are considering the case for and against devaluation. One thing is quite clear. If devaluation were forced upon us, the brunt of this tidal wave of further inflation, or further devaluation of our currency, would have to be borne by thrifty people on fixed and relatively fixed incomes. I sum up this part of my argument by saying simply that general measures to keep inflation in Australia at least in line with inflation in other major countries with which we trade are essential, and have had and always will have my full support in this Parliament.
Perhaps two measures in particular may be mentioned in this connexion, not because they are the most important, but because they have not received hitherto the attention that they deserve. First, I believe that more control should be exercised over hire-purchase business to ensure an even rate of growth by preventing an undue proportion of prospective income from being mortgaged at any given time, thus causing a catastrophic decline in purchasing power at some later stage. There are, in my view, two special dangers. Many people to-day are depositing their money with hire-purchase companies on shortterm notes as if the investment were as secure as deposits in a current account in a bank or short-term fixed deposits in a bank.
– Does not the honorable member think that the investments are as sound as those to which he has referred?
– No, I do not. A slight set-back in the economy, rendering a hirepurchase company incapable of making repayment on the due date, could cause insolvency and panic. This is a peril that must be avoided. Again, the too-rapid growth of hire-purchase business could cause very easily a mushrooming of industries supplying classes of goods usually bought on hire-purchase terms. This could bring about a slump in those industries should a steep decline of purchasing power result from the too-rapid mortgaging of future earnings. Although I would not anticipate any dramatic changes to result from bringing hire-purchase interest rates under control, the Treasurer (Mr. Harold Holt) should explore diligently the means and powers available to him to achieve this end for the common good. It may well be that banking, in its modern conception, has a wider meaning than it had in the minds of the founding fathers of the Constitution.
Secondly, in an era of combination and monopoly, I believe that the AttorneyGeneral (Sir Garfield Barwick) should be requested by the Government to examine the English Restrictive Practices Act and English Monopolies Act, together with the relevant United States legislation, to see whether the public can be protected against unnecessarily high prices that add fuel to the flames of inflation. I remind honorable members that the United States is the spiritual home of private enterprise, and that a Conservative Government in England introduced the measures to which I have referred. The road to socialism lies in the belief that socialism is better than capitalism corrupted beyond redemption.
I turn now to the degree of inflation that must be regarded as inevitable, and, in some respects, as salutary if it leads to full employment and the expansion of the industrial base. Even though the degree of inflation may be 2 per cent, or 3 per cent, per annum, it can do grave injury to almost every section of our retired people except those who own and derive incomes from businesses, the value of whose property and the level of whose earnings rise in step with the inflationary tide.
Fear and anxiety are gripping at the hearts of tens of thousands of thrifty people in this community as they watch the erosion of their savings and wonder how they can provide for their declining years. I make a plea for these forgotten people, who are a numerous and not negligible section of the community.
They suffer I submit, in two ways; first, because of certain unobserved but revolutionary changes, due in no small measure to the impact of inflation itself, which have deprived them of the means to save sufficient for their retirement; and secondly, because they find it impossible to utilize their inadequate savings in such a way as to avoid erosion. This may seem odd when one recalls the trumpetings about the very high proportion of national income that is saved and invested in this country. In 1957-58 fixed capital investment amounted to 25 per cent, of the national income. However, the fact is that this high figure of savings and investment is due to forced savings by governments and corporations at the expense of the private citizen’s ability to provide for his future retirement.
This happens in two ways. Let us consider, first, public investment - that is, expenditure on public works, which include everything from schools and hospitals to the Snowy Mountains scheme. In pre-war days the money for such works “was raised by loan. The citizen was invited to purchase bonds, from which he would derive interest and with which he would be able to make some provision for his widow. Since the war, the tax gatherer has found that he can take the money without asking, thus .depriving the citizen of both assets and interest. I have before me a table which shows that in 1938-39 taxes and other current revenues used for public works constituted only 18 per cent, of the total funds available to governments for this purpose. In 1948-49 the figure had risen to 26 per cent., and in 1957-58 to 30 per cent. In other words, the citizen is being left with less money to invest on his own account to make provision for his declining years.
Let us consider next the sources of investible funds available to corporations. One will find from an examination of the tables contained in White Papers over the past decade that while undistributed profits and depreciation allowances in the aggregate represented 23 per cent of total private investment in 1951-52, they had grown to .56 per cent, by 1958-59.
On the other hand, assurance funds and other personal savings, in the aggregate, amounted to 41 per cent, of the total private investment in 1951-52, and have shrunk to 37 per cent, in 1958-59. In other words, corporations, like governments, were financing a higher proportion of their expansion by making high profits at the expense of citizens, and setting aside an increasing proportion of these for development purposes. They, too, were :finding it easier to take money out of the citizen’s pocket than to invite him to subscribe for shares. If I .might coin a phrase, 1 would call this a “ pricing tax “ for industrial development. In passing, one might observe that this is also what the Post Office is now doing - obtaining capital to expand its services by higher charges rather than by .borrowing money. Other public utilities such as electricity have been doing likewise.
My conclusion is that the citizen, having a growing proportion of his earnings taken from him without compensation for public investment, for corporate investment, and for public utility investment, is a bird so plucked that he has fewer feathers to fly with. Although during his working life he will share in the fruits of a high national rate of growth, his capacity to save and invest on his own account and to provide for his declining years is greatly impaired.
But this is not the end of the story: Try as he will, he can find no investment, even for his diminished funds, that is not subject to capital erosion. What are the avenues available? The traditional trustee securities are government stock, mortgages and debentures. Every one of them, .at the nest, will erode at the rate of from 2 per cent, to 3 per cent, per annum. That is, in 30 years they will have lost threequarters of their real value. Exchange devaluation would, of course, cause a quite catastrophic drop.
What then of shares in companies? The prices have become fantastic for ‘three reasons: First, many are trying to hedge against inflation by just this means. The unit trusts are a symptom of this urge. Secondly, on account of political instability in other parts of the world, such as South Africa, Asia and South America, overseas investors have added to stock exchange pressures. Third, companies, on account of taxation advantages, are preferring to issue unsecured notes and debentures rather than shares.
If, then, all the normal forms of investment are subject to erosion, has any protection been possible against it? As I have said, the owners of businesses, shares in businesses, or some types of real estate not ham-strung by landlord and tenant legislation, may erect a hedge. But some other cases are worth examining.
Age pensions, in relation to the C series index and even in relation to average earnings, broadly have kept pace with the inflationary tide. That, of course, is not to say that they are adequate now any more than they have ever been.
Take, again, a very important class, those who are entitled to superannuation payments. These may be public servants or the former employees of private industry. The position of neither, broadly speaking, has kept pace with the decline in the value of money. Governments, from time to time, have increased the payments by making larger contributions to public service schemes. Private companies have done the same in regard to their employees. But these gestures have seldom meant full compensation for the decline in the value of money.
The Commonwealth Bureau of Census and Statistics, in 1951-52, and again in 1955-56, made a survey of private pensions and retiring allowance schemes. These disclosed a steady growth in the number of firms, small, medium and large, instituting such schemes. A large number, especially in the case of small and medium firms, are of post-war origin. But, especially in the case of the small and medium firms, many employees are not covered. A growing number of such schemes are administered through assurance companies. The Bureau reports -
The largest single avenue of investment is in Commonwealth bonds, but there has been a large reduction in the total of these to total assets . . Government securities as a whole have declined relative to company shares and debentures.
The Bureau also reports that, between 1951-52 and 1955-56, in the case of the “ separately constituted schemes “, the average pension paid increased slightly from £274 to £283 per annum, about 3 per cent.; while the average lump sum retiring allowance increased from’ £208 to £341, approximately 64 per cent. I have no details regarding schemes organized through life assurance companies, but I cannot see that they could be more favorable because all institutional investers are compelled through force of circumstances to invest the major part of their funds in erosion-prone securities.
My conclusion, therefore, is that inflation has borne harshly upon a very large section of people in the middle income brackets. First, Government exactions and excessive prices and profits have denied them the means to save adequately. Second, almost every avenue available for investment is subject to the erosion of savings. Moreover, even the most favoured, who have the benefit of superannuation schemes, have suffered. The lot of employees not so covered and of self-employed people is more difficult still. I do not propose to put forward specific remedies, but only to suggest that, where the will exists, remedies can be found. Here are some examples worthy of examination.
First, for those at the bottom of the scale, certain differences could well be recognized. Should not a single person receive an age pension of rather more than half, say 60 per cent., of the pension received by a married couple? The payment of rent, for example, which takes such a large share of a pensioner’s income, would seem to be disparate as between a single person and a married couple. Should not people over 70, when they can no longer earn, and need more help, receive a pension rather higher than the pension of those under 70? Surely nothing could be more unimaginative than a flat rate increase of 7s. 6d. all round! Again, ought not the property means test to be liberalized, for example, by reducing the pension by £1 for every £20 of property in excess of £200, instead of £1 for every £10 as at present?
If we wish to be more radical, might we not begin to abolish the means test, for example, by paying a pension, by way of a national dividend, of, say, £2 a week, to all persons on attaining 70, completely free of means test? At the 1954 census there were 442,694 people over that age of whom, at 30th June, 1959, 318,035 already received the pension. The cost, therefore, would be approximately £13,000,000 per annum - a not unmanageable sum. in the case of those on the higher incomes, a large part would come back to the Treasury in taxation. It may be said that such a burden might become insupportable as the years go on. Quite the reverse. It is estimated that over the next ten years the proportion of old people to population will not increase while the work force will increase by 33 per cent, with a total population increase of only 25 per cent. Besides, it seems reasonable to aim at an increase of productivity of between 2 per cent, and 2i per cent, per annum. The burden of the aged will therefore tend to diminish rather than increase.
I pass to those in the middle income bracket. These include people who will receive superannuation, either as public servants or as employees of private industry; people who are employees and who will not receive superannuation; self-employed people such as professional men; and widows living on income derived substantially from traditional trustee securities such as bonds, mortgages and debentures, all subject to erosion at the rate of from 2 per cent, to 3 per cent, per annum and upwards. They may be fortunate and also have some shares in companies.
What safeguard against inflation can be provided for these people? First, it has been suggested that Governments should protect their bond holders by tying the redemption value of securities to a price index. At the present time, of course, governments are perpetuating a swindle in borrowing good money and returning bad. Politically, I imagine, no government would find the Treasury prepared to give up the profits of this fraudulent transaction.
– That is tough language.
– It deserves to be tough. This applies to all governments everywhere.
In Denmark, a low basic pension is paid, free of means test, and it is varied with the cost of living. In addition, a citizen can take out, through approved assurance offices, what is called an “ index contract “ up to a maximum which is about double the basic pension. It is, in effect, an endowment policy, the premiums and the payments being automatically adjusted from year to year in accordance with a cost of living index. Any deficit in the scheme is financed by the government. The particular scheme may have weaknesses, but could not the principle be explored and exploited - namely that the Government might be fair and just at least to individuals and groups trying to save and provide a modest competence for themselves in their declining years?
Again, it has been pointed out by Professor Downing, of Melbourne, that in certain French professions what are called by economists “ distributive “ superannuation schemes have been instituted. The principle is that members pay into a fund a set proportion of their professional earnings each year, and this fund is available each year for distribution among retired members in proportion to their past contributions. In this way, the effect of inflation, which makes nonsense of any actuarial scheme, is by-passed. But for this kind of scheme to be possible, there must be continuity of membership. If then, a profession, after study of the details of a proposed scheme, elects to adopt it, the Government must be prepared to make membership compulsory upon all subsequent entrants to the profession. In other words, if the Government, after study, should regard this sort of development as desirable - as I believe it is - it should include an appropriate enabling act as part of an overall policy to make it possible for thrifty people to provide in decency for their declining years.
Now, I do not put forward these schemes as themselves desirable for adoption in detail. Still less do I claim that they exhaustively cover all the ground - namely, the compensations due to the thrifty from those who flourish on inflation. But I do say, with all the emphasis at my command, that the swindle and scandal involved in shortchanging tens of thousands of honest and industrious people cry aloud for remedy. Too long has the Government ignored the problem. Too long have these matters been relegated to a junior Minister; if, indeed, they have received consideration at all. If the Treasurer seeks an honoured place in history and the applause of decent men, here is his opportunity.
Sitting suspended from 5.57 to 8 p.m.
.- Mr. Chairman, I congratulate the Treasurer (Mr. Harold Holt) on the presentation of his first Budget. That is an achievement of which any honorable member might well be proud. It is the first Budget submitted by a member of the Liberal Party in the past twenty years. Like the vast majority of Australians, I disagree with the contents of the Budget, but I console myself with the thought that the Treasurer may, in the normal course of events, present only two more Budgets, after which, I hope, he will have the opportunity for a long time to criticize the contents of Budgets drawn up in the best traditions of the Australian Labour Party. Saint Matthew, Chapter 25, verse 29, says -
Unto everyone that hath shall be given and he shall have abundance. But from him that hath not shall be taken away even that which he hath.
I commend this text from the Authorized Version of the Bible to the Treasurer, with the reminder that before he became an Apostle St. Matthew was also a tax gatherer.
Mr. Chairman, the Prime Minister (Mr. Menzies) on Thursday night last, after falsely accusing the Leader of the Opposition (Dr. Evatt) of deliberately misrepresenting certain facts in his speech, proceeded to give a first-class display, in his own inimitable fashion, of the practice he condemned. He deliberately misrepresented, not only the speech of the Leader of the Opposition - and that was a bad enough thing for him to do - but he also chose, in the most blatant fashion, to misrepresent the sound views and general policy of the late Mr. Chifley on the use and misuse of treasury-bills. Let us consider the right honorable gentleman’s allegations against the Leader of the Opposition. He suggested that the Leader of the Opposition had compared - and I quote his words - “ the rate of tax as if the income has stood still.” He himself, of course, has compared the rate of tax as if prices had stood still. He cannot afford to admit the scandalous manner in which he has allowed prices to run riot during his term of office. Over the period from his first full year of office to this last year, prices rose, Sir, by nearly 60 per cent., and the value of the 1949 £1 fell to 12s. 9d. He even had the temerity, when the honorable member for East Sydney suggested that inflation had “ run riot “, to tell him, “ Do not dig yourself a trap too soon”. As usually happens with the over-clever approach of the Prime Minister, he has dug himself a trap.
He tells us that the net income of the single man, earning average wages, after tax, has risen from £527 in 1950-51 to £930 in 1958-59. Now, Sir, if he were capable of doing simple arithmetic he would be able to work out that this means an increase of only I2i per cent, in real income after nine years of “ progress and stability “. This means an increase of not much more than 1 per cent, per annum in real income for the whole bulk of the community. If the Prime Minister considers 1 per cent, per annum as a reasonable rate of material progress, he should examine the figures for other countries, and should be informed of the general view that something between 2 and 5 per cent, per annum is the minimum acceptable rate of progress in the United States and Russia. I do not ask any honorable member to accept the Russian figures, which suggest that the rate of progress in that country has been of the order of 8 per cent, or 9 per cent, a year. That might be just so much Communist propaganda. I ask them to accept what the Americans say about Russia, and the American claim is that Russian production is increasing at the rate of 4 per cent, per annum, while the Americans themselves claim a rate of 6 per cent, or more.
But the Prime Minister, in his usual anxiety to make a smart point, has actually got his figures wrong. If he had even studied the speech of the Leader of the Opposition - and it was a very good speech, one of the best on a Budget that I have ever listened to - he would have discovered that there were some inconsistencies between his calculations and those of my leader. He, of course, would say that this is another misleading inaccuracy which he expects from the Opposition. Unfortunately for him, he is just as wrong in this case as he usually is. With all the resources of the Government behind him, as compared with the narrow range of information which is available to members of the Opposition, he is apparently completely unaware of the fact that the estimate of average earnings was substantially revised some ten months ago, and that the Government Statistician now estimates average earnings in 1950-51, not at £575, as the Prime Minister thinks, but at £601. Again, if he had bothered to study the Leader of the Opposition’s speech closely he would have realized that the calculations of current tax were based, not on income in the year just completed, but on probable income in the coming year, which means last year’s figures plus £39 for the recent basic wage increase. If the Prime
Minister were to recalculate his sum, he would find that income after tax in 1950-51 was £549 and in 1959-60 it will probably be £975. This is an increase in real terms of 9.9 per cent, over ten years - which is less than the 1 per cent, per annum I mentioned previously - and that, in itself, is sufficient to condemn this Government as a government, not of progress and stability, but as a government of instability and stagnation. No government elsewhere in the whole world would have the arrogance to suggest that if it had raised average real earnings by less than 10 per cent, in ten years of office it would have done a wonderful job upon which to congratulate itself, as this Government has been doing.
Since the Prime Minister is obviously either incapable or unwilling to understand the elementary facts about rates of income tax, I feel that I should proceed to explain, for his benefit particularly, the simple facts, as far as is practicable in words of one syllable, so that neither he nor any one else will be able to evade the point which, after the Leader of the Opposition made it, he has endeavoured to obscure with bombast. The first simple fact which I want to put is that goods which cost 20s. in 1949-50 will in the current year cost 36s. lid. No honorable member opposite will deny that. This assumes a further rise in retail prices of 3 per cent, during the current year, but this assumption is based on the official figures for retail prices published by the Commonwealth Statistician. If the figures are correct, and I know no reason to think otherwise, an income of £1,000 in the current year is worth no more than an income of £542 was in 1949-50. The relationship for other current incomes is similar. The average rate of tax on an income of £1,000 in the current year will be 2s. in the £1 for a single taxpayer. The average rate of tax for an income of £542 in 1949-50 was ls. 7*d. in the £1. In 1949-50, £542 had the same purchasing power as the current £1,000 has now. So, it follows that in this particular instance there has been a rise in the tax rate from ls. 7id. in the £1 to 2s. in the £1, or a rise of 25 per cent, in the rate of tax for people in that tax group.
– That is not correct.
– It is correct. I am paying heed to what the Commonwealth
Statistician says and what the Commissioner of Taxation says. I assert without fear of contradiction that the average rate of tax on an income with a modern purchasing power of slightly less than £20 a week has been raised by this Government from ls. 7id. in 1949-50 to 2s. in 1959-60, or a rise of 25 per cent, in tax rates. A similar calculation for an income of £10,000 shows that this year the rate of tax has risen from 8s. 8id. in the £1 to 8s. 9id. in the £1, an increase of only 1 per cent. That is, the rate of tax has risen by 25 per cent, in respect of an income of £1,000 and by 1 per cent, in respect of an income of £10,000.
The Government says that it has dealt justly with everybody. Here we have the essential picture: For the man on average earnings - the lower and middle class groups - effective rates of income tax have been raised by 25 per cent, but for the man with a taxable income of £10,000 a year the effective rates of income tax have been raised by 1 per cent. For higher incomes still the position is even more favorable. The maximum rate of tax has actually been reduced from 15s. in the £1 in 1949-50 to 12s. 8d. in the £1 in 1959-60. No honorable member can dispute that fact. That is a reduction in the effective rate of 16 per cent. So, for the extremely rich in the community there has actually been a tax reduction which approaches 16 per cent.
These figures illustrate clearly enough how this process of slugging the great bulk of taxpayers has been going on every year. That was a phrase used by the Leader of the Opposition, which the Prime Minister was pleased to describe as deliberately misleading.
– What was that percentage?
– Sixteen per cent.
– That is something like the rate the Labour Party got from its radio station.
– If the honorable member would only take time to think before he interjects he would enjoy an exhilarating experience. But this is only the picture for the single taxpayer. For the married taxpayer with two children and an income with current purchasing power of £700 a year the position is far worse. This is roughly the present basic wage level and, in spite of much misleading propaganda, tens of thousands of men and women in this country live on an annual income of that figure or less. The latest figures for income tax assessments show that many family men have no greater annual income than 52 times the basic wage. For those men the rate of tax in 1949-50 was 2id. in the £1. In 1959-60 the rate of tax will be 51d. in the £1, an increase of 125 per cent. The tax of the family groups with the lowest income in this country has been more than doubled in the ten years that this Government has been in office, as compared with an increase of only about 30 per cent, for single men. For the family man with a current income about equal to average earnings, the effective rate of tax has been raised by nearly 50 per cent.- from 8d. in the £1 to ls. Old., in the £1,
The complete picture is given in the following figures showing the effective rate of tax for various incomes ranging from £700 to £10,000 in current prices for 1949-50 and 1959-60 for single taxpayers and married taxpayers with two children. I have shown the table to the Minister for Labour and National Service (Mr. McMahon) and, with the concurrence of the committee, I shall incorporate the table in “ Hansard “. The table is as follows: -
The figures in that table show the effective rates of income tax after correction for inflation. Just as it is improper to claim that the whole increase in expenditure since 1949-50 is due to greater services - much of it is due to higher prices - it is improper to compare the income tax rate for a man on £1,000 now with the income tax rate for a man on £1,000 in 1949-50. To-day £1,000 is average earnings. In 1949-50, £1,000 made a reasonably wealthy man.
The Prime Minister quotes nominal tax rates of this sort when he says that he has made a “ percentage reduction on the rates provided by the Labour Government when it was last in office of 60 per cent, on the lowest taxable income, tapering down to 19 per cent, on the highest incomes. “ The real rates of tax - the effective rates of tax which I have quoted - show that he has raised taxes by 30 per cent, on the lowest incomes of single men and by only 1 per cent, on the higher incomes. For family men in the lower income group he has raised effective rates of tax by 125 per cent.
Those figures tell the true story. They are not grossly misleading, as the Prime Minister would have the country believe. I am not concerned about the opinions of honorable members, because all of them have decided how they will vote on the motion of censure moved by the Leader of the Opposition, but it was a healthy experience to hear the honorable member for Bradfield (Mr. Turner), the honorable member for McPherson (Mr. Barnes), the honorable member for Richmond (Mr. Anthony) and other honorable members on the Government side saying more censorious things about this Government than complimentary ones. The figures that I have quoted show how this Government has calculatedly and deliberately allowed inflation to impose ever-increasing burdens on the lower incomes, and how the vicious attack on the people of Australia has been concentrated even more venomously on the family man than on the man who has no family responsibilities.
In 1956 eight professors produced a plan for what they called skimming off the surplus spending power of the community - as if it was the cream on the milk. They actually agreed on a whole blue-print. They did not agree on one particular problem or suggestion; they agreed on the lot. They submitted their plan to the Government. They suggested that the Government should raise additional taxes by increasing income tax. The Government did not do that. It increased excise duties and customs duties instead. Now, when it has a chance to remit some of those excise duties and customs duties, and some sales tax imposts, it has decided to reduce income tax instead. The Opposition thinks that is wrong. I heard the honorable member for McPherson (Mr. Barnes) say that he would not mind foregoing the income tax reduction if the Government will set aside the proposed increases in postal rates. I heard the honorable member for Fremantle (Mr. Beazley) say that he could be quoted all over Australia as saying that he was not in favour of a reduction in income tax because he preferred a reduction in other taxes first. I think that is a fair proposition.
This Government has taken every care to see that its own friends - the rich - have been protected from the pernicious process of exploitation that goes on through the current system of income tax. Truly it may be said that the Treasurer is a Robin Hood in reverse. He takes from the poor to give to the rich. He has called his Budget a give-and-take Budget, but he takes more than he gives, as his speech proves. I refer any honorable member to the Budget papers to show that the Treasurer will get more revenue in actual fact this year than he got last year, and that the amount of his tax remissions is less than the amount that he will receive from the increase in postal and telephone charges and the charge of 5s. for each prescription issued under the pharmaceutical benefits scheme. The Minister gives with one hand and takes back with two. That reminds me of what Disraeli once said. Disraeli, of course, was a great Conservative; he founded the Conservative Party of Great Britain. In his declining years, he said -
Every Conservative Government is an organized hypocrisy.
He doubtless spoke from experience - and with great honesty and, in respect of this
Government, also with prophetic vision. This is a rich man’s Budget. Wealth and privilege are stamped all over it, and blue blood drips from every page. I know, Sir, that I have mixed my metaphors, but I have done so deliberately and purposefully, because I want to stain this Budget in a way that will enable the people of Australia to identify it when the next general elections take place, because if ever there was a government that should fail because of its Budget, it is this Government.
Before I leave this matter of the exploitation of the family man through income tax. Sir, I must link it with the expropriation of child endowment which has been achieved through inflation. The present child endowment of £39 a year for two children would have been worth £63 if the rates of child endowment had been raised since the financial year 1950-51 in accordance with price increases. This is an old story, and one of which all mothers are only too painfully well aware. But the Prime Minister, in his speech on the Budget, has, for the first time, implied clearly that the Government does not intend at any time in the future to raise child endowment again. And I ask the Minister for Labour and National Service, who will follow me in this debate, and who occupies the portfolio that was once occupied by the present Treasurer, the gentleman who introduced in this Parliament legislation providing for the first child endowment scheme, to say whether the Government has decided to make child endowment a dead letter. I believe that the Government intends to allow child endowment to be whittled away to virtually nothing by the steady process of inflation. And inflation is still with us; it has not stopped at any stage in the last ten years, during which this Government has been in office. Sometimes it has galloped; sometimes it has crawled; but prices continue to increase, and the value of money continues always to decrease.
This Government, as I have said, has allowed child endowment to be whittled away by inflation - by a process which, on the one hand, it fosters, and about which, on the other hand it professes horror and concern. The Prime Minister has seemingly discovered a new principle not present in the judgments of the Commonwealth
Conciliation and Arbitration Commission which he says justifies this approach. He argued that, since 1951 -
That is a verbatim report of what the right honorable gentleman said.
– It is right, too.
– The honorable gentleman may think that the Prime Minister is right, but I do not think that he is. However, I interrupted myself to make that comment. Resuming the quotation from the Prime Minister’s speech, I should like to read this -
In doing this, it is quite clear to anybody who has followed the proceedings, that the family needs of the wage-earner have not been ignored. To add substantially to the burdens of industry -
These are the important words - by raising child endowment . . . would have an additional effect upon the capacity of industry to pay.
This, Sir, makes it quite clear that the Prime Minister has not followed the proceedings of the Arbitration Commission. It has not referred to child endowment once since its 1940 judgment, at a time when it was known as the Commonwealth Court of Conciliation and Arbitration, and when it was presided over by Chief Judge Beeby, who told the Menzies Government of that time that if it did not introduce child endowment the court would raise the basic wage by 6s. a week. So it was suggested that child endowment should be introduced, and that it should be financed by the pay-roll tax, because that would be a lesser burden on industry than would be an increased basic wage. The first Menzies Government accepted the suggestion.
Under pressure from the Commonwealth Arbitration Court, as it then was, the first Menzies Government, as I have said, established the system of child endowment - not out of the generosity of its heart or out of sympathy for the family man, but in order to save its big business friends from having to. pay a higher basic wage. Big business has done very well out of the deal since 1940, but the system of child endowment has been reduced in effective value to about one-half of its pre vious level of value. The Commonwealth Conciliation and Arbitration Commission has not, as yet, directed the Government’s attention to the needs of wage-earners with families, who, on the principles enunciated in 1940, are now again insufficiently provided for, but it is obvious that, within the terms in which the commission works, some such adjustment is now necessary. Yet the Prime Minister informs us that the principles of the Arbitration Commission are opposed to any increase in child endowment. And I ask the Minister for Labour and National Service to deny that categorically, if he can.
I do not know whether to believe the Prime Minister and regard his statement as a nail in the coffin of the commission, or to disbelieve him and rely on the industrial wing of the Labour movement, pending the election of another Labour government, to force him once again to do justice to the families of Australia. But let us at least state this more clearly: The Prime Minister is opposed to any further increase in child endowment as long as the Arbitration Commission fixes the basic wage on the capacity of industry to pay, and before the original Commonwealth Court of Conciliation and Arbitration made its decision in that regard the Prime Minister had relegated child endowment to the limbo of forgotten things. There has been no increase in child endowment for the second and subsequent children since 1948.
– You opposed child endowment for the first child.
– We did, for very good reasons - because you used it only for election bait. What we opposed in the Senate was the payment of only 5s. for the first child, and not 10s., the same as for every other child. This Government tried to make the first child appear to be of secondary importance, Sir.
– The Arbitration Court’s first judgment-
– Order! I ask honorable members to cease interjecting.
– As I was saying, Sir, when I was interrupted, the Prime Minister is an expert at passing the buck to some so-called independent body of experts, or, worse still - and more usually - at doing nothing, when just and fair proposals are put to him. Anything which smacks of fairness and justice to the ordinary people of Australia, and particularly to the families of Australia, is abhorrent to his Government. We believe this. It is one of the strange phenomena of our times. But the Government’s insistence that a bar to increases in child endowment should be laid down and accepted will cause the industrial and political wings of the Labour movement to redouble their struggles to achieve real wage and social justice in this country. The 1,500,000 mothers in Australia who receive the present grudging allowance of 10s. a week for second and subsequent children have it in their own hands to support us in this struggle when next they vote. And, on the programme that we put forward on the occasion of the last general elections, which was supported by a majority of the primary votes of the people of Australia, we should have been the Government to-day but for the fact that the preferences of the Australian Democratic Labour Party - the party which said that our social services programme was right and that of this Govent was wrong - put the present Government back into office. By no stretch of the imagination can this Government claim that it is functioning in accordance with the principles of democracy, of government by consent of the people, because the Australian people do not consent to this proposal.
The honorable member for Canning (Mr. Hamilton) is again seeking to interject. Let me say to him-
– Order! Let me have a word with the honorable member for Canning. The honorable member will cease his continual interjecting, or I will ask him to leave the chamber.
– I was about to say that if the honorable member had even a portion of the ability he thinks he has, he might some day make a come-back.
The Prime Minister has been pleased to attack the Leader of the Opposition as being a supporter of “ inflationary finance, naked and unashamed “. This was a wild, irrational attack, but it is a favourite method of approach of the Prime Minister, to charge others with what he himself is doing. This is a technique which was widely used twenty years ago by a certain deceased German leader, who accused the small nations around him of planning to attack him. In this case I cannot make up my mind whether the Prime Minister’s attack is based on deliberate misrepresentation or merely on ignorance.
It is quite obvious that the Prime Minister is unable to distinguish between the form and the reality, between treasury-bills and bank credit. This is a most important point, and one which was dealt with very well by the honorable member for Fremantle (Mr. Beazley) the other night. The customary method of financing a government deficit is to issue pieces of paper called treasury-bills, which are merely a statement of the government’s bank overdraft. What matters is not the name given to the pieces of paper, but the fact of the overdraft. This year the Government has issued pieces of paper to the banks, which it calls bonds, instead of pieces of paper called treasury-bills. The change of name does not conceal the fact of the overdraft, but it is an attempt to conceal the fact that 4 per cent, and 5 per cent, interest is being paid on the overdraft to the private banks instead of 1 per cent, to the Government’s own bank, the Commonwealth Bank.
Let us look, first, at what has actually happened to the pieces of paper called treasury-bills. At the peak of the war, in June, 1944, the total of treasury-bills issued by the Curtin Government amounted to £376,000,000. The Labour Government had already begun to redeem them before the end of the war, and by June, 1949, had paid off £253,000,000, leaving only £123,000,000 owing. This was a tremendous effort. The Government was responsible for helping to win the war, mobilizing the nation for the conduct of the war, looking after the men in the fighting forces, supplying them with all that they needed. The Chifley Government then had to pass through the transitional period from war to peace, which was .equally, but differently, dangerous. Yet this was the period in which the Labour Government reduced the total of treasury-bills from £376,000,000 to £123,000,000.
During the year 1949-50, when this Government was in office for only half of the year and had not had time to reverse Mr. Chifley’s policies, a further £15,000,000 was paid off, reducing the figure to a postwar low of £108,000,000. Nearly threequarters of the treasury-bills negotiated during the war period and the post-war period - and this is what I want to emphasize to the House - had been paid off four years after the war. But as soon as this Government took control and started its long career of muddle and fuddle, the policy of redeeming treasury-bills was reversed, and they now total £171,000,000, which does not include the £80,000,000 issued to the private banks last year under another name.
It is now proposed to issue a further £61,000,000 this year, which means that this Government will have been responsible for more than doubling the treasury-bill issue since it came to power.
– Your leader said you ought to do more of it.
– He said it was preferable to do that than to do what the Treasurer is now doing, paying the banks 4 per cent, and 5 per cent, interest.
– What do you think we ought to do, tax more heavily?
– The first thing you ought to do is resign - and if I were you I would not wait until to-morrow morning to do so. The position is, and I repeat the story for emphasis, that three-quarters of the treasury-bills made necessary because of the war were paid off by the Labour Government, but the total of treasury-bills has been doubled by the Liberal Government in the last ten years, during which it has held office. It is those ten years that the locusts have eaten.
The Prime Minister speaks of treasurybills, of “ those wonderful things, those I O U’s, those promissory notes, as the proper source of . . . vastly increased payments out of the Treasury.” It is clear that he spoke from his heart, but, oddly enough, he attributed the policy to the Leader of the Opposition and not to himself.
– You read very well, Arthur.
– Yes, and I hope the intelligent people understand me. I excuse the honorable member for Maribrynong. I ask: Could self-delusion and gross misrepresentation go further than they do with the Prime Minister?
I should like to make one or two other facts quite clear. The Leader of the Opposition did not attack the use of bank credit last year. He does not attack the use of bank credit this year. What he did attack was the use of private bank credit at 4 per cent, and 5 per cent, last year instead of central bank credit at 1 per cent. That is the point I made in reply to the Treasurer a moment ago. This point, too, has been made with great clarity by other honorable members, including the honorable member for Fremantle, and the honorable member for Werriwa (Mr. Whitlam) on this side of the House.
We believe that at certain times it is right and proper for the Government of the day to use bank credit. The present is such a time, when the Government’s policy of stability - meaning stagnation - has run the economy down to such an extent that a stimulus is badly needed. But it is never right to camouflage credit from private interests, at high interest rates, as public borrowing. That is the completely dishonest way of doing things, but it is what this Government has done. The central bank last year, under ministerial direction, lent money to the private banks for them to lend back to the Government at high interest rates. We protest against this practice, at this misuse of public funds to make big profits for private interests. We do not advocate, and we never have advocated, unrestricted use of bank credit. We advocate its use only when necessary to employ available resources of both manpower and material. Our record is clear and honorable in this regard. Let the Government look at its own record in this matter, a record that is neither clear nor honorable.
This method of financing public deficits by the indefensible misuse of public funds is clearly the present Government’s policy. The Government now proposes to finance not only its deficit but also its temporary seasonal over-draft from private sources, and from private sources at about 3i per cent, instead of from public sources at 1 per cent. Against this proposal we raise a most emphatic protest, because it is a proposal to present £1,000,000 a year to the private banks, and is opposed to every moral and ethical concept.
Let the Prime Minister continue his attempt to camouflage it how he will with distortions of fact, with abuse, with false analogies, with the outmoded patter of high finance, but the facts remain clear and identifiable. This Government presented £3,000,000 of public money to the private banks last year without warrant and without justification, and it proposes to present them with another £1,000,000 this year. The Australian people will never stand for this reversion to the practices of a wicked past, to the wicked practices that the 1945 Chifley banking legislation was designed to render impossible of repetition when those who survived World War II. entered into the new era of government by the people, and not government by the stooges and political tools of the private banking institutions.
I want to say something about postal rates, because postal rates and the prescription charge are the two things that will haunt the Government until the next election. When the Prime Minister announced that certain of the proposed increased postal charges were to be withdrawn, he made a statement the full significance of which has not been emphasized. He said that on this vital subject - the great lengths the Treasurer went to in his Budget speech in justifying the increases indicates their importance - the Government was a little in the dark. I repeat that the Prime Minister said that he, and presumably his colleagues in the Cabinet, were a little in the dark.
This is a far-reaching confession for the Prime Minister to make. Is this chamber and the nation to understand that one of the most vital parts of the Budget was approved by the Cabinet, by the Treasurer and by the Prime Minister without the full facts being placed before them? If this is so, then how much faith can we have in the wisdom of the other proposals? Is it not possible that the Government was a little in the dark about most or all of the Budget proposals? Is this the reason why the Treasurer was so unsure of his facts and failed to justify such items as the with holding tax, the increased charges for prescriptions and the like? Are the Cabinet Ministers in the dark about all those things?
– Could he not have known the facts but not been sure of the implications?
– The Minister makes a half-hearted sort of admission. He says, “ We might have known the facts, but we did not know what the implications were “.
– Surely he can make a candid admission if it is true.
– Is this the reason why the Treasurer was so unsure of his facts and failed to justify such items as the withholding tax. There was a case in the House of Commons when Mr. Butler as Chancellor of the Exchequer imposed a purchase tax. After two days’ debate, there was uproar in the Government ranks. After four days, the Chancellor had to resign, and they made him the Leader of the House. We cannot do that with this Treasurer because he already occupies both positions. The only thing we can do with him is try to make him Prime Minister and see whether that would improve the situation.
I think it would be true to say that on all the Budget provisions and omissions, the Government was completely and utterly in the dark. We have been told about the great losses that the Post Office is suffering. Since federation - it may be only for the past seventeen years, though perhaps it covers 57 years - the profit of the Post Office on postal charges, telephones and telegrams is no less than £70,000,000. This comprises a profit of over £27,000.000 for the postal section, a profit of over £50,000,000 for telephone services and allows for a loss of over £7,000,000 for telegraph services. In other days, the profits of the Post Office were taken into Consolidated Revenue to finance general government activities. Why does the Government not introduce a proper system of accounting, and give the Post Office the credit to which it is entitled for the profits it has made in the past and suspend these proposed increases at least for a period, or cut them down very considerably?
We of the Labour Party can say, “ Let the galled jade wince, our withers are unwrung “. During our period of government we never increased postal rates by more than a id., from 2d. to 2id. in the dark days of the war when the Japanese were approaching. We made the charge permanent in 1949. But the postal charge which was 2d. in 1930 is now 5d. This Government is responsible for the whole of the increase, with the exception of a id. Similarly, it is responsible for most of the increased telephone and telegraph charges. To-day, the average user of postal services is being asked to pay an increase of 25 per cent, for ordinary mail. The person who has a telephone is being asked to pay 33i per cent, more, with the increase from 3d. to 4d. for local calls. The honorable member for Canning contradicts me. I not only saw him shake his head, but I heard it rattle. The postal charges are being increased to pay for telephone losses. There should bc an inquiry into the Postal Department by a joint committee of both Houses of the Parliament. Let the Parliament see what is happening in the Post Office. Let the Parliament as a whole see a good deal else that is happening in other departments, too.
I do not think that I should fail to mention the fact that the spokesman for the Australian Country Party on Thursday night last was the honorable member for Mallee (Mr. Turnbull). He was interesting and entertaining but not informative.
– I was talking about the reading of speeches, as you are doing now!
– The honorable member spoke from notes and put the case of the Australian Country Party as no other member of that party can. It was a typical Country Party speech which said nothing and meant nothing. Consequently, it made a great impression on his Country Party colleagues. The great achievement, and one that I envy, of my friend from Mallee - he is my friend; he has defended me here - is that he has no enemies here or anywhere else. What he had to say from his notes did not increase the total.
The Leader of the Opposition condemned this Budget and I shall recapitulate his arguments. He condemned it because the Liberal conception of progress means progress for the wealthier interests at the expense of the pensioners-
– I rise on a point of order. Mr. Chairman, will you give a ruling on whether the Deputy Leader of the Opposition is entitled to read his speech, as he has been doing to-night?
– Order! I have no knowledge of his reading his speech. I have not examined the papers to see whether he is reading. He is quite entitled to quote.
– At the moment I was interrupted I was quoting what the Leader of the Opposition had said. I was paraphrasing his statement and was putting it in a form that I thought would be easily understood.
– Did he write this speech?
– The honorable member for Lilley should try to use his head because, after all, it is the little things that count.
The Leader of the Opposition condemned the Budget because the Treasurer’s taxation proposals, combined with the increased postal charges were clearly calculated to reduce the living standards of the broad mass of the people. The Leader of the Opposition pointed out that the greatest benefit of the taxation concession will go to those earning £35 or more a week while the family man earning between £15 and £30 a week will have more than his reduction taken back because of the higher taxes he will have to pay on the recent 15s. a week basic wage increase.
The Leader of the Opposition stressed that at the very time when farmers need relief the Treasurer chooses to hit them with a big increase in all their postal and telephone charges. In support of that I again call as my witnesses the honorable members for Richmond and McPherson.
Pensioners and those in receipt of repatriation benefits were given niggardly, contemptible increases. Taxation allowances for dependants have not been raised in line with rising prices, yet the Treasurer boosts the deduction for life assurance from £300 to £400. These points, too, were made by the Leader of the Opposition. How many people in this community can afford to pay £6 to £8 a week for superannuation or life assurance benefits?
– The ordinary worker cannot.
– Exactly. The Leader of the Opposition pointed out also that the family man and the pensioner will be the hardest hit by the imposition of the new charge of 5s. on every prescription. He said that the completely unjustified increases in postal and telephone charges are the way in which the Treasurer is going to find the money to pay for the tax concessions for the rich. The Government has pandered to the private banks at the expense of the Commonwealth Bank and of the Australian people. The Government’s policy is one of sacrificing the many in the interests of the few. Labour is opposed to the extension of privilege which permeates the Budget, and for which the Treasurer is making himself principally responsible. Labour believes in the principle that our Australian society should be free from economic injustice and that all its citizens should have equal rights to health, freedom, happiness and prosperity. All this was argued with great conviction by my right honorable friend.
What this Budget does not do is reduce sales tax - particularly that additional iniquitous imposition of March, 1956, which was to be a temporary measure, but has remained permanent ever since. What this Budget does not do, if the Government wants to increase production, is to increase initial depreciation allowances so that machinery can be installed and we can have a more efficient system of production which will increase productivity and give the whole community the opportunity of benefiting from the new products of man’s ingenuity and inventiveness. But this Government is prepared to just carry on and let the country stagnate.
The Prime Minister’s answers the other night were weak and unconvincing. His reasoning was specious and unimpressive. He worked on the old Liberal Party principle, “ If you can’t convince them, confuse them “. Sir, this Budget indicates that Ministers are physically tired and inert It is palpably evident in their thinking that they have become sluggish and indifferent and that their outlook continues to stagnate. To use the vernacular, they have “ had it”. To use the vernacular again, the community has “ had “ them. To say that Ministers and members of the Government parties have disappointed all who returned them to power in 1949 is to be guilty of a vast understatement.
– Think of the alternative.
– The alternative is good government. I should have thought that even that would be obvious to my honorable friend. The new era of liberalism which the supporters of the Liberal and Australian Country Parties thought they were helping to usher in, is fading out in disillusionment and disgust. It is ending up as a shabby caricature of the bright hopes that it once inspired, and it is now revealed as a piece of political brummagem that was once thought of as a genuine article.
– I had, to-night, changing the usual pattern of my contributions to the Budget debates in this committee, intended to say what I thought about the objectives of Government economic policy and particularly the way in which the Budget might affect our capacity to develop this country in the future. I do not think I was mistaken in coming to that decision. I had intended to ignore what the Opposition has said, and nothing that the Deputy Leader of the Opposition (Mr. Calwell) has put before the committee to-night has made me change that point of view. There are, however, one or two things that I should say.
For nearly 55 minutes the Deputy Leader of the Opposition has read from a bundle of pages. He has made some scurrilous remarks about the Prime Minister (Mr. Menzies). I do not want to be critical and I do not want to say too much of the Deputy Leader of the Opposition and his new-found and unaccustomed role. I do not know whether it is the role of Brutus or Mark Antony. Perhaps, we might draw the conclusion that some of the gossip now circulating in Sydney may prove to be correct and that the Deputy Leader of the Opposition might be seeing himself in a somewhat more serious role during the course of the next few months than that which he occupies at present. I notice the anguished look on the face of the honorable member for East Sydney (Mr. Ward). 1 need not go further than point out to honorable members on this side of the committee the colour of the toga which the Deputy Leader of the Opposition is so jealously pulling around his shoulders.
I think that the Deputy Leader of the Opposition indulged in a little too much personal abuse of the Prime Minister. Not that the Prime Minister would mind, because he knows, as we and as honorable members opposite know, that his reputation to-day is higher than it has ever been before. That is proved by the fact that only recently the Australian people returned him and the Government parties to office with an unprecedented majority. The Deputy Leader of the Opposition referred to the question of child endowment. He said that the Prime Minister had given a clear indication that this was a dead letter. I shall refer to what, exactly, the Prime Minister said and allow his own words to confound the honorable member. The Prime Minister’s clear statement to the Australian people is recorded on page 460 of “ Hansard “. He said that in the proceedings before the Commonwealth Conciliation and Arbitration Commission - the family needs of the wage-earner have not been ignored.
If any one can get from that statement the implication suggested by the Deputy Leader of the Opposition, then, frankly, it seems that words can be made to mean anything. It is a form of abuse of words with which I do not agree and which should not be permitted in this place. The Deputy Leader of the Opposition went on to deal with other matters. We have heard so much carping criticism of the Budget proposals from the other side of the committee that, frankly, every one is bored with them. Half way through the honorable member’s speech I noticed that the galleries were being emptied. When I loked at one corner of the press gallery reporters there were asleep, and I had grave doubts as to whether there would be any report of his speech in the press tomorrow unless the reporters gathered it from the 28 or 30 pages of copy from which he was reading.
The honorable member drew attention to two matters. First, he said that the banks took up a large amount of bonds during last year which should have been financed by treasury-bills. He appeared to think this a heinous offence, something for which the Government should be rebuked. At that time - or shortly before that time - there was a school of thought which held the view that the deflationary process of last year was still continuing. When it was decided to go to the people-
Mr. Cope. - Look at the galleries now. (Honorable members interjecting) -
– Order! This is unseemly behaviour. The Opposition asked for silence while an Opposition member was speaking, and 1 insist that they extend the same courtesy to the Minister.
– Thank you, Mr. Chairman. I make two points. First, there was a doubt as to whether expansion had got under way and no one could have forecast that the banks would have purchased the bonds at the time that they did. No one could have forecast that the banks would have surplus funds. Shortly before the banks took up those bonds, the central bank, not the Government, had made a release from the special accounts. That proves that no one could have made a positive forecast that the trading banks themselves would be in the market and would be prepared to take up Commonwealth bonds. The second point that 1 make relates to the question of the seasonal treasury-bill issue. Even the Leader of the Opposition (Dr. Evatt), who usually understands such matters, has claimed that the seasonal treasury-bill issue was made at the behest of the money-grabbing private trading banks. What are the facts? Let me explain them. There is a seasonal period in each year when there is an over-supply of money within the banking system - usually the March quarter - due to the fact that our exports are then at their maximum, that rural credit advances are at their maximum, and that income tax payments have not commenced. Usually at that time of the year the trading banks are flush with money.
I can see the honorable gentleman trying to persuade members of the Opposition to leave the House. I think that that is a rather dirty trick. Apparently he could not take my statement that the galleries were being denuded of people during the course of his speech.
However, I shall continue. As I have said, during the March quarter the private banks are usually flush with money. Ii was decided, on the representations of the central bank, that it would be wise to issue seasonal treasury-bills so that this seasonal flush of money would not be placed on deposit with the trading banks but would go into the seasonal treasury-bills. In other words, the Government’s decision had a particular purpose - to ensure that the trading banks did not obtain the money and, consequently, that they would not be able to lend it at a time of what is called temporary seasonal liquidity. Far from the Government’s action being taken at the behest of the private trading banks, it was taken at the behest of the central bank. The Government’s decision was taken in order to permit the central and trading banks themselves to estimate more accurately their lending capacity, and to permit the central bank to control more rigidly the volume of credit in the community. I make that point merely for the purpose of illustrating that the Labour Party does not understand the mechanics of finance and has not understood, first, why the trading banks took up the bonds, and secondly, why seasonal treasury-bill issues have been made.
I sh–l! return, if I may, to the modest contribution I want to make to this Budget debate, and shall refer to the statement of the Treasurer to the effect that the last ten years have been years of exceptional development in this country. I shall go further and try to prove the Government’s thesis that the next decade can be a period of unprecedented progress and growth. We know the record of the last ten years. We look forward to the future, and we know that it will be even better than the last ten years.
In this context we should not think of the Budget as a single entity. Rather, we should think of it as a part of a pattern. Running through each of the ten budgets that have been presented to this House by the Menzies Government has been a consistent theme. That theme, to use the words of the Prime Minister, is stability with growth and progress. There we use the phrase of a very celebrated economist, 1 think it was Mr. A. G. B. Fisher. I am indebted to my colleague, the honorable member for Wentworth (Mr. Bury) for giving me his name. As I have said, we should not regard this as a single Budget, but as one of a series of budgets aimed at the growth, progress and prosperity of this country.
Nor should we pick out individual items in the Budget and criticize them. Rather, we should regard the Budget as a whole and ask ourselves, “ Looking at the Budget as a whole, do we think that the Government has done its best in terms of social progress and social welfare? “ I venture to say that if you look at it in this way, Mr. Chairman, you will agree with the Treasurer’s statement that the Budget will bring a high measure of social justice to this community.
What can I say of Government policy? It is predicated upon the simple fact that we want growth, progress and prosperity. Whatever action has been taken by the Government in this and past years has been taken with this purpose in mind. I repeat that the policy of the Government is predicated on the growth and progress of our country. The plans of the business community, of the manufacturers, of the primary producers, of the service and transport industries are based upon the expectation that we will progress in the future, and that we will steadily increase our population to 11,000,000, to 12,000,000, to 15,000,000 until that happy day when we shall see 20,000,000 contented Australian citizens.
Having assumed the portfolio of Labour and National Service from my distinguished predecessor, how do I think of the problem from the point of view of the department which I administer? If I can, I shall think of the next five or six years, during which time we hope that our population will increase to about 11,500,000, with a consequent increase in the work force from 4,000,000 to 4,750,000. That is an increase of something like 2£ per cent, per annum, compared with an increase of something like 2 per cent, per annum over the last decade. Three conclusions follow: First, that work must be found for the increasing work force. We are certain that employment will be found for those people. The other two implications are of critical importance. The first is this: If we are to find employment for these people and if we are to achieve the goal of progress, the amount of money necessary to provide capital equipment must be greater in the future than it has been, because I think we realize that to obtain increasing productivity and higher standards of living there must be a combination of employment and a growing intensity of capital per worker.
The Government and industry have to find ways and means of obtaining sufficient finance to purchase the additional capital equipment that will be required both for the increasing work force and to achieve greater productivity. This is a necessity if our goals are to be achieved. Far from being criticized, I think that the Treasurer should be complimented for his courage in bringing down a Budget which puts into practice in the sphere of government some of the principles that have been used so successfully in the past by commercial enterprises. I shall use only one illustration - the Postmaster-General’s Department. We know that much of the capital required to finance our public works programme has to be found from taxation. We know that to-day businesses get a large proportion of capital for their development from their own internal funds. The Treasurer, in effect, has said, “ A total of £50,000,000 is required for the capital expansion of the PostmasterGeneral’s Department. Let us adopt the now accepted practice of business and of the Government and have the department itself provide between £15,000,000 and £17,000,000 from its own internal profits for the further development of postal facilities and services.” The Treasurer has merely applied normal commercial procedure to this very difficult administrative problem of seeing that the Postal Department expands and that services to the Australian community increase.
What has the Opposition said about these things? Frankly, any first-year student could have got together much of the statistics that were poured out by the Deputy Leader of the Opposition to-night. The Opposition’s main criticism has been that the reduction of income tax by 5 per cent, will mean taking from the poor and giving to the rich. I think that the Prime Minister demolished that argument when he compared the tax of the man on £5,000 a year with that of the man on £1,000 a year. Under the proposed tax rates, the man on £5,000 will pay sixteen times more in taxation than the man on £1,000 a year, whereas in 1949 the man on £5,000 a year was paying fifteen times more in tax than the man on £1,000 a year. In other words, the ratio of tax paid on £5,000 a year to the amount of tax paid on £1,000 a year has increased during the tenure of office of this Government.
As the Minister for Supply (Mr. Hulme) pointed out in connexion with postal charges, the average person posts only two or three letters a week. So, the real burden of the increased postal charges will fall, not upon him, but mainly on commercial and industrial concerns and they will be able to classify the charges as a taxation deduction because they are paid in earning assessable income. I think, Mr. Chairman, that the arguments put forward by the Opposition have been effectively demolished.
I repeat, in examining the Budget we must not think exclusively in terms of criticizing individual items. Instead of criticizing postal or pharmaceutical charges, we should examine these against the general background of the Budget. We should take into consideration the increases in payments to the most needy section of the community. In other words the Budget is doing what I think should be done - giving to the needy but making those who use services pay for them. Tt would have been wise for the Opposition to have analysed it against the background of a basic wage increase of 15s. a week which will add £50,000,000 a year to the pockets of working men, and of increased hospital and pharmaceutical benefits which will assist those who have to pay high medical or high hospital expenses; that is, those most in need.
I think that the Treasurer adequately summarized this Budget when he said that it brought a real measure of social justice to the needy section of the community. Reflection, will, I think, show that the Labour Party in its approach to the Budget has shown itself out of touch with reality and out of touch with the feeling of the average member of the trade union movement. What does the average trade unionist want? First, to use the phrase of the Prime Minister, he wants stability and security. He wants security of employment. He wants a growing population. He wants adequate opportunities for employment so that, if a person should lose his job, he will be able to get another one. He wants relative stability of purchasing power. Above all, he wants to feel that he is a participant in the growth and progress of this country. He wants this country to be great. We have not heard one word from the Opposition dealing with the aspirations of the working man, of his real wish to participate with the Government in making Australia a great country, fulfilling its destiny and its role in the future.
Having said that, may I now come to what I regard as the real problems of the future? 1 think it is right, on an occasion such as this, to take some part of what the Treasurer has said as the text for the debate. I shall take that part of his speech in which he said that we cannot rest upon what has been achieved; that progress must go on. As I have said, throughout our budgets, we have had a common theme which has been the growth and progress cf the Australian economy. 1 speak of progress, not only in the national sense, but also in relation to the individual. Cultural development, education and an expanding economy - all these things are encompassed by the word “ progress “, if it is to have any real meaning.
Accepting the fact that we have this goal of progress in front of us, what are the real difficulties that the Government faces in the future? They are these: First, there is a need to find employment for about an additional 110,000 people per annum. Secondly, if that is to be done, it will be necessary to find capital investment from savings or other contributions for the machines and equipment they are to use. Thirdly, it will be necessary to maintain relative stability of the currency. Those who have read the recent statement from the United Kingdom Government will realize how much it can mean to any country to maintain this relative stability of its currency. Finally, there is the problem of trying to ensure that we have greater access to overseas resources. This, in turn, means that we must export more, replace imports by locally produced goods, and give real encouragement to overseas investors to come into this country.
Against this background, what should be the role of the Government? Here I think we strike a problem that has to be answered in this chamber. As I see it, the real role of the Government is, first of all, to provide the public services - transport, education, roads and the dozen and one other things on which private industry, that is, secondary industry and the tertiary industries can expand. The Government has the real job of creating the climate in which the individual can go about his task of making his contribution to the future, making a profit for himself and carving out a niche for himself and his family. That, as I conceive it, is the role of the Government.
In the continued development of this country we all have a part to play. The Government, it is true, can use the financial mechanism and the Budget mechanism to achieve its objectives. But many other organizations have a role to play as well. The Commonwealth Arbitration Court, the Tariff Board and others should adjust their actions to fit in with the long-term objectives of this Government. Of vital importance is the role of secondary industry, particularly the manufacturers. It is to these people we feel incentives should be given for it is to them we must look to employ perhaps 30 to 50 per cent, of the increasing work force. They have a big role to play and the real incentive they have is the continually increasing demand for their products due to the bigger population and by reason of the fact that progress demands ever increasing quantities of equipment for each worker.
What has the Government done? 1 think you should divide the answer under five headings. First you can look at the state of the nation; secondly, CommonwealthState financial relations; thirdly. Budget action; fourthly, changes in the financial mechanism, and fifthly, long-term measures such as scientific research. Finally, you can ask what result would you expect from these actions. Let us look at the state of the nation itself against the background of a basic wage increase of £50,000,000, an increase in farm income last year of £73,000,000 and a prospective increase this year of far more than that, against the background also of a very healthy employment situation, with wool prices going up in the past few days by 10 per cent, to 15 per cent, and with a fairly confident expectation that they will continue.
I cannot go on mentioning all the changes that have occurred, but I think when we look at the state of the economy, we come to the conclusion that it is healthier to-day than it has been for some years past. Sir, what has this Budget done? We have budgeted for a deficit of £60,000,000, and in addition we have decided that 125,000 immigrants will come into the country this year. All this must add up to the fact that there will be a considerably increased demand for goods and services this year as compared with last year and at a time when the employment situation is healthy. This is enough to justify real confidence in the future.
The only other point I would like to mention refers to Commonwealth-State financial relations, and I mention first the provision for roads. The Government has put the States in a position where, over the next five years, £250,000,000 more can te spent on roads than was spent in the past five years. General revenue grants to the States have been increased from £205,000,000 to £245,000,000 and the provision for State works programmes has been increased from £174,000,000 to £220,000,000. Now, Mr. Chairman, does this make the prospects bright? It means that at least, for the year to come - and I should imagine for the next two years to come - the demand should be big enough not only to absorb the increasing population and the work force, but also to give adequate incentive to the businessman to go ahead with the development of their industries - in other words to invest in more and better capital equipment. There will be opportunities to develop. Opportunities not only for employing the increasing work force but also for increasing the quantity of equipment that our workmen use so that we can be sure of better productivity and higher living standards for every one.
I should mention that if you look at changes in the financial mechanism, such as the issue of seasonal treasury-bills, and the creation of a money market coupled with the Budget, and changes in the Commonwealth and State financial relations, you come to this conclusion: There is a consistent and positive theme running through these nine or ten Budgets of the
Menzies Government. That thread is predicated on the idea of continual growth and continual progress.
I conclude on this note. I know that the prophet is not recognized in his own country. It is seldom that one who sits on the government benches can realize fully just what the Menzies Government has achieved. If you read what has been said during the past few days by distinguished visitors to Australia - a distinguished prelate, a Minister of the Crown from the United Kingdom Government and businessmen from every quarter of the globe - you realize that this is the place to invest your capital. This is the place to invest your money. New money is the most timid thing. If it is prepared to come here from abroad: if it is confident - so too, we should have confidence in our future.
– Order! The Minister’s time has expired.
.- Usually the Minister for Labour and National Service (Mr. McMahon) is very honest and extremely sincere, but listening to him climb the Kosciusko of his own economic platitudes for the past half-hour has indicated to us that the Deputy Leader of the Opposition (Mr. Calwell) completely demolished the case made by the Government in relation to the Budget if it had not already been destroyed by the speeches of the honorable member for Werriwa (Mr. Whitlam), the honorable member for Melbourne Ports (Mr. Crean), the Leader of the Opposition (Dr. Evatt) himself, the honorable member for Fremantle (Mr. Beazley) and other honorable members I have heard speak in this debate. It is true as the Deputy Leader of the Opposition has said, that this Budget is a poor thing, and it is true to say that the people who should be recognized and provided for in all Budgets have been neglected. It is an axiom - and the supporters of the Liberal Party know it better than we do - that this is a laisser-faire Government. It lets everything rip. According to the Government, you do not put anything in the way of roaring or rushing profiteering progress; you let it have its way. You let inflation raven and let people make a return of their own capital yearly instead of dividends as General Motors-Holden’s Ltd. do. Various speakers on the Labour side have referred to those matters.
So far as the Liberals are concerned, it is a delightful, speak-easy, tiptoethroughthetulips Budget. The Government has no intention of going into the vital problems that beset the Australian community. But since the Deputy Leader of the Opposition and other speakers have most trenchantly traversed the Budget, I have no desire to run the whole gamut to examine every aspect of it and reveal it for the poor thing that it is. I should like to turn, as the Deputy Leader of the Opposition did, to the sort of defence of the Budget that was made by the Prime Minister (Mr. Menzies). In view of the enormous prestige which the right honorable gentleman claims for himself and this country, it is rather surprising and shocking to find that the speech he makes on the Budget is a sort of “ Yah yah! you are not the government. You have not been in office.” The Prime Minister says to the Leader of the Opposition, “ I am the boss, and you have yet to win a place as the government. The Labour Party has not succeeded for so many years.” All this shows the arrogance of the man. He has made no attempt to approach the very vital problems that affect us all and give us great concern to-day.
One is entitled to discuss, in a broad sense, the state of the nation as well as the state of its finances, and the sort of place that the Menzies Government has given us. What sort of Australia do we live in to-day? What is it like for the average working man whom we in the Opposition represent or the average citizen in the community of workers and middle-class people such as I represent in the electorate of Parkes? I say it is a deteriorating place in many respects. Man lives not by bread alone nor by money made in certain ways. That is what we apply ourselves to to-day. That is what the Leader of the Opposition and the Deputy Leader have spoken of. Before we talk again of money, let us ask: What sort of country have we under this new philosophy of money above all things? In the past few days, after returning to this place from the parliamentary recess, I have found members such as the honorable member for Moreton (Mr. Killen), the honorable member for Mackellar (Mr. Wentworth) and - I say it with regret - the honorable member for Chisholm (Sir Wilfrid Kent Hughes) making speeches that reflect the deep south of America. They are the speeches of a Little Rock in the Pacific. If this is a good example of where we are going because we have tied ourselves to the money moloch, something should be said about what is actually going on.
To-day we are bespattered with knighthoods. The only virtue of knighthoods under this regime is this: “You are doing good for yourselves and have done good for the Liberal Party “. They go to a distinguished doctor, a prelate or a scientist occasionally, but in most cases they are only a hand-out. There has been an utter degradation of the dignity. We believe that there is nothing more honorable than a plain Mr. or Mrs., but if there is to be any decoration coined in this country, it ought to be the Legion of Honour for the toil-worn women workers who have helped to pioneer Australia. But they are utterly neglected. They are utterly neglected in regard to social services, utterly neglected in regard to pensions, and utterly neglected in regard to more money for schools, houses and hospitals. You expect them to make room in the community for the migrants coming in, and to share their schools, hospitals and amenities; yet when the time comes to hand out the accolade and the decoration, it goes to some linendraper, some accountant or some lawyer whose greatest virtue has been that he has looked after No. 1 and will continue to look after No. 1.
So as we go on to consider this Budget we see that it has been conceived in the wrong sort of atmosphere. The Prime Minister was confronted by an egregious error in regard to postal rates, and the Minister for Labour and National Service, an economist, tried to excuse him by saying that the Government knew the situation but did not know the implications. He reminds me of the chap who gave cheek to the policeman and when he woke up on the cell floor realized that every effect has a cause. I suggest that the Minister should study that more closely. But the Prime Minister has no such humility. With great arrogance he struts along and says, when the error in the Government’s postal rates proposal is pointed out to him, “ That is all right. We will fix it up. I was completely in the dark.” Just as he was in the dark about the Richardson report! He says, “ If you don’t like my policy, I will change it”. What a lot of nonsense to give to the Australian people! So you can understand why the Menzies era has become one of verbal fustian.
When the Prime Minister made his speech in the House I was not here, but I studied the report of it with great interest because he is, and is presented to us as, a great Australian figure. I went back through the “ Hansard “ records of his speeches over the years and found that in his mouth there are platitudes and fine statements, but in “ Hansard “, which embalms the wisdom of this Parliament, there is nothing in the Prime Minister’s speeches on which you can hang your mind or your memory - nothing about which you can say, “ That is good. I must remember that.” His speeches are just empty words and, as such, reflect the emptiness of this Budget.
We are entitled to talk on the financial side of this matter. What sort of future have we when we have these defamatory statements about near neighbours, and when you can talk as if we were a little community - a “ Little Rock “ in the Pacific, as I called it. We are getting to be small, we are getting to be bent and crushed in on each other, and conservative and tory in the extreme. Is that the result of prosperity, or is it the result of ten years of Liberalism?
The Government boasts of prosperity. How did it balance its budget? It did not expect to balance its budget. It balanced it as a result of £100,000,000 or so of overseas investment, which it was not sure it was going to get. Where did this money come from? If it is not Yankee money on the prowl for a 100 per cent, return, it is compradore money from China which has been scooting round Asia, Europe and Africa for settlement, and has now come into this country, or it is Singapore money. It is money from outside. As the Labour Party has said, and as its leader has said, we look askance at overseas money. We do not accept it as the Minister for Labour and National Service does. He has said, “ We are succeeding in this Budget because we have money coming in, we are giving everybody employment, and we are trying to get more migrants so as to increase con sumption “ - the ad nauseum formula for living on your political wits, but that will not give you, eventually, a balanced economy and a progressive country.
If wool had failed us, we should have had a minor recession. We did not have one, because money came in from overseas - money that we had been chasing, although we could have had that money by the proper application of the Labour Party’s policy towards the Commonwealth Bank. In all this, the Commonwealth Bank is ignored. The Commonwealth Bank is ignored in the matter of the new treasury-bills. Treasury-bills used to be penny plain, and are now twopence coloured. They bring in a healthy increment to the trading banks nowadays, whereas formerly they were merely a medium of temporary exchange, a fiduciary arrangement between the Government and its bank to tide the Government over until the time when its money came in. To-day that has been aborted into something quite wrong, something quite different, and everybody who has watched events looks at the matter wilh alarm.
In addition, the Government says nothing about the breaking down of the banking system. All over the country you can see banks building, you can see increased advertising by banks, you can see banks proselytising and running booklets telling you what great institutions they are. But how many of them have bothered to tackle seriously the greatest problem that is facing this country - the building of houses for the people? How many of them have breached the spirit of their charters, which said that, whether they were incorporated in England or created in this country, their business was to lend money to Australians for all projects - and surely long-term projects as well as short-term projects? Surely they were there to lend money to the worker who wanted to build a home, to the man who wanted to develop his little business into a better one, and to the man who wanted his firm to grow slowly and surely with Australia itself. But no! They have subverted the whole of their activities with the connivance of the Government into a mad rush to find money for short-term development and to lend the most extravagant amounts of money for time-payment transactions.
Millions of pounds have been found by all banks for the development of time payment, and we are living on borrowed time so far as that is concerned, as everybody knows.
Does the Government tell us everything about its overseas debts? The other day I picked up a well-written booklet on the World Bank. It tells of the development of backward countries. They need money for development. I found - and I was shocked to find - that the loans to Australia from the World Bank amount to £317,730,000. There is only one other country in Asia, or indeed among the whole of the borrowing units of the bank, which has borrowed more money from the World Bank, and that is India, which has borrowed £507,000,000. I think honorable members will throw their minds back to the statement of the then Prime Minister when the bank was created, in which he said, “ We never expect to go cap in hand to borrow from this bank “. He made that statement because he had his eyes on the Commonwealth Bank. As a socialist, his star rose over the Commonwealth Bank. The policy of the party he led was integrated with the progress and development of the Commonwealth Bank. He said, and said truly, that in providing money for the World Bank and the International Monetary Fund, we did not expect to have to borrow from those bodies. He said, “ You have always to pay back when you borrow. We can raise money for ourselves, but we will provide money for the countries which require development.” In his mind he had India. Ceylon and the other countries of Asia which should get this money from the bank.
How far have we deteriorated financially, and how many members of the Government tell us about it? The Leader of this nation went abroad with a great flourish of trumpets, and with a retinue. He swept into America. He went to see the Chairman of the International Bank. He wanted to borrow a paltry £22,000,000 to refurbish the railway between Mount Isa and Townsville, and he was refused. How have the mighty fallen! The leader of the great Australian Labour Party, and then Prime Minister, knowing that we had £800,000,000 of overseas reserves in our accounts at the time, said that we would not be a mendicant and a borrower from the World Bank, but to-day a paltry £22,000,000 has been refused to the Leader of the Australian Government because some people do not want us to get into a racket which belongs exclusively to the Americans. We all know the story of this thing and we all know the story of Mount Isa’s development. There has been a quota fixed arbitrarily by the American nation, we have been the victims of that quota, and no money can come to us because of the decision made.
It should not be necessary to get thai money from overseas. We on this side of the House are always pointing that out to the Prime Minister, who is a novice as far as finance is concerned. He has never had the feeling for his own country. He has never had the feeling that the Commonwealth Bank should be the paramount force in our financial relations. He knows that we could get that railway to-morrow. The sleepers are there, the men are there, the steel is there - the best steel in the world - and the will is there. Yet he went journeying overseas to ask the World Bank for a loan, and met with a refusal from the bank, to which we already owe over £300,000,000, not because they consider us a bad risk, but because they are teaching him a lesson to do his shopping at home and do some of the other things he should do. So when the Prime Minister talks about everything being all right, I am dismayed that he has not told us some of the things that happened. We already owe the International Bank £317,000,000 - the second biggest debtor country. We are in the same pond with the little fish - Mexico, Guatemala and San Salvadore. That should not happen. It is wrong and it is a rebuke to the Government and to the Treasurer that such things happen.
The Prime Minister talked about naked inflation. He is the greatest creator of inflation that this country has even seen. Because of his stupid and inane remark that he would put value back into the £1, he has created careering inflation that cannot be stopped. Inflation is racing like the four horsemen of the Apocalypse. It will have the effect sooner or later, unless it is checked, of bringing this country to it knees. Inflation to-day is one of the greatest curses. The Prime Minister, that juggler of words, said that the Leader of the Opposition had been speaking lately about the terrors of inflation. We all know what will happen and we have warned the Prime Minister about inflation. My electorate is in a built-up area and recently a small block of land only a few doors from my home in Summer Hill was sold for £2,000. A worker is vainly trying to finance the purchase of that block of land through the bank- A builder is standing by to charge him £4,000 to build a house on that block. The total cost will be £6,000, and by the time he has paid interest on his loan, whether he is a returned soldier or not, he will have paid almost £12,000 for a shelter for his family. How mistaken can the Government be to talk nobly of a balanced Budget and of the wonderful tempo of the times? We are living, financially and morally, on borrowed time and the plight of the little man brings that position home to us very clearly.
On occasions such as this I am always impelled to talk about the plight of exservicemen. I believe that civilians have equal rights with ex-servicemen, but since the Government has given ex-servicemen special consideration I want honorable members to pay some regard to the skin game that the Government is playing on exservicemen The President of the New South Wales Branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia, Mr. Yeo, recently said that the Government had made a profit of £60,000,000 from war service homes. What a wonderful customer the exserviceman is! He has yielded bigger profits than have been made by General MotorsHolden’s Limited or Custom Credit Corporation. The Government has made more profit out of war service homes than has been made by all these predatory people who have come up since the war. The Government has made all this money out of payments for homes. Look what the trading banks lose when they ignore housing finance! In the long run, an ex-serviceman pays about £8,000 for a £4,000 home, despite the fact that he gets a low rate of interest and better terms generally. The ex-servicemen suggested at their congress that in view of the large profit made by the Government out of war service homes, the maximum advance for a war service home should be increased to £4,000 and that there should be no waiting time for loans. If the hire-purchase companies were seeking £2,000,000 from the banks they would have no trouble getting it. This silly clamp on one of the best customers this nation has ever known is an indication of the way the Government regards war service homes.
Considering the uneasiness and the feeling of uncertainty that exists in this country to-day, could there be anything more erratic or more stupid than the present take-over bids? Every day we read in the newspapers that “ Camiknickers Limited “ is trying to outbid “ Lace and Insertion Limited “ while some other linen draper or rag merchant is turning the Stock Exchange upside down and talking about offering £1,000,000 more than somebody else. While those firms water their stock, manipulate and form subsidiaries, we all know who pays in the end. Honorable members opposite know as well as do members on this side of the chamber that those take-over bids are paid for eventually in higher prices. The country is being ravaged by these ravening take-over bids. Every second organization in the country is trying to consolidate its position. Why? Because they are looking for more and more capital. If you are a big shot the Government will give you everything that you want. So long as you prove that you are doing all right the Government will let you do better, but if you are not doing all right - if you are a struggling man - it will watch you go under.
Let me give some illustrations of what 1 mean when I say that circumstances enable some people to make a good thing out of the Budget and out of the system that creates the Budget. The Leader of the Opposition and the Deputy Leader of the Opposition have adverted to the plight of the worker. Opposition speakers have submitted that it is unfair to place an impost of 25 per cent, on a man earning a little more than the basic wage, but to place an impost of only 1 per cent, on a man earning £5,000. But that goes on because it is in accordance with Liberal philosophy and Liberal thinking. If you are big enough or game enough, and you have a clever accountant or lawyer, you can diddle the Government hands down in taxation. But the worker, whose money is mulcted from him before he opens his pay envelope, has no chance.
During the last few months I have made a personal investigation of how taxes are evaded in this country. In most cases it is the big man who evades taxes. The little man has no chance to evade taxes, whether he wants to or not. In most cases the little man has no desire to evade taxes. All he wants to do is pay his whack and be left alone. But there are dozens of accountants, solicitors and barristers engaged in the industry of legal tax evasion. They are making fortunes. Here are some of their operations, which I have personally investigated during the last twelve months. The first man I will deal with is the company former and share manipulator. This is how he avoids taxation. He forms a company in which he splits shares between his wife and members of his family. It is quite phoney but it cuts down the rate of taxation because of family interest. The husband pays the total tax and collars the difference. He goes to church on Sunday and complains that the worker will not lift production. But he is an inflationeer, more deadly than the profiteer because he spreads his taxes between himself, his wife and his children. In that way he evades the honest payment of taxes.
The worker who pays his tax at the source of his earnings by a direct collection out of his weekly wage does not have a sweet cop like the company former. He cannot split his earnings amongst his family and pocket the difference. If the worker’s wife goes to work she is taxed and her husband gets hit to leg with lost deductions. The worker cannot form himself into a company. He pays all the time. If he gets a basic wage rise he is said to be creating inflation, but the real culprit - the company former - escapes criticism. Like some amoebic form of low life he keeps breaking himself up into segments by forming companies and evading taxation. As his prosperity grows, so does the number of companies he forms. It is all perfectly legal and respectable. He is a smart cookie in fact. He is admired at the club, where his fees are on the firm and his grog is on the swindle sheet.
Now I come to the swindle sheet. Does the Government do anything about this enormous drain on taxes? The worker is not responsible for this. This is strictly big business, strictly on the grab. The swindle sheet is more famous in this country than Magna Carta. It is worked ad nauseam. If the Prime, Minister is looking; for a source of inflation, here it is in all: its ugliness. This evasion is costing the country millions of pounds. The swindle sheet is not to be confused with theworker’s expense sheet, which is checked by his firm’s accountant down to the last penny. This is strictly big time, availableonly to the elite. Directors and executives - very elastic terms - charge their grog, cigarettes, dinners and general entertainment to the firm. The firms go quietly, because it is a tax deduction. This is an enormous racket.
Nobody who is anybody is caught paying cash for meals, cigarettes or grog at cafesor restaurants these days. He produces a credit card from the diners’ club. The obsequious waiter bows to big business. He knows that he is dealing with a wise guy. All the diners’ club bills go to the “ office “ and are cheerfully paid because they are deductable from taxation.
I have observed this credit card system in operation. It is legal but I think that it is discreditable and is a tax evasion. At big restaurants like Princes, Romano’s and Caprice, I have been told that only one in twenty customers pays cash. The others are members of diners’ clubs. Why should these greedy gourmandizers and their wives eat on the nation? Why do they not pay their whack in taxes and lay off the worker? Why do they not stop begrudging him his basic wage when it is they who are the maggot in the apple because of their unproductivity?
I know that the Diners’ Club is a wonderful institution and a great convenience for travellers. I am not hitting at the bona fide traveller or diner-out; it is the tax racket that I object to - the dining and wining on the firm. Some one pays eventually. We all pay inflation, and the nation pays in a slack moral outlook which accepts that the price for anything is not the fair thing, but what the traffic will stand. This is what we say to the Government: There is not a fair price to-day. The Government has not the guts to fix any price in taxation or in any particular. The price is fixed by anybody who wants to fix it and get the best he can out of it for himself.
Then we come to another racket which as a fruitful source of tax evasion - the convention racket. Because travelling expenses overseas are a deduction, conventions crop up like mushrooms. A friend of mine told me the other day that he was going to a convention in Canada, that it would not cost much because of tax reductions, and that it was a cheap way of getting a holiday. Conventions take tycoons all over the world. Travel agencies tell me that there is at present a textile convention in Rome. Lollobrigida is making personal appearances in the Eternal City! There is a businessmen’s conference in New York, not far from Forest Hills, where the Davis Cup is to be decided. And the gumshoe boys are having a convention just prior to the Kentucky Derby. The expenses for all this come off the income tax! The costs of trips abroad in order to look at aspects of industry are a tax deduction. The expenses of the tycoon’s wife also are a tax deduction. The tycoon and his wife travel on luxury liners and stay in glamorous hotels, and the seven wonders of the world all roll before their eyes. “ Isn’t it lovely, John? “ says the wife, “ And all tax free, too! “ It is all at the expense of the Commissioner of Taxation and the Australian people.
But the worker, hanging on by his eyebrows in the midst of the transport snarl in both the morning and the evening, must be a very patient guy. He was refused his paltry fares to and from work as a tax deduction, although he has to live out at Penrith or somewhere down the Illawarra line, 20 miles or so from his job. But there it is. All the executives, however, run cars, and they change them as often as they like and charge the cost up to the company. It is freely accepted. In my electorate recently, I saw the newest, most slashing Ford. Full of admiration, I was told by the young man in it, “ Dad did not really want it, but T did. After all, it comes off the tax.” Dad, of course, is a managing director.
Before I leave the question of conventions, I should just like to say that I see that the bread manufacturers are having a convention at Surfers Paradise. I am not hitting at the bread manufacturers particularly. They only supply the illustration for the point. I suppose that the yeast must rise somewhere. What better place than Surfers Paradise!
There is another scheme that I would call an easy and terrible method of tax evasion. It is adopted by the most morally impregnable companies, such as trustee companies. All that is needed is the establishment of an office in Canberra, and Federal estate taxes are avoided. The Perpetual Trustee Company (Canberra) Limited - this sober company of happy memory which has interred so many of our millionaires and which looks after what is left of them - has, I am told, 160 companies on its shingles for which it provides the registered office. All that you need in order to evade taxes in this way is a share register and a minute book. That is all you need to be in trade in Canberra. I made a note of this. It is a smooth and easy method which is indulged in. The tools of trade are a share register and a minute book, and you are in business. Do you trade in Canberra? How positively amusing! You do not have to sell a thing. And you are registered to avoid Federal estate duties. As I have said, there are these 1 60 companies registered in the one office of a trustee company in Canberra. They do not sell a toothpick, but it is a new piece of taxation planning.
These are some of the more aggressive tax ramps. But there is also the accretion of capital by the watering of stock, by getting new stock and new earning powers, and by take-overs. All the capital gain is tax free. And it is so easy. It is no wonder that those on one side of the community are fat to the point of explosion and that the worker, on the other side, is thin and lean because he has to do without so many things.
It is completely wrong - I think, more than that, that it is misleading and malicious - to imply that the case made by the Opposition in respect of the worker is not a valid one. The Minister for Labour and National Service, who made some play after the devastating speech made by the Deputy Leader of the Opposition, made no case. But I submit, whatever honorable members may think of what I have said about these matters - and I have tried at least to be honest about them - that the Budget has been smashed in its entirety by the contributions made by previous speakers from this side of the committee, who have proved the fallacy of the Government’s budget planning as we see it. The Government has been responsible for a piece of laisser-faire budgeteering. As I said at the outset, this is something that the Government has let rip. It says, in effect, “Do not interfere with the boys. They are doing all right. Let them get in for their cut. A good time is coming. Wool is going up again. Gamble, guess and hope.” All those things will be gathered into a recession of the worst possible kind unless there is guidance to see us through these troublous times.
– Order! The honorable member’s time has expired.
.- I claim the indulgence of the committee to make my contribution to the debate on the Budget for the financial year 1959-60, Mr. Temporary Chairman. I have listened with great interest to this, my first Budget debate, and, strange as it may seem, speakers on the Opposition side of the chamber have made the biggest impression on me. They have caused me to wonder just what would happen if the present Opposition team were to occupy the Government benches. I am sure that, if the present Opposition were to hold the reins for three years, the government that followed would have a very difficult period. To begin with, it would possibly find the Treasury very empty.
I should like to congratulate the Treasurer (Mr. Harold Holt) on the presentation of his first Budget. I realize that there is no popular Budget. No Budget can appeal to all and sundry, and I expect that this one is no exception. Naturally, there are in it a few anomalies, and I should like to direct attention to them. Before I do so, however, I should like briefly to deal with the remarks made by the Deputy Leader of the Opposition (Mr. Calwell) about child endowment. He said that this was a Budget for the rich. He criticized the present level of child endowment generally. But why does he suggest that child endowment should be increased, when the rich would receive the benefits equally with the not so rich?
As I said a moment ago, this Budget is no exception, in that it has some anomalies. In the few minutes at my disposal, Mr.
Temporary Chairman, I should like to direct the committee’s attention to them. No doubt, the things that 1 am about to suggest may appear to honorable members to be of minor importance, but I feel that most of them are not of minor importance to the industries or to the individuals affected. The first thing that I should like to mention is pensions. I do not want the committee to think that 1 am opposed to an increase in age and invalid pensions. My attitude is quite the contrary. 1 believe that most pensions are too small to meet the needs of the deserving case, but I cannot agree that the age pension should be fixed at 50 per cent, of the basic wage. I think most honorable members agree with me, although perhaps they may not be game to say so. However, there are several matters with regard to pensions that I would like to mention. First, there are the age and invalid pensions, which it is proposed to increase to £4 15s. a week. Then there is the war pension, the proposed rate for which is £5 10s. a week based on 100 per cent, disability. Then we have the pension of £12 5s. a week for a totally and permanently incapacitated ex-serviceman.
Again let me assure honorable members that I am not opposed to the T.P.I, pension. On the contrary, I believe that 99 per cent, of the T.P.I, pensioners to-day deserve every penny they can get their hands on. This pension is really a form of repayment for what these fellows have been through, and what they are going through at the present time. It was a good move on the part of the Government to increase the T.P.I, pension by 15s., but I do not agree that the pension awarded to an ex-serviceman on the basis of 100 per cent, disability should be so much less than the T.P.I, pension. In my understanding the words “ 100 per cent, incapacitation “ mean what they say. Unfortunately, in the years that have passed since World War I., the proportion of the basic wage represented by service pensions has decreased considerably. Having this in mind, I wish to refer to one aspect of the problem that has not, I believe, received the attention it deserves. I believe that the pension classification categories are rated too highly. In other words, the degree of disability necessary to qualify for a particular amount of pension is rated too highly. If the 100 per cent, incapacitation was more freely interpreted as total and permanent incapacitation, then I believe that about 50 per cent, of those now receiving the 100 per cent, disability rate would receive the T.P.I, pension. If pensions were increased and, at the same time, the disability basis liberalized, exservicemen’s organizations would be much happier.
I often think that the recommendations that are made by the Federal Congress of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia do not receive sufficient consideration. If it was not for the work done by this congress, I believe that governments would have much bigger problems on their hands. If any honorable members have not yet seen the notable R.S.L. pension plan, then I suggest it is time they had a look at it.
Most speakers in this debate have made some remarks about the PostmasterGeneral’s Department, and I shall be no exception. We have heard many comments about the various proposed increased charges, but before I become somewhat critical of the department on this aspect of the matter, I would first like to congratulate the Postmaster-General on his efforts to improve the services rendered by his department. His long-term ambition to provide an automatic telephone service throughout the Commonwealth is an excellent idea. The general aim of the department to increase the number of trunk lines between our major cities, towns and other centres is also praiseworthy. Never before has the public had better trunk line services than at the present time. I also wish to commend the department for its policy of installing rural automatic exchanges in outer areas wherever possible - areas in which there are not sufficient subscribers to justify a large telephone exchange. Let me say, however, that I feel that there should be twice as many R.A.X. installations than are in existence to-day. I -realize the problems associated with the installation of this facility. Firstly, there is the matter of finance, and secondly, there are technical problems. I do suggest, however, that the number of these R.A.X. installations should be increased considerably.
We, as a nation, pride ourselves on our endeavours towards expansion. We have tried to increase our population and to develop our country areas. I can think of no better way to assist this development than by extending the facilities of the PostmasterGeneral’s Department. The departmental services are public utilities, and we should be able to assist public utilities financially in the interests of the nation as a whole.
On the side of criticism, I must make mention of the proposed increases in various Post Office charges. First, let me congratulate the Prime Minister (Mr. Menzies) on his announcement that certain proposed increases in bulk postage charges would not be implemented. I believe that the proposal to enforce a minimum charge of twopence on each article was most severe. I realize that in most cases the department incurs a loss on bulk postage, but here again I believe the loss is justified from the point of view of service to the public. In my own electorate yesterday a newspaper proprietor informed me that, even with the amended alteration, the increased cost of his telephone and postage on newspapers - not including normal letter postage - would amount to £950. That is only one of not fewer than eighteen newspapers in my electorate, but I do not suggest that they are all as large as this one is. Unfortunately, the newspaper that has not a big circulation and is working from hand to mouth will be hit most severely. These newspapers, perhaps with a circulation of only a few hundred, serve the rural interests and are most important in the various centres.
The increased postal charges hit the rural interests generally. Increased charges for telephone calls and rentals and increased postal rates really kill the goose that lays the golden egg, and I urge the Government to consider removing some of the imposts. If it cannot remove them, it should cushion their effect. Instead of increasing all these charges at once, and so affecting rural interests to such a big extent, the charges should have been increased a little at a time.
– Does the honorable member mean that they should be increased over a two-year period?
– Over a twelve-months period or if necessary over a two-year period.
Another matter to which I would like to refer is war service land settlement. I was grateful to notice that the allocation of finance to the various States for this purpose has increased from £5,700,000 last year to £7,000,000 for this year. I am pleased to observe that, although the war service land settlement scheme is nearing completion, the Government has seen fit to maintain the allocation and so speed up the final settlement of returned servicemen. I suggest that on completion of this scheme the Government consider assisting the States to implement a general land settlement scheme similar to that now operating in Victoria. Most of us realize that Australia is a country of natural agricultural pursuits and that it can be developed only by opening up new country.
I was very pleased to hear the Prime Minister inform honorable members this morning of negotiations that he had with a Western Australian Minister. Unfortunately, he did not give us his reply to the Premier of Western Australia. I look forward to learning what the decision was because I believe that the decision in respect of Western Australia could make or break this country. The proposition placed before the Government could, over a period of years, increase the population of a small part of the West to the equivalent of the present population of Victoria. Naturally, where we have some fertile areas, we likewise have some more or less useless areas, but these co-called useless areas have not been thoroughly examined. We do not know fully what mineral resources are there or whether these areas hold oil or gold, but we do know that various mineral deposits are there. I was pleased to hear the Treasurer announce that assistance would be given to the development of the oil industry.
The first point that enters our minds when we examine a budget is finance and naturally finance is in our minds when we think of the national economy. Of course, a budget is based on what we call a balanced economy. A balanced economy enables the Government to produce a reasonably good budget but, without a balanced economy, we will have a very weak budget. We must keep in mind that this is a very young nation and that it needs much development. From my very small political knowledge and experience, I suggest to the Treasurer that the allocation of finance for any scheme should be based on the eventual return from the scheme. For instance, the Snowy Mountains scheme cannot be valued in terms of cash, but must be valued on its return to the nation or, better still, the overseas return to the nation.
While on the subject of agricultural pursuits I should like to refer honorable members to the figures dealing with farm income contained in the White Paper on Nation Income and Expenditure. Those figures which concern me somewhat show that for the year 1956-57 farm income amounted to £519,000,000. Unfortunately, the next year was a bad one and the figure fell to £335,000,000, but for the year 1958-59 it rose again to £408,000,000. That total, however, was a drop of some £100,000,000 over the period of two years. That decline can be accounted for on a seasonal basis, but generally the tendency is for farm income to drop. The other item I wish to mention is wages depreciation and other costs, which we find are rising. If our farm income remains the same but our expenses continue to creep upwards, it is obvious that it will be only a matter of time before the two figures meet and the result will be disaster for the farmers.
Another item is wheat research in Victoria. Some people may feel that this is only a State issue and that it has nothing to do with the Commonwealth. However, I remind honorable members that two years ago this Parliament passed legislation providing for the setting up of a committee in the various States to deal with wheat research. Most Victorians will appreciate the fact that such a committee has not yet been appointed in their State owing to the deadlock between the organizations affiliated with the Australian Wheatgrowers Federation and the State Government. It appears that neither of these bodies will forgo their right or claim, and that this is preventing the setting up of the committee. I should like to suggest to the Minister for Primary Industry (Mr. Adermann) that he ask the wheatgrowers of Victoria to have a ballot on this issue.
Although this might be a costly procedure, it must be remembered that Victoria is now almost two years behind in wheat research.
Finally, I wish to support the claims made ;by my colleagues the honorable members for Mallee (Mr. Turnbull) and Wannon (Mr. Malcolm Fraser) for the provision of television services in the western part of Victoria. We realize that it is not possible, -to provide television services throughout the Commonwealth within a short period, or even in one phase, but those of us who live in Victoria emphasize that the western area of our State plays a very vital and valuable part in the economy of this nation.
.- When a Budget is introduced one fully expects that some of the weaknesses which are showing up in the national economy of the Commonwealth will be dealt with. Because the Treasurer (Mr. Harold Holt) introduced his Budget with very many glowing phrases concerning the improvement in the economic life of Australia and postulated that the future was bright and rosy, one would fully expect the Budget to contain provisions to deal with some of the national weaknesses which are only too evident in our economy. I refer to such matters as the need for help to those in the lower income groups and those in receipt of social service payments as well as to the growing number of unemployed throughout Australia. I think also of the need to reduce the cost structure of Australian production so as to give our secondary industries an opportunity to establish markets overseas and receive more reasonable prices for their products than they are receiving at the present time. But one looks in vain in the Budget to find any indication that an attempt is being made to attack these national weaknesses. The failure of the Government to deal with these questions is sufficient for this committee to accept the amendment which has been moved by the Leader of the Opposition (Dr. Evatt).
I do not propose to deal with social services at great length, because this subject can be discussed when the relevant amending legislation comes before the Parliament. But one thing is certain, and that is that the Australian people as a whole desire that those who, through no fault of their own, are unable to earn an income shall receive from our social service provisions a sum which will enable them to live in comparative comfort. The purchasing power of the age, invalid and widows pensions and of child endowment has fallen considerably in recent years. The proposal in the Budget to increase pensions by 7s. 6d. a week, on the Treasurer’s own statement, is a skimpy increase. The Government could very easily have made that increase double the amount which is suggested. The pressure of modern living and of modern costs falls extremely hard upon the family circle, but no attempt is being made in any shape or form to increase the rate of child endowment. In view of the fact that child endowment is not dealt with and that social services are left untouched, the Budget must be regarded as being totally unsatisfactory. However, at a later stage, it will be possible to express oneself more fully on this question.
I want to deal with the subject of unemployment which the Government apparently passes over as being of no consequence. The only reference in the Budget speech to employment and unemployment is contained in nineteen words which read as follows: -
Employment rose considerably and unemployment fell. Of the additional people available for employment most if not all found occupations.
If one looks at the unemployment figures in Australia one is satisfied that unemployment is not falling. Although there may have been an increase in general employment throughout Australia, one finds that that has occurred more in governmental institutions and enterprises rather than in private enterprise activities.
I should like to bring to the notice of the committee the position that has existed during the past four years. In October, 1955, we had reached the lowest point in unemployment in this country. At that time 14,300 people were unemployed, 1,727 were receiving the unemployment benefit and 63,000 unfilled vacancies were registered with the Department of Labour and National Service. One can appreciate, therefore, that we had almost full employment in Australia. What is the position to-day? Instead of 63,000 unfilled vacancies, the number has fallen to 21,000. Instead of 14,300 people being unemployed, the number has risen to 63,600, and instead of 1,727 people receiving the unemployment benefit the number has risen to not less than 27,450. Month by month over the past four years we have seen a steady increase in unemployment in this country. Notwithstanding that many new industries have commenced, that hundreds of millions of pounds have been invested in Australia by overseas corporations, that the capital of many of our existing institutions has been increased very largely, and that hundreds of millions of pounds have been spent on public works, unemployment is steadily growing. It is of no use for any honorable member to say that the figures which I have quoted do not take into consideration our increased population. I point out that although the number of unemployed has increased five times in the past four years, it is certain that our population has not increased by a corresponding amount.
If we are to prevent the number of unemployed increasing rapidly from the present figure of 63,000, we must tackle the problem. In January, 1959, the figure was 81,000, compared with 70,000 in January, 1958. The number of unemployed decreases slowly until the Christmas period, rises again in January and then begins gradually to decrease again, but unfortunately, we find that the number of unemployed in the peak period each year is greater than in the preceding year.
It is interesting to read a statement contained in a brochure published this month by the Australian Industries Development Association, an organization which no one could term a Labour organization. The statement is in these terms -
After 12 years of remarkable development the Australian economy has lost some of its impetus, and must be invigorated if sufficient opportunities for gainful employment are to be available for the increase in the labour force over the next ten years.
This association has recognized that a problem has arisen which, if unchecked, will grow to dimensions that could affect very seriously the economic life of this country.
The latest figures published by the Department of Labour and National Service indicate that unemployment is growing in the country districts in each State. Although we do not have the figures showing the numbers of persons unemployed in the various parts of the various States, we have the figures showing the number of people receiving unemployment benefit. It comes as a shock to find that although the great bulk of the population in New South Wales is located in Sydney, almost half the people who are receiving unemployment benefit are in the country districts. The same position applies in Victoria. One is astonished to find that in Bendigo, which is a relatively small provincial city, 192 persons are unemployed. In Ballarat the number is 300, while in Geelong and Warrnambool the numbers are quite high. We must watch very closely the trend of unemployment in the country districts.
Now, Mr. Acting Chairman, I shall deal with another factor which must be watched. It is what is referred to generally as the cost structure. Because of the fall in the prices of primary products, we have not been able to build up our overseas credits to the extent that we would like. There has been a general tendency on both sides of the House to refer to the importance of building up an export trade in our secondary industries. However, to do so we must make sure that the cost of production of our secondary industries is such that we can hold our own against competition from Canada, the United States and elsewhere. One looks in vain to the Budget for any lead as to how this may be done. Instead, we find two factors which indicate that the Government itself, by its taxation policy, is creating considerable difficulties in the matter of the cost structure of Australian manufacturers.
The two factors that I have mentioned, neither of which is dealt with in the Budget, are, first, the pay-roll tax, and secondly, the sales tax. The pay-roll tax is included in the costs of production, just as wages are included. It becomes a part of the actual cost of production. When you apply to the pay-roll tax the multiplying system that many years ago was explained so clearly by the late Professor Giblin, you see that its effect is to increase steadily the costs of production. Applying the multiplying theory, the pay-roll tax of £53,000,000 at present being paid by the employers of Australia could result in increases in costs amounting to well over £100,000,000. If that be so, pay-roll tax could well be responsible for our secondary industries losing markets which might otherwise be open to them. Obviously, if the Government desires to attack the problem of the cost structure in order to build up our export markets, it is essential that the pay-roll tax be reviewed. I hope that within a very short time it will be removed from the statute-book of this country.
Another comment I wish to make deals with the unfair application of the pay-roll tax in local government. Muncipalities are placed in a most difficult position. Unlike the States, they cannot say to the Commonwealth Government, “ We want increased allocations of finance because of our increased responsibilities and functions”. Municipalities are prevented from increasing their rates above a certain figure and, therefore, are unable to pass on the amount of the tax. In addition, the States are constantly adding to the functions of the municipalities, with the result that money that could well be used in the interests of the ratepayers is. not being utilized in that way. It is being used to pay the pay-roll tax.
This also applies in respect of sales tax which has created difficulty and increased costs for Australian industry. Sales tax enters into costs in a thousand different ways. The amount paid in sales tax by producers of goods in Australia is about £150,000,000 a year. If the multiplying theory is applied to sales tax it will be found that costs are increased enormously because of percentages being added. As a result of this, it is almost impossible for people to find markets. The Government has made no attempt to deal with the problem of sales tax which increases the cost of living of the Australian people. I suppose that most members have received, as I have, communications from people who are feeling the effects of the sales tax. Many of the items required in the ordinary household are subject to heavy sales tax, ranging from 12i per cent, upwards.
This tax falls heavily and harshly on the family because it is the family, in the main, that uses the household requirements that: are subject to sales tax. The bigger the family, the more it pays in sales tax and the less it is able to buy, as a consequence, from the income it receives. The items affected include custard powder, cornflour laundry starch, detergents and boot polish. This enables one to appreciate the difficulties of the family man. In addition, sales tax is having a bad effect on industry. I have received letters from constituents inwhich they have pointed this out. A letter that I have received from a retailer drawsmy attention to the excessive sales tax of 25 per cent, charged on many lines in hisbusiness which is that of jeweller and silversmith, selling fancy goods. Because of the high prices that he has to charge, due to’ sales tax, his business is going down.
I have received communications from, cordial manufacturers who point out that, as a consequence of sales tax upon carbonated soft drinks, flavoured cordials, and milk bar syrups, their business has declined and is continuing to decline. The figures given by the industry show that the persons who generally buy the commodities concerned are in the low income groups such as the teenager and other persons not receiving the full adult wage. The statistics of the industry show clearly that within the last few years many businesses have closed down and employment has declined by about 25 per cent. The per capita consumption of goods purchased in this industry has substantially fallen. It is to be hoped that more consideration will be given to these factors so that the consumer may be relieved of an unnecessary charge upon necessities, so that industry may revive where it is declining and so that the costs of goods for export may be brought down.
There are two other things that I desire to mention: One is pharmaceutical benefits and the other is the increased telephone charges. It is proposed in the Budget that a charge of 5s. shall be made for each pharmaceutical prescription. As a consequence of this, I understand, it is proposed to increase the range of medicines that will be available to the taxpayer. As the charge made under the English medical scheme is only ls. per prescription, one finds it difficult to understand why the charge should be 5s. in Australia. The details given in the Budget as to how this charge is to operate are somewhat vague. The Budget announcement certainly has not been improved upon by the statement of the Minister for Health (Dr. Donald Cameron). Whilst the Minister’s statement gives some idea of the background of the pharmaceutical benefits scheme, it does not give details as to how the new proposal will operate.
I would point out to the committee that certain drugs cost less than 5s. per prescription. Three such drugs which are largely availed of by the public are thyroid tablets and the heart tablets, digitalis and digoxin. Does the Government’s proposal mean that these necessary drugs, all of which have been on the free list, will have to be paid for by the patient himself? I understand that it is usual for the doctor to order 100 tablets of these drugs and to have the prescription repeated. Because 100 tablets cost less than 5s. it seems that there will be a good deal of difficulty here.
I take this opportunity of raising what I regard as a somewhat extraordinary action on the part of the Government in regard to a drug known as butazolidine which is used for the treatment of arthritic and rheumatic complaints. It has been extremely successful in giving relief from these complaints. Until recently it was on the pensioner free list. The Government has recently ordered that it be struck off the free list so that pensioners no longer have this drug available to them. The cost of 50 tablets of 100 milligram strength is £1 5s. 9d.; the cost of 50 tablets of 200 milligram strength, which are generally used in the first treatment, is £2 ls. 6d.; and the cost of 100 tablets of 200 milligram strength is £3 18s.
I have had complaints from pensioners in Bendigo and have been spoken to on this matter by doctors who have pointed out that the removal of this drug from the pensioner free list will place pensioners in an extremely difficult position. One invalid pensioner who suffers badly from arthritis jot in touch with me. His sole income in his invalid pension and his wife’s allowance. Because the free supply of this drug has been stopped it will cost him £1 3s. a week to get the drug to relieve his pain. I need hardly point out to members that probably the complaint that affects most people in Australia and in other countries is arthritis. It is not a disease that kills but it is a disease that cripples. Those with experience of arthritis - and I contracted it when fourteen years of age - will know the agonizing pain through which a sufferer goes. This pensioner said to me, “ My husband has to have this drug. He cannot sleep. He is in pain the whole time. The great bulk of our combined pensions has to go each week to buy this drug.” I suggest to the Minister for the Army (Mr. Cramer), who is at the table, that he might well take this matter up with the Minister for Health (Dr. Donald Cameron) and ascertain why this drug should be struck off the free list for pensioners at this time when it is proposed to make big changes in the provision of free medicines. I sincerely hope something can be done.
In the few minutes at my disposal, I want to say something about postal, telephone and telegraph charges. I agree entirely with what has been said by the honorable member for Wimmera (Mr. King). The charges that are to be put into operation for our postal and communications system generally are outrageous. They are not justified on any grounds. The Budget itself has shown that since 1945, we have spent £400,000,000 out of revenue on postal facilities. This year, the Government proposes to spend £50,000,000 more. The people are paying for everything that is done for the expansion of postal, telephone and telegraph facilities. These increased postal charges might well be a classic example of the fact that if you try to get too much for a service, as the Government is doing, you kill the service itself. The postal charge for ordinary letters is to be increased by 25 per cent, but for second class mail, the increase will be 43 per cent. Postcards which were previously carried as second class mail will now be first class mail. In addition, higher charges are to be made for papers, periodicals, newspapers and similar articles. Country newspapers will be put in a most difficult position. Most of the papers they sell are posted to persons miles from the place of publication. The new proposals will cost one newspaper in my electorate £1,700 more. The costs of two tri-weekly newspapers in the Bendigo electorate will be increased from £700 to £900. Other costs, such as telephone charges, will rise and the newspapers will probably pay more for news received by cable and teleprinter.
This process of constantly loading industry with additional charges is defeating the very thing this Government claims to stand for - stability in the community and the arresting of inflation. If these processes are allowed to continue, the Government will pile inflation on inflation. Industries will have difficulty in surviving and the people will not be able to secure from their own earnings the standard of living to which they are entitled. I have received telegrams and letters of protest not only from chambers of commerce and newspapers but also from writers, free-lance journalists and others emphasizing that a terrific burden will be placed on the dissemination of news and information. In Australia, the newspapers are part of our daily life. Without free access to the newspapers and an opportunity to study them, we cannot keep ourselves abreast of world affairs.
Order! The honorable member’s time has expired.
House adjourned at 10.56 p.m.
The following answers to questions were circulated: -
d asked the Prime Minister, upon notice -
– The answer to the honorable member’s questions is as follows: - 1, 2 and 3. Following a request by a State Premier the question of Commonwealth participation in an inquiry into the needs of primary, secondary and technical education in Australia was recently under consideration by the Government. Each State Government was given a statement of the reasons why the Government would not be prepared to participate in an exercise of this kind. I will arrange for a copy of the statement to be made available to the honorable member.
d asked the Prime Minister, upon notice -
– The answer to the honorable member’s questions is as follows: - 1 and 2. It would be physically impossible to invite representatives of every section or group in the Australian community to official functions at Parliament House, much as the Government would like to do so.
e asked the Prime Minister, upon notice -
– The answer to the honorable member’s questions is as follows: - 1 and 2. I propose to discuss the honorable member’s suggestion with the Art Advisory Board.
m asked the Prime Minister, upon notice -
– Before writing to the Premiers on this matter I have been awaiting information on certain proposed Victorian legislation relating to poisons which could well have affected the terms of my request to the States. This information has recently become available. I am now in a position to make definite suggestions to all Premiers and will do so in the very near future.
m asked the Minister representing the Minister for National Development, upon notice -
– The Minister for National Development has furnished the following replies: -
Cite as: Australia, House of Representatives, Debates, 25 August 1959, viewed 22 October 2017, <http://historichansard.net/hofreps/1959/19590825_reps_23_hor24/>.