House of Representatives
20 August 1964

25th Parliament · 1st Session

  1. House of Representatives
  2. 25th Parliament
  3. 1964

Mr. DEPUTY SPEAKER (Mr. Lucock) took the chair at 10.30 a.m., and read prayers.

page 423

QUESTION

CIVIL AVIATION

Mr WHITLAM:
WERRIWA, NEW SOUTH WALES

– I ask the Prime Minister a question which arises from the statements made yesterday by the Premier of South Australia and himself on proposals which it appears the right honorable gentleman has made - and rightly made - for new Commonwealth legislation to regulate civil aviation throughout the nation on an economic basis. Will the right honorable gentleman take the occasion to accept the offer, which the Premier mentioned in the South Australian House of Assembly twelve months ago, to allow Trans-Australia Airlines to operate air services to Kangaroo Island and other places in South Australia which at present have only one service? Will the Prime Minister also give an assurance that any new Commonwealth legislation will not be used to override rights to an equal share of intrastate traffic under existing Tasmanian and New South Wales laws which T.A.A. and East-West Airlines Ltd. and the two State Governments have successfully defended against court actions brought by the Ansett companies?

Sir ROBERT MENZIES:
Prime Minister · KOOYONG, VICTORIA · LP

– It is no part of my function to deal with individual cases of this kind. They fall within the jurisdiction of my colleague, the Minister for Civil Aviation. So far as these other matters are concerned, it is true that I have sent a long and reasoned letter to each Premier, because the normal channel of communication is from Prime Minister to Premier. I am not in a position to publish the letter. I have now asked all the Premiers whether I may do so with their concurrence. But I wanted them to consider it first. One Premier has made an announcement about it. I have now asked for the approval of all the Premiers to publish the letter. I have no doubt that I will receive approval. When I have it, I will table in the House, and make available to honorable members, the full text of the letter, which elaborates the proposals that I have made.

Mr Whitlam:

– May we then debate the matter?

Sir ROBERT MENZIES:

– Yes, certainly.

page 423

QUESTION

TRAINING OF SKILLED WORKERS

Mr WHITTORN:
BALACLAVA, VICTORIA

– I address a question to the Minister for Labour and National Service. In view of the recent successes by Australian companies in obtaining skilled labour from England and Europe generally, will the Minister speed up his discussions with employers and the trade union movement so that unskilled adult Australians may be trained to qualify for these better and more highly paid jobs in Australia?

Mr McMAHON:
Minister for Labour and National Service · LOWE, NEW SOUTH WALES · LP

– I think it should be known that for the last two years the Government has been attempting to provide opportunities for unskilled labourers-

Mr Jones:

– Why is the Government itself not training more apprentices?

Mr DEPUTY SPEAKER:

– Order! The honorable member for Newcastle should maintain order.

Mr McMAHON:

– The honorable member’s comment is silly, and he knows it.

Mr Whitlam:

– This is the only form of education in which the Government will not interest itself.

Mr DEPUTY SPEAKER:

– Order! I suggest again that honorable members come to order and give the Minister an opportunity to answer the question without interruption by interjections.

Mr Jones:

– Why doesn’t he tell the truth?

Mr DEPUTY SPEAKER:

– Order! I ask the honorable member to withdraw that remark.

Mr Jones:

– I withdraw the remark.

Mr McMAHON:

– As I have said, the Government has been attempting during the last two years to create a consciousness of the necessity to obtain additional skilled people. If they cannot be obtained locally, naturally we ask the Department of Immigration to obtain them from abroad. In reply to the substance of the question of the honorable member, I regret to say that I read in this morning’s Press that some sections of the trade union movement which met yesterday to consider the Government’s proposals on supplementary training have said that they will reject them and that they can see no useful purpose in continuing discussions. It does seem extraordinary to me that the trade union movement will not have further discussions with the Government on this problem. Already the trade unions are complaining to me that there is not sufficient conciliation, discussion and negotiation on major industrial problems. Now, when they think that industry might achieve an increased supply of skilled labour, and that employees might get better wages and conditions, they fear that this greater supply of skilled labour might in some way interfere with the power that the unions can wield in industrial life, and they refuse this same process of conciliation, negotiation and some sort of compromise.

Mr Calwell:

– Stop the lecture and answer the question.

Mr McMAHON:

– I am answering the question. You did not ask it. I must now wait until I receive a full reply from the trade union movement. I expect to get it within the course of the next couple of days. As soon as I get it I will make a detailed comment in reply to the question.

page 424

QUESTION

MINEWORKERS SUPERANNUATION FUND

Mr L R JOHNSON:
HUGHES, NEW SOUTH WALES

– I address my question to the Minister for National Development. It relates to the Mineworkers Superannuation Fund. Is the Minister aware that, because of a heavy decrease in the number of contributors and a rise in the number of pensioners, the fund is no longer considered to be actuarially sound. Does he appreciate that this situation poses a serious threat to the welfare of 9,000 retired miners? Has the New South Wales Government asked the Commonwealth to impose an excise duty on coal to assist the fund? Does the Commonwealth intend to co-operate?

Mr FAIRBAIRN:
Minister for National Development · FARRER, NEW SOUTH WALES · LP

– This fund was set up under legislation of the New South Wales State Parliament, but the Joint Coal Board does have an interest in its adequacy because it naturally affects the industry generally. The fund originally was set up, I think, in 1940 and contributions are made to it by the miners, by the colliery proprietors and by the State Government. It is perfectly true that at one stage the fund was fairly low, but recently, after consultation between the State Government and the Joint Coal Board, the contribution was increased. 1 am led to believe that at the present moment the fund is receiving more money than it is paying out. However, the New South Wales Actuary is looking into this matter and we expect to have a report from him in the very near future. I believe that at one stage the contribution of the colliery proprietors towards this fund was made dependent upon the amount of coal that was produced. This was held by the courts to be an excise and therefore beyond the power of the State Government. At present, the colliery proprietors make their payment dependent upon the number of employees in the mines. To the best of my knowledge, no application has been made to the Commonwealth Government to place an excise duty on coal so as to increase the amount in the fund. However, as I say, everything is now waiting until we receive the report from the New South Wales Actuary.

page 424

QUESTION

JURY SERVICE

Mr GIBSON:
DENISON, TASMANIA

– I direct a question to the Attorney-General. When the Jury Exemption Act was passed in 1905, was the number of male Commonwealth public servants some 10,500? Has the number now risen to some 139,500 as at 30th June 1964? Will the Minister consider an amendment of the Act which, in its present form, excludes members of the Commonwealth Public Service from serving as jurors in the States and places the burden of jury service on private employers and on the three States which do not have wholesale exemption but which exempt only those public servants who might properly be regarded as indispensable, such as departmental heads?

Mr SNEDDEN:
Attorney-General · BRUCE, VICTORIA · LP

– I am unable to confirm the figures cited by the honorable gentleman. I will consider the matter raised by him but I am bound to say at this stage that I do not think the matter comes within my ministerial responsibility.

page 424

QUESTION

MERCHANT NAVY

Mr BARNARD:
BASS, TASMANIA

– I direct a question to the Minister for Shipping and Transport. Is it true that no facilities exist in Australia for the training of engineers and seamen for the merchant navy? In view of the greatly increased tonnage of shipping available on the Australian coast and the expansion generally of the merchant navy, has consideration been given to providing facilities for this type of training to ensure an adequate service in the future?

Mr FREETH:
Minister for Shipping and Transport · FORREST, WESTERN AUSTRALIA · LP

– lt is not true to say that there are no facilities for training the categories of seamen referred to by the honorable member, lt is true, however, that there is a shortage of personnel coming forward in these categories. My Department is currently examining ways to offer better training facilities and to encourage people to take up the occupations of maritime engineer and other seafaring occupations.

page 425

QUESTION

PAPUA AND NEW GUINEA

Mr MACKINNON:
CORANGAMITE, VICTORIA

– Will the Minister for Territories say when the report of the International Bank for Reconstruction and Development, which made an investigation last year into the economic potential of Papua and New Guinea, will be made available to honorable members? I understand that a draft report has been received already by the Government.

Mr BARNES:
Minister for Territories · MCPHERSON, QUEENSLAND · CP

– A delegation from the World Bank did visit Australia recently to check facts and make further inquiries on certain matters in relation to its investigations in Papua and New Guinea last year. The delegation’s report in draft form has been received but I cannot say when the final report will be released. I hope it will be some time this year.

Mr Whitlam:

– Will you make it available to the House?

Mr BARNES:

– That was not part of the question.

page 425

QUESTION

OLIVE OIL

Mr GALVIN:
KINGSTON, SOUTH AUSTRALIA

– Has the Minister for Trade and Industry made a decision on the application by olive growers and processors for their case to be referred to the Tariff Board Special Advisory Authority? The olive growers seek protection from imported olive oil. They fear that if they do not obtain some protection the present harvest will remain on the trees.

Mr McEWEN:
Minister for Trade and Industry · MURRAY, VICTORIA · CP

– Yes. It has been claimed that the importation of olive oil is having an effect on the local industry and that hundreds of tons of olives now ready for picking in Australia may not be picked or crushed. In these circumstances I have referred to the Special Advisory Authority the question of whether some action should be taken to protect this Australian industry.

page 425

QUESTION

MEAT

Mr SINCLAIR:
NEW ENGLAND, NEW SOUTH WALES

– Will the Minister for Trade and Industry indicate what effect the recently announced variation of the United States beef and lamb import regulations, resulting from the passing of compromise legislation by the United States Senate and House of Representatives, will have on Australian meat exports in the next twelve months? Will the variation, if given presidential assent, bc countered by import restrictions on certain United Slates exports to Australia as was suggested earlier this week in a letter sent to President Johnson by the Australian Prime Minister?

Mr McEWEN:
CP

– I have to be quite frank and say that I cannot give a complete explanation of the implications of the Bill which T understand has passed both Houses of the United States Congress. We are endeavouring to get an understanding of exactly what it means, lt is a very complex piece of legislation. It appears to commence with a basic quota for Australia of not 160,000 tons as proposed originally by the Senate, but 186,000 tons, with provision for an additional 10 per cent. This would seem to indicate a basic quota of 204,000 tons of meat. Then there is reference to a variety of contingencies and provision for increasing, not applying, suspending, and so on. My departmental officers in Washington and in Canberra are not yet able to interpret these provisions. This matter is so intrinsically important that we are naturally endeavouring to get a correct interpretation of its implications to the Australian trade.

As to the latter part of the honorable member’s question, I can say that neither in the communication which the Prime Minister addressed to President Johnson, nor in any other communication that has been made cither by way of correspondence or at the diplomatic level, has there been any threat by Australia of retaliatory measures if certain things were done.

page 426

QUESTION

BANKING

Mr HANSEN:
WIDE BAY, QUEENSLAND

– I ask the Treasurer whether he is aware of any clamping down of credit for the purchase and development of agricultural and pastoral holdings. Are the banks doing this on their own initiative, or at the direction of the Treasury. I draw the Treasurer’s attention to the need for further bank credit for the development of Queensland and for special consideration for the recent expansion in the sugar industry.

Mr HAROLD HOLT:
Treasurer · HIGGINS, VICTORIA · LP

– The Government has at all times encouraged the provision of credit on favourable terms for rural development. I am not aware of any restriction having been imposed. It may be that a particular bank, acting within the limits of its own liquidity, has to apportion credit amongst those who seek it; but the banking system as a whole is well aware that it continues to be the Government’s policy to encourage lending for the purposes of production of those commodities which will return export income to this country.

page 426

QUESTION

TELEPHONE SERVICES

Dr GIBBS:
BOWMAN, QUEENSLAND

– By way of preface to a question addressed to the Postmaster-General relating to the new telephone rentals, I point out that much has been made of the new £20 rental, and I feel that many people in country areas are under the impression that this is to be a Commonwealth-wide flat rate. I ask the Postmaster-General for some salient facts as to rentals. What will be the lowest and the highest telephone rentals?

Mr HULME:
Postmaster-General · PETRIE, QUEENSLAND · LP

– Following the introduction of the Budget by the Treasurer, I circulated to honorable members and to the public details of the new telephone rental charges. They are in three classes. The rental which will apply to capital cities, and to Newcastle and Canberra, is £20 a year. For the third class, which covers the smaller country centres with non-continuous exchanges and up to 2,000 lines, the rental will be £8 a year. For the other areas between those two classes, the rental will be £12 a year with small reductions for duplex and party services.

page 426

QUESTION

CIVIL AVIATION

Mr CLYDE CAMERON:
HINDMARSH, SOUTH AUSTRALIA

– Will the Prime Minister explain to the Parliament why the Government continues to pay subsidies to subsidiaries of Ansett-A.N.A. which operate on unduplicated air routes throughout Australia, when Trans-Australia Airlines is quite happy to operate on the same routes without a subsidy?

Sir ROBERT MENZIES:
LP

– The question should be directed to the Minister representing the Minister for Civil Aviation. I would not know the answer. It is as simple as that.

page 426

QUESTION

MALAYSIA

Mr CHIPP:
HIGINBOTHAM, VICTORIA

– My question to the Minister for External Affairs relates to statements made by the Deputy Leader of the Opposition criticising the membership of the Malaysian Cabinet and parliamentary representation from the States of Sarawak and Sabah, and alleging that there is disaffection for the Malaysian Federal Government in those States. The statements to which I refer also contain the allegation that Malaysia is too dependent on Britain. This brought an immediate correction from the Malaysian High Commissioner in Canberra. Has the Minister, or his Department, been able to calculate the extent to which the statements by the Deputy Leader of the Opposition have encouraged the Government of the Republic of Indonesia in its open aggression on Malaysia, or gauge the extent of the shock which these extraordinary statements caused in Kuala Lumpur, where the Government of this courageous nation is fighting for the survival of Malaysia?

Mr HASLUCK:
Minister for External Affairs · CURTIN, WESTERN AUSTRALIA · LP

– My departmental officers have not yet prepared any report on the effect on Malaysian morale of statements made by the Deputy Leader of the Opposition. I would wish to take the responsibility myself, without involving departmental officers, of saying that I think that in a country like Australia persons occupying responsible positions must exercise a great deal of care in the comments that they make about other nations and the internal affairs of other nations, particularly if the health and survival of those nations are of considerable importance to our own health and survival.

page 427

QUESTION

KANGAROOS

Mr COPE:
WATSON, NEW SOUTH WALES

– Is the Minister for Trade and Industry aware that due to this Government allowing the export of kangaroo meat, scores of thousands of kangaroos are wantonly destroyed each week? I appreciate the fact that in some rural areas kangaroos are a nuisance to primary producers and that their numbers must be kept at a reasonable level, but at the present rate of killing they will become extinct, as almost happened to the American buffalo in the 19th century. Will the right honorable gentleman consider placing a ban on the export of kangaroo meat in order to prevent this wanton destruction?

Mr McEWEN:
CP

– I am not expert on this matter but my understanding is that the killing of kangaroos is not free and indiscriminate, that there are State laws which permit it and State laws which forbid it. When kangaroos are a menace to the pastoral industry by reason of their great numbers, the States permit their killing to reduce the menace. As the kangaroos are being killed, I think it is in the interests of the Australian economy that those who take this job as their employment should turn their work to economic advantage by selling the kangaroo meat.

page 427

QUESTION

BROADCASTING

Mr TURNER:
BRADFIELD, NEW SOUTH WALES

– My question is addressed to the Postmaster-General. I am informed that a number of commercial radio stations in Sydney which previously broadcast serial dramas written and produced by Australians suddenly discontinued this practice some weeks ago although, following upon public protest, there has been a partial restoration. Recognising the national interest in encouraging Australian drama, can the Minister make any comment on this situation?

Mr HULME:
LP

– The advent of television, I believe, had quite a substantial effect on some of the broadcasting stations, many of which found that the revenues they were receiving did not justify the continuation of many of these drama programmes. They therefore turned to the presentation of more music and broadcast less of this kind of programme. I do not know that there is anything that can be done in the matter but I will certainly ask the Australian Broadcast ing Control Board to have a look at it and advise me on it.

page 427

QUESTION

HAWKER-SIDDELEY HS125 AIRCRAFT

Mr CALWELL:

– I wish to ask the Minister for Air a question. Has he seen reports of a statement by Air Commodore E. M. Donaldson, defence correspondent for the London “Daily Telegraph”, to the effect that the Royal Australian Air Force may consider buying some Hawker-Siddeley HS12S jet aircraft? Air Commodore Donaldson has said that the R.A.A.F. may do this because it is unhappy with the French Mirage fighter deal and that serious difficulties have arisen with the Mirage engine. Are these facts?

Mr HOWSON:
Minister for Air · FAWKNER, VICTORIA · LP

– I have seen the report and I know nothing at all about any move on the part of the R.A.A.F. to buy the HS125 aircraft.

Mr Beaton:

– Why don’t you consult your department?

Mr HOWSON:

– Nor do any members of my department know anything of it. It is amazing what information comes here from London. This information certainly has not come from an Australian source.

page 427

QUESTION

THE BUDGET

Mr CLEAVER:
SWAN, WESTERN AUSTRALIA

– Has the Treasurer’s attention been directed to the most informative and impressively printed Budget speech published by the Government of the province of British Columbia, a copy of which I have before me at the moment? If so, does he agree that Australia’s Budget Speech document, quite apart from its vital content, is a little drab and that perhaps the use of colour and illustrations might make it a much more understandable and inspiring document for businessmen and others who follow the Government’s financial programme? Will he study this refreshing document to which I have directed attention?

Mr HAROLD HOLT:
LP

– By the courtesy of a visitor to my office recently, I did have an opportunity to glance through and study for some time the contents of this beautifully produced document. It is well illustrated, excellently printed, and tells a most impressive story of the development of this important part of the Commonwealth of

Nations. I wondered, though, how this House would receive a statement by me of the extraordinary length of the Budget Speech presented by the Treasurer of that part of Canada. I feel that even the contents of the Budget, after a time, would tend to pall if it were delivered at similar length. While I cannot guarantee the quality of the printed material in Australia as against that produced by British Columbia, I can assure the House that the contents of this Government’s Budget do not suffer in any way by comparison with the contents of the Budget of British Columbia.

page 428

QUESTION

PAPUA AND NEW GUINEA

Mr BEAZLEY:
FREMANTLE, WESTERN AUSTRALIA

– I wish to ask the Minister for Territories a question. Is he yet in a position to say whether he accepts or rejects the report of the Currie Commission which inquired into higher education in Papua and New Guinea, or can he say which of the Commission’s recommendations he accepts and which he rejects? Is an opportunity to be given to the Parliament to debate this document?

Mr BARNES:
CP

– I realise the interest that has been taken in this report. As a consequence, I issued quite recently a rather lengthy considered statement on the report. I have nothing to add to that statement. If the honorable member has not a copy of it I will be pleased to make one available.

Mr Calwell:

– What about making the report available?

Mr BARNES:

– The report is available now. It is in the Library.

page 428

QUESTION

MARRABOOR WEIR

Mr TURNBULL:
MALLEE, VICTORIA

– Will the Minister for National Development, in that capacity and as Chairman of the River Murray Commission, at the first opportunity visit the suggested site for the proposed Marraboor weir near Swan Hill, Victoria, to meet the people interested in the project and to hear the case for closer co-operation between the Commonwealth and the Commission and the States concerned in respect of the early building of this weir which would bring many thousands of acres of land into production?

Mr FAIRBAIRN:
LP

– Yes, I would be delighted to do that. I am hoping to go a little further down the Murray River fairly shortly to have a look at the Chowilla dam area. I will see whether I can work in a visit to the proposed site for the Marraboor weir at the same time.

page 428

QUESTION

TOBACCO

Mr BEATON:

– I direct a question to the Minister for Primary Industry. I refer to recent disturbances at tobacco sales in Melbourne and the general dissatisfaction among tobacco growers in various districts with the discriminatory tactics used by tobacco buyers. Has the Minister received reports of the disturbances and of such dissatisfaction? Is he aware of the dire financial circumstances in which some growers are placed as a result of the passing in of their tobacco crops at the sales? Will he take appropriate action to alleviate these conditions? Will he take action to increase the percentage of Australian leaf used in cigarette and tobacco manufacture in order to create a market for good quality Australian leaf? What progress has been made towards the proposed stabilisation scheme following the Minister’s conference with representatives of the growers last week?

Mr ADERMANN:
Minister for Primary Industry · FISHER, QUEENSLAND · CP

– I understand that the disturbances in Victoria to which the honorable member has referred are the subject of investigation by the Victorian State Government. So far as the stabilisation proposals are concerned, three Ministers - the Minister for Trade and Industry, the Minister for Customs and Excise and myself - met the representatives of the manufacturers and the growers last week. We had considerable discussions. I understand that, arising out of those discussions, the manufacturers and the growers are meeting in Brisbane this week to discuss the matter of grades and to see whether they can reach agreement on grading and assessment of the values of particular grades. We expect that we will receive a further report or that we will have a further meeting with the representatives consequent upon their meeting this week.

Mr Beaton:

– What about the percentage of Australian leaf used?

Mr ADERMANN:

– That is involved in the overall stabilisation proposals and will be discussed in conjunction with them.

page 429

QUESTION

SYDNEY (KINGSFORD-SMITH) AIRPORT

Mr COCKLE:
WARRINGAH, NEW SOUTH WALES

– I ask the Minister representing the Minister for Civil Aviation whether plans for improvements to runways and terminal buildings at Mascot airport make any provision for the replacement of the present completely inadequate thoroughfare connecting the airport to the City of Sydney. Will the Minister agree that that thoroughfare could more appropriately be likened to a goat track? In fact, in some places it smells dangerously like one.

Mr Cope:

– I rise to order. Is the honorable member entitled to say that my electorate stinks?

Mr DEPUTY SPEAKER:

– Order! There is no substance in the point of order.

Mr COCKLE:

– With respect, Mr. Deputy Speaker, I did not imply that at all about the electorate of the honorable member for Watson. If the Minister is unaware of any such planning, can he inform the House which government or municipal instrumentality would be responsible for the planning and construction of a new roadway? Will the Minister look into this matter as one of urgency and advise the House in due course whether and when it is likely that Mascot airport will have a roadway connecting it with the City of Sydney appropriate to its importance as the recognised No. 1 airport in Australia?

Mr FAIRBAIRN:
LP

– I shall see what information I can obtain for the honorable member from the Minister for Civil Aviation in this connection. The Commonwealth Government is concerned only with roads built inside aerodromes. Roads outside aerodromes are the responsibility of the States and local government authorities. I think in the case referred to by the honorable member the authority would be the Department of Main Roads of New South Wales. I understand that some consultation has taken place between the Department of Civil Aviation and the Department of Main Roads. As soon as the Minister in another place can supply an answer I will obtain the details for the honorable member.

page 429

QUESTION

INTEREST ON CAPITAL WORKS EXPENDITURE

Mr COSTA:
BANKS, NEW SOUTH WALES

– My question is directed to the Treasurer. When was it decided to charge interest on capital works expenditure, dating back to Federation, in the development of the Australian Post Office? Why does the Government compel the Postmaster-General’s Department to pay interest on its capital expenditure when it does not compel other departments to do likewise? For example, the Department of Civil Aviation spends millions of pounds on aerodromes and services each year, and private air services, which are making huge profits, benefit. Is the vicious increase in telephone rentals contained in the Budget due to the fact that the Postmaster-General’s Department is required to pay to the Treasury this year about £22 million in interest on capital expenditure? Is it really the purpose of the Government to use the Post Office as another taxing machine?

Mr HAROLD HOLT:
LP

– It has been the objective of the Government, so far as is practicable, to have the various commercial instrumentalities of the Government function along business lines. Over recent years this has been occurring in respect of various utilities. The honorable gentleman asked how long this has been operating. He will recall that a committee under Sir Alexander Fitzgerald was established by the Government, and that one of the recommendations of the committee was that the Post Office should seek to earn a return on the services provided by it. This return would include a provision for an interest charge on the capital which had been made available to it.

Mr Calwell:

– I think that -was in 1956.

Mr HAROLD HOLT:

– No, it was in quite recent times, and during my own term as Treasurer. The honorable gentleman referred to the Department of Civil Aviation. As announced in the Budget Speech, the House will be asked to pass legislation increasing by another 10 per cent, the air navigation charges which are paid by those who use Department of Civil Aviation facilities. It has been suggested that we are using the Post Office as a taxation instrument. The reverse is the case. The Post Office charges for the services it provides. If those using its services were not required to pay charges commensurate with the services they receive the Postal Department would be an instrument of taxation, in the sense that the general body of consumers would be required to meet the cost, regardless of whether they used the services of the Post Office.

page 430

QUESTION

CANBERRA AND AUSTRALIAN CAPITAL TERRITORY

Mr GIBSON:

– I direct a question to the Minister for the Interior. Has the Minister’s attention been directed to a Press article by a political columnist who quotes Tasmania’s Premier as describing part of Canberra as a “ planned slum “? Has his attention been drawn also to an earlier Press report of the recent exhibition titled “ Outrage “, organised in Hobart by the Tasmanian Chapter of the Royal Australian Institute of Architects, which was congratulated by one of the Premier’s junior Ministers for its initiative in pointing to this shocking situation? Does the Minister regard the Premier’s own backdoor experience as in any way qualifying him to judge the Causeway district in the contradictory words, a “planned slum “?

Mr ANTHONY:
Minister for the Interior · RICHMOND, NEW SOUTH WALES · CP

– I have seen the reports to which the honorable member has referred. I believe that the statement of the Premier of Tasmania as it appeared in the Press was a little exaggerated when it referred to a part of Canberra as a “ planned slum “. The Causeway district came about only by chance. It was built for the workmen who were building Canberra some 30 or 40 years ago. I think the article on this matter which appeared in a Melbourne newspaper overemphasised the point. I admit that the class of housing at Causeway is of a lower standard than that of housing in other parts of Canberra. But there is a social need to provide cheap homes for rental in Canberra, and the rents of these houses do not exceed £1. At the moment, while there is a huge demand for houses in Canberra, I have no intention of having the houses at Causeway knocked down. A portion of Canberra known as Westlake might have been considered to be a slum but buildings in that area have now been eliminated. Some columnists like to be constructive and informative, others like to be knockers. I suppose the knockers serve a purpose but they become known for what they are.

page 430

QUESTION

POTATOES

Mr DUTHIE:
WILMOT, TASMANIA

– I direct my question to the Minister for Trade and Industry. In July this year I took up with him, and with his Department, a question of the alleged importation from the United States of America of 1,100 tons of processed potatoes - 600 tons for Sydney and 500 tons for Melbourne. It was alleged that the ship carrying the consignment was on the way to Australia. Is the Minister aware that his Department indicated to me that after 36 hours of intensive investigation there was no evidence of any such purchase by any Australian firm but that Customs officers would keep a close watch at ports? Has any evidence been found since mid July to confirm the story? Would the Minister agree that such a story could have been circulated to depress the price of Tasmanian potatoes on the Sydney market?

Mr McEWEN:
CP

– I recall the honorable member bringing this matter to my attention. Senator Lillico also made representations to me about it. There was a rumour circulating that a substantial consignment of processed potatoes was on the way from, I think, the United States of America to Australia. I caused investigations to be made and the position was that we could never discover that any processed potatoes were on their way from the U.S.A. or anywhere else. A watch has been kept on the situation but nothing has eventuated. As a matter of fact the honorable gentleman will know that the price of potatoes in Sydney is at a very high level and has been so for some time, and has been very profitable to potato growers.

page 430

QUESTION

WOOL

Mr HOLTEN:
INDI, VICTORIA

– My question is addressed to the Minister for Primary Industry. Is the Minister aware that many woolgrowers wish to study the original report of the Wool Marketing Committee of Inquiry which was submitted to the Australian Wool Board? Has the Minister authority to order that this report be made available? Does the Minister know that there is a feeling among some wool producers that they will not have an opportunity to vote on any proposal to change the present method of marketing? Has the Minister had discussions with the

Australian Wool Industry Conference on this matter and will he state the Government’s attitude as to whether or not a ballot will be held?

Mr ADERMANN:
CP

– The report of the Wool Marketing Committee of the Australian Wool Board was presented, in the first instance, as required by the relevant Act, to the Board, which, in turn, made (recommendations to the Australian Wool Industry Conference. An ample number of copies of that report is available from the Board on request by people who write seeking copies. If any member of this House requires a copy, he may obtain it on application.

Consequent on the Wool Industry Conference receiving the recommendations from the Wool Board, the Executive of the Conference came to me and informed me that the Conference had received the report and in due course would make recommendations to the Government. At that stage, I intimated to the industry that the Government was prepared to allow a ballot of growers if that was desired. That intimation was given in accordance with a statement in my second reading speech on the Wool Industry Bill 1962 to the effect that the Government was prepared to hold a ballot of growers on any proposed variation in wool selling policy.

page 431

COMMITTEE OF PRIVILEGES

Motion (by Mr. Adermann) - by leave - agreed to -

That Mr. Howson be discharged from attendance on the Committee of Privileges and that in his place Mr. Gibson be appointed a member of the Committee.

page 431

FOREIGN AFFAIRS COMMITTEE

Motion (by Mr. Adermann) - by leave1 - proposed -

That Mr. Howson be discharged from attendance on the Joint Committee of Foreign Affairs.

That, until such time as Opposition members of the House of Representatives are nominated to serve on the Committee, Mr. Killen be a member of the Committee.

That the foregoing resolution be communicated to the Senate by message.

Mr CALWELL:
Leader of the Opposition · Melbourne

.- Mr. Deputy Speaker, I want to know what qualifications the honorable member for Moreton (Mr. Killen) has to be a member of this study circle or kindergarten group, the so called Foreign Affairs Committee.

Mr Whitlam:

– He is in need of education more than most.

Mr CALWELL:

– Yes. I am afraid that if the honorable member is appointed to this Committee his university studies will be seriously interfered with this year and he will not be able to give to any subject in which he is interested so fully of his time as he has done heretofore. The honorable member has not served on many committees.

Mr Jones:

– Was not he elected on the preferences of supporters of the Communist Party of Australia?

Mr CALWELL:

– He was. Therein I see a very great danger. Will he be a Trojan horse for the Communist Party on the Foreign Affairs Committee? As he received preferences from supporters of the splinter group, will he be a Trojan horse for it, too? Will he run in double harness, as it were? Will he do the sort of thing that only a man like him can do? The honorable member has been described as Killen the magnificent. The man who gave him that description was entitled to do so, because the honorable member represented the Government’s majority. I believe that a man with the qualities of the honorable member for Moreton should not be languishing on the back benches. He should not have to serve on a tuppeny ha’-penny Committee like the Foreign Affairs Committee. He ought to be in the Ministry. A man of his outstanding qualities, particularly a man who helped to keep a government in office, ought not to be treated in this rather churlish manner two or three years after the event.

I should like to hear from the honorable member himself the reasons why he thinks his services can be so valuable at this late stage if he is appointed to a committee that rarely if ever meets and that never reports to the Parliament, because it is never permitted to do so. I do not know now who the other members of the Foreign Affairs Committee are. If the honorable member for Moreton is regarded as a deputy for the Opposition until such time as we make up our minds to join the Committee, he will be there for the lifetime of this Parliament, because we shall not join the Committee during the life of this Parliament. I shall not canvass the uselessness of this Committee while discussing the motion now before us. The subject of my attention now is the honorable member for Moreton. His services on the Committee must necessarily be useless. I am completely at a loss to find any one qualification that he has. The fact that he will one day adorn the legal fraternity does not make him an expert on foreign affairs. The present Chief Justice of the High Court of Australia was a very great lawyer before he became a foreign affairs failure.

I shall have to leave the matter there. I hoped that my remarks would bring the honorable member for Moreton into the House to say something in his own defence. I think he is being put on trial by being asked to join a number of people who are not in his class intellectually. The honorable member for Chisholm (Sir Wilfrid Kent Hughes) used to be a member of the Foreign Affairs Committee. The honorable member for Mackellar (Mr. Wentworth) used to be a member of it. Those gentlemen have now moved out. The honorable member for Moreton is one who thinks very much like them.

Mr Reynolds:

– They were too independently minded.

Mr CALWELL:

– That is right. Until now, I thought that the honorable member for Moreton was a man of independent thought. But perhaps he is now being carefully cultivated. Perhaps he is being prepared for inclusion in the Ministry at some future time. Perhaps he is ready now to sacrifice his independence and pay due obeisance, as do all members of the Liberal Party of Australia, to their chief - the right honorable gentleman who owns them and controls them body and soul.

Mr HAROLD HOLT:
Treasurer · Higgins · LP

– Mr. Deputy Speaker, the Government has attached considerable importance to the work of the Foreign Affairs Committee from the time it was established. We believe that the Committee has a big contribution to make towards a better understanding of international questions by members of the National Parliament and that the study of these matters and consultation within the Committee can serve a valuable national purpose. I say quite genuinely that it is a matter for continuing regret on this side of the House that the Opposition has not seen its way clear as yet to accept membership of the Committee. 1 repeat that we attach considerable importance to the Committee’s work. I am sure that those who have served on it would agree that they have found the experience to be of value. The Government’s aim has not been to stifle in any way the expression of views by those who participate in the Committee’s discussions. Reference has been made to former members of the Committee. They could hardly be said to have been muzzled by their experience on it. I gather from a very eloquent contribution made in the debate on the Appropriation Bill 1964-65 yesterday that it can hardly be claimed that the honorable member for Bradfield (Mr. Turner), who is the newly appointed Chairman of the Foreign Affairs Committee, has sacrificed his independence of outlook by the assumption of his office on the Committee.

In the first place, as I have said, the Government attaches continuing importance to the work of the Foreign Affairs Committee. I repeat that it remains for us a matter for regret that the Opposition will not join in the Committee’s work. I am quite certain that all of us who have had the pleasure of associating with the latest recruit to this body, whether on his own side or in opposition to him, would agree that he will be a very worthy member of the Committee and will bring an earnest and intelligent mind to bear on the matters that come before it and, by his presence, contribute to its effective working.

Sir Wilfrid Kent Hughes:
CHISHOLM, VICTORIA · LP

– My name was brought into this discussion by the Leader of the Opposition (Mr. Calwell). I want to say only two things. One is that in 37 years experience in politics I have never heard a cheaper, nastier, more irresponsible statement made by the leader of any party than that made just now by the Leader of the

Opposition. The other is that the low state into which the Australian Labour Party as a whole has fallen is shown by the fact that its members elect as its leader a man of this calibre who makes a statement of this nature in the House at this time in world affairs.

Mr MACKINNON:
Corangamite

– I am afraid that my colleague from Chisholm (Sir Wilfrid Kent Hughes) has almost taken the words out of my mouth, but I intend to say them. I think it is a deplorable commentary on the standard to which Her Majesty’s Opposition has lowered itself that such a statement should be made by a man to whom Opposition members look for future leadership. I deplore his action entirely, because in many ways I have a great respect for the Leader of the Opposition (Mr. Calwell). However, when he descends to the level that allows him to make a speech of this nature, in which he attacked my colleague from Moreton (Mr. Killen), some of us must stand up and comment on it.

Why should the Leader of the Opposition make these statements? Obviously, with his political views, he realises that by a stroke of luck my colleague from Moreton was responsible for retaining these parties in government during the last Parliament. We naturally have a great affection for the honorable member for Moreton, and the Opposition naturally regards him with suspicion. But let us get down to the basis of this personal attack. I think this is the first time in my experience in this Parliament that a criticism of this nature has been directed against the appointment of a backbench member to a committee. Goodness knows, if some of us were to get up on our hind legs and discuss the merits of some of the appointments made to committees by the Opposition we would never stop talking, and our comments would not be entirely flattering.

I know the workings of this committee. I know that it has done some very valuable work. Of course, its publications are not made available to everybody, but that is one of the conditions of our system of government. Although this is a joint committee it is a private committee to which the Government has delegated some advisory responsibility in the important matter of foreign policy. It could not work if its proceedings were made public. I think Opposition members know mat this is so. I would also say, and I think the honorable member for Chisholm would agree with me, that many members on the Opposition side would be very attracted to the idea of joining this Committee were it not for the attitude taken by the Leader of the Opposition. He has been completely adamant and he has overruled the wishes of his own members to widen their minds on the subject of foreign policy.

I hope that my colleague from Moreton will enjoy his term as a member of this Committee. I know that he will be an asset to the Committee and I support his appointment to it.

Mr ASTON:
Phillip

.- I also regret the personal attack made by the Leader of the Opposition (Mr. Calwell) on the honorable member for Moreton (Mr. Killen). 1 want to make one or two corrections to the statement made by the Leader of the Opposition, because he shows a complete ignorance of the facts. He said that the Committee never meets. Of course, this is quite untrue. The Committee meets every Tuesday morning at 10.30 and during the week it has sub-committee meetings on various subjects relating to international affairs, lt is rather interesting to learn that the Leader of the Opposition thinks that this is an appointment by the leaders of the Liberal Party. I would like to inform him that we on this side of the House have a freedom that many of his members do not enjoy. The honorable member for Moreton was elected as the Liberal Party nominee for appointment to this Committee by a complete and free vote of the individual members of the Liberal Party, who recognise his ability and his worth and the value of the contributions he has made in this House on foreign affairs and on many other subjects.

I know that this Committee is a very touchy subject for the Leader of the Opposition. Not only is his own party divided on its foreign policy, but also, in respect of foreign affairs, it is dictated to by the 36 faceless men outside the Parliament. I know full well that many members on the other side of the House would gladly join the Committee so that they could improve their own standing in the community and in the House and obtain a better knowledge of world events today. Instead of being allowed to do this, they must make garbled contributions to debates on international affairs. I deplore the attitude of the Leader of the Opposition. I am sure that he would not have the support of all honorable members on his side of the House.

Mr JONES:
Newcastle

.- The members of the Australian Labour Party agree 100 per cent, with the decision of the party not to participate in the Foreign Affairs Committee while it is constituted as it is at present. The Committee has a hole and corner constitution which does not permit its members to report back to their parties or to disclose to their parties what is taking place on the Committee. Government supporters may, if they wish, remain members of this hole and corner Committee, but we on this side of the Parliament are not prepared to become members or to participate in any way in the proceedings of the Committee while the present conditions obtain.

Let us be quite clear on this point. This matter was discussed in our caucus, and the Labour Party decided to reject completely the proposition submitted by the Government. I say that the Government deliberately framed its proposition to the Labour Party as it did so that Labour could not, and would not, accept it, either as a parliamentary party or as an organisation outside this Parliament. Let there be no misunderstanding. We as a party, individually and collectively, are opposed to this hole and corner Committee which has been set up by the Government. The Minister for External Affairs (Mr. Hasluck) will not relax the restrictions surrounding the Committee and will not permit the Committee to operate in a democratic way. He therefore prevents the Labour Party from participating in the activities of the Committee. The Government does this deliberately. It knows that we will not be a party to such a set up.

The honorable member for Phillip (Mr. Aston) referred once again to the “ faceless 36”. I challenge him and other members on the Government side to name their faceless men, to name their associations, to name the business concerns that they repre sent and to name the business concerns chat dictate the policies of the Government. Let me say this about the alleged faceless 36 on the Australian Labour Party’s Federal Conference: The conference is a most democratically elected body; it is possibly one of the most democratically elected bodies in the Commonwealth today, lt is elected at the annual conference of the Australian Labour Party, which is attended by 700 delegates from Sydney, 300 odd from Melbourne and others from Adelaide, Perth, Hobart and Brisbane.

Mr DEPUTY SPEAKER:

– Order! The honorable member for Newcastle is getting a little beyond the scope of the motion before the House. We are dealing with the appointment of a member to the Foreign Affairs Committee. I think the honorable member’s remarks are going outside the scope of the motion.

Mr JONES:

– With due respect, Mr. Deputy Speaker, you did not ask the honorable member for Phillip to restrain himself when he was speaking about the faceless 36.

Mr DEPUTY SPEAKER:

– Order! The honorable member for Newcastle should take note of what the Chair has said and keep within the scope of the motion before the House.

Mr Calwell:

– You have made your point, Charlie.

Mr JONES:

– I accept the advice of my Leader. This is one of the few occasions on which the Leader of the Opposition ox any Opposition member has made any personal comment whatever about a member on the Government side. But often in this Parliament we have listened to vicious and scurrilous attacks on Opposition members made by the honorable member for Moreton, the honorable member for Phillip and other honorable members opposite. They have made attacks on the honorable member for Yarra (Dr. J. F. Cairns), the former member for Parkes, Mr. Les Haylen, the honorable member for Reid (Mr. Uren) and the honorable member for Hindmarsh (Mr. Clyde Cameron). Numerous attacks have been made by Government supporters on the integrity and character of those men but the moment the Leader of the Opposition gives a few facts about Government supporters they fluff their feathers and rise in indigation to defend one of their colleagues. It is about time we on this side of the House started to toss back some of the muck that you people opposite have been throwing ever since I entered the Parliament.

Mr DEPUTY SPEAKER:

– Order! I suggest again that the honorable member for Newcastle concentrate on the motion before the House. He is getting rather wide of it now.

Mr JONES:

– I am concentrating on the people who for years have been tossing muck in this Parliament.

Mr DEPUTY SPEAKER:

– Order!

Mr HASLUCK:
Minister for External Affairs · Curtin · LP

– Mr. Deputy Speaker, the motion before the House is for the appointment of the honorable member for Moreton (Mr. Killen) to a committee of the House. I think all honorable members on this side of the House regret that this occasion should have been used by the Leader of the Opposition (Mr. Calwell) to make a personal attack on the honorable member. If an honorable member on either side of the House, in the conduct of his business as a member, does something or says something that exposes him to criticism, quite legitimately his political opponents in this House may engage in that criticism. I do not think any of us who are experienced in the ways of the House resent a good deal of freedom -of give and take - and a hot and vigorous debate. That is part of the proceedings of the Parliament. But on this occasion all that has happened has been that an honorable member has been nominated by his party for appointment to a committee. The honorable member so far has not, himself, engaged in any activity in this House in respect of the Committee. He has not nominated himself for election to the Committee. By a decision of his party he has been nominated for a committee. Through you, Sir, I submit to the honorable member for Newcastle (Mr. Jones) that on such an occasion it is unfair and quite improper to attack the honorable member for Moreton personally because this is not an activity of his that is under discussion; it is an activity of his party. It would be open, I submit, to the Leader of the Opposition to criticise the Government parties, if he wished to do so, for having chosen a man but I do not think it is within the conventions of this House for him to attack the man personally.

We on this side of the House regret deeply that, on this occasion, the conventions of the House have been ignored in two ways. First, the Leader of the Opposition has implied that the Government parties are not within their rights in choosing such a man as the honorable member for Moreton. We have the liberty to choose whom we like as a nominee for this Committee. A hopeless situation would arise if a party were attacked on every occasion that it did something that was within its competence to do. We on this side of the House could indulge in quite a number of comments about decisions made by the Australian Labour Party in the appointment of its members to offices within theparty. We could question very much whether the party was wise in choosing as its leader a person like the honorable member for Melbourne or whether it was wise in choosing certain honorable members to sit on the Opposition front bench. But surely we must recognise that it was within the Opposition’s competence to do so, just as it is within our competence as the Government parties to nominate whom we choose for a committee.

Despite what the Leader of the Opposition may now say, he did, in his remarks, say things about the honorable member for Moreton personally which I submit should not have been said. Those remarks were a reflection on the honorable member as a person. They were not a reflection on him because of any action he had taken or any statement he had made in the course of his duties as a member of this House. They were a reflection on him personally. I would hope that, on reconsideration, the

Leader of the Opposition will concede that perhaps he exceeded the conventions of the House. I do not see much profit in continuing this debate and accordingly I move -

That the question be now put.

Question resolved in the affirmative.

Original question resolved in the affirmative.

page 436

PERSONAL EXPLANATIONS

Mr CALWELL:

– Mr. Deputy Speaker, I wish to make a personal explanation. The Minister for External Affairs (Mr. Hasluck) said that I made a personal attack on the honorable member for Moreton (Mr. Killen), as he himself did on the honorable member for Wills (Mr. Bryant) when the honorable member for Wills was appointed to a committee set up to inquire into the rights of Aborigines at Yirrkala. I did nothing of the sort. I have no intention, at any time, of reflecting on the integrity or personal qualities of the honorable member for Moreton. I regard him as a friend. He is my friend. Obviously, honorable members opposite cannot stand a little mild satire or play of sarcasm. I was using the occasion to ridicule the committee. The remarks of the honorable member for Chisholm (Sir Wilfrid Kent Hughes) and the honorable member for Corangamite (Mr. Mackinnon) are too silly for words. They have no sense of humour, no sense of proportion and no sense of the fitness of the occasion. I want to go on record as saying that any attempt to depict me as a person who would use the forms of the House to make a personal attack on any honorable member is completely without foundation. I am entitled to do today what I have done because it has been done on many occasions past when this very matter has been before the House and on those occasions nobody has claimed to have been reflected upon.

Mr LINDSAY:
FLINDERS, VICTORIA

- Mr. Deputy Speaker, I wish to make a personal explanation. In my speech on international affairs on 13th August, in my hurry to finish, I said that certain bodies were nothing but traitors to this country. The word “traitors “ was not in my notes. What T meant to say was that they do nothing but disservice to this country.

page 436

QUESTION

APPROPRIATION BELL 1964-65

Second Reading. (Budget Debate.)

Debate resumed from 19th August (vide page 413), on motton by Mr. Harold Holt-

That the Bill be now read a second time.

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

That all words after “ That “ be omitted wilh a view to inserting the following words in place thereof: - “the House is of opinion that the Budget does not adequately grapple with the problems of striking a realistic and fitting balance between the claims on national resources arising from defence, development and social welfare “.

Dr FORBES:
Minister for the Army · Barker · LP

.- Mr. Deputy Speaker, I wondered, as the Leader of the Opposition (Mr. Calwell) was talking a few minutes ago about the qualifications of people for things, just what qualifications he had for the strictures that he made on the Government in relation to its defence spending when he made his speech in this debate on Tuesday night. He gave this aspect of his speech on the Budget a very big build-up. He gave us advance notice of his intention when he spoke in the debate last week on the position in Vietnam. The Press seems to have discovered well before he actually spoke that he intended to deal with defence. His argument had a very big build-up indeed. But I submit that when we finally heard his speech it turned out to be a damp squib. It was a highly generalised, highly emotional account. There were no details, nor was there any chapter and verse expression of point of view by him. It all fitted in very well with not only his own record but the record of the whole of his party on this matter, going back over a great number of years. I hope honorable members opposite will respond to the challenge when I say that it is about time they told us where they stand on this matter.

The Leader of the Opposition criticised the fact that the increase in defence expenditure this year is only of the order of £36 million. Do honorable members opposite not regard this as enough? They have criticized the increase of £99 million since 1961. Do they not regard this as enough? It would be very odd if they did not believe that it was enough because, year after year, they have been attempting not to increase but to reduce defence expenditure. Let them get up and tell us whether the amount by which they would increase this expenditure, if they were in office, would in fact be greater than that. Then let them tell us what they would spend the money on. If they did that, we would be inclined to listen to their views on defence as responsible views.

For the time being I do not regard myself as having any case to answer with relation to what has been said by the Opposition on this score. Far more penetrating, and far more indicative of genuine interest in, and genuine knowledge of, defence have been the comments that have been made during this debate on this side of the House. Therefore I propose to ignore what the Opposition may have said on this matter and say something about the remarks that have been made by a number of my honorable friends - one or two of them did not sound too friendly, but I still regard them as friends - particularly on the subject of national service training.

Before I say anything specifically about national service training, I should like to reiterate one or two things about our defence planning, particularly as it affects the Army. What I have to say has been said before, but I sometimes think that at least some people have lost sight of it in their assessment of the situation and in the remedies they have proposed. It has been said time and time again by the Government that we base our defence planning on a cold war - limited war situation and, furthermore, that we relate this particular situation to the possibility of conflict in the South East Asian area. I have never heard anybody seriously dispute that we should do that, yet sometimes, it seems to me that a good deal of the criticism assumes some other basis.

Much of the criticism assumes, for instance, that Armageddon is just around the corner, that we should be basing our defence planning, for example on the belief that we are in imminent danger of attack or invasion. As I say we base our planning on a forward posture in a cold war - limited war situation in South East Asia. The point I make is that if that is what we are facing, that is what we have to prepare for. What we have to face and what we have to prepare for is a cold war situation that might escalate into a limited war situation.

The role of the Australian Regular Army, if I may refer to that first, is to deal with a cold war situation, to have the capacity to deal with the likely situations which may arise in a cold war, the sort of situations which have repeated themselves from time to time - some of them quite recently - and to provide the initial Australian response to a limited war situation. These are the things which determine the characteristics of and the type of Regular Army that we require. It must have the characteristics to do this. It must have the size to do it. It must have the mobility to be able to do it, and it must have availability. That is, it must be ready to move at a moment’s notice if it is to be able to do these things. It must be well enough equipped to do them and to employ that equipment in the area to which it is likely to go.

I believe that the Australian Regular Army is able to fulfil this particular role. Honorable members can criticise the role if they like but, given the role, the Australian Regular Army has the characteristics and the capacity to fulfil it. The only exception that I make is that it is short a few thousand men in its strength. I say: “ a few thousand “ deliberately because so much of the criticism, and so many of the remedies suggested are based on the assumption that the Australian Regular Army is short not a few thousands but tens of thousands. In the eyes of some people it is short hundreds of thousands. I emphasise that, with relation to our planned target for the Regular Army, we are short a few thousands.

Let me mention particular figures. Today we have a strength of approximately 24,000. Our target for early 1967 is 28,000. We expect and hope that we will be able to make up this leeway; that we will achieve our planned target by 1967, partly as a result of the improved pay and conditions of service. Let us not concentrate entirely on the pay. Conditions of service are probably even more important than pay, especially our decision to do away with the housing backlog in the Services within three years. As I say, we hope, indeed believe that we have a fighting chance of achieving that target in the time laid down. Even if we do not achieve it, we shall not be far from it. In any case, as honorable members will know, the Government has made a decision to amend the Defence Act to provide for a Regular Army emergency reserve which will be well able to fill any gap that is left.

Sir Wilfrid Kent Hughes:
CHISHOLM, VICTORIA · LP

– They will be volunteers?

Dr FORBES:

– Yes, and I might add that volunteers are given very great inducements. For instance if ex-members of the Regular Army volunteer they will be paid a bounty of £125, in addition to the pay they receive for the fortnight’s training they do each year. That £125 will be paid in their first year and will be increased by £25 a year to £175 by the fourth year. I believe that will be a very welcome inducement which will ensure that exmembers of the Regular Army do volunteer. In addition, if they are called out for full-time service they will receive £55 to compensate them for the arrangements that have to be made for their families, and so on. I emphasise that this is the requirement of which I have been speaking in the cold war and in the early stages of a limited war situation. But of course we have to look beyond the cold war, the situation with which we have been dealing day by day, to a full limited war commitment.

If the Regular Army at the strength I have set out were the only force available to meet our commitments and any potential future situation, we could be justifiably criticised. The people who say only too readily that we have minute forces would be right if that were true. But it is not. The Australian Army - I cannot emphasise this too strongly - is not just the Australian Regular Army. It is an army of much greater size, organised on the basis of two divisions. I am sure most honorable gentlemen will agree that in the current situation an army of two divisions is a very creditable contribution by a country of Australia’s size. I repeat that the Australian Army is not just the Australian Regular Army. It is an army of much greater size consisting of the Regular Army and Citizen Military Forces components. It consists of one army organised in peace time to provide the framework for expansion and mobilisation in time of war.

I have mentioned the role of the A.R.A. The role of the C.M.F. in this one army is to provide the follow-up forces after mobilisation and a period of full time training. It is not now just a basis of expansion in time of global war as it has always been in the past. This concept, we believe, has been given even more meaning by the recent decision by the Government to amend the Defence Act to give the C.M.F. a greater availability - to make the C.M.F. available short of the point at present laid down in the Defence Act, which is an attack or an apprehended attack on Australia. We envisage that after the amendment of the Defence Act the C.M.F. will be available if required in what we generally describe as a limited war situation.

Let me emphasise that those particular tasks, this particular relationship, this one army of which I speak, this assessment, are not just a question of hoping for the best, as in the suggestion so lightly thrown off last night by the honorable member for Bradfield (Mr. Turner). In the opinion of our advisers - I say this quite deliberately and despite what the honorable member for Bradfield said about our advisers - the C.M.F. will be ready to move by the time it is required as dictated by the exigencies of the military situation. The C.M.F. is thus an integral part of our response to a limited war situation. In considering our response to a limited war situation it is quite wrong just to concentrate attention on the regular element of our one army.

Let me put the point another way. If we doubled the size of the A.R.A. tomorrow it would not all be in the same formation. You would not have a Regular Army division on the one hand and a couple of C.M.F. divisions on the other hand. If we decided to double the size of the Regular Army part of it would be integrated with the C.M.F. in each of the formations that were created. This is a new concept in Australia, but I suggest that it makes sense. It enables us to utilise the unique virtues of the citizen soldier, who is so much a part of the Australian tradition. Let us not forget the Australian tradition in this respect. This makes it unnecessary, in a situation of great man power shortage and vigorous national development, to withdraw more than a proportion of our Army from the work force. Of course, we are nol alone in this approach. It will not have been lost on honorable gentlemen that at a very early stage in the Cuba crisis the great United States of America, despite the size of its forces, started to withdraw men from the work force almost immediately and bring them into the services.

The Government has emphasised the new role of the C.M.F. - their unique role in the Australian defence picture - by making a concession to C.M.F. members which very few people in the community enjoy, namely, the exemption of their pay from income tax.

Now I want to say something about national service training. I emphasise that 1 deliberately make the points I have just made, and what I have said should be considered in the light of what I have to say now about national service training or conscription. So many people, including some of my friends on this side of the House, whose views I respect, see national service training as the remedy for the present situation. We should, first, be clear on what we are talking about. There are few people now, as I understand it, who envisage a repetition of the previous scheme, which was adequate for the circumstances which existed at the time; but as events have moved on the circumstances have changed, and the previous scheme would be unsuited to the present situation.

I think it is generally agreed that the ingredients of any workable scheme must be, first, two years of continuous service with the A.R.A. followed by three years on the reserve; secondly, liability for compulsory service overseas; thirdly, while on the reserve, liability to call up for war service with either A.R.A. or C.M.F. units; and, fourthly, the age of call up to be at least 20 years, so that we will have an opportunity to get into the Services at least some of the skills that we require. This view accords with those of our military advisers. Why, then, have we not introduced national service training? Let me say at once that the Government has no objection on the ground of principle to national service training or to conscription. I say this deliberately because, as I understand it, the Opposition has said that it objects to national service training on principle. It has said that it would not introduce national service training in any circumstances. We do not say anything of the kind. We hold ourselves ready to introduce national service training if it best meets the military circumstances of the time.

I want to make perfectly clear, as we have made perfectly clear in the past, that we do not reject national service training on principle; indeed, we were responsible for introducing and presiding over such a scheme in the 1950’s. I should like to say also that not only are we not opposed to national service training on principle, but also that we do not baulk at the cost, although it would be considerable. I shall say something briefly about that in a moment.

Mr L R Johnson:

– Then why have you not introduced national service training?

Dr FORBES:

– We have not introduced it because to do so would be against the unanimous advice of our military advisers. Why do our military advisers give that advice, and why do we accept it? Last night the honorable member for Bradfield rather mocked at the proposition that any government should pay heed to or accept the advice of its military advisers in such matters. I do not agree with him on this, but just to make the point I will canvass the kind of advice which the Government’s military advisers have given.

This advice is partly the result of their assessment of the requirements of the current situation and the adequacy of our forces to meet it. Can we meet the current situation without re-introducing a national service training scheme? This is a matter that our advisers have attempted to assess. Their advice also is partly the result of their assessment of the adequacy of our forces to meet the situation if national service training were introduced. Would the forces be less adequate? Would they be more adequate? Would the introduction of such a scheme make no difference? A proper answer to these questions springs from a knowledge of the defects of the national service training scheme.

As to the adequacy of our regular force to meet the requirements of the current cold war situation, let me emphasise that in strength it is down by a few thousand, not by tens of thousands as is sometimes suggested. It is down from 28,000 to 24,000. This is hardly a situation calling for Herculean expedients or undue panic. In terms of efficiency, equipment and availability, the Australian Regular Army completely meets the requirements. In relation to the current requirement of the A.R.A. - highly trained, readily available forces - national service has certain military disadvantages. First, it involves a very large turnover in individuals and units which has a great effect on efficiency to perform allotted tasks. Remember that a national service trainee serves for a maximum of two years, whereas the normal term of engagement for a regular soldier is six years.

A national service training scheme is not a source of long-service officers, noncommissioned officers, technicians, tradesmen, specialists and instructors. These are the people who are scarcest at the present time, and it is precisely these people who would be diverted from their current operational roles by the necessity to train national servicemen. It is sometimes suggested - I hear the honorable member for Bradfield muttering something about it behind me - that an army instructional corps should be established. It is precisely the young, fit people with recent experience whom we need in the field force, that we also need for training the C.M.F. and national servicemen.

In other words, the attributes to which wc attach the greatest importance - readiness, efficiency, availability - would be substantially reduced by a national service scheme on any worthwhile scale in the circumstances existing at present. The honorable member for Bradfield and the honorable member for Sturt (Mr. Wilson) actually made a specific suggestion that the national service scheme should be reintroduced with an intake, I think, of 15,000 a year. Let me say something about a scheme of these dimensions. This would involve 18 per cent, of the people in the eligible age group in Australia. Let us consider officers as one of the limiting factors. We would require 1,800 more officers than we have at present in order to train these national servicemen and to staff the additional units created without reducing the effectiveness of our present battle groups in the field force. Without the additional officers such a scheme would, for some considerable time, render our existing battle groups in the field force completely ineffective and this, quite frankly, is just not militarily acceptable. At the end of the period, the force would not be in as high a state of readiness as the field force is now. There would be an adverse effect on the morale and the role of the C.M.F. The cost would be £247 million spread over the first five years. That would be additional to the present Army vote. Once established, the cost of the scheme would level out at an additional cost of £117 million a year.

It was for reasons of this kind that the British Government abandoned its two year scheme. The United States has a national training scheme, but I would point out that the larger the army the more readily you can accept the consequences of the defects of national service training. Even in the United States there is much alarm at the consequences of the defects. I think it was the honorable member for Bradfield who originally brought these defects to my attention. Just let me mention one of them. It was referred to in the last issue of the United States “Military Review”. The United States has at any one time, partly as a result of its national service training scheme, 140,000 men, the equivalent of ten divisions in the pipeline, either undergoing training or in transit. We have 2,000 even without national service training. The Canadians have had no national service training scheme since the war. The New Zealanders have one, but it is even more limited than the one that we used to have.

I emphasise that I have given the view of the Government’s advisers, based on their assessment of the current situation. This may change. If so, selective national service training may well become necessary. But, in this new situation, not only would priorities change, but many of the shortages which militate against the introduction of the scheme at the present time would also disappear. For example, officers would almost certainly become available from the C.M.F. and the reserve of officers, technicians from civilian life and so on.

The introduction of a selective service scheme, if it ever does become necessary to introduce one, is a matter of timing relative to the resources available, military priorities and requirements and the strategic situation. I believe a decision on timing can be soundly made only by those who have access to all the relevant facts, information, plans and intelligence estimates. I repeat that: I believe a decision on timing can be soundly made only by those who have access to all the relevant facts, information, plans and intelligence estimates.

In conclusion, it appears to me that some of those who advocate the immediate introduction of national service training are taking undue counsel from their long term fears and advocate action to meet a possible long term requirement, action which would weaken our capacity to deal with the realities of the situation that faces us now and in the short term. Let them consider the possibility that, by doing what they suggest, we might make a certainty of the possible long term adverse situations which we seek to avoid.

Mr COLLARD:
Kalgoorlie

.- Just a few days before the Treasurer (Mr. Harold Holt) was due to introduce the Budget he was reported in several daily newspapers as having said that this was to be his “ best ever “ effort. Admittedly, he had not said in which way his previous efforts were to be excelled, but a very large number of people quite naturally took his remarks to mean that the improvement would be for the benefit of that section of the community that had been treated so badly on previous occasions. While realising that the Treasurer’s previous Budgets left him nothing to beat, many people were still hopeful that, at long last, they would see a Budget which would at least treat the various sections of the community fairly. But wc found, of course, that this was not to be the case. Upon discovering what the Budget actually contained and what it would mean, the majority of the people were sadly disappointed and are now saying quite freely that if this is the Treasurer’s best effort it should also certainly be his last.

Once again, the Government has failed to give justice to many sections of the community. Once again it has failed, quite deliberately, to give encouragement or provide incentive to people in those parts of Australia where encouragement and incentives are required most. It has failed to pro vide finance where finance is urgently required for the development and retention of industry in Australia. It has failed badly to provide anything like adequate additional provision for the defence of this country and its people. Once again the Government has followed its usual policy of lowering the standards of people on fixed incomes and people in the lower income groups while, in comparison, substantially improving the position of people in the wealthy sections of the community.

As I have said, the Government has failed to make provision for adequate defence. Certainly the Treasurer made or attempted to make much of the additional money that the Government claims is required for defence expenditure this year. The Treasurer told us that as the result of the very serious consideration given to this matter by the Government, £36 million wis the amount decided upon as the amount required for additional defence expenditure. Hoping that the public would accept taxation increases for defence purposes as a necessary sacrifice, the Treasurer did not bother to point out to the public that only a small portion of that £36 million would be used for procuring the items of equipment which are so very necessary for our defence preparations. He did not tell the people that the amount that would be available for such equipment would provide very little to improve or build up our defences, except perhaps by way of some increases in Service personnel. Whether such increases will occur is exteremely doubtful.

Actually, of the £36 million that the Treasurer has said is required to build up our defences, it is estimated that £10 million will be required to meet increases in pay and allowances for Service personnel and that a further £14.5 million will be required to meet the cost of homes which are to be provided for some Service personnel. So £24.5 million, or slightly more than twothirds of the total amount, will be absorbed in meeting the requirements of those two items alone. Of course, there will be other additional costs this year and next year; such as, apart from pay and allowances, costs incidental to any increase in the number of Service personnel, and also increases in the cost of items purchased this year compared with the cost of similar items purchased last year. So, of the £36 million which is to be extracted from the taxpayers and which the Treasurer has claimed to be the Government’s great forward step towards the better defence of this country, we will be extremely fortunate if more than £5 million or £6 million is actually available for defence measures apart from the possible increase in manpower.

I am not suggesting for one moment that members of the Services should not receive increases in pay and allowances or should not have these homes provided. As a matter of fact, knowing the attitude of this Government and its supporters to pay increases of any sort for any people who have to work for a living, I would be more likely to suggest that the increases are probably long overdue. Actually, prior to the last election the Labour Party advocated these pay increases, and it was only because of the action of the Labour Party that the Government found it necessary to take these measures. I refer to the pay increases simply to point out that most of the £36 million will be exhausted before any other defence measures can be taken and also to direct attention to the fact that the Government not only is still dodging the real issues of defence but also is in the process of endeavouring to fool the people into believing that something worthwhile is being done. The Government is trying to make the taxpayers believe that their extra contributions by way of both direct and indirect taxation will result in a greatly improved defence position. But, unfortunately for Australia, that is not so. However, fortunately for Australia but unfortunately for the Government and the Treasurer, the people will not be taken in by the Treasurer’s smooth words.

Members of the Government Parties are very fond of putting on a great show of promising various countries that they will be supported by Australia if they should happen to be invaded or attacked. But those members are strangely silent on an explanation of just how that support will be given. If this Budget, with its provision for defence measures, can be taken as a guide, the support will be by way of troops who will be equipped with exactly nothing to defend themselves, let alone anyone else or anywhere else. If we are to give our Service personnel a reasonable chance of proving their worth, if the need to defend this country should arise, we must see that they are supplied with sufficient modern equipment to enable them to do so. The provisions made in this Budget will not even scratch the surface. We will find that, as in the early years of the Second World War, the troops will have only imaginary pieces of equipment with which to do their training.

During the debate on the Budget honorable members usually devote most of their time to matters which are of prime importance to their own electorates or matters which they believe are of great importance to Australia generally. Therefore, I will be following the practice of the House if I refer to decentralisation because it not only is of considerable importance to my electorate of Kalgoorlie but also is or should be high on the list of important subjects for Australia generally. Unfortunately, the Budget that we are now discussing will set further obstacles in the path of decentralisation. This Budget will make it a great deal harder to accomplish decentralisation or to make any move in that direction.

Decentralisation is a subject about which we read and hear a great deal; but unfortunately it does not receive much attention beyond lip service. Quite often we see reports that a Minister or some other high-ranking person has addressed a meeting or gathering of country people and has spoken quite emotionally about the need for decentralisation, what it means and so on. We hear Ministers lamenting very loudly the fact that there are not more industries and more population in country areas. We also hear them advising on how decentralisation should be accomplished. Whilst they are absolutely magnificent in giving advice on these matters and in making speeches on them, they are abject failures when it comes to making financial provision or granting concessions to people in country areas to encourage decentralisation.

People in the country areas do not need Ministers or anyone else to tell them what is required in relation to decentralisation. They realise only too well what additional industries, the expansion of industries and additional population would mean to country districts. All they want is for the Government to take some action along those lines. Most of the people are quite enthusiastic and are quite prepared and quite happy to do everything they possibly can to bring about improvements in their own districts, in other districts and in Australia generally. But the part that they can play is extremely limited. The greatest needs and requirements for decentralisation are beyond their resources. Their efforts can accomplish very little if the people who have the authority, the finance and the means of collecting the finance do not use the means at their disposal in a proper and sympathetic manner in order to make decentralisation a matter of fact instead of one of fiction as it is at the present time.

Before decentralisation can become effective, it will be necessary for the governments of the day, both State and Federal, to create in country areas an atmosphere that will attract industry and population to them and encourage people to seek employment and live in country areas rather than move into city areas. Unfortunately, that encouragement is not being given by governments. In fact, the opposite is happening. This Budget, which I suggest should be drawn up so as to allow such things to happen, actually will make the position much worse.

For instance, people in country districts invariably are required to pay substantially more for government and semi-government services than people in city areas are asked to pay. To my mind, that is completely wrong, completely unreasonable and completely unrealistic, if we are honest in what we say about decentralisation. It cannot be denied that simply because some people are prepared to live and to work in country areas the main cities are able to expand and the people in those cities are able to live and to obtain employment. By the same token we appreciate also, and nobody denies, that the people living in the cities are producing and manufacturing goods, which allows the people in the country to continue to live in country areas and to produce. So city and country dwellers are necessary to each other. That being so, why should the people in country areas be called upon to pay so much more than city dwellers for the ordinary requirements of life? Why should they be denied the amenities and comforts provided for those living in city areas? Why, for instance, should people living in the country be required to pay so much more for water, electricity and petrol? Why should they continue to be forced to pay sales tax on freights?

Why should people in country areas be expected to suffer from a lack of communications and a lack of transport? Some honorable members may suggest that lack of finance is responsible for the situation. That is the reply that we always get - insufficient finance. People in country areas who are doing their best to bring about, or are advancing propositions that would bring about, some real decentralisation, are often met with the suggestion that there is insufficient finance. But lack of finance is not always the reason for the attitude taken by the Government. Quite often the reason is a complete lack of concern by governments such as the one we now have. Although Ministers and others are very voluble on the need for decentralisation, they quickly run to cover as soon as they see put forward a proposition which will require the expenditure of a few thousand pounds. When the Government requires finance to run the country it does not hesitate to ask the country people to contribute to the same extent as city people of similar means. The proposed increase in income tax applies to all parts of Australia, and so also do the increases in sales tax, excise and the cost of telephone installations. When it is a case of collecting money the Government treats everybody equally, but when it comes to the Government providing money we find that the country people are treated very differently.

This Budget has been a very great disappointment to the people in the north and north west areas and also to people in the fringe areas, all of whom were looking to the Government to give them some relief from taxation. Instead, an added burden has been placed upon them, both directly and indirectly. The people resident in the areas which are referred to in the first and second schedules of the Income Tax and Social Services Contribution Act as zones A and B certainly have a very good case for their claim that taxation concessions in those areas should be extended. Several places now outside zones should be included in the zone because of their isolation and their high cost of living. Although the Treasurer has told me on several occasions that nothing can be done in that regard until there is a complete review of the whole system, he has done absolutely nothing over the years to have a review carried out. In the meantime, the people in those areas continue to be penalised. As a result of this Budget the people of the north will pay increased taxation, both on their actual earnings and also in indirect taxation on the purchases they make.

Although we talk about decentralisation and the need to populate the north, there is certainly no encouragement along those lines contained in this Budget. In fact, the Budget will have the opposite effect, and people will be more likely to move from the country to the city. It is quite certain that the Government gave no consideration whatever to people in country areas when it decided on the increased telephone charges. To the country people the convenience of a telephone means much more than it does to residents of city areas. The same applies to the telegraph system. People in country areas have a much greater need to make trunk line calls, and the calls are usually over great distances. I have received many letters from people all over a very large part of Western Australia complaining about the charges for trunk line calls. They have every reason to complain, because in country areas such calls represent a very big item of expense.

I should like to place on record that people making a call over a distance of between 200 and 300 miles, which is not a great distance when measured against the size of Western Australia, for instance, are obliged to pay 10s. for a three minute call between 9 a.m. and 6 p.m., or 7s. during other hours. Should they make a person to person call there is a further charge of 4s. If the distance is between 300 and 400 miles the charge is 12s. for three minutes between 9 a.m. and 6 p.m., or 10s. between 6 p.m. and 9 a.m., with an extra 5s. for a person to person call. If the distance should exceed 400 miles the charge for a three minute call between 9 a.m. and 6 p.m. is 15s., or 12s. during other hours, with an aditional charge of 6s. if a particular person or a call at a particular time is required.

There would be very few calls made over long distances which could be described as social type calls. Practically all the calls made from the country to the city are person to person calls, either because it is essential to speak to some particular person or to avoid excess charges for wasted time which could arise from being switched from department to department or from one person to another before finally being able to conduct the business. We have the position that in the case of the 200 to 300 mile call to arrange perhaps for the despatch of an urgently required piece of equipment or machinery, or to deal with some matter requiring urgent attention, the person making the call would have to pay at least 14s. because when dealing with these matters it is not possible to telephone a firm after 6 p.m. or before 9 a.m. Consequently, calls have to be made when the charges are highest. If the call were over a distance of 300 to 400 miles it would cost at least 17s.. and if it were over more than 400 miles the charge would be 21s.

I suggest that a telephone call of three minutes which costs 14s., let alone 17s. or 21s., could be put into the luxury class, and yet all the calls about which I have been speaking would be on matters of urgency or matters of necessity, not just social matters. Some honorable members may suggest that the charge for calls over more than 400 miles is reasonable because it does not matter how much greater than 400 miles the distance happens to be. I suggest that calls made from a capital city to a capital city, which in most instances would be over 400 miles, would be made by people who could well afford to pay more, or by companies or business heads who would be in a position either to recover or offset the charges, no matter what they were, whereas people in country areas in most instances would not be in those happy circumstances. The Government should give heed to these matters, because there is no doubt that the charges to be made by the Postmaster-General’s Department certainly could not be described as any encouragement for people to live in country areas.

I wish to refer now to a matter which has a considerable bearing on the possibilities of encouraging people to move to, or to continue to reside in, certain parts of my own electorate. It is not my intention to say very much on the subject of television for Kalgoorlie and Geraldton, because I hope to have the opportunity to deal with this matter more fully when we are debating the Estimates. However, as I have been speaking about decentralisation, I want to point out that there is no doubt that a top class television service in those areas would go a long way towards encouraging people to live there. Unfortunately, it appears that if this Government can find a way of setting up a cheaper and inferior type of service it does not intend to provide for the people of Geraldton or Kalgoorlie a television service equal to that provided elsewhere.

I take very strong exception to the Geraldton and Kalgoorlie districts being treated differently from other districts which are of no greater importance and which have not many more people. Geraldton and Kalgoorlie are very important areas of Western Australia - equally as important as Albany and Bunbury and equally as important as those country areas of New South Wales and Victoria which now have, or are being provided with, a service as good as money can possibly buy. There is no reason why Geraldton and Kalgoorlie should not also enjoy a top grade service.

Instead of searching for ways and means of setting up inferior types of service, such as package stations, the Government should bc setting machinery in motion to put up a decent national station which would not only give a top class service to the people in its range but would also allow the service to be transmitted to areas outside. If package stations will give a service equal to existing larger stations, as has been suggested by at least one Western Australian senator, I would like to know why the Government has spent about £500,000 in putting up a station elsewhere when a package station costs only £30,000 or £40,000 and would give a service equally as good.

The people of Geraldton and Kalgoorlie have the right to have a good television service, the same as people have in other districts. I am not prepared to stand silent and watch them being fobbed off with some poor, inferior type of service. Once an inferior service is provided it will be there for all their lives. It is quite certain that once a station is established, no matter how poor or how good it is, it will be there for all time. As I have said previously, a good type of service will certainly encourage people to settle in country areas whereas a poorer type of service will have exactly the opposite effect.

I want to deal now with the Government’s paltry attitude towards the pensioners. I shall be fairly brief because I hope to have the opportunity to deal with this matter more fully at a later date. With the exception of the total and permanent incapacity pension which was increased by 10s., increases for pensioners did not go above 5s. a week. The Commonwealth Conciliation and Arbitration Commission decided after lengthy deliberations that the economy of this country could stand an increase of £1 a week to employees under Federal awards. This Government, which is forever claiming that it has placed Australia in a prosperous and strong economic position finds apparently that it is able to give pensioners an increase of only 5s.

The Government has failed to make an increase at all in the majority of social service items. Even where it has made increases, it has failed to restore the difference between the purchasing power of the pension in relation to the basic wage before the £1 increase and the purchasing power following the increase. Had the same relationship been retained between the pension rate and the basic wage the married pensioner should have received an additional 7s., not 5s. A single pensioner should have received an increase of 8s. and not 5s. and class A widows should have received 8s. and not 5s. It becomes obvious that, in relation to purchasing power and the basic wage, the pensioners today will be much worse off than they were previously.

Other items of social service, such as sickness and unemployment benefits, have been completely disregarded by the Government. Medical entitlements, funeral benefits, child endowment and the maternity allowance were not mentioned in the Budget and there was no mention of easing the means test. The Treasurer (Mr. Harold Holt) seemed to suggest that because so much more money was being paid out today for social services as against 20 years or so ago everybody, including the pensioners, should be quite happy about the position. Of course, there can be only one measuring stick really in relation to these matters - can the pensioners live reasonably well on the amount being provided for them? One only has to move around mixing with pensioners and it soon becomes obvious that, unless one is deliberately blind - as apparently some Government supporters are - the pensioners are not able to live in the manner to which they are entitled. Yet the Government continues to make adjustments of this type to the pensions, and the conditions of most pensioners gradually deteriorate.

The Government has not mentioned the gold mining industry in this Budget although of course the overall provisions of the Budget will harm the industry and not help it. I would have thought this was a good opportunity for the Government to introduce some measure to give further assistance to the gold mining industry. The Government should help the existing mines by granting some assistance to keep up the margin between production costs and the value of production and to maintain them in the position they were in when the last adjustment was made. The Government should also make some provision to aid in the search for new fields and the opening up of new ore bodies. Unfortunately the industry is declining. This Government has the opportunity to do something about it if it wishes to do so.

I refer now to decentralisation in Western Australia. I took out some figures on the position as it was in 1960. It was interesting to find that the average number of employees for each factory in Western Australia in that year was approximately Hi. In the rural areas, the number of people employed per holding was less than two in every 10, while in gold mining the average number employed per mine was approximately 200. If one measures the value of one mine against one factory - taking into consideration the number of people directly dependent on the employee, and those in business or engaged in other inci dental activity - it can be seen that there is no better way of aiding decentralisation and increasing the population in our country areas than by giving assistance to the gold mining industry.

When we make an analysis of the provisions of this Budget, it became obvious that the Government is not one wit concerned about the welfare of the people in the lower or fixed income groups. The Government has little, if any, concern about the difficulties facing most country residents and is not concerned with the need for decentralisation. This Budget, and its effects, will provide a further obstacle to decentralisation. The higher tax charges, both direct and indirect; the higher Post Office charges in relation to telephones and telegrams, and the failure of the Government to give any tax relief to people in isolated and high cost areas, will act as a further deterrent to people to settle in areas outside the city. The failure of the Government to provide a television service for Geraldton and Kalgoorlie, and its failure clearly to state its intentions in this regard, together with its lack of consideration for the gold mining industry, will create a further obstacle to the development of a large part of Western Australia.

Unfortunately my time has expired. I intended to refer to the Ord River project. I am greatly disturbed that the Government has not seen fit to make provision in the Budget for the construction of the main dam, particularly when we heard the Prime Minister (Sir Robert Menzies) at the opening of the diversion dam, tell a great story of how the project must be pushed ahead.

Mr ACTING DEPUTY SPEAKER:
Mr. Mackinnon

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

Sitting suspended from 12.44 to 2.15 p.m.

Mr CHIPP:
Higinbotham

.- Mr. Acting Deputy Speaker, once again the National Parliament is debating the Budget, which is probably one of the most important documents brought before it throughout the entire year, because it determines the financial destiny of the nation for the ensuing 12 months. I have witnessed the presentation of four Budgets since I became a member of this place, and I have been pleased strongly to support all of them. However, I find myself impelled on this occasion to be critical of the present Budget - indeed, highly critical of one aspect of it. I shall put my criticism as strongly and as logically as I can. That criticism is certainly not based on the character of this Budget as an economic document. I believe that in that respect it is sound and that it is what the country needs, although I make a small reservation and say that I hope the Treasurer (Mr. Harold Holt) is wrong in his estimate that only £275 million will be raised on the loan market. It is my hope that more will be raised, thus draining off a little more purchasing power from the economy than is presently envisaged.

Who can challenge this Budget on economic grounds? We have full employment in the Austraiian economy. Our migration intake this year will be greater than that of last year. The price and cost stability of the nation is more certain than ever before. Our balance of payments position is sound. Our overseas reserves are higher than they have ever been. The loan market is buoyant and consumer demand is strong. This Budget, above all, will provide another stimulus to growth, which, last financial year represented an increase of 9 per cent, in the gross national product. However, I am critical of this Budget, because I believe that it is a selfish one. I believe that it completely overlooks a fundamental need of Australia’s neighbours. I refer to the fact that the appropriation for foreign aid has not been increased to anything like the extent to which it should have been raised. May I commence my remarks on this aspect by quoting a very famous man, who said -

The war against hunger is truly mankind’s war of liberation . . . there is no battle on earth or in space more important, for peace and progress cannot be maintained in a world half fed and half hungry. We have the capacity to eliminate hunger from the face of the earth. Victory will not come in the next year . . . but it must come in our lifetime.

Those words were uttered by the late President Kennedy in 1963. If we want to go even further back in history, we can recall that in 1951 the Prime Ministers of the Commonwealth stated” -

There can be no lasting peace while millions arc living in poverty.

Before I take my particular criticisms of the Budget further, I feel impelled to answer one or two of the arguments put before the House by the Leader of the Opposition (Mr. Calwell). Again, he has scoffed at our concern about inflation. I never cease to be astonished at the way in which a man who is the self appointed champion in this country of the underprivileged and the fixed income groups cao wave off the fear of inflation with an air of gay nonchalance and reckless abandon. This is something that I have never been able to understand. I considered most carefully his remarks about indirect taxes. Here, we have a rather veiled criticism of the indirect taxation levied by this Government compared with direct taxation. The honorable member for Hindmarsh (Mr. Clyde Cameron), of course, was not so inhibited as his Leader was, for he devoted at least half his speech to manifesting his paranoiac hatred of the Ansett organisation, and for the remainder of his time concentrated on this question of the imbalance, as he called it, between direct and indirect taxation. The honorable member for Hindmarsh said, with some justification, that there is less equity in indirect taxation than in direct taxation, and he made the point that indirect taxation shows no discrimination between single and married men or rich and poor men, for everyone bears the burden equally. But perhaps his knowledge of economics is not as expert as that of those gentlemen who write speeches for the Leader of the Opposition. Those men know full well that in 1949, the last year in which Labour was in office, indirect taxation was 5 per cent, higher than it will be this financial year.

This, I believe, is not the only reason why the Leader of the Opposition did not feature this aspect of the Budget in his speech. Any economist, even one who writes speeches for the honorable gentleman, knows very well that, in a socialist economy in which those in authority want to plan and regiment the resources of the country, indirect taxation must be increased. As a means of controlling resources, indirect taxes are far more potent and far more powerful than direct taxes are. So let us never forget, when the socialists opposite criticise us on this side for levying indirect taxes, that if they ever take office we must necessarily expect them to increase indirect taxation, because that represents one of their ways of controlling and regimenting the economy.

Mr Peters:

– As long as they control the rich, it will be all right.

Mr CHIPP:

– I am never disturbed if the honorable member for Scullin throws interjections at me when I am speaking on economic matters, Mr. Acting Deputy Speaker. I shall completely disregard any interjections that he makes on this subject at least.

I accuse the Leader of the Opposition of deliberately misleading the House with some figures relating to direct taxation that he incorporated in “ Hansard “ with the concurrence of the Minister who was at the table at that time. The privilege of having material incorporated in “ Hansard “ should not be abused, because the Minister for the time being in charge of the House has no opportunity to vet the material being incorporated. When I looked at the report of the Leader of the Opposition’s speech, I was astonished to find the nature of the official looking table incorporated by him, which appears at page 310 of “Hansard” of this House. This table purports to show the average earnings of Australian wage earners and the income tax they pay on those earnings. The figures presented by the Leader of the Opposition in this table suggest that in 1964-65, the average earnings of the Australian wage earner will bc £26 7s. a week.

Mr Whittorn:

– That relates to the little man.

Mr CHIPP:

– Yes, the so called little man. According to the Leader of the Opposition’s figures, a married man with two children would pay £2 6s. a week income tax on average earnings of £26 7s. a week. The figures in this table represent the basis of the honorable gentleman’s criticism of the Government. He said: “ You have hit the small man again “. Let us see how honest these figures are. The tax figures were taken straight from a tax schedule giving the rate of tax on a taxable income of £26 7s. a week. In other words, the Leader of the Opposition has made an assumption - a dishonest one - that the average earnings of £26 7s. a week represent the taxable income. He knows, and the person who prepared the table for him knows, that every taxpayer is entitled to concessional deductions. For example, is it unreasonable to believe that a married man with two children who earns an average of £26 7s. a week would pay annually £50 ii. insurance, £40 in rates and taxes, £50 in medical expenses, £20 in contributions to hospital and medical benefit funds and £25 for school uniforms, books and the like, and would make gifts totalling £5 to various charitable organisations, all of which payments are deductible? I am sure the House will agree with me that these figures that I have given are quite reasonable. If these expenses are deducted and the taxable income ascertained, we find that the tax payable is only £1 12s. a week, or about £40 a year less than th. figure given by the Leader of the Opposition in the hope that we would accept it.

Let us now consider further the position of a man with two children. If they are under 16, and in some instances if they are older, he will receive 15s. a week in child endowment. So his total net payment in direct taxes will be 1 7s. a week. If he has a third child - it is not uncommon for a married couple to have three children, as I think even the honorable member for Scullin (Mr. Peters) would concede - he would pay to the Commonwealth in tax a net amount of 2s. a week.

As I said last year when I spoke during the Budget debate, for this 17s. a week, or 2s. a week if he has three children, he is defended, he has an army, navy and air force provided for him, when he is 65 years of age a pension is provided for him, if he is an ex-serviceman he has the whole resources of the Repatriation Department provided for him. he has the benefits of an immigration programme, he has a health scheme that is the envy of the world and he also has the various State services such as police, hospitals, roads, bridges, the eradication of tuberculosis and so on. All these benefits are provided for him for 17s. a week or, if he has three children, for 2s. a week. Yet the leader of a political party comes into this place and says that this is far too much for the small man to pay. Goodness me, a resident of any municipality in Melbourne, Sydney or elsewhere in Australia would pay far more than that to the local council in rates for the privilege of having the roads and footpaths repaired, kindergartens provided and the garbage collected.

I say it is time that we Australians stopped snivelling about the amount of tax we have to pay and gave some consideration to the position of people in other parts of the world. We who live in Australia, which is a sophisticated country, are among the lowest-taxed people in the world, particularly those on the lower incomes - the small men, the group that the Leader of the Opposition wishes to champion.

In his final tilt at the small man, the Leader of the Opposition said: “ If we come to power, we will introduce a capital gains tax “. For the first time in my experience, he kindly excluded the profit on sale of houses from his capital gains tax. He said: “ Of course, we would not tax houses “. But this presupposes that he would tax any gain a small man made from selling his car or his land or his shares. Does the Opposition still labour under the false impression that only the wealthy hold shares? There are almost 1,000,000 shareholders in Australia today. Does the Labour Party dissociate itself from 1,000,000 Australians and put them in the wealthy class? But even forgetting those who have direct shareholdings in public companies, there are those who have assurance policies. Let us think of how much assurance companies invest in equity shares. The Leader of the Opposition wants to put a capital gains tax on these institutions and on people who happen to buy and sell shares at a profit. The net result of such a proposal, of course, would be that assurance premiums would rise. Am I to be told that no Labour voter, no small man, has a life assurance policy? Of course, this is not true.

I now turn to foreign aid. I ask: What is this Government of an affluent society, of a prosperous people, doing to help those who are underprivileged? From an examination of the Budget I find that we are providing .5 per cent., or one-half of 1 per cent., of our gross national product. This means that for every £1 that this country produces we give to an underprivileged nation lid. This, to me, is just not good enough. At the outset I want to make it perfectly clear that I am not advocating in any way that foreign aid is a substitute for military security in these countries on the other side of the world, as my friend, the honorable member for Hunter (Mr. James) and some of his colleagues would. To me it is naive in the extreme to believe that in a country such as Vietnam you can simply pull out your troops, your military forces, and just give aid in the wild and fond hope that the people there will come good. I am not substituting my proposal for military aid at all. Indeed, I agree with those of my colleagues here on the back bench who advocate that we should be increasing our defence expenditure materially, and that the increase should be even more than it is.

In this context I pose the question: Why should we extend our foreign aid? If there were no other reason, there would be an unanswerable case put forward on the humanitarian and moral aspects. I know , it is suggested that those of us who are elected to this place become hardhearted, cynical and embittered against the world. This, of course, is not so. Tonight two out of every three people in Asia will go to bed hungry, two out of every three people in Asia are infested by sores or ravaged by some kind of disease. Surely this is enough for us as a Government to say to the people of Australia: “ Dig a bit deeper into your pockets for these people and stop snivelling about paying the small amount of tax we ask you to pay “.

If the humanitarian grounds are ruled out, a case can still be made out for this aid on economic grounds. Our future trade must depend on gaining our share of the markets in the developing nations. 1 sometimes wonder how our balance of payments situation would be if Japan, just one nation, had not developed as it did since the last war. We benefit from the wool, wheat and other materials we sell to it. We are told by the Department of Trade and Industry that we must look to an expansion of our exports by £300 million a year by 1970. We are confidently told that the substitutes for wool are always knocking on the door, and that the dietetic habits in some countries are changing, with a consequent effect upon our sales of wheat. If 1 may digress for a moment, I would like to say that I am unhappy about the extent to which our wheat sales are developing towards one market, the market of Red China. Fruit, meat and sugar are also threatened by the loss of preferences. But how can we trade with a nation that has no hard currency? How can these nations ever be brought up to the standard where they can buy Australian goods, unless their economies are developed.

A third reason is that Australia is an exposed Western nation in a very disturbed area. I hope I will be permitted to put an analogy, and I hope it is not too fundamental or too simple. I sometimes imagine that I am penniless here in Australia, that I am sick, that I have little or no income, that I have a large family, that members of my family are hungry and 1 cannot provide for them, that one of my children contracts a disease and I have not the money to obtain medical advice, that my child dies before my eyes; and that living next door to me is another Australian who is wealthy, healthy and enjoying all the benefits of a prosperous society. I am not naive enough to believe that, after a time, I will not despise that man. I am not naive enough to believe that I will accept from him that this is my concern and that our relationship should remain unaltered.’ If we adopt this stand-off attitude and let these people in Asia hunger and die we will reap retribution in our children’s lifetime.

I turn now to our immigration policy. It is not a policy to endear us to our neighbours. I make that statement simply and clearly but in doing so I also make it perfectly clear that I agree with our immigration policy, although I believe that at times it could be more flexible than it is. I just make the point that our immigration policy does not necessarily endear us to our neighbours to the north, although I believe it is not a policy that necessarily makes them resentful of us, as is sometimes supposed.

Let me refer to the advance of Communism. I know that foreign aid has sometimes been wasted. The Clay report is a condemnation of man’s instability but this is an argument for reducing waste, not reducing aid. I know that Australia has played a leading part in establishing the Colombo Plan. 1 know that we are now contributing the equivalent of 100 million dollars in foreign aid. I know there are difficulties in determining what aid we should give, to whom we should give it and the form it should take. I am not naive enough to believe that we will be overwhelmed with outbursts of gratitude from people to whom we give this aid. Indeed, there have been cases where aid can lead to hostility rather than goodwill because inherent in human nature is the basic feeling that the have-nots despise the haves. I know that it is sometimes contended that we cannot afford to give foreign aid because we are a developing country. But if we are growing richer is this an argument why we should allow the poorer countries to grow poorer? I know that we are a capital-importing country. Because of this, are we not siphoning off the foreign capital that could be going to under-developed nations? ls it possible for the Government to encourage Australians to export capital overseas? I know that we have domestic needs. I know that we need to build roads and to care for our Aborigines, but are these reasons why we should turn our eyes away from the people who hunger and die? I know, also, that Australia’s income per head of population is 20 times higher than the per capita income of Pakistan, to give only one example. I know that, of the 2,000 million people in the poorer countries, only one third are in the Communist bloc. The remaining two thirds - more than 1,300 million people - are still allegedly free - free but hungry. People who are free but hungry today could well be in different circumstances tomorrow, as witness the tragic march of Communism in the world.

What is the answer? One thing is certain. The under-developed countries cannot supply the savings from their own resources to provide the capital works needed to develop their countries as they need to be developed. Nor can the governments of those countries, whether they be autocratic or democratic, tax the people to the extent of being able to finance capital works out of revenue, because the people do not have the revenue required. What can we do? We can give more. We can give it directly out of our pockets by increasing taxes. I repeat that I am critical of this year’s Budget because it is designed to develop this country and make it even more prosperous than it is without considering the needs of other people. Let me give examples of what I mean, although I am aware that these are stupid analogies. The Australian people today spend eight times as much on beer, wines and spirits as they do on overseas aid. We spend four times as much on cigarettes and tobacco as we spend on overseas aid. I throw in those two examples to show the paucity of what we are contributing.

The second thing we need is a Government pronouncement on policy concerning trade with other countries. We should not erect our tariff walls and prevent other countries from exporting to us as we have in the past. I know that some honorable members will not agree with that statement. The third thing we should do is encourage the voluntary aid organisations in this country. I am astonished to know that the Community Aid Abroad project, the patron of which is Sir Edmund Herring and which is dotted with magnificent people from the lay public of Australia, has been refused registration by the Government as an organisation in respect of which donations are deductible for income tax purposes. To me, this is almost incomprehensible. The Government allows donations to a hospital or a local charity to bc deducted for income tax purposes but, for some extraordinary reason the Government says that if John Citizen wishes, for Christian or humanitarian motives, to donate a sum of money to a show that is building a school or a hospital in India, the Government will not allow him to deduct the donation from his taxable income. We all know how such a decision can dry up large donations to these community projects. The fourth thing we can do is encourage Australians to invest abroad.

The fifth thing we can do as a Government - and this appeals to me - is to encourage young Australians including young agricultural scientists, veterinary surgeons, irrigation engineers and dairy farmers, to go abroad under government auspices and try to assist people at the grass roots level in the hamlets and villages of Asia. These young Australians could show the people of Asia how to double their crops of wheat and rice and how to double their production of fowls. These things may be done without a great deal of expenditure but one thing that is needed is determination in our hearts as legislators to do something for the people of these nations. If we do not do these things we will fail the people whom we govern.

I conclude my remarks by giving two quotations which sum up the situation more eloquently than I can. I repeat what the late President Kennedy said -

The war against hunger is truly mankind’s war of liberation . . . there is no battle on earth or in space more important, for peace and progress cannot be maintained in a world half-fed and half-hungry.

My second quotation is from John Donne, who said -

No man is an island, entire of itself . . . Any man’s death diminishes me, because I am involved in Mankind; And therefore never send to know for whom the bell tolls; it tolls for thee.

Mr L R JOHNSON:
Hughes

.- I am reminded by the remarks of the honorable member for Higinbotham (Mr. Chipp) that someone once said that there is need for the realisation of the existing fact - the universal brotherhood of man. I was pleased to hear the honorable member make such a warm-hearted appeal for the cause of humanity. The dilemma confronting the world is so tremendous that Australia must give far more thought to this problem than it has given in the past. We must pay far more attention to this problem than is paid in the Budget now under discussion. The world’s present population of 3,000 million is expected to double in the 36 years that remain before the end of the 20th century. I think that these figures and this situation which the honorable member has enunciated so vividly and dramatically this afternoon have been best typified in the terms of the Freedom from Hunger campaign. Australia in particular has a great responsibility in this field for we are one of the great food arsenals and one of the great mineral arsenals of the world. It is no tribute to us that our country is so generously endowed in these things. But we are the beneficiaries of this good fortune, and it is apparent that we have a great obligation and responsibility to exploit the resources and opportunities that are available to us in such a way as not only to ensure that the best interests of the people of this country are served but also to ensure the advancement of the peoples of the world.

I am pleased than an honorable member from the Government side of the House has talked about these things this afternoon, and it is certainly not out of character for members of the Labour Party to speak in this way.

Our concern for humanity extends beyond the borders of Australia. We realise that our destiny is inseparably entwined and involved with that of people in other parts of the world. The truth is that we in this country are so privileged that even bad governments are unable to ruin the economy, which is something that cannot be said of many other parts of the world.

According to the Government, our financial equilibrium for this year is beyond reproach. When we read the Budget Speech we see glowing remarks about such things as our overseas reserves. We are told that our overseas reserves increased by £228 million during the last financial year. We note also that our exports increased by £309 million to no less a sum than £1,374 million. Then, in the various economic surveys we find mention of the fact that the gross national product has increased by as much as 9 per cent. And all this has happened despite the Government’s actions. Certainly it has not happened because of any inspiration given by the Government in these various directions.

As a result of all these good conditions, expenditure is to rise by £224 million this year. One would have expected that under such circumstances the Government might be prepared to spread its wings to embrace a consideration of very many apparent social problems such as the one which was referred to by the honorable member who preceded me. Unfortunately, the Government is not prepared to do this. Why, we have only to peruse the index of a paper called “The Australian Economy, 1964” published by the Treasury, to see that the economy is in a very flush state at the present time. The headings include, “Activity Runs High”, “Employment, Output, Expenditure and Prices “, “ Stronger Still Abroad “, “ Wealth of Money “, and “Progress Overseas”. And so it goes on. That is the position in which we find ourselves today. This bulletin produced by the Treasury clearly indicates that from an economic standpoint our country has seen much darker days. We know this. In fact, the document states -

The survey records a year scarcely to be paralleled in our history.

One would expect that with the situation so buoyant, stronger attempts might have been made to grapple with those things that are of such great moment and concern to large sections of the Australian community. The decade of development which has been our due has, in fact, been denied us, and it seems that it is to be denied us for yet another year. The dead, unimaginative hand of Menziesism has pervaded the Cabinet and the countryside for far too long. Conformism obviously is the order of the day for candidates for the Cabinet and no Minister dares initiate any bold or imaginative endeavour unless it has the imprimatur of his uninspired and intellectually senile superior. This is the state of the nation; and it is typified by this flabby, unimaginative Budget.

There are no new frontiers identified in the Budget and many of the old ones have been neglected, underrated or completely abandoned. This Budget leaves nearly all of the running sores unattended. The underprivileged in our community have gained the usual few crumbs from the rich man’s table - 5s. for the aged, the widows and the cripples. Why, that is less than enough to enable them to maintain the status quo with relation to increases in the basic wage and so on.

Only the other day I obtained statistical evidence of this fact from the Minister for Social Services (Mr. Roberton), and 1 had to squeeze it out of him. Heaven knows, we wait long enough for his answers on these things; but I was able to ascertain from him the declining value of the pension. As a result of the information obtained, I was able to note the manner in which the relationship of the pension to the average male weekly earnings has declined. It will be staggering to honorable members to know that in this year of grace, 1964, we have set the rate of pension for a married couple at a figure which represents only 21.7 per cent, of the average male weekly earnings. And this, mind you, in this prosperous year, in this year that is referred to so glowingly in the Treasurer’s Budget Speech and in Treasury bulletins. This is represented to us as a good year, yet the best we can do

Is give pensioners only 21.7 per cent, of the average male weekly earnings. Why, this figure is lower than it has been in previous years - even in some of our more unfortunate years, economically. In 1962 the pension for couples represented the same proportion of the average male weekly rate as it does now - 21.7 per cent. - but I note that as far back as 1949 it represented 22.9 per cent, and in 1947 it represented 23.2 per cent. The pension paid to couples in 1946 represented 24.8 per cent, of average male weekly earnings, and today it is down to only 21.7 per cent.

Will the pension ever rise to a higher proportion of the average male weekly earnings under this Government? Or have we now reached the very zenith of the Government’s aspirations in this matter? There are many people who are completely dependent upon the pension. For example, 68 per cent, of the pensioners have no income at all apart from the pension. If they are married, their base rate pension is £5 10s. a week and if they are single it is £5 15s. a week. Another 10 per cent, of the pensioners have no more additional income than £1 a week. In other words, something like 55,000 pensioners in Australia have an income of under £6 10s. a week.

Now let us consider the pensioner medical service in this flush and prosperous year. Why, 96,000 pensioners are denied the security of a medical entitlement card! Thus there are 96,000 pensioners who have no right to free medicine, free hospitalisation, free doctors and so on. And it was this Government that invoked the economic barrier away back in October 1955 when it introduced a means test within the ordinary means test. As a result, if a pensioner enjoys an income of more than £2 a week from sources other than the Department of Social Services, he is denied this security. Why is this matter not attended to in this flush and prosperous year? Can we ever expect any improvement in this situation?

I come now to the funeral benefit. This may not be a happy subject, but the funeral benefit is a’ matter that concerns those pensioners who have the misfortune to lose their pensioner mates. This benefit was set at £10 as far back as 1943 and it has remained at that figure ever since. It has stood at the same level for 21 years. When can we expect it to be increased? When can we expect it to be brought up to a realistic level that has some compatibility with present day circumstances? When can we expect it to be brought up to a level where it will bear some relationship to the situation that prevails in the community at the present time? Have honorable members on the Government side abandoned consideration of this matter entirely? Do they think that this is an adequate amount? Whoever is to follow me in this debate might be good enough to clear up that point.

We can go through the entire range of social services. Maternity allowance, an important matter for large numbers of people, is a case in point. It stands at £15 for the first child, £16 for the second and third children and £17 10s. for each subsequent child. These amounts, except in respect of the first child, have not been changed for many years. In fact, the allowance has remained substantially unaltered since 1943. Widows without children receive £5 7s. 6d. a week in pension. That small allowance is pretty hard for any government to justify.

I was interested to read the Government’s attitude to these matters. The Budget speech, which is the 1964 survey of the economy, tells us that good fortune has been with us in several guises - excellent seasons, rising export prices, wider market opportunities overseas. Those are the three factors which, according to the Government, are responsible for the situation we enjoy at present. I do not know for which of these the Government wants to take the credit, whether it is the excellent seasons, whether the rising export prices or the wider market opportunities overseas, but it seems that if these are the factors responsible for our present prosperity there is little reason to endow the Government with credit.

I want to refer to a number of matters, as most honorable members do in a debate of this kind. Foremost among them is defence. This morning the Minister for the Army (Dr. Forbes) said that we are not to have national service training in Australia. So the announcement has now been made. This Government has abandoned the concept of national service training. Many people will be disappointed to hear this. After all, we have been told that the increased taxation impositions have been designed for a number of reasons, among them being our defence requirements. But what the people of Australia do not realise is that there will be only a paltry uplifting of the level of expenditure on defence. It will be not more than £36 million, and the total expenditure, in comparison with other years, has declined as a proportion of our gross national product. In the 10 years of the Menzies Government’s administration defence expenditure has fallen from 4.3 per cent, of the gross national product to 2.8 per cent.

In this Budget we are making provision of £296 million for defence, but it is interesting to see what this represents in terms of expenditure per head of population and the manner in which this compares with similar expenditure in other countries. How seriously does this Government treat defence? It talks a great deal about the subject. Voluminous reports are brought down by so many different Ministers concerned with defence - the Minister for the Army, the Minister for the Navy, the Minister for Air and the Minister for Supply. We have all the trappings, but not much in the way of results. Last year the United States was expending on defence the equivalent of £112 per head of population. The United Kingdom was expending £32 and Canada £39, whereas in Australia we were expending a miserable £18. Some degree of caution should be exercised by those honorable gentlemen opposite who have a tendency, in the face of our miserable expenditure, to be over-provocative and over-belligerent in foreign affairs.

What is the Government’s target in defence? What is it heading for? Look at the situation relating to the TFX bomber or the FI IIA, as it is now called. This Budget makes no provision to pay any contribution towards the cost of these aircraft. We are virtually buying them on the layby system, but his year the Government has welshed on the payment. That is what it amounts to. As I recall the remarks of the Minister for the Army in relation to national service training I cannot help but think of two neutral countries, Sweden and Switzerland, which are spending more than we are on defence. Moreover, they have national service training as well. But here in Australia, a country that wants to be in every battle these days, we have reneged in the face of this challenge.

Look at the situation in which we find ourselves from the defence aspect. The Navy, for example, has li officers for every 10 naval personnel and 1 admiral for every 2 operational ships. Of course, most of the ships are purely defensive. Only our destroyers have any kind of offensive weapons. A few destroyers have 4.5 inch guns. Apart fro. i those, our Navy must play a purely defensive role. Once upon a time Australia could boast the biggest navy in this part of the world, but today it is overshadowed by the navies of Japan, India, China and even Indonesia, our closest neighbour. This is the state of defence in Australia at the present time.

Something similar could be said of the Army and the Air Force. There is far too much lack of objectivity about the Government’s attitude. Our defences are down, despite enormous expenditure over the years. I suppose that over 10 years our defence expenditure would exceed £3,000 million - and how little we have to show for it. Twothirds is spent in wages and things of that kind. The Government should pull up its socks, because there is in Australia today a very real awareness of our inadequacies in defence.

Let me make some passing comments about the proposed increases in charges associated with the Postmaster-General’s Department. The new impositions which will bc squeezed out of the populace amount to something like £9i million. Telephone rentals will be increased to as much as £20 a year, and a number of other charges will be increased. The Government claims that the new charges are designed to ensure that future demand will not be artificially stimulated. I do not know how artificial stimulation in the demand for telephones comes about. In my area, for example, we have about 1,200 applicants who have been waiting for ages for telephone Priorities do not matter one iota. Business priorities mean nothing. After all, you cannot get blood out of a stone.

We have reached the situation in which exchanges all over New South Wales are filled to capacity. There is nothing left in the way of cable or exchange equipment. Of all Commonwealth departments, the Postmaster-General’s Department probably has been subjected to the greatest degree of mismanagement. There has been inadequate forward planning, which is the result of poor budgeting. The Postmaster-General’s Department does not know from one year to another what money will be made available to it for its services.

Will the Postmaster-General (Mr. Hulme) tell us when the order was placed for the cross arm equipment, or whatever it is called? Was it placed in time to meet the delivery date? Were any penalties contained in the contract for the late supply of these essential components and this most vital equipment needed by the entire nation? It seems to me that the supply of this equipment, which was to come from Sweden, is about 18 months overdue. Having waited almost a year fo* it we were told by the Postmaster-General that the Swedish firm had decided not to manufacture it in Sweden and was in the process now of setting up a production line in Australia. So at the end of June 1963 we still had 82,657 outstanding applications for telephones.

The Minister has said that the installation of telephones in Australia is very expensive because of our great expanses and the long distances involved. The fact is that 80 per cent, of installations are connections with automatic exchanges, and these should not represent an’y greater problem than that experienced in other countries. I am satisfied that New South Wales in particular is getting a raw deal in the matter of supply of telephones, and I intend to have a good deal more to say about this when the estimates for the Postmaster-General’s Department are being debated. I see that New South Wales is receiving only 24.2 installations out of every 100, as against 25.2 for Victoria, although there is a much bigger waiting list in New South Wales. Heaven knows why this Government has developed this kind of parochialism in favour of Victoria, but it is evident in many fields. We see it, for instance, in the matter of the development of an international airport at Tullamarine in preference to such a development at Sydney (Kingsford-Smith) Airport. It is certainly noticeable in the supply of telephones.

I want to criticise the Government for its levying of high interest charges on money provided to the Postmaster-General’s Department for capital works. In 1962-63, which is the last year for which a report is available, the interest charges amounted to £22.6 million. For telephone services alone, interest on capital funds provided amounted to £19.9 million. The practice of usury, which once was frowned upon and considered to be quite disgraceful, has been indulged in holus-bolus by this Government so that, as I say, interest in respect of telephone services alone has amounted to £19.9 million. How many telephones would this provide?

Having taken into account these unreasonable and unfair charges, the Government tells us that the Telephone Branch incurred a loss of £1.9 million. If the Department was not required to pay these interest charges it would be able to satisfy the people who need telephones throughout Australia and whose businesses are suffering because they cannot get them. It would be able to satisfy those who need telephones because of indifferent health which may require urgent communication with a doctor. This Government’s method of taking off the list applications from such people is to increase the installation fee, which is now so high that it is beyond the means of most pensioners. It is a most callous thing to raise these fees to a prohibitive level and fail to make some arrangement to allow pensioners a concession. This would be reasonable and possible. We give similar concessions in respect of radio and television licences for which age, invalid and widow pensioners pay only a quarter of the ordinary rate. Surely we could grant a concession in a case in which a doctor’s certificate was provided to the effect that a telephone service was essential for the wellbeing of the particular pensioner.

These are matters of great concern. The milk of human kindness flowing from this Government is running sour. It is curdling even in 1964, this prosperous year, this year of great growth, when the Treasurer becomes so flamboyant with his language in the Budget Speech. There are many topics that one could discuss along similar lines. Education is a subject that needs consideration. It was about three years ago that the six Premiers of the Australian States held a meeting. It followed a meeting of the Australian Education Council, which consists of the Ministers for Education in the six States. After the meeting of the Premiers, one of their number became spokesman for them all, and he pointed out to the Government that there was a serious shortage of education buildings, a shortage of adequately trained teachers and a lack of necessary equipment and supplies. He made his submissions on behalf of all the States, not just Labour led States but also Liberal led States. After all, this is not a partisan matter. There is an education problem in every State. It is just as serious in the Liberal led State of Victoria as it is in Labour led New South Wales.

The submissions were made three years ago. The position was put to the Prime Minister (Sir Robert Menzies) in a very realistic manner. But we find that the Prime Minister has looked at the subject on only one level - that of university education. We do not deny that a contribution - inadequate, it is true, but representing some substantial assistance - has been made to universities, but secondary and primary schools, both public and private, have been neglected. Make no mistake about the fact that the problem extends to private schools as well as public schools. Unfortunately the Prime Minister is interested only in exploiting the private schools politically to squeeze votes out of the situation. He has no real interest in solving the problems of those schools in their attempts to come to grips with the difficulties and obstacles that they face. He merely wants to squeeze votes out of the situation. This is a hobby horse that he is prepared to ride to death.

In this prosperous year of 1964, when we have been able to increase our exports to a high level and build up vast reserves because of certain fortuitous circumstances, we still see many inadequacies in the field of education. Ten years ago, Australia spent 2 per cent, of its gross national product on education. Even today I believe the proportion is less than 1 per cent, higher. The United Kingdom is spending 4 per cent, of its gross national product on education, and Canada is spending 5 per cent. A number of the Scandinavian countries are spending a similar proportion and I believe that in the U.S.S.R. the proportion is about 7 per cent.

It was in 1960 that I moved an amendment in this House directing attention to the inadequacy of Budget provisions in this field and the failure of the Government to come to grips with the problem and provide for our undoubted needs. We have seen many budgets since then - in 1961. 1962, 1963 and now 1964 - none of which has shown any realistic approach to this matter. How much more prosperity is to descend upon the Australian people before the importance of education is recognised? When are we going to provide the means for our young boys and girls to obtain educational opportunities second to none, so that they can develop their undoubted possibilities and talents, and exploit their educational skills for the advancement of the Australian people and the peoples of other countries?

We need to establish a committee of inquiry. The teachers have asked for this and the Parents and Citizens Associations have asked for it. Let us ascertain the extent of the problem. Is this an unreasonable request? We plead with the Government to consider the position seriously from now on and to find out where we are going bad, because our failure in the field of education will have important consequences for this country. Having found the extent of the problem, let us then make some emergency grants to overcome it. Ultimately, the Commonwealth might see the need to underwrite State activities, so that every one of our boys and girls may get the educational opportunities that he or she deserves.

I had planned to speak of many other matters. I believe that a complacency prevails in the Parliament at the present time. We should see more of our Ministers emerging with a spirit of independence. I hope we will see, in the debates that flow from this Budget, a stirring out of the apathy that is apparent from this lethargic, dull and monotonous proposal which represents the legislative intentions, in many directions, of this Government for the ensuing year. It is not good enough because it leaves our country without any challenge and our people without the leadership they obviously deserve.

Mr ENGLAND:
Calare

.- If this debate were to be conducted on normal debating lines I should have been taking copious note, and I should spend half my time answering the honorable member for Hughes (Mr. L. R. Johnson) because there are adequate answers to the questions he has posed. But I have my own story to tell and I intend to proceed with it. The Australian people will have had time to take stock of the Budget and to show their reaction to it. The answer to the complaints from the other side of the House is in the reaction, or rather the lack of reaction, of the people to the Budget.

In my opinion, the Treasurer (Mr. Harold Holt) did well to summarise at the outset of his Budget Speech Australia’s record of achievement and the position from which this Budget was launched. It is a magnificent record of achievement of which all Australians can be proud. The Commonwealth Government, whilst not taking credit for all the favorable aspects of the economy, as the honorable member for Hughes suggested it does, can take its full share of credit, along with other people. I will mention some of the figures which I regard as noteworthy. Our export earnings have risen by more than f 309 million. Our overseas reserves have risen by £228 million to a record figure of £854 million. In a country of about 11 million people, these are big figures. The gross national product, which is always a very good indicator of the state of the economy of a country, has risen by 9 per cent. Wages and salaries have risen by 9 per cent., too, and I am mindful of the fact that we have an increased population. Income earned by companies has risen by 10 per cent. Farm income has risen by the phenomenal figure of 26 per cent. I want to stress that figure particularly, because it is of tremendous importance in the Australian economy. The Government can take some of the credit for that increase because of its orderly marketing arrangements, the overseas trade agreements that it has negotiated and so on. But that figure also represents a warning to this country of the terrific reliance that we place on the seasons. Australia, being substantially a primary-producing country, still depends a very great deal on its farm income. The total Budget expenditure has risen by £224 million. I do not think those figures can be repeated too often. I believe that we can afford ourselves the pleasure - it is not a luxury - of looking back with the Australian people on a year of great achievement.

It is well to keep in mind some of the more significant advances in recent times. I refer to advances which have been made possible largely by Government legislation. Manufacturers and exporters of primary products can be glad that after this Budget they still have their export incentives and their pay-roll tax rebates. People who use plant and machinery, whether in primary production or anywhere else, can also be glad that they retain the investment allowance of 20 per cent, on plant and equipment, despite the gloomy forebodings of many a machinery agent throughout the country who was apt to use the threat of abolition of that allowance in order to boost his sales before the Budget was presented. The 20 per cent, depreciation allowance is retained. Farmers will appreciate that the five-year averaging system is retained. We also retain our superphosphate bounty. Depite the fact that certain circumstances in New South Wales have taken away more than half of the superphosphate bounty of £3 a ton, it remains in force.

Oil search subsidies continue to rise, and they are producing results. So the Commonwealth can be said to be contributing partly to the continued development of the search for oil and to some of the more encouraging findings that have occurred in recent times. Special financial grants to the States for national development purposes, science training and technical training continue, and continue at an increasing rate. That is the background against which this Budget has been introduced.

There is some increase in the rates of social service and repatriation benefits. I suppose there are many people who, if they were given the opportunity, would alter what has been done. But I do not think we can repeat too often some of the figures on social services in Australia. I know that there has been a change in the value of money since 1949. We talk about that a lot. However, in 1949 expenditure from the National Welfare Fund amounted to £92 million. In this Budget we are legislating for an expenditure of £452 million from that Fund. That is quite a large increase. Let us look at this matter in another way: In 1949, when this Government came into power, 16 per cent, of the national expenditure was on social welfare. This year the figure has risen to 21 per cent. Do not let anybody take it that I consider that figure ample; but let us be fair. Let us look at the figures and say that the position is improving. It is also interesting to note that, in 1949, 47 per cent, of the total income tax collections went into the National Welfare Fund. In other words, 47 per cent, of every £1 paid in income tax went into that Fund. This year 60 per cent, of every £1 paid in income tax will go into that Fund.

There would not be an honorable member who, if he had the opportunity, would not change the Budget in some respect. I am very disappointed in the estimates of the Postmaster-General’s Department. I also want to make some comments and express some reservations about defence - if my voice holds out. The estimates of the Postmaster-General’s Department show an addition of £17 million to its expenditure. A very large slice of that increase is earmarked for wage and salary increases. I am not contesting the wage and salary increases here. I believe in the principles of arbitration and conciliation. However it seems to me that there is a bleak outlook for the many thousands of people who want to be connected to the Australian telephone system, for people in the country who are anxious to have a continuous telephone service, and for people who would like the refinement, to which I think they are entitled, of an exclusive telephone service without recourse to party lines.

Throughout my period of service in this House I have commented on these matters many times, but I have never attacked the Postmaster-General or any of his officers. I know the task that they have. I have constantly tried to understand their problems. The first essential is to understand a problem if you can, before you start acting to solve it. I have a very healthy regard for the stupendous task of providing communications and services for our growing population in this country in which vast distances and big money are involved. I have praised in the past where I considered praise to be due. I have always traced the cause of these problems back to the fact that Parliament has not voted sufficient funds to the Postmaster-General to enable him and his responsible officers to carry out the task.

One thing I have praised in the past - I mention it here to highlight the cost factor - is the way that the Department can supply details of the cost of any operation. It can give the cost of handling any one article of mail or the capital cost of installing a telephone. The Postmaster-General has said that the average capital cost throughout the Commonwealth to connect a telephone, that is, taking the country and city together, is £570. That figure has been often quoted and never challenged - more than £500 for one telephone or two telephones for £1,000. That is the capital cost to install a telephone whether the wires have only to cross Pitt

Street, Sydney, or have to be taken to the back of beyond.

While speaking of costs, I ask: Is the prime purpose of the Department to make the service pay as a business undertaking, or is it to give service to the people, bearing in mind that the Department has constantly to pay due attention to the cost factor? I strongly maintain that telephones must be considered to be a community amenity - not merely a convenience in a time of emergency and certainly not a luxury for the few, priced out of the reach of those who actually need them. That is my contention, and I can see no reason to alter it. I believe that the service eventually should develop to the stage where it is not restricted in hours of service. A telephone which is restricted in hours of service is a negative thing. I know that there are good points in favour of party lines - many good points - but people should not be compelled to throw away the privacy to which they are entitled. Party lines provide cheap communication. In times of emergency, such as bushfire or accident, they have their good features, but the time for them has long passed.

How widespread is the party line problem? I do not know, but I do know that the Federal member for Calare is on a party line and that five parties share the line. I would not change one of those parties - they are a fine lot of people - but it is rather awkward when people wish to talk on a private matter. When people learn that it is a party line they say. “We will wait “. I have only to go to my gate to see two party lines passing my property, one shared by 12 people and the other by 11. I have been raising these matters for a long time, but my suggestion for the installation of a rural automatic exchange has been rejected. Why? It is not because somebody did not want to give it to us but because, first of all, the equipment was not available. Now that the equipment is rolling in the money is not available. That is the type of thing that we are usually told to explain the difficulty. Statistics relating to telephone services are available, just as they are for television coverage. Incidentally, I congratulate the Postmaster-General on the terrific television coverage that Australia will have at the end of phase 4, when 91 per cent, of our population will have access to television programmes. Similar figures can be given with regard to telephone services.

It is significant that this is the third Budget on which I have spoken on the problem of telephone services, not because I have no ideas on other subjects but because this problem is close to me. In the Budget debate in 1962 I referred to the great advances that had been made in my electorate. I do not want to be parochial, but I think I should present to honorable members the facts as I see them in my electorate. In .962 I cited some remarkable figures to show the progress over the 11 years up to that date, but now I turn to the rate of progress in the last two years. Before I continue I should give honorable members an idea of the origin of these figures. Whenever you see figures you like to know where they came from, how substantial they are and whether they can be relied on. The figures that I now propose to give are not from Post Office sources. I have not gone behind somebody’s back to officers of the Post Office; I have taken the figures from the telephone directories. It was a long and tedious job, but it has been done. We all know that there are very few mistakes in the telephone directory. Let us compare the positions in 1962 and 1964.

In 1962, of the 97 exchanges in the electorate of Calare 28 were automatic and one was a combination of manual, central battery and automatic. In 1964 we lost three exchanges. The reason for that, which is rather significant, is that the postmistress or postmaster died or went away and the Postal Department could not find anyone for the job. The services previously connected to those three exchanges are now connected on party lines to the nearest town. The position now is that we have 94 exchanges, of which 29 are automatic, so we have made a profit of one rural automatic exchange in two years.

Mr Devine:

– Not enough.

Mr ENGLAND:

– The point is that it is not enough. Let us consider the service in 1962. There were then 51 exchanges on continuous service and 46 operating on restricted hours. In 1964 we made progress because we had an additional exchange. After two years we had one additional exchange on continuous service. The number of telephone exchanges on a continuous service had risen from 51 to 52.

Let us get away from the equipment side of the argument and consider the sub scribers - the people, the flesh and blood. In 1962, 10.5 per cent, of the subscribers on exchanges in this electorate were on party lines. In 1964 this figure had been reduced to 10.15 per cent, a decrease of 35 per cent. - not a decrease of 35 per cent., or 3.5 per cent., but a decrease of 35 per cent, in two years. In 1962, 7.95 per cent, of the subscribers suffered under the drawback of restricted hours, and by 1964 this figure had decreased to 7.64 per cent. - a decrease of .31 per cent, in two years.

Mr Holten:

– At that rate it will take a fair while to fix them all up

Mr ENGLAND:

– These are the figures and I have sta d them, for what they are worth, in the hope that they will produce some sort of answer. In 1962 - I find this very hard to tie in with the published figures - 16.6 per cent, of subscribers connected to exchanges in the electorate of Calare were on an automatic service. In 1964, largely because of a batch of subscribers in the provincial cities being changed from manual and central battery to automatic services, the percentage had increased to 19.1. Ti.-.t means that one subscriber in five in the electorate of Calare has the benefit of an automatic service. These figures show a rise of 2.5 per cent, in two years. As the honorable member for Indi (Mr. Holten) interjected, it will take a long time before this matter is pu* right.

The annual report of the PostmasterGeneral published in December 1963 showed that in country districts 46.8 per cent, of subscribers were served by automatic telephone services. In my electorate, which is not hard up against the city, a suburban electorate or a large electorate like Maranoa, Kalgoorlie, Leichhardt, or Darling - it is a pretty average sort of country electorate - 19.1 per cent, of subscribers are connected to automatic exchanges. That is not sufficient at this time. I might point out one of the side effects of this situation. I have in my hand a publication which reports the rate of issue of coloured telephones in December 1962. The Post Office introduced coloured telephones of modern design and i:i a range of five colours in 1962. That looks good until one realises that when country people go along to apply for coloured telephones, they find that the sets are made for use only with automatic exchanges. I am not an advocate of coloured telephones. If someone wants coloured telephones, let them have them, but if they are available they should be available to everybody. If the lady of the house wants to re-arrange her furnishings and wants a coloured telephone to match, then that is her business, and the people in the country should have the same facilities as those in the city.

I do not want to highlight this matter too much, but that amenity is available only to 19.1 per cent, of subscribers in my electorate. I know people can say that there is big work afoot in that area. The telephone equipment in the towns of Forbes and Parkes and the city of Orange is in the stage of being converted but these plans have been proceeding for some time. Even when these works are completed there still will be a long way to go before people in outlying areas are covered in this regard. The comparatively small sum that we are voting for the Postmaster-General’s Department is throwing a terrific decision on to someone’s shoulders. Somebody in that Department has to make a decision as to how the money is to be spent. They have the alternative of either spending it in a sparsely settled area where practically every farm is a business farm engaged in earning export income and where fewer subscribers will benefit because of the higher cost, or spending it in a closely settled area where the same outlay will satisfy many more people.

This responsibility must be thrown on to somebody’s shoulders. It is putting District Telephone Officers in an untenable position. I found these men are very conscientious. They no more enjoy this frustration than the Postmaster-General does. They have to decide whether to spend £15,000 on a C.A.X. which will satisfy 50 subscribers in a country area or whether to spend the same sum in the Blacktown area for example, or some other spreading suburb, where ten times the number of subscribers will be satisfied. My contention is that if we could be more liberal with the funds we provide and allow the Postmaster-General to put a solid effort into catching up with the backlog, then we could spend more on both the city and the country areas.

I would like to say more on the telephone problem but I notice that time is running out and I want to refer again to the increase in the price of telegrams. I note that the price has gone up again. This is another of the increases announced in association with the Budget and it is not a big one. It is not going to make much difference. The increase will not do much damage to the people because I think the damage has already been done. I contend that the Postmaster-General’s Department has priced itself out of the telegram business. I have support for this contention from conversations I have had with a lot of people, including persons employed in the P.M.G.’s Department.

The annual report of the Department for 1963 states that there was an increase in the telegram traffic for that year of 241,219 - nearly a quarter of a million telegrams in a population of 11 million people. Those are small figures by comparison. When I go into Post Offices I see that nearly all grade 3 telegraph offices, and higher, have teleprinters. What these machines cost I do not know. I look forward to the day when I will see one of them working. When money is used to buy machines of that sort, you have to keep the work up to them to make them pay. I think they will pay in the long run because no one in a business undertaking can allow costly equipment to lie idle.

I wanted to refer to the defence situation but I will reserve that matter to a later stage in the debate on the Estimates. The Postmaster-General’s Department is engaged in some massive business. One example is the intercity coaxial cables. The installation of these cables was a magnificent operation done efficiently and quickly. If the coaxial cables were merely to carry television programmes I would have been against them, but it was absolutely essential for our trunkline traffic - for business purposes apart from private purposes - to have them installed. I am sure it was a paying proposition.

We read of another big development in a recent statement by the International Telecommunications Union in Geneva that in 40 years’ time we can expect to be able to dial telephone numbers all over the world. I understand that Australia is entering into this project. Sydney is to be one of the six major switching centres. Apparently we are engaged in a satellite programme in this connection. I do not know what role Australia will play but there is to be a separate inter-communication system.

I would like to know just what departmental funds are going into the Compac cable service. This scheme is absolutely essential and I solidly support it because good communications between nations are important for business and for international relations.

These are all big problems in which the Postmaster-General’s Department is engaged. Honorable members have seen reports that in Melbourne, I think, there has been or there is to be a demonstration of a television telephone. From the point of view of research, the development of the prototype deserves good marks. But I would strongly oppose money being put into that project to make it available for the public until such time as the backlog of telephone applications is brought up to date.

Officers of the Department have made a magnificent effort in the research field but 1 think we ought to get back to a basis of first things first. If I have appeared to be critical, I hope honorable members feel they can concede that my criticism has been constructive. I would like the PostmasterGeneral to know that when the scrum is formed and the money is placed in the middle, I will be there to throw weight behind him so that he may get more funds from the central pool. I know that I speak for a number of people in this corner of the House in this regard and that they will give him assistance in the scrums too.

Mr MINOGUE:
West Sydney

.- Mr. Deputy Speaker, 1 rise to support the amendment proposed by the Leader of the Opposition (Mr. Calwell) in protest against many of the cruel features of the Budget that this Government has brought down to deal with Australia’s present financial position. Almost every speaker in this debate on the other side of the House has told us that Australia is so wealthy that we do not know what to do with all the money we have. The other day, the honorable member for Macarthur (Mr. Jeff Bate), in effect, said: “There is only one thing wrong wilh this country: We have too much money and we do not know what to do with it “. If that is so, there is no justification for the meagre increase of only 5s. a week granted to repatriation pensioners other than those in receipt of the total and permanent incapacity rate, and to age and invalid pensioners. Many of these repatriation pensioners who are to receive only an additional 5s. a week fought for this country in two world wars. An increase in pensions of only 5s. a week is bad enough. As appears at the very next page of the report of the Budget Speech, the Treasurer (Mr. Harold Holt) then told us that television licence fees, installation charges and rentals for telephones and many other charges were to be greatly increased. This is where the cruelty of the Budget becomes apparent.

The honorable member for Sturt (Mr. Wilson), who spoke in this debate yesterday, said that pensioners did not want more because they were afraid of inflation. Have honorable members ever heard such a remark in all their lives? 1 understand that this honorable member is the gentleman who is responsible for the denial of any increase in pensions to pensioner married couples for the past three years. Now, after married pensioners have waited for three years for an increase, the base rate of pension has been raised by 5s. a week, but most pensioners will pay at least 7s. 6d. a week more in additional charges. If the man of the house smokes a pipe or cigarettes, he will pay 4d. or 5d. more for a packet of cigarettes or tobacco. In cities such as Sydney, telephone rentals will cost about £5 a year more. This is the sort of thing that will happen throughout Australia. I see that the honorable member for Wakefield (Mr. Kelly) laughs. It is all very fine for him. He can hardly count his sheep or reckon up his farming interests. If he represented a constituency like that of West Sydney, he would understand these things better. The honorable member for Sturt told us yesterday that his electorate contained probably a greater proportion of pensioners than any other. If 1 have not two pensioners in my electorate for every one in his electorate, I shall apologise to him.

As I have said, the total and permanent incapacity rate paid to repatriation pensioners is to be increased by 10s. a week. This is the only increase that is out of line. Everyone else will receive only 5s. a week. The old slogan of the Coles stores used to be: “Nothing over 2s. 6d.”. This Government’s slogan could well be: “ No pension increase shall be more than 5s. a week “. Age and invalid pensioners represent a section of the community that is very badly treated by the present Government. Speakers on both sides of the House in this debate have not denied that full employment exists. From the window of my office in the Commonwealth Bank building in Martin Place in Sydney I can see under construction seven large buildings, most of which look as if they will be about 20 stories high. I gladly admit that there is plenty of work for those who are able bodied. But what about those people who cannot do heavy work? Day after day seven or eight mcn come to my office, and a similar number go to the offices of both the honorable member for Dalley (Mr. O’Connor) and the honorable member for Watson (Mr. Cope), seeking help in getting light work. Nearly everybody knows that almost all work is light these days compared with 20 or 30 years ago. Nevertheless, men who are unable to do hard or heavy work cannot find light work. Unless they fill in a form and explain to the Department of Social Services that they have visited six places of employment trying to get a job, they are refused unemployment benefit, which I regard as practically a dole, anyhow.

What is to become of such men? This Government ought to be sincere in dealing with the problems of people like this. I suggest that, in Sydney and the capital cities of all the other States, factories ought to be established to provide work for men who cannot undertake heavy labour of the kind offered to them by the Commonwealth Employment Service. Factories processing waste paper, for example, would provide suitable employment and could be made to pay their way in the long run. Many men cannot get ordinary jobs. Would any honorable member, as an employer, give a job to a man whose fingers were bunched up and could not be straightened? Only the other day, I was interviewed by such a man who told me that he had visited half a dozen establishments. I rang the places that he mentioned and found that he had in fact called on them all. However, because he could not write down the names of the establishments that he had visited, he had been refused unemployment benefit. The Department of Social Services is wasting money that could be well spent on a factory that would provide light work for men who can no longer do the heavy work that they used to do in days gone by. But this Government will do nothing to help them.

Let us now turn to more of the wrongs that are apparent in this Budget. Many of us have always looked forward to the day when television licence fees and telephone rentals would be reduced for pensioners. However, on this occasion, pensioners have only received a slap in the face, because these charges have been greatly increased. Let me tell the House of some more of the problems of pensioners. Suppose a pensioner collapses in the street, as is not uncommon. He may be taken to a hospital for t. atment and be sent a bill for £4, £5, £6 or £7. Then he may get in touch with me and ask me to visit him if he is not able to see me at my office. When I visit him, I find that he is worried about paying his bill, because his wallet is empty. He may have received a bill for ambulance charges, too. This Government has been asked, not so much by me as by the ambulance authorities in New South Wales, to do something to help pensioners to meet these charges. Indeed, the New South Wales ambulance authorities are extremely benevolent, for they often remit the whole of the charge if a pensioner finds difficulty in paying. The Government, however, says that these matters have nothing to do with it. It seems to think that its only function is to add repeatedly to the expenses of pensioners and, every three years or so, to raise pensions by no more than 5s. a week.

Let us see how inadequate is the funeral benefit paid in respect of pensioners. Is only £10 enough for a dec. nt burial? Would any honorable member opposite like either of his parents to be buried as a pauper? We all know that today a burial costs as much as £100. How can the son or daughter of a pensioner, often hard put to rear his or her own family, provide properly for the burial of a parent? This Government, despite its talk about a budget of some £2,5*1 million, declares that it cannot afford to pay a funeral allowance of £40 or £50. It is shamed by this attitude.

I turn now to the Post Office. Charges for some of the services provided by it are to be increased. In the suburb of Glebe, where I live, postal facilities are inadequate. Honorable members opposite need not worry; I am not about to talk of clocks again. This matter is more serious than the restoration of the clock at the Sydney General Post Office, lt is a matter that I raised in this place two years ago during the Budget debate. There are 9,300 electors enrolled in the Glebe subdivision of my electorate. The officers on the staff of the Glebe Post Office will tell honorable members that there are in the area about 4,000 new Australians, many of whom are constantly moving from one flat to another. All these people transact postal business at the local post office. There is no other post office within a mile to the north, south, east or west. Yet the entire business of the post office has to be transacted in one room that appears to be only about 20 feet by 16 feet. At Easter and Christmas, 15 or 16 people work in this room trying to get the mail out, and this has been going on for two years. I know very well that the Department is concerned about the telephone exchange in this area. You might as well ring up heaven as try to get a telephone installed in this district.

Mr Curtin:

– You will never find the Minister in heaven.

Mr MINOGUE:

– I would not wish him to go anywhere else. The Department intends to build a new telephone exchange. It bought four houses some 2± years ago and put the people out, but still nothing has been done to build the exchange. Of course, the exchange is badly needed; but when will it be built? Every pension day at the Glebe Post Office, the pensioners have to go around the corner into another street to receive their pensions. At a time when banks, insurance companies, Government bodies and others are being held up and their money taken from them, it is not right and proper that the pensioners’ money should be taken around to another street in this way. A number of trips are made each day with the money. I made inquiries about this and I was told: “ If anything happens, we only take small amounts, we do not want the lot to go “. These are the conditions at the Glebe Post Office. Pensioners have to go into another street to be paid. They have to climb up steps to get their money and, if they have to wait, they have to sit on board seats. A room should be provided for them.

The same system is used for the payment of child endowment. I would like to know what the Government intends to do to improve conditions at this post office. I think an effort is being made to camouflage the post office now; the front is being painted. But I would rather see some effort made to extend the premises and some provision made for the people who patronise this post office. I know of no post office in New South Wales that would take more revenue for the Government than this post office does.

I have a letter here that I received yesterday from the local branch of the Australian Labour Party. It asks me to ask the PostmasterGeneral’s Department through the Minister to provide better facilities for both the staff and the general public at the Glebe Post Office. The branch asks that alterations be made to the post office while the new exchange is being erected and that the PostmasterGeneral be requested to legislate for licences to be granted to newsagents and others to sell postage stamps, for which they would receive a small commission. If you live any distance from a post office in Glebe, and you want to buy a stamp to put on a letter you must take a tram or a bus at a cost of 9d. each way, to buy a stamp at the post office. This is not fair to aged people and to young mothers. They should not be asked to trudge to the post office to buy stamps when the Government could easily pay a small annual commission to newsagents and other shops for selling stamps.

I said to the newsagents one day: “ It is a wonder that you do not sell stamps. I am always asked by elderly people why you do not. They cannot go to the post office and pay their fares backwards and forwards just to buy stamps “. He said: “ What about you and the Government? You don’t work for nothing and you shouldn’t ask me to work for nothing”. That was a reasonable answer. The Government could easily arrange for newsagents and others to sell stamps on a commission basis. People go to the shops to buy paper, pens and pencils and it is only reasonable that they should be able to buy stamps at the same place to put on their letters. I do not think it would be wrong for the Government to pay a small commission to people who sold stamps.

I come now to other troubles that I have. I have no doubt that other honorable members receive letters asking that more money be made available for education. I have received a letter from the Fort Street Girls High School and another from the Camperdown school. There is only one way to meet all the requests that are made and that is to provide more money. Until the Government decides to give more money for education, we will not be able to meet the needs of the children at the schools. There has been considerable controversy over education and the cost of it. I have in my electorate the largest public school in the world - -Blackfriars. Thousands and thousands of children have been educated by this school. Here again, the working conditions for teachers are not good. I have visited the school on several occasions and seen the conditions there. I have raised this matter before, but I have always received the usual answer.

The Prime Minister (Sir Robert Menzies) is very interested in education. During the last election, he became more than interested as the campaign proceeded. The schools in my electorate asked me to put a question to him about State aid for private schools. I did so and in answer he said: “ The honorable member for West Sydney knows perfectly well that the Constitution will not allow me to give money for this purpose “. He said that every year the States came to the Australian Loan Council and received an allocation of money, but how they spent the money and how much they allocated to education was their affair. However, during the last election he found that he could scatter money around for all kinds of educational purposes. The only fault I can find with this is that not enough money has been provided.

I would like every child in Australia, black, white or brindle, to receive a full education. This is the policy that we have advocated for the whole of the Commonwealth and we will adhere to it. No other country in the world, except perhaps New Zealand, pays so little attention to education as this Government does. I do not think that New Zealand gives full recognition to private schools, but this is the only other country that does not do so. Scotland does, and if a Scotsman can pay for something it should be the green light for everybody else. As a rule a Scot does not waste his money. lt is my duty as the member for West

Sydney to pass on to the Government the complaints of my constituents. In my electorate, I am concerned for the welfare of the working man on the basic wage or a little more than the basic wage who, perhaps, has three, four or five children. I am more concerned about him than I am about the parents who are better off and able to send their children to high schools. It is my moral obligation to bring to the attention of the House the complaints of my constituents. I hope that something will be done to improve the lot of pensioners. A satisfactory education should not be denied any child, no matter what may be the circumstances of his or her parents. Something should be done also to make light work available to persons who cannot undertake a heavy job.

I hope that the Government will heed my remarks this afternoon. The Glebe Post Office is a standing disgrace to this Government. At Christmas time people have to stand outside the door of the post office to receive their parcels. I brought this matter to the Government’s attention two years ago. I hope that this year something will be done about it.

Mr DAVIS:
Deakin

.- Last Tuesday week the Treasurer (Mr. Harold Holt) introduced into this Parliament the Budget. We had a week to think about it. The debate was resumed last Tuesday and since then the Parliament has been talking about subjects that, at best, are vaguely related to the real purpose of the Budget. I hesitate to use the word “ debate “. I think it just does not apply, for example, to the speech made by my friend the honorable member for West Sydney (Mr. Minogue). He is not alone in his attitude. I think that illustrates the point I wish to make.

The honorable member for Hughes (Mr. L. R. Johnson) reminded the House that since the beginning of this century the population of the world has doubled and that it is anticipated that in the remaining years of the century the population will double again. In the last decade, the means of communication and calculation have increased more than they did in the whole previous history of mankind. In the last 25 years, the capacity to produce has outstripped the record of any previous century. When we bear in mind that the demands explosion accompanies the population explosion and that in many countries people are demanding higher standards of living, including more food, not tomorrow but today, we cannot help but be appalled at the ever increasing pace of the world in which we live.

The procedures in this House seem to me to bear little relationship to the realities of today. In saying that, I do not intend to reflect on the Chair. It is 10 days since the Treasurer introduced the Budget. In these days a Budget has, I suppose, a number of major purposes. Broadly you might say the purpose of a Budget is to provide for what is loosely known as the ordinary annual services of the Crown - to provide for capital works and expenditure, and for defence. Lastly, all the threads and the other items I have not mentioned are drawn together and related to the particular and specific purpose of government today. That is to regulate, control, adjust, stimulate - call it what you like - the effect of the Budget on the economy.

There are questions that cannot wait. Last year, for the first time in 60-odd years of this Parliament the Treasurer, when he delivered his Budget Speech, presented to the Parliament a number of documents designed to assist the Parliament in assessing the realities of the situation - the economic consequences. Those documents were based on documents that had been presented previously but the form of their presentation represented a departure from previous practice and they cleared from the previous documents a good deal of dead wood. I want to refer, more or less in passing, to some dead wood that still remains in these documents and which, without loss to anyone, could be removed. Pages 145 to 228 of the Appropriation Bill 1964-65 contain a schedule of salaries and allowances. The note on the first page of the schedule reads -

Supporting provision made in appropriations included on page 6-144.

This is a fascinating document. It purports to show the number of people and the class of people engaged or employed by the Commonwealth in all its departments. It is an interesting exercise to look at the document. Take the Department of the Interior, one of the smaller departments. Does it serve any purpose today to know that in the Administrative Section of the

Department there are 187 industrial officers, finance officers, accountants, clerks, inspectors, leasing officers, property supervisors and librarians, in respect of whom salaries totalling £258,459 will be paid this year? That information may be of use to somebody, but I cannot conceive who that somebody would be. The total estimated salaries and allowances in the Administrative Section this year is £455,054. A footnote shows that the amount estimated to remain unexpended this year is £76,115. I cannot see that this information serves any purpose, except that it may induce somebody to suggest that there should be 188 of the officers I mentioned instead of 187. We have no information on how many people are actually employed or the nature of the work they do. In plain terms these 70- odd pages are not worth the paper they are printed on. I think consideration should be given to deleting that information from the Budget Papers, as a number of other matters were deleted last year.

The Budget covers all aspects of activity in the community. It effects everybody in the community, by direct or indirect taxes - by direct or indirect action. I believe that the Parliament should be so geared as to be able to discuss fully the major propositions contained in the Budget. To help us to do that, the Treasurer has supplied a mass of information to the Parliament; but there is a lot more information that comes to this Parliament later in the year in a haphazard fashion and that bears directly on the discussion of the Budget. That information gives details of how and where money is spent. I refer to the reports that come to Parliament from so many departments and authorities. I remind the House that this is the age of the computer, the age of electronic data processing equipment; but so far only two annual reports have been presented to the Parliament. One is the Auditor-General’s report and the other the report of the Reserve Bank of Australia. Other authorities which are required to submit annual reports to Parliament include the Public Service Board, the Department of Social Services, the Department of Repatriation, the War Service Homes Division, and the Snowy Mountains Hydroelectric Authority. The PostmasterGeneral’s Department submits an enormous report in two sections.

My point is that if these reports are to be of any practical use to the Parliament they should be presented to the Parliament at the time when the Parliament is debating the principles which ultimately lead to appropriation of moneys for activities which are the subject of the reports. To say that this cannot be done is, in my opinion, to ignore the facts. If the AuditorGeneral and the Reserve Bank can do it, and if some of the other departments can do it, I see no earthly reason why the annual reports of all departments cannot be presented to this Parliament within five or six weeks after the end of the financial year. I believe that if those documents were available to the Parliament they could well affect the debate on the Budget.

I want now to say a little more about the Parliament. I believe that in many ways our procedures and practices are outmoded. But be that as it may, it is my belief that authority is slipping from the hands of the Parliament and going into the hands of the Executive. The fault for that rests with the Parliament. We alone are responsible for the declining prestige of this Parliament, because we simply do not accept and discbarge the responsibilities that are ours. The prestige of parliaments in other parts of the world is declining for similar reasons.

The Budget debate is one example of what is happening. The Budget proposals, which are supported by a stack of documents, are integrated proposals designed to provide certain services and to raise revenues to pay for those services. Those are the two sides of the ledger and they are ultimately brought together for the general purpose of stimulating, retarding or holding the economy. In other words, the Budget is an integrated document. You cannot treat one item in it in isolation. Therefore, it seems to me obvious that if in dealing with the various items, we say that we believe that more money should be spent in a particular direction, we have a responsibility to look at the other side of the ledger and say where and how that extra money should be raised. If, on the other hand, we say, as honorable members do quite frequently, that less money should be raised, then we have an equal responsibility as members of this institution to say where we would reduce expenditure to compensate for that. I agree with the honorable member for Higinbotham (Mr.

Chipp) on that point. These things seem to me to be obvious. I have seen other Parliaments on occasions and I know that we are not unique. But authority is slipping from our hands and we alone are responsible for that. This is not the fault of any particular government or of any particular movement of circumstances. It is the lethargy of members of Parliament, and their concentration on politics rather than principles that will ultimately destroy the Parliament or produce a very different sort of parliament from the traditional institution that we know today.

It seems to me that if we are to debate this Budget with understanding we should start off, as we are obliged to do, by looking at the first two or three pages of the Budget Speech in which the Treasurer refers to the facts of the economy on which he bases his assessment of the need for taxation and for the provision of the various services. I have heard little, if any, challenge to that part of his speech. Indeed, I should like to quote from the speech delivered by the Leader of the Opposition (Mr. Calwell) when referring to the tax structure, the Leader of the Opposition said -

Let me put it this way: In the last ten years the basic wage has risen 30 per cent In the same ten years prices have risen 25 per cent. Average earnings are up 54 per cent.

That seems to me to be a statement that might well be happily made by any Treasurer in justification of his good government over the past ten years. That is the basic statement by the Leader of the Opposition and it seems to me that as it has come from the man who speaks for the Opposition, there can be very little real argument about the state of the economy.

My friend from Higinbotham referred to the table presented by the Leader of the Opposition - and with the concurrence of the House incorporated in “ Hansard “ - showing the basic wage and the average weekly earnings over the last ten years. It was on this table that the Leader of the Opposition based an argument about taxation. I want to point out, however, that, according to his own figures, whereas in 1954-55 the income of average weekly earnings was 45 per cent, above the income of the basic wage, in 1964-65 - the year of this Budget- the income of average weekly earnings will be 70 per cent, above the income of the basic wage. These are facts presented by the Leader of the Opposition and I submit that they go to make an excellent case in support of the general contention that, on the whole, the Government has governed wisely and well over the last few years.

The general policy of the Opposition seems to be one of spending more or raising less, without looking at the other side of the Budget. Take the general argument advanced either in part or in whole by many speakers for the Opposition. They have said, in effect, that the tax structure should be amended, that those who earn more should be taxed more heavily. One outcome of such a policy would be a reduction of the pool of savings from which investment is made. Again, the Opposition argues that we should reduce or curtail the amount of overseas investment in this country. Then, on the other side of the ledger, the Leader of the Opposition and his supporters attack the policy of growth. Here is an approach to problems that has all the virtues of complete and utter inconsistency - on the one hand reduce the possibilities of investment, and on the other hand increase investment. Theses things are the toys of politics. These are not contributions to the Parliament and the country which, as a Parliament and as a country, are confronted by great problems.

Let me mention now the PostmasterGeneral’s Department. Reference has been made to this Department but I do not think its activities have been debated. In effect, Opposition speakers claim that everyone who wants a telephone should have one, that the workers employed in the Postmaster-General’s Department should receive the highest wages and work under the best conditions and that the country generally, and the north particularly, should be developed. In the main, these are objectives with which I agree. I do not think there would be any great argument about these objectives in principle. But the Opposition fails to face the reality that if these things occur a number of consequences must flow. First, someone must pay more. That is the whole plain fact. If that additional payment is in the form of taxation then, on the economic argument advanced by the Leader of the Opposition and other economists in the Labour Party, you will reduce the incentive and capacity of industry to produce, thereby reducing the prospects of growth which they talk about here so fluently.

Then there is the matter of principle raised by my friend the honorable member for Lawson (Mr. Failes) and the honorable member for Calare (Mr. England). Included in the accounts of the Postmaster-General’s Department is a component - I do not know how large it is and I do not think anyone else does - for work done for developmental purposes represented by the cost of installing telephones in sections of the country which are not as closely settled as the metropolitan areas. There are areas in the north and the west where telephone lines run hundreds of miles to serve relatively isolated settlements. That causes a large part of the work of the PostmasterGeneral’s Department. That is a condition of the development that well meaning theorists talk about. Communications are essential to development.

This again is an issue that the Parliament should face. I believe it can be stated simply in this way: Should the users of these facilities pay more to achieve this development, or should the cost of the development be spread over the whole range of taxpayers? In political terms it means that you either tax a few people more heavily or tax all taxpayers not so heavily. That is a political reality. However, I believe some assessment should be made of the developmental costs in this Department, and perhaps in other departments, that we should know the costs and that we should face the reality and take the responsibility, if necessary, of imposing taxation to meet those costs. Unless we face up to these problems they certainly will not be solved. We will solve nothing by ignoring them.

Finally, I want to say something about a matter which I think looms over every member of this House and every citizen of this country. I refer to defence. I agree with the honorable member for Higinbotham who advocated the expenditure of additional funds for aid, in terms of foodstuffs, to under-developed countries. I believe that in the ultimate this contributes to our defence. It is one of the problems that we should face. If we do not face it now we will be compelled to face it in the relatively near future. However, passing from the humanitarian aspect to the narrow question of defence, again I say that we will not find a solution to our defence problems in time of peace until the issues are stated and until we face the issues.

In blunt terms, what are the issues? 1 do not think it would be understating or overstating the position to say that almost everyone in this community would be happy to see a more active defence programme. The problem is: Will the voluntary system provide the men needed for a defence programme? The second part of that problem, which people dodge with some agility, is this: If the defence forces are expanded, what effect will that have on employment in the industrial field? In blunt terms what effect will it ‘have on the policy of growth? There are the two problems. Can we get the men, and can we get the munitions of war? People in this country tend to throw their minds one way or the other. There are some who say we should never depart from the voluntary system. There are others who say we must have a compulsory system for our defence. Yet the real issues in this are not debated.

The first issue is this: Can the voluntary system be made to provide, first of all, the men needed for adequate defence? What is the cost in terms of money, in terms of men and in terms of the effect on production and growth? Facing the reality, if you cannot get enough men under certain conditions, then it is reasonable to assume that if you alter those conditions you will get enough men. It is a matter of how much you alter the conditions and what effect that has on others. Maybe we will face it, maybe we will not. But if we do not face that sort of thing we will slip a little further into the discard.

There is a bit more to it than that. Although I admit that people in this country realise that munitions nowadays are a bit beyond those of the bow and arrow age, they have a strange idea about how to get munitions. Some of them seem to think that when an emergency arises we can quite easily get rifles, guns and shells which have been packed away in cellophane or grease. Of course, that is just not so. The scientific and technical advances of recent years and the present pace of scientific and technical advances renders tilings, particularly in the field of warfare - equipment and munitions - obsolete perhaps by the time they have come off the production line. That means feat we cannot buy off the hook, as it were, in other countries. It means that we have to order ahead. It means, as I understand the situation, that the 1 1 million people of Australia do not necessarily have a priority over the people of the supplying country or of its other allies. In other words, the obtaining of munitions can be a fairly long range programme.

Can we manufacture the necessary equipment in Australia? Maybe we can manufacture some, maybe we cannot manufacture a lot. But even if we could manufacture it here, are we prepared to face up to a big expansion in munitions production in this country at the cost of private industry? This seems to me to be quite apart from the situation to the north or the question of by whom or from where we might expect attack. These are the kind of things that this Parliament, not the Government, should be deciding in principle. It seems to me that the Budget gives a reasonable indication of the Government’s appreciation of the defence situation and of efforts to meet it. Whether those efforts are great enough cannot be assessed until the kind of questions that I have asked are answered. At the moment I accept and support the Budget.

On the Budget generally, I make the point that the economics of it have not, in fact, been challenged. I believe it is soundly based. I believe it gives us progress and I also believe it gives us stability within that progress. Using a phrase that I read recently, it gives us stability and motion. These are not necessarily contradictory terms, although in ancient thinking they might well have been such. It is a reasonably good Budget in the circumstances we face and I believe it should work. If it does not have the desired effect, the responsibility will rest not so much on the Government but on the Parliament as a whole for its failure to carry out the duties entrusted to the individual members of it.

Mr SEXTON:
Adelaide

.- Government supporters in this debate have, in the main, spent their time apologizing for the things that the Budget does not do, rather than praising the uninspiring provisions of the Budget. The honorable member for Deakin (Mr. Davis) has just treated us to an academic discourse on various matters, some of which did not even receive a mention in the Budget. The Leader of the Opposition (Mr. Calwell) has pointed out the weaknesses in the Budget in an appropriate way by moving an amendment directing attention to the fact that the Government has failed to grapple adequately with the problems of striking a realistic balance between the claims on our national resources arising from defence, development and social welfare.

This Budget is notable for a steep increase in taxation, while giving little compensation in return. The Treasurer (Mr. Harold Holt) laid great stress on the expansion in defence expenditure, but this increased expenditure includes an extra £36 million which is mainly for increased salaries and wages and homes for Service personnel. No mention was made of the equipment and weapons of war that are so vital to the defence of our nation. We see a sorry state of affairs in the defence field in this country at the present time. Despite the fact that hundreds of millions of pounds have been spent on defence in the last few years, we have a totally inadequate Army, we have a Navy that is almost a memory - submarines have been ordered only this year - and we have an Air Force that expects to obtain bombers in 1968. Yet, with such a miserable array of defence weapons, our Government has during the last few months been threatening the Indonesian nation in respect of war activities. It would be a sad development indeed if any nation, Indonesia or any other, were to call our bluff and say: “ What are you going to do about it? “ We would have to rely, as we have in the past, almost entirely on assistance from the United States of America or the United Kingdom.

The Treasurer, with a great play of words, painted a rosy verbal picture of our defence effort, but the Leader of the Opposition effectively exposed its weaknesses when he described the Treasurer’s efforts as misleading and pointing to an appalling deficiency in our defences. The Treasurer tried subtle means and waxed eloquent about our buoyant economy and the spectacular increase in defence spending. He endeavoured to paint a picture of an adequate defence effort. But despite his claim about this great buoyancy in the economy, he has imposed the greatest tax increases since the horror Budget of 1951-52.

Despite what Government supporters have said, this Budget will hit the little man and those in the middle income group much harder than it will hit the wealthy sections of the community which support the Government both financially and in other ways. The fact is that the Budget will merely widen the gap between the rich and the not so rich.

When we look more closely at the tax increases we find that £59 million is to be taken from the taxpayers in indirect taxation. The amount, of course, could be greater because of our expanding economy. We know, too, that in the past the Treasurer’s estimates have been grossly inaccurate. It is interesting to consider how the extra revenue is to be raised. On income tax alone, the Treasurer expects to get £162 million, from customs and excise £44 million and from sales tax £15 million. Postal charges, including steep rises in telephone rentals, will account for another £20 million, while increased broadcasting and television licence fees will bring in £2,750,000. These are comparative figures against last year’s revenues. The Treasurer has set them out in the schedule attached to his printed Budget Speech.

It is interesting to note that an increase of some thousands of pounds is expected from interest on war service homes. Yet honorable members on the Government side ask us to believe that they protect those in the lower and middle income groups. The fact is that persons in these groups will contribute the bulk of the extra revenues that are expected. The pay-as-you-earn taxpayers, the wage and salary earners, will contribute, in the aggregate, £61 million of the expected new revenues. This, of course, is not the whole picture, because these same taxpayers will contribute substantially in other directions through indirect taxation. The largest contributions to the extra revenues from customs and excise through the sale of cigarettes and tobacco will be made by the same groups. We should realise that to hundreds of thousands of people in Australia smoking is regarded as a cheap form of relaxation and a necessity in everyday life. The lower and middle income groups will also be heavily hit by increases in sales tax. They will also, of course, be gravely affected by increased postal charges and telephone fees.

The increase of 6d. in the £1 in company tax will not mean much hardship to companies, as an examination of their financial structure will show. We were told by the Treasurer that in recent years companies have enjoyed a variety of concessions and that, in the aggregate, companies would be paying £30 million less in taxation because of these concessions. The Treasurer also said -

Of total income tax collections, income tax on companies has declined as a proportion of the whole from 36.1 per cent, in 1958-59 to 31.3 per cent, in 1963-64. Meanwhile, the proportion contributed by pay as you earn taxpayers has increased from 38.7 per cent, to 42.2 per cent.

That is not a claim by members of the Labour Party; it is a statement that the Treasurer made in his Budget Speech. It is a good illustration, and provides supporting evidence, of Labour’s claim that, in the matter of taxation, under a Conservative government the working man, including the man in the middle class group, is always the hardest hit member of the community. Speaking of additional revenues, the Treasurer said -

For the most part the burden falls on personal income or personal expenditure.

Once again the Treasurer supplies evidence in support of Labour’s claims. So we can well afford to ignore the loud protestations that come from Government backbenchers when they try to set themselves up as the protectors of the working class.

The whole picture of the Budget is disappointing because it follows the age-old conservative idea of legislating so as to widen the gap between the rich and the poor. The Government learns little from the world situation in which nation after nation is coming under Communist influence because Communism offers the people bread instead of their age-long hunger and, in many cases, death from malnutrition. Capitalism and Conservative government are not meeting the challenge. It is a tragic fact that two-thirds of the world’s people go to bed hungry each night. Therefore, the creeping influence of Communism continues to grow. Our Government learns nothing from history. Its record in international affairs is a pathetic one. The Prime Minister (Sir Robert Menzies) has been a signal failure in all major crises over the past few years. The vital requirement is for all world governments to unite in providing bread for the underprivileged countries and to teach those countries how to produce to meet their own needs, so that our present unsettled world may settle down and live the life that was intended by our Creator.

The Government’s idea of success is wrapped up in commercial affluence. Money values are more important to it than human values. It regards the record profits of companies as the measure of success and continually boasts about our affluence. It is an interesting exercise to look at how companies are managing. The following statements have been culled from the financial pages of the Adelaide “ Advertiser “ of Tuesday last -

Net earnings of Adelaide Steamship Co. have reached a new peak of £466,825, or 20.3 per cent, above previous figure.

Onkaparinga Woollen Co. has held its dividend at 11-2/3rds per cent, for the third successive year.

Consolidated net profit of Johns & Waygood Holdings Ltd. rose by £18,140 to £574,098 of the year.

Boral Ltd. shows a further leap of almost 50 per cent, in net profit to £2,457,300 for the year.

United Motors Ltd. has lifted its dividend rate to 15 per cent. Net profit rose by £14,042.

Associated Minerals Ltd. has lifted its net profit by more than 42 per cent, after a one for three bonus issue last year.

Rigby Ltd. is paying 12) per cent, dividend for the third successive year.

I have some other figures from company reports, as published in the Press. The Portland Cement Co. Ltd. had a record profit of £254,000 and its dividend rate rose to 12) per cent, after its capital had been watered down by a handout of shares in a one for four bonus issue. The profit of Reids Ltd. was up by 33.5 per cent. The profit of the Australian Guarantee Corporation Ltd. was up by £151,000. The profit of the Mount Lyell Mining Co. Ltd. was up by 1 1 .5 per cent. The profit of WallarooMount Lyell Fertilisers Limited was up by 71.6 per cent, and the dividend rate was raised from 9 per cent, to 12) per cent. The profit of E.M.I. (Australia) Ltd was up by 33 per cent. Esanda Ltd. earned a record profit of £775,000. Pelaco Ltd. more than trebled its profit for the previous year. The profit of the S.A. Brush Co. Ltd. rose by 25 per cent.

Burns Philp and Co. Ltd earned a record profit of £2 million. Its shareholders funds have increased to £24 million on a paid up capital of £7 million. In spite of those facts, the company receives a subsidy of £240,000 a year in respect of shipping services between Australia and New Guinea. The profit of the Commercial Banking Co. of Sydney Ltd. increased by £173,000. The Finance Corporation of Australia Limited earned a profit of £443,000. The Broken Hill Pty. Co. Ltd. increased its profit to a record £18.3 million. Those are some of the profit figures which show a very affluent society, as far as company profits are concerned.

I have many more profit figures here. I will give some more of them. Lensworth Finance Ltd. had a net profit of £191,000 and a dividend rate of IS per cent. Dennys Lascelles Ltd. has raised its dividend rate to 17i per cent, compared with 14 per cent, last year and 12i per cent, the year before that. The profit of Westfield Development Corporation Ltd. rose by 11.5 per cent, and its earning rate rose to 18.1 per cent. The profit of the Commercial Bank of Australia Ltd. jumped by £163,000 or 22.3 per cent, on the figure for the previous year. Plastyne Products Pty. Ltd. doubled its profit of the previous year. Bradford Insulation Industries Pty. Ltd. made a record profit which was 36.5 per cent, above the figure for the previous year.

Those figures show the way in which companies have been enjoying prosperity in the past year. There has been a spectacular increase in profits. There is no question about that. The Government has imposed an increase of 6d. in the £1 in income tax on company profits, and already many companies are screaming about the increase. But the profit figures reveal how well companies managed under the 1963-64 economy. The increase of 6d. in the £1 will not worry them unduly. In fact, it will assist many companies to increase their profits still further because undoubtedly they will pass on costs in the form of higher prices for their goods and services.

The rat race of price increases is already well under way. Daily firms are announcing price increases, using the basic wage increase as the stalking horse for their actions. The announcement by the Australian Council of Trade Unions expressing alarm at price increases demands attention. A report in Wednesday’s Press states that last month the A.C.T.U. laid down a four point programme, including the suggestion of a boycott if the Government fails to carry out its responsibilities. That programme states -

  1. The Federal Government should use its considerable powers and influence to call on sellers of goods to hold price levels.
  2. The Government should confer with the States on price control.
  3. The Government should press on with its proposals to eliminate restrictive trade practices.
  4. Failing action on these points State branches be asked to consider boycotts to resist unwarranted price increases.

Since then, two strong employee organisations have endorsed the statement issued by the Australian Council of Trade Unions and have promised support for the A.C.T.U. These two organisations, the Australian Council of Salaried and Professional Associations and the High Council of Commonwealth Public Service Organisations, represent many thousands of employees who are alarmed at the uncontrolled upward movement of prices, now gathering momentum because the Government stands idly by and refuses to protect the people against the indiscriminate greediness of so many commercial enterprises.

The Government resolutely refuses to attempt to introduce price control, yet it is all for wage pegging and salary control. That is a grave injustice to our people, who are all affected in some way by the burden of price rises. Whilst this affects the ordinary citizen in many ways, we must consider also how it affects the pensioners and people on fixed incomes, such as superannuation. It is a sad sight to witness each year a delegation of pensioners from all States coming to Canberra to plead with the Government for social justice. On 11th August we mingled with these pensioners and heard their pleas for a fair go. We talked to them and heard their views. It goes without saying that their views coincided almost entirely with the views of the Labour Party. Their representatives met the Treasurer and the Minister for Social Services (Mr. Roberton), but all that they received was sympathy and a mass of figures which they found hard to understand. The pittance of 5s. given to some sections of pensioners was no real gain at all. It is doubtful whether that increase would meet the increased cost of goods and services which are vital to the sustenance of the pensioner. Prices of foodstuffs have risen. There are daily announcements of increased prices. The price of milk is the latest to join the ranks, yet milk is a vital food to many old people. Already the prices of butter and cheese, cakes and pastries have risen, and the price of bread is to increase in the near future.

Let us look at some of the problems that confront pensioners and see what are their claims for a better deal and better social justice, which they believe to be their right. First of all, we can challenge the Government for failing to halt price increases so that the purchasing power of pensions can be synchronised with their money value. Today, unfortunately, pensioners are running a losing race in this regard. The fact is that the small rises in pensions are always chasing the cost of living increases. There is no doubt that the pension rate will get further and further behind this year because of the rapid increases in so many prices of foodstuffs and other goods and services.

I come now to a vital point which has been mentioned before. We know that the Government has failed to ease the means test applicable to a pensioner medical entitlement card. The present means test is very severe; a pensioner who receives more than £2 a week apart from his pension is ineligible for a pensioner medical card. Interest on capital is taken into account, but it is not considered for any other pensioner entitlement. Yet this section of pensioners, who need this medical service, are deprived of it because of the severe means test. The Government has failed to remove the discrimination between married and single pensioners and, in effect, has set up a further means test for married pensioners. Again, this is a disgrace. The Government has failed to recognise the need to raise the funeral benefit from £10, the sum which was fixed in 1943. It has failed to extend the Aged Persons Homes Act to embrace a wider field of organisations. In particular, it has failed to provide for widows who are unable to take employment because of their responsibility to their children. This is one of the greatest hardships of the pension and social services setup in Australia.

Reference has been made to the callous treatment meted out to blind pensioners in respect of telephone services. Nobody needs a telephone more than a blind pensioner who, if he becomes suddenly ill, has no other way of getting aid. If he has not the means of communication provided by a telephone he is at a dead loss to make contact so that he can obtain medical aid.

Mr Birrell:

– That would suit the Government; he would die.

Mr SEXTON:

– Yes, as the honorable member for Port Adelaide said, he could die so far as this Government is concerned. In addition, the Government has failed to make any provision for an alteration in the purchasing power of unemployment and sickness benefits. These are still the same old rates, despite the ever increasing rise in costs. Consequently, those who are unfortunate enough to have to receive these social service benefits will be worse off than were those who received them in the past.

In the field of national development an interesting announcement was made this week. The Government claims that it is going ahead enthusiastically with national development, yet we find that two organisations in Victoria have banded together in order to make a contribution to the national development of Australia. It has been reported that the Victorian Employers Federation and the Constitutional Club in that State are negotiating with the Northern Territory to obtain vast tracts of good land in the Territory so that it can be developed. The first thought that runs through our minds is why are private organisations such as these seeking permission to develop the Northern Territory? Is that not the responsibility of the Government? Honorable members opposite prate about the defence of Australia, but the Government is doing precious little about it when it fails to take adequate steps or spectacular action to develop northern Australia, which would be the gateway to our land should an invasion occur. Evidently these organisations are disgusted with the Government, and so propose to take the bull by the horns and set out with their own funds to try to do what our national Government should be doing. In this regard, it is disquieting that many foreign interests are acquiring land in northern Australia. Only last evening the honorable member for Griffiths (Mr. Coutts) said that 20 per cent, of the assets of companies in Australia today is owned by foreign interests. This is a very sad state of affairs and, again, it reflects the lack of government action to safeguard the interests of Australia. Time is running out and I must conclude. I do hope that the Government in the not too distant future will take more interest in the human values of this nation than it is now taking in the monetary values. When it reaches that happy state we can expect a greater distribution of the natural wealth that this nation creates.

Mr WENTWORTH:
Mackellar

– I think it is safe to predict that this Budget will pass the House. Indeed, I am sure of it if for no other reason than that this is a Budget put forward by the Government and the Opposition has shown that it is quite incapable of being the Government. Criticism of this Budget by the Opposition has been carping and puerile. It had had no constructive basis. In many cases it has been contradictory. Of course, this merely reflects the divisions which rend the Australian Labour Party. To some extent these divisions may do the Party credit because at least it shows that some of its members are prepared to resist the pernicious left wing influences which characterise some other sections of the Party.

This Budget does not have any great marks of distinction. It is not a highly coloured Budget. It could almost be described as a pastel Budget. This in itself is not necessarily a reason for thinking that it is a bad Budget because when things are going well, it is the mark of a good Treasurer to interfere as little as possible. This Budget does very little that is new, but this, as I say, is not necessarily a criticism of it because if things are in a position that requires no drastic action then it is to the credit of the Treasurer that he takes none.

But I do feel that the general financial policy of the Government does lack certain long term and constructive ingredients which should be there. It is because of this lack of constructive financial policy that there is a cyclic history of boom and depression in Australia. This is a criticism not only of this Government but of previous Governments also. This cycle is a fact and we had better look at it. What happens?

First you find a period of prosperity. Then a saving shortage occurs and because of that a boom develops. Then you necessarily get Treasury repression followed by depression and then a period of stability which is based on the fact that the consumer does not have confidence of long term stability. The stability is based on lack of confidence because, once confidence returns, consumer spending reasserts itself, the savings shortage manifests itself again, you go into the period of boom and the cycle repeats itself.

This must happen if there is this chronic and endemic shortage of savings. It must happen if, in periods of prosperity, the average holder of income - whether he be a wage-earner, a farmer or a man owning property - does not put aside for capital investment sufficient money to provide the capital goods necessary to make the schedule of consumption goods on which he wants to spend his money.

There is no need for me to argue this point; the proof is before honorable members. Even today Australia, which is not developing at any really phenomenal rate, is requiring savings of £300 million or so from abroad every year in order to keep the economy stable. Our savings rates are insufficient to sustain it. The Government rightly uses the short term instrument of credit expansion and retraction in order to control this process. I have no quarrel with this, whether it be done through quantity of money, through interest rates or through taxation. It is right and proper for the Treasury to use these short-term instruments. What is not right and proper is for the Treasury to be without a long-term policy to correct the endemic shortage of savings. We have to think in terms of a long-term policy which will increase our savings rato and therefore allow us to sustain prosperity - even when confidence in prosperity grows - and thus prevent prosperity passing over into unhealthy booms.

As I have said, the short-term regulator of credit in its various forms is good, but it is not good to rely on it in the way that this Treasury has relied on it. When I say “ this Treasury “ I mean the Treasury not only under this Government but also under its predecessors. lt we want to increase savings - and we do - I look, in the main to three things. First, I look to the means test on pensions. The means test is an extravagance which this country can no longer afford. It is time we stopped talking about the cost of removing the means test and talked instead of the real cost of having the means test continued. In this period when we are short of labour and the Minister for Labour and National Service (Mr. McMahon) is talking about shortages, can you imagine anything so insane as to say to people who want to work: “ You cannot work or you will lose your pension”? This is madness. We are creating dis-saving in the elderly groups of the community and among people who would otherwise save because those people say: “What is the good of it? All you do is disqualify yourself from the pension”. Because of this, savings are insufficient in the community and we are forced willy nilly into this cycle of boom and bust which we have been experiencing over the decades in Australia.

Apart from the humanitarian aspects - and I believe they are important - the means test, I repeat, is an extravagance which the Australian economy can no longer afford. It is time something was done about it. I say that it is a reproach to the Treasurer (Mr. Harold Holt) and the Government that they are not doing more. I admit - and in fairness other honorable members should admit with me - that the merged means test which was brought in some years ago was a great improvement. It is true that something was done then ‘but it was not enough and the existence of a test which dissuades people from working and earning when they want to work and earn is surely insanity in the present state of our economy. It is an extravagance. Do not let us talk, I say, about the cost of removing the means test; let us talk about the cost of retaining it.

Secondly, I think something has to be done in regard to spending in the lower age groups in the community, particularly in the case of the unmarried. This Government has done a lot to provide housing for newly married couples, and rightly so. But it should also be doing something by taxation policy and in other ways to help teenagers to save for their own houses. This is a matter which I have mentioned in this place in* the past. At one stage I introduced an amendment to the Act - I hope I shall have an opportunity to do so again and press it - which was designed to allow taxpayers to save a small amount each year in the form of special bonds, that amount to be a deduction from their taxable income for the year. The amendment provided also that, when they withdrew the sum involved, it would be an accretion to their taxable income but that in cases of marriage and events of that kind a certain amount could be withdrawn free of accretion to income. This is a concrete scheme. As I indicated, I intend to bring it forward again and to press it. I hope I shall have the support on both sides of the House.

Let me turn from this major financial matter which is not connected intimately with the present Budget but which is connected with the general financial policy upon which a string of Budgets must be set Let me turn to the subject of defence, which perhaps is the main matter now before the House and the country. It is unfortunate that, apart from the provision for highly desirable increases in rates of pay and housing conditions for members of the forces, this Budget does not provide for any substantial increase in defence at all. In relation to our work force and our national income, there may even have been a decline. However, the Treasurer and other members of the Government have spoken of their plans which may and I hope will be implemented in the course of this financial year. I hope they will be implemented early in the year.

The defence situation is serious. The Minister for the Army (Dr. Forbes) told us this morning that the Government, in formulating its plans, had to reply upon the advice of its senior officers. In regard to details, that is true; but the general defence and political situation throughout the world is in the hands not of officers, but of members of Parliament. This is our responsibility. It is our responsibility to assess the general situation; it is the responsibility of the officers to devise detailed means of dealing with the situation.

In a few years’ time Australia’s position could be grim. As no defence preparations can be effective immediately, we should now be doing that which could protect us against a situation which may develop. That would be a reasonable insurance to take. May I reiterate that I believe in disarmament under international inspection and control, even though it may involve a certain measure of world government. But there are simply no developments in that direction. If such should occur, well and good; let us co-operate 100 per cent. Let us even give a lead. But, in the meantime, let us undertake the necessary defence insurances lest those desirable disarmament developments are not agreed to by those who could be our enemies, namely, the Communist world and its satellites.

It is in this context that we must look at the defence situation. It would be terrible if in this financial year the Government did no more than to provide for what is embraced in the present Budget. The present Budget can be accepted only on the basis of statements such as that made by the Treasurer last week when he said that the Government would be reviewing the situation and would be expanding the defence programme, and such as that made abroad by the Prime Minister (Sir Robert Menzies) four or five weeks ago when he said that our defence preparations - our defence expenditure - would have to be doubled. It is only on that basis that one can accept the meagre provision for defence which has been made in the current Budget. When looking at the kind of defence we must provide, equipment must be given top priority. Nowadays fighting is very largely a matter of equipment, whether it be aeroplanes, ships, guns or rockets. I do not propose to go into what our equipment should be. I do not feel competent to go into such matters of detail. I simply say as a matter for the record that equipment must have top priority. However, I shall try to say something specific about manpower.

We need more manpower in the forces; we need it fairly desperately. In relation to the Navy and the Air Force, expansion of the permanent forces seems to be the only possible thing to do. The degree of technical skill required is so high that national service training would be out of the question. By and large, the members of the Navy and the Air Force must serve for long periods of time. So really I am talking about manpower for the Army. We listened to the comments of the Minister for the Army this morning. I ask the

House to consider carefully an inherent contradiction implied in what he said. It will be recalled that he told us that we could not have national service training because this would mean drawing from our operational forces trained personnel who were desperately needed. He said it would mean breaking up and weakening our operational forces. I believe he was quite right when he said that. But I ask honorable members to follow me for a moment while I discuss the consequences of what he said. The crisis, impending or actual, which requires you to expand the Army is the same kind of crisis as that which makes it imperative for you to maintain the integrity of your operational forces. In other words, what the Minister was saying was that we are running into a blind alley and there is very little we can do about it. It is of no use to give us this soft soap about having the Citizen Military Forces and so forth to draw from in time of crisis. That is not the point. In the kind of crisis I have mentioned you just would not have trained and organised manpower available. Some rethinking of the Government’s position in this regard is now necessary.

What do we want? We want two things. We want, first, to have in being operational forces of a greater magnitude than those we have at present. We want, secondly, to have available trained reinforcements which are not necessarily organised into operational units but which will give us the capacity to maintain existing operational units and to form new ones fairly quickly. Therefore, whatever else be done, the first step is to create a proper instructional corps. This should be done here and now. Every day’s delay is almost criminal. Whatever other step be taken, and whether or not any other step is taken, we have to create a proper instructional corps, and we have to do this quickly. This instructional corps will have to exist separately from the operational formations whose integrity we do not wish to disturb. Unless the corps takes this form, we shall be kept in the blind alley where the Minister for the Army this morning told us we are now.

We must create this instructional corps without delay. Its numbers need not be very numerous. Probably they can come very largely from among personnel who would otherwise be retired from the Army. What is thought of is not a corps very great in numbers. What is thought of is a nucleus organisation that will make further expansion possible if further expansion is decided on. So I say that, whether or not any decision on national service training is made at this moment, we must create the necessary background instructional corps independent of the operational formations.

What is to happen after an instructional corps has been created? Here I get onto more nebulous ground. I have been quite definite so far but on what is to come after I do not feel the same measure of detailed conviction. I believe that something like this should be done: We should have selective national service training, perhaps for two or three years, the first part of that training being given in training battalions or units and the last part in operational units which are in being and the integrity of which will be preserved. This would enable us, all the time, to be turning out people who have some experience and it would therefore give us, in addition to the operational units, a reserve of manpower which could be fairly quickly mobilised in case of emergency. This would be a great improvement on the present situation, which will become rather more difficult as the last war recedes and those who had practical experience in it, by the very fact of their age, become less qualified to take part in future training or defence programmes.

So I feel that, after we have created an instructional corps, we should have a system of national service training for two or three years, the first part part of this training being served strictly in training units and the last part in operational units, followed by a period on the reserve, with reserve personnel not necessarily organised into operational units but organised on a basis that will enable them to be brought in quickly for the reinforcement of operational units or the creation of new ones. We should look on the Citizen Military Forces as a training ground for officers and non-commissioned officers. These forces would provide, as they do now, an opportunity for a kind of voluntary additional service for those who are on the reserve. Personnel in the C.M.F. would be able to play the role of officers and N.C.O.’s should it be necessary to expand our operational forces quickly. It will be necessary, of course, to give our trainees repatriation benefits and all the other kinds of benefits now extended, for example, to men who are called up for the draft in the United States of America.

I have not tried to be too detailed and definite about this. But I am quite definite that something must be done. The blind alley or dead end which we have reached and which the Minister for the Army described to us this morning represents a position in which we cannot provide adequately for Australia’s safety. I say this in the context of my earlier remarks and with the reservation that I made previously. That is the reservation that the question of equipment may well be even more important than that of manpower. I have not endeavoured to deal with the question of equipment. On the manpower side, however, I say that we must move now to establish an instructional corps and we must prepare to move as soon as possible into the next phase. I know that this makes unpleasant hearing. I know that honorable members on both sides of the House would rather these things had not to be done. But, in the near future, Australia may well be placed in a unpleasant international situation, and any government that continues to avoid giving us the necessary insurance against what may happen would be failing in its duty. I hope that this Government will not fail.

Mr HANSEN:
Wide Bay

.- Mr. Deputy Speaker, we are at present considering the first Budget to be presented in the life of the Twenty-fifth Parliament. This Budget will have considerable effects on the Australian public. For this reason, thousands of people throughout Australia listened with interest to the words uttered by the Treasurer (Mr. Harold Holt) on Tuesday of last week. The great majority of the thousands of people who listened to him were disappointed and disillusioned, particularly after having heard, early in the Speech, the right honorable gentleman’s reference to the state of the nation’s credit. He spoke of a sharp increase in production, a 9 per cent, increase in wages and salaries, a 10 per cent, increase in company income, a 26 per cent, increase in farm income and an increase of 9 per cent, in the gross national product. He stated that a big rise in exports had a lot to do with this and added that, externally, the results for the year 1963-64 were quite spectacular. Anyone who heard those remarks early in the Treasurer’s Speech could justifiably have felt that the Budget would hold something of value for him and would give him an incentive in the coming year.

The Treasurer went on to speak of high domestic activity and great external strength as we move into 1964-65. According to him, everything in the garden is rosy. He suggested that we have every reason to expect a further good increase in production this financial year. Despite these favorable signs and despite the fact that the deficits budgeted for in the last two financial years have in fact turned out to be surpluses, the Treasurer has presented this Budget on behalf of the Liberal-Australian Country Party Government with a certain measure of timidity. I believe that the honorable member for Mackellar (Mr. Wentworth) spoke some words of wisdom.

Mr Reynolds:

– It is time he tried to do that.

Mr HANSEN:

– There is always a first time for everything. He reminded us how the economy of this country has gone from boom to burst and how the people have grown accustomed to looking for a recession after a period of prosperity. It seems that the Treasurer is expecting a recession to follow prosperity again. Despite the affluence evident in the economy, he has decided that personal income tax shall be increased by 5 per cent. In his words, the rebate of 5 per cent, will be withdrawn. But withdrawal of the rebate amounts to the same thing as an increase of 5 per cent. - call it what you like. The sales tax on motor vehicles has been raised by 2b per cent, and the excise on cigarettes, cigars and tobacco by the equivalent of 3d. for a packet of 20 king size cigarettes. As we have seen, already the manufacturers of these products have stolen an extra Id. from the pockets of the people by raising the price by 4d. Television viewers’ licences are to be increased by £1. The Leader of the Opposition illustrated how this Budget will have the greatest effect on the little man. He showed how the little man is being slugged the most. He gave figures showing that over a period the man on the basic wage, the low wage earner, has had an increase of 30 per cent, in income.

Mr Chipp:

– That table is false.

Mr HANSEN:

– It was genuine enough for one of our national newspapers to follow it and use the figures from it. Quite a number of people throughout Australia are still on the basic wage and there are many receiving less than the basic wage. The table shows that the rise in income tax has hit this group harder than those in the higher income bracket. This newspaper, for one, commented that the tax formula was unfair to the small man. That is perhaps to be expected from this Government. It would not be expected to favour the little man. The Treasurer commented -

Certainly the foundation for a strong, steady advance has been well laid in the past two years.

The adoption of Labour Party policy over those past two years has been responsible for the steady advance in the economy. He went on -

We still have the basic conditions of stability within Australia and I believe that, with good national teamwork, they can be preserved. But if and when circumstances arise to threaten stability . . .

Here again comes the threat of a bust - . . such as the big rise in expenditure, including defence expenditure, of which I have spoken earlier, at a time when our resources are already fully committed, it will not do for us merely to sit idly by and hope for the best. We must take firm and positive action in these circumstances to preserve stability. In the Budget we propose action directed to this purpose. I am confident that the community will recognise the need and recognise also that, in what we propose, we are acting in their own best interests.

Those words have a very familiar ring. They sound much the same as the words of the Prime Minister (Sir Robert Menzies) in 1961, when he said: “Someone has to take the medicine “ We know what section of the Australian community took the medicine in 1961 and we know how it reacted against this Government at the end of 1961.

I refer to the “ Reserve Bank of Australia Report and Financial Statements 1964”, which states-

But capacity to produce will grow less rapidly than in 1963-64; the rate of growth of the work force will not change significantly and little further contribution to employment can be expected from a reduction in unemployment. Opportunities for short term increases in productivity may well be less.

There we have a warning. Already there has been a sharp increase in costs following an increase of £1 a week in the Federal basic wage not much more than six weeks ago. The Federal basic wage would not apply to half the workers in Australia, but already this increase has been used as an excuse by various manufacturers and all sorts of organisations and authorities for increases in the prices of foodstuffs and various other commodities. About two days after the increase was announced, there was a statement that the price of footwear would increase.

The Government lacks ability to deal with these increases in prices. Although the increase in the basic wage was granted after consideration of the state of the economy over the previous 12 months, the opportunity was immediately taken for all round increases in prices by as many as could get on the merry-go-round. I see no attempt by this Government or by any government other than State Labour Governments to introduce any form of restraint on increasing prices. It is a matter of concern to me personally, and I feel to many others, that, despite assurances by the Treasurer, when decimal currency is introduced we shall see staggering rises in prices, particularly in less costly items priced from Id. to 10s. The introduction of decimal currency will be used as an excuse, and no attempt will be made to tell the people who increase prices that they cannot do this. This Government believes in free enterprise. It believes that competition will reduce prices, but we see many cases of what amounts to restrictive trade practices - agreements by groups of manufacturers to increase prices - and the Government takes no action to curb them. Nothing is done about price increases.

I agree with the Leader of the Opposition, who states - . . that the Budget does not adequately grapple with the problems of striking a realistic and fitting balance between the claims on national resources arising from defence, development and social welfare.

When decimal currency is introduced the Government will not be fit to grapple with increased prices for small commodities which will result from this change.

An item which will hit the little people very hard is the proposed increase in telephone rentals. The Treasurer has refer red to an artifically stimulated demand for telephones. The Minister for Housing (Mr. Bury) stated that it costs £570 to install a telephone and that the Post Office is now losing £7 per annum on each new service installed. I find it very hard to understand this. The “ Financial and Statistical Bulletin” of the Postmaster-General’s Department contains a table which shows the growth of telephone services since 1938-39, in metropolitan and country areas combined in each State. The increase in the number of subscribers is shown. It is natural perhaps that the Post Office has developed more than any other Commonwealth department in recent years with the introduction of the micro-wave link from Brisbane to the north and improvements in overseas telephone communications, including the completion of the Seacom c.able.

People no longer regard telephones as items of luxury, although they probably will do so after they see the new rental and installation charges. Telephones are regarded now, like refrigerators, as necessities in the home. Perhaps there is no place where they are more regarded as necessities than in the home of an invalid or aged pensioner living alone. Many a time I have heard questions directed in this chamber to the Postmaster-General (Mr. Hulme), in relation to telephone concessions to pensioners. He says that this is a matter for the Minister for Social Services (Mr. Roberton), who says that it is a matter for the Postmaster-General. They are passing the buck from one to the other. Neither will agree that concessions should be made to those people who depend on a telephone for keeping in communication with the outside world and with members of their families who are not in the immediate vicinity. Many of them may find in the middle of the night that they require the services of a doctor. If they have a telephone installed, it is comparatively easy for them to get to it. An honorable member on the Government side of the House recently said that, if these people cannot afford to have a private telephone, the public telephone is just down the road. I can imagine poor old granny, who may already be sick, stumbling down the road in her nightdress to the public telephone to ring the doctor because she cannot afford a telephone for herself. These people generally do not seek the services of a doctor unless they are very sick.

Let me return to an examination of the “ Financial and Statistical Bulletin “ of the Postmaster-General’s Department. In 1939, right throughout the Commonwealth, there were 487,535 combined metropolitan and country services. At 30th June 1963, 12 months ago, there were 1,812,181 services. Each year the number of services has increased substantially. The PostmasterGeneral has said that the installation of each new service costs £570; but this would not have been the cost of installation in 1939 or in the early days of Federation. I venture to say that a service installed in 1939 would well and truly have paid for itself by now. In the 12 months ended 30th June 1963, 93,612 additional services were installed. The Postmaster-General has said that the Department is now losing £7 per annum on each new service. Are we to multiply 93,612 by £7 and say that this is the loss that the Department must bear? The Government has turned the Postal Department into a source of revenue by charging interest on capital works carried out by it.

This week the honorable member for Stirling (Mr. Webb) asked the PostmasterGeneral whether some concession could be allowed to pensioners now that telephone rentals had been increased. I think most people would be prepared to pay a little more if this meant that those in indigent circumstances received some concession on the rental of their telephones. The honorable member was told that this was a matter for the Minister for Social Services. We all know the sort of answer that is given by the Minister for Social Services when these matters are referred to him, but nevertheless this request was made of the Minister for Social Services and he gave his usual answer.

I wish to refer now to a matter that was raised by the honorable member for Wilmot (Mr. Duthie) last night. The honorable member referred to nationalisation by monopolisation. Overseas interests are taking over established, substantial undertakings in Australia. This has reached such a stage that even the Deputy Prime Minister (Mr. McEwen) has expressed his concern. He referred to it as taking a part of the farm each year to pay for the mortgage. This activity is not confined only to business concerns, to the ordinary mixed business or to grocery stores; it is found also in the banking world. The policies of trading banks operating in Australia are being directed by people who have no interest in Australia. Their only interest is in the amount of money that can be raised by the businesses they own in this country.

This morning I asked the Treasurer whether he was aware of any restriction of credit for the purchase and development of agricultural and pastoral holdings. I asked this question because in recent weeks I had heard of two cases which suggested that this was so. A widow who owned a property the conservative valuation of which was £14,000 had an overdraft of £1,700 with one of the private banks. She had reduced the overdraft by £900 by selling one property. The shire council was pressing her to pay her rates. In Queensland, a shire council is entitled to sell a person’s property if rates are in arrears for three years. The widow wrote a cheque for £300 and gave this to the council in payment of half of the rates owing on her property, but the bank refused to honour the cheque and it was referred to the drawer. In the other case, a son was purchasing a property from his father. He offered assets and other securities to the bank but the bank refused to give him a loan.

I asked the Treasurer whether the banks were acting on the direction of the Treasury or whether they were acting on their own initiative. He made it clear that the Government’s attitude is that money should be made available for ventures of the kind I have mentioned. The only conclusion I cas reach is that the banks, in refusing to advance money, are following a policy that they have formed themselves. The bank involved in the cases I have mentioned is controlled by directors in London. I ask: Of what concern would the lending of money on the security of a farm in the Wide Bay area be to a board of directors meeting in London to formulate a policy? Overseas interests are beginning to have some say in the countrol of this country.

Because of its isolation, Australia has been singularly free of the international pressure groups that have afflicted other countries. If an election is being held in a European country one neighbouring country will support one party and another neighbouring country will support an opposing party. Their object is to gain favour with a future government. This is not new; it has gone on for centuries in Europe. These activities have resulted in one country gaining some control of the affairs of a neighbouring country. This has happened in South America and in the Central American republics. But Australia so far has been singularly free of this interference. However, it is no longer as free as it was and some action should be taken to restore our freedom. We look forward to the early introduction of legislation to control restrictive trade practices, but some action is also required to curb monopolies in the interests of the people of Australia. If the current trend is allowed to continue, we may find that the affairs of Australia are controlled by people who have no real interest in the country and who regard Australia only as a place in which to invest their money. The Government should take action during this session to curb this activity.

Much has been made of the fact that the Budget provides for defence expenditure to be increased by £36.3 million. This morning the Minister for the Army (Dr. Forbes) spoke on this subject. But he did not say whether he was satisfied with the increase of £36.3 million. He asked the Australian Labour Party how much it would spend on defence. This attitude has been adopted time and again by Government supporters. Is the Government so devoid of ability to manage the affairs of the country that it must ask the Opposition for advice and adopt the methods suggested by the Opposition? Must the Government continue to do this? If any query is made as to why Australia’s defence position is so critical at this stage, the blame must be laid directly at the feet of the present Government parties which have been in office during the last 15 years. The Minister for the Army was well known to honorable members as an advocate of national service training, but this morning we saw a complete change. We heard him give numerous reasons - possibly quite adequate reasons - why national service training should not be introduced at this stage. In today’s issue of the “Australian”, the national newspaper, there is a heading “ Ten Lost Years “ under which we read -

For ten years Australia has neglected the great issues of development and defence . . . and of planning, sacrificing for the nation’s future.

The article continues -

The last decade has seen ten years of neglect in the development and defence of Australia. It has seen a steep and dangerous decline in the proportion of our national spending devoted to the defence of our country. It has seen only a belated effort to meet the challenge of educating our children, whose minds represent the raw material from which Australia’s future greatness or failure will stem.

Commenting on the Budget, the Country Party Premier of Queensland said it was sad to see that the Government was not making more money available for the development of the north. He realises at last that action must be taken and, together with the Premier of Western Australia, has urged the setting up of a national development authority. Today’s issue of the “ Australian “ compares Australia’s record in public authority spending with the records of other countries over the last ten years. It shows that in that period Australia spent 18 per cent, of its gross national product in this field, as against Canada, 20 per cent.; France, 22 per cent.; New Zealand, 21 per cent.; Sweden, 25 per cent.; the United Kingdom, 24 per cent.; and the United States of America, 22 per cent. As I said before, the Government’s approach to defence and development has in this Budget been one of timidity. The Treasurer told us that the mixture he sipped when announcing the Budget was a Gladstone recipe. With all due respect to that Queensland town and to my colleague the honorable member for Capricornia (Mr. Gray), I suggest that on the next occasion the Treasurer should use a Bundaberg recipe which might embolden him to produce a more progressive and positive Budget.

Sitting suspended from 5.58 to 8 p.m.

Mr McEWEN:
Minister for Trade and Industry · Murray · CP

– Mr. Deputy Speaker, in the Budget debate last year, and on other occasions both in the House and outside, I have spoken of a wide range of policies designed to stimulate national growth. A balanced growth by all sectors of the economy, with the Government providing the right environment, is the policy and performance of this Government. It is the role of government to provide the right climate for growth. The current Budget is aimed at providing the environment for maximum sustainable growth in the future.

Australia’s record of growth is abundantly evident. The present state of the economy reflects this progress. The great expansion which has occurred is a testimony to the success of our earlier policies. The economy continued to grow rapidly in 1963-64. This was heartening, but what was even more heartening was the stable, well balanced and durable nature of this growth. Seldom, if ever, has our growth been more soundly based. Seldom before has it had such a confident look of permanency about it. Not only was there a solid increase in production and a substantial fall in unemployment, but these were accompanied by a record increase in international reserves, and price stability. We thus achieved simultaneously all our cherished economic objectives - growth, full employment, and internal and external stability. There are not many nations today that can boast of such high levels of employment as we have, with so few internal or external problems.

The last financial year has been a phenomenally good one - in many fields a recordbreaking year. In our great primary industries the value of production has nearly trebled since we set the stage for growth in 1950. Rural output alone reached the record level of £1,670 million last year. This remarkable achievement has been due in part to improved prices, but quite importantly to increased production in physical terms. Our farmers today are feeding three million more Australians, and exporting almost two-thirds more than in 1949. Since then there has been a reduction of 33,000 workers, that is 10 per cent, in the workforce of primary industries. This is a real and demonstrable increase in productivity. It is no accident; this is what we aimed at. The first major attack on farm productivity in 1952 has been consistently sustained.

Last year, the volume of production from our farms was up by two-thirds on 1948-49 output - another record performance with new peaks reached in wool, wheat, beef and veal, canned fruits, rice and tobacco. The coming sugar crop will be a record. It was thus a broadly based advance. The value of mine production in 1963 also reached a new peak, and a further advance is expected this year.

An all-time high was recorded in the value of exports of rural origin. The value of such exports exceeded £1,000 million for the first time in our history. Again, this result was due in part to better export prices for wool, sugar, beef and veal and dairy products, but in part also to significant increases in the quantity of commodities exported. In aggregate, the volume of rural exports is up by almost 60 per cent, since 1949. Export earnings from metals and minerals are likewise running at record levels, and we are on the threshold of further significant advances in metals and minerals. Growth in productivity and exports of this order is not just an accident - not just a chance occurrence. It has been going on over the last 15 years.

These are the achievements of our great rural and mining industries - not the achievements of government. But governments can and must make - and this Government has made - contributions to growth and development, through soundly based and appropriate policies. This Government has systematically taken action in its budgetary policy to provide for tomorrow’s gains in productive efficiency. Within the last two years the Government has broadened its measures to sustain the growth and increase the efficiency of the primary industries. Investment allowances have been extended from manufacturing industry to primary producers to encourage re-equipment. A bounty is paid on superphosphate to encourage increased production. The lending resources of the Commonwealth Development Bank have been strengthened. Commonwealth finance for rural research and expansion has been increased. And so provision is made i» the current Budget - as in previous Budgets - for a continued growth in productivity and the total physical output of the primary industries.

Apart from the annual allocations which the Government makes for agricultural research and extension activities, specific provision is made in this year’s Budget for a wide range of development projects to help the primary industries. This investment in future growth and welfare covers such widely diversified projects as the development of 4b million acres of brigalow lands in Queensland, cattle roads in the north, coal-loading facilities, great water conservation schemes, rail reconstruction and standardisation, and so on.

There is obviously little sense in planning for a significant upsurge in future output unless we can be reasonably confident of our ability to find growing market outlets at remunerative prices. Here again we can point to spectacular achievements - total export earnings last year of over £1,370 million, almost £310 million in excess of the previous year, and that was a record. As long ago as May 1960, in opening the National Export Convention in Canberra, I stated that we would need, within a period of five years, to increase our annual export earnings by £250 million. I maintained that this was an essential pre-requisite if our rate of growth was not to suffer. Many - I think most - thought such a tremendous increase in so short a time beyond the nation’s achievement. But, in fact, comparing this year with the year 1959-60, we have - within four years - increased our annual income from exports by over £500 million. In short, our recent export performance has been excellent and the Government, through the pursuit of energetic trade policies, has contributed in no small measure to this achievement.

Domestic price stabilisation schemes and orderly marketing arrangements have provided a foundation for those engaged in production. The negotiation of international commodity agreements and bilateral trade agreements has provided access to markets. Our policies pursued in this context coincide with the needs of the new and developing countries, which are also dependent on improved access and remunerative prices for their products. We have played a vigorous and constructive role along with others in efforts to improve the viability and the welfare of new and developing countries.

Our widely dispersed and, I think I may say, highly regarded Trade Commissioner Service has supplied market intelligence and trade contacts. In 1961-62 the Government introduced tax concessions for trade promotion expenditure. A trade publicity programme costing over £1 million a year supports our sales drive. We have sought always to work with private enterprise and in the United Kingdom alone expenditure by the Government of some £400,000 last year has been supported by expenditure by exporters and their agents of about £3 million.

Over-all, although exact figures are not available, Australian industry probably spent in 1963-64 something like £17 million on overseas promotion and investigation. All of these activities have made their contribution to our record export performance in 1963-64. Yet I would be the first to admit that we had our lucky breaks in export markets last year. We had a record production and record exports of wheat. We were helped in the latter by poor crops in Europe and a sustained demand for wheat from Mainland China. The world price for sugar, until recently, stood at unexpected heights and new and larger markets have been open to us.

On the other hand, despite the recent improvement in the export prices of a number of major bulk commodities, it is well to remember that the over-all level of export prices today is still appreciably below the levels of the early 1950’s. If the general level of export prices for our commodities had not fallen off from those realised in 1952-53 - I disregard the boom prices of 1950-51 - last year export earnings would have been almost £190 million more than they were.

Last year’s increase in factory production was no less dramatic than in the primaries. Admittedly, there was some little ground to make up, but, even taking the whole of the period 1959-60 to 1963-64, the average annual increase in factory production has been in excess of 5 per cent. - a pretty good record. Last year, of course, we did much better than that. Some notable performances, for example, were an increase of Hi per cent, in production of ingot steel; an increase of nearly 13 per cent, in cement production; an increase of 16 per cent, in motor vehicle registrations; and an increase of 10 per cent, in new dwellings completed.

Since 1949 more than 1 million people have been absorbed in the work force, and more than 1 million new homes have been built. Some 20,000 new factories have been opened during this period. This Government has followed a determined policy of industrialisation to support population growth. In February 1962 an investment allowance was introduced to assist manufacturing industry to re-equip itself for greater efficiency in the future. Almost every development in modern manufacturing, aimed at higher efficiency and lower costs, involves the installation of new and expensive machinery. The investment allowance was designed to encourage this.

Frequently the scale of operations, more than any other factor, determines the level of unit costs in an industry, so adequate policies of protection are therefore needed to ensure, to efficient and economic producers, a sufficient share of the relatively small Australian domestic market. Some believe that manufacturing in Australia is excessively protected. There is difficulty in making tariff comparisons between different countries. However, it is of interest to note that in December 1961 Australia was classified as a medium-tariff country by a United States Congressional Committee set up to study the tariff structures of other countries. The same Committee at the same time classified the United Kingdom, Japan, and the Common Market countries all as high-tariff countries. Some 70 per cent, of our imports enter free of protective duty.

Many manufacturers are now really going after export markets as a means of achieving volume throughput, competitive efficiency and enhanced returns. The results are to be seen in a 33 per cent increase in 1963-64 in the export value of manufactures. I point out that in speaking of manufactures, I exclude basic iron steel and petroleum products, because there is a violent fluctuation in the exports of these items.

This upturn has been facilitated by the introduction by the Government of taxation incentives for exporters and recent improvements in export credit facilities.

Government and business, working together, have induced a phenomenal growth in export consciousness. The Government’s major economic objectives are well known. Its growth objective was defined clearly and precisely by the Prime Minister during the last general elections, when he said we aimed to achieve an increase over the next five years of not less than 25 per cent, in gross national product, in terms of constant prices.

Our other objectives are a high level of employment, reasonable stability of prices, stable exchange rates and a satisfactory level of international currency reserves. Our policies are designed towards these ends. All of these objectives were secured during the last financial year. However, in the latter half of the year, after three years of unprecedented stability, prices commence to edge up again. Even so, taking the last five years, the rise in consumer prices has been only 9 per cent in Australia compared with 24 per cent, over the same period in France, 27 per cent in Japan, 17 per cent in Italy, and 12 per cent in Britain and West Germany.

Whilst production has been advancing strongly, so too have been domestic expenditures. Retail sales, which appeared a little subdued early last year, picked up strongly later in the year; consummer spending on motor vehicles jumped 141 per cent, in 1963-64; private expenditure on nonresidential buildings and on vehicles, plant and machinery rose by over 10 per cent; whilst expenditure on dwellings increased by a remarkable 15 per cent.

There was also a substantial spill-over of demand into imports, which we were able to meet with equanimity because of the strength of our overall balance-of-payments position. Obviously it is not possible for production to keep up with this rate of increase in spending. There are few, if any, additional labour reserves to draw upon. Plant capacity is now much more extended than it was twelve months ago. Overtime working is at record levels and shortages of some types of skilled and unskilled labour have been growing steadily worse. Indeed, the present labour situation is even tighter than at the same point in 1960. Reports suggest that a shortage of labour rather than a shortage of orders is putting a brake on the expansion of many basic industries such as building and construction, structural steel agricultural machinery, ferrous forgings, machine tools, earthmoving and conveying equipment, and certain types of building materials. In times when demand is running ahead of supplies, a government may resort merely to negative measures to shrink demand. Our first objective is to initiate positive steps to increase the production and supply of goods and services.

I believe the potential for growth in the coming year is very great. Another large intake of school-leavers into the workforce is expected. Our immigration target for next year is in excess of our achieved level last year. We have proposed positive steps to increase the availablity of certain classes of skilled labour by the introduction of a plan to retrain workers. If required, we have the foreign exchange reserves to finance a large increase in imports to sustain our need for raw materials, machinery and any items in short supply. There is scope for further big gains in production per worker in most sectors of the economy. Those are the ingredients of continued growth.

The Government in its Budget, and in its policies, has not neglected the positive course of encouraging production increases. This will enable the economy to meet substantial increases in demand. Nevertheless, it was apparent to the Government when considering this Budget that unless it exercised a gently restraining influence on demand the increase in market supplies of goods and services, though very large, could not sustain the expected increase in spending. This was our diagnosis of the situation. It was a diagnosis accepted, I am sure, by most thinking people. All of these factors needed to be taken into account in framing the Budget. But, just as importantly, the Government reviewed most carefully the extent to which it could avoid undue pressures on the economy through the management of its own expenditure.

However, Government expenditure is basically to provide the essential requirements for future growth - undue curtailment now would inevitably have repercussions for growth later on.

All members of the community must be only too conscious of the problems which we face in developing and defending this, continent on the edge of an area in South East Asia of instability and restlessness. It is the responsibility of government to build today for tomorrow’s growth and for tomorrow’s security. We would have been open to the charge of unbalanced management of national affairs if we had not made provision for a continuation of the development and national welfare policies which we have been pursuing. This will involve increased expenditure on defence, payments to the States, welfare payments, capital works, expenditure to ensure the continued growth of primary and secondary industries and so forth. Without these expenditures there can be no continued growth, national prosperity and national security.

Thus we faced a situation in the framing of this year’s Budget in which, in contrast to last year, some moderation of the steep increase in demand was called for. And yet, as I have stated, the Government was committed to increased expenditures for the nation’s growth and security. In those circumstances, to have ignored the growing pressure of demand on resources would have undermined our objective of steady growth; for steady growth is only sustainable if there is a reasonable balance between production and expenditure.

If expenditure is excessive, prices tend to rise; there are long delays in delivery or completion of orders; basic industries essential to growth are starved of labour; there is a decline in managerial efficiency and in the average quality of labour employed; speculation sets in and an unjust burden is imposed on retired people, fixedincome earners and many sections of our work force. Ultimately our balance of payments and standard of living must suffer. Therefore, we aimed at stability with growth.

The price stability of recent years has given Australian exporting and importcompeting industries a strong competitive advantage, an advantage which many have fully exploited. It would be tragic to fritter away this advantage now. Some compare our present situation with that prevailing in 1959-60. It is a false comparison. The economy today is far stronger, sounder and better balanced than in 1960. Nevertheless, if there is one lesson to be learned from the 1959-60 boom it is this: That it is wise to apply the brakes gently at the first signs of over-acceleration. This, then, is the background to the Budget, a Budget which it is hoped will close the potential gap between production and expenditure.

Looked at from the viewpoint of national accounts, the Budget provides for an increase of £257 million in revenue but an increase of only £212 million in expenditure. The precise net effect this will have on aggregate spending is not easy to assess. Political economics is by no means an exact science. However, the broad aim is clear. It is to continue to encourage the maximum growth in production and to slow down somewhat the rate of increase in total demand for goods and services. The objective is to achieve a balance between demand and availability.

As I said at the outset, I have often spoken in this House about plans for growth. I have favoured policies, and we on the Government benches have introduced policies, leading to sustained growth over the last fifteen years. We have pursued policies which are conducive to growth in the future, to an equitable sharing of future increases in national wealth. We have a clear concept that prosperity and high standards of living depend not upon speeches or Acts of Parliament, but upon the production of real wealth, and our policies have been directed at all times to the encouragement of the production of more and more wealth. The success of those policies is to be seen in the phenomenal growth and the high standard of living in this country. Our concern at this stage in the current Budget is to prevent pressures from developing which would negate past achievements and frustrate future expectations.

Mr CREAN:
Melbourne Ports

– In Australia, there is no reason why any year with which one is dealing should not be a better year economically than the year before. In a country where the population is increasing, as it is in Australia, and where resources are being used as they are in Australia, production ought to rise year by year. The argument really should be whether the growth is as good as it should be and whether that growth is likely to continue to get better still. We experienced one year recently - it was 1961-62 - when economic growth was negative because of the policy pursued by the Government.

The Government has chosen to defend its record on the grounds of defence, development and social welfare. We have chosen to challenge the Government on the same three grounds. Let me refer first to defence. I shall deal with it only briefly now because I think it will be discussed in greater detail when the estimates of expenditure are being debated. It has been the habit of the present Government to mislead the people of Australia on the question of defence, and it is very difficult to assess performance when we are given only a set of figures, as we are, in the Budget.

Honorable members can see the record of this Government in financing defence in the document “Australian National

Accounts “. It shows the record of defence expenditure year by year from 1950-51 to 1962-63. The figure for 1962-63 appears in the White Paper on National Income and Expenditure as does the projected expenditure of £293 million for this year.

Until this year, this Government has spent on defence over £2,500 million. Budget time is the occasion to examine such questions as whether defence is adequate for the sort of policy that is being pursued in other parts of the world, whether there is inefficiency in spending and whether there is an aptness in the way in which the Budget is allocated as between the Navy, Army and Air Force.

On 4th April 1957 the Prime Minister (Sir Robert Menzies) read out in this chamber the document, “ Australian Defence - Ministerial Statement “. On page five of that statement he said -

We have for some time been greatly disturbed by the fact that an undue proportion of our annual expenditure has been laid out upon the maintenance of existing forces, the bulk of whom are only partially trained, while too small a proportion of our expenditure has been available for equipment.

That review in April 1957 was supposed to herald a great new improvement in defence outlay. Again I ask honorable members to examine the record of this Government. If adequacy is to be measured in monetary terms, the Government’s best year was in 1952-53 - twelve years ago - when its actual expenditure was £203.1 million which, at today’s money value, would be worth about £280 million. That figure was not reached again until 1962-63. The Prime Minister’s statement was made in April 1957 and defence expenditure for 1956-57, the year prior to the review, was £182.2 million. Then we had a great review and were supposed to have increased expenditure. But the year following the Prime Minister’s statement defence expenditure fell by £11 million to £171 million. As I have said, it was not until 1962 that the figure returned to the level of 1952-53.

In 1957 the question was raised of how defence expenditure should be apportioned between manpower, administration and other matters. All honorable members should study the composition of defence expenditure in, 1963-64, the last completed year, and the Estimates for 1964-65. In 1963-64, according to the Budget, total expenditure was £258 million. In physical terms, according to the White Paper on National Income and Expenditure, it was only £240 million. The Government might explain where the difference of £18 million has gone.

Returning to Budget figures, of the total expenditure of £258 million in 1963-64, £97 million was for expenditure in the nature of salaries, £77 million for administration and only £84 million - that is less than one third of the total sum - for the sorts of things that are supposed to frighten the enemy. Is that considered to toe a proper balance? What is the balance to be in 1964-65 when an increase of £35 million is to occur? Of that increase, £17 million is for salaries, £7 million for administration and only £11 million is to be spent on activities where our commitments are. If you are to involve yourself in commitments you should measure the words against the likely performance. The Minister for Trade and Industry <(Mr. McEwen) has just spoken about terms of trade. I suggest that the Government ought to examine its terms of talk so far as it concerns defence activities.

I have gone through the Estimates in order to compare increases in physical expenditure with increases in expenditure on manpower and administration and I shall cite the appropriate figures: There is an increase of £2 million on the defence of Malaysia, when compared with last year’s expenditure; the proposed vote for the Department of the Navy is £14 million more this year than last year; the Department of the Army has an increase of £16 million; The Department of Air is to spend this year £1 million less than last year. Estimated expenditure for the Department of Supply has risen by £4 million. Of the increase of £35 million. £17 million is for wages, £7 million for administration and £11 million for physical requirements. The increased expenditure on physical requirements apparently is to take place this way: £2 million in Malaysia on equipment; £8 million on naval construction; and £4 million on Army equipment. But £10 million less is to be spent on aircraft.

The Treasurer (Mr. Harold Holt) has already projected outside this House additional expenditure on defence. I suggest that such predictions ought not to be made on television but should be made here in this House. If there is to be additional expenditure, it can be incurred only if the Government buys off the hook. You cannot jack up expenditure in Australia in any immediate short-term period to any degree at all.

What does the Government mean? Surely we are entitled to a little more explanation. I hope that between now and the debate on the Estimates some of the information I have requested will be forthcoming. Already, there is talk of a Senate election on 21st November and I believe that the issues will be defence and the battle against Communism. If those are to be the issues it is time that we examined the division of expenditure more closely and systematically than we have done. Is the projected expenditure this year of £293 milton adequately distributed in terms of the commitments that the Minister for External Affairs (Mr. Hasluck) referred to when he said that he thought some matters could be resolved ultimately only by force? Is it adequate to distribute £114 million for manpower, £84 million for administration and only £95 million for the sorts of things that can shoot the enemy out of the sky or hunt him out from under the sea, if that is what you are going to be stupid enough to try to do? Surely at Budget time the Government ought to be able to say that of this £2,500 million it has already spent and the £300 million it is going to spend this year, plus whatever further amount it plans to spend, so much represents aircraft and ships and other things that are supposed to be helping Australia’s forces, not in Australia, but overseas. Surely if our commitments, as the Government desires, have to be overseas, it is aircraft and ships that are significant in the kind of escapades that the Government envisages. That is all I wish to say on defence.

I want to turn now to the question of development because I think that is the basic issue so far as the ordinary people are concerned. During the last election campaign both parties said that they believed in economic growth at the rate of 5 per cent, to 51 per cent. What does that mean? I was pleased to see that a new document was published by the Treasurer in association with the Budget Papers. In this document, which is a special supplement to the “Treasury Information Bulletin”, the Treasurer says -

It is hoped by this means to portray, in a more readily understandable form, the major types of public outgoings and expenditures and thenmagnitudes and, by so doing, to assist in the interpretation of the economic significance of the Budget for the economy as a whole.

This Budget plans to spend £2,500 million, so £100 million represents 4 per cent, of the Government’s proposed expenditure. The White Paper on National Income and Expenditure which was circulated puts Australia’s gross national product now pretty close to £9,000 million, so £100 million is little more than 1 per cent, of our gross national product. If our gross national product is to grow at the rate of 5 per cent, to 51 per cent., that means an annual increase in the total value of goods and services of the order of £500 million. It means, on the proportions that I have already quoted, that the Government’s expenditure will probably rise year by year by something like £125 million.

These are the facts of life relating to Australia’s economic circumstances, yet at election time the Government endeavours to bamboozle the people by saying that if you increased pensions by £60 million a year or did something else that would cost £30 million a year the country could not afford it. Why cannot the country afford such expenditure in terms of a better total national product in 1964 than was obtained in 1954? Why cannot the country put back into benefits like child endowment the value in real terms that they had 10 or 15 years ago? What does growth mean if you are to be alarmed, as this Government seems to be alarmed, about the state of the nation when wages are increased to make up for adjustments that have taken place in prices? This is what the Treasurer said in regard to that-

What we have to ensure is that demand does not rise excessively. Should it do so, there could soon be over-strong competition for goods and labour and materials. Costs and prices would be driven up. Speculation could break out again. Imports could rise excessively.

If those things could happen in the shortterm foreseeable future - costs and prices driven up, speculation breaking out and imports rising excessively - is it not time that the Government put into operation some plan that might stop those things happening, rather than waiting until they do happen and them finding that it is too late to take action - finding that the damage is wreaked not on those who have done the injury but on innocent people in the community?

The Treasurer said that costs and prices would be driven up. The Government is leading the way in driving up costs and prices. It is increasing the annual rental on a telephone by £6 and it is increasing the cost of a television viewer’s licence by £1. Translated into ordinary terms for the ordinary family, that means a rise of 3s. a week on those two items alone. This afternoon an honorable member opposite disputed some of the figures that were quoted by the Leader of the Opposition in relation to taxation. I want to cite an example for honorable members to cogitate upon. They oan go to the post office in this Parliament House and obtain one of these documents that I have and check the figures for themselves. If they find anything wrong with the figures they had better see the Commissioner of Taxation about them. The taxpayer on £26 a week - the gentleman who is called the average wage earner - has an annual income of £1,352. Let us suppose that he has a wife and two children and that, like many other taxpayers, he has deductions, apart from these for his family, of the order of £50. His taxable income will be £1,000. On that taxable income he pays tax of £100 19s., or near enough to £2 a week. I think that is too much tax for a married man on £26 a week, with a wife and two children to support.

In the coming financial year, if he has received the £1 increase in the basic wage, which undoubtedly he has, his taxable income will rise from £1,000 to £1,052 and his tax will rise from £100 19s. to £111 9s., an increase of £10 10s. for the year or 4s. a week. In other words, the Government by its own policy is taking away something that another instrumentality has given. Out of that £1 increase in the basic wage the Government is taking 3s. for the telephone and the television licence and another 4s. for income tax. If this taxpayer happens to like a packet or two of cigarettes in a week, the Government will take another ls. or so from him as well. Yet the Treasurer is alarmed lest costs and prices could be driven up. For a start, they are being driven up by the Government’s policies.

Surely if .the £1 that the worker received only put him back where he was supposed to be, he was 7s. a week worse off the day that the Budget was introduced. Is he not entitled to agitate and organise to get back his 7s.? In my view he is. The Government, according to the Minister for Trade and Industry (Mr. McEwen), believes in balanced growth and sharing our prosperity among everyone. Has the Government faced the Ultimate reality that in our economic system four out of five people who have an income receive that income as wage earners? If prices do not fall - prices have not fallen in the history of this Government - how can the worker get his share of our economic growth unless he receives higher wages? Why should he be interested if he is not to be given an opportunity to receive his share? But the Budget does nothing to stop the things that the Treasurer says could happen.

On page 5 of the report of the Reserve Bank of Australia, which became available today, the following statement appears -

Fortunately, we are not faced with a really explosive situation. If and when more serious challenges arise, monetary measures by themselves might well prove inadequate. The currently rising trend of expenditure, both on public and private account, could present us with such a challenge.

Why does not the Government meet the challenge in advance? The Treasurer specially uses the words “ speculation could break out again”. But how many people in the community as a whole can speculate in such a way as to make their speculations an economic danger? There is surely only a limited number of people who can speculate. If we have a system which will rivet wages for people, why cannot we have a system which will stop people speculating, or penalise them if they do? Why wait until they have done it before taking action?

There has been plenty of talk in latter years about what have been called fringe institutions. I think the Labour Party led the way in criticism which has gradually become more general. I refer to what we have called the banking system outside the banks. What is being done about this? It is beginning to develop in the same way as it developed in 1960 when the credit squeeze was imposed. Linked with the fringe institutions, of course, is the sale of motor cars. One lesson that I hope the Government has learned is that the motor car industry is intimately interwoven with the whole economic prosperity of Australia. Yet what has the Treasurer done in this Budget? Of a total estimated revenue of £2,200 million or £2,300 million he hopes to collect an additional £6 million by imposing additional sales tax of 2) per cent, on private motor cars. I think we are at least entitled to suggest that this is a rather meaningless gesture. What are you putting this impost on at all for?

Mr Harold Holt:

– How many taxes would you put on?

Mr CREAN:

– I am getting a bit tired of hearing members of the Government say: “What would you do if you were in power?” If we had been in power measures would have been taken six or eight months ago that would have resulted in a very different situation from that confronting us now. What is at the back of your mind when you decide to impose this additional sales tax? If you seriously believe that 400,000 motor cars are too many for the Australian community to purchase in a year, do you really believe that you will make any difference by increasing sales tax so that a car that now costs £1,000 will in future cost £1,025? Does anybody on the Government side seriously believe this? If you do not, what is the reason for this additional sales tax? Is it not just an easy way of getting another miserable £6 million to add to your total of other revenues amounting to £2,000 million? What is the logic behind it? I think we are entitled to have an answer to these questions at the first opportunity.

Now let me refer to this matter of speculation. If speculation is going to break out it is time the Government announced plans to curb the speculation before it gets to the excessive level envisaged by both the Treasurer and the Governor of the Reserve Bank. Are we to wait until the really explosive situation arises and we have to take harsh measures? Surely the only measure that the Government can introduce very quickly is the sort of monetary restraint that it imposed disastrously on the last occasion. So I say to those people who come along and talk about growth as though it is assured: At least look back to 1961-62 and see what were the results of curbing too late the trends that are again already apparent in the economy.

On this side of the House our struggle is to see that the standards of living of the great majority of Australian people - and they are wage earners and breadwinners - are maintained. We have to do the best we can to see that those standards arc maintained. This Budget erodes them. There is no doubt about the erosion. It can be seen plainly enough in the Budget itself and in the policy of the Government that is evident in the Budget. I say nothing of the policy that can still be pursued outside the Budget or the fact that the prices of goods and services can go up and are going up and will continue to go up from now on. It is easy enough, I suppose, to become complacent about matters concerning social welfare, but in my view there are two sections of the community at the moment experiencing great economic difficulty in what is sometimes glibly described as the affluent society. The first group includes people on pensions. There has always been some sort of rough comparative relationship between the basic wage and the pension. In fact, when it suits them Government members justify the pension level by saying that it is a certain proportion of the basic wage. If the basic wage went up by £1, at least the minimum increase in the pension should have been 7s. 6d. However, we find that it is to go up by only Ss.

I have referred to one section only. The other section includes the kinds of persons that I mentioned when speaking about taxation, the average wage earners. There are plenty, of course, who earn less than the average. When one speaks of an average wage one realises that there are some who earn more and some who earn less. But I am now referring to the average wage earners, who receive about £1,300 a year, and those who receive less, and who have wives and families to support. They are too heavily taxed. Income tax is a good example of this. The real income of the average wage earner is not £26 a week but £24, because income tax takes £2 away

page 489

QUESTION

F.9348/64.- /?.-[! 8J

from him. That is the direct tax. Goodness knows what the incidence of indirect taxation is. We have said - and we reaffirm it - that it is time there was a recasting of the whole structure of income tax in Australia.

It is easy enough to point to this Budget, as the Minister for Housing (Mr. Bury) did last night, and say that there is a better balance between direct and indirect taxes than has been the case previously. Such a statement camouflages the fact that there are still injustices inherent in the overall structure of the income tax legislation, for two reasons. One is that family concessions are not as valuable now, when related to the income, as they were 10 or 12 years ago. The second reason is that a large number of fancy allowable deductions have been introduced which are available to only a very limited section of the community. We have mentioned previously in this connection insurance premiums which are allowable deductions to the extent of £400 a year or £8 a week. How many people in the Australian community can take advantage of that concession by paying £8 a week in insurance premiums? This kind of thing shows the social attitude of this Government. We say it is time for a clearing up of the tax structure, both direct and indirect, and until that is done the members of this Government cannot claim to be apostles of social welfare. I support the amendment moved by the Leader of the Opposition (Mr. Calwell).

Dr MACKAY:
Evans

.- When the honorable member for Melbourne Ports (Mr. Crean) rose to speak the first statements we heard were to this effect: “There is no reason why in a country like Australia each year should not be better than the last “. To my mind this denoted a kind of grudging admission that the attack he was about to make would be launched on thin ice. This has certainly proved to be so. I could not help thinking, as I listened to him, how much better it would have been, and perhaps how much better his remarks would have been received by the nation as a whole, if the shadow treasurer had admitted that there was very little to be gained from basing criticisms of the Budget on such hypothetical statements as he referred to, made by the Governor of the Reserve Bank, picked out of a vast mass of material that was not described and then distorted into a major statement. How much better it would have been if he had looked ahead to some of the more exciting possibilities of growth and made some constructive criticisms and offered some positive propositions to the Government.

Tonight I want to direct the attention of the House to certain statements with which the Treasurer (Mr. Harold Holt) concluded his Budget Speech. He said -

During recent times a good deal has been happening in Australia to suggest that we may be moving up to a phase of growth faster and more varied than anything we have seen hitherto. 1 am thinking here of oil and the great mineral discoveries, which alter our whole long-term outlook. . . .

. we could move on from where we are now to an era of quite unprecedented expansion.

I direct my speech tonight to that very point because I believe that during the recent parliamentary recess there have been developments in this nation which provide the very foundation for the exciting prognosis made by the Treasurer.

I refer particularly to the tremendous developments in the oil production industry in this country. This industry had a very hard birth. First we know of Rough Range which seemed as though it would be a one well discovery, and then we know of Moonie which seemed as though it would be a one field discovery. In between the two there were eight years and the expenditure of many millions of pounds. Then came the breakthrough. On one day on opposite sides of the nation there were two major discoveries. To these must be added the enormous gasfields in central Australia and southern Australia, which are nearing the stage of commercial production, and also the steady progress that is being made in this direction by the associated group of companies in Queensland.

We now meet in a situation in which Australia is assured of self-sufficiency in natural gas and experts believe that it will not be long before we can produce our own oil requirements. This is a vastly different backdrop to our economy from anything that many people in Australia would have ever dared to hope for. I think particularly of the expert from overseas who said that he would drink all the oil that came out of the Surat basin. Australians have tended to be preoccupied with oil search and are only now waking up to the tremendous significance of natural gas, which is not only a rich fuel but also a valuable chemical raw material. From it can be derived many products such as synthetic rubbers, a great range of modern plastics and nitrogenous fertiliser such as urea. The enormous reserves of gas which are being proved today make it certain that soon we will see pipelines reaching across the nation, and in their train new and very important industries will be springing up.

All this will not take place without a challenge. There will bc a challenge from two directions - the coal industry and the oil importing industry. The rumblings from them are being heard already. I do not intend to discuss in detail the rivalry between coal and natural gas - that is a subject in itself - other than to emphasise this one point: The coming of natural gas to a city such as Sydney does not necessarily mean that coal gas will be completely displaced. It will be enriched and the resulting gas, which will be of much higher heating value, could be so much more attractive as a domestic fuel as to lead to increased demand.

Until Moonie oil first flowed to the seaboard in Brisbane, Australia was totally dependent on imports of overseas crude oil. In the national emergency of the Second World War we had a maximum of six weeks’ supply in tanks on the seaboard. We are spending £150 million of our reserves of currency in purchasing oil. The stockpile of oil is small. Giving credit where it is due, one must acknowledge the role of the Commonwealth Government in bringing about the totaly new picture of today by means of generous subsidies to the exploring industry, taxation concessions to investors and the important contribution which is made to exploration by the work of the Bureau of Mineral Resources. In these and many other ways, the Government is enabling the search for oil to receive priority encouragement.

Most, but not all, Australians rejoice that we are in this new situation. Not everyone has been glad to see the coming of Moonie oil or of any other locally produced crude oil. When the Commonwealth, through the leadership of Senator Sir William Spooner, recently insisted that the price which was to be placed on Australian crude oil should bear a very real relationship to the world posted price, it was obvious to the refiners in Australia that their long honeymoon was drawing to a close. It is true that the price which was accepted then as a short term basis for the use of Australian crude oil was a compromise price. But the struggle surrounding the determination of that price makes it apparent that when the real issue is joined for the future there will be very sharp negotiation.

This is the situation in a nutshell: Oil is a commodity which requires the expenditure of untold millions of pounds to produce. A single well in Australia can cost half a million pounds or more. Off shore drilling will be up to four times as expensive. An exploring company may look for a decade without discovering oil, as the Wapet company did in Western Australia. On the other hand, of course, success may come with the first or second well, as it came to UnionKernAustralian Oil and Gas Corporation in Queensland. But in between those extremes there is a vast sequence of dry holes and the expenditure of millions upon millions of pounds in the search.

On the other hand, viewed as a single entity, a single producing well, such as on the Moonie field, is a fantastically profitable venture. A well there may cost up to £50,000, but it will produce £150,000 worth of petroleum each year for 20 years or more. But any child would realise that one cannot just take that well on its own. It must be viewed against the background of the tremendous number of dry boles. All this simply means that every barrel of oil that is produced is very costly. At the same time we must remember that when it is produced it is lost forever. When we are talking about the economics of the industry we must realise that all our fossil fuels, including coal, are produced from diminishing reserves. But for the very high rewards that come with success in exploration and production in the petroleum industry, not many people would risk their money in oil ventures. The number of ventures which go to the wall in the process is very large.

That leads my to the first point that I want to make. It is tremendously important for the future. It is this: Unless the prices paid for locally produced crude oil are adequate to encourage large scale production and exploration and to take over when

Government subsidies taper off, then foreign importing companies will have succeeded in stifling Australian production. Let me repeat that. Unless the prices for Australian crude oil are sufficiently high to pay for exploration and make it profitable, then importing companies will have succeeded in stifling our Australian exploration and production.

Why do I assert that the international importers are upset about and disturbed by our local production? Why has their whole attitude to exploration changed since new oilfields have come into existence? The logic is very simple. I do not want to be thought to be launching an attack on or trying to belittle the work of the importers or the refiners. In the old situation they did a good job, although it was a highly profitable one for themselves. The prices that we pay for petrol and oil in Australia compare favorably with the prices in most, if not all, other countries. All I am trying to show is that the dream situation is drawing to a close and a new and harder era of commercial bargaining lies ahead.

The cream of the present situation lies in the fact that overseas crude oil is readily available to refiners in Australia, in many cases out of their own production. This proves to be very cheap oil. Exploration costs in the oil industry are paid out of current income. They are an annual recurring income and expenditure item. The only remaining costs of bringing oil from Seria in Borneo into Australia are (he lifting costs, the transportation costs and royalties which, for a company such as the Shell Company importing oil into Australia, could add up to about 1 dollar 20 cents a barrel.

But if you had your own tanker and went out to purchase oil in the Middle East or in the countries to our near north, you would pay approximately the world posted price of not 1 dollar 20 cents but 2 dollars 42 cents. That is the price which actually applied in June of this year. Whilst that is undoubtedly true in regard to the world price for crude oil on the world market, if you were to go inside the United States of America and attempt to purchase the same quality of crude oil, you would pay not 1 dollar 20 cents and not 2 dollars 42 cents but 3 dollars 17 cents.

Let me explain how this different price structure comes about. It is vitally important to the whole future of this industry which is about to blossom forth in our midst in Australia. Let us understand it. First it must be emphasised that there is a glut of crude oil in the world. Some very cheap oil can be procured by somebody with his own tanker or somebody who can hire a tanker and go shopping. To quote a specific example, Ampol Petroleum Ltd., whose refinery is about to begin operating in Brisbane, could go across the seas and purchase crude oil at panic prices, under glut conditions, 50 cents below the posted price for crude oil of a certain quality. At the same time, Union Oil is able to get 50 cents more from inside the U.S. for its own production of the same quality oil than if it produced it and sold it at world posted prices or indeed, if it sold it at Australian prices as fixed today. Mow does all this come about? It simply means that the price of indigenous crude produced inside the U.S. is determined by a mixture of controls which are Governmental and industrial. It is set at levels which will keep the rewards for finding oil sufficiently high to get crews out into the field and to get the nation moving continually in looking for new production so that it is replenishing its reserves continuously.

Compare the oil search activities in the two countries. I realise that there is a tremendous backdrop of history to this, but last year in Australia we were rather satisfied when we drilled 100 wells in the search for oil. Last year in the U.S. they drilled 44,000 wells in the search for oil, and last month 3,500 wells were completed there. That is how the U.S. Government regards the priority of oil search, and the importance it gives to it. The Americans see this as a basic factor of defence as well as of economics. The U.S. armed services have their own oilfields under wraps. Do we in Australia need to put any less significance on the value of oil search in this country?

To ensure that home produced crude has its place in the markets, the United States Federal Government comes into the arena at this point. It makes its decisions with regard to the amount of outside or foreign crude which is allowed to be brought into the country. That is the role for the Commonwealth Government here. It is the first essential step in bringing order into the industry, and it must be one of the first considerations given to this new situation by our own legislature. The next action lies with the various State Governments in the United States. They severally impose varying quotas on production. This is known as proration. In Texas, for instance, it is not uncommon to have a law passed which states that oil wells are allowed to operate for only five days in every month. This quota is fixed well by well and field by field with a view to retaining desirable reserves of crude in the best place in which it can be stored - in the ground. After these official factors have been weighed the actual price paid for crude is determined by the law of supply and demand within the industry itself. The suggestion has been heard lately in Australia that if it is not possible for the overseas owned refineries to come to terms with the Australian production companies it will be necessary to set up some kind of arbitrator, or else tariff board action will be required to determine fair rates and prices. This may sound very reasonable, but surely such a suggestion must be tinged with ignorance of the complexity of the economics of this tremendously varied industry. I make bold to say that no arbitrator yet born could start off from scratch and work out a fair profit margin for a company producing oil in Australia. For example, one large international company, which operates in Australia, some time ago spent 40 million dollars looking for oil in one overseas area, only to scrap the entire project and wrap the entire thing up as a misfortune. How do you assess this kind of thing in trying to decide on the cost of production? Even if it were possible to average out all the costs incurred up to now in terms of exploration, and set off against them the amount of probable reserves in the ground, it should be remembered that many things will materially affect prices during the long producing life of the field. Again, it must be remembered that the more crude that is found the less there remains to be discovered. At some time the costs of exploration are bound to become increasingly expensive.

To my mind there is only one thing that a young and relatively inexperienced country such as ours can do in the light of the imminent need for a decision on the matter of pricing locally produced crude, and that is to follow the example already available through a century of experience in countries with standards of living similar to our own - not basing our prices on those in Kuwait or the Middle East, or in countries such as these where there is easy production and very great production. The price we set upon our indigenous products in Australia ought not, by any reasoning, to be less than that which is arrived at inside Canada and the United States for their own local production. Our need is to stimulate and develop the industry, and it is an even greater need than theirs. So there is a good case for accepting the United States posted price as a beginning point, at least until our experience grows.

There is another important reason - a moral reason, if you like - why this price should be maintained. This is the price that the explorers in Australia have had in mind when budgeting for their oil search. Surely a government such as ours, which has done so much to encourage oil search, a government which has gone right into the field and paid so much of the actual costs, has not imagined that those who went into the industry did so without any regard to the kind of prices that discovery would bring. I have had a very close relationship with this industry for many years, and I still have. I have understood how oil people think and I know that those who are in this business have assumed - it has been an unquestionable assumption - that the Government of Australia would not treat its producers any worse than the Canadian or U.S. Governments treat theirs. On the other hand, I have never heard the suggestion that we ought to go to extremes such as the prices set for local production by Western Germany, for instance. Surely it is a simple and reasonable assumption that, with so much in common between the two countries in this industry, the indigenous crude oil price in Australia should bear a very real relationship to the prices applying in these other countries. Anyway, this has been the assumption of Australian companies that have gone into the field in this highly expensive search. In my judgment, the Government has an obligation to consider this question in that light.

I hope that I have demonstrated that the price paid at the refineries for Australian produced crude ought to be no less than the price which is paid for oil of equivalent quality inside the United States. I fully realise that in a country like Australia, with its vast geographical areas, with enormous wide open spaces, this will mean that many small fields that are discovered will not be economically viable. This is understood and accepted throughout the industry, and it is realised that for many years some fields may not be able to produce. I would not like to see a system of subsidies, for instance, brought into this industry unless it were to be as part of a specific project - of northern development, for instance, when a particular field which otherwise would not be profitable might be developed because it fitted into an overall project, and the Government would assist it to come into production.

In the remaining time available to me at this juncture I intend to devote a few words to the new and exciting prospect Qf natural gas production in Australia. During the recent parliamentary recess I was the guest of Delhi (Australia) Ltd. and Santos Ltd. at the site of their wells near Innamincka in South Australia. It was indeed a sobering experience to go up there into the rolling wastes of the desert and to see a small group of trailer caravans and a huge drilling rig which very soon will be joined by ‘additional rigs. Strung out several miles apart through the sands are the Christmas trees of successful gas wells, each one of which is capable of supplying a city the size of Adelaide. While there I rose before dawn to see one interval of 50 feet in a well tested, and I watched fascinated as a flow equivalent to 10 million cubic feet of gas a day roared out over the sand, which became white hot with the heat of the flame, which screamed out of the testing tube at such a rate that the sound could be heard in the camp six miles away. I flew around the area in a small plane and visited seismic crews working miles away delineating other and even larger structures in the vicinity. It was unforgettable experience, being present at the birth of a new age in the history and economics of Australia.

Since then, equally exciting news has been brought to us from many hundreds of miles further north in the Northern Territory, where the huge Mereenie structure is sending exciting headlines across the world. In the American oil and gas journals one is struck with the excitement behind articles which, instead of saying, “ Go West, young man “, are showing that in Texas the cry is: “Go to Central Australia, young oil man “. Some weeks ago, with other members of the Government Members National Development Committee I was looking at properties in the northern development scheme on the Ord River, in Darwin and south of Darwin. Everywhere I went the story was the same. People said: “ We want water. We want fertiliser.” With deposits on Nauru running out, part of our future depends on the supply from other sources of fertilisers for our primary industries. Whilst we have searched, we have not yet found any large, high grade deposits of phosphate rock within Australia - certainly not sufficient to meet our requirements in the future. What is the answer?

It is precisely here that one of the aspects of natural gas discovery come into prominence. Out in the deserts are the raw materials which could transform those areas. Whilst natural gas is there to supply fuel and power to make life more livable, including the provision of air conditioning on a large scale, it may also play a vitally important role as a chemical raw material in the production of nitrogenous fertilisers. It is being used for this purpose overseas at present on a large scale, for example, in Italy by the E.N.I group. Again, in the metalliferous mining industry natural gas is the best possible fuel for many processes such as the reduction of ores. It is better and easier to use in many circumstances than is coke oven gas. With reserves now being proved up in Queensland by the Associated Group of Companies, it is only natural that the owners of the new alumina smelters to be erected at Gladstone will be weighing up the various factors involved in obtaining gas supplies for their industry. If natural gas could be discovered within 100 or 200 miles of Mount Isa and Tennant Creek, a new chapter would be opened up in terms of mining profitability and expansion in those areas. Already gas discoveries in the Perth Basin of Western Australia have caused new thinking on the part of the Broken Hill Pty. Co. Ltd. and Conzinc Riotinto of Australia Ltd., to say nothing of the French petroleum interests which recently obtained a farmout over some of this area.

Between the oil and gas wells on the one hand and the Australian consumer on the other hand, however, there stretches a very long road. This is where the economics of the pipeline industry come into the picture. In the United States of America, where a vast network of pipelines absolutely covers the entire picture, the economics of the pipeline industry are well established. Buying shares in a pipeline company in the U.S.A. is a blue chip operation. It is the kind of thing that one would put his grandmother’s little store into. The rewards are sure and good. All this prompts this vitally important question in respect of Australia: Who will own our pipelines? It must be acknowledged that at the time of the construction of the Moonie line the economics of the venture were by no means certain. The Union Oil organisations called it a business risk. It was not really surprising, therefore, that Australian institutions which were approached would not lend money at realistic rates for such a purpose. So, apart from a minority interest held by the Australian Oil and Gas Corporation Ltd., that pipeline is foreign owned. But surely the vast and obviously commercial discoveries that are now taking place in South Australia and central Australia are a very different story. Here we need a large Australian equity. All the discoveries have been made by syndicates involving both overseas and Australian interests. The construction of pipelines should be no less an Australian venture.

I draw to a conclusion, Mr. Deputy Speaker, by appealing to the Governments concerned, both Commonwealth and State, to get cracking immediately on this matter. Huge American financial interests have already been here and have made their surveys. Let us make no mistake about the fact that money is available for this purpose. The only vital issue is this: Whose money will be made available and on what terms will it be available? I fail to see why the Chase Manhattan Bank should land a large slab of business with tremendous implications for the future while our own Commonwealth Development Bank does not participate. The record of the Development Bank in assisting mining ventures has not been brilliant. There are still in this country many stodgy thinkers who imagine that the oil and gas business should be put in the category of a naughty gamble. On the other hand, a man who is possibly one of the best informed on oil field and gas pipeline financing in Australia told me recently that it was not inconceivable that by 1975 the Australian petroleum producing industry alone - that does not include refining and marketing - could be eight times as large as the present B.H.P. undertaking. Even if he is only partly right, honorable members can see the kind of money and power that this represents for the future.

These are exciting days, Mr. Deputy Speaker. They demand a spirit of adventure with vision and faith. We must leap into the task of training our manpower - our engineers, scientists, geologists, economists and businessmen - to realise the implications of the new age. With these new resources we can look more securely to the future in terms of defence, wealth and, most importantly of all, in terms of people. People are our first line of defence. With the power and raw materials that can be provided by this industry, Australia can look forward to greatness sooner and more surel’y than in the past she dared to hope.

Dr J F Cairns:
YARRA, VICTORIA · ALP

.- The Budget is the most important subject which comes up for debate in the National Parliament. I should like to return to the main aspect of the debate between the Government and the Opposition, which has been taken up tonight by the Minister for Trade and Industry (Mr. McEwen) and the honorable member for Melbourne Ports (Mr. Crean). The Budget is important because it concerns every aspect of national policy - external relations, defence, economic development in the public and private sectors. the distribution of income and, perhaps most important of all, the exercise of power in Australia. It is impossible to discuss all these issues in the time available, but I think we can profitably take up the debate again by referring first to external affairs. The significance of the debate on this subject in this Chamber last week was that the Opposition gained the initiative and moved the centre of gravity of the whole subject over the ground chosen by the Opposition. The Government has been placed on the defensive. It is now trying to prove that it does not follow blindly the United States of America and that it speaks for Australia. So far it has not succeeded in proving this point. The Government has recognised the importance of securing good relations between Australia and the emerging or anti-colonial forces in Asia, but it has proved itself to be unable to reconcile that admitted objective with its present relations with the United States, Great Britain and Malaysia.

The question is: Does Australia come down completely on the side of the white, affluent people who see every challenge to their position as a manifestation of Communism, or can Australia remain close to the United States and still get along with the new, emerging Asia? This is the great challenge of the century. The Government is at last facing the challenge after five or six years of turning almost completely away from it, but so far it has shown no sign of producing a solution to the problem. The Government has been placed on the defensive also in denying that it relies alone upon force and war in its relations with the trouble spots of the world. Whilst it denies this and asserts that its reliance upon force relates only to the current situation, the current situation in South Vietnam has lasted for 20 years and the Government says that no consideration will be given to the possibility that the war in that area could be stopped now. It is not true, as the Minister for Trade and Industry so forcefully tried to say just recently, that there has to be a Communist defeat or a stalemate before this war can be brought to an end. The Geneva Conference of 1954 followed a Communist victory at Dienbienphu, and the Communists agreed to withdraw from many areas. They did withdraw.

The next matter in relation to which the Government has been placed on the defensive is precisely this: Up till now it has asserted that all the fighting in Vietnam was due to the southward thrust of an aggressive, expansive China. We are now left with the evidence that China has actually supplied very little to South Vietnam and not very much more until recently to North Vietnam. We are now left with the evidence that the South Vietnam guerrilla war is predominantly indigenous and a product of South Vietnamese conditions. What is more, the Western representatives on the International Control Commission - the Western representatives - have agreed that both sides, not one, are guilty of breaches of the Geneva Agreement.

The Government has been forced to admit that the fight in South Vietnam is not about democracy, but that any conceivable government will be a dictatorship. At last the Government has been forced to deal - and this is the most important point - with the Australian Labour Party’s argument that the war in South Vietnam, and similarly in many other places, is not merely a guerrilla or terrorist campaign but is an economic, political and social movement. The Government has been forced to face the conclusion drawn by an American, Lieutenant General Gavin -

The most probable nature of future war is a slow almost imperceptible transition of bad economic and political situations into disorder.

This new defensive position into which the Government has been forced is a gain for Australia as a whole because it means the Government is now asking the right questions. Can Australia become more independent? Can Australia reconcile her relations with affluent, white, powerful America and with economically poor, emerging and coloured Asia? This is a question that cannot be brushed aside by the conservatives among us. This is a question which has to be faced. This is a question to which we have to find an answer or else we cannot survive in this part of the world.

Again, the Government is facing the question of whether the war in Asia can be stopped. This is a question that has to be faced and not brushed aside by saying that all the faults in this war are on the other side. Again, the Government is facing the question: How can bad economic and political situations be prevented from passing into disorder and war? There are questions which have to be asked. They may be supremely difficult for Australia as a whole to solve. They may be impossible to solve at all by a Government led by white supremacists but this is no reason why those who ask the questions should be regarded as dangerous or traitorous.

I turn now to the question of defence. There has been great agitation to spend more money on defence. Now it seems there is almost general agreement to do so. There is a danger in doing this because some people seem to think that as long as much more money is spent on defence then much more will be done. A little over half an hour ago the honorable member for Melbourne Ports (Mr. Crean) demonstrated clearly that this is not the case.

Mr Cleaver:

– They are erroneous figures.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– They are not erroneous figures.

Mr Cleaver:

– Well, have a look at them.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– Will you have a look at them and see if you can disprove them? But it is not a matter of figures, lt is much more than that. It is a matter of what the money is spent on. For example consider the TFX aircraft. This fast fighter-bomber some day in the future will be able to cover several thousand miles, drop a nuclear bomb - or perhaps a conventional bomb - and fight its way back. But this aircraft is an instrument for use in a nuclear war or in a full-scale conventional war. Is this the kind of war we are preparing for? Surely we are preparing for wars of infiltration and for the transition of bad economic and political situations into disorder. How much can the TFX contribute to this type of war?

Consider war of the infiltration type. Suppose an Indonesian Government decided to confront East New Guinea, claiming that it was colonial territory, and began to infiltrate with small bands of guerrilla type groups. Could the TFX meet this situation? Could we bomb those guerrillas? Could we bomb Djakarta or even threaten to bomb Djakarta with the TFX? Would massive retaliation not prove as incredible and as unusable as massive retaliation has always done? Is it not a fact that the guerrillas would have to be met on the ground, and they having been met on the ground, would it not have to be a basically political answer that would have to be used in the final analysis? At this stage, it seems clear that Australia’s power in defence, even in the narrow sense, cannot be conceived as being made up by what goes into the £293 million provided in this Budget. In the true sense of the word, what is represented in that £293 million is not worth a fraction of what is contained in it from a true defence point of view.

At this stage in our history, defence in Australia is a matter of the strength of the nation as a whole - economically, industrially and scientifically. To step up quickly this kind of defence means that some fundamental and unpleasant things must be done, lt is here that economic policy comes in. It is here that the Budget comes in.

But today in Australia we are supposed to live in an affluent society in which no party but one with a popular policy can possibly hope to win. We have been led for a number of years by the perfect figure of popularity - the father image who has a perfect appeal, who upsets nobody, disturbs nobody, maintains prosperity and stability and pleases all the television viewers. We are in a position today that you have to be popular to win. I say with all seriousness that we cannot meet the changes that face this nation of ours by continuing to be popular indefinitely.

At present it seems that there can be no increase in taxation; there can be no attempt to control the monopolies in the public interest; there can be no requirement that the fringe institutions and other powerful money lenders come into line with public policy; there can be no attempt to give any real justice to old people and to families in this nation. If these problems are to be solved, then some unpopular things have to be done. They are not being solved now because no unpopular things are being done. The strength of Australia as a whole cannot grow fast enough in the fundamental things unless these problems are solved.

Evidence of failures lies so clearly in the insulting increase of Ss. a week in pensions that is provided in this Budget. There arc perhaps 500,000 people now trying to live on nothing but the pension alone. Paying, as they do, a rent of no less than £3 a week means that those 500,000 people are below the poverty line and if members of the Government are not aware of this they are not in touch with conditions in this country.

How can Australia be economically strong if 500,000 of her old people are below the poverty line? How can we have any appeal to justice? How can we appeal to Australians to make sacrifices in the national interest when we allow 500,000 pensioners to live on nothing but the pension? Further, there are perhaps a million Australians, men, women and children - and it is the women and children who suffer far more - who are living or trying to live on wages and endowment of less than £20 a week. They, too, are living below the poverty line.

People living in more comfortable circumstances say that this situation does not exist and that there are not something like a million people living on less than £20 a week wages and endowment. But statistics prove that these are facts. Those who deny them have no awareness, and having no awareness they have no conscience. How can Australia be economically strong if a million people of her working class families are living below the poverty line? An increase in wages for them is not the only way out but the increase given to them by the Commonwealth Conciliation and Arbitration Commission has been followed by price increases and now by a Budget which, as the honorable member for Melbourne Ports so vividly showed, has taken from them most of the £1 increase that came their way through the basic wage decision. That was a decision, by the way, that was based on the principle established by the Commission that, at that time, industry could afford the increase. I think it has been widely demonstrated that industry is now busy passing on that increase. This is contempt of the Commission, but it is not so treated. It is regarded as a legitimate business procedure.

Economically, the price problem is the real economic problem in Australia today. The genera] retail price index figure obscures the problem. The main impact of price increases on the average Australian today is in the cost of housing. Between March 1960 and March 1964. retail prices in general rose by 5.7 per cent., but the cost of housing rose by 1 8.6 per cent. Over the same period, weekly wage rates rose by only 7 per cent. The 500,000 elderly people and the 1 million Australians to whom I refer are being squeezed between rapidly rising costs of housing and fixed or frozen real wages and pensions. How can they ever escape from this situation? They cannot educate themselves out of it. Even if expenditure on education rises - as it has done - their position will not change. It has not changed in recent years.

In 1960, official statistics showed that men in the professional class represented 7 per cent, of the employed population. But the children of professional men represented 27 per cent, of university students. Men in the administrative, executive and managerial class were 9 per cent, of the employed population, but their children represented 26 per cent, of university students. Wage earners, however, were 52 per cent, of the employed population, but their children represented only 15 per cent, of university students. In other words, there were about 3) times as many wage earners as there were men in the professional and in the administrative, executive and managerial classes, but only about one quarter as many of their children were in universities. Not only is this acute inequality artificially produced, but also it is a rank injustice. Moreover, it is depriving Australia of large numbers of trained personnel who are required to make this country strong.

How can we overcome these problems? Certainly, many of them can be tackled in the Budget. But, sooner or later, every attempt to solve these problems and every attempt to secure more for the poorer people by pensions or endowment, for education and science, for housing and for national development is checked by price increases and fears of a boom. What happens then? These are the very things that are checked or even cut back. The very things that we are trying hardest to achieve are the very things that are then cut back. The absence in this Budget of proper provision for social services is an example of this cutting back. The absence of the provision of funds even to remove the most glaring deficiencies in schools and universities is another example of this cutting back. The admission by the Treasurer (Mr. Harold Holt) about national development is an example of this cutting back. He said -

Plainly, it would be a mistake at this stage, especially in view of the labour situation, to enlarge further the present big volume of works activity.

Australia has not a big volume of works activity. Since the initiation of the Snowy Mountains Hydro-electric Scheme, no really national works project has been undertaken. It would not be a mistake to enlarge the present volume of works. Even if there were no other way - and there is another way - it would be better to go ahead and risk inflation of 4 per cent, or 5 per cent, a year than to cut back the economy in the present circumstances.

The Government, facing the basic price problem, chooses to cut back where it can. It can cut back on pensions, child endowment, national works and, in due course, bank credit. But what does this cutting back do? It allows the large and powerful industries to grow at the expense of pensioners, working class families, national works and, finally, small firms, farmers and home seekers who, unlike the large and powerful industries, cannot get from the savings and trading banks the money that they need. The Government is forced to take this action because it has a means of controlling pensioners, wage earners - whom it controls through the Commonwealth Conciliation and Arbitration Commission - national works and bank credit. But it has no means - nor does it want any - to control large industrial concerns. So the economy is not only an affluent one; in some senses, it is a distorted one as well.

Here, we can take advantage of some of the work of a man who is probably the most brilliant economist in the world today - J. K. Galbraith. He expresses an obvious truth when he writes -

Defects exist in the design of economic systems as they exist in machines . . . There is such a defect in our system. We do not remove it either by pretending that the defect doesn’t exist or by horrified denunciation of those who point it out.

What, then, is (his defect? Galbraith gives the answer to this question in these words -

In that sector of the economy where firms are large and control over prices by individual firms is substantial, there is opportunity for large discretionary increases in prices whenever demand is favorable. The demand that is favorable to high employment is favorable to such price increases. There is, moreover, a powerful incentive to exploit this price discretion when wages are raised. The cost of the wage settlement can then be passed to the public. So increases in wages are usually covered by a price increase - typically with something more. So long as demand is at, or near, full employment levels, we must expect that, in industries characterised by strong firms and unions, prices and wages will react on each other in a steady upward spiral. Even with considerable idle capacity, the spiral will continue in some industries.

What can be done about this? Galbraith says that the first possible course is to do nothing. But he thinks that this is not a tolerable choice because of its effects. He describes those effects very vividly. Indeed, the description is so vivid that one is strongly reminded of the conditions that prevail in Australia, for we are doing as little as possible. In fact, what we are doing amounts almost to nothing. The second thing that Galbraith suggests we might do is to rely on monetary or fiscal measures, or a combination of the two. Monetary policy, as we know, is used in an effort to limit the influence of prices by central bank action. Fiscal policy is used in an effort to influence the level of prices by means of the Budget.

Monetary policy has been admitted, so far, to be weak in this country, partly because of the growth of the new banking system outside the limits of the old. But recently it has been thought to be a little more effective. It may well have been, but this is only because there has been no real problem for it to deal with. If it has a real problem to deal with, it can deal with that problem only by restricting those who need to borrow. These are small firms, farmers and home builders. But it does not restrict those who do not need to borrow and who, in fact, invest mainly out of the funds that they have accumulated by using their monopolistic price powers. That there are few in this position is revealed by the statistics. I believe that very few Australians realise the significance of these statistics. In recent years, there have been in Australia more than 61,000 taxpaying companies. But only 1,057, or 1.7 per cent., earned 61.95 per cent, of the total income of all companies. That this small proportion has dominated the economy can be seen from the fact that, if they had 61.95 per cent, of all company income, they must have had about 61.95 per cent, of the output and the employees of all companies. At the same time, 3 per cent, of the total of more than 50,000 factories in Australia employed 50.5 per cent, of all factory employees.

What can monetary policy do about this great concentration of power? Monetary policy, when it is effective, restricts the many who are small and leaves free the few who are large. Achieving this, it is the kind of policy that we would expect to be used by those who favour the large and powerful and who fool the many. I refer to those who compose the Menzies Government. Fiscal policy is little different. The Budget has never really been used in Australia as an instrument of public policy. When effective expenditure outside the Budget was down, as it was in 1961-62, Budget expenditure did not rise much to make good the deficiency. Perhaps the only cyclical increase was represented by the £20 million granted to the States for employment giving activities - and this only after a great deal of pressure had been brought to bear on the Commonwealth. No one can claim that there was any increase in expenditure on social services, education or development, apart from this £20 million, for reasons of fiscal policy. Then, when expenditure outside the Budget is up, there is a failure to increase Budget expenditure as much as it could be increased, and it has no more than a marginal fiscal effect.

Galbraith concludes -

Neither monetary nor fiscal policy make contact wilh the present form of inflation in an effective and practical way. Firms in the concentrated sector of the economy can advance their prices, and do, whenever the economy is at or even near full capacity and employment.

Monetary and fiscal policy can do nothing about it What then is the next possible course? It is to break up, says Galbraith, the large corporations and unions. No-one really supports this course, although, perhaps, the so called Democratic Labour Party gets as close to it as anyone. Its supporters seem to be concerned to preserve the large corporations in accordance with the principle of private property. They come as near as they can go to favouring the breaking up of large unions.

Galbraith warns - and it is a good warning to take into account here and now - that whatever antitrust laws can do there is no hope for an inflation remedy in the antitrust laws, new or old. What then remains? Galbraith provides the answer in the American context, an answer that must be heard by everyone if this problem is to be solved. He said -

Only one course of action remains. That is some form of public intervention in that part of the economy where full employment, or an approach to full employment, means inflationary price and wage increases. Such intervention, when it comes, will not be the result of anyone advocating it.

This is in America where very few people do advocate it. He continued - lt will be because there are no . . . alternatives.

Mr Nixon:

– Do you advocate it?

Dr J F Cairns:
YARRA, VICTORIA · ALP

– Of course I advocate it. It seems very difficult to make some of you understand. This proposal, even in the United States, has great support. Galbraith goes on to say -

Economists in considerable numbers are coming to accept the need for such intervention. A poll of professional economists conducted by the Joint Economic Committee of the Congress in 1958 showed that between 40 and 50 per cent, of those responding accepted the need for wage and price regulation, at least as a reserve weapon against inflation.

The basic economic problem, I submit, is the problem of price increases. The public realises this and the Government realises it. The solution lies along the road of wage and price regulation. The honorable member for Melbourne Ports said that wages are riveted and pensions are riveted. Recognising this, the Australian Council of Trade Unions has simplified, and properly simplified, much of the economic policy into the one proposal - price control. Concerned as it is with the price problem, the Government always puts it down to wage increases and holds hard to wage regulation. Its onesided attitude is the sectional class attitude we would expect from a sectional class government - and that is exactly what the Menzies Government is.

We must seek national government and national policy in which a system of price regulation is built into the Australian economy. We cannot foresee, nor can anyone exactly foresee, what form these institutional developments would take in building into the Australian economy an effective system of price regulation. But I would say it must be in the arena of arbitration. I suggest that the Arbitration Court must be built up into an institution capable of knowing what is needed for industry and what the prices should be to meet the requirements of national policy. This is the direction finder of national economic policy. Only the Australian Labour Party can muster the strength and influence to build the national institution necessary for this road to be taken. The reason for that is that if it is to be built, there must be a substantial element of public control exercised over the basic monopolies of this nation. No party that does not represent the mass of working people can generate enough political power in this nation to achieve that purpose. On the other hand, we face opposite to us in this Parliament those who serve, whether they know it or not, an instrument of the great monopolies in this country. I am sure that many honorable members opposite have no idea that they serve this purpose because very few of them have the slightest understanding, either of Australian history or of the economics of the nation at this stage.

So, Mr. Deputy Speaker, I think that this debate has been most significant. It has allowed the Opposition to obtain the initiative in external affairs and to place the responsibility upon this Government of trying to prove that it is seeking some element of independence in its relations with the great nations of the world. The Opposition has caused the Government to face the responsibility of showing that it is not going for ever to rely upon force and war and threats, or upon accusing its opponents of being responsible for all the evils in the world situation.

I think that the Opposition in recent weeks - completely in accord with Australian Labour Party policy - has forced the Government to face the question that most of the difficulty in the so-called trouble spots is an economic, social and political phenomenon and not a military one. If the spread of the thrust of Asian Communism, as it was described by the Minister for External Affairs (Mr. Hasluck), is to continue, then that challenge has to be taken up and these situations of economic disorder have to be prevented from turning into wars. This cannot be done by the military methods that have prevailed so far.

Finally, I believe that the Opposition has now thrown the responsibility upon the Government to show how the economy can be managed in the interests of the people, and how the necessary and fundamental changes that have to take place in it can, in fact, be worked out and applied.

Mr CLEAVER:
Swan

– My colleagues on the Government side of the House are quite intrigued by the claims made by Opposition speakers as to their successes in recent days. In the presentation of our opinions in this debate we have already proved conclusively that Her Majesty’s Opposition has been on false and insecure ground on the many points that have been advanced. The honorable member for Yarra (Dr. J. F. Cairns) has preferred in this debate to force an extension of the foreign affairs debate of last week, rather than to deal in any great detail with the Budget itself. The honorable member for Yarra, worried about the popularity of the Government for so long, has virtually, by his criticism of our popularity, indicated that his criticism was an indictment of the opinion of the Australian people who have voted this Government back into power on so many occasions.

From what the honorable member has just been saying, one would think that this Government has never done one unpopular thing. Yet we, as members of the Government parties, well know that this Government has been returned to power after demonstrations of real courage and, may I suggest, genuine statesmanship on a number of occasions. The Government has known and has proved that normal popularity just cannot be followed. Like the Australian Broadcasting Commission programme of last week, the honorable member for Yarra bas completely weighted the pensioner situation against the Government. I will have a little more to say about this matter later on, but it is not as significant as some of the other matters that the honorable member for Yarra raised. He took great delight in quoting, not once, but on a number of occasions, the opinions of J. K. Galbraith. My attention has been drawn to the fact that the honorable member is outdated in his reading because he has quoted a man who expressed, in one complete chapter of his book, a change of mind back in the year 1940-41.

It is rather significant to me and my colleagues, and to all who may be listening to this debate, that the honorable member for Yarra argued first, that there was, of course, some warlike activity, and secondly, that what mattered was not so much the amount of nearly £300 million provided for defence in this Budget, as the economic and social situation. He was building up the argument that Galbraith developed, that it was the gross national product of a country which counted rather than its defence measures. But that is the very point on which Galbraith changed face. It would appear to us, therefore, that the honorable member for Yarra has not kept himself up to date with these modern expressions of opinion. I am very interested in drawing attention to the fact that there is one well known personality in Australia who should be pleased with the Budget. Early in the month of August it was Sir John Allison who reminded us not to forget the importance of stability. It was Sir John Allison who, in his article, said -

I favour rather stability with reasonable growth.

His article contained a very good message indeed for the thinking Austraiian - stability with reasonable growth. Amongst other things that he wrote were these -

We in Australia are determined to expand fust, as fast as we can, but on a sound, not a chancy basis . . . The great increase in export income last year, more than £300 million higher than the previous year, will provide sufficient stimulus.

It was in this context that this great Australian said -

F want to see a budget which aims at some encouragement but with stability.

That is just what this Government has provided in the Budget that is before the House for debate at the present time.

The Leader of the Opposition (Mr. Calwell) early in his speech, when opening the attack against the Budget, termed the 1964 measure a “ stop growth “ Budget. He said this notwithstanding that the Treasurer’s Budget Speech indicated an increase of over £6 million in developmental grants to the States this very year and the assumption in addition of commitments of a further £70 million in future years for approved projects. Again, it was the Leader of the Opposition who claimed that this 1964 Budget was deflationary. It would appear to me that in his simple approach he must have reached this conclusion on the one factor of increases in taxation. I suggest that he takes no account whatever of the Government’s planning for increased revenue - and it is a substantial amount - to be utilised for large scale defence expenditure and also for capital works and developmental grants which will be spent mainly in our own country. The consequences of this, of course, should be the enlargement of employment opportunities for both labour and economic resources.

But of course it is not just the Labour Party, Her Majesty’s Opposition in this House, that is unsound in its criticism of the Budget. The Labour Party is not alone in this position. We only have to turn to the opinions of some of the economists as expressed in the Press and some of the writings of Australian journalists to find that these people have endeavoured unsuccessfully to find fault with the financial proposals embodied in this document. One of the newspaper headlines that comes to mind is, “ Hidden Death in the Budget “. I refer to one passage, which reads -

Soured by a budget which to him makes no sense at all, our finance columnist says, “ Holt has run wild”.

I read on with interest to see what this character had to say as he let himself go, and I discovered this gem -

The accelerating rate of increase of other Government spending is the villain of the piece. This is the penalty for less of parliamentary control of the Treasury. Successive elections have added new ministerial portfolios and their tail of new departments - seven ministries concerned with defence - and new charges to pay off election promises.

What this fellow forgets is that growth nationally demands, particularly in a country like ours, expansion of government departments and services. I take a moment to remind the House that we have expansive areas in this country that few other countries as young as ours have to contend with. We have difficult climatic conditions in certain areas. There are high costs which invariably mean that private enterprise which, in other places, would forge ahead with development and exploration - as indicated earlier this evening by one of my colleagues in a splendid speech concerning national development and, particularly, the search for oil in Australia - prefers and, in effect, finds it necessary to leave development and exploration to the Government. So it is that this Government in these recent years is moving into areas previously left abandoned, to undertake tasks which have been untouched. Of course, there is the attendant problem of developmental growth with which to contend.

I find it a little refreshing at times to go back to the first Budget that I encountered in this chamber nine years ago. The 1955-56 Budget of this Government was £1,138 million. Now, nine years later, we find that the figure has risen to £2,511 million. Because of the criticism about the Public Service and the departments that have had to be expanded, I turned today to the very latest figures obtainable from the Commonwealth Public Service Board. A comparison between the present figures and the figures for 1955-56, when I first entered this House, is of interest. In 1955-56, the Public Service totalled 153,000. Since then, as I have said, our Budget has doubled, and by the end of May last, the Public Service had risen to 176,352. It is very hard to find a yardstick by which to measure whether that increase is justified or excessive. But I do suggest that, after so many years of successful economic expansion, during which our Budget figures have risen so astronomically, it is difficult to argue very strongly against an increase in the Public Service which, thank goodness, in this country is maintained at a very high level of efficiency indeed. The extension of governmental activity into new fields has been clearly endorsed by the Australian people at recent elections. I am one member of the House who is glad at any time to acknowledge what we owe to the leaders of our Public Service and those who serve under them. I believe that, bearing in mind the amazing expansion of population and the developmental projects that have been undertaken, this Government has kept reasonable rein upon the Public Service, its expansion, and its spending.

I remind the House that it was this Government which, back in 1951, established the Public Accounts Committee. That Committee exists, of course, to provide an additional check upon the spending of funds provided in a Budget of this kind. It is rather pleasing to those associated with this Parliamentary Committee to note that the Taxpayers Association, which is so critical of many Government activities, praises the work of the Committee. The Association has actually advocated reinforcement of the Committee’s funds and a re-invigorating of its programme - if busy members and senators can find the time to increase that programme - so that it may exercise even more significant parliamentary control over administrative methods and procedures.

I move on to another Press criticism that is not based upon fact. The writer said -

There is no more glaring example of public management ineptitude than Treasury control of post office finances. By charging capital costs to expense,-

That, of course, is quite an erroneous statement - the Telephone Branch is represented as showing a loss - a phoney loss used to justify rising charges.

In other words, it is claimed that the Treasury control of Post Office finance is a glaring example of public mismanagement. This critic, I suggest, reveals a palpable lack of knowledge of the purpose and the value of the very commendable commercial accounting system that was introduced only a few months ago by the Post Office. This fellow, by inference, would discount the fact that the Government now has an accurate measuring rod for the trading profits or losses of the vast organisation of the Post Office.

I should refer in passing to the suggestion by the critic in the Press that seven departments handle defence. Even journalistic licence does not permit one to stretch, say, four departments related to defence, to seven. But I am not finished with this matter of defence. I trust that time will permit me to return to it later, paricularly because of some of the statements made by the honorable member for Melbourne Ports (Mr. Crean). But we want to clear up this matter of Post Office accounting. I want to lay stress upon the fairness with which the Government has come to the decision that certain Post Office charges this year should be increased. I was rather pleased that the honorable member for Melbourne Ports did not attack the commercial accounts of the Post Office. I would expect him, as a former member of the Public Accounts Committee, to have sufficient background to recognise the impact upon the Budget of the commercial accounts.

The unwary critic, when looking at the Budget figures for the Post Office, which appear in the normal Treasury presentation of the Budget Papers, might begin to shout about a large surplus, because here frankly are the figures that are set out in the Budget: The revenue of the Post

Office for this year is given as £185 million as against £165 million for the previous year. Expenditure is estimated at £126 million as against £116 million for last year. The unwary critic might say that the Post Office has an operating surplus for this year of £59 million and for last year of £49 million. The critic might note that expenditure for capital works, the fixed assets of this vast organisation, is estimated at £78 million for this year and was £70 million for last year.

Some years ago attention was drawn to the danger of such conclusions being drawn from these figures. This is what commenced the battle for the commercial accounts system of the Postal Department. It was the Parliamentary Public Accounts Committee that first wrote this into a report and indicated to the Parliament that this was a change, a development, that was highly desirable. The Government in its wisdom appointed an independent committee and when the report of the committee was adopted the Post Office then instituted this system of commercial accounting. So today the public has the benefit of the full set of commercial accounts, which can be found in Tables 1 to 7 in the “ Financial and Statistical Bulletin “ issued by the PostmasterGeneral’s Department. When we look at this bulletin we find included in the balance sheet in Table 1 figures for depreciation based on assets valued at £673 million and an interest provision on Government advances totalling £528 million. We see also a provision for furlough liability amounting to £12 million.

This shows that we are not playing with the normal Treasury system of cash revenue and cash expenditure alone, that here there has been a change. This has the full approval of the accounting profession, the institutes of accountants, and it has the endorsement of the Taxpayers Association as a highly desirable change, implemented in recent years. I am suggesting that it is only upon these accounts that the Government has said, so openly and frankly in these Budget Papers, that the losses in the telephone departmental accounts were such that there was full justification for the increases which the

Budget has indicated. Let me quote what the Treasurer himself said -

Since the last major adjustment of Post Office charges in October 1959, the direct and indirect effects of higher wage rates have added something like £17,000,000 to yearly operating costs, and for three successive years there have been operating losses on the telephone service, which faces increasingly heavy losses at current charge rates.

When I turn to the telephone services profit and loss account I find in table 4 a loss of £1.941 million transferred to the Consolidated Profit and Loss Statement for the year ended 1962-63. So I suggest, Mr. Deputy Speaker, that there is nothing phoney about these telephone accounts but rather that we are fortunate today in having modern, commercial accounting procedures which make effective information available for Government decisions in respect of the charges that have to be made upon the public.

In the balance of the time that I have at my disposal I wish to turn to the subject of defence, because the honorable member for Melbourne Ports had a lot to say about the wrong presentation of the estimates for defence. Of course, he was following his leader in this. The Leader of the Opposition said that the greatest proportion of the increase in the defence vote for the current year has gone to increase pay and provide better conditions for servicemen now enlisted. I point out that the defence vote for this financial year quite properly reflects the measures recently introduced to improve the pay, conditions of service, and the housing of members of the various Services. These are essential measures for our defence manpower buildup. This year they involve an expenditure of an additional £16,700,000, and we recognise that they should go a long way towards stimulating recruitment and the re-engagement of the personnel of the Services.

Contrary to what the Leader of the Opposition and the honorable member for Melbourne Ports have had to say, the trend of the defence expenditure for some years has been upwards. Ten years ago the figure was £177 million, and this financial year the Government is spending nearly £297 million. I emphasise that figure because members of the Opposition have been very freely using the figure of £293 million. The figure of £297 million represents, over the ten-year period, an increase in defence expenditure of something like 68 per cent.

The Government recognises, of course, that the defence programme is not static. lt makes adjustments to the programme according to the circumstances that arise. When the Prime Minister announced the results of the Defence Review in May 1963, the allotment for defence was stated to be £237,500,000, and it was then contemplated that the allotment would increase to £253,400,000 in this current year. This is the figure of £15,900,000 referred to in the Budget Speech for planned increases in military capability and preparedness. This is the very figure over which members of the Opposition, in my opinion, have been stumbling.

Since then other decisions have been taken to provide for new defence proposals, or to accelerate existing projects. I am one who believes that these new measures are by no means inconspicuous. They are quite spectacular and I want to enunciate them. They include the construction of two new anti-submarine frigates to replace H.M.A.S. “Voyager”, the provision of Matra air-to-air missiles and substantial amounts for the buildup of the forces and their equipment, including provision for Ikara anti-submarine missiles, radar equipment for the Royal Australian Air Force, and accelerated naval construction on submarines, Charles F. Adams class destroyers and the escort maintenance ship. We must take issue with the Leader of the Opposition when it comes to a reference to the TFX aircraft. Tonight the Minister made it quite clear that this important project is progressing right up to schedule. He said -

I have a firm assurance that there is no reason at all to doubt that deliveries to the R.A.A.F. will be made as scheduled in 1968.

We should take cognisance of the fact that that assurance is based on an official United States Government assurance. It comes from the Pentagon and from the United States Air Force and these assurances are up to date. There is only one correct deduction to be made from the fact that there is no payment for these aircraft in the Budget figures this year: That is that the United States of America docs not require any payment this year.

Mr Hansen:

– Is that a reduction?

Mr CLEAVER:

– It is a deduction. The Government, let it be noted, with good financial acumen, is negotiating a revision of the payments which it is necessary for us to make to meet deliveries in the year 1968. 1 wonder whether honorable members opposite have taken any notice at all of the fact that the amount of about £9 million paid last year towards this contract stands to our credit and is drawing interest. We are getting these first class aircraft on the most favorable financial terms, at an estimated cost of some £56 million, with payments spread over a term of years to suit our budgetary requirements. Let us never forget that we will get the aircraft on time. The total of the increased defence expenditure approved for this current year has been partially offset by this reduction of £8.968 million, to which I have referred. It is apparent, therefore, that the real increase in the cost of defence in 1964-65 is* considerably greater than the £36.342 million which represents the difference between the actual provision made last year and that made this year. This means that the figure is about £45 million. It should be borne in mind that when major items of defence equipment are being procured considerable planning is required. They cannot be bought off the shelf. From this it follows that the provision required in earlier years may not be large and the cost may be spread over a long period.

The provision made each year is determined by full consideration of the progress of manufacture and the delivery arrangements and any contractual arrangements into which the country may have entered. So I am one who believes that the Government has the defence programme under continuous review in the light of changes in the strategic position as we assess it. The new measures provided for in this Budget will substantially increase the level of defence preparedness. Others do not agree with me. It would appear that all members of Her Majesty’s Opposition disagree with the Government’s programme for defence, but we certainly believe that this preparedness is apparent, that the amount being expended represents a substantial increase and that the planning in all the three Services is sound and sensible. The moments are flitting by and I want to conclude with a reference to something which caught the attention of the Prime Ministers of the Commonwealth at their recent meeting in

London. I notice that in the communique issued at the end of that very important conference there was reference to the Commonwealth Parliamentary Association. I want to quote some words from the communique. They are -

The links between the countries of the Commonwealth are strengthened not only by co-operation between their governments in initiatives of this kind but even more by frequent personal contacts between individuals who share common professional interests.

The Prime Ministers recorded their support for the valuable work which the Commonwealth Parliamentary Association performs in bringing together members of the Parliaments of all Commonwealth countries. The British Government stated that they would be prepared, if other Commonwealth governments would do the same, to increase their contribution to the Association.

Within a month or two the annual conference of the Commonwealth Parliamentary Association, at which this Parliament will be represented as usual by six delegates, will convene in Kingston, Jamaica.

Mr Hasluck:

– Who is going?

Mr CLEAVER:

– I am one of the fortunate ones who will be in the party. In view of the proximity of the next meeting of the Association I feel that this is an appropriate occasion to underline the importance of those words from the Prime Ministers’ communique and to endorse the attitude of the British Government in indicating that it will give freely an increased amount for the important work of the Association. We hope that this gesture on the part of the British Government will inspire our Government and other members of the Commonwealth to do likewise. I am sure the House would express the sincere wish that this conference will become an historic one by moulding together the fellowship and the friendship - so important in international affairs - which is enunciated in the British Commonwealth of Nations.

Mr RIORDAN:
Kennedy

.- I support the amendment moved by the Leader of the Opposition (Mr. Calwell). When the House discusses a Budget it in effect discusses a statement delivered by the Treasurer setting out what the Government proposes to do in the next 12 months, what its expenditure will be, and the ways in which it will raise revenue necessary to meet that expenditure. Having listened last night to the Minister for Labour and National Service (Mr. McMahon) and having heard today the Minister for the Army (Dr. Forbes) and the honorable member for Swan (Mr. Cleaver), and paying due regard to the fact that this Budget was devised and drawn up while the Prime Minister (Sir Robert Menzies) was abroad, it is obvious that it is only the first instalment, and that in the new year, after the Senate elections, a supplementary Budget will be brought down increasing taxes substantially.

The complaint of the general public against this first part of the Budget is that the section of the community least able to bear the burden has been the hardest hit. We have read reports of company directors stating that the Budget will cause them a little embarrassment because it will add to their problem of costs. The honorable member for Swan referred to certain newspaper headlines. I propose not to refer to headlines but to select excerpts from the leading articles of two newspapers in which the Budget is dealt with. In its editorial of 12th August last the Melbourne “ Sun NewsPictorial “ stated -

It was a depressing, distressing, unimaginative Budget . . .

Of course it is distressing. It is distressing to the poor unfortunate pensioner, who already sees his costs rising, who already sees the 5s. that he is supposed to get out of the Budget disappearing in the increased costs that have already been imposed upon him. Of course it is a distressing Budget. The editorial continues -

Its disappointments are all the more unfortunate at a time when the country had seemed to be set for real progress and expansion.

That is true. What the people of Australia are seeking today is expansion of the type being experienced in some other countries. I will say more about this matter later.

The daddy of them all was in the Brisbane “Truth” of Sunday, 16th August. It was headed “ Budget: A Bungle from Bingil “ and stated -

Some aspects of last week’s Federal Budget by spear fisherman Harold Holt are enough to make thinking people physically sick.

It should go down in history as the Bungle from Bingil . . . Bingil, of course, being the North Queensland resort where Mr. Holt gives birth to his macabre budgets each year.

Macabre is about the only word which adequately fits any Budget which would magnanimously give a round 5/- a week to our haunted pensioners on the one hand, and proceed to milk them of5/- and more on the other.

You can develop this thought by lining up just three things like a telephone, a TV set and a radio.

They are, in these days, almost an essential to living.

They are not a luxury, yet to have these things in any normal household over the next twelve months is going to cost a minimum of £28/10/-.

That is before you begin making one local call on your telephone, or even switching on the TV.

Everybody knows the Government had to get extra money for defence and such like.

But Mr. Holt went about it the wrong way. Sectional taxation is bad, and that, in the main, is what he has given us. Far better, far fairer, if he had done it all through a lift in direct taxation. In that way the burden would have been shared by all.

It is quite obvious, as that leading article in “ Truth “ says, that sectional taxation is bad, and it is sectional taxation that is causing the most resentment outside of this place. There is room for criticism by the wage earner, as “ Truth’s “ article also pointed out. In addition, the average worker has to pay more for his cigarettes and tobacco. Apparently the Government wants smokers to cut back on their smoking because of the fear of lung cancer. The collection of revenue, of course, is only incidental. Television licence fees are to be increased by 20 per cent, or £1, telephone rentals are to go up to £20 and the cost of installing a telephone will rise by £5 to £15. Apparently, as I said a short while ago, in the eyes of this Government the telephone is a luxury. Further evidence of bow this Budget hits the little man - the workers and the pensioners - is contained in an article in the “ Sunday Mail “ published in Brisbane. The article is headed “ Pound Now 3s. 8d. . . . And Falling” and states -

Prices rises and Government costs have raised living costs by 16/4 a week since the £1 Federal basic wage increase onJune 19. A Sunday Mail survey yesterday showed the average Brisbane family of a man, his wife and two children with a taxable income of £20 a week had only 3/8 left each week of the £1 increase.

And. they are in danger of losing that.

They will certainly lose it when the supplementary Budget is brought down next year. The article continues -

The weekly 16/4 increase consists of:

An immediate taxation increase of 4/1 for the wage rise.

A budget taxation rise of 1/3.

Telephone rent up 2/1.

Price rises in cheese, butter, soap, soft drinks, pies, small cakes, tinned meats, spaghetti, cigarettes, haircuts, bacon, pre-packed sausage, and household brooms - about 8/4 weekly.

Beer (for the man of the house) up 7d.

National inflation average of 8d. to 9d.

In Brisbane the inflation figure has been offset by an 8d. a dozen drop in egg prices.

But the average family has little chance of keeping the 3/8 left.

Manufacturers have warned the price of men’s clothing will rise soon.

Meat industry trade unionists say a meat price rise is a “ distinct possibility “.

A milk authority said: “Rising prices are going to shorten the period of current prices”.

A footwear manufacturer said footwear prices would rise substantially when the higher cost of materials was known.

What chance has the worker got of holding his 3s. 8d. In Brisbane “Truth” of Sunday, 16th August, we find an article headed, “ Case of the Vanishing £1 “.

It states -

This is the sad story of the £1 that never wasthe pound that was added to wages in the basic wage rise in June.

Since then the wretched note has fought a dying battle for survival.

Now, according to union leaders and taxation experts, there’s only ls. 4id. of it left.

Despite all the talk of how the burdens to be imposed under this Budget are to be spread over the whole community, the fact is that the poorer sections, those who are least able to carry the burden of indirect taxation, will have to bear it. Company directors have said that the increase in indirect taxation will add to the problem of costs. What a horse laugh they must have had, because they know full well that the end of the road is the consumer, that the consumer always pays. The only problem that the company directors will have with the increase in indirect taxation will be that they will have to put up the prices of the commodities that they sell to the consumers.

The Government says that there is a shortage of skilled men and that as a consequence we shall not be able to get the increased production that we need. It says that the only way that we can really fight inflation is to increase production. We have been told during the course of this debate, and previously, by Government speakers, about the shortage of skilled men, how factories are working to capacity, and so on. This Budget, which was introduced ostensibly as a restraint Budget, a deflationary Budget, must, because of the taxation imposed under it, because of this Government’s policy with regard to indirect taxation and because of the Government’s failure to institute any form of price control, add to the present inflationary pressures which are causing the Governor of the Reserve Bank some worry. That they are causing him worry is obvious from his last annual report.

The Opposition is hostile to anything savouring of inflation or deflation. This is a young country and we do not want any more credit squeezes. The potential of development to which reference has been made by Government speakers tonight has hardly been tapped. Where are the projects like Labour’s Snowy Mountains project - major projects of some moment? The Snowy Mountains project was started in a period of postwar reconstruction when financial problems were a lot more difficult than they are today. Where is the recognition by the Treasurer of the developmental needs of the empty and ignored north that we hear him talking about when he mentions, for instance, beef roads? We heard the Deputy Prime Minister (Mr. McEwen) referring tonight to the brigalow lands iia Queensland, but, compared with the great problem of northern Australian development, these things that Government members talk about are only a drop in the bucket. Large projects are needed. It is a large problem, and this is a large country. It needs an imaginative government to realise what is necessary and to understand the facts about that part of the country to which I have been referring.

This Budget shows lack of the imagination needed to meet all the conditions and demands in northern Australia. How can we expect any imagination with regard to the development of northern Australia from this Government? This is an anti-growth Budget, a deflationary Budget, a Budget in which imagination, foresight and drive are forgotten. The Opposition has repeatedly made it clear that we desire to see the economy stimulated and allowed to get into top gear so that it can move towards achieving the objective of doubling the rate of growth, with spectacular increases in production. If Japan can do it why cannot this country? Japan is at present embarking on a ten year programme to double production in order to raise the living standards of its people. The plan is succeeding. I have here a report which appeared in the Sydney “Daily Mirror” of 19 August 1964. It states -

The Japanese economic comeback, the survey notes, “ is one of the most significant and remarkable events of our time “. By 1953 industrial production and per capita income had been restored to their peak wartime levels. Since then industrial output had tripled and personal income in real terms had more than doubled.

And they lost the war! If Japan can do it, we can do it. If some imagination were to be shown by this Government we could follow a policy which would give a continual rise in the living standards of our people. Yet the House and the country have been confronted with a deflationary Budget, a Budget which has been devised to restrain. The deflation means that vast human and material resources cannot be invoked for northern development and other improvements. They are not being used. I will leave development at that.

I shall now turn to the question of defence, a subject of great interest. The honorable member for Swan dealt with defence from the point of view of figures. The Treasurer (Mr. Harold Holt) stated that increased revenue was necessary in order to increase defence expenditure. The total increase in revenue is £234 million, a record increase for any one year. The Treasurer said that defence spending has risen quite spectacularly. That is not quite true, because of the total increase of £234 million in revenue, defence spending is to be increased by only £36 million.

As the Leader of the Opposition pointed out in the course of his speech, defence expenditure this year will be 3 per cent, of the gross national product and 10 years ago it was 3) per cent, of the gross national product. Where is the spectacular increase in defence expenditure?

The unpopularity of this Budget would have been minimised to an extent if the revenue increase was for the purposes of defence. Of the increased revenue of £234 million, £109 million will be obtained from personal income tax; £31 million will be raised by the cancellation of the 5 per cent, rebate on income tax.

The spectacular increase in defence expenditure - so-called by the Treasurer - is to be £36 million, which would not go far in this day and age, as the Minister for the Army knows, if there was to be a real expansion of our defence resources. Of this £36 million, £1 1 million is for extra pay for the forces, £5 million is for housing for the forces and so on.

If in the future there is to be spectacular defence development, taxation will have to be stepped up to meet the cost. It is quite obvious that a supplementary Budget will be introduced in the new year after the Senate election. The state of our defence is deplorable and as Labour has said, before the last war our first line of defence was in the air. lt still is in the air. The TFX bomber has frequently been mentioned during the course of this debate. We are supposed to get it in 1968.

The Sydney “Sun” of Tuesday, 18th August, carries on page 2 the screaming headline: “ New look at Australia’s defences “, and the following statement -

Minister for Defence, Senator Paltridge, is studying the early purchase of a new fleet of giant troop-carrying Hercules transport planes.

These would supplement the 12 dated Hercules in R.A.A.F. service.

A later £10 million purchase could be of a squadron of McDonnell Phantom fighter-bombers to fill the gap until delivery of the new U.S. FI IIA (TFX) bombers in 1968.

The Navy is pressing the Government to acquire a U.S. Essex-type attack aircraft carrier which could accommodate the McDonnell Phantom bombers.

As I said at the commencement of my remarks, it is obvious from the attitude adopted last night by the Minister for Labour and National Service in his fairly lengthy reference towards the conclusion of his speech to this question of defence, and from the way in which the Minister for the Army spoke today, that the Prime Minister has decided to hold this conference in November when a draft defence plan will be presented by the Minister for Defence (Senator Paltridge). That defence plan will be considered and then, with the meeting of the Parliament in the new year, will come a supplementary budget. Incidentally, the article in the newspaper to which I have referred mentions what is involved in a three-year programme. Were the remarks of the Minister for Labour and National Service and of the Minister for the Army prompted by the knowledge of this proposed defence plan?

Here we have a Budget presented to the Parliament and, within a few days of its presentation, we are confronted with the statement that the Cabinet will meet, apparently after the Parliament goes into recess, to discuss a three-year defence programme. If that suggestion is not correct I have yet to be shown otherwise, lt is obvious that a supplementary budget will be presented in the new year. Does the Government know where it is going? Has the Prime Minister’s trip overseas altered plans?

One of the grounds of the Opposition’s amendment refers to defence and the state of our defences. I want to refer briefly to the Navy and to point out how the Government has allowed the defence position generally to deteriorate. Labour is an antiwar party but it believes that our defences should be as adequate as they can be, having due regard to our financial capacity, to prevent these shores from echoing to the tramp of hostile feet. Australia is an island continent. Lt needs a highly efficient modern navy to keep our sea lanes free and our communications open in the event of any conflict. If that cannot be done, the whole of our economy will collapse. Now that diesel power is used so much, how would the people in my electorate in Western Queensland, for instance, manage in the event of our sea lanes not being free and our communications not being maintained?

In addition, the Navy’s job is to protect our shores, especially our harbours and cities, from seaborne attack, and to cooperate with our allies in achieving these objectives. I have tried to find out the state of our Navy today and it would almost make you cry when you look at it. If any arm of our defences has been allowed to deteriorate in a time of sabre rattling on the other side of the world, it is our Navy - this very vital part of our defence system. We have in commission the “Melbourne”, originally an aircraft carrier and today a helicopter carrier. She is used principally in an anti-submarine role. She carries the Westland Wessex helicopters. There are three destroyers in commission, four new type frigates and one old type frigate, the “ Quiberon “. There are six coastal minesweepers. Then there is the former aircraft carrier “ Sydney “, which is now a vehicle transport. We have also a tanker and fewer than 20 other smaller ships. I have not included the dinghies.

In short, this Government has permitted the Royal Australian Navy to run down completely. It has made a joke of that arm of the Services. It is true that we are to get three Adams class destroyers from the United States of America. They are not being built in Australian dockyards, where they could have been built. We are also to get four submarines from Scotland. These also could have been built in our own dockyards, which are a vital part of our defence organisation. In reserve there are two destroyers and three frigates.

The fighting capacity of the R.A.N. is at a pretty low ebb, with an anti-submarine aircraft carrier, a helicopter carrier, which has a very limited capacity to protect itself against air to surface and surface to surface missiles. We have nine escort ships and three British submarines on loan. As a matter of fact it was the Chifley Government that arranged to have those submarines brought here on loan. I thought I was going to have a ride in one of them. They came here about the time of the election campaign in 1949. Today the most important vessel in any fleet is the submarine. This is particularly true of a country like Australia. I read in a newspaper the other day about acoustic buoys and so on which are now in use. These were in operation at the end of the war. They are supposed to be able to detect long range submarines and so on.

In a conflict involving conventional weapons the number of escort vessels now available to us would be well below the safe minimum if modern surface to surface missiles were used against our Navy. Naval defences have been reduced below the barest minimum. Government spokesmen talk about defence. I tell them to go and talk to the people of north Queensland. They will let the Government know what they think of its defence policy. The R.A.N, urgently needs to have the number of its escort vessels substantially increased. Additional modern type frigates should be added as well as escort vessels. These vessels should be obtained now, not in the sweet by and by. You are getting the TFX bombers in the sweet by and by and the Mirage fighters in the sweet by and by. Everything is coming in the sweet by and by. Arrangements are made but nothing is done except in the sweet by and by.

The Australian people have paid no less than £3,000 million for defence since this Government came to power, and they are continually asking us what they have to show for it. I say to the Government: Beg, borrow or charter an aircraft carrier capable of carrying strike aircraft as well as helicopters, and an aircraft carrier that could operate in associate wilh “ Melbourne “. Other R.A.N, ships should also be provided with helicopter landing stages. More submarines should be built and they should be built in Australian dockyards, so that this vital section of our defence facilities may be kept functioning and capable of rapid expansion in the event of our being engaged in a conflict.

I could go on, Mr. Acting Deputy Speaker, and cast similar reflections on Air Force equipment. I have spoken to lads in the Navy and lads in the Air Force. They ask me when they are going to get modern equipment. I say to the lads in the R.A.A.F.: “ You will get it in the sweet by and by “. I say to the lads in the R.A.N.: “ Wait until you get the Adams class destroyers “. Is it any wonder that the Opposition has moved its amendment? It reads, in part - the Budget does not adequately grapple with the problems of striking a realistic and fitting balance between the claims on national resources arising from defence, development and social welfare.

The Government certainly has not grappled with the problem of social services in respect of the pensioner. He is to receive an increase of 5s., again in the sweet by and by; but already the increase has been absorbed by price increases.

Mr LUCOCK:
Lyne

.- It would be rather strange if there was ever brought into this House a Budget which received the approval of the Opposition and of all organisations and newspapers in the Commonwealth. One Australian newspaper made this comment on this year’s Budget -

This is a huge budget and on the whole an expansive one. In general terms it looks as if it is by far the best budget Mr. Holt has brought down as treasurer and one of the most interesting in the history of the present Government.

If newspaper comments condemning and criticising the Treasurer (Mr. Harold Holt) are to be quoted, it is only fair to quote comments in support of the Budget. There are certain aspects of this Budget with which honorable members on the Government side have expressed a degree of disappointment.

Mr Birrell:

– Then let them vote against it.

Mr LUCOCK:

– To a certain extent, that is perfectly natural. In reply to the interjection made by the honorable member for Port Adelaide, I say that no member of the Government Parties would vote against the Government at this stage because when we look at the Opposition benches we realise the tragedy that would face Australia if the present Opposition ever became the government. In the Treasurer’s Budget Speech we see evidence of the continuing progress and development that have occurred in Australia since the Liberal Party and the Country Party came to the treasury bench way back in 1949. The Treasurer said -

Within the total increase of £224,400,000 we have made provision for -

Defence Services- a total of £296,800,000 which is an increase of £36,300,000 over expenditure in 1963-64;

An addition of £21,000,000 to the amount to be raised for State borrowing programmes for works and housing;

A net addition of £31,700,000 for grants to the States. . . . financial assistance grants will increase under the formula which governs them by £22,600,000, special grants to Western Australia and Tasmania by £4,400,000, aid roads grants by £7,000,000 to a total of £65,000,000, assistance for universities by £2,100,000 to a total of £19,000,000; and there will, besides, be increased payments amounting to £4,300,000 for various development projects and approximately £10,000,000 for science laboratories and technical training facilities.

Yet we hear from members of the Opposition criticism of this increase in expenditure. One comment was that it was terrible that there should be such increases in revenue raised and money expended. These figures provide evidence of our progress in developing Australia. In this regard 1 invite honorable members to consider an analysis of revenue and expenditure contained in the Budget.

In 1963-64 the actual expenditure on repatriation was £26 million; the estimate of expenditure for 1964-65 is £28 million. In 1963-64 the expenditure for Post Office works was £64 million; the estimate for this year is £76 million. Last year, cash social service payments amounted to £514 million, whereas the estimate for this year is £543 million. Last year expenditure on foreign aid was £36 million and this year the estimate is for £42 million. Those figures show just what contribution is being made to the development and progress of Australia and the assistance that is given to other countries. I know that figures are not complete evidence, but they are part of the story.

Let us compare the per capita cost of some items of expenditure last year with the estimated cost for this year. Payments to or for the States this year will cost each Australian £42 13s. 3d., whereas last year the figure was £40 12s. 9d. This year appropriations for the National Welfare Fund will represent £40 4s. Id., a head whereas last year the figure was £37 15s. 2d. For the Postmaster-General’s Department we compare this year’s estimate of £18 2s. 9d. with actual expenditure last year of £16 17s. 9d. Special appropriations for the Australian Capital Territory, Cocos Island, Norfolk Island, the Northern Territory and Papua and New Guinea will cost each Australian about £6 per head. Surely in a country like Australia, which is developing and making progress, that expenditure is not too heavy a burden for each and every one of us to bear.

If one assesses the needs of pensioners it may well be considered that we could never give them enough. 1 realise that in certain circumstances some pensioners are finding great difficulty in being able to sustain themselves. I have suggested previously in this chamber, and I put forward the suggestion again, that we should try to sectionalise pensioners according to rents charged in districts in which they live. I know that certain steps have been taken in this direction, but perhaps more can be done. I suggest that a single pensioner living in a metropolitan area where rents are high, could receive greater assistance than a person living in the country or in some other area where rents are not so high. I know that there would be difficulties in administering such a scheme, but I believe that something could be worked out which would be of advantage to all.

Let us consider the amendment moved by the Opposition. Great play was made of this amendment by the honorable member for Kennedy (Mr. Riordan). It states - the House is of opinion that the Budget docs not adequately grapple with the problems of striking a realistic and fitting balance between the claims on national resources arising from defence, development and social welfare.

Mr. Acting Deputy Speaker, if you listen to honorable members opposite you will realise that they are the ones who have not faced up to the problem of striking a realistic and fitting balance between the claims on national resources arising from defence, development and social welfare. I would hesitate to hazard even a guess at the amount of additional finance that would be required to meet all the suggestions that have been advanced by honorable members opposite. Anybody with any sense of proportion or any sense of reality will realise that in Australia we have to find a balance between progress, development, defence and all the other calls that are made on us because we are still a developing nation. The relative merits of each must be assessed.

A great deal has been spoken about defence. Honorable members opposite constantly ask: “ What has the Government to show for its expenditure on defence? “ Surely they must realise that a fair proportion of expenditure on defence is used to pay the members of our defence forces. Surely we are not to expect servicemen to serve without payment. I repeat that we cannot see any tangible evidence of a fair percentage of our expenditure on defence, because it is applied to the payment of members of the Services. I have the privilege of having the Royal Australian Air Force station at Williamtown in my electorate. I have not been able to visit the station as often as I should like, but on the occasions that I have visited it I have been very proud of the personnel who serve there. Having seen the type of men who are serving at Williamtown, the officers who are in command, the equipment they have and the work they are doing, may I say that nobody in this country should be ashamed of our fighting services. Perhaps that is too strong a word to use. The ground to air missiles which have been installed at Williamtown provide additional evidence of what we have procured with defence funds.

I invite honorable members opposite to consider what is being done by the Department of Supply in the field of research. Let them consider the co-operation that Australia has extended to her allies in this field. I invite them to consider, too, the Mirage fighter which we have procured for the R.A.A.F. I am not quite sure of the exact details, but I understand that this aircraft has been assembled in Australia and put into the air much more quickly than has been the case with similar aircraft in the

French Air Force. The destroyers that we are having built in the United States of America are further evidence of what we have done with our defence moneys. What do members of the Opposition want us to do? It would be impossible for us in Australia to have everything that is needed for the Services. We must balance our expenditure to give us the best possible assets for our Services. I reiterate that we must pay the members of the Services. That accounts for a certain percentage of our defence expenditure.

I now wish to mention a matter relating to primary production which was mentioned earlier tonight by the Minister for Trade and Industry (Mr. McEwen). It has been said on many occasions by supporters of the Government, in particular by members of the Australian Country Party, that the primary industries of Australia have provided the foundation for our economic stability. Unfortunately, very many people have not a full appreciation of this fact. Great progress has been made by secondary industry. It has been pointed out that secondary industry is now exporting to markets which perhaps five or even ten years ago it was thought would not be available to us. But let it never be forgotten that if it were not for the primary producers earning funds overseas from the export of their products Australian secondary industry would not be in the position to take advantage of overseas markets. We may derive great satisfaction from development of secondary industry, but we must never forget that our primary industries have provided the basis for this development.

That brings me to the subject of tariff protection. Nobody will deny that secondary industry needs tariff protection. It needs this form of protection, because it sustains a large part of our work force. Country people appreciate that this work force buys the products of the primary producer. But one thing that the Tariff Board must consider more carefully is that protection should be granted because of financial and economic factors and not because of inefficiency. The Board should recommend protection only when there is complete and absolute efficiency in an industry. This is something which should be stressed.

Reference has been made to decentralisation. There are many problems associated with decentralisation and I acknowledge that the Labour Government of New South Wales has taken certain action and given certain assistance in this connection. 1 offer only one criticism of the New South Wales Government in this matter. I believe that it is concentrating too much attention on certain areas in New South Wales. I realise that there are particular and peculiar problems associated with the coalfields and therefore it is natural that a certain amount of emphasis should be placed on that area. But in my own electorate I know of an industry that was offered financial assistance by the New South Wales Government if it would shift to the coalfields area. If this industry was to move it would almost be a death blow to the country town in which it is established. So I think that too much emphasis has been placed on particular areas in New South Wales and not sufficient thought given to the overall picture. I believe that the Commonwealth Government should have discussions and closer co-operation with the State Governments in regard to this matter. I believe that decentralisation is one of the most important and vital projects facing Australia at this time.

A great deal has been said regarding financial assistance to be given to the primary producer. Mr. Cutler, leader of the Country Party in New South Wales, has said that one of the major factors in this connection must be long-term loans by the banks to the primary producer. Members of the Country Party have said that in this House often. The availability of long-term loans on low interest is important because when a primary producer establishes himself he faces many problems. In his first year he might suffer a drought or floods and various other hazards. If the worry of repaying a loan within a very short space of time, or at a high interest rate, is on his mind then this may operate against him successfully establishing himself in primary industry. I can cite many examples of this including a case which occurred in my electorate in the Upper Macleay area.

Those associated with the dairying industry have had many problems to face over the last few years. The major problem confronting the dairying industry particularly in this area is bow to assist the primary producers to achieve a greater economic return without affecting dairying in other areas detrimentally. Much more attention will have to be given to this problem. One way we can assist is in rural research. In my electorate of Lyne, much is being done by some factories to assist the farmers in rural research, but the Government should concentrate on providing even more financial assistance as a tremendous amount of good work remains to be done.

There is only one thing that I want to emphasise: This should not be allowed to remain in what one may describe as the academic sphere. We have to get the results of this research out of the academic sphere and onto the properties themselves. Unfortunately, we have found in a number of instances that a tremendous amount of research work has been done and yet no practical application has been directed into the correct channels. I believe, as I have said, that this is something on which we should concentrate in order to give the necessary assistance so that we can continually expand production without further increases in costs, the effects of which we have seen lately. The man on the land has the problem of facing higher costs in respect of the commodities that he buys.

In this debate, Sir, a great deal has been said about increased charges for telephone services provided by the PostmasterGeneral’s Department. May I say that, like many of my colleagues, I am not satisfied with the telephone services provided in country areas? We shall not be satisfied until these services are 100 per cent, efficient. Opposition members have made a great deal of the increase in installation charges and rentals for telephones in metropolitan areas. I do not want to argue the rights or wrongs of that issue at the moment. I just point out that certain people in country areas have to pay the cost of a line, posts and everything else needed to connect telephone services to properties. In some instances, the cost is as much as £100 or £150. On top of this, these people still have to pay rental and charges for calls. Honorable members opposite may talk about the hardship that they say is imposed on the residents of metropolitan areas, but 1 point out that the problems of the country man in relation to telephones also should be considered.

Some time ago, I suggested that the Postmaster-General’s Department should be separated from the Public Service and be established as a commission. I still believe that this could and should be done. The organisation would still have to be under ministerial authority, but it could be run as a commission in the way that many other commissions are administered. I believe that we face a problem relating to automation. On a number of occasions, I have suggested that a committee composed of members from both sides of both Houses of the Parliament be appointed to look into this matter of automation. I say frankly that I believe that we in Australia are not at present giving sufficient consideration to the problem of automation. If we do not do so very soon, the problem will be on us before we have worked out any way of solving it. I say sincerely that members of both Houses of the Parliament should be able to give the necessary thought and attention to this problem.

I turn now to the situation of local government. I consider that something should be done to assist this branch of government. I hope that the proposed consultation between the States and the Commonwealth will come to fruition in the not too far distant future. I believe that the States must understand and appreciate the problems of local government and that, with co-operation between them and the Commonwealth, something could be done to assist local government. This branch of government is a very important part of our democratic system and I believe we could do a great deal to assist it. But, as I have just said, the State Governments as well must accept their share of responsibility for finding a complete solution to the problem.

In conclusion, Sir, I want to say something more about defence. I have been rather disappointed at the attitude to defence taken by some Opposition members, particularly with reference to our relations with the United States of America. On many occasions, honorable members opposite have said that this Government has no policy of its own, but just follows after the Americans in whatever they do. This implies, of course, that what the United States does is wrong, for surely it would be intelligent and sensible for us to follow that country if what it did was right. Therefore, if there is criticism of our following the United States and doing what it docs, I assume that this means there is criticism of what the United States has done. Nobody would say that everything the United States does is correct.

Surely in the situation in which we find ourselves and in the situation which we see developing in Asia at this particular moment - as my leader, Mr. McEwen, said the other evening in the debate on the Ministerial statement on international affairs - when you have a friend you stand by him as you hope he, in a time of . danger, will stand by you. Surely honorable members opposite appreciate that we have a particular and a peculiar opportunity, being a European nation in an Asian area, of making a valuable contribution to this area and its politics.

If we look at the contributions Australia has made through the Department of External Affairs and through the Department of Trade with its Trade Commissioner Service, over the last 12 or 15 years, we can be proud of the achievements of Australians in this area. Do not forget that these achievements were made at the instigation of the Australian Government.

If we look at Papua and New Guinea we find that we have accepted responsibility to assist the people of that area. I hope that we establish a university there so that the people of Papua and New Guinea and the children of the administrative folk will be able to attend it. If we look at the contributions we have made in the Asian area we can be proud of what we have achieved. It is about time that honorable members opposite realised that we in Australia have made contributions and ceased knocking everything we have done and implying that Australia has made no contribution at all.

Debate (on motion by Mr. Mortimer) adjourned.

page 514

ADJOURNMENT

The Parliament

Motion (by Mr. Adermann) proposed -

That the House do now adjourn.

Mr WENTWORTH:
Mackellar

– There is a small nursery rhyme which I think should be repeated to the House. It goes like this -

Oh what a tangled web we weave When first we practise to deceive.

Last night in the House, when referring to the formation of the Yugoslav Settlers Association, the honorable member for Yarra (Dr. J. F. Cairns) used these exact words, which are reported at page 417 of “ Hansard “-

With regard to the formation of the association, my knowledge of its existence at the timeI made the statement on 13th May was that it had come into existence only a few weeks before.

The honorable member for Yarra on 19th February was one of the signatories to a letter on behalf of the association, and in that letter it was asserted that the association was in existence on the preceding 29th November. I need say no more.

Dr J F Cairns:
YARRA, VICTORIA · ALP

.- Last night the honorable member for Mackellar (Mr. Wentworth) chose to say something to the effect that I had made false statements and that other statements that had been made had given the lie to what I had said. I answered him immediately and showed that in substance his charges were groundless. I said that I would examine what he had said in detail and, if necessary, comment on his detail. I have done so and find that his speech contains not only a complete failure to support his charges but also a series of errors and false statements which he himself must explain.

Let me have a look at the substance of his charge: First, I had signed a letter on 19th February 1964 which stated that on 29th November 1963 members of the Ustasha planted ether bombs at one of the Association’s meetings to celebrate Yugoslav National Day; and again, on 31st December 1963 at their own New Year’s Eve dance attended by about 300 people, members of the Ustasha threw gas bombs into the crowded hall; and again, on 9th February 1964, in the absence of any Association members, members of the Ustasha broke into their cluub rooms and destroyed property. Then, says the member for Mackellar, because there are references to an association which was in existence on 29th November, 31st December, and 9th February and which was mentioned in a letter signed by the member for Yarra, he must have been misleading the House, telling lies, when he said on 13th May that the Yugoslav Settlers Association had only been in existence for a few weeks.

The explanation of why this biased interpretation is not correct is contained in the statement made by the member for Mackellar himself. He said that there had been a Dalmatian Settlers Association before there had been a Yugoslav Settlers Association. This is so. As far as I was aware until some time after 13th May 1964, I believed the association referred to in the letter of 19th February relied upon by the member for Mackellar was in fact this association. I believed until some time after 13 th May that this name, Yugoslav Settlers Association, had been adopted no earlier than February 1964, as I said at the beginning, and as I said last night, although I had known that an association had existed for some months and that it had clubrooms at 220 Gertrude Street, Fitzroy. But the member for Mackellar did not leave room for this possible interpretation. He chose the other interpretation and not only to accuse me of lies but also to seek the maximum audience for his biased interpretation.

Let me direct the attention of the House to the errors and false statements made by the member for Mackellar himself. First, he claims that the letter upon which he relied was signed by me. There is no signature whatever on it, and it does not suggest that it was even signed by any of the people whose names are typed at the bottom. There is no suggestion there that anybody signed that letter. But no, the honorable member for Mackellar chooses to make a particular point about this letter having been signed by me. It is in contrast, very remarkable contrast, to the other letter produced last night by the honorable member for Mackellar, which says at the bottom: “ Signed, M. Jurjevic, Chairman “. There is quite a distinct difference, but this seems to escape the notice of the honorable member for Mackellar.

So his biased statement is made. The most that happened was, in my own case, that when this meeting was proposed I said I would sponsor it, and a statement was made which I read over in general to ensure that it agreed in substance with what I wanted to say. I was not concerned about its details. I merely took the word “Association” - in the quotes used by the honorable member for Mackellar - to refer to whatever association it was that had been in existence before at 220 Gertrude Street, Fitzroy, and at some time later had its name changed. To my knowledge until some little time ago that act of change took place some time in February.

As far as I was concerned, there has been no signature of mine on this letter at all. Yet the honorable member for Mackellar claims that this has been signed by me, although there is no indication on the letter iself that it has been signed by anybody. We sponsored this conference, and we did so over a general statement of that kind. I said I would allow my name to be used as a sponsor for the meeting and that a statement could be made along the lines I had indicated to show my support of that meeting.

The honorable member for Mackellar said that I had told the Press that the Association was formed to attack the Ustasha, when he went on to form his statement that I had told a lie or was misleading the House, with this ferocious kind of bias that the honorable member for Mackellar so clearly reveals. He made that statement, not knowing whether it was true or false apparently, because there is no evidence in his statement made here last night or in anything he produced to indicate that I told the Press that this Association was formed to attack the Ustasha. No evidence whatever was produced by the honorable member for Mackellar on that point.

Next I turn to a point of error or false reasoning, of which the honorable member for Mackellar was guilty. He said that I had said in the House that the Association had been formed to protect its own members from the Ustasha and that I had said to the Press that it was formed in order to attack the Ustasha. He made that contrast. I find no reference in the speech that the honorable member produced and no Press report of any kind to support these propositions. At no stage have I told the Press, nor has the honorable member for Mackellar ever produced a report to support his allegation made last night that I had told the Press, that this Association was formed to attack the Ustasha. But after having claimed that, he went on to say that I had made two statements which were incompatible, although he proved neither statement to have been made. Did he know that he had no evidence, or was he led by this unusual passion that he presents to mislead the House himself so fundamentally last night?

Finally, he claimed that Mr. Jurjevic, the Chairman of the Association, had said that the Association was formed to attack the Ustasha, and that Mr. Jurievic had said so in a letter to the Liberal Party. This letter was tabled in he House last night. What Mr. Jurjevic said in the letter was this -

Our Association was formed to help new arrivals from Yugoslavia to learn English, to help them to overcome their initial difficulties in their new environment, to facilitate their settling here and to help them become good citizens of our adopted country.

He was appealing to people. He said in the last sentence of this paragraph -

This foreign group -

He was referring to the Ustasha, which has upset and disturbed the process I have just mentioned - is a serious threat to our freedom and our democratic institutions and therefore it is our duty to fight the Ustasha and thus to safeguard and strengthen the democracy in our adopted country.

That is not enough for the honorable member for Mackellar. He interprets those remarks to mean that Mr. Jurievic said that this Association was formed to attack the Ustasha. Nowhere did Mr. Jurjevic say that the Association was formed in order to attack the Ustasha, as the honorable member for Mackellar claims.

What is the explanation? Was the honorable member unable to read the letter? Was he so biased that he twisted what he had read into what he said? These circumstances strongly suggest that the honorable member for Mackellar is so extreme, biased and unreasonable in his accusations that no one is justified in treating seriously any of his paranoiac accusations. I do not propose to treat them seriously ever again in this House. Everything the honorable member said has been disproved. He has made false and misleading statements himself. I now challenge him to get up at the first opportunity and to explain these false and misleading statements, to explain whether they are the result of this strange passion that grips him and to explain whether he has any right to claim the trust of this House on any matter or veracity whatever.

Mr Wentworth:

– I ask for leave of the House to answer the matters brought forward by the honorable member for Yarra.

Mr DEPUTY SPEAKER:

– Is leave granted?

Mr Luchetti:

– No.

Dr J F Cairns:
YARRA, VICTORIA · ALP

– He can have leave from me.

Mr DEPUTY SPEAKER:

– Order! Is leave granted?

Dr Cairns:
YARRA, VICTORIA · ALP

– I will not stop anything. The only excuse he can have at this stage is that he is stopped from replying.

Mr DEPUTY SPEAKER:

– Order! The honorable member for Mackellar asks for leave to make a statement. A refusal by one honorable member is sufficient to deny leave. I have heard a “ No “ and therefore I take it that the honorable member for Mackellar is not granted leave by the House to make a statement.

Mr Wentworth:

– Not being granted’ leave, may I make a personal explanation? lt does not matter; I will leave the matter until next week. It is obvious that the Labour Party does not want me to answer.

Mr UREN:
Reid

.- I just want to bring a particular matter to the notice of the House about the smear that has been made by the honorable member for Mackellar (Mr. Wentworth) against the honorable member for Yarra (Dr. J. F. Cairns). This is in regard to the old bogy of playing up to the Press when making accusations or smears against a member of the House. We know that it has been the practice for many years for certain Government supporters - I do not say all Government supporters; only certain elements on the back bench on the Government side - to play up to the Press, and to get in touch with certain pressmen so that they will be in the gallery when a smear is made against an honorable member.

We know that last Thursday night the honorable member for Watson (Mr. Cope) gave a very clear account of the eccentric background of the honorable member for Mackellar. It is interesting to note that no newspaper, including the Sydney “Daily

Telegraph “, published one word of that. However, the smear made last night by the honorable member for Mackellar was given headlines by the Sydney “Daily Telegraph “. It is only after a little research that the picture becomes clear. In the early editions of the Sydney “Daily Telegraph “ no mention was made of the speech by the honorable member for Mackellar, but the late edition of the paper which is circulated in Sydney and was available in the Library carried the following headlines -

Cairns accused.

Statements on Croats challenged.

The report then says -

Mr. Wentworth (Lib.), (N.S.W.) tonight accused Dr. Cairns (Lab.), (Vic.) of “deliberate and calculated misrepresentation.”

Then the article goes on. It is remarkable how the honorable member, such an unbalanced member, can get such a wide press, particularly in the Sydney “Daily Telegraph “. I say this to the remainder of the pressmen in the gallery: So far as I can see from the research I made, no other pressman took the honorable member seriously. At least the other pressmen know that certain smearing accusations were made and that the honorable member for Yarra said: “I will look at the charges and then I will answer them.”

For far too long have we heard smearing accusations from honorable members on the Government side of the House against Opposition members. We know that the honorable member for Yarra raised the matter of the Ustasha movement and surely all honorable members will agree that this movement is un-Australian in character. All the honorable member for Yarra has asked is that an inquiry be made. Questions were placed on the notice paper some six months ago and it has taken a long time for the Government to answer them. However, the Prime Minister (Sir Robert Menzies) has said that he is now making a thorough investigation and he will make a statement next week. I will be very pleased to hear his statement. Surely members on both sides of the House want to clear up the position in regard to this extremist organisation. If in fact there are unAustralian activities, let us clear the matter up and let us get a little bit of fresh air into this matter. I hope that there will be a more balanced approach and that the smearing accusations which have been laid by the honorable member for Mackellar at the door of the honorable member for Yarra will cease.

I could say many things about the collusion with certain pressmen, but of course these matters are sub judice. I assure you that when the time is ripe I will give the House plenty of evidence to look at. If the House desires, 1 will make it available to the Privileges Committee. I hope too, that honorable members will be objective. I think that the charges and accusations made by the honorable member for Yarra have been fair. I think also that the counter-charges and smears by the honorable member for Mackellar have gone on for far too long.

If members on the Government side, particularly Country Party members, desire to align themselves with the honorable member for Mackellar, they may do so. However, if they do support the honorable member for Mackellar in the charges he has made, they should get up and do so openly. I think that there are decent people on that side of the House with some balanced thoughts who are embarrassed by the honorable member for Mackellar. I know that the honorable member for Mackellar is a most irrational and unbalanced person, and quite clearly he makes charges very loosely and has not the courage to back them up outside.

No other newspaper besides the “Daily Telegraph “ has published the report I have mentioned. We know the type of journalism that the “ Daily Telegraph “ carries on. It is particularly interesting to note that although normally Alan Reid has his byline over his articles, as head of the Canberra Bureau of the “ Daily Telegraph “, for some reason or other he decided to withdraw his name from that one.

The statements made by the honorable member for Mackellar are only character assassinations. There has not been the slightest substantiation of any of the charges made, and I hope that honorable members on the Government side with balance will take some cognisance of this fact. I hope also that some tolerance and understanding will be shown by them, and that they will not resort to the smears and accusations that have been made, particularly by the honorable member for Mackellar.

Question resolved in the affirmative.

House adjourned at 11.42 p.m.

page 518

ANSWERS TO QUESTIONS

The following answers to questions were circulated -

Decimal Currency. (Question No. 339.)

Mr Reynolds:

s asked the Treasurer, upon notice -

  1. Has the Government yet made a decision on what symbol will be used to indicate the dollar sign in the new decimal currency system?
  2. If so, what is it?
  3. If a decision has not been made, has consideration been given to the use of “ D “ or “ DA “ (Australian dollar) to avoid confusion with the American symbol?
  4. Would the use of either of these alternatives obviate considerable expense in the conversion of typewriters and other office machines?
Mr Harold Holt:
LP

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

  1. Yes. I first announced the decision in answer to a question in this House on 19th September 1963. I repeated the decision when announcing, on 20th February 1964, the arrangements for compensation for cash registers, adding machines and accounting machines. More recently, the Decimal Currency Board has issued, with the Government’s approval, a statement covering notation in decimal currency which included reference to the symbol for the dollar.
  2. The symbol chosen is a capital S with two vertical strokes superimposed on it.
  3. Various possible alternatives to the symbol chosen were given full consideration before the decision was made. Any confusion with dollar signs used in oversea currencies will be avoided by placing the capital letter A after the symbol, thus - SA.
  4. While the alternatives suggested would avoid the adaptation of some typewriters and other office machines, one reason for adopting the $ symbol is that it is already fitted to many machines. Moreover, the Decimal Currency Board has emphasised that the symbol will not be prescribed for general purposes and may be varied within reasonable limits. For example, in the case of typewriters which have no dollar symbol, it will be possible to use a capital S crossed by a diagonal stroke, until the owner considers that the expense of converting to a dollar symbol would be justified.

Telephone Services. (Question No. 386.)

Mr Turner:

r asked the PostmasterGeneral, upon notice -

  1. How many applications for telephones were outstanding in (a) metropolitan areas and (b) country areas in each State at 30th June in each of the years 1960, 1961, 1962, 1963 and 1964?
  2. How many such applications were outstanding in each electoral division in New South Wales at the same dates?
  3. What was the average cost to the Department of installing a telephone in (a) metropolitan areas and (b) country areas in each State during the year 1963-64?
  4. What (a) scale of charges for installing telephones and (b) scale of rentals charged for telephones operated immediately prior, and subsequent, to the 1964-65 Budget?
Mr Hulme:
LP

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

  1. The number of deferred applications for telephone service at the dates shown are -
  2. post Office records of telephone demand are not normally classified in order of electoral divisions and it is regretted, therefore, that the figures for past years are not available. However, a special study has been carried out to show the. number of deferred applications in each electorate as at early June 1964, and the figures for New South Wales are -
  3. Separate figures for each State are not available, but the Commonwealth average is - (a) £540 for each new metropolitan service; (b) £620 for each new country service. 4. (a) At present, a service connection fee of £10 applies for the provision of each new or additional telephone exchange service, including the removal of a service from one address to another. This fee operates uniformly, except where a service already installed in premises is taken over on an intact basis by the incoming occupant. In such cases, a connection fee of 10s. is payable.

As from 1st October 1964, it is proposed to increase the sen-ice connection fee of £10 and intact connection fee of 10s. to £15 and £1 respectively, (b) The existing rental charges for telephone exchange services and those proposed for introduction from 1st October 1964, are as follows -

Department of Supply. (Question No. 391.)

Mr Collard:

d asked the Minister for Supply, upon notice -

  1. Was an auction sale on behalf of the Commonwealth recently held at Talgarno in the north of Western Australia?
  2. If so, was a Perth finn of auctioneers granted the conduct of the auction?
  3. What total amount was realised from the sale?
  4. How much of the amount will the Commonwealth receive?
  5. How much did the auctioneering firm receive by way of (a) expenses and (b) commission?
  6. Were tenders called for the conduct of the auction; if so, in which Western Australian papers was the calling of tenders advertised, bow many tenders were received, and from which firms were they submitted?
Mr Fairhall:
Minister for Supply · PATERSON, NEW SOUTH WALES · LP

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

  1. Yes.
  2. Yes- H. E. Wells and Sons.
  3. £25,215.
  4. Under current Treasury Instructions the whole of the amount realised is paid to Consolidated Revenue and the expenses are met from departmental estimates.
  5. Auctioneers operating on behalf of the Department of Supply throughout Australia receive commission on a standard basis as follows -

Five per cent, on first £5,000.

Three and a half per cent, on second £5,000.

Two and a half per cent, on third £5,000.

One and a half per cent, on fourth £5,000.

One per cent, on balance.

The auctioneer’s commission was therefore approximately £677.

The following expenses were also allowed for this sale-

Air fares at cost.

Accommodation and travelling allowance in accordance with Public Service Regulations - i.e. £7 6s. 6d. weekly.

The total expenses paid to the auctioneer were estimated at £450.

  1. Tenders are not called for auctioneering services for the Department of Supply. The department continues the practice of the Commonwealth Disposals Commission, of appointing auctioneers from an approved panel and makes a selection, taking into account experience, capability, organisation and financial standing. For this special sale my department selected H. E. Wells & Sons as the most suitable auctioneer.

Cite as: Australia, House of Representatives, Debates, 20 August 1964, viewed 22 October 2017, <http://historichansard.net/hofreps/1964/19640820_reps_25_hor43/>.

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