Senate
27 November 1946

18th Parliament · 1st Session

  1. Senate
  2. 18th Parliament
  3. 1946

The President (Senator the Hon.;

Gorden Brown) took the chair at 3 p.m., and read prayers.

page 589

QUESTION

SHIPPING

OVERSEAS AND INTERSTATE services.

Senator TANGNEY:
WESTERN AUSTRALIA

– In view of the high cost of. war-time sea ‘transport between Great Britain, and Australia, and the inconveniences which it entails, will the Minister for Supply and Shipping have inquiries made as to the possibility of allocating two, four, or six berth cabins to- mothers travelling with young children, rather than having as many as ten children and ten women in one cabin? ‘Will he also ascertain whether any reduction of fares is contemplated for such dormitory accommodation, as £109: sterling is exorbitant, particularly in view of the primitive conditions on board transports such as Orvieto, which recently arrived at Fremantle from the United Kingdom, and about which I have received complaints?

Senator ASHLEY:
Minister for Supply and Shipping · NEW SOUTH WALES · ALP

– I shall have inquiries made, and shall supply the honor able senator with the desired information.

Senator ARNOLD:
NEW SOUTH WALES

– Oan the Minister for Supply and Shipping inform the Senate when interstate travel facilities by water are likely to be made available again to the Australian people?

Senator ASHLEY:

– The difficulties in connexion with interstate travel facilities by water are the result of a world-wide shortage of shipping. The conversion of ships from war uses to the requirements of peace-time transport is a slow job; it takes as long as 12 months to convertsome vessels. Every endeavour is being made to expedite the work of conversion and also to construct additional ships, so that the needs of the Australian people may be met as early as possible.

page 590

RAIL TRANSPORT

Trans-Australian Services

Senator COURTICE:
Minister for Trade and Customs · QUEENSLAND · ALP

– On the 7th November, Senator Leckie asked whether steps would be taken by the Commonwealth Government to provide for trans-Australian railway passengers who, owing to the dislocation of train services because of strikes, were stranded at Adelaide, and were unable to find accommodation in that city. He suggested that there should be some proper apportionment of responsibility between the Commonwealth and the States for getting these people to their destinations.

The Minister for the Interior has now furnished the following answer to the honorable senator’s question: -

It is gathered that Senator Leckie’s remarks referred to the situation which arose recently, when a strike occurred An the Victorian railway system which necessitated the cancellation of express trains from Adelaide to Melbourne. This meant that passengers from Western Australia for Victoria, New South Wales and Queensland could not proceed beyond Adelaide, while the strike continued, and were obliged to find temporary accommodation there.

It was first understood that the stoppage in Victoria would be for one day only, and had the stoppage been so limited, passengers from Western Australia would not have been affected. The stoppage, however, was extended beyond one day, consequently, passengers who had arrived in Adelaide from Western Australia on the Monday, or were en route on the train out of Perth on the Monday, were obliged to remain at Adelaide.

Immediately it became apparent that the stoppage in Victoria would last some time, one train from Western Australia was cancelled, and steps were taken to warn intending passengers by later trains of the position both in regard to lack of connecting trains beyond Adelaide and the extreme scarcity of accommodation in that city. The CommonwealthRail ways Commissioner personally contacted the Secretary for Railways, Perth (in the absence of the Western AustralianRailways’ Commissioner), andarranged for action to betaken for all intending passengers to beadvised that there would be no connecting train beyond Adelaide and that there was no accommodation to be obtained in that city. Intending passengers for beyond Adelaide were strongly advised to remain in Western Australia. Arrangements were also made for this informationto be broadcast in Western Australia.

Prior to the departure of the next train from Perth the Commonwealth Railways Commissioner again discussed the matter with the Secretary for Railways, Western Australia, when the latter advised that notwithstanding; the warnings given passengers were still clamouring for train accommodation to the eastern States. At the Commissioner’s request he then agreed in additionto continuing to issue the warning to obtain a signed undertaking from all passengers that they fully understood the conditions in regard to travel beyond Adelaide and the non-availability of accommodation there.

The position is that practically the whole of the passengers commenced their journeys on a State railway system and terminated on another State system, the Commonwealth line being an intermediate section only between the State systems.

Every endeavour was made by the Commonwealth Railways to ensure that passengers were aware of the conditions and the danger of being inconvenienced at Adelaide, but apparently passengers preferred to take the risk involved.

It cannot be agreed that in the circumstances responsibility in regard to the provision of transport beyond Adelaide rested with the Commonwealth.

page 590

QUESTION

RE-ESTABLISHMENT

Land Settlement ofex-servicemen.

Senator ASHLEY:
ALP

– On the 15th November SenatorCollett referred to a reply given to him in answer to a questionrelating to a statement said to have been made by the Director of Land Settlement inWestern Australia on the subject of the settlement of soldiers in that State. The reply given to Senator Collett that the statement of the number of Western Australian ex-service approved applicants for farms under the war service land settlement scheme only 50 percent. might be successfully accommodated within threeyears, if made at all, was not made by the Commonwealth Director of War Service Land Settlement or any other Commonwealth officer, was correct. There is only one

Director of Land Settlement in the Commonwealth Service, namely, Mr. W. A. McLaren. He was not in Western Australia on the 30th September last and definitely did not make the statement. Apparently the statement mentioned by SenatorCollett was made by theWestern AustralianState Director of Land Settlement, Mr. Fyfe, who is not a Commonwealth official. SenatorCollett states that he was present at the conference, and I accept without hesitation his assurance that the words mentioned were spoken.

Senator COOPER:
QUEENSLAND

asked the Minister representing the Minister for Post-war Reconstruction, upon notice -

  1. How many returned soldiers from World War II. have been rehabilitated under the land settlement scheme in - (a) Queensland; (b) New South Wales; (c) Victoria;

    1. South Australia; (e) Western Australia; (f) Tasmania?

  2. How many single-unit farms have been purchased for the rehabilitation of ex-service personnel from World War II.?

Senator McKENNA:
Minister for Health · TASMANIA · ALP

– The Minister for Post-war Reconstruction has supplied the following answers : -

The rehabilitation of ex-servicemen on the land is effectedunder the war service land settlement agreements between the Commonwealth and the States and by means of agricultural loans of up to £1,000 under the CommonwealthReestablishment and Employment Act.

The number of ex-servicemen reestablished underthe two schemes are - War service land settlement scheme - New South Wales, 40; other States, nil. Agricultural loans approved under the Re-establishment and Employment Act - New South Wales, 1,389; Victoria, 500; Queensland, 231; South Australia, 214; Western Australia, 756; Tasmania, 110; total, 3,296. Of the loans approved; the numbers used to finance the purchase of single-unit farms are - New South Wales, 96; Victoria, 179; Queensland, 50: South Australia, 26; Western Australia, 333; Tasmania, 53; total, 737.

The number of single-unit farms purchasedfor settlement under the war service laud settlement scheme - 25.

page 591

QUESTION

PRICES OF MEALS

Senator TANGNEY:

– I ask the Minister for Trade and Customs whether the regulations fixing the prices of meals have been repealed insofar as they apply to Sydney ? If not, is the Minister aware that restaurants in that city are charging up to 18s. for meals whilst in Perth pro prietors of similar restaurants havebeen fined for charging an additional 3d. above the prices fixed in 1942? Will the Minister guarantee that uniformity of prices shall apply throughout Australia in order that no State will be unduly penalized in this respect?

Senator COURTICE:
ALP

– I have no knowledge of the position mentioned by the honorable senator. The regulations under which the prices of meals have been fixed have not been repealed in any State. If the honorable senator will furnish me with detailsof breaches of the Price Fixing Regulations by proprietors of restaurants I shall take the necessary action to discipline offenders.

page 591

QUESTION

SUGAR

Senator ALLAN MacDONALD:
WESTERN AUSTRALIA

– In view of the serious shortage of sugar, particularly as it affects the larger commercial users, and in view of the fact that the shortage is due to extreme drought conditions in the sugar growing areas of Queensland will the Minister for Trade and Customs recommend that the Sugar Board grant temporary additional licences to licensed growers to grow more sugar in order to overcome the present temporary shortage?

Senator COURTICE:
ALP

– The present shortage of sugar is due to the serious drought in Queensland which, unfortunately, is continuing. The Government will do its utmost to ensure that sugar is rationed in such a way as will do justice to all users of the commodity. I cannot accept the honorable senator’s suggestion that permits he given to additional growers in order to get over the difficulty; because extension of the present sugar growing areas would involve other difficulties, such as, the provision of additional milling facilities. It appears to me that the honorable senator has not given much thought to the matter. The problem of rationing sugar is receiving the fullest consideration of the Government.

page 591

QUESTION

COAL

Senator McLEAY:
SOUTH AUSTRALIA

– I ask the Minister for Supply and Shipping whether the Joint Coal Authority which was to be set upby the Commonwealth and the Government of New South Wales has yet been appointed? If not, is the rumour correct that the appointment of that body is being delayed until a successor to His Royal Highness the Duke of Gloucester has been appointed?

Senator ASHLEY:
ALP

– It is true that the proposed coal authority has not yet been appointed. The appointment of a new Governor-General, facetiously referred to by the Leader of the Opposition, has not any bearing on the subject. I assure ‘him that Che Government wishes to have this body constituted as speedily as possible. Extreme difficulty has been met in obtaining the right men to appoint to the board. The matter concerns not only the Commonwealth Government, but also the Government of New South Wales, and consultations are being carried out almost daily. The appointment of the new authority will not be delayed for one day longer than .is necessary.

page 592

QUESTION

WHEAT

Senator GIBSON:
VICTORIA

– Will the Minister representing the Minister for Commerce and Agriculture bring ito the notice of Cabinet the necessity to grant permanent licences to grow wheat, -rather than temporary (licences, so that wheat-farmers may make preparations to plant the ensuing seasons or op?

Senator COURTICE:
ALP

– I shall place the honorable senator’s question before the Minister for Commerce and Agriculture who will furnish an answer in due course.

page 592

QUESTION

WAGE-PEGGING

Senator McLEAY:

– Has the PostmasterGeneral any report to make in connexion with the Government removing wage-pegging regulations, so that increased wages may be paid to employees in the Postal Department?

Senator CAMERON:
Postmaster-General · VICTORIA · ALP

– This is a matter of Government policy, on which I do not propose to comment.

page 592

QUESTION

OVERTIME

Senator McLEAY:

– As officials of certain trade unions nave passed resolutions preventing their members from working overtime, will the Minister for Health and Social Services say whether that is an offence against the law? If so, does the Government propose to take appropriate action against the offenders?

Senator McKENNA:
ALP

– I am not aware that union officials have advised men not to work overtime, and -I doubt very much whether they would be committing an offence if they did. However, I shall investigate the position. I invite the Leader of the Opposition to draw my attention to any regulation that he considers would render this practice illegal.

page 592

ADDRESS-IN-REPLY

PRESENTATION to the GOVERNOR.General

The PRESIDENT:
.Senator the Hon. Gordon Brown

– I have ascertained that His Royal Highness the GovernorGeneral will be pleased to receive the Address-in Reply to his opening Speech at Government House at noon to-morrow. I invite as many honorable senators as - can make it convenient to do-so to accompany me.

page 592

QUESTION

IMPORT LICENCES

Senator COURTICE:
ALP

– In reply to a question asked by the Leader of the Opposition (Senator McLeay) a few days ago, I promised to make a statement on the attitude of the United Kingdom Government towards the administration of import licensing as it affects sterling goods. I now inform the honorable senator that no protest has been received from the United Kingdom Government concerning any violation of the Ottawa Agreement by the withholding of import licences for United Kingdom goods, either by the Division of Import Procurement or by the Central Import Licensing Branch of the Department of Trade and Customs which has taken over this part of the work of the division. It was made clear on behalf of the Government when the import licensing system was first applied to goods of sterling origin, and has been confirmed at various times subsequently, that the restrictions on imports were not in any sense to be regarded as protective measures for Austraiian industry. I again give the honorable senator that assurance. The import restrictions on United Kingdom and other sterling origin goods are maintained solely for balance of payments purposes. There is no dV.ibt that quantitative import restrictions imposed for exchange reasons, even when operated on the liberal lines of the current Australian restrictions on sterling goods, have a protective effect in some instances. This cannot be avoided. But the effect is entirely incidental and temporary, and that point has always been made clear. The United Kingdom Government acknowledges that the same effect results from its own import licensing control. It, too, lias clearly announced that the incidental protection cannot be maintained beyond the point which the balance of payments position makes necessary. The Commonwealth Government will always give the closest consideration to representations from the United Kingdom Government in specific cases in which the import licensing system is regarded as affording protection to .Australian manufacturers. There have heen frequent consultations on matters such as these. In fact, the whole question of the relationship between the Australian import licensing system and the Ottawa Agreement has been fully discussed between the two ‘Governments and the United Kingdom Government has invariably .expressed its full satisfaction with the Australian policy. Its most recent statement to this effect was made in April, 1946.

page 593

IMMIGRATION

GoVEBKAtENT POLICY.

Senator ARMSTRONG:
Minister for Munitions · New South Wales · ALP

– I lay on the talble a copy of the statement made in the House of Representatives on the 22nd November, by the Minister for Immigration and Minister for Information (Mr. Calwell) .on Government policy in respect of immigration (vide page 502).

page 593

QUESTION

TARIFF BOARD REPORTS,

Senator COURTICE:
ALP

– I lay on the table the reports of the Tariff Board on the following subjects : -

Felt polishing bobs or wheels - Question of the rates of duty that should be imposed.

Magnet winding wire - Question of the rates oT duty that should be imposed.

Ordered to be printed.

page 593

QUESTION

TUBERCULOSIS

Control and Afteb-tbeatm:ent - Allowance to Sufeebebs - Sanatobia.

Senator COOPER:

asked the Minister for Health and Social Services,, upon notice -

  1. Has the Minister read a statement made by Dr. Sir Henry Simpson Newland, president of the Federal Council of the British Medical Association, to the effect .that grants recently made to the State Governments by the Commonwealth Government for an anti-tuberculosis campaign were absurdly inadequate?
  2. In view of this condemnation of .the Commonwealth Government by such an eminent medical authority, will the Minister undertake to revise the Government’s attitude towards the all-important question of the control and after-treatment of tuberculosis?
  3. Will the Minister, in view of this statement, indicate whether he favours a substantial increase in the allocation of federal funds to the States for tuberculosis treatment?

  4. Will the Minister take steps to ensiiTe the provision of nothing less than a living wage allowance for tubercular suffering breadwinners in all States ?

    1. Will .the Minister give urgent considera tion to a programme providing for the construction, equipment and staffing of adequate sanatoria throughout Australia?
Senator McKENNA:

– The replies to the honorable senator’s questions are as follows : -

  1. . No ; but I may add that moneys provided by the Commonwealth Tuberculosis Act 1945-46 have not yet been taken up by all States. 2, 3 and 4. These three questions involve government policy, which the honorable senator will recognize is not usually dealt with in answers to questions. The Governor-General, in his Speech to Parliament a few days ago, referred to the Government’s intention to explore the possibility of fuller collaboration with the States for the prevention and treatment of tuberculosis.
  2. The provision and staffing of sanatoria have customarily .been the responsibility of the States. Many States have programmes of con struction ready which will be put into forct when materials and labour are available. Moreover, the late Prime Minister, -Mr. Curtin, and the Prime Minister, Mr. Chifley, have both made it clear that the Commonwealth will share with the States some part of the capital cos.t when the States -are in a position to put forward positive proposals which can be embodied in a general construction programme.

page 593

QUESTION

COMMONWEALTH BANK

Dealings with Trading Banks and State Attthobities - New Bbanches.

Senator LAMP:
TASMANIA

asked the Minister representing the Treasurer, upon notice -

  1. What is the total amount of the special1 accounts lodged by the .trading banks with the-

Commonwealth Bank under Part II., Division 3, of the Banking Act 1945?

  1. As the trading banks are still able to create credit, will the Government propose to the Commonwealth Bank a limit on such funds?
  2. Will the Treasurer explain how these funds are to he used?
  3. Has Part VII. of the Banking Act 1945 been put into operation?
  4. If so, how many States and local governing authorities have been affected?
  5. How many new branches of the Commonwealth Bank have been opened since the 1st January, 1945?
Senator ASHLEY:
ALP

– The Treasurer has supplied the following answers : -

  1. At the 18th November, 1940, the amount was £258,067,000.
  2. The principal powers of the trading banks to create credit have been brought under the control of the Commonwealth Bank by the provisions of the Banking Act 1945 which give the Commonwealth Bank authority to lay down the advance policy to be followed by banks and to control the purchase of securities by banks. The Government does not consider that it is necessary to impose any further control.
  3. Special account funds lodged by the trading banks with the Central Bank are invested by the latter mainly in treasury-bills and London funds.

  4. Part VII. of the act is in force but no doubt the honorable senator is particularly concerned to know whether section 48, which refers to the banking business of States and State authorities is fully operative. The position in this regard is as follows: -

    1. Having regard to the expansion that is taking place in the business of the Commonwealth Bank and the consequent difficulty of obtaining suitable staff and sufficient working space, it has been recognized at all times that it would not be possible for the Commonwealth Bank to take over simultaneously all the banking business of the States and State authorities that do not bank with it at present.
    2. Section 48 was therefore drafted in such manner that the change-over could be made gradually and thus not inconvenience the States and State authorities or the bank.
    3. The position is constantly under review and steps to bring the section into operation as opportunity offers from time to time will be taken as soon as it is possible to do so without inconvenience to the parties concerned.
  5. See answer to question No. 4.
  6. Since the 1st January, 1945, the Commonwealth Bank has provided full banking facilities at 50 additional points. At some 48 of these points savings bank facilities only had previously been available. The bank has an extensive branch opening programme now in hand covering approximately a further 125 points.

page 594

QUESTION

AUSTRALIAN NATIONAL FILM BOARD

Film Production : Cost

Senator COOPER:

asked the Minister representing the Minister for Information, upon notice -

  1. How many films have been produced by the films division of his department since the National Film Board came into existence?
  2. What were (a) the titles of such films, (b) the length, and (c) the cost?
  3. Have any of the films yet been screened; if so, where?
  4. Is it a fact that one film, dealing with the model village of the Minister for External Territories, in New Guinea, cost £3,000?
  5. If so, how does the cost compare with what a private film producing company would charge to make a similar film?
Senator ARMSTRONG:
ALP

– The Minister for Information has supplied the following answers : -

  1. Up to the 31st October, 1946, 23 films had been completed. Another 28 are in hand, of which six are in the editing stages, fourteen in the shooting stages and eight in the research or planning stage.

The fire in the Melbourne premises of the Films Division on the 25th March last, destroyed entirely a colour film on the Jacaranda Festival at Grafton, and two partly completed films, Cattle Stations of the Outback, and a film sponsored by Unrra.

  1. Jacaranda Festival (Grafton), 500 feet, 16 mm., £365; Building a BrickHouse, 400 feet, 10 mm., £420; Selection Interview, 400 feet, 10 mm., £728; Something to Eat, 960 feet, 35 mm., £854;Back in Circulation, 700 feet, 35 mm., £650; Story of a City,600 feet, 16 mm., £1,150; Native Earth, 1,200 feet, 35 mm., £2,750; Pacific Terminal, 1,000 feet, 35 mm., £676; Western Gateway, 1,000 feet, 35 mm., £900; Cinderella on Strings, 1,000 feet, 35 mm., £676; Australian Diary Nos. 1 and 2, 1,000 feet, 35 mm., claims by suppliers still outstanding; Men Wanted, 1,000 feet, 35 mm., claims by suppliers still outstanding; School in the Mail Bag, 2,000 feet, 35 mm., claims by suppliers still outstanding; and fourteen newsreel and Treasury loan short items.
  2. All of the films produced have been screened. Some productions designed as instructional or technical films are not available for public screenings. The department’s overseas bureaux make extensive use of all films produced for the National Film Board, foreign language versions being produced when necessary. Native Earth is being shown in leading theatres in capital cities at the moment, and was rated by one newspaper as “ the film of the week “. Last week-end School in the Mail Box was similarly acclaimed.
  3. No film has been made dealing with a model village in New Guinea. The Dim Native Earth, which is a portrayal of the success of the Australian administration of New Guinea cost less than £3,000 to make.
  4. The cost of film-making by private enterprise varies with the nature of the subject. Comparative figures are not available.

page 595

QUESTION

MINIATURE RIFLE CLUBS

Senator SAMPSON:
TASMANIA

asked the Minister representing the Minister for the Army, upon notice -

  1. Is it a fact that issues of .22 ammunition to open range miniature rifle clubs in Tasmania have been cancelled?
  2. Is it a fact that the Launceston Rifle Club has been and is run strictly as a musketry school, under instructor A. J. Kemp, not for sport or practice for old and experienced rifle shots, but to train young men and boys, whose success on passing into the fighting forces hae been outstanding, in the art of sniping and rapid?
  3. ls it a fact that if supplies of ammunition are not made available, operations of this school will bo suspended?
  4. Will the Minister issue instructions that 22 ammunition be made available for open ranges at once?
Senator COURTICE:
ALP

– The Minister for the Army has supplied the following answers : -

  1. During the war, open range rifle clubs lA’(31’(3 not permitted to carry out their normal shooting activities, but so that club members could obtain some practice, authority was given for .22 ammunition to be issued for use on miniature ranges. Now that the Government has approved of the resuscitation of the rifle club movement throughout Australia, the authority for this issue of .22” ammunition has been withdrawn. However the issue of .22 ammunition to authorized miniature rifle clubs hae not been cancelled. 2 a.nd 3. There is no official record of this.
  2. No. Stocks of .22 ammunition are such that issues must be restricted to the requirements of senior cadet training and approved practices and prize meetings of authorized miniature rifle clubs.

page 595

QUESTION

ALUMINIUM

Senator SAMPSON:

asked the Minister for Munitions, upon notice -

  1. What was Australia’s pre-war consumption of aluminium per annum?
  2. What is Australia’s consumption at the present time?
  3. Is it a fact that there is a world oversupply and that the present-day price is cheaper than the pre-war price?
  4. Is it a fact that many plants in Great Britain, Canada and the United States of America, established for war purposes, have now closed down because supply is in excess of demand?
  5. What tonnage of ingot aluminium is aimed at annually by the Australian Aluminium Production Commission?
Senator ARMSTRONG:
ALP

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

  1. Average yearly importations were 1,520 tons.
  2. Between 4,000 and 5,000 tons of ingot plus an unspecified quantity of fabricated imports.
  3. There is no evidence of a world oversupply. Present ingot prices are lower than pre-war.
  4. Certain government-owned plant in the United States of America (including those established in uneconomic conditions for war purposes) were as a matter of policy closed by the Government. A number have since been leased to private enterprise.
  5. Plant capacity will be 10,000 tons.

page 595

QUESTION

DRESS MATERIALS

Senator AMOUR:
NEW SOUTH WALES

asked the Minister for Trade and Customs, upon notice -

  1. Is it a fact that, in the future, the import of all materials for the manufacture of ladies’ dresses is to be subsidized?
  2. If so, will the Minister inform the Senate - (o) what will be the amount of the subsidies, and (6) when and in what manner will the subsidies be paid?
  3. Is it a fact that, if there is any great delay in the payment of the subsidies, it will be playing’ into the hands of large concerns, and will be the means of putting small importers out of business?
Senator COURTICE:
ALP

– The answers to the honora’ble senator’s questions are as follows : -

  1. No.
  2. Certain subsidies have been paid in respect of imported fabrics. It cannot be said at this juncture what will be paid in the future. ,
  3. There is no information to indicate that Government policy favours any one type of importer as against another.

page 595

QUESTION

SERVICE CANTEEN FUNDS

Senator JAMES McLACHLAN:
SOUTH AUSTRALIA

asked’ the Minister representing the Minister for Defence, upon notice -

  1. Is there any truth in the report that the Commonwealth Government intends to set upa central fund to take over the balance remaining in canteen and welfare funds of the three branches of the services?
  2. Is it intended to set up a government department to control these funds?
  3. In view of a statement made by theMinister for Air some time ago. that the credit standing to the Royal Australian Air Force Canteen Fund would ultimately b.e handed tothe Royal Australian Air Force Welfare Fund, will the Minister confer with his service colleagues with a view to presenting to the Senate a statement setting- out the Government’s intentions in relation to the balance standing to these welfare funds - a sum for all the services approximating £5,000,000 - in order that ex-members of these services and their dependants will secure the direct benefits originally intended and that excessive waste by an unnecessary central department to administer the fund will be avoided?
Senator ASHLEY:
ALP

– The Minister for Defence has supplied the following answers : -

  1. The Government proposal in regard to this matter was announced by the Prime Minister in Parliament on 19th July, 1946, when he said -

It is proposed that the whole of the surplus funds (of the canteens service) as they become available will be transferred to a trust for the benefit of members who served during the war and their dependants. It is contemplated that provision will be made for educational assistance for children of deceased and incapacitated servicemen and other necessitous and deserving cases. An interdepartmental committee is now working out machinery for setting up a trust for these purposes.

It is intended to introduce legislation to give effect to the proposals as soon as possible, when full information will be furnished concerning the three services.

  1. No; the funds will not be controlled by the Government. All funds will be held in trust by the trustees of the fund and applied by them under the conditions of the trust for the benefit of ex-servicemen and their dependants.
  2. A full statement will be made when the hill is brought before Parliament.
Senator COOPER:

asked the Minister representing the Minister for Air, upon notice -

  1. Is it a fact that the Minister or any other member of the Government promised that £850,000 canteen profits would be paid into the Royal Australian Air Force welfare funds?
  2. If so, when was such promise made and to whom?
  3. Was a Commonwealth co-ordinating body consisting of Air Vice-Marshal Jones and others appointed to deal with the profits?
  4. Is it a fact that the promise was not honoured and that the amount in question was paid into Consolidated Revenue?
  5. If not, will the Minister supply the Senate with full details of the position?
Senator CAMERON:
ALP

– The Minister for Air has supplied the following answers : -

  1. No.
  2. No such promise was made. On the 19th July,1946, the Prime Minister did, however, outline to the House the Government’s proposals in regard to surplus canteen funds. He stated that it was proposed that the surplus funds would be transferred to a trust for the benefit of members who served during the war and their dependants.
  3. An inter-departmental committee was set up to recommend to the Government, the best method of disposing of canteen profits for all three services. The Department of Air representative was Air Commodore G. J. Mackinolty and not Air Vice-Marshal Jones.
  4. I can definitely state that not one penny from canteen profits has been paid to consolidated revenue nor is there any intention so to do.

  5. The inter-departmental committee mentioned above has made recommendations for the disposal of canteen profits. These recommendations have already been accepted by the Government and legislation on the subject will be submitted to Parliament. The interdepartmental committee considered that if welfare or benefit funds were maintained within the resources of each of the services, unequal amounts percapita would be available for the provision of benefits to exservicemen and ex-servicewomen and their dependants, and this would give rise to dissatisfaction and criticism. The committee recommended, therefore, that there should be one fund to be known as the Services Canteens Trust Fund to which all the services would contribute from their canteen profits and from welfare and like funds, and that from this common fund, the following benefits would be extended to ex-servicemen and exservicewomen of all services and their dependants: -

    1. relief and assistance to members and ex-members and dependants of members,ex-members and deceased members who served during the war which commenced in September, 1939;
    2. educational assistance to children of members, ex-members and deceased members who served during the war which commenced in September, 1939.

The committee has also recommended that the Services Canteens Trust Fund should be administered by trustees which would include representatives of the three services. Provision will be made, however, that the services of the trustees of the existing Air Force Welfare Fund might be utilized as agents for the central trust to the greatest extent practicable in dealing with claims of members and exmembers, and dependants of ex-members and deceased members of the Royal Australian Air Force.

page 596

QUESTION

HOUSING

War Service Homes - Costs

Senator COOPER:

asked the Minister representing the Minister for Works and. Housing, upon notice -

  1. Will the Minister have a statement prepared showing the number of war service homes built in each State in 1942, 1943, 1944, 1945 and in each available quarter of 1946?
  2. How many applications were received for war service homes in each of the periods mentioned ?
Senator ARMSTRONG:
ALP

– The information requested by the honorable senator is being obtained and will be furnished as early as possible.

Senator COLLETT:
WESTERN AUSTRALIA

asked the Minister representing the Minister for Works and Housing, upon notice -

With regard to the acute shortage of housing and the alleged present-day high costs of bousing construction -

Is it a fact that because of the high costs a great number of intending builders of homes are prevented from proceeding with their plans?

Will the Minister approve of the appointment of a competent authority to investigate the causes of high prices of building materials and costs of construction, with a view to suitable legislative action? If not, why not?

Senator ARMSTRONG:

– The Minister for Works and Housing has supplied the following answers: -

  1. Home building, in Australia, is proceeding at the present time up to the fullest extent possible in the light of the resources available. No specific information is available, but it is believed some persons are deterred from proceeding with plans for home building because of prevailing building costs.
  2. No. The question raised by the honorable senator is mainly one for attention by the States, with whom rests the major constitutional power in regard to housing. In Western Australia, the Government recently appointed a commission to examine questions of the kind raised by the honorable senator. So far as the Commonwealth is concerned, the Prices Branch, which is administered by the Minister for Trade and Customs, has a special section devoted to investigation of building costs. This section works in close liaison with other sections controlling prices and building materials. It is recognized that costs have been rising, but the question is kept under continual observation and it is not considered that any amendment of the prices control legislation is considered necessary to maintain efficient control. In general, the present disabilities in regard to building in Australia are in large measure occasioned by the dislocation to the building industry caused by the war, a situation which Australia shares in common with most countries in the world.

page 597

QUESTION

SHEET STEEL

Senator McLEAY:

asked the Minister representing the Minister for Works and Housing, upon notice -

In view of the acute shortage of sheet steel in Australia at the present time, will the Minister inform the Senate what steps have been taken to meet the shortage and indicate whether steps have been taken to ensure sufficient supplies for the years 1947 and 1948?

Senator ARMSTRONG:
ALP

– The Minister for Works and Housing has supplied the following answers: -

Immediately upon cessation of hostilities the Government surveyed the steel sheet requirements in Australia and has been in constant touch with the two manufacturers in an endeavour to improve the supply position. Steel sheets should be considered under two headings, viz.: -

1 ) Those produced by Lysaghts which are again divided into (a) galvanized iron, and (b) industrial sheets ; and

Those produced by the Commonwealth Rolling Mills which are of industrial sheets of the deep drawing quality.

The sheets produced by John Lysaghts are in particularly short supply because of the inability of the company to obtain the necessary man-power to work its plant at Newcastle and Port Kembla. Despite this, the company at the instigation of my department, installed a new mill at Port Kembla for the production of light-gauge sheet and isnearing completion of another mill at Newcastle for the production of light-gauge sheet. These mills each have a capacity of approximately 25,000 tons per annum. When man-power is available and it is hoped that this will be early in 1947, the shortage existing at present will be considerably reduced although this will be offset to a certain extent by the big increase of industrial sheet requirements for secondary industries developed in Australia during the war years and being developed now because of our inability to obtain essential materials from overseas. My department is constantly in touch with the. manufacturer who is fully informed as to the requirements and is investigating further developments to meet the total requirements.

The sheets produced by the Commonwealth Rolling Mills are in short supply because of lack of plant capacity. The plant was installed primarily to meet the requirements of the motor body builders and it is now working at full capacity but increased demands have arisen not only for motor body building but for numerous industrial purposes, including the production of housing requirements, and the production capacity of the plant represents only 50 per cent. of the total requirements of this type of sheet in Australia. The balance would ordinarily be imported but so far Australia has been able to secure only comparatively small quantities from overseas.

The question of importation of sheet of all types has been closely followed with the United Kingdom and the United States of America authorities, but the supply position throughout the world is extremely difficult. The trade and Government representatives at the present time are making a special effort to obtain the motor-grade sheet from the

United States of America in which country the principals of most of the motor body manufacturers are located. The United Kingdom has already indicated that there is no possibility of obtaining appreciable supplies from that country. Negotiations are proceeding with the manufacturers in an endeavour to arrange the installation of additional plant but this could not be brought into operation for probably two years and the immediate requirement is receiving our best attention.

page 598

REPATRIATION

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

What is the policy of the Repatriation Commission in respect of the recognition, as temporary disabilities, of recurring illness originally acquired by ex-members of the forces whilst on active service?

Is malaria, in its various forms, adjudged to be such a disability?

Are such temporary disabilities pensionable; if not, why not?

Senator CAMERON:
ALP

– The Minister for Repatriation has suppliedthe following answers : -

  1. Recurring illnesses originally acquired by members of the forces whilst on active service are accepted by the Repatriation Commission as having resulted from occurrences happening during the period of the member’s service.
  2. Yes.
  3. Yes, providing that the degree of incapacity arising from the disability warrants a pension assessment.

page 598

QUESTION

ESTIMATES AND BUDGET PAPERS 1946-47

Debate resumed from the 14th November (vide page 209), on motion by Senator Ashley -

That the following papers be printed: -

Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works, Buildings, &c, for the year ending the 30th June, 1947.

The Budget 1946-47 - Papers presented by the Right Honorable J. B. Chifley, M.P., on the occasion of the Budget of 1946-47.

Senator McLEAY:
Leader of the Opposition · South Australia

– I do not propose to make a lengthy speech upon this motion, because we shall have an opportunity to deal with the Estimates in detail at a later stage. However, as Leader of the Opposition, I wish to say that the budget speech of the Treasurer (Mr. Chifley) was the dullest and most uninteresting and unimaginative presented to this Parliament during the twelve years that I have been a member of the Senate.

I propose now to deal in general with two particular points. Taking the overall picture, it is interesting to note that a comparison of the actual taxation revenue received during the financial year ended the 30th June, 1946, and the estimated revenue for the current financial year reveals a difference of only £4,000,000, in spite of the fact that we are now in the second year of peace. In 1945-46, the actual revenue received was approximately £389,000,000, and the estimate for the current financial year is £385,000,000. Noteworthy, too, is the fact that the Treasurer’s estimate of revenue in 1945-46 was no less than £49,000,000 below the amount received. The estimate was £340,000,000, whereas actual receipts total £389,000,000. Obviously, therefore, if the Treasurer could underestimate by as much as £49,000,000 last year, with the substantial increase of prices that must take place in this country, his estimate of £385,000,000 for the current financial year will be exceeded by many millions of pounds. The Government should take that matter into consideration at the earliest opportunity because the high rates of both direct and indirect taxes are doing more than anything else to retard progress, rehabilitation and developmental work in this country. If the Government had sufficient courage to reduce the income tax considerably, the extra incentive that would be given to not only the wage-earner, but also to people in all walks of life, would mean greatly increased production. I am confident that the Treasurer would have derived a greater return from income tax by granting a reduction of 20 per cent. than he will recei ve with the rates at their present high level. All honorable senators must be aware that wherever one may travel in this country, one hears from men on the wharfs, on the coalfields, professional men, industrial workers and controllers of industry, the statement that with the present high taxes there is no incentive for a man to do his best and to increase production to the degree that itwould be increased if taxes were reduced. It is interesting to take the general picture of indirect and direct taxes shown in the budget papers, and to find to what degree the general public has been relieved of the vicious rates that operated during the war. For the year ended the 30th June, 1946, receipts from indirect taxes such as customs and excise duties, sales tax, &c, amounted to £15 ls. per head of the population. Under the proposals now under consideration, the amount to be extracted from the people of this country in the current financial year is £16 ls. Id. a head. In other words, in spite of promises of reduced indirect taxes, the people of Australia, in the current financial year, will be asked to pay approximately £1 per head more in indirect taxes than they did in the last financial year. Turning to direct taxes, we find that the amount collected in the financial year ended the 30th June, 1946, was no less than £32 6s. 6d. per head of the population, whereas the estimate for the current financial year is £30 lis. 5d., or a reduction of £1 15s. a head. Therefore, considering indirect taxes and direct taxes together, the net reduction will be only 15s. per head, in spite of the fact, as I have said, that this is our second year of peace. There is no evidence in the budget speech -of any serious attempt to reduce commitments or eliminate unnecessary war expenditure. In spite of the continued representations of the Opposition parties in both Houses of the Parliament, the Government is very slow in closing down departments administering food control, rationing and other war-time measures. These departments wastefully employ large staffs at considerable expense to the nation.

I refer now to unemployment and sickness benefits. The actual cost of these benefits last year was £1,114,432. I ask the Minister for Health (Senator McKenna) why, although there is a heavy demand in almost every industry for man-power, the amount estimated to be required for these benefits this year is £4,000,000. That is a staggering total. The Government should prevent the thousands of men who are engaging in unnecessary strikes from obtaining unemployment benefit payments while they are on strike. When the legislation providing for these benefits was passed, I am sure that nobody intended that strikers should benefit from it.

Senator McKENNA:
TASMANIA · ALP

– The act positively prohibits the payment of .unemployment benefits to strikers.

Senator McLEAY:

– I understand from reports that I have read that many thousands of strikers receive payments after the first week of idleness, on the ground of unemployment.

Senator McKENNA:
TASMANIA · ALP

– Unemployment benefits are not paid to strikers.

Senator McLEAY:

– I should be very pleased to have the assurance of the Minister that people who are unemployed to-day because of strikes are not receiving unemployment benefits.

Senator McKenna:

– I could not give such an assurance. That is a different matter.

Senator McLEAY:

– If the Minister is not prepared to give information on this point, perhaps he will explain why the Government has provided for the expenditure of £4,000,’000 during the current financial year on unemployment and sickness benefits, although the actual expenditure last year was only £1,144,412.

Senator McKenna:

– I shall deal with that later.

Senator McLEAY:

– In addition to making the income tax reductions which I have suggested, the Government should, as a matter of national urgency, promise a reduction of company tax at the earliest possible moment. I believe that there are hundreds of people in Great Britain and the United States of America who would come to Australia if the company tax here were at a level comparable with the levels in their own countries. They would be desirable immigrants. While the company tax remains at a high rate, it not only prevents numbers of our own people from extending industrial production in order to provide goods that are in short supply but also deters people in other countries from migrating to Australia. Although the Prime Minister said during the recent election campaign that he would not make any promises, he should not maintain his stubborn attitude any longer than is necessary. If the Government is not prepared to reduce income tax and company tax rates during 1946-47, it should give an indication at -the earliest opportunity that reductions will be effected in 1947-48, so that people who hope to participate in the economic development of Australia will have plenty of time to make their plans. ‘We should encourage the immigration of people anxious to engage in industry. Their activities would be of great benefit to Australia.

In addition to my disappointment at the Government’s failure to reduce income tax and company tax, I am greatly concerned about another of its defections. “I refer to the greatest problem confronting the Government to-day, namely, that caused by continued turmoil and bitterness in the industrial field. lt is a melancholy experience to pick up the newspapers day after day to read about transport strikes,’ shipping strikes, coal strikes and waterfront strikes. Industidal unrest has been rife now for five years. Even though the Labour party - has been in control of six of the seven parliaments in the Commonwealth during that period, we are to-day experiencing the most severe industrial disturbances in our history. I am sure that Government supporters are just as anxious as we are to have the position rectified as soon as possible. Therefore, I am amazed that, in spite of frequent reassuring statements made on behalf of the Government, very little has been done by it or by any individual Minister to improve conditions in the industrial field. Numerous promises to settle disputes in the coal-mining industry have been made by Ministers in the Senate. An important measure was rushed through this Parliament last July, after lengthy negotiations between this Government and the Government of New South Wales, ‘and the people were promised that the two governments would appoint a board to improve conditions for coal-miners and that the problems of the industry would soon be solved. Four months have passed since then, but nothing has happened in fulfilment of that promise. The board has not yet been appointed. Whenever the coalminers approach the Government it gives way and seeks to appease them. The latest scheme provides for miners to work on Saturdays in order to build up coal stocks for the Christmas period. Now., we .find that most of the men who work on Saturdays refuse to work on Mondays or Tuesdays, and, of course, they are paid at the rate of time and a half for their Saturday work. .This is .a deplorable state of affairs. The failure of this Government and the Government of New South Wales to handle the problem is disgraceful. Every time there is trouble on the coal-fields, members of the Labour party talk about the poor conditions under which the miners work. They say that wa.ge8 are too low, that the dust menace has not been removed, or that some other problem has not been solved. For five years the power to remove all causes of complaint has been in the hands of the Labour .governments in the Commonwealth Parliament and in the New South Wales Parliament. Increased coal production would be the means of overcoming stagnation in many other important industries.

Senator Amour:

– What is the Opposition’s solution of this problem ?

Senator McLEAY:

– The first step is to enforce the laws of the land against the coal-miners. For political reasons, this has not been done. The Government lacks courage. In spite of threats made, summonses issued, and instructions given by members of the Government, the law has not been enforced. The Government’s appointed representatives have been “.let down “ time after time. On ever) occasion that the policy of appeasement is practised, the position goes from had to worse. My statements are borne out by the reports ‘of authorities appointed by the Government to investigate the problems of the coal-mining industry. The present unsatisfactory .situation must not be allowed to continue. Sooner or later, the Government will have to pluck up courage and enforce the decisions of the arbitration courts. I refer now to another extract from the Treasurer’s budget speech, and I commend whoever was responsible ‘ for its inclusion in the speech. I shall quote it in order that a dear opinion may be formed by all honorable senators and all thoughtful people throughout Australia. The statement is as follows: -

Clearly we are developing a potential in secondary production capable not ‘only of meeting a much wider home demand but of supplying markets abroad. But this, like other possibilities of the kind, is entirely dependent upon our achieving a higher allround standard of efficiency and productivity

I draw special attention, to the word “ entirely “. The paragraph concludes - Failure in this direction would involve painful readjustments once the present scarcity demand had been satisfied.

That problem is more’ important than any other. We need increased production and at a lower cost. That mean? efficient production. Reports are coming to employers that, because of rising costs in Australia, they are finding it difficult to compete in many markets near to this country which they should be enjoying at present. If we examine the cumulative effect of the policy practised by some of the key trade unions, we shall discover the reason why costs are increasing as they are in Australia. I commend the Government for having done all it can to prevent inflation. It has been said that the object of wage-pegging is to prevent inflation, but there are other contributing factors more pernicious than an increase of wages. I refer to “goslowism “ and the prevalence of strikes, as well as the attitude of key trade unions which desire to prevent employees from working overtime, because the Government is not willing for them to have a 40-hour week or an extra £1 a week. That attitude is doing more to retard progress than anything else I know. That is the greatest inflation bug we have to fight. Despite repeated promises by the Government, there is an entire lack of action regarding this important matter. I have raised it in this chamber previously, and it has been mentioned in the House of Representatives.

I find it difficult to understand why the Government has been so stubborn in its attitude towards wage-pegging. As we are now enjoying a period of peace, the proper authorities to determine what is a. reasonable wage are the Arbitration Courts, or the various tribunals appointed by the Government, as an employer, to fix wages and conditions of. work for its employees. Under the wage-pegging regulations, however, the large body of employees in the Postmaster-General’s Department and in other sections of the

Public Service, have not the right to appear before those tribunals to have their wages adjusted. The stubbornness of the Government in this matter has, I believe, contributed considerably to the industrial turmoil experienced to-day. I draw the attention of honorable senators to a statement by Professor Giblin in the Commonwealth Arbitration Court in Melbourne yesterday during the hearing of the application by the Australasian Council of Trade Unions for an increase of the basic wage by £1 a week. I remind honorable senators that Professor Giblin is Chairman of the Advisory Committee on Finance and Economic Policy. It is interesting to hear the views of the Government’s adviser in respect of finance and economic policy, and I suggest to Ministers in this chamber that they will find it difficult to reconcile his statement with the Government’s attitude to wagepegging. Professor Giblin is reported to have said -

There is evidence that during the war the basic wage did not keep pace with increased production. Net national income rose 45 per cent, during the war, but the basic wage rose only 26 pex cent. An increase of 5s. in the basic wage would add less than 2 per cent, to costs and prices. This increase in costs would have no harmful economic effects. It would make no more than a ripple on the tide of exporters’ prosperity. In 1944-45, export prices had risen 30 per cent, above pre-war levels. By September last, Australian wage rates had risen 29 per cent, since 1939. In the United Kingdom, wage rates had risen 64 per cent, in the same period. In America and Canada they had risen at least 68 per cent.

If that be the considered opinion of the Government’s economic adviser, I invite Ministers opposite to furnish a reply to the statement. For how long will the Government persist in its stubborn policy of preventing Commonwealth tribunals from fixing what they regard as reasonable rates of wages for employees in the Public Service? Six months ago, the Government thought it wise to intervene in the dispute with regard to hours of employment. At that time, despite repeated representations by the Opposition that the subject of wages was interlocked with that of hours, and that, in this time of emergency, an increase of wages was more important than a shortening of the hours of employment, the Government took six months to “ see the light “ in that matter. Now, at this late period, it has raised the issue of the basic wage. I am told that the official responsible for fixing wages and conditions of employment in the Postmaster-General’s Department will be unable to .move on satisfactory lines until the wage-pegging regulations are modified considerably. If we are to have the spectacle in this country of the Government, as an employer, setting the bad example to the rest of the employers, it is not surprising that we are having the industrial trouble now being experienced. “We cannot laugh this matter off any longer.

Judging by our experience after World War I., it is obvious that while high prices rule, and there is a tendency towards inflation, a golden opportunity is presented to us to produce everything we can and dispose of it at good prices in our own country, or in markets close to Australia. When prices are high and markets are readily available, the people should work longer hours and be paid higher wages. To me it seems ludicrous for any body to step in at this stage, when the country is short of manufactured goods and such things as steel, houses, and hospitals, and pander to a few extremists who are trying to get a 40-hour week by hook or by crook. A responsible Government should not be prepared to stand idly by and allow a few Communists to dictate to the key trade unions that their members shall not work overtime, in order to bludgeon the Government into agreeing to a 40-hour week, and the granting of an extra £1 a week in vage3, because such a policy prevents Australia from experiencing the progress that it should make in the years following the recent devastating world war. Those who have a good grip of this problem are sure that the present opportunity for industrial expansion will present itself for only a period of three, four or five years. If we continue to adopt the policy followed in the first fifteen months of the peace period, Ave shall have brought about a sorry state of affairs for the people a few years hence. Talk about higher standards of living and full employment will re-act seriously on those who make ill-advised statements about the need for a 40-hour week. If we take a lesson from the past, we shall, in the next few years, make every post a winning post in order to improve the national economy. We should create conditions in which individuals and firms could produce to the maximum, obtain good profits and create reserves which would be available to cushion the effects of deflation, should it unfortunately occur. I heard one Minister say that two years would elapse before Australia would be in a position to produce sheet steel with which to manufacture motor cars in this country. We have encouraged people to come to Australia from overseas and manufacture motor car bodies here, but we cannot induce the employees to work overtime. As we cannot obtain peace and full production in the sheet steel industry, we have induced those people to operate in Australia under false pretences. I had an opportunity last week to discuss this matter with the representatives of one important manufacturing firm which has geared up its plant in anticipation of being able to obtain reasonable supplies, but, because of the frequency of strikes and shortages of iron and steel, the company lias, for its first financial year, lost £56,000. It faces the prospect of a loss of £47,000 for the next year, and anticipates losing, in all, £150,000. In 1947, it will have thousands of its experienced men on the unemployed market. Therefore we cannot treat the industrial situation lightly.

Senator ARMSTRONG:
ALP

– What firm is that?

Senator McLEAY:

– I do not propose to mention the name in this chamber, but I am prepared to supply it to the Minister privately. I am dealing now with principles, and what applies to one firm may be said of many others. Costs are rising, and unless key industries can obtain supplies of essential material they will be unable to get into full production. We are told that full production may be achieved in four or five years, but at the end of that period the markets now available to us may be no longer within our grasp.

In conclusion, I suggest that a reduction of taxes would -help industry at this stage. The Government should take action to bring about improved conditions in the industrial world. Again I shall make one or two suggestions to the Government. They are not new, but they are important and of real significance. I hope that Ministers will take their courage in their hands and not allow the weak policy adopted during the last five years to be continued. The Government has survived the general elections and may have three years ahead of it with which to grapple with the industrial problem; if it has faith in, and a love for, this country, and desires the employees to enjoy higher standards of living, full employment and social service benefits, these can be paid for only by full and efficient production. That demands hard work, hut the desired results will not he obtained by strikes, ill feeling and conditions approaching industrial war in practically every activity in Australia. The time is ripe for all the governments in Australia to launch a national campaign for increased production and greater efficiency in industry, as was done in Great Britain by a Labour government and also by the representatives of Labour in New Zealand. I urge the Government to challenge the Communists and the fanatics in the community, and to tell the people that much of the nonsense that is talked about a shorter working week and the benefits of socialism will not develop this sparsely populated country, but that what is needed is a willingness to work overtime when necessary, to accept payment by results, which involves piecework in some instances, and that only on that basis can effective high wages be paid. I advocate that a system of payment by results be superimposed on the basic wage, and that workers be encouraged by the payment of bonuses and the provision of increased superannuation .benefits. If governments, trade unions, employers and employees were to co-operate in an educational campaign directed towards increased efficiency in workshops and factories I am sure that good results would accrue. I emphasize the need for a substantial reduction of direct taxes and a rigid enforcement of industrial law and awards. If a definite move in that direction be made, Australia will make greater progress during the next four years than at any other time in its history. If, on the other hand, we continue as we are going, we shall be in reverse gear and shall not be able to take advantage of the golden opportunity that awaits us.

Senator NASH:
Western Australia

– As I listened attentively to the speech of the Leader of the Opposition (Senator McLeay), I detected in it an echo of remarks which I had heard in the House of Representatives. The honorable senator makes a habit of repeating in this chamber what others have said elsewhere. He has described the budget speech as the most dull, uninteresting and unimaginative budget speech ever presented to the Parliament. Such language may be grandiloquent, but I do not know that it will hear close analysis because a careful study of the budget speech reveals much for which the Government is to he commended. The Government has accomplished a great deal since hostilities ceased less than eighteen months ago. Many thousands of members of the fighting services, as well as workers who were engaged in war production, have been transferred to civil employment without any great dislocation of industry, or the imposing of great hardships on the people generally. Despite what the Leader of the Opposition said on the subject of industrial unrest, employment in Australia has reached record levels, and production is increasing. Moreover Australia’s trade prospects overseas are most favorable. The speech of the Leader of the Opposition shows that he has not studied the contents of the budget speech.

We have heard a good deal regarding the necessity to provide an incentive to increased production by reducing taxes. We have been told that the main reason why production has not increased is that workers are not given the full benefit of the overtime worked by them because much of their increased earnings is taken from them in taxes. During the election campaign Opposition candidates used extensively as propaganda the slogan, “ Why work for Chifley ? “ At the same time, they argued that the time was overdue for increased production and an all-round reduction of -taxes. I do not know how they expect to reconcile those conflicting arguments. I do not profess to be an expert in economics, but I suggest that those who criticize the Government should pay greater regard to the need for accuracy in their statements. Because of the assertion by opponents of the Government that high taxes defeat the Government’s purpose, and retard production, T have taken steps to ascertain the effect of the present taxes on overtime earnings. Official figures show that a single man without dependants who is in receipt of £5 a week, or £260 a year, pays £29 8s. in taxes. Should he increase his earnings by £1 a week through working overtime, thereby ‘bringing his income for the year t” £312, he is called upon to pay an additional £13 18s. as tax, or a total of £43 6s. In other words, he retains £38 2s., or approximately 74 per cent, of the £52 received for overtime. A worker without dependants whose ordinary income of £6 a week is increased to £7 a week because of overtime .retains 72 per cent, of the overtime paid to him, whilst a man whose ordinary earnings of £10 a week are raised by £1 a week because of overtime, retains 68 per cent, of the additional amount. It will be seen, therefore, that notwithstanding high taxes which have been in operation for some years, workers still retain most of the money paid to them for working overtime. Let us now consider the effect of taxes on overtime earnings in .respect of workers with dependants. A man with three dependants pays £3 16s. as tax on an income of £5 a week-. Should he receive £1 a week for overtime, his tax amounts to £13 18s., or an additional £10 2s. because of the overtime. In other words, he still retains £41 18s., or approximately 80 per cent, of the £52 paid to him as overtime. Those figures disprove the contention that high taxes destroy the incentive to increased production.

The Government’s control over prices has been effective. I admit that it is not difficult to cite instances of increased costs of goods and services, as Senator Tangney did earlier in the sitting, but the fact remains that the controls have been exercised in such a way as to be of great benefit to the people. Whilst the Government has stabilized prices, preventing them from rising more than 23 per cent, above 1942 levels, it has also considerably reduced our overseas debt. At present, our London funds are £218,000,000 in credit. The Government has not only stabilized our internal economy, but also built up our prestige overseas. In those circumstances, this .budget cannot be described as unimaginative.

Provision in respect of future defence must take account of our responsibilities in Empire defence and our contribution towards the maintenance of security in the Pacific. On a previous occasion, I emphasized that Australia must now look at the problem of defence through spectacles different from those to which it has been accustomed in the past. We shall find it necessary to maintain standing forces in the three services. We discussed this matter at length on the motion for the adoption of the AddressinReply, and I do not propose to repeat what I then said. However, whilst it may be said that quite a deal of unnecessary expenditure is being incurred at present, it is useless to say that we shall be able to make a substantial reduction of our defence expenditure in the near future. The Treasurer estimates that approximately £60,000,000 annually will be required under this heading. We do not yet know what commitments we shall undertake as a member of the United Nations. Those things are in the lap of the gods for the time being.

I have pointed out that employment in this country has reached a record level. As the result of that improvement the demand for consumer goods has increased. In spite of the Government’s rehabilitation undertakings since the end of the war, 20,000 more people are now employed in factories than were employed at the peak period of the war, and 230,000 more than were employed in June, 1939. Despite that great increase of employment, which must result in increased production, we are still experiencing shortages of many consumer goods. We cannot hope to overcome those shortages in the immediate future; but they will be overcome so soon as it is within our capacity to do so. In view of these facts, the Government, despite the criticism levelled against it in respect of industrial disputes, has nothing to be ashamed of so far as industrial progress is concerned. I do not hesitate to express agreement with those who believe that an all-round improvement in our production efficiency is urgently required. But the attainment of that objective is not the responsibility of the workers only. Those obligations must be shared also by the employers. The first requisite is the establishment of goodwill between employers and employees in both private enterprise and governmental undertakings. Honorable senators opposite merely indulge in cheap sneers when they contend that our production difficulties are due primarily to industrial unrest which they allege is caused, first by Communist influence, and, secondly as the result of appeasement on the (part of the Government towards employees. I recall that not so long ago an antiLabour government endeavoured to deal with this problem in a different way, preferring a policy of coercion on workers. But, as the result of adopting that policy, that government was thrown out of office. If there is one thing which the Australian people will not tolerate it is coercion in respect of their employment. We can solve the problem of industrial unrest only by tackling it in a commonsense manner. Honorable senators apposite say that the Government is preventing ind.ustrial development in this country because it insists upon retaining present wage-pegging controls. They contend that by lifting those controls the Governvent could at once establish the millennium in Australia. However, it is clear that immediately those controls were lifted the value of the worker’s wages would decrease. If the worker were now given an additional 10s. a week in his pay envelope and controls were lifted he would find that within a very short time he would have to pay 15s. more for commodities he now purchases with his present wages. No doubt, it sounds nice to advocate the lifting of wagepegging controls and to say that workers’ wages should be increased. I am in favour of giving to the worker every possible additional benefit, but I shall not be a party to giving him something which inevitably must react to his detriment within a very short period. It is useless to allow wages to be increased when the additional wage will be eaten up by rising living costs. In that way we shall perpetuate a vicious circle in which every rise in wages will be overtaken by increasing living costs. That has been our experience in this country for many years, in spite of the fact that we have one of the most effective systems of industrial arbitration in the world, and also provide for quarterly cost-of-living adjustments in the basic wage. In view of these facts, it is essential to maintain vital economic controls until such time as supply will meet the demand. In the United States of America the cry has been raised that the supply of consumer goods is already sufficient to meet the demand, and, consequently, many price- fixing controls have been lifted in that country. However, latest reports show that that is not the case, and that the great majority of workers there do not receive sufficient wages to meet rising living costs. That is why there is now greater industrial unrest in the United States of America than in any other country. The threat of widespread unemployment in the United States of America is imminent. Millions of workers are fearful of what the future holds for them. Honorable senators opposite claim that the Government is preventing the workers in this country from increasing their earning capacity. That claim is unfounded. Is it not a fact that for some time past any organization of employees has been enabled to apply to industrial tribunals for an increase of wages, provided they can show that the circumstances of their employment have changed, or that an anomaly has arisen in their industry? Therefore, when the Leader of the Opposition makes the bald statement that the Government is preventing the workers from increasing their earning capacity, he forgets that the Government has made ample provision to enable wage tribunals to grant increases of wages where such increases can be justified on the ground of anomaly or change of circumstances.

Senator James McLachlan:

– This Government did not do that.

Senator NASH:

– The Government has done it by amending the regulations, and in fact some organizations have already taken advantage of the amendments. Otherwise, why is .there an application before the Commonwealth Arbitration

Court now for a shorter working week avid for an increase of the basic wage?

Senator James McLachlan:

– They have always had that right.

Senator NASH:

– “We were told by the Leader of the Opposition to-day that they have not that right. I am endeavouring to show that they do have it and have always had it.

Senator James McLachlan:

– But the honorable senator said that this Government had given them that right.

Senator NASH:

– I said that the Government had amended the wage-pegging regulations to enable them to exercise their right. One hears in this chamber far too much talk about industrial disputation. Much of it has no effect other than to increase unrest by focussing public attention on disputes. Honorable senators opposite never miss an opportunity to say that certain individuals in this country - Communists and others - have obtained control of some key industries with the result that there is virtually a state of civil war in industry. Assuming that there are some Communists in the trade union movement - I do not say that there are not - who is to blame for the fact that they have obtained some measure of control over certain industrial organizations? Obviously the people who elected these individuals to office are to Marne. Trade union officials are elected hy members of the unions just as members of this Parliament are elected by the people of Australia. There is nothing undemocratic in that. I hold no brief for the Communist ideology. Many industrial disputes in this country are caused by the lack of tolerance, not only on the part of the workers, but also on the part of employers. In some cases, employers have not been prepared even to discuss problems with their employees, with the result that the workers have taken the bit in their teeth, and have been charged immediately with having fomented industrial unrest. Then of course follows the allegation that this Government lacks courage and is pursuing a policy of appeasement. Production to-day is greater than it was a year ago, and more people are in employment to-day than there were a year ago. In fact, there is almost full employment in Australia, and that is something that has never happened before.

The budget shows that returns from income tax and sales tax last year exceeded the estimate by approximately £13,000,000; but against that, expenditure on defence and war services in relation of World War II. was approximately £19,000,000 greater than the estimate. Honorable senators opposite claim that remissions of indirect taxes totalling £20,000,000 will not be of as great benefit to the people of this country as even a small reduction of income tax. Like most other honorable senators, I should like to be able to announce an income tax reduction of 5 per cent, or 10 per cent. ;. but let us examine the effect of the present concessions. Which would be the more valuable to a man with a wife and family - a pay envelope containing ls., 2s. or 3s. a week more, or an increase of purchasing power generally by the removal of the sales tax from essential goods? The incidence of the sales tax has been heavy. The tax has been levied on practically every commodity that the worker has to buy. When the Government reduces indirect taxes by £20,000,000 it is also increasing the purchasing power of the workers by that amount. As finances improve, I am confident that the Government will make further tax reductions. Tax reductions effected by the Government since the cessation of hostilities total approximately £61,000,000 - a remarkable achievement. By confining current concessions to indirect taxation the Government is acting in the best interests of a majority of the people of this country. I notice also that although the Treasurer’s estimate of receipts from income tax and sales tax was exceeded by approximately £12,000,000, the company tax yielded less than the estimate. Therefore, it would appear that the Government’s taxation policy generally must be of benefit to the manufacturers of this country.

Estimated expenditure on social services this year is approximately £68,000,000, due to the increased cost of invalid and old-age pensions, child endowment, the effects of a full year of hospital benefits, and other pensions. Although honorable senators opposite say a great deal about the desirability of reducing the income tax, some of them, at least, overlook the fact that under our new taxation system there are two different scales of tax and that social services contributions are levied on lower’ incomes than is the income tax. It would be interesting therefore to know how the Opposition would apply a reduction of the income tax. We were told during the election campaign that the Opposition, if returned to office, would grant, not only a reduction of the income tax, but also payment of child endowment in respect of the first child of a family.

Senator James McLachlan:

– We always keep our promises.

Senator NASH:

– I invite Senator James McLachlan when he speaks in this debate to tell the Senate exactly how in the present financial circumstances he would grant a 20 per cent, reduction of the income tax, and at the same time provide for the payment of child endowment in respect of each child in a family.

The estimated expenditure of the PostmasterGeneral’s Department in the current financial year is £5,400,000 more than last year. That amount includes approximately £2,000,000 for new works and £1,900,000 for the maintenance and extension of existing services. I am pleased that the Postmaster-General is to have an opportunity to spend this money, and I hope that in doing so he will give consideration to the urgent need for improved telephone facilities in Western Australia. I realize the disabilities that Western Australia suffers in this regard because repeatedly I make requests to the Deputy Director of Posts and Telegraphs in that State to make additional services available. I understand that the difficulty at the moment is the inadequacy of existing buildings to house the equipment required for an increased number of telephone subscribers.

Senator Gibson:

– That is not the case in country districts.

Senator NASH:

– I am speaking of conditions in Western Australia. I bring this matter to the notice of the PostmasterGeneral, in the hope that he will endeavour to overcome Western Australia’s disabilities as soon as possible. I also draw his attention again to the subject-matter of a question which I asked on the 13th November, with reference to the necessity for installing a second landline from the eastern States to Western Australia, in order to improve the national broadcasting service in that State. The need for an additional landline is brought about by the use of the existing line for the transmission of parliamentary broadcasts during the sittings of this Parliament. During parliamentary broadcasts, national station 6WN has its programmes transferred to station 6WF. On the first sitting day of the week, station 6WN broadcasts parliamentary proceedings exclusively from 1 p.m. to 4 p.m. and from 5.20 p.m. to 9.30 p.m. Western Australian time. On Fridays proceedings are broadcast from 8.30 a.m. to 11 a.m. and from 12.30 p.m. to 3 p.m. On the intervening days, the broadcasts are from 12.30 p.m. to 4 p.m. and from 5.20 p.m. to 9.30 p.m. One of the principal objections to the transferring of items from station 6WN to station 6WF while Parliament is being broadcast is that this involves the broadcasting of the “ Country Hour” from a metropolitan station and the cancellation of certain regular programme features. For instance, on Wednesdays at 8 p.m. the “ Forum of the Air” is cancelled, on Wednesdays at 10.15 p.m. the British Broadcasting Corporation programme “Calling Australia “ is cancelled, and on Thursdays at 4 p.m. the British Broadcasting Corporation “ Science Notebook “ is cancelled. People who listen to national stations in Western Australia are anxious to have the full service restored as soon as possible. The Postmaster-General has told me that the department is considering the technical possibilities of providing an additional high-quality programme transmission channel between Adelaide and Perth, but that, owing to the very complex nature of the project, he cannot state at this stage when the second relay circuit will be available. I understand that Tasmania suffered a similar disability as the result of the introduction of parliamentary broadcasting, but that the problem has been solved in that State. I hope that the Postmaster-General will have a new line installed as soon as possible, because the people of Western Australia arc entitled to the same degree of consideration as residents of other States. They should be given the full benefit of the rational broadcasting programmes.

Senator James McLachlan:

– Probably they need educating more than people in the other States.

Senator NASH:

– No. The Western Australian people are just as well educated as other Australians. In fact, they have shown that, in many respects, their political education has been much ‘better than that of people in other States. They have a better federal outlook than have many other people.

Senator James McLachlan:

– They are always talking about secession.

Senator NASH:

– Secession has been forgotten in Western Australia. To-day, Western Australians have a very sound federal outlook. They proved this at the elections.

I refer now to another matter, and in doing so I may be treading on dangerous ground. The gold-mining industry in Western Australia fell on particularly hard times during the war, not because of a shortage of gold in the ground, but because of its inability to obtain the labour and materials necessary for its operations. The Government’s receipts from the gold tax have decreased very considerably in recent years. In this respect, the following table of gold tax receipts is informative: -

The Government should consider either eliminating or reducing the gold tax at the earliest possible opportunity. In making this proposal, my intention is not to assist the wealthy shareholders of gold-mining companies. I merely want to help the industry to return to its pre-war standard as quickly as possible. In 1926, the Commonwealth Parliament passed the Precious Metals Prospecting Act, and in 1930 it passed the Gold Bounty Act. Also, in an endeavour to locate new mineral fields, the Commonwealth allotted the sum of £32,000 to finance a programme of geophysical prospecting in Australia. This survey began in April, 1928, and was completed in February, 1930. In 1934, the Commonwealth Parliament passed the Northern Australia Survey Act. At that time, the Commonwealth Government and the Governments of Queensland and Western Australia agreed to co-operate in conducting an aerial geological and geophysical survey of certain areas of Australia north of the 22nd parallel of south latitude. This survey was completed in 1940. Its total cost was £252,000, of which £44,500 was expended in Western Australia. The Gold Bounty Act 1930 provided that for a period of ten years from the 1st January, 1931, a bounty of £1 per oz. would be payable, under prescribed conditions, by the Commonwealth for fine gold produced in excess of the average production for the years 1928-30. However, under the Financial Emergency Act 1931, the bounty was reduced to 10s. per 02. and was made subject to certain conditions relative to exchange. Under the Loan Appropriation (Unemployment Belief) Act 1934, a total of £283,750 was made available to the States in grants for assistance to metalliferous mining. Of that amount, Western Australia received £106,400. The gold tax is levied at the rate of 50 per cent, of the amount exceeding £9 received for each ounce of gold. In view of the fact that the Commonwealth derived only £383,552 from this source in 1945-46, compared with £1,214,621 in 1939-40, 1 consider that the time is ripe for the elimination, or at least a reduction, of the tax. There are many other subjects which I wish to mention, but in order not to prolong this debate, I shall defer them until we are considering the Estimates.

Senator BRAND:
Victoria

.- One important feature of the budget is that the gap between estimated revenue and expenditure has been reduced to (£59,000,000. This has been done by maintaining high rates of tax rather than by reducing expenditure. Whilst the allotment for defence and war services has declined by £157,000,000 since last year, estimated expenditure in other directions has increased by £59,500,000. Therefore, had the proposed expenditure for this year been kept at last year’s level, the budget would have been balanced: In. his budget speech, the Treasurer (Mr. Chifley) declared, that higher living standards and full en>ployment could not be attained without a greater productive effort. However, he apparently failed to realize how - greatly the burdon of direct taxation^ which he insists upon, retaining, hampers the attainment of the desired objective by destroying incentive and creating industrial unrest. A bold step in the direction of reducing taxes would have gone far towards removing the causes of strikes and eliminating blackmarketing. The remissions of indirect taxes will afford considerable relief to many hard-pressed homes in the community. However, they represent only a small instalment of the remissions that should have been granted. Real prosperity based on increased purchasing power cannot be achieved, nor will industry flourish and individual enterprise be stimulated, until the multitude of taxpayers find more “ take home money “ in their pay envelopes. A large remission of direct taxes would provide the tonic which the people of Australia need. Its restorative effect would speedily become apparent in the community in increased production. The Treasurer has been reluctant not only to reduce taxes but also- to reduce government expenditure. The cost of sending diplomatic representatives overseas with expensive retinues has trebled1 since 1939. Trips around the world are again being awarded as consolation prizes for disappointed Government supporters. The Department of Information, which was created to meet war-time emergency conditions, continues to expand, notwithstanding the fact that peace returned to the world fifteen months ago. The Navy, the Army, the Air Force, and the munitions services functioned very well before the war under one co-ordinating Minister. Now each service has a Minister, although the strength of the services is much the same as in 1939. These are only a few items, and such extravagance makes one apprehensive as to Australia’s ability to grant a small increase of the already inadequate war pensions, particularly in distressing cases. How is Australia to meet ite post-war defence, commitments unless Government’ economy be practised? The money will have to be provided. If’ Australia. doe3 not fulfil its obligations, it. will be a. defaulter in the eyes of the Mother Land and gallant New Zealand.

Paragraph 9 of the Governor-General’s Speech indicates that the Government recognizes Australia’s obligation, not only to defend its own territories, but ako to contribute its share towards the cost of the maintenance of world peace. The Government’s sincerity in this matter is not questioned. World War II. has taught pre-war pacifists and isolationists a lesson. The English-speaking nations can never be justly accused of “ trailing the coat “ or “ rattling the sabre “. Lovers of peace, mindful of the impotence of the old League of Nations, and sceptical of the security plans of the modern United Nations, prefer to prepare for any eventuality. It stands to reason that the extent of those preparations cannot be on a war-time scale. As a joint guarantor of world peace, Australia’s interest is centred mainly in the South- West Pacific Area. The Government has stated its intention to make adequate provision for that purpose. As a preliminary to that effort, it is imperative that the foundations of the interim forces be well laid. This basis for our po3t-war services must not be sabotaged for political expediency, which had much to do with the partial unpreparedness of Australia in the pre-war period. That mistake must not occur again. Defence policy will have to be formulated in a national spirit. Defence preparedness is a continuing responsibility and should not be whittled down by succeeding governments for voter catching reasons. Continuity of policy is of the very essence of defence preparedness.

In his budget speech,, the Treasurer stated that employment had’ reached a record high level. Some, satisfaction could be derived from that statement, if there were visible signs that ali employed persons are producing something. An undue proportion of the employees is on government pay-rolls. They are consumers, not producers. Industrial unrest is due to the high cost of goods and services. Under-production is the cause of soaring prices, and the Government is to blame. It is not game to take a risk, and lift the dead hand of taxation off employer and employee alike. During the war years our workmen, under skilled direction, proved they could make almost anything, expeditiously and efficiently. Now we are not even producing enough for our own requirements. We are letting the United States of America “ put it all over “ us by collaring our pre-war overseas markets. Every honest working man knows that in his own interests, and in the interests of the nation as a whole, the greater our overseas markets for both primary and secondary surplus products the better will be the prospects of full-time employment. Australia has had a good opportunity to build up a profitable and significant export trade in manufactured products, but golden opportunities have been lost. Industrial unrest has been the major cause of under-production, or of inability to supply overseas customers.

As this country has been barely scorched by the fires of war, it should be first past the post in the race for postwar recovery. Australia’s position contrasts strongly with that of Great Britain. That war-stricken country, with its ill-nourished people, anticipates that its export trade in 1946-47 will exceed that of the pre-war year 1938-39. Britain’s output from steel plants during last year was an all-time record. What a recovery! The British Prime Minister’s exhortation to work and produce, and the co-operation secured between employers and employees, are the factors responsible for that splendid achievement. In Australia that co-operation is lacking. The “ boss “ is regarded, not as a normal being who has achieved a measure of success by virtue of his ability and determination, but as a capitalist who must be opposed at every turn. The honest worker realizes that his economic interests are bound up with the prosperity of the business in which he is employed. The agitator, whose ambition is to gain a seat in Parliament, has much to answer for, and so has the employer who does not treat his employees as human beings.

The needs of war pensioners could be met in either of two ways : a percentage increase to bring the pension rate to a figure commensurate with the increase of the cost of living, or extra payments to meet special needs. An application of both methods might be warranted, since the present uniform rate is undoubtedly too low. If uniform rates of war pension are not to be related to actual need some provision must he made for those cases in which the need is most pressing. The returned servicemen’s league has always opposed the imposition of a means test in respect of war pensions - or war compensation, as it should be called - ‘believing rightly that the pension should be fixed as compensation for loss.

But if a general rate be not enough to meet the needs of men who are disabled by war, and who, but for the war, would have : been as other men, then something should be done to lessen the existing distress. Clearly, £2 10s. a week is not enough for board and lodging, plus clothes and other essentials. The 22s. a week allowed for a wife is inadequate. The joint income of £3 12s. a week for a husband and wife leaves little, after rent, fuel, lighting and clothing needs are met. Ask any housewife how far £2 10s. or £3 12s. a week will go ! A reasonable payment for rent alone would be £1 10s. a week.

Up to now, war pensioners have been reluctant to obtrude their needs. In fact, many have acquired an over-sensitiveness about their pensions. The war having demanded a maximum of sacrifice on the part of the citizens, and with millions of pounds having been expended for war purposes, servicemen hitherto have been diffident about stressing the smallness of the amounts granted to them. With a high sense of patriotism, war pensioners have had some regard for what the country might be able to afford. The hope has always persisted that, when the national finances improve, war pensioners will receive an increased payment. But experience shows that national finances never improve. When surpluses come, they offer only further opportunities for new avenues of expenditure. But now the war is over, a more realistic attitude is developing, prompted by the fact that the Government is spending money freely in directions not nearly so important as was war expenditure. War pensioners are stirring themselves, and are expecting attention to be given to their pension needs. I ask the Minister representing the Minister for Repatriation to make a note of what I have said, in the hope that something may be done in the direction of granting more adequate compensation to those who are finding it hard to make both ends meet.

Senator ARNOLD:
New South Wales

– The contents of the budget must give solid satisfaction to the people.

Senator Nicholls:

– Including the Opposition ?

Senator ARNOLD:

– It is difficult to satisfy honorable senators opposite at any time, but they have little to find fault with on this occasion. The budget speech sets out the position of Australia after fifteen months of post-war activities. That is a period in which we might well have expected much disorganization, unemployment and chaos, due to the changeover from war-time to peace-time production, great shortages of supplies of essential commodities, and a serious decline of the national income. With much gratification the Government is able to report to the nation that the national income is now at a higher level than ever before. In addition, the Government has been able to demobilize the members of the armed forces and place them back in civil employment. There are now 770,000 employees in secondary industries, which is 20,000 more than we have ever had before, either in times of peace or of war.

Senator Sampson:

– The population has increased since the pre-war period.

Senator ARNOLD:

– Yes, but not to the degree that we could have desired. The Government has so planned the economy of Australia that full employment is now provided for the whole of the working population. That is one of the truths which the Opposition is not pleased to hear in this Parliament, but it is a fact of which the people should be reminded, whenever the finances of the nation are under review.

Sitting suspended from 5.44 to 8 p.m.

Senator ARNOLD:

– As I said before the suspension of the sitting, the budget reveals that after fifteen months of postwar activities Australia has a record national income, all its people are employed, and its servicemen have been almost totally demobilized and absorbed into industry. The budget is, in fact, evidence that the change back from the making of weapons of destruction to the making of the things that really matter and which will be of benefit to the nation, has proceeded well. The transition cannot be a speedy process, but the Government has every reason to be proud of its record. That many goods are in short supply cannot be denied, but it must be remembered that this country is still feeding twice as many people as actually constitute the Australian population. I well recall the time when the parties in Opposition chided the Labour Government with calling up too many men into the fighting services. Honorable senators opposite said that that would disrupt the country’s economy and they predicted a period of great difficulty before the men in the fighting services were re-established in civil occupations.

Senator Collett:

– The suggestion was that the men who were being called up were not being properly used.

Senator ARNOLD:

– I do not recall that that was the view of the Opposition at that time, but we know that Australia came through the war little harmed by the activities of the enemy, and, in my opinion, the Government is entitled to some credit for its policy of calling up men. That period is past, and now those men are getting back into civil life. We are tooling up for peace-time production; materials are beginning to flow more freely; housing schemes are slowly getting under way.

Senator Gibson:

– “ Slowly “ is the correct term.

Senator ARNOLD:

– It may be that the progress appears slow; but I point out that many men who should have been trained in various trades served the time of their apprenticeship as members of the fighting services. During the war thousands of men who otherwise would now be available as bricklayers, carpenters, &c, learned only how to use a rifle. And so they must be trained and made fit to engage in the skilled trades. It is not possible to make them proficient in a few weeks. I agree with Senator

Gibson that it is a slow process. The demand for homes is great, but the blame for the shortage cannot be laid at the door of the present Government. When the Social Security Committee investigated the housing shortage two or three years ago, it concluded that, even then, 300,000 homes were required, and that, in addition, some thousands of homes were unfit for human occupation and ought to be demolished and replaced. Although the task of overtaking the shortage is slow, we are heartened by the figures showing what has taken place. Progress will be accelerated as men are trained in various trades and materials flow to the sites on which houses are to be erected. Already timber, tiles, and other building materials are coming forward in greater quantities, and we can expect an accelerated building programme in the near future.

Senator Gibson:

– The biggest trouble is the cost.

Senator ARNOLD:

– Unfortunately, the cost of houses is high, but costs always rise after a war. Two or three years will elapse before the position gets back to normal. The Government has done a fine job in maintaining controls, with the result that Australia’s economy is regarded as among the soundest in the world. That is so despite rising costs, shortages, increased purchasing power in the hands of the people, and some blackmarketing. We can, however, derive a good deal of satisfaction from the fact that the Australian economy remains sound.

For some years the Estimates have provided £72,000 annually for national fitness, and this year a similar amount is provided. It is altogether too small. In order to equip our young men to protect their country when it was in danger from an enemy, the country was prepared to expend hundreds of millions of pounds. Compared with that expenditure the vote for national fitness is appallingly small. The result is that children who leave school at fourteen or fifteen years of age are thrown on their own resources. No special thought is taken to train them to make the best use of their leisure time. Apparently, the country cares very little about what happens to them. We hear a good deal of vandalism by youths, of child delinquency, and of the anti-social activities of many of our young people; we deplore their interest in racing and starting-price betting, and yet we set aside only £72,000 a year for the national fitness movement. An expenditure of about £25,000,000 on education is contemplated. I have nothing to say against expenditure for the development of the mind of the youth of Australia, but I point out that it is largely a waste of money to provide education for young people whose bodies are not healthy. Our first interest should he to ensure a healthy nation. It is intended to disburse about £60,000,000 this year in social services; we propose to do something for invalids and aged people, those in hospital and those who need medicine, but when it comes to providing funds for the development of strong healthy young men and young women, and facilities to equip them to become useful units of society, we adopt a niggardly attitude and vote a paltry £72,000 a year for the purpose. In this matter Australia falls far behind many other countries. There was much in pre-war Germany cruder Hitler that called for our strongest condemnation, but in its treatment of the youth of the nation Hitler’s Germany had much to teach the world. I do not propose that we should guide their minds as the Hitler administration did, but I suggest that we could follow its example in respect of the physical training of our youth. Before the war, in Germany and other countries, hostels, camping sites, and all sorts of other facilities, were made available for the youth of the nation. Properly trained supervision, together with equipment, should be available to fully engage the leisure hours of the youth of this country. What country has a climate more suitable for camping than has Australia? Skill in bushcraft together with a. love of our country is not fostered in our children. We should develop camping sites so that our young people may learn bushcraft and engage in healthy outdoor exercise. By doing so we would make a useful contribution to our children’s future. In the district in which I live there are many enthusiasts who are keenly interested in all that pertains to the good of the young people. Local sporting organizations are taking a great interest in the sporting activities of the youth of the district. They have provided equipment for the use of the young people but they cannot provide playing areas or other major facilities. And so we see young Australians trying to play football and .cricket on roadways. The Commonwealth ‘Government is prepared to make available . a certain .sum of money for national fitness but it takes the view that the -State authorities must accept the main .responsibility in this matter. I say that this is a national responsibility .and that the burden cannot be horne by the .States or local governing .bodies. Therefore, I urge the Treasurer :to make substantial provision for this ‘activity on a national basis when he is drafting his next budget. Perhaps, the Commonwealth could agree to subsidize expenditure on this work by State Governments, or local government .authorities, on a £1 for £1 basis. The National Parliament should be most concerned about the protection of the health of our young people. We must discharge our duty to the youth of this country in that respect, and resolve to give them every opportunity to develop healthy bodies.

Senator LECKIE:
Victoria

.- Honorable senators will agree that when I praise I praise generously, and that when I criticize I make generous allowance for the human frailties and failings of those whom I criticize. I do not think that this budget is altogether bad. It could be very much worse. How much worse is in the lap of the gods. We are told that the proposed reduction of taxes will relieve taxpayers of a total payment of £61,000,000 in the current financial year. However, upon examining the budget, we find that, despite the so-called remissions, the Treasurer’s estimate of income is almost exactly the amount received in taxes last financial year. Therefore, we must examine the propositions propounded in the budget a little more closely before we can join in the praise of the Government’s generosity to the taxpayers. The fact remains that the taxpayers will pay almost the same amount of tax as was extracted from them last year. Therefore, I am unable to .agree that real remissions are being made in the budget. Most of them, of course, relate to reductions of sales tax, and these are represented as savings to the majority of the people who buy the necessaries -of life. When we examine the budget, however, we find that the estimate of revenue from .sales tax for the current financial year is nearly as much as the amount received last year. That is accounted for, first, by the fact that more goods are being sold, and, secondly, by the fact that the sales prices of most articles are from 60 per cent, to 70 per cent, higher than when the sales tax was originally imposed. The Government’s claim that it is remitting sales tax amounts to nothing, because the cost of most commodities bearing tax is now skyhigh. No credit is due to the Government when it proclaims that it is remitting sales tax to the people who buy the ordinary things of life.

However, as I have .said, the budget might have been worse. A Government like the present Government requires a lot of money. It finds it difficult to vacate any field of taxation. It has a reputation for generosity, but it has not established that reputation. The Government, of course, must provide jobs for defeated Labour party candidates. Every now and again, out of the murky depths of Labour politics, arises a’ matter such as that of which we were informed to-day. A Labour candidate who was defeated at the last elections has been appointed, under a contract for a period of three years, to a position with the Council for Scientific and Industrial Research. This man has no scientific, or technical, qualifications; but he has been appointed to take his place in that body alongside such distinguished scientific and technical men as Sir David Rivett, Dr. White, Dr. Richardson and Professor Ross.

Senator James McLachlan:

– They need practical men.

Senator LECKIE:

– So far as I know, the only thing this man has practised in is Labour politics. I cannot comprehend how the Government could appoint such a man to the company of the distinguished technical and scientific men who are associated with the Council for

Scientific and Industrial Research. Thus, as I have said, this Government is in need of all the money it can get. I am painfully aware of the fact that, probably, this is the last budget which I shall examine in this chamber. I realize the position with which the Leader of the Senate (Senator Ashley) will be faced in this chamber from the 1st July next. It reminds one of the old nursery rhyme -

There was an old woman who lived in a shoe,

She had so many children she did not know what to do-

This I might apply to the Leader of the Senate -

He decided the best that the State could afford,

Was to send them away for a long trip abroad.

Of course, such generosity will need money. Yet, the Government is so neglectful of its opportunities to dispense largesse in this way, that it says to the people that it is giving them back £61,000,000 in reductions of taxes. Of course, it will take back all of that money. I have listened with concern to the endeavours of honorable senators opposite to justify this budget. It seemed to me that they were chewing the cud of contentment. There was no alteration in their paean of praise; they were absolutely content. But we cannot neglect an opportunity such as this of pointing out some of the fallacies to which they gave utterance. For instance, Senator Arnold referred to the marvellous advances which had been made in industry in Australia during the war. But, during the war, goods were turned out at immense prices. It must never be forgotten that a great degree of our war production was carried out under the cost-plus system.

Senator Ashley:

– That system was introduced by the Menzies Government.

Senator LECKIE:

– Yes; and it was continued by the present Government. But it was inaugurated by the Menzies Government for the specific purpose of establishing industries which had not previously existed in Australia. Had that Government continued in office it would not have retained that system after it had achieved its purpose. When honor able senators opposite proclaim to high heaven what manufacturing industry has accomplished in Australia in recent years, we must have regard to the conditions under which it operated; and we must admit that those conditions cannot possibly be perpetuated in peace-time. At that time, money did not matter. The only thing that mattered then was the safety , of the country. Therefore, it is meaningless to say that because production was achieved at very high prices under those conditions, the national income is now in a healthy condition. But that argument is proclaimed from every platform, and in this Parliament. It is said that everybody is working; and that, since the outbreak of the last war, the national income has increased from £750,000,000 to £1,400,000,000. Surely, no one imagines for one moment that that is a true indication of the national income. The national income can best be expressed in terms of goods produced. If the argument of honorable senators be accepted, it would mean that the national income could be doubled by doubling everybody’s wages and salaries. How can one advocate such a false outlook with respect to the national income? But that idea is being sedulously fostered in this country. It is most dangerous to pursuade the people to believe that we have an immense national income. We have nothing of the kind. It may be - although I doubt the statement - that every one is at work; but if they are at work, what work are they doing? What goods are they producing? Why is there a shortage of so many commodities?

Senator Courtice:

– Does the honorable senator suggest that private enterprise has failed?

Senator LECKIE:

– The Government has failed.

Senator Ashley:

– The electors did not think so.

Senator LECKIE:

– But the people of Australia will receive a rude awakening within the next few years if the Government proceeds along the lines it is now following. Such a policy can lead only tobankruptcy. Why do honorable senators opposite lull the people into the false belief that the national income is now at its highest in the nation’s history? Such statements only do injury to the people.

Senator Ashley:

– Does the honorable senator suggest that we should hide the figures from .the people?

Senator LECKIE:

– No ; .the Government should tell the people the truth. I am trying to tell them the truth now, whereas the propounders of .this budget are trying to deceive them by attempting to lead them to believe that they are prosperous, and that industry is turning out a maximum quantity of goods. I hope that, in future, I shall hear less of this cry that everybody is in work, that our industries are producing immense quantities of goods, and that our national income has doubled since the outbreak of the last war. Senator Nash appealed to every one to digest the budget. I assume that he meant that people should examine it, and see whether they could swallow it whole. I confess that I am unable to do so. The honorable senator also said that the claim advanced by many taxpayers that they were “ working for Chifley”, and that that was the cause of absenteeism, strikes, and industrial unrest generally, was not right. I believe there is something in what he says, and that some of the figures that he cited were not far wrong; but there can be no doubt that many people do believe that they are working for the Treasurer, and, unfortunately, honorable senators opposite are not doing anything to discourage that belief. If high taxation is not the reason for industrial unrest, what is the reason? Senator Nash advocated the retention of wage-pegging. Apparently he is convinced that that is not the cause of industrial unrest; yet every day we read in the newspapers that strikes and lock-outs are caused by the pegging of wages. The Government has got itself into an unholy muddle in this matter. First, it favours an increase of the basic wage. I have said before in this chamber that the reason for the low basic wage in this country is that the Government has deliberately kept it low by pegging wages and subsidizing commodities in the “ C “ series list. Every one knows that a substantial proportion of the commodities upon which the ordinary man in the street spends his wages are not in the “ C “ series; but the Government has been adamant that the production of goods in the “ C “ series list should be subsidized, and their price kept down. Therefore, the basic wage earner has had things loaded against him by the very people who purport to represent him in this Parliament, and things are still loaded against him. When he strives for better working conditions and higher wages he is told that wages are pegged and that nothing can be done about it. There is no indication in the budget of any attempts by the Government to rectify that anomalous position. There seems to be a lack of unanimity amongst honorable senators opposite and their supporters as to whether wage-pegging is right or wrong. Senator Nash says it is right, and the Government says it is right, but the people whom they represent in this Parliament say it is wrong. How are we to determine this matter?

Senator Devlin:

– What does” the honorable senator say?

Senator LECKIE:

– The continuance or removal of wage-pegging is not my responsibility, but I suggest to the honorable senator, who is a member of a great party, that it is about time he and his colleagues examined some of these things to see whether or not their own actions are causing the industrial unrest that is rampant throughout Australia to-day. The fact that industrial unrest is rampant cannot be denied. The only solution of the problem that honorable senators opposite can offer is. nationalization. That of course is a plank of their platform. It is their remedy for all the ills of humanity; yet we find that the very people who have been responsible for most of the strikes in recent years and who have ridden roughshod over their fellow workers, depleting their earnings, and putting them to considerable inconvenience, are engaged in industries which have been nationalized. In almost every State railwaymen and tramwaymen - all government employees - have been on strike, and, strangely enough, in every State except one in which those strikes have occurred, Labour governments are in office. Against whom are the workers striking?

Not against their bosses suavely, because after all they are the masters of their bosses. But what is this Government doing about it ? It is standing pat, and hoping that things will improve. The Government will have to be up and doing, because until it makes a determined effort to banish industrial unrest and bring contentment back to employers and employees alike, it will have a difficult time. I appeal to honorable senators opposite to take their courage in both hands, and, if necessary, in both feet, because some kicking-out will have to be done. The budget shows that the Government is completely devoid of energy. It compliments itself upon its past record, upon having achieved what it believes to be full employment in this country, and upon having brought about the highest national income in our history; but honorable senators opposite know in their hearts that it is a false national income, and that real, wealth can be .measured only in terms of the production of consumable goods. What are they doing about it? I am rather ashamed at times to have to ask questions in this chamber about the number of houses now under construction, and the cause of the shortage of housing materials such as galvanized iron, piping, &c. We have had five unbroken years of Labour rule and it is, useless for the Government to tell us that that is the best it can do. Yet that, is what we are being told. We are informed by Ministers that they hope that things will be a little better in the future. In this budget, which honorable senators, opposite proclaim from the house-tops to be a good budget, we find that the Government proposes in the current financial year to collect as much revenue in taxes, and probably a good deal more, than it did last year. Unless the Government wakes up to the fact that it is not. the best administration we have ever had in this country, and that there are still many things it has to learn, we cannot expect any real improvement. In fact irreparable damage may be. done.

Senator Nash:

– We are always willing to take advice.

Senator LECKIE:

– I doubt that. I am more willing to believe that the honorable senator is apt to sneer at any advice that does not come from his own side of the chamber. After all, even if we do belong to the capitalist system, we have had long experience. There have been other times in the history of Australia when everybody has been in employment, and when production has been much higher than it is at present. I have yet to learn of any matter upon which the Government has taken advice from this side of the Senate.

The alleged remissions of taxes provided for in the budget are all “ hooey “. Ostensibly, the Treasury will collect in taxes during the current financial year as much as it collected last year, but actually the revenue from this source will be considerably more than that. However, during the election campaign, the Government set itself against reductions of direct taxes and its policy was approved by the people. That was the vital difference between Labour’s policy and the policy of the anti-Labour parties. We claimed that reductions of taxes would lead to added incentive and therefore increased production, but Labour’s surporters said, “No, we do not believe that direct taxes should be reduced “, and on that principle Labour was returned to office. As the result of the people returning the Labour party to power on that policy, this budget has been introduced and -will be implemented. The Treasurer said in a half-hearted, casual way, “ But we will keep our eyes on the budget from month to month and we will see whether something can be done to ease the position “. That is a remarkable situation. The people have placed their trust in the Treasurer, but instead of making a firm estimate of revenue and expenditure for the whole year, he has prepared a makeshift statement and said, “ That is the best we can do, but we will watch the situation from day to day, and if we change our minds about reducing taxes, we may be able to grant some concessions “. When commodity prices have gone sky-high as a result of industrial unrest, the Government will be able to grant further sales tax remissions, because then revenue from that source will increase in conformity with prices. The Government is in a glorious position.

I am disappointed with the budget, as the Senate no doubt realizes from what I havesaid. I am sure that the people of Australia, too, will be disappointed with it when they realize its full effect.

Senator Gibson:

– They have not awakened yet.

Senator LECKIE:

– When they do wake up to the fact that the budget is up in the air and that their supposed prosperity is mostly on paper, there will be such a reaction against the Government that Ministers and. their supporters will have to run for cover in all directions.

Senator Finlay:

– That is the situation the honorable senator would like to create.

Senator LECKIE:

– The situation I would like to create would include a governing body which would do everything necessary to curb industrial unrest and which would ensure that the national income, instead of being a false paper estimate, was based on actual production of goods, as. it should be. That situation will occur in time. I could say much more about the budget but, having condemned it with faint praise, having even applauded some of its: features in spite of its inconsistencies, and having expressed amazement at the “ cheek “ of some of its remissions, I leave it to the people to realize that what I have said is the gospel truth. I hope that on their heads will not fall the fate that has overtaken other peoples who have been careless enough to allow the reins of government to fall into the hands of fanatics of narrow vision who, while they have control, ensure that their bread is always carefully buttered on one side.

Senator O’FLAHERTY:
South Australia

– The Deputy Leader of the Opposition (Senator Leckie) said that he would have had a lot more to say in criticism of the budget had certain circumstances arisen. I can well imagine that. Had the Opposition parties been returned to power at the elections, he probably would have had a longer “ say so “ on the budget than he has had on this occasion. Most of his criticism related specifically to two or three items. He said that the tax reductions for this financial year would amount to approximately £61,000,000. In the next breath, he said that what the

Government gave to the people with one hand it would take- back with the other hand. That was the essence of his statement. The honorable gentleman apparently has forgotten that thousands of people have become re-employed in civilian industries since the previous budget was introduced. The result of this is that the Government can reduce income tax, for instance, or sales tax, and still derive just as much income as previously because these people have reentered the taxable field.

Senator Leckie:

– That is exactly what I said.

Senator O’FLAHERTY:

– No. The honorable senator said that the Government was giving £61,000,000 to the people by means of tax reductions with one hand and taking back more than that amount with the other hand. That is not the position. The Government has, in fact, granted relief to. the individual taxpayer because its income from taxes this year will be obtained from a greater number of the people than previously. As the result of the return to industry of exservicemen, there will be a greatervolume of taxable income in the Commonwealth. Therefore, the honorable senators contention is incorrect. His reasoning is altogether wrong. He forgot, to allow, for the effect on our national economy of the demobilization of men and women from the armed forces. Many of these people were free of income tax commitments while they were in the services. From the time when they returned to civil occupations, they became subject to tax. In. addition, they have greater spending power than they had prior to the introduction of the previous budget and, therefore, they will buy more goods, and. will thus contribute to revenue through indirect taxation. The Government’s income this financial year will be derived from more people than in 1945-46, and the individual taxpayer will not bear such a heavy burden. This applies even to people with big incomes, whom honorable senators opposite represent. They will benefit from slight reductions also.

Senator James McLACHLAN:

-We represent all of the people.

Senator O’FLAHERTY:

– I have noticed recently that honorable senators opposite have taken up the cudgels on behalf of the working people. In fact, the Deputy Leader of the Opposition almost shed tears over their plight. My God, what did honorable senators opposite and their friends do to the working people during the depression? Did they worry about the working people when they had control of the nation? Not on your life!

Senator James McLachlan:

– The Labour party brought on the depression.

Senator O’FLAHERTY:

– No. The depression started before the Labour party came into power. ‘ A Labour government tried to remedy the position, but it was forced into a situation which had been planned previously by the anti-Labour interests. Furthermore, the anti-Labour parties did nothing for the welfare of the people after they emptied the Labour Government out of office. Yet honorable senators opposite proclaim to-day that they want to do something to help the working people ! They complain bitterly about industrial strife. The Deputy Leader of the Opposition has said that strikes and lockouts are directed against the Government’s wage-pegging controls. I can understand working men raising a “ shindy “ about wagepegging, but I cannot understand employers having lock-outs in an endeavour to have wage controls removed. Why should employers want to have lockouts? The answer is that they want the whole system of prices control to be removed. During the war, they were willing to co-operate with any government and to co-operate with the working people in order to protect their material interests. But as soon as the war ended, industrial strife began as they sought to regain control of Australia’s internal economy. They want to return to the old conditions. The Leader of the Opposition (Senator MacLeay) spoke of conditions in days gone by. He said that the Government’s stubbornness in refusing to lift the wagepegging regulations was the primary cause of all of our industrial troubles. I remind him that there was industrial unrest years before wage-pegging was applied. There is industrial unrest in China, although there is no wage-pegging in that country. Wage-pegging is not; the cause of the trouble. The Leader of the Opposition amplified his statement and said that the remedies for our industrial troubles were piece-work, the working of overtime, and longer hours of* work generally. In other words, he wants to revert to the bad old system. I havea vivid recollection of my early childhood, when I worked sixty hours a weekProduction was no greater then than it is to-day with a shorter working week.. Those conditions did not prevent industrial trouble. I recall joining in a strikein order to have our working week reduced to 50 hours. Yet the Leader of the01)position wants to return to longer’ hours of work and to introduce piecework. The piece-work system is applied’ in coal-mines in Australia and in the United States of America, but it does not prevent industrial upheavals. The causes of strife in the mining industry are thebad conditions under which the men have to work. The system of capitalism under which we operate creates much of the industrial turmoil from which we are suffering. The trouble is aggravated by the unreasonable attitude of employers both in Australia and in other countries. None of the suggestions made by. the Leader of the Opposition will solve our problems. Whatever faults this Government may have - and I do not claim for a moment that it is a paragon - it has attempted to overcome our industrial difficulties. For instance, it appealed to the people by means of a .referendum recently for greater power in relation to industrial matters. Nevertheless, honorable senators opposite, who now shed crocodile tears for the working men, fought the Government on that issue. The Government sought to establish machinery within the National Parliament for the purpose of settling industrial disputes. Honorable senators opposite and the parties which they represent spent thousands of pounds throughout Australia and paid organizers in many districts wages varying from £7 to £10 a week in their efforts to have the Government’s proposals defeated. Yet they have the audacity to pose as the champions of the workers, and would have .the people believe that the present Government has done nothing to overcome industrial] turmoil.

The industrial arbitration system in Australia is so complex that nobody seems to understand it. The workers, and in some instances the employers also, are at a loss to know exactly what it means. In each State certain sovereign rights are retained. In New South Wales a State arbitration court and a conciliation system operate side by side with the Commonwealth arbitration system. Victoria has no State arbitration court, but a wages board system, and the employees also have access to the Commonwealth Arbitration Court. South Australia has a State arbitration court and a wages board system, which function under State jurisdiction, and, of course, there is also the Commonwealth Arbitration Court. About one-fourth of the total number of workers in Australia are employed under federal awards, and slightly over one-third of them are under State jurisdictions. The conflict between Commonwealth and State jurisdictions is so great at times that there, is no way to settle industrial disputes other than by round-table conferences or by threats of one kind or another. The remainder of the working people in this country are not employed under either Federal or State awards. Yet the Opposition objects to the proposal submitted to the people at the recent referendum for the granting of increased powers to this Parliament in respect of the fixation of wages and con- ditions of employment in industry. The Government is doing all that it can in this matter in the interests of the community within the limits of the Constitution, but I should like to see an alteration of the regulations which apply to Commonwealth Government employees, in order to give to all of them the right to have their wages and salaries and conditions of employment determined by the Commonwealth Public Service Arbitrator and not to be ratified by the full Commonwealth Court of Conciliation and Arbitration. I could also mention certain anomalies which I hope “will eventually be removed, or at least modified. A policy to that end has been adopted in the past for the purpose of bringing about industrial peace, notwithstanding statements to the contrary by honorable senators opposite, but the employers are more blameworthy in some instances than the employees. In New South Wales there is now a lockout by the employers. I heard honorable senators opposite condemning the Government for not taking action against employees who go on strike, but we hear nothing about the necessity for action against employers who have locked out S,000 employees. The dispute occurred over one man, and the employers refused to -tell him to join a union in order to produce harmony. They said that they would rather shut down their works, and they have done that. Honorable senators opposite, instead of blaming the present Government for the industrial unrest, should consider their own shortcomings. I cannot understand why they constantly criticize the actions of the Government. When I was a member of the opposition in a State parliament I would not justify criticism of the party in power unless it was supported by constructive proposals.

We were informed by Senator Leckie of an interesting truth. He said that the present Government has a reputation for generosity. That is a surprising admission, coming from the Opposition. He qualified the remark by saying that the Government has provided jobs for defeated Labour candidates at the recent general elections. When reference was made to a job having been found for a candidate who will have to work with a number of professors, one honorable senator opposite suggested that the Government must have the assistance of some practical men.

Senator Finlay:

– The remark was made by Senator James McLachlan.

Senator O’FLAHERTY:

– It was a tribute to the action of the Labour Government for having chosen a practical man. Even Senator Leckie has no objection to the appointment of qualified men for certain work. I do not think he would object to giving a position to a defeated candidate at the elections. I would not object to placing even a defeated Liberal party candidate in a job, if the occasion to do so arose. Criticism of that kind is not worthy of Senator Leckie. He also referred to the cost-plus system and to the part played by another government in establishing it. No Government supporter, so far as I am aware, has yet criticized the operation of that system during the war period. What members of the Labour party have taken exception to is the exploitation of the cost-plus system during the regime of the last antiLabour administration. We now have proof- that something is radically wrong with the system, because the Government lias had to pay enormous sums in compensation because of the mistakes of the previous administration. The trouble was due not to the system itself, but to the abuse of it. Senator Leckie said the Labour Government was deluding itself and the people when it declared that the national income had doubled. When I went to school I was taught that twice seven was fourteen. The honorable senator said that the national income prior to the war amounted to £700;000,000 and has now mounted ,to £1,400,000,000. If that is not twice as much as in pre-war days, a new system of multiplication is required.

Senator McLeay:

– The honorable senator’s point was that the increased income did not make possible the purchase of double the quantity of goods.

Senator O’FLAHERTY:

– The honorable senator referred to the purchase of goods at a later stage. He said that we were deluding the people and that is when he made a statement about strikes and lock-outs. Undoubtedly, in monetary terms, the income of the people of Australia has doubled, but it is also certain that the purchasing power of the £1 is not so great as it was prior to the recent world war. Nevertheless the currency has not depreciated to the degree that some honorable senators opposite would have us believe. In addition, the Government is helping the needy by the social service legislation which it has passed. For the first time in the history of the Commonwealth it has dealt with this legislation on the basis of family units. It has increased the imposts on those members of the community who are in receipt of the larger incomes in order to grant benefits to those in the greatest need. The Government is supplementing the purchasing power of the people, even of those in need.

If honorable senators opposite will study the statistics relating to production they will find that Australia is producing more secondary goods than ever before. It is true that in some respects primary production has fallen, but that is because of droughts. Even in some places where seasonal conditions this year are good, the effects of earlier droughts are still felt. Nevertheless, the overall production is greater than it was prior to the war when the national income amounted to £700,000,000. Honorable senators opposite should be sure of their figures before they speak.

Senator Leckie said that the Labour party believed that nationalization is the cure for almost all evils, particularly those which affect industry. I do not know where he gets that idea, because no such thing has ever been said by any responsible member of the Labour party. Nationalization is not the cure for all evils; it is not even the cure for our industrial troubles. Referring to some industries in Victoria which are nationalized the honorable senator said that they are not free from strikes. That is true. He did not say that one reason is that in control of some national undertakings are men who have no conception of what punning a national concern really means ; they are steeped in the traditions of capitalism and they believe that interest on borrowed money is the most important thing. That is what is happening in Victoria. That brings me to say that either the present Government or some future government will have to do something about Australia’s national debt. It may be that there will have to be some writing down. During the war the national debt doubled, and therefore we must make some provision to reduce it.

Senator McLeay:

– How can it be reduced without repudiation?

Senator O’FLAHERTY:

– It can be done without repudiation. For instance, some of the country’s revenue could be used to reduce the national debt. In other words, instead of reducing taxes, some of the revenue derived from taxes could be applied to reduce the national debt.

Senator Sampson:

– Reductions are now being made under the National Debt Sinking Fund Act.

Senator O’FLAHERTY:

– That will take too long and, in addition, more money is being borrowed all the time. If we pay £40,000,000 into the National Debt Sinking Fund and at the same time borrow £60,000,000 it is useless to think that the national debt has been reduced.

Senator McLeay:

– Has the honorable senator placed his suggestion before the Treasurer i

Senator O’FLAHERTY:

– I make the suggestion now for the information of the Senate and the people of Australia. During the recent election campaign, Opposition candidates offered to reduce taxes if a non-Labour Government were returned. The reduction offered varied from 20 per cent, to 33 per cent. Even the leaders of the two Opposition parties differed as to the amount by which the taxes could’ be reduced. Despite the bribe offered to them, the people rejected the proposal and returned the Chifley Government to office. It is true that the Government suffered some casualties, but not among candidates for the Senate; it is stronger here than before the elections. I believe that there ought not to be any more reductions of taxes until the national debt has been reduced. Failing that, there are other ways of reducing the debt in addition to what is done through the National Debt Sinking Fund. Lf we continue as we are going, we shall build up a huge national debt. Knowing our commitments and the position confronting the British Commonwealth of Nations, particularly Britain, Australia needs to be in a position to help the Mother Country. That brings me to a point raised by Senator Brand when he spoke of reductions in connexion with the Navy, the Army and the Air Force, and of our obligations to Britain. Never again will Great Britain be in the position that that country occupied in the past. Australia’s obligations relate particularly to the Pacific zone. We must keep some of our Navy, Army and Air Force to carry out our obligations there, because we can no longer rely on help from Britain. During the war, Britain disposed of practically all its overseas securities, and now its people are in need of food, clothing and shelter. Australia cannot reduce taxes and at the same time carry out its obligations in the Pacific and be in a position to help Britain. We must face the issues. The Government has not failed to do so hitherto, and has, in fact, taken its courage in both hands. It must do so again in the interests of, not only Australia, but also the British Empire as a whole. Despite pressure on it to do things which would weaken Britain’s position, the Government will stand up to its responsibilities as no previous government ever did. The position which now confronts the British Commonwealth of Nations has never previously arisen. Time after time Senator Brand has told the Senate of Australia’s defence needs. He has complained that political expediency was resorted to by previous governments in order to dodge their responsibilities. The present .Government is standing up to its responsibilities despite criticism by the Opposition and the press of Australia. Should the occasion arise, Australia wants to be in a position to help other components of the British Commonwealth of Nations. I hope that the Minister will take notice of what I have said, particularly in connexion with the national debt. Should further reductions of taxes be decided upon, I trust that they will be made, not by reducing direct taxes, but rather in the realm of indirect taxation.

Senator SAMPSON:
Tasmania

– I shall not traverse at length the speech of Senator O’Flaherty, but I agree with what he said regarding Australia’s national debt. That debt, as the honorable senator pointed out, increased largely during the war when Australians were fighting for their very existence. Now that the war is over, we must tackle the task of reducing the national debt, but I see no sign in the budget that the Government proposes to do anything in the matter. Apparently Senator O’Flaherty does not believe in freedom of association. The honorable senator spoke of strikes and lock-outs. I submit that if a strike is legal, a lock-out also is legal. The honorable senator cannot have it both ways; what is sauce for the goose should be sauce for the gander also. Referring to the lock-out in New South Wales, the honorable senator said that the trouble arose because one man would not join a union. He showed clearly that he does not believe in freedom of association. I do believe in that freedom. I do not believe in compulsory -unionism. I go so far as to advocate that the Constitution should be amended to provide that no man or woman shall be penalized because of his or her refusal to join any particular organization. Senator O’flaherty referred to full employment, but he had nothing to say about full production. He spoke most bitterly against piece-work. I well remember when, for -a period of twelve months, I worked at the Golden Phoenix Gold Mine in Rhodesia. At that time we worked not for wages but on contract. Three or four of us, with a party of, perhaps, 30 or 40 native boys, would take a contract with a company sinking or driving. The company provided us with explosives, and other things. We could do much better on contract than we could do on the ruling payment of 30s. a shift. I cannot understand why honorable senators opposite object to the piecework system.

To me, the salient feature of the budget is the omission of any reference to a reduction of direct taxes. No reference was made to that matter in the Governor-General’s Speech. .Senator O’Flaherty ridiculed any suggestion that direct taxes should be reduced. He said it; was essential that the existing rates be. retained. I join issue with him on that point, because I believe that the present heavy rates of income tax is one of the chief causes, if not the chief cause, of the industrial discontent which we arc experiencing to-day. We cannot run away from the fact that although the war ended over twelve months ago industrial discontent exists in every country. I agree that some relief should be given in respect of indirect taxes, such as sales tax, in order to counteract the rising cost of goods. Wages to-day in the Commonwealth are nominally high, but their buying power is exceedingly low. Heavy taxes retard the expansion of industry and discourage the investment of overseas capital. I have endeavoured in vain to discover the reason why the Government and its supporters are so obsessed with the idea of retaining the existing high rates of income tax. Possibly, the reason is the need to finance the social services about which honorable senators opposite have boasted so much in recent years. Apparently, the Government will not reduce direct taxes because it requires all the money it can get in order to do for the individual, through social services, what he should really do for himself. If the Government proposes to provide social services of all kinds - and I do not believe that the community is receiving full value for the money expended on some social services - it follows that it must retain heavy rates of taxes. Otherwise, it could not finance those services. Heavy expenditure must also be incurred in the setting up of various departments to administer social services. Those departments require big staffs of highlypaid officials. During the election campaign I advocated that direct taxes should be substantially reduced. Apparently, the Labour party will not listen to reason in this matter. Yet, its own platform provides that persons earning less than £300 a year should not be obliged to pay income tax. Honorable senators opposite tell us most fervently from time to time that they are pledged to uphold that platform, that they would die in the last ditch rather than fail to adhere to it. Surely they realize that a reduction of income tax would increase the purchasing power of the wages of taxpayers in the lower groups of income. That is elementary. I have discussed this matter with members of the ministerial party, but I have not yet been furnished with a satisfactory explanation as to why .the Government is determined not to reduce the existing high rates of income taxes. The present heavy taxation is one of the primary causes of industrial discontent now prevalent throughout the Commonwealth. Honorable senators .opposite also appear to overlook another elementary factor, namely, that money is worth only what it can buy. That is a simple economic principle. Every one knows perfectly well that the purchasing power of the £1 depreciated substantially during the war, and that it is still decreasing in spite of all the existing economic and price controls. So long as production remains at its present low level, and it is still falling, costs will continue to rise. This applies to all the necessaries of life, including housing. That is obvious. The purchasing power of the £1 is steadily decreasing ; and that is what is really meant by inflation. Inflation arises under conditions under which the purchasing power of money is depreciated. That is the problem which confronts us to-day. The Government has made a timid effort to reduce the sales tax, but reductions of the sales tax will .not, as the Treasurer seems to think, check inflation. It will merely bring about a temporary fall of prices of articles on which the tax is reduced. It will not check rising costs. “Within a month rising costs will wipe out any benefit which might be given to the people by reductions of sales tax. I again urge the Government to reduce the tax on incomes in the lower range. Apparently, that portion of the Labour party’s platform which prescribes that a tax shall not be levied on incomes under £300 a year has gone by the board. I repeat that reductions of tax on incomes in the lower groups would go a long way to overcome much of our present industrial troubles. I do not suggest that it would prevent industrial discontent altogether. Indeed, discontent is a good thing in some respects; to be always content with existing conditions is a bad sign. The first essential to check inflation is a drastic reduction of direct taxes. By that means an incentive will be given to increase production, and this in turn will be followed by reduced costs, with a corresponding increase of the purchasing power of the community. A worthwhile reduction of direct taxes would solve most of our economic troubles. That is elementary. People work in order to earn incomes with which to buy the things they need. They do not work in order to pay exorbitant taxes. I have discussed this subject with the man in the street, and I am convinced that the retention of the present high rates of income tax is one of the root causes of industrial discontent. Taxation is a funny thing. Taxes grow and grow. I recall how, in 1930, the Scullin Government brought a gentleman named Jones from Canada to this country to explain the sales tax. I had visited Canada two years previously, and as I travelled through the various provinces I heard quite a lot about sales tax. Members of the Government in Ottawa told us what a fine thing sales tax was. One Minister said it was an absolute “ money-spinner “, and that people really liked it. They did not know much about it because it was not very obvious. However, as we travelled round the country and spoke to members of boards of trade which are equivalent to our chambers of commerce and other people, we found that they did not have a good word to say for the sales tax. However, it was introduced to this country by the Scullin Government - purely as a temporary measure of course - to tide us over bad times. It was to be lifted when our economic position improved. Of course it was. Those impositions are never permanent - so we are led to believe. I recall that in about 1935 or 1936 certain members of Parliament including myself, approached the Treasurer of the Government then in office - it was a nonLabour administration - and urged a reduction, or the total abolition, of the sales tax. The Treasurer told us that we were mad; that we were superoptimists to believe that any government could relinquish such a “ money-spinner “ - those were his actual words. And so it goes on. Once a tax is imposed, it is the devil’s own job to have it removed. In fact, it is well nigh impossible. I am reminded of a story of an old kaffir chief in South Africa, when I was a trooper in the British South African police under the British Chartered Company in Matabeleland when a hut tax had been imposed upon the natives. It was a simple tax. Every man had to pay 10s. a year for each hut that he possessed. Of course, many of the natives had three or four, or perhaps in the case of a chief, seven wives. They had to pay 10s. for each wife because each wife had a separate hut. This was rather a stiff impost and one old kaffir chief was very annoyed about it. In the good old days before the advent of the British . into Africa the natives had not paid any taxes. They were able to do all sorts of things that we put a stop to, and of course the question of taxes became a burning issue. The old chief was told that we taxgatherers protected him from his enemies, more or less fed him, and looked after him, and that, therefore, it was only fair that he should provide some of the money required by the Government to do these things. The chief finally said, “ Yes, I understand. It is like this. I have a dog, and the dog is hungry. Hecomesto me and begs food. Isay to him, ‘ My dear faithful dog, Icanseethat you are hungry and I amsorry for you,I shall give you somemeat’. I then take my knife and cutoff thedog’s tailandgiveit to him,saying, ‘ Here my faithful dog, be nourished by this nice piece of meat “. I n many respects the Government’s social servicescheme about which honorable senatorsopposite are so boastful, makes me think of the kaffir chief and his dog.

Senator SHEEHAN:
Victoria

– I am afraid that any onewho had endeavoured, by listening to the arguments advanced by honorable senators opposite in the course of this debate, to reach a sensible understanding of what the budget is all about, would find confusion worse confounded. It was interesting to hear Senator Sampson talk about the old kaffir chief and his dog; but I think he should have told us whether or not the army of occupation was taxed too. Various lines of thought have been followed by speakers in this debate. I realize, of course, under the Standing Orders, on the motion of the printing of the budget papers, honorable senators may advance their pet theories and discuss almost any matter under the sun. The fact that we are discussingthe amount of revenue that is to be made available to the Government during the current financial year, bring all matters of government within the scope of the debate; but it is not my intention to ride any particular hobbyhorse to-night. I shall endeavour to get back to the real purpose of the budget. In the Speech of His Royal Highness the Governor-General, the Government intimated to the Parliament, and to the country at large, what it proposed to do on behalf of the nation during the present session of Parliament, and in subsequent sessions. The budget speech of the Treasurer (Mr. Chifley) indicates to the people of Australia the manner in which the Government proposes to finance its various undertakings. I say quite frankly that if I believed that the budget wasa last word so far as reductions of taxes are concerned, I should be rather critical of the proposals, but all honorable senators are fully aware, althoughthey haveendeavoured to confusethe issue, thatthe Treasurer has alsoannounced the intention of the Government to reducetheheavy burden of taxation,whenever theopportunity arises. The warconcluded onlya littlemorethana year ago. This is our first peace-time budget, and already the Government has been able to effectsubstantialremissions off taxes, which this financial yearamount to £81,000,000. Income tax isreducedby no less than £37,000,000, sales tax by £20,000,000 and customs and. excise duties by £4,000,000.Senator Leckie suggestedthat Labour supporters wereso satisfied with the Government’s proposals that they wereadopting the attitudeof a contented cow chewing its cud. That simile, I think, is a good one, because we on this side of the chamber contend that we have at the helm of this country a government that will reduce the burden of taxation at every possible opportunity. But what is the attitude of honorable senators opposite, and of members of the Opposition in the House of Representatives? Have they put forward any constructive criticism? Have they suggested how expenditure on any particular item can be reduced?No. All sorts of epithets have been hurled at the Government. We have been told that the budget is politically dishonest and contrary to Labour’s policy; but we have not been told how expenditure could be reduced. It is easy to adopt the attitude of Oliver Twist and just “ ask for more “. It is easy to make bald statements that certain things should be done, without showing how they could be done. Senator Leckie endeavoured to show that the tax concessions in the current financial year, amounting to £61,000,000, would be made up by additional moneyspaid into the coffers of the Treasury. Because of the wise planning of the Government, unemployment is nonexistent. Men and women who have been engaged in the armed services or in the production of munitions of war are returning to industry and becoming wageearners, and they will be contributing to the Government’s income from taxes. Is it not better to have that army of people contributing to the upkeep of the nation than to revert to the conditions which existed prior to the war, when many of them, instead of being revenueproducers, were a charge upon the Government because they were unemployed, and had. to apply for the dole? When honorable senators opposite make suggestions of the kind I have mentioned they show clearly that they are devoid of any ability to apply themselves intelligently to the problems of the nation. Senator. Sampson uttered a truism when he said that money is only worth what it will buy. He said that a reduction of direct taxes would enable the taxpayers to have more money to spend; in other words, the workers would bring home more money in their pay envelopes. That is a very desirable objective. However, I have always said that the value of the wages received by workers cannot be accurately gauged in terms of the pounds, shillings, and pence that they bring home. The true value is represented by the quantity of goods and services that the money will buy. How would the workers benefit if the Government reduced direct taxes on the average wage by 10s., 15s., or even £1 a week and if, following that reduction, there was wholesale inflation? In such circumstances, the workers would find that their increased wages could not buy as much as the wages they previously received. It is not necessary to have more than .a rudimentary knowledge of the intricate subject cf economics to understand that the value of wages is represented by the quantity of goods and services that money will buy.

What does the Government intend to do for the people? It intends to give them some real social benefits, some amenities of life, some improvement of their standard of living. If we can see that the living standards of the people will be raised as the result of the Government’s budget proposals, we must agree that the Government is doing a very good job. The Treasurer’s budget speech states that the estimated total expenditure during this year, apart from defence and post-war charges, is £223,000,000, which is £59,000,000 more than was actually expended in 1945-46. The extra money will be used in the interests of the people. Additional amounts will be expended on increased social services. Pay ments to the National Welfare Fund will amount to £51,000,000 in respect of. social service contributions, plus £13.000.000 in respect of pay-roll tax, making a total of £64,000,000. Payments to this, fund last year amounted to only £4.6,000,000. Do honorable senators opposite suggest, that the Government should reduce its expenditure on social services.? Do they suggest that,, because only £46,000,000 was expended in that way last year, the Government should not spend £64,000,000 this year? I have heard no such suggestion from them. Prior to the elections, the Parliament agreed to relax the application of the means test to persons seeking the benefit of social services. The policy of this Government is to reduce the incidence of the means test by a gradual process. Will not that give something of real advantage to the people? It will give to people in the lower income groups the opportunity to obtain services which they could not obtain as the result of a reduction of direct taxes. What would it avail the wage-earner if, as the result of a reduction of his direct tax payment by 10s., 15s. or even £1 a week, he could not obtain financial assistance in times of adversity or sickness ? The Government, in its social service plans, intends to provide such people with medical attention and hospital treatment in the event of ill health or injury. Under the powers conferred upon this Parliament by the people at the recent referendum, the Government is able to give to the community benefits that will enable them to enjoy life and which will make them an .asset to the community instead of a hindrance.

I refer again to the Government’s proposals as they were outlined in the GovernorGeneral’s Speech at the opening of this Parliament. That important document shows that the Government intends to carry out many important works, particularly for the improvement of postal and telephone services. I agree with the Postmaster-General (Senator Cameron), who has expressed the hope that in the very near future postal employees will be able to secure increased wages and improved conditions of work. I hope that the industrial tribunal which has authority to determine the wages and conditions of postal employees will soon get busy. Honorable senators opposite have frequently complained of unsatisfactory postal services throughout Australia. They, like myself, receive many communications from electors asking whether new telephones can be installed and whether better postal, telegraph and telephone facilities can be provided in country districts. The budget makes provision for the expenditure on behalf of the Postal Department of £34,400,000, which is £5,400,000 more than the actual expenditure last year. The increases contemplated are £2,000,000 for new works, £1,900,000 for maintenance and extension of services, and £1,500,000 for capital finance for the Overseas Telecommunications Commission. Does any critic of the Government say that it should not undertake this expenditure? Do honorable senators opposite claim that the Government should reduce taxes and thereby be compelled to tolerate the unsatisfactory conditions which we have suffered over a long period ? The Postal Department, although it has been a good revenue-producer, was starved by anti-Labour governments. Ramshackle buildings all over Australia are used as post offices. Would honorable senators opposite urge the PostmasterGeneral to reduce his estimates of expenditure so that taxation might be reduced ? Is there any other part of the Government’s developmental programme that they would condemn? Senator Brand said this afternoon that many people are engaged in unproductive work. Almost in .the next breath he said that the Government should maintain adequate defence forces in order to make Australia safe for future generations. I agree with him that it is essential for us to embark on adequate defence preparations. But does the honorable senator say that taxes should be reduced so drastically as to make it impossible for the Government to do these things? Taxes should not be reduced in a way which would prevent Australia from taking its part in the councils of the world and from contributing its share to the moulding of future peace. Honorable senators opposite have put forward their suggestions merely for party political purposes, with the intention of confusing the minds of the people. Their arguments are not soundly based. The

Leader of the Opposition wanted to know why there is a shortage of consumer goods. Senator Sampson said that the shortage was the result of discord within the nation. Many people who have all sorts of pet theories say that discontent is rife because there is a shortage of consumer goods. The reason for this shortage is simply that there was a wholesale exodus of man-power from the field of civil production into the armed services and the munitions factories. It is unreasonable to expect that the leeway could be made up in such a short time. Many of our industrial undertakings converted their peace-time plants for the production of munitions of war. The machines used in peace-time were thrown aside and new machines installed, so it is unreasonable for honorable senators opposite to expect that factories could be geared up for civil production within a short period. The men and women who have been demobilized from the fighting services are consumers to-day. They have considerable purchasing power, and are not merely window-shoppers, as they were forced to be during the depression years when they had little or no purchasing power. There is now a greater demand for consumer goods than there was in the prewar period. I hope that before long Australia will be able to meet the demand made to-day for those goods. It will be necessary to increase the number of factory operatives, and the Government is embarking on an immigration policy. Unfortunately, the natural increase of the population is not sufficient to cope with the demand, for the goods which Australia can produce. We have to look overseas for immigrants with which to populate this country, in order to make it safe and provide sufficient workers for industry.

We can confidently accept the proposals outlined in the budget-speech. When the war expenditure ends, we can alter our economy to make further tax reductions possible. Honorable senators have found that the heavy income tax now paid by them in respect of their parliamentary allowance has caused a great reduction of their purchasing power. The Labour party, which has sprung from the people, and whose continuance is dependent on the support of the great majority of the people, would not countenance legislative action calculated to do harm to the community. The intention of the Government is to reduce the burden of taxation as soon as practicable. Those honorable senators who contend that the present heavy taxes are responsible for the industrial unrest are acting against the best interests of the people. That unrest is due to other factors to which I have referred on previous occasions. I shall not reiterate them this evening, other than to say that when the workers throughout the world are assured of their proper place in society and of security in their old age and in times of sickness or unemployment, a different psychology will be created. They will then be inclined to give more of their energy than at present. The newspapers are full of advertisements clamouring for men, women and minors to accept positions of various kinds. The chief complaint of the captains of industry is that they cannot obtain sufficient bricks and other materials with which to enlarge their factories, so we know that the present production level is not due to industrial unrest. The one object of honorable senators opposite is to destroy the faith of the workers in the Labour movement, but the workers know the kind of budget that would be presented to the Parliament if the Opposition were in power. I hope that honorable senators opposite will advance constructive criticism, or refrain from the kind of arguments used up to the present merely for the purpose of causing confusion. !

Senator COOPER:
Queensland

– I have listened with keen attention to the speeches delivered by supporters of the Government. Senator Sheehan always presents a good case for his side, but I cannot understand how he manages to derive consolation from the budget proposals for the ensuing financial year, as they afford little encouragement to the taxpayers. I now know why the budget was not introduced prior to the recent general elections. The Treasurer (Mr. Chifley) found it more expedient to give a brief outline of revenue and expenditure for the last financial year. Had the budget been introduced before the elections, I believe that the result of the appeal to the people woud have been very different. After an examination of the figures one realizes that the budget offers no substantial relief. Certainly a reduction of the sales tax is to be made, but that will not greatly benefit the great mass of workers in the lower income groups. As the wealthierpeople have more money to spend individually, the reduction of the sales tax actually benefits them more than thepoorer classes.

Provision has been made for the expenditure in 1946-47 of £221,000,000 on defence and post-war charges. That is a reduction compared with the actual expenditure for last year. In 1945-46’ the total expenditure on defence and post-war charges was £378,000,000,. and for 1946-47 it is estimated at £221,000,000. The actual expenditure on service pay and allowances in 1945-46 was £130,000,000, and the amount expended on deferred pay was £72,000,000. The estimate for 1946-47 for active service pay and allowances is £25,000,000, and for deferred pay only £17,000,000. That represents an actual saving in service pay, allowances and deferred pay of £170,000,000. The expenditure on defence in 1946-47 will be £3,000,000 more than in- 1945-46. That is the position more than twelve months after the cessation of hostilities. I am astounded that such a large sum of money should be allocated to defence without details of the expenditure being given. T well remember that eight or nine years ago, when the Labour party was in opposition, its members strenuously opposed a vote of £5,000,0000 for defence. Even later, when war seemed practically certain, and it was clear that Australia could not escape participation in it, the Labour party opposed an expenditure of about £10,000,000 on defence. Now that party has gone to the other extreme. When we take stock of our position we must realize that Australia has many advantages over other countries. It also suffers some disadvantages. Among Australia’s advantages is its ability to produce almost any primary product that is grown elsewhere. A great variety of soil and climate enables that to be done. This country has rich raw materials, including valuable minerals. Moreover, it has a big home market that is starving for goods. There is con:siderable purchasing, power in the. hands of the people, enabling them to buy foodstuffs, furniture, furnishings, machinery, and other things which this country can. produce. There is, in addition, a good world market for Australian products, both primary and secondary. At the. moment, there is no need to look for markets for our goods. Australia was fortunate that, with the exception of some damage by enemy raids to Darwin, no great destruction of property took: place. Its shores, were not invaded by an enemy, and its towns and cities, manufacturing plants, shipbuilding yards, &c, are intact. “With few exceptions, the homes of the people were untouched. Being unable to obtain manufactured goods, from abroad, Australia set about to manufacture machinery of various kinds, as well as war equipment and materials. The result is that we now possess industrial plant, machinery and equipment which, but for the war we might not have obtained for many years. This country, therefore, is in a better position in respect of secondary industries than it was in 1939. We have had a flying start and are in a much better position than are many other countries which suffered invasion and occupation by a ruthless enemy. All that is required is the will to work and produce. As I have said, Australia has disadvantages as well as advantages. Huge debts were incurred during the war, but thanks to the valour and courage of the members of the fighting services and the civilian population, we have come out of the conflict successfully. We have, however, increased our national debt, which now stands at over £2,000,000,000. Fortunately, our indebtedness is mostly to our own people. Other handicaps are high taxes, industrial unrest, and the presence in the community of an undesirable element whose main object seems to be to prevent others from working, and to retard or destroy Australia’s progress. There is a lawless element among the industrial unions which is preventing Australia from taking full advantage of the opportunities that I have mentioned. The heavy burden of high taxes is, in some measure, preventing increased production. What has the Government done during- the last twelve months to increase production ? Not a month passes without industrial unrest, occurring- in one State or another.

Senator Armstrong:

– This year Australia’s exports constitute a record.

Senator COOPER:

– That, record is in connexion with primary products, not secondary goods. It must also be borne in mind that, prices for all our export, goods are much higher than was the case in 193.9. I am speaking of industrial unrest in secondary industries. The favorable credit, balance which Australia, has with other countries has been provided by our primary industries. We. have received high prices for our primary products, ,and guaranteed prices from Great Britain in respect of wool,, meat and dairy produce. These exports have provided a most necessary pool o.f credit. But if we continue to have strikes on the coalfields and in secondary industries generally we shall lose our favorable position among the nations. I challenge the Minister for Munitions (Senator Armstrong) to cite one instance in which an. employer has not done everything possible to encourage his employees to settle down and get on with their jobs. I do not need to tell the Minister that the majority of strikes which have occurred during the past twelve months have been against governments, and not against private employers. Most of those strikes have been due to the failure of employees to obtain an increase of their wages. In other words, they struck in the face of decisions of the Arbitration Court. The Government has done nothing to prevent this disruption at a time when Australian industry has the bail at its feet, and the best chance yet presented to it to expand. Has the Government encouraged trade with the Netherlands East Indies during the last twelve months? Has it done anythng to ensure that goods bought by foreign countries will be shipped to those countries? It could thus help to build up our export trade, which the Minister for Munitions says is so important to Australia. Australia is a country awaiting further development with a sparse population, and if we are to stand on our own feet in the future we must accept every opportunity to build up our export trade. But the Government has failed completely to assist industry to achieve that objective.

A reduction of direct taxes would provide the greatest possible incentive to in1 crease production. Reduction of direct taxes gives a great incentive, not only to employees, but also to employers. In addition, it would increase the purchasing power of wages without interfering with the price structure. A straight-out increase of the basic wage by, say, 15s. or £1 a week, would inevitably result in an increase of the cost of production which, in turn, would involve an increase of the prices of the commodities. Thus we would have a vicious circle. As wages are increased costs also must increase to a corresponding degree. On the other band, however, a. reduction of income tax would increase, the purchasing power of wages without affecting the costs of production. A reduction of income tax would be the equivalent of a rise in the basic wage. Thus the best way in which to increase the purchasing power of the community is to reduce direct taxes. In view of these facts, I fail to understand why the Treasurer refuses to reduce direct taxes. He would be perfectly justified in effecting such reductions even if they involved, some risk. He says, in affect, “ If we reduce direct taxes, the Government will lose revenue “. That argument is not substantiated by a comparison of the Treasurer’s estimates and actual receipts during the last three years, in each of which actual receipts exceeded the estimate. That fact is easily explained. Hundreds of thousands of men and women have, in that period, been discharged from the services. They have received their deferred pay and other monetary settlements in respect of their military service, and, to-day, as employees in civil industry they are earning wages and paying income tax. At the same time, they have increased the demand for consumer goods, and this increased demand is reflected in total collections of sales tax. It is clear that this trend will continue throughout the current financial year, and that revenues will remain buoyant. I have no doubt that in the current financial year actual receipts will exceed the Treasurer’s esti- mate. Therefore, I repeat that even at some risk the Treasurer would be wise to reduce direct taxes. In that way a very great benefit would be conferred upon ths community as a whole. During the recent election campaign the Leaders of the Opposition parties pledged themselves if returned to power to reduce direct taxes, and in Queensland the people endorsed that policy by electing the candidiates of those parties, including myself, to the Senate. There is not the slightest doubt that direct taxes can be reduced without detriment to the nation’s finances. Indeed, the Leader of the Australian Country party, the right honorable member for Darling Downs (Mr. Fadden), explained how he proposed to effect such reductions. He pointed out that arrears of income tax amount to a substantial sum, whilst assessments have not yet been issued in respect of many incomes for the last three financial years.

Senator Ashley:

– Is the honorable senator advocating that primary producers who suffer losses as the result of the present drought in Queensland should be obliged to pay their tax immediately?

Senator COOPER:

– I am glad that the Minister for Supply and Shipping (Senator Ashley) has raised that matter. I propose to deal with it in some detail. As I have said, arrears of tax amount to many millions of pounds, whilst assessments have not been issued in respect of some incomes earned as far back as 1943-44. We must look at both sides of this matter. The main reason advanced for the introduction of pay-as-you-earn tax was that it would enable individuals to pay as they earn, However, that objective has not been achieved in respect of a large class of taxpayers whose incomes for the last three years have not been assessed. Many individuals whose tax has been deducted under the pay-as-you-earn system have shown a loss during those years in respect of income from property. In some cases that loss may exceed the income earned from personal exertion. I refer to persons who own farms, or businesses, which are operating at a loss. However, the tax which they have paid in respect of income from personal exertion is retained by the Government, although during the last three years they may have been working their farms or businesses on an overdraft, on which they would be paying interest. On the other hand, many taxpayers have shown a profit on farming, or business activities, and these are still waiting for their assessments. When they receive their assessments they will be obliged to pay in a lump sum tax in respect of their income for two or three years. In such cases, the taxpayer is denied the very benefit which the pay-as-you-earn system was designed to confer on the taxpayer.

Senator McKenna:

– The honorable senator is quoting a very exceptional case.

Senator COOPER:

– No; I know of quite a number of taxpayers whose incomes for the last three years have not yet been assessed. I shall now deal with the position of the primary producer. I take, first, the case of a man who made a. profit in the financial year 1944-45. He is assessed at the beginning of the year .1945-46 on his income for 1944-45. He may then incur heavy losses due to drought, disease or other depredations, in the year 1945-46. In many cases that I could cite, farmers have gone deeply into debt in this way, and have had to borrow money and pay substantial interest on it. I submit that in these cases tax assessments should be withdrawn until the end of the year.

Considerable hardship is being caused to many members of the community by the National Security Regulations governing the sale of land and property. Some land-owners have found that although they purchased their property ten, or perhaps twenty years ago, and have paid rates and taxes upon it ever since, the valuation placed upon it for the purposes of the National Security Regulations is lower than the original purchase price. As prospective buyers in most of these cases are quite prepared to pay the original purchase price, I see no reason why permission should not be granted for the sale at this figure. The same difficulty occurs in connexion with houses. Many dwellings are assessed at considerably below the figure that they would cost to-day, or that they would have cost even in 1941 or 1942. Whilst I admit that restrictions are necessary upon the sale of property, there should be some elasticity in their administration.

The housing shortage in every State of the Commonwealth is acute, and little headway is being made by the Government in its efforts to remedy the position. Hundreds of thousands of people, including young service men and women, are inadequately housed. Many of them are living under unhygenic conditions, sharing houses or portions of them. Nothing is more likely to break up harmony in a home than two or three families having te share one kitchen. I have no doubt that the industrial unrest to which I referred earlier in my remarks is due in a large measure to present-day housing conditions. The Government cannot escape entirely the blame for the position that exists to-day. Quite apart from delays that have occurred due to strikes in the past twelve months, very little planning for housing programmes was undertaken during the war period. It is true that all our energies had to be devoted to defeating the enemy, but tha* should not have prevented the Government preparing plans to be put into operation immediately the war ceased. Five years ago, the Government was warned that the housing position in this country would be very difficult when the war ended. On the 24th September, 1941, the Social Security Committee in an interim report stated -

If a housing programme is to be included in plans for absorbing our returned soldiers immediately after the war and also those whose labour is now engaged in war-time industries, an immediate start upon planning a housing programme is necessary.

It is the opinion of the committee that thi« should be undertaken forthwith.

In 1941 the committee recommended that a housing planning authority be set up immediately to investigate the Australian housing situation. That was five years ago.

Senator Nash:

– And the worst years of the war have intervened.

Senator COOPER:

– That is quite true and I make every allowance for that fact. In May, 1942, the committee again recommended the immediate appointment by the Commonwealth of a House Planning Committee, and eventually in April, 1943, the Commonwealth Housing Commission was appointed to go fully into this matter. The Commission made its report to the Government in October, 1943, stating that it was estimated that by 1945, the deficiency of houses in Australia would be between 250,000 to 300,000 dwellings. The commission recommended an immediate post-war programme providing for a target of 50,000 dwellings in the first post-war year, and a long term programme and permanent housing plan, extending by the third postwar year, to 80,000 dwellings a year. It is apparent therefore that the Government was aware of the position that -was likely to arise, yet we find that in the first year after hostilities ceased, the target for homes was set at 24,000 and that the actual number completed to the 30th June, 1946, was 13,000. For the current year the target is 42,000. It is estimated that to meet ordinary demands, 40,000 new homes are needed each year in this country. Adding to that, the additional homes required to offset the war years when no building was carried out, the total number of homes required in the next ten years will be 800,000. If we are to complete only 13,000 homes a year, or even if we are to achieve the target set for the current year, namely 42,000, we shall still be many hundreds of thousands of homes short of the demand. I understand that housing is being given one of the highest priorities. This is necessary, because without adequate housing, it is impossible to bring up good citizens. All our improved medical schemes, and social services of all kinds will be of no avail unless homes of a good standard can be provided for all those members of the community who need them.

Expenditure on unemployment and sickness benefits in the current year is estimated at £4,000,000. Last year, only £1,444,000 was expended on these services, and it is difficult to understand the reason for the increase. If the Government believes that £4,000,000 will be required during the current twelve months for the payment of unemployment benefits, a considerable degree of unemployment must be expected.

I shall reserve any further remarks that I have to make on the budget until the individual items are under discussion.

Senator TANGNEY:
Western Australia

.- At this late hour I shall not delay the Senate by discussing items of the budget which already have been fully dealt with by previous speakers, but in a debate of this kind, one naturally expects to hear some constructive criticism - if criticism be necessary - from members of the Opposition with regard to the ‘ems of expenditure contained in the budget. First, I do not regard this as a peace-time budget, but rather as a transition budget which has to provide substantially for the aftermath of the war period as well as to pave the way for the period nf peace. We are faced with heavy defence expenditure as a safeguard for the pence years. Opposition speakers have been unanimous in stating that we must provide adequately for defence in the post-war years, but at the same time, they decry the only means by which adequate defence can be achieved, namely by the expenditure of revenue derived from taxes. At the outbreak of World War II., we learned the folly of having left Australia undefended during the years following World War I. In the interests of peace and the preservation of the safety of the Commonwealth, it is absolutely necessary for us to have an adequate defence scheme. _ While speaking on this subject to-day, Senator Brand advocated the unification of the various- defence portfolios under one Minister ; in other words, he suggested the abolition of the separate portfolios of the Minister for the Army, the Minister for the Navy, the Minister for Air and the Minister for Munitions and the substitution of one ministerial office. He claimed that this system had served very well in the years preceding the outbreak of World War II. I disagree with that view. I do not believe that any thoughtful Australian will agree that the pre-war defence policy of Australia was adequate. When war broke out on the 3rd September, 1939, this country was inadequately prepared to take part in any form of war, either in distant theatres or on our own shores. We must not regard the defence system which’ was in operation before the- outbreak of “World1 War II. as a model for the future-. This budget provides for the continuance of the separate portfolios for the various, defence units and for the Department of Munitions, together -with a co-ordinating Ministry of Defence. That is a sound first step towards ensuring that our defences shall be maintained at a level commensurate -with security. It is fallacious to talk about maintaining, adequate defence forces- and at the same time to talk of reducing taxes. A” tost every honorable senator opposite who has taken part in this debate ha 3 spoken only of taxation,, as though the taxation proposals- in the budget were the only points of any importance in it. That attitude betokens the personal interest of honorable senators opposite on the subject of taxation;, not a broad national point of view. Senator Brand spoke of the necessity for increasing, pensions, such as war widows’ pensions. The object of the Government’s repatriation policy is to increase pensions, but that policy cannot be carried out in its entirety unless taxes are maintained at a high level, certainly at a much higher level than existed prior to the war. This talk of the necessity for improving repatriation benefits and defence services and at the same time making drastic tax cuts is utterly ridiculous. The main criticism of the Government’s tax reduction plans is that they apply only to indirect taxes. The attitude of honorable senators opposite in this regard is at complete variance with the policy which they enunciated in the recent election campaign. They and their supporters in every .State proclaimed from public platforms and by advertisements published at great cost in the newspapers that indirect taxes were an unfair burden on the people. They promised that, if they were returned’ to power, they would remove indirect taxes altogether. This budget provides for ,a. move in that direction. It goes a great way towards ‘ the elimination of sales tax and other indirect taxes. Nevertheless, the Opposition, which advocated this course as a part of its vote-catching tactics, now claims that the Government is insincere and that reductions of direct taxes would have been more in the interests of the people. Their arguments are indicative of their insincerity.

A great deal has been said about the reduction of direct taxes. Everybody in Australia would like to pay a little less in taxes, but I recall the time - doubtless it is still vivid in the memories of other honorable senators - when the most important problem to many people was. not taxation but the means, of finding a shilling or two- for the next meaL Income tax did not worry many people fifteen years ago.. Income was the main problem. Thousands of people were grateful if they received even- a few shillings from the unemployment relief doles, which had to be handed out at that time because productive employment could not be found for them. That is why (axes are being maintained at a high level. The Government is ensuring, that we shall not return to those evil days of depression and dole payments. Every Australian must have his birthright,, which is a decent, standard of living. Should the misfortune of illness or accident cause a worker to be unemployed for even a short period’, he will be given an allowance which will guarantee to him and his wife and children a decent minimum standard of living, not just the few shillings a week which was considered to be sufficient during the depression. For these reasons, J consider that honorable senators who criticize the budget for providing indirect tax. reductions instead of direct tax reductions are insincere and not very realistic. During the election campaign, the leader of the Liberal party (Mr. Menzies) and the leader of the Australian Country party (Mr. Fadden) tried to outbid each other by making specious promises to the people. They offered tax reductions varying from 20 per cent, to 28 per cent. Fortunately, the elections occurred in time to stop their bargaining; otherwise their bids might have been increased. Had these reductions been applied, the workers, for whom honorable senators opposite have expressed so much concern to-night, family men who earn about £300 a year, would have benefited by only about lid. a week. The Opposition would have us believe that this would have put an end to industrial strife. People with incomes of £5,000 a year, however, would have benefited by about £11 aweek. Of course, the greatest benefit would have gone to the people served by the Opposition parties. The Opposition’s cry for a reduction of direct taxes is merely intended to mislead the workers into believing that they would secure some great benefit from a reduction. An analysis of the amounts of tax paid by basic wage-earners and others in the lower income groups shows that they would have benefited very little, if at all, by the implementation of the Opposition’s schemes. At present, they pay very little in the form of direct taxes. This fact exposes the falsity of the sympathy expressed by the Opposition for the workers, who, they say, would be contented in industry if granted these slight tax reliefs. The causes of industrial stoppages are much more deep-seated than the Opposition would have us believe. I do not sympathize with every industrial upheaval that has taken place in the Commonwealth, but in many instances the men have been fully justified in taking direct action. Frequently, strikes are employed as a last resort after all other attempts at settlement have failed. As an example, I refer to the stoppage whichoccurred last year on the Collie coal-field in Western Australia. I had the audacity to go to Collie to investigate conditions there. We are told that the Commonwealth Government should intervene in industrial disputes, but as soon as one of its supporters takes action to help reach a settlementwhen trouble arises, the Government’s opponents raise an outcry. I have had a lot of dealings with the’ Collie coal-miners, and when the strike occurred I went to Collie and saw them, communicated with the Minister concerned, and secured promises from employers. I gave my word that an arbitration court judge would come to Western Australia to adjudicate in the dispute, and the men went back to work within an hour of my arrival. My intervention in the dispute restored the industrial life of the State to normal, but I was soundly rapped over the knuckles by the judge, who complained that I had made up his mind for him. He said that he had been forced to come to the west in order to save my face. As my young brother said, perhaps if he had seen my face first he would have saved himself the trip. The trouble ended, but a settlement was reached seven months after the first promise had been made that the case would be submitted to arbitration. In that time, the men’s patience had been exhausted as the result of delay and frustration. That sort of thing happens in other cases. Strikes are resorted to only because other methods have failed. They are the last resort of the workers. I ask leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

page 633

PAPERS

The following papers were presented : -

National Debt Sinking Fund Act - National Debt Commission - Twenty-third Annual Report, for year 1945-46.

Ordered to be printed.

Air Force Act - Regulations - Statutory Rules 1946, Nos. 162, 163.

Broadcasting - Composite statement of programme and technical service accounts of Australian Broadcasting Commission and Postmaster-General’s Department in respect of the national broadcasting service for year 1944-45.

Commonwealth Bank Act - Classification of positions with names and salaries of officers in the Service of the Bank as at 1st July, 1946.

Commonwealth Public Service Act - Appointments - Department -

Interior- F. E. Wells.

Labour and National Service - F. P.

Bridges, P. H. Cook, T. J. E. Laidlaw.

Supply and Shipping - E. J. B. Foxcroft.

Works and Housing- J. S. Smith, E. G. A. Weiss.

Customs Act - Regulations -Statutory Rules 1946, No. 161.

International Labour Organization - Twentyeighth (Maritime) Session, Seattle, June, 1946 - Reports of the Australian Government and Workers’ Delegates.

Lands Acquisition Act - Land acquired for -

Commonwealth purposes - Sydney, New

South Wales.

Defence purposes -

Cabarlah, Queensland.

Carnarvon, Western Australia.

Winchelsea, Victoria.

Woolloomooloo Bay, New South

Wales.

Postal purposes -

Footscray West, Victoria.

Lilydale, Victoria.

Moorabbin, Victoria.

National Security Act -

National Security (General) Regulations -Order - Control of elastic materials - Revocation.

National Security (Shipping Coordination) Regulations - Orders - 1946, Nos 44-48.

Northern Territory Acceptance Act and Northern Territory (Administration) Act-

Ordinance- No. 8 of 1946- Tax Ordinances Repeal.

Regulations - No. 3 of 1946 - (Crown Lands Ordinance).

Re-establishment and Employment Act - Regulations - Statutory Rules 1946, Nos. 141, 165.

Sales Tax Assessment Acts (Nos. 1-9) - Regulations - Statutory Rules 1946, No. 159.

Sales Tax Procedure Act - Regulations - Statutory Rules 1946, No. 158.

Seat of Government Acceptance Act and Seat of Government (Administration) Act -

Ordinance - No. 11 of 1946 - Careless Use of Fire.

Regulations - No. 6 of 1946 - (Apprenticeship Ordinance).

Trial of W. W. Braitling and A. Wilson at Supreme Court, Alice Springs - Allegations made by counsel for defence - Report of Commissioner (Mr. Justice Simpson) appointed under Inquiries Ordinance of Northern Territory..

Senate adjourned at 11.27 p.m.

Cite as: Australia, Senate, Debates, 27 November 1946, viewed 22 October 2017, <http://historichansard.net/senate/1946/19461127_senate_18_189/>.

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