20th Parliament · 1st Session
The President (Senator the Hon. EdwardMattner) took the chair at 11 a.m., and read prayers.
– Isthe Minister for Supply aware that Captain Murchison, the SydneyHarbour Master, who has just returnedafteratourabroad of ten months in the course of whichhe made an exhaustive study of the loading and unloading of ships, has statedthat the main cause of the delay in the turn-round of ships in Sydney is the inadequate facilities obsolete equipment and uneconomic handling of cargo. Does the Minister accept that statement as being correct? If so, will he refrain in future from blaming wharflabourers for all the trouble, and will he ensure that action is taken by the stevedoring companies to improveSydney’s obsolete waterfront facilities?
SenatorMcLEAY. - I notice that whenever there is a period of acute congestion on the waterfront a number of people usually become very vocal. From the reports that I have studied and the observations that I have made of the subject, I am convinced that there is plenty of room for improvement of port facilities, and, as I have informed the Senate on various previous occasions, the whole matter of port facilities is very largely one for the State governments. From time to time I’ have drawn the attention of those governments to various shortcomings in their port facilities, but we cannot get away from the basic fact that the main problem on the waterfront is that the output per man-hour is SO per cent, less than it was ten years ago. In my opinion, that is the major weakness in the present situation. It is true, of course, that certain other factors contribute to the slowness of turn-round, and as I mentioned in the Senate the other day, from my discussions with master carriers and others I know that the 40-hour week has had a serious effect on the turn-round of shipping because it delays the distribution of cargo from the wharfs. Since the 40-hour week was introduced many warehouses now have to close earlier, and in some instances do not open at all on Saturdays, so that the time available to carriers to move cargo from the wharfs has been seriously curtailed. I have noted with interest what is taking place in New South Wales, and at all times I appreciate constructive suggestions from any section of the community that may help in improving the present position. Certainly, the points raised by Senator Grant should be taken into account, but I ‘remind the honorable senator that the actual task of effecting improvements is purely a matter for the State Government of New South Wales.
– Is it not a fact that the New South Wales Government is interested in the loading and unloading of ships in Sydney only to the extent that the wharfs are under the control of the Maritime Services Board, which is a State instrumentality? Is it not a fact that the employment of labour on the waterfront comes under the control of the Australian Stevedoring Industry Board? Therefore, is it not also a fact that the congestion that has arisen on the Sydney waterfront is the responsibility of the Australian Stevedoring Industry Board and that the Australian Government must accept responsibility for the congestion as that board operates under its control.
– The position is perfectly clear. Senator Grant referred to the congestion that exists on the Sydney wharfs at present. That congestion has been caused by the lack of shed space and the fact that carriers are unable to clear cargoes as quickly as they are unloaded by the waterside workers. Shed accommodation and other such matters are the responsibility of the Maritime Services Board, which is under the jurisdiction of the New South Wales Government. The Australian Stevedoring Industry Board, which is under the jurisdiction of the Minister for Labour and National Service, engages waterside workers for the loading and unloading of vessels. I do not wish to give the wrong impression that, in this instance, congestion has been caused by the shortage of labour on the waterfront. As I have said, it ha.3 resulted from the inability of carriers to move cargoes as quickly as they are unloaded and from the shortage of shed space.
– Will the Minister for Shipping and Transport ascertain whether it is not a fact that in 1948, when serious congestion occurred on the Sydney waterfront, the appropriate department advised the consignees of goods that were congesting the wharfs of Sydney that if the goods were not removed within a specified period they would be moved by the department at the expense of the consignees and stored at
Maroubra? Will he also ascertain whether it is not a fact that the action taken on that occasion had the effect of clearing the wharfs within a fortnight? Can the Minister inform me of any particular reason why similar action has not been taken to deal with the present congestion? I point out to him that the only mechanism available on the Sydney waterfront, the fork-lift trucks, is unable to operate because of the acuteness of the congestion, and that only this week the labour gangs on one wharf had to be reduced to two men to enable men to move about certain parts of that wharf.
– If Senator Ashley issued such instructions when he was a Minister, he did so without legal authority because no Commonwealth Minister has the power to interfere in such matters. However, I should not be surprised if the Minister did issue such an instruction because an examination of other files in the department reveals that “ rafferty “ rules prevailed on more than one occasion. In Victoria action has been taken along the lines suggested by the honorable senator, but in that State the action was taken by the Victorian authorities. State governments and harbour authorities are the only bodies empowered by the law to issue such directions.
– The matter rests with the Australian Stevedoring Industry Board.
– If that is Senator Ashley’s interpretation of the law then I do not propose to accept his advice on legal matters. If it is desirable that similar action to that taken in Victoria should be taken in New South -Wales, the appropriate steps should be taken by the Premier of New South Wales or one of his Ministers.
– In explanation of my question and for purposes of comparison, I ask the Minister representing the Minister for the Navy whether he is aware that in England recently the Admiralty failed to get the courts to place a- limit of £6,246 on its liability for loss of life or injury in the disaster to the submarine Truculent ? Is he aware that on Tuesday of this week in Melbourne the Supreme Court awarded a worker compensation of £3,300, under the provisions of the workmen’s compensation legislation, for the loss of three fingers? Is the Minister also aware that, in connexion with the Tarakan disaster in Sydney in 1950, a widow was paid £1,000 for the loss of her husband ai.d that a stoker mechanic was paid £603 15s. for the complete crippling of one leg and the 50 per cent, loss of one arm? Will the Minister re-open the question of compensation paid to those injured and to the dependants of those killed in the accident on H.M.A.S. Tarakan in 1.950? Will he amend the Commonwealth Employees’ Compensation Act to bring its benefits into line with repatriation benefits? If not, will he give serious consideration to extending repatriation benefits to all service personnel in peace-time as well as in war-time in view of the fact that normal working conditions in the armed services entail far more risk of life than does employment in other services covered by the Commonwealth Employees’ Compensation Act?
– The questions asked by the honorable senator raise matters of principle and of policy. I recollect that at the time of the Tarakan disaster, when similar questions were asked of me, I submitted them to the Minister for the Navy and obtained considered replies which I submitted to the Senate. I take leave to adopt the same procedure again, and I therefore ask the honorable senator to place his questions on the notice-paper.
F-Lj IX l j_ j.j.i.’uUERS.
– I draw the attention of the Minister acting for the Minister for Commerce and Agriculture to a news item, emanating from Singapore, which appeared in the Adelaide Advertiser on the 23rd of October under the heading, “ Australia Asks for Soviet Fertilizers “. The article states -
The Australian delegation to the trade promotion conference at Singapore seized upon a Soviet offer of fertilizers to ask for 100,000 tons of superphosphate and 20,000 tons of ammonium sulphate. This request was forwarded to Moscow by the Soviet delegation and a decision is expected in Canberra this week. The Soviet agreement to supply ferti lizers is thought likely to be dependent upon Australia’s ability to balance the deal with materials needed by the Soviet Union.
Can the Minister say whether it is true that the Commonwealth Government expects to conclude negotiations this week for the importation of superphosphate and ammonium sulphate from Russia? If so, what materials will Russia require in return from this country?
– I thank the honorable senator for bringing that matter to my notice again. As most honorable senators are aware, there is a world shortage of superphosphate. I understand that officers of the Department of Commerce and Agriculture are examining the position. I shall be pleased to make inquiries over the week-end, and to obtain a reply for the honorable senator in time for the next meeting of thu Senate.
– I understand that the present delay of four, five or six hours in the trunk-line service between Tasmania and the mainland is due to the limited number of channels iri the submarine cable. Will the Minister representing the Postmaster-General seek an investigation of the possibility of introducing into the Bass Strait service the newest technique of filtering and repeating which has been developed in the United Kingdom, and thus reducing delays ?
– I shall be pleased to bring the honorable senator’s suggestion to the notice of the PostmasterGeneral, who, I am sure, is eager to provide the best possible telephone service between Tasmania and the mainland.
– Is the Minister representing the Minister for the Army aware that the construction of houses as married quarters for Australian Regular Army personnel at Puckapunyal is far behind schedule; that the house? already erected are very badly sited and will provide little privacy for individual families; and that the rents are to be based on capital cost? If those statements are true, will the Minister take the necessary steps to expedite the rate of construction? Will he also consider a method of siting that is consistent with modern home planning, and confer with the Treasurer with a view to relating rents to the incomes of the occupants and not merely to the capital costs of the buildings? I ask this question because t believe strongly that the maintenance of family life at its highest level is fundamental to the well-being of society and the citizen defence of the nation.
– I have no knowledge of the conditions at the camp to which the honorable senator has referred, but I have some general knowledge of the building programme now in progress for the Army. I assure the honorable senator that no request to expedite the work is necessary, because defence priorities are high and the Minister for the Army is continually urging the Minister for Works and Housing to have camp buildings completed as quickly as possible. The siting of the homes is a technical matter. As the works are undertaken by the professional officers of the Department of Works and Housing, I shall bring the honorable senator’s representations in this connexion to the notice of the Minister for Works and Housing. Rents of all houses that are occupied by public servants and other Commonwealth employees are fixed in accordance with a formula that relates to the capital value of the house and its rental value according to where it is situated. In the cases involving objections to rentals that have come to my knowledge, I have always come to the conclusion that the formula adopted is fair and equitable and I should be astonished if in this case there was evidence on which any other judgment could be given.
– Is the Minister representing the Minister for Labour and National Service aware that due to drought conditions in Queensland this year thousands of workers in the meat and sugar industries will soon be confronted with the prospect of several months unemployment? Have arrangements been made to provide them with other employment? Will the Minister ascertain whether other crops could be grown economically in Queensland’s coastal districts to alternate with the sugar crop, in order that those workers could be assured of regular employment?
– In view of the present state of the labour market, I should be surprised if the conditions that have been mentioned by the honorable senator would lead to widespread unemployment. Quite clearly, the position throughout Australia to-day is that there i3 a surplus of jobs. However, if the honorable senator will place his question on the notice-paper I shall bring it to the notice of my colleague, the Minister for Labour and National Service.
– By way of preface to a question that I shall direct to the Minister representing the PostmasterGeneral, I point out that the DirectorGeneral of Posts and Telegraphs has indicated that it is essential to the health of telegraphists that when rostered on certain shifts they should have a respite of ten or twelve minutes. Will the Minister inform me whether this privilege is enjoyed by telegraphists in all States other than Queensland? Is it a fact that the excuse that has been given for the non-extension of the privilege to that State is that there has been inadequate staff to permit of the health break being given, and that it would be too expensive? Is the dismissal of telegraphists from the General Post Office, Brisbane, contemplated by the Minister as a part of the Government’s staff dismissal policy? If so, how could such dismissals be justified, in view of the apparently acute staffing position that already exists at the General Post Office, Brisbane?
– I shall be very pleased to bring the question to the notice of my colleague, the Postmaster-General, and request that a considered reply be forwarded to the honorable senator direct as early as possible.
– Oan the Minister representing the PostmasterGeneral say whether it is a fact that it now costs 8s. lOd. to send a food parcel to the United Kingdom, whereas, before the recent increase of postage rates,- the cost was only 5s. 10d.? Will the PostmasterGeneral consider restoring the former postage rate on food parcels intended as Christmas gifts to people in the United .Kingdom ?
Senator- COOPER.- There has been a general increase of postage rates, but I am not quite sure what the increase is on food parcels to the United Kingdom. I shall bring the honorable senator’s question to the notice of the PostmasterGeneral, who will prepare a reply.
– I preface a question to the Minister representing the Minister for Defence by referring to an announcement which appeared in the Hobart Mercury of the 17th October, to the effect that the Derwent Park munitions factory has been sold by the Commonwealth to the Tasmanian Government, ls the Minister in a position to state under what authority the sale was made and whether consideration was given to the possibility of the factory being required in the foreseeable future for it3 original purpose, which was the manufacture of munitions? Can the Minister also inform the Senate of the reasons which induced the Australian Government to sell the factory to the Tasmanian Government, thereby fostering State landlordism, instead of offering it for private sale?
– I intercept the question asked by the honorable senator because such matters are under the control of the Division of Industrial Development, which is attached to my department. I am unable to answer the specific inquiries of the honorable senator, beyond saying that a certain procedure is laid clown for the handling of such matters and that the greatest care is taken in order to ensure that none of the factories which were used during the last war are disposed of if there is the slightest possibility that they will be required for future use. My department is in an unfortunate, although unavoidable, position, because a number of establishments which were in operation when the last war ended have been sold or let on long leases. An unexpected demand for them has now arisen, and it is difficult to cancel the previous arrangements, which were made at a time when it was not thought that they would be required again.
– Can the Minister representing the Minister for Ai state whether it is true, as reported in the Melbourne Argus of the 23rd October, that 70 per cent, of civilian clerical staff employed at the Royal Australian Air Force training station at Point Cook have been given one week’s notice of dismissal ? Is it also correct that the men concerned are either returned airmen or returned soldiers of the last war and that all of them are quartered at the station and will experience great difficulty in obtaining other accommodation? If the report is correct, is the Minister in a position to explain where the Government stands in view of its professed policy of preference to returned servicemen?
– It is interesting to note how honorable senators opposite endeavour to make political capital oi matters such as that raised by Senator Sandford. I remember their previous attitude towards returned soldiers, and there is no need for me to elaborate that subject. I am sure that the honorable senator would not expect the Government to retain men in employment at Point Cook when there is no suitable work for them to be employed upon and when labour is in such short supply for urgent defence works elsewhere. I shall refer the matter to the Minister for Air and obtain the facts for the honorable senator. I repeat that I am becoming somewhat tired of political capital being made of such matters and of hearing them being used for propaganda purposes.
– I address a question to the Minister for Repatriation, but before doing so I wish to read portion of a letter which I have received from the Murrabit sub-branch of th, Returned Sailors, Soldiers and Airmen’s Imperial League of Australia. The letter is in the following terms : -
The executive of the Murrabit sub-branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia desire to bring to your notice a grave omission in the budget.
We refer :to the non-adjustment of the partly disabled ex-servicemen’s pensions. These men received injuries solely in the service of the Commonwealth. Surely it is the Government’s duty to make adjustments in line with those granted other pensioners. We urge you to do all in your power to have this anomaly corrected.
Will the Minister give to the Senate and to the Murrabit sub-branch of the Returned Sailors, Soldiers and Airmen’s Imperial League of Australia an assurance that in the near future he will give favorable consideration to increasing pensions payable to partly disabled exservicemen ?
– Yesterday, I made a short statement in answer to a question almost exactly similar to that asked by the honorable senator to-day. If it is the desire of honorable senators that I should repeat the statement, I shall be only too pleased to do so. I shall send the honorable senator a copy of that statement, and he can forward it to the organization which made representations to him.
– On the 17th October, Senator O’Byrne asked me the following questions : -
I have been informed that sisters employed at repatriation hospitals are required to be on duty for. eight hours each day, but that in some instances a sister who goes on duty at 9 a.m. docs not complete her eight-hour day until 10.3O p.m. because of broken time. Often after a week or two on a shift of that kind, a sister is required to go on duty at 7.30 a.m. Will the Minister for Repatriation investigate the method of rostering hours of duty for the nursing staff at the repatriation hospitals, particularly at Concord Hospital, Sydney, with a view to minimizing the spread of up to seventeen hours attendance in order to complete an eight-hour shift? As sisters are leaving the hospital because of dissatisfaction over the lack of an equitable roster system, will the Minister apply himself to the rectification of the anomaly ?
In reply to the honorable senator, I desire to inform him that the duty rosters of nursing staffs of all repatriation institutions are at present under review by my department. In isolated cases it has been necessary to roster a sister for duty at 7.30 a.m.. following late duty on the previous day, but action is being taken to discontinue this practice. In no instance is there a stretch of shift of seventeen hours in repatriation institutions, and investigation by my department discloses that the stretch of shifts in institu tions under the control of the Repatriation Department are of shorter duration than those in operation in some public hospitals. There is no evidence of nursing staff leaving repatriation institutions because of dissatisfaction over rosters. The general question of stretch of shifts is at present the subject matter of a claim before the Public Service Arbitrator, and I feel that this matter should be left to determination by that officer.
– I desire to ask a question of you, Mr. President. Last evening, when I was speaking on the Estimates and Budget Papers, you interrupted me, and said that you would not allow me to continue. For future guidance, I now ask whether the Standing Orders restrict the right of an honorable senator to discuss matters relating to the budget, and to compare reasons given for increasing taxation, which was what I attempted to do last evening
– I rise to a point of order. Inherent in the honorable senator’s question is a challenge to your ruling, Mr. President. The honorable senator had his remedy last night. He could have moved that your ruling be disagreed with, but he did not do so. He has no right to revive the matter now.
– I gave my ruling on this issue last night, and I will not allow any post-mortems, except under the conditions prescribed in the Standing Orders. I -am here to give rulings, not reasons. I was fortified in the ruling I gave by a study of rulings given by my eminent predecessors in office. The question at issue was the relevancy of Sena? tor Morrow’s remarks to the Estimates and Budget Papers, which were properly under discussion. I ruled that his remarks were not relevant. It is true that in a’ debate on the budget honorable senators are allowed to range widely, but it is for the President to decide whether their remarks are relevant. I have before me the rulings of other Presidents, and the honorable senator may consult them if he likes. They are the authority for the ruling which I gave last night, and that ruling stands.
– I understand that the Government is investigating proposals for the growing of rice in New Guinea and elsewhere. Will the Minister for National Development pay special attention to the claims of the Northern Territory, and particularly of Anson’s Bay, an area about 100 miles south of Darwin, where water, soil and climate seem to be ideal ?
– I am aware of the developments mentioned by the honorable senator, and since we are undoubtedly short of rice in Australia I shall place his suggestions before the officers of the Department of National Development. As the honorable senator is probably aware, a private company has been formed with sufficient capital to carry out experiments in the growing of rice in the Northern Territory, and it has already achieved a great deal towards establishing that industry there.
– I understand the Minister representing the Minister for the Army has an answer to the question that I asked him yesterday concerning Watsonia camp, in Victoria?
– In view of the tribal warfare that broke out last night between Victorian senators, I deemed it advisable to ascertain the facts regarding the Watsonia camp in order to make them available to the Senate. The facts are that in March, 1950, a lease of the property, for two years from August, 1949, at a rental of £1,200 per annum, was given to the Victorian Government by the Commonwealth Government. That lease contained certain covenants, including a provision that if the premises were required by the Department of the Army urgently during the currency of the lease, they were to be vacated by the lessee upon seven day’s notice and no compensation would be payable to the lessee. At the expiration of the lease in August, 1951, the lessee was to be permitted to remain in possession on a monthly tenancy terminable upon seven days’ notice. On the 20th June, 1951, the Department of the Interior advised the Victorian Go vernment that the Department of the Army wanted the camp. After discussions with the Victorian authorities the military authorities advised the Government that they realized the difficulty of re-establishing the families that were accommodated at Watsonia, and although the lease had expired in August, 1951, they agreed to defer re-occupation of the premises until March, 1952. That is the present position. I emphasize the fact that, although the Army urgently requires the premises, and although it is entitled to resume possession upon seven day’s notice, it has very fairly appreciated the difficulties confronting the Victorian Government, and has made other arrangements.
– During the course of the debate on the budget last night the Attorney-General stated, by way of interjection, that although increases of the basic wage are based on the prices of goods in the “ C “ series index, that index is always three months behind the current prices. I now ask the Minister whether he will explain to the Senate on what basis increases of the basic wage are determined?
– The statement attributed to me by the honorable senator is not the statement that I made last night. I presume that the honorable senator is referring to an interjection that I made when one of his colleagues was speaking in the budget debate. That honorable senator had stated that the index figures on which basic wage adjustments were dependent were always three or four months old. I interjected and said that that statement was wrong, and I think that I was quite right in doing so, because, as Senator Hendrickson himself must realize, the recent adjustment of the basic wage was made by reference to the figures for the quarter ended the 30th September last. To suggest that the adjustment is based on figures that are three or four months old, when in fact figures at the 30th September were taken into account in the adjustment that became effective in the middle of October, is to convey an entirely false impression to the public.
asked the Minister representing the Treasurer, upon notice -
– The Treasurer has supplied the following answers: -
Following discussions with the trading banks, the Commonwealth Bank recently issued instructions concerning the method of payment for imports into Australia and has furnished the following replies to the honorable senator’s questions: -
No change was made in the arrangements for imports covered by drafts payable at the rate of exchange current at the time of negotiation in London but an alteration was made in those cases where the rate of exchange was left open. Under the altered arrangement, importers are entitled (subject to the agreement of their bankers) to defer the fixing of the rate of exchange and payment for imports until approximately60 days after goods have been shipped. It is also possible for these importers to arrange with their bankers a further deferment of payment but not of the fixing of the rate of exchange. 2. (a) The instructions were issued because Australian importers had been using increasingly the facilities of the banking system to defer fixing the rate of exchange for their imports until well after the goods had arrived in Australia and, in many cases, until after the goods had been sold. ‘The purpose of the alteration was to rectify these unsatisfactory features in exchange practices which were also affecting the level of London funds. (b) The new conditions do not apply to goods on the water prior to 1st August, nor to credits established by banks in Australia prior to that, date covering goods for future shipment.
– by leave - On behalf of the Minister for Territories, I make thisshort statement with respect to the Legislative Council of Papua and New Guinea. In accordance with the provisions of the Papua and New Guinea Act 1949-1950, steps are being taken to inaugurate the Legislative Council for the territory of Papua and New Guinea. His Excellency the Administrator of the Commonwealth, Sir
John Northcott, has appointed the nominated members of the council as laid down in the act, and elections will be held in the territory on the 10th November, under the provisions of an electoral ordinance of the territory, to choose three elected members. Monday, the 26th November, has been selected as the date for the first meeting of the council at Port Moresby. His Excellency the Administrator of the Commonwealth, whose vice-regal office extends over the territory, will attend. Arrangements have also been made, through the President of the Senate and the Speaker of the House of Representatives, and in consultation with party leaders, for the Commonwealth Parliament to be represented by a delegation of five members. The various political parties were asked to select the members of the delegation, and the following have been chosen: Senator Paltridge, Senator Sand ford, Mr. Timson, Mr. Leslie, and Mr. Nelson. The Minister for Territories will represent the Government. In making these arrangements the Parliament and the Government are demonstrating their responsibility for the territory and the direct link between the Commonwealth Parliament and the new legislature. I feel sure that the Senate, as well as the Government, will wish to use this occasion to express its active interest in the welfare and progress of the territory and I trust that, at the appropriate time and in an appropriate manner, the Senate will convey its sentiments to the new legislative body which this Parliament has established.
Bill received from the House of Representatives.
Standing Orders suspended.
.- I move-
That the bill be now read a first time.
This bill is one of two measures that will come before the Senate to provide for Supply until the end of December. Supply has already been granted until the end of October. This bill is one which the Senate may not amend and, therefore, in the debate on the motion for its first reading, honorable senators may discuss matters that are not relevant to it. The bill, however, is being presented in the midst of the budget debate, and it is for the Senate to decide whether it wishes a second general debate to be commenced before the first has been completed. I suggest that honorable senators might be prepared to regard the two Supply bills as forming a part of the general financial, and budgetary programme, waive their privilege of unrestricted debate, pass the two Supply bills and then resume the general debate on the budget.
I should like to emphasize two points about these measures. It is necessary for the Government to request the Opposition to pass both Supply bills before the Senate rises. Both bills were passed by the House of Representatives yesterday afternoon. With respect to the Senate T think that the course I have suggested might be adopted because honorable senators have full opportunity to debate the Estimates and budget papers as distinct from these two Supply bills. Except in regard to defence and one comparatively minor matter the bills follow the usual Supply procedure in that they include no provision for new services.
– The Opposition is prepared, subject to developments that may occur on the Government side, to treat this measure and the subsequent one related to it, with a degree of formality. The Opposition recognizes that it has other opportunities to debate the budget proposals. This bill and the one with which it is associated are integral parts of the budget proposals, providing for expenditure during the months of November and December. However, the mere fact that the Opposition is prepared, subject to the qualification that I have mentioned, to treat these bills with a degree of formality is not to be taken as approval of the Government’s expenditure programme. We recognize that, on th3 motion for the printing of the budget papers, we have an opportunity to disi cuss matters at large. So far, the Go vernment has not shown any inclination to curtail that debate. There will be a further opportunity, subject of course to any “ gagging “ that the Government may enforce, to debate the budget proposals fully when the Appropriation Bills are received from the House of Representatives. For those reasons I do not propose to open up controversial matters at this stage. The ordinary services of the country must be carried on, and the Supply bills must be passed before the end of this month. However, on behalf of the Opposition I protest at the late introduction of these two measures into this chamber. One of them provides for the expending of £6S,000,000, and the other, £28,000,000. They are being introduced on the last sitting day this week, and, if normal procedure were followed, the debate on them would be adjourned at least until next week, with the result that it would be completely impossible for all honorable senators to express their views on them if they wished to do so. I protest strongly against the late introduction of the measures, and the consequent limited time allowed to debate them if a debate were desired by the Opposition. The presentation of the Supply bills at this late stage has no doubt been dictated to some degree by the late introduction of the budget, but I remind the Government that the Senate was adjourned on the 19th July, and did not re-assemble for more than three months. The Opposition believes that the Government has had ample opportunity to formulate its budget proposals and to submit them to the Parliament ere now. The normal procedure has been reversed in this instance. Supply is normally sought before the budget is introduced. Earlier in the year, Supply was sought and granted to the end of October. It is unusual to have a further request for Supply so late in the year, and after the introduction of the budget. With these comments, and subject to any developments that may occur, the Opposition does not propose to debate this measure further. It realizes that the ordinary services of the Government must be carried on.
Question resolved in the affirmative. -
Bill read a first time.
– I move -
That the bill be now read a second time.
Requirements for the first four months of the financial year 1951-52 were provided in Supply Act (No. 1). The purpose of this bill is to obtain Supply for a further two months to carry on the necessary normal services of government, other than capital services. The amount to be appropriated is £68,060,000 and may be summarized under the following heads : -
It has been customary until recently to use the appropriations of the previous year as the basis of the provision in a Supply bill. However, under present conditions, this course is impracticable. Salaries have increased progressively with the rise in the cost of living, and the highercostof materials have added considerably to the amount required by departments. In consonance withthe procedure instituted last year the amounts in the bill therefore relate to the current needs of departments as shown in the Estimates papers for 1951-52. The amount of £35,690,000 included for defence services is to provide for expenditure under the Government’s defence policy, including current commitments in Korea and Malaya. Except for defence requirements and an amount of £2,000,000 which has been included to meet Australia’s obligations under the Colombo plan for “the development of countries in South and South-East Asia, no provision is made in the bill for any new service.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stageswithout requests or debate.
Bill received from the House of Representatives.
Standing Orders suspended.
Bill (on motion by SenatorSpooner) read a first time.
.- I move-
That the bill be now read a second time.
This measure provides for a further appropriation of £28,031,000 to enable Commonwealth works in progress at the 30th June, 1951, to be continued pending the passing of the Estimates by the Parliament. Amongst the major items for which further appropriation is sought are £6,020,000 for the Postal Department, £3,164,000 for the Department of National Development, mainly for the Joint Coal Board and the Snowy Mountains hydro-electric project, £1,540,000 for civil aviation, and £1,145,000 for railways. A sum of £12,500,000 is included for war service homes, representing one-half of the estimated requirements for the year 1951-52. No allowance wasmade in the Supply Bill (No. 2) 1951-52 for this expenditure, as payments were then being met from loan fund. The loan appropriation which authorized expenditure for the early months of this financial year will, of course, not now be utilized.
The bill provides for a further two months’ expenditure on works, based approximately on the expenditure programme of £101,648,000 included in the capital works Estimates . 1951-52, which are now being considered by the Parliament. Together with the amounts provided in the Supply (Works and Services) Act (No. 1) 1951-52, this bill therefore makes provision for the estimated requirements for six months of the current financial year. As was mentioned in the budget speech of the Treasurer (Sir Arthur Fadden), the Government has given the closest scrutiny to all works programmes and has made heavy reductionson original departmental proposals toensure that there shall be no undue competition for scarce labour and materials. In accordance with the usual practice, no provision has been made in this measure for any new service.
– For the reasons that I gave when dealing with the Supply Bill (No. 2) 1951-52 that has just been passed by the Senate, I do not propose to raise any controversial issue on the motion for the second-reading of this bill. I record the dame protest against its late introduction as I voiced in relation to the earlier measure. I realize, of course, that the works that were begun on the 30th June, 1951, or were in operation at that date, must be continued. It is recognized that no matter what the Opposition might do or say, the Government must secure the passage of this measure before the present month runs out. From all practical points of view, to-day is the last day for that purpose.
– I shall raise a couple of issues. I do not know whether they will be controversial. In his second-reading speech the Minister for National Development (Senator Spooner) stated -
Amongst the major items for which further appropriation is sought are £(5,020,000 for the Postal Department, £3,164,000 for the Department of National Development, mainly for the Joint Coal Board and the Snowy Mountains hydro-electric project. . . .
I do not know whether this measure will affect in any way the retrenchments that have already taken place. I refer to the dismissal of 10,000 persons from the Public Service, including 4,000 postal employees. I do not consider that the Government has taken full cognizance of the implications of the dismissals. The Postal Department provides services for almost every section of the community. In addition to providing postal, telephone, and telegraph services, it also performs numerous subsidiary services for the Government. Almost 4,000 employees have been engaged in connexion with the installation of telephones, particularly on engineering aspects, and the provision of cables and aerials. I am of the opinion that these dismissals will achieve- nothing towards halting inflation, although I understand that the Government considers that they will be effective to some degree. The retrenchments will deny to 100,000 applicants for telephone services the hope of early installations. All members of the Opposition, both in the Senate and in the House of Representatives, daily receive representations concerning the provision of telephone services. I wish to refer the Senate to a statement that was made by the PostmasterGeneral (Mr. Anthony) on the 27th June, last, during his second-reading speech on the Post and Telegraph Rates Bill, which sought to increase telephone and postal charges. In the course of hig speech the honorable gentleman said -
Any curtailment, of services to the public would cause grave difficulties and would not be in the interests of the community, having regard to the vital importance of the communications services in the daily life of every individual. Such a curtailment would necessitate the dismissal of thousands of specially trained men . . . and also lead to serious loss of revenue.
He would not entertain the proposition for one moment. It is not uncommon for statements such as that to be made at election time by the members of a political party, but I think that this is the first time that a declaration made by a Ministor has been completely reversed within a few months. . Four thousand employees, who have been engaged in supplying services for which the public of Australia is clamouring, are to be dismissed.
I am also concerned with the hitandmiss method that has been adopted in regard to the dismissal of Postal Department employees. I have here a list which shows that the men to be dismissed from that department have been selected, in the main, from married men with responsibilities and dependants, and from returned soldiers. I do not propose to cite names to the Senate, but if the Minister or any honorable senator wishes to see them they will be available. The list is as follows: (a) A married man with four dependants; twelve months’ service; single men retained. (6) An ex-serviceman; married; two years’ service with the department; four dependants ; notice :of dismissal given before it was given to returned single men and nonreturned married men. (c) Exlineman ; two years and four months’ service with, the department; married; four -dependants; ex-serviceman; single men and non-ex-servicemen, junior in service, retained, (d) Ex-lineman; two and a half years’ service; married man with four dependants; many men with less service retained, (e) Ex-lineman; exserviceman; thirteen months’ service; other men with only two or three months’ service, not returned soldiers, retained in employment. (/) Ex-serviceman; married ; senior to many other employees with only a few months’ service, (g) Ex-serviceman with more than four years’ service, (h) Ex-serviceman; three years and four months’ service. (’) Exlineman; five years’ service; married; «x-serviceman ; six dependants; single men retained, *(j) Ex-serviceman; exprisoner of war; others with less service retained. That list indicates that married men with dependants, and men with responsibilities, have been selected for dismissal. In addition, returned soldiers predominate. It will be seen that in one instance an ex-prisoner of war has been retrenched from the department while the services of junior men have been retained.
If the Government wishes to make a contribution to the defence of this country it can do no better than to ensure that our communications are up to date. At the outbreak of the last war telephonic and other postal services had to be duplicated and auxiliary plants had to be provided because of the condition of the services at that time. The dismissal of 4,000 employees, who are mostly concerned with the work of the engineering branch, such as the laying of cables and the provision of aerial groups for telephonic and telegraphic purposes, will adversely affect the work of the department. It will be years before the lag in telephonic services is overtaken. It is vital that the services of trained men should be retained, not only for the convenience of the public, but also to meet the needs of defence preparation.
I understand that the Postal Department Estimates have been reduced by £6,000,000. I do not think that it is too much to ask that instead of making such a reduction of Postal Department expenditure, that £6,000,000 be taken from the expected surplus of £114,500,000, which will probably be., double that amount. I ask the Minister to endeavour to retain the services of experienced and trained Postal Department employees in order that services for which the people of Australia are clamouring may be provided.
– Although I appreciate the position regarding the time factor, I am fully in accord with the remarks that have .been made by the Leader of the Opposition (Senator McKenna). I regret that this legislation has been introduced in the Senate at such a late hour. I appreciate that successive governments have been more or less guilty of the same practice, but it seems to me that each year less time becomes available for discussion of Supply bills. I endorse the remarks of Senator Ashley. I have a question on the notice-paper about retrenchment in the Public Service, and I regret that the information which 1 sought has not been forthcoming. The Senate is being denied information on a matter which affects many thousands of people who will suffer under this Government’s retrenchment proposals. I have read that many of those already dismissed have found other positions in the service. Temporary clerks have been treated unfairly. Some of them were dismissed when they were within a few months of qualifying for long-service leave. Others, with five or six years’ service, would shortly have qualified for certain concessions in respect to annual leave, sick leave, &c. As a matter of fact, whilst temporary officers with several years’ service have been dismissed, others with less than twelve months’ service have been retained. I trust that the Government will not feel that it is bound to uphold the ruling of the Public Service Board on this matter, and that leave concessions to which dismissed officers should be properly entitled will not be denied them. Of course, it is a saving to the Government to dismiss officers who are almost due for longservice leave, but it is most unfair to the officers. It cannot be claimed that the system of appointing temporary clerks, and of keeping them in that capacity for years, has operated fairly. I. am glad to say that in South Australia, the State Government has kept temporary employment in the Public Service to the minimum. Some positions must always be filled by temporary officers, but it is not right that departments should’ go on employing men and women in a temporary capacity after they have given many years of faithful service. The Minister for Trade and Customs (Senator O’Sullivan) has on previous occasions spoken against the practice of temporary employment in the Public Service, and I hope that he will use his influence to see that justice is done to those exemployees on whose behalf I have been speaking.
– I trust that the Government, in applying its policy of retrenchment, has kept in mind the needs of country residents. If we are to promote settlement and increase primary production we must maintain and improve facilities available to country people. One of the most important of these is telephone communication, yet I note with concern that many linemen employed by the Postal Department have been dismissed. Linemen are skilled workers, many of whom have been employed by the department for years. .The Government, in justification of its policy of retrenchment, has said that labour should be made available for private industry. It seems to me that the Government is displaying too much interest in secondary industry, and is not sufficiently encouraging primary industry, with the result that our economy has become unbalanced. Primary industries, and particularly those associated with the production of food, should receive every encouragement. The Chifley Labour Government was always genuinely sympathetic towards country residents and did its utmost to extend and improve government services for _ country residents. As a former Minister. I have some knowledge of the technique of government, and I know that unless the Australian Country party wing of the present Government takes the initiative, nothing will be done by this Government to improve the lot of country residents. I am most disappointed that members of the Australian Country party in this country have acquiesced in the curtail ment of government services to country residents, and particularly in the reduc-tion of postal and telephonic services.
– in reply - Although the functions of the Postal Department are most important to the community, and whilst I do not desire to underrate them, I suggest to the Senate that the matter should be viewed in proper perspective. Senator Courtice suggested that there has been, a reduction of postal and telephonic services in country areas, but that is not so. Of course, I realize that one line of criticism that the Opposition might have adopted is that the Government should proceed with its plans for the extension of those services more rapidly than it is doing. However, such matters are really related, to the basic consideration whether we can supply more telephones, transport services and houses than we are already doing. If we desire to increase the production of houses or of any one of the other basic necessities we can do so only at the expense of the others. In order to assist the production of essential goods and services, the Government has endeavoured to restrict activity to those avenues which seem to be really important at present. I suppose every one regrets the need for the temporary halting of the tremendous programme of expansion of the Postal Department, but I think that honorable senators will agree that the budget, which makes provision for the expenditure of approximately £27,000,000 upon the Postal Department^ will permit of really effective work being carried out.
Concerning the matter mentioned by Senator Critchley, I point out that that has been the subject of inquiry by experts in public administration, who are thoroughly acquainted with all aspects of the matter. I rather suspect that Senator Critchley spoke from the heart rather than from the head.
– I spoke also from long experience.
– I think that in such matters we should accept the advice of the Public Service Board, whose members have had long experience in these matters.
Question resolved in the affirmative.
Bill read a second time.
– Iespecially asked the Minister for National Development (Senator Spooner) whether the appropriation of £6,020,000 for the Postmaster-General’s Department would in any way lessen the effects of the proposed retrenchments. Apparently the Minister did not con- sider my remarks worthy of reply, but whether he refrained from replying to them deliberately orthrough oversight I do not know. I also desire some information that arises out of the proposal to appropriate £3,164,000 for the Department of National Development for expenditure principally upon the Joint Coal Board and the Snowy Mountains hydroelectric project. I should like the Minister to inform me of the reason for the delay in the appointment of a third member of the Joint Coal Board. Is it not a fact that the Minister has been endeavouring to obtain the concurrence of the Government of New South Wales “in the appointment to the board of a professor, although the position really calls for the appointment of a qualified engineer or a sound technical man, which is, I understand, the reason why the New South Wales Government will not agree to the Minister’s proposal?
– I regret that there has been any misunderstanding about the programme of the Postal Department because I thought that I had specifically replied to the remarks made by Senator Ashley. The money proposed to be appropriated will be sufficient to provide for the smaller staff that will be required in the department after the proposed retrenchment has been carried out. It will not affect the present position, and if the honorable senator’s remarks are to be interpreted as an inquiry whether I will make representations to increase the budget allocation of the Postal Department
– I did ask that.
– So that the staff may be increased-
– Or retained.
– Then I reply “ No “, because this is part of the Government’s over-all plan which it believes to be necessary in the national interest.
Concerning the filling of the vacancy on the Joint Coal Board, it is evident that the honorable senator has been given access to certain information that I thought was being regarded as confidential between two governments. I made no previous statement on the matter mentioned by Senator Ashley because I did not feel that I was free to do so. However, since the honorable senator has raised the matter, I regret that it will be necessary for me to say something about it. It is true that the Commonwealth Government has recommended to the New South Wales Government that the present vacancy should be filled by the appointment of Professor Phillips, who is at present Professor of Mining Engineering at the New South Wales University of Technology.. That recommendation was made only after a great deal of thought had been given tothe matter, and it is quite unfair of Senator Ashley to refer disparagingly to Professor Phillips’s qualifications as being merely academic. In addition to his academic qualifications, Professor Phillips has excellent practical qualifications. When he left school in the Old Country he went straight into the pits, where he served his time as a pit-boy and in various trades associated with coal-mining, subsequently gaining certificates of competency from the appropriate governmental bodies in Great Britain. He saw service in World War I., and on his return from that war, won an exhibition to Cardiff University that was open for competition by men working in the coal mines. He had a brilliant university career, and crowned bis academic achievements by winning a doctorate of science at either Oxford or Cambridge University. Throughout the whole of his university career he spent his vacations working in the mines in order to supplement his income. After Professor Phillips had completed his extensive academic training he returned to the mines, and subsequently held various important governmental appointments in Great Britain. Not very long ago he was selected by the Government of New South Wales to occupy the first Chair of Mining Engineering in its University of Technology, and since then he has been appointed by that government to be chairman of an expert committee established to investigate the great problem of stowage in coal mines, which is, perhaps, the greatest single coalmining problem that has to be solved. In reply to this Government’s recommendation to the New South Wales Government that Professor Phillips should be appointed to the vacant position on die Joint Coal Board, the New South Wales Government suggested that the position should be advertised overseas. However, I discussed the matter on friday with the Premier of New South Wales and he has undertaken to re-submit the matter to his Cabinet for further consideration and to inform me of its decision, within the next ten days. I know that it is difficult for the Government of New South Wales to replace Professor Phillips in the University of Technology, and it probably feels aggrieved that, after having secured the services of such an eminent expert for its new university, it should be asked to agree to his vacating that position in order to take up another appointment. However, our view, which I explained to the Premier of New South Wales in the course of my discussions with him, is that although the Chair of Mining Engineering at the University of Technology is undoubtedly a most important position, the regulation of the coal-mining industry in this country is even more important. I regret greatly that I have had to make thi3 information public at this stage, but, since the whole matter was raised by Senator Ashley, I thought that it would be most unfair and misleading if I refrained from making public all the facts. I certainly did not want a mere garbled version of the facts to receive publicity.
– I regret exceedingly that the Minister for National Development (Senator Spooner) did not reply more specifically to the matters that I mentioned. I am grateful for hisacknowledgment that he believed that I spoke from the heart even if he considered that my views did not emanatefrom my head. Of course, I will admit that my head has been knocked about a lot. However, the tragic fact remains that thousands of men will,, through no fault of their own, be displaced from their employment and possibly compelled to seek re-employment in occupations for which they are not fitted.
Sitting suspended from 12.b5 to 2.80 p.m..
– I invite theMinister to state how he himself would feel if, in 1942, as a comparatively young married man with a family of three or four young children - judging from his present appearance he was a handsome and attractive young fellow twenty yearsago - he had been appointed as a temporary clerk in the Public Service, and I had been appointed in a similar capacity some years later in the same job, and as a result of government policy almost ten years later, when he was on the eve of qualifying for long-service leave and other benefits, he was suddenly retrenched and I, whose appointment had post-dated his, was retained in the Service. If he were placed in those circumstances I am sure that he would appreciate the appeal that I have made to him to-day. Many temporary clerks have served the Commonwealth for a great number of years. If they are now being retrenched because their services are regarded as unsatisfactory that, surely, is a grave reflection on those responsible for the administration of the departments in which they have served. It is not in the interests of good administration for the Government to retain an excessive number of temporary clerks whose services may be dispensed with at any time when government policy dictates a reduction of the number of Commonwealth employees. The Minister brushed off my appeal with the brief statement that this matter must be considered from all angles. I invite him to name one government department in which the practice of employing temporary clerks for year after year has not been adopted. Particulars of the cases I have mentioned are on record. I regret very much that information on this subject which I sought in a question that I placed on the notice-paper a week or two ago has not yet been furnished. I make no apology for having pressed the claims of temporary clerks in the Public Service. I should do so irrespective of what government was in office. I have had many years of active association with the Public Service and I am well aware of the invidious position in which temporary clerks are placed and of the hardships that have been inflicted on those who have been retrenched after having served the Government faithfully for many years. To deprive such men of their rights to long-service leave and other benefits is to inflict a very grave injustice on .them.
– Senator Critchley, who presented his case eloquently and with great force, invited us to form in our minds a picture of what he and I looked like twenty years ago. The imaginative powers of honorable senators are not sufficiently developed to enable them to essay such a task. The case that he presented has agitated the minds of administrative heads of departments for many years. The honorable senator, however, stated only one side of the case. I do not feel inclined to take up his challenge because there are so many different angles from which the subject may be viewed that to debate them without preparation would be to do an injustice to the Public Service generally. I am sure the honorable senator will agree that this matter has been the subject of exhaustive inquiry from time to time. Indeed at one time it was inquired into by a New South Wales judge who was appointed as a Commission of Inquiry. Tt is a fact that in very great undertakings, such as the service of the Commonwealth or of a State, there must be some elasticity in the level of the staffs. It is inevitable in those circumstances that there must be two groups of employees - permanent officials and temporary officials. It is a matter of extreme importance that the scales of justice should be held firmly between the two classes. Many young men who enter the Public
Service as cadets after passing an entrance examination, attend evening courses at a university to equip themselves for appointment to higher administrative posts. Their interests must be safeguarded. It would not be proper if persons who joined the Public Service in a temporary capacity were able, because of seniority, to hold back the promotion of those who joined the Public Service with the object of making service to the Crown a professional career. I can only say that in these staff re-arrangements a standard procedure has been adopted that has been approved by the Public Service Board. That procedure conforms to the board’s approach to the wider problem of permanent and temporary employees. I am confident that, considering all these cases in toto, the best has been, and is being done. If there are cases of unfairness or hardship, or cases in which there are special circumstances, I have not the slightest doubt that the department concerned or the Public Service Board will be prepared to review them.
– I regret the necessity for having to rise again to appeal to the Minister. I trust that he does not think that in stating my appeal I overlooked the rights of young cadets who have entered the Public Service with the object of making public administration their career. What I am concerned about, and what I have been greatly concerned about during the last fifteen years, is the practice of continuing to employ officers in a temporary capacity without giving them an opportunity for advancement or the attainment of permanent status. In times such as this, men who have served for perhaps eight or nine years, and are now in middle age, find that their services are dispensed with, and they may have the greatest difficulty in securing suitable employment outside the Service. In many instances temporary clerks with long service have been dismissed, while others, junior to them in length of service, have been retained. I assure the Minister that I have not attempted in any way to pit the case of temporary clerks against that of the young people who have entered the Public Service as a career. I fully subscribe to the view of the Minister that the rights of such, men should be protected in every way. In my long, experience of Public Service matters, I have invariably found that the temporary clerks have- had a very raw deal.
– The Minister has sa:.d that we have stated only one side of the case. I do not think that any honorable senator will deny that in his reply the Minister stated only one side of the case. In his reply to my earlier speech, he spoke of the qualifications of Professor Phillips, Professor of Mining Engineering at the University of Technology, Sydney, for appointment as the third member of the Joint Coal Board. He knows quite well that the New South Wales Government has nominated a person for appointment to that post. In fairness he should also have stated the qualifications of the nominee of that Government. I have no desire to deal with this matter on a personal basis. It is common knowledge that the post has been vacant for the last six months and that no serious attempt has been made to fill it. The nominee of the New South Wales Government, whose qualifications are as good as, if not better than, those of Professor Phillips, has had a great deal of practical experience in the coal-mining industry. The Minister should be prepared to state his qualifications as fully as he stated the qualifications of the English professor for whose appointment he is pressing.
– The answer to Senator Ashley’s criticism can be stated very shortly. It is that the New South Wales Government has neither nominated nor suggested any person for appointment as third member of the Joint Coal Board.
Bill agreed to.
Bill reported without amendment; report adopted.
Bill read a third time.
Bill received from the House of Representatives.
Standing Orders suspended*
Bill (on “ motion. by Senator O’sullivan) read a first time.
. -I move -
That the bill be now read a second time
The object of this bill is to repeal, from the 27th September, 1951, the provisions, of the Excise Tariff Rebate Act 1944. In. 1944, the then Government made provision in the Excise Tariff Rebate Act, for a rebate of 4^ per cent, to be allowed as on and from the. 1st November, 1943, on excise duty payable on tobacco, cigars and cigarettes manufactured, in Australia.Honorable senators may recall that when the original measure was before the Senate uniform prices control operated throughout the Commonwealth, and, to obviate an increase of the retail prices of tobacco, cigarettes and cigars, owing to increased costs of imported tobacco leaf, the then Government met the position by remitting to manufacturers a portion of the excise revenue. The 4£ per cent; rebate remained unchanged until the introduction of the Excise Tariff Proposals associated with the 1951-52 budget. In those proposals the excise duties on manufactured tobacco, cigars and cigarettes were not increased as much as the corresponding customs duties on the same products. That action was taken so that the Excise Tariff Rebate Act could be repealed without disrupting the relativity, between customs and excise duties. Apart from any other consideration, it is, I suggest, desirable that, as far as is possible, the rates of duty shown in the Excise Tariff should be expressed as net rates. The repeal of the existing act will achieve this. This bill is merely a machinery measure and full opportunity will be available at a later stage to discuss the rates of customs and excise duties on manufactured tobacco, cigars and cigarettes when the relative bills are under consideration. I commend the bill to the Senate.
.; - I see no reason why the Opposition should not support this measure. The Minister for Trade and Customs (Senator O’Sullivan) has outlined its purpose clearly. The measure has nothing whatever to do with the rate of excise. It merely repeals the Excise Tariff Rebate Act which, as the Minister has explained, was passed in 1944 to allow the Government to remit to manufacturers of tobacco, cigars and cigarettes, a portion of the excise revenue payable on those commodities, as a means of obviating a rise in retail prices.
. - in reply - I thank Senator Courtice and other members of the Opposition for their support of this measure.
Question resolved in the affirmative.
Bill read a second time, and passed through its remaining stages without amendment or debate.
Debate resumed from the 24th October (vide page 1068), on motion by Senator Spooner -
That the following papers be printed: -
Estimates of Receipts and Expenditure, and Estimates of Expenditure for Additions, New Works and other services involving Capital Expenditure, for the year ending 30th June, 1952;
The Budget 1051-52 - Papers presented by the Right Honorable Sir Arthur Fadden on the occasion of the Budget of 1951-52;
– The debate on the motion for the printing of the budget papers has now been proceeding in this chamber for some time, and a general discussion on the budget proposals has been in progress for a considerable period in the House of Representatives. Naturally, the budget debate induces speakers to direct their minds to many topics closely, and some perhaps not so closely; associated with national finances, so, as the debate proceeds, it is opportune from time to time to draw the attention of honorable senators back to the fundamental principles, financial and economic, on which the budget is based. As I understand the budget, its aims are first, in the broadsense, to cure inflation, and secondly, to provide for a defence programme. In the execution of the: plan to. dealwiththe shocking inflation which is corrupting the social and economic heart of this country, certain allegedly orthodox economic principles have been adopted. The first is that money should be drawn away from the community so that it cannot continue to exert pressure on the available goods, and, therefore, on prices. The second principle, which may be regarded as ancillary to the first, is that the supply of consumer goods should be increased. It is not sufficient merely to talk about drawing off money. The real problem is to determinewhat money is to be drawn off. If this economic principle is to be accepted, the money that should be drawn off is what may be called dangerous money, the real surplus money, the loose money, that puts real pressure on goods, and, therefore, on prices. The Government has failed completely in its assessment of what is and what is not dangerous money, if there is any such money abroad in this community. That is the first basic weakness of the budget, and because of that weakness, it is doomed to failure. Dangerous money ismoney that is in the hands of people who do not require it, and who, therefore, can go into the market not only for consumer goods but also for unnecessary, or what may be strictly termed luxury goods, and buy them at will. Undeniably some people do possess such money. It has come to them through inheritance, from investments, or through their association with industry and commerce. The Government, in presenting this budget, purports to be following an orthodox economic formula. Before developing my point about the kind of money that the Government seeks to draw away from the community, let us have a look at the orthodoxy of the economic formula now being applied. No economic formula is impeccable, and no economist is infallible. That, unfortunately, was established not only in this country, but also in every other country during the shocking days of the early 1930’s. If ever people suffered at the hands of orthodox economic thinking, the unfortunate men; and women, the poor and downtrodden of this country, and of the rest of the world, did so in the; depression years. At, that time we: were prepared to put our individual lives and destinies, as well as the welfare and destiny of our country, into the hands of orthodox economists whom subsequent events have proved were completely wrong. To-day, because conditions are the exact opposite of what they were in the early 1930’s, the conclusion is drawn that the remedial formula to be applied must be the exact antithesis of that applied during the depression years. That is not necessarily logical thinking, and I believe that it is one of the inherent dangers in these budget proposals. If an orthodox economic formula is to be applied it has to be applied in toto and not partially applied and partially rejected. This Government purports to apeak with complete certitude about the success of its financial proposals. It is sponsoring those proposals, apparently with complete and untrammelled confidence that they will succeed. The Government is trying to transmit that confidence to the people, but the people should be warned that because of the historical facts to which I have referred, the Government cannot possibly be as confident as it pretends to be. Because, basically and fundamentally, the Government cannot be certain of the success of its proposals it cannot engender a feeling of confidence in those proposals among the people generally. In New Zealand, where also orthodox economic theories are being followed to some degree, the Administration has not adopted the taxing measures that this Government regards as indispensable to its financial proposals. The New Zealand Government has made a point of reducing taxes, and, in fact, reduced taxes were promised by both parties at the recent general election, as a means of stimulating production and halting inflation.
– Taxes are still higher in New Zealand than they are in this country.
– Taxes in New Zealand may be higher relatively than taxes in this country, but the fact remains that the New Zealand Government has not increased taxes. The fact that taxes in New Zealand are relatively higher than they are here is no answer to my condemnation of this Government’s proposals. Some economic authorities consider that New Zealand is following the correct path, and that by reducing taxation it is doing the correct thing. They consider that this country is doing the incorrect thing and is following a course that may lead us into further trouble. The Queensland economist, Mr. Colin Clark, who is equally as eminent, as Sir Douglas Copland, whose name has been so freely mentioned in connexion with the budgetary proposals, has advocated an overall reduction of taxes. I mention that to show that there is not close at hand an easily usable economic panacea. The Government will delude itself and the peopl if it tries to convince them that there is. This is a dangerous budget, the consequences of which neither the Government nor the Australian people can visualize. Therefore it is approached with anxiety and fear.
The Government has denied the necessity for prices control although the Commonwealth subsidizes prices administration in the hands of the States to the extent of about £800,000 a year. The Minister for National Development (Senator Spooner) is personally completely opposed to prices control, in the control of inflation, even as an ancillary measure. Yet the United States of America, which subscribes in general to the principles that have been adopted in this budget, postulates prices control as being an essential ancillary of other economic proposals. This Government has a half-baked economic scheme which it claims to be an orthodox economic proposal, and which it is trying to sell to the Australian people. For that reason, also, this budget is dangerous to the Government, which the Opposition does not regret. It is extremely dangerous to the economy, and may prove fatal to the Australian people.
I commenced by referring to dangerous money that must be drawn off, and, to use the phrase of the Treasurer (Sir Arthur Fadden), placed where it will do the least harm. What is this conception of dangerous money? According to the assessment of the standard of living of the people is dangerous money defined. If we had a conception of a high living standard, there would be very little surplus or dangerous money to draw off. On the other hand, if the conception of what constitutes a necessary and basic living standard postulated a system almost on bread and water level, there would be ample surplus money in the community to draw off for any purpose that the Government may desire. Let us consider this Government’s idea of what constitutes a reasonable standard of living, using as a measuring stick the alleged surplus consumer goods of which the public can be deprived. “We must assume that that is the Government’s approach to the matter, because the prices of those goods will be raised by indirect taxation. Could any sane person consider for a moment that razor blades are in the luxury class? Could anybody who had any conception of a standard of living other than the very lowest consider that they are anything but absolute and complete necessities ? Could ‘ anybody who has even a fair conception of a reasonable standard of living consider that radios are in the luxury class? In an advanced community, and particularly in a democracy, a radio is now practically a necessity as a means of supplying information to the public. At great expense, the proceedings of this National Parliament are broadcast. We believe that that is the democratic thing to do, and that democracy can continue to function only if its people are well informed. People who are not informed cease to be democratic. Quite apart from considerations of comfort, convenience, and entertainment, a radio in the home in a modern, civilized, democratic community is virtually a necessity. Yet this Government has seen it fit to regard a radio as a luxury or a semi-luxury item, by raising the rate of sales tax on it.
Almost every person in the community considers that it i3 necessary to carry a watch. He buys one reluctantly, and replaces it equally reluctantly, because watches are expensive. A watch is a necessity to any person who enjoys an adequate standard of living. Let us also consider fountain pens and collar studs. They are only small items in themselves, and I do not complain about the incidence of sales tax on one or the other particularly. I cite them merely to show the Government’s conception of the stan dard of living. By increasing the sales tax on these items the Government postulates a standard which is extremely low, something to which the Australian people have not been accustomed for a long time, and a standard to which they are determined that they shall never return.
The Government is levying taxes on the people in the community who have very little money to spare. In addition to being unfair, that policy will have serious economic consequences in relation to the Government’s financial proposals. The people who cause the trouble are those who have real surplus money which they spend when they should not. By contemplating a surplus of more than £114,000,000 the Government seeks to over-balance its budget. Increased taxation is to be imposed on the whole community, including those who can least afford to pay. In effect, the Government intends to protect a big section of the community that is really holding the money that is accentuating the inflationary tendency. To that extent the Government’s proposals will defeat their objective. The Government’s expected surplus will come from the wrong quarter.
Generally speaking, in the past public loans have been supported by people who have surplus money. Very seldom are the workers in a position to support them, because even under the best social and financial circumstances they very seldom have any surplus. Small contributions are made by the middle or upper class - I am speaking of classes from an economic rather than from a. social point of view. In the top group there are many people with a lot of money. Perhaps the Government is depending on them to support its loan programme. But has it been made virtually impossible for those people to invest their money in any other way? Originally, the Government could have obtained the bulk of its surplus from those people, and it need not have been faced with uncertainty whether they would subscribe to the loan raisings. Last night we heard a very explicit and detailed review by Senator Cole of the financial position of many of the producers and distributors of consumer goods in the community. The figures that he cited were absolutely staggering. They revealed remarkable buoyancy in trading. I have ascertained that the authority from which he obtained his figures is completely accurate and valid. Trading enterprises are making fantastic profits. What is the Government doing about the enormous reserves in their possession?
– It is proposed to increase the rate of company tax.
– The Government has not imposed an excess profits tax or dividend control. Therefore, it is logical that the people I have mentioned will continue to hold their money, and to invest in industrial stocks rather than government loans. In the final analysis, the budget proposals will injure the small man and make things very easy for the big man. The policy of the Government will defeat the internal structure of the budget. Another reason why, inevitably, the loan programme will not be supported, is that the Government has done very little to gain the confidence of the people. During its term of office it has undermined the confidence of the people by its economic proposals. Undoubtedly, public loans will fail consistently. If honorable senators opposite expect successive loans to be filled they will be disappointed. The loan raisings of a government are successful or otherwise in proportion to the confidence that the Government has inspired in the people. The failure of the last loan truly reflects the lack of confidence of the Australian people in the financial ability of the Government.
– Does the honorable senator consider that it had something to do with the rate of interest?
– As far as the expected surplus is concerned, there is an absence of internal certitude by the Government. The Treasurer made a firm statement that, if the loan raisings failed, the expected .surplus would be transferred to the National Debt Sinking Fund, and used to underwrite the States’ loan programmes. .During question time yesterday I referred ,to the famous “ Spooner declaration “, in which the Minister for National Development covered almost all aspects of the economic proposals of the Government,, but disagreed with most of them. The Minister stated that the Commonwealth had to underwrite the States’ loan programmes in order to prevent overseas repudiation, but the expected surplus would be expended only over hia dead body. What a contradictory position I On the one hand the Treasurer has stated that if necessary the surplus will be applied to underwrite the States’ loan programmes, and on the other hand the Minister for National Development has stated that the money will be expended over his dead body! We should not like to see the matter ever reach that critical situation, because we like the Minister. He has revealed an internal contradiction. Doubtless, ultimately, the Treasurer’s proposal will be adopted as Government policy, and be implemented by the Executive. If the Minister for National Development is correct, it seems as though State public works are going to lag behind. I endeavoured to elicit from the Minister, by way of a question in the Senate yesterday, some information concerning that matter, but the only answer that I received was an attack upon three State governments. Significantly enough, two of those State governments are Labour governments, while the other, that of Victoria, is a Country party government, which is supported on the floor of the House by the Australian Labour party. The Minister tried, by means of an attack upon the Australian Labour party, to cover up .the fact that the Australian Government is uncertain concerning its own proposals. I suggest that the matter goes much further than a mere attack on State governments.
We are in a very sorry economic position in Australia to-day. During the last two years there has been a rapid deterioration of our economy. Day after day and month after month this Government has callously disregarded and torn up, one by one, the most sacred contracts into which it entered with the Australian . people. First, it broke the contract that it made with the people to restore value to the £1. I know that when that subject is mentioned it brings a smile to the faces of honorable senators opposite.
– Because it is not true that that contract was made.
– Surely the honorable senator is not attempting to assert that the Government parties did not make such a contract? It made a firm promise which buoyed the hopes of the Australian people. It was one of the factors which caused the people to place their confidence in the Government parties and elect them to office. Now when that promise is recalled, the only reaction of members of the Government is laughter, as if the matter should never be raised. I can understand the reluctance of honorable senators opposite to have it recalled, but when it is recalled should it be greeted with complete and callous cynicism? I regard it as a solemn promise which has been violated.
A more reprehensible matter than that is the repudiation by the Government of the solemnly conceived agreement to subsidize butter. It is very well for the Attorney-General (Senator Spicer) to laugh, but as a lawyer he should appreciate the sanctity of a contract. I remember clearly that during the early days of World War II. a suggestion was made that bondholders should reconvert_ their bonds to a lower rate of interest in the interests of national defence. At that time the then Minister for the Army, Mr. Spender, referred unctuously to the sanctity of contracts. He stated that a contract had been made with the bondholders, that it was sacrosanct and could not be violated. Now, because the matter of subsidizing butter concerns the whole of the Australian people, the Government repudiates the agreement that it made. I am aware that the Queensland Government incurred a great deal of criticism in the press because of the action that it was compelled to take during the critical situation which arose after the repudiation of that agreement by the Australian Government. All that the Queensland Government did was to endeavour to bring back this Government to an appreciation of the responsibilities that it had solemnly assumed and later repudiated. It cannot possibly exonerate itself from responsibility for its inactivity by saying that the matter is one for the States.
This Government reminds me of a boy who murders his father and mother, and then throws himself on the mercy of the court and asks for leniency on tho ground that he is an orphan. The Government entered into a contract in this matter, but it now claims difficulty and impossibility of performance as the reason why it should no longer be asked to discharge the obligation which it assumed. Such a defence would not be valid in a civil court. The Government, which contributed to the impossibility of performance of the contract by allowing inflation to drift on, now throws up its hands and says, “ We are no longer obliged to honour our responsibility because the subsidy would bo too great “. Such a defence would not exonerate a client of the Attorney-General for whom he appeared in a court of law, and it certainly will not exonerate the Government.
In addition to the matters that I have already mentioned, there has also been a repudiation of the proposals regarding the Burdekin Valley development scheme and the reduction of taxation. Perhaps one of the gravest repudiations of the Government concerns capital issues. It will be remembered that the late Mr. Chifley had capital issues control firmly in hand. That control was doing marvellous work in channelling capital to essential industries of this country. Since this Government has been in office, virtually by its own actions it has encouraged people to commence industries - perhaps some of them in essential industries - by the removal of financial barriers. The kind of businesses into which many of those people went are those which will be forced out of existence by the incidence of sales tax on such articles as toys. During the last general election campaign the Government parties claimed that the issue was communism and that only. The Australian Labour party told the people that the real issues concerned economics, the cost of living, the value of the fi and the financial position generally. The Government parties did not base their campaigns on those matters at all. Yet to-day, when the country is in a frightful economic position and is threatened with disaster there is no mention of communism. The accent is on inflation and economics. Members of the Opposition have been pouring the truth into ‘ the deaf and unresponsive ears of the Government for two years. We realized that they were the real issues and might lead to the great danger which is to-day threatening the whole country. We take no pride in our prescience or forethought. Eather do we regret that the Government parties did not also display a small degree of prescience.
The Government now asks the people for their complete confidence. I suggest that it cannot expect their confidence and that, on the contrary, it has done everything possible to alienate public confidence. The Australian people are now being asked to co-operate with the Government so that a rehabilitated Administration may lead the country slowly out of the economic condition into which this Government has precipitated it. All governments are capable of making mistakes, but it is the people who pay for those mistakes. In the 1930’”s the governments and economists of the day failed to solve the economic problems that confronted them and allowed the position to drift. Ultimately, the people themselves brought the country out of the depression. That is what may happen again.
I now wish to refer to aspects of the budget which touch upon the financial relations between the Commonwealth and States. I have referred to this matter on previous occasions when I have spoken in this chamber. We are all conscious of the need for a strong federation and of our new responsibilities of nationhood. We appreciate that unless we are strong internally we shall not be strong in the eyes of the world. In the new economic and financial developments that are taking place between the Commonwealth and the States, a challenge is being made to the very pattern of federation. The spotlight falls most definitely on Commonwealth and State relationships during an inflationary period such as this. The Commonwealth Parliament is undoubtedly and clearly the custodian of the economic welfare of the whole nation. If that was ever in doubt before, it is certainly not in doubt now. The position has been made clear by the inflationary trend. The Australian Government controls exports, subsidies, and all those things, apart from wage determinations, which ultimately make for the economic stability or instability of the country. On the other hand, the States which are the construction authorities, are affected most of the economic situation which day after day is draining away their sovereignty. They are no longer the principal taxing agencies. That is a position which we must face.
I have been not only disappointed but also disgusted to hear in this chamber during the last few days the remarks of some honorable senators on the new position which the States now occupy. Their sovereignty has definitely been curtailed. The State Premiers some time ago attended a conference of Commonwealth and State Ministers because the Australian Government, which is in charge of the affairs of the nation had failed to handle the economic situation as it should be handled, and had allowed prices and costs to rise. As the constructing authorities, the States ultimately must bear the full burden of the dereliction of duty by the Australian Government. When the State governments approached the Australian Government for more money, their action elicited the following comment from Senator Cormack, “ They came like two mendicant beggars “. The honorable senator was referring to the Premier of Victoria, Mr. McDonald, and to the Treasurer of that State. Has this federation reached the stage when a comment such as that concerning the Premier of a sovereign component of the federation can be made in the National Parliament and pass unnoticed? It should be remembered that the Premier of Victoria was merely asking for money with which to develop that State, because he is conscious of his responsibilities. Let us not forget that the States preceded the Commonwealth and that, in a way, their sovereignty constitutionally is less fettered than that of the Commonwealth. I direct the attention of honorable senators to the new responsibilities which rest upon the members of the Commonwealth Parliament, who have become, in the fullest sen*, trustees for the States. We hold the destinies of the States in our hands. We can strangle them economically, and that, apparently, is what some honorable senators opposite would like to do. Whether their attitude is dictated by political considerations, I prefer not to say. The fact is that we have power of life and death over the States, and thus over the Commonwealth itself. I urge honorable senators to realize the difficulties which confront the States, and to remember also that without the States there would be no Commonwealth. The States created the Commonwealth. They are the creator, we are the created. Without them we would not exist.
The Government has been playing politics, and that is a dangerous thing to do at a time like this. It has succeeded in distracting the minds of the people from the real issue, but in so doing it has distracted its own mind, also. During the 1951 election campaign, [ said something to thi3 effect: “Inflation has gone on until now somebody will have to be hurt “. How true that was 1 Some one is going to be greviously hurt, and the responsibility for that can be laid at the door of the Government which, for political reasons, refused at the proper time to do what was necessary to protect the people of Australia. The Government has failed in its duty, but it is the people who will have to suffer, just as they suffered during the depression as the result of government ineptitude. The gravity of the situation is such that even yet many people do not fully appreciate it, but business interests are already becoming seriously disturbed. Let us not think because of the apparent quiescence of the people, the absence of letters to the newspapers, and so on, that the people are satisfied with the budget. When the budget waa first brought down certain experts offered their opinions, and this made some impression on the public mind, but the full economic effect of the budget has not yet been felt. When the people fully realize how their standard of living will be reduced, the Government will be confronted by an angry and disturbed population, and an angry and disturbed population is a dangerous one.
I hope that the budget proposals will succeed in the sense that inflation will be checked. Many of the Government’s proposals are unjust, but they may succeed in checking inflation. If they do not, the people must suffer. Even if its proposals do succeed, let the Government not take the credit to itself. The credit will belong to the Australian people who, by their courage and their readiness to co-operate and make sacrifices, will finally restore economic stability.
– If the arguments adduced by Senator Byrne were in themselves as effective as the skill with which he presented them, they would be very good indeed. I am sorry that I have not the time to deal with all the points that he raised, but I must join issue with him on what he said about the way in which the Queensland Government dealt- with the price of butter. It is well to bear in mind that the Queensland Government refused to allow the dairy farmers to receive 3s. l£d. per. lb. for their butter, thus casting a reflection on the accuracy of the findings of the committee which inquired into the cost of production. The rejection of those findings by the State Government was tantamount to the rejection of an industrial award. The cost-finding committee was given the task of discovering a just price for butter, and it fixed on the figure of 3s. 1 1/2d. per lb. The Queensland Government tried to prevent the farmers from receiving the amount awarded to them by the committee, and even passed through the Parliament legislation, of a kind unparalleled in the history of the State, empowering it to confiscate the farmers’ butter. That was an example of Stalinism of the worst kind. The measure was challenged by the Opposition in the State Parliament and even outside the Parliament so widespread was the reaction against the Government’s tyrannical procedure that it was obliged to retrace its steps. Finally, as a face-saving expedient, it referred the question to the State Prices Commissioner, who upheld the finding of the committee which had ascertained the cost of production. Then the Government caved in, and awarded the proper price. Tie Government of New South Wales, which had acted in concert with the Government of Queensland, also capitulated, and the dairy-farmers in both States are now receiving for their butter the price to which they are entitled.
It is a disturbing paradox that, at this time of unexampled prosperity in Australia, it should have become painfully evident that there are weaknesses in the Australian economy. I have waited in vain for members of the Opposition to suggest remedies. I read carefully the report of the speech delivered in the House of Representa lives by the Leader of the Opposition (Dr. Evatt), but I have not yet heard the Leader of the Opposition in the Senate (Senator McKenna) on the subject. There has been an abundance of criticism, but no honorable senator who has condemned the budget has been able to offer any practical alternative. Some honorable senators have put forward nebulous proposals for the re-introduction of prices control by the Commonwealth. I realize that there is room for some form of prices control, particularly in the case of monopolies. Wage-earners are entitled to protection against rapacious monopolies and traders, but there is price-fixing machinery in all the States. However, one cannot expect ordinary price-fixing machinery to deal with an inflationary situation such as exists to-day. Mr. Colin Clark, the noted economist, in a broadcast over the Australian Broadcasting Commission network, made the following comment on price control: -
Now, price control has a useful and necessary part to play in our society. There are numerous abuses practised by monopolies, and by combinations of manufacturers and traders, which it is the function of price control to check. But in a situation like that of Australia to-day, with inadequate production and an ever-increasing stream of money trying to buy it, to expect price control to hold down prices under such circumstances is like expecting a fly spray to extinguish a house on fire.
That is an accurate description of the situation. Honorable senators opposite are not being helpful when they suggest Commonwealth price control as a remedy for inflation. For some time the Queensland Government has been trying, without success, to hold down the prices of onions and potatoes. The introduction of prices control in any country must result in one or two things happening. If the control is sufficiently rigid it inevitably has the result of either reducing the production of goods or stimulating an overflow of goods through side-doors into the blackmarket. As long as human nature remains what it is that cannot be avoided. If the prices of primary produce become unduly high at any particular time the explanation is almost invariably to be found in seasonal conditions which restrict production. However, high prices tend in themselves to increase production, which, in turn, inevitably has the effect of reducing prices. The less interference there is with primary production the greater will be the flow of produce. I remind honorable senators that at present every State has a system of prices control, so that we already have nation-wide prices control. I cannot understand why, in practice, such a system should be less effective than control of prices by the National Government.
Let us consider the real causes of high prices. Although no one will deny that we are at present in the throes of inflation, the problems associated with inflation and the high cost of living are admittedly immensely complicated, and I do not think that any single individual knows all the answers. The task that confronts us is to take such action as will stimulate the supply of goods and services sufficiently to bring it into balance with the volume of purchasing power in the community. In order to achieve that result the quantity of goods and services must be increased. In other words, we must either increase the supply of essential goods, or we must restrain the ever-expanding purchasing power of the community.
One important aspect of the budgetary proposals which disturb me is that the increasing cost of production must increase enormously the demands of State governments and other semi-governmental bodies that are carrying out huge developmental works, lt is clear from the statement made by the Treasurer (Sir Arthur Fadden) that an unpredictable amount, possibly the whole of the estimated Commonwealth surplus, may be required to fulfil the guarantee that the Commonwealth has given to make good from Commonwealth revenue any undersubscription of such loans. I believe, of course, that it is bad business for the Commonwealth to underwrite State loans for developmental works, but since the Commonwealth has given that undertaking it .must be honoured. The point is that if the loans are undersubscribed, and the Commonwealth has to make good the amount of the under.subscription, it will be difficult to regard the present budget as anti-inflationary, because the Government’s financial proposals will have the effect merely of transferring excess spending power from the pockets of the people to the Commonwealth Treasury. In my opinion, the budget can be regarded as antiinflationary insofar as it actually results in the accumulation, at the end of the financial year, of a surplus for transfer to the National Debt Sinking Fund. That, of course, is a matter for mere speculation at the moment, but, as I view the position, effective action must now be taken to overthrow the Frankenstein monster which threatens to destroy our whole economy.
The budget does not get to the roots of inflation. If a rose gardener were treating a bush that was diseased he would not content himself merely with snipping and pruning a few twigs and branches. To do so would be a mere waste of time.’ He would use his spade and dig out the diseased bush, roots and all. The Government’s financial proposals are not designed to deal with the two principal causes of the present inflationary condition. The first cause is the automatic increase of the basic wage that has been taking place every quarter, and the second is the 40-hour week. If we want to have leisure and are prepared to work only 40 hours a week, we must be prepared to pay the price of that leisure, which is a lowered standard of living, because obviously we cannot continue to enjoy our present standard unless there is a sufficient supply of goods to support it. If we want to combat inflation, we must have sufficient courage and there must be strong leadership in the Government to intervene in the Commonwealth Arbitration Court and seek an increase of the standard working hours. We must ask our people to work longer each week and to produce more goods in order to tide us over this time of economic crisis.
In the course of the speech delivered! by Senator Morrow last night he contended that rising prices started the spiral of wage increases, but complained that wages have lagged behind ever since. However, I think that the unsoundness of that contention is effectively answered by a statement made by Mr. Colin Clark, the Queensland economist, who is so well known for his eminent contributions to economic thought in this country. Under the heading, “ Wages rise will be the start of a vicious spiral “, Mr. Clark was reported in the press in 1946 to have said -
The experience of 1010-20 unfortunately makes it all too clear that the first year or two after conclusion of hostilities may show an even stronger tendency to price rise than the actual war years.
On these grounds, we should retain wagepegging regulations if we want to prevent further rises in prices - as we certainly should wish to do.
He went on to say -
If costs of production are raised by an allround increase in wages, price control will break down in confusion. Some of its principal officers have themselves admitted this privately.
A rise in wages will cause prices to go up not merely to -the extent of increases in the cost of production.
When the wage-pegging regulations were relaxed in 1946 Mr. Clark made it abundantly clear that a rise of wages would be the beginning of a vicious spiral. 1 now emphasize that that increase of wages has continued ever since. Indeed, the increase of the basic wage that has occurred automatically every quarter since makes the basic wage fixation machinery function like a robot. Every increase inflates the national economy by millions of pounds because it puts into circulation huge additional sums of money to compete for a supply of goods that is already inadequate and is not increasing. Unfortunately, everybody seems to be too timid to pick up the shotgun .and fire a charge of buckshot into the robot. Nobody seems to be willing to point out to the Commonwealth Arbitration Court, and to the people of Australia generally, a very simple fact-
– It also accentuates the increasing co’t of living,
– I quite agree. Indeed, that is an obvious fact. For the benefit of members of the Opposition, I mention now that Mr. Olive Evatt, M.L.A., who is the Chief Secretary in the New South Wales Government, and is, incidentally, a brother of the Leader of the Opposition in the House of Representatives (Dr. Evatt) when referring to the recent increase of 14s. a week in the basic wage, which is estimated to cost an additional £60,000,000 a year, said: “ The wage increase will be disastrous and is a national economic calamity”. I think that everybody will agree with his description of the situation. Unfortunately, there will be a still further increase, which it is estimated may be as high as £80,000,000, in February, 1952. The consequence will be that the purchasing power of the community will have been swollen by £140,000,000, and perhaps as much as £180,000,000, when the May, 1952, basic wage adjustment is made.
– What does tho Government intend to do about it?
– I put those matters before honorable senators in order to give them some idea of the alarming nature of the present situation. Will not the release of the additional £60,000,000 of purchasing power, which has already occurred, plus the February and May, 1952, basic wage increases, upset the Treasurer’s budget forecast of an estimated surplus of £114,000,000? I am convinced that the continuing increases of the basic wage constitute a fundamental weakness in our national economy, and the great task with which we must come to grips now is to break the inflationary spiral. What sense is there in having the effect of wage rises nullified every quarter by resulting price increases? Is this not mid-summer madness? Does it not throw a tremendous burden on the Commonwealth Treasury? What will be the position next year ? We are now imposing heavy taxes., Indeed, heavy taxes are a feature of this budget. If an additional £200,000,000 in wage increases is thrown into the economy next year, and prices and costs rise in consonance with the expenditure of that amount of money, the effect on the public services of the Common wealth and of the States, on government instrumentalities of all kinds, and on industry generally, may be disastrous.. In such circumstances what task will face the Treasurer next year? Will taxes have to be increased again? Where will this dance of folly end? Mr. Colin Clark, the noted economist, before leaving for Rome to undertake an important job for the United Nations, said that uncontrolled inflation would reach its peak in Australia in 1953 and could conceivably destroy our whole economy. He said -
Australia is heading for roaring inflation by 1953.
How should we set about the task of rectifying the unbalance in our economy? There are many avenues by which the problem may be approached. We could break the spiral of inflation by ceasing to make quarterly adjustments to the basic wage thereby stabilizing the wage level. The first approach should be made to the trade unions, for preference through the Australian Council of Trades Unions. Surely the wage-earners and trade union leaders of Australia would not reject an invitation to discuss this matter with a view to ascertaining whether we can iron out these difficulties, and, if so, how best to essay that task. Mr. Monk, the president of the Australian Council of Trades Unions, is reported in the Sydney Daily Telegraph of the 20th October to have had this to say upon the subject -
The real point is that State control of prices is not effective because of lack of cohesion among the States, and failure to use sufficient inspectors to police the prices of controlled goods properly.
The trade union movement would not consider wage-pegging or restraint of claims for increased wages unless it was satisfied that the Federal Government would - ( 1 )Reimpose federal price control.
Use competent administrators.
Employ sufficient inspectors to ensure that controls would work.
I admit that every one who sets out to do a little horse-selling usually quotes a price that is sufficiently high to enable him to give way a little if he is compelled to do so in order to effect the sale. What intrigues me is the fact that Mr. Monk should have left the door so wide open for the summoning of such a conference as I have suggested. He is prepared to “ talk turkey “ if an invitation to do so is extended to him and to those whom he represents. That very important possibility should be fully explored. Mr. Monk, with other trade union leaders, should be invited to a conference to ascertain whether the difficulties caused by quarterly wage adjustments cannot be ironed out in a manner that will be agreeable to the great body of wage-earners throughout the Commonwealth. Such a conference could consider the possibility of stabilizing the wage level. If trade union leaders reject such an offer, and we cannot come to terms with them, we should take whatever constitutional steps are open to us to establish wage-pegging, to fix a ceiling on wages or to stabilize the wage level. I realize that, except in time of war, the Commonwealth Parliament has no power to freeze wages. The States have power to freeze the wages only qf workers whose wages and conditions are not governed by awards of the Commonwealth Arbitration Court. Most of the wage-earners of Australia, however, work under awards of that court. There is nothing to prevent the Australian Government from intervening and asking the court to investigate the effect on the national economy of automatic increases of the basic wage, the wisdom of fixing wage ceilings and the inflationary pressures that result from the 40-hour week. In its judgment on the standard hours case the court had this to say -
If experience shows that we hare erred and contrary to our best judgment the economy docs suffer . . . then Mie Court can take such necessary steps as will best protect and preserve our community against any such untoward possibility.
The Commonwealth Arbitration Court is able to exercise powers and make decisions for the control of inflation which the Parliament lacks. Moreover the court has left the door wide open for an approach on this matter by the representatives of industry or the Commonwealth Government, or both. We cannot hope to check inflation unless we discard the vicious system of automatic wage increases. Those increases add to the cost of goods and services, the added cost of which is passed on to the consumer. We cannot check inflation while this sort of nonsense continues. It is not sufficient for us to say that we can do nothing about the matter because the Commonwealth does not possess sufficient power to enable it to do so. Our national economy has been weakened and undermined by automatic wage increases that exert new inflationary pressures every quarter. The British economic mission that visited Australia in 1928 condemned the system of automatic wage increases which was then in force. In 1790, the Government of France resorted to inflation by large issues of what was termed “ fiat money “. Mirabeau, speaking in the French Chamber of Deputies in that year, justified the issue of paper money in these terms : -
We must accomplish that which we have begun. There must be one more large issue of paper, guaranteed by the national lands and by the good faith of the French nation.
In order to show how practical the system was he insisted that as soon as paper money became too abundant it would be absorbed in rapid purchases of national lands; and he made a very striking comparison between this self-adjusting, selfconverting system and the rains descending in showers upon the earth, then in swelling rivers discharged into the sea, then drawn up in vapour and finally scattered over the earth again in rapidly fertilizing showers. He predicted astonishing success for this paper money, but six years later the plates, printing presses and undistributed assignats were solemnly broken and burned in the Place Vendome. Every economist and every political thinker agrees that the key to the solution of our inflation problem is increased production of all essential requirements. We want more coal, more ships, more locomotives, more rolling stock, more of the equipment that will help the primary producer, more fencing wire, more barbed wire and wire netting, more of the products that will help the home builder - timber, bricks, cement, galvanized iron and tiles - and perhaps most important of all, more foodstuffs, more beef, mutton, fruit, vegetables, milk, cream and butter, sugar, fish, wheat, poultry and eggs. The inflation that exists in Australia to-day is not due, as was the case in France in 1796, to the government proceeding with deliberation to obtain money by resort to the printing press, but it has precisely the same effect, ami it sweeps on in the same irresistible way. Without consideration by the Commonwealth Arbitration Court, these automatic increases occur, and a fresh supply of paper money is required every quarter to pay the extra wages involved. This self-adjusting wage system entirely ignores the whole question of production. If the standard of living is to be raised, our people must produce more food, more clothes and more of the necessaries of existence. By raising wages under this objectionable system of automatic increases, we cannot possibly hope to raise the standard of living. If increased supplies of paper money represented a source of wealth we could properly claim to be in clover. Money is accumulating, but foodstuffs and other essentials are in ever-shortening supply. When the 40-hour week was decided upon, the lower productivity that followed made inevitable a lower standard of living for the Australian community. The introduction of the 40-hour week and the quarterly adjustment of the basic wage have let loose the forces of inflation. Those foolish decisions have swung the economy of the country into a spiral and wages continue their ridiculous and everlosing chase after prices. That chase will go on until some one with power and authority is courageous enough to break the spiral. In order to illustrate my belief that public opinion is behind a movement to that end, I propose to refer to the results of a Gallup poll conducted in July last. The general trend nf public thought as expressed in the poll disclosed that insufficient production, high wages and the 40-hour week were the chief causes of the increased cost of living. Gallup polls taken in August and September disclosed that 58 per cent, of the people favoured a return to the 4A- hour week, whilst 38 per cent, favoured the taking of compulsory savings out of each week’s pay. Only 11 per cent, favoured increased taxation on wages and salaries, and 16 per cent, favoured increased sales tax. It will be discerned that public thought recognizes that the inflated conditions warranted the drawing off of amounts within reason, but prefers a system of compulsory saving to in- creased taxes, both direct and indirect. In Gallup polls taken in April, May and June last, the people were asked this question -
Considering both prices and your income, would von say you are better off or worse off than you were six months ago?
The comparison, of course, was with the period before the £1 a week all-round increase had been granted in wages and salaries. Sixty per cent, of the people answered “I am worse off”. In April the Gallup poll authorities submitted this question -
If full price control is brought in again, do you think wages should or should not also be controlled?
Eighty-two per cent, answered, “ Yes, control wages if prices are pegged “. Some time ago, no less au authority than Lord Bruce, dealing with the problem of inflation in England, proposed twelve counter measures. The first of them was an immediate wage freeze. That was followed by other measures which depended to some degree on the acceptance of the first proposition. In his thinking, Lord Bruce was just a few months ahead of Mr. Gaitskell, the British Chancellor of the Exchequer, who told a conference of trade unionists at Blackpool that wage demands must be moderated. That was a bitter pill for the workers, but the result of his speech was that a motion stating “ That further wage increases are essential for all sections of British workers “, was defeated by 5,284,000 votes to 2,199,000 votes. That decision reflected the good sense of the British workers. They took their lead from the Chancellor of the Exchequer and recognized the folly of wages chasing prices. The position now is, therefore, that although no wage ceiling has been fixed by statute, there is an understanding between the trade unions of the United Kingdom and the British Government that no demands will be made for wage increases. That is the best kind of agreement that can be reached. The inflationary spiral has been broken. To break the spiral in this country, wage increases must be stopped. Once the upward movement of wages has ceased, there will be no ground for price increases. Should any hard-hearted merchant step out of line and seek to increase prices in spite of the freezing of wages which constitute 80 per cent, of costs, he could be dealt with adequately under the prices laws of the States. Such an attempt to break the inflationary spiral should have the co-operation and goodwill of all good Australians regardless of their political affiliations. We have before us the example of the British workers who have agreed by a two to one majority not to seek further wage increases. The Swedish trade unions, too, have agreed to peg wages for the whole of next year in an effort to check inflation and to enable the government of that country to implement its four-year prosperity plan. I read recently that Western German factory workers had refused an offer to increase their wages by from 5 per cent, to 14 per cent. The Germans, of course, are hypersensitive to inflation because of their experiences in the 1920’s. They realize too, that if they want to re-establish Germany as one of the world’s leading exporting nations, production costs must be kept at a minimum so that manufactured goods may be sold overseas at competitive prices. That shows the good sense of the German workers. They cannot be won over by seductive offers of increased wages. They know only too well that when wages increase, prices follow suit, and an impetus is given to inflation.
However, in seeking correctives for inflation we much avoid moving from one economic extreme to the other. We are now in a period of extreme inflation, but we must be careful not to slide precipitously into a recession, because the cure might be worse than the disease. There is a golden mean and I .believe that government policy should be directed towards stabilizing our economy somewhere between the extremes. The wind should be tempered to the shorn lamb. Falling wool prices are already acting against inflation. Australia’s wool cheque has already been reduced by £250,000,000 compared with last year. That in itself will ease the inflationary pressure. Credit restrictions will also have anti-inflationary effects, as will any budgetary surplus. If the Government were to follow its budget proposals by a move to break the spiral of inflation by means of an agreement, if possible, with the trade unions to place a ceiling on wages or to refrain from making further demands for wage increases,’ our economic difficulties would be greatly eased. Whether wage pegging is statutory or voluntarily would matter not, but of course we should all prefer a voluntary agreement. If wages were pegged and then, because of factors over which we have no control, such as falling prices for our exports, our economy started to recede from the high inflationary peaks, the necessary adjustment could be made. When prices fall, wages generally follow suit. By degrees, we would return to normality with a minimum of friction, unemployment, and inconvenience. Since the end of the war we have lived in marvellous times. The period must be regarded as one of the most momentous and romantic in our history. We have reached heights of prosperity that could not possibly be exceeded in any other country; but there is only a thin line between inflation and deflation at any time. Let us relax our hold on prosperity gradually. That is my advice. Let us move gradually away from the hazards of uncontrolled inflation.
I wish to refer briefly now to defence matters. Last night, Senator Morrow claimed that the Government was creating a war scare. I have no doubt that some people would like to see the democracies wholly disarmed and incapabale of offering any resistance to totalitarian forces that wish to impose their yoke on freedom-loving people. To-day there is trouble in China, Korea, Malaya, Persia and Egypt. In the midst of all this disputation, one country stands with great armies poised for attack whenever the order is given. While Senator Morrow is quite willing to refer to his fellow countrymen as warmongers and merchants of death, I have never heard him turn his attack upon the merchants of death and warmongers behind the Iron Curtain. He always soft-pedals that aspect of the matter. He conveniently overlooks the fact that, aggressively poised for action, stand millions of men armed for war. If he would stand up occasionally for this country, find quit calling his fellow Australians derogatory names that they do not deserve, he would be doing a better service to his country. The defence preparations now being undertaken in the United Kingdom, the United States of America, Australia, and elsewhere in the free world, have been forced upon us. Senator Morrow should get that into his head. “We do not undertake these commitments lightly. “Who would want to pay taxes to finance warlike activity unless his very existence was threatened? We are obliged to arm to defend ourselves against the dangers that are manifest in the world to-day. If the country that Senator Morrow regards as his spiritual home means well by other nations, why does it not disarm, disband its armies, open its borders to travellers, and encourage trade? Instead of doing those things, Russia persists in waging a “ cold war “. We want peace and good will. We do not want war. I am not a warmonger, and I do not think that anybody else in this country is a warmonger; but I value the liberties and freedoms that I enjoy as an Australian, and I am prepared to do my “ whack “ to uphold and maintain our right to live as a free people. Senator Morrow should think over these things in his quieter moments. Then, perhaps, as a good Australian he will see some good in his fellow countrymen who are preparing to defend themselves against those elements in the world that wish to end our democratic way of life.
Our defence preparations must be closely related to primary production. In the last ten years, the labour force in our primary industries has decreased from 520,000 to 450,000 although, in the same period, Australia’s population has increased by 20 per cent. Food is the immediate and urgent need of our growing population, and would have to be given top priority should we become involved in a war. The provision of ample supplies of foodstuffs would be one of the most valuable contributions that Australia could make should war be forced upon us. I have no doubt that there is a military understanding between Australia and the other democracies, but has the food problem been taken into account ? We are unable at present to produce sufficient food for our own civil requirements, yet we might be called upon at short notice to supply food to large armed forces. I believe, therefore, that top priority should be given by the Government to the problem of increasing food production so that we shall be able to meet the requirements of our civil populations and also, if necessary, of large armed forces. An all-out drive, under capable leadership, should be made in both primary and secondary industries to increase the production of food and other basic requirements. By bolstering food production we should also be going a long way towards correcting some of the effects of inflation. It would help considerably if we were able to provide food to the general body of consumers throughout Australia at cheaper prices. Th, Minister could well give his full attention to this important problem.
I shall now refer to the defects of our transport system. I understand that overseas ships are not permitted to lift cargoes from one port to another along our coast. If that is true, it is one of the things which, at this particular period in our history, when both shipping and railways are letting us down, baffles and perplexes me. Why cannot that action be taken to enable overseas ships to pick up and deliver merchandise from port to port? According to an article that was published in the Brisbane Courier-Mail of the 10th October, there is a serious shortage of salt in Queensland. It reads, in part -
No salt ship is expected in Brisbane until raid-November. . . .
Normally South Australia supplies Queens land with 10,000 to 12,000 tons of table salt a year.
Overseas ships could easily bring salt from Adelaide to Brisbane, and the people would not be short of that commodity. But somebody says “ No, they cannot do it “. There are not enough interstate ships trading on our coast, and the railways are hopelessly bogged down. There is something radically wrong when this sort of thing is allowed to happen in Australia. Why we cannot improve our transport problem, and permit the overseas ships to lift cargoes from port to port on our. coasts is beyond me.
On many occasions I have seen convoys of motor trucks conveying motor vehicle bodies to Queensland to be fabricated into complete motor vehicles. They are transported overland direct from
Adelaide. To my knowledge that has been going on for three years. A considerable saving of petrol could be effected if the motor vehicle bodies were transported by sea from Adelaide to Brisbane. There is enormous wear and tear on the roads under the present system. The motor trucks that are being used for this purpose could be utilized to convey coal from the Callide coal-field to the harbour at Gladstone and in other profitable directions.
In September, I visited the northern part of New South Wales near the Queensland border, where I met some cattlemen who told me that their store cattle were dying in hundreds in the paddocks because of the unavailability of railway wagons to transport them to the southern districts of New South Wales, whore flood rains had fallen and the grass was lush. New South Wales lacks the Tolling stock end locomotives to meet the requirements of men who are battling on the land. Although beef is in short supply to the people in the community, bullocks are allowed to die in the paddocks. There is something radically wrong with the whole business. I do not know how the 100,000,000 dollar loan waB allocated, but the need to improve our transport system shrieks to high Heaven. Our primary producers do the hard work. They are out on the land battling against the elements, and when drought overtakes them” they are not able to get their store cattle away to agistment areas, bo that beef can be made available to the people at reasonable prices. I do not suppose that a census will ever be taken of the number of beef cattle that have been lost this year, as the result of the drought. I have heard that at least 10,000 head of cattle will be lost in the north-west of New South Wales, and it is reasonable to assume that at least that number will be lost in Queensland.
I hope that the matters that I have brought forward will not be lost Bight of by the responsible Ministers’, “because they are most vital to our economy. I support’ the budget.
Debate (on motion by Senator Cameron) adjourned.
Motion (by Senator O’SULLIVAN agreed to -
That the Senate, at its rising, adjourn to Wednesday next, at 3 p.m.
The following paper was presented : -
Public Service Act - Appointment - Department of the Interior - A. H. Spowers.
Senate adjourned at 4.37 p.m.
Cite as: Australia, Senate, Debates, 25 October 1951, viewed 22 October 2017, <http://historichansard.net/senate/1951/19511025_senate_20_214/>.