Senate
21 September 1955

21st Parliament · 1st Session

  1. Senate
  2. 21st Parliament
  3. 1955

The President (Senator the Hon. A. M. McMullin) took the chair at 3 p.m., and read prayers.

page 229

QUESTION

SHIPPING

Senator BENN:
QUEENSLAND

– Can the Minister representing the Minister for Commerce and Agriculture explain how an error was made by the officers of his department when they were calculating overseas shipping costs, and found that costs to shipowners had increased by 4.3 per cent., whereas, as was reported this week, the increase was actually 6 per cent ?

Senator SPICER:
Attorney-General · VICTORIA · LP

– As I am not familiar with the matter to which the honorable senator has referred, and do not know whether an error was made, I shall draw the attention of the Minister for Commerce and Agriculture to the honorable senator’s question, and ascertain what the position is.

page 229

QUESTION

DAIRYING

Senator ANNABELLE RANKIN:
QUEENSLAND · LP

– In view of the Government’s acceptance of the recommendation by the Dairy Industry Investigation Committee that, for the current year, dairy-farmers be paid the same guaranteed price for butter and cheese as they were paid last year, and since any reduction of the total amount of subsidy made available to the industry was taken fully into account by the Minister in declaring the increased price for local consumption, will the Minister representing the Minister for Commerce and Agriculture explain why returns to dairy-farmers have been reduced by at least 4½d. per lb?

Senator SPICER:
LP

– The honorable senator was good enough to indicate that she desired some information on this subject, and, accordingly, I referred her question to the Minister for Commerce and Agriculture, who has supplied the following answer:-

Under the equalization scheme, which is operated on a voluntary basis by the industry itself, farmers must he paid for their butter and cheese before it is actually sold. Since these payments, therefore, are made from an overdraft, the equalization committee cannot afford to take any risks of overpayment. In calculating this year’s overall return to factories for payment to farmers, the Dairy Produce Equalization Committee Limited - and I must emphasize that this is an industry committee and not a government committee - assumed that oversea prices wouldbe much lower this year than last year. Whereas, under bulk contract sales of the lastfifteen years, the equalization committee could work to a known export value, it must now advise factories what price they can safely pay in advance and be assured of reimbursement through open market sales over the next twelve months. Conservatism is obviously essential, but . no degree of conservatism subtracts from the ultimate return to the producer under the present system of the full realization of his produce. This new situation inevitably produces in the face of lower export prevailing values a sharp reduction in the interim payment. But I again emphasize that none of this has anything to do with the Government. It is completely within the control of the industry and depends on the industry representatives’ own decision.

page 229

QUESTION

COMMONWEALTH REHABILITATION SERVICE

Senator HANNAFORD:
SOUTH AUSTRALIA

– I ask the Minister representing the Minister for Social Services the following questions: -

  1. How many people have passed through the rehabilitation scheme since its inauguration?
  2. What is the annual cost of the scheme? (c) What are the estimated savings in pension payments?
  3. What is the estimated effect on production?
Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– My colleague, the Minister for Social Services, has supplied the following answers: -

  1. From July, 1948, to the end of June, 1055, 7,489 physically handicapped persons, mainly invalid pensioners and sickness beneficiaries, have been successfully placed in employment after receiving treatment and training provided by the Commonwealth rehabilitation service.
  2. The expenditure on rehabilitation from the National Welfare Fund in the last three financial years was as follows: - 1952-53. £454,557; 1953-54, £428,717; 1954-55, £450,918. With the recent extensions to the Commonwealth rehabilitation service, it is estimated that the cost in 1955-50 will be £510,000.
  3. As a result of the employment of 2,800 invalid pensioners a saving of more than £520,000 a year in invalid pensions and dependants’ allowances is now being made. If this calculation were based on the proposed new pension rate of £4 a week, the annual savings would be increased by £74.000.

By the reduction in the recovery time of those im lung-term sickness benefit, and the return to employment of those beneficiaries who wen’ drifting towards permanent invalidity, a further saving of £50,000 a year can be added. Tt will he seen, therefore, that these aggregate savings more than offset the annual running costs of the Com mon wealth rehabilitation service. (</) it lias been conservatively estimated that the contribution to the national income by physically handicapped persons restored to the work force after receiving rehabilitation treatment is more than f 1,400,000 a year.

page 230

QUESTION

TELEVISION

Senator PEARSON:
SOUTH AUSTRALIA

– My question to the Minister representing the PostmasterGeneral concerns the introduction of television into Australia. In view of the fact that television licences have been granted in New South Wales and Victoria for the cities of Sydney and Melbourne, will the Minister indicate whether the claims of other States have been examined by the Postal Department, and, if so, whether the applications of interested parties in South Australia for the establishment of television in Adelaide have been considered ?

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– At present I cannot answer the honorable senator’s question with any authority, but I believe that the claims of all the States with regard to television have been examined. T shall bring the question to the notice of the Postmaster-General, and ask him to supply a considered reply to it.

page 230

QUESTION

HOG CASINGS

Senator HENTY:
TASMANIA

– Is the Minister for Trade and Customs aware of the grave shortage of hog casings in Tasmania? J.< be also aware that a number of new importers who qualified for licences under the “ no quota required “ period are not trading in Tasmania? Is he further aware that licensed importers, who haw been trading with Tasmania for many years, have, through the introduction of these new importers into the total import pool of 450,000 bundles, had their quotas reduced by up to 50 per cent.? “Will the Minister take steps to investigate the position in Tasmania with a view to increasing the supplies of hog casings to that State?

Senator O’SULLIVAN:
Minister for Trade and Customs · QUEENSLAND · LP

– The honorable senator was good enough to indicate that he intended asking such a question, and I am in a position to give him a reply. I have received representations from a number of sources to the effect that the present import quotas for hog casings are insufficient. The position appears to be as stated in the second part, of the honorable senator’s question. However, the import licensing measures do not prevent any firm from trading in any State. Prior to the 1st October, 1954. imports of hog casings from non-dollar countries were free of import quota restrictions. As from the 1st July last, quotas were re-allocated among all importers on the basis of their respective share of total imports during the year ended the 31st March last, and total imports were limited to the quantity recommended by the Tariff Board, after public inquiry. It will be apparent, therefore, that any company which imported during the period when no quota restrictions were applied would now receive a proportionate share of the overall allocation which has been made. The general position with respect to supplies of hog casings and substitutes therefore is being investigated in connexion with the allocations to be made in the October-December quarter.

page 230

QUESTION

INSURANCE

Senator TANGNEY:
WESTERN AUSTRALIA

– I preface a question to the Attorney-General by informing bini that, in the last few days. I have been approached by an age pen,sioner here in Canberra who had taken out several life assurance policies, the premiums on which ranged from 6d. to ls. a week over many years, and who has informed me that now, when the policies should have matured, no payment is being made because the assurance company concerned apparently has been wound up by an order of the High Court. Can the Attorney-General say what guarantees, if any, are made by insurance companies to protect the interests of policyholders? In the event of a company such as this- the Associated Dominion? Assurance Society Proprietary Limited - being wound up by an order of the

High Court, is there any way in which small policy-holders particularly, and all policy-holders generally, may be protected and be assured that at least their premiums will be returned to them, instead of losing everything, as it appears has happened in the case to which I refer ?

Senator SPICER:
LP

– This question relates t.o a company which has been the subject-matter of lengthy litigation over a very long period. At the moment, I am not quite up to date concerning the present position of that litigation. The honorable senator will appreciate, of course, that if the assets of the company ultimately prove insufficient to meet all its liabilities, then those who have claims on the company must share what is available, in the way in which it is usually clone when a company is in liquidation. [ shall look further into the points which the honorable senator has raised and give her more detailed information in regard to the matter.

page 231

QUESTION

OVERSEAS INVESTMENTS IN AUSTRALIA

Senator LAUGHT:
SOUTH AUSTRALIA

– Can the Minister representing the Treasurer say whether it is a fact that the inflow of United States capital and industry to this country became noticeably greater after the completion of a system whereby double taxation on income was avoided? Will the Minister give consideration to the negotiation of a similar arrangement to apply to Canada?

Senator SPOONER:
LP

– I think it would be as well if the honorable senator were to place his question on the notice-paper. T have a recollection that some matters are proceeding in this connexion, but I do not think it would be wise to trust to my recollection concerning them.

page 231

QUESTION

TARIFF BOARD REPORTS

Senator WRIGHT:
TASMANIA

– I wish to direct a question to the Minister for Trade and Customs. I have found the task of keep; ing myself informed regarding decisions of the Tariff Board completely beyond me, because of the manner in which reports of these decisions are presented to this House. Honorable senators receive the reports as they are presented, but it is most difficult to relate individual reports to the general picture of commerce. The annual report of the Tariff Board is a most stimulating document, but it deals mainly with the year’s activities. Will the Minister inform the Senate of the degree to which the second Tariff Board has been employed in dealing with applications for increased tariffs, and also will he make a statement to the Senate reviewing the general operation of tariffs over the last five years, or some other convenient and significant period?

Senator O’SULLIVAN:
LP

– I do not fully appreciate the implications of the honorable senator’s question as to the second leg, so to speak, of the Tariff Board’s operations. The Tariff Board is now operating in two sections instead of one as hitherto, and to that extent applications and hearings before the board have been expedited. As to a review of the operations of the Tariff Board over the last five years, I am unable to appreciate exactly what the honorable senator means. Knowledge of the operations and activities of the Tariff Board over the last five years can be gleaned from a perusal of the Tariff Board reports for those years. In my office, I have the Tariff Board’s report for last year, and I hope to table it in the Senate soon. It is very comprehensive and, as the honorable senator said of previous reports, it is a stimulating and interesting document. I do not think that I could improve on it by giving a resume of the work of the board by way of a personal statement. If I did not understand the honorable senator’s question correctly, perhaps he could be more explicit, and if I have information that I am able to give him I will gladly do so. The operations of the Tariff Board are very important, and its reports are most lucid.

Senator Wright:

– I thought it would be an advantage to have a comprehensive statement showing the trend of the tariff, particularly in relation to present economic problems. I was hoping that the Minister would give that information in the course of a review.

page 232

QUESTION

TELEVISION

Senator COOPER:
CP

– On the 7th September Senator Ashley asked a question concerning Mr. J. H. T. Fisher, a former employee of the Australian Broadcasting Control Board. I have now received the following reply from the Postmaster.General : -

Mr. J. H. T. Fisher was employed as Engineer (Television) on the staff of the Australian Boardcasting Control Board from June, 1054, to June, 1055. Prior to that he was employed on the engineering staff of the Postmaster-General’s Department. He resigned from the Commonwealth Public Service in June, 11)55, to accept the position of chief engineer of the television station in Melbourne to be operated by Herald Sun Television Proprietary Limited. Mr. Fisher’s resignation was entirely a matter for himself and no inquiry was called for or conducted. Mr. Fisher, in company with other Commonwealth officials, investigated television services in overseas countries in 1051 and the cost of his visit was £1,100.

page 232

QUESTION

IMPORT RESTRICTIONS

Senator SEWARD:
WESTERN AUSTRALIA

– With reference to the reply to an earlier question on import restrictions, will the Minister for Trade and Customs give an assurance that in any restrictions that may be imposed as from the 1st October, next, no additional restrictions will be imposed on the already heavily restricted items in Category B?

Senator O’SULLIVAN:
LP

– The honorable senator knows very well that I cannot give any undertaking or assurance along the lines that he desires. All I can assure the Senate is that the right thing will be done in the circumstances.

page 232

QUESTION

TAXATION BRANCH OFFICERS

Senator BENN:

asked the Minister representing the Acting Treasurer, upon notice -

Can the Acting Treasurer say if the deputy commissioners of taxation examine the income tax returns of the members of their staffs to see if they are engaging in employment other than that for which they are paid departmentally ?

If they are examining the returns of their officers for such purpose, will the Acting Treasurer see that they cease contravening the secrecy provisions of section 10 of the Income Tax and Social Services Contribution Assessment Act?

Senator SPOONER:
LP

– The Acting Treasurer has supplied the following reply :-

The Commissioner of Taxation states that he i3 not aware of any case in which a deputy commissioner has disclosed to any other person, either in breach of the secrecy provisions or otherwise, the contents of the income tax returns of an officer. It is the duty of a deputy commissioner of taxation through his officers to examine the contents of returns lodged by taxpayers. It is also the duty of the deputy commissioner, who is the delegate of the chief officer, to see that his officers observe the terms and conditions of the Public Service Act. The secrecy sections of the act expressly exclude from their provisions such disclosures as are required to be made by an officer in the performance of his duties.

page 232

QUESTION

RECRUITING- FOR ARMED SERVICES

Senator PEARSON:

asked the Minister representing the Minister for Defence. upon notice -

  1. Is it a fact that there are more servicemen leaving the permanent forces than there are men joining?
  2. If so, what is the excess of withdrawals in each nf the three services over the last twelve months?
  3. What is the present strength of each of the three services in the permanent forces?
  4. What steps, if considered necessary, are being taken to obtain a greater number of recruits?
Senator O’SULLIVAN:
LP

– The following information is given in reply to the honorable senator’s question : -

  1. Tn the rase of the Navy and Army the number of personnel leaving the service at present is greater than the numbers joining.In the case of the Air Force on the other hand the number joining exceeds the present losses.
  2. The excess of withdrawals over enlistments in the last twelve months is 050 for the Navy, and 1,250 for the Army. Enlistments in the Royal Australian Air Force during the same period exceeded withdrawals by 550.
  3. The present strength of the permanent forces is: - Navy, 13,150; Army, 23,000: Air, 15,400.
  4. Full employment, the national shortage of man-power and the progressive decline in the size of the local man-power pool in the age groups most suitable for the services are the basic considerations which militate against the achievement of the strengths required for the forces. However, since the 1st July last applications for enlistment have increased by 35 per cent, and actual recruitments by 24 per cent, compared with the same period last year. The Government has taken active steps to improve the attractiveness’ of a career in the services including the following: - (o) Payment of gratuities to members upon competition of their engagements. A higher rate is payable to those who re-engage for a further period. (6) The services pay code was reviewed in December, 1954, when substantial marginal increases were granted. Pension rates under the defence forces retirement benefits scheme were also increased, (c) The lack of housing is one of the major causes of the services being under-strength. Substantial provision has been made by the Government for houses for married personnel. (<i) An -effective recruiting organization is being maintained for which increased financial provision has been made this year.

page 233

QUESTION

BRITISH COMMONWEALTH STRATEGIC RESERVE

Senator McKENNA:
through Senator Armstrong

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

Will the Minister ask the Minister for the Army to amplify his statement, made on 7th September, to the effect that the Australian Malayan Force was part of a British Commonwealth strategic reserve. In particular, will the Minister state - (a) when and where the reserve was established; (fi) which members of the British Commonwealth of Nations are parties to the arrangement; (o) which members arc not; and (<j) what obligations are assumed by nations who are parties to the arrangement?

Senator O’SULLIVAN:
LP

– The Minister for Defence has supplied the following answers : - («.) The Commonwealth strategic reserve is being established in Malaya by agreement between the Government’s of the United Kingdom, Australia and New Zealand, following the Prime Ministers’ meeting in London early this year.

  1. and (n). The British Commonwealth countries participating in the strategic reserve are the United Kingdom, Australia and Kew Zealand. id) The Prime Minister announced on 1st April, 11)55, that “Australia will participate in the establishment in Malaya, as a very important portion of the Manila Treaty Area, as a contribution to the defence of the treaty area, of a strategic reserve in which the United Kingdom and New Zealand will -participate “. Tim Commonwealth- strategic reserve has been established for the defence of Malaya and is also available for use in operations against the. Communist terrorists. As stated by the Prime Minister on 15th June, this will not permit the use of Australian forces in relation to any civil disturbances, nor in the internal affairs of the Federation of Malaya or Singapore.

page 233

QUESTION

TAXATION

Senator WRIGHT:

asked the Minister representing the Minister acting for the

Treasurer, upon notice -

  1. Will the Minister inform the Senate whether the amendments recently introduced into the Income Tax and Social Services Contribution Assessment Act, providing for schemes for self-employed persons to be relieved of tax, have been availed of?
  2. How many schemes have been considered by the Commissioner of Taxation, and how many have been approved?
  3. What is the general criterion of reasonableness applied by the Commissioner?
Senator SPOONER:
LP

– The Prime Minister, who is acting for the Treasurer, supplied the following answers : -

  1. Yes.
  2. Three funds have been considered by the Commissioner of Taxation under section 23 (ja) of the Income Tax and Social Services Contribution Assessment Act. The terms and conditions applicable to all til roe. funds have been approved by the Commissioner.
  3. The Commissioner has not established a general criterion of the reasonableness of the benefits provided for and the amount, of ‘the fund in relation to those benefits. Each fund has been considered having regard to all relevant factors relating to that fund.
Senator RYAN:
SOUTH AUSTRALIA

asked the Minister representing the Minister acting for the

Treasurer, upon notice -

Will the Acting Treasurer supply information relative to sales tax revenue for 1954-55 in respect of the several rates of tax in operation?

Senator SPOONER:

– The Prime Minister who is acting for the Treasurer, has supplied the following answer : -

Precise statistics of the amount of sales tax revenue collected at the several rates of tax are not maintained. However, the collections of tax during the financial year 1954-55 from the various rates in force are estimated as follows : -

The Tate of 10 per cent, was first operative from 19th August, 1954. As from the same date also, certain goods were transferred from the 163 per cent, “rate to the general rate of 12J per cent, and other goods were exempted from the tax.

page 234

ESTIMATES AND BUDGET PAPERS 1955-56

Debate resumed from the 15th September (vide page 180), 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 the 30th June, 1956.

The Budget 1955-56 - Papers presented by the Right Honorable Sir Arthur Fadden on the occasion of the Budget of 1955-56.

National Income and Expenditure 1954-55

Senator ANDERSON:
New South Wales

– Honorable senators are debating the Estimates and Budget Papers, and are using a parliamentary procedure which enables them to hold this debate concurrently with a similar debate in another place. Honorable senators on both sides of the chamber have availed themselves of the opportunity presented by the budget debate to examine the economic position in Australia. Senator Byrne said that the budget should canvass the economic, financial and international situations, and all honorable senators can agree with that observation, but it is about the only one made by Senator Byrne with which I do agree. His speech was remarkable because he bemoaned the fact that the Treasurer (Sir Arthur Fadden) did not portray the economic situation as one of great seriousness. He was distressed to note that the Treasurer bad not shown that Australia was in the throes of an economic disaster. Thereupon, Senator Byrne proceeded to paint a picture of that sort himself. Then, with masterly skill, he began to criticize it. So enthusiastic did he become, that he forgot that he was attacking the creation of his own mind, and not the Treasurer’s portrayal of the economic situation.

When we review the economic and financial position, we should start by reflecting upon current trends. The first point we can make with certainty is that, in Australia, we are living in a period of unparalleled prosperity.

Senator Sheehan:

– For how long?

Senator ANDERSON:

– We are also living in a period of full employment. In that connexion, I direct the attention of honorable senators to a statement by the

Minister for Labour and National Service (Mr. Holt) that has just come to my notice. Referring to employment in Australia, the Minister stated that vacancies registered with the Commonwealth Employment Service increased by 2,069 to 58,181 as at 26th August last. In other words, there are 58,181 positions which we cannot fill because we have not sufficient men to fill them. There is a state of full employment or, as some people describe it, a state of overemployment. We are living in a period of high wages, and there has been a constant and progressive increase of the real value of the payments made to workers. As I do not expect honorable senators opposite to accept what Isay on this subject, I shall cite some figures provided by the Commonwealth Statistician. Those figures reveal that since this Government has been in office there has been a progressive increase of the real value of wages. They show that if we accept the figure of 1,000 as the value of wages in the base year 1939, the value has risen each year. In 1950-51 it was 1,201, in 1952-53 it rose to 1,217, in 1953-54 it rose still further to 1,223, and for the year 1954-55 it reached 1,229. The Statistician also reveals that the savings of the community are at a record high level. During the month of July, 1955, savings bank deposits rose by £7,300,000, to reach a total of £1,081,000,000. The savings represented £1181s. for every person in the community compared with £113 12s. a year ago. Those figures support my claim that we are indeed living in a period of unparalleled prosperity. If we have a problem, it is the problem of preserving and maintaining that prosperity. However, the Treasurer in his budget speech, very properly, in my opinion, has drawn attention to a number of factors which, if not attended to, could prejudice that prosperity. Those factors are, first, our adverse trade balance with other countries, and, secondly, what he termed “ a mild and incipient form of inflation “. Every honorable senator knows that a nation pays for its imports by what it sells overseas. That is a simple economic fact. If it happens, as has been the case this year, that we import more than we export in terms of money, the difference must come out of our overseas reserves. At the 30th June last, those reserves amounted to £428,000,000. That is a healthy overseas balance, especially when we compared it with our overseas balances prior to the war.

Senator Hendrickson:

– Why impose import restrictions?

Senator ANDERSON:

– At the 30th June, 1938, our overseas reserves amounted to £S5,200,000. A year later they were down to £60,700,000. It is well known that, before the Avar, our economy, as shown by our imports and exports, operated on reserves overseas amounting to about that sum. During the war years Australia’s exports increased enormously in order to meet the needs of the free world, with the result that our overseas balances reached astronomical proportions. At the same time, because of the war, we were unable to bring in many imports. At one stage after the war our overseas reserves amounted to about £1,000,000,000. I hope that no one will suggest that it would have been a sound business decision to leave that colossal balance overseas. Surely a young country like Australia, with vast developmental projects to be undertaken, could use that money to buy materials and equipment which would enable Australia to expand and develop. Up to a point, I submit that it was proper to reduce that huge reserve overseas, and so, I cannot criticize any government which did so in the past. In my opinion, it would have been almost criminal to sit down and say that, although we had £1,000,000,000 in reserves in London, we should still live within our means, and leave the money in the reserves. I think that every honorable senator will agree that that would not have been good business. As I have said, our reserves overseas are now £428,000,000, but as our adverse balance for the year just ended was £142,000,000, the Treasurer, very properly, has drawn attention to it. He has suggested what he considers would be a reasonably safe margin on which to lean, and urged that in future we should try to balance our imports and our exports, so that the balance would not get below that sum. Already, some action has been taken to do so, by the imposition of some import restrictions. No doubt those restrictions will be intensified, if necessary, to retain that balance. The figures published by the Statistician already reveal a more healthy position at the end of the first three months of this financial year, following that corrective action. In the short run, I do not quarrel with the device of imposing import restrictions, but I feel bound to say that a young, go-ahead, country, with a small population in a vast territory, and with the need to develop its secondary industries, an abundant supply of imports is vital to its progress and development, and the maintenance of our way of life and present prosperity. As I have said, I do not criticize the imposition of import restrictions as a short-term policy, but during the debate there has been, in my opinion, too much talk of the easy way to correct the trade balance by restricting imports, and not enough consideration given to the need to increase our exports.

Senator Courtice:

– This Government has never given that aspect sufficient consideration.

Senator ANDERSON:

– It is the hard way, but in the long run it is the proper way to attack the problem.

Senator Hendrickson:

– How would the honorable senator go about it?

Senator ANDERSON:

– In the long run we should meet the threat of an adverse trade balance by increasing our exports. It is clear that if we limit imports of the things which we, as a nation,’ do not as yet manufacture, we shall deny the community of something that it needs and to which it is entitled. I know that it will be said that wool prices dropped by about 11 per cent, last year, and that it is easy to talk glibly about increasing our volume of exports at a time when the prices of our primary products are falling. But, even with the reduction of wool prices and the decline of the prices of other primary products, our exports last financial year were reduced by only about £49,000,000. I remind honorable senators that even now the value of our exports is about £763,000,000, which is quite a large sum of money.

It is pertinent to ask whether we are producing at our optimum capacity, or anywhere near it. Are we using all the scientific aids and knowledge that we should have been able to obtain for the benefit of primary industry during the post-war years? Yesterday, an honor*able senator from the Opposition referred to the Australian Mutual Provident Society’s land scheme in South Australia. That is an excellent example of the way science has been applied to develop land for grazing purposes. However, there are many other areas which could be made more productive, but no steps have been taken to apply the new methods. Of course, that is not because the farmers or graziers are lazy. I suggest that it is because governments, members of Parliament and others in public positions have not kept the primary producers informed of the benefits that agricultural science can bring to them. We all have a responsibility in that regard.

Are we making a sufficiently vigorous attempt to sell our primary produce on overseas markets? I believe it is quite clear that we are not. The important subject of wheat was discussed in the Senate yesterday, and the debate clearly showed that for too long we have tended to produce what we thought we should produce, and not what overseas purchasers want. An example to illustrate that fact lies in the marketing of Australian wines. Recently, I was overseas and, quite frankly, I was appalled to find that there was such a small demand in the United Kingdom for Australian wines. There is no doubt that some Australian wines are comparable with wines produced in any other part of the world, and I tried to find out why our wines were not in greater demand in Great Britain. I asked Australian representatives overseas about the matter and they told me that it was largely a question of what might be called snobbery. They said that it had always been fashionable to drink French wines, and for that reason people did not order Australian wines. Later, I discovered that that opinion was hardly consistent with the fact that at present South Africa is capturing the wine market in the United Kingdom from other countries.

Therefore, I made further inquiries, and I discovered that our bad marketing methods have a lot to do with the lack of demand for our wines in Great Britain.. To indicate how the sale of our winesin the United Kingdom has fallen, honorable senators will notice that, in 1949, we sold 1,351,000 gallons of wine to the United Kingdom, in 1954, we sold only 942,000 gallons and in 1955 that total was reduced to 800,000 gallons. The plain fact is that the wine industry has been the victim of bad labelling and bad bottling of wines that we have tried to sell in Great Britain.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– Have we exported our best wines?

Senator ANDERSON:

– I suggest in answer to Senator Byrne’s interjection that we certainly have not exported our best wines. There has been too great a tendency by manufacturers in this country to export the wine left over after the Australian demand has been satisfied. When I was in London, my wife and I walked down the Strand. In the window of a shop we saw a bottle which had a label on it stating that it was an Australian product. It was the most dreadful looking bottle that I had ever seen, and it was, if I may use the expression, clearly a brand of plonk which no sane person would attempt to drink. Yet, the dominant thing about the whole display was the big placard indicating that it was an Australian product. If that is a sample of our overseas’ marketing, it is quite understandable that our sales should be declining.

I have been heartened to learn that the Government is launching a publicity campaign with a view to making overseas buyers realize that we produce good commodities in this country. I sincerely trust that in the future we shall send overseas only good quality wines, properly graded, so that customers will not find a good tasting wine under one label and a bad tasting wine in another bottle under a similar label. We need good products properly labelled and bottled.

Are we making any serious effort to produce goods in our secondary industries for export to the clamouring near East? Right on our doorstep are the undeveloped nations of the East striving for a new and enlightened mode of life. Surely there is a ready made market for Australia there, and in our drive for more exports we should concentrate on providing goods for those nations. How far have we gone in the production of goods that we now have to import? Clearly, increased production of such goods would reduce our adverse trade balance, but. it is obvious that in this matter the cost of production is a dominant factor. We have a duty to ensure that Australians shall realize their responsibilities as citizens, and try to hold down our production costs. By holding them down we shall maintain our prosperity.

Good management, and the proper use of techniques, plant and efficient systems are the first requisites to a reduction of the cost of production. Also, a constant stream of highly skilled persons from all branches of industry in Australia should frequently visit the old world and, more particularly, America, to study industrial systems and techniques, and to bring back new ideas to this country. That would help to bring down our production costs. I believe, also, that the working community must give a good volume of work for wages received. We must have - and this is something to which the supporters of the Australian Labour party should have particular regard, because, at least on their own say so, they are the friends of the working community - good employer-employee relations. So long as we in Australia have people who advocate class war, so long will our difficulties regarding production costs be aggravated.

Senator Cooke:

– Does the honorable Senator think that the difficulties are all on one side?

Senator ANDERSON:

– No. I have not said that, and I have been most careful not to say it. In addition .to good employer-employee relations, I think that management must be efficient. In my opinion, the worker responds to efficient management, and if management is bad, the worker is slack. If management is efficient, the employee is efficient also. Therefore, unlike many, I believe that management plays a most important part in costs of production.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– What are the honorable senator’s views on excessive profits?

Senator ANDERSON:

– I believe that our system in regard to profits is quite sound economically. I ask the honorable senator not to draw me from my theme in the limited time available to me. I suggest that we have to concentrate on cost of production, because that factor, in turn, plays a vital part in the problem of increasing exports which, I suggest, is the long term and only really effective way to preserve the balance of trade that is so earnestly desired.

The second weakness to which the Treasurer referred was what he termed a mild and insidious form of inflation. Ii should be said quite clearly that inflation, after all, is a side effect of prosperity. We all are prone to forget that, before we can have inflation in any serious form, we must have prosperous times. It is true to say that inflation is caused by excess spending power in the hands of the community; that is, an excess of spending power in. relation to the goods available for purchase. In the short term view, it is natural to attempt to solve this problem by curtailing excessive expenditure, but the real solution is to produce more, so that goods will be available in abundant supply to meet the demand.

In considering this problem of inflation hire purchase has come under review. In any consideration of hire purchase, certain basie factors must be borne in mind. About half of the Australian families to-day are using hire purchase. Approximately 35 per cent, of the motor cars purchased are bought on hire purchase. Fifty per cent, of the furniture, 60 per cent, of the refrigerators, and 70 per cent, of the radios are sold on terms. Hire purchase is used by ordinary people who have little capital but regular incomes. Through hire purchase, they lift their standard of living. A survey of manufacturing industries, made last May by the Division of Industrial Development, revealed the figures to which -I have just referred. It also disclosed that only 60 per cent, of good? bought on hire purchase are for personal use. Nearly 40 per cent, of the goods so purchased, such as trucks, tractors and machinery, are used for production, and I think it is fair to say that they are not inflationary.

The boom in hire purchase is not an Australian phenomenon. Hire purchase is booming everywhere in the Western world, especially in countries with high living standards and full employment. In America, four of every five motor cars are sold under hire purchase. In fact, even education and world tours can be obtained on hire purchase in that country. In Great Britain, the public pays approximately £7,000,000 every week to hire-purchase firms. In Canada, 70 per cent, of all durable consumer goods are sold on hire purchase.

Hire purchase has become a vehicle which carries along industrial development. It is an essential part of the economic system of the free world. I feel impelled to speak in this way because I have noticed a trend towards criticism of hire purchase. It has become clear that all the countries of the free world have decided that this system must bc related to the productive capacity of a country. England and Canada, and indeed even the United States of America, are at present taking certain action to contain hire purchase within the capacity of their productive effort. Quite clearly, Australia will have to do the same. In my opinion, it was right and proper for the Treasurer to direct attention to this matter, and I think it is also right and proper, at this time of prosperity, to attempt to maintain and preserve our prosperity.

I wish to refer to only one other matter in connexion with the financial side of the budget, and that concerns remarks made by the Leader of the Opposition (Senator McKenna), who pointed out that the Commonwealth was providing the whole of its capital works funds from revenue. He attacked the Government on that ground, using the argument that much of this money is being spent on works that, will endure over a period of years, that they will be there for posterity and that, posterity should, therefore, make some contribution to their cost. The Government, on the other hand, is paying for capital works from revenue which, in my opinion, is clearly an anti-inflationary measure. If we were to do what the Leader of the Opposition wants us to do, the effect would be to accelerate inflationary tendencies, so that inflation would be not in a mild and incipient form but in a more vigorous and dangerous form, because it would tend to put into the community money far in excess of our productivity.

The speech of the Treasurer concerning the budget was a good one. Basically, the right honorable gentleman pointed out that we are living in times of great prosperity and that the Government, having regard to that fact, has pointed out features which, if left unattended to, could prejudice prosperity. In accordance with liberal principles, the Government is taking action to meet the situation and to preserve for the Australian community a way of life which, I hope, will remain with us for all time. I congratulate the Government and the Treasurer on the budget.

Senator ARMSTRONG:
New South Wales

– It is good to hear a few nice things spoken about the budget. 1 suppose if we were to search through it we could all find things to commend, but in the short time that we have in which to make our remarks, and having regard to the fact that the budget contains so much that cannot be commended, I think it is more our national duty to be critical, so that at least the Government might learn something from our criticism. When this budget was produced, it was welcomed as a “ stay-put “ budget, or a “ stand-still “ budget, but now, after a week or two of conferences by the Prime Minister (Mr. Menzies) with representatives of all aspects of industry, trade unions, banks, hire-purchase firms, retail traders, and the Australian Council of Trades Unions, and the resulting flood of pessimistic paragraphs in the newspapers of Australia, I should say that this is no longer a “ stand-still “ budget. It is rather a “ depression is near “ or a “ calamity near “ budget. If the economic position is as good as Government supporters suggest, what is the need for the calamity howling that we have heard in the past two or three weeks? The plain fact of the matter is that the position is not as bright as the Government would have- us believe, nor is the present prosperity as enduring as we would like.

What has resulted from the talks that the Prime Minister has had with the groups I have mentioned? One of the most important results is an extraordinary loss of confidence by the people, because the talks have been badly publicized and presented to the public. Both the employee and the manager are looking for pitfalls about which they had no knowledge yesterday. I do not say that the talks have produced the pitfalls, but the way in which they have been publicized has lessened community confidence, and that is the first step towards serious economic trouble. Many years ago, the economic position was measured by the gold standard. That is not so to-day, and the nation’s prosperity is measured by the degree of the people’s confidence. That confidence must not, be destroyed or tampered with, but upheld and developed. To break it down would be to undermine what is the greatest strength in the modern economic world. One of the best indications of the degree of the people’s confidence can be found in the Stock Exchange reports and price levels over the past three weeks since this budget was brought down. There has been a substantia] downward trend, and that will continue if the result of the current talks is no better than the results already achieved.

The Prime Minister had a conference with hire-purchase interests and told them that he did not want them to do anything. He wished only to talk to them and to have them tell him what to do.

Senator Gorton:

– How does the honorable senator know that?

Senator ARMSTRONG:

– Would I be telling Senator Gorton something secret if I answered his question? I am merely recounting what the Prime Minister said to the deputation. This was not a secret meeting; it was fully reported. If the honorable senator wants to know what happened he should ask the Prime Minister. The right honorable gentleman said to these people : “ I want you to tell me what to do in this matter. Here is a national problem, what is the solution ( I do not want you to reduce your lendings on hire purchase; if you can hold the present position that will do “. There is really only one problem to deal with in the hire purchase, and that is in relation to motor cars, particularly modern ones. The greatest single problem facing the Government is the deterioration in our overseas trade balance. The flight of capital from Australia last year was in the vicinity of £250,000,000.

Senator Paltridge:

– It was £142,000,000.

Senator ARMSTRONG:

– That figure does not include the £90,000,000 of new money that came in. I am speaking of our actual trading.

Senator Paltridge:

– Our overseas holdings were £240,000,000.

Senator ARMSTRONG:

– In our buying and selling overseas we were not able to meet our actual commitments to the full extent of £240,000,000, and £90,000,000 was brought in to provide the balance needed. I do not want any one to be misled. That could easily he a permanent investment. Included in that figure would be the sums collected by the banks in the last three months in ordinary trade dealings which might have reached £150,000,000. For the purpose of producing figures for the end of the year, the amount of £240,000,000 included the £90,000,000 referred to. Australia’s problem is that we are not selling enough overseas to buy all we need.

One of the great imports on which hire-purchase firms lend large sums is motor cars, and this is an aspect that the Government should examine. Perhaps a higher deposit could be required. Buying a motor car is very different from buying a household appliance. If a housewife buys a refrigerator, the hire-purchase commitment is the first and last expense, and her standard of living is lifted with the help of that appliance. When a person buys a motor car on hire purchase, however, his deposit and weekly payments are his least expense. He still has to run, maintain, register and insure it, and that is a heavy drain on his finances. This year, the number of motor cars bought on hire purchase has been incredibly large, and the Government will have to be careful. I hope, however, thai the Government will not interfere with hire purchase of home appliances because these are not only an enormous asset in the home, but also a tremendously important factor in maintaining the economy of Australia. In spite of the criticism of hire purchase by the Government, criticism which had its effect on hire-purchase business, the position 13 becoming more stable. Refrigerator manufacturers and others have found that their sales have drifted substantially despite their efforts to make terms easier for the housewife. This points to the fact that finance is becoming harder to obtain.

Senator MAHER:
QUEENSLAND

– Is saturation point being reached?

Senator ARMSTRONG:

– No, but the nation is getting nearer to it. I consider, however, that saturation point is never actually reached. The United States of America provides an example. If a person goes to buy a motor car the salesman tries to sell him two. In the Australian family one motor car would represent saturation point in that line, but in the United States when they sell a new motor car to the head of the family they attempt to sell a second-hand car also for the use of the mother or daughter. If money is available to purchase the goods, there is no saturation point.

The Government should examine the Australian overseas trade balance and carefully supervise the goods which may be imported into Australia so as to prevent unnecessary items from coming in. The value of food imports last year was £43,000,000. A substantial proportion of that sum was represented by tea and coffee, which are essential commodities, but a substantial proportion of the balance was represented by cheeses and biscuits from Great Britain. There was not a great quantity of caviare but [ think its value was between £120,000 and £140,000. In the present problems with which we are faced a very close examination of our import licensing system is necessary. I saw hawked around the city, only a few weeks ago, singlets from Japan which could be bought at 22s. a dozen. They were an open weave singlet that would sell for only 20 per cent, of the price of the Australian article. That is deflationary, if enough of it is allowed to go on. The fact remains that our problem is that of increasing our overseas balances but we shall not look after those balances by bringing into the. country things that Australian manufacturers can make competently. One has only to go through the retail stores to see a flood of imported towels and sheeting that could be made just as competently in Australia.

I know that the problem of import licensing is very difficult. Such a system is full of abuses. I am not attacking the Minister for those abuses because such abuses automatically flow from a system of import licensing. However, the time has come for a complete review. We should have another look at import licences from the word “go” to see if we can work out a system that will bring into this country only those things that are necessary for our community. I am not in the Menzies Cabinet and I do not know what the talks were about last week, but I am afraid that the next imports out might easily involve fundamental products that are necessary for manufacture in Australia. If that were to happen we would be faced with serious trouble. It is better to face up to the position now. Luxury imports should be eliminated from category B. Mushrooms are imported from France, but I do not know whether they are any better than mushrooms from Westmead. But the fact remains that such luxuries figure in our overseas balances, and add up to a substantial sum each year.

Senator Maher:

– France has to find money to pay us for our wool.

Senator ARMSTRONG:

– There are other things we could buy from France. We could buy steel, and I shall deal with that in a moment. Surely, we do not have to work out our trade balances with other countries by buying unessential luxuries? During the development of the debate the necessity to encourage exports has been stressed. But when honorable senators are asked how it can be done, as Senator Anderson was a few moments ago, it is not so easy to answer. In the sphere of primary production we dealt with the subject of wheat in this chamber during the last day or two, but [ desire to say a few words on the subject of steel. Steel is one of those basic things which, if properly developed, would give us an export market in which we could be more than competitive. But what is our present position? The Broken Hill Proprietary Company Limited cannot meet the demands made upon it by the Australian people. Its policy is one of producing steel at a basic level and obliging the Australian public to import its extra requirements. That is completely contrary to the policy of the United States and Great Britain, and, I think, of most of the great nations of the world. These countries have built their steel industry upon a peak requirement and have always got the capacity to produce steel to spare.

In the United States at present, despite its tremendous prosperity, steel production is only at 91 per cent, of the nation’s capacity, whereas in Australia the industry can supply only between 75 per cent, and 80 per cent, of our requirements. The average consumption per head of steel in Australia is an interesting figure, and I think it proves more than does anything else that although the Broken Hill organization has done a great deal in its own way it still has not done or attempted to do the. job tha nation rightly and justly requires it to do. During the last three years, the basic consumption in Australia of ingot steel is 637 lb. a head of population. The total capacity to-day of the Broken Hill organization is S50 lb. of ingot steel a head. That is interesting because in the United States in 1914 the consumption a head was 850 lb.

Senator Kendall:

– The honorable senator is quoting only one company.

Senator ARMSTRONG:

– That is the only company there is in Australia.

Senator Kendall:

– What about Australian Iron and Steel Limited?

Senator ARMSTRONG:

– That company is completely owned by the Broken Hill organization. In 1905, the United States capacity was 637 lb. a head, which is the average for Australia during the last three years. To-day, the capacity in the United States is 1,550 lb. a head. It can be seen that there is a tremendous lag in our production. We are receiving from the Broken Hill Proprietary Company Limited less than 80 per cent, of our requirements. That organization should build its plant for a peak load so that it could meet every demand on it by Australian manufacturers. If that were done there would be growth in Australia to-day more in line with the growth that has taken place in the United States.

Senator Wright:

– Can the honorable senator give us any information of ita capacity to expand faster than it is doing ?

Senator ARMSTRONG:

– Yes ; and that brings me to my main complaint against that organization. If I could see that in two or three years’ time it would be able to meet Australian requirements, I would reckon that would be a fair thing. The Minister for National Development (Senator Spooner) made a statement in August, 1954, that the following year, 1955, the Broken Hil Proprietary Company Limited would have the capacity to meet Australia’s demands. Although the company intends spending £67,000,000 between now and 1966 - and that is a lot of money in anybody’s money - it will still be at least S00,000 tons of ingot steel short of Australia’s requirements. We supply to New Zealand 20 per cent, of that country’s steel requirements, but if we had the steel we would be able to supply a great deal more than that. In addition, if we built up a fabricated steel industry with an exportable surplus we could supply South-East Asia, which at the present time is going through its early stages of national development. There is a field there that would be impossible for us to fill, because we could not produce sufficient steel, but on our present prices and our quality we could capture much of that market. However, we must leave that tremendous field untouched because we have not the capacity to serve it.

I come back to my criticism of the Broken Hill organization. It has tied up all the best iron ore deposits that we have. Not only has it tied them up, but it has also done so contrary to the normal mining laws. In two States, South Australia and Western Australia, the company has had particular acts of Parliament passed which eliminate it from the ordinary mining laws that apply to ordinary mining people in Australia.

Senator Wright:

– When were those acts passed?

Senator ARMSTRONG:
NEW SOUTH WALES · ALP; ALP (N-C) 1941-42

– The act in South Australia was passed in 1937, and that in Western Australia in 1952. When I last dealt with this matter, I said that the Broken Hill organization had not only all the decent iron ore in the west but it had it for ever. Nobody knows what is going to happen for ever, but the fact remains that it can keep renewing its contracts in Western Australia as it can in South Australia.

On reading my last speech I noticed that Senator Vincent and Senator Paltridge were very critical when I said that that organization had tied up the iron ore deposits in Western Australia. They mentioned the fact that in Koolyanobbing it had not done so. I refer the Senate to the Broken Hill Proprietary Steel Industry Agreement Act 1952 that was passed in South Australia. Sub-section (1) of section 3 of the act reads -

Subject to the provisions of this act, the mining reserves described in the second schedule to this act shall not under the provisions of the Mining Act 1904-1950, for a period of tcn years from the passing of this act be declared to be open for mining, cancelled or be temporarily occupied.

The State retains the right - and this is all that the State has - of taking from that area, 50,000 tons of iron ore a year.

Senator Paltridge:

– That is for ten years ?

Senator ARMSTRONG:

– Yes, during that period.

Senator Paltridge:

– And what happens after that?

Senator ARMSTRONG:

– -We do not know.

Senator Paltridge:

– The Broken Hill Proprietary Company Limited has those rights for ten years only.

Senator ARMSTRONG:

– In South Australia there is a right of renewal.

Senator Paltridge:

– That is not in the Western Australian act.

Senator ARMSTRONG:

– I am trying to find out what will happen after ten years. One oan see what happens during the ten years. In this temporary mining reserve there is an area of approximately 12 square miles known as the Koolyanobbing iron ore deposits. The Broken Hill Proprietary Company Limited also has Yampi and associated islands, and now it has tied up what appears to be another very valuable iron ore deposit. That has been the policy of the company. The stage has been reached in this country at which another steel master trying to establish himself could not get access to the iron ore deposits unless government action were taken. That action would be to eliminate these State agreements in Western Australia and South Australia. Another steel master could not come here and make steel under the present conditions. I believe it to be a desperate situation for a country with a population of over 9,000,000 to have only one steel master. It is leading the way to a most vicious monopoly. Honorable senators opposite may call it a benevolent monopoly up to this point, but in my opinion it cannot be other than a vicious monopoly. The company’s expansion is proceeding too slowly, because it is trying to finance its expansion out of current profits. That policy slows down expansion and keeps the industry entirely in the company’s hands. .That is a bad thing for Australia, because the company has, in the last twelve or eighteen months, increased the price of steel to the public at a rate completely disproportionate to the rise in costs of other commodities in Australia in that period.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– It is impossible to buy fencing wire.

Senator ARMSTRONG:

– There are many things that one cannot buy, and the company cannot tell us when we will be able to buy them. It is a sad situation. Admittedly, the profits do not tell all the story, but I will give the Senate some interesting figures. In 1951, the profits of the Broken Hill Proprietary Company Limited amounted to £1,700,000. In 1952, the figure was £1,900,000, in 1953, £2,300,000, and last year, £3,200,000. A lot of that profit was made on commodities sold to the public at a price which, in all justice, was too high. It is all very well to talk about the overseas shipping companies increasing their freight rates by 10 per cent., when they cannot justify such an increase. Who has asked the Broken Hill Proprietary Company Limited to justify its increased prices? It cannot do so, if one compares the general rise in costs in Australia in the last twelve or eighteen months.

Senator Gorton:

– What is the company’s earning rate on capital?

Senator ARMSTRONG:

– I am making a very simple point. In the last twelve months the company has shown that it is following a conscious policy of trying to finance its expansion from current profits, and it is going to make the people of Australia produce those profits by paying higher prices. The company has access to iron ore in this country at a rate which is cheaper than in any other country. The Premier of South Australia, when discussing this matter at the last Premiers Conference, said that the Broken Hill Proprietary Company Limited was getting its iron ore 40 times cheaper than any other steel master in the world. When we talk about the Broken Hill Proprietary Company Limited making cheap steel, I say, as I have said before, that it is cheap only because of the fundamentally low cost of the iron ore.

Senator WRIGHT:

– Is that figure based on government royalties?

Senator ARMSTRONG:

– On what the company pays to governments. I do not know what the company is doing in South Australia, but in Western Australia it started off by paying 6d. a ton, and the company has magnamimously increased that to ls. a ton in the last six months or so. The agreement which is the subject of the Western’ Australian act, a section of which I have read to the Senate, was entered into by the McLarty Government, not a Labour government.

Senator Mattner:

– What do steel companies pay for ore in America?

Senator ARMSTRONG:

– They pay 10s. or 15s. a ton. The industry is competitive in the United States. A new steel master could commence business in the United States and, by organization, obtain access to ore and start a steel business.

Senator Mattner:

– The American figure is not 40 times ours.

Senator ARMSTRONG:

– Multiply 6d. by 40, and that is the answer. To the best of my knowledge the company is paying 6d. a ton in South Australia to-day.

Senator Pearson:

– It is ls. a ton.

Senator Critchley:

– The South Australian Premier is not very happy about it.

Senator ARMSTRONG:

– Mr. Playford is very angry about the matter, because the company has failed to establish a decent steel industry in South Australia. When I say that the company is getting its ore 40 times cheaper than steel masters in other countries, I am repeating what Mr. Playford said at the last Premiers conference. I do not have to defend that statement. I do not know whether it is true or false, but, knowing Mr. Playford, I suggest that it is very true, because he does not say things like that without substantial reason.

In Australia now we have a vicious system. There is only one steel master in a country with a population of 9,000,000, and growing rapidly. Surely we should be able to expect that by 1960 the company would at least he able to cope with the demands of the Australian people for steel, which is the fundamental fabric of development; but in that year the company will still be 800,000 tons short of Australian requirements. These requirements could be met if the company showed proper drive and energy in producing steel from the deposits it is using at present, and in the meantime, developing some of the second grade iron ore deposits which it is hardly touching. It could then develop an export trade which would be of substantial value in the future.

It is important for us to develop a secondary industry export trade. Under favorable conditions, primary industry exports are indeed wonderful for the wealth of the community, but they can disappear quickly. We can become vulnerable if our whole economy and prosperity rests on the sheep’s back alone.

Senator GEORGE RANKIN:
VICTORIA · CP

– We have had a good ride on it.

Senator ARMSTRONG:

– We have ridden on it for 40 years, and have fallen off more than once- in that time. We will fall off again unless we can stabilize our economy by developing a secondary industry export market. That is not impossible. Indeed, if governments showed the energy in that direction that they show in other directions, it could be done in the very near future. I commend that thought to the Minister, because I think it is a tangible way in which to approach the problems that are facing us now because of our adverse overseas balances referred to in the budget.

Senator GORTON:
Victoria

.- This is the second or third time that Senator Armstrong, when addressing this chamber, has adverted to the matter of the Broken Hill Proprietary Company Limited and the steel industry generally in Australia. I hope that the next time he addresses the chamber on this subject - and I am sure that there will be a next time - he will have found out what the earning rate of the company is on the capital employed, because only when he finds that out and lets us know can he or we decide whether the company is charging excessive prices for it? products.

Senator Armstrong:

– That has nothing to do with it.

Senator GORTON:

– I believe that it has a great deal to do with it, when the honorable senator claims that the company is exploiting the Australian people. I want to know the earning rate of the capital employed, and I do not think that we can have a sensible discussion on this matter until we know that. That is all I have to say about Senator Armstrong’s remarks.

Senator Armstrong:

– Tell us about the iron ore monopoly. Does the honorable senator agree with that?

Senator GORTON:

– We shall come to the question of monopolies later. We are now discussing what is properly called a report on the state of the nation. This report indicates to the nation that some problems are developing upon which action needs to be taken. In examining this report, it is well that we should clearly have in our minds the different philosophical and political approaches to these matters by honorable senators in various parts of this chamber. Some sort of State action will obviously be needed. Because supporters of the Government have said that, some honorable senators on the Opposition side have declared that we believe in socialism.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– Hear, hear!

Senator GORTON:

- Senator O’Byrne has confirmed that observation by way of interjection. I wish to repudiate that suggestion at once. -Of course, honorable senators on the Government side believe in State action to build roads, dams and other projects of that sort. If there are rings or cartels in Australia, formed to keep prices up or production down, of course we believe it is right and proper for the State to take action to provide competition so that the people can have a choice in these matters. We do not believe - as honorable senators on the Opposition side believe in their blind acceptance of socialism - that the State should say to the individual, “ You have no right to engage in this field of industry or “ The law of the State will be used to prevent you engaging in this industry”. We do not believe in that because it causes all sorts of frustrations in the individual. And even when labour has been directed and the individual has been initiated and frustrated, the system still does not provide the economic benefits promised in return for the surrender of personal rights and freedoms.

We have had experience of those socalled benefits. Those controls and directions were imposed by the previous Labour Government. We had prohibitions on persons entering various fields of industry. What was the result? We had no goods. We had blackouts. Industries stood idle half the time and production was reduced. That was the result of compulsions, irritations and controls, and that is what this Government set its face against. It is well to have that distinction clearly in our minds.

What does the budget disclose? Its disclosures have been greatly exaggerated in the public mind. It has disclosed that production, in real terms, is up and is going up each year. It has shown that the use of capital goods by governments for public works is increasing each year. I do not speak purely in terms of money. Anybody who looks around his own State can see marked increases of capital goods, power stations and irrigation projects, and they arc all growing. The budget has disclosed that the use of capital by private industry to build new factories to produce more goods is growing year by year. It has disclosed also that consumers are using more goods to provide themselves with a higher standard of living. At the same time, the immigration programme remains at least constant, and that makes for the use of more capital goods and further development. All these things are disclosed openly in the budget speech of the Treasurer (Sir Arthur Fadden), and in the White Paper that accompanied it. They are not political reports. All that they have revealed is obviously good and promising. That being so, where does the problem lie?

We have a problem because the budget has disclosed, also, that the consumption of goods by people, governments and companies has been more than the nation has been able to produce. That has been the case for some time. We have bridged the gap in the past by importing goods from overseas. In effect, farmers have been growing, not wool or wheat, but all the multitudinous goods that people require from abroad, and for which we have exchanged primary products. We have also been bridging the gap by bringing in capital from abroad, either for private investment or public investment. That also means bringing goods into the country, or making available to the Government dollars and sterling which can be used to buy the goods.

Now, we can no longer bridge the gap between what we are using and what we arc producing by means of export income or by new capital development. We do not know just how far the quantity of goods we can bring in will drop. Wool prices are down this year about 20 per cent. on the prices at the end of last year’s sales, but we tend to overlook the fact that the quantity of wool produced this year will be at least 10 per cent. or more than was produced last year. Neverthe less, the trend is there. The monetary demand for goods has remained constant or has risen. If anything, the quantity of goods to meet that monetary demand has declined.

That is the problem posed in the budget speech, and that is the one to which we have to address our minds, but that docs not mean a crisis. The budget speech of the Treasurer did not contain the word “ crisis “. Neither has it been used by the Prime Minister (Mr. Menzies) or anybody who is responsible for the economy of the nation. A crisis involves some suggestion of defeat. The position that is clearly disclosed in the budget statements is that of an army which has made a successful attack, and has advanced so far and fast that it has temporarily outrun its supplies. It must not retreat, but it must wait until its supply lines catch upnot for the purpose of merely holding its ground, but for the purpose of a further successful attack. That is the position we are in, and any talk of a crisis is utter nonsense.

If that is the position, and the problem is the one that is posed to us, it is pertinent to examine what solutions are offered by those on the Opposition side and those on the Government side of this chamber. We can tell from the statements of honorable senators on the Opposition side what they offer as a solution. Although we are in a position where there is more money than goods to buy, they suggest that we should make more money available for pensioners. They have said that we should make more money available, in millions of pounds, for wages. They have suggested that we should not bring in goods from overseas by way of capital loans, and that we should decrease production by compulsorily curtailing wheat-growing. These are the things which honorable senators of the Opposition have suggested to meet the position. If anything could be devised to exacerbate the problem which is facing this country, it is the constant proposal to issue more money for this and that, and to curtail the supply of goods which are necessary to meet our needs. It is a confidence trick on the Australian people. It is like a theatre manager who sells tickets to twice the number of people that his theatre will seat, and does so knowingly, because he thinks that temporarily it will please some one to get a ticket so long as he does not know that it does not entitle him to a seat. That is what honorable senators opposite say we should do. That is their sole contribution to the problem which faces this country.

Senator Hendrickson:

– Will the honorable senator tell us what ought to be done?

Senator GORTON:

– I shall suggest the lines on which we should work to meet the problem. It is right that there should be some restriction of imports, in order to preserve our overseas balances for the essential things we have to bring from other countries. That, in turn, involves some slight increase of the problem, because it means that the volume of goods will fall off. It is also necessary, in the conditions that have been described, that there should be some restriction of credit and of advances for new industries, because those new advances involve new demands on supplies of goods which already are not sufficient to meet demands. It is necessary, further, that the vast growth of hirepurchase sales should at least be halted, because this comparatively new phenomenon is getting to be as great a factor in the economy of a country as is the control of bank credit. In effect, hire purchase is credit. In passing, I add that it may be necessary in the future to give some thought to the over-all control, as opposed to the detailed control, of hirepurchase credit as we now control central bank credit. In my opinion, by doing those things we shall attack the problem in the way it ought to be attacked. What happens if a man buys a motor car without making any deposit - and that can be done - and pays 10 per cent, or 12 per cent, interest on the purchase price? It means that goods which are available pass to him, but the money required to buy those goods is in no way reduced. Multiply that one instance by thousands, or even by millions, and we see how the problem of having too few goods for the money available is aggravated. That is the course which I suggest should be taken. We should attack the problem in the proper way, and not attempt a confidence trick to make money available.

Our export income can be increased by an improved sales drive. Honorable senators may have noticed that that improved sales drive is already taking place. We have improved our advertising methods overseas, and have appointed additional trade commissioners in new places, and efforts are being made to push the sale of goods, both primary and secondary, produced in this country.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– It has taken the Government a long time.

Senator GORTON:

– The point I am making is that those things are being done now. They constitute one of the steps being taken by this Government to attack the problem.

Senator Hendrickson:

– It is a case of shutting the stable door after the horse has gone.

Senator GORTON:

– I suggest that those are some of the methods by which the problem can be dealt with. I repeat that there is no element of crisis in this matter, as a proper examination of the problem makes quite clear. It is merely a case of pausing to consolidate and complete a great advance already made, so that we can make still further great advances. So long as we can bring ourselves to believe that there are some really concrete things which no amount of political manoeuvring can overcome, that you cannot use more than you have, and that to pretend you can do so by printing more money is of no use at ali, and that you cannot expand credit unless you have the goods, we may get somewhere. It means that every person engaged in industry must work 40 hours a week, and that every person in control of industry shall make sure that that 40 hours’ work is directed into proper and useful channels, because on the evidence of the past six years during which great things have been done in this country - an expansion of private enterprise, an increase of the standard of living - it is a record of good generalship, which can come only from the parties on this side of the chamber.

Having those things, we can go forward, not in fear, but in confidence. When I think of Australia’s future, I am reminded of the classical quotation, “ All the past is prelude” - as I put it, “You ain’t seen nuthin yet “.

Senator COURTICE:
Queensland

– Senator Gorton has treated the Senate to what may be described as a novel speech from the Government benches, because he has revealed a socialist outlook. I wonder whether his change of view has been caused by the situation existing in Australia to-day. However, the honorable senator refused to face the actual situation - a situation for which the present Government is largely responsible - which is that prices have risen so much that our goods have been excluded from the markets of the world. That state of affairs exists, but the Government has made no suggestion about how to alter it. On the contrary, the Government and its supporters tell us that we enjoy unparalleled prosperity. We are told that there is too much money in the hands of the people; but does the wheat-grower believe that is so? Is he convinced that he is too prosperous? Does the young man who wants to get married, or the young married man with a family, who desires to obtain a home, believe that he has too much money? Does the working man who desires te obtain a farm, so that he may become a useful producer, but finds that he needs £15,000 to secure sufficient land for a one-man farm, believe that he is too prosperous? From the time of its election to office this Government has failed to face realities. We on this side have issued warnings to show where the Government’s policy would lead the country, but we were laughed at, and told that we were running with the “ comms “. When we warned the Government that good seasons and high prices would not last, no notice was taken of us. Wo knew that those conditions could not continue indefinitely. The result is that to-day prices are so high that industry is unable to sell its products, which are the results of the expenditure of man’s energy. For the present unsatisfactory state of affairs, the Government .must. accept responsibility. In a general statement, the Treasurer (Sir Arthur Fadden) tells us that we enjoy great prosperity, but we on this side know that that prosperity is not fairly distributed among the community. In Queensland,’ palatial homes, costing as much as £25,000 or more, are being built for some people to live in luxury at week-ends, but what i.the position of ex-servicemen who really need homes? They cannot get homes. The racketeers who have held this country to ransom for the last five years arc largely responsible for the inflationary conditions that now exist. But the Government has aided and abetted inflation because high profits mean high taxes. I suggest that no government in our history (has been as extravagant as the present Government. It is the most spendthrift Government that we have ever been saddled with. It spends vast sums of money, but when it is faced with any sort of economic difficulty it does not know what to do.

The Government has decided to adopt, the policy of restriction of imports. By restricting the importation of goods it will interfere with the business and commercial life of the country, cause disruption and unemployment and ruin many people who have invested their all in their businesses. I understand that 75 per cent, or 80 per cent, of the goods that we import are used in secondary industries. If the Government restricts the importation of any of those materials it will, as a result, restrict the manufacture of goods in our secondary industries, and thus cause unemployment.. That is not the way a young country like Australia should face a decline of its exports, but this Government is quite bereft of ideas and does not know what to do.

Senator Armstrong spoke recently about the steel industry. I agree with him that there is much room for the development, of that industry. I believe that the Broken Hill Proprietary Company Limited has been of great service to this country, but Australia is growing rapidly and there is room for further development of our basic steel industry. But this Government has no plan to increase the production of steel or anything else, although there are many well known methods of increasing production. For example, the Queensland Government is spending millions of pounds in the far north of the State to develop the tobacco and cotton industries, but this Government has never offered any assistance of any kind to the Queensland Government in this great project, notwithstanding the fact that well-developed cotton and tobacco industries in this country would greatly strengthen our economy.

The Government has for too long ignored the danger of a series of bad seasons. We have had excellent seasons in the last few years, but it is inevitable that bad seasons will come again, and then our economy will be further impaired. The last Labour Government controlled prices and endeavoured to ensure an orderly expansion of our industries. After World War II., it took some time for industry, both in this country and overseas, to get back into its stride. We in Australia were in a better position than the people of many other countries, because we had not suffered great devastation during the war. Nevertheless, about 1,000,000 of our workers had been withdrawn from industry, and their services had been used in the war effort. It was the task of the Labour Government to get them back into production, and when the history of those times is written it will be recognized that the Labour Government did a great job for Australia.

If the present Government had adopted the policy of the Labour Government that it supplanted, all would have been well. But the Government obtained office by telling the people that every one was tired of controls, and that they would be eliminated. The controls still exist, but they are not administered by Ministers who are responsible to the people; they are administered by big business. Big business has, during the last five years, exploited this country and become extremely wealthy. On the ‘other hand, the average family man faces a very difficult task in keeping his position in the community and doing his duty to his family. I, like Senator Kennelly, believe that the home is the place for a wife and family, but because there has been more than one breadwinner in many families during the last few years, those families have been able to obtain their needs and, in many cases, more than their needs. But let us think of the family man who is the sole breadwinner of the family. This Government has made no effort to help him.

When the Government assumed office at the end of 1949, our economy was the soundest in the English-speaking world, and our costs of production were less than half our present costs. The Government obtained office by promising, among other things, to reduce costs and put value back into the £1. Instead it doubled costs and halved the value of the £1. If this Government were the manager of any private business, the shareholders of the business would not tolerate it.

Neither the Government nor the Treasurer has suggested how we are to hold our economy in its present state, let alone how we are to improve it. Nothing has been said by the Government to indicate that it is aware that excessive profits are being made in Australia, but I know that racketeering profits have been made, and I know how the last Labour Government saved the country millions of pounds by taking action against excessive profit-earning. To illustrate the way business concerns are forcing up costs, I point out that one big business in Melbourne has recently spent about £500,000 in making the front of its establishment a little more attractive. It would have been far better to spend that money on building homes for the workers. The Government’s policy is doing more to bring about communism in this country than anything else that I know of. There is widespread unrest here, and the average young man is beginning to evade his responsibilities because he is unable to meet the great costs demanded of him in establishing a home and living the life that we believe he should live.

It is no over-statement to say that if the people had an opportunity to-morrow they would dismiss the Government. Perhaps the only thing that would save it in the event of a general election would be the trouble in the Australian Labour party. Unless the Government is prepared, as Senator Gorton suggested, to take vigorous action our economic position will not bo improved. It should be our endeavour to make this young country greater and better, but the Government has no imagination, and cannot see how to develop Australia. Let us consider the cotton industry. This Government ha3 provided an agreement lasting for a year or two in respect of an industry which, technically and scientifically, has been proved to have great possibilities. The development of the industry is not proceeding nearly as rapidly as it would if the Government rendered adequate assistance.

As a Queenslander, I protest strenuously about the large sums of money which the Government is able to expend in other States of the Commonwealth, whilst Queeusland gets nothing. I was a member of a government that, at least, promised to assist certain industries and projects in northern Queensland, and although this Government promised to honour that undertaking, at least to the extent of a contribution of £10,000,000 towards the construction of the Burdekin River dam, nothing has been done. If honorable senators were to visit north Queensland to-day, they would see the great possibilities for development there, and they would appreciate how development of that part of Australia could be related to defence. Of course, there is great waste in defence expenditure. We do not receive an account of much defence expenditure, but L suggest that if 25 per cent, or 35 per cent, of the defence allocation were used to improve roads, ports and rivers, and to assist in the development of irrigation and primary production, that would be a very wise course, particularly in the present circumstances.

It is interesting to note the changed expressions on the faces of honorable senators opposite. Each year, until this one, they laughed to scorn any suggestion that our present prosperity was due to any other cause than the efforts of the Government. If that was so, perhaps they can inform me why the Government cannot preserve our prosperity. We were all aware that certain events were taking place, and the Government could have lessened their economic impact. For instance, it could have attempted to curtail the excessive profiteering which, in my opinion, is one of the major economic factors at the present time. If Labour were in office to-morrow, I think it would have no difficulty in securing co-operation from the States to control the profiteering influences that have contributed so greatly to our economic difficulties.

How can a young country, such as Australia, be developed adequately when farming costs are so high ? The problems of the wheat industry were discussed in this Parliament only yesterday. I know a member of the House of Representatives who was able to buy land on which to grow wheat, many years ago, for £1 10s. or £2 an acre. Some time ago, he sold 1,000 acres for £40 an acre.

Senator Scott:

– What was he getting for his wheat when he bought the land?

Senator COURTICE:

– Very little. To-day, however, because of the low value of our money, the wheat-grower must receive a high price for his wheat. This Government has made no attempt to continue the long-term agreements which the previous Labour Government arranged with the United Kingdom. An excellent business arrangement existed between Australia and the United Kingdom at that time, hut that has all gone by the board because this Government failed to recognize the position of that country. For the sake of a paltry 4d. or od. a bushel, the Government refused to sell approximately 80,000,000 bushels of wheat. If it had sold that wheat, the need to erect storages and silos would have been avoided. If the Government wants the wheat-growers to continue to grow wheat, it should guarantee them a fair price, and the nation, not the wheatgrowers, should have to meet any disaster that may confront them.

Senator PEARSON:

– The Government has said that already.

Senator COURTICE:

– A certain price has been guaranteed, but why build storages if the wheat could be sold?

Senator Hannaford:

– Granaries hare been built throughout history.

Senator COURTICE:

– We all know that the cost of handling wheat and other commodities is so great that it will not he long before the wheat-growers will be very sorry indeed that their commodity was not marketed.

Some people contend that restriction of production is a policy of despair. That may be so, but if economic conditions and declining prices mean that the more production there is, the worse off the producers are, some action must be taken.

Senator Pearson:

– Does the honorable senator advocate restriction of production?

Senator COURTICE:

– That depends on circumstances. I believe that the Government has to safeguard its own interests.

All sections of the people have expressed great dissatisfaction with this budget. It seems to me that the Government will have to make a statement soon, in order to indicate its financial policy. At the moment, the Prime Minister (Mr. Menzies) is consulting bankers and other people with a view to ascertaining the best economic policy for the Government to pursue. Although Senator Gorton has said that there are no real difficulties, nevertheless the Government is unable to make up its mind what course to follow. I admit that such a decision is difficult to make, but it is unfortunate that the Government should now be thinking of imposing import restrictions, as it did in the past. The economic position should have been watched carefully, and the importation of certain commodities that we do not really need should have been eliminated, not by compulsion, but by means of wise negotiation with the people concerned. Instead, many importers will now be faced with great difficulties. Unrest will be caused because manufacturers, even now, do not know from day to day what the policy of the Government is in such matters.

We should concentrate more on trying to increase production. In 1949, the workers were prepared to co-operate with the Government in an effort to stabilize the economy. This Government has not sought the co-operation of workers. Under our system of wage fixation, the judicial bodies concerned make full inquiries into the cost of living. Had costs of production not gone up, wages would not have gone up, and we should have been able to compete with other countries of the world. The Government has failed because it had the foolish idea that controls of this kind were irksome and wrong. But if those control? are not in the hands of the Government they are exercised by interests which are not so concerned with the economy of the country or the welfare of the masses of the people. At all times, whether controls are used or not, the Government should take constitutional power to protect the purchasing power of the people and prevent commercial concerns and individuals from making extravagant and excessive profits. Nothing was contained in the budget speech about excessive profits and honorable senators on the Government side made no reference to them. But they cannot deny that excessive profits are being made. As 3 said earlier, the Government realizes that fact. It has imposed high taxation and indulged in extravagant expenditure.

Has it ever occurred to the Government that there may be some possibility of improving the economy of Australia by assisting in the development of northern areas, particularly Queensland? I ask the Minister for National Development (Senator Spooner) whether he believes that increased production of commodities which Queensland is capable of growing could not be undertaken, with advantage to the nation. Would not money be well spent to develop that part of Australia in an effort to make the country more secure? It is impossible for the States to undertake rural development because of the excessively high cost of settling people on the land. The Australian Government has spent money on development in other States and surely it should fulfil its promises of 1949, which were partly responsible for its election to office, to assist in the development of Queensland’s industries. If more tobacco and cotton were grown in Queensland those two items alone would ease the strain on our overseas expenditure.

In regard to the Government’s attitude towards pensions, I fear that the cost of social services will be greater than the earnings of the country will be able to meet. The only remedy is to hasten the development of more industries. Sales tax amounting to more than £100,000,000 is hampering production, and the pay-roll tax is another imposition that is retarding development. In addition, the country has to bear the cost of collecting these taxes and as a result the general cost structure is higher. The only excuse the Government can offer for these high imposts is that it needs the wealth of the country earned by industry to meet other obligations. But ohe increased cost structure makes it more difficult for industry to carry on. Sales tax may not directly affect the workers very much, but it has its ultimate effect on the cost structure. I know thousands of good men and women rearing families who are unable to educate their children as they wish because of the high cost of living. That sort of condition should not obtain in a country like Australia. I know that large incomes are being earned by some families because, in addition to the husband, the wife and several members of the family are employed, but that is not the case in the home of the average worker. He believes that his wife should remain at home so that she can give his children the attention that they need. It is not in accordance with the Australian way of life for the wife to leave home to engage in employment. One ill effect of this trend is seen in the increase in juvenile delinquency. If children are not protected by proper home influence their morals will be adversely affected.

The Government should ensure that whatever wages are paid, the use of those wages in purchasing goods essential for the average family needs should be protected. Unfortunately there is too much racketeering and profiteering going on at a time when Australia needs to conserve its economy. The Government has allowed this situation to develop and has shown no appreciation of these existing evils. Australian cost of living is higher than that of Canada, England, the United States of America or any country that one might mention. The result is that Australia will have increasing difficulty in meeting its obligations and in developing this country satisfactorily. The Government will have to take remedial action in order to protect our overseas credits. I know that hardship may be created in many places and that the departments concerned will have a difficult task. But every effort must be made to give com,mercial enterprises a fair deal. The Government should have taken earlier action to prevent the deterioration of the overseas trade position.

Senator MATTNER:
South Australia

– The opportunity of reviewing the budget papers is most valuable because. it enables the Senate and the public to take stock of the economic situation of the nation. I do not agree with the views expressed by Senator Courtice.

Senator Guy:

– He was very gloomy.

Senator MATTNER:

– Unusually so. Since he comes from the sunny State of Queensland, I should have thought that he would make a realistic approach to the problems that are supposed to exist. I use the word, “ supposed “ because I agree with Senator Gorton that the Australian prosperity has never been higher than it is to-day. There may be a few danger signals, but 1 have sufficient faith in my fellow Australians to believe that they are best fitted to know the proper remedies to take to prevent the danger from becoming reality. It is not a function of the Government to be the know-all in this country. I would remind, not only Senator Courtice, but every other senator opposite, that they were swept out of office in 1949 because the policy which they pursued, and which they still pursue, was one of controls and the reduction of production.

Senator Courtice:

– That is nonsense.

Senator MATTNER:

– I well remember how the Government which honorable senators opposite supported passed a law to reduce the sowing of wheat in Australia and paid farmers in Western Australia at the rate of 12s. an acre not to grow wheat. At that .time I was chastized in this chamber - I was sitting in the seat which Senator < Courtice now occupies - and I made the statement that Australia would be importing wheat within a few years. I was called a Jonah and a Jeremiah. The Labour Government did import wheat into Australia, and, in additionfi it made that magnificent deal with New Zealand - magnificent. so’ far as New Zealand was concerned.

It may not be a true barometer, of the prosperity of Australia, but when a community can spend over £327,000,000 in twelve months- on. beer, cigarettes, and tobacco-

Senator Scott:

– They are broke.

Senator MATTNER:

– I do not say that they are broke by any means. But, to go a little farther^ when Australians can spend £250,000,000 in one year on gambling at the race-courses- it is not a symptom of poverty.

Senator Courtice:

– That is not spending, that is only moving the money around.

Senator MATTNER:

– There are only two classes of people who go to racecourses - pigeons and hawks. I am one of the unfortunate pigeons. Had this money gone through the totalizator then, at 12£ per cent., State governments would have levied at least £30,000,000 on the turnover. I put this question to honorable senators opposite: Would they wish to go back to the hardships that this country experienced in 1949? The very workers, whose only angels of mercy they claim to be, could not go to work, because their was not sufficient coal or power for industry. The age pensioners, over whom honorable senators opposite weep’ crocodile tears, could not light their fires or obtain electric power because of the system of controls that was in operation. There was not enough power and coal to supply the nation’s needs. We had the terrible spectacle of men who’ were willing’ and able to work not being able to do so because the Labour government of the day did not provide the community with coal’, or power, or the means of transport to get workers to their jobs.

Senator Hannaford:

– What about the black market?

Senator MATTNER:

– The black market was thriving.

Senator Pearson:

– What about petrol rationing?

Senator MATTNER:

– I am reminded about petrol rationing. That all1 happened in 19491, and honorable senators opposite were swept from the treasury benches because this Government set our to do three simple things; and it has done them. To-day, men can earn a good living. Not one senator opposite has- ever challenged the number of men and women in employment since this Government came’ to office. Not one of thiem has ever said that the workers are not earning a good wage. Not one of them has ever challenged the proposition that, to-day, the workers can save money. What is more to the point, the people now appreciate ‘that they can own property. There is no socialization about this Government. I intend to quote son.,interesting figures about the owning of property. I hear talk about putting the matter to the .people. The sooner that comes about the better pleased we will be.

Sena.tor Courtice. - What date is it?

Senator MATTNER:

– I do not think I should be asked that because honorable senators opposite are the ones who are challenging us. They can have whatever date they like and the sooner the better. They are the challengers. Of course we have to admit that, perhaps, we have passed from a sellers’ market to a buyers” market, but there is nothing very much wrong with that. We have faced such a thing for many years ; it is the spice of life and is the only thing that makes progress possible. It is the only thing, that speeds up our production, spurs us to produce economically and to lower our production costs. I have heard a great deal about production costs. I was glad that Senator Gorton stressed the point. On the one hand, honorable senators opposite tell us that our income may fall and, on the other hand, they tell u? that workers have to get more money, but work, shorter hours and do less work.

Senator Courtice:

– Who told the honorable senator that?

Senator MATTNER:

– The honorable senator who has just interjected told me that. Senator Gorton gave a simile which was very much, to the point. I think that all Australians are quite prepared to’ face the future; they are prepared to accept the challenge and produce the (roods- that the world requires.

Senator Cameron:

– What about wheat ?

Senator Mattner:

– I am happy that the honorable senator has reminded me about wheat. If he will bear with me I shall deal with that later on. During the discussion we had yesterday the Leader of the Opposition (Senator McKenna) made a most illuminating point which I have been trying to stress ibr years in this chamber. I was delighted to hear it; I thought that at last the old leopard had changed his spots. It is the first time, to my knowledge, that the good senator has overbid his hand. I have waited for years to get him to do so. I think honorable senators will appreciate this when I come to the point, because I do not think the Leader of the Opposition will be able to renege when I put it to him. I know that in 1946 Labour had the great idea that if it had an immigration policy perhaps some of our ills could be cured. On that occasion I stated that unless we stepper! up our production we would not succeed and that if immigrants came into this country and worked exactly as we were doing - the same hours and under the same terms and conditions - we would not improve our position materially. I said then that such conditions would aggravate the shortages of many things in Australia.

Senator O’BYRNE:
TASMANIA

– Because of the immigration programme?

Senator MATTNER:

– There is nothing wrong with immigration, but it is time that we took stock of our working conditions.

Senator Courtice:

– Not our profits?

Senator MATTNER:

– I think that working conditions are our problem. I believe that if we can expand our secondary industries we will do much to assist our financial position. I have some very interesting figures relating to our secondary industries. Although I have always ‘stressed the value of our primary industries, I must admit that our secondary industries also play an important part in our economy. Since 1949, the work force in Australia has increased ‘by 1,500,000 people. Those additional persons have been absorbed into industry. In many industries, not one Australian workman has been displaced by an immigrant. The figures relating to our production in secondary industries are also interesting. In 1930, the secondary industries in Australis, produced £203,000,000 worth of goods. In 1053. they produced no less than £1,080,000,000 worth of goods. That represents an increase of 430 per cent. In our population of 9,000,000 we have had an increase of 1,500,000 in the work force.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– Where does that figure come from? It seems very large.

Senator MATTNER:

– One million immigrants, and the remainder by natural increase. In the basic metal industries, 3S5,000 of those have been absorbed. I would like to reply to Senator Armstrong’s very wrong attack on the Broken Hill Proprietary Company Limited. I should have thought that Senator Armstrong would welcome this company in New South Wales. It has a remarkable history, and it is a good Australian company. No other company in Australia has expanded to the same extent, put so much capital into its operations, or employed more men. Senator Armstrong is not correct when he says that all other .steel producing concerns in the world pay 40 times as much for their raw products as does the Broken Hill Proprietary Company Limited. I am sure that the honorable senator misquoted the Premier of South Australia. But let us assume that that company does pay one-fortieth of what is paid in other countries. The Broken Hill Proprietary Company Limited gets ore for ls. a ton, so that if other people have to pay 40 times as much, the cost to them will be £2 a ton for the basic raw material. Whether the processing is carried on in Newcastle or elsewhere, the method is the same, and yet Australian steel is sold on the local market at much more than £2 a ton less than overseas prices. Therefore the honorable senator’s argument does not cut very much ice. The cost of the basic raw material has not increased, but the price of labour for handling it has increased, and that is the cause -of the increased price of steel.

Some of the figures that I have obtained regarding the Broken Hill Proprietary Company Limited are very illuminating. From 1945 to 1954, our production of pig iron increased by 79 per cent., and of ingots by 86 per cent. We must remember that until 1940 the Australian production was greater than the local demand. Many people in this chamber doubted that it was wise to continue with the expansion of the iron and steel industry in Australia, and those people sit .on the Opposition side of the chamber. This company had faith in Australia, and since 1940 it has proceeded with its production of iron and steel. If a company wishes to expand, it must have a great deal of faith, and it must be able to convince the investing public that it is right. Enormous amounts of capital and materials are needed, ‘as also are labour and time, which are two important factors. As late as 1949, there was the greatest difficulty in finding men to work in the iron and steel plants that were then in existence.

Senator Hannaford:

– And they were working only 66 per cent, of the time.

Senator MATTNER:

– I will come to that. It was difficult at that time to get men for the existing iron and steel works, let alone for new plants. Senator Hannaford has reminded me that the men worked only 66 per cent, of their time, and that was because the company could not get the required coal. That was during the term of office of a Labour government. Coal is now available, because the mines have been mechanized. I say again that not one Australian has been displaced, either from the coal mines or the iron works, by immigrants. I have some further interesting figures. During the term of office of the Government supported by honorable senators opposite, the number of iron and steel plants operating was the same as it is now, and at that time 1,000,000 tons of iron and steel were being produced annually. With those plants to-day - and they have not been enlarged - the production has increased to 1,S00,000 tons of iron and 300,000 tons of steel, simply because the coal has been available.

Although the Government has been chided about the operations of the Broken Hill Proprietary Company Limited,

Senator Armstrong has not told us of a suitable location for an iron and steel works outside of Port Kembla.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– What about Port Pirie?

Senator MATTNER:

– It is enough to make even me lose my balance when the honorable senator suggests Port Pirie.

Sitting suspended from 5.45 to S p.m.

Senator MATTNER:

– I propose to deal now with some of the topics that have been touched upon by honorable senators on the Opposition side. Senator Courtice, who usually has a grip of hi.* subject, astonished me with his dismal speech. He said that this Government had not done anything to increase production. I remind him that in 1949 - the so-called “ golden age “ of the Labour Government - production of cotton in Queensland totalled 522 bales. In 1953. production had been expanded to 4,429 bales. The crop fell to 2,189 in 1954 because of bad climatic conditions, but this year it is expected to reach 7,500 bales. That is typical of the increased production and prosperity of Australia. Senator McKenna, whose speech as the Leader of the Opposition in this chamber

Senator Sandford:

– He is a good leader, too.

Senator MATTNER:

– I wish some of his colleagues could measure up to him, then. He chided this Government because it had paid £912,000,000 out of revenue for capital works. I commend the Government for that action.

Senator Cooke:

– The trouble is that the people have to pay.

Senator MATTNER:

– Exactly, and they can afford to pay for the work. It is good business for them. Senator McKenna said that we should let posterity pay for it. In other words, he advocates a policy of borrow and bust. Let us see what posterity would have to pay for £912,000,000 spread over 50 years.” The cost would be £2,277,000,000! In other words, on that basis, posterity would pay for the cost of the work and £1,365,000,000 extra. For every £1 we pay now, therefore, we save ourselves 30s. The Opposition suggests that instead of paying £1 for” work now, we should allow posterity to pay £2 10s. Yesterday, the Leader of the Opposition in the Senate chided the Government, during the discussion on wheat storage legislation, because farmers who enter the scheme in years to come will have to discharge a debt that is contracted now. If Senator McKenna applies that reasoning to wheat storage, he should apply it also to public works.

As to social services, this Government has a wonderful record of achievement. When the Labour Government was in power, the age pensioners could not get fuel, gas, light or public transport because there was no coal. This Government proposes to increase pensions by 10s. a. week, so that a couple will be eligible for a total pension of £8. That amount can be increased to £15 a week by way of superannuation or other income. Senacor Willesee criticized the Government on this point, and said that a basic wage earner living alongside an aged couple would receive only £13 while the pen.sioners could receive £15. Not long ago, the Australian Labour party was advocating the abolition of the means test, and an increase of the pension rate to 50 per cent, of the basic wage. If Senator Willesee believes it is wrong for a couple on the pension to receive £15, compared with £13 for the basic wage earner, how does he reconcile his criticism with his proposition of £20 a week for the pensioners and £13 for the basic wage earner ? The “ silver-tails “, to whom he has referred, might receive £20 or £30 a week in superannuation and £8 for the pension if the means test were abolished. Then the comparison would be £28 or £38 a week to £13’. Senator Willesee’s argument is ridiculous.

This Government has made available to church and charitable organizations an amount of £1,500,000 to help provide homes for the aged and needy. There are 425,000 age pensioners in Australia and 78,000 invalid pensioners. A recent survey revealed that 32.81 per cent, of age pensioners in Australia own their homes, and 17.23 per cent, of invalid pensioners own the homes in which they live. A person is eligible for an invalid pension at the age of sixteen years, so that the proportion of adult invalid pensioners who own their homes is higher than the figure I .have given. To the end of June last, 77 applications for assistance to provide homes for aged and needy were received, and the Government made available £98S,000. This will provide 1,894 beds. Since June, nine grants have been approved involving an expenditure of £20S,323. By this means, 358 more beds will be provided for needy persons. This is the best plan of its kind that has ever been put before the Australian people to help the less fortunate in our community.

Senator O’byrne:

– It is time that the Government started to think about the needy.

Senator MATTNER:

– Ever since this Government has been in office its record in the field of social services has been beyond challenge. Once the Government has approved the applications of charitable and church organizations which seek assistance, the money is paid over, and there are no tags to it. In Australia, there is a great body of Christian, charitable people, and this Government has given them a great incentive to contribute towards the provision of these homes. For every £1 that is provided, the Government will find £1. I should like to have spoken on defence, but as my time has expired, I congratulate the Government on the social services programme it has implemented. The Government will continue to uphold the right of every person to earn a living, save money and own property.

Senator SHEEHAN:
Victoria

– Senator Mattner suggested that Senator Courtice, in the course of a speech that I regarded as excellent, had, in fact, appeared to be rather downcast.

Senator Hannaford:

– So he was!

Senator SHEEHAN:

– That may be the honorable senator’s opinion, but I regarded it as an excellent speech. However, if Senator Courtice was, in fact, downcast, I could easily understand the reason, because, during the course of this debate, statements made by responsible Ministers and others on the Government benches have been such that any honorable senator, as well as the people of Australia, could well be downcast. It is not my intention, however, to follow Senator

Mattner’s concluding remarks in which he endeavoured to say something to the credit of the Government.

I regard the presentation of the budget and its accompanying papers as the most important event in our parliamentary year, because the budget is an announcement, not only to the Parliament, but also to the nation, of the intention of the Government in relation to its sources of revenue and its items of expenditure. The budget should give us a fairly clear idea of how the Government intends to raise the funds necessary to carry on the work of government, and also how it proposes to disburse those funds, which are collected from the people directly, through such avenues as income tax, and indirectly by means of the imposition of customs and excise duty, and so on. Both the Treasurer (Sir Arthur Fadden) in another place, and the Minister for National Development (Senator Spooner) who represents him in this chamber, told us that Australia was experiencing a period of great prosperity. They said that during the last few years Australia had enjoyed bountiful seasons, that the prosperity of the people was real prosperity, that there was nothing fictitious about it, and that it would not easily pass away. We were also told that our national revenue had exceeded the revenue of the previous year by a considerable sum, and that we enjoyed a state of full employment.. Figures were cited in support of that claim. We were told that the number of persons in employment was 83,000 in excess of the previous record. Another statement along the same lines was that the- national income had increased by £191,000,000, and was 5 per cent, greater than at any previous time. A further point mentioned by the Minister was that Australia’s output of primary products, as well as of manufactured goods, had increased considerably. That was a striking tribute to those engaged in our primary and secondary industries; in other words, it was a tribute to the workers of this country, and was a sharp rebuke to those people in the community who claim to be responsible and yet repeatedly say that’ Australian workers are slowing down their output, and in general are not. playing the game. The speech of the Treasurer clearly demonstrated that the reverse is true, and that there can be no quarrel with those engaged in rural pursuits or in industrial undertakings. The Treasurer also made it clear that record profits were the order of the day, and that some very large dividends had been declared by a number of companies. He painted a wonderful picture. The people generally were aware that production had increased, and that there was general prosperity. Accordingly, when the Government announced that the year had ended with a large surplus, the people’s hopes rose. Age and invalid pensioners believed that the time had come when the Government would do something real for them, and that they would enjoy a substantial increase of their pensions, and thus be better able to pay the high prices charged for the commodities that they needed to keep body and soul together. The general taxpayer, too, believed that the prosperity of the nation would mean a reduction of taxes, and a lightening of the burden on the community. Municipalities and other employers hoped that, at last, their representations for some relief from the payment of pay-roll tax would bear fruit, whilst others expected a reduction of sales tax, as a result of which goods would be cheaper, and that Australian citizens, who had been told on many occasions that Australia was the best country in the world, would be able to enjoy some of the good things of life and realize with pride that that claim was justified. I honestly believe that Australia is the best country in the world. That was the picture presented to us, but, unfortunately, as the truth was unfolded, it become evident that the prosperity of which the Government boasted, was not real prosperity at all. They told us that we were no longer citizens of a wonderfully prosperous nation, and that we could no longer enjoy the things that should rightly be ours. We were told that there were indications that all was not well with the economy. Therefore, instead of giving some concessions to the people, the Government told them that they would have to set aside their hopes and aspirations..

A committee was appointed by the Government to investigate- ways of giving taxation allowances in respect of the depreciation of industrial machinery, so that our manufacturers might compete with overseas manufacturers in the world’s markets. The committee made certain recommendations, but industrialists were told that the recommendations could not be put into effect because the time was not ripe for any concessions. The ‘pensioners expected that the Government would do something for them, but they were told that they would receive a pension increase of only 10s. a week. Age pensioners whether their only income is the pension or whether they have other sources of income, are all to receive only 1.0s. a week increase. Ex-servicemen, widows, invalids and other classes of pensioners are also to receive this far from munificent increase.

Honorable senators should remember that all those people had been told that Australia was a wonderfully prosperous country, that our national income had increased beyond all expectations and that </ur production had greatly increased. Yet- this Government has now informed them that the only thing they can expect out of all this prosperity is the meagre sum of 10s. a week. The Government has told us that the present budget is designed to -hold our’ economy in its present state. [ would call the budget a stay-put budget or a bleak budget. According to the philosophy of those who are opposed to the Labour movement, the cause of our high industrial costs is high wages. I point out that it is the workers who have increased our production, and it is the sweat of the workers that has made the huge profits and dividends for those who own our industries; yet the workers have been told that they can expect no further improvement of their standard of living.

Honorable senators will remember when the present Treasurer introduced his horror budget into the Parliament in 1951. In those days he did not blame the worker for *he precarious condition of our economy, ne blamed the muchmaligned section of the community known as the- wool-growers. According to the Government, the wool-growers got too much money for their wool because people overseas were prepared to pay too high a price for it. The Treasurer then decided to take about £140,000,000 from the wool-growers because he considered that they were too prosperous.

Senator COOPER:
CP

– He did not take it from them.

Senator SHEEHAN:

– Well, it was taken in the form of a compulsory saving. The Treasurer said that the wool-growers were too rich and could not be trusted with their own money. Therefore, the Government would look after it for them. That was the story he told in the horror budget. To excuse the present, or stayput, budget the Treasurer has told us that the world is not paying enough for our wool, and that some of our good customers are not purchasing as much of it as they used to. He has also told us that the demand for our wheat is not as great as it was, and that consequently the national income is beginning to decline. That has been his theme, notwithstanding the fact that people in the wool industry believe that before this year’s wool sales are over the demand for our wool is likely to increase.

During the debate in the Senate yesterday about storage facilities for our surplus wheat, honorable senators supporting the Government assured the Senate that there was really not much difficulty with wheat, that the sales of wheat were increasing and that everything would be all right in the near future, yet the Treasurer has put before the Parliamen the Government’s belief that because of reduced prices for primary products there will be a. recession in our economy. Apparently, we are no longer to enjoy a rising standard of living. The Senate is a very important part of our legislature and we have the right to discuss the budget, notwithstanding the fact that the debate on it in another place has been concluded. Since the budget has been introduced, what do we find? All of a sudden, like a bolt from the blue, we are told that the scene has changed, that we have been living above our means, and that certain things must be done. I ask honorable senators to cast their minds hack to the years preceding the last depression, when Australia had enjoyed a period of prosperity somewhat akin to that which has existed in recent years.

At that time, we had visitors from abroad who told the Australian people almost the same story that they are being told to-day. Those visitors included the

Big Four “, Sir Otto Niemeyer, and a few more. They told the people of this country that their standard of living was too high, that there were too many radios and things of that kind, that the wages of the workers were too high, and that too many amenities were being enjoyed by the common people, as they termed them. They contended that the standard of living should be reduced, and in consequence, workers had to accept a 10 per cent, reduction of wages. Indeed, there were reductions in almost every sphere. That was the method by which the Liberal Government, or the United Australia party Government, whichever term is preferred, that existed in those days, handled the. situation.

When those people came to Australia they found a Labour government led, as honorable senators opposite have said, by the late Mr.- Scullin. 1 point out, how- ever, that at that time Mr. Scullin was powerless to act, because he did not command a majority in the Parliament.

Senator Paltridge:

– Why did he not seek a double dissolution?

Senator SHEEHAN:

– Because the anti-Labour forces would not let him. Accordingly, a certain economic policy had to be inflicted on the Australian people. The economists to whom I have referred said what should be done, and perforce, the government of the day was compelled to accept the dictates of the financial interests. Of course, Labour eventually altered those conditions and established in this country a financial institution that would make it impossible for such conditions to operate again. The present Government parties have partly destroyed the edifice that was erected by Labour.

Let us examine current events, and also the speeches that have been made by the Treasurer and other responsible Ministers on behalf of the Government. In the later part of his speech on the budget, thu Treasurer said that we are in this position because of the over-spending of private enterprise. Private enterprise - the god of the present Government, the thing that can do no wrong in its eyes!

Senator Robertson:

– The saviour of Australia !

Senator SHEEHAN:

– That is not so, according to the speeches that have been made by the Treasurer in this connexion. The private banks have been doing something wrong and are rather naughty at the moment. Notwithstanding the directions of the Commonwealth Bank, the private banks have refused to heed the advice and the warnings that have been given.

In theory, the supporters of the Government do not believe in controls. The Government therefore removed controls and, in doing so, destroyed the power of the Commonwealth Bank to regulate the currency. Now the Government claims that it is by means of control of the currency, or of the volume of money that is available, that the economic position of the country is determined. The supporters of the Government say that when money is plentiful and goods are in shortsupply, costs rise. They point to the picture that confronts Australia to-day and forget that it is their own work, thai they destroyed the only edifice that was capable of keeping the economy on an even keel, of ensuring that inflation did not get out of bounds, and that pensioners and all those in receipt of social service benefits enjoyed a reasonable standard of living. The supporters of the Government seem to forget that, although pensioners and people on fixed incomes receive more money to-day, its purchasing power is less than it was when Labour was in office.

To-day, the Treasurer is at Istanbul endeavouring to raise money. This Government may be likened to a yodeller with a mandolin over his shoulder, singing among the Swiss Alps for Swiss francs. The Treasurer has been across to America in search of American dollars, and also to our great Mother Country, of which we are all so proud. What is to be the position of the United Kingdom, the home of sterling and the banker for the sterling area, when the Government’s proposal to introduce import restrictions begins to take effect? Although the Government did not believe in controls a little while ago, apparently it is going to try a small dose of them soon. For that reason, the Mother Country will lose markets for the goods which it manufactures. We are going to trade elsewhere, instead of with our own kith and kin. That is the policy of the Government.

In the crisis that is approaching Australia - and it is is a crisis, according to the Treasurer and other spokesmen for the Government - it is most unfortunate that the Government is without a clue to the correct method of dealing with it. Not one ray of hope has emanated from the Government ranks to encourage the people. Despair is taking hold of the business community, and there is fear in the minds of the workers. Government supporters claim that hire purchase has something to do with it. Of course, the attitude of the Government is that those on modest incomes must not enjoy the comforts of life - no washing machines for the worker’s wife, just as there was no radio in the worker’s home during the last depression. None of those amenities that should be available in a prosperous country may be enjoyed by the workers. The Government will not grapple with the problem of hire purchase in a scientific manner by profits and interest charges, ft says to the workers, “ We deny you the right to enjoy the amenities of life “.

Instead of this Government formulating plans after applying its mind to these great problems, it turns to the interests that it will not control, such as the banking institutions. To-day, we have the spectacle of the Prime Minister and Acting Treasurer pleading with the bankers, and saying, “ Please, please, Mr. Banker, be careful of the credits that you issue. Close down on this one and close down on that “. It will be the small people on whom the closure will be applied, not the big interests. He turns to the manufacturers and says, “ Please Mr. Manufacturer, will you do this for me? Will you do that?” A few weeks ago, the Treasurer proudly spoke of the prosperity of this great nation. Now its lender is pleading, on bended knees, with these institutions to do something for the people. That is the picture of Australia to-day, but honorable senators opposite are still blaming those wicked people, the trade unionists, who have been wanting something out of the pool. Of course, as an afterthought, the unions have been called in for discussion. ‘At first,, when the Prime Minister proposed to have talks on the economic situation, it was not considered necessary to call them in, but now they are recognized as the people who can keep Australia on an ever keel. I am disappointed at the turn of events as a result of this budget. Instead of the Australian people being able to look forward to a continuation of prosperity and the enjoyment of all the things that Australia is capable of producing, they can look forward only to tightening their belts, as they have had to do in past years.

Senator HENTY:
Tasmania

.- Two points in Senator Sheehan’s speech call for a reply. First, he is incorrect in saying that any senator on this side called this budget a stay-put budget. That was the name given to it by the right honorable member for Barton (Dr. Evatt) in another place. That right honorable member is faced with a problem of staying put in Barton at the next election. The second point is the absurd suggestion that the Government is destroying the Commonwealth Bank. I was fortunate to receive to-day a copy of the report and balance-sheet of the Commonwealth Bank for 3 955, and it contains some worthwhile reading. According to the record of last year’s trading by the bank, which this Government is accused of destroying, the assets in the Rural Credits Department increased from £55,000.000 to £60,000,000 - 3 cool £5,000,000 - in the process of being destroyed ! Assets of the Mortgage Department were £5,000,000 and increased to £6,000,000 this year - another £1,000,000 gained in the process of destruction. The Industrial Finance Department had assets of £26,000,000 last year which increased to £2S,000,000 - a couple more million within twelve months. Surely this is a sorry picture of destruction. The profits of the trading bank for the year increased from £660,000 to £734,000. If that is the way in which the Commonwealth Bank is being destroyed by the Liberal Government, it will be a mighty powerful institution after another ten years of Liberal administration in Australia. Those two points made by Senator Sheehan are typical of the tenor of his whole speech.

Any honorable senator who is looking forward to a perfect budget will be doomed to disappointment, because no such document can be produced. The Government, in this budget, has accurately interpreted the economic signs of to-day, and its decision to consolidate this year the prosperity and economic gains of the past few years is a proper one. There seems to be an old Spanish custom of tagging names on to the budget; I should like to label this budget the “ Consolidating of prosperity “ budget, because that is what it will achieve. Since it is not a perfect budget, it is natural that it has caused some disappointment, and I am disappointed with it in some respects. I regret, indeed, that this year something has not been done to remove the vicious pay-roll tax from industry. It is easy for any honorable senator who is not responsible for the government of the country to say, “ Abolish the pay-roll tax “. It is estimated that £46,500,000 will be received this year by the Treasury from that source, which represents 2£ per cent, on industry’s pay-roll. It is a. liquid tax because it is received each month, and no Treasurer is likely to abolish it readily. Those who advocate its abolition should suggest something to take its place. In my opinion, the rates of personal income tax should be increased to yield revenue equivalent to the pay-roll tax, and then that vicious impost should be abolished. It would be cheaper for the people of Australia to make up the revenue by paying more income tax. Pay-roll taxis naturally added to the cost of manufacture, and sales tax has to be paid on the cost of the manufactured article. In addition, there is a percentage for overhead and, lastly, a percentage for profit - that dreadful word which honorable members opposite loathe so much. That means an accumulation out of the pockets of the people of Australia of a far greater sum than the £46,500,000 paid by industry to the Treasury. It is a fair and equitable proposition to say that we should abolish this tax on industry at this time when we are exploring every avenue to reduce costs. That is my first disappointment; but I have another.

I am disappointed that in this year when we are advocating that private industry should consolidate its prosperity and make this a year of stocktaking and review, the Government has not set an example. The Government should have said to the people, “ We want you to review your expenditure and keep it at a reasonable level “ ; but at the same time it should have set an example by dealing with, its own capital expenditure in the same way. If the people of Australia are given a policy in which they can believe they will follow a Government which says, “Do as I do”, and not one which says, “ Do as I say “. I read in the press with some interest - I do not know whether it was official or not - that there has been a review of capital expenditure and that that review may mean a reduction in that class of expenditure by the Government. That is an example which I think should have been set ia this budget in the first place.

Having expressed those disappointments, I should like to express to the Government some commendations of the budget. Particularly, I should like to commend the Government’s social services programme and the increase of 10s. a week to the pensioners along with all the other things that this Government has done in the way of free medicine, free doctors, free hospitalization and that great scheme of providing homes for the aged. The latter is one of the greatest schemes that any Government has ever brought forward and one of which thi? Government may well be proud. I commend it in that respect particularly. J have been six years in the Senate and this is the first year in which I have received letters from pensioners saying what a great boon it is for them to receive this extra 10s. I judge this matter not by the political discolour of members of the Opposition but by the expressions of these plain and humble people who have written to me saying that it is going to be of great benefit. They are the people I take notice of because they know what it means.

Another thing I desire to commend the Government for, particularly the Minister for Repatriation (Senator Cooper), is the lifting of the ceiling from service pensions. That is the last of a long list of anomalies to which the Returned Sailors, Soldiers and Airmen’s- Imperial League of Australia had drawn attention. That is the last of them; and the Minister for Repatriation can be very proud of having rectified all of them in the short time that this Government has been in office. Having mentioned those two commendations, I go further and commend the Government for providing storehouses of revenue against days of lesser prosperity. In these days we sometimes feel we know so much more than our forefathers, but when we study history we find we have not really progressed so much. Our forefathers handed down over the years the very sound advice that we should make provision for a rainy day. To the younger generation who are growing up in business and earning big wages, who have never seen tough days but have known only prosperity, I say, “ While you are enjoying our present prosperity, save, because that will be your backstop against a rainy day”. That advice has been handed down to us by our forefathers. In many ways, they were very wise and we should not scoff at them.

I commend the Government also on the provision it has made to spend £250,000 in an advertising campaign for Australian goods in Great Britain. That is a commendable principle and I should like to explain some of the detail of it and to offer some advice on the matter.

Senator Critchley:

– Free ?

Senator HENTY:

– I am much better qualified to advise on a sales campaign than are many honorable senators because I have been 30 years in the game. The scheme envisages shop window and highlevel displays, with all the modern techniques, of selling. On the labels of the articles is to be blazoned the word “ Australian “. We are setting out to establish in Great Britain a belief in the products of Australia. With that must- go complementary legislation to fix a standard of quality. Any one who has had experience in selling knows full well that whilst it may be comparatively easy to induce a housewife to try a line, if the article is not of good quality it will not be possible to get repeat business; and it is the repeat business that brings profit in the long run. So, a proper standard of quality must be laid down in respect of all goods that are to be advertised in this sales campaign by being labelled “Australian “. I know there is a cheaper market in Great Britain and that some of our manufacturers chase that market; but no real market can be developed in that way. at all. If somebody else comes along and sells for a penny cheaper, one loses such a market. We should not allow manufacturers of goods of inferior quality to label their products “Australian “. They can label them “ Production of the British Commonwealth “ or anything else they like, but they should not label them “ Australian “ unless the product is of top-line quality. The British housewife will buy a high quality product again and again after she has tried it.

I now desire to point out to the Government a source of revenue which we may be missing in our overseas markets. I refer to the new process of the reconstitution of milk. I do not think the Government has had a keen enough look at this and at what it could mean. The reconstitution of milk is merely the recombining of the milk solids and the milk fat with water. The objects of reconstitution are to make milk solids available in non-dairying countries as cheaply as possible, and at a commerial level. I have no intention of wearying the Senate with all the details of this particular process, but I should like to explain that reconstitution in its present form was first undertaken on a large scale by the United States army, which provisioned large forces . by this means during the last war. The first attempt to develop reconstitution on a commercial scale was undertaken in Mexico City by the Kraft Company of America, which flew in the powder and the butter oil from the United States of America. After many initial failures, the project was developed on an economic basis, and it is still in operation. American interests have also introduced reconstitution to Hong Kong and are currently interested in deVeloping projects in about ten other cities in the East. Australian interests have also investigated the feasibility of establishing such plants which, of course, would use Australian raw materials; but the initial finance, which is very heavy - about £150,000 - is beyond the scope of our manufacturers. The plants themselves, however, can- be produced in Australia, and approximately 75 per cent, of all the equipment required would be of our own manufacture.

This year we shall export about 70,000 tons of butter, of which 60,000 tons will go to Great Britain. For that we shall receive about £9,000,000 less than our cost “f production. I suggest to the Government that if we spent only part of that sum in establishing these plants and, if necessary, gave them to the people involved on the condition that they used our products, we should save a great deal of money. Instead of selling our butter to Britain at an unprofitable price, we could establish a profitable market for our dairy farmers for the future. If the Australian manufacturers are finding that the outlay of £150,000 for the plant is too much, then the Government might consider attempting to establish the plants in other countries, thus providing a future profitable market for our dairy farmers. I offer that as a suggestion for increasing our overseas income. The capital would have to be provided in one year only.

Senator MARRIOTT:
TASMANIA · LP

– That has been done in India, I think.

Senator HENTY:

– I understand that it is proposed to do so in India. This is one of the things that could revolutionize our dairy industry. [ now wish to make one or two remarks on the economy and the external finances of Australia. In earlier times, when faced with such difficulties as are confronting us now, two courses were available to us. When we could not pay for our imports because of insufficient export income, we borrowed the necessary money from Great Britain. We also went without some things, because the exchange rate rose at once and we were not able to buy certain goods. We cannot adopt that practice to-day. .We cannot borrow in Great Britain, because that country is in financial difficulties. We cannot go without imports to any great extent, because our policy of full employment depends on importing sufficient raw materials and partly finished goods for our factories. I agree with my colleague Senator Paltridge that we cannot much longer depend on primary producers to provide all the money for our imports. For the last 40 years, most of the money for our imports has been provided by the sale of primary products. Our population is growing rapidly and must be fed, and our requirements of overseas products are also growing rapidly. I do not think the primary producers should be called upon to satisfy both requirements. Another thing which has always affected our primary production is the fact thai droughts have occurred regularly in cycles. No matter how hard the primary producers work their whole production for a year may be lost in a drought. We should look at the problem in the light of those facts and keep in mind that we need to import about £750,000,000 worth of capital goods, raw materials and partly fabricated goods to keep our factories going and our people employed. Therefore, we should make secondary industry play its part in the export trade. I am confident that this can be done. Firstly, a more mature approach should be made to employer-employee relationships and we certainly need a more adult conception of incentive payments. If, with those things in mind, we can embark on a long-term plan for our industrial structure we can make great strides with secondary industry exports. The trade union movement can help by studying the properly policed incentive payment systems of other countries. Incentive payments must be introduced into Australia. We must also send our young executives, in both primary and secondary’ industry, overseas frequently in order to learn what overseas markets require, and how our goods should he packed. We can no longer say, as we have in the past, “ This is what we have produced for our own requirements. This is what is left; take it and huy it”. We must go out into the markets of the world, see what they require, what quality of goods they need, and how those goods should be packed, and then endeavour to produce and sell those goods to them. In that way we can increase the scope of our secondary industries and provide some help for our primary industries. I have great faith in the ability of Australia to do this.

I was greatly heartened by listening to a talk in this very building by the head of the great Lincoln electrical company of America. He is’ an experienced industrialist, and his company has factories in America, Great Britain and Australia. Ee said that Australia can become the greatest manufacturing country in the world. That is worth hearing, when Homing from a mature and experienced businessman. He said that to bring that about four things were necessary. Two of them we had and two we must develop. Of the two which we have, be said that one was the labour force with the greatest initiative and intelligence. He gave that as his opinion, after fourteen years’ experience of employing labour in Australia. He said that the second thing we had was the cheapest steel in the world. That will be of interest to those who have been embarking this evening on a diatribe against certain manufacturers. This gentleman also said that there were two things we must develop. The first was a proper employeremployee relationship, together with a proper understanding that productivity and prosperity in industry were the only means of raising the standard of living in Australia. The second thing which we must develop was a burning faith in the future of Australia as a manufacturing country. They were indeed heartening words, because I see no reason why we cannot develop those two things that we do not have at present. I believe that honorable senators opposite, and the great trade union movement, can be of great assistance by studying and understanding the advantages of properly policed incentive payments, which would allow people to earn to their fullest capacity, and remove the dargs and other limits on production which merely lower the workers’ income. I am greatly heartened because these statements have been made by a great man with world-wide experience. I am confident that if we adopt his advice, and retain the Government which has freely demonstrated its adherence to sound, economic principles, Australia will emerge triumphant from the immediate economic difficulties which beset the nation, and will go forward to greater prosperity.

Senator SANDFORD:
Victoria

– It was refreshing to hear Senator Henty say that he is prepared to believe the report of the American industrialist who visited Australia and said that we had a work force with the greatest intelligence and initiative of any work force in the world. Those are not the sentiments of Senator Henty, but he was generous enough to repeat the words of the American industrialist.

When debating the budget, we have to ask the Government some fundamental questions. Although I do not expect any supporter of the Government to answer these questions, the people of Australia believe that they should. In 1949, before the election campaign of that year, the political parties which now form the Government, were in Opposition. They pledged themselves to put value back into the £1, increase real wages and reduce the cost of living. Can anybody deny that that promise was made ? I do not ask my listeners to believe what I say on this matter. I shall quote from the policy speech of the Prime Minister (Mr. Menzies), who was then Leader of the Opposition. The right honorable gentleman should never have vacated that position, because he was a much better leader of the Opposition than he is a Prime Minister. In his policy speech in 1949, he said -

Perhaps our greatest charge against the financial and economic policy of the present socialist Government-

That was the Labour Government led by Mr. Chifley- is that, while it has paid a good deal of attention to increasing the volume and circulation of money, it has largely neglected the problem of what, and how much, that money will buy.

Every housewife knows how grievous this problem is.

The Statistician will conservatively allow that the pound of 1939 is now only worth 12s. 2d. in purchasing power. But on the true cost of household requirements, it would be nearer the mark to say that it is worth only 10s. The greatest task, therefore, is to get value back into the pound, that is, to £et prices down.

The people of Australia want to know what has happened to that promise because even if the Government is not prepared to admit it, the £1 in 1949 could purchase a great deal more than the £1 of to-day. The curing of economic ills is a responsibility that rests fairly and squarely upon the Government. Supporters of the Government might reply that they have been returned to office at elections since 1949. The people know, however, that at each of those elections, the Government raised the bogy of communism. I might call it a political red herring. In 1951, at the Senate elections in 1953, and again on the occasion of the elections for the House of Representatives in 1954, the Government raised the same bogy. Undoubtedly, during the next general election campaign the Government will dangle the futile Petrov report before the electors.

It is significant that the Prime Minister has not said one word during the debate on this budget. That is unprecedented in the political history of Australia. That right honorable gentleman has refused to say anything in support of the budget that has been brought down by the Treasurer (Sir Arthur Fadden). In the meantime, the Treasurer has cleared out. The last time he was overseas he was climbing the Swiss Alps looking for francs. The Swiss roll that he found so tickled his palate that now he is looking for some turkey. It is a striking fact that every supporter of the Government in this chamber and in another place has been apologetic in his approach to the budget.

Senator Hannaford:

– Nonsense !

Senator SANDFORD:

– I have heard practically every Government supporter in the Senate and in another place speak on the budget, and all have been apologetic. They have not offered one suggestion or idea to cure the economic ills of Australia. On the contrary, by using diversionary tactics, they have tried to throw the onus upon the Australian Labour party. Almost every Government supporter in the Parliament has been content to attack the Labour party and the Leader of the Opposition (Dr. Evatt).

Senator MARRIOTT:
TASMANIA · LP

– It sounds like a conspiracy.

Senator SANDFORD:

– It might have been a conspiracy if it were in Assyria, but not here. This has been called a tight-wad budget and a stay-put budget.

I call it a bile beans budget, because it is a bilious budget. Certainly it has made the people of Australia bilious. It is an astronomical budget in size. Total expenditure is to be £1,114,000,000. The Government had a surplus of £70,000,000 in the last financial year, and it is budgeting for a surplus of £48,000,000. Although it has been called a stay-put budget, it has been condemned by every section of the Australian people. Even the press, which is usually on the side of the Liberal party and the Australian Country party, has condemned it in no uncertain manner. “What does it offer the people? There is to be no reduction of taxes. I suppose we must be thankful for small mercies when we remember the increase of 10s. a week in pension rates. Almost every speaker on the Government side has stated that the Government has been beneficent in making 10s. a week more available to the pensioners. I remind honorable senators of the statements made by the Prime Minister in 1949. He said, in effect, that it was not the amount of money received that mattered, but the goods and services the money would buy. Will any one on the other side of the chamber deny that pensioners cannot huy as much to-day with their pension as they could buy with the pension of 1949? Almost half a million age and invalid’ pensioners in Australia are expected to live on a miserable £4 a week. That number does not include persons in receipt of repatriation benefits. They cannot live on that paltry sum. I do not like connecting the pension with the basic wage, but in order to be realistic and to get a sound basis on which to value the pension, it is well to take into consideration the relationship of the pension to the basic wage. Will any supporter of the Government deny that the pension, even when raised by 10s. a week, will be less in comparison with the basic wage than it was in 1949? It will be said by supporters of the Government that the permissible income of pensioners also has been raised. It may sound all right to say that, in addition to receiving a pension of £4 a week, a pensioner may earn £3 a week, but there are very few pensioners who are able to supplement their pension in that way. In the great majority of cases they have to try to live on the basie pension that they receive. Senator Guy made the misleading claim that pensioners now receive more money than they ever did. That is true in terms of money, but it is, nevertheless, a dishonest claim. I repeat that the amount of money received by a pensioner is not the important thing; what matters is how much that money will buy. The child endowment payment to-day is the same as it was when this Government caine into office. There has been no increase of the amount payable, nor has there been any addition to sickness and. unemployment benefits. Senator Guy, who claims great credit for the Government in proposing to increase pensions by 10s. a week, was a supporter of a government which, in 1933, after he had deserted from the Labour party, made claims on the estates of pensioners after their death in order to recoup money paid to them by way of pension. The government of the day was, I think, known by the name of the United Australia patry. The initial letters “ U.A.P.” stand also for “ unemployment and poverty “ - a very apt description. In proof of my statement I refer honorable senators to the Invalid and Old-age Pensions Act, No. 56 of 1933, which provided -

Upon the death of any .person who, at any time after the 12th day of October, 1932, was in receipt of a pension (which person is hereafter in this section referred to as ‘ the pensioner’) there shall be repayable to the Commonwealth out of the estate of the pensioner an amount ascertained in accordance with the provisions of this section.

As a result of that provision, the number of pensions surrendered by people who were urgently in need of the money was about 12,000. In addition, 13,000 were deterred from applying for a pension, making a total of about 25,000 persons who, because of that condition imposed by an anti-Labour government, could not obtain a pension.

Senator Hannaford:

– When was that ?

Senator SANDFORD:

– I cannot repeat what I have said merely to satisfy the honorable senator, but if he desires information on the subject I am prepared to let him have, later, as much as he can absorb. Because. of that provision, imposed by an anti-Labour government, the government of the day saved over £600,000 per annum. I suggest that honorable senators opposite, W110 to-day claim that they have done so much for the pensioners, should remember what the government of that time did.

For a long time we have heard from honorable senators opposite nothing but denunciation of controls, yet only a few days ago a supporter of the Government in the House of Representatives advocated a most vicious form of control. I have here an extract from the Melbourne Sun of the 8th September, 1955. I shall not read all of it, but shall recite some of the headlines. One reads, “ Make children care for old parents “. It goes on to say, “ Legislation to compel children to look after their parents was suggested by Mr. Bostock (Liberal, Victoria) in the House of Representatives to-night”. 1 think that those who have so bitterly opposed controls of all kind will agree that that suggestion, if given effect, would be a vicious form of control. If adopted, it would mean the introduction of legislation to compel children to support their parents. What would be the result? We frequently hear that young people who desire to marry and set up homes are unable to afford to do so. If legislation of the kind that I have mentioned were in force, there would be further delays, and many young people would have to postpone marriage for a number of years. The Government does not seem to know what to do in regard to many of the problems which face it. In the presence of difficulties the Government is helpless. The Prime Minister, instead of trying to do something as the Leader of the Government, to rectify existing conditions, is running around, cap in hand, asking the banks to help him out. His colleague, the Treasurer (Sir Arthur Fadden) in his budget speech appealed to the people to exercise restraint in buying, and he approached the banks with a request that they should restrict credit for the hire purchase of goods - a system that mustoperate in a modern community, because it is the only system by which most people can acquire what more fortunate people call luxuries, but which I claim are essentials. I ask honorable senators opposite whether they are in favour of depriving housewives of refrigerators and washing machines and forcing them back to the old

Coolgardie safe and the scrubbing board. If any of them are in favour of doing so, I suggest that they should ask their wives to dispose of their refrigerators and washing machines, and get back to the conditions that they advocate for others. One of the main factors involved in maintaining the economy of this country on a stable basis from 1941 to 1949 under the Curtin and Chifley Governments was a Commonwealth-wide system of prices control. I do not understand how we r-an maintain economic stability unless we exercise some form of prices control, on a Commonwealth-wide basis, at any time when goods and services are in short supply. Together with prices control we should consider a system of profit control, ft would be interesting to know what percentage on the original capital the huge profits made by the Broken Hill Proprietary Company Limited represent. The percentage of the profit to the watered capital of that company might be 5 per cent, or 6 per cent., but the percentage to the original capital invested in the company might be 50 per cent., 60 per cent, or 100 per cent.

Senator Hannaford:

– There is very little watered capital in the Broken Hill Proprietary Company Limited.

Senator SANDFORD:

– I think that the honorable senator who interjected could do with a little water. Only recently, the Prime Minister (Mr. Menzies) assured a meeting in Sydney that Australia was enjoying a period of unprecedented prosperity. But, while the Prime Minister was giving that assurance, the Minister for the Interior (Mr. Kent Hughes) and the Minister for Labour and National Service (Mr. Holt) were warning representatives of trade unions that conditions to-day were ominously like those of 1929 and 1930. Who is right? Are we to believe the Prime Minister, or are we to believe Mr. Kent Hughes and Mr. Holt?

In 1948, the then Labour Government asked the people, by way of referendum, to give the Commonwealth power to exercise prices control whenever and wherever necessary. The anti-Labour forces opposed the referendum on the ground that the States could control prices more effectively than the Commonwealth could, but those forces did not deny the need for prices control. Even now, although they often say that they are against any form of control, we find that in all the States of the Commonwealth except Victoria some form of prices control has been introduced.

In 1950, when there was a Labour, majority in the Senate, we submitted a bill to the Government which would have allowed a referendum to be held on the question of prices control, or which would have allowed the Government to seek a transfer from the States of the power to control prices. The Government would not accept that measure. Senator Hannaford has told us that the people are enjoying prosperity. He said that wages were higher than they have ever been, and that more luxuries were being bought than ever before. He said that there was an upsurge of spending, and that pressure was being exerted by the hire-purchase system on the banks. However, he made no Contributions to wards a solution of our problem; he merely spoke about our prosperity.

Senator Paltridge spoke about defence, and I bow to nobody in my determination to do all that I can to ensure that the defence of Australia is kept at the highest possible point of efficiency. Senator Paltridge mentioned a statement that was made by General Blarney in 1949, to the effect that the military forces of this country at that time were not as powerful as they should have been.. That is a misleading statement, because in 1949 the war had been won, and we were endeavouring to convert our economy from a war-time basis to a peace-time basis. Senator Paltridge, quite conveniently, did not say anything about a statement made by General MacArthur towards the end of the war, or soon after it had finished. General MacArthur said that the contribution to the war effort made by Australia had been proportionately greater than the contribution of any other participating nation. Senator Paltridge did not tell us that that great war effort was made under the leadership of* Labour governments. Between 1939 and 1941, when . the Curtin Government took over from the Menzies Government, our defences were in a shocking condition.

Senator Henty:

– Mr. Curtin did not day that.

Senator SANDFORD:

– I am glad of that interjection because it gives me the opportunity to point out that -when the Japanese vere knocking at our front door it was not likely that our Prime Minister would have said, for the edification of the enemy, that our defences were in a parlous condition. The leaders of the present Government, the Prime Minister and the Treasurer, controlled the country in the early stages of World War II., but they deserted in the face of the enemy and let Australia down. This country was crying out for leadership, but at that time one of Mr. Menzies’s Ministers, the late William Morris Hughes, said that Mr. Menzies was the arch intriguer, the fountainhead of every whispering campaign, and could not lead a flock of homing pigeons. He could not lead and would not follow. Yet Senator Paltridge had the audacity to stand up and quote a statement made by General Blarney in 1949, quite conveniently forgetting the words of praise spoken by General MacArthur.

Senator Paltridge also made the amazing statement that we had no right to criticize the Government’s defence policy. £ would like to criticize that policy, and if I had sufficient time at my disposal I would gladly do so. But honorable senators on the Government side do not want to hear facts. No less than £190,000,000 is to be spent on defence this year. If that money were to be spent properly and scientifically, I should not say that it was too much; but in this age of science and nuclear energy, the only defence measure with which this Government is concerned is to put rifles into the hands of boy3 of eighteen years of age, and to use the parade grounds of Aus* tralia for the benefit of military careerists. The Government refuses to tackle matters which are essential for the defence of the country, such as decentralization, the construction of roads, railways, transport systems generally, power storage plants; and the provision of an effective modern air force and navy. To-day, the question is not so much how many ground troops can be put into the field, as to what extent science can be used to assist in defence measures. To use a vernacular expression, a lot of this defence allocation i.-i being poured down the drain.

Although the international situation has eased, I do not suggest for a moment, that we should ease up too much on defence measures; but I do contend that those measures should be in keeping with the scientific age in which we live. Land settlement and rural development also are closely connected with the defence of the country. Our experience in World War II. taught us that Australia is the bastion of western civilization in this part of the world. We should appreciate that it is necessary for us to develop our primary and secondary industries, as well as our transport system. I have some figures concerning Australian roads which J had proposed to cite this evening, but, unfortunately, time will not permit me to do so. I could continue almost indefinitely pointing out our defence needs to honorable senators opposite, but it is very difficult to penetrate their intelligence with even the simplest argument. I have before me, also, a great deal of material concerning anomalies in connexion with repatriation benefits, but since I understand that a bill dealing with repatriation matters is to come before this chamber shortly, I shall then avail myself of the opportunity to say something on this subject.

The people of Australia demand a lead from the Government and an indication of the policy it proposes to adopt to cure our economic ills. It is not sufficient for honorable senators opposite, and for the supporters of the Government in the House of Representatives, simply to evade the issue, adopt an apologetic air, take a defensive position and, whenever possible, criticize and ridicule the Australian Labour party. That is what has been done throughout the budget debate. I am certain that the people of Australia are disgusted with the Government and that, as soon as they have an opportunity to pass judgment upon it, the Government will meet the fate its deserves.

Senator WARDLAW:
Tasmania

the budget my unqualified support. In my opinion, the proposals contained in it are sensible, sound and very safe. The presentation of the budget is the outstanding event of the political year, because it reflects the financial position of the country and lets us know where we stand at the moment, as well as giving us an idea of what the future may hold for us. This budget has attracted some criticism and, in varying degree, comment by politicians, both Federal and State, manufacturers and businessmen, graziers and others, but I venture to suggest that none of that criticism is of very much account, because most of it was made without a complete understanding of the facts or a full knowledge of the exact position.

This is the eighth budget to be presented by the Treasurer (Sir Arthur Fadden). In addition to his undoubted great qualities and ability, the Treasurer is a man of very long experience. 1 should say that no man in Australia has a firmer grip of the economy and the financial position of Australia than has Sir Arthur Fadden. In reaching his conclusions regarding the economy, he, of course, has the advantage of knowing the facts. In addition, he is a member of a government which brought into operation a magnificent policy of development of primary production, which is the basic reason for the sound economic position which we enjoy to-day. The Treasurer, of course, has the benefit of the advice and the knowledge of a galaxy of talented experts whose job it is to gauge the economic position and the needs of the Australian economy from A to Z. Therefore, I think it is fair to say that no one is in a better position than is the Treasurer to present a budget to the Parliament.

Budgets cannot be placed in watertight compartments. They are, in effect, balance-sheets, and must be considered in conjunction with the balance-sheets that have been presented to the nation on previous occasions. In order to get ft correct estimate of the position, it is necessary to go back at least three years. If we do that, we come t« the 1951 budget, which our friends opposite have called the “ horror “ budget. It will be remember that, in 1951, there was a tremendous increase in the price of wool, which contributed greatly to the national income and benefited the wool industry, but which also threw out of gear, and affected adversely, our economy. It brought about severe economic dislocation and consequent inflation. The Treasurer acted promptly on that occasion and instituted increased taxation, as well as restricting imports and introducing capital issues control. His actions gave rise to a storm of criticism. The restrictions that were applied were certainly drastic, but J suggest they were eminently successful.

In 1952, the value of our imports reached the astronomical figure of £1,200,000,000, and our wool cheque fell steeply by £300,000,000, compared with that of the previous year. Therefore, Australia experienced a recession in 1952 equal, in most respects, to that of the disastrous ‘thirties. So successful were the remedies applied that we skated over that very thin ice without, I should say, nine men out of ten appreciating that we had done so. The Treasurer’s judgment of the position proved to he correct on that occasion, and I do not think there is any reason to suppose that it is not equally correct now. The Australian economy is perfectly sound, and there ha? been great industrial development.’ As the Treasurer has said, the country is going ahead at a fast rate, taking into consideration its financial position. However, he warns the nation against overstrain and over-exuberance - those are the two expressions he used - and he counsels that development should be on safer and sounder lines. He said also that, rather than seeking to expand too quickly, we should consolidate our present position. If we can achieve stability without losing the initiative that is sonecessary to the development of Australia, the future can be faced with much greater confidence.

This budget is a continuation of the last ope. The Treasurer has been content to adjust anomalies in taxation and to increase pensions, and this action has met with general approval. Honorable senators wil] recall that the Government reduced taxation in the previous two years by £200,000,000. That is a great deal of money, and the reductions- were not just a shop window display for an election. They were the greatest that any government had ever made in two successive years, and they were referred to by Mr. Short, secretary of the Federated Iron Workers Association, and by Mr. Monk, president of the Australian Council of Trades Unions, as a great benefit to the worker and to the employer alike. There is full employment in Australia, and a well-paid job is available for every man who is willing to work. I urge honorable senators to remember, however, that no Treasurer or government can afford to gamble with the future, or dare to do so.

The Menzies Government, by careful and prudent financial management, has brought about an era of prosperity unrivalled in the history of this country. The Government is determined to do everything in its power to hold that prosperity. Many demands have been made on the Government, demands which, to its credit, it has resisted. It is easy to attain cheap popularity by spending money freely and not providing for a rainy day. The Government has set its face against such a policy, and its object of safeguarding the future of Australia is laudable. Our overseas trade balance has been steadily decreasing because the home market has been absorbing all imported and manufactured goods. The time has come to call a halt in reckless expenditure. There is a subtle danger in the feeling of easy prosperity, and we should be unwise to allow that feeling to blind us to future possibilities which no one can forecast. Unrestrained expansion requires huge sums of money, which have to be either borrowed or earned. Borrowing abroad has become difficult, ;and money can be earned only by exports which must compete overseas with those of other countries. Unfortunately, our present high cost of production rules this out as practically impossible. More production at lower cost is vital to Australia, and this budget seeks to achieve that object. This holdfast budget is well thought out. It is inspired by common sense, and is a splendid attempt to come to grips with inflation, Australia’s greatest enemy.

It must be obvious that very little worthwhile criticism of the budget has been offered by honorable senators opposite. By worth while, I mean constructive criticism based on the understanding that we are trustees of the public money. Parliament is bound to safeguard the economic and financial position of the Commonwealth with the same care and forethought that we would exercise as trustees of a private estate or in conducting our own business. Any other type of criticism, of a merely destructive and irresponsible character, which makes the budget debate a vehicle for a little cheap notoriety, is unworthy of comment. Criticism can be ignored unless it springs from an intelligent consideration of the financial affairs of this country.

This budget does not claim to be spectacular. It is not a shop-window budget. It is not a politician’s budget. It is a statesman’s budget. Criticism of it, in the main, both inside and outside of this Parliament, comes from those who cannot appreciate this distinction. The budget is aimed at assisting those most in need of help, as honorable senators opposite will acknowledge. It gives assistance to pensioners in every group. Surely honorable senators opposite have no desire to analyse -too closely the relevant contributions of the two parties to pensions since they were first introduced by a Liberal government.

In addition, the budget has substantially improved the position of disabled soldiers. That point has been well canvassed by honorable senators on this side. It makes provision also for help to provide homes for aged people by the various religious and charitable institutions. Surely that must be one of the most praiseworthy and humanitarian moves ever undertaken by any government, and must receive the wholehearted support of every section of the community. Practically all the relief foreshadowed in the budget is devoted to those least able to help themselves.

The basis of the success achieved by the Government since assuming office in 1949 has been a policy directed to the development of primary production. It has been said on previous occasions in this chamber that primary .products have been responsible for 85 per cent, of our export income - wool and wheat 60 per cent., sugar, butter, dried fruits, and meat, 20 per cent., and metals 5 per cent. We have been unable to maintain that position lately, but Australia has been fortunate in having had eight favorable seasons in succession, and markets overseas have held well during that time. At the moment, our mainstay in the overseas market, wool, has suffered a decline in value that is difficult to understand, because comparable fibres such as cotton, rayon and silk are holding the market, while wool has been sold at a reduction of about 12 per cent. The fall in the price of wool can be discounted to some extent because it may be a matter of finance, but I hope in the interests of Australia generally that the wool market recovers during the next few months.

It seems clear at, this stage that Australia can no longer look to the traditional exports of primary products to pay for its imports, and to support the accepted standard of living in this country as well as large-scale development. Until we have developed a larger export market for manufactured goods, the balance of payments problem is almost certain to continue, but it seems that in the long run lower costs will be the decisive factor affecting the balance of payments. I am rather disturbed about the wheat position which was debated in this chamber only yesterday when we made special provision for storing surplus wheat. That emergency storage may be required for a year or two, although some speakers considered it may actually be required for a period of five years, or even longer. Last year we carried over a surplus of 90,000,000 bushels and it looks as if this year we will carry over another 90,000,000 bushels. It will be in the interests of Australia if we can in some way shift some of this wheat overseas. It has been stated here, and I think perfectly correctly, that the storage will involve a tremendous cost if we have to hold the wheat for any length of time. In addition, the wheat would deteriorate and so place a greater charge on the wheat-growers.

We should take into consideration the changed position of our trading overseas and take advantage of the credit position in respect of approved nations by building up goodwill and securing regular customers for the future on that basis. I have always been a great believer in the credit business because I think we can over a period build up a trade on that basis and retain it. I agree with the Minister for National Development (Senator Spooner), who discounted the suggestion that any benefit would accrue from a reduction in the price of wheat. I do not think we would sell an extra bushel if we reduced the price by half. Furthermore, I do not think we would thereby increase the consumption of wheat. The only effect would be to start a price war overseas with our American friends. It would lower our national income and in addition bring about a fall, in the price probably on a permanent basis. Also, it would affect wages, and all those interested in the production of wheat would, consequently, be faced with lower prices and lower wages. It is recognized to-day that we must accept the overseas market as it is. It has changed from a seller’s market to a buyer’s market, and, therefore, we must change our method of trading.

It is impossible for the primary producer to lower his costs of production while he is paying present high rates for the goods and services that he requires. If secondary industry were to play its part, it could provide 25 per cent, of exports from Australia instead of about 6 per cent, or 8 per cent, as at present. Secondary industry could bring about a big improvement in our export trade by reducing costs to primary industry and so enable primary industry to produce at a lower cost. The very fact that it could export and compete overseas would guarantee a lower price in Australia.

I desire to say a word or two about the Treasurer’s comments on the growth of hire purchase and time payment in Australia, which has aroused such widespread interest. There seems to be some doubt as to the Australian Government’s powers to control hire purchase in Australia owing to the division of control between the Commonwealth and the States. Therefore, the problem may be a little more difficult than it appears on the surface. The present great boom has had a serious inflationary effect in America, where it is regarded as highly dangerous, but it has become an integral part of the

American economy. A recent visitor on his return from America said that 95 per cent, of the business carried on in that country is conducted on a hirepurchase basis. That seems to me to be difficult to believe. In a young country such as ours there is a danger that the hirepurchase system may develop and possibly get out of hand. Still, there is a danger that if that system is interfered with unduly it may have serious repercussions on business generally. New Zealand has recently introduced regulations for the first time to provide that buyers of motor vehicles now have to pay a minimum deposit of 50 per cent, of the cash price, and they must finalize payment within eighteen months. On all other goods, the minimum deposit is 15 per cent, and the terms and repayments are spread over 24 months. I understand that the United Kingdom has also instituted certain controls on hire purchase and that these controls are producing fairly satisfactory results. In my opinion, hire purchase builds goodwill and helps to make life more bearable for people on the lower incomes who are not in a position to pay cash for their purchases. It also contributes to the maintenance of good living standards and helps the manufacturer to deal with his turnover on a fixed level. It does much to extend the business turnover and reduce the cost of selling. It also fosters the desire to accumulate assets and the habit of saving on the part of the individual - both very important features of hire-purchase selling.

The undesirable features of hire purchase are brought about by selling goods without a deposit and on long terms, particularly goods that deteriorate in value during the period of payment. Goods, such as furniture, washing machines and refrigerators retain their value and are permanent assets in the home and contribute to the comfort and happiness of family life. I am sure that hire-purchase companies would welcome some control of thu hire-purchase system in order to put the business on a sounder basis. The only restriction that I can suggest would be to make the deposit at least 25 per cent, and to limit the period of payment to eighteen months. As yet, I do not think that hire purchase has interfered in any way with government loans. The last loan was over-subscribed by approximately £4,500,000, and there is nothing to show up to date that it has interfered in any way with the raising of money for the development of Australia. By fixing the interest rate on bonds at 4^ per cent, it means that they return with tax rebate a little over 5 per cent. They have the advantage of being guaranteed as to both capital and interest and are, of course, the best security that can possibly be obtained in this country, as they are backed by the public and private resources of Australia. The soundness of Australia’s present financial position is further demonstrated by the fact that the whole of our national debt, which amounts to £3,749,000,000, is more than covered by the annual combined income of the Commonwealth and the States, which, last financial year, amounted to £4,033,000,000. I note that there was an improvement of £280,000,000 in the national debt figure, as compared with last year. It is significant that 84 per cent, of the total indebtedness is to Australian subscribers, leaving only 16 per cent, owing to overseas creditors. That is a very creditable position.

During its term of office this Government has applied itself assiduously to strengthening Australia’s security, developing our’ national resources, and maintaining a healthy economy and the social welfare of the Australian people. The budget is very strong, and T believe that it will have the unqualified and enthusiastic support of every senator in this chamber.

Senator TANGNEY:
“Western Australia

– I find myself in a strange position, in debating a budget which, before it has been discussed fully in this chamber is already obsolete. Since the budget was introduced by the Treasurer (Sir Arthur Fadden) in another place, economic events in Australia have apparently moved so rapidly that people are no longer interested in the budget as such, but are rather bewildered and stunned by the amazing sneed at which things in the economic sphere seem to have become confused in the short time since the beginning of this parliamentary session. Tt is difficult for the people to understand why, during such an important time, not only is the

Treasurer absent from Australia, but also there has been no comment from the Prime Minister (Mr. Menzies) on any aspect of the budget. This bewilderment of the general public is shared, I think, by some of the outstanding economists of the day. In making these statements I am not speaking without some support. I shall refer the Senate to an article which appeared in the July-September, 1955, issue of the review produced quarterly by the Institute of Public Affairs in Victoria. This publication could not be called, by any means, a socialist review, or even a Labour party review. It contains an article written by Mr. W. S. Crick, who is the general manager of research and statistics for the Midland Bank in London. Mr. Crick has had a varied and interesting career in banking, and he has been a member of a very important royal commission on the taxation of profits and income, the report of which has recently been published in the United Kingdom. He has probably endeared himself in that way to some senators on the Government side of the chamber. During his stay in this country Mr. Crick studied the Australian economy, and he has written an article on the need for an economic policy for Australia. I think all honorable senators have received a copy of this review, and they would know of this article if they bothered to open their mail. The article says -

In important sectors of economic policy, particularly where equilibrating action is called for, there seems to be a tendency to fall back upon constitutional obstacles or electoral risks as justifications of inactivity. In particular, the central Government seems to lack any explicit, coherent economic policy, adaptable to changing current conditions, while its actions seem to bc limited to improvisation.

The central government referred to is, of course, the Menzies Government. That statement, coming from a man of the standing of Mr. Crick, and not from a person who is diametrically opposed in politics to the present Government, is surely an indictment of the Government. Mr. Crick goes on to explain that perhaps one reason for the confusion existing in the minds of the public of Australia to-day is the lack of confidence shown between the Government and the people in discussions of economic problems. He deplores the fact that there is not inAustral ia any economic survey, such as is published by governments in other parts of the world. In the United Kingdom, America and New Zealand certain economic statements are published each year, or perhaps more frequently. They enable the public to know what the trend of affairs is at the particular time, so that people can be prepared for any action that the Government may be forced to take in order to maintain economic stability. This Government, with all the expert assistance that it has at its command, as I think was mentioned by Senator Henty, should be able to prepare some authoritative documents to be made available to the Parliament and the people, so that they would know the economic position of the nation at any time.

I now advert to the budget itself. Most honorable senators have visited various parts of the Commonwealth in the last few months, and I am sure that they have been impressed by the quantity of imported goods - many of them unnecessary luxury goods of little value but very costly - which have flooded our shops. When the country has an adverse trade balance, and its imports are considerably in excess of exports, we begin to wonder why this is so. In Perth the larger shops have recently been staging what are called “ continental weeks “. Prom reading advertisements in the press, I see that the same thing has been occurring in the capital cities in the eastern States. All kinds of extravagant articles from continental countries have been on display at terrific prices. They range from frocks priced at a couple of hundred pounds to exotic foods which the majority of the people could never afford to buy, even if they had a taste for them. Shoes have been displayed, for sale which could hardly be worn more than one or twice, being not only extravagant in design but also of flimsy construction. Such thingsmight be quite all right if we were living in ordinary times, but when we have an adverse trade balance why should the money that is available for imports be frittered away in this fashion?

In Western Australia, there are factories capable of turning out very fine farm machinery. In a factory at Welshpool recently I saw some excellent tractors which had just been completed. That factory provides work for Australian workmen and for some new Australians who have come here under the Government’s immigration scheme. The* manager of the factory told me that he was hoping to be able to export some of these tractors to Asia and other parts of the world. While we are looking for markets abroad for tractors and other farm implements made in Australia, we arc spending dollars in America to import those machines. The whole thing seems topsy-turvy. It is plain that there is not a woman managing the finances of this nation, because a woman would not do such things. She would have had too much experience in balancing a family budget, particularly if she came from a large family where every shilling had to do the work of a shilling. Those of us who are ordinary people, without a vast background of economic experience, without being theorists, or great students of economics, cannot’ understand how the Government can get along with such a policy. What we need is less theory and more common sense applied to the national economy, just as it is applied to the household economy.

During this debate, questions have been asked about defence, lt has been said that the Australian Labour party has opposed the adequate defence of Australia. Nothing could be further from the truth. No section of the community has a greater interest in the defence of Australia than has the Labour party. We do not begrudge one penny spent on defence if it is spent wisely. That is the crux of the matter. We differ from the supporters of the Government only on the wisdom or otherwise of the allocations of money for defence. I come from a State which forms one-third of this continent. It is a very vulnerable and important part of Australia. It is in the closest proximity to South-East Asia, and only a few hours flying time from the heart of countries where there are millions of Asiatics. If they become our enemies, they could invade Australia.

During World War II., the north-west of Western Australia was bombed by enemy aircraft and, in the intervening fourteen years since those bombs dropped on Wyndham, Darwin and Broome, great advances have been made in science and the art of war. No longer is any part of the Australian continent completely free from danger. That part of the continent which is so close to the land mass of Asia should have every possible form of defence, but what do we find? The Royal Australian Air Force squadron which was stationed at Pearce has been withdrawn, and we have to depend on occasional visits from aircraft of squadrons stationed in the eastern States. The outports of Western Australia are not being developed. There has been very heavy expenditure on the Kwinana refinery which will be opened next month. I hope many honorable senators will attend to see for themselves what can be done in a short time if there is a will and an opportunity to do it. However, the outports beyond the metropolitan area have not been fully developed.

There is a marvellous harbour at Albany. Not a great deal of expenditure would be needed to develop it, but money has not been spent there because the ships no longer call at Albany. Before the war there was a weekly steamer service between Fremantle and the eastern States and the ships called at Albany. Now they by-pass Albany and go to Fremantle, and extra freight is charged on goods that are sent by rail from Fremantle to places with a few miles of Albany. This adds to the cost of goods bought by primary producers and others in the area. Money spent on the development of the port of Albany would benefit the whole of Australia from a defence point of view. That applies also to Geraldton and ports in the north.

Recently, I was astonished by the reply that the Prime Minister (Mr. Menzies) gave to a deputation from Western Australia which asked for Commonwealth assistance for the development of the north-west of Western Australia. I was the secretary of a Labour party committee dealing with this matter, and we had discussions from time to time with persons representing different interests in the north-west of the State. We drew up a report, and many of the conclusions reached were also embodied in the requests made by the deputation representative of all political parties which asked the Prime Minister for help. This was not just a Western Australian project. In this National Parliament, we are all Australians. Often there is a tendency to regard ourselves as Victorians or New South Welshmen. Commonwealth funds for developmental purposes are allocated, apparently, to where the largest population is concentrated. The demands made by various governments, whether Liberal or Labour, by other than governmental bodies, non-party organizations and others interested in the development of the north, have all been met with the reply that it is impossible to do anything for that area. We are told that consideration will be given to the proposal. When consideration is given, the answer is in the negative.

During the recent war, much lip service was paid to the people in the northwest of Western Australia. Lip service has been paid for decades to the people who went out as pioneers into the vast outback. Now we want to encourage people to stay there to help develop those distant outposts, but no consideration is given them in the way of tax concessions or in other ways although requests have been made to the Government. A start was made by the Chifley Labour Government in this connexion. It did discriminate a little, and gave tax concessions by way of a zoning allowance. It was not very much, but it established the important principle that there may be variations in rates of taxation in various parts of Australia based on geographical considerations. I should like to see more attention paid to the development of the outback areas. The budget gives no indication that the Government proposes to set aside any money for the development of projects other than those that are already under way. I deplore that deficiency.

This matter is bound up also with payments to the States. Reference has been made in the press to some move in the eastern States to bring about the abolition of uniform taxation. That would not be popular in Western Australia,

South Australia or Tasmania. We could not possibly undertake the full financial burden of developing Western Australis to its capacity. It covers a third of the continent, and the population is equal only to one-third of the population of Sydney or Melbourne. How can we undertake the gigantic task of developing Western Australia and defending such a vital part of the continent in the interests of the whole of Australia? Our motive is not selfish. Western Australia is a vital part of the continent, and we could not defend it adequately on the limited amount of revenue we could raise if uniform taxation were abolished.

The Treasurer states in the budget speech, apparently with pride, that there will be no further subsidies on tea and butter. That will be a great tragedy for people in the lower ranges of income, particularly pensioners. The subsidies paid on tea and dairy produce were not large in comparison with the total budget, but the removal of the subsidy and the increased price of tea and butter will mean a great deal to pensioners and people on the basic wage, particularly those with large families. I regret exceedingly that the Government proposes to discontinue the subsidies on those two important items. Subsidies will still be paid on sulphuric acid and jute goods, but they are to be discontinued on the two items which mean so much to the ordinary people in the community. As a Western Australian, I am pleased that the Government proposes to continue to subsidize the gold-mining industry. But I think the Government could have been more generous: it could have extended the subsidy to the asbestos-mining industry which i.operating at the Wittenoom Gorge, in the north-western portion of Western Australia. The people who have gone there have taken on a tough job in a hot district, and they are entitled to every consideration. Their enterprise in a district 1,000 miles from the capital city of the ‘ State is an excellent example of decentralization. Already, a great deal of money has been expended on” capital equipment, and in the provision of excellent housing for the workers, as well as the establishment of a hospital scheme and other amenities for a thriving community. We must remember that that portion of Australia cannot develop as we would like it to develop if reliance is placed solely on agricultural and pastoral development. The mining centre at Wittenoom Gorge now has a population of about SOO persons, whereas previously it was a part of a station area and had only two or three employees living there. [ pay a tribute to Senator Scott for the part that he has played in the development of this mining enterprise, which is helping to develop that part of the State. People who go into these outback areas and expend their capital, whether it be money or labour, should be assisted. They ire doing much to develop these areas, and are not content to get things in the a sv way.

Plans are in hand to welcome Ausralia’s millionth immigrant. Immigration is a subject that is dear to me, and I am pleased that it can be discussed on non-party lines. The scheme originally n der taken by a Labour government has been continued by the present Government,, and members of all parties are agreed that is should be continued. It a great achievement for a. young country to receive and absorb 1,000,000 immigrants in less than ten years.

During this debate honorable senators have said that Australia has in operation

  1. policy of full employment. I should like to agree with that statement, but I cannot do so, because, unfortunately, in recent months I have seen numbers of men seeking employment who have told me that at 40 years of age they are too old to get jobs. That is a most serious state of affairs. Most of the men to whom F refer were clerks or semi-skilled workers, and when they get out of a job and seek other employment they are told that they are too old. It would appear that after such men reach the age of 35 years there is not much hope for them in the employment market. It, is terrible for a man to find that he is “ too old at 40 “. I pay a tribute to the officers of the Department of Labour and National Service who have done everything possible to place in employment men on whose behalf I have acted. One morning I went to the department to see what demand there was for men seeking jobs. We are told that the records of the department show that very few workers are out of employment, but those records do not square with the facts. They show only those who are in receipt of unemployment benefits. Some of the workers who are seeking jobs do not qualify for inclusion in the records because they have wives and children working. This is a matter which the Minister should investigate, particularly the difficulty of obtaining work in government departments. A man who has heavy family responsibilities finds it most discouraging to be told in effect, that he is no longer of any use and any day may be thrown on the scrap-heap. Unfortunately, when positions are offered to these people, the jobs are often far away from their homes, or are such that they are not physically fit to perform. And so, when we are told that there are so many jobs available, we have to bear in mind what kind of jobs they are, where the work is situated, and the domestic and other conditions associated with them. I do not want to see any curtailment of our immigration policy, because Australia has already gained a lot from those who have come here, and because an increase of population is vital to our security, but we must view the position carefully from the employment angle. I am certain that much of the confusion and chaos in the minds of the people to-day is due to the fact that they do not know where the Government is going, or what it plans to do. They are worried when they read of so many conferences being held. Conditions may not be so bad as the people fear, but they are worried just the same. They fear, not without reason, that if severe import restrictions are imposed, employees in some industries will be dismissed. I hope that, in the event of any regression, those who suffer will not be family men with heavy responsibilities. There is a great deal more that should be said in a budget speech, but this budget is out of date before we have started to analyse it, and before it has been fully dealt with by the Parliament. That is because of the new factors that have arisen in our economy. Surely some advice should have been given to the Treasurer about the economic situation before the budget was prepared, so that that document could have reflected the real state of our economy. As that was not done, certainly some authoritative statement should now be made about our economy in order to reassure the people. Our economy cannot have gone downhill as fast as we have been led to believe. When we consider the great amount of development that has taken place in this country, the number of buildings that have been erected and all the signs of prosperity, surely we are entitled to know the true position, and to know whether all that is merely a facade of false prosperity.

Within the next few weeks an opportunity will be given to us to discuss two very important aspects of the Government’s policy, that is, social services and repatriation benefits. They are the only bright spots in the budget, although the spots are not as large as I should have liked to see.

To-day, I brought a matter before the Senate, by way of question, which I consider to be most important. It concerned the fact that large numbers of people have taken out small insurance policies, and have paid 6d. or ls. a week for many years hoping to get something back from their savings in their old age. In many cases people have taken out these policies in order to pay for their own funerals. However, some people who had paid 6d. or ls. a week to a big company for twenty years or more, were told about eighteen or 22 months ago that the company had been wound up by order of the High Court. It is a pretty poor state of affairs if the Government does not arrange for some guarantee to be given to the people to the effect that their small nest egg will not he taken away from them in that cruel manner. The Government should ensure that insurance companies put up a bond in the same way as land agents have been required to contribute towards a fund, so that if there is any default innocent people will not have to suffer. I believe that land agents have to furnish bonds because there have been instances of cheating or embezzlement. If such a fund were set up by insurance companies, the Government could ensure that policy-holders, particularly pensioners, would get the amounts) that they were entitled to.

I believe that hire purchase does assist people on lower incomes to get a few extra comforts together, but one of the dangers of the system is the smallness of the deposits required. Fairly large deposits should be demanded, not only in the interest of the hire-purchase organizations, but also in the interests of their clients. It is also important that interest rates on hire purchase should be kept as low as possible, consistent with the ordinary safeguards required by hire-purchase firms.

May I now repeat that we are fumbling about in the dark at present, because inadequate information has been placed before us by the Government about our financial position. No government can expect to he trusted so long as it displays conspicuous reluctance to state its policy, to define the grounds on which its policy is based, and to take all measures within its proper competence to carry out thai policy. That is what has been happening in Australia, and I believe that the Senate, the Parliament and the people are entitled to know exactly what the Government intends to do in the near future.

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

– If I adopted the view jus expressed by Senator Tangney that this budget is obsolete, I should not waste any time in discussing it. It is because I hold the view that it is an operative and important document, making an assessment of the national economy at one of the most interesting and challenging times in our history, that I feel that it is my duty to offer such comments as I am capable of offering. The Government, in its budget, takes the opportunity each year of indicating the activity that it believes is necessary in connexion with its annual revenues. On this occasion, because of the state of our national affairs, it would be less than in keeping with our trust if we engaged in any partisan or party political debate.

I find myself in agreement with some of the views expressed by the Opposition. I agree with Senator McKenna with regard to the continued financing of capital expenditure out of revenue, and with Senator Armstrong as to the need to examine the basis of our very important steel industry, which is the industry that gives us the best prospect of expanding our export trade. I do not condemn the present agencies of the industry, because they have made magnificent progress in the post-war years and nobody would be serving Australia by impeding their activity in the slightest degree; but we should establish other agencies designed to give an impulse to an expansion of the steel industry. I suggest that that would be one of the greatest developmental services that the Government could render to this country.

I notice that the Treasurer (Sir Arthur Fadden) expects to receive increased revenue for this year, and also that he has budgeted for increased expenditure. For myself, as a simple unit of the 9,000,000 people who inhabit this land, I see great difficulty in finding out how individuals are to be expected to budget their affairs an any basis other than that of increased revenue and increased expenditure.

With regard to increased revenue, I am one who believes that revenue should be exacted only for the purpose of financing governments, and I am adamantly opposed to the idea that revenue is to be collected for the purpose of public expenditure which is to be substituted for private, individual saving. If revenue is reduced, there will be found within the community that element of thrift and Scotch tradition that will insist on a good part of the money being saved and going into the savings of the people. One can be very disappointed that the Government proposes no substantial reduction of taxation, notwithstanding the economic conditions.

Having regard to the fact that other business is to be called on shortly, I have now only about five minutes left in which to indicate certain matters which I wish to bring to the notice of honorable senators on both sides of the chamber. I believe that the economic condition of the country should be looked at from the point of view of the impact of Commonwealth parliamentary agencies on it. It is of no use to flap our wings and ask for something over which we have no control. There is some degree of apprehension about the economy, due to the gap that exists between our export income and the prices which we have to pay for the imports we require to maintain industry and preserve full employment in this country - the raw materials and capital goods that necessarily must be imported. As I say, there is a gap between the prices of imports and the prices that we can get for our exports.

One of the most significant features of the White Paper presented by the Treasurer is the revelation that agriculture, which is expected to produce 85 per cent, of our export income, is in an extraordinary position compared with the other sections of our economy. In 1949-50, farm incomes totalled £421,000,000. Last year, the total was £4S0,000,000, an. increase of almost £60,000,000. In the same period, wages and salary earners, who had a total income in 1949-50 of £1,197,000,000, increased their incomes to £2,200,000,000 odd. Therefore, while the farmer was increasing his income by a miserable 14 per cent, or so, salary and wage earners increased their incomes by more than 100 per cent. I am not attempting to pick on wage and salary earners and single them out. I shall have something to say, on a later occasion, before I conclude my remarks, in justification of their position, but so that there will be no thought of partisan discrimination, I point out that the total income of the other section, represented mainly by secondary industry, was £458,000,000 in 1949, and is £867,000,000 to-day.

Senator BYRNE:
QUEENSLAND · ALP; QLP from 1957; DLP from 1968

– Does that take into consideration the number of people employed in the sections to which the honorable senator referred?

Senator WRIGHT:

– I am merely pointing out that the incomes of employers and employees have gone up by approximately 100 per cent., whilst the total income of farmers has gone up by a mere 14 per cent, to 20 per cent. Yet the farmers are expected to earn about 85 per cent, of our export income, and so pay for the imports which it is necessary to have in order to run the country.

We have to face the fact that we have not sufficiently geared our economy to maintain equilibrium between secondary industry and agriculture. I believe that if agriculturalists in this country were paid for their labour, on the basis of seven days a week, in addition to earnings from their produce and assistance which might be afforded by the Government, there would be a great increase of farm incomes. To my mind, that is one of the fundamental considerations underlying the disparity between imports and exports, which is giving rise to apprehension. Having briefly stated that opinion, I ask for leave to continue my remarks at a later date.

Leave granted; debate adjourned.

page 278

SPECIAL ADJOURNMENT

Motion (by Senator Cooper) agreed to -

That the Senate, at its rising, adjourn to Wednesday next, at 3 p.m.

Senate adjourned at 10.57 p.m.

Cite as: Australia, Senate, Debates, 21 September 1955, viewed 22 October 2017, <http://historichansard.net/senate/1955/19550921_senate_21_s6/>.

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