Senate
21 March 1956

22nd Parliament · 1st Session



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

page 307

QUESTION

COAL

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

– Can the Minister for National Development indicate to the Senate the general trend in the coal industry during the last six years, and can he say whether there is anything in the immediate circumstances associated with that industry to warrant some of the gloomy prognostications as to the production of coal?

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– Having regard to the general atmosphere in this building to-day, I confess that a question on coal is not unexpected. However, I cannot oblige the honorable senator by giving him an off-the-cuff statement upon the trend of events in the coal-mining industry for so long a period as six years. The immediate position is that the production of coal from underground mines for the year 1955 was greater than during the previous year. In 1955 the production of coal from underground mines in New South Wales was 118,000 tons higher than it was in the preceding year. Having regard to that factual statement of the position, surely one can say with complete justification that there is no crisis in the industry in New South Wales. The underground mines are producing more coal than they produced in previous years. Running side by side with that state of affairs is the fact that the number of employees in the industry at the end of 1955 was 9G3 fewer than at the end of 1954. It is hard to present the facts accurately offhand, but speaking in general terms, that reduction of the number of employees in the industry has come about because of greater mechanization in the mines, by the production of coal by mechanized means and, side by side with that, much more effective treatment of the coal that is produced, by the use of washeries and treatment plants. As a result, in the competition which coal is now facing, in my opinion the position of coal is strengthening. The coal that is being produced is of better quality, and production is much cheaper than it was previously. I think that all honorable senators will agree that that is a very desirable state of affairs, having regard to the competitive influences that are operating.

Senator BENN:
QUEENSLAND

– I also wish to as the Minister for National Development a question about coal. Will the Minister say whether he has given consideration to the question of the future use of coal for fuel and other purposes? That is, has he submitted the question of the future use of coal to the Commonwealth Scientific and Industrial Research Organization and other scientific bodies, and if he has, will he inform the Senate of the deductions he has made?

Senator SPOONER:

– This question follows the previous one in that it open* up such a very wide vista that it is most difficult to deal with it offhand. ThU problem falls into two parts; First, what should we do, at this juncture; and secondly, what should we do, from a longterm point of view, to seek greater uses for coal? Taking the first part of tho question first, because that is in respect of all who are interested the much more important aspect of the matter, the outstanding factor at the moment is that coal in facing competition. What should we do to defeat that competition? As I say, the coal industry is not sleeping. It is not taking this position lightly. I think that, from memory, some £3,000,000 waa invested last year to improve coal mines and erect washeries. The immediate task is to improve the mechanical processes of obtaining coal and, indeed, to obtain better industrial relations on the coalfields. That is the Achilles’ heel of the coalmining industry. It is a sad fact that in this year of 1956 the miners have been back at work for about seven weeks, and in those seven weeks, because of losses through industrial disputes, the coal produced in New South Wales was 50,000 tons short of the quantity of coal that was consumed. There has been more industrial trouble this year in New South Wales than there has been for some time past, and it is entirely opposed to the interests of the employees of the coalmining industry that those disputes should continue. If we can produce coal of good quality and at the right price we shall more effectively meet the competition that we have to face. That is one - angle. Then, there is the long-term angle concerning better and different methods of utilizing coal. Upon that work we have n special section of the Commonwealth Scientific and Industrial Research Organization which is carrying out a long-range programme in connexion with the basic properties . and the basic uses of coal. Within recent months, I am pleased to say, the proprietors themselves have set up quite an extensive research organization. The proprietors are subscribing to a substantial degree, and are utilizing laboratories and doing work on the various coal fields in the State. Too much is said in the coal-mining industry about producing oil from coal. A South African plant to do this work cost £40,000,000, and the coal for that plant is purchased in South Africa at 6s. a ton. If, in those circumstances, doubts have arisen about the economic success of the South African enterprise, we have obviously to proceed cautiously in regard to any such scheme in New South Wales.

page 308

QUESTION

URANIUM

Senator MARRIOTT:
TASMANIA · LP

– My question is directed to the Minister representing the Minister for Supply, and I preface it by saying that in Tasmania what is considered to he a rich uranium find has been made in a most inaccessible area. lt is desired to take heavy earth-moving equipment into that area so that exploratory and developmental work can go ahead. I ask the Minister whether, in the event of a discovery being made of a rich uranium field in a very inaccessible area, are any Commonwealth funds available for the construction of access roads to enable heavy earth-moving equipment to be taken in to develop the field.

Senator COOPER:
Minister for Repatriation · QUEENSLAND · CP

– Certain sums of money are made available to the States out of the proceeds of the petrol tax for development of roads. However, I am not sure just where this money may be used, or whether it may be used for the purpose indicated by the honorable senator. I shall bring the question to the notice of my colleague, the Minister for

Supply, and obtain a considered answer for the honorable senator at an early date.

page 308

QUESTION

COAL

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

– My question to the Minister for National Development is similar to questions, asked by Senator Wright and Senator Benn, and touches the human side of the coal industry. As the Minister has said that there iB no crisis in the coal industry, I desire to say by way of preface that the coal industry has been notorious for the complete contempt and irresponsibility it has shown to its employees whenever a crisis has arisen.

The PRESIDENT:

– Order ! The honorable senator should ask his question.

Senator O’BYRNE:
TASMANIA

– Will the Minister inform the Senate whether, in view of the decline in the use of coal because of competition from diesel oil, he has any plans for the future of the people who are associated with the coal industry on the coal-fields. Is there any plan in existence for alternative industries to be set up on the coal-fields to absorb coalminers who are displaced by the increasing use of diesel oil, and is there any plan for orders for coal to be guaranteed, to keep employed in the coal mines for the remainder of their useful lives those who are unable to change to alternative jobs?

Senator SPOONER:
LP

– I heard the purport of the honorable senator’s question once expressed in another way. T was telling somebody that changes on the coal-fields affected only a very small percentage of the miners, and my listener said, “It might he a small percentage, but the degree, to a person affected, is 100 per cent. “. I agree that the matter raised by the honorable senator brings problems in its train. The honorable senator has said that the coal mine proprietors have been irresponsible, and so on. It is not my function to take sides; my function is to do my job as best I can in an impartial way, having regard to industrial awards and all interested parties in the community. What has happened to the present time, except at the Bellbird colliery which is in a peculiar physical geographical and industrial position, has been done in a pretty good atmosphere of co-operation between the proprietors, the miners’ federation and the government departments concerned. There is a permanent standing committee comprised of representatives of the proprietors, the federation, the Joint Coal Board and the Department of Labour, and National Service. That committee is very conscious of its responsibility and I have heard officials cif the miners’ federation admit that it works efficiently to ensure that when changes occur in mines the men whose services are no longer required are given the first and prompt opportunity of employment elsewhere. I think it would not be an overstatement to say that, except for the men involved in the Bellbird colliery episode, all the 963 men affected by the decline in the industry have found employment elsewhere. “We have to look at the general background. Enough men cannot be found to staff the mines on the south coast of New South Wales. A tremendous number of vacancies exist outside the coal-mining industry in the Newcastle area; and the average employer cannot obtain enough staff to carry on. Therefore, so far as the miners are concerned there are ample vacancies outside of the mining industry. There is also a tendency to talk about the men who have been put off without making allowance for the men who voluntarily leave the industry because they do not like it, want to go elsewhere or want to obtain better employment. The number in that category far exceeds the number who are put off because a particular mine is affected by competition. These men who leave the industry voluntarily create more than enough vacancies to provide for the mau ber of men who are put off, and despite all these changes that are occurring in the industry it is necessary each year to bring in a substantial number of new people who have not been in the industry previously. Without bringing in new men the mines could not be staffed. Apart from incidents which are difficult to control I say that given goodwill and co-operation th, changes that are taking place can be managed without hardship to anybody and in the ultimate will bring benefit to every one associated with the industry.

page 309

QUESTION

PRIMARY PRODUCTION SURPLUSES

Senator HENDRICKSON:
VICTORIA

– I direct a question to the Minister representing the Minister for Primary Industry. Tn view of the difficulties being created by the methods of the United States of America in disposing of surpluses of wheat, dairy produce and other primary products, will the Minister inform the Senate what action is being taken to protect Australian farmers from this avalanche which has so disastrously disturbed normal export trade? Will the Minister explain to the Australian wheatgrower how it is that Canada can outrace and outbid Australia in selling its wheat to the Poles, Czechoslovakians and Hungarians and other iron curtain countries which are making hay through buying wheat in Canada which is satisfied to sell Canadian wheat at current prices for the next three years?

Senator PALTRIDGE:
Minister for Shipping and Transport · WESTERN AUSTRALIA · LP

– I shall refer the question to my colleague, the Minister for Primary Industry, and ask him to supply a full statement as to the methods adopted by the Government in regard to the issues to which the honorable senator has referred.

page 309

QUESTION

ARTIFICIAL LIMBS

Senator TANGNEY:
WESTERN AUSTRALIA

– Is the Minister for Repatriation aware of the good work being done by the Civilian Maimed and Limbless Association of Western Australia in supplying civilians with artificial limbs? Is he also aware of tho great difficulty the association is experiencing in obtaining supplies of bright mild steel for the manufacture of sideirons for such limbs? As this steel is unprocurable in Western Australia and a? it is very difficult for the association to import large quantities from the eastern States or from overseas, the only source of supply in Western Australia being the repatriation factory in Perth, would it be possible for the Civilian Maimed and Limbless Association to draw supplies of mild steel for this purpose from the Repatriation Department’s factory, so that it can continue its good work of supplying artificial limbs to civilians?

Senator COOPER:
CP

– I shall be only too pleased to look into the matter raised by the honorable senator, and let her know the result as early as possible.

page 310

QUESTION

COAL

Senator RYAN:
SOUTH AUSTRALIA

– “Will the Minister for National Development inform the Senate of the present position in relation to recent negotiations between the South Australian Government and the Joint Coal Board? As a result of the negotiations, has any satisfactory arrangement been reached concerning the price? I remind him that failure to do so would result in a considerable reduction of supplies for one of South Australia’s largest and most essential industrial organizations. If the Minister is unable to supply any information on this matter at present, will he undertake to have it investigated, in view of its importance in relation to the production of coal, and the threatened unemployment of coalminers ?

Senator SPOONER:
LP

– At present, negotiations are proceeding between interested colliery proprietors and the South Australian authorities concerning the supply of 100,000 tons of coal to South Australia. The attitude of the New South Wales coal industry in this matter can be summarized in the phrase, “ Come and get it as it has all the coal that could be required for any contingency that might arise. The coal industry would be very glad, indeed, to accept an order for the supply of 100,000 tons of coal to South Australia. South Australia knows that, and I think a little bit of hard bargaining is going on behind the scenes regarding the price. That is not, a matter which concerns me; it i–. one for consideration by the buyer and the seller.

page 310

QUESTION

STEVEDORING INDUSTRY INQUIRY

Senator WRIGHT:
TASMANIA

– The question that I direct to the Minister representing the Minister for Labour and National Service relates to the interim report of the committee of inquiry into the stevedoring industry, which was tabled by the Attorney-General yesterday. I remind the Minister that the 1954 act required the committee to inquire into and report upon the facts - I emphasize “ facts “ - relating to certain aspects of the industry. I have searched the interim report, almost in vain, for any statement of fact with regard to the industry. I ask the Minister whether he will consider having collated the transcript of evidence taken in this matter - running into, I believe, between 6,000 and 7,000 pages - with a view to laying before this chamber in a not more compendious form than 30 or 40 pages of foolscap, a statement of the main facts that the parties put before the committee in evidence, and the main contentions that were advanced, so that we can see in some sort of manageable form the material upon which this report is based.

Senator SPICER:
Attorney-General · VICTORIA · LP

– I shall place the request of the honorable senator before my colleague, the Minister for Labour and National Service.

page 310

QUESTION

REPATRIATION

Senator HENDRICKSON:

– 1 appeal to the good nature of the- Minister for Repatriation for a favorable answer to this question: Will he arrange for the Repatriation Commission to assist the members of the Returned Nurses Club of Victoria, who are working so hard in connexion with “ Operation Gratitude “ ? I make an appeal on behalf of war veterans, with special emphasis on the claims of the nurses who served in World War I., on whose behalf I have previously sought the generous aid of the Minister.

Senator COOPER:
CP

– I take it that the honorable senator refers to hospital treatment for nurses of the 1914-18 war. If that is so, I may say that this question has been put to me on various occasions, and I have always pointed out that a nurse who served during that war is regarded as having enlisted as did any member of the armed forces. According to the act she was equally a member of the forces as was a fighting man, and she is therefore, entitled to certain benefits under the Repatriation Act. I have pointed out also that it is very difficult, and would he unfair, to give one section of the forces a benefit that could not be given to another section. I have told the nurses that if the Government were prepared to give hospital treatment to all enlisted members of the forces of the 1914-18 war, the nurses would be included, but that it would be unfair for them to be given that benefit whilst others were not. Many members of the forces fought hard in that war and now, at an advanced age they are suffering from disabilities which are not accepted as being war-caused. It would not be fair to deny them hospital benefits that were enjoyed by the nurses.

page 311

QUESTION

ENERGY FROM THE SUN

Senator VINCENT:
WESTERN AUSTRALIA

– My question is addressed to the Minister for National Development. Has he read a press report of a recent experiment in the United States of America concerning the use of vast resources of energy derived from the sun and stored in the upper atmosphere? Can the Minister say whether technical advisers in the Commonwealth Scientific and Industrial Research Organization have , ally views on this interesting subject?

Senator SPOONER:
LP

– I am not the Minister in charge of the Commonwealth Scientific and Industrial Research Organization, but I am in charge of coal and consequently I have a keen interest in anything that relates to the use of energy. I read the paragraph in the press to which the honorable senator refers, and the following day I read a further report of a method of producing energy by the use of tidal waters. I decided that I would rather put my money on the prospect of getting energy from tidal waters than on any proposition for using stored energy in the sky. Joking apart, however, the honorable senator has asked a fair question, and if he places it on the notice-paper I will refer it to the Commonwealth Scientific and Industrial Research Organization for comment.

page 311

QUESTION

BRACKEN FERN

Senator O’BYRNE:

– I direct a question to the Minister representing the Minister in charge of the Commonwealth

Scientific and Industrial Research Organization. In view of the tremendous impact upon primary production in Australia as a result of using catoblastus in cactus country in Queensland, myxomatosis on rabbits, and superphosphate for the improvement of pastures and crop yields, will the Minister give special attention to the desirability of directing scientific research into the eradication of the common bracken fern, which covers hundreds of thousands of acres of Australian land that could well be used for primary production ? Although this problem has been under consideration during the past 30 or 40 years, greater emphasis should be placed on research into the eradication of this very noxious type of fern.

Senator SPICER:
LP

– I will direct the attention of the Minister in charge of the Commonwealth Scientific and Industrial Research Organization to the honorable senator’s question, and ascertain whether any useful information can be obtained from the organization concerning the eradication of the menace to which he has referred.

page 311

QUESTION

STIRLING NORTH TO BRACHINA RAILWAY

Senator CRITCHLEY:
SOUTH AUSTRALIA

asked the Minister for Shipping and Transport, upon notice -

When is it expected that the new railway line in South Australia from Stirling North to Brachina will be completed, and when is it expected the line will be open for traffic?

Senator PALTRIDGE:
LP

– I have the following reply in answer to the honorable senator’s question: -

The line was completed as far as Brachina on the 28th May, 1.955, and was opened for traffic on the 10th June, 1055.

page 311

QUESTION

SUGAR

Senator WRIGHT:

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

  1. Is it h fact that the Sugar Agreement is due for renewal on the 30th June, 1956?
  2. Have negotiations yet been commenced for renewal of the agreement?
  3. Will the representatives of the fruit industry be given full opportunity to submit views for appropriate provisions as to the relationship between the fruit and sugar Industrie* tu be incorporated in the agreement before its renewal is concluded?
  4. Will the Minister keep the Senate informed us to the progress of negotiations?
Senator PALTRIDGE:
LP

– The Minister for Primary Industry has supplied the following information in reply to the honorable senator’s questions: -

  1. The Sugar Agreement 1051-50 between the Commonwealth and Queensland Governments expires on the 31st August, 1956.
  2. No. It is expected that an approach will be made to the negotiations when the Queensland Government has had an opportunity to consider the industry views.
  3. The Minister for Primary Industry will be pleased to consider any representations made by the fruit industry or other interests affected by the agreement.
  4. It would not be appropriate to make public the detailed developments in these governmenttogovernment negotiations. When the appropriate stage has been reached, the Senate will he informed.

page 312

QUESTION

BARLEY

Senator WEDGWOOD:
VICTORIA

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

  1. Is it a fact that very recently the Australian Barley Board, a semi-governmental agency, attempted to re-consign through the port of Portland some thousands of bags of barley which had been rejected at Geelong by Victorian government inspectors?
  2. If so, will the Minister take steps to see that such practices are discontinued.
Senator PALTRIDGE:
LP

– The Minister for Primary Industry has supplied the following answer to the honorable senator’s questions: - 1 and 2. The Australian Barley Board operates under complementary Victorian and South Australian legislation. It is not a Commonwealth authority. However, the Department of Primary Industry has made inquiries into the matter and can find no confirmation of any such action by the barley board. The inquiries do indicate that there has been a shipment from Portland of barley grown in that area. It is understood that, in the event of any barley being rejected for export at Portland on quality grounds, it would most likely be sent to the board’s depot at Geelong for “ internal sale. However, it would seem contrary to all commercial principles to incur the transport costs of forwarding to Portland barley rejected at Geelong with the likelihood of further rejection at Portland. Moreover, I am sure that a body with the standing of the Australian Barley Board would not countenance such a move.

page 312

QUESTION

EXPORT OF FAT LAMB CARCASSES

Senator MARRIOTT:
TASMANIA · LP

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

  1. Is it a fact that, in former years, Tasmania n fat Iamb carcasses exported to Great Britain were clearly branded as being from Tasmania?
  2. Has this practice been prohibited, and do all Australian fat lamb carcasses now bear the same brand?
  3. In view of the fact that Tasmanian fat lambs are keenly sought by British housewives, what action can the Government take to reintroduce the Tasmanian State brand, which would boost the Tasmanian fat lamb industry and increase Australian exports?
Senator PALTRIDGE:
LP

– The Minister for Primary Industry has supplied the following answers to the honorable senator’s questions: -

  1. It was, at one time, the practice to brand lamb carcasses “ Empire - Tasmania “.
  2. Yes. The lamb carcasses are now branded *’ Australia “.
  3. Legislation in the United Kingdom’ requires that lamb carcasses be branded with either the word “ .Empire “ or the name of the country of origin, and it is very desirable that the markings on the meat be kept to the minimum required by the law. There is no objection to the inclusion of the word “ Tasmania “ or a map of the State on the coverings or tags attached to the carcass.

page 312

QUESTION

WHEAT

Senator PALTRIDGE:
LP

– On the 23rd February, Senator Pearson asked a question as to the function of the Australian delegation to the International Wheat Conference. I am now in a position to inform him that the delegation represents the Australian Government. Its purpose is to explore. with the representatives of other countries, the possibilities of a new international wheat agreement, and to negotiate regarding the terms and conditions of any such agreement. The Australian delegation includes government and industry representatives and the chairman of the Australian Wheat Board. The decisions on issues of any importance are matters for the Government, which instructs the delegation regarding the attitude it is to adopt on any development that may arise in the course of the conference.

page 313

MEAT EXPORT (ADDITIONAL CHARGE) BILL 1956

Second Reading

Debate resumed from the 20tb March (vide page 284), on motion by Senator Paltridge -

That the hill be now read a second time.

Senator McKENNA (TasmaniaLeader of the Opposition) [3.3SJ.- Thi measure now before the Senate stems from two pieces of legislation that were before us last year - <one being a measure with a similar name, and the other the Meat Agreement (Deficiency Payments) Bill 1955. If the Senate will remember, a meat agreement was entered into with the United Kingdom Government in 1951. Under it, trade in various kinds of meat was to proceed on a governmenttogovernment basis until such time as it would he possible to return to a tradertotrader basis. The agreement further provided that when the second stage had been reached - and that happened in 1954 - if certain minimum prices over the period of a year were not realized on the British market, the United Kingdom Government would make up the deficiency and pay it to the Australian Government which, in turn, was under obligation to make sure that the deficiency payments reached the producers. We had a bill to give effect to that provision about this time last year, or a little later. It appeared, at that time, that substantial deficiency payments would have to be made; the amount was estimated at about £1,000,000. In order to help the producers of beef, in particular, the Government arranged an overdraft of about £1,000,000 on behalf of the Australian Meat Board, to enable it to make the payments to the producers of meat, through the exporters. As it turned out, the market recovered, and the deficiency payments amounted to only £152,000, and therefore the amount of £650,000 which was distributed in anticipation of a larger deficiency payment having . to be made must now be recovered from the exporters, and ultimately from the producers. This bill, therefore, repeals the 1955 legislation which imposed the additional charge, and re-enacts it with a different provision as to the point at which the additional charge re-imbursing the Commonwealth Government, or the Australian Meat Board, is to be made. I think it was a good thing to repeal the earlier measure and re-enact the legislation rather than amend the act passed last year.

This bill provides that the £650,000 is to be paid at the rate of -Jd. per lb. in respect of meat delivered to the store for export. The Opposition has no quarrel with the principle of deficiency payments. My concern last year was lest amounts paid to exporters, being the distribution of deficiency payments to be received from the United Kingdom Government, might not find their way to the producers, and I expressed certain doubts on that point. It is recognized that there is something of a shotgun effect about the whole of the procedure, whereby amounts intended to reach producers are paid to exporters who have only a moral obligation, without a legal obligation, to make sure that the payments do, in fact, reach the producers. In order to ensure that the exporters would do their best in that direction, their books were to be open to check, and if the Minister were not satisfied that the benefit of the deficiency payment had been passed on, he might refuse to allow such exporters to participate in any further deficiency payments. I am somewhat reassured on that point by the Minister’s second-reading speech, in which he said that the distribution of the deficiency payment had resulted in higher prices for beef in meat export areas, but I should like him to indicate, when he replies to the debate, whether any inspection of the books of the exporters has, in fact, taken place. The Minister may be satisfied with the general overall position, and conclude that the payments have been passed on to the producers, but I should like to know whether any examination of the books of the exporters has been made, and if so, with what results. I should like the Minister to say whether it was necessary to stimulate any of the exporters into greater activity. I notice from the Minister’s second-reading speech that prices of meat rose steadily as the deficiency payments were distributed. He told us that, whereas in April, 1955, the price of beef in Brisbane was 117s. for 100 lb. of beef, it rose to 133s. in September. Obviously, there was an accelerating tempo in the price rise, but whether that was due to prodding by the Minister, or was the natural result of market operations, I do not know.

The Opposition does not oppose this measure, but I personally should like to know whether the Minister is in a position to ensure that the benefit of the deficiency payments does, in fact, reach the producers. Anything that he can tell us on that point we shall be interested to hear.

The measure that we are now considering is to be followed, by another one relating to the deficiency payment. I may be permitted, Mr. President, to say now that the alterations contained in that measure are formal and consequential on the bill now before us, and that when, in due course, that other bill is before the Senate, I shall feel that the comments I have made to-day will be adequate for the purposes of that bill also.

Senator SEWARD:
Western Australia

– In briefly supporting this bill, I congratulate the Government on having brought the measure forward last year, because I was somewhat dubious whether the money received in deficiency payments would really reach the producers. I suppose it is likely that the whole of it did not reach them, but it is refreshing to have the statement from the Minister that the price paid for beef in Great Britain rose after the deficiency payments were made from, as the Leader of the Opposition (Senator McKenna) has just said, 117s. a 100 lb in May to 133s. a 100 lb. in September. It is also significant, as the Minister pointed out, that when the deficiency payments ceased the price of beef on that market tended to decline again. It is, however, disappointing that there is such a large amount to be repaid, although it will be repaid in relatively small amounts.

The point that I want to emphasize more than any other is the need that exists for us in Australia to get away, as far as possible, from the frozen beef trade and to get into the chilled beef trade. I read in the newspapers only a few days ago that Argentina is able to put chilled beef on the United Kingdom market and consequently, of course, that country is able to out-sell Australia on that market because chilled beef is very much better than frozen beef. I was also disappointed to see, in the recent report of the Australian Meat Board, that only a comparatively small amount of our chilled beef went away in the period from October, 1954, to June, 1955. I think the total amount was approximately 1,000 tons, which represented only a small proportion of the total quantity exported. The report contains the rather significant statement that, of the first shipment that went abroad, 104 tons had to be frozen in Melbourne. I think that the Australian Meat Board regards as desirable a minimum voyage of 45 days and a maximum of 50. Looking at the shipments specified in this report, 1 notice that the average period taken for the voyage was 50.8 days, or slightly over the maximum. That shows how essential it is, if we are to succeed in the chilled beef trade, to ensure that the beef gets to the market in the shortest possible time, including the time spent in handling.

That, of course, brings into prominence the conditions on the waterfront, because any hold-up on the waterfront, such as occurred in respect of the first shipments, will result in the beef having to be frozen. In addition, there is a limited tonnage of shipping available to cater for chilled beef, and if ships come out here to take our cargoes it is essential that they should be able to get back in the shortest possible time. I sincerely hope that these experiments in placing our chilled beef on the United Kingdom market will be progressively successful.

I want to refer now to the report of the committee that was appointed last year to deal with the air transport of. beef.

The PRESIDENT:

– Order ! I think that the honorable senator is getting completely away from the bill.

Senator SEWARD:

– Yes, I agree that that may be so, but nevertheless, this matter has a particular bearing on the question of deficiency payments and meat export. However, I how to your ruling, M.r. President, and with those few remarks I support the bill.

Senator PEARSON:
South Australia

.- I support the bill. The Minister, in introducing the measure, gave the best estimate that could be given of the effect of the deficiency payments, and also outlined the method of distribution. I am indebted to the Leader of the Opposition (Senator McKenna) for his very fair analysis of the legislation which has now been in existence for approximately twelve months. I wish to correct the idea in the minds of some people that because, theoretically, the meat producers have been paid approximately £650,000 more than the deficiency payments from Great Britain, that represents in some way a general subsidy to the meat producers of this country. That opinion has been expressed to me, but in actual fact nothing of the kind has taken place. The industry is now faced with the task of repaying, by the methods outlined in this legislation, the amount of the overpayment of approximately £650,000.

The whole basis of this legislation was the fifteen-year meat agreement with the United Kingdom, under which that country virtually undertook to take the whole of our meat production for a period. In return, the principle of deficiency payments has been agreed to as a kind of guarantee to the producer in the event of the price on the British market falling considerably. Therefore, there is no suggestion of a subsidy payable by the Australian taxpayers to the meat industry of this country. I think it is fair to point that out to those people who have suggested that, in some way or other, the meat industry is receiving a benefit from the Australian taxpayers or the Australian Government.

Our experience of this legislation leaves me with very mixed feelings indeed. I believe that the Minister, at the request of spokesmen of the industry at the time, made an honest attempt to meet a situation which was likely to arise and which, in fact, did arise. The British price of meat did fall considerably, so that meat producers, particularly in Queensland, found themselves in difficulties. However, experience show* that the Commonwealth Bank, which I think finances this payment, has, in fact, advanced more money than perhaps it should have expended in anticipation of the amount which ‘ would ultimately have been received from Britain.

Senator WRIGHT:

– Was not that expenditure to subsidize the price?

Senator MCKENNA:
TASMANIA

– Yes, from the United Kingdom Government.

Senator PEARSON:

– That was the effect of it, yes. However, its real off est has been to create some confusion and to indicate the sheer impossibiity - and I say that advisedly - of arriving at a scheme which will prevent a position of this kind from arising, lt is difficult to believe that the producer has, in effect, received an actual benefit to which he may have been entitled. I have read the remarks of the Minister, and I appreciate what he has said. It is more difficult still to believe that the person who may now be called upon to make the repayment was the person who received the benefit, and I think that that is the crux of this whole matter. I do not blame anybody because thi3 position has arisen I have said already that I think th, Minister made an honest attempt to arrive at a scheme to meet the situation, and I say in fairness to him that he was advised very strongly, and even pressed by representatives of the industry to take the action that he took. Therefore, the Minister cannot be blamed for what has happened. The industry itself agreed to the principle of repayment of such money.

This experiment, honest as it has been, shows the sheer impossibility of working out a scheme to govern circumstances such as these. Some people will find that, by making a contribution in the way outlined in the legislation, they will in fact be contributing something when, possibly, they never received anything. That cannot be helped, and I blame nobody if that should happen. I am well aware that, in South Austraia, spokesmen for the meat industry - and I think I may include also the South Australian representative on the Australian Meat Board - question the wisdom of enacting, legislation of this kind. However, an honest attempt was made to go on with it. It is my view that the best way to safeguard the producer of any “meat, whether it be beef, mutton or lamb, is to ensure that the maximum advantage is taken of the provisions of the fifteen-year meat agreement so that as large quotas as possible may be made available for sale outside Great Britain. 1 compliment the Minister upon the recent announcement that the quota of meat which may be sold outside the British markets has now reached 15,000 tons. 1 believe that the producer must have the benefit of competition in world markets, and he must be allowed to sell his product wherever he is able to do so to the best advantage. Therefore, I applaud the Minister for securing the approval of the British Government for the sale of 15,000 tons of meat outside Great Britain. Such sales are perhaps the best method of ensuring that the man who is chiefly concerned in this matter - that is, the man who produces the meat - is able to get the best possible price for his product. I sincerely trust that he will be encouraged m this way over the years.

I support the bill, and I believe that the right thing has been done in repealing the previous legislation and in introducing this measure. I am indebted to the Minister for putting before the Senate the figures that he has cited, and f believe that at a certain stage last year the Government’s actions ensured that confidence would be retained in the beef industry whereas otherwise it might have been lost. It would have been a tragedy if certain things had happened in the beef industry last year which would have resulted in less- meat being available for export at the present time,. when it is well known that we need to export everything that we can lay our hands on.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

in reply - I am gratified to know that this measure has received support from both sides of the Senate. Senator McKenna has inquired whether any accurate inspection was made last year of the payments to meat producers. To be more accurate, his question revolved around the point whether it had been thought necessary at any time to make such an inspection. Comprehensive returns were supplied by exporters, and it was felt that those returns revealed _ a state of affairs which was generally satis factory ; consequently, no specific or continuing inspection was carried out. Recently, the Australian Meat Board has been inquiring into certain claims that have been made, and it is quite possible that an inspection has been made of the books supporting the relevant returns.

Senator McKenna also inquired whether there were any complaints about the non-receipt by the producer of the export payment. My information is that there were a few isolated complaints to the effect that in a few cases the benefit did not reach the producer. However, when those complaints were investigated it was found that they could not be substantiated, and the members of the board who represented the industry were not favorably impressed with the complaints made. Therefore, all in all, it would seem that the position was generally satisfactory in respect of the two matters raised by Senator McKenna.

Senator Seward referred to the quantity of chilled beef being exported to the United Kingdom, and to the fact that there was room for a substantial increase, as revealed in the report of the Australian Meat Board. The honorable senator will be pleased to know that recently there has been quite a substantial increase, and that whereas the report from which hr. read reveals a shipment of about 1,000 tons per annum, the latest figures indicate that the shipment this year will be about 6.000 tons.

Senator Pearson raised the interesting point whether it would be possible under this scheme for a producer or exporter who received the bounty last year not to be paying the levy this year. It is fair to say that that is recognized as a possibility. Under ‘ a system such as this, I suppose that the best justice that can be applied is a measure of rough justice. However, it must be remembered that this deficiency payment scheme is unique, and it has not advanced beyond the experimental stage. Nevertheless, the first year of its operation has brought satisfaction to all those concerned. No gross error has yet been revealed in regard to the matter raised by Senator Pearson, although it must be admitted that such a situation could arise, where one man could benefit ;it the expense of another.

Senator Wright:

– To what extent are the payers under this scheme the receivers of last year’s subsidy ?

Senator PALTRIDGE:

– It would be impossible to answer that question without examining the accounts of each individual concerned, to find out how much any person lost and how much any other person benefited. It is a matter of rough justice, but apparently it has worked with satisfaction up to the point of being accepted by all the parties concerned. I believe that the payers and receivers would be the same in the vast majority of cases.

Question resolved in the affirmative.

Bill read a second time.

In committee:

The bill.

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

– I rise in complete ignorance of the circumstances of the meat industry, and I believe, from what the Minister for Shipping and Transport (Senator Paltridge) has said to the Senate, that we should not be wasting a few minutes by having a discussion to provoke ideas which may lead to avoiding mistakes in future years under this experimental legislation. I am seeking information about the extent to which the exports that benefited by last year’s1½d. payment are seasonal in relation to the individual exporter. I desire to know whether or not it is a different group of exporters who will be subject to the charge of1/8d. under this bill, because I believe that before we can say that it is just to impose on the exporter of 1956 a charge of½d. per lb., we must be sure that that charge will fall on the group of people, exporting meat this year, who received benefits last year.

I would like to be assured by those who have a knowledge of the industry whether the payments are seasonal in character. Also whether there is any possibility of real discrepancy between the two groups, the payers of this year and the payees of 1955?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– The scheme in essence is one which can be conducted only on an industry basis. I repeat that it is possible under this scheme that individuals can be affected differently in successive years. They may either go out of the business or enter into the export business. The whole essence of this scheme, which was established by the industry, is the acceptance of the imposition of the charge to recoup excess payments. For this year, and for this year alone, I point out that the rate of one-eighth of a penny per lb. is very low compared with the lid. per lb. paid last year. This year, at any rate, those people who might perchancebe affected to their disadvantage will be affected only to a slight degree. The shortcomings of the scheme are appreciated by both the Minister and the industry, but despite those shortcomings the scheme is acceptable to all sections of the industry.

Senator PEARSON:
South Australia

– I desire to ask the Minister a further question. The charge fixed under this legislation is, of course, one-eighth of a penny. The amount which is to be recouped, I think he said, is something in the nature of £650,000. How long will it bo before the £650,000 has been completely repaid by the industry, having in mind that we are now selling meat to Great Britain at a time when the deficiency payment scheme is again operative? Can the Minister give any information on that point?

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– As the honorable senator acknowledges, deficiency payments are now being earned from the United Kingdom at the rate of 3d. per lb., and those” moneys will, it is hoped, liquidate this £650,000 in the shortest possible period. This is a matter which has to be continually kept under review by the Minister.

Senator O’BYRNE:
Tasmania

– I should like to ask the Minister whether there is any check on the repayments made from the fund. Does the grower get the extra money? I draw attention to the fact that right throughout Australia there has grown up in recent years what I consider to be a sharp practice with regard to the working of a plan between agents and professional buyers who live in country towns. These buyers are able to obtain first information of stock coming from the stations and get the first offer to buy the stock on the hoof on the properties, and then for the purpose of making two sales and obtaining two commissions the stock actually passes through a second stage before it reaches the market. What efforts has the department made to make certain that the grower of this stock receives the benefit of any payments that are made for the purpose of stabilizing this industry? Are any statistics available to show what proportion of stock handled through the exporter goes direct from the grower to the market, and what proportion goes through these intermediaries of professional dealers who are getting a good cut because they get first offer and have a grip on the market? The agents also obtain a commission on each sale between each dealer before the stock reaches the exporter. I should like the Minister to give me any information he has which would indicate whether these payments are reaching the people who grow the stock and whether these refunds will have to be paid by the growers or by those people who make the biggest profit out of the stock?

Senator WARDLAW (Tasmania) [4.10 1 . - At the time this scheme was inaugurated a shade of doubt was cast upon it because it was feared the producers might not get the benefit of this extra payment. It was thought that the exporters would play the game; and the fact that their books were open to inspection was an earnest that they would do so. I believe the producers did get the full benefit of these payments. It is very difficult to say whether they received the full amount claimed by way of deficiency, but I would say that the market benefited by stabilization right from the store stock market until the finished article was sold for either local consumption or export. The stabilization of the market, which was brought about by this scheme, has amply repaid its inauguration. The scheme came at a time when the industry wanted stabilization, and I believe that the producers did receive the full benefit of the payment.

Senator PALTRIDGE:
Minister for Shipping and Transport · Western Australia · LP

– I think Senator Wardlaw has largely answered the question asked by Senator O’Byrne, which was also asked by the Leader of the Opposition (Senator McKenna) in his second-reading speech and to which I replied that the system had given the general assurance, which Senator O’Byrne now seeks, that the money actually did get back to the growers. This scheme was introduced in complete agreement and to the complete satisfaction of the industry itself which, naturally^ would have its own interests at heart. As to the question of dealers, I am informed that in Queensland the practice of dealing in cattle is not common and that most producers deal directly with exporters. Therefore, the possibility of instances occurring such as Senator O’Byrne has mentioned is remote.

Bill agreed to.

Bill reported without requests; report adopted.

Bill read a third time.

page 318

MEAT AGREEMENT (DEFICIENCY PAYMENTS) BILL 1956

Second Reading

Debate resumed from the 20th March (vide page 284), on motion by Senator Paltridge -

That the hill be now read a second time.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 318

FISHERIES BILL 1956

Second Reading

Debate resumed from the 20th March (vide page 285), on motion by Senator Paltridge -

That the bill be now read a second time

Senator McKENNA:
Leader of the Opposition · Tasmania

– The bill now before the chamber amends the Fisheries Act 1952-1953. Confining myself to the very simple purposes of the measure, I indicate that it has the support of the Opposition. The bill merely seeks to synchronise, as it were, the granting of Commonwealth and State fishing licences. The State authorities are concerned, as agents for the Commonwealth, in the issue of Commonwealth licences. The bill makes certain simple provisions which will enable both Commonwealth and State licences to be dealt with simultaneously. That will be an advantage not only to the State officers who are administering the scheme, but also to the fishermen, inasmuch as they will not be obliged to make separate applications. The Opposition quite cordially supports the measure.

Senator KENDALL (Queensland) 1 4.18]. - The Leader of the Opposition (Senator McKenna) has explained the purposes of the bill, to which I have no objection, because it brings into line the issue of Commonwealth and State fishing licences. That is to say, where previously it was necessary for a fisherman to take out two licences - perhaps at different times - under the bill the procedure is brought into line, so that a licence taken out, for example, on the 14th December might remain current until the 3lst December of the following year, when the fisherman can take out his two licences at the same time.

As I have said, I have no objection to the bill. I am addressing my remarks to it, however, because this alteration alone does not go nearly far enough. A reference to section 9 of the principal act shows that the term “ licence “, as used in the measure before us, merely means a licence that the prescribed authority may grant to a person in respect of a boat - authorizing the use of the boat in the taking of fish in proclaimed waters, and in respect of fishing gear aboard the vessel. No mention whatever is made of inspections of the vessel’s hull find engine.

To-day, we have in Australia a most extraordinary position. It is perhaps more extraordinary than the position in relation to fishing in other countries. Having been granted a licence to fish, a person can take an unseaworthy vessel wherever he likes. In some instances, when a fishing vessel has leaked or the engines have broken down, the Australian Government has had to bear the cost - perhaps running into hundreds of thousands of pounds - of sending out aircraft operated by the Royal Australian Air Force, or naval corvettes or destroyers to look for the lost fishermen. This is a matter that should have been dealt with many years ago. I now ask the Minister for Shipping and Transport (Senator Paltridge), as I have previously asked in this chamber over the years, to direct the attention of the Cabinet to the fact that fishermen are allowed to take out boats that have not been subjected to engine or hull surveys. In my opinion, this matter should be placed -under the jurisdiction- of the Navigation Department.

During the last five years, the !New South Wales Government has itself instituted hull and engine surveys of fishing vessels, but I point out to the Senate and the Minister, in case he is not aware of the position, that the jurisdiction of the States extends only to the three-mile limit, beyond which the Commonwealth exercises jurisdiction. Therefore, I believe that hull and engine surveys should be undertaken solely by the Commonwealth.

Another section of the principal act which deals with licensing and is, therefore, within the ambit of this bill, is section 17, which makes certain provisions in relation to prescribed signals and rules of navigation to be observed . by fishermen. If we have no Commonwealth survey to see that the necessary lights and instruments are aboard fishing vessels, how can fishermen be compelled to carry out these prescribed signals or navigation manoeuvres ?

The other matter that I want to bring to the attention of the Minister is that the principal act contains a definition of “ Secretary “ - that is, the Secretary of the Department of Commerce and Agriculture, under the administration of the Minister for Commerce and Agriculture. I point out that, due to the recent re-arrangement of portfolios, there is no longer a Minister for Commerce and Agriculture. We have the Minister for Trade (Mr. McEwen) and the Minister for Primary Industry (Mr. McMahon). As yet, the fishing industry cannot, be placed within the jurisdiction of the Minister for Primary Industry as it is not a proclaimed primary industry. 1 have previously referred to this matter in the Senate. Although the measure before us deals with the fishing industry, I do not consider that we have power over the fishing industry under the existing legislation. I urge the Minister to declare the fishing industry to be a primary industry, so that it will be administered by the Minister for Primary Industry, under whose jurisdiction I have no doubt we shall be able to get something done. Personally, as I have said before, I think it is high time that a full inquiry into the fishing industry was conducted.

The small machinery measure before us has brought two or three things to light. I think a proposed committee of inquiry should include representatives of fishermen’s interests in all States, as well as senior officers of the Department of Primary Industry and the Commonwealth Scientific and Industrial Research Organization. The committee should direct its attention to removing anomalies that have existed in the industry for a long time. In supporting the bill, J earnestly ask the Minister to take up with his colleagues - I cannot ask him to take up the matter with a particular Minister, because at present no member of the Cabinet exercises jurisdiction over the fishing industry– the desirability of appointing a committee to inquire into the fishing industry, which could be such a boom to Australia.

Senator BENN:
Queensland

.- I support the bill before the chamber for the very good reason that it removes at least some of the circumlocution that has existed in relation to the issuing of fishing licences. Senator Kendall, who has just resumed his seat, has explained in general terms some of the disorganization which definitely exists in the fishing industry to-day. In my opinion, the Commonwealth has not constitutional power to do the things that Senator Kendall has suggested should be done. I have given considerable thought to this subject, because the fishing industry provides a valuable item of food. I have found that the Australian Government has not the authority, under placitum (x.) of section 51 of the Constitution, to do all that is necessary to place the fishing industry on a sound basis. For example, the six States and the Commonwealth comprise the seven authorities that are able to grant licences. There is also another authority for the Northern Territory. A further anomaly is that control by ‘the Commonwealth is limited to the area outside the three-mile limit. Senator Kendall mentioned a very important matter concerning craft, which engage in deep-sea fishing but which might operate over the continental shelf or even beyond it. So long as they are in waters inside the three-mile limit they are still within the jurisdiction of the State, and the Commonwealth has no power to require them to keep their craft up to a certain standard.

Attempts have been made at the wrong end to organize the fishing industry. In Queensland a fish board functions, and similar authorities operate in other States. Their purpose is to receive fish and control the sale or disposal of it. That is satisfactory from the point of view of both the fishermen and the consumers, but it satisfies nobody in the Commonwealth as far as catching fish is concerned. There is no organization. The catching of fish should be carried out on a co-operative basis because of the cost involved. No one expects a company to be formed to organize a fleet for fishing. This industry has to depend largely on the efforts of individual fishermen, and in saying that I am expressing an opinion based on my personal experience as an amateur fisherman.

In future, any person who wishes to obtain a licence will need to answer only a few questions. Then he will be given a licence and will be entitled to go out with a net and throw it where he wishes and catch whatever he can in it. He will be operating within the laws of the State but I have a strong objection to that practice. I am not castigating the Commonwealth, but I am speaking on a subject with which I am familiar. The amateur fisherman using a net is causing injury to the fishing industry which because of existing conditions cannot be remedied. By way of illustration, let me point out that if any one were to go into country areas bordering the Australian Capital Territory and begin to destroy bullocks or sheep which were not ready for market they would be condemned for wanton waste, but amateur fishermen are doing something very similar to that with their nets. They are destroying young fish every day, and apparently nothing can be done to prevent them.

The supply of fish is diminishing all too rapidly. I can recall that only a few years ago it was possible to go by launch 30 or 40 miles from the mouth of the Brisbane river and within a short time catch 120 bream and a dozen or two dozen flathead. Nowadays, it is almost impossible to catch one fish in a whole day in the same area. The depletion of fish may be due to increased consumption by the increased population of the Commonwealth, but a major reason is the destruction of young fish by methods I have mentioned. I should like to see certain inlets, estuaries and rivers preserved as fish-breeding grounds, not only in Queensland but in all States. Fishing in these areas should be prohibited for an indefinite term - even several years. T have learned that fish come to the same areas each year, almost on the same day, and soon afterwards leave again. If people are to be allowed to use nets indiscriminately while the fish are in, the supply of fish will diminish far too rapidly.

The fishing industry should be cultivated more intensively. How can that be done, and how can existing impediments to this important Australian food supply be removed? Senator Kendall has pointed out that the fishing industry is .not regarded as a primary industry. It is high time that that anomaly was corrected. I should like to see the Commonwealth made the sole authority to control the fishing industry, because it alone is capable of doing what is necessary to place this important industry on the water again. A great deal of organization and education is required. The Australian Government, through the Commonwealth Scientific and Industrial Research Organization, is continually making investigations, carrying out experiments, and acquainting the public with its findings. Perhaps something could be done per medium of theatres by the exhibition of films to educate the public as to the value of fish as a food, and also to warn against the depletion of fish by indiscriminate use of nets on breeding grounds.

A most important factor is the retail price of fish. Last Monday, as I passed through Sydney, I noticed in fish shops bream fillets priced at 6s. per lb. and flathead at 5s. 6d. Those prices are far too high for the average citizen to pay. I should like to see a bill which would go much further than this one, and which would provide for the fishing industry to be brought entirely under the control of the Commonwealth Government. The Commonwealth could spend thousands of pounds in experimenting and investigating the industry and educating the public in the protection of fishbreeding areas.

Senator O’BYRNE:
Tasmania

– I support the bill, and commend Senator Kendall on having taken up this matter on one of the rare occasions that the opportunity has offered to discuss this most important primary industry - fishing. The honorable senator has stressed the limitations to the power of the Commonwealth to control this industry. An effort is being made in this bill, however, to bring about some measure of co-ordination in the matter of licensing. The need for this can be illustrated by an event which happened in Tasmanian waters last Christmas, when Tasmanian fishermen were prevented from fishing outside the 3-mile limit for gummy shark. Victorian fishermen, taking advantage of calm, fine weather, were able to come within 3 miles of the Tasmanian coast and obtain a plentiful catch of gummy shark while Tasmanian fishermen had to stand by and watch it being taken away to the Victorian markets. A ready market was available in Tasmania, and the fishermen had the equipment to catch gummy shark, but because of a difference in State laws they were unable to operate.

Senator Wright:

– There must be some explanation other than a matter of legislation.

Senator O’BYRNE:

– The Tasmanian authorities wanted to protect the young sharks, as Senator Benn has mentioned. They wanted to give the sharks a chance to multiply over the breeding season so that future supplies would be available for the Tasmanian market.

Senator Wright:

– What were the Tasmanian police doing?

Senator O’BYRNE:

– The Victorian fishermen were outside the 3-mile limit. Senator Wright should understand that. He has been concerned with legislation on matters affecting Tasmanian fishing, and he should know that the Tasmanian police are not entitled to go beyond the Tasmanian limits. Senator Kendall has referred to a survey of facilities. The Australian Government should approach that matter on a Commonwealth level to make facilities available to fishermen at various parts of the Australian coast. Slipways should be provided so that the men could take their boats to them for an overhaul by themselves. It is expensive to take the boats to professional engineers or mechanics, and many fishermen, who are handy folk, could do the work themselves. Only the lack of facilities in the fishing areas prevents many of them from overhauling their boats. They tie them up to a small buoy or jetty, the portion of the boat under water becomes decayed, and then accidents happen when the boats spring a leak at sea.

The co-ordination of this industry is very important. I believe that the Austraiian Government also should assist fishermen by providing more navigation lights along the coast. In Bass Strait and around Flinders Island there is an extensive fishing industry. Much fishing is done also along the East Coast of Tasmania as the warm currents bring pelagic fish to that area, but navigation facilities are so primitive that the enterprise is hazardous. The Australian Government could assist in the expansion of the industry if it sought to co-ordinate State activities and tried to help the individual fishermen who have their own small businesses and responsibilities. They have no big store houses, but they could harvest much wealth from the sea if given encouragement.

Many fishermen use petrol in the engines in their boats. They seldom use the roads, and I suggest that some of the additional money that is to be granted to the States for country roads could be diverted profitably to the provision of facilities for fishermen along the coast as their share of the tax they pay on petrol.

It is beyond the capacity of the States to develop fully deep-freezing plants for the storing of fish. With some coordination and encouragement, Tasmanian fishermen could be encouraged to go out into the deep waters where great quantities of fish are known to abound, just as fleets go out into the North Sea. They could be of mutual assistance and could bring in the fish harvest after being out at sea for some time. At present, if a fisherman returns to port with more than 30 cwt. of fish, he gums up the works because there is no place to store it. If a Tasmanian fisherman operates from Bridport or St. Helens, the fish can be handled there, but it is an expensive business to buy ice, pack the fish and take supplies by road to some centre where the fish can be frozen.

These matters are not often discussed in the Senate, and I am pleased that this measure has given us an opportunity to refer to matters which are of more than local interest. At present they are mostly State matters, but the States, because of their other responsibilities, have not been able to deal with these problems in a co-ordinated way. Senator Kendall and Senator Benn have referred to the problems of Queensland fishermen. We have the same problems in Tasmania, and they should be approached from a Federal point of view with a view to the development of the industry. That could be done if the fishermen were provided with basic facilities and given encouragement and incentive. We could be providing the Australian market with good fresh fish. Large quantities of fish are now imported at the expense of our balance of payments. By helping the fishing industry, we could be assisting to stabilize the economy. I support the bill and am glad that we have had an opportunity to discuss important matters which affect the activities of those fine citizens who engage in the hazards of the fishing industry and match their wits against the sea. Any assistance that can he given to them by the Australian Government will be of advantage to Australia generally.

Senator HENTY:
Tasmania

.- I. support the bill; and I rise to refer to several matters that were mentioned by Senator Kendall. I agree that inspection of fishing boats and gear is very important. In my opinion, most damage is done, not by professional fishermen, but by amateurs who venture beyond the three-mile limit. Professional fishermen take great care of their tools of trade. Generally, their boats are fitted out well. The amateurs often go out in boats that are not fit for the purpose. I do not know how we could possibly police these matters, but we should ensure that no boat less than 16 feet in length goes out beyond the 3-mile limit or some similar distance. If a boat is 16 feet or more long, it should have lifebelts and proper kit. Amateur fishermen who get into difficulties often cause great expense to the community.

Reference has been made to the quantity of fish in waters around the Australian coast. Not long ago, I listened with interest to Sir Ian Clunies-Ross who spoke to members of Parliament in the dining-room of Parliament House on this subject. I find that there is a great divergence of opinion between Sir Ian Clunies-Ross, chairman of the Commonwealth Scientific and Industrial Research Organization, and Senator O’Byrne. Sir Ian Clunies-Ross said that the Commonwealth Scientific and Industrial Research Organization had investigated the fisheries of Australia, and the quantities of fish there were not comparable with those on the fishing grounds in other parts of the world.

Senator Kendall:

– They do not know. They have not investigated the supplies.

Senator HENTY:

Sir Ian CluniesRoss said that the Commonwealth Scientific and Industrial Research Organization had made an investigation. He is a reputable gentleman. If honorable senators were in the room at that time, they will recall what he said. He stated that except for the south-west waters of Tasmania-

Senator O’Byrne:

– Those are the waters to which I have been referring.

Senator HENTY:

– The honorable senator would not know if there are fish there or not. Sir Ian Clunies-Ross said that the Commonwealth Scientific and Industrial Research Organization had investigated the fisheries in Australian waters, except to the south-west of Tasmania. In his opinion, the quantity of fish available in Australian waters does not compare favorably with the position in many other parts of the world. He went on to say that, in his view, Australia would never be able to supply the Australian market with fish.

Senator Kendall:

– Then why is it that Japanese fishermen come down thousands of miles to fish in Australian waters ?

Senator O’Byrne:

Sir Ian CluniesRoss did not say that.

Senator HENTY:

– He did say that; I heard him say it, and was most interested in what he told us. In Tasmania, officials connected with the Commonwealth .Scientific and Industrial Research Organization have been making investigations regarding the supply of fish. I saw some of them at Flinders Island. I know that three men were there for a considerable time. Other men carried out similar investigations in other Tasmanian waters. If I heard Sir Ian Clunies-Ross aright-

Senator Willesee:

– That is a qualification.

Senator HENTY:

– I think that is what he said.

Senator O’Byrne:

Sir Ian CluniesRoss was referring to New South Wales.

Senator HENTY:

– He referred to Australia generally. He did not refer to separate States, except to say that his remarks did not cover Tasmania’s south-west waters. He qualified his statement by saying that in that area there might be a small quantity of fish where two currents met.

Senator PALTRIDGE (Western Australia - Minister for Shipping and debate on this measure has produced some most interesting comments. I do not think that any one would be surprised to hear me say that, because of the special knowledge which Senator Kendall has brought to the debate, he has fairly hit me between wind and water. The honorable senator voiced his opinions clearly, as he has done on other occasions when maritime matters have been ‘ under consideration, and I feel somewhat of a land1 lubber in replying to him. I shall bring his comments to the notice of the Minister, and ask him to supply the honorable senator with information regarding the matters he has mentioned.

Senator Wright:

Senator Kendall asked whether there was a Minister in charge of fishing.

Senator PALTRIDGE:
LP

– I am coming to that. Senator Kendall referred to the Fisheries Act and mentioned the reference in that act to the Minister and the Secretary of the Department of Commerce and Agriculture. For that department we must now read the Department of Primary Industry, which is now undertaking the administrative arrangements connected with fishing. The position is covered by the Acts Interpretation Act. At least I can assure the honorable senator that there is a Minister in charge of the Fisheries Act.

Senator Kendall raised an interesting point when he referred to the inspection of hulls and engines. I understand that Tasmania has a system of licensing under which certain standards have to be complied with. In the Commonwealth sphere the position is covered by the Navigation Act. That act deals mostly with safety measures at sea, and embodies a code which operates in many countries as well as Australia. No attempt has been made to apply to Australia provisions which do not apply also to other countries which have adopted the code. A fishing vessel which trades interstate does come under the provisions of the Navigation Act, and is subject to the requirements to which I have referred.

Senator Benn advocated the setting up of a single authority, but I point out that section 51 of the Constitution gives the

Commonwealth power to legislate in respect of fishing only in waters outside territorial limits. To set up a single authority to control all fishing in Australian waters would require either an amendment of the Constitution or the passing of uniform legislation by all the States and complementary legislation by the Commonwealth. The honorable senator also referred to the system of licensing, and the inference I drew from his remarks was that it was something of an open slather. The position is not quite as bad as the honorable senator’s remarks seemed to indicate. In all the States, with the exception of Queensland and South Australia, it is necessary for a person to produce evidence that his income is derived largely from fishing before a licence will be issued to him. In the Commonwealth sphere, it is the practice not to issue a licence to any person who does not hold a State licence. That practically limits the granting of licences for fishing to persons who are engaged professionally as fishermen.

Senator O’Byrne had something to say about the protection of sharks in Tasmanian waters, and instanced a case in which young sharks were taken by Victorian fishermen from under the noses of Tasmanian fishermen.

Senator Henty:

– That action almost caused a tribal war.

Senator PALTRIDGE:

– Last year there was a conference of representatives of all the States with a view to arriving at an agreement about the protection of young sharks. It was agreed that the States should pass uniform legislation, and that the Commonwealth should pass complementary legislation to protect young sharks. That agreement was to become operative in December, but about the middle of November the Government of Tasmania announced its withdrawal from the arrangement. Consequently, it broke down. I thank honorable senators on both sides of the House for the support they have given to this measure.

Question resolved in the affirmative.

Bill read a second time, and passed through its remaining stages without amendment or debate.

page 325

CANBERRA

Report of Select Committee

Debate resumed from the 20th March (vide page 305), on motion by Senator

McCallum -

That the report of the Select Committee on the Development of Canberra, presented to the Senate on the 20th September, 1955, be considered.

Senator HENTY:
Tasmania

.- Prior to the interruption of the debate under sessional orders last night, I had commended the Senate Canberra committee for the immense amount of work that it had done and the results which it had produced. I had canvassed certain points on which I disagreed with the findings of the committee. I now want to deal with a matter raised by Senator Wood, which I think is a very important one. I refer to the relationship between town planning and economics. I thoroughly agree with the honorable senator that town planning should take into consideration the economics of the situation, as well as the development of the beauty of the area. I wonder whether we could assess the loss that has been occasioned over the years because Canberra has a transport service which has to run round in circles. The buses are obliged to travel through areas where there is no possibility of picking up passengers for most of the time, and must traverse a route of perhaps 8 or 10 miles whereas, if they were able to travel in a reasonably direct line, they could cover the route in about a mile. The losses occasioned by expenditure on capital equipment, plant and maintenance in continuing such a system would be very hard to assess. That is why I think it is important, in all town planning, to have regard to the economics of the position. In Canberra, a situation has developed which is of grave detriment to the present town plan. This is a matter that should be considered closely because, after all, the taxpayers have to bear the losses on this transport system year after year. In my opinion, those losses are attributable to the fact that the buses have to cover unnecessary miles because of the Griffin plan. I think that Senator Wood brought to light a very good point when he raised this matter.

Before I deal with other points on which I disagree with the findings of the committee, I wish to say something about the recommendation that the National Capital Planning and Development Committee should be abolished. I entirely disagree with that recommendation. Why abolish this body? The committee has suggested that some other organization should replace it. Why not amend the provisions of the legislation under which the National Capital Planning and Development Committee operates? Why not develop that committee and give it teeth? Why not make it work? The committee is comprised of experts who have been members of it for a long time. They come from Melbourne, and Sydney and devote a great deal of their time voluntarily to the work of the committee. I commend them for their devotion to duty in the circumstances in which they have been asked to work. After all, they have no power to do anything but recommend, and in many instances, before ever their recommendations reach the Minister they have been vetoed by half a dozen officials on the way through. How is it possible for a committee to function properly when it has not the power to do the things it would like to do?

Instead of abolishing the National Capital Planning and Development Committee, I suggest that it be asked to carry on and plan the development of Canberra. It should oversee that work and make direct recommendations to the Minister. What is more, it should be ensured that those recommendations reach the Minister direct. Then, if the Minister wished to discuss the recommendations, he could approach the various departments and ask them what they thought. If that were done, at least the recommendations of the committee would reach the Minister without being vetoed departmen tally on the way through. In my opinion, this is a matter well worth remembering and acting upon. As I say, the National Capital Planning and Development Committee has had great experience. It has been dealing, in an advisory capacity, with many of the subdivisions, and I believe that if it were given adequate powers it could do a good job for Canberra. 1 come now to the portions of the report of the Senate Canberra committee in respect of which the committee is at variance with the views of the Public Works Committee. The Senate Canberra committee has stated that the recommendation of the Public Works Committee in relation to the connecting road between King’s-avenue and Constitution-avenue, if adopted, would mean disrupting the peacefulness of the area. I point out that the Public Works Committee had before it a great deal of evidence, including evidence from the chief town-planner and the Director of Works. The minutes of the Senate Canberra committee contain no record of the committee ever having discussed this matter with those officials. It may have done so, but there is no record of it. In addition, the Public Works Committee heard evidence concerning the subdivision that is to take place in that area, and it had placed before it a long list of the buildings which eventually will be built there. It also had an indication of the way in which the Griffin plan, in relation to that area, had been altered. At one time it was proposed that the area should be the Griffin market place, but that proposal has been removed from the plan.

After hearing a great deal of evidence, discussing the matter and considering it at length, the Public Works Committee felt that the road suggested by it, which would deviate just beyond the King’savenue bridge across towards Civic, would fit in with the buildings planned for that area, in addition to greatly reducing travelling time and obviating traffic bottlenecks. The provision of such a road would mean that the existing road would be available to people wishing to travel out towards the aerodrome, past the War Memorial. Such a road would divide the traffic. For those reasons, the Public Works Committee considered that that was a very sound recommendation.

The Senate Canberra committee stated, at page 82 of its report, that the principle features of the Griffin plan should be maintained at all costs. The committee then went on to say that the permanent Parliament House should not be constructed on Camp Hill, where Griffin intended it to be. Yet, the erection of a Parliament House on the top of Camp Hill is perhaps the greatest feature of the Griffin plan - a capitol on Camp Hill. On one hand the committee said that the principle features of the plan should not be departed from, and on the other hand it said that the most important feature of the lot should be disregarded. There is a great lack of logic in the recommendations.

Senator Hannaford:

– That would not alter the general layout at all.

Senator HENTY:

– The recommendation of the committee says nothing about the general layout. It refers to the “ principle features “. One of those principle features is, of course, the erection of a new Parliament House on Camp Hill. Then, in the next breath, the committee says that the Parliament House building should not be where Griffin said it should be. I am merely indicating points at which the Senate Canberra committee and the Public Works Committee disagree.

The next matter on which we fail to agree is referred to at page 58, paragraph 352 of the report, where the committee says, in relation to Westbourne Woods -

The Senate Committee recommends that it not he given over as a golf links . . .

So far as I can see, the committee took no evidence at all from officials of the Royal Canberra Golf Club to support this view, although evidence taken by the Public Works Committee, from officials of that club and from golfing experts, particularly favoured that area. The fact that a large sum- of money already has been expended, and that an expert was brought here to examine the area and recommended it as an excellent site for golf links, influenced the Public Works Committee in its opinion that it was a suitable site. It is noticeable that while recommending against it, the Senate committee made no alternative suggestion at all. If West Lake is to be developed, and the golf links is to be removed, one would have thought that an alternative site would have been suggested. Having in mind that the people interested in the golf links favour Westbourne Woods; that there is an expert report about it, and that a vast amount of money has been spent on this site already, the

Public Works Committee considered that it is the best alternative site to be found when the present golf links is removed to make way for West Lake.

I now desire to refer honorable senators to paragraph 412, on page 73, of the Senate committee’s report. Here the Public Works Committee is in conflict with the Senate committee. Although the Senate committee stated that it did not wish to traverse the actions which preceded the elimination of that part of the lakes scheme, nor the evidence taken by the Public Works Committee in that respect, the Senate committee duplicated the evidence taken by the Public Works Committee. It did not take evidence from as many people as the Public Works Committee did, but it was inclined to accept evidence from officials who were interested in the elimination of West Lake. The recommendations of the Senate committee cast doubts upon the recommendations of the Public Works Committee, and because of that the work necessary to be done in respect of the scheme has been completely held up.

The Public Works Committee received a great deal of technical evidence from a number of experts, and was very favorably impressed by the Wilson report. That report guided us largely in our deliberations on this particular matter. Some doubt has been cast on the Wilson report, although it was made by a highly qualified man. The Public Works Committee discovered, when dealing with the matter of the erection of a new Canberra hospital referred to it by the Parliament, that the Department of Works had made use of the flood levels given in Dr. Wilson’s report. Apparently, therefore, the department has completely accepted Dr. Wilson’s flood levels, upon which doubt had been cast by the Senate committee. If the department has accepted Dr. Wilson’s flood levels, then surely honorable senators will agree that it must now be accepting his report, although that report was not fully accepted by the Senate committee.

The Public Works Committee finds itself in conflict with the Senate committee on the matter of West Lake, because the Public Works Committee discovered, through technical evidence, that a satisfactory base for a dam could not be obtained at Lennox Crossing or thereabouts. In other words, satisfactory foundations for a dam could not be laid in the vicinity of Lennox Crossing. If that is so, then we cannot have the three basins of water without having West Lake. Honorable senators will perceive that that must be so, because if we cannot have a dam near Lennox Crossing we must have a dam at Yarralumla. If we have a dam at Yarralumla, the water banked up will form West Lake and the basins of water. The Public Works Committee recommended along those lines, but the Senate committee recommended only the three basins of water.

Senator MCCALLUM:
NEW SOUTH WALES

– That is not so.

Senator Hannaford:

– The Senate committee left the matter open.

Senator Vincent:

Senator Henty should read the Senate committee’s report and recommendations at page 73.

Senator HENTY:

– I shall read the report to indicate that what I have said is correct. I refer the Senate to paragraph 412 at page 73 of the report where it is stated -

The Senate committee does not wish to traverse the action which preceded the elimination of this part of the Lakes Scheme from the approved plan, nor the evidence taken by the Public Works Committee in this respect.

I have already mentioned that part of the report, and have stated that the Senate committee duplicated the whole of the work of the Public Works Committee on that particular point. The report continued -

From the evidence given before the Senate committee, it would seem that public opinion is rather equally divided on the desirability of retaining West Lake.

On the one hand there are those who feel that an observance of Griffin’s Plan in this respect is desirable, and on the other hand there are those who feel that the elimination of the lake would lead to a better balance of the water aspect, and permit of utilization of the area for other purposes. 413. The main impression gained by the Senate Committee, was that far too little real investigation has been made of the issues involved in the Lakes Scheme, and that too much uncertainty still appeared to exist. It noted that there had been no investigation conducted between the time of the Peake Owen Report of 1928 and the Wilson Report of 1953, upon which the Public Works Committee placed particular emphasis and upon which it based its conclusions. The Senate committee’s own feeling, expressed with some reluctance in view of the Public Works Committee’s findings, is that insufficient official recognition and endorsement has been given to the Wilson Report to constitute it a satisfactory basis upon which to make a determination upon such a vital matter. The Lakes Scheme is the most important single aspect of the Griffin Plan, and there cannot be room for differences of opinion on engineering and mechanical aspects of the Scheme, such as still appear to persist.

The Public Works Committee completely disagrees with that part of the Senate committee’s report, because our committee accepted the flood levels in the Wilson report, and the Department of Works also accepted those flood levels for the preliminary work on the new hospital site. That is the particular point that I have already made.

The report continued - 414. The Senate committee therefore recommends that at the earliest possible opportunity the Government should commission a panel of engineering experts to go fully into, and report upon, all aspects of the Central Lakes and West Lake proposals. Definite decisions in regard to the Lakes have been delaying the implementation of the Griffin Plan, and endangering future development. Canberra has come to the stage where the implementation of the La.kes Scheme, be it on a modified scale or not, cannot bc much longer postponed-

We thoroughly agree on that point. The report continued - and all the necessary vital inquiries should be conducted now. The Wilson Report, to which so much importance is attached, should be definitely affirmed or rejected, and the resultant necessary action taken in regard to the Lakes Scheme.

The Public Works Committee considered that we cannot have the basins of water unless we also have West Lake. That committee also accept the Wilson report, because the Department of Works has apparently accepted it.

Senator Hannaford:

– The ribbon of water was to displace West Lake. It was to be instead of it.

Senator HENTY:

– It was to be instead of West Lake, not to displace it. The recommendation that was- made and was accepted by the then Minister was that instead of having West Lake and the ribbon of water, only the ribbon of water should be retained. The Public Works

Committee has stated that we could not have the basins of water without also having West Lake, because a dam could not be put in at Lennox Crossing but must b» put in at Yarralumla. If it is put in at Yarralumla we shall have both West Lake and the basins of water.

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

– We are all out. of our depth now.

Senator HENTY:

– Yes, that is unfortunate. The point I make is that the Senate select committee based its recommendations on the evidence of nineteen witnesses. It said in its report that its conclusions were based on the evidence of the majority of those witnesses. Of those witnesses eleven gave evidence which conflicts with the findings of the committee. The evidence of three was doubtful; so we have fourteen out of nineteen witnesses giving evidence not in conformity with the findings of the committee. The five who gave evidence against the lakes scheme were departmental officers who would have to carry out the scheme if it was foisted upon them. The position is that out of nineteen witnesses who appeared before the committee fourteen, in effect, were either for or not against the establishment of the scheme and five were against it. It was upon that basis that the Senate committee made its findings. I think they found against the weight of evidence.

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

– And against the weight of numbers.

Senator HENTY:

– Against the weight of evidence and against the weight of numbers; they were against both. The weight of evidence was definitely the other way, and the Public Works Committee has expressed the same view. On those points I am at variance with the committee.

One thing I do regret is that the finding of the committee in. respect of the lakes scheme has given the guilty men, whoever they were, who withdrew West Lake from the Griffin plan without having that decision properly aired in Parliament, something to hide behind. The committee drew attention to the fact that West Lake bad been withdrawn from the Griffin plan and that nobody can find who made the recommendation that it should be withdrawn.

Senator Hannaford:

– And the ribbon of water substituted.

Senator HENTY:

– I agree - the basins of water substituted; but that cannot be provided without West Lake. That is our argument, lt is a case of which came first, the chicken or the egg. I feel that that is the damage that has been done; and it has given an opportunity for the people, whoever they were, who withdrew West Lake from the plan to hide behind the committee’s report and maintain that West Lake should not be gone on with although both of our committees are agreed it should come into being.

Having mentioned points with which I disagree, I should now like to mention some of the things with which I do agree. The thanks of honorable senators are due to members of this committee for the immense amount of work which they did in collating all of this evidence.

Senator Tangney:

– The secretary would do that work.

Senator HENTY:

– It is the work not only of the secretary. The members of the committee had to sift the wheat from the chaff. Perhaps they did not do it as well as I wish. However, if they have accomplished one thing, if they have awakened in this House, and among the people of Australia, a national spirit and a national pride in our capital, they have done a great deal for Australia and, therefore, they deserve the thanks of honorable senators. The committee has brought great credit to the Senate in the immense amount of work it has performed and in the manner in which it has placed its report before honorable senators.

Senator VINCENT:
Western Australia

– I much appreciate the remarks of Senator Henty. He is the only senator, other than those who sat on this select committee, who has taken sufficient interest in the subject to say something about it. I sincerely hope that other senators will follow his example. I find this an absorbing and most important subject and I approach it in all seriousness. Having thanked Senator Henty in those terras I shall say a few words about what he said, but before doing so I make the point that a report on the future development of Canberra involves a consideration of three very important aspects of the problem. In the first place, Canberra, is a city of between 30,000 and 35,000 people; and a city of that size introduces local government problems. In the second place, this growing city has a populated hinterland which involves problems which are on what one might call a State level. Laws relating to property, freedom of the individual, trade and commerce and industry are necessary. Finally, and not the least important, the third aspect which deserves deep consideration, is the problem of building a national capital.

Those three important aspects should receive consideration before one can be dogmatic on how Canberra should be developed. I say with all respect to Senator Henty and Senator Wood, that they have overlooked the very important third factor I have mentioned, namely the development of Canberra, not only from the point of view of local government, or making laws with respect to the lives and property of 30,000 citizens - and perhaps in ten years’ time 130,000 citizens - but also the problem of building a national capital worthy of this nation. A town plan is in existence for Mackay, and I believe also for Hobart, but the three factors I have mentioned are not involved in either of those cities; and that fact, I suggest, should entirely influence a debate on this subject. Senator Henty complained that the committee had looked too far ahead and he quoted Mr. Cole’s very worthy report. I desire to take the memories of honorable senators back some 150 or more years.

Senator O’FLAHERTY:
SOUTH AUSTRALIA · ALP

– Our memories do not go back that far.

Senator VINCENT:

– If one remembers history .one remembers a time when the citizens of Sydney had a town plan. That plan can be inspected in the Mitchell Library. It is a very interesting plan of a city beautiful. Some of the people in those days were inspired by the vision of Sydney becoming a very great city. Others did not see things in that light. In those days there were some people like Senator Henty who said, “ We do not want an elaborate town plan for Sydney at this stage, you are looking too far ahead “. Otters like Senator “Wood said, “ We want a very simple plan at the moment, we do not want anything elaborate “. One hundred and fifty years ago that magnificent town plan for Sydney was scrapped. I have had the advantage of having had a look at it. Because it was thrown on to the scrapheap Sydney is now a terrible city, a city of horror, without the possibility of a plan. I mention that because I think that Senator Henty touched on a very important aspect of this city. Quite obviously, we planned in this report not only for tomorrow. Unless we looked 100 or 200 years ahead we would fall into the same error as those people in Sydney did 150 years ago when they adopted the principle of not looking too far ahead in planning. Why, dear me, is not planning of the very essence of looking ahead?

Having said that, I want to make one or two more references to Senator Henty’s remarks. He quoted the very worthy report of Mr. Cole, who, in answer to a question, very properly said that the citizens of Canberra should have a local authority - that there should be a municipality or its equivalent in Canberra. He advocated the immediate setting up of such a body. We did not look that far ahead. Senator Henty was not logical when, on the one hand, he said that we looked too far ahead, and on the other hand that we should have followed Mr. Cole’s report. As a matter of fact, we made a recommendation in connexion with future municipal bodies, which reads as follows: -

  1. That there be established as Canberra’s development and circumstances warrant: -

    1. a Canberra Municipality for the City of Canberra, and
  2. a Shire Council for the balance of the Australian Capital Territory.

Both bodies when constituted to be responsible to the Minister through the Canberra Authority.

I suggest, with the greatest deference to Senator Henty, that we did not look even as far ahead as he did in that respect.

Senator Henty suggested that the local authority to be set up could well look after law-making, combining both local governing and law-making functions in one body, presumably for the sake of simplicity. Surely that is a monstrous proposition, because we would have a body carrying out the responsibility of a local authority in a position to delegate authority in relation to laws made by itself. I do not think I have ever heard in my life of a more confused or Gilbertian set-up.

Senator Henty stated that we should have a democratic organization in Canberra. 1 think he really meant that we should have not only a body with corporate existence administering local government laws but also anotherbody passing laws and attending to the administration of justice at state level. Those two functions cannot be combined in one body. They are separate functions and I see no virtue in any suggestion providing for their combination.

Senator Henty also suggested that we advocated the abolition of the National Capital Planning and Development Committee. Actually, if he read carefully the evidence and our recommendations, he would see that we recommended the abolition of the committee in its present form. That is a very different proposition. We are, in fact, proposing to give that body some teeth, as he himself advocated. Therefore, the differences of opinion between Senator Henty and myself are fast disappearing. For example, in relation to the lakes scheme, at one stage he suggested that our committee advocated the abolition of West Lake. Actually, we did not do so. I believe the honorable senator has read the committee’s recommendations for the first time to-day. If he were to read them again carefully, he would see that, very clearly, we did not advocate its abolition at all. It is quite obvious from the evidence given that there is a good deal of very loose thinking about the lakes scheme. It was apparent from the evidence that there is not a clear volume of thought as to what should happen in regard to the lakes. Mr. McLaren, a man for whose views on this matter I have the highest regard, said this in connexion with the ribbon of water, at page 32 of the evidence -

This is a much more economical scheme. In 1920, the lakes scheme, without East Lake, was estimated to cost ?1,500,000.

If the scheme would have cost ?1,500,000 then, I invite honorable senators to compute what it would cost now.

Again, at page 47 of the evidence, m relation to the “Wilson report - and this is very important - Mr. McLaren stated -

That report has been mentioned publicly, but has never been adopted by the Department of Works. The report was made by an engineer employed in that department.

My friend, Senator Henty, places a great deal of reliance on the Wilson report, but it has never been adopted. We have further evidence of the confusion that exists in relation to this matter. We took evidence from Professor Winston, of Sydney, who advocated the ribbon system, and also Dr. Langer, who did not ! These witnesses were not men who have had little experience in these matters. They have considerable knowledge of them. Evidence was also taken from Mr. McDonald, the chairman of McDonald Constructions Proprietary Limited, who said that a definite decision was needed. He also deplored the implementation of a scheme other than the central lakes scheme. He also said, at page 1360 of the evidence -

Public opinion is probably half for the lakes scheme, and half against.

I repeat, our committee did not make any specific recommendation either for or against any particular lake scheme. Apparently Senator Henty has not read the recommendation properly. We said that we thought the project should be gone into very carefully by experts as there was a divergence of views about it and evidence of ill-balance in the proposal.

Senator Henty also touched on the question of the golf links. At page 45 of the evidence, Mr. McLaren said-

Senator Henty:

– Apparently the honorable senator is relying to a great extent on Mr. McLaren’s evidence.

Senator VINCENT:

– I do not think he would deliberately lie on the matter.

Senator Henty:

– I do not think that Mr. McLaren would lie on anything. That is an unfair assertion.

Senator VINCENT:

– I said that I did not think that Mr. McLaren would lie on the matter. About half an hour ago,. Senator Henty said that we had no evidence about the golf club. I quote from the evidence. Senator Hannaford asked the following question of Mr. McLaren : -

Has the golf club made any objections to the proposed ribbon of water?

Mr. McLaren replied, “No”. He continued: ;

They have not lodged any objections to the lakes scheme. I do not think that they are worried about it. Previously, you mentioned the abandonment of Westbourne Woods. The scheme to have a golf course there was abandoned because it was premature. If the Government decided, on any particular date, to initiate the lakes scheme, it would be some years before any progress would be made with the scheme. During that time, if the Government felt so disposed, it could construct another golf course elsewhere. A state of affairs in which the Government had no intention of implementing a lakes scheme and in which the Royal Canberra Golf Club had two golf courses, in my opinion, would be crazy. The expenditure of ?40,000 would have been required to complete the course at Westbourne Woods, so the plan was abandoned.

That is the evidence relating to the golf links, but I do not think that Senator Henty has read it. Senator Ryan took up the cudgels and asked -

But the course had been almost completed T

The evidence in reply was -

No. Some trees had been cut down and a certain amount of grass has been sown; but there were no greens, no water had been reticulated there, and there were no structural improvements.

I do not want to carry the matter further except to remind the Senate that this committee made its recommendations on that particular question only on the expert evidence available. It did not apply any of its own particular knowledge or experience to the recommendations it made.

I wish to comment on Senator Wood’s interesting discussion last night. The honorable senator suggested that the town plan of Canberra should be reviewed by a competent authority. The evidence of the innumerable witnesses who were called in relation to this matter makes it abundantly clear that the existing plan of Canberra is constantly under review, front day to day and from week to week, and therefore the suggestion of Senator Wood is completely redundant.

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

– Does the honorable senator mean “under scrutiny” or “ under review “ ?

Senator VINCENT:

– It is being not only scrutinized but also revised. In the past twenty years it has been modified and altered in a number of material particulars, and the proposed alterations have been laid on the table of the Senate in accordance with the provisions of the act. Senator Wood suggested that we should have presented a more simplified report. I suggest that it is not possible to have a simplified report concerning the many functions and problems of a city like Canberra. I have indicated three broad considerations which are important, but one cannot crystallize them in a nutshell and make a simple report about them. The administration of this city must be complex for the reasons I have given. Senator Wood suggested also that a single officer should be in charge of the review of the plan. With very great respect to the honorable senator, I suggest that he could not have read many of the recommendations of the committee, because that is exactly what it set out in them. I shall refer briefly to the recommendations in this respect. At page 104 of the report, recommendation No. 3 reads -

That the present system of divided deportments,] control of Canberra be replaced by a single Authority to be known as The Canberra Authority, and that to this end new provisions be inserted in the Seat of Government (Administration) Act providing for its establishment.

The next recommendation, which is also germane to this discussion, reads -

That the authority bo constituted by a Commissioner, be a corporation sole with perpetual succession and an official seal, &c.

There is the answer to Senator Wood’s suggestion - the recommendation has already been made.

Having made a few observations about the criticisms of the report which have been conjured up in the minds of Senator Henty and Senator Wood, T express the opinion that not one member of the committee considered that he was an expert in uub field of inquiry. Each member was convinced that his job was to hear evidence from experts. Valuable evidence was given by gentlemen of great experience and knowledge of the various matters considered. The committee approached the whole inquiry with an open mind and the findings which have now been presented to the Senate are based on the evidence tendered to it. The witnesses included architects, builders, eminent scholars, some of Australia’s best artists, some well-known industrialists, heads of the Public Service, heads of some churches, and even housewives. These experts displayed a commendable zeal and a great interest and enthusiasm for the inquiry. They represented an interested cross-section of the community, not only of Canberra, but also of Sydney, Melbourne and Adelaide, and I was greatly impressed with their keenness that something should be done about Canberra to make it a city worthy of this nation.

Every one knows the deficiencies of Canberra because they are so obvious, but it is another matter to rectify them. Although Canberra has a population of 33,000, it is not the centre of government administration. Every Friday morning the sight of honorable senators, Ministers, and members of another place leaving Canberra as fast as they can, on the first aeroplane, is a clear indication that Canberra is not what it was intended to be, and that the centre of government administration is located elsewhere. Canberra is certainly not the centre of Australian art or culture. It has no gallery. It has only an embryo university. It has no school of national drama and no library of any consequence. It lacks all the things that a national capital should possess. It lacks also plans for them, and nobody is giving the subject much thought. No one is doing anything to make this conglomeration of buildings and trees a national capital city. That weakness was emphasized, directly or indirectly by each witness. The answer is not a matter of placing a library here or a national art gallery there. That will not make Canberra a national capital. A great deal of sentiment lies behind the establishment of these places. In this connexion I wish to quote from the report of a fine body of experts who gave some interesting evidence on this matter, a committee of the Australian Planning Institute. After referring to the date when Canberra was first thought of, that report proceeds -

Since then, Australia has taken its place as one of the foremost nations of the world. In two world wars it has built an Australian tradition based on the qualities of courage, leadership and initiative. In peace, it has distinguished itself in world trade and international relations and in the fields of art, science, and sport.

In a Commonwealth of sovereign states, strong and independent, no more fitting means of expressing national unity and spirit exists than in the National Capital. The City of Canberra, built according to the principles conceived by Walter Burley Griffin, will be capable of demonstrating Australia’s stature as a nation - to Australia’s citizens and to visitors from other countries.

The building of the City of Canberra is therefore a project of great magnitude and significance. It is a national development project requiring the utmost skill and vision in planning and administration and is the direct responsibility of the Federal Government, representative of the citizens of the Commonwealth. [Sitting suspended from 5.45 to 8 p.m.]

Senator VINCENT:

– I ask for leave to continue my remarks at a later stage.

Leave granted; debate adjourned.

page 333

QUESTION

AUSTRALIAN ECONOMY

Debate resumed from the 20th March (vide page 278), on motion by Senator O’Sullivan -

That the following paper be printed: -

Economic Measures - Statement by the Prime Minister dated 14th March, 1956.

Senator McKENNA:
Leader of the Opposition · Tasmania

– Just seven months ago, the Treasurer (Sir Arthur Fadden) introduced the budget for this financial year, and he budgeted for a surplus of £48,500,000. Last week we had the spectacle of the Prime Minister (Mr. Menzies) brushing the Treasurer aside, and making no reference to him in the course of a lengthy statement introducing the supplementary budget to tax the people of Australia to the tune of another £115,500,000. In the course of that statement, the Prime Minister addressed himself to three problems - the problem of inflation, with its allied problem of the high cost structure, and the difficulties associated with our balance of trade payments overseas. The statement of the Prime Minister, which has commanded very great attention in Australia, was outstanding for three reasons : First, because of its cold-blooded, contemptuous audacity; secondly, for its deception of the people of Australia; and, thirdly,because of the futility of the proposals advanced.

I should like first to justify the statement I have made regarding audacity. To put into perspective the whole of the Prime Minister’s statement, it is necessary for me to go back down the years. I take the Senate back to the beginning and origin of inflation. Unquestionably, it was born of war and war expenditure. Enormous war expenditure, the stepping down and the cutting out of normal peacetime production, inevitably meant that, at the end of the war, there would he huge monetary resources chasing goods and services in short supply. The Labour government of the day had the vision of what was to come and the Curtin Government, with a sense of responsibility, went to the people and asked for economic powers for a limited time in the postwar period, so that the even balance in the economy that had been preserved by the Labour Government throughout the war might be preserved. That economy, I say without hesitation, was the admiration of the world because costs were held and goods were fairly distributed. There were controls which came to the Australian Government through the temporary expansion of the defence power, of course.

We put the proposal to which I have referred to the people by referendum. The parties who now form the Government advised the people not to grant the powers, and they were refused. Then, in 1946, the Labour Government recognized the startling rises that had occurred when prices controls were abolished. We saw the development of the inflationary tendencies of which we were afraid, and again we did something about it. In 1948, we went to the people of Australia and asked them to give us more powers, including power over prices, rents and charges. Once more the Government parties of to-day advised the people not to grant the powers.

Then we came to the 1949 general election. Every honorable senator will remember the extravagant promises that were then made by the present Government parties. They said that they would put value back into the £1, that they would reduce living costs and increase real wages. Above all, they told the people that they had “ a practical plan “ - and I am using the exact words - “ for increasing the purchasing power of wages and reducing the cost of living”. The great sin of this Government against the country and its people is that it did not even make an attempt to give effect to those promises.

In October, 1950, the Australian Labour party, with a majority in this chamber and with the same sense of responsibility pervading it, introduced a bill to enable a referendum to be held on the question of controlling profits, prices and rents. “We did not suggest that those powers would be a panacea that could cure all of our economic ills. We acknowledged frankly that they would need to be buttressed with other control*, but the granting of those powers would be the first step m the direction of checking inflationary tendencies.

Everybody knows what happened. Through the Labour majority in the Senate the bill was passed. When it went to another place, it was put at the bottom of the list and the Government did not even allow it to be debated. What was the answer given by the Government, through the representative of the Treasurer in this chamber, the Minister for National Development (Senator Spooner) ? His exact words in speaking to the proposal Were -

The other method of approach is to try, in an intelligent way, to diagnose the basic cause of the trouble and so to direct the national effort as to eliminate that cause; in other words, to encourage the efforts of the citizens of Australia who alone can provide the’ solution of the problem insofar as it can be solved by any action within Australia.

Let me paraphrase that statement. The government of the day, in the face of inflation, threw tip its hands helplessly and said, “ Governments can do nothing about this. This is a matter for the people themselves. Nothing can be done “. What a completely defeatist attitude that was, and what calamitous results it has had for the economy of this nation ! Let me, by contrast, refer to the statement made by the Prime Minister, which is now before the Senate. Honorable senators will find a repetition of some of the words that Senator Spooner used in 1950. The Prime Minister said -

It will, I hope, be widely understood that you cannot cure inflation by doing nothing.

What a colossal pity it is that it took the right honorable gentleman six years to discover that! Look at the damage that has been done to the Australian economy in the meantime. The Prime Minister continued -

You can cure it only by endeavouring to diagnose its causes and then take such measures as are possible to deal with those causes.

The Prime Minister repeated the very words that were used by Senator Spooner six years ago, but he flatly contradicted what was then said on behalf of the Government. The great tragedy is that this has led to the development of a belief that nobody can do anything about this problem. As a result, our economy is in a condition of chaos and disturbance. That was admitted by the Treasurer in his last budget speech.

I wish to refer now to one other sequel to the action of the Labour majority in this Senate. The Prime Minister was stung into making two long broadcasts. One dealt with “ Rising Prices - the Cause “. The other dealt with “ Rising Prices - the Answer “. One of the answers that the right honorable ‘ gentleman furnished in a statement on the 6th October, 1950, was this -

As, in the period of inflation and rising prices, profits tend to rise and, in particular, there are certain businesses in which the acute scarcity of the commodity sold enables the sellers to obtain extravagant profits, we propose to present to Parliament a bill to impose an excess profits tax. This is a novelty, in time of peace.

That was almost six years ago, but not one thing has been done to give effect to that solemn undertaking to the people of Australia. It is there that the cause cf inflation lies ; it lies in the extravagant profits that the Prime Minister recognized ar that time, which he promised to curb, and which, in accordance with the policy of those that he represents in this Parliament and which he announced then, he has done nothing to curb. It is an inglorious record ; and the Government has let Australia down. The Prime Minister has presided over a basic wage which has risen from £6 9s. a week in 1949 to £12 lis. to-day, dealing with it on the basis of the six capital cities. In fact, the basic wage is £12 19s. in Tasmania, and £13 5s. a week in Western Australia, which is more than double what it was when Labour went out of office. The fall in the value of the £1 has been caused by rises in prices and in the cost of living as reflected in the C series index.

Senator Spicer:

– Plus what the £.1 produced.

Senator McKENNA:

– lt produced very little. In fact, its value went down and down. In the first two years of thisGovernment’s term of office the value of the £1 ran down at the rate of 6s. 5d. a year. At that stage, the trade union, movement of this country, which also had a sense of responsibility, had indicated, as I informed the Senate in 1950, that it would agree to the pegging of wages if there were effective federal control of prices and profits. This Government had that opportunity, and it could have saved the inflation over which it has presided with ignominy during the past six years. What a golden opportunity it missed ! It began with balanced budgets and a steady and stabilized economy, and it has been blessed with wonderful seasons throughout the whole six years it has been in office. If only it had held our cost structure stable, we could have captured every overseas market in the world and become the most prosperous country in the world. But what is the position to-day? It is one .of distress and uncertainty and worry in every field.

The Government is now reaping the whirlwind of its incompetence and inaction, and of its occasional panic action. I shall refer to that panic action presently. It is paying for the dishonouring of its promises solemnly given te the people of Australia. The unfor tunate thing is that the people of Australia are paying dearly for the Government’s short-sightedness. What has inflation done to Australia? It is the cause of nearly all our ills. It is pricing our products out of every overseas market. We have 100,000,000 bushels of wheat that- we cannot sell, largely because of the high cost of production. I know that there are other factors, such as surplus stocks in other countries, but the prime difficulty is the cost of production. The other day we had the Minister for Trade (Mr. McEwen) bemoaning the fact that Great Britain is buying apples and pears from the Argentine instead of from Australia, because Argentine fruit is cheaper. But, as every one knows, the balance of trade went down last year by £256,000,000 in respect of actual trade itself. After allowing for other factors, we finished with a. loss of £142,000,000 on our overseas balances. That was largely a matter of high costs and our inability to sell on overseas markets. That trend is continuing this year.

Inflation is one of the main factors in the serious position that arises from the drying up of the loan market. That is causing difficulty, and obliging the Government to tax the people of Australia not only to carry out its governmental works - capital works which will endure for generations, and even centuries - but also the great developmental works of the States. I have looked at the position to-day, and I find that the people of Australia have paid for these great public works, which will endure for generations, the sum of £600,000,000 during the six years that this Government has been in office. In the last four years they have contributed out of taxation £312,000,000 towards the developmental projects of the States. I invite any one who can think intelligently to assess what a colossal burden on the taxpayers that is. It is a burden which, if the loan market had been steady, would have been spread over a period of 53 years, with the result that there would have been no heavy burden in any one year. It is inflation that has thrown industrial conditions in this country into chaos. Who will deny that there is chaos in industry to-day? There must be chaos when one set of workers who are governed by Federal awards receive 17s. a week less than workers doing similar jobs who are paid under State awards. The whole of the troubles in £he industrial field, and all the difficulties that confront us, arise primarily out of the inflation that has been allowed to run uncurbed during the past six years. It has eaten away the value of margins for skill, and has caused great industrial unrest. At the same time, we have profiteers in Australia making record profits, paying record dividends, and putting record amounts away into reserves, and building up funds that are competing for materials and labour, which are in short supply, against the things that are required for developmental works. I refer to such essential things as new schools, and more homes and hospitals. That is where the pressure . is coming from - it is coming from the extravagant profits that the Prime Minister saw coming in 1.950, but has done nothing about.

In order to direct attention to the background to the statement now before the Senate, I shall refer to a statement made by the Treasurer (Sir Arthur Fadden) in 1953, when delivering his budget speech. On that occasion he said, “Now that we have attained the first great goal of economic stability . . .” But listen to his voice in the last budget speech that he delivered in this Parliament. I summarized it last September, and every word that I use came from the Treasurer’s budget speech. On that occasion he said -

Australia was affected by labour shortages, that costs and prices were rising, that overseas exchange reserves had run down seriously, that there was active inflation, that our defence programme was lagging, that the armed forces were losing strength, that import cuts were necessary, that there was a boom in consumer spending and private investment, ana that there had been a too generous expansion on the part of the banking system, and too rapid a growth of hire purchase finance.

That is the state of inflation as outlined by the Treasurer in his budget speech last, September. That is the state of inflation that the Prime Minister, using diplomatic double talk, calls prosperity. God save us from prosperity of that kind !

I now come to the first point that I wish to make. . I draw attention to the audacity of the Prime Minister in his statement in utterly disregarding the past and all the difficulties that he and his Government have-allowed to develop, the ignoring of his “promise to put value back into the £1, letting inflation run, failing to face economic problems, breaking every major promise to the people, and doing nothing to prevent the basic wage from almost doubling. He makes this statement which we are now considering as though inflation had only now reared its head in Australia. That is audacity. The Prime Minister poses as the champion dashing out to do battle with a new enemy. But we know that we have come through the worst period of inflation that Australia has ever seen. The basic wage rose in two years by £1 18s. In the next year it rose by £1 lis. The Prime Minister, in making this statement, completely ignored that, and I say that that is an instance of the most colossal audacity.

Now let me come to the deceit” aspect. I have already indicated to the Senate what the Treasurer said in 1955, in introducing his budget, when he painted a dire picture of the state of the national economy. I want to show that he was not the only one to do so. The Governor of the Commonwealth Bank, on the 13th September last, directed attention to a similar state of affairs. He said - and I am reading from what purports to be au exact quotation of his statement, printed in one of the newspapers -

Imports are continuing to flow in at a high rate, and the outlook is for a further balance of payments deficit in the current year. Domestic conditions show an excess pressure of demand, and measures are urgently needed to steady down the increase of expenditure, particularly on imported products.

And he remarked further -

Wool export prices have fallen, freight charges have increased, and the inflow of private capital has slackened in pace.

There is an indication that things were bad. The Prime Minister, in his economic statement last September, the Treasurer, and the Governor of the Commonwealth Bank all told the same story, a story that is no different to-day. The point I make is that if that was the position then, why was something not done about it in the budget? Why n-as it left until now, some seven or eight months later? There is no difference in the position outlined by those three gentlemen and the position that exists now, and I invite the Government to tell me of any change of consequence that has taken place in the meantime.

Now I want to come to the degree of deception. The Prime Minister, in speaking of conferences that he had had with the leaders of industry in Australia said in September last -

My conferences have encouraged the Government to hope that there will bc a wide and wise response.

I ask the Senate to remember the context

If this turns out to be wrong, we will not hesitate to take further fiscal or other measures to ensure that by the 30th June, 1050 our payments are in balance and our reserves secure.

The right honorable gentleman was speaking about conferring with hire-purchase people, and representatives of banks, chambers of commerce and the rest. That is the context. He warned that there might be fiscal or other measures, but where was the warning to the individuals of Australia? “Where was there a word about that? How many people of Australia even know what the word “ fiscal “ means ?

Senator WRIGHT:
TASMANIA · LP; IND from June 1978

– Oh, my goodness!

Senator McKENNA:

– How many people would know that it means “taxation”? I should say that 90 per cent, of the people of this country have not a clue as to what it means.

Senator Wright:

– Then they ought to have one.

Senator McKENNA:

– They ought to, [ agree. That word was concealed in a context which was deliberately designed foi- the purpose, and certainly had the effect, of leading the people of Australia then to believe that the only people concerned in these threatened “ other measures “ were the great financial institutions, the manufacturers, the primary producers, and the rest. There was total concealment as far as the people of Australia were concerned.

Now let me come to the Prime Minister’s policy speech, delivered not very long afterwards, in November, when he brought on an election prematurely by nearly two years, for the House of Representatives at least. Again, speaking in the context of the conferences he had had, the right honorable gentleman referred to a great experiment in cooperative liberalism in talking to the chambers of commerce, the manufacturers, the bankers, the retail traders, the hirepurchase companies and the primary producers.

Senator Vincent:

– That is quite true.

Senator McKENNA:

– It is true that he talked to those people, but he did not talk to the ordinary people. In the context to which I have referred, the right honorable gentleman said -

I do want to make it clear that my Government is determined to arrest this running down of reserves or savings by the end of the financial year, that is to say, by June 30 next. This is so vitally important that we will hold ourselves ready to take any other measures that may be needed if co-operation is not as successful as we now hope. What those measures may need to be will be entirely governed by future circumstances.

Again I ask: Where was the warning to the people that they were to be taxed so directly, so rudely and so roughly? There was not the faintest warning. The truth of the matter is that the action that the Government has now taken was clearly in the mind of the Prime Minister when he made his statement in September, when he delivered the policy speech in November, and when he refused, on the hustings, to tell the people what he would do if the Government came back. He asked for a blank cheque and the people of this country were foolish enough to give it to him.

Senator Spicer:

– There is no doubt that we got a blank cheque.

Senator McKENNA:

– I admit that the Government got a blank cheque. The only thing that the Prime Minister and the Government did throughout the election period was to slander their political opponents and revile them with untruths, instead of getting down to the issues. Such things characterized the whole election campaign conducted by the Prime Minister and his colleagues.

If these measures are justified now, clearly they were justified when all of those warnings were issued back in September. I say to the Government, or to anybody who cares to speak on its behalf : Do not deny that these things were in contemplation and were deliberately suppressed from the people. Do not deny that the election was called on because the Prime Minister knew he would never survive this breach of faith and breach of trust to the people. If honorable senators opposite have sufficient hardihood to deny those things, they must be prepared for the people of Australia to laugh at them, because nobody will believe them. In truth, this is a most arrant piece of deception on the people of this country. It is just one more instance of the political expedience that has characterized every major action of the Government.

Let us consider the horror budget of 1951-52, when £209,000,000 worth of additional taxes were imposed in one year. Then, in 1953 there was a letting-up. Why? Because there was a Senate election in 1953. There was a further lettingup in 1954. Again, why? Because there was a House of Representatives election in 1954. Now, having got an election out of the way, the Government comes back to repressive measures, and the people of Australia are almost back to the days of the horror budget of 1951-52, a budget which did so much damage to the economy that the Government immediately had to set about undoing it.

I want to come now to the practical measures that the Government proposes. On the taxation side, it has said that it proposes four remedial measures. It proposes to levy additional sales tax by lifting the tax on non-commercial motor vehicles from 16$ per cent, to 30 per cent., on commercial motor vehicles from 12£ per cent, to 16§ per cent, and making a general increase from 16$ per cent, to 25 per cent, on many major items. The second measure that the Government proposes is to impose customs and excise duties to the tune of £43,500,000 on beer, spirits and tobacco; the third proposal is to increase the taxation on petrol by £12,000,000 ; and the fourth is to increase taxation on companies by £30,000,000. Does anybody seriously suggest that putting up the price of cars, putting up the price of beer, spirits and tobacco, and increasing the cost of petrol will do anything to inflation ? Do you cure inflation by increasing costs?

Senator Cooke:

– You accelerate it.

Senator McKENNA:

– Of course you do. You make the inflation infinitely worse. Therefore, that cannot be the reason why this action is proposed. Indeed, it is not the reason. Let me refer to an incident that happened the other day, which illustrates the impact of this new sales tax. A man bought one of the lower-priced cars and paid for it. The car available was not of the colour he wanted, and he had to wait until after the budget statement the other evening before he could pick up the other car. He was asked to pay £103 0s. 3d., being £103 tax and 3d. extra for the gallon of petrol that he put in the car.

Senator Henty:

– Did he pay it?

Senator McKENNA:

– I cannot tell the honorable senator that, but he was asked for it. Apart from his case, the Senate may realize the type of burden that is to be carried. The tax on commercial vehicles has also been increased, and accessories and parts for vehicles will cost more from now on. In taking £30,000,000 from the motor vehicle industry the Government has not only increased the prices of cars, petrol and accessories, but it has also increased the cost of all repairs made to motor vehicles.

The Senate should also bear in mind that the new taxes will cover the whole field of transport, because 75 per cent, of the goods carried in this country are carried by motor vehicles, and the additional costs imposed by the Government will be felt through the prices being increased on almost every commodity handled in Australia. In that way prices will be put up not merely on petrol and motor vehicles, but on every commodity that is transported by road. Then, of course, the consumers will have to pay the increases caused by the additional taxes, as well as the profit margins that will relate to those increases.

Beer will be increased by 2d. for a glass of a decent size, spirits by Id. a nip, cigarettes by 3d. for a packet of twenty and tobacco by 6d. for a 2-oz. package. Honorable senators should bear in mind that tobacco is one of the items in the C series index, and wherever costofliving adjustments are allowed the cost, of living will immediately be reflected in an increase of wages. There is not the faintest doubt; - and I agree with the Prime Minister (Mr. Menzies) in this one thing - that there will not be a reduced consumption of beer. What purpose will he achieve by the increases?

Senator Henty:

– The consumption of beer has been reduced in Queensland already.

Senator McKENNA:

Senator Henty recently gave the best exposition about standards of living that 1 have listened te for a long time. He said that when the people find their incomes reduced because of increased taxes, they will exploit every credit source available to them in an effort to maintain their standard of living. I believe- that, and I commend his speech to the Government. The Government should realize that the demand for taxed goods will go on, and in the matter of beer I believe that it will increase.

Now let us consider the Government’s actions in regard to companies. In the field of company activity, colossal profits have been made ; but the Government has mildly imposed an additional tax of ls. in the £1 over the whole field of companies, big and little, whether they are making extravagant profits or not. There is to be no discrimination, and I suggest that, in the circumstances, a flat rate tax is quite unfair. The companies are not being asked to help in the present emergency because the tax will not become operative until next year; but the people who want drinks and smokes and motor vehicles began to pay the additional charges from the night the Prime Minister delivered his speech. The companies will not pay additional taxes until about March of 1957.

Senator Kendall:

– But they will pay tax on this year’s income.

Senator McKENNA:

– That is so, but it will take a year to start collecting the tax. If honorable senators refer to the White Paper that the Treasurer circulated a few months ago, they will find that in 1952-53 the profits of Australian companies were £378,000,000. In the next year, 1953-54, they had increased to £452,000,000 and in 1954-55 it was estimated that they would be £505,000,000. In two years they had increased by £127,000,000, and ‘that was at a time when the basic wage was pegged under all federal awards. I also want to make the point that an analysis of those figures shows that 3 per cent, of the companies, that is, about 600 out of 25,000, made more than half of the total profits. Indeed, 3 per cent, of the companies made about 60 per cent, of the profits. Immediately one considers those figures one feels that the Prime Minister should be admonished for his failure to implement the promise that he would introduce an excess profits tax in 1950.

In order to see how extravagant company profits are, one has only to consider the vast and expensive advertising programmes that are conducted by the major companies. That is most wasteful expenditure, and is undertaken in the full knowledge that, money so spent can be treated as a deduction from taxation. I have little doubt that the ingenuity of companies in passing on charges will enable them to pass on the additional ls. in the £1 that has now been imposed upon them. They will find ways to pass it on, and the poor old consumer will ultimately find himself paying all the increases.

Senator Kendall:

– Is Senator McKenna opposed to the tax?

Senator McKENNA:

– I am opposed to it in its present form, but I favour the imposition of an excess profits tax as was promised some years ago by the Prime Minister. It would not be so easy to pass on such a tax, because an excess profits tax would be levied more heavily. During the last general election campaign the Labour party indicated that if it were returned to office it would raise £50,000,000 by way of an excess profits tax.

Senator Spicer:

– By taxing profits over £25,000.

Senator McKENNA:

– We did not say that. We said that it would not apply to companies with profits below £25,000.

Senator O’flaherty:

– Honorable senators on the Government side are becoming vocal now.

Senator McKENNA:

– That appears to be the case. The Government promised to introduce an excess profits tax, but it broke that promise, and supporters of the Government resent the Labour party pointing out that such a tax could and should be imposed.

I shall pass now to the important matter of hire purchase. It is unquestionably one of the problems of the money market that the big finance companies and hire purchase companies have been offering high rates of interest to attract money on deposit.

Senator Sheehan:

– Yes, C per cent, for two year loans.

Senator McKENNA:

– Yes, and the hire purchase companies lend out the money that they obtain at a still higher rate of interest on a fiat-rate basis over the whole term of the hire purchase agreement. Over a three-year period,, for example, 8 per cent, becomes 16 per cent. Therefore, in two ways the hire purchase companies need curbing.

Senator Kendall:

– The Commonwealth Bank .lent money at the same.- rate of interest.

Senator McKENNA:

– When the interest rate was 4^ per cent., which made, the hire purchase interest rate about 8 per cent, or more. However , the Commonwealth Bank abandoned -the hire purchase field, and I take it that it has done so, if not at the dictation of the Government, then certainly by direction. The one curb on the charges of the hire, purchasing com,panies in the new motor car field’ was the Commonwealth Bank, but the bank has now been taken out of the field, and that, has been to the advantage of the companies.

The Prime Minister has recognized the danger that the hire ‘ purchase^ and finance companies present to the loan market, but he has washed his hands of the responsibility and has stated that he has no power to do anything. Accepting that to be a true statement, why does lie not say that he will ask the States to give the Commonwealth sufficient power, and if he does not get it from the States why does he not go to the people and ask them for the power? If he had” any sense of responsibility at all he would a0 that; But the Prime Minister has’ been dithering with our constitutional problems for the last two years. In 1954, he promised to set up a joint committee of the Parliament to consider constitutional matters and the further economic powers that the Commonwealth needs. He has acknowledged that the Government must have further, economic powers to. control capital issues, interest, prices and profits. In 1954, the Prime Minister promised .to, set up that committee,, and he has been, asked about it repeatedly in this Parliament. Each .time he promised, to set it up he ultimately broke his promise. He and his Government ran away from responsibility in relation to this matter. I recognize the Commonwealth is hamstrung in exercising full economic control.. ,It has great powers, but not full powers in an emergency like the present. However, the responsibility of a government is to face up to, the fact and at least seek the powers it needs. We do not complain about hire purchase., It is - a very essential community service; but we do complain about those two aspects.

Let me pass on to the subject of import cuts,, one more control that is being exercised by this Government which claims that it does not believe in controls. “ Controls are futile,” said the Treasurer quite recently. We .were told that this control which was imposed on the 8th March, 1952, was to be temporary only. Pour full years, have passed and there is no sign of its ending; and the position is getting .still worse. What an indictment it is against this Government- that these import cuts are not only still run; ning but also- running with greater severity after four, years.! Is the Government proud of that performance, that the position has drifted and got steadily worse and worse? Is there anything to be proud about in that? I lay some of the blame for this trouble at the door of this Government itself because the Prime Minister gave it. away when he made his economic statement in September last. .1 quote from Hansa,rd of the 27th September, 1955,. page 968. He said -

In April, ]!)54, a large group nf items was put on a “no quota restriction” basis, which meant that licences were given for any amount so Ions as it could be shown that goods were genuinely on order and available. The results were .so dramatic that in last October it be- came necessary to discontinue the no quota restriction system, which had proved a major factor …

  1. ask honorable senators to note these words, which are true - . . a major factor in ‘import pressure.

Look at the significance of the dates. There was a House of Representatives election in April, 1954. That is why import cuts were lifted, why the reins were taken off, and imports were allowed to run free. And, as the Prime Minister himself said, the results were so dramatic that, in October, only six months later, the Government had to clamp down again. But, in the meantime, the damage was done. Mainly because of that action of the Government, Australia lost. £142,000,000 of its overseas funds during last year alone. Will any honorable senator on the government side get up and justify that stupid action on the part of tie Government? I would be very pleased to hear somebody justify that.

I shall now make a quick reference to the trading position with Russia. Two years ago we sold £26,000,000 worth of goods to Russia, but the Government stepped in, and instead of keeping the Petrov matter in security, where it could have extracted every ounce of good that came out of Petrov’s defection, it opened1 it out for political reasons to the world. And what happened ? For two years we have lost £27,000,000 of our overseas trade. Since June, 1955, not one penny in exports has been made to Russia. Canada and New Zealand have gone into the field.

A Government Senator. - That is not true.

Senator McKENNA:

– I ‘ heard an honorable senator opposite say that that is not true. As late as to-day I verified the- figures with the Commonwealth Statistician. Therefore, the honorable senator’s argument is not with me, but with the Statistician. I took the trouble to verify the figures with him.

Senator O’SULLIVAN:
Minister for the Navy · QUEENSLAND · LP

– Ou with Russia was £1,600,000 when there was an ambassador of that country here. Tt was not that much the year before. Did the Statistician give the honorable senator the figure for the preceding year?

Senator McKENNA:

– I have the figure for the year ended the 30th June, 1954; it was £26,145,000.

Senator O’SULLIVAN:

was it the year before that?

Senator McKENNA:

– I do not know. The following year it dropped to £153,000, and since then it has been exactly nil; and at a time when the balance of payments position is so adverse to Australia, the Government must accept full responsibility for the loss of approximately £54,000,000 worth of trade under that heading. It is very clear that that is the trading position.

Now, let us have a look at the stupid way in which this control is exercised. Under present conditions, there is a cut of 25 per cent, in consumer goods, 12-£ per cent, in capital goods and 12^ per cent, in producers materials. Arbitrary cuts were made in those three categories when of course, the sensible thing would have been to select the essential goods, the less essential goods and the non-essential goods and. deal with them on that basis. There was no sense at all in grading them in this way.

The Prime Minister’s statement does not in any way advert to the cost problem except to make two suggestions, namely, to obtain more productivity, first, by industry making better use of the plant available to it; and, secondly, by putting on double shifts. Did anybody ever hear a more stupid suggestion than the second one - calling upon industry to put on double shifts! At a time when we have what the Government describes as overfull employment, how would industry start to do that ? It could close down one-half of industry and shift all the people employed in that sphere to the other half. Butt what a solution that would be! Will any Government supporter get up and justify that brainy suggestion? Of course, if the Government were really serious in wanting to get costs down, it would haw attacked direct taxation. Sales tax amounted to £106,000,000 this year and pay-roll tax to £40,000,000, and I guarantee the two together, as I have demonstrated to the Senate, will add to costs at, least £300,000,000 in a year. If tho fact that there is an economic problem in Australia were made plain to the people, 1 do not_ believe there is one taxpayer in the country who would mind paying more in tax so long as it was fair taxation. Let it be in the field of income taxation, where the tax would be levied according to ability to pay.

Senator McCALLUM:

– And ability to conceal.

Senator McKENNA:

– Knowing the Commissioner of Taxation and his very competent staff, I suggest that anybody who seeks to conceal anything from them will make a very bad error.

Now I want to come to what is probably the worst feature of the Prime Minister’s statement. It is supposed to be a remedy for all our ills, but it is the mo3t iniquitous of all. I refer to the proposal to increase the bank overdraft rate from 5 per cent, to an average of 5i per cent, with a dead limit of 6 per cent, and, simultaneously, to increase by 1 per cent, the interest rate on moneys deposited with the banks for fixed periods. Who will benefit from that? Nobdoy but the banks themselves. They are the only’ people who will benefit, and I shall indicate how.

Senator Spicer:

– What about the depositors ?

Senator McKENNA:

– Let us see who will make the profit out of this. At the end of February last advances made by the private trading hanks amounted to £780,000,000. I am excluding the Commonwealth Bank, which made advances amounting to £104,000,000. At i per cent, only, and I am taking only half of the maximum increase of the rate which may be made-

Senator Spicer:

– That is the average.

Senator McKENNA:

– I am taking it at that. At the figure of £780,000,000 the private trading banks will earn an additional £3,900,000. Fixed depositsagain I exclude the Commonwealth Bank -amount to £260,000,000.

Senator Spooner:

– Where did the honorable senator get that figure from ?

Senator McKENNA:

– I have cited the Statistician’s figures, which were circulated on the 28th February. In case the Minister for National Development (Senator Spooner) would like to examine them while I am speaking, I now pass the statement to him. He will note that I have marked the relevant figures in red ink. He will see that the figure in relation to deposits is £260,000,000. They are better off to the tune of £1,300,000, which is the difference between the two figures of £3,900,000 and £2,600,000. And if, as I suspect and believe, they will go to the limit of 6 per cent., another £3,900,000 can be added, so that they will make £5,200,000.

Senator Spicer:

– What about the increased deposits?

Senator McKENNA:

– I have allowed £2,600,000 in that connexion. What will that do? It will put up costs to everybody who uses bank credit, including the primary producers. How does that get inflation down? Inevitably, the increased interest will go into costs.

Senator Spicer:

– How would the honorable senator himself get it down?

Senator McKENNA:

– As I have already indicated, both pay-roll tax and sales tax could be cut out. I have offered the Minister that suggestion. The Primp Minister himself, in the course of his speech, stated that he hoped the increased overdraft rates would have some effect n the demand for overdraft moneys. What complete and utter nonsense ! To-day, people with excellent security are paying up to 20 per cent, for money on second mortgage. The Minister knows very well the particular financial institution to which I refer, although I have not mentioned it to him. If the Minister wishes to obtain some information in this connexion, I shall be happy to tell him where he can get it. I have been told of money being sent to one of the big financial institutions on the mainland for investment in second mortgage at 20 per cent, interest for two years. It is stupid for any one to say that the Government’s proposals will stop people borrowing money at interest rates of between 5 per cent, and 5£ per cent., when at present people are paying 20 per cent, interest for loans.

Again, it was suggested in the Prime Minister’s speech that something was being done to help the primary producers, in that their depreciation allowance of 20 per cent, would be extended for another three years from the 30th June next. My first comment on that is, that that was going to be done anyhow; the Government dare not do otherwise. The second point is, that the Government claims that the primary producers are being helped in that the amount of £2,000 that they can claim as an allowable taxation deduction in respect of expenditure on homes for their employees, is to be increased to £2,750. I should like to say two things : First of all, the farmer mostly does his own work. Secondly, he is mechanized up to the hilt at the present time, which accounts for his better production. Therefore, neither of those concessions mean anything to him. How many farmers in this country have employees for whom they want to built homes costing nearly £3,000 ? How many of them have employees at all? That benefit will be availed of only by some farmers who are in a very good way of business. It will have no application to the great bulk of our farming community. Therefore, the iniquitous lifting of the bank rate will benefit only the banks.

Let me trace what happens to the individual and the community under the proposals I have talked about. A Melbourne Herald economist, who has signed his name to an article, has worked it out that if a man smokes a large packet of cigarettes a day, has two pots of beer on working days and two bottles for the week-end, he will pay £60 8s. lOd. more in tax each year than the non-smoker and non-drinker. If he drives 5,000 miles in his motor car, he will pay another £12 10s. in tax, making his additional taxation upwards of £72 a year. There is the contrast. Who benefits under these proposals? - the banks alone. Who pays? The worker, the ordinary man in the street, will carry the whole burden, because he will struggle to maintain his ordinary rate of consumption. I think the estimate made by the economist is an extremely modest one.

I now wish to say a word or two about the bond rate, which is another disgrace lying at the door of this Government. The Prime Minister has justified the withdrawal of Commonwealth Bank support of the bond market. Why does the Commonwealth Bank support the bank market by buying bonds which are offered for sale? One main reason is to preserve the confidence of investors in the government loans. When the Commonwealth Bank withdraws support, the hungry speculators get in to extricate the greatest possible yield in interest from their purchases. When quite recently - earlier this month - the Commonwealth Bank withdrew its support, what happened! Long-term, 3i per cent. £100 bonds fell as low as £85. There was a repetition of what happened after the introduction of the horror budget in 1951, when £100 Commonwealth bonds dropped to £82. Looking back, I realize how blind I was when I did not see the same trick being played in 1951-52. I have no doubt that, on that occasion, there was a withdrawal of support by the Commonwealth Bank so that the market price of bonds fell and speculators dashed in.

What a disgrace to this nation, and in particular to the Government, that a Commonwealth bond with a face value of £100 should be selling for £82! The Opposition of that day had helped us to tell the people during the war years and the post-war years that Commonwealth bonds were as safe as the country itself; that there was no surer investment, that investors were certain of getting their money back, and the feeling was that they could get it at any time. The only variation that occurred under Labour was associated with the approach and departure of the dates for payment of interest. That was the one conditioning factor. This Government has thrown open the Australian bond market to the speculators, and that is a complete and utter disgrace. A Commonwealth bond should be as safe as a savings bank deposit, and it should be as readily realizable. But what has been the attitude of this Government? From the time it took office, it has been eager to increase interest rates, and to put up the bond rate. For years, whilst the Chifley Government was in office, the interest rate on long-term bonds was 3£ per cent. That was the rate in 194J9 and in 1950. In 1951, the bond market was made to collapse - again at the instance of this Government.

Senator Spicer:

– The honorable senator knows that that is nonsense.

Senator McKENNA:

– I am certain of it. The rate went up to 3f per cent.

Senator Spooner:

– What was the price of bonds when the Scullin Government was in office?

Senator McKENNA:

– Do not let us go back so far. In November, 1952, the rate of interest was lifted to 4^ per cent. This Government enjoyed the distinction of having increased the interest rate on Commonwealth bonds by 44 per cent, since it has been in office. That is nothing for the Government to be proud of.

The Prime Minister has stated that he fears the Commonwealth Bank putting out new money to support the loan market. I should like some one on the Government side to tell me how much money the Commonwealth Bank was so putting out. Was it £2,000,000 or £3,000,000 a year or a greater amount? I should like to know, and I think we should be told. It comes rather strangely from this Government that it is afraid of new money going into circulation when, in this financial year, the Government has used £105,000,000 of central bank credit. It is true that some of that credit, and probably the greater part of it, was called on because the greater part of the income tax revenue has yet to come in over the balance of the year. But why the horror of new money being issued by the central bank when this Government has called upon it to the tune of £105,000,000 in the last eight months of this financial year?

All I can say is that the Government has destroyed the loan market. The one thing that it has done has been to help the banks to make more profit, improve its own revenue, and leave everybody else in difficulty. It is a disgrace that within a measurable time of the introduction of a budget that envisaged a surplus of £48,500,000, the country should be asked for another £115,000,000. I repeat what I said earlier in my speech, that this country has enjoyed bountiful seasons but that the Government, through its incompetence, panic action and inability to see and plan ahead, combined with a complete lack of leadership, has let down the country badly. Recently they have broken faith with the people of this country in a very wretched way, and there is great resentment and indignation from one end of Australia to the other. This time it will not fail to have its effect. The people of Australia have been tricked just once too often.

Senator SPOONER:
Minister for National Development · NEW SOUTH WALES · LP

– Honorable senators listened with great interest and a little mystification to the view of the Leader of the Opposition (Senator McKenna) as they tried to follow the logic of his arguments. He made a most extraordinary speech. I have been trained in the intricacies of some particular matters dealt with by the honorable senator, but it required a discernment greater than mine to follow the points he was making, or to understand what was the target at which he was aiming.

The argument of the Leader of the Opposition can be broadly divided into two general classifications. The first is the fundamental unsoundness of his approach, and the lack of knowledge of the effects of the Government’s proposals upon the economy; or, alternatively, not fundamental lack of soundness, but recklessness. The argument of the honorable senator that a policy, deliberately aimed at damping down certain activities, can result only in increased costs, is difficult to justify from whatever angle it is approached. For him to say, further, that the only result from the increase of interest rates will be extraordinarily large profits for the banks concerned, is a reckless and untrue argument.

Is it to be believed that the Government agreed to the interest rates without inquiring into the matter, or what would be the effect upon the profits of the bank. Would any Australian in his senses be prepared to accept the statement advanced by the Labour party that the Government agreed to an increase of interest rates knowing that it would result in an increased profit to the banks of £1,500,000? Can anybody expect Australians to believe that? .

Taking the argument a step further, would any Australian believe that the banks would take advantage of circumstances to benefit to that extent at the expense of the Australian public ? I have a very high opinion of my fellowAustralians, and do not believe that a majority of them would consider it possible for the banks to act in such a manner. Neither do I believe that the Australian people will accept a statement that the Government did not make proper inquiry into the effects of these increased interest rates, not only upon the economy of Australia, but also upon the profits of the bank. I wish to refer to two points contained in the statement of the Prime Minister (Mr. Menzies). The first reads -

We do not intend that the profits of the trading banks should rise as a result of any counter inflationary action taken b)r us. There are, indeed, various ways and means by which this can, if necessary, bo dealt with by Government action.

The second point is this -

We will closely watch the results of these decisions, because, and again I repeat it, our purpose is te recognize the stern facts of the interest position and, at the same time, to avoid any building up of banking profits as a result of tin! new limits allowed to the overdraft rate.

In the face of those statements by the Prime Minister, we have the spectacle of the Labour party, devoid of argument or logic or of any reasonable line of attack upon government policy, resorting to the scurvy expedient of making an attack upon the banking system and the bankers merely because the bankers are hereditary enemies of the Labour party.

Before I try to deal in detail with the points raised by the Leader of the Opposition - not that I will have time to answer them all - I wish to consider the situation in general terms. It is necessary to view in perspective this statement on the Australian economy presented by the Prime Minister, and to consider it against the background of what has happened in Australia in recent years. The period from the year 1950 onwards has been one of the greatest prosperity and development in the history of Australia. In the past six years, Australia has progressed to an extent that has never previously been equalled. The whole aim and object of these proposals is to maintain that prosperity and development, to keep employment at its present high level and not to permit a lowering of the high standard of living in Australia. The Prime Minister’s statement represents the Government’s prescription for attaining these objectives. There is no doubt about the prosperity of Australia.

Senator GRANT:
NEW SOUTH WALES

– Then why talk about it?

Senator SPOONER:
LP

– I shall’ come to that if the honorable senator will possess his soul in patience. In due course the matter will become clear even to him, and that is the most optimistic statement I have ever made in this chamber. In the past six years the population of Australia has increased by 15 per cent., the number of employees has risen from 900,000 to more than 1,000,000, capital investment in secondary industries in Australia by that section of the community which the Labour party professes to despise so much, companies, which are the backbone of the country’s economic progress, has been more than £1,000,0000,000. Side by side with the development in secondary industries there has been increased primary production, and money has been ploughed back into rural properties to develop primary industries, which is something unknown previously in Australian history.

One does not have to be a statistician to realize the elements of the situation. Whichever way we turn and wherever we go, we see the infusion of new Australians in the community and the benefits of our immigration programme. We see great industrial works which have been completed, and in which every Australian, including members of the Australian Labour party, must take pride. I invite honorable senators to look at the Kwinana oil refinery and the development of the steel industry, as examples. How can honorable senators on the Opposition side hate these people when they see the evidence of the work that they are doing for Australia? Any honorable senator passing through his home suburb will see amazing evidence of expansion. There are new houses practically in every street. Each year, 80,000 new houses are being constructed in Australia. There is not a thoughtful Australian who does not know of the rate of progress in our development, and who does not recognize also that too great a demand has been made, for the past six years, upon the resources that are available to us.

The Leader of the Opposition in the Senate said that the proposals of the

Government were a surprise to the Australian people. I contest that proposition in the strongest terms because I believe that with all our ambitions, our natural characteristics and our urge to go ahead, we are attempting more than we can do at present from the resources available to us. We see an increase of prices. We know there is a shortage of people for every vacant position. There are 50,000 vacancies that cannot be filled. They range from jobs for boys leaving school to go into offices and apprenticeships to positions for skilled workmen and tradesmen. We lack the men to do the tasks that are at hand. Because of the tremendous prosperity within the community, because living standards have risen and because the people can buy more, we are unable to import into Australia, not only so-called luxuries, but also raw materials, plant, machinery and replacements that are needed to keep our secondary industries going. We face difficulty in providing overseas funds for those purposes.

An honorable senator has suggested that the people are working overtime and that more than one member of a family has to work. That is typical of the attempts of honorable senators on the Opposition side to decry the progress that we have made as a nation and the prosperity that is evident throughout the community. Let me . develop that point in simple terms. Since 1948-49, the average weekly earnings of adult males in Australia have increased by 103 per cent. In the same period, prices have risen by 77 per cent. The average male in Australia to-day is 36 per cent, better off than he was in the last year in which the previous Labour Government was in power. That is something of which we are proud.

Senator Grant:

– The Minister wants it both ways.

Senator SPOONER:

– May I say, with great respect, that Senator Grant should be proud of that, also. Of all the statements made by the Leader of the Opposition in his speech, I take the strongest objection to his sneer that the Prime Minister had attempted to deceive the Australian people on this issue. I cannot find words strong enough to express my contempt of that approach to the matter. Let us take the words out of the right honorable gentleman’s own mouth. In the last budget, the warning note was sounded. In September, the Prime Minister made a statement in the Parliament on economic matters. The right honorable gentleman not only diagnosed the position and dealt with the effects of prosperity but he set down, under definite headings, the problems of prosperity and what could be done about them.

When we went to the electors, what did we do? The fourth paragraph in the Prime Minister’s policy speech sounded a note of warning and referred to inflationary pressures. It gave our answer to that problem. Pages of the policy speech were devoted to the economic situation. Of course, we did not go on the platform and say, for example, that we were going to put up the prices of motor cars. What folly that would have been ! The Leader of the Opposition has said that the Government parties- did not put forward specific proposals. What set of responsible people would go on to an election platform and announce such proposals, throwing wide the gates so that every speculator could take advantage of the position? Let me cite a paragraph from the policy speech delivered by the Prime Minister last December -

For the last six years. Labour has lived on prophecies of disaster. We have been warned by Dr. Evatt, to the gloomy obbligato of his unwilling followers, that mass unemployment is just around the corner; that effective wages arc falling: that old age pensioners will be starved; that purchasing power is falling .111 d that the States are being starved.

I will not finish the paragraph. Labour now has a vested interest in gloom and disaster. The Australian Labour party has lost the capacity to think constructively in a forward way. That was shown by the speech of the Leader of the Opposition in this chamber. He spoke for one hour criticizing the Government’s programme, and he did not make one constructive suggestion. When Hansard is printed to-morrow, I defy any honorable senator to point to one sentence in the Leader of the Opposition’s speech indicating what the Labour party would do if it were in power.

Let me examine some of the criticisms made by the Leader of the Opposition, who appears to be permanently in that office. I have referred to his allegation that the Government had concealed the situation from the Australian people. The only section of the Australian people which does not understand the situation fully is the Australian Labour party and its supporters. Australia is in a new era. It is an era of full employment and great development, and we- have new problems to face. We have to evolve new techniques. We cannot go along in the old stereotyped way. We must find new methods to deal with the situation. I ask honorable senators to cast their minds back. What is the Government’s record? It came into office in 1949. In 1950 we faced the position in Korea, the cold war and all its problems. In 1951 we took effective action, and as a result of the action then taken we stabilized the Australian economy for three years. The great fear of the Labour party is that we will be successful again on this occasion, and stabilize the economy for another three years. The only asset of the Labour party is its prophecies of gloom and disaster. If those prophecies prove wrong, its stature falls in the Australian community. As I have said, the Government stabilized things in 1951-52, and only during the last twelve months have events again started to run against us. We have to accept the situation, and choose between the alternatives available to us. Of course, we shall be criticized for these proposals that we have brought forward in this financial statement, but we are a responsible Government, and there is not one member of it who would not sooner accept criticism than refrain from doing the right thing as circumstances arise. We can make adjustments such as we have made in these proposals. We did it in 1951-52, and we are doing it again now. There is no ground for dispute about the need to take action, although there may be a field of argument as to the various kinds of action that are available. What we have done is to touch lightly in a number of directions, instead of confining our activities to one field. As I have said, we can make adjustments such as those now before us, or we can adopt the alternative course, beloved of all socialists, of con trol of prices, control of rents, the control of capital issues, the direction of labour and the placing of the whole community and its activities in a strait- jacket, thereby destroying confidence and driving overseas capital out of Australia.

If ever a political party should be ashamed of an unjust accusation, it is the Labour party, which in 1949 said that our purpose was to create a pool of unemployment. I remind the Senate that the Government has sustained a high level of employment, and I claim that there never has been a higher level of employment in this country than has existed in the last six years. If, instead of making the adjustments contemplated in these proposals, we had adopted a socialistic approach, and placed our economy in a strait-jacket, we should have depressed activities within the community to such a degree that it would have led to unemployment, prevented using our resources to the fullest possible extent, and retarded our progress as a nation. The fact is that it is later than we think. We must not miss any opportunity to develop this country and make progress, and therefore we have to be willing to take calculated risks to achieve that objective. That is what is being done. The Government realizes the necessity to damp down and halt things for a while, so that we shall be in a position to consolidate the progress already made and go forward again in the future. Unless we are prepared to do that in order to ensure our future prosperity, we shall have to take more drastic action in regard to development and immigration. We see no prospect of encompassing a demand for more imports if we frighten away those who would invest overseas capital in Australia. That would eventually lead to the collapse of our currency, with all its attendant evils. I make the point again that the adjustments made in 1951-52 were even more fiercely criticized than these adjustments are. The adjustments made then led to the three most prosperous years in Australia’s history, and there is little doubt that that will happen again.

Senator Grant:

– How will these proposals stop inflation? The Minister has not answered that question.

Senator SPOONER:

Senator Grant complains that I do not answer his interjections. In reply, I say that if only I could understand the honorable senator and get the drift of his remarks I have no doubt of my capacity to answer him effectively. If the honorable senator would emulate the visitors from the coalfields who were in Canberra to-day, and put a placard above his head so that 1 could read what he is trying to say, I should be glad to answer him.

Before I turn to another matter to which the Leader of the Opposition referred; - the bond rate - I point out that I have already answered most of his questions. 1 made a note of them while he was speaking. I have shown that the Government has acted efficiently, and I have answered with all the strength of which I am capable his unworthy accusation that we concealed the true position from the people during the election campaign. I have also answered his comments, about increasing the sales tax, and reducing demand merely by increasing prices. Never have I heard of anything so one-sided. I have dealt in some measure also with his accusation that companies are being treated lightly. I have not dealt in detail with his comments on hire purchase, although I have done so in round terms. The Leader of the Opposition said that we should approach the States. I tell him that we did so and I remind him that a Labour government, instead of acting in a responsible way, made it easier to obtain goods under the hire-purchase system. I have also dealt with the honorable senator’s accusation that bank overdraft rates were increased in the interests of the banks. That is a narrow approach to an important subject. I have difficulty in finding words to express my contempt for that approach to this subject by the Labour party.

The last point that I have noted to which the Leader of the Opposition referred concerns the bond rate. This is a very big question. The honorable senator betrayed his complete ignorance of the magnitude of the problem when he suggested that we might have had the support of the bond market, even to the extent of a couple of million pounds a year. It is incredible that an honorable senator who has been a Minister of the Crown should think that this problem is as small as that. Does the honorable senator really think that support of the bond market to the extent of a couple of million pounds a year would be a factor in an economic situation such as this ? Does lie really think that the transactions were at such a low level that such support would be justified? The position of the bond market is symtomatic of the all-round inflationary condition. In times of inflation, fixed interest-bearing securities lose their attraction. Great skill and judgment are required in dealing with each set of circumstances. As the Prime Minister (Mr. Menzies) has said over and. oyer, again in his statement, this is not so much a question of increasing interest rates as of refraining from holding interest rates down.

Money is a commodity in the sense that men and materials are commodities. What has happened is that this extraordinary era of development in Australia has created a demand ‘for financial resources which cannot be met within Australia without printing Treasury bills. It cannot be met by the resources available to us. I speak subject to correction, but I believe it is correct to say that Australia is the only country in the world that has not increased interest rates in recent years, and’ that our overseas clients’ are financing their transactions by using Australian overdraft facilities instead of using the facilities normally, available in their own countries. They are doing so because Australian overdraft, rates are ridiculously cheap by comparison with world parity.

It is all very well to try to make up a sob story about interest rates. Everybody likes cheap interest rates. Indeed,, in a country, that is growing, and developing it is all .to the- good to have interest rates that are as ©heap as practicable, but we-. can destroy the foundations, of our own stability by woolly thinking on this problem. The proposals of the. Government have not been evolved lightly, nor have they been presented without duc thought and reflection. If honorable senators cast their minds back to the period before the September statement of the Prime Minister, they wilt recall that we called in representatives of the various interests in the community, the banks, the hire-purchase companies, the trade unions, the primary producers, and so on. We talked with them and had the benefit of their ideas. In September, we put forward our proposals. We did so on the floor of the Parliament, and we invited debate and discussion of them. Then we went to a general election and made our position quite clear in our policy speech. Of course, the great regret of the Australian Labour Party is that, although it supporters prophesied gloom and disaster and. said that, if the Government were returned it would do this, that and the other thing, the electors would not lis-ten to them. Honorable senators opposite find it a great matter for regret that, although they raised those bogeys, the people of Australia knew that the Labour party lacked stability, that it was not a real political force, and refused to take it seriously. Having fought the general election, the government parties have come back to office. Again, the Government has not rushed into things. Again, it has consulted those whose advice it thought would be helpful. Although it has taken all the adVice available, it has nevertheless made up its own mind.

We, as a Government, take responsibility for these decisions, and I do not think. I am divulging, any secret when T say that we have not accepted all the advice that was tendered to us. We have accepted the responsibility of making, up our own minds and reaching our own decisions. Having done that, we have brought this matter back into the Parliament, and it will stay in the Parliament so long, as the Opposition wants to debate the matter. In relation to these proposals, we shall answer on the floor of the Parliament all the criticism that is made of them, and as each argument is advanced against them we shall do our best to answer it in debate. There is nothing in these proposals that we think is not for the benefit of Australia. It is not only the companies which the supporters of the Australian Labour party affect to despise, yet approach at election time for election funds, that will benefit from these proposals. Eather will the average citizen benefit. He is the person who is badly hit by inflation, and it is he who will benefit if these proposals that we have advanced are as successful as we all hope and believe they will be.

Senator O’BYRNE:
Tasmania

– When the Minister for NationaDevelopment (Senator Spooner) speaks logically he uses a very smooth, suave voice, .but to-night, in a very loud voice, he has bluffed his way past the points put to him by the. Leader of the Opposition (Senator. McKenna). The Minister did. not answer one of them. He was asked by the Leader of the Opposition to indicate how these _ measures will stop inflation, and the honorable senator ran. away from that issue, as other honorable senators opposite have run away from it. They are squirming, because they know very well that the financial proposals represent a sell-out to the banks. They perpetuate the policy of advancing the private banking system against the interests of the people of Australia. Throughout the years, we of the Australian Labour party have tried to warn the Australian people of what was coming to them. The Minister for National Development gave us a very weak outline of the proposals of the Government and made a feeble reply to the challenge of the Leader of the Opposition. It is rather significant that, on a previous occasion when Australia was facing a great crisis, . Senator Spooner had something to say about moratoriums in New South Wales, a matter to which I shall refer later on. It is most interesting to me that he should have replied to the speech of the Leader of the Opposition in a further attempt to pull the wool over the eyes of the , Australian people in order to make them believe that the Government’s actions are anti-inflationary.

The financial statement of the Prime Minister (Mr. Menzies) merely indicates that this Government has sold: out the country and abdicated to the private banks and financial institutions. During World War LT., our leaders made certain promises to the people. At that time, the private banks were quite content to be allowed to go along quietly and1 take whatever profits they could get. Then, during the stabilizing period of the post-war reconstruction years, they were content to maintain their existence and consolidate their positions. However, since the present Government has been in office, the private banks have again raised their heads with all their old time arrogance, and are now acting in the same way as they were acting just prior to the outbreak of war.

The Government’s financial statement indicates that once again the old economic cycle is under way - war, boom and bust. The people of Australia were promised all sorts of things if they would stand firm, fight and repel the invader. But they now find that instead of receiving what they were promised, they have to experience the same old destructive cycle. The Government’s statement indicates that this Government has sold out the financiers, because whenever the banks find a servile government - and this Government is a servile one - they immediately start to take action against the interests of the people. Senator Spooner said, in challenge to Senater McKenna, “ Is it to be believed that the Government would agree to an increase of interest that would benefit the private banks “. He said that because Senator McKenna had pointed out that, according to the Commonwealth Statistician, the private banks were benefiting largely by this Government’s actions.

I have here the monthly average of selected liabilities and assets on the 1st, Sth, 15th, 22nd and 29th February, 1956, published by the Commonwealth Statistician. According to this information, loan advances for all banks totalled £878,514,000. The Commonwealth Trading Bank advances were £104,782,000, so that about £7S0,000,000 at i per cent, gave the private banks £3,900,000, over that period. The total of interest-bearing deposits for that period was £306,482,000, and the Commonwealth Trading Bank handled £46,735,000 of that sum, which meant that there was about £260,000,000 at an increased interest rate of 1 per cent, which yielded the private banks £2,600,000. If the last figure is subtracted from the £3,900,000 I mentioned earlier, honorable senators will notice that there is a profit of £1,300,000, which is really a gift to the private banks as a result of the measures being taken by the Government in accordance with the Prime Minister’s financial statement.

T do not like quoting figures in a case like the present, but I was induced to do so because .Senator Spooner said in a very aggrieved voice “Is it to be believed that the Government would agree to an increase of interest that would benefit the banks ? “. In answer to that question, I say of course it is to be believed. The people who control the money in this country have the Government in the hollow of their hands. No power can stand up against them if they are given an unlimited field to work in.

Government supporters do not know what the banks are doing, because they are here in this Parliament merely as units in the governing parties. They constitute a big majority in another place and a temporary majority in this place, and they do not understand the actions that have been taken by the private banks over many years. Let us now trace actions similar to the actions that the Government is now taking, which were adopted in the early 1930’s. I suggest that our economic conditions at present is the beginning of the same sort of cycle that brought in the depression of the 1930’s. If we study the history of economics, we must discover that our present economic cycle has happened before, and will happen again.

On the 19th December. 1930, when the then Government introduced an expansionary credit policy, a statement issued by the private banks declared that they were unable to accept such a policy and could take no responsibility for the consequences which must inevitably follow unless there was a drastic curtailment of government spending, and active cooperation by the Government with the bankers to reduce costs. Honorable senators will perceive that the bankers at that time told the Government what to do, and they are now telling this Government what to do.

I desire again to stress that the Leader of the Opposition suggested quite a number of ways in which the present economic crisis could be dealt with, but the Government has seen fit to adopt opposite measures which, as a short-term policy, can only bring about further inflation and tighter control by the private banks. Senator Spooner said that it seemed that the Government was accused of deceit. Never have we seen such deceit as exhibited by this Government, which was put temporarily into power by the people but which really is here to carry out the wishes of the banking organizations. The general election last December was not fought on this financial issue at all, and consequently the people were definitely deceived. They were not made aware of the matters exercising the mind of the Government. During the campaign before the last general election, the old Petrov horse was flogged out again for one more gallop. Honorable senators have only to consider how this Government manipulated the date of the federal election in relation to the date of the New South Wales general election to see that the Government wanted to get into power on any pretext, and used the Petrov issue rather than the real issues. I assure the Government that Senator Spooner’s apology will not carry any weight with the Opposition.

This Government has not kept the people informed about what is going on in Britain at present. Last year the British Government introduced a supplementary budget which embodied proposals similar to those contained in the Prime Minister’s financial statement. The British Government, according to the reports that we are receiving daily, is allowing the orthodox classical economic cycle to gather impetus in Britain. Quite recently, I saw a picture of a huge field in England filled with motor cars that could not be exported because of the British Government’s policy. Honorable senator? on the Government side tried to tell flip people that that sort of thine; cannot happen here, but the people should remember that Ave are tied to the samo interim Hon al financiers, and the same shareholders who are seeking profits, as ave the people of England. We cannot escape from the vicious net of international and internal finance.

The Labour party’s attitude towards the handing over of the parliamentary institution to the money changers was indicated quite clearly to the people when a Labour government introduced the Banking Act 1945. In that legislation we defended the Commonwealth Bank all along the line. The charter of the Commonwealth Bank is designed to make it an institution to serve the interests of the ordinary Australian people. The private banks have never liked the Commonwealth Bank, and when each government of the same political kidney as that which is now in charge of the destiny of this country has been in power, there has been a subtle process of whittling down the powers of the Commonwealth Bank and an attempt to hand over its great assets to the private banks. That is exactly what is going on to-day.

Reference has been made to the Cabinet first eleven and the second eleven in the Government. It is all very fine to use such sporting phrases to cover up more serious things, but if I were to employ sporting phrases I would say that the Government’s economic advisers are au interstate eight with “ Nugget “ Coombs as their cockswain. They are definitely steering Australia into a backwater when this country should be flowing with the tide of development and prosperity. That tide should be flowing full in this country. There should be no need to introduce these measures to deprive the ordinary man of the right to spend his money in own way. What right has any government to take from the ordinary man the right to spend his own money? What right has it to tell him how much he will be permitted to spend on razor blades, a shaving mug, his beer, his wife’s cosmetics, gramophone records or whatever else he wants to buy? This Government is interfering with the rights of the individual when it says, in effect, to the people, “We will take £100,000,000 away from you. We know how to spend your money better than you do “. The Government speaks about great prosperity. It is great prosperity only for the bankers and backers of the Government. That is the position as I see it.

In 1929 and 1930, when the previous depression commenced, the interest rate charged by private banks was 7-J per cent, and that charged by the Commonwealth Bank was 6^ per cent. In 1934-35, as a result of the depression, those rates were forced down to 4i per cent. Any one with the most elementary knowledge of economics will know that high rates of interest rate will lead to a rapid, allround financial squeeze and that a policy of dearer money will force real estate securities on to the market and cause a deflationary trend which could quickly get out of hand. No one can deny that. That is the orthodox process of such measures. Honorable senators on this side may be called prophets of gloom, but over the last six years, since Australia departed from the stable policy of Labour, there has been a decline. When Labour held office Australia had overseas credits of which it could be proud. Our £1 would buy a £l’s worth of goods. The country was being developed in an organized way and as a result racketeers, profiteers and money grubbers were unable to profit at the expense of the community.

When the Labour Government asked present Government supporters to assist it to get control of prices they put up a story which sounded plausible at th°. time but which rings very hollow now. I am sure they would now like to have power to control prices. Lack of that power is the cause of the present economic crisis which is creating employment difficulties. Honorable senators opposite opposed the Labour party’s efforts to introduce prices control. They did so purely in order to get into government; but now that the time of reckoning has come they realize that the things we have stood for all along have been constructive in the interests of the nation, and, in the long run, will have to be accepted by the people. Unfortunately, the rank and file salary earner in this country will have the thumbscrew applied to him before these things can be put into effect. The Prime Minister (Mr. Menzies) and his supporters really have no desire whatever to put value back into the £1, even though they promised in their platform to do so. They do not want to put value into the £1 until vested interests are back on the throne again. These proposals will enthrone vested interests, particularly the proposal to increase interest rates. All the other things - getting the fellow in the hotel a bit sour about paying 2-Jd. or 3d. extra for his beer, getting a chap to complain to his shopkeeper that he has to pay extra for his cigarettes or the motorist to grumble because he has to pay extra for his petrol - are merely to distract the attention of the people from the most important proposal to increase interest rates. That is how the really big money will be made.

The Minister for National Develops ment (Senator Spooner) denied that excessive profits would be made, but the Commonwealth Statistician’s figures show that an’ immediate hand-out of £5,700,000 will be made to private banks as a result of the proposed increase in interest rates. Government senators who have tried to answer the points raised by the Leader of the Opposition as to the effect these proposals will have on inflation, have mouthed many unsubstantiated statements about what this Government has done. This Government has done nothing of a constructive nature. I have been a member of the Public Works Committee for six years, and not one of the recommendations made by that committee during that period has been put into effect. No major works have been undertaken. All this Government has done is consistently to whittle away the nation’s assets and break down the unity of purpose of the Australian people. Nothing constructive has been done. There has been a gradual process of selling out to vested interests. That has gone on until, as I have already said, to-day we are witnessing the enthronement of those interests which are able not only to control the destinies of the Australian people but also, by their tie-up throughout the world, to make and break governments and start wars. Honorable senators opposite can put’ that in their pipe and smoke it - and they need pay no sales tax for that privilege.

The worst feature of the Prime Minister’s statement was his remark, “ There will be a lot of people who will cry more than I will. I could do with a holiday anyway “. He has fulfilled his purpose. The Prime Minister is a very astute politician. He has a great gift in the presentation of words. Indeed, the former American Ambassador, Mr. Peaslee, said the other day that he is the best after-dinner speaker in the world. He has a hypnotic effect on his listeners ; he spins words and hypnotizes them. But that sort of ability is useless in dealing with basic facts. The Prime Minister’s statement, “ There will be a lot of people who will cry more than I will. I can do with a holiday anyway”, is an abdication on his part. It is further evidence of the fact that now the people I have referred to are again enthroned, as the result of increased interest rates, they can put the screws on the farmer, who nas to borrow money in order to meet heavy expenses from month to month until he is paid for his wool, wheat or other products. In the interim he has to pay interest on his overdraft. If he wants to effect any improvements on his property, he must pay a higher rate of interest on his overdraft. He is thus in a similar position to when he was in the grip of the financial institutions previously. Nearly every farmer in this country, irrespective of his age, has felt the knout when the financial institutions controlled his destiny. All I can say is, that Lord Menzies of Kooyong, and his colleague Lord Bruce-

The PRESIDENT:

– Order 1

Senator O’BYRNE:

– If these two gentlemen are ever recorded in history, the most that can be said of them is that they were great friends of vested interests - money grubbers. I am sure that the ordinary people of Australia will not say of them, “Well done, thou good and faithful servants “. In view of the fact that these savage measures are being imposed only three months after the Government’s re-election to office, I am sure that the people of Australia will now be convinced that the worn-out Petrov story was too hollow and shallow for words. If ever the electors of Australia are to have the right to recall their elected representatives, they should have it now. If the Government were facing the people in the near future, I am sure that the people would demonstrate in no uncertain manner their uneasiness about what the Government has done, and their apprehension of the result of its mishandling of the economy.

The Minister for National Development has stated that there is a condition of tremendous prosperity in the community. He emphasized the word “ tremendous “. Doubtless he associates with the people who are enjoying tremendous prosperity, such as those who know how to bull and bear the stock market. It is evident, from the financial pages of the metropolitan newspapers that some companies are enjoying tremendous prosperity. The Minister showed how completely out of touch he is with the economic affairs of this country, because the current prosperity is not equally shared. For instance, it is not enjoyed by a vast number of people, because prosperity, peace of mind and security go together. By measures such as the ones we are discussing, this “ fits and starts “ Government is destroying the people’s peace of mind and security. They do not know from month to month what will happen to their investments in Commonwealth bonds. Because of the instability of the Government’s policy, they are fearful for their homes, and wonder what price they will receive if they are compelled to sell. What incentive is the Government giving to the ordinary people to work 40 hours or more per week? As a result of increased sales tax, they will have little opportunity to save, because it will cost them more for the small pleasures of life. I have already mentioned one letter that I have received. Another reads -

I voted for Menzies at the last election, but 1 would go out of my way now to make him realize the utter stupidity of his latest measures. By increasing sales tax and interest, does he hope to bring industry to a standstill? I would gladly help to organize a monster protest against this autocracy. What would happen if the shopkeepers and schoolteachers refused to open their shops and tench their pupils?

Of course, the Prime Minister knows that the people will not have another opportunity for three years to express their displeasure of these latest measures. It is all very fine for the right honorable gentleman to make beer drinkers the butt of his jokes, in order to direct attention to the staggering quantity of beer that is consumed in this country, but I point out that one of the few remaining freedoms left to the people is that of deciding how they shall spend their money. Evidently, the non-smokers, the nondrinkers, and those who do not own motor vehicles, are not to be asked to contribute anything towards the Commonwealth’s payments to the States, nor are they to be asked to contribute towards the cost of road construction and repair. Only the smokers, the drinkers and the owners of motor vehicles have been singled out for these savage imposts. If that is not an injustice, I should like to know what is.

The Opposition has consistently challenged the Government’s economic policy. To-night, the Leader of the Opposition (Senator McKenna) has suggested equitable means by which inflation might be arrested. The Government has adopted an indirect and subtle means of filching more money from the wage and salary earners of this country by increasing sales tax. As was pointed out during the last general election campaign, Labour favours a reduction of sales tax and pay-roll tax, but would impose an excess profits tax. We favour direct, rather than indirect taxation, because direct taxation is imposed according to the principle of ability to pay. That is how a democracy should work. We also pointed out during the election campaign that, if elected to office, we would restore confidence in the bond market, A grave injustice has been inflicted on the patriotic people who invested their money in Government loans during the war and post-war periods. To-day, the real worth of their invested capital is only about a quarter of what it was at the time they made their subscriptions. Indeed, if they were forced to sell their bonds at the present time, it is doubtful whether they would even receive the nominal value of their equity. This Government stands condemned as deceitful. It has started the economy on the downgrade, by selling out Australia to financial interests. History will judge this Government very harshly for its actions.

Senator GORTON:
Victoria

– The part of Senator O’Byrne’s speech with which I wish to deal is the part in which he claimed that no development had occurred in Australia during this Government’s term of office, and that there had been no prosperity. That is the part I wish to deal with, because it is germane to the discussion of this economic statement to ascertain how much, development and prosperity has taken place.

I do not propose to traverse the ground covered by Senator Spooner, but 1 shall make some statements which are incontrovertible. In the last seven years, there has been a greater volume of public works throughout Australia, Federal and State, than has ever been known in this country before, and expressed as a percentage of the national income, than has ever been known in any other country before, in a comparable time, except, possibly, the United States of America. Evidence of that fact can be seen on every hand throughout Australia. Senator Spooner mentioned the Kwinana and other oil refineries, the equipment of railways with rolling stock, the building of new dams - one in Victoria being the biggest in the southern hemisphere - new schools, and a housing programme which is gigantic in its relation to the Australian economy generally. These are all items which prove that development is taking place on a stupendous scale. It is also incontrovertible that, because of the national prosperity, the wages that the ordinary worker takes home are worth more than at any comparable time; and there are now more goods for the worker to buy with his wages. Those goods were not available when this Government came into office after a Labour government had occupied the treasury bench.

Senator MARRIOTT:
TASMANIA · LP

– Except on the black market.

Senator GORTON:

– That is so. 1 mention these facts to prove that development and prosperity have led to unprecedented demands. The immigration programme, with all the public works it brings in its train, has been greater than in any other country. The defence programme, which is essential for Australia’s security - although honorable senators opposite object to it - is another factor to be considered. Taken in conjunction with a drop overseas in the value of our primary exports, these things have created a position in which we are trying to-do more in Australia than is possible with the labour force available, and with the income received from the sale of our exports. Consequently, the Government has to choose among a number of alternatives which things can be done, because we cannot do them all, even with the expedient favoured by the Opposition of issuing paper money and pretending that we are building on something solid.

Senator Grant:

– That is just what the Government is doing.

Senator GORTON:

– It is doing nothing of the kind. All that the Opposition is doing is to deceive the Australian people. In view of all these development I have mentioned, the significance of the statement of the Prime Minister (Mr. Menzies) on the Australian economy becomes clearer than otherwise it would be. There are three main thoughts running through the statement which are related to one another, but which can be discussed separately. One deals with general economic conditions in Australia, showing the background against which we are living. The second relates to the real genesis of the statement - the extremely difficult cash position which faces the Government in its efforts to finance Commonwealth works and the works of all the governments throughout Australia. It should never be forgotten that the Australian Government is raising and guaranteeing money not only for federal works, but also for all the schools, hospitals, &c, which the State governments build, but which they would not be able to build if they were thrown on the resources of the loan market. That is why I say, “ All the governments throughout Australia “.

In a position such as now exists it seems to me to be absolutely incontrovertible that such works must be paid for either out of revenue or out of genuine loan money raised in Australia or obroad If they are not to be financed by these means, the only other course open is for the Government to issue £100,000,000 or £150,000,000 of new money, which would lead to the bad conditions which honorable senators opposite consider would be preferable. The loan market in this country will not provide genuine loan money to the extent needed to finance al] the Government commitments. I do not know the extent to which it falls short, but I suspect that it is by a considerable amount, and may be in the vicinity of £100,000,000.

Senator Armstrong:

– The Government has destroyed the loan market.

Senator GORTON:

– That is not so. If the loan market has fallen short to that extent, and if resort to bank credit is to be avoided, the only alternative is to pay for works from revenue. Consequently, proposals are contained in this statement to raise extra revenue for that purpose. It is true that the raising of that revenue will not reduce inflation, but it is also true that if government works were not paid for out of revenue raised in this way a tremendous impetus would be given to a galloping inflation. That is the answer to the question of honorable senators opposite as to how these proposals deal with inflation and relate to keeping the economy of Australia on an even keel. It is absolutely essential that revenue should be raised, in the present circumstances, to enable government works to continue.

It may be argued - although I have not heard it - that government works should cease or be greatly curtailed, which would be an alternative to these proposals. I am pleased to know that the Government has rejected such an idea. If anyone were to adopt it, or the Opposition were to suggest it, they would have to take the responsibility of pointing out which government works should cease or be curtailed. It is of no use, either here or anywhere else, calling for increased social services or additional repatriation benefits, or easily built or cheaply rented or cheaply purchased houses, or for hospitals and schools and the multitudinous items asked for if we are not prepared to pay for them. We shall get into far more trouble that way than by genuinely raising revenue for these particular purposes. I accept completely, and without reservation, the need to raise revenue in order to meet the short fall of the loan market. I do not suggest that this will counter or reduce inflation, but it will stop an immense impetus being given to inflation, and it is the Government’s responsibility to do that.

Some criticism has been made of the methods being adopted to raise this revenue, but I find little to criticize. It is true, as always, that action taken by a government is often not only deflationary but also inflationary. That is inevitable. It is true of almost any economic action that is taken, and it is not right to look at the secondary or the primary result only. It is proper to ascertain whether the deflationary or inflationary effect is the greater as a result of the measures taken. It seem to me that the raising of revenue by taxing tobacco, beer and spirits must appeal to all reasonable people. Nobody has to buy tobacco, beer and spirits if they do not want them, and unquestionably they are luxuries and not necessaries. The raising of company tax is far better than the raising of income tax, which I am very pleased to see was not attempted by the Government because too many people - particularly the professional classes - have too many burdens to bear already. It seems to me that the raising of the sales tax on private motor cars can be justified as a tax on a luxury. The sales tax on petrol and commercial vehicles is in a slightly different category, because it will have some slight inflationary effect, but revenue must be raised for the purposes I have mentioned if greater inflation is not to result. I accept the proposition that revenue must be raised, and I agree to the methods by which it is to be obtained.

However, I believe that some more farreaching, fundamental measures attacking the root cause of inflation must be put in hand, preferably by the time the next budget is presented. That would be the proper time to do so in order to get at the root causes of inflation which make necessary the economic measures we are discussing. I know that it is easy to talk about getting at the root causes of inflation, and very difficult to act, but in the short time remaining to me, I propose to put some suggestions before the Senate and the Government. I do not pretend that I am dealing with this field exhaustively. I am sure that my proposals could be improved and extended very much by others, but I submit my proposals for what they are worth.

If it is true that the loan market has fallen so far short of requirements - and I believe it has - one of the major tasks facing the Government is to organize the loan market to bring in the money we require, and will continue to need for our expanding economy. I do not believe that raising the interest rate on government bonds will contribute very much to this inflow of money, but I am convinced that a policy of issuing loans on short terms of four or five years or even less would attract more money .into the bond market from people who are prepared to invest their money for a few years.

If age pensioners were allowed to have, in Commonwealth bonds, sufficient money to bring them in an income equal to that which they are now allowed to earn by personal effort without having the pension reduced, I believe there would be a great influx of money into the bond market from people who have reached the retiring age and are prepared, for that inducement, to put money into the care of the Government. I believe that some , experiment may be made to allow tax concession’s on’ Commonwealth bonds. That has been done before.

I believe some measures might be adopted to make life assurance far more attractive to the average citizen. That could be done by raising the concession allowed for income tax purposes for premiums that are payable to life assurance companies. Those companies use the funds of policy-holders largely to support government and semi-governmental loans. I suggest that something like war savings certificates should be issued and called “ peace development certificates “. They would bring in money from small investors - not a large amount - similar to the loans that were raised during wartime by war savings certificates. I do not believe that any of these propositions should be overlooked simply because they will bring in small, rather than large, amounts of money.

It might well be possible for some State governments and State instrumentalities to borrow abroad for particular projects where the Commonwealth Government has not been able to do so. To me, it is quite incontrovertible that, if we are to develop as we should and maintain our standard of living, the more capital we can get from overseas in the form of borrowed money, the better it will be for Australia, as it has always been to the benefit of other countries. None of them has developed without calling on the savings of those in other countries to help the production and savings of those at home.

As to taxation methods, I suggest that one method by which the root cause of inflation might be attacked - although it might seem to be paradoxical at first sight - would be to abolish the pay-roll tax, because that tax is paid principally by large companies which would undoubtedly pay in income tax most of the money thai the Government would lose on the pay-roll tax. The work force that is at present engaged by those companies in compiling records for the pay-roll tax would be released for productive work. It would be possible to cause some slight downward economic trend in that way. I suggest that the sales tax that is now levied on the wholesalers, so that more is always added to the margin of profit by the retailer, might well be levied at the source of manufacture, thereby reducing the cost to the consumers.

Although this may be regarded as a wild flight of imagination, I suggest that it might be possible for taxation to be taken into consideration by the Commonwealth Court of Concliation and Arbitration when it is compiling a C series index or a cost of living index, because the amount of money that the worker takes home is affected by the rate of tax, and a reduction in the rate of tax might again lead to a downward movement, which is what we want if it does not go too far.

It might be possible to consider a complete overhaul of the arbitration system, and the introduction of a productivity index. That could not be applied throughout the whole field of industry, but it might be done in the case of particular industries. That is the best and fairest method of ensuring that those who manage, invest in and work in an industry share in the increased production which they can obtain as a team.

Finally, 1 suggest that much more consideration should be given to the control of hire purchase, and the interest rates that may be charged by hire purchase companies, because they are now acting as the banks act, whether or not they act legally under the definition of banking institutions. The funds that they are beginning to use are of sufficient magnitude to affect the economy of the country in the same way that bank credit affects it. I know that we probably have no power whatever to pass any legislation to raise or reduce interest rates charged by those companies, but at the same time it would be possible to see that this- was done by a few indirect methods. It would be possible to pass an act, applicable to the Australian Capital Territory and the Northern Territory, limiting the amount of interest collectable at law on hire-purchase transactions,- and then to call to this capital city, with great publicity, all the State Premiers and ask them openly and publicly to pass similar legislation.

My friends ‘ opposite must agree, and the “whole party to which they belong must agree with any action taken by this Government along those lines. Moreover, all those people who are now engaged in hire-purchase transactions in the States must be attracted by such a proposition to bring pressure to bear on the State governments to accede to the request. It may be done privately, but I believe it should be done as publicly as possible. If all other things fail, and if the effect of hire purchase is what I think it is, I should be prepared to say to the State governments that we are helping the economy of Australia by guaranteeing their loans, and we now want them to pass legislation restricting at law the amount of interest collectable on hire purchase, as otherwise we shall not be able, in the economic circumstances of the country, to give them all the money they ask for. I should like to see some attack made along those lines.

I conclude by saying that this is not an attack on the root causes of inflation. I have made suggestions which may, or may not be silly, as to how the problem can be attacked, but I am sure that either these suggestions or similar ones, and suggestions as adventurous as possible, and as untrammeled by legal doubts as possible, must be taken, and must be taken soon. If there is doubt as to some action being permissible, I would still say “ Give it a go until the next budget is presented”. In the meantime, in this country’s present position, when we are trying to do more in the way of- development than we can borrow money to do, the only possible thing is to raise revenue if people are to have the things they want.

I know that it will be suggested that what I have said is untrue, because the defence vote can be cut and the money made available for loan works. It will be argued that, if that were done, there would not be any necessity to raise revenue. I believe that that is economically true, but I can only say that, in my best belief, the need for the defence of this country is now greater than it has been for the last ten years. I think that the time has now come when we may need to start thinking of planning for the defence of this country in Australia, if the worst comes to the worst. That position did not arise six or eight years ago. On this occasion, and in view of Australia’s development and the prosperity that we enjoy - I admit that conditions might be improved - I would not cut the defence vote. It is an insurance premium which must be paid.

Another course might be taken. There is no doubt in my mind that one of the greatest inflationary pressures in this country now is brought about by the high level of immigration, and the high level of public works which immigration inevitably brings in its train, and by the high level of the demand for private capital investment for consumer goods which immigration also brings in its train. I do not think that any other country, except the United States of America, has ever brought people into it in such proportions to its population in one decade.

The difference between Australia and the United States is that the United States brought in immigrants who carried with them only a bag of tools, and after they landed from the ship that brought them to America they were told, “You are on your own “. “We have not done that, and should not do so, but because we do not do it, and, instead, provide them with houses, and jobs, and schools for their children, we have a far greater inflationary pressure as a result of our immigration policy than other countries have had. This is not arguing that immigration should be stopped, but it means that, if continued, it should be continued on the clear understanding that it is a tremendous inflationary force that must be balanced against the good which immigration can do. I have no doubt that, in time, immigration will produce iu this country sufficient to overcome the inflationary effect which it is now having, and which it will have in the future. It is the task of the Government to balance the inflationary effect against the good which immigration brings with it.

For the last time in this speech, I express my agreement with the proposals to raise revenue, and with the necessity to do so at this time.

Senator WILLESEE:
Western Australia

Senator Gorton reminds me of a school master who calls a boy before him and says “Johnny, you are a good boy, but- “. He then lectures him on his faults. Senator Gorton skipped over what the Government had not done, and then proceeded to say what the Government had done and to refer to things which he said were good. Had he compared his notes to-night with some of the speeches made by honorable senators on this side during the last budget debate, he would have found them almost identical, particularly when he spoke about bonds. I do not care how members of the Liberal and Australian Country parties try to get around the proposals - members of the Australian Country party have been exceedingly quiet - but the utterances of the Prime Minister (Mr. Menzies) were the most vicious, unfair and dishonest utterances ever made in this Parliament. I say that knowing that this Parliament has been in existence for nearly 55 years.

Why do I use the term “dishonest and unfair “ ? The Prime Minister’s utterances are completely dishonest because it is as plain as the nose on a man’s face that the raising of this revenue was not introduced for antiinflationary purposes. It was perfectly obvious when the budget was prepared last year what the economic position was likely to be. The reason that this £115,500,000 was not mentioned then was that the Prime Minister was angling for votes at the election which he was not game to hold at the end of this year. These proposals increase taxes, but not indirectly. The Government has chosen to impose indirect taxation because that hits the little man.

The things that Senator Gorton mentioned in the second half of his speech are wrong. At last the rebels on the back benches have become vocal. In another place, last night, the Minister for Territories (Mr. Hasluck) said that Mr. Chifley was a great Treasurer, but that he had different problems to handle. He went on to say that if Mr. Chifley were in office to-day, he would do what the present Government is now doing. I know that time dims memories, but I am sure we all agree that the country has never been faced with economic problems greater than those that arose during the demobilization period after the end of 1945. At that time, most of the countries from which we had imported goods were ex-enemy countries. I refer to Germany, Italy and Japan. People were coming out of the armed forces with money to spend. There was a banked up demand for goods which had not been available during the war. Ex-servicemen were looking for work, and many of them had to be re- trained. That period of transition was handled more efficiently in this country than in any other country of the world.

The problems facing us to-day are no greater than those that faced us in those days, with the exception of the problems which this Government has deliberately created over a period of time. Some of the statements that were made by Senator Gorton to-night were made by members of the Labour party, particularly by Senator McKenna, in 1950 and 1951, when we asked the Government to reimpose prices control and offered to support a referendum for that purpose.

What are the problems about which thu Prime Minister has spoken, and what are the measures that he proposes should be adopted to solve them? The problems and the measures seem to me to be as far apart as the two poles. He talked about our overseas balances. Surely the history of our overseas balances stands out stark and clear. When Labour left office, our overseas balances were at an all-time record high level. As I have said in this place on several occasions, the vital time for the economy of this country was between 1949, when this Government came into office, and the time when it was angling for the double dissolution that, took place in the first half of 1951. If honorable members read the reports of the’ speeches delivered in the Parliament in those days, they will find that not one

Minister ever dealt with the bill that was before the Parliament when he was speaking. All Ministers used the Parliament as a propaganda forum. Their aim was to get a double dissolution, which finally came about. There is no doubt that their propaganda was effective. Any propaganda campaign lasting for fifteen months and supported by the newspapers generally is effective. The propaganda was effective from a narrow political viewpoint, but from the viewpoint of the economy of the country it was a tragedy. From that day onwards we have not had the degree of stability which a Labour government gave to this country, not only during the war, but also during the difficult period from 1945 to 1949.

In this debate, our statements made in the past will be twisted, so let me say now that we never said that import controls should be abolished completely. We bolstered them with capital issues control. We bolstered them with subsidiary prices control until 1948, when the Liberal party destroyed it. I use that term, which is probably not a good one, intending to convey that prices control was not the be-all and end-all in handling the economy of the country. However, it was one of the measures that we adopted. Capital issues control was useful then, and it could be useful to-day if the Prime Minister had the courage to stand up to his supporters, instead of making the swingeing attack that he made on the little man in this supplementary budget. The right honorable gentleman’s statement was nothing less than a supplementary budget. Instead of making a swingeing attack on the small people, the Prime Minister, by the control of capital issues, could achieve a. selective diversion, of finance in the direction of industries which deserve finance, and away from luxury industries, which do not deserve it.

You will remember, Mr. Deputy President, that in 1950 and 1951 the idea was to do away with what were called the useless controls that had been applied by the Chifley Government. This Government is still caught up in the propaganda which it used in the general election campaign of 1949. In 1950 and 1951 the policy of the Government was that we should import all that we could import from the London market. The idea was that if those goods were put on the Australian market, they would absorb the excess money in the community. It is mostamusingtoseethatthepresentview of the Government is that, in order to counter inflation, we should do the reverse of what was done in 1950 and 1951. In those days, the view was that if we imported all the goods that we could import, that would fix inflation. In fact, honorable senators opposite used to rise one by one and tell us that inflation had been cured, although the only people they were kidding were themselves. To-day, the view of the Government is that, in order to counter inflation, we must restrict imports. Business men who rely upon imports do not know from one day to the next what the policy of the Government will be. One day, they are encouraged to bring goods in from other countries. Then, overnight, imports are cut off. Next day, imports are allowed again; but on the following day, they are cut off once more. Everything seems to depend upon whether an election is to be held.

There is no doubt that the more we examine the record of this Government since the 10th December, the more clear it becomes that every one of its measures has been related in some way to a political move. By contrast, the Chifley Government re-imposed petrol rationing on the eve of an election. That was something about which the present Government parties made a great song and dance, hut it was effective in keeping up the level of our overseas funds. That action of the Chifley Government was not politically popular, and it may have been one of the factors that caused us to lose the election. But if governments were to avoid all unpopular but necessary action six months before an election, I do not know how we should finish up. If this Government, in presenting its budget last year, had showed the same courage that Mr. Chifley showed when he was the Prime Minister, the Australian public would have had an opportunity, on the10th December of last year, to make a complete analysis of the position.

How can we keep up our overseas balances ? We can do it either by importing less or by exporting more. The

Labour party said throughout the last general election campaign, as it had been saying for some time previously, that the job of this country, with its surpluses, is to go out into the markets of the world and try vigorously to sell its goods - in other words, to export more. That was why, in our policy speech, we said that, if elected, we should set up a special department of exports, in charge of a Minister whose job would be only to try to expand exports.

I am taking the problems as the Prime Minister listed them, not as I have listed them. How in the wide world can any of the measures that the Government has proposed on this occasion increase exports? The cost of beer and tobacco has been increased. The increase in the cost of petrol will increase the cost of transport. It is proposed to increase interest rates. The increase of the sales tax on motor vehicles will have an adverse effect on transport costs. Those measures will make it more difficult to expand our export trade. An expanding export trade in primary products depends upon farms. An expanding export trade in manufactured goods depends upon machinery. In each case, it is necessary to borrow money from banks. If high interest rates are charged on overdrafts, it will be more difficult for farmers and manufacturers to make profits. We have been told month after month and year after year that our costs of production are too high, and that that is the reason why we cannot compete in overseas markets with other countries. Yet the moment these oracles try to solve that problem, the first thing they do is to make costs of production much higher by increasing interest rates and transport charges.

Then the Prime Minister referred to the question of productivity. I do not think that Ministers know where they are in regard to productivity. Last night, Mr. Roberton, a new Minister, wailed away. He said that this was a terrible place, that we were frittering away our opportunities, that production was going down and that all would be lost unless people worked for a few more hours a week. He seemed to believe that Australia was a terrible place to live in, and

I thought that he was going to pull up his stakes and go back to Scotland.

I was most impressed this morning when the Minister for National Development (Senator Spooner) was answering questions about the coal industry. I do not think that even these great critics of trade unions and workers will say that the coal industry is an easy industry in which to work. If I took the figures down correctly, 118,000 more tons of coal were produced in this country in 1955 than in 1954. That result was achieved with nearly 1,000 fewer employees. To come back to the question of productivity, let me remind the Government that increased production is achieved, not by propaganda, but by machinery. As everybody knows, a bulldozer will shift more sand in an hour than 1,000 men with shovels can shift in a day. “We must have, machinery. The people who want machinery must have money to buy it. How in the wide world does the Government think that an increase of interest rates, one of the measures proposed in this supplementary budget, will help to increase productivity?

The only remark by the Prime Minister about productivity with which I agreed was that it was a question of efficient management. I agreed wholeheartedly with that statement. But how can any government, having done the things that this Government has done in this supplementary budget, appeal to the working people to increase productivity? How can it make an appeal for greater productivity to the people who want to buy machinery - the small businessmen and the small producers - when it has done the things that it has done to them on this occasion?

I am hurrying along because my time has been cut rather short to-night, but the next point I want to make concerns internal spending. Surely internal spending is not going to be affected by the man who knocks off at five o’clock in the afternoon and has four schooners of beer on the way home. I am speaking of Western Australia now, because the people in this part of the continent do not know what a schooner is. Is it suggested that the man who will be charged an additional 8d. for four schooners of beer, or the man who will be charged an additional 4d. for four nips of whisky, will be affecting internal spending? The Government is not going to stop spending by the wealthy man, either. If he wants to buy a new car, he will still do so. Those who will be affected are young couples trying to get a home together. If they have saved f SOO towards the cost of a new Holden motor car, these financial measures will not stop them from buying the car. Does the Government think that their £800 will stay in the bank? If I know anything about people of that kind, they will try to get the extra £200 to buy the car, or they will take the £800 out of the bank and spend it on other things.

Why is it that beer, tobacco and petrol have been selected for increased tax? I think the fact that those commodities have been selected gives the show away completely about this being an antiinflationary measure. The Prime Minister himself has said that he does not expect that the consumption of alcohol in Australia will be reduced because of the additional tax. Indeed, he cited figures to bolster his contention and pointed out that, on the last occasion that sales tax on alcohol was increased, consumption actually rose during the following twelve months. I think that these measures have been taken because the Government did not budget fairly and, as a result, found it had to put its hands on £30,000,000. That sum could not be raised by increasing company tax alone, because the taxation returns do not come in until after the end of June. The Government had not sufficient courage to try to raise the money by means of direct taxation. The big boys that back the Government did not want it done in that way. Therefore, the Government was obliged to increase taxes on certain commodities and thereby reap an immediate return. That, I think, is the only reason why those commodities were selected.

How can it be said to be antiinflationary if you take £115,500,000 from the pockets of the people and then spend it yourself? I have read and re-read the remarks of the Prime Minister last Tuesday night. Perhaps I am a little dumb, but I cannot follow them. This is the man who went about in 1949 saying that the people should be allowed to spend their money themselves, who said that Mr. Chifley was imposing taxes and was not spending all the taxation revenue. The right honorable gentleman wanted to know what right the Labour government of the day had to interfere with the rights of the individual. Yet, last Tuesday he was defending the practices of which he. accused the Australian Labour party.

When restrictive measures were taken “previously in 1951, the Minister for National Development (Senator Spooner) was right to the fore in claiming that the money so saved would be put in cold storage. When he was questioned on this matter in New South Wales and asked whether it would not be spent, he said, in effect, “ Over my dead body “. If the honorable senator has not improved in wisdom, at least he has gained in expedience, because now he is not at all keen to- interpose himself between the Treasury and the electors of Australia. There is no suggestion that the money that is’ going to be raised by means of additional taxation this time is to be placed in cold storage.

The so-called liberal policy of letting the individual spend his own money,, which the Government parties have expounded over the years, is now being, abandoned by them. The more I look at these proposals, the more upset I feel about them. Honorable senators will pardon me if I discuss their possible effect on the north-west of Western Australia, because the development of that, area has long been a hobby-horse of mine. If ever a place needed development it is that part of Australia. Yet it is the only part of the Australian continent that ii» slipping back. This Government,, by increasing the price of petrol, and by other measures, has retarded the development of the north-west during the last six. years. If there is one thing that is vital to that area,, it is transport. Adequate transport is essential to the successful operation of the blue asbestos industry at Wittenoom Gorge, the banana industry at Carnarvon;,, and the pearling industry at Broome. It is also vital to the outback stations. Senator Gorton spoke of the defence of Australia. I suggest that defence expenditure could well be made in that part of the continent. For instance, the construction of roads is most necessary from a defence point of view. Every proposal of the Government in this supplementary budget will act to the detriment of the development of the northwest.

If we accept Senator Gorton’s contention that it is proper to increase taxes in this way, why was no indication of the proposal given in the last budget and during the recent general election campaign? The Government has chosen to increase its revenues by means of indirect taxation which hits the family man harder than anybody else. The man on £15 a. week, with a wife and five children, naturally buys more commodities than does the single man who may be earning £60 or £70 a week. If honorable senators opposite care to- examine the budgets that were introduced by the Chifley Government they will find that the major source of revenue was direct taxation. This Government has reversed that process, and the major part of its revenue comes from indirect taxes which hit hardest at the family man. I suggest to the Government that if it were, to give £5 to a poor man he would immediately spend it, but if it gave £5 to a rich man he would invest it. Mr. Chifley believed in taking from the big men by means of direct taxation, and distributing such revenue to the people who needed’ it, by way of family allowances and other social services. That was anti-inflationary. By taking from the big’ men, the Labour Government drained the surplus money from the industries about which this Government is complaining to-day. Written into the constitution of the Labour party is a dislike of indirect taxation. We believe that however unpopular direct taxation may be, at least it ishonest taxation. It falls hardest on the. person with the biggest income,, whereas indirect taxation has the opposite effect.

This Government always cracks downon. the decent citizen, the person who. deserves a break in life. The economic proposals of the Government will not effect the wealthy people in the community or the “don’t care” kind of people. But when the Government increases the interest rate it also increases the cost of homes for young people by an additional £500 or £600. If young couples want to purchase motor cars, they find that cars are pushed out of their reach. The Government never attacks the people who can best resist attack, but always the people who can least resist it.

I was most interested in the remarks of the Minister for Labour and National Service (Mr. Harold Holt) in the House of Representatives last night, in the course of which he repeated a charge made by the Prime Minister in his policy speech. Why these so-called intelligent men make statements of that kind I do not know. Apparently, the Minister for Labour and National Service was trying to refute the charge that the Government’s economic proposals represent an attack on the small man - a charge which I support wholeheartedly, because I think that this Government has consistently attacked the small man.

Debate interrupted.

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ADJOURNMENT

The PRESIDENT (Senator the Hon. A. M. McMullin). - Order! In conformity with the sessional order relating to the adjournment of the Senate, I formally put the question -

That the Senate do now adjourn.

Question resolved in the affirmative.

Senate adjourned at 11 p.m.

Cite as: Australia, Senate, Debates, 21 March 1956, viewed 22 October 2017, <http://historichansard.net/senate/1956/19560321_senate_22_s7/>.