28th Parliament · 1st Session
The PRESIDENT (Senator the Hon. Sir Magnus Cormack) took the chair at 12 noon and read prayers.
National Health Scheme Petition
Senator YOUNG- I present the following petition from 126 citizens of the Commonwealth:
To the Honourable the President and members of the Senate in Parliament assembled. The humble petition of the undersigned citizens of the Commonwealth respectfully showeth:
That Australian citizens place great value on their freedom to choose their own doctor in all aspects of medical care.
That we believe in a doctor’s freedom to provide a personal service based on personal responsibility within a system based on quality rather than quantity, as opposed to an impersonal service in which doctor and patient lose their identity.
That proposals to change the existing health scheme are unacceptable to the people of Australia.
And your petitioners, as in duty bound, will ever pray.
Petition received and read.
Motion ( by Senator Byrne)- by leave- agreed to:
That leave be given to introduce a Bill for an Act to alter the Constitution so as to enable the Australian Parliament to control prices and incomes.
Bill presented, and read a first time.
-Did the AttorneyGeneral note that yesterday morning’s Press contained comprehensive details of the submission which he made to the Federal Cabinet for amendments to the trade practices legislation? Did he also note that the Press details in that submission antedated the Prime Minister’s statement yesterday afternoon of the Government’s intention and were published in the absence of any Press statement by himself? Who authorised the release of a Cabinet submission and to whom was it released? If he is unable to say, will he cause the question of who released that Cabinet submission to be investigated with a view to seeing who was responsible? And if he will not do that, why not?
-I will not do any of those things. I noticed something in the Press about the legislation which I propose to introduce. I noticed in the Press about a week ago, I think it was. a report of a speech by the Treasurer. Mr Crean, in which he went into considerable depth about the proposals which I would introduce, which was very sensible because he was talking to a group of people who were interested in the proposals. In the Senate I have fairly freely answered, in the course of the last few months, questions which have been put to me about the nature of the legislation.
– Do not dodge the question.
– I have not hesitated in the Senate or out on the platform or anywhere else to indicate the lines of the legislation with as much specificity as was appropriate to the occasion. I do not see that any action is called for in relation to legislation which has been expounded for months. I think that even before the election our proposals to introduce the rule of law into economic affairs were put in a fairly great deal of detail.
– My question, which is directed to the Minister representing the Minister for Defence, concerns one of the unannounced cuts in defence expenditure. I refer to the 25 per cent reduction in flying hours which has been imposed on all branches of the Royal Australian Air Force. Does the Minister acknowledge a direct relationship between air accidents and flying experience? Has not this reduction in flying hours reduced flying time for pilots below a safe minimum? Is it a fact, as reported in this morning’s Financial Review’, that the Air Force now has too many pilots and flyers and that these men are being encouraged to leave the Royal Australian Air Force? Will the Government find suitable alternative employment for these men as it plans to do for civilian defence workers?
– The answer to the last part of the honourable senator’s question is that there is certainly no intention on the part of the Government or the Royal Australian Air Force to allow the reduction in flying operations to reach a point at which there may be some development of unsafe practices. Arrangements have been worked out with those in command in the Air Force. They are experienced people. They have met the operations consistent with what was necessary to keep Air Force expenditure within the vote which nas been allotted to it in view of the huge amount which has been appropriated in other directions in the defence Services. The slow down in operations generally is largely the result of the expenditure which the Government has announced in respect of improved conditions- that is, pay, defence forces retirement benefits, re-engagement bonuses, housing, etc. That slow down is part of the program. The Air Force and the Government will see that there will be no redundancies of pilots as a result of the changed conditions and the slow down in operations. In the event of any servicemen being redundant because of operations, whether it is in the Air Force, the Army or the Navy, the Government will make every effort to see that they will be protected in the same way that it is trying to safeguard the position of that minor number of people who may be displaced in other professions.
– My question is directed to the Minister for Primary Industry. In answer to a question yesterday he indicated that while in Japan next month he would be speaking to wool importing interests. In view of the volume of Australian primary products exported to Japan, will he indicate whether he will be taking the opportunity to discuss with the Japanese authorities commodities other than wool?
-I am sure that the honourable senator would appreciate that on most occasions when Ministers are overseas they are very hard pressed for time. I should not think it would be possible for me to see all the representatives of Australian primary production exports in Japan, but I have made specific arrangements, apart from matters referred to yesterday, to see the Japanese interests in the dairying industry and also in the meat industry. If possible I will be speaking also to the Australian representatives of the Australian Barley Board while I am in Japan. However, I think that may be about the limit to the number of representatives of other industries to whom I will be able to talk.
– Will the Minister for Primary Industry explain how, with the meat export levy for inspection purposes yielding an estimated $69m over 33 months, there will not be a large surplus of revenue over expenditure, given that meat inspection is estimated in the Coombs report to cost only $12.5m in 1973-74? Is it a fact that revenue from the levy on meat exports for the 33 months is intended to meet inspection costs for 36 months? What will happen to the surplus revenue accumulated over the 33-month period or, indeed, received in any one year? Will the Minister oppose the establishment of a fund and committee to administer the revenue raised in order to ensure that surplus revenue at the end of 33 months is repaid to meat exporters?
– That is a very long and complicated question. If the Minister wishes to ask for it, my inclination at this juncture is to have the question put on notice. I leave the option open to the Minister.
-Mr President, I am glad to hear your words of advice. I intended to say that this matter is covered by a Bill that will come before the Senate for debate within the next couple of days. I think that is the proper time for me to answer the questions that are now in the honourable senator’s mind.
– I direct a question to the Minister representing the Minister for Social Security. No doubt the Minister is aware that the present rate of inflation of food prices is about 1 7 per cent per annum. Has the Department of Social Security carried out any surveys into the proportion of a pensioner’s pension that is spent on food? If not, will it urgently carry out such a survey so that an immediate increase in the pension can be made if it is found that pensioners are existing below the poverty level, as I suspect many of them are?
– I do not know whether the Department of Social Security has carried out any survey of the type referred to by Senator Townley. I will certainly refer that matter for the consideration of my colleague, Mr Hayden, the Minister for Social Security. However, I remind the honourable senator that during the autumn session of the Parliament the Government moved to increase age pensions at the rate of $ 1 .50 a week and yesterday in the Senate I introduced further legislation on behalf of the Government to increase those pensions during this Budget session by another $ 1 .50 a week.
-Is the Minister for the Media aware of the disquiet in the motion picture industry over the Government’s intention to establish an authority to control the import and distribution of films in Australia? Is it a fact that nearly all overseas producers have indicated that they will not supply films to a Government controlled buying pool? If this is so, can he inform me how the Government proposes to ensure that theatre proprietors will have an adequate choice of films for their patrons?
Senator DOUGLAS McCLELLANDFirstly, I tell the honourable senator that it is not necessarily the Government’s intention to establish an authority to control the purchase of films from abroad. This was one of a great number of recommendations embodied in the Tariff Board report to the Government on what the Board considered should be done to help establish a viable film industry in Australia. The Government considered the Tariff Board report and without adopting any of its recommendations decided to refer the report for the consideration of myself and my Department and to bring further recommendations to the Government on it. My Department is now working on the preparation of those recommendations. I am not aware that overseas film distributors have threatened to put a boycott on overseas products coming into Australia in the event of a single buying authority being established, although I have heard it said that they might have to give consideration to withdrawing their products from the Australian market. All these matters are being taken into consideration by my Department in drawing up recommendations which I hope to be able to submit to Cabinet in the near future in the event of such a buying pool being established.
– I direct my question to the Minister representing the Treasurer. Because of the historical importance of this matter, will the Minister take up with his colleague, the Treasurer, the question of the identity of the ship depicted on the Australian $5 note so as to clear up some doubts expressed recently that it is not the ship ‘Waverley’ which was wrecked and became a total loss at the mouth of the Don River near Devonport in Tasmania late last century or early in the present century? Could the Minister ascertain how the Department of the Treasury came to select the ship ‘Waverley ‘ to be depicted on the $5 note?
-That must have been the last time that Don and a $5 note got together. It is so long since I saw a $5 note that I am unable to comment on that matter, but certainly I shall pass the question on to the Treasurer.
– My question is addressed to the Minister representing the Minister for Aboriginal Affairs. I refer to the outbreak of scabies and gastro-enteritis on Palm Island and medical disclosures that up to three-quarters of the children there are suffering from those complaints. As much of the problem allegedly is due to lack of sewerage and other hygiene facilities, will the Government make money available to ensure that at least sewerage facilities are installed on the island for the benefit of the people there?
– I have received no report on this matter from the Minister for Aboriginal Affairs, whom I represent. I have been concerned about Press reports. I did not know that scabies was one of the complaints involved, but I knew that the incidence of gastro-enteritis there was bad. The report, which was backed up by a medical report, was that this was a result of the economic position; that it was due to undernourishment. The Minister for Aboriginal Affairs has sent an officer to Palm Island to see whether anything can be done. For the first time we now have a Minister for Aboriginal Affairs who will pay every attention to this question. Obviously, because of past neglect the people have become undernourished to such an extent that they can contract all possible diseases. I will have the matter looked into. I am not sure that lack of sewerage is as much a cause of the problem as is the undernourishment of the population.
– I draw the attention of the Attorney-General and Leader of the Government in the Senate to what amounts to a serious breach of parliamentary privilege in the publishing last evening in the Sydney ‘Sun’ of details of a report of the Joint Parliamentary Committee on Prices concerning meat prices before the report had been presented to Parliament, thus placing all members of the Committee in an invidious position. As this is the third occasion recently on which the Press and the media have published material to which they should not have had access, will the Attorney-General consult with the President of the Senate and the Speaker of the House of Representatives with a view to reminding the Press and the media that the Parliament takes a very serious view of people contemptuously breaching parliamentary privilege?
– I certainly accept the honourable senator’s suggestion insofar as it relates to approaching you, Mr President. This is not a matter, as I see it, for the Attorney-General or a Minister to raise, and it may not be the appropriate course for me to approach the Speaker of the House of Represenatives; rather I should see whether the matter can be dealt with as a parliamentary matter, as it should be, and not as a governmental matter. As Leader of the Government in the Senate I certainly shall be happy to confer with you, Mr President, and to take the matter up with the Prime Minister in his parliamentary role.
– Order! I think I should intrude at this stage. The Presiding Officers of the other place and of the Senate are not in a position to take any notice of what may be breaches of privilege. These matters must come from the agents of the Houses, that is, joint, select or standing committees and it is for them to report to the Parliament on what they conceive to be a breach of privilege. At that stage machinery is set in motion by which the alleged breach of privilege can be proved or disproved. In these circumstances I think that there is no responsibility on me until such time as a committee has reported to the Parliament that a breach has occurred.
– Is the Minister for Primary Industry aware of the concern in the export meat industry because of the current uncertainty in the industry created by non-confirmed Government comments on what further rate of export tax the Government may impose? Is the Minister also aware that some meat export industries, involving many specialised workers, are being placed in jeopardy because of the uncertain climate existing due to the Government not promptly clarifying the position? Will the Minister make an early statement on the matter?
-As I think the honourable senator is aware, a committee report on this matter is to be tabled in the Parliament today. During the course of this matter I have indicated all along my personal view. It is a matter for determination by the Government. The Government made it quite clear in its reference to the committee that if any action were to be taken it would not be taken until such time as that committee report was tabled. It is to be tabled today. I am not in a position to say what further action may or may not be taken but I am quite sure that the overall interests of the Australian community will be taken into account should the Government decide to do anything.
-I ask the Minister for the Media: Why have the Australian Broadcasting Commission concert admission prices at the Sydney Opera House been increased?
-The Australian Broadcasting Commission concert admission prices at the Sydney Opera House will go up next year by about 25 per cent. The increase will cover not only the increased rent which is fixed by the Sydney Opera House Trust at the Opera House in comparison with the rent charged at the Sydney Town Hall, but also the higher costs involved in maintaining the Sydney Symphony Orchestra, higher artists fees and other running costs. The policy of the Commission is not to raise concert prices year by year but to make a periodic survey of costs and to adjust prices accordingly. The fact is that ABC concert prices in Sydney have not generally been increased since 1 97 1 for 3 seasons. In any event, ABC concert prices are among the cheapest in the world having regard to the high standard of the artists and orchestras which are presented. Even with next year’s proposed higher prices, the average cost per concert for a series of 10 orchestral concerts to the average patron in the best seats will be a mere $2.70. A subscriber may attend these concerts for as little as $1.40 a concert if he chooses sections other than the best sections of the Opera House.
– I ask the Minister representing the Minister for Foreign Affairs whether his attention has been drawn to the letter written by Dr Sakharov to the United States Congress appealing to Congress to block trade concessions to the Union of Soviet Socialist Republics unless it allows free emigration of its citizens. Will the Minister re-examine his answer to my question last week when he said that restrictions placed on Jewish emigration from the Soviet Union was an internal matter? Does the Minister agree with Dr Sakharov that the free movement of peoples is not an internal matter but a fundamental principle of international law? Does the Minister agree with Dr Sakharov ‘s view that:
The refusal to follow a policy based on principle would amount to a betrayal of thousands of people, Jews and nonJews alike who wish to emigrate; hundreds in the camps and psychiatric hospitals; and the sacrifices of the Berlin Wall.
Will the Minister assure the Senate that the Government will heed Dr Sakharov’s appeal in relation to Australia’s own trade dealings with the USSR?
– I did not give an answer last week because I was not here last week. I have not read Dr Sakharov’s letter. I will do so in the context of the question asked by Senator Kane and give him any information I obtain.
– I am sorry, perhaps I should have directed the question to the AttorneyGeneral, who answered the earlier question.
– Does the Attorney-; General wish to answer it?
– I am sorry, I was not listening. I ask the honourable senator to put the question on the notice paper.
-I draw the attention of the Minister representing the Minister for Transport to an article by Mr Gordon Messiter which appeared in yesterday’s edition of the Canberra Times’. Does the Minister agree with Mr Messiter’s advocacy of the wearing of crash helmets by motor cyclists? Does he endorse Mr Messiter’s denunciation of the arguments used by opponents of the compulsory wearing of crash helmets?
– Yes, I have seen the article written by Mr Messiter. I believe there is a trend among motor cyclists to question the value of wearing crash helmets. The article written by Mr Messiter referred to motor cyclists. Mr Messiter is a traffic engineer with the Department of the Capital Territory. He pertinently points out in his article that motor cyclists comprise the highest proportion of people killed on the roads. The number of motor cyclists killed on the roads reached an all time high of 145 in 195 1, and this figure has decreased over the years since the introduction of compulsory wearing of crash helmets in all States of the Commonwealth. The crash helmets must comply with the standards laid down by the Standards Association of Australia, and the wearing of these crash helmets has cut the death toll of motor cyclists by one-third. So I agree with what Mr Messiter says in his article, namely, that the compulsory wearing of crash helmets is justified because of the protection they afford.
– I ask the Minister representing the Prime Minister whether he will confer with the Minister for Aboriginal Affairs and the Treasurer with a view to making an additional sum of money available immediately to upgrade sharply the socio-economic conditions of” Aborigines on the Palm Island reserve. In particular, will the Government take urgent steps to institute the following: The installation of sewerage for every home; improved wages, with at least the basic wage for every worker; provision of a Commonwealth medical team to include available Aboriginal nurses, to work on the reserve for at least 6 months; and the application of pressure on the Queensland Government to abolish the Acts related to Aborigines thus giving mental and physical freedom to all who live on the reserve?
-The policy of the Government in general terms is that action be taken to bring the regulation of Aboriginal affairs under legislation of this Parliament and under the administration of officers appointed by the Government. At the moment Palm Island is under the control of the Queensland Government and is still subject to the laws of the Parliament of Queensland. Nevertheless, steps can be taken to give relief in relation to some of the matters referred to by the honourable senator. I shall certainly take up the matter with the appropriate Ministers for their consideration.
– My question, which is directed to the Attorney-General, refers to the Minister’s statement yesterday regarding proposed Federal legal aid to thalidomide victims. Is the Minister aware that the New South Wales Government has granted a certificate under the Legal Assistance Act to every person where an action is to be brought for thalidomide damage, that the New South Wales Government by voluntary gesture provided finance for the Thompson case in the Privy Council against an action by the Distillers company and that the solicitor acting for all identified thalidomide cases in New South Wales and also acting either directly or as an agent for virtually all such cases in Australia has not sought payment for his fees or indeed for the counsel whom he briefed? In view of these facts, will the Minister dispel any suggestion that might arise from his statement that thalidomide victims have suffered any serious impairment of their legal rights due to inability to pay costs? Finally, will the Minister also acknowledge that the action of the New South Wales Government in this matter has been taken promptly, sympathetically and without invoking any needs or means test?
-I am indebted to the honourable senator for what he has said and, without knowing the precise details of the matters to which he has referred, I will accept them and say that the Australian Government is concerned only to see that aid is available for all. There are some who apparently have been accepted as being in the category of victims, there are others who are not accepted, and there is a certain amount of doubt about the area to which this extends. I am pleased to hear what has been said about a member of the legal profession. Insofar as aid is being given by the New South Wales Government, it is important to note that the New South Wales Government is trying to assist the victims. So also is the Australian Government. I am quite sure that between us all the appropriate legal assistance will be given.
If I may put in a commercial for the Australian Government regarding legal aid, I should indicate that this year the Australian Government will be supplying to the States for supplementation of their legal aid services the sum of $2m, of which about $733,000 will go to New South Wales.
-Is that on a population basis?
– That is on a per capita basis. It was agreed at a meeting of the Standing Committee of Attorneys-General. Of course, it is still dependent on the will of this Parliament, but assuming the Parliament endorses the Budget proposals, including that part, there would be a very generous distribution of money to the States. It is pleasing to know that out of all this will come assistance to the victims of thalidomide.
– My question, which is directed to the Minister for Primary Industry, refers to an answer that he gave to Senator Laucke yesterday concerning the abolition of the sales tax exemption on beverages which contain less than 5 per cent of fruit. By way of preface, I would like to quote one or two sentences from the Minister’s answer. He said:
It was made clear to me by the industry that it was on the current lemon crop that action had to be taken, and taken quickly.
He went on to say:
I appreciate …. that there will be problems with oranges later and with apple juice after that …. We have stated quite clearly that we will assist in the readjustment of the industry where that is necessary.
Is the Minister aware that 100,000 tons of fruit has been adversely affected by this precipitate action and that 80 per cent of that fruit is concerned in the production of apple juice? Is he aware also that manufacturers of carbonated waters have huge stocks of apple juice on hand, which means that in the short term they will have great losses and in the long term it will be the apple industry, much more than the lemon industry, which will be adversely affected and probably will have growers put out of action?
– Yes, I am aware that the area of greatest concern as regards volume is the apple industry. I thought I had indicated that either in an answer yesterday or in a previous answer. The point that I was making in my reply yesterday was that the most immediate problem was in the case of the lemon industry. I am not aware of the precise figures to which Senator Dame Nancy Buttfield has referred, but I imagine that it probably would be correct that 80 per cent of the amount of fruit she mentioned is apples. My understanding of the position is that the lemon problem has been resolved to the satisfaction of the industry. The Government now has to make a decision in regard to oranges and apples. As I understand the position in regard to those fruits, there is not the urgency that there was in the case of lemons. Further consideration will be given to this matter and we will come up with a resolution of the problem along the lines that we have adopted in regard to the lemon industry.
-Has the attention of the Minister for the Media been drawn to an article which appeared in today’s issue of a Melbourne newspaper to the effect that the Victorian Trades Hall Council will have discussions with the Victorian Football League about the direct televising of the Victorian Australian Rules grand final in that State? Can the Minister advise me whether there have been any further discussions between the Australian Broadcasting Commission and the Victorian Football League concerning the televising of this game? If not, will the Minister ascertain whether any talks have taken place and advise me of the results of those talks?
Senator DOUGLAS McCLELLANDSenator Poyser raised this matter with me one day last week at question time and on that occasion I pointed out to him that the responsibility for the Victorian Football League grand final not being telecast would rest purely and squarely on the shoulders of the Victorian Football League. I can tell the honourable senator that, if the Victorian Football League is prepared to allow the Australian Broadcasting Commission to telecast the game, the Commission will be very happy to do so. I do not know whether any further negotiations have been going on; but I will check with the General Manager of the Commission and advise the honourable senator accordingly.
– My question, which is directed to the Minister for Primary Industry, is really supplementary to a question on notice that was answered by the Minister yesterday. Was the 300 tons of potatoes imported from New Zealand by Marrickville Holdings Ltd during the months of August and September 1973 part of the 800 tons approved for importation, or is it an addition thereto? Who were the other importers? If the Minister cannot inform the Parliament of the price paid in the contracts, can he inform the Parliament whether it was less than the Australian market price during August, the same or in excess of the Australian price?
– The 300 tons referred to was part of the 800 tons. The other 500 tons was imported by a firm which I think is called All States Foods Ltd. In regard to the price, I stand by the answer which I gave to the honourable senator yesterday. This was a matter of commercial negotiation. I do not really think this should be a matter of concern to the Parliament. The arrangements were entered into in the normal way by traders.
– The growers here would like to know what they have to compete with.
-I would think it would have been a normal operation of the market and an agreement between those traders as to what price was negotiated.
– My question is directed to the Minister for Primary Industry. Did the Government propose in March this year to increase the interest rate on debt reconstruction money under the rural reconstruction scheme from 4 per cent to 5 per cent? Was the proposal strongly opposed by the so-called rural rump of the Labor caucus and was it later abandoned in accordance with the demands of the States? In view of the opposition then to an increase in the interest rates applying to primary producers, has the Minister and/or a section of caucus attempted to make out a case to exempt producers from the crippling new interest rates now being imposed?
– Taking the last part of the honourable senator’s question first, I am not aware of any crippling rates which have been imposed and 1 am not aware of any section of the Parliamentary Labor Party that is exercising any great influence in this area. The first part of the honourable senator’s question indicated that he was under a complete misconception as to what happened last March. The officers of the various States who met prior to the meeting of Ministers indicated that the interest rate should be increased from 4 per cent to 5 per cent. It was on that basis that the matter was raised at the ministerial meeting. There was no increase in the rate. To my knowledge no initiatives have been taken by anyone to change it now.
-My question is directed to the Minister assisting the Minister for Foreign Affairs. I refer to the Prime Minister’s announcement that an agency is to be established to administer Australia’s international aid. Can the Minister say who will comprise the membership of this agency. Is it proposed to have on it representatives of voluntary organisations many of which have worked in the area of international aid for a very long time? Will the agency have any advisory capacity regarding the amount of money to be provided for international aid and where it should be spent?
-The Prime Minister’s announcement followed an inquiry by the Joint Parliamentary Committee on Foreign Affairs and Defence last year under the chairmanship of the present Minister for Science and Minister for External Territories, Mr Morrison, into the whole subject of aid. I am sure honourable senators will recall the report of the Committee being tabled in the Senate. I think I tabled it earlier this year. The matters raised by the honourable senator in his question will be the subject of the appropriate Bill. We have not yet considered the details of it. There will be a broad advisory body which will encompass the things to which Senator Davidson referred. I cannot give the honourable senator the names of the people who will be on it.
Aid has come to be a matter of vital importance now. In spite of the aid projects that are taking place around the world we are not achieving- when I say ‘we’ I mean the donor countries- what we set out to do. There is still a tremendous amount of poverty in the world. In some cases the gap between the poor and the rich is getting greater. This adds up to the fact that one has to be tremendously efficient in the provision of aid. There cannot be any waste in the provision of aid by international bodies. I will be attending a meeting of one of the international bodies shortly. They are fining down what they regard as being aid. An investment in another country will not necessarily be counted as being an aid project. Arising out of international movements in this report the Government decided to make its aid available on a more efficient basis. It will appoint somebody who will be solely responsible to the Minister for Foreign Affairs for the control of aid rather than it being just a part of the Department of Foreign Affairs as it has been in the past.
– I direct a question to the Attorney-General. Is it not a fact that recently the Government knowingly admitted entrance to Australia without question a communist terrorist, one Tariq Ali? Is it not a fact that Tariq Ali came to Australia to raise money for the Black September Movement? Is it not also a fact that the present Government is now acutely aware of the possibility of terrorist activity in Australia by the Black September Movement against such distinguished personages as the Prime Minister, the Attorney-General and the Hon. Moss Cass? Will the Attorney-General reassure the Senate by indicating that all proper protection will be afforded to these personages until the danger has passed- not necessarily by providing a helicopter as was provided for Mr Bijedic?
-Without dealing with all of the honourable senator’s question which, if he wishes, might be placed on notice, I should say that special security precautions have been put into effect, that they are being continued and that appropriate measures will be taken in the event of terrorist activities occurring in Australia. I mentioned yesterday and I say again that the Government is quite conscious of the danger, of the real possibility of some terrorist incident occurring in Australia, is doing all it can, and is receiving co-operation from the law enforcement authorities of the States, and that proper planning has taken place. Systematic procedures have been adopted and in every way the Australian Government has done what would be expected that it would do.
– Before I suspend the sitting of the Senate I should like the Leader of the Government to indicate whether he would agree that question time should continue to the normal hour.
– Do you mean by continuing now?
– No, after the luncheon suspension.
– Yes, we will continue to the usual hour if honourable senators wish to avail themselves of it.
Sitting suspended from 12.47 to 2.15 p.m.
Australia must get off its backside and find oil quickly, effectively and massively.
He also said that unless this were done Australia would be ‘liable in the 1980s to be held to ransom by every sheik in the Middle East’. He went on to say that the Federal Government was fiddling while the oil burns’. Will the Leader of the Government in the Senate acknowledge that the unco-operative attitude of his Government and the policy of his Government towards the mining industry as demonstrated by the withdrawal of special concessions and encouragements to the mining industry have been largely responsible for the dramatic reduction in the amount which the mining industry proposes to expend on exploration- for example, $60m this year compared with $ 1 6 1 m last year?
– The question was asked in the context of what we know is a world energy crisis. Other industrialised countries are suffering from a shortage of fuels. No doubt these shortages will persist unless some way is found to obtain energy more directly from its source and without the intermediary of fossil mechanisms as is the case with oil. The Minister for Minerals and Energy has acted decisively and correctly to survey the whole of the industry. He is able to regulate the export of energy of all kinds in order that Australia will not have its resources unduly depleted. He has taken other action such as the introduction of the legislation to establish a National Pipeline Authority. In various ways he has shown that he is aware of the problems and that he is determined to see that there is a wise utilisation of Australia’s resources in the interests primarily of Australians. This attitude replaces the attitude of the previous Government by which Australia and its oil resources were open to exploitation, principally by foreign corporations which had, understandably, a concern which was not primarily an Australian concern. I think that future generations of Australians will be thankful for the efforts of the Minister for Minerals and Energy and because he is so aware of the problems.
In order that there be some degree of certainty that the approaches which are being taken by the Minister are correct he has proposed that a royal commission, to be chaired by Mr Justice Collins, should inquire into the whole of the operations of the oil industry and its ancillaries. That inquiry will commence shortly. Every opportunity will be given to have an open hearing of the various facets of the industry and a determination of what is best for the industry. I think that this action demonstrates that the Minister is confident of the policies upon which he has embarked. Also, it indicates his confidence that an open hearing and a full investigation of the ramifications of Australia’s oil industry by an independent commissioner is the best way to show that the course upon which he is proceeding is correct. Of course, if it is shown that there should be some modification or alteration, he will have the best advice to be able to do that.
– I direct a question to the Minister for Primary Industry. I refer to a question asked by my colleague Senator Dame Nancy Buttfield this morning in regard to the consideration that is being given to enable sales of apple juice and citrus juice to move in view of the deterrent that has come from the Government ‘s Budget proposal to withdraw the sales tax exemption on carbonated cordial. In view of the urgency of the matter, will he consider the quantity of 100,000 tons, 80 per cent of which is apple products, suggested by Senator Dame Nancy Buttfield? Will he take up the matter as one requiring urgent consideration and let the Senate know what alternative proposal he will put forward when the sales tax exemption is removed?
-The matter is already under urgent consideration, as I think the honourable senator knows from replies I have given previously to questions on this subject. I will make an announcement when the Government decides what its intentions are and what action it intends to take.
– I direct a question either to the Minister representing the Treasurer or alternatively to the Minister representing the Minister for Urban and Regional Development. I am not sure precisely who is in the best position to answer the question. Can the Minister provide any details of the terms of the agreement between the Bond Corporation, Sun City Pty Ltd and the Tokyu Corporation of Japan relating to the Yanchep development in Western Australia? Further, is it a fact that the Commonwealth proposes to acquire part of that land for regional development? If so, what is the agreed price which the Commonwealth is to pay Sun City Pty Ltd?
- Senator Cavanagh, is the answer to this question within your knowledge as Minister representing the Minister for Urban and Regional Development?
– If this is an agreement involving the Department of Urban and Regional Development, I know nothing of it. I suggest that the honourable senator place the question on notice. Whatever portfolio it comes under I can assure the honourable senator that he will receive an early reply.
– I direct a question to the Attorney-General. Mr President, it will be necessary for me to refer briefly to a letter over the signature of Senator J. T. Kane dated 19 September 1973, which is today, which I understand was distributed to all Australian Labor Party senators and members of the House of Representatives. I refer to the first paragraph of the letter so that the question will be intelligible.
-Is this anticipating matters that are before the Senate at the present moment? If so, I rule the question out of order.
-It may fall within that category, but may I read the first part of it?
– All right.
– It is addressed as follows:
The Government is prepared to submit a prices power to a Referendum. But the Attorney-General’s Depanment says that if this prices referendum is passed it will also give the Commonwealth power to fix wages throughout the nation. The Depanment says that wages are simply the price of labour. Therefore it concludes that fixing pices will also mean fixing wages.
I wish to ask the Attorney-General: (1) Is he aware whether his Department has, in fact, provided that legal opinion to Senator Kane; and (2) if it is not beyond the bounds of the Standing Orders, will he be able to inform the Senate as to his opinion of that?
– No, I rule it out of order as to the Attorney-General giving an opinion. He is not entitled to be asked nor is he entitled to give a legal opinion. He may answer the first part of the question.
– The answer to the first part of the question is no. This puzzles me. I have not had a chance to speak to Senator Kane about the matter, but in view of the fact that it has been given wide circulation -
– There was a Press statement to that effect.
– Some reference in the Press to the same kind of advice was brought to my attention. It was to the effect that power to fix prices would provide power to fix wages throughout the nation. I have made inquiries and, as far as can be ascertained, my Department has given no such advice; nor has the Solicitor-General and nor has the Crown Solicitor. It is not known how that came to be stated! There may be some misapprehension.
– Do you think there is any substance in it?
– Any response by me has been ruled out of order by you, Mr President. Let this be clear No such advice has been given, as far as can be ascertained, by the AttorneyGeneral’s Department or anyone connected with it.
– I direct my question to the Minister for the Media. In view of the greatly increased involvement of the Government in all matters pertaining to the media and the dangers inherent in any possible over-participation, and in view of the call by the Australian Broadcasting Commission for changes to the Broadcasting and Television Act in order to strengthen its independence, does the Government intend taking such action as would ensure the greater independence sought by the Commission?
– I have read the annual report of the Austraiian Broadcasting Commission. If I may say so, I think it is an excellent report and I commend it to all honourable senators for reading. As to the independence of the Commission, shortly after I assumed this office I had discussions with the then Chairman of the Australian Broadcasting Commission, Sir Robert Madgwick. I told him that it was Government policy to guarantee the political and programming independence of the Commission. I asked him to discuss this aspect with the Commission and to make recommendations to me as to how the Broadcasting and Television Act could be amended in order more effectively to achieve that aim. Since Sir Robert Madgwick ‘s retirement I have continued that sort of discussion with the new Chairman, Professor Downing, and recommendations for amendment of the Broadcasting and Television Act were submitted to me recently. They are now being studied, along with representations I have received from the ABC staff association.
One area which might interest the honourable senator so far as the independence of the Commission is concerned is section 16 (3) of the existing Broadcasting and Television Act which enables the Australian Broadcasting Control Board to determine the transmission hours not only of commercial broadcasting and television stations but of all broadcasting and television stations, and that naturally includes the ABC stations. This means that one statutory authority can determine the hours of transmission of another statutory authority. This rather impedes the Commission in its complete independence. As to the first part of the honourable senator’s question, I draw his attention to remarks appearing on page 1 1 of the annual report of the Commission, where this is stated:
There is no field of human activity where freedom can be guaranteed solely by an Act of Parliament. The spirit in which an Act is interpreted is often far more important than the terms of the Act itself.
– Order! The Minister is beginning to debate the matter.
-I direct a question to the Leader of the Government in the Senate as Minister representing the Prime Minister, I refer to the report of a Press conference which was held by the Prime Minister on Tuesday, 1 1 September, at which he revealed that a plan for the Australian Government to buy overseas held shares in Australian companies had been informally discussed. The Prime Minister is reported as stating that no formal paper was being discussed at that time but that he did not in any way disparage the idea. I ask: Has any formal plan been discussed which has resulted in Government action to acquire directly or through Government corporations or nominees any shares in public companies within the past 7 days?
– A similiar question was asked before the suspension of the sitting for luncheon. I then requested that it be placed on notice. I am not really able to tell the honourable senator with any exactitude what the answer is. But I will endeavour to get an answer for her today. I ask the honourable senator to place the question on notice. If I can find the information before the day is out I shall give it to her.
-Mr President, I ask that further questions be placed on the notice paper.
– The honourable senator took 5 minutes to answer the first question this afternoon.
– Order! I must make this observation and it is fair that I should make it. If honourable senators ask questions which are long and complicated they invite long and complicated answers, with a tendency to debate the answers. If honourable senators want to get through question time satisfactorily, questions must be succinct and I suggest that answers also should be succinct. Oddly enough, in the last week the number of questions asked and answered dropped by 10 per cent, basically as a result of this practice.
Dear Mr President,
In accordance with Standing Order 64, 1 intend to move on the next day of sitting that the Senate, at its rising, adjourn until 9.59 a.m. on Thursday, 20 September 1973 for the purpose of discussing a matter of urgency, viz:
The irresponsibility of the Government demonstrated in its failure to give the community a fair and honest deal on the issue of inflation.’
Is the motion supported? (More than the number of Senators required by the Standing Orders having risen in their places)
– I move:
I do so for the purpose of debating a matter of urgency, namely:
The irresponsibility of the Government demonstrated in its failure to give the community a fair and honest deal on the issue of inflation.
The purpose of this motion and statement of urgency upon which the motion is based is to focus attention, and to continue to focus attention, on questions which the Government of the day seeks to avoid. The question under discussion is the problem which is caused to an increasing number of Australians by the inflationary situation represented by rising prices and an everincreasing cost of living. It is an issue, of course, upon which the Opposition both in this chamber and in the House of Representatives has raised matters of urgency in the past. It is an area about which questions have been continually asked. It is a matter of increasing public concern. Yet what we have received from the Government- from the Prime Minister (Mr Whitlam) and his Ministersis a series of bombast, double talk, prevarication and ultimately evasion. This is not good enough when on all sides the apprehension and the anxiety which one hears everywhere one goes is not being resolutely recognised and tackled. I said last week that the purpose of an opposition was to expose the inadequacies of a government and to stimulate government to action where action was required. If ever there was a case for this sort of exposure to take place, if ever there was an area where action should be taken, it is in relation to this question of coping with inflationary pressures and the cost of living as expressed in inflation. The statement of urgency, as read by the President, states:
The irresponsibility of the Government demonstrated in its failure to give the community a fair and honest deal on the issue of inflation.
There should be no question in anybody’s mind that responsibility for the condition of the economy must rest with the Government. I did not understand the Australian Labor Party, when in opposition, to have challenged that, and it is only in more recent times, when it has been in government, that there has been some doubt as to whether the Government accepts responsibilities in this area. The Liberals certainly acknowledged that responsibility for over 23 years. We take pride in our performance as economic managers in this country because in the 23 years of LiberalCountry Party Government there were continuously rising standards of living for every Australian and protection was accorded to those persons for whom society always has an obligation to provide.
I think that the appropriate approach is to recognise what the Australian Labor Party said before it was elected to government and what it highlighted in its election propaganda. The
Labor Party then said- it was in all its propaganda on prices and inflation- ‘Inflation is the Government’s responsibility, not yours’. It is in respect of that responsibility, that obligation, that the Australian Labor Party has been so derelict during the period it has been in office. How is this irresponsibility demonstrated? I suggest that it is demonstrated in the following ways: It is marked by promises of action upon which people were entitled to place some reliance when they were determining the government that they wanted in this country, and which have been broken or have not been honoured. There has been an almost total unwillingness to recognise the need to deal with all the factors contributing to inflation. There certainly has been an expressed recognition and desire to deal with some of the factors, but there has not been a recognition or willingness to deal with all the factors and of course prominent, if not pre-eminent, amongst those factors are constant wage demands, wage increases which are an element, differing from industry to industry and from business to business, in the cost pressures which find expression in increased prices.
If there is one salient and obvious truth which the Australian people accept, it is that if you are going to increase wages, then your employer who has to pay those wages will pass on the increase in some way, and the way in which he usually passes it on is by increasing the prices that he charges the consumers. One cannot ignore the inter-relationship of wage increases and price increases. The irresponsibility is marked by a lack of real concern about rising prices, the impact of Government spending and the impact and consequences of high interest rates. There is a lack of concern about the way in which the Public Service has been used as a pace-setter to establish standards which we are told constantly by the Government are to be the standards which ought to apply generally throughout industry. We have a lack of real concern about the cost of living and we have the anxieties and real apprehension that an increasing cost of living, without any sign that at some future stage it will cease, naturally creates amongst many people in Australia.
There is also irresponsibility in that there is apparently a vested interest by the Government in having continuing inflation. The Government came into office with promises which must cost thousands of millions of dollars if they are to be implemented. The Government came into office with a promise that it would not increase the rates of taxation. But it is determined, notwithstanding all the evidence of rising costs and rising prices, to proceed with its policies for greater public expenditure. In order to maintain the promise that it will not increase the rates of taxation, the Government has a vested interest in inflation by ensuring that incomes are continuously rising so that the rate of taxation which is applicable to higher incomes will provide the revenues from which the Government can finance what it calls its great social reforms.
The whole of the present Budget is postulated not on an increase in the rates of taxation- I leave aside the increases in postage rates and certain forms of indirect taxation- but on the basis that revenue will rise simply because people will be earning more. For that situation to prevail, the Government must continue the inflationary pressures. Indeed, the Budget itself acknowledges that over the next year there will be an increase in average weekly earnings of some 1 3 per cent on the rate of average weekly earnings over the preceding year. That is an acknowledgment, if ever one was required, of the fact that the Government expects that that will be the way in which wages will rise.
If we maintain the general pattern over recent years- namely, a productivity increase, measured as best it can be by the economists, of 2 per cent to 3 per cent a year- we are geared to an inflation rate of something like 10 per cent. But it is the fact that the Government adopts this attitude and presumes to regard inflation as the ordinary pattern that must continue into the future which I believe marks the irresponsibility of the Government’s approach to this whole question. In short, there is no comprehensive plan, there is no sense of urgency and there is no preparedness to tackle inflation, in all its aspects, at its root causes. This is a point which has been made by the Opposition ever since it became an Opposition, but with increasing urgency as the problem has become more apparent.
I stressed earlier that the Liberal and Country Parties have a proud record in terms of the management of the economy of this country for the 23 years in which they were in office. That is something which I know the people of Australia will not deny, because so many people can point to their own increase in standards and prosperity which could have come about only in the type of environment which the previous Government created. When we did have problems arising from boom conditions in 1969-70 there were consequences which had to be dealt with by the Government. It is true that we had a developing rate of inflation which was above the average of 3 per cent that had prevailed throughout the 1 960 ‘s and which got up to a level of 7 per cent in 1971-72. We did have unemployment which reached 2 per cent of the working population, which was quite remarkable by world standards but certainly unsatisfactory by traditional Australian standards- traditional standards which the Australian Liberal-Country Party Government had created over its years in office.
In the middle of last year, because we did have a need to restore confidence in the community, because there was a need to give a stimulus to consumer spending, because there was a need to reduce the rate of unemployment and because with all of this we had to limit or avoid any significant increase in Government expenditure, steps were taken in the last Budget which were designed to improve the flow of money throughout the community. But those members of the Liberal and Country Parties who were in Government at that time recognised that one had to keep an eye on the volume of money and to ensure that excessive consumer spending did not produce an inflationary spiral. As good economic managers, members of the Opposition realise that that was the course which the new Government should have pursued early in 1973.
Suggestions have been made, of course, that the present inflationary spiral is directly the consequence, and therefore the blame, of the previous Government. Figures marked for their incompleteness rather than their proof of that proposition have been put forward by Ministers of the present Government. But let us look at what the position is. During the 5 -year period from June 1966 to June 1971 the volume of money in the community increased at the annual average rate of 7.7 per cent. The amount of money in the community increased at that average rate over a 5-year period. In the 1 2 months to June 1 972 it increased by 10 per cent. Part of that was due to deliberate government action. In the 6 months from June 1972 until the previous government went out of office at the end of 1 972 it increased by 16.7 per cent. But the figure for the whole year- from June 1972 to May 1 973- was 25.8 per cent. The real increase in the volume of money over that period occurred in the latter part of that financial year. The real point is that there is an unwillingness on the part of the Government to recognise that that volume of money, when there is added to it a tremendous upsurge in public expenditure and in the growth of the Public Service, requires countervailing action to lessen the impact which it must have upon demand and, because resources are limited, the effect that must have on prices. It is the unwillingness of the Government to recognise those facts and to take comprehensive action which is the cause of so much concern.
When one examines the question of prices, which to everybody who is concerned about this matter is the real problem and the real source of anxiety as to what is to happen in the future, what does one find? There is an almost daily parade in the newspapers of prospective price increases. If it is not electricity rates which are going up it is doctors’ fees or water rates. We know, of course, that there has been a continual increase in the price of land. We also know that there has been a continual increase in food prices. We know, for example, that hospital charges are to go up by 50 per cent on the fees which were fixed in 1971. No longer are we recognising price increases of marginal amounts. Price increases and, indeed, claims for wage increases are being measured in terms of 1 5 per cent and 20 per cent. In the case of Victoria the teachers have put in a claim for a 43 per cent increase. All this flows from a basic concern by people in the community that they cannot see the end of inflation and they cannot see in government action any real prospect of an end to it.
What has happened in terms of the consumer price index? I mentioned last week that from January 1 972 to December 1 972 the consumer price index rose by 4.5 per cent. The increase was higher than the rate of increase which we experienced throughout the 1960s but it was a remarkably moderate rise when contrasted with the pattern this year. In the first 2 quarters of this year the consumer price index has risen by 5.4 per cent. It has already risen more in 6 months than it rose throughout the whole of 1972. This morning’s Press indicates that the rise in the index for the 3 months ending in September is likely to exceed the record 3.3 per cent rise which occurred in the June quarter. I have in front of me this morning’s Melbourne ‘Age’, which states on its front page: ‘Food prices up 2.8 per cent in one month’. A table is also set out- I presume that it was prepared for the ‘Age’ by its economist- which indicates the percentage increases in the prices of some products over the past 12 months. Cereal products have increased by 6 per cent. Dairy produce has increased by 6 per cent. Preserved fruits and vegetables have increased by 4 per cent. Potatoes and onions have increased by 21 per cent. Soft drinks, ice cream and confectionery have increased by 7 per cent. Other foods, except meat, have increased by 3 per cent. Meat has increased by 32 per cent. It is broken up into beef, mutton, lamb, pork and processed meat, all of which indicate that there has been a continual rising pattern over the whole of our foodstuffs- our household essentials. What indications are there of an end to these price rises?
– A good argument for price control.
– I will not get into a debate which will occupy us later today and tomorrow. The problem about price control, being digressed slightly by Senator Cant, is that throughout all of this year the Government has said that it did not want price control. The Government and its advisers apparently still do not want price control. The Prime Minister said on Monday night that he had great reservations about price control. It was the panicking Labor Caucus, the 90-man Government of this country, which apparently decided for political purposes that it wanted to put up a piecemeal referendum, as though that can solve the matter unless the Government is prepared to tackle other matters as well.
May I refer to a couple of passages from the Treasury’s review of the Australian economy which was published prior to the Budget of this year. We all know that this document, ‘Australian Economy’, is published by the Treasury every year. What this one says is, I think, a fair basis upon which to look at the position in December 1972 when the present Government took over. This is what the Treasury paper says:
At the same time, some levelling off and indeed reversal of the rate of price increases were emerging and some mild optimism as to the future course of prices did seem warranted.
It concluded that aspect by saying:
There is a need to tackle all the factors contributing to inflation in a concerted way and with the weapons appropriate to each.
I make 2 points from that. Firstly, at the time the change of government occurred in December 1972 the Labor Party received an economy which was in good condition and, with the Treasury assessment of the prospects, every reason to believe it would be in a better condition with good economic management as 1973 progressed. The second point I make, following the Treasury statement, is this: If inflation is to be tackled, it must be tackled in a concerted way and with the weapons appropriate to each aspect of inflation. In short, you must look at the whole problem and you must deal with the problem as a whole.
Price increases have had enormous consequence in a variety of ways. One has only to look at the food prices increases which were mentioned this morning. If a person can think back 12 months he will recall that his or her food bill cost $30 a week. That person will find that today he or she has to pay $36 for precisely the same food bill. And who can say that the cost will not be $40 or $42 before the year is out. A newspaper in Melbourne has since March this year been running its own shopping guide which is very interesting to read week by week. This shows that in 6 months since March the cost of basic commodities which constitute that shopping guide has increased by 10 per cent. I am sure that every person knows from personal experience that costs be they for food or household items, the interest rates which he is paying on his home, the cost of fees to his doctor or to his plumber or the television repairman or one of the other persons who come to the house have risen enormously. And there does not appear to be any real concern on the part of this Government to do anything about them. This affect’s not only the wife or the mother who is responsible for the family. She of course sees the value of her dollar diminishing daily and does not know when that is going to end. This affects also not only persons on fixed incomes such as pensioners and superannuants, the persons who have no industrial power with which to pressure for increased wages. They may have to eat into whatever shares they hold, if they hold any, and find they must sell them at a reducing price, particularly on a market which is depressed; or, if they have money in the bank which they have set aside for use some day, the interest they receive from it is eaten by the price increases which are occurring daily.
This is undermining and destroying the basic stability and basic aspirations of the ordinary Australian who over the past 20 years felt he could build up some wealth and some ability to look after himself. He finds now that it is all being dissipated simply because factors have emerged which he cannot control. We all know that one of the great problems in Australia is to make people feel that they are identified in some way with the society of which they are a part, that they are not constantly being controlled or manipulated by forces which they are unable to overcome. In this area of inflation they feel that there are pressures crowding in upon them which they are unable to break through. That is where the Government has an obligation. The previous Government constantly recognised it as an obligation, but this Government seems to regard ideological and sectional fixations as more important than concerted, positive action in the public interest.
We have reduced stability and diminished capacity on the part of people to cope with rising prices and the needs of ordinary living. We have a breeding of anxiety and apprehension. All of this is against a background in the business community in which there is a demanding, by those who have money to lend, of higher interest rates. They will demand even higher interest rates as they sense that there is every prospect of getting them. That is what the Government has done by the uncertainty with which it indicated it was approaching the monetary policy question less than a fortnight ago. We have an increasing speculation in real assets; we have a raising of prices whenever anyone gets the chance because he believes that unless he does so there will be some plan which will prevent him from raising prices and getting what he thinks is his return. Throughout the wage earning community we have the natural anxiety which leads to wage claims being made on the assumption that unless wage demands are made and unless increased wages are obtained the wage earners will be left behind as prices rise around them. This is part of the environment in which some action has to be taken and in which, as I stress because it is the purpose of debating this matter of urgency, the Government has shown that it is quite reluctant to do anything.
Why is the Government reluctant? All honourable senators on this side know- I am sure that the Government itself knows- that it is reluctant to take action because it knows that if it deals in any way on the front of wage demands or if it deals in any way with incomes there will be an initial reaction, which it cannot withstand, from the trade union movement. Why should Mr Hawke so easily throw a douche of cold water in the face of Mr Whitlam only 2 nights ago by denying what Mr Whitlam said? Mr Whitlam said that he would receive co-operation from the trade union movement if price control was effective. Mr Hawke did not even indicate that he would be prepared to take action on the trade union front if there could be effective price control. It is a totally unco-operative attitude, and it is based upon the fact that the union movement is not prepared to give an inch. There is a refusal, as I see it, in many statements made by the Government, to recognise this relationship between wages and prices. The Government has simply said that wages must keep up with prices, as if at some stage in the past wages had fallen behind prices. I repeat what has been said previously because it is worthy of repetition. In the 5 years from 1968 to March 1973 average weekly earnings in this country rose by 43.4 per cent. In the same period the consumer price index rose by 26.4 per cent. In that 5-year period the wages which a person was receiving, based on average weekly earnings, were increasing at a higher rate than the basic commodities in the consumer price index were rising.
What do we have from the Government? We have seen from the Government this year action which was supposed to deal with inflation but which has not dealt with inflation. At the time that the Prices Justification Tribunal came into force the Acting Prime Minister (Mr Barnard) said that it was a key element in the Government’s drive against inflation, but it has not yet determined any application before it; yet it has granted to some 480 companies exemptions from its provisions. That is a fine example after 3 months work. What has the Joint Parliamentary Committee on Prices done? It lacks any decisive power. It has simply investigated. We are expecting a report in the near future. What have the tariff cuts done? Last week I asked the Leader of the Government in the Senate (Senator Murphy) whether he could point to one area in which there had been any reduction in prices as a result of the tariff cuts. He was unable to single out any one area. What has the Government done, on the other hand, by way of contributing to the situation with which we are now faced? We have the Public Service used as a pace setter. We have 4 weeks annual leave granted to all public servants, with the intention, as the Government has acknowledged from time to time, that this should become the norm throughout the community. We have 13 weeks maternity leave granted to female public servants before and after their confinement, with the same intention on the part of the Government that this standard should apply throughout the community. In addition to that, we have had the promise of a reduced working week which will be applied in the Public Service in the hope that it will be the pace setter and that the principle will be applied throughout the community generally. We have had introduced into the Parliament employees compensation legislation which is absolutely munificent in the benefits which it gives. It gives not only the benefit of the average weekly earning at the time that a person was injured but also it gives a lump sum payment. Again, this is meant to be the standard to apply throughout the community.
It would be marvellous if, as a nation, we could afford these things. One day, as a nation, if we are soundly managed, we will afford them. But to introduce them all at the one time in the course of an inflationary spiral is irresponsibility in the extreme. The matter of urgency suggests that the people of Australia have not been given a fair and honest deal by this Government. They have not been given a fair and honest deal because there has been inconsistency and irresponsibility in the Government’s approach. I do not look at the host of promises which were made at election time and the way in which they are being dishonoured. I do not refer to the promise of low interest rates or the assurance that consumers would be protected. It is a tragedy to read such fine words so dishonoured in performance. But surely it has to be made clear and emphasised to the people of Australia that we have a government which is irresponsible, a Government which has not been prepared to face up to the issues and that it is the function of an Opposition to expose this. We trust that the debate this afternoon will have some contributing effect in making that exposure more widespread.
– I am afraid that the hope expressed by Senator Greenwood in his last sentence will not be fulfilled. He is generally an enthusiastic speaker. Today, he seemed most unenthusiastic. Obviously, he did not have his heart in it in speaking to the brief that was prepared for him. Even so, he went right back to the old conservative attitude that now is not the time to improve the lot of working people. He says particularly that it is the wrong time to give increased annual leave and maternity leave, even though the latter was the subject of a decision of an International Labour Organisation convention. He says that we should ignore that decision and do as his Government did for years, namely, make pious resolutions at Geneva and then ignore them in Australia. That was one of the resolutions that was ignored.
I can remember many years ago as a very young man reading articles on the very matters that he has mentioned. Workers compensation was being introduced in Australia, so there was a concerted effort by employers to sack their employees. They said they could not afford to keep them on and pay their insurance to cover them for workers compensation. By law they were required to do this. The employers told the employees: ‘If you have an accident we are liable. Therefore, you have to leave ‘.
– They said the same thing when holiday pay and annual leave were introduced.
– A man with great industrial experience reminds me that the same thing happened when holiday pay and annual leave were introduced. Yet, even the former Liberal-Country Party Government with its tremendous hatred of the trade union movement and with its tremendous arrogant contempt for anybody who works with his hands was not game during the 23 years it was in power to take these things away from the people who, underneath, it hates so much. This was revealed to some extent by Senator Greenwood this afternoon. Of course, the situation in regard to this matter is quite obvious. Only last week, we had Senator Cotton move for the debate of the following matter of urgency:
The reduction in the consumer’s purchasing power, the increased cost to home buyers, the damage to export industries and local manufacturers, together with the consequence of unemployment in affected industries, without any significant impact on Australia’s inflationary problems, of the Government ‘s dollar revaluation and action to increase interest rates.
That was last week. The very next debate in the Senate will be on the question of whether we ask the Australian people to put the tools to fight inflation in the hands of a Federal Governmentany federal government. This will apply now and for evermore because it will be written into the Constitution that this Federal Government will have power to grapple with inflation and the inflow of money to the people of Australia. It will give the power to divide up the cake in some more equal way, a division which was severely maladjusted by deliberate action of the Liberal.Counrty Party governments over the years. This debate, of course, is a time waster because the Opposition does not want to have to face up to this. The Opposition has been criticising the Government because of inflation, but when it was in government for 23 years it did nothing about inflation except, as Senator Greenwood pointed out this afternoon, on the eve of an election in 1972 when it decided to pour money into the economy because the economy needed a boost. It was only coincidental that the hot breath of the Australian people was on its neck and it was facing an election in a few months time. After 23 years the then Government suddenly decided that it had to pour money into the Australian economy. There is an atmosphere of piety here this afternoon; one can almost smell the incense burning. The great managers sitting opposite were in government for 23 years. There was no inflation in their time! None at all! No, it never arose! What sort of humbug is the Opposition talking?
The proposition presented by Senator Greenwood is time-wasting. That is what this Opposition has been doing ever since we came to office. Opposition members have said piously that they do not want to hold up legislation: they want to face up to the issues. But what do we have now when we are waiting to debate this great issue this afternoon? We have a repetition of last week’s debate and a preview of the debate that we will have when this present matter is disposed of in a short time. Honourable senators opposite have been griping about inflation.
– Go and ask for a double dissolution, if you are still complaining. Stop whinging about obstruction.
– You do not have the stomach for a double dissolution.
– The honourable senator for Victoria is talking about stomach. He is the man who has been dumped by the Liberal Party. He does not have the courage to stand on his own 2 feet; yet he talks about stomach. He was challenged before the Australian people and he squibbed it. In Western Australia when the Liberals wiped off the Country Party the Country Party came out as a team and won. It did not take from the Liberal Party what the honourable senator is taking in such a supine way. He introduced this with his talk about courage. I did not introduce this.
– You worry about yourself.
-Do not start talking about my courage. That is what your Party did in Western Australia and it won. Do not talk about courage and that sort of thing.
The ACTING DEPUTY PRESIDENT (Senator Durack)- Order! I think we should return to the subject.
-The Liberal-Country Party Opposition talks about what it would do about inflation; but what will it do when it gets the opportunity to do something about the constitutional situation? It will turn and walk away from the situation and say: ‘No, we will not have anything to do with that idea’. As I said before, the Liberal-Country Party coalition Government did one thing in 23 years- it poured some money into the economy on the eve of an election.
There were some contradictions in the attitude expressed by my friend Senator Greenwood today. He started his speech by saying that this Government had done nothing about these things, but he finished it by criticising all the things that we have done. He cannot have it both ways. It would have been a far more honest approach if his script writer had put the last part first and started by criticising what we have done. I agree that this is a perfectly normal debating technique. Are the things that we have done in grappling with inflation the best things that we could have done? If we have a debate along those lines we will help the Parliament, help the Government’s advisers and help the Government in approaching the question of inflation.
Let us be perfectly honest and frank about the question of inflation. Inflation is a problem throughout the world. It has been a problem for the last 25 years in every country except those in which there is a tight dictatorship and complete control over trade unions, prices and the very lives of the people. No economist has come to the aid of the world and said: ‘Here is an economic theory, a form of economics, which can control inflation’. Towards the end of the depression there were economists who said: ‘If this sort of thing happens again certain things can be done ‘. It seemed that we were able to use the advice of those economists and to avoid a repetition of the deep depression of the early 1930s. But today the situation is quite the reverse and no friendly economist has come along to tell us what to do about it.
This Government has recognised that inflation is hitting Australia just as it hits every other country. We make no denial of that. We dc not try to run away from it, as the previous Government did. We recognise that this is a complex problem. It is not merely a matter of sitting down and writing out a few theories on economics, passing a few laws and saying: ‘Go on, get about your business. Do that and everything will be all right.’ We are dealing with human nature. We are dealing with people who will transfer funds. As a personal observation only, I see the great danger- I do not see it striking first in Australiathat with the accumulation of funds and the loss of faith in accumulating money in banks we will start to get hedging against inflation and a moving into securities such as land and that sort of thing. If that runs away and people start to lose faith in paper money then there can be a sort of secondary run of inflation which will be tremendously damaging throughout the world.
– Is that not what the Government is creating?
– I do not say that we are creating it. I am talking about a world situation. No sane government or person would want to create that situation. The previous Government created a situation which was very much worse than that created by anybody else. In 1973 we are facing up to what was created in the early 1970s. From 2 December we could not have created the situation which we have today. If Senator Wright in his rare honest moments -
– What about -
-Do not speak when I am speaking. It is rude. Senator Wright in his rare honest moments would know perfectly well that what we face today was created over the last few years. The effect of the money which the previous Government poured into the economy to try to win the election is what this Government is facing up to at this very moment. The previous Government did not do that with any degree of honesty or to keep inflation down. It was done as a straight out bribe to the Australian people. Honourable senators opposite know that perfectly well. In their honest moments they do not even try to deny it.
As I say, the solution is not simple. We admit this frankly. It is not something that is confined to Australia. It is something which has to be fought on all fronts. In relation to everything we have done there has been no analysis by the Opposition. There has been straight out carping criticism. An exchange rate is one of the most important factors in facing up to inflation. What did we do in relation to that? When we assumed office the exchange rate was clearly undervalued. When we acted in relation to the currency of those days we did so on the advice which was lying on the desks vacated by the members of the former Government. They refused to act on that advice. Do honourable senators opposite think that in the first week in January, after we had been in power for a month, that we found a magic formula so that we could come forward and revalue the Australian dollar? Of course we did not. We picked up the advice which the previous Government had received. That Government rattled itself to pieces. It knew clearly not only in the field of finance but also in all other areas of government that things were staring it in the face. This had been pointed out by the public servants and other advisers. But the then Government did not go ahead and do these things. That was one of the reasons- and this is a deprecation of ourselves- that we were able to act so quickly. The advice was there, lying on the unswept desks when we took over.
In that situation we moved in December with a revaluation of 7 per cent of the Australian dollar with a significant tightening of controls over capital inflow. As I say, this was advice which we received in the first 3 or 4 weeks of our administration. It was clearly available to the previous Government. Did we receive an analysis of the situation? No. We got cries of horror at what was going to happen to the Australian economy. The fact is that these measures worked. There was a very successful stemming of the large inflow of capital and the second half of 1972-73 actually saw an outflow of private capital from Australia. This was the thing which was bedevilling us in that region of inflation at that time. Our action also had a further important anti-inflationary impact because it led to a substantial reduction in import prices. Between the December quarter of 1972 and the June quarter of 1973 import prices fell by 5 per cent. The further appreciation of the Australian dollar in September will also have important anti-inflationary effects in helping to keep down the growth in the money supply and further reduce the price of imports.
Another important factor which can contribute to an inflationary situation is lack of competition in industry. This enables firms to take advantage of shortages by unjustified price increases. In this area we acted decisively to rectify the situation. In July we made an across the board reduction of 25 per cent in tariffs. This is one of the boldest moves ever made by an Australian government.
– And the most stupid.
– It was not the most stupid at all, if the honourable senator will sit down and examine the position. Of course if we had increased tariffs by 25 per cent that would have been said to be the most stupid thing and if we had left tariffs where they were that would have been said to be the most stupid. While honourable senators sit as an Opposition and carp and criticise without making an analysis of what we are doing then they are guilty of dereliction of their duty. Our action means that the flow of goods into Australia will be increased. It will bring about a direct reduction in import prices. It will increase the degree of competition in the economy and it will have a salutary effect on those who have been exploiting the public. How can honourable senators opposite deny this? It stands clear. The previous Government had this advice but it did not have the courage to adopt it.
Of course these things must have an impact on people who have built up business interests in the field of trade and commerce. We recognise that. It is quite obvious. We have said that we stand by that decision with an ambitious program of assistance which will ensure that people, particularly employees, who may be adversely affected by the tariff reduction will not suffer hardship. One of the worries which I had when I voted for that measure in Cabinet was that there would be a tremendous degree of unemployment. The fact is that I was wrong. The situation has not been nearly as severe as I thought it would be at that time. The money supply which rose by 26 per cent in 1972-73 obviously has an inflationary effect. Of course this is not due to a sudden happening on 2 December. It had been building up under the previous Government. The situation was aggravated by the last minute desperate measures of the Government in pouring money into the economy to try to build up support for its election campaign. As I say, the increase is traceable to 1972.
Liquidity still remains excessively high. This is due largely to the unrestrained increase in 1972. This is quite obvious by examining any set of economic figures which one wants to look at. There is speculation in this. This is a personal view. Earlier Senator Wright interjected and asked whether we were not encouraging it. We are not encouraging it. The whole system throughout the world is encouraging it because of inflationary pressures and people are starting to move into investment in land and property. They build up and borrow and turn money over as quickly as they possibly can. There is still a need to soak up this liquidity. The objective is not to have a credit squeeze but we have to end excessive liquidity. This is the thing with which we are battling. Our action on 9 September was designed to achieve this by making government securities much more attractive. No one was investing in Government securities and people were running to the private market. Of course if money is left in the private market the Government does not have any control over it. If the money is in Government bonds the Government has control of it.
It does not matter how one may argue; the effects of our action are anti-inflationary. They may not be anti-inflationary to brilliant people like Senator Wright and our friend from Victoria, Senator Webster. Our actions may not be as brillliant as those which honourable senators opposite could take. When in government they had 23 years in which to take such action. But I did not see that happen. Maybe the Opposition has learnt in the last 6 months. If it has, we are prepared to listen to it. We do not think that we have all the answers to this situation but at least we are prepared to tackle it and to try to do something about it, something that honourable senators opposite never did. We have given the people an opportunity to invest in government bonds. This will create the opportunity for more savings and reduce the rush to spend. After the present imbalance between earnings on financial assets, such as government securities and other assets, is dispelled excessive liquidity will be drained off. If this succeeds, possibly we will be able to take the edge off such things as high land prices and property booms. If we can do that, that will be the turning point.
There has been a broad attack on inflation by this Government. The Opposition has criticised the establishment of the Prices Justification Tribunal, but it never did anything about setting up such procedures itself. If the Opposition would like to analyse the procedures and point out the weaknesses we would be happy to look at the situation. But the most carping criticism of the Opposition is this: ‘Ah, that will not work’. Senator Greenwood was hoist by his own petard. First of all he said that we had done nothing and he finished his speech by criticising the things that we had done. He criticised the Parliamentary Joint Committee on Prices which was set up to inquire into and report on movements in prices of goods and services and complaints arising from prices charged by private industry and the public sector. Apparently that too was a wrong move. We must not even identify a movement in prices, according to our great prophets who sit opposite. We must not even look at this problem. We must not even say: ‘Here is the situation that ought to be challenged’. This was one of the problems when we took over. We could not find out how much overseas investment there was in Australia. We could not identify where the overseas investment in Australia was located. We could not identify any of these things because for 23 years the previous Government did not give a damn. As long as the big boys could get bigger and as long as it could grind the trade union movement down a little further, that was all it cared about. The Prices Justification Tribunal took a little time to get under way. Of course, it would take a little time to start something which is unique in Australian political history. But it finally got under way on 1 August.
As I say, we have had a look at the constitutional position in relation to prices. What is the reaction of the previous Government to that? Its reaction is: ‘No, no, a thousand times no. Let us be critical about it. Let us say that the Government is doing nothing about prices. Let us say that it does not give a damn about people’. I thought there was one delightful little touch in Senator Greenwood ‘s speech. He said that public servants are pace setters. That accusation has been made for 20 years, and every time it was investigated during the term of the previous Government it was proved to be wrong. Apparently in the last 6 months it has suddenly proved to be right. The Opposition says that wages are being increased far too quickly. It says that the Public Service should not be getting their increases. But Senator Greenwood is tremendously worried about another section of the community. He is worried about the people who might have to sell their shares. What a terrible thing. They might lose money on their shares. But as far as he is concerned the people on wages can be ground down. But it is a terrific worry that certain people might have to sell their shares.
-That is what the honourable senator’s friend says. It is no good Senator Wright saying: ‘Oh! ‘ They are the very words that Senator Greenwood used, and Senator Wright should have a look at them. One would think that increased prices was a phenomenon of the Labor Government. One would think that there has not been an increase in prices since 1949. A former government used to say: ‘Put value back into the pound’. According to the Opposition the value of money has been stable for all of those years. What utter humbug. Why does the Opposition not have a look at what is going on in the world? Why does it not have a look at what the Labor Government is doing? As I say, we welcome criticism from honourable senators opposite in relation to these things, but they should not just say: ‘No, no, nothing can be done about it’. The Government is determined to mount an attack on inflation in Australia to the extent that it can be done by an Australian Government. Inflation is a world phenomenon. It extends beyond the shores of Australia. Nevertheless, that does not mean that we should merely turn our back on it, throw our hands up in horror, as the previous Government did, and say that nothing can be done about it.
– How can you account for about 4.8 per cent increase in inflation when you came into office?
-The honourable senator speaks like a machine gun, does he not? I did not hear one word he said.
– Would you like me to repeat it?
-No. So far the honour.rable senator has said nothing worth listening to. I think it is a little late to start now, particularly in a debate on economics. The situation is that the previous Government-Senator Greenwood acknowledged this- did 2 things. First of all when it had to do something about the inflationary spiral it created unemployment because, as I say, traditionally it does not worry about working class people. It thinks that if the working people can be used as economic fodder that is fair enough, and that is what the previous Government did.
For a period of time it kept quite a pool of unemployed, which Senator Greenwood graciously acknowledged. Then it tried to get out of the situation on the eve of an election by pouring money into the economy as fast as it could. If an election had not been pending it would have allowed well over 2 per cent unemployed at that time. We are not prepared to use that weapon as an antiinflationary measure. That is one weapon we will not use because, in the final analysis, the choice is very easily made between people starving and people paying too much for their goods because of inflation. But there is no need for either. Fundamentally we must have a full employment situation in Australia. The next job is to tackle inflation on all fronts. Some of our proposals are on trial; some of them are unique; some of them are being tried for the first time in the political history of Australia.
I repeat that we welcome criticism from the Opposition if it thinks it will be of any help. If the Opposition was at all honest it would analyse these things. It realises that it did nothing itself over 23 years. It takes the attitude now that it is a good political stunt to oppose what we are trying to write into the Constitution. As the world economy shows and as the history of Australia shows, the Constitution of Australia does not give power to the government of the day, whether it be Labor, Liberal, or whatever, to deal with prices. What we intend to do, in addition to all the things we have done in 9 months- we have shown more initiative in 9 months than the previous Government did in 23 years- is go to the final masters, the final judges in all of these things- the Australian people- to ask them to give us authority to write permanently into the Constitution of Australia the powers for this Government and future governments to deal with the whole question of prices. This will ensure that the Australian cake is cut up in more equitable shares than it was under previous governments and, at the same time, see that unemployment will not be the weapon used by governments in the future. Until the Opposition can adopt an honest approach to this matter it should stop the time wasting tactics which it has employed by moving this motion so that we can get on with the job of controlling prices, which we will do as soon as this matter is disposed of.
– I believe this is a very worthwhile exercise and it certainly is not a time wasting one because I am sure that when each member of the Government returns to his electorate he is inundated with questions about the economy of this country. I am sure that many Government members find it very difficult to explain to the people just what the Government is doing. Senator Willesee said in his speech that this Government at the present time is doing some of the things which the previous Government did not do in 23 years. Let me say, first of all, that no member of the previous Government or none of the people of this country ever dreamt in the early 1950s that they would experience the economy that exists in the early 1970s.
– Your answer was the dole. You put people on the dole.
– I recognise that the economy of last year or the year before did have a setback but I want to remind the Senate and the people of Australia that this came about because of the rural situation in this country. It still proves to the people of Australia that when there is a setback in the rural industry the economy as a whole feels it. Senator Willesee said that the costs we are experiencing at the present time are brought about because last year we tried to bring down a budget that would win favour with the electors. I believe that the troubles we are experiencing at the present time have been brought about by the present Government in its outbidding of the previous Government to win an election. One has only to look at what was said by some of the members of the Labor Party who are now Ministers during that election. For example, the honourable member for Riverina (Mr Grassby) was going around his electorate and around Australia as the shadow Minister for Primary Industry saying: ‘If Labor gets into power it will give you lower interest rates on long term loans’. He was saying that the Government needed to spend only $18m and it could have a scheme which would give to primary producers long term loans at a rate of interest of 3 per cent. Where has this promise been honoured? The Minister for Primary Industry (Senator Wriedt) stands in this chamber and says: ‘You should not look at the interest rates on loans; you should look at the length of the term’. How long do farmers get in which to repay loans? They get 5 or 8 years, no longer.
– At what rate of interest?
-And what rate of interest do they have to pay? Under the previous Government those engaged in primary industry used to receive a concession in interest rates, but what will they pay now? They will pay 9 per cent, which is nearly 2.5 per cent higher than they paid under the previous Government. The Labor Party made this promise during the last election campaign in an endeavour to outbid the previous Government, and this is why it is in trouble now.
Senator Willesee made the point that the previous Government never did anything for the workers of this country. What nonsense! The Government that went out of office on 2 December last always had the welfare of the Australian people at hean. It endeavoured to assist them in every possible way.
– You had them on the dole.
– I say to
Senator Poyser that no member of the Opposition would oppose increased welfare benefits being given to the Australian people. But before any government can give welfare handouts to the people it first of all has to earn the money, and how does it do that? It does not do it by introducing shorter working hours and granting longer holidays; it does it by achieving a bit of productivity- by people getting in and doing some work on the farms and by producing more meat. If this had been done we would not have the present meat situation. But just when we want to increase the productivity of our cattle industry, what happens? This Government takes over and does away with what it calls some subsidies to the rural industries. Do honourable senators opposite think that the superphosphate subsidy is a subsidy to the rural industries? Of course it is not.
– We have not taken the superphosphate subsidy off.
– I would not be surprised at what you took off. You have just about taken everything else off the farmers at the present time. Now you want to impose more taxes in order to stop farmers from exporting meat. Let us have a look at how much meat we export. How much lamb, beef and mutton do we export?
– They are very well off.
Milliner should test those figures closely before he thinks that. I remind the Senate that one of the first actions taken by the Opposition was to assist Commonwealth employees to receive extra holidays. The Government introduced into this chamber a Bill which provided for 3 weeks annual leave and that Bill went out of this chamber providing for 4 weeks annual leave to employees. Is that opposing the workers? Of course it is not. Then Senator Willesee referred to workers compensation. What was the position regarding this question? The Labor Pary, before taking office, made an election promise that it would increase the benefits provided under the Commonwealth employees compensation scheme. But even the Minister for Repatriation (Senator Bishop), who was in charge of the Compensation (Commonwealth Employees) Bill in this chamber, admitted that when the previous Government increased the benefits under the Commonwealth employees compensation scheme-in, I think, October-it was the best compensation scheme in Australia at the time. I admit that if it was an election promise, this Government would want further to bump up the benefits, and I have no objection to that. I would have no objection either if the States, could they manage it, increased the benefits payable under State employees compensation schemes- each State would have to introduce legislation in order to increase their compensation benefits- and if industry itself could cope with increased compensation benefits. But I know that industry could not cope with it. This is why Senator Greenwood referred to the Commonwealth Public Service being a pace-setter. I believe that if the Government has a good scheme it should introduce it, but certainly it should not do so as soon as it gets into office and then try to make the scheme the pace-setter for the rest of the Commonwealth.
I remind honourable senators that the Government in an endeavour to honour the promises which it made in an attempt to outbid the previous Government during the last election campaign, found itself in difficulties in framing the present Budget. So what did it do? It immediately fooled around with the very security of this country. The first thing which the Government did to cut back on defence expenditure was to say to the Air Force: ‘You have to take a cut of 25 per cent in flying hours’. This immediately raised a problem which the Government never foresaw. As aircraft are not flying as often as they were, engine overhauls are not due as regularly as they were. We find the aircraft industry saying: ‘We have not got work.’ We find Mr Hawke coming up here and saying: What about the jobs of my men in the defence works?’ Now the Government has to try to find a way out of this situation.
I am taking part in this debate this afternoon because I believe that the Labor Government stands guilty on 3 major counts concerning the Australian economy. Firstly, I believe that it is guilty of consciously aggravating inflation by its own reckless spending since it came into office. Secondly, it is guilty of ignoring, in its first Budget after governing for only 9 months, the fact that it should take corrective measures to meet soaring inflation. Thirdly, it is guilty of double standards in that following the Budget’s green light for record public spending it has introduced measures to restrict severely spending in the private sector. Senator Willesee used the argument that the Government inherited inflation. This is utter nonsense. When this Government came to power on 2 December last, the inflation rate was 4.6 per cent, and it was falling. Now there is an inflation rate of 13 per cent.
– And people on the dole?
-Senator Poyser interjects and says that people are on the dole. Of course there are people on the dole today. Mr Clyde Cameron said 200,000 people would be out of work by last February. Where are they?
– There was a change in Government.
-Yes, there was a change in government, but let us see what was said by the Australian Treasurer (Mr Crean). Surely he knows something about the economics of this country. He said that there was not inflation. When speaking to a meeting of the Grocery Manufacturers Association in Melbourne on 6 September 1973, after thanking the Association for inviting him to the meeting, he said:
I find myself, by some strange good fortune, in a very happy and confident situation.
This is what was said by the Treasurer only 6 or 7 months after he took up that position. Prior to that the Government consisted of 2 members. He went on to say:
The fact is that, by practically any test we care to make, the Australian economy today is thriving, and the immediate future looks good. In the way of problems, inflation is by far the most serious and immediate difficulty facing economic management in Australia today. We don ‘t have this problem to ourselves. Inflation is proving to be the most intractable economic problem of western democracies.
I suppose it is suggested that the problem of the rate of inflation- the Treasurer does not say that it is high- has been overcome in the 7 or 8 months that the Government has been in office. But I say that it has risen from 4.6 per cent to 13 per cent. How will we overcome this problem? Let us have a look at how Mr Crean will overcome it. In the same speech he said:
Although inflation reduces the purchasing power of each dollar, we need to bear in mind that the test of people’s real buying power depends on the increase in their own money incomes as well as the increase in prices. In fact the real test as far as you are concerned is whether incomes have risen faster than prices. They have. Over the last decade, average weekly earnings have consistently risen around 3 per cent faster than prices. Even allowing for the fan that income tax reduces the growth of average weekly earnings, the margin has still been favourable.
Will Mr Crean just go on increasing wages and not worrying about inflation as long as wages stay ahead of prices? Ask the housewife what she thinks about this. Many housewives have had an increase in their housekeeping money since this Government came to power. They thought that they had more to spend when they went down to the marketplace; but before they could spend that money they found that the prices of all goods had soared upwards by 5c, 6c or 7c. This is a result of inflation. This is the problem that they have. On top of that, because of some of the corrective measures that the Government is taking the housewife now finds that increased interest rates have added about $2.50 to the repayments on her house. She finds also that she has to pay higher interest rates for the household goods that she has purchased with money borrowed from a bank, life office or hire purchase company.
– Order! The honourable senator’s time has expired.
-The subject of the matter of urgency raised by Senator Greenwood- namely, inflation- is without doubt one of the greatest problems bedevilling this nation and like nations of the Western world, although not just nations of the Western world. This problem is generally known. Inflation eats into the very heart of our national economy. More particularly, it erodes the purchasing power of individuals, particularly people who are recipients of fixed incomes. It is regrettable that debates in this chamber on matters of such importance tend to degenerate into purely a political scoring game.
I must say at this stage that I disagree with the claim made by Senator Greenwood and Senator Drake-Brockman that Labor did not inherit inflation. I recall Senator Greenwood relying on a Treasury White Paper published in 1971. To support the view that I have expressed, namely, that Labor did inherit inflation, I propose to refer briefly to the Treasury White Paper entitled ‘The Australian Economy 1972’ published in July 1972. The following statement is made on page 1 of that document:
Our unemployment problems have remained much less severe than those of most countries. But our rate of inflation in 1971 was as steep as in most developed economies and the determination of our exchange rate involved no less difficulty than attended the general currency realignment finally achieved in December.
It goes on to say:
Within 1 97 1 -72, the economic situation has been changing in response to complex forces. But with excessive inflation and above normal unemployment persisting, the year has been notable for the range of policy instruments used and the flexibility of policy adjustments.
I make this final brief quotation from this document:
The major problems of economic policy in 1971-72 were three fold. First, there has been an excessive rate of price increase carried over from 1970 and continuing throughout 1971 and into 1972.
When we achieved office in December 1972, according to the Commonwealth Statistician more than 100,000 persons were unemployed. I think I have said in this chamber on more than one occasion that the Statistician’s figure is a very reasonable guide to the level of unemployment; but it is never the actual number of those unemployed, which is always in excess of the number of people who go to the trouble of registering for employment.
It is interesting to look back over the Press cut- tings of yesteryear in order to gauge the performance of the previous Government. The Melbourne ‘Sun’ of 21 January 1972 carried the banner headline: ‘Prices Spiral is steepest in 15 years ‘. I will quote briefly from this article, which was written at a time when 130,000 people were registered for employment. The article stated:
Prices rose faster in the past three months than they have for IS years.
They went up by an average of 2.3 per cent.
The article referred to the increase in Hobart, which at 3.3 per cent was the biggest recorded for the December quarter of 1971 and matched the increase in the consumer price index of the July quarter of 1973. It would have been quite feasible at that time to have said: ‘Well, that represents an average annual cost of living increase of something in the vicinity of 13 per cent’. But that increase in prices, of course, coincided with the highest unemployment figures for 9 years. The following day, the then Treasurer -
– Who was that?
-Mr Snedden. The ‘Australian’ newspaper of 21 January 1972 carried an article under the banner headline: ‘Wages under control-Snedden’. Of course, the previous Government gave constant attention to laying the whole blame for the inflationary tendencies in the economy at the door of the people employed in industry. The article reports what Mr Snedden said, and I can recall that he never challenged this statement. It states:
The Federal Government was gaining more control over wage inflation through its economic policies, the Federal Treasurer, Mr Snedden, said yesterday.
Mr Snedden said in Sydney the economic climate was preventing the unions pressing for over-award payments, a major contributor to inflation.
We have achieved what we set out to do in that we have created an environment in which over-award payments are depressed’, he said.
In other words, the technique employed by the former government at a time when everyone was concerned, as we are now, with the inflationary trend in the economy was to cut back on public spending and not to increase the payments to recipients of unemployment and sickness benefits and the like. As a result it was able to be shown at the time by the Institute of Applied Economic and Social Research at the Melbourne University that those who were on fixed incomes were in fact below the breadline.
What has happened since the Australian Labor Party has come into office? It is true that the consumer price index for the quarter ended December 1972 showed an increase of 1.2 per cent and that the one for the quarter ended March 1 973 showed an increase of 2. 1 per cent. It is interesting to note that a breakdown of the increases in the consumer price index will show that the major portion of them has been attibutable to meat prices and food prices generally. By and large those who produce the foods that we eat have not been the recipients of the benefits of those increases; I am not saying that at all. The consumer price index for the July quarter showed an alarming increase of 3.3 per cent, but a breakdown of that 3.3 per cent showed that meat and other food prices accounted for no less than 5 1 per cent of the increase. In the quarter before that meat prices represented 44 per cent of the increase and the food group as a whole 62 per cent.
Why has this happened? Has it been just because there has been a change of government or has it been as a consequence of the fact that during the course of the general election the Australian Labor Party announced as part of its policy speech that it intended to deal with inflation and that it intimated precisely what it intended to do? Among other things the Australian Labor Party said at the time that it was determined to set up a Prices Justification Tribunal and to set up a joint parliamentary committee on prices to review prices in key sectors of industry and the economy. It also undertook to strengthen the trade practices laws. It is interesting to note- I intend to quote from only one article to substantiate my argument on this point because I do not have the time at my disposal to quote from others- that in the Melbourne ‘Age ‘ of Wednesday, 18 July 1973 in an editorial which had
Thunder of Inflation’ as its heading the following comment appeared:
In fairness, some part of inflation’s sudden surge has been caused by the rush to raise prices before Mr Whitlam ‘s Prices Justification Tribunal becomes a fact of life on August 1 .
Honourable Senators opposite might question the quotation because it is only from an editorial. Therefore I propose to quote from an article on page 17 of the same newspaper. The article appeared under the sub-heading of ‘C.O.L. Rise “Alarming” ‘, which contains the words of none other than the economist of the Victorian Chamber of Manufactures, Mr Ray Price. The article reads:
The economist of the Victorian Chamber of Manufactures (Mr Ray Price) said the announcement would come as ‘a nasty shock ‘ for Federal Cabinet, now preparing the Budget.
The index meant that inflation had risen to ‘an absolutely critical’ situation.
We have to go back to 195 1-52 to match inflation of this scale’.
Among the factors that presumably have contributed to the present disturbing increase, two stand out’.
First, food prices had undoubtedly contributed. Second, it is another world phenomenon that the introduction of price justification laws precipitates price increases ahead of their time ‘.
I think honourable senators will agree with me when I say that that is a large part, if not the whole, of the reason why there has been such an upward trend in the inflationary situation in Australia. To point this up quite dramatically I refer to an article which appeared on page 5 of today’s Daily Telegraph’ under the banner line ‘500 per cent Mark-ups on Frozen Foods’. Again I am not in any way being critical of the producers. Among other things, the article states:
Retailers and manufacturers were splitting profit mark-ups of between 200 and SOO per cent on some lines of frozen foods; Mrs Phyllis Johnson said yesterday.
Mrs Johnson is the general secretary of the Campaign Against Rising Prices Association (CARP).
She said the lines included peas, beans, potatoes, tomatoes and corn.
I want to complete my reference to this article by quoting another paragraph of it, which reads:
The NSW Government commissioned CARP to prepare a submission for the parliamentary joint committee on prices by November.
So it is quite clear that what I have said can be supported by factual evidence. As Mr Price of the Victorian Chamber of Manufactures said, we are witnessing in this country the phenomenon of the projection of some type of machinery to regulate prices and an immediate pushing up of prices by business interests in anticipation of the establishment of such machinery.
What has the Labor Government done since . coming into office to attempt to curb this worldwide problem? I have in front of me three or four books that I have been reading on the subject and I have read articles by Professor Harry G. Johnson, Professor of Economics at the London School of Economics about it. It is quite obvious that there is no economist in the world, name whom you wish, who has the answer to the problem of inflation and there is no simple panacea to overcome it. What we have done is, first of all, appreciate our dollar to try to insulate the Australian economy against the side effects of the American market. In December we appreciated our dollar by 7.5 per cent. It was not long after that that the American dollar was depreciated by 1 1. 1 1 per cent and we were told that great disaster would be wrought upon the Australian economy. There has been no evidence to that effect. We again appreciated our dollar on 9 September. That is one of the instruments or weapons in its economic armoury that the Government has used to try to insulate our economy against the effects of world inflation.
I can assure members of the Australian Country Party that I have evidence in my office which proves that right across the board, from the cane grower in Queensland to the farmer in the Gippsland area of Vittoria, the decision to reduce tariffs by 25 per cent was welcomed. It was on 19 July that the Government reduced tariffs across the board by 25 per cent. I can show honourable senators opposite articles which appeared in farmers’ journals from as far north as the canefields of Queensland to the Gippsland area of Victoria about this decision being welcome. As a matter of fact it was long overdue.
The ACTING DEPUTY PRESIDENT (Senator Poke)- Order! I am sorry to say that your time also is overdue, Senator Brown.
-From what he said at the beginning of his remarks I thought Senator Brown would be introducing a worthwhile philosophy into the debate and that he was not going to make inflation a political issue. I thought I would be able to listen to a learned dissertation as to what is the present rate of inflation, what was the cause of it and how it was taking place both in Australia and in other countries. But he slipped back into a political harangue in which he said that the Australian Labor Party was better than the Liberal Party of Australia and that, in terms of the rate of unemployment and everything else, we were better off when Labor was in power than we were when a Liberal-Country Party government was in power. That is a subject of political controversy.
I agree with Senator Brown’s statement that there is no economist in the world- there is certainly no Treasury official in Australia- who has the complete answer to the problem of inflation. In my view the Treasury officials in Australia have always adopted the wrong policy. I have expressed that view on several occasions, particularly in relation to interest. They have done so in their attempts to prop up a classic theory of economics which, in my view, is outmoded. The fact that they have been endeavouring for so long to control the situation has proved the theory to be a failure. For supporters of the Government to try and argue that the rate of inflation at this point of time is not dangerous is ridiculous. The Government has just introduced a Budget to try to do something about the danger of inflation. Whether it is doing right or wrong things at this moment is of no concern. The fact is that the Government has admitted that inflation has it worried, that it exists and is a greater danger than it was before. The Government has taken steps- wrong steps in many instances, I think- to meet inflation.
I do not see how the Labor Party, having been elected to government on promises that it would not increase taxation and elaborate promises about the money it would hand out, in order to balance the Budget should increase the excise on cigarettes and petrol by 10 per cent and then claim that it is controlling inflation. How can an increase in the cost of a basic commodity like petrol control inflation? The price of all goods that come to the market is rising as a result of distribution costs, one of the greatest inflationary costs. If wages in the manufacturing process are increased, then at least that increase is producing something; but an increase in wages in the distributing sector, merely takes the goods from one place to another in the market, but produces nothing. The retailing section provides a service to the community; it does not produce more goods to meet the demand that exists. Every wage increase must be inflationary unless productivity is increased at a rate which can withstand such an increase right across the board. That is an economic fact of life.
I should have thought that Senator Brown would tell us some of these things. I should have thought that he would refer to some of the ageold theories and the fact that we did not have inflation with a gold and silver currency. There was a bimettalist theory that because our currency consisted of precious metals we could not have inflation. But of course those who have taken some interest in the matter know that that is a lot of hoky-poky, that instead of doing what we do now- printing more money or creating more credit through banks and so on- they created inflation simply by debasing the value of the precious metal in the currency by introducing more zinc to the silver and more copper to the gold so that the golden sovereign no longer was of the same purity or the silver coin became darn near a nickel one. We have learned that we can exchange our goods just as well for a document which has no value other than its acceptance by a government to pay taxation or to buy a postage stamp.
If we limit the capacity of our development to the amount of gold we can find, that is probably the most stupid theory about the exchange of goods that we produce that one could possibly have. Yet for centuries man has chained himself to that concept just as some people of the world chained themselves to the idea that the only way in which they could store for future use that which they earned today was to drill holes in the coins and hang them around their necks. But we have developed a banking structure by which money saved today can be loaned out for development of industry somewhere else. And we still get inflation, as was found by people who put coins around their necks on a string while others debased the value of the precious metal in coins. It is a problem to which no economist has found a perfect answer. However, that is not what we are discussing.
We are discussing the fact that in the 10 months of this Government’s term of office inflation has had a tremendous impetus, which this Government recognises, because of what it has tried to do in the Budget. It is now rushing around wondering whether it will have price control on this and that. It says the principal problem is with food prices. This morning’s newspapers say that food prices have gone up by 1 5 per cent in the last 9 months. I suggest that if the Government goes out and samples the market it will find that the highest level of inflation is in home building. That is where prices have gone up. But it is not as a result of the cost of building houses today for houses that were built 20 or 30 years ago with cheaper labour have gone up in price as much as new houses. It is a fallacious use of the economy which has caused this situation. I agree with Senator Brown’s opening remark that we should not always say: ‘The other fellow is wrong, and we are right. He said look at what we did about unemployment- there were 20,000 more out of work when we were not in government than since we have been in government.’ In an economy as big as Australia’s the fact that 20,000 people more were registered for unemployment benefit at any specific time is not important while we have the social services structure that we have.
One member of the Government keeps saying: You put them on the dole.’ Where is the intelligence in that approach? Certainly they were put on the dole. But we have progressed from that concept, thank goodness; we just do not any more let people starve. But two or three members of the one family who are on the dole are better off than a family of five or six children whose father is working 40 hours a week. That is how bad being on the dole has become. I do not deprecate that situation. But how unintelligent it is to try to introduce these sorts of statistics as relevant to the subject of inflation which we are trying to discuss. Surely anyone can see that a government does not have to do anything to cause inflation: It only has to create a condition of mind in the people. By its very promises made before its election this Government induced a higher rate of inflation at the moment the people entrusted it with government, because people expected prices to go up. And if they expected prices to go up, was it not natural that they should start to spend their reserves in order to buy before the prices went up? Members of the community are not as unintelligent as some members of Parliament try to make them out to be. But they too joined the stream. They are intelligent enough to know that, and they rushed into the market to buy before prices went up. So any suggestion that there will be inflation helps to create inflation.
What greater inducement can they have than that the Government is on the one hand pledging that it will not increase taxation and, on the other, making extravagant promises that it will spread a lot of new incomes among the community, that it will expand ministries enormously and will employ a whole new field of labour which is not producing any goods to meet the market demands? That is the point of commencement for increased inflation. One should not envy the fellow who gets a job. He must work; but it is non-productive work in terms of creating goods to meet the demand which is being pumped onto the market by this Government’s monetary policies. The Government did all these things and now it must accept the responsibility for them. It is now receiving advice from the Treasury which not all Government members will accept, as we know from clashes in Caucus.
Mr Hawke has been to Canberra to advise the Government as to what the unions will accept. I suggest to this Government that it is reaching the stage where it will have to govern this country itself. It will have to accept some advice from somebody who knows the position if it does not know it itself. If it will go so far forward and then step backwards because Mr Hawke tells it that his section of the community- and it is a very important section- will not co-operate, then the Government must be strong enough to reject Mr Hawke and his advice or it must accept the responsibility that it cannot contain inflation. I know what were the Government’s intentions and its dreams. The Government disagreed with the defence policy of the Party to which I happen to belong. It argued that many of its promises could be financed as a result of defence cuts, and it has endeavoured to do that. But even in that area it is not free. Mr Hawke arrived again this week and said: ‘Stop putting our fellows in the defence industry out of work’. The Government has been putting them to work in many other industries and creating a demand for labour in the market place.
– What is wrong with that?
– There is nothing wrong with it- but inflation-wise everything is wrong with it. It is a trap. If the honourable senator will sit and listen intelligently instead of just interposing without any deep thought, he will understand. Mr Hawke arrived here and said: ‘In spite of the fact that you have now created no need for work in the defence industries, you must keep the fellows employed.’ The Minister for Defence (Mr Barnard) has agreed to some extent with this philosophy because he has said: ‘We will not put anyone in these industries out of work’. But the Labor Party dreamed of financing some of the things which it thought were more important than defence by putting people in the defence industries out of work. Now the Labor Party is finding that it is not free to do so. It cannot have it both ways. If it wants the lolly, it has to pay for it. If the Government dreamed, as I believe it did, that many of the things which it has suggested were more important to the nation than defence could be financed by putting people out of work, it was wrong. Honourable senators opposite know whether that was the dream. I might disagree with them about what was more important to the nation, but that is another subject.
The Labor Party realised the enormous expenditure on defence and thought that there could be great savings there. They have not been as great as it thought. Now the effects of its policies are beginning to be felt. It is finding that the influences in its organisations are preventing it from making in the areas savings of money and, more importantly, labour power which it intended to direct into more productive types of industry. What I say is true. Labour power that is involved in defence production is always inflationary because it produces nothing that can be commonly used to meet the demand in a time when there is no war. In fact, the great inflationary effect of all wars is that they create and the labour force creates things that do not meet the demand of the people who are earning the money, particularly those in the munition industries, to buy the things that they want. Wars build up an enormous reserve of demand in their pockets. While the demand can be controlled in wartime conditions, it is likely to break out like a flood immediately a government is forced to remove the wartime restrictions once the war has finished. In that alone there is a simple lesson in economics that surely everybody who lived through the war years should have learned unless they had their eyes and ears shut. Those sorts of things were handled.
That is why today members of the Democratic Labor Party believe that the national economy has to be the responsibility of somebody. We cannot go back to the old days of laissez-faire, when the private banks could produce credit at will and inflate the demand by this means and when they could restrict demand by withdrawing overdrafts at their whim. Time and again I have said that we support the idea that only one authority should be responsible for the national economy. Whether we think it is an efficient one at the moment is not relevant. It is for the people to decide. They have elected a government. It is the Government’s job to manage the national economy. The Government should not be trammelled in its job because only the Commonwealth Government can do it. But this Government is doing it wrongly. It is resorting to those remedies which have been tried and proved to be failures. The Government wants to accept the sugar that goes with the medicine but not to take the medicine.
The ACTING DEPUTY PRESIDENT (Senator Poke)- Order! We will have to leave the medicine there. The honourable senator’s time has expired.
-The problem of inflation is a very serious one. I was rather amazed by a statement made recently by the Prime Minister (Mr Whitlam) in which he treated the problem in such a flippant way that one of the papers which was a strong supporter of his prior to the election took him to task for the flippancy with which he dealt with this very serious problem. It is a serious problem because it affects every citizen. Unfortunately, a lot of people think that it does not affect them, but it does. I think that the Government, in its financial actions to control inflation, has been acting most irresponsibly and in a dangerous manner. I shall indicate to the ordinary citizen how inflation affects them now. In the past year inflation has risen at a much higher rate than it did under previous governments. Let there be no misunderstanding on this question. The inflation rate is rising much faster now than it rose under the Liberal-Country Party governments. Last year it rose by 13 per cent. What does that mean to the ordinary person? It means that every $100 he saved last year is now worth $87. That is putting it in clear, cold facts. That $100 is now worth only $87 to the person who made the saving. There is a lot of talk about people wanting homes. Every $1,000 that a person has saved for a home is now worth only $870. So we can see what happens to the efforts of thrifty people who are trying to save. They are not achieving much because their money has been made to disappear under this Labor Government.
If the inflation rate rises to 20 per cent, as some people say it will, the $100 will be reduced to a mere $67. So we can see how it is going down the scale of values. The $1,000 that a person has saved for his home will be worth $670. So we can see that inflation is a very serious thing so far as the ordinary individual is concerned. The effects of inflation on the individual need to be driven home to the ordinary person. If the inflation rate rose by only another 10 per cent, the $ 100 would reach the low level of $77. The $1,000 would be worth only $770. So we can see how serious the position is. There is no question about it. Mr Whitlam, as Prime Minister, is now a financial magician. He has that very unhappy knack of making your money disappear before your eyes without you even seeing it. The Labor Party, by the very basis of its policy, has set its sails to cause inflation. Irrespective of the talk about the endorsement of its policies- the average person cannot remember what he heard in the policy speech- if it carried out those policies in full all of us would be working for the Government. What would happen? There would be raging inflation.
No section of the Labor Party is trying to control inflation. That means that it is costing the ordinary citizen a great deal more to live. Inflation means not only a loss of savings but also causes a higher cost of living. Labor’s policy is to spend, and the way that it is doing so is increasing inflation. It has acted absolutely contrary to the efforts which should be made to reduce inflation. What has it done? It has spent money; it has thrown money around as though it were water. Look at its actions in regard to the Public Service. Instead of being careful about this matter the Government has appeared before the arbitration court and said: ‘Give them the money’. Then what did the Government give the public servants? It gave them an extra week’s annual leave. It also gave the women in the Public Service maternity leave of 3 months. The Government also will give paternity leave to husbands. I do not know why. As a bachelor I cannot understand this pregnancy business. The Government’s elections have caused real inflation. There is no question about that. Its actions are costing this country money.
It is not the Labor Government or any government that pays; it is you, I and every citizen who has to meet these charges. The money has to be forked out of our pockets. We are getting less value for our money, and we are paying more to do things. It is very nice for the Government to be generous to the Public Service, but imagine the position if these benefits flow to private industry. There will be greater costs of production. There is no question that the Budget is encouraging inflation. The Government should be concentrating on 2 counts to decrease inflation. Firstly, it should cut down on Government spending which it is not doing. It is increasing Government spending. Secondly, it should be trying to build up production. They are the 2 key points that the Government should work upon to decrease the rate of inflation. There is no doubt that that would have an effect.
Let us take the matter of price reductions. To put it in simple terms, if a manufacturing industry could produce twice as many goods tomorrow as it is producing today, the cost of those articles must be reduced. What does the Government do? Is it encouraging anything like that? It does not encourage the keeping down of Government spending. It is accelerating Government spending and not doing anything to encourage increased production. Do we hear a call for the people to do more work to try to bring about more production? Do we hear a call for those in business and industry to work harder? Not one call comes from this Government on this issue. Instead we find that the allowance which used to be paid to business and industry for purchasing new machinery, equipment and that sort of thing in order to increase production has been cut out. The way in which the Government is acting is against increasing production, which could be one of the key factors in reducing inflation.
Also, we find in the Budget that primary industry received a kick in the neck. The country people do not count for anything with this Labor Government. Let me take the case of the dairying industry. That industry has been deprived of various contributions made by previous Commonwealth governments. It was very nice for the Government to say that these people do not need this assistance. But what we must try to do is get increased production. If production goes down in the dairying industry, consequently the price of butter will go up. That is one of the table commodities in almost every home in Australia and is vital to the cost of living. Do not tell me that these things cannot have an effect. During the period when the Chifley Labor Government imposed a price control, the number of cattle in the dairying industry in Australia was reduced by 300,000 head. Senator Lillico from Tasmania informed me that on that occasion in that small State the number of cattle decreased by 26,000 head. In addition to that, price control wiped out the fat lamb export industry.
Now we hear all this talk about price control bringing about this deflationary aspect. What a lot of nonsense. The Government has not proved this and to introduce price control is only kidding the people. Wherever one travels, one finds a very serious and deep concern expressed by the people of this country in relation to the activities of this Government. They will tell you straight from the shoulder: ‘We are very worried about what is going on’. Because of this worry, there is deep concern. As can be seen from the opinion polls which are now being conducted, these things are having an effect. I believe that the people are waking up to the situation as it now exists. This Government is causing inflation, not trying to stop it. It is doing everything possible to develop inflation through its irresponsibility and the recklessness of its financial administration.
I do not want to take very long on this matter because I believe in speaking in simple terms. The position has become so bad that I am reminded of a song that used to be very popular in days gone by. The tune fits in with some lines that I have here. The song was called ‘Mr Gallagher and Mr Sheehan’. I do not propose to sing it but I have added a few more lines to it. I think that this story can be concluded with these lines. I will read them because this is the type of thing that probably people will remember:
Oh Mr Whitlam,
Oh Mr Whitlam,
No doubt you ‘ve heard this talk about inflation;
A man can ‘t buy a house, he ‘s living like a louse
And things are really tough within the nation.
Oh Mr Crean,
Oh Mr Crean,
Things are crooker now than they have ever been;
The cost of living ‘s got so high
It’s far cheaper now to die,
Absolutely Mr Whitlam,
Positively Mr Crean.
In dealing with inflation we talk about the cost of housing about which the Government is so concerned. What hypocrisy do we find? The Government says that people should sell land cheaply so that other people can obtain homes cheaply. I always believe in practising what you preach. For some months now we have seen the Prime Minister, Mr Whitlam, trying to sell a house in Sydney and asking a price that is $10,000 to $12,000 above what is considered a fair market price. He has not sold it yet.
– Has he not sold it yet?
– According to the newspaper I read the other day, he has not sold it. His price is too high. He is the type of hypocritical man who talks about cheap housing for the people. Oh Mr Whitlam, oh Mr Crean, positively and absolutely the cost of living is far too high.
– We have been treated to a very cavalier approach by members of the Opposition to the very vexed problem of inflation. After all, they had a very considerable number of years to rectify not only a national problem but also an international problem in regard to inflation. What have been the Government’s actions in the brief 9 months that it has been in office in an endeavour to grapple with these problems which all economists in the world have recognised, have an international implication. In fact, international influences are contributing greatly to our problems. The Government took the extraordinary step early in December of last year after the elections of revaluing the Australian dollar, subsequently to be followed by tariff cuts. In addition, a further revaluation of the Australian dollar took place recently. Just over 2 weeks ago the Prime Minister (Mr Whitlam) put the proposition to the State Premiers at the Australian Constitutional Convention to give the Commonwealth power to control prices. Of course, in the last few days certain action has been taken in respect of interest rates. As a result of a decision taken in the House of Representatives yesterday we have currently before the Senate a proposal that the Commonwealth should have the power to control prices. It may be argued that those actions were incorrect actions. But they represent an attempt by this Government to remedy a very unsatisfactory situation.
If honourable senators opposite have the time and energy, I would like them to read what is contained in the Budget documents. I do not think the figures that have been produced in the Senate can be said in any way to relate directly to the problems of economic management in this country. The figures indicate that during the first half of 1972-73 the Australian Government budgetary transactions resulted in a domestic deficit of $1, 351m. That statement is contained on page 14 of the Budget Speech of the Treasurer (Mr Crean). The Speech goes on to state that the volume of money increased by 16.7 per cent in the 6 months to December 1972. 1 put it to honourable senators that the difficulties we are living through now are the product of the previous Administration and, in particular, a product of the Budget introduced for the year 1972-73.
Let us examine what has been said by some of the Opposition speakers in this debate. They have spoken at great length about the problems of inflation. Of course, it is a problem that is facing this Government and one which is worrying every person in Australia. Let us look at what has happened since 1949 when the Liberal Party took office and at the inflationary rate from 1949-50 right up until today. These figures were produced by the research section of our Parliamentary Library. Therefore, I think they can be regarded as coming from an unimpeachable source. Using an index ratio of 100, in 1949-50 we start off with a figure of 64.96. That year there was an inflation rate of 9.4 per cent. In the following year- the first 1 8 months after the Liberal Government took office- the rate of inflation was 25.4 per cent. A year later it was 4.5 per cent and in the following year it was 14.4 per cent. These percentage increases are in excess of the current rate of inflation with which we are concerned today. It is suggested that the total problem involved is one which can be corrected by a simple mechanism of having some form of wage control and wage fixation. Some honourable senators have taken the view over a great number of years that wages determine prices, and because we have a demand situation at the moment it is in that area that the attention of the Government should be directed. They say that there should be an endeavour to cut back on Government expenditure.
I digress for a moment to draw the attention of the Senate to what is included in the current Budget proposals which have yet to be endorsed by the Senate. The Government proposes to spend $799m more. In the last few weeks in which we have been debating the economy and examining the Budget I have heard all sorts of complaints about not enough money being provided for housing, for pensions and, according to the Democratic Labor Party, for defence. There has been criticism about the inadequacies of social welfare payments. It has been said by those who stand behind the Opposition parties that not enough migrants are coming into the country. Let the Opposition parties say what area of public expenditure should be reduced in order to reduce government expenditure. They constantly repeat this theme in a parrot-like fashion. They say that the panacea for inflation is the simple expedient of reducing government expenditure. The fact is that in the year under review it has not been the expenditure of the Commonwealth that has been responsible for the increase in demand; it has been the expenditure at the State and local government level. Commonwealth Government expenditure certainly is mooted and planned in respect of the 1973-74 Budget, but no one can say that at this stage that expenditure is a contributing factor to inflation.
Let us examine what has been said by previous speakers in this debate. They have talked about average weekly earnings. I want to draw to the attention of the Senate and of the intelligent people outside who are listening the ratios that ought to be examined. In 1949-50 the gross operating surplus of companies in Australia was $63 lm. That was the amount of profit in that year. By 1972-73 that had increased to $5,286m, an increase of 1,190 per cent on that for the 1949-50 base year. I believe that the previous Government was largely responsible for the problems we have to face today. Let us look at average weekly earnings for the same period. The figures are supplied by the same unimpeachable source. Average weekly earnings in 1 949-50 were $19.40. The projected average weekly earnings in 1973-74, taking into account the current rate of inflation, are $1 14.70- an increase of 600 per cent. It is just a little more than half the increase in the gross operating profits of major companies in Australia. Average weekly earnings are not the earnings of the people whom Senator Little and members of the Labor Party are endeavouring to represent. If average weekly earnings are increasing, they are increasing at the top level of the scale and not at the bottom level. People earning in excess of the average weekly earnings are contributing to the increase in average weekly earnings.
Members of the Opposition have had much to say about the consumer price index. Starting again at the same base, in 1949 it was 47.6. The last figure available, that as at 30 June, was 129.8 per cent- an increase of 367 per cent. So wages and the consumer price index are lagging considerably behind the gross operating surplus or profits of secondary industry. If we examine farm incomes for the same period, the figures show a dramatic increase from $ 1,468m in 1953-54-1 was unable to get figures for previous years but I imagine that they would be considerably less- to $3,08 lm in the current year. So, on all fronts we see that there has been an accumulation of profits, an accumulation of income and a reduction in general living standards.
One would imagine that honourable senators opposite would apply themselves to an intelligent examination of these facts instead of clinging to the old philosophies about government expenditure. After all, what contributed to the defeat of the previous Government was its refusal to make money available to solve the problems of land and accommodation. In those areas today we have a crisis on our hands. Hitherto those matters came within the province of the State governments. They are not matters in which the Commonwealth expressed any great interest. It is true, however, that in the current Budget this Government has made considerable sums of money available for improvements in the fields of land and accommodation.
Some honourable senators have suggested that it is totally wrong for the Government to cut back on subsidies for rural and secondary industries. Is someone going to tell me that if the Commonwealth spends its money on housing, health and welfare, urban affairs and sewerage, instead of in the rural sector in the form of subsidies, one form of spending is inflationary and the other is not? Yet that has been seriously suggested by honourable senators on the Opposition side of the chamber. They have criticised the Government for cutting back subsidies in the rural sector and deciding to spend money in the urban sector. They say that because that money is now being spent in the urban sector it is a contributing factor to inflation. How false is this reasoning? Every Opposition senator who has spoken in this place since we reassembled has been very critical of the Government for its endeavours to reallocate resources and to establish a new system of priorities. Yet when we have an opportunity to deal with the problem of price control, when the Commonwealth Government suggests that it should have the power to control prices, we have this time wasting proposition by Senator
Greenwood. The Senate should today be discussing the Bill dealing with price control.
Today the Senate proceedings are being broadcast and we can reach the greatest number of people, but it was interesting to note that when Senator Greenwood, the Deputy Leader of the Opposition, moved this urgency motion only 12 members of the Opposition were present and nobody from the Democratic Labor Party was present. Only 12 members of the Opposition were present to indicate interest in this great question of inflation, this great matter of urgency, this great matter that is concerning and occupying the interest of people throughout Australia. Of course the Government is concerned about inflation and it has taken important steps to do something about it. It has asked the Senate to give the Commonwealth Government power to control prices, to give it an opportunity to manage the economy. But I will bet pounds to peanuts that I know what will happen in the next 24 hours during which that Bill will be brought before the Senate. The Opposition will take its traditional Opposition position. It will be partisan and will not apply itself to the problem of solving inflation any more than it was prepared to apply itself to the inflation that was characteristic of its long reign of office in this country.
Honourable senators, I notice, will stand up and talk about productivity as though it again were an important factor for consideration. If it is a factor, why during the period in which the Opposition was in office did it permit the proportion of the work force in primary and secondary industries to drop- those are the 2 areas which produce things- from 54.69 percent to 43.43 per cent? Senator Wright was a member of the Government at that time. He and other honourablle senators are always prepared to stand up and criticise the situation in which the Government finds itself after having inherited 23 years of inflation, 23 years of misrule and 23 years of inability to find a proper resource allocation policy for the Australian people.
It does not matter what documents honourable senators like to pick up. They can refer to the documents on the Australian economy produced by the Treasurer. The document I have was produced as at June 1973. It shows that there has been no slackening in the pace of economic growth in the early months of 1973. We accept that view as a basic tenet. Is it suggested that if there has to be a slackening off it has to be in the Government sector? This is the proposition of those who are criticising the Government today. That is what Senator Greenwood said. He said that we have a vested interest in inflation and that all we are concerned about is continuing the present situation because we will get greater income as a result of inflation. That is precisely what Mr Snedden said when he presented his Budget last year. He said that the Government recognised that inflation was creating additional funds for the Commonwealth and the 1972-73 Budget reduced personal taxation. The Opposition parties recognised that that was a feature of every Budget that they produced before this Parliament and before the Australian people. For the Opposition to suggest that the Government should rectify this situation in its first few months of office is to adopt a superficial and irresponsible approach. It is suggested that there was no real attempt to grapple with the problems facing this nation, that they were dealt with on a purely party political basis and not on a basis of assisting this Government to have power to control the economy. The Opposition is prepared to leave the powers to control prices and incomes at the State government level. It is not prepared to give the powers to the Commonwealth.
The ACTING DEPUTY PRESIDENT (Senator Durack)- Order! The honourable senator’s time has expired.
-I agree with what has been said by Senator Wood, that inflation is probably the most insidious robber one can imagine. The most pathetic thing about inflation is that it robs the small man of his savings and income. Over the years when the Liberal Party was in Government we sat here week after week and listened to stories about inflation until one was almost led to believe that it was a Liberal-Country Party phenomenon, that it was something which we aggravated and caused. But there was a change of government and an argument has evolved that our inflation was worse than the inflation caused by the present Government. We heard that in this chamber this afternoon. I have the report and financial statements of the Reserve Bank of Australia for 30 June 1973. I should think that this is a thoroughly impartial document. It states:
In the second half of 1972-73 -
That is for the 6 months which has not long ended - however, the rate of growth of prices quickened markedly; the rise over the 12 months to June 1973 was somewhat greater than that over the previous year and the largest for any financial year since 1951-32.
That was about 18 months after the LiberalCountry Party Government came to office. The position of the last year has been aggravated by the past 6 months through which we have just passed. It has not been wholly accounted for by the increases in food prices which were mentioned by Senator Brown. It has been the worst inflationary year since 195 1-52. The other argument which we have heard in this chamber both today and yesterday is that inflation is a worldwide phenomenon to which all countries are subject. That argument somehow reminds me of a sick man going to hospital. He takes a look around and thinks to himself: ‘I must be all right because everyone else here is sick.’ In fact that does not make any difference to the condition in which he finds himself. I have come to the conclusion that this Government and in particular the Treasurer (Mr Crean) simply do not understand the position with which this country is confronted. The Government has put out a publication entitled ‘New Legislation of the Australian Parliament’. I do not know whether it would be a fair thing for the Opposition also to put out a countermanding publication at the expense of the taxpayers. This publication contains an article by Mr Crean. I am certain that it negates the opinion of any worthwhile economist that I have ever heard express an opinion about inflation. In big type appear the words:
We aim to attack rising prices.
Mr Crean stated:
In a buoyant and strongly growing economy, with inflationary pressures intense, we are limited by the overriding need to bring down a Budget which does not add to these pressures.
I do not suggest that we can aim, through the Budget, to do the whole job of curbing inflation. Rather, we aim to attack rising prices by a series of inter-related measures.
After detailing the setting up of the Prices Justification Tribunal and saying a lot of other things the Treasurer stated:
The Budget too must fit into the overall anti-inflationary policy.
I ask anyone who has thought about this whether it fits in to the pattern of an anti-inflationary policy. But the Treasurer went on:
With that in mind the Government came to 2 major conclusions. First, despite competing demands for resources, the whole thesis of the Government’s policies requires that there be some increase in the share of resources going to the public sector.
The share of resources which is going to the public sector has increased by more than 20 per cent and is definitely and positively inflationary. This afternoon we have heard State governments and local government authorities blamed for this increase but I feel perfectly certain that any economist would say that this terrific increase in Government expenditure brought about by this Budget has definitely and positively been caused by the inflationary tendencies which it contains. If we add to that the high rate of interest which will accrue as a result of action taken recently by the Commonwealth Government then the position will be aggravated still further. It was only a few days after Mr Crean said this that the ‘Australian’ newspaper, which for some strange reason that I can never account for advocated the cause of the Labor Party prior to the last election, had this to say:
Now it’s time to pay Labor’s bill.
I shall read 2 quotations from the article. It states:
The Government decided to go ahead with the program and budgeted to increase spending by practically 20 per cent.
The newspaper says that that is inflationary. Mr Crean says that he fits his Budget into an antiinflationary policy. Up to that time it was obvious that the Government was taking a calculated risk on inflation. The newspaper pointed out:
The calculation has now come to a reckoning sooner than many people, including possibly the Government, might have expected.
The article concluded by stating:
The next 9 months must be the most crucial of Mr Whitlam ‘s career. As the credit squeeze gathers way the Opposition must be more and more determined to force him into a double dissolution and the chances of the Government returning to office after it must diminish.
The actions taken to date by this Government to combat inflation- revaluation of the currency, the setting up of the Prices Justification Tribunal, and the across the board reduction in tariffshave had a nil effect. More definite and more positive action needs to be taken than the trifling pettifogging actions such as the setting up of the Prices Justification Tribunal and the revaluation of the currency. These actions cannot have any positive quick result on inflation. Although I am not in favour of the proposal to implement a prices and wages freeze, we read that the New Zealand Government with which this Government claims to have great affinity- it is a Labor Government with the difference that Mr Kirk stands on his own feet, is his own man, does what he thinks fit and is not dictated to or told what to do by anyone else- states that strikes and excessive wage demands are the reason for the New Zealand wages-prices freeze. This was reported in an article in the Hobart ‘Mercury’. The article continued:
The number of stoppages and the loss of man hours in New Zealand in the first 6 months of this year exceeded the totals for the 12 months of 1972. The parallels with the situation in Australia since Labor gained office are startling.
They are the reasons given by the New Zealand Labor Prime Minister for instituting a wagesprices freeze. We are on the verge of debating a measure which an honourable senator described this afternoon as the tool to be placed in the hands of the Government to enable it to combat inflation. I think the honourable senator who made that statement is a super-optimist. The strange thing about the whole proposition is that Mr Whitlam says that he will implement neither policy. He has said that publicly. He said that such things are done only in totalitarian societies but in a democracy, where people do pretty much as they please, such a thing is right out of court altogether. Yet Mr Kirk has been forced to take this action because of excessive wage demands and industrial chaos. That situation bears a strange resemblance to what is happening in this country.
I do not know why it is, but immediately the Labor Government assumed office the number of man hours lost because of industrial stoppages jumped. This certainly has been very much a contributing cause of inflation. I do not know whether the number of man hours lost jumped because those people responsible for this situation knew perfectly well that penalties would not be enforced. Yet Mr Whitlam has told them- I have a copy of his statement- that while the Conciliation and Arbitration Act remains on the statute book and while the Labor Government is responsible for enforcing those laws, they will not be enforced. That is what he has said. So he proposes, as it were, to try to control the whole Situation without any regard whatever to the components which together create the situation. They can go where they like and do what they like.
– Order! The honourable senator’s time has expired.
Address-in-Reply: Presentation to Governor-General
– In response to a long historic parliamentary obligation, I suspend the sitting of the Senate until 8 p.m. for the presentation of the Address-in-Reply to His Excellency the Governor-General at 5.30 p.m. Cars are available at the front steps of Parliament House to take honourable senators to Government House, and I invite them to join me.
Sitting suspended from 5 to 8 p.m.
– Honourable senators, I report that, accompanied by honourable senators, I this day waited upon His Excellency the Governor-General and presented to him the
Address-in-Reply to the Speech of His Excellency on the occasion of the opening of the Fiftyfourth Session of the Parliament, agreed to by the Senate on 30 August 1973. His Excellency was pleased to make the following reply:
Thank you for your Address-in-Reply which you have just presented to me.
It will be my pleasure and my duty to convey to Her Most Gracious Majesty the Queen at once the message of loyalty from the Senate, to which the Address gives expression.
I have noted the other views expressed in the AddressinReply and am aware that this expression of views is already known to my advisers.
-I ask for leave to make a comment on your announcement, Mr President.
-Is leave granted? There being no objection, leave is granted.
– I wish to say how grateful I am that you, Mr President, have made that announcement particularly for the benefit of Government senators, none of whom was present at the ceremony. I believe that their nonattendance is not only a disgrace and an expression of contempt of the Governor-General but also an action which degrades the Parliament of this country.
-I seek leave to make a statement.
– Is leave granted? There being no objection, leave is granted.
– What rot was spoken by Senator Jessop. He relished the idea that Opposition senators would be able to run over, as quickly as they possibly could, to His Excellency the Governor-General, with the amendment to the Address-in-Reply to the Governor-General’s Speech. I was originally the seconder of the Address-in-Reply. It was an excellent address. The Governor-General’s Speech was one of the most progressive speeches by a GovernorGeneral. Mr President, I had some thoughts about whether. I should accept your invitation to accompany you. With respect, I did not go. I did not go because I felt that the amendment to the Address-in-Reply was entirely unnecessary and unjustified. I took as a precedent for my behaviour in this matter something that happened in the Senate in 1914 when Senator Givens was the President of the Senate.
– That was over 50 years ago.
-Senator O’Byrne, why did you interrupt and assume the office, privileges and prerogatives of the President?
– I apologise, Mr President.
– I took as the precedent for my behaviour on this occasion what happened in 1914 which was the last occasion on which a similar incident happened. The behaviour of the Labor Party then was the same as that adopted by the Labor Party on this occasion. I am sure that His Excellency completely understood our stand in not wanting to take over an amendment to an illustrious Address-in-Reply.
– Order! I think the constitutional proprieties have been fulfilled by the observations from my left and my right. I feel that the matter should be left at that stage.
Formal Motion for the Adjournment
– I take the opportunity to protest against the criticism that was inflicted on the Government by the Opposition, especially since the delaying tactics of the Opposition caused the excessive delay in the presentation of the Address-in-Reply. The delay is the responsibility of the Opposition. I needed to remind myself that what we were doing today was delivering the Address-inReply to the Governor-General after a debate that commenced some 8 months ago.
- Mr President, I rise to order. I refer to standing order 4 1 9 which relates to digressions from matter relevant to the subject before the Senate. Two speeches were delivered, one by Senator Jessop and another by Senator McAuliffe, following the announcement which you made. We have now moved on to the subject matter before the Senate, which is the matter of urgency and the motion for the adjournment of the Senate to discuss it. Mr President, I submit to you that nothing which Senator Georges has said is relevant to the matter of urgency or to the adjournment of the Senate. I submit to you that he is entirely out of order and ask you to so rule.
– Order! I think that any orator is entitled to set the stage for what he is about to say.
– Especially in his own time.
– I have no qualification to add about that. Perhaps the honourable senator might embark upon the subject matter of the matter of urgency.
-Yes. It seemed strange to me that Senator Greenwood raised such an objection because honourable senators on his side of the Senate made the criticism in the first place. But having made the criticism they decided to duck for cover. Tonight the Senate is debating a matter of urgency which the Opposition has raised. It is worded:
The responsibility of the Government demonstrated in its failure to give the community a fair and honest deal on the issue of inflation.
I welcome the debate on this matter of urgency. I welcome it because I hope that it is an indication that the Opposition will support legislation which the Government is bringing forward to deal with this matter. It is strange that Opposition members, not long out of Government, should begin to concern themselves with the problem which they created and, having created it, ignored. It served the interests which the former Government represented to ignore inflationary pressures and movements because in a situation of inflation it is the quick who survive and it is the not so quick and the weak who are deprived. It is for that second class of people that I now seek to speak in the short time that I have available. During the 23 years that the members of the Opposition were in Government they did not take one constructive step to control inflation. Rather, they took measures that made the powerful more powerful and the weak weaker. To control the economy they used a bludgeon and a stop-go method which led to the great becoming greater and the weak becoming considerably weaker.
Let me remind the Opposition- it was stated by Senator Lillico- of the rate of inflation at the present time. The rate of price increase is the greatest since 1951. But what happened in the years 1950 and 1951? What was the rate of price increase in those years? I wish to cite some figures that I have before me. In 1950 the percentage increase in prices over those for the previous year was 10.2 per cent. But in the following year, 195 1, the rate of increase was 20.7 per cent.
– Who was Prime Minister then?
-The Liberal-Country Party Government was in power. Sir Robert Gordon Menzies was the Prime Minister at the time. The percentage increase in prices in the second year of office of the Liberal-Country Party
Government- 1951- was 20.7 per cent. It began to decrease slightly in 1952. In that year the figure was 16.5 per cent. The economic system under which we live, and under which we suffer, seems to produce a rather savage increase in costs and charges at the time of a change of government. That occurred in 1950-51 and it is occurring again. There is no doubt that people who work within the economy endeavour to anticipate the decisions of government. They endeavour to take advantage of a change in government by increasing prices and charges. They charge as much as the market can stand, in anticipation of the policies of the new government. That is exactly what happened this time because the Australian Labor Party had indicated that it would undertake certain radical reforms.
- Mr President, I raise a point of order. There is a little section of natter yacks over there in the corner, disturbing the speech of my colleague. Will you call the attention of those honourable senators to the decorum required in the Senate?
– I do not think there is any substance in the point of order.
– Look up what a natter yack is.
– It is an idiom that I looked up previously in the Oxford dictionary and I could not find any reference to it. Senator Georges, do not be daunted.
– I am not daunted. The description fitted, and I thank Senator O’Byrne for his attempt to protect me. But I have no doubt that my voice will carry over the noise coming from the Democratic Labor Party benches. There is no doubt that many people acted in anticipation of the program of reforms that the Australian Labor Party was to carry out. There is no doubt that many economic interests and many industries in this country anticipated legislation which might be to their disadvantage, and prices rose rapidly. There is no doubt that prices rose substantially. Perhaps this was because of the enthusiasm of some of our Ministers in announcing plans. Perhaps they should not have announced them so early. However, it was necessary to inform the people of what this Government intended to do- that health programs were to be commenced, hospitals were to be built, houses were to be constructed, cities were to be improved, a prices tribunal was to be established and the Trade Practices Act was to be strengthened. It was necessary to announce those things. As a result of that, prices and charges rose. But they already had commenced to rise under the previous Government.
When the 2 major Opposition parties formed the coalition government they did nothing whatsoever to control the flow of money in the economy. The rackets on the stock exchanges were exposed and small investors, afraid of losing further on the stock exchanges because of the manipulations, rackets and frauds carried out by so-called reputable firms, withdrew their savings and sold their shares. Investors of capital had been living under a system by which they came to expect to take as much as they possibly could through the use of their capital. The money did not flow back to the savings banks so that housing programs might be carried out and so that the ordinary person might go to a savings bank and obtain a small loan at a reasonable rate of interest to build a home. Investment money flowed into the fringe banking area which has never been controlled. It would never have been controlled but for the fact that there has been a change of government. When the money flowed into the fringe banking area without control and without supervision by the Reserve Bank of Australia interest rates went up. Permanent housing societies came into the field. The housing societies set the pace. Out of control and without any supervision, the societies attracted money to themselves which went into speculative enterprises in spite of their mandate. So the pace setters became the housing societies.
I will not speak about the viability of housing societies. 1 am not going to question the advisability of people depositing in housing societies on the short term and the housing societies lending on the long term. I will not speak about the ethics of housing societies which advertise that deposits can be made today and withdrawn tomorrow. I will not go further or more deeply into whether that should have been permitted. All I say is that it was permitted and that it distorted the economy and the levels of interest. This Government has not had an opportunity to bring forward legislation which will bring the fringe banking organisations under the control of the Reserve Bank. It intends to do this and it will. I would like to see what the Opposition will do when we bring forward legislation on prices, on controlling the major corporations, on controlling hire purchase companies and housing societies and on preventing the flow of money into speculative enterprises.
Senator Webster knows as well as anyone else that the speculative money which flows into the heart of the major cities deprives the people whom he represents of just prices and value for services which they deserve. At the present time in the centre of cities buildings are being erected with money which should flow to the public sector for the building of homes for the people. That money pays as much as 2c a dollar a month. It used to pay lc a dollar per month. The erection of these commercial buildings is pitched at such a level of return so that the capital can be recovered in 8 years on a two-thirds capacity and also to obtain a capital gain. Nothing was done by the previous Government to prevent the flow of money into these speculative enterprises. What would the Opposition do if we brought forward legislation to say that money shall not be spent on such enterprises? There are other causes for this inflation. They are merely incidental but they are of great benefit to the country. I do not know whether Senator Wriedt is a rainmaker, but as soon as he was appointed Minister for Primary Industry it started to rain. The seasons have been good and bountiful. The returns to the farmers have been great. Now that the people whom Senator Webster represents are receiving good, healthy returns for their products, does he object to them catching up after that drought or quenching their thirst which developed during that drought? Does the honourable senator object to the fact that after 7 years of hardship these people are endeavouring to catch up by coming on to the market with this new won money and purchasing their requirements?
– The honourable senator does not object?
– Not at all.
-Therefore the honourable senator should be able to see why the prices they are charged for the goods they need and the services they require should be kept at a reasonable level. Yet his Party and the Party he has supported for so many years have done nothing to give power to the Commonwealth Government to legislate for the control of the price of goods and services. I wonder how the honourable senator will vote next week, or perhaps today, on the legislation introduced by the Government to give the Government power to hold a referendum on prices. Will the honourable senator support this legislation which will have the effect of bringing prices under control and protecting the people he represents? He will not because he has not done so for the last 23 years. At the present time the area the honourable senator represents is short of manpower, materials and all sons of goods. Even if the goods were available they would be overpriced.
For so many years the primary producer whom the honourable senator represents has been overcharged for the goods he needs.
– Order! The honourable senator’s time has expired.
– The Senate is debating a matter of urgency, in effect condemning the Labor Government for its failure to cope with the rising and serious inflation of the day. It is appropriate that we do so on a day on which the Press of Australia has announced an index of general food price rises of the order of 5 times the magnitude of those of last year when a Liberal government was in power. It is appropriate that we should do so against the background that when the Liberal Government left office inflation, according to the Treasury, was running at 4.7 per cent and falling. Now it is at the level of 1 3.2 per cent and rising.
If a subversive organisation set out to plan a blueprint to bring into Australia deliberately and subversively roaring inflation it would use a program of 6 points, and I shall now enunciate them. First of all, it would increase indirect taxation which, of course, would force up the prices that the ordinary people pay. The Labor Government has done exactly that to petrol, liquor, cigarettes, and the ordinary soft drinks of the children. So, on the first test, the Government has deliberately acted to put up prices. Secondly, such a subversive organisation would by its action take thousands of people out of the productive and manufacturing sector of the community where goods are made and transfer them into the public service which is a non productive area. By this action it would create demand and reduce the supply of goods. Indeed, the Government of the day has done just that to the tune of some 10,000 people.
If this subversive organisation was bent upon creating fewer goods and more demand it would cut down migration and thereby reduce the workforce which produces goods but at the same time increase the demand for those goods. The Labor Government has cut migration by 60,000. It would advocate an open ended increase in wages and the destruction of margins for skill. The Labor Government, by its support for collective bargaining and its destruction of the arbitration system, has done exactly that. A subversive organisation would foment industrial unrest so that there would be strikes, go-slows and trouble in industry, so that industry would be brought to a stop and inflation would be created by a shortage of goods. In the time of this Labor
Government there has been an all time record of industrial strikes.
Finally, as a sixth test, in a form of lunacy unless it were deliberately subversive, an organisation would raise interest rates generally because a substantial rise in interest rates will cause a substantial and significant rise the price of every commodity in the community. The Labor Government has done precisely this. A weekend or so ago it announced a general increase of 1 .75 per cent in the overdraft interest rate. This was a huge increase in interest rates; an increase which will be a pace setter. It will cause a rise in the cost of every home- not only every home to be built in the future, and few will be built because of costs, but every home which is being paid off today. Make no mistake that what this Government has done by its action has been to put up the price of every commodity that every person on low wages is paying for by way of hire purchase. Note the silence of Government senators now. This is the Government that tried to lecture us and tell us that it was guiltless of causing this inflation. Let everybody in Australia understand this: Tomorrow, by an act of this Labor Government, a refrigerator will cost an extra $30 or $40.
– What did your Government do about inflation?
– Yes, Senator Gietzelt, by your Government’s action a washing machine will cost an extra $40 or $50 and a television set will cost more. By the action of this Government in the time that it has been in office the price of ordinary motor vehicles on the market has increased by $300 and by increasing interest rates on hire purchase the price will be increased by another $200. The Government, by its action, has done this. No matter what it intends to do in future in subsidising interest rates, what it has done has been to force up the payment on every home by $20 to $30 a month.
This is a Government which says: ‘We do not cause it’. This is a Government which, by my tests, raised indirect taxes. Did not the Labor Government- and I invite honourable senators opposite to answer this- raise indirect taxes? Yes or no? The answer is yes. Did it in fact increase by 1.75 per cent the general overdraft interest rate? The answer is yes. Is not the Government today faced with the greatest industrial unrest for many years? Has not the Government in the last few months known the highest rise in nominal wages and the greatest destruction of margins for skill that we have seen? Did not the Government, by its action, cut migration by 60,000 and so take 60,000 workmen out of the work force each year? Did it not in fact take 10,000 people out of the private sector and put them into the public sector? The answer is emphatically yes.
Did not the Government, by increasing interest rates, put up the cost of repayment on every home and the cost of repayment of hire purchase on television sets, refrigerators, washing machines and motor cars? The Government is guilty, by its own deliberate actions, of adding a minimum of $40 a month to the cost that an ordinary low wage family has to meet without their having the ability to buy a thing for it. The Government has taken out of the pockets of the ordinary people of Australia, on average, $40 a month for nothing.
– What did your Government do?
-Senator Gietzelt asks this question because he has just been guilty of this robbery. My Government, over 17 of its 23 years, created an inflation rate of 2.5 per cent, which was the lowest in the world; it achieved a state in which we had the lowest industrial unrest of any country in the industrialised world; and it provided for the greatest sharing of real wealth of any Western country, so there was a diminution of the gap between the rich and the poor. Let Senator Gietzelt eat those words. That is not a bad record for a country such as ours.
Now comes the cream of all things. During an outburst tonight I heard the comment: ‘You, of course, support the Prime Minister’. Let me tell honourable senators the proposition that the Prime Minister is now putting forward. I remind the Senate that the Prime Minister, on his own say-so, never wanted a prices referendum. He certainly never wanted it on its own; he fought not to have it on its own; but he was defeated in his Caucus. What the Leader of this Government is saying to us is this: ‘Come along with me and vote yes for our prices referendum. Oh, by the way, I want to tell you that I, the Leader of the Labor Party, do not want it; I never wanted it; and it will not work’. That is what the Prime Minister told his Caucus. He told it that a prices policy would not work on its own. But now he says: ‘By the way, I want you to vote yes because my Caucus has forced me to support this referendum. I tell you that I do not want this referendum; I find it anathema; it will not work; it certainly will not work on its own. Even if twinned with incomes it will work only mildly. But, I am sorry folks, the Caucus will not let me have a referendum on both prices and incomes’.
So the Labor Party members in the Senate say: We will go along with a person who says “Fol low me, but I want to confess to you that I do not believe in my cause ‘ ‘. ‘
I repeat that today an announcement was made that food prices, by index, have gone up by 5 times the rise in the previous year. Is that denied? Is it denied that the Treasury identified the fact that when we left office inflation was falling? ls it denied that Labor has robbed the poor by putting up indirect taxes and that it has even got into the kids’ lolly water? Is it denied that Labor is to increase hire purchase rates on every item that is produced- from washing machines, television and radio sets through the whole range of products- and that Labor is forcing up prices by its deliberate and direct action? Mr President, for members of the Labor Party to deny their guilt is ridiculous because by all tests they stand condemned; they stand condemned in terms of responsibility. I move:
- Mr President -
– Order! Under Standing Orders, once the motion ‘that the question be now put’ is moved I have no option but to put that motion.
The Senate divided. (The President- Senator Sir Magnus Cormack)
Question so resolved in the affirmative.
Original question resolved in the affirmative.
– I inform the Senate that I have received a letter from the Leader of the Government in the Senate requesting the discharge of Senator Georges from service on the Senate Select Committee on Civil Rights of Migrant Australians and nominating Senator James McClelland to fill the vacancy.
Motion (by Senator Willesee) agreed to:
That Senator Georges be discharged from service on the Select Committee on Civil Rights of Migrant Australians and that Senator James McClelland be appointed to fill the vacancy.
Suspension of Standing Order 242
– I move:
Contingent on the Constitution Alteration (Prices) Bill 1973 having been received from the House of Representatives that Standing Order 242 be suspended to enable the third reading of the Bill to be passed without a call of the Senate.
Standing order 242 states:
Before the Third Reading of any Bill by which an alteration of the Constitution is proposed there shall be a Call of the Senate. If the Third Reading of any such Bill shall not have been carried by an absolute majority of the Senate the Bill shall be forthwith laid aside without Question put, and shall not be revived during the same Session.
I draw the attention of honourable senators to standing orders 283 to 288 inclusive which relate to the call of the Senate. Standing order 283 states:
An Order for a Call of the Senate shall be made for any day not earlier than twenty-one days from the day on which such Order shall have been made.
This means that from the time of the passage of the Bill and from the time that the order for the call of the Senate was made it would be at least 3 weeks before that event could be carried out.
This is a measure which the Government regards and which obviously the Opposition has regarded- certainly in view of the matter of urgency which it raised last week and the matter of urgency which it raised today- as a matter of urgency. Since it is the Government’s desire to give the Australian people the earliest possible opportunity to determine by referendum whether the Australian Parliament should be able to control prices in this way, we believe that standing order 242 should be suspended. I point out that this motion now moved on behalf of the Government is not in any way a precedent. I refer the Senate to the fourth edition of the publication ‘Australian Senate Practice’ which was written by the Clerk of the Senate, Mr Odgers, particularly pages 284 and 285. At page 284 Mr Odgers, in pointing out that standing order 242 had been suspended to enable the third reading of the Constitution Alteration Bill to be passed without a call of the Senate, stated that for precedents one should refer to Journals of the Senate, 1 950-5 1 , at page 1 49, and 1 95 1 -53, at page 49.I will not weary the Senate with a dissertation on that which appears in Mr Odgers ‘ fine work.
I point out that the motion which I have moved on behalf of the Government does not, by any stretch of the imagination, set a precedent. A similar attitude has been adopted by anti-Labor governments on 2 previous occasions because they probably, in their knowledge of the political circumstances at the time, regarded the suspension of standing order 242 as a matter of necessity in view of their political judgments at that time. This Government, following that precedent set by previous anti-Labor governments, now seeks to set aside this standing order in order that we can get this very urgent Bill through the Senate and have the matter determined by the Australian people. As I have said, similar action was taken previously. All honourable senators are now in their places. Some honourable senators have been brought back from overseas. I know that 2 honourable senators on this side of the chamber and probably some on the other side have been brought back. Because the matter is one of extreme urgency we believe that the standing order should be suspended.
The Bill which requires us to take this action requests the Australian Parliament to approve a referendum to amend the Constitution to enable the Australian Parliament to control prices. The Bill is designed to give the Parliament of this country the powers that almost every other national parliament of a comparable country has. It is a power sought for the Australian Parliament. Under the Constitution, the power, if given to the Australian Parliament, will reside in the Parliament. The Government seeks that power at a time when, it is fully aware, it does not control the numbers in one House of the Australian Parliament. That thought should be borne in mind when we hear members of the Opposition opposing the motion. The matter is urgent because we are seeking this power for the Parliament, with the full knowledge of our limitations in this place. We are seeking the power with the full knowledge of the powers of the Opposition in the Parliament, particularly in the Senate.
What is extraordinary in this situation, as it appears to me, having regard to the motion relating to a matter of urgency which was moved last week by Senator Cotton and the one which was moved today by Senator Greenwood, is that, from events which took place in another place and from what we have read in the papers, there are members in the Parliament- I refer to members of the Opposition who collectively, among themselves, constitute a majority in the Senate- who can review important legislation in this area. If the Parliament is given the power by the people, in the reviewing of any legislation introduced by the Government the Opposition can either amend it or reject it. Apparently members of the Opposition still oppose the idea that the sovereign Parliament of Australia should have powers over prices.
- Mr President, would you rule whether the Minister’s speech is relevant to the motion or whether he is debating the main purpose of the Bill?
– Order! I do not think there is any substance in the point of order. It can be argued one way or the other, but I think the Minister is entitled to seek supporting arguments for his motion to suspend standing order 242.
– In elaboration of the moving of my motion I am seeking to set out why the Government is moving in this way. We regard the matter as one of urgency.
– That is quite all right, provided that you do not debate the Bill.
– In this regard I am pointing out that the Government believes that the Opposition is attempting to impose a burden on the Government by employing deliberate waylaying tactics.
– How is that relevant to a call of the Senate?
Senator DOUGLAS McCLELLANDBecause I have moved that standing order 242 relating to a call of the Senate be suspended. I have moved that standing order 242 be suspended because the Government regards the passage of this legislation as being a matter of urgency.
– Order! I make this clear to the Senate: When a Bill is in the Senate it is in the custody of the Senate, and the Senate will make a judgment as to how it is to be disposed of.
Senator DOUGLAS McCLELLANDBecause the Government regards the matter as one of urgency, because it does not wish to have to wait at least another 3 weeks to have a vote on the Bill and because all honourable senators are in their places at present, we believe that standing order 242 should be suspended. I shall explain why the Government feels that there is urgency involved in the matter. It appears to us that the Opposition is deliberately delaying the passage of this legislation by seeking the nonacceptance of it by the Parliament, which will mean that the people will be denied the right to determine by way of referendum whether the Australian Parliament should have the power to control prices.
– Once again I take a point of order. I suggest that the Minister’s speech is not relevant to the motion. He is debating the subject of the Bill. If it is urgent, as he suggests it is, he should resume his seat and let us start disposing of it
– Order! As I mentioned earlier, the Bill is in the custody of the Senate and the Senate will dispose of it in its own good time. The Minister is arguing that the Senate should speed up its processes. That is all. Provided that he does not touch on the subject matter of the Bill, he can argue as long as he likes.
– I am amazed at the attitude of the Opposition, having regard to the debate which lasted for 3 hours in this place during which time members of the Opposition whinged about the inflationary spiral which they allege has taken place under this Government. A motion to debate a matter of urgency was moved by Senator Cotton last week, and he has been on his feet taking points of order now. During that debate members of the Opposition were demanding that action be taken by the Australian Government to curb inflation. When we decide to take action they decide to waylay it. We believe that the matter is urgent. We believe that the standing order should be suspended.
Debate (on motion by Senator Withers) adjourned.
Debate resumed from 18 September (vide page 64 1 ), on motion by Senator Murphy:
That the Bill be now read a second tune.
- Mr President, the Opposition opposes this Bill. The Liberal Party will vote against the second reading of the Bill. If the Second Reading of the Bill is carried, we will vote against every clause of the Bill in the Committee stage. If the Bill is not then defeated, we will vote against the Bill at the third reading stage. If we succeed in defeating this Bill and the Government wants to bring it forward again in 3 months time, as it is entitled to do under section 128 of the Constitution, we will again vote against the Bill. Whenever a referendum on the proposal is held the Liberal Party will oppose the referendum proposal. We believe that it is our duty to do so and that we would be acting in an irresponsible manner if we failed to act at every opportunity to defeat the Bill.
When one reads Senator Murphy’s second reading speech, it is difficult to understand why such a measure is necessary. Senator Murphy painted a glowing picture of the Australian economy. He says on the third page of his speech:
By vigorous and decisive actions on the currency, capital inflow and tariffs, by setting up the Prices Justification Tribunal and the Parliamentary Committee on Prices, and above all, through the Budget- a remarkable combination of economic responsibility and far-reaching reform- we have erected excellent defences against such a misfortune.
Reading that, one can only have an admiration for someone who is prepared to make such an audacious statement. If all he says is true, why this Bill? The plain fact is that the only defence against misfortune that this country has is the Senate. It is the Senate that stands between the centralist power-hungry socialist party that now controls the Federal Government and the liberties of the Australian people. We suffer from a Government that is arbitrary, indiscriminate, inconsistent and indecisive. Every decision it makes is subject to review by Caucus. No one in Australia is really sure on just who is running this country. The Labor Party Government has been a misfortune for Australia and it is only the Senate which has maintained some balance in government.
One can only applaud the wisdom of the men who drew up the Constitution for their action in giving this House of Parliament concurrent powers with the House of Representatives. It is the Senate which acts as a check on the hasty and ill-considered actions of this Government and the Liberal Party hopes that it is the Senate which will once again rally and throw out an illconsidered and hasty proposal. I should point out to the Senate that for 23 years of LiberalCountry Party Government, the inflation rate was kept within reasonable limits. The Liberal
Party did not need additional powers to do this. It was able to use sound economic management to achieve its aims. The Liberal-Country Party criteria for making judgments relating to the economy were based on ecomonic assessments. Unfortunately for the Australian people, the Labor Party allows its socialist centralist dogma to over-ride sensible economic judgment.
The introduction of this Bill is preposterous. It is not even the aim or the wish of the Prime Minister (Mr Whitlam). It is something that is being thrust upon him. The Prime Minister did not want it. Caucus told him he must have it. It is ludicrous for the Prime Minister to suggest that the idea of the referendum is in any way his idea, or that he even believes it will help to fight inflation. It is incorrect for Senator Murphy to say on behalf of the Government: ‘So we have decided to go direct to the people of Australia’. It is not the Government that decided to take that course at all. It was the Caucus in revolt against the Prime Minister.
When the Prices Justification Tribunal was established, the Prime Minister made it very clear that this would provide the necessary restraint on prices. In relation to the present Bill, one can only be grateful that he is not making a similar claim.
In fact, he has gone out of his way to say that he does not believe that it will work. Prices control, he has said, is not the panacea of all economic ills. As he put it, and I quote: ‘control of prices is not a cure-all for inflation’. What is recognised by most people is that inflation is the greatest problem facing the Australian community. Inflation makes itself felt in a general and continuing rise in prices. However, it is not caused by price rises. These are merely the symptoms. The cause of inflation is an imbalance in the economy- for example, too much Government spending.
To deal with inflation, the combination of forces causing inflation must be diagnosed. Price control merely suppresses the symptoms at the cost of distorting economic allocation and ultimately causing other serious economic problems. One can hardly say that the Government is fair dinkum when the Prime Minister admits that this particular measure is not likely to be effective and when he admits that he has reservations about the value of price control powers. All governments, except this one, all political parties, except the Labor Party, recognise that incomes are a significant part of the price structure of this country. But the Prime Minister and his Party have declined to include the control of incomes as part of their approach to the problem of inflation. This, of course, is to be expected.
The Prime Minister’s approach to the problem has always been piecemeal, even before the intervention of Caucus. Honourable senators will recall that he told us he had received an assurance from Mr Hawke, the President of the Australian Council of Trade Unions and the Federal President of the Australian Labor Party that the unions would practise forebearance and restraint in seeking any wage increases if the Government demonstrated that it was fair dinkum about attempting to restrain prices. Despite the Prime Minister’s assurance, Mr Hawke has made it very clear that he will make no promises regarding wage constraint and certainly Mr Halfpenny, the Victorian Secretary of the Amalgamated Metal Trades Union, has made it very very clear that his Union, the Amalgamated Metal Trades Union, will not be a party to any arrangement which would mean that they had to restrict other wage demands. The Prime Minister cannot deliver what he has promised. Furthermore, Mr Hawke could not deliver union concurrence to an agreement even if he did promise to do so.
Mr Hawke has also made it clear on a number of occasions that the trade unions would not be subservient to the Labor Government. He said at the opening session of the ACTU’s recent congress that it would be degrading for the unions to endorse automatically all that a Labor Government said or did. I do not see how the Prime Minister can expect the people of Australia to accept his word on an arrangement reached between himself and the leader of the ACTU on wage restraint when the leader of the ACTU himself denies that such an agreement has been made. The Prime Minister has clearly demonstrated that he does not really know what he wants. He does not know in what direction he should now head. A prices referendum has been forced upon him by Caucus and he must make the best of it.
Despite all the promises made by the Prime Minister on how the action that he took would help to limit and restrict inflation, inflation is still continuing at a pace unprecedented in this country. It is a critical problem which this Government has been unable to solve or even ameliorate. This Government has given no advice and no information on what might be expected from the Government if this referendum is carried. It has not indicated what goods will be subject to control. It has given no indication on how it would implement any controls that it might deem necessary, no information on how it would select commodities for control. We have no idea of the extent of this proposal. I ask: Does it include interest, which is the price of money lent? Does it include wages?
We may well ask that question. After all, Mr Hawke has said on a number of occasions, even as late as Monday night, 10 September 1973, on the television program ‘Monday Conference’, that wages are the price paid by an employer for labour. But we have no indication from the Government just what is envisaged in its proposal. Trade union power is preventing inflation control because it refuses to let the Labor Government have an incomes policy as part of an overall approach to attack and counter inflationary pressures.
I repeat that the Prime Minister has not given any assurance on just what the Government intends to do if this referendum is carried. Will it mean the creation of yet another Government department in Canberra staffed by ‘ fat cats ‘?
Does it mean that a Canberra bureaucracy will be able to tell home owners the price at which they must sell their homes? Will Canberra be able to tell the car owner how much he can receive as a trade-in on his car? If price control was instituted, would a minimum or maximum price be set for an item? Is the Government, through price control, going to decide what the people of Australia are going to buy, rather than the people themselves?
Price control will mean a complete misallocation and misdirection of resources. It will mean an increase in cost to the community. A bureaucracy will have to be established to supervise and implement price control. Business will be compelled to fill out more forms and send them to Canberra. This in itself will add to their costs and certainly will not help in the curing of inflation.
With no restraint on wages, small industries forced to capitulate before union demands will be forced out of business. The only organisations that will survive are the large organisations. That wages are an important part of the problem of inflation is demonstrated by what the 3 Labor Premiers have said when introducing their Budgets this year. In South Australia, the Labor Premier, Mr Dunstan, in announcing increased electricity charges, hospital charges, marine charges and so on, stated that a major factor accounting for the increased charges was increases in wages and salaries.
The Western Australian Labor Premier, Mr Tonkin, has stated that the continued increase in wages and salaries has been a major factor in the increasing costs in Government expenditure. In Tasmania, the Labor Premier, Mr Reece, stated that the main factor contributing to higher deficits has been the effect of award increases for wages and salaries.
To judge how effective price control in isolation will be, the Government should consider the prices that are already controlled. Electricity charges are set by government. Have not they continued to increase? Water rates are set by government. Have not they continued to increase? The prices of many food commodities are regulated on the domestic market- butter, cheese, processed milk products, liquid milk, eggs, potatoes in some States, and so on. Have not they continued to increase? The Prime Minister has little interest in or knowledge of food prices. In answer to a question in the House of Representatives on Monday, he said that, except for meat, he did not believe food prices were a major factor contributing to inflation.
It would seem from that type of statement by the Prime Minister that there are to be no further controls other than those which already exist over food products. Certainly Mr Cameron, his Minister for Labor, did not agree with him, because on the same night Mr Cameron declared that of course the Government was going to control food prices. Mr Cameron also made the comment that this was only one of many controls that the Government needed.
Whom is one to believe? How would the Government implement the control of food prices? Is the Government going to set one price for each article and make no allowance for quality? Before anyone can endorse the Government’s proposal, the Australian people are entitled to more information. The referendum plan as proposed by the Government ‘ignores reality’, as the ‘West Australian’ so aptly put it in its editorial last Saturday. Furthermore, the Prime Minister does not have to have this Bill. We all know that he does not want to have it. If he and his Government really want to fight inflation and not be phoney about the whole affair, the Government should follow the course of action outlined in the House of Representatives yesterday by the Parliamentary Leader of the Liberal Party, Mr Snedden. I might add that it is not the first time that he has put forward these proposals.
In his statement yesterday, the Leader of the Government in the Senate, Senator Murphy, stated:
We have actively and at great length sought action by the State governments to refer the necessary power to the national Government. Nothing in the public or private responses of the Premiers of New South Wales or Victoria-not to mention the Premier of Queensland- gave the slightest room for hope that they were prepared to refer such a power to the national Government on remotely practicable or acceptable conditions.
This is utterly false, as was pointed out yesterday by the Leader of the Opposition in the House of Representatives, Mr Snedden. All Liberal/Country Party Premiers have indicated that they would be prepared to co-operate with the Australian Government if the Australian Government was to call a conference to discuss inflation.
The Commonwealth Government should forthwith call a conference with all the Premiers. The conference should develop a course of cooperative action which would call upon the Commonwealth and the States to use their governmental and legislative powers to tackle the problem of inflation. All Liberal/Country Party Premiers have indicated that they would be prepared to co-operate in such a conference. The ability and the facility are there for the Commonwealth to join with them.
What is lacking is the will on the part of the Australian Government and its leader to make such a conference a success, a leader who does not even have the support of his own Party could not expect the support of the Australian people. The Government can have action within weeks and can show that it is fair dinkum about the problem of inflation.
The Prime Minister has said that he would accept a temporary reference of powers for control of prices and incomes from the States, but the Prime Minister will not say whether he would use the power over incomes. It is easy to understand his dilemma. He could not use the power over incomes because his own Party, and the union movement which is the very basis of his Party, could not permit him to do so. A referral of incomes to the Labor Government is therefore in fact a waste of time.
The Government has no intention of dealing fully with the problem of inflation. Inflation has been attacked only in a piecemeal manner by the Government in the past and that is all the Government intends to do in the future. This whole proposal by the Government is a fraud. It is an interesting phenomenon that in the rest of the liberal democratic world power is being decentralised and central governments are attempting to give responsibility back to local areas, and it is only in Australia, where we have a socialist Government, that there is a desire and mania for controls to be rested with the central government.
The Prime Minister, the head of this Government, is misleading and deceiving the Australian people. He refuses to face reality and he refuses to take the action that as a Prime Minister he ought to take. This Government is ruinous for the Australian people, and the Liberal Party will not participate in deceiving the Australian people, as this Government is trying to do.
Why should the Australian people give price control power to this Government? One has only to look at the example of the Australian Capital Territory to note how selectively and how discriminately it would apply this power. Not only would it be a Jekyll and Hyde for Canberra; it would become a Jekyll and Hyde for the whole nation. The double standards that this Government has applied to so many other aspects of Australian life would apply also to the price control. The Government has placed private rents under price control in the Australian Capital Territory, but it is to increase rents on Government houses, increase the charges levied at Government hostels, as well as increase a large number of other charges which must add to the inflationary spiral in this city. This Government is out to enrich itself at the expense of the whole Australian community. It cannot be trusted; it should not be trusted and it has given no one any reason to believe that it would act in a fair and evenhanded manner.
It does the Prime Minister’s case no good for him to indulge in vulgar abuse of the Leader of the Parliamentary Liberal Party, as he did when he introduced this Bill into the House of Representatives. He brings no credit to the office or person of the Prime Minister or to this Parliament when he indulges in personal abuse. He has also, as we all know, frequently indulged in abuse of the Senate, which is a crucial part of the legislative process of this country. There is no need for the Prime Minister so to indulge himself. If he is dissatisfied with what the Senate is doing or has done, the remedy is in his own hands. He has the means of obtaining a double dissolution. So, rather than indulging in abuse, he should go to the Governor-General and ask him for a double dissolution.
The opportunity is there, what is lacking is the Prime Minister’s courage- or maybe Caucus will not allow him to take the plunge. Its faith in him is not as great as his own faith in himself. We of the Opposition are also sure that Australia’s faith in the Prime Minister is not such as to persuade it to give this socialist Government more centralised arbitrary power to be exercised from Canberra.
– I have listened to the Leader of the Opposition in the Senate (Senator Withers) with tremendous interest. During the course of his speech in opposition to the second reading of the Constitution Alteration (Prices) Bill which was introduced by the Attorney-General (Senator Murphy) yesterday seeking referral to the Australian people for a referendum on the control of prices, not only did he say that he opposed price control being imposed but also that he was against letting the Australian people determine by referendum whether there should be price control. The whole point is that honourable senators on the opposite side are probably responsible in the main for the tremendous inflationary spiral which is now occurring as a result of the desperation on the part of the then Government 4 months before the last election to try to do something to stop the political tide running against it. Those honourable senators are now saying to the Australian people through their spokesman in this Parliament that not only are they opposed to price control but also they do not want the people to have a say. That is the gravamen of the remarks made by the Leader of the Opposition tonight. In fact, he is against letting the people say whether they want to see the Australian Parliament have power over prices.
Senator Withers suggested that we should take note of what the Leader of the Opposition in the other place (Mr Snedden) has said. But why should we, on Mr Snedden ‘s past track record as Treasurer of this country, take note or heed of his remarks? I think that during the time that the present Leader of the Opposition in the other place was Treasurer he brought down 2 Budgets -one in 1971 and one in 1972. In 1971 he brought down a Budget which so heavily discriminated against the wage and salary earners of this country that he put 130,000 men out of work. Because he could not stop that growing swell of unemployment, 4 months before the last election he brought down another Budget in a desperate attempt to push money into the economy. He might have reduced the unemployment rate from 130,000 to 120,000 but he brought about the dual problems of unemployment and inflation. The Labor Government will not take the action, which the Liberals took on so many occasions in setting out to curb inflation, of creating unemployment. Under no circumstances will a Labor Government adopt policies which will bring about that situation. Senator Withers suggested that there be more talks between the Commonwealth and the States. That is typical of the conservative forces in this country. They want to do a lot of talking but they do not want to take much action.
We have a lot of talk from honourable senators opposite in this Parliament, especially over the last 2 weeks. We heard Senator Cotton move an umbrella urgency motion last Wednesday. He roped in every section of the economy in an attempt to score political capital merely for the Parramatta by-election. This afternoon and tonight for a period of 3 hours as a result of an urgency motion moved by the Deputy Leader of the Opposition (Senator Greenwoood) this Senate has been talking about the problems of inflation.
– It was a rehash of last week.
– It was a repeat performance of what took place last week. The Opposition would only get one point instead of 5 points under the points system. But what is the situation? The next subject for debate which is brought on by the President of the Senate is a Bill which seeks legislative enactment by this Parliament that the people be asked to determine by popular vote whether there should be price control exerted by the Australian Parliament in order to curb inflation. We have the hypocrisy of honourable senators opposite who, after talking in this place for 3 hours about inflation, get up and say that they oppose the legislation. As I have said, Senator Withers referred to a suggestion that there be talks between the Commonwealth and the States. There has been a lot of talk but very little, if any, action on the part of the reactionary forces in this community. Indeed, earlier this week- I think it may have been yesterday morning- I heard the Premier of Queensland, Mr Bjelke-Petersen, who is the Leader of the Country Party in that State- incidentally, that Party has now amalgamated with the Australian Democratic Labor Partysay that in no circumstances would he, as Premier of Queensland, co-operate with the Commonwealth to give the Commonwealth Parliament power over prices. It is the same old approach and the same old program. The Australian Prime Minister raised the matter at the June Premiers Conference. He wrote to the Premiers following the Conference. He again raised it at the Australian Constitutional Convention. All honourable senators opposite want is a rehash and repeat of talk after talk while they say that the price of groceries has spiralled to 5 times what it was at this time last year. But while honourable senators know that the Australian people are concerned about the price structure they have refused, by their remarks this evening and by the manner in which they have chosen to oppose Government legislation, to give the people the right by way of popular vote to say yea or nay whether they want to give this Parliament-not the Government but this Parliament- power over prices. This is a very genuine attempt by the Government to refer the seeking of approval for parliamentary control over prices to the Australian people. This Bill requests Parliament to approve a referendum to amend the Constitution to enable the Australian Parliament to control prices. It is a measure designed to give the Parliament of this country powers which almost every other national parliament of a comparable country has. It is a power which we seek not for the Government but for the Parliament. Under the Constitution, as the Opposition knows, the power should reside in the Australian Parliament. As I said during the course of moving on behalf of the Government the suspension of standing order 242 we are seeking this power for the Parliament in the full knowledge of our limitations in this chamber. If they choose to vote collectively the Liberal Party senators, the Country Party senators, the Democratic Labor Party senators, quite disregarding the Independent senators, can defeat any legislation in this Parliament. Knowing that they have that protection, they still set out to refuse the Australian Government the right merely to ask the Australian people to determine for themselves whether the Australian Parliament should control prices.
We have had a constant whinge and moan from our political friends opposite about inflation. We have heard much about the cost structure. We have heard by way of continual questions directed to my colleague the Minister for Primary Industry (Senator Wriedt) about their concern about the high costs faced by primary producers. We have also heard, as we just heard from the Leader of the Opposition in the Senate (Senator Withers), much about the high cost of running governments. But what happens when it comes to a showdown? Indeed, we recently had a showdown at the Premiers Conference. One Premier took the problem so seriously that he did not bother even to attempt to discuss it with the other Premiers or with the Australian Prime Minister (Mr Whitlam). He said that under no circumstances would his Government introduce price control or would he consider doing anything to hand over the power to the Australian Parliament. He said that at the Premiers Conference and, being consistent, he said it also on a national broadcast this week.
Despite that the Leader of the Opposition in the Senate came into the chamber tonight and said: ‘No, do not let the Australian people determine this question. Let the Government go back to the State Premiers and see whether it can reach agreement with them on how to solve the problem’. While all of this talk would be going on with the Premiers we would have the Opposition on each Wednesday, when the Senate proceedings were being broadcast, moving- it knows it has the numbers to carry the motionurgency motion after urgency motion merely to gain political capital instead of helping the Government to solve the problem. The Opposition’s attitude is typical of that adopted by its Liberal and Country Party forebears some 25 years ago. The Chifley Labor Government in 1948 referred a matter, with the approval of the Australian Parliament, to the Australian people. The Parliament gave approval for a prices referendum to be held. At that time the then Opposition in the House of Representatives and in the Senate opposed this matter being referred to the Australian people. But apparently that Parliament must have been more democratic than this one because at least the matter was put to the Australian people. On this occasion the Opposition is refusing the Australian people the right to determine this matter. But 25 years ago the Chifley Government sought the same power by way of referendum. Because of the smear tactics and fear campaign in which the then Opposition engaged- apparently the present Opposition is trying to parrot it now, unfortunately the referendum was not carried by a majority of the Australian people in a majority of the Australian States.
I simply say that had that proposal been accepted at that referendum in 1948- we do not query the decision of the Australian people; at least they had an opportunity to express themselvesthis country would not have the problem of inflation that we have today. But that was in 1 948. A year later a Federal election was held an unfortunately the Liberal and Country Parties won it. But the very issue on which the won the election was the promise of the then Leader of the Opposition, Mr Menzies, to put value back into the pound. As Senator Brown interjects, the pound of 1949 is now worth about 35 cents. In 1 949 the Liberal and Country Parties sought a mandate and were given a mandate by the Australian people to put value back into the pound. After 24 years they now say: ‘What are you doing about inflation? ‘
– And inflation jumped from 8 per cent to 23 per cent.
-As Senator McAuliffe says, in the time they were in office inflation jumped from 8 per cent to 23 per cent. In the 23 years of their administration this country’s economic progress was regularly convulsed by the stop-go economic policies they pursued. Because of the economic policies pursued by the Liberal and Country Parties, supported by the Democratic Labor Party, inflation got completely out of hand. At first they referred to it as creeping inflation. Then they referred to it as spiralling inflation. Then they referred to it as galloping inflation. In an endeavour to slow it down every three or four years they created unemployment. They came into office in 1949 to put value back into the pound. In 1953 there was an economic recession. In 1957 there was an economic recession. There was an economic recession in 1961 when at a general election they were re-elected with a mere majority of 240 votes in one seat. Of course, we all know what happened in 1971 and again last year. The method used by the Liberal and Country Parties to tackle inflation is to create unemployment for countless thousands of Australian workers. By their economic policies they retarded the growth of the Australian economy. But whilst they did all this- whilst they threw men out of work and could not at the same time solve the problem of inflation- they refused to do anything about the price rise spiral. Their constant answer to the problem was a duo of inflation and unemployment.
As I said earlier in my remarks, in 1971 the present Leader of the Opposition, Mr Snedden, in the first Budget that he introduced as Treasurer created a pool of 130,000 unemployed. In a desperate attempt to plug the crack, 4 months before the last election, last year the previous Government pumped dollar after dollar into the community by spending money here, there and everywhere as if it was bidding at an auction sale. That is virtually what was happening because the previous Government was trying to buy votes. It created the dual problem of unemployment and inflation. But the spending was to no avail because at long last the Australian people had woken up to the then Government. It lost the election, and in its desperate attempts to retrieve the political situation it would exacerbate the problem of inflation. I tell the Opposition that the Labor Government will not have a bar of its philosophy of creating unemployment pools and of using stop-go policies. We seek the approval of the Parliament to allow the people of Australia to determine for themselves whether we, as the democratically elected Parliament of
Australia should be given the power to control prices, as is possessed by all other comparable countries. This Government is committed to the maximum utilisation of the nation’s resources so that all Australians can enjoy a higher standard of living and a better way of life. What we as a Government are seeking by this legislation is to acquire the capacity to regulate prices. It appears to me from the remarks of the Leader of the Opposition, who preceded me in the debate, that the Opposition is adopting the false premise that wages and salaries are the prime cause of price increases. This premise has been rejected time after time by the Commonwealth Conciliation and Arbitration Commission when the trade union movement has gone to the Commission seeking an increase in the minimum wage rates.
Prices which are currently affecting the consumer price index and which reflect the level of price increases are overwhelmingly related to commodities which are not significantly affected by wage and salary increases. For instance, the price of land is not determined by the wage and salary structure of the Australian economy. The price of land is based on the capitalist law of supply and demand. If there is a demand- and there is a very great demand in the urban areas of our capital cities- then the price is high. The rates payable by the worker who is seeking to purchase land on which to build a house for his wife and family are fixed on the unimproved capital value of the land which in turn is based on comparable sales that have taken place in the area. So there is a land price spiral and a rate price spiral, neither of which is affected by the wage and salary structure of the Australian worker.
– Are you really serious?
Senator DOUGLAS McCLELLANDDespite what Senator Wright might be trying to say by way of interjection, the price of land has spiralled out of all proportion to the value of wages and salaries in the Australian community. The price of meat is determined not on the wage and salary structure of the Australian economy, not by what the wage and salary earner can afford to pay, not on the salary structure assessed by the Arbitration Commission, but again on the capitalist law of supply and demand.
– Export prices.
-As Senator Poyser has said, there is an export market for meat. Meat is sent to the export market, there is a shortage of meat in Australia and so the price goes up.
My friend the Minister for Primary Industry (Senator Wriedt) was asked a question recently about the importation of potatoes from New Zealand. Potatoes were imported into this country because of a shortage of potatoes in Australia. The prices of meat and potatoes were not affected by the wage and salary structure of this community but they are all pan of the consumer price index. Inflation is a world-wide international problem. All imports into this country are the subject of that international inflation. Yet honourable senators opposite would make it appear that inflation is caused by excessive wage demands by Australian workers. But the gravamen of their objection to this Bill is that they oppose the Australian people being given the opportunity to express, by referendum, their opinion, as to whether or not the democratically elected Parliament of Australia should have constitutional power over prices.
If inflation is of concern to the Australian people, as was said last week by the Opposition and as was reiterated in a repeat performance this afternoon, then I think that prices have been of concern to the Australian people for many years- long before this Government came into office. So it is about time the Opposition determined that the Australian people have the right to express themselves by way of popular vote. It is for the people themselves to decide whether this Parliament will have the power, and it is impossible for me to comprehend why the members of the Opposition will not let the people determine this issue. By their actions this evening, by their opposition to this Bill, they are refusing to let the people say.
-In rising to oppose the Bill before the Senate I find that there is only one really potent point to answer in the speech of the Minister for the Mediocre. I am referring, of course, to Senator Douglas McClelland. He has been critical of this Opposition for taking a stance in opposition to the measure introduced by the Government. He tried to interpret the Constitution as saying that the Government or the Opposition or a senator or a member can put to the people a question to be decided by referendum; whereas the Constitution lays down that the Parliament will decide whether and what questions are to be put to the people, and this is precisely what is happening in this national Parliament this week. This measure has been debated in another place and those who have the same political allegiance as I have have shown cause why they oppose the measure, why in effect they are saying that this question should not be sent on to the people for decision.
We say that this Parliament can make a decision on this and that the wise decision on behalf of the people is or should be that the question should not be decided by the people.
No one will argue with anybody in Australia on the point that inflation is a national problem of great importance. What the Australian people regret is that this factor was not recognised by the new Government when it came into office in all its glory and newness after the dictatorship in the early part of December. What happened was that the new chum Government went around the country not only promising but also undertaking the expenditure of many millions of dollars. On 2 1 August last it came to us with a Budget. When it was so obvious that the flames of inflation were being fanned, it came along with an inflationary Budget. It must be admitted in all fairness, that some anti-inflationary fiscal policy was undertaken by the Government in the hope, we presume, that it would dampen down the flames of inflation. But unfortunately, the continuing policy of the Government of bolstering expenditure in the public sector has overcome the remedial action that the Government has taken.
So the Labor Caucus, worried about the electoral prospects in the forthcoming Parramatta by-election and about the fact that the Labor Party will not have the nerve to go for a double dissolution, says to the Prime Minister (Mr Whitlam): ‘You will go to the country on a referendum to control prices’. The Prime Minister realised that it might be a runner to ask the people for power to control prices, costs, charges and wages. Mr Hawke, whether as President of the Australian Labor Party or as President of the Australian Council of Trade Unions or as a tycoon of the Reserve Bank Board- I know notindicated that the private conversations already exposed to the public were not a true interpretation of his feelings. He said that the trade unions would not guarantee any assistance in respect of wages, costs and other charges. But Caucus has said that the Government will go on with the prices referendum. This is what this Bill is all about, lt is not about inflation; it is about who is to have control of prices in Australia today. Is the control over prices to be altered? If so, the Constitution must be altered.
It is not news to anyone in this Parliament that the States have the power over prices. I will not repeat to the Senate what has happened in recent weeks in regard to what some Premiers will do, what other Premiers may not do and what one Premier has indicated he will not do. But what is obvious is that the States have had enough of this Government’s usurping of the powers of the
States. There is no doubt in the minds of State governments and State parliamentarians that this is what is happening. They have the feelingand justifiably so- that this centralist Government is attempting a takeover of the States. Therefore they will fight any move to give the central Government further constitutional powers.
- Senator Withers just told us that they would confer and give them to the Government. Who is right- you or he?
– If the honourable senator will stop his cackling and listen, I will tell him that, as I understand it, Senator Withers quite rightly said that it was likely that the Premiers would meet with the Prime Minister and cooperate, in a temporary sense, in respect of power over prices. What I say- I believe that Senator Withers will agree with me- is that the State Premiers will not agree to give permanent power to the central Government.
What has happened in respect of the powers of the State governments since this Government came to office? It is true that at the first Premiers Conference and Loan Council meeting a generous Government gave the States the right to spend many hundreds of millions of dollars in the form of grants and loan funds. This was one of the Government’s first big inflationary moves. But some time after that meeting was over the master- the Prime Minister- announced that there would not be any more Premiers Conferences. It was indicated quite clearly to the Premiers that, if and when they wanted anything from the central power, they could come to Canberra at a time convenient to them and the master and put their own individual case or their own individual requirements. This appears to be an amazing move which has been made to stop the Premiers of the sovereign States getting around the table and talking with the Treasurer (Mr Crean) and the Prime Minister.
The Prime Minister took over- quite rightly, because he is the elected Prime Minister- being in charge of the arranging of the Constitutional Convention which had been mooted by State Premiers and the previous Government and which was held in Sydney early this month. The Convention consisted not only of delegations from the Federal and State Parliaments but also of delegates of local government bodies. This move had my full support. But, unfortunately, it would appear that the Constitutional Convention, which was a pipe opener for the needed consideration of required constitutional amendments, turned into a mini Premiers Conference.
There was a lot of haggling at the convention until the Prime Minister and the Premiers, with the exception of the Premier of Queensland, had a chit chat around the table at Kirribilli. We probably will hear more about what went on at that conference when we read the celebrated nonsense column ‘My Day’ in a few days’ time. But it is a fact that the master, who had said that there would be no more Premiers Conferences, turned the Constitutional Convention into a mini Premiers Conference and that nothing to dampen the fires of inflation resulted from that meeting.
Then the rolling began. The small Cabinet made a decision- by coincidence, perhaps, when the Minister for Overseas Trade and Minister for Secondary Industry (Dr J. F. Cairns) was away attending a very important trade conference on behalf of this nation. Then the mini Cabinet took that decision to the big Cabinet and the big Cabinet took it to Caucus, and the rolling went on. So the Australian people, in considering why the Opposition is opposing this Bill on their behalf, will realise that in the national Government which is not yet a year old there is no solidarity, there is no unified thought and there is no cohesive view of what should be done in the future. The Government is divided into a thing of shreds and patches. This is the alarming feature of the national Government today.
The Government, in a bit of political gimmickry, decided to introduce this Bill to alter the Constitution so as to enable the Australian Parliament to control prices. Clause 2 of the Bill states:
Section5 1 of the Constitution is altered by inserting after paragraph (xiv) the following paragraph: (xivA.) Prices:’.
That is what this debate is all about. It is the job of the Labor Party, if it is sincere, first and foremost to try to persuade the Parliament to give the Government the authority to go to the people on this question. I do not blame the Labor Party for its efforts to persuade the Parliament if at the same time it gets across to the people of Australia the reasons why, if the referendum is held, they should be prepared to vote to give the central Government power over prices.
But I believe that the public will be grateful to the founding fathers who, in drawing up our Constitution, made it very difficult for it to be altered. As we all know, a majority of the people and of the States has to be obtained before the Constitution can be altered. If one does not want the Constitution to be altered, it is customary for one to vote ‘No’. A celebrated statesman of earlier years, when stating why constitutional amendments had a long history of defeat, said that it was obvious that they always would have because of the way the Constitution was set up. When he was asked why, he said: ‘Because in Australia there are more women voters than men voters and they have always been taught to say no’.
– I cannot follow that argument. Could you elaborate?
– No one laughed at that joke.
The ACTING DEPUTY PRESIDENT (Senator Wood)- Order! I ask Government senators to allow Senator Marriott to make his speech and to desist from their continual interjections.
– But he is not making a speech.
The ACTING DEPUTY PRESIDENTOrder! I want Senator Keeffe to know that an order which is given by the Chair must be obeyed. The comment that Senator Marriott was not making a speech was a ridiculous and silly one. I ask Senator Keeffe to refrain from making such interjections.
– I have emphasised that the writers of the Constitution, as history has proved, knew their job and that it is difficult to alter the Constitution. Senator Douglas McClelland told us about events that took place in, as he said, 1 948. His script writers may have a better knowledge of the subject than I, but I did have in my notes a reference to these events taking place in 1947. However, in either 1947 or 1948 the then Labor Government attempted to obtain control of rents and prices, including charges, and failed. Up until 1 949 the Commonwealth Government, under its defence powers, had control of prices in the Commonwealth. Something which should be remembered by those in government today is that some 24 years have elapsed since then and that anyone who was 17 at the time of the last Labor Government would be 41 now and would not have had any experience as a voter of what life was like in the workforce under price control with a Labor Government in office.
– And with a war on.
– There was a war from 1939 to 1945.
– We had to take over the governing of the country.
The ACTING DEPUTY PRESIDENT (Senator Wood)- Order! Senator Gietzelt will cease interjecting.
– Since 1 949 many hundreds of thousands of people have come to this country as migrants and are now Australian citizens.
– And the Labor Party instituted that policy.
The ACTING DEPUTY PRESIDENTOrder! Senator Mulvihill will cease interjecting.
– It is true to say that the great bulk of the Australian public has no real memory of what Australia was like under Labor with central price control. They would not remember the blackmarkets, the favouritism, the frustration of people trying to buy and sell, the dampening down of initiative and the killing of enterprise. I defy anybody to try to prove otherwise than that the hardships to which I have referred do occur in a nation which has central control over prices only.
– Do you want a society of spivs?
The ACTING DEPUTY PRESIDENTOrder! I just want to say -
– Sit down while the Acting Deputy President is on his feet, Senator Marriott.
The ACTING DEPUTY PRESIDENTSenator Keeffe, I ask you not to treat the Chair with contempt. The continuing running fire of interjections must stop. I want all honourable senators to know that Senator Marriott has the right to be heard in silence. I will take steps to make sure that he is heard in silence by naming anyone who interjects.
– We used to hear Senator Cavanagh talk sincerely about the rights of people to be able to speak. It is an extraordinary thing that the so-called democrats are now drunk with power on being elected to office. Honourable senators opposite are trying their best to stifle criticism of the Government, but they will never howl me down. With great respect to you, Mr Acting Deputy President, I do not need your protection. I will get my views across in this Parliament whenever I rise to speak. There is not a ratbag on the other side of the House who will be successful in stopping me. If Senator Keeffe thinks I do not mean him he is mistaken.
The ACTING DEPUTY PRESIDENT (Senator Wood)- Order! I have spoken to you before, Senator Poyser, and warned you. I want you to understand that if I hear another interjection from you I will name you.
– This is just a cheap way of trying to waste time. Every minute of my time that is wasted by interjections is one minute less of valid criticism that will be heard not only by the people in this chamber but also the listeners to the broadcasting of the Senate’s proceeding and that will be read by the readers of Hansard. The Government will know from the result of the Parramatta by-election next week how it is held in such low regard throughout the country today. When honourable senators opposite are criticised they very easily turn into a mob of larrikins. As far as I am concerned, I will carry on regardless of their behaving like larrikins. I want to point out to the people of Australia that the Labor Government’s ideas, ambitions and efforts are based on control and more control. It is never happy unless it is controlling the people, increasing the size of the Public Service and appointing people to advise it on how to control and manage the people. The people of Australia were free of that for 23 glorious years. What is happening today? After only 9 months of occupation of the Treasury benches by the Labor Government the people are waking up to the sorts of things it will do when it is in power. It has set up the Prices Justification Tribunal. I do not know whether it is going to be of any use. I am not prepared to voice an opinion yet. I will give it a chance to prove itself. But I do not think it has any teeth. However, I understand that it took the Tribunal only about half an hour to say: The extra excise on petrol provided for in the Budget is a justifiable reason for an increase in the price of petrol by 5c a gallon. But what is the position in the Australian Capital Territory, which has no local government, which has no State parliament, and which is under the control of a person whom caucus wished to destroy by making him Minister for the Capital Territory. I refer to the honourable member for the Australian Capital Territory, Mr Enderby.
-What about the 10c a gallon offin Victoria?
– It was not me.
The ACTING DEPUTY PRESIDENT- I know.
– What happened? The Minister for the Capital Territory immediately froze the price of petrol in the Australian Capital Territory. That is an example of what Labor will do in government. He then rightfully asked the Prices Commissioner in the Australian Capital Territory to inquire into the price of petrol and ascertain whether an increase should be granted.
From my reading of the Press the Prices Commissioner reported to the Minister that in his view the price of petrol in the Australian Capital Territory should be increased by the amount of the increase in excise imposed by the Budget. Did the dictator of the Australian Capital Territory say that the judge’s decision- the umpire’s decision- was final and that he would abide by it?
– I rise to a point of order, Mr Acting Deputy President. I ask for the words dictator of the Australian Capital Territory’ to be withdrawn. They are a reflection upon a member of another place. They are grossly offensive. I ask for them to be withdrawn.
The ACTING DEPUTY PRESIDENT- The word ‘dictator’ was used by you, Senator Marriott, and Senator Poyser has asked for it to be withdrawn. I ask you to withdraw it.
– I have no hesitation in withdrawing the word ‘dictator’ or the words dictator of the Australian Capital Territory’ if they offend a member of the Australian Labor Party. I have nothing but the highest regard personally for Mr Enderby. But I must say- I think Senator Poyser will in all fairness allow me to say- that by using almost dictatorial powers he refused to accept the umpire’s verdict- the decision of the Commissioner. This is an example of what Labor will do when it is in power.
The Opposition does not want to give the Government central power over prices because that is how it behaves when it has such power. What is the situation at the present time in respect to the controlling of prices by Labor in the only place- the Australian Capital Territorywhere it now has power to control them? The price of petrol is still frozen to the preBudget price. The companies are paying the extra 5c excise, and the Minister has called in the manager or managing director or head man of one of the independent oil companies to advise him over and above the head of the Prices Commissioner what he should do about the price to be charged for petrol and fuels in the Australian Capital Territory. This may not be of great moment to people outside the Australian Capital Territory, but it is at least an indication of what would happen if they gave this power by referendum.
I return to the Bill. I have given a number of cogent reasons why I at any rate am pleased that my Party and I believe other members of the Opposition are opposed to this Bill. 1 believe it would be wrong, first of all, to waste the money. It has been publicised that a referendum would cost well over $2m. There is an effort to hurry it on. Parliament, we are told, has a very heavy program of legislation before it. The Parliament, we are told, is scheduled to meet until 9 December, yet the Government is trying to suspend Standing Orders so it can rush the Bill through and then hold a referendum, if Parliament gives it authority to do so, by or on 1 December. My sincere hope, for the sake of the people of Australia both now and in the future, is that the Bill will be killed here and that the people will not be put to the bother and expense of a referendum; that the Parliament will be allowed to get on with the job of legislating; that the Government will really and truly settle its problems internally and get busy with seeking outside advice, if that is needed, and try to do something to stop the great on-rush of inflation which has made such headway since the Government came to office. For those reasons I hope the Senate will defeat this Bill and that the Government will get on with governing and will let the people have a little more freedom.
– It seems to me that Senator Marriott made 2 points. First, he expressed concern about the people of Australia and then he stated that what the Labor Party wanted to do was to control the people of Australia. May I remind the honourable senator that what we are proposing tonight is that the Senate and the Parliament of Australia will allow the people of Australia to vote on a certain proposition. We do not want to decide it tonight. We want to refer to them the question whether the Australian Parliament- our Parliament- should be allowed to control prices. That is what this debate is about. So in that circumstance we do not want to control the people of Australia. We do not want to boss them, we do not want to stand over them. We are very much concerned about them. Inflation concerns the Government of Australia and of course it concerns the people of Australia.
Let me make the first point. This Government is asking the Parliament of Australia to allow the people of Australia to decide the question. And what is more democratic than that? Why should the Opposition in this Senate frustrate that option? For many weeks it has been attacking the Government and saying to the Government: We want you to control incomes and prices’. In every debate that has occurred in this Senate and in the other place the attitude of the Oppositionthe so-called coalition, the Country and the Liberal Party- has been to demand that the Labor Government should take this action, should have an option on control over incomes and prices.
But what has it said tonight? It has said: ‘No, we are going to back off from this point of view. We do not think that the Labor Government should have any control at all’. The Opposition has not even put up the alternative which it has stressed in every debate.
This issue is a very important one for the Parliament. I suppose it is one of the most important Bills that has ever come before the Senate and it is being discussed at a most important time in Australian history. We have inflation in Australia and the Labor Government acknowledges that. We have taken various initiatives in that area but up to the present our initiatives have not been effective. We have tried a number of devices. May I mention the sorts of things we have tried. We have set up the Prices Justification Tribunal which is now operating, though its operation has been brief. It has been in operation for only about a month and has not had time, I suppose, really to get into its work. We have set up the Joint Parliamentary Committee on Prices and I have been told by the Chairman of that Committee that despite the disparaging remarks of the people on the other side, the Committee not only has worked very hard, as we all know, but that it has a great effect on the community generally and has frightened off a number of large enterprises which wanted to put up prices. Tomorrow that Committee will make its report to the Parliament.
– And the Opposition leaked it.
-Of course it did. In addition to the Prices Justification Tribunal and the Parliamentary Prices Committee -
- Mr Acting Deputy President, did I hear the interjection correctly? Senator O’Byrne said that the Opposition leaked parts of that report. If that is so- and I understand that it was Senator O’Byrne who said it- I ask that it be withdrawn.
The ACTING DEPUTY PRESIDENT (Senator Brown)- I must confess that I was writing at the time and did not hear it.
– In continuation of the point of order, that is a shocking accusation to make and I do ask that it be withdrawn.
– It is true, too. If the forms of the Senate make me withdraw an interjection, even though I believe what I said. I withdraw it.
– May I put it very clearly, because what we have been faced with in the last fortnight is just a series of propaganda speeches from the Opposition here and in the other place.
The Opposition has been trying to criticise the Labor Government for not being effective against inflation. What has been the story? I have mentioned what the Labor Party has done. It has set up the Prices Justification Tribunal, it has set up the Joint Parliamentary Committee on Prices which will report tomorrow; it has imposed a 25 per cent cut in tariffs; it has revalued the currency; and it has acted on the issue which is presently before the Australian people. We have an extremely unusual economic situation today in that for the first time in the history of Australia we have inflation coupled with overemploymentone might call it overemploymentor full employment. Whenever members of the previous Government talk about inflation they forget to mention that they had inflation coupled with grave unemployment. Every time we raised the question of inflation and unemployment, the previous Government said it could not correct it, that it was taking measures to do so. Yet only 5 months after we became the Government we had corrected that situation. We have full employment and more vacancies than people to fill them. It is a most unusual situation, but it is not new in the Western world. It is not new in an economy such as Australia’s or in the economies of Western Europe where there is high mechanisation and very sophisticated machinery and equipment. May 1 mention what I said one night recently that Professor Galbraith had said about it. I repeat what he said when he arrived in Melbourne on 3 September. I shall quote the report of his remarks from the Melbourne ‘Age’ which appears on page 473 of Hansard of 12 September. The report states:
Professor Galbraith, who arrived in Melbourne yesterday, said he doubted that any action taken in Australia alone would control inflation.
The decisive question is that it be brought under control in my country- the United States’, Professor Galbraith said at an airport Press conference.
Inflation is a world-wide problem, and it is going to be serious as long as it isn ‘t tackled in the metropolitan economy.
As long as inflation is out of control in the United States, it is likely to be out of control in those countries that do a lot of trade with the United States of America- like Australia.
Yet we have this repeated propagandising by the Opposition when it moves motions to debate matters of urgency and contests, in the other place, the Government’s actions. Our actions are clear. We have done things of the sort I have mentioned. Now we want to ask the Australian people to give us a power. It is most extraordinary to me that senators, when I talk to them about the various Bills and campaigns, say that the Senate is the elected House, it is the States
House and it has a more democratic basis than the other place. Yet they are afraid to let us ask the people of Australia whether they want the Australian Parliament to control prices. To me. that is extraordinary. What we are proposing is a most democratic action.
Why have we reached this situation? We have reached it, as the Prime Minister (Mr Whitlam) and Senator Murphy have pointed out, because in the consultations with the States they have indicated a resistance to the handing over of powers to the Australian Government. Most of the speakers from the Opposition side tonight have said: ‘Why not get the States together and ask them what they want to do about prices?’ We have asked the States what they want to do about prices. Except for the Labor States, my own State in particular, there is a resistance to the handing over of powers to the Australian Government. The Prime Minister has stated, in speeches in the other place, what the reactions of the States were when he floated this idea that we should have power over prices. It is extraordinary that in this world today- 1 973- other countries have great and sophisticated powers over these things, but Australia does not. Australia is a great country. All honourable senators acknowledge that. It is a sophisticated country. Each State has great economic units which can produce commodities which are as good as any in the world. The States have become the playground of the multinational corporations. We can do all sorts of things yet we cannot act as an Australian Government.
What is wrong with the proposition contained in the Bill? The only contest can be on the basis that perhaps it does not go far enough. We are saying that the only power which is necessary at present is the power to control prices. Let me remind the Senate of what the Prime Minister told members in the other place and what Senate Murphy told us last night about what took place at the Australian Constitutional Convention. There the Prime Minister floated the idea that the States should give the Australian Government power over prices. Everybody knows that prices have increased. Honourable senators should ask their wives about the increases in prices of foodstuffs.
– My wife says: ‘Kick the Government out’.
-Of course she would. Quite clearly she is under the honourable senator’s domination. I suggest that he would not be the most logical -
The ACTING DEPUTY PRESIDENT (Senator Brown)- Order! An air of tranquillity settled down over the Senate, which I thought was quite pleasing to see. It was before you re-entered the chamber, Senator Jessop. As a matter of fact, you helped to unsettle that atmosphere. I ask the Senate, and you in particular, to ensure that speakers from both sides are given the opportunity to address themselves to the question without constant interjection and undue audible conversation.
– I did not resent the interjection because it was clear to me, and I think it is common knowledge- the dogs are barking itthat every week the price of foodstuffs jumps by 20 per cent or 30 per cent. I occasionally go to the supermarkets with my family, and I know that it does. Why does the price jump? It jumps because not only the commercial interests but everybody else have the advantage in this situation. They know that the Labor Government is intent upon controlling prices as far as the Parliament will allow it to exercise that control.
– They do what they like.
-As Senator O’Byrne said, they do what they like. The result is that we have had this drastic rise in the price of foodstuffs because everybody who wants to make a quick dollar is out to make a quick dollar. All the speculators and the people in the community who are not the traditional merchants and operators are out to make a quick dollar.
- Senator Jessop ‘s wife is the same as mine- she is subject to the market. So we have to do something about the situation. The Labor Government has asked the State Premiers: ‘ What about giving us power to control prices?’ Some State Premiers, as is well known, have rejected the proposition put by the Prime Minister. Let me state what the Prime Minister said, as reported at page 1056 of Hansard. He said:
The Parliament can obtain the power by reference, by some or all State Parliaments. That is something which could be done in a matter of weeks. The reference of power could be permanent or temporary. If, however, the Governments in the two great States of New South Wales and Victoria, Governments which currently have a majority in both Houses of their Parliaments, decline to introduce a Bill, then the reference would be ineffective. I venture to say that without New South Wales and Victoria, it would be a largely futile exercise, while, with those two States alone referring, it could be made effective throughout Australia.
We are the only Party which consistently has argued in favour of price control. The promise to introduce price control was made by previous leaders of the Labor Party. I mention the late
Arthur Calwell. It was in his pre-election policy speech. It was in the pre-election policy speeches of the present Prime Minister. We have said that the Australian Parliament should have the constitutional power to control prices. It is extraordinary that today we cannot have that power.
There are some other devices which the Government admits might be used. We could use the corporation powers. If the Opposition says that it will not allow the people to answer the question, we say that we would like to use the corporation powers. We know that if we use them we will face the frustration of all sorts of appeals in the courts. So the clear solution is to ask the ordinary elector to decide the question. That is the real issue tonight. The extraordinary thing is that honourable senators opposite say: We will not let the people answer the question’. Honourable senators opposite, particularly members of the Country Party believe in fixed prices for primary products. There have to be fixed prices for sugar, eggs, milk and bread. For the producer, fixed prices are always necessary. If we talk about fixed prices for people generally- for workers in the community and for the average people in the community- they say: We will not give you the power. You should talk to the States.’
What is alarming to me is that in the debates which have occurred up to now in this place and in the other place there has been a great deal of propaganda attacking the Government for what it has failed to do. I have mentioned the sorts of initiatives which we have taken already. Tomorrow in Parliament a report will be presented by the Joint Parliamentary Committee on Prices. It will tell us its experience in relation to prices. We are saying that it is evident that we need to go one step further and ask the people of Australia what powers they think the Government should have. I think it is clear to everybody- I think it is clear to the people of Australia- that this is a most important” objective of the Government. We are confident that if a referendum is held the people will support us because it must surely be something unusual for a country such as Australia, in this day and age, not to have power over prices. I ask the Senate to support the Government’s Bill. It is the only way to make some sort of progress. If we go into the wider areas, I think the matter could become more contentious in the community. I am satisfied that if we have the power to control prices, in addition to the measures which we have taken and which I have mentioned, we will have the satisfaction of knowing that finally the trade union movement, once it sees that we have taken the initiative, will give us its support. There has been criticism of what Mr Hawke has said. Nobody can expect him at this stage to take the stand, not knowing what the Parliament might do, that he will rest upon what the Prime Minister has stated is his policy. We have first to ask the people of Australia what powers they think the Government should have, if we win their support, which I believe we will receive. Then, having effective control over prices, I am quite sure that the effect will carry into the trade union movement, into the area of wages and into the sorts of arrangements and controls that we might best obtain. I ask the Senate to support the Bill.
-The policy of the Australian Democratic Labor Party on the question of prices is clear. We believe that the Government of Australia, in the same way as the governments of Great Britain, the United States of America and New Zealand, ought to have power to control prices. But we go further on the grounds of plain and ordinary common sense. We say that the power to control prices is useless unless it is accompanied by power to regulate wages and incomes. I do not know of any country which has successfully coped with the question of rising prices unless it was able also to cope with one of the most vital elements in rising costs, namely, wages and incomes. Therefore, when we of the Australian Democratic Labor Party learnt that the Government proposed to call for a referendum upon prices, we favoured the proposal. But when the Bill was introduced and we found that it was to be confined to prices, we felt that it was necessary- I repeat, in the name of common sense- that the action should not be confined merely to prices but that it should be extended also to wages and incomes. For that reason, my Party introduced in the Senate today a Bill in which we state our view that the question to be put to the people should be whether they feel that the Commonwealth Government should have power to control both prices and wages. That is where we stand.
– What are incomes?
– Incomes and wages, if you like. At the moment in this country we have galloping inflation. There is galloping inflation on many fronts. I am not terribly interested in the long history of misdemeanours of other governments. I am interested in what this Government has done and what it proposes to do because it is in the saddle at the moment. Under this Government we have galloping inflation upon many fronts and upon 2 fronts in particular. The worst kind of inflation is occurring on foodstuffs, on the requirements of the housewife, on housing and on land. Those things are essential for young couples if we are to promote what we should promote in this country, that is, a good family life. Not only have we had increases in prices which have shocked even the most hardened among us, but in addition we have been told bluntly that prices will continue to go up infinitely more in the next 12 months. We are told that the price of land is rising at the rate of $200 a week for a good block of land in Melbourne. We are told that prices, despite the tremendous increases, are going to increase all the more. Wages are lagging. People on fixed incomes, pensions and superannuation are being reduced to the poverty line in the light of what is happening.
– Did you say that wages are lagging?
– It appears to me that they are lagging, definitely. Therefore, it appears to me that it is necessary for this Government to take some vital action. Government members say that they have established the Prices Justification Tribunal and that it will make a very fine report. But all honourable senators on the Government side know that without constitutional power the Prices Justification Tribunal, although very nice, is really worth very little. Unless the Government of this country has the power, the Prices Justification Tribunal is just a mirage. Therefore, I believe that we have to face up to the question of what is going to be done on prices. I want to warn that perhaps too much of the focus has been placed upon the question of prices. It is one vital point in the present inflationary malaise. But even if the Government gets the power, not only over prices but also over incomes and wages, it faces no easy task in implementing a satisfactory method of dealing with inflation. All sorts of other factors have to be brought into the campaign.
My Party made that clear in a motion which it passed at its Federal conference last year calling for a number of actions to be taken for the purpose of dealing with inflation. We called for a check in unreserved Government spending. We called for greater reserve bank control under Government supervision over credit expansion of banks and other institutions. As will be known, institutions of a banking type function at the present time under no law, or practically no law. We called for a reduction in private spending, firstly by encouraging savings and, secondly, by reforming the tax system to ensure that the low income earners do not carry the entire burden. We called for the checking of excessive inflow of foreign funds for the purchase of assets.
Also we called for action to regulate prices. But it was clearly understood in the discussion on the motion that when we called for action to regulate prices we were calling also for the obvious complement to any action in that direction- action to regulate incomes and wages. We believe it is essential that nobody should attempt to tell the people of this country that all that has to be done is to introduce price control and everything will be fixed. That would only be deceiving the people. I repeat that I believe the Government’s best means of trying to do something effective about inflation is to pass legislation or to hold a referendum which will enable it to control both the prices sector and the wages and incomes sector. Unfortunately, there are strong divisions of opinion in the Senate at the present time. There are before the Senate 3 different propositionsfrom, in effect, 3 different quarters. No party has a majority for its proposition. The Government says that a referendum should be only to give it control of prices. The Country Party and the Liberal Party say that there should be no referendum, no control of prices and no control of incomes. We in the DLP say that the question to be put to the people should ask them to give the Commonwealth a package power to control prices, wages and incomes. At present time nobody is able to get over the fact that the Senate is divided and no party has a majority for its proposition.
I believe that action in regard to prices is essential if inflation is to be dealt with. The motto that could be put at the head of any argument on this question is the statement of Mr Chifley who said years ago: ‘It does not matter how many pounds are in your wage packet; what matters is what you can buy with those pounds’. I believe that that is the position. If the Commonwealth Government is given power to control wages and power to control prices, and the complementary power to which I have referred, it will be put in the situation of trying to ensure that we will not have this vicious circle of continual inflation and of attempts- often unavailing- by sections of the trade union movement to catch up, and we will not have the position that we have today, in which people on fixed incomes, superannuation and so on, are reduced to the poverty line.
The Democratic Labor Party wants the Government to trust the people to make a decision. If the Government believes that only the prices proposition should be put, let it put that on the referendum ballot paper. But, in view of the fact that a considerable number of the country’s leading economists and most of the critics who have written on this subject in the newspapers affirm that it is equally necessary to have power over incomes, let the Government adopt the DLP suggestion and include this second question. ‘Are you in favour of the Commonwealth having power over both prices and incomes?’, and let the people decide between those 2 alternatives.
I want to say something to honourable senators sitting on the Government side. They are a band of brothers sworn to honourably maintain the secrecy of the Caucus. Their Party admits people to its Caucus on the honourable understanding that none of them will reveal what has happened. But everybody knows that 5 minutes after the Caucus breaks up every top journalist in this building has his leak who informs on his mates.
– It all depends on how much they have been drinking.
– They do not have to be drinking in order to inform on their mates to the Press- often to the anti-Labor Press. In their Caucus today a proposal was put forward- it was not exactly the DLP proposition- for 2 things to be included in the one question. I understand the proposition was that the Government might put incomes and prices in 2 separate questions. That proposition was defeated by only 45 votes to 42, I am told, and the Prime Minister (Mr Whitlam) was in favour of the proposition to let the people have a vote on the question of incomes. 1 hope that members of the Labor Party will have another look at that proposition. It will be a pretty poor situation for them to have to go to the people and say, through their leader, that they believe that the Commonwealth should have power over prices, when their leader can be asked whether it is a fact that he believed that the Commonwealth also should have power over incomes. What could he say? Could he say: ‘Yes, I did believe that’? The numbers in the Caucus were 45 to 42, and that is too close for the Labor Party to be able to say that it will forget the proposition. I say to the Labor Party senators that if they go to the people on the question of prices only they will be defeated, and defeated overwhelmingly. On the other hand, if they go to the people with one question covering both prices and incomes they will have a good chance of success. We in the Democratic Labor Party will persist with our Bill. We believe that it is the right thing to do. Even if the Government insists on putting its own proposition, we appeal to it to put the other proposition as an alternative. What is wrong with letting the people decide?
I want to say one or two other things. A good deal of scorn has been poured upon suggestions that an approach might still be made to the States. I realise that the States have not been very co-operative on this issue, but I think we do well to remember that the States are the ones who have the power to control prices today in this country. We do well to remember that the States have failed completely to co-operate as they should for the purpose of assisting to control inflation by action in regard to prices. I may be wrong, but I thought I detected this morning in some statements on behalf of the States, a certain realisation that they may not be justified in opposing this proposition as strongly as they have. As this referendum could only be held in some months time, there is nothing wrong with still trying to get co-operation from them.
However, there is another section of the community which has to be called upon to play its part also. I refer to the trade unions. Let me be blunt. Obviously, one reason why Mr Whitlam and Mr Crean have not been happy about this proposal- it is well know that Mr Whitlam did not want the referendum- is that they realise the immense difficulties they face from sections of the trade union movement, such as the Amalgamated Metal Workers Union under Mr Carmichael and Mr Halfpenny who now have established a system by which they go to a cosy love nest with the employers and work out increases. The understanding is that they can get their increases while the employers can recoup the cost by charging higher prices and manipulating the tariff. That union is committed to that couse of action without regard to the effect upon other unions or upon the economy when demands are made for a flow-on.
I would have a good deal of pity and sympathy for Mr Whitlam and Mr Crean if they were called upon to try to implement a prices policy in the face of the sort of co-operation they would get from the Carmichaels and the Halfpennys. Therefore, it is necessary that we call upon the trade union movement of Australia, not through one individual but through its interstate executive, or by means of a special conference if necessary, to delcare where it stands upon this question. I have been told that at the recent congress of the Australian Council of Trade Unions it was determined that there should be no control over wages.
– No further control.
-No further control? So far as the individuals I have mentioned are concerned, when they say none they mean none. The policy of Mr Carmichael and Mr Halfpenny is no control at all. They believe in straightout negotiation with the bosses on the basis that they share the cake between them and the interests of the rest of the community are not to be regarded. The Labor Party claims to be the Party of the unions. Why does it not go to the unions and ask them where they stand? No system of price control can operate if the unions propose to institute, where they have power, a system of industrial anarchy.
I will never be Prime Minister of this country but if I were, in a case such as this I would have one more go at the States and I would go to the trade unions and say: ‘You cannot expect us as a government to go on with this kind of thing unless you are prepared to be good Australians and do your bit. ‘ I conclude by saying that the Democratic Labor Party is not afraid to give power over incomes and prices to the Commonwealth Government. We do not believe that such action will reduce Australia to socialism. After all, one of the things I have noted about the Labor Party in recent years is that it is always socialist except before an election. As I have said, when governments in Great Britain, New Zealand and the United States of America have these powers, we see no reason why they should not be given to the Commonwealth Government. We appeal to honourable senators to have regard to the fact that if we are to implement a system of price control as one factor- I emphasise that; not as the single nostrum to cure inflation- in a series of measures which ought to be taken then I believe that it is essential that the proposition put to the people should give them the right to choose whether they want to confine that power only to prices or whether they are given an alternative choice which I suggest should be incomes.
– In rising to support the Constitution Alteration (Prices) Bill I will startle honourable members on this side of the chamber by a most unusual utterance. I congratulate the previous speaker, Senator McManus, on his address this evening. I think that he has made a fine contribution on the evils of Australia and the methods of overcoming them. I also congratulate him on his source of information from Labor Caucus. Although the figures are not accurate, nevertheless I think he has given a good description and displayed a knowledge of what went on in Caucus this morning. Whether it is loyalty or not, no one is concerned about the disclosure of what goes on at Labour Party meetings because we are fully open. Although because of some prejudice, the honourable senator has perhaps destroyed his attitude to the trade union movement I think that his call for co-operation with the movement is one which we have to accept and explore. I think that this Government will be able to explore this possibility better than any other government.
One is surprised by the action of the Oppositionapart from the Australian Democratic Labor Patry- in directly opposing the giving of powers to the Federal Government and in not permitting the people to decide whether the Federal Government should have powers. The first thing to remember is that this is not a new power. The States have it at the present time. We are prepared to leave it to the States but we have the knowledge that they are unable to use the power. Let us look at the lines of the agreement between the parties. Everyone agrees that inflation is injurious to the nation and that if possible we should do something to curb it or get to the stage where it will not cause as much suffering. It is no good saying that inflation has increased. Everyone knows that it has increased. Inflation occurs as a result of the demand for goods exceeding the supply. This permits the owner of the goods to sell on the highest market. There will be greater bidding for the product at a time when there is a shortage of the product.
– The cost of production of the goods is a factor also. The honourable senator cannot ignore that.
-That is the old Marxist theory of value and service. Leontief ‘s theory of political economy was that the true value of any product was the amount of necessary labour which was employed in its production. When someone sells above the cost of the necessary labour employed in the production of the goods there is a higher value for the product which is not a true value. Let us consider by way of illustration coal in the ground. It is simply valueless until labour is employed to bring it to the surface. The labour that is employed gives it its value. If one sells a product at a price which is in excess of what one paid for the labour one is selling it at an exploited value.
We have recognised the use of machinery and the right of ownership which necessitates the investment of capital. We have recognised the sanctity of capital in production. Under our system those who invest capital are entitled to their margin, that is, a profit for the investment. Of course, the whole question of surplus value comes in when it is necessary to decide whether the selling price is in excess of what has been paid for production plus a reasonable return on the money invested. If we sell a product at its true value- that is the price of production plus reasonable return- we get to a stage where the wages of the individual are sufficient to buy back the product which he produces. One does not have a surplus of commodities but an even market.
At the stage where either the cost of production or the return on capital is in excess of the amount produced there is an expending power whereby demand exceeds the amount of goods which can be purchased. Of course, with the shortage of goods and the demand for goods there is a bidding for the goods which are available, and so up goes the price of goods.
– But interest is income. How does the honourable senator explain the Labor Party’s action in increasing the interest rate to 10 per cent? Has the honourable senator read Marx on interest?
-Yes, and 1 have read Marx on income. If the honourable senator will be patient and not try to make the speech I will come to interest payments. Of course, if someone is making a profit out of surplus interest this gives him a spending power in excess of the value of the goods produced. He reverts to the position of making a demand upon the goods produced which again results in a greater demand which cannot be fulfilled from production. And up goes the cost of goods. Under our economic system we seek to control this by some method.
Senator McAuliffe the other night gave us some figures which indicated that under the previous Government- I think it was 1951- inflation for the year was about 22 per cent. Despite all that the previous Government did not fail lamentably in controlling inflation, seeing that inflation has gone through the developing countries of the world. Inflation in Australia was not in excess of that rate of 22 per cent. But on every occasion the previous Government tried to control inflation by budgetary measures- by restricting the flow of money to those areas of production which were contributing towards inflation so that production ceased. The demand for goods ceased which created a pool of unemployed. Because of the low social service unemployment benefit families were deprived and the demand for goods was curtailed further. So we had a situation of supplies meeting the demand. Because on those occasions we restrained demand by creating poverty in our society -
– Surely any demand placed in the hands of the person who is unemployed produces nothing and must lead to the very situation that you are giving as an example. It is a demand in excess of what is being produced, even in the form of social services. This is why Marx is 100 years out of date.
– I was very patient and did not interrupt Senator Little. But I am afraid that at times it is necessary to do so because he fails to understand the position. I am talking about the situation where there is a commodity for sale and there is a demand for the commodity. An over-demand is created if there is wealth in the community and if few commodities are available. You rectify that situation by reducing demand. You do that by taking the purchasing power away from a section of the community so that it is unable to buy. The previous Government tackled inflation through the suffering of the people. While it is true that the unemployed receive some sustenance, they are not able to purchase the surplus of goods produced by the people who are employed, but it is necessary that they be given sufficient sustenance to maintain their existence. Mr President, because of the other arrangements that have been made, I seek leave to continue my remarks.
Leave granted; debate adjourned.
– I desire to inform the Senate that due to the need for urgent consideration of the Constitution Alteration (Prices) Bill it is in the interests of the Senate that priority be given to this matter. Under the circumstances, it would appear to be in the best interests of the Senate that tomorrow we proceed with the debate upon the Bill and not suspend the Senate for meetings of the Estimates Committees.
Senate adjourned at 10.59 p.m.
The following answers to questions were circulated:
asked the Attorney-General, upon notice:
– The answer to the honourable senator’s question is as follows:
asked the Minister for the Media, upon notice:
– The answer to the honourable senator’s question is as follows:
asked the Minister for the Media, upon notice:
What is being done, or can be done, to improve television reception from the Brisbane stations in the Gold Coast area.
– The answer to the honourable senator’s question is as follows:
I understand from the Australian Broadcasting Control Board that whilst there have been very few complaints received regarding poor television reception of the Brisbane stations in the Gold Coast area, there are some pockets of unreliable reception in the area. The Brisbane stations are anxious to improve reception of their stations in these areas. The question of improvements to the service in these pockets is not a simple matter for technical reasons and the engineering staff of the Board have been making measurements of the signals in the area. These will be studied by the Board at the first opportunity.
asked the Minister representing the Minister for Foreign Affairs, upon notice:
– The Minister for Foreign Affairs has provided the following answer to the honourable senator’s question:
New Zealand- Australia Free Trade Agreement
– On 8 June 1973, Senator Lillico asked the Minister representing the Minister for Overseas Trade the following question, without notice:
I ask the Minister representing the Minister for Overseas Trade and Minister for Secondary Industry a question based upon a reply that he gave to a question by me last week. Is he aware that the reason why there has been no case of serious injury sufficient to invoke the safeguard clauses of the AustraliaNew Zealand Free Trade Agreement appears to be because of a determination not to accept any claim of damage under any circumstances? Would the Minister indicate whether the departmental officer who induced the former Minister for Trade and Industry to take up this attitude is now feeding the same folly to the present Minister? Would the Minister admit that imports to an already glutted market are the cause of considerable damage to that market?
The Minister for Overseas Trade has provided the following answer to the honourable senator’s question:
As the honourable senator will be aware, Article 9 of the New Zealand-Australia Free Trade Agreement provides for consultations between the Australian and New Zealand Governments if, in the opinion of one of the member states, scheduled goods are being imported in such increased quantities and under such conditions as to cause or threaten to cause serious injury to its producers.
In evaluating claims of ‘serious injury’ in relation to this provision, the relevant Government Departments are required to consider the effects on the industry which are due solely to New Zealand import competition. In many of the cases so far raised by local industry for examination it has been found that circumstances other than New Zealand competition- such as the general level of world prices and supply- have had a significant bearing on the problems of the industry. In those cases where New Zealand competition has contributed to the problem, New Zealand has been approached and remedial action taken.
Where it is thought that future difficulties may arise from New Zealand competition, appropriate Departments and/or bodies such as the Joint Australia/New Zealand industry panels maintain a watch on imports and seek to reach agreement on how damage may be avoided. These methods have so far satisfactorily ensured that imports from New Zealand do not cause serious injury to Australian industry.
The honourable senator also asked about advice which the Minister for Overseas Trade receives from officers of his Department. Such advice is not based on the personal opinions of individual officers but represents the considered view of the Department in the light of all the known facts about particular situations under examination.
Cite as: Australia, Senate, Debates, 19 September 1973, viewed 22 October 2017, <http://historichansard.net/senate/1973/19730919_senate_28_s57/>.