House of Representatives
2 May 1940

15th Parliament · 2nd Session

  1. House of Representatives
  2. 15th Parliament
  3. 1940

Mr. Speaker (Hon. G. J. Bell) took the chair at 2.30 p.m., and read prayers.

page 469

OLD-AGE PENSIONS

Mr. BEASLEY presented a petition from pioneers and other citizens of the Commonwealth praying that the old-age pensions be increased from ?1 to ?1 10s. a week.

Petitionreceived and read.

page 469

QUESTION

AUSTRALIAN IMPERIAL FORCE

Mr FRANCIS:
MORETON, QUEENSLAND

– Has the Minister for the Army been advised of the strong resentment in Queensland regarding the arrangements made for the departure of 400 Queensland members of the Australian Imperial Force for the south on Tuesday last? Further, is he aware that the men were marched through back streets to the interstate railway station, and that their relatives and friends were kept behind barricades until six minutes before the train left, although they arrived at the station with 35 minutes to spare? Will the Minister have an inquiry made in order to ascertain the cause of the bungle, and will he see that better arrangements are made in future for relatives and friends to farewell soldiers who are entraining for the south?

Mr STREET:
Minister for Defence · CORANGAMITE, VICTORIA · UAP

– I have seen the newspaper cutting to which the honorable member refers. The matter has also been brought under my notice by the honorable member for Lilley (Mr. Jolly). I am unaware as to the correctness or otherwise of the information contained in the newspaper paragraph, but in all probability the. State Government was consulted as to the route along which the troops would march. I shall have an investigation made into the circumstances surrounding the incident and let the honorable member know.

page 469

QUESTION

WOOL APPRAISEMENT

Sir EARLE PAGE:
COWPER, NEW SOUTH WALES

– Will the Minis ter for Commerce request the Central Wool Committee to reconsider the claims of Newcastle as a wool appraisement centre, in view of the importance of Newcastle and the surrounding district?

Mr ARCHIE CAMERON:
Minister for Commerce · BARKER, SOUTH AUSTRALIA · CP

– Yes.

page 469

QUESTION

REPATRIATION HOSPITAL, PERTH

Mr NAIRN:
PERTH, WESTERN AUSTRALIA

– Is the Minister for the Army in a position to make a statement regarding the erection of a repatriation hospital at Perth, particularly as to the site, the cost, whether the work will be carried out by contract or otherwise, and when building operations are likely to commence ?

Mr STREET:
UAP

– It has been decided to build a repatriation hospital at Perth, on what is known as the university site. The hospital will be a permanent structure and will contain 100 beds. The work will be done by contract and the services of a Western Australian architect will be secured in preparing the design.

page 469

QUESTION

WHEAT

Mr McHUGH:
WAKEFIELD, SOUTH AUSTRALIA

– In respect of the 1939-40 wheat harvest,which is known as the second wheat pool, can the Minister for Commerce say how many bushels have been sold from that pool and how much of it has been shipped from Au’stralia to date?

Mr ARCHIE CAMERON:
CP

– I propose to make a full statement on that subject to-morrow.

Mr WILSON:
WIMMERA, VICTORIA

– Is the Minister for Commerce in a position to state when a further advance will be made on the No. 2 wheat pool ? If not, when will he be in a position to do so? The matter is an urgent one to the wheat-growers of Australia.

Mr ARCHIE CAMERON:

– I am not in a position, at the moment, to make the suggested statement, but it will be made when I am.

page 469

QUESTION

WINE

Mr PRICE:
BOOTHBY, SOUTH AUSTRALIA

– Can the Minister for Commerce say what arrangements have been made for the shipment overseas of Australian wine?

Mr ARCHIE CAMERON:
CP

– About ten days ago arrangements were made for the shipment this month of about 7,000 hogsheads of wine and it is hoped that a similar quantity will be shipped next month. More than that I cannot say at present.

page 460

QUESTION

WOOL CLIP

Mr COLLINS:
HUME, NEW SOUTH WALES

– Can the Minister for Commerce say what proportion of the Australian wool clip is supplied by growers who produce less than 100 bales each ?

Mr ARCHIE CAMERON:
CP

– I shall have inquiries made, but the honorable member may be satisfied with figures, which, were taken out recently, showing the quantity of wool supplied by growers of under 50 bales and over that quantity. That information I shall supply to him to-morrow.

page 460

QUESTION

MARGARINE

Mr ANTHONY:
RICHMOND, NEW SOUTH WALES

– Has the Minister for Commerce seen a statement which recently appeared in the press, purporting to have been made by ‘ Sir David Rivett, the chief executive officer of the Council for Scientific and Industrial Research, in which he advocated an extension of the margarine industry by manufacture for export? If the statement, as reported, is correct, does the Minister know whether it comes within the sphere of Sir David Rivett’s duties, as an officer of the Public Service, to tender advice on matters of high economic policy, as apart from scientific questions? Further, does the Minister know that the competition from margarine has already made serious roads into, and is imperilling, the dairy industry of the Commonwealth, and does the Government intend to do that industry further injury by giving any encouragement to the suggestion reported to have been made by Sir David Rivett ?

Mr ARCHIE CAMERON:
CP

– I have seen two statements attributed to Sir David Rivett relating to the improvement of the quality of margarine, but I do not know whether he was correctly reported. This matter is now the subject of correspondence between myself and the VicePresident of the Executive Council. As soon as I have heard from him regarding it. I shall inform the honorable member officially. He can rest assured, however, that the Commonwealth Government will do everything within its power to safeguard the interests of the Australian dairying industry.

page 460

QUESTION

IMPORT LICENSING POLICY

Mr HOLT:
FAWKNER, VICTORIA

– Many cases have come to the notice of the Government of importers having been advised by American exporters that they are prepared to allow to romain in Australia the proceeds of the sales of their goods in this country. I understand that the policy of the Treasury and the Department of Trade and Customs has been to refuse to permit transactions of this kind for fear of a sudden drain on these funds at the end of the war. In view of the fact that many of these exporters are prepared to invest money for an indefinite period in somes cases in the establishment of plant and equipment, will the Treasurer, in his own capacity and as the Minister representing the Minister for Trade and Customs, state whether the Government will give early consideration to the formulation of a policy whereby, with proper safeguards, means may bc evolved to permit transactions of this kind to take place?

Mr SPENDER:
Treasurer · WARRINGAH, NEW SOUTH WALES · UAP

– Each particular case has to be decided on its own merits, lt does not follow that, because the import licensing system prohibits the importation of certain items, the mere readiness of people to invest in Australia to produce the item prohibited should be acceded to. If the investment were to be a permanent one, the governing factor would be the necessity of the type of investment proposed ; for example, as to whether or not it would he directed to an avenue of industry or activity that i? necessary for the prosecution of the war.

page 460

AUSTRALIAN LABOUR PARTY (NON-COMMUNIST)

Mr BEASLEY:
West Sydney

- by leave - I desire to announce that the honorable members for Dalley (Mr. Rosevear), Lang (Mr. Mulcahy), Reid (Mr. Gander), Cook (Mr. Sheehan), and I, at the express wish of the rank and file members of the party in our electorates, have withdrawn our membership from what, is known as the Australian Labour party in New South Wales, and are now members of the non-Communist branch of the Australian Labour party in that State. I have been chosen to act as the leader of the party in this House, and the honorable member for Dalley will fill the position of deputy leader.

page 461

QUESTION

DAYS OF SITTING

Mr FRANCIS:
MORETON, QUEENSLAND · NAT; UAP from 1931; LP from 1944

– Some time ago, the Prime Minister intimated to honorable members that the House would sit on Tuesday, Wednesday, and Thursday of one week, and on Wednesday, Thursday, and Friday of the following week. According to DameRumour, that is not now the intention. Can the right honorable gentleman let me know what the position is to be during the next few weeks?

Mr MENZIES:
Minister for Defence Co-ordination · KOOYONG, VICTORIA · UAP

– I have had an opportunity to discuss this matter with members of the Government and also with the Leader ofthe Opposition. Having regard to the great volume of Cabinet business which needs to be attended to, particularly in the present difficult circumstances, it is proposed to ask the House to sit on Wednesday, Thursday and Friday of each week until further notice.

page 461

TARIFF BOARDREPORTS

Mr. SPENDER laid on the table reports and recommendations of the Tariff Board on the following subjects: -

Imitation gut.

Mercerizedcotton yarn.

Metal leaf and metal foil. Foil paper. Foil board.

page 461

QUESTION

RESEARCH LABORATORY AT FISHERMEN’S BEND

Mr BARNARD:
BASS, TASMANIA

– Has the Prime Minister seen the statement which appeared in the Melbourne Herald on Monday last, indicating that the Government has decided upon the establishment of a laboratory for research work at Fishermen’s Bend, at an estimated cost of £50,000? Was the publication of this statement authorized by the Government? If so, does the right honorable gentleman think that this research work can be more effectively, efficiently, or economically carriedout in Melbourne than at the National Capital ?

Mr MENZIES:
UAP

– I have not seen the report referred to by the honorable member, but I shall look into the matter and furnish him to-morrow with the information he desires.

page 461

LEAGUE OF NATIONS

internationallabourorganization.

Mr McEWEN:
Minister for External Affairs · INDI, VICTORIA · CP

– I lay on the table-

International Labour Organization of the League of Nations - Twenty-fifth Conference, held at Geneva, 8th to 28th June, 1939- Reports of the Australian delegates. and move -

That the reports be printed.

Debate (on motion by Mr. Curtin) adjourned.

page 461

QUESTION

AUSTRALIAN LABOUR PARTY (NON-COMMUNIST)

Mr JAMES:
HUNTER, NEW SOUTH WALES

– In view of the announcement of the honorable member for West Sydney (Mr. Beasley) I draw your attention, Mr. Speaker, to the accommodation provided for honorable members on this side of the House. The members of the non-Communist branch of the Australian Labour party naturally will not wish to be associated with the members of what they term the “ Communist” section of tie Australian Labour party. Seeing that on the benches opposite, there are approximately twenty vacant seats which are never occupied, is it not fair that the seven members of the Government parties who occupy seats on the corner benches on this side of the House should be found places opposite, thus making possible the occupancy of the seats that they now fill by the honorable member for West Sydney and his supporters?

Mr. SPEAKER (Hon. G. J. Bell).If it is thought desirable that the honorable member for West Sydney and his party should occupy a portion of the chamber apart from that occupied by members of the Opposition generally, it is a matter which, I think, might easily be arranged between honorable members themselves, without the intervention of the Chair. I have not noticed that on the Government side of the House there are twenty seats that are always vacant. I shall look into the matter again to see if any rearrangement of seats is practicable.

Mr LANE:
BARTON, NEW SOUTH WALES

– In view of the statement made by the honorable member for West Sydney (Mr. Beasley) and the silence of the Leader of the Opposition (Mr. Curtin) are we to assume, Mr. Speaker, that you have any understanding that the Labour party is now divided into two political groups, one non-Communist and the other anti-non-Communist?

Mr Menzies:

– It is a sham fight.

Mr Lane:

– No; it is not.

Mr SPEAKER:

– The honorable member for West Sydney made an easily understood statement in which there was no reference to communism.

Mr CURTIN:
FREMANTLE, WESTERN AUSTRALIA

– Is it competent for members of this Parliament to ask you, Mr. Speaker, to take cognizance of the fact that they are members of a particular political party? If it is not within your duty to take cognizance of them in that connexion, how comes it that any member of this Parliament is authorized to say for your special edification that he is or is not a member of a non-Communist party ?

Mr SPEAKER:

– It is possible that like the Leader of the Opposition I do not understand the position clearly, but I think that it will be allowed that the honorable member for West Sydney was quite right in informing me of the new party. That is just about all that there is in it.

Mr CURTIN:

– I did not understand the honorable member for West Sydney to say that he was no longer a member of the Federal Labour party; nor did I hear him say that he was no longer a member of the Opposition party.

Mr SPEAKER:

– Neither did I.

Mr CURTIN:

– Then I do not think that there is anything for the House to take cognizance of. Is it your intention, Mr. Speaker, to accord to the honorable member for West Sydney the status of a party leader in this House?

Mr SPEAKER:

– I feel that I should do as I did previously when the honorable member for West Sydney was the leader of the New South Wales Labour party. Inasmuch as the honorable member for West Sydney has announced that he is the leader of a party I think that I am bound to recognize him as such.

Mr Curtin:

– Now we know the position.

page 462

QUESTION

BONUS SHARES

Mr WARD:
EAST SYDNEY, NEW SOUTH WALES

– Was the Treasurer correctly reported as stating that it is not intended to grant any further permission for the issue of bonus shares by commercial undertakings for the duration of the war? If such is the case, why was the announcement not made at the outbreak of the war?

Mr SPENDER:
UAP

– The matter of bonus shares was dealt with in respect of the administration of capital issues. The announcement was in respect of goodwill shares. No further bonus shares based on a mere revaluation of assets or capitalization of goodwill will be permitted. That was the only announcement made.

page 462

QUESTION

ROYAL AUSTRALIAN AIR FORCE APPLICATIONS

Mr ANTHONY:

– In asking the Minister for Air to take up with his officers in Sydney the question of more expeditious handling of applications for admission to the Royal Australian Air Force, I point out that I have received this letter, typical of many others, from a constituent of mine in Lismore -

Re your letter of the 11th March last advising that you had taken up the question of my application for entrance to the Air Force with the recruiting folk in Sydney, to date I have received no word from them although quite a number of local chaps whom I know have been called up.

It does not appear possible for either an applicant or his member to obtain satisfactory information.

Mr FAIRBAIRN:
Minister for Air · FLINDERS, VICTORIA · UAP

– If the honorable member will draw my attention to particular cases, I shall be pleased to investigate them. We have gone to a great deal of trouble to expedite to the greatest possible degree the calling up of applicants, but at the Sydney depot there is a considerable waiting list and the members of the recruiting staff are working until 11 o’clock at night in trying to overtake the arrears.

page 462

QUESTION

REPATRIATION ACT

Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936

– In view of the Government’s intention to amend the Repatriation Act, will the Minister for Repatriation take into consideration the repeated requests of a number of honorable members for the inclusion of South African War veterans in the service pensions scheme?

Mr STREET:
UAP

– It is inadvisable to give advice as to what may be in a bill that has not yet been introduced, but the honorable gentleman’s suggestion will receive attention.

page 463

QUESTION

GOVERNOR-GENERAL’S SPEECH

Address-in-Reply.

Debate resumed from the 1st May (vide page 455), on mot-ion by Mr. Scholfield -

That the following Address-.in-Reply to the Speech of His Excellency the Governor-General be agreed to: -

May it please Youn Excellency:

We, the House of Representatives of the Parliament of the Commonwealth of Australia in. Parliament assembled, desire to express our loyalty to our Most Gracious Sovereign, and to thank Your Excellency for the Speech which yon have been pleased to address to Parliament.

Mr BERNARD CORSER:
Wide Bay

– It is with much pleasure that I support the motion so ably moved and seconded by the honorable members for Wannon (Mr. Scholfield) and Richmond (Mr. Anthony), and I join with them in taking the opportunity given by the AddressinReply to express loyalty to. His Majesty the King. The GovernorGeneral’s Speech was punctuated by two very important facts, first the war and defence, and, secondly, the disposal of the surplus production of Australia.

This House benefits from the fact that wo now have a composite government. The entry of the Country party to the Ministry cannot but be an advantage to the whole of the people, because a composite government_will make for our better prosecution of the war. I. hope that it will not be long before it will, be possible for each section of this House to join in n national government so that Ave can make our greatest effort. A united front should find its starting place in this Parliament, and to-day more than ever before we should be a united people with one destiny. I hope that even the announced division of opinion among members of the Opposition will not prevent all parties from seeing the wisdom of the establishment of a strong national government which will be able to make one strong and long push to help in the war effort and the defence of our own country.

The terrors and horrors of war will soon be brought home to us and no doubt there will be casualty lists and reverses from time to time. The people of Australia, as well as other Empire peoples, will then feel more strongly even than now that every effort should be made by every section of the community, without reserve, in the interests of the whole of the people. We have to remember that in this war there is no certainty that the Allied forces will win. We hope and expect to win, but we must realize that in Herr Hitler we have a foe who up to the present has not suffered a reverse in anything that he has sought to accomplish. Beginning from the time when he occupied the Rhineland, he has been successful in everything he has undertaken. He is, of course, utterly ruthless in his methods, and now he is striving desperately to bring Italy in on his side. This indicates, at any rate, that he is fearful of the outcome of the war, should he be left to his own unaided resources. Unfortunately, since the acquisition of Austria by Germany, Italy has become practically a vassal State, and we have every reason to fear that whatever action italy takes will be against our interests. We have a colossal task before us, and, as I have said, defeat is not impossible. The Allies are fighting, not for themselves, but for all nations which love freedom, and stand to suffer by aggression. We are fighting to rid the world of a terrible danger. At a time like this, there should be complete unity of purpose, not only in this House, but also throughout the whole country, if we are to play our part adequately. Internal strife may be fomented by enemy action, or it may be due to Communist influences. It is important that we should distinguish between the two. Though Communists are a very dangerous disruptive force in Australia, they may not be actuated by a desire to help the enemy. We should be careful, in any action we take against them, to make it clear that our only desire is to check their activities to upset our democracy and introduce their policy in this country. On no account should the impression be given that our action is directed in any way against Russia’s domestic policy. It is possible that, before this war is over, Russia, for its own purposes may be fighting the same enemy as we have to-day.

Many of the things which the Government has to do in order to prosecute the war must necessarily be unpopular, even amongst the well-disposed. Therefore, we must all accept our share of the responsibility for this unpopularity. There can be no question of a change of government during the war. The Government is carrying a tremendous responsibility at the present time in its endeavours to guide the country safely ‘ through this terrible emergency. It enjoys confidences entrusted by the Allies. It is straining every nerve to make Australia secure on land, in the air, and on the sea. It has embarked on a great construction programme for the production of munitions, and all requisites necessary for the carrying on of the war, both for ourselves and for Great Britain. It is a most ambitious programme, and it must be an everexpanding one. I hope that these unprecedented activities will be distributed among all of the States. I hope, in particular, that Queensland will take its place beside New ‘South Wales and Victoria in the manufacture of aeroplanes and munitions of war. Probably the most vulnerable parts of Australia are the coastlines of Queensland and Western Australia. I do not ask the Government to publish all that it is doing for the protection of those parts, but I should like to have its assurance that it has taken all necessary steps to meet a possible emergency.

I hope that an energetic ship-building programme will be undertaken in Australia, with the encouragement and support of the Government, so that we may continue to transport our products abroad. We have here the men capable of building the ships, and we have all of the raw material necessary for their construction. Not long ago, we were told by certain English authorities that it would take Australian workmen three years to produce the first anti-aircraft gun of a certain type. To the surprise of those authorities, the first gun was completed in ten months, and it is expected that others will be turned out regularly from now on at the rate of one a week. Important economic adjustments are necessary because of this expanding production programme, and I am confident that the Government will do everything necessary in this way, in regard to both primary and secondary industries.

I compliment the Government upon having arranged for an extension for a further period of the sugar agreement. The sugar industry is one of our important primary industries, and it means a great deal to the people of Queensland, and, indeed, of the whole of Australia. The fact that this industry exists in the north, providing as it does for the sup; port of a large population, is a tribute to the wisdom of previous governments. I feel sure that the protest recently lodged by a section of the canned fruits industry against the renewal of .the agreement, without an increased subsidy to them, was based on lack of knowledge of the real situation. The industry provides employment for a great deal of labour at highly remunerative wages. The fruit canners realize the benefits which they are receiving under the present system, and -that they are receiving more than those actually engaged in the production of sugar-cane. When the fruit canners realize that under the last agreement the cane-growers agreed to a reduction of price, they will appreciate to a greater degree the assistance which has enabled them to operate on a more profitable basis than previously.

It is also gratifying to know that the Government proposes to assist the cotton-growing industry by extending the present bounty for five years. Under such a policy more persons can be placed on the land, and the production of this commodity, so valuable in time of war, will increase considerably..

The acquisition and export of many important primary products has received the careful attention of the Commonwealth Government, which, by co-operating with Great Britain, has arranged for the sale to the British Government of the greater portion of our surplus of primary products. This has been of great benefit, not only to those engaged in our rural industries, but also to the Mother Country. Our primary producers, who are receiving higher prices for their products than previously, are also carrying on production under peaceful conditions while producers in other parts of the world have to submit to difficulties and dangers which we can hardly visualize. The export of our primary products has been made possible owing to the protection afforded by the British navy, which in time of war keeps our trade routes open. While we are disposing of large quantities of our primary commodities at payable prices we are also assisting Britain, which is making such an heroic attempt to protect smaller nations. Australia is exporting its surplus wool, meat, butter, eggs, copper, lead, spelter and dried and canned fruits at prices much higher than those which prevailed in June of last year. The export price index rose sharply in September, and at the end of last year it was 77.5 as compared with 65.0 in June, 1939. Although Great Britain has obtained a two years’ supply of wheat from Canada it has also purchased 63,000,000 bushels of Australian wheat. In 193S our total exports, including gold, were valued at £137,000,000, but for last year they were valued at more than £160,000,000.

Whilst we do not wish to see any alteration of our economic system which will be detrimental to any of our primary or secondary industries or to the workers, I am pleased to know that the Minister for Commerce (Mr. Archie Cameron) favours a restriction in the production of table margarine, which is seriously affecting those engaged in the dairying industry. As there are more homes and probably more persons engaged on a dairy farm than there are on any other rural holding in Australia, the industry is an important factor in the SUecessful development of this country. I trust that the Minister will continue his efforts to retard the production of table margarine, which enters into serious competition with butter. The present Minister for Commerce has knowledge, not only of the dairying industry, but also of other rural industries, and I feel sure that he will do all in his power to induce the British Government to arrange for the disposal of Australian butter in Great

Britain at reasonable prices. This can be done by reducing storage and a reduction of price in Britain. I also trust that he will arrange for all table margarine to be coloured so that it cannot be used as a substitute for fresh butter.

Mr Brennan:

– Why discourage the manufacture of a healthy foodstuff?

Mr BERNARD CORSER:

– We object to the importation of vegetable oils, produced by cheap coloured labour, to be used in the manufacture of a product which enters into strong competition with Australian-made butter. The use of margarine made from animal fats, and used extensively in making pastry, is not objected to, but table margarine interferes with the sale of butter and is detrimental to those engaged in dairying.

Mr Brennan:

– Poor persons cannot afford to buy butter.

Mr BERNARD CORSER:

– There may be some persons engaged in small industries who cannot afford to pay the wages which the law provides, but they rightly are not permitted to import cheap coloured labour.

The success of the £17,000,000 loan raised in March last was due to the desire on the part of the people to assist the country in time of war, as £10,000,000 of the total amount raised was for defence purposes. Some ask why the Government can make so much credit available in time of war when it is impracticable to do -so in peacetime, but we should realize that in an emergency the Government must obtain every credit possible in order to provide for national security. According tu the latest figures published by the savings banks, no less than £246,503,000 is held to the credit of depositors. Up till June last, the cheque and paying banks had accumulated deposits amounting to £335,000,000. At the same date, their advances totalled £287,000,000, while their holdings of Government securities had risen to £25,600,000. Some people imagine that when a loan is floated by the Commonwealth or by a State most of the capital is subscri’bed by the private banks. That is not so. Of a total Australian debit of £1,300,000,000 only £2.5.600,000 was subscribed by the private banks - they have not the money to subscribe more - the bulk of the money being subscribed by private investors, companies, and government savings banks. The Common-wealth Government is now wisely appealing to the people to invest their money in war savings certificates. During the last war a similar appeal realized £7,250,000. And that sum has been returned to the people in full. The war savings certificates to-day are issued in denominations of £1, £5 and £10 valued at 16s., £4 and £8 respectively, redeemable in seven years at face value. And it is hoped that private investors, who to-day hold £240,000,000 in the various savingsbanks, and £335,000,000 in private banks, will invest their money in these certificates. For the first four years the profit rate is £3 2s. 6d. per cent. and for the last two years it is £4 13s. per cent. It is to be hoped that the Government’s action in issuing war savings certificates, the purchase of which will definitely help a successful prosecution of the war, will meet with public approval.

Our monetary position to-day is considerably better than it was in 1914, except for our national debt. In 1914 the average weekly wage of adult males was £2 15s. 7d., whereas in 1939 it was £4 14s. 9d., and the corresponding figures for adult females were £1 7s. 5d. and £2 12s. 4d. respectively. The aggregate wages paid to employees in secondary industries in 1914 was £34,000,000, by 1937-38 they had risen to £102,000,000. In 1914, State and Federal taxation amounted to only £23,000,000, whereas in 1939 the total was £124,565,000. State taxation is seven and a half times as great to-dayas it was in 1914, and Commonwealth taxation is four and a half times as great. Commonwealth payments to the States in 1914 amounted to £6,283,000, and in 1938-39 the total was £15,989,000. Those figures give some cause for reflection. The total public debt of the Commonwealth to-day is £1,317,000,000, which is equivalent to £188 per head of the population. An examination of the financial position of Great Britain reveals that that country has a legacy of debt from the last war amounting to £7,000,000,000, and expenditure is greatly increasing owing to war commitments. Australia’s part in the war is involving this country in a huge expenditure in relation to its population. Taking into consideration all these factors, it becomes evident that something must be done to alleviate the financial difficulties into which Australia, in common with almost every other country in the world,has drifted under the present-day calls for expenditure which is overburdening our economic system. Many methods of rectifying the position have been suggested, and most of them are useful contributions of thought, hut nearly all of them provide for currency inflation. That the watering of currency is detrimental has been proved over and over again in various countries which have adopted inflation as a means of improving their financial position. Nevertheless no effort should be spared to relieve Australia and other countries of the great strain of indebtedness ; for I believe that if the burden of debt were eliminated, we would eliminate international unrest. In Australia to-day in some areas poor housing conditions exist, and there is insufficient employment for the workers, while huge irrigation schemes and other works await development. I have examined the situation thoroughly, and I have found that no concerted effort has been made by the nations of the world to tackle this problem. Conferences have been held to discuss peace, armaments, trade agreements, and many other matters, but no attempt has hitherto been made to find some way out of the financial burden caused by the debt position. Probably the best contribution in this direction was made by the great World Economic Conference in 1933. That conference representing 64 countries did very important work and considered many economic disabilities. A vast amount of data, including the debts of all the countries concerned, their trade positions, and their economic difficulties, was placed before that conference in the hope that something might be done to alleviate the troubles arising from the last war and the terrible depression which followed it. It was adjourned when the representatives of the United States of America withdrew to manipulate its own currency. They did it alone and failed; so did the conference. It cannot be denied that advantages which would be derived from a successful effort in this direction would rid the world of most of its economic troubles, and set in operation a peaceful and law-abiding spirit, which would enable peoples of all nations to work in happiness, in better health, and with a greater chance of developing social services and trade between one another. But such an improvement is not possible until a determined effort is made to tackle the vast accumulations of debt which are crippling every section of the people. I am somewhat hesitant to suggest methods of effecting such an improvement at such a conference. Whilst credit expansion within a community is undoubtedly a source of considerable danger, that clanger would be entirely eliminated if the expansion were carried out on an equitable world basis. The nations of the world have been brought together in conference on dozens of subjects, and there is no reason why they should not be brought together to deal solely with this most important issue. It is possible for the mind of man to conceive a plan, not to cancel the debts of individual nations, hut to repay them by the issue, on an equitable basis, after inquiry and adjustment of proportions, of an amount sufficient to meet the debt position of each nation.

Mr Blain:

– From revenue?

Mr BERNARD CORSER:

– No, that is impossible. If necessary, an international credit bank could be created to police the distribution of this agreed credit and see that it is used in the direction of repaying debt. If by such means it were possible to relieve the nations of their debts, such injection of credit being of an international character, ho dangers or difficulties would arise. All communities throughout the world, their governments and local governments’, would be relieved of taxation, because most taxation is imposed for the purpose of meeting interest payments on national debts. This scheme would not break down our credit system; it would free our debts and equalize credit value in every land.

Mr SPEAKER:

– The honorable member has exhausted his time.

Debate (on motion by Mr. Spender) adjourned.

page 467

SUSPENSION OF STANDING ORDERS

Motion (by Mr. Spender) - by leave -agreed to -

That so much of the Standing Orders be suspended as would prevent, before the Address-in-Reply is adopted, a .financial statement being delivered by the Treasurer, the Committee of Ways and Means being appointed, and resolutions being moved in the Committee of Ways and Means.

page 467

FINANCIAL STATEMENT 1940-41

Mr SPENDER:
Treasurer · Warringah · UAP

[3.33 j. - The immediate purpose of making a. financial statement at this stage is to lay before the House taxation proposals for the financial year 1940-41. The details of the full budget must await the close of the current financial year, but it is necessary for an explanation of the measures now submitted to state broadly the financial plans of the Government for the period ahead, and to review the financial and economic conditions in which these plans are intended to operate.

It is probably unprecedented in the financial history of the Commonwealth to bring down taxation proposals before the commencement of the period to which they mainly relate, and before the full details of the budget are settled. But the swiftness of current developments demands flexibility of procedure. Our war undertakings ate increasing rapidly, necessitating financial operations of the first magnitude ; and if these measures are to be successfully integrated with the broader task of organizing our whole economy for war, appropriate and timely adjustments must be made. It will be an advantage, moreover, for the public to know in advance what their obligations for next year will he, so that individual financial arrangements can be adapted accordingly.

When on the Sth September last the Prime Minister (Mr. Menzies) introduced the budget for 1939-40, he explained that, although it was not being delivered until after the outbreak of war, the estimates on which it was framed had been prepared in time of peace. New taxation was subsequently imposed, including certain supplementary war measures, to the amount of £8,000,000 per year.

Two months later a Supplementary Financial Statement was brought down, dealing chiefly with proposals for increased war expenditure. It was stated, as part of considered Government policy, that full wartime taxation would be postponed until ourinternal economic position had improved to the desired degree. Meanwhile the additional funds required would be obtained chiefly by loans, including loans from the banking system. To-day I propose to give a fuller explanation of that policy and an account of how it has worked out, so far, in practice.

Broadly, it may be said that defence commitments already undertaken for the coming year will entail an ever-increasing transfer of men, materials and equipment to war activities. As the financial instrument and counterpart of this transfer, greatly increased funds must be acquired by the Government. That fact, taken with the attainment of a high general level of employment and industrial activity, necessitates a major change of emphasis in our, financial methods. My review of the main facts of our economic policy and experience since the outbreak of war is designed to make that necessity clear.

Financial and Economic Policy for 1939-40

The outbreak of war found Australia in a mild recession. As a result of a long period of falling export prices, business activity was declining. Investment had fallen away, the liquidity of the banks was very low, and the state of London funds was causing anxiety. Employment had been sagging for some months, during which factory employment had fallen 5 per cent. ; some recovery was in sight, but not yet taking shape.

The declaration of war inevitably caused some dislocation of business. Imports were reduced in volume and rose in price. Unemployment occurred in particular fields, and apprehension for the future operated to check investments.

A three-fold task confronted the Government -

First, to prosecute the war with all the force at its command.

This involved incidentally various emergency measures which had to be taken for the preservation of both internal and external trade stability. Controls had also to be established to promote the progressive organization of our resources for war.

Secondly, to increase our war potential by raising to their maximum the general levels of income, employment and production.

Thirdly, to take a longer view over the whole period of the war to the phase of reconstruction beyond.

With this outlook it was determined to reduce interest rates, keep the growth of public debt to a minimum, maintain essential development, and above all avoid a cumulative rise of costs and prices.

These aims sometimes appear to conflict and it has been necessary to hold the balance between them. For example, there was some danger that overconcentration on some phase of the immediate war effort might result in resources ultimately necessary for war being disem ployed for civil use before they could be employed for war purposes. The danger was the greater because actual expenditure on defence naturally lagged behind the Estimates. This is almost inevitable when activity is being expanded in an untried field. It may be noted that war expenditure even in Great Britain was £100,000,000 behind the estimates in 1939-40. The Government has kept constantly in mind this danger of a waste of resources during the transition from a peace to a war economy.

With the aim of increasing employment and income to the maximum, the problem in the first months of the war was to carry out our war programme without much diversion of spending power from private pockets to the Government. The economic conditions were appropriate to positive Central Bank action, and the Commonwealth Bank had in fact been sustaining the business structure for some time before the outbreak of war.

Consequently considerable help has been afforded by the banking system in providing loan funds this financial year, so that we have made only modest calls on the public by borrowing or new taxation. A loan of £12,000,000 was provided entirely by the banks, principally by the

Commonwealth Bank. A further’ appreciable contribution can probably be made to future loans. I say “ probably “ because the wise limits of credit expansion are set by the economic conditions at the time. “When the resources of the country are being fully used whether for peace or war, further credit will only drive up prices in spite of the efforts of a hundred price-controllers. The result would be to buy a momentary relief to the Government and popularity in some quarters at the cost of a lasting disservice to the community. The Government is doing no trade on these terms.

Our financial needs, therefore, have so far been met without much strain on the community. But the necessities of war have required the institution of a number of controls of business activity, designed to conserve our resources for the present and still more for the future. The management of these controls involves a difficult balancing between our future needs for war purposes and the present necessity of raising income and employment to the highest possible level. UP to the present, the latter purpose has seemed thu more urgent, and controls have been exercised gently.

The control of overseas exchange was set up primarily to prevent the export of capital. Its second use was in connexion with the control of imports. When income is being increased, and while spending power is not being diverted from private use, imports are bound to increase beyond our capacity to pay for them with exports, and this has been happening for the last three months in spite of certain measures of control and the increased value of our exports. The pressing problem has been the conservation of nonsterling exchange. We have been spending many more “dollars” than we earn, and command of “dollars” is necessary for our war purposes and essential civil needs. In 193S-39 our adverse balance with non-sterling countries was £14,000,000 sterling and for the current year it is now clear that it will be still greater, in spite of the restrictions imposed, even if credit be taken for all re-exports of our products sold to Great Britain. On top of this is the need to pay for aeroplanes and other war material. More stringent control of non-sterling imports is now urgent, and limitation of sterling imports may also be necessary if they are not checked sufficiently by the transfer of spending power to the Government through public loans and taxation.

Control of exports has also been necessary to ensure that the proceeds of exports are available for essential purposes.

The broad purpose of investment control is to avoid the dissipation of resources in ventures which have no special justification in time of war, and to guide investment increasingly towards those forms of activity, both public and private, which can best assist the national war effort. It is also recognized that by the same means a favorable influence can be exerted upon the trend of interest rates as well as of prices and costs. So far this control has been applied with relative moderation; it will necessarily become more .rigorous in proportion as the requirements of war make heavier demands upon our resources. .

The outbreak of war is apt to be associated with rising prices and costs. Rising costs must be resisted because they lessen our ability both to export and to compete with imports, and this ability needs all possible strengthening in view of the state of our balance of payments. In addition, rising costs add to the cost of all war commitments. They are also a prolific cause of individual injustice and industrial unrest. The Government has therefore set up a control to prevent the unnecessary rises of price which are likely to take place under war conditions from fear, uncertainty or greed. In association with our general economic and financial policy this control has been effective. It has put no serious strain on business activity, and I am assured by my col-~ league, the Minister for Trade and Customs, that the business world in general has co-operated very willingly in carrying out the policy of price control. In the result it may be said with confidence that no other country has done as well as Australia in maintaining a reasonable stability of prices under war conditions.

Review of Progress Made

I may now briefly review the progress of our economy under the policy I have sketched.

The two main factors in the recovery from the pre-war recession have been : -

A good season gave an unusually large volume of export production and export prices have been 20 per cent. above the low level of last export season.

The marketing of these exports has presented difficult problems to which the Government has given unremitting attention. As a result the greater part of our export surplus has been sold, mainly through direct negotiations by the Government and at prices appreciably higher than those ruling before the war.

  1. A large defence programme financed in substantial degree by the banking system.

The effect has been to make possible new defence activities which have directly or indirectly brought additional men into employment without at the same time robbing other productive activities of their finance or their labour.

On both counts there has been a substantial increase of national income.

Employment

The most searching test is employment. While the above conditions offered a good field for the Government’s policy of increasing employment, there was acute danger of a temporary set-back. It is some tribute to the administration of our policy that total employment, which had previously been falling, has increased month by month, allowing for the Christmas break, from August up to the present, in spite of the shocks to business in the early months of the war. Some men, of course, were displaced; that was inevitable. But the increased employment on acount of defence expenditure has all the time much more than made up the loss.

Total employment is roughly estimated to have increased by about 80,000 between August and February, or by about 4 per cent. of the total working population. Enlistment in the fighting services is not here counted as “ employment “. Figures of employment in factories show that employment since February is continuing to expand. The defence authorities estimate a need of 50,000 additional men between January and July of this year, and another 60,000 in the next financial year. All probabilities point to the conclusion thatwe shall soon have no great reserves of unemployed man-power, at least of the kind which can readily be employed.

The Government fully recognizes the necessity for bringing into employment every unit of labour which can be effectively employed, which includes many people who do not usually seek employment in industry but who are able and willing to undertake some form of war work. But it has to be stressed that from the present time onward this task will present increasing difficulties. Whereas much of the unemployment which existed last September was of a general character and could therefore be corrected by a general expansion of activity, the existing residue is mostly of a type which requires special measures of adaption and transfer. To measures of that kind the Government is giving urgent attention. But it has to be emphasized that the process will inevitably take time and careful organization.

The important point, however, is the substantial and continuous improvement in employment, which bids fair to continue.

Liquidity of the Banks.

The liquidity of the banks is very important to business activity of all kinds, and incidentally to the raising of Government loans. If liquidity is low, they are unable to meet the needs of business for working capital. A year ago the liquidity of the banks was so low that there was grave danger of a serious contraction of credit.

From September to March the banks’ ratio of liquid assets to deposits improved by no less than 50 per cent., and has moved from a position where it was very uncomfortably low to one where it is comfortably high. The change is due mainly to -

  1. Better export prices and more rapid payment to producers for their exports ;
  2. Increased defence expenditure, financed directly or indirectly through the banking system.

The effect of this improved liquidity has been that the banks have been able to support a continuous business expansion and at the same time make substantial contributions to Government loans.

Rates of Interest

Attaching the greatest importance, on social as well as economic grounds, to the object of reducing interest rates on all classes of security, the Government is especially gratified at the downward movement so far registered. The success of its policy in this field is illustrated in the figures below: -

A consequential reduction of overdraft rates may be expected to follow in due course.

It is hardly necessary to point out the widespread benefits which must accrue from the success of this policy. The burden of public borrowing for the war upon future budgets will be kept at a minimum, costs will be favorably influenced, and while the control of investment operates to check superfluous enterprise, the availability of cheap finance will strongly encourage necessary industrial expansion.

Concluding Remarks

The administration of this far-reach ing and complex scheme of control, much of it without precedent in Australian experience, has inevitably been difficult. It must be remembered that we are still living under a free system, relying on individual initiative and willing cooperation rather than compulsion. It is our fundamental belief that these methods will, in the final outcome, yield permanent results at least equal to the transitory achievements of an authoritarian State.

On a broad view of the existing situation, moreover, the Government feels that it has good reason to be satisfied with the results so far accomplished in the working out of its economic plans. If a period of far heavier economic strain is now approaching, the nation is indisputably in a better position to meet it than it would have been eight months ago. From this fact confidence may justifiably be drawn for the future.

Future Financial Policy

In November, 1939, the Government made it very clear that, when the national income had been raised and employment improved, it would he necessary to shift the emphasis of its financial programme away from borrowing from the banking system and throw it substantially on to taxation and loans from the market. The improvement of our economic and financial position which. I have outlined suggests that the time for this change in the balance of our programme has now come. It is necessary to take into account not only the immediate position but also the trend of developments, for we cannot plan our financial programme from day to clay. The programme I lay before honorable members to-day should be capable of meeting the situation up to June, 1941.

Practical Difficulties

We must for practical purposes make a definite plan, based on the best judgment we can make of the probabilities. At the same time, the plan must have some elasticity so that it can be adjusted to changing circumstances. We live in a rapidly changing world and we must therefore be prepared in our minds to face the possibility of drastic changes in the outlook, which might enforce a wholesale reconsideration of financial and economic policy.

For the present we must plan on the probabilities. The Government is proposing finance only for that part of our commitments which it is confident will be carried out before the end of Juno, 1941. It is therefore satisfied, and has been at trouble to ensure, there is no danger that it will, over the year as a whole, take more from the public in loans and taxation than it will spend on the war programme. Indeed, if the acceleration in our defence works proves to be as great as the military authorities hope, we may well find that we have understated our financial needs.

There remains the fact that our receipts from taxation and from loans will not be, because they cannot be, perfectly synchronized with expenditure, and that at times there will be some accumulation of treasury balances. The importance of this temporary movement is not great. It can have an effect only insofar as it causes people to change their spending habits or restricts direct investment, or insofar as the banking system allows its lending policy to be influenced. None of these factors is likely to be significant. The Government, however, intends to leave nothing to chance. If there are any signs that the piling up of treasury balances is excessive and having adverse effects, the Government will take appropriate action to deal with the situation. It has under consideration, for instance, the possibility of extending the period over which payment of subscriptions to loans can be spread. This should have the double effect of helping those who need to draw on current earnings for their subscriptions and of ensuring a more even flow of money into the Government account.

The General Outlook

In summing up the economic factors to be taken into account in determining the general character of our financial programme, three clear trends are evident -

  1. The employment position continues to improve steadily. With every improvement the task of bringing into employment more idle labour resources becomes more difficult and more special in character. Employment is, however, so high now that no great further increase of national income can be expected from even the most successful treatment of the hard core of unemployment.
  2. The rate of defence expenditure is steadily rising. There has been some lag in this expenditure in the past. The lag is already being reduced and we must expect it to be substantially overtaken during the coming year. This will mean that the stimulus of defence expenditure on the economy generally in 1940-41 will be greater than that suggested by the original plans for that year.
  3. The third trend is less happy. In the two pre-war years our reserves of London funds were reduced by low export prices together with a high level of imports. It was expected that this year, with better prices and perhaps some economies in imports, these reserves would be somewhat restored. In fact imports, after a temporary check, have been coming in at a remarkably high rate. This is due in part at least to temporary causes, but the fact remains that for the third year in succession our balance of payments is likely to be unfavorable. The Government’s programme must ensure that next year we have at least some margin on international account,

Future Policy

From the foregoing survey it should be clear that, basic economic conditions having changed very favorably, it is no longer necessary to apply in the same degree as hitherto the stimulus of monetary expansion. We have still the task of developing to the utmost such reserves of capacity as we possess, and it must still be the central object of monetary policy to facilitate this process so far as possible. I have already pointed out, however, that the present liquidity of the trading banks should be sufficient to enable them to continue their present policy of financing industrial expansion and contributing substantially to public loans.

Meanwhile the continuing upward trend of employment, already at a high level, makes it certain that resources must be transferred increasingly from civil to defence employments in order that our growing war programme may be carried through. This process, unfortunately, cannot be accomplished without causing sectional dislocations of business which may be serious enough to require special remedies.

All considerations point, therefore, to the advisability of relying upon taxation and public loans to obtain the funds required by the Government in the period immediately ahead. The advantages of this course may be summarized as follows : -

  1. The transfer of resources from civil to defence activities can be more systematically effected and the burden upon the community can be more deliberately and more exactly apportioned.
  2. The diversion of purchasing power from private to public uses is the only alternative to inflation, and at the same time it conserves essential overseas resources by reducing the demand for imports.

Before proceeding to a detailed explanation of the Government’s proposals, I feel that I should enlarge upon two considerations which have strongly influenced the Government in framing its plans.

One is the imperative need to which 1 have just alluded of guarding adequately against inflation. No person with a sense of responsibility would minimize the danger of this evil at a time of disturbance and uncertainty like the present. While gratifying success has been achieved in the regulation of price trends, it must be recognized that powerful factors are now operating to raise important sections of prices and costs. This increases the necessity for removing any factor which could promote a cumulative general rise of prices whichmight well become uncontrollable.

The second consideration relates to the increasing burden of taxation. As I shall explain in detail later, our proposals envisage the financing of approximately one-third of next year’s war expenditure from this source. This will increase the aggregate burden of the Australian taxpayer very considerably. Nevertheless, as a community we are probably in as good a. position to support such a burden as we have ever been. It is an interesting fact that, even with the additional imposts, the aggregate of Australian taxation - Commonwealth, State, and local authority - when expressed as a percen tage of the national income will be less than it was in 1933. At that time we were in the depths of an unprecedented depression with unemployment at a level of 25 per cent. Yet from that time wo went forward and staged a notable economic recovery. It is also relevant to point out that, although taxation will have been increased very substantially since the outbreak of war, community income has, through the improvement of economic conditions, been increased by very much. more. I feel justified in believing, therefore, that since the new proposals have been prepared with full regard to the principle of capacity to pay, they will not cause undue hardship or appreciable discouragement to business enterprise.

We may now pass to a detailed examination of the budgetary problem confronting us.

Budget 1939-40

When the supplementary financial proposals for 1939-40 were brought down in November, the sum of £13,780,000 was provided from revenue towards meeting defence and war expenditure. In accordance with the policy I have just outlined, the imposition of additional taxation was withheld pending the restoration of employment and income. It is now clear that the budget position will be better than was anticipated, and that a greater sum than was budgeted for will be available for war purposes. The reason for this is the abnormal collections of customs and excise revenue due to causes which could not reasonably have been anticipated.

In the original September budget, which was based on estimates prepared in peace, customs and excise revenue was estimated at £48,000,000. This was reduced in the November proposals to £45,000,000. At that time a substantial check to the flow of imports was being experienced, due partly to the uncertainty of importers as to the future, partly to increased freight, exchange and insurance charges andpartly to some difficulty in arranging for supply and shipment. The fears in regard to shipping were not realized, thanks to the British navy, and other uncertainties were removed, with the result that since January there has been a rapid and unexpected acceleration of imports. For the four months from September to December imports averaged £7,300,000 sterling a month. Since then imports (in sterling) have been as follows - January, £11,500,000; February, £13,900,000; and March, £9,700,000, or an average of £11,700,000 sterling a month. This movement is clearly abnormal and is due to large rush orders placed in anticipation of shortages of supply, rising prices and other difficulties. Importers have also been influenced by the fact that licences for goods from nonsterling countries in respect of orders placed before the 1st December last will lapse unless the goods arrive in Australia before prescribed dates, varying from the 31st March to the 30th June according to the class of goods.

Customs and excise revenue is notoriously difficult to estimate because of so many unpredictable factors, but it is now clear that there will be a substantial increase compared with the budget estimate of £45,000,000 for 1939-40. For the ten months to the 30th April the total customs and excise revenue was £45,000,000. After a close review, I am estimating the customs and excise revenue at £52,000,000, or an increase of £7,000,000 on the November estimate. Other items of the budget for 1939-40 are expected to result in a net improvement of £1,000,000. Consequently there will, if this forecast is realized, be available £8,000,000 more for war purposes out of this year’s revenue. Additional estimates will be brought down at an early date for a further appropriation for war expenditure in the current year.

Budget Outlook for 1940-41

I have already indicated that the full budget and detailed estimates of revenue and expenditure for 1940-41 are not being brought down now but will be submitted at a later date. The estimates of the main items of revenue and expenditure have, however, been examined in order to obtain an approximate forecast of the position that would be reached with present rates of taxation.

The key to the budget outlook for 1940-41 on the basis of existing taxation is customs and excise revenue. The latest estimate of £52,000,000 for the current year is made up of customs £34,000,000 and excise £18,000,000. A serious recession from this level is, I believe, inevitable for several reasons. First, the revenue for 1939- 40 has been greatly inflated by the abnormal factors to which I have just referred ; secondly, the policy of restriction of imports from non-sterling countries in order to conserve dollar exchange will not’ take full effect for some time; and thirdly, in spite of such restrictions as have ‘been imposed, the position of our London funds is such as to make it essential to keep total overseas purchases within a reasonable limit, by positive action if the anticipated reduction does not take place.

I am accordingly estimating customs and excise revenue for 1940-41 at £46,000,000, viz., customs £28,000,000 and excise £18,000,000. This is £1,000,000 more than the sum set down in the November budget proposals for 1939-40, in which £13,780,000 was provided for defence and war purposes. I have closely examined the tentative estimates of other items of revenue and expenditure for 1940- 41. On the expenditure side we must face an additional liability of £600,000 due to the increasing number of persons who will become eligible for invalid and old-age pensions. After allowing on the one hand for other unavoidable commitments, including war pensions, and on the other hand for certain savings in controllable items of expenditure and for the normal growth of revenue, the maximum amount that can be provided for defence and war expenditure is £16,000,000 on thebasis of existing rates of taxation. This estimate is based on a liberal outlook, and can only be achieved by observing a rigid economy over all controllable expenditure.

War Expenditure

I now turn to an examination of our war expenditure. Less than two years ago the Government announced a special three-year defence programme which would cost £43,000,000. At that time the normal expenditure on defence from all sources was less than £10,000,000 a year, and the special programme was then regarded as involving a heavy financial obligation.

The deterioration of the international position and, later, the actual outbreak of war have necessitated a succession of such heavy additional obligations that for the current year 1939-40 and next year the estimated expenditure in Australia alone, “based on present commitments, amounts to £125,000,000. In addition, there is a large obligation for expenditure overseas. This it is impossible to assess with any accuracy because it will be affected by the course of events in the war areas. For the two years 1939-40 and 1940-41 the overseas expenditure can be stated at a minimum of £35,000,000; it may well reach a much greater figure on the basis of present commitments alone. The rate of expenditure overseas has, of course, increased since the Australian Imperial Force embarked some weeks ago. As provision for such expenditure, the Government raised a defence loan of £6,000,000 sterling in London last June. The question of finance of further overseas war expenditure is one that raises special difficulties. A temporary arrangement has been made with the British Government to make finance available by <v.ay of loan to meet the balance of our overseas war expenditure up to the end of December, 1940. These loans will bear interest at the effective rate which the British Government itself is paying for loans of similar maturity and similar amortization. The interest rate, it is known, will be low. The financing of this expenditure by loans from the British Government adds to the burden of Great Britain because additional sacrifices have to be imposed upon the community there in order to secure the necessary diversion of resources. For this reason, we must keep in mind the problem of making provision for at least some portion of our overseas war finance being supplied from Australian resources as early as practicable.

If overseas finance is to be provided by Australia itself without resort to borrowing from the British Government, not only must the necessary amount be raised in Australia by borrowing or taxation, but also sufficient London funds must be amassed in the Australian banking system. With reluctance, the Government has decided to defer for the present the question of providing funds in Australia to meet any portion of the overseas expenditure in 1940-41. In. the proposals which I am now about to make I am, accordingly, leaving out of my calculations the whole question of overseas war finance. I emphasize, however, that this question must be faced at a later stage.

I turn now to the specific problem of providing finance to meet our war expenditure in Australia. On the basis of our present commitments, the expenditure for the current year is estimated at £46,000,000 and for next year at £79,000,000, or a total of £125,000,000. These estimates have been arrived at after very close examination of the various, items in the programme, so as to limit the amounts for which finance will be provided to the expenditure which will actually have to be met before the 30th June, 1941. “With regard to the estimated expenditure of £46,000,000 for the current year 1939-40, we have already provided, or have in sight, the greater part of the amount required. This task was facilitated by ‘bringing forward some balances of loan and trust moneys, and by the unexpected windfall from the budget, estimated at £8,000,000. The total already provided, or in sight, is estimated at £39,000,000, so that the balance to be raised to meet expenditure in Australia for the remainder of the current financial year, without providing any money with which to carry on in the early months of next year, is £7,000,000. The problem that immediately faces us of financing war expenditure in Australia between now and the end of next financial year may, therefore, be put in this form : -

Here I emphasize four important points: first, that this estimate of £70,000,000 represents only the expenditure which will have to be paid for in Australia to the 30th June, 1941, after a close examination of the programme of present commitments; secondly, that it contains no provision whatever for any further commitments over and above the present programme; thirdly, that it makes no provision for funds to carry on war expenditure in the early months after June, 1941, for which temporary arrangements will have to be made at a later date; and fourthly, that it makes no provision towards meeting any proportion of our heavy overseas expenditure. Notwithstanding these factors, the Government, after a careful review of our economic position, has, as already indicated, decided for the present to limit its proposals to the financing of the £70,000,000 required between now and the 30th June; 1941. This amount is needed for such expenditure as will have to be met in Australia on the basis of the present war programme.

Proposals for War Finance

The finding of this large sum of £70,000,000 is no easy task, and it would be superfluous to emphasize the careful examination given by the Government to the Australian financial structure in its efforts to evolve a programme which will have the least disturbing effects on the economy asa whole. But the money must be found ; and it must be found with certainty, with justice and with the least possible interference with the essential civil needs of the people. Above all, it must be found without recourse to those excesses of wartime financial expediency which have wrecked empires as well as homes. But the voice of the tempter is not absent from the counsels of the nation.. “Why should we be taxed,” it whispers, “ when money can be had for nothing?” The subtle voice, unfortunately, too often strikes a responsive chord in the minds of those too honest, or too simple, to realize the full import of the suggestion. It would be taking too low a view of the Government’s intelligence,I suggest - perhaps even too low a view of its mere instinct of selfpreservation - to imagine that it has not exhaustively surveyed and planned a thorough utilization of such resources as a policy of monetary expansion can pro- vide with safety and justice. Its general financial policy is one of liberalism in every sense of the word; but it stops short at reckless measures which could end only in a spiral of rising prices and costs, growing industrial unrest, inevitable war profiteering and gradual, but certain, dissipation of the ‘ value of savings. Wage and salary earners would be among the first and most certain sufferers, but experience warns us. that many of those actively engaged in trade would inevitably profit as prices soared. The only end could be financial and economic collapse. The feet of the Government have been firmly placed, therefore, on the terra firma of taxation and public loans, with resort to Central Bank assistance limited to the effects of action already taken and such future action as the economic circumstances of the time may warrant. The policy of the Government is, therefore, to find this amount of £70,000,000 for war expenditure in Australia almost entirely by borrowing the savings of the community and by taxation. In the present circumstances the Government proposes to raise as much of it as possible by loan from the public. The remainder must be found by taxation. After full consideration by the Government, the proposals I now put forward for finance from these two sources are -

Borrowing from the Public.

The Government has given careful consideration to the probable savings of the community in the next fourteen months and the consequent capacity of the loan market. As members are aware, war is not the only purpose for which borrowing in Australia is necessary, and provision must be made for the essential public works of all governments and public authorities. “When allowance is made for these requirements, the conclusion of the Government is that £50,000,000 is the maximum amount that can be borrowed for war purposes between now and the end of June, 1941. It is very unlikely that the whole of this sum can be raised without some support from the. Central Bank, but it may reasonably be hoped that any help so given will not be in excess of what is justified by economic conditions.

Taxation Proposals

The imposition of £20,000,000 of taxation, in addition to the £16,000,000 which it is anticipated will be available from the budget on the basis of existing taxation, will give a total .contribution of £36,000,000 from the budget towards meeting an estimated total war expenditure of. over £110,000,000, both in Australia and overseas in 1940-41. This proposed contribution from the budget of 1940-41 will represent approximately’ onethird of our estimated expenditure.

The Government, before arriving at de,cisions on the detailed proposals, explored very carefully the available fields of taxation in order to spread the burden equitably. Direct taxation by the Commonwealth is limited .by the height of the taxation already imposed by any State in each field, and more generally by consideration for the importance of direct taxation to the revenues of the States. These factors necessarily restrict the amount of additional direct taxation that can reasonably bc levied by the Commonwealth, and it is therefore inevitable that some recourse must be made to indirect taxation - a field which is not available to the States. After full consideration the Government submits proposals which, broadly speaking, divide the burden equally between direct and indirect taxation. In the proposals which follow, the Government has taken care to avoid any increase of indirect taxation which would directly affect employees upon low incomes. It has also given special con sideration, in the field of direct taxation, to the position of the married man. On the other hand, the Government believes that large profits derived by companies from investment of capital should make a special contribution to wartime taxation. In genera], the taxation proposals have been widely spread, so as to produce the maximum collections with the minimum of disturbance to the economic -conditions of the community. The detailed proposals of taxation are -

Taxation of Companies. ordinary company tax.

The rate of ordinary company tax was increased in 1.939-40 from 13.8 pence to 2s. in the £1. No further increase is proposed.

It is proposed, however, to obtain additional taxation from companies by two new forms of wartime taxation, viz. : - a wartime company tax and. a. tax on undistributed profits. wartime company tax.

It is proposed that- an additional tax in the form of a wartime company tax shall be imposed in respect of companies earning more than 8 per cent, on capital employed. The tax will be a graduated one, commencing at 4 per cent, and increasing to a maximum of 60. per cent. The first 1 per cent, of profits in excess of 8. per cent, on capital employed will be taxed at 4 per cent.; that portion of the profits between 9 per cent, and 10 per cent, will be subject to a tax of 8 per cent.; that portion of profits between 10 per cent, and 11 per cent, will be subject to a tax of 12 per cent., and so on. The maximum rate of 60 per cent, will apply to that portion of the total profits in excess of 22 per cent. It is estimated that this tax will yield an additional annual revenue of £5,300,000, of which £4,250,000 will be collected in 1940-41.

Before arriving at a decision to recommend the proposal just submitted, the Government fully explored various alternative methods by which a wartime company tax might be levied. In particular, it examined the measure which was in operation during the last war, and it is informative to quote the comments of the Commissioner of Taxation in his report to Parliament in 1921, relating to that measure, viz.: -

Further experience of the operation of this tax ha3 shown that it has failed to achieve that end which the Parliament intended, and, tr common with the general public, fully expected of it. Out of slightly more than 109,000 businesses in the Commonwealth, which have paid income tax, only 1,636 have been assessable for wartime profits tax during the financial year 1919-20.

The tax is unequal and harsh in its incidence. These features of it are duc to its peculiar construction, which, as shown by the figures quoted, permitted escape from the tax of the vast majority of large and oldestablished businesses which have made consistently substantial profits, both in amount and in percentage on capital employed, whilst small and struggling businesses, particularly those which were commenced shortly before or after the outbreak of the recent war, were obliged to pay relatively heavy amounts in tax.

The act and the principles upon which it was founded were condemned by other authorities, and the Government is convinced that it would be undesirable to re-introduce similar legislation.

A measure on new lines has, therefore, been drawn up, and it is confidently anticipated that the anomalies criticized in the former measure have been avoided. A comparison in detail of the respective measures is not possible here, but there are two important differences in the proposed act worthy of mention.

The Wartime Profits Tax Assessment Act 1917-1918 taxed profits in excess of a pre-war standard. As a result, businesses which made large profits in the pre-war years and continued to make them in the wartime years, paid little or no tax, although their ability to make an extra contribution in wartime was undoubted. The tax which the Government proposes to impose does not allow a pre-war standard of profits as a deduction, and thus this anomaly is removed.

The other point of difference to be mentioned is that, under the former measure) the tax imposed was originally 50 per cent., and, later, 75 per cent, of the profits subject to tax, and this irrespective of the rate of profits to capital which the taxpayer was making or of any other consideration. The measure now proposed will provide for a graduated tax, beginning at the low figure of 4 per cent, where the taxpayer is not making an excessively large percentage of profit to capital, and reaching its maximum only when the taxpayer is making a large percentage of profit to capital. The old measure had no regard whatever to ability to pay, whilst the proposed measure definitely has.

The War-time Profits Tax Assessment Act 1917-1918 applied to businesses carried on by both companies and individuals, but the proposed measure will apply to companies only. The reason for this is that the proposals of the Government in respect of income tax are considered to take from individual taxpayers, whether in business or otherwise, all that they can be reasonably expected to pay at this stage. The weight of taxes upon individuals; Commonwealth and State combined, is, in fact, much heavier than the taxation which falls upon companies.

The bill, when introduced into the House, will make liberal provision for companies employing small amounts of capital or deriving small amounts of taxable profits.

UNDISTRIBUTED PROFITS TAX.

Another additional form of wartime company taxation that the Government proposes to introduce is an undistributed profits tax. This will be a tax of ls. in the £1 on the undistributed taxable income, after allowing an exemption of 25 per cent, of the distributable income. In calculating the taxable amount, allowance will necessarily be made for all Commonwealth taxes paid, including the proposed wartime company tax, as well as State taxes paid. The estimated amount of the yield from the undistributed profits tax is £575,000, of which £450,000 should be collected for the financial year 1940-41.

It is not proposed that any rebate shall be allowed in respect of dividends which may at a later date be paid from such undistributed profits.

The proposed wartime company tax and the undistributed profits tax will not, apply to the gold-mining industry.

Income Tax - Individuals

It is proposed to increase the rates of income tax on individuals in such a way as to produce an additional collection of £3,000,000 during the next financial year. To produce this result the yield of taxation for a full year must be increased by approximately £4,000,000. For various reasons it is not physically possible to assess and collect within one financial year the whole of the income tax payable in. respect of that financial year.

The proposed alteration of the rates of’ taxation to produce an additional collection of £3,000,000 during the next financial year will be placed before the House in an income tax bill in due course. Present rates of tax give about £8,200,000 for the full assessment in 1940-41, so that the yield of the tax will be increased by about 50 per cent, by these proposals.

It is neither possible nor desirable to seek to obtain an increase, of this order by a uniform percentage increase of the rates of taxation.

It is not possible because of the high levels to which income tax has been raised in some of the States. The effect would be to impose a tax up to 12s. 9d. in the £1 on very high incomes which had already paid over 8s. in the £1 in State taxation of incomes.

It is not desirable, because the present scale of rates is not suited to the much heavier demands which the present war threatens to make on income taxation. The old scale was originally designed to produce a moderate revenue by taxing higher incomes with considerable severity while falling lightly on middle incomes and exempting lower incomes altogether. lt is unfortunately necessary now to widen the field so as to obtain a substantia] contribution from middle incomes. This requires a revision of the whole scale of progression. At the same time, as I shall explain more fully when I introduce the Income Tax Bill, the present scale of rates during its long career of adaptations and alterations to meet pressing emergencies has accumulated a number of anomalies and relative inequities. On this account, also, it is desirable to take the opportunity for a thorough revision which will make it as equitable as possible between members of the community, and at the same time an efficient instrument of wartime taxation.

One result of the revision will be, as I have indicated, to obtain a substantial contribution from middle incomes. Higher incomes, notwithstanding the severity of present taxation, must also bear additional imposts. The Government, however, does not propose to ask for any contribution from incomes at the wageearning level. The exemption will re-, main at £250 for the single taxpayer, and at £400 for a married man with two children.

This exemption of the family man reduces the possible yield from the lower middle income group, but the Government is resolved that even under the present strain of war taxation the economic burden on families shall not in general be increased. The effect of this exemption is that over 80 per cent, of the families of Australia will not be asked to make out of income any direct contribution to the war. I hope they will make what voluntary effort is possible, and put such savings as they can compass into war savings certificates.

I must postpone details and discussion of numerous points of interest until the introduction of the Income Tax Bill.

Land Tax

It is proposed to double the present land tax rates.

The increased collection from this source in 1940-41 will be £1,500,000.

The statutory exemption of £5,000 will still remain for residents, but the rate of tax will then commence at Id. in the £1, increasing to a maximum of 9d. in the £1 for taxable unimproved values in excess of £75,000. These rates are those which were current under the Land Tax Act for the financial years 1922-23 to 1926-27 inclusive. They have been reduced in successive years by various amounts to the figures at which they now stand. For the years 1918-19 to 1921-22 inclusive, the rate of tax was 20 per cent, higher than that at present proposed.

About three-fourths of the land tax is derived from urban land, and the balance from country land.

Estate Duty

It is proposed to increase the rates of estate duty so as to produce an additional £500,000 revenue during the financial year 1940-41. Owing to the lag that takes place between the date of death and the date of assessment, because of various administrative functions to be performed, and because of the necessity for State death duties to be first assessed, it is not possible at this date to obtain during the financial year 1940-41 the full effect and benefit of the increased rates. These, it is estimated^ will produce over a normal year of assessment an additional yield of £850,000.

The additional rates producing this result will be submitted to Parliament with the amending Estate Duty Bill. Although the rates of duty have been increased in the middle and higher grades of taxable value, honorable members will appreciate the provision made for remitting totally all duty in respect of estates of £2,000 and under passing to widows and children. This has been brought about by converting the present fixed exemption of £1,000 taxable value, in the case of families, to a decreasing exemption of £2,000, vanishing at £12,400.

In respect of the estates of members of the various defence forces dying on active service, provision will he incorporated in the bill that all such estates of a taxable value of less than £5,000 will be totally exempt.

At present rates of duty, the estimated collections for 1940-41 would be £2,000,000. With the addition of the £500,000 mentioned above, the total collections from estate duty next year will, therefore, be £2,500,000.

Sales Tax

It is proposed to increase the present rate of sales tax from 6 per cent, to 8^ per cent., and a bill to impose this increased liability is to be brought before the House immediately. The increased rate of tax, it is estimated, will produce an increased revenue during 1940-41 of £5,000,000. The estimated collections for 1940-41, based on the present rate of 6 per cent,, would be £13,000,000, so that a total of £18,000,000 from sales tax is to be expected during the next financial year.

Consideration has been given to the extension of sales tax by bringing back into the taxable field some or all of the items which have been exempted since the original sales tax waa imposed in 1930. The Government, however, is definitely resolved against including any items which would put an additional burden on low wage incomes, or would adversely affect employment. Under these conditions, there was little scope left for extending the field. When introducing the sales tax legislation, I shall give more specific reasons for increasing the sales tax rate rather than widening the field.

Customs and Excise

Certain increases of customs and excise duties are proposed which are expected to yield an additional revenue in 1940-41 of £5,300,000. Details will be given to the committee at a later stage.

Taxation Proposals Summarized

The estimated additional revenue to be obtained next year by the Government’s proposals may now be summarized thus : -

It will be seen that the amount of £20,000,000 is made up of indirect taxation £10,300,000, direct taxation £9,700,000.

page 480

CONCLUSION

The proposals which I have laid before the House surpass in magnitude anything of a similar kind ever submitted to an Australian Parliament. But in that respect they merely express the scale of our national Avar undertaking, as it has so far taken form. I have explained already that they cover only commitments actually undertaken to date, and do not provide for expenditure to be met overseas.

We are moving forward into a hazardous and an uncertain future, as to which no man can safely foretell what trials we may have to face, even within the period of a year. Yet I do not doubt for one moment that we can support the burden. This country is strong, with the virile strength of youth, and it is animated by a great heart and will. All that it asks is that burdens imposed shall be equably shared, according to its democratic ideals. This, I believe, we have contrived, as far as is practically possible.

Where the apportionment of burden is concerned, we have to bear in mind that though the war will demand sacrifices of all, there cannot in the nature of things be perfect equality. Some men, indeed some women, will give their lives. No material loss can equal theirs. The obligation of every citizen to his country, his family, and his children, demands that heshould accept his share of the common burden. The way of victory is long and will not be easy. It will come to us in. the end, be assured. It will, however, make ever-increasing demands on the community.

I feel, therefore, that, beyond the explanations I have given, these proposals require no justification other than the nation’s dire need, which we all recognize, and it is with confidence that I ask for their acceptance both by honorable members and by the whole of the Australian community. I lay on the table the following paper: -

Financial Statement by the Honorable P. C. Spender, K.C. M.P., Treasurer, and move -

That the paper be printed.

Debate (on motion by Mr. Curtin) adjourned.

SALES TAX BILLS (Nos. 1 to 9) 1940.

In Committee of Ways and Means:

Mr SPENDER:
Treasurer · Warringah · UAP

– I move -

  1. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 1 ) 1930-1939 there be imposed sales tax at the rate of eight and one-third per centum upon the sale value of goods manufactured in Australia by a taxpayer and on or after the third day of May, One thousand nine hundred and forty sold by him or treated by him as stock for sale by retail or applied to his own use.
  2. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 2) 1930-1939 there he imposed sales tax at the rate of eight and one-third per centum upon the sale value of goods manufactured in Australia and sold on or after the third day of May, One thousand nine hundred and forty by a taxpayer who purchased them from the manufacturer.
  3. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 3) 1930-1939 there bo imposed sales tax at the rate of eight and onethird per centum upon the sale value of goods manufactured in Australia and sold on or after the third day of May, One thousand nine hundred and forty by a taxpayer, not being either the manufacturer of those goods or a purchaser of those goods from the manufacturer.
  4. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 4) 1930-1939 there be imposed sales tax at the rate of eight and one-third per centum upon the sale value of goods manufactured in Australia and sold to a taxpayer who has, on or after the third day of May, One thousand nine hundred and forty, applied those goods to his own use.
  5. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 5) 1930-1939 there be imposed sales tax at the rate of eight and onethird per centum upon the sale value of goods imported into Australia by a taxpayer on or after the third day of May, One thousand nine hundred and forty.
  6. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 6) 1930-1939 there he imposed sales tax at the rate of eight and one-third per centum upon the sale value of goods imported into Australia by a taxpayer and, on or after the third day of May, One thousand nine hundred and forty, sold by him or applied by him to his own use.
  7. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 7) 1930-1939 there be imposed sales tax at the rate of eight and one-third per centum upon the sale value of goods imported into Australia and sold on or after the third day of May, One thousand nine hundred and forty, by a taxpayer not being the importer of the goods.
  8. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 8) 1930-1939 there be imposed sales tax at the rate of eight and one-third per centum upon the sale value of goods imported into Australia and sold to a taxpayer who has, on or after the third day of May, One thousand nine hundred and forty applied those goods to his own use.
  9. That in lieu of the rate of tax imposed by the Sales Tax Act (No. 9) 1930-1939 there be imposed sales tax at the rate of eight and one-third per centum upon the sale value of goods in Australia, including goods which nave gone into use or consumption in Australia, leased by a taxpayer to a lessee on or after the third day of May, One thousand nine hundred and forty.

Honorable members were advised in the financial statement earlier to-day of the Government’s proposal to increase the rate of sales tax from 6 per cent. to 8&1/3 per cent. that is,1d. in each1s. The additional revenue which will be obtained from this action will amount to £5,000,000. The revenue which it is estimated would be obtained if the existing rate were maintained in the year 1940- 1941 is £13,000,000. At a rate of 8£ per cent, it is estimated that £18,000,000 will be obtained.

The proposal will no doubt be heard with regret by many honorable members who have been hoping that whatever extra revenue may have to be obtained from this source would have been secured by withdrawing some of the exemptions now existing, thus widening _the field and so achieving the desired result without any appreciable increase of rate. I may assure honorable members that I am one who shares their regret.

When one considers simply the bald facts that for the financial year 1940- 1941 the total sales of commodities in Australia are estimated to amount to approximately £750,000,000 and that of that total only about £215,000,000 will be subjected to sales- tax, it would seem to be a relatively simple matter to withdraw sufficient of the exemptions to enable a low rate of tax to be imposed and at the same time obtain the revenue required. This idea, however attractive at first sight it may appear, proves upon close examination to be fallacious. The first large bite is made out of the available field by goods exported for sale or sold for export. The sale value of these goods amounted in the last year for which statistics are available to £165,000,000. There are obvious objections to imposing sales taxation on goods for export which have to compete in the world’s markets with goods from countries whose standards of living are not as high as our own. The next item in point of magnitude is made up of basic foodstuffs. Sales of ‘ these goods absorb £128,000,000. I think it quite safe to say that nobody wishes to see sales tax imposed on basic foodstuffs if that can be avoided. When I refer to basic foodstuffs I do not mean luxury foods, most of which are still subject to tax, but to articles of diet which are essential in all Australian homes, such for example as meat, butter, bread and vegetables.

Then there are two more classes of goods which it would be unwise, except in extremity, to subject to sales tax. They are : -

Primary products (not including exports or foodstuffs) amounting to £26,000,000. .

Sales to Government Departments amounting to .£40,000,000.

I need say very little in support of the continued exemption of primary products; their claims to freedom are already well known. It is sufficient to remark that the range consists mostly of food for livestock, such as oats, oaten and wheaten hay, lucerne and green forage. If tax were imposed on such primary products and primary producers’ costs increased accordingly the Government would, no doubt, be called upon to make up the amount in some form of assistance to the industries concerned. There would, of course, be no gain in taxing the sales to Government departments amounting to £40,000,000.

The annual sale value of goods I have thus referred to totals approximately £359,000,000 and reduces the optimum field available for the levy of sales tax from £750,000,000 to £391,000,000.

I now turn to the goods which represent the difference between this amount of £391,000,000 and the present taxable field of £215,000,000. Why, it might he asked, cannot these exempt sales amounting to £176,000,000 be made subject to tax and so “avoid any increase of rate? Let us then consider of what this £176,000,000 is composed. First, there is fuel, light and power amounting to £61,000,000. This item is not confined to fuel, light and power used in businesses, but includes all sales of such services. It. includes the firewood which is used in private dwellings as well as the electric current and gas with which the private homes of the citizens of the Commonwealth are supplied. Much of the two last-mentioned items is supplied by Government bodies, semi-Government bodies! or local governing bodies not concerned with profit-making. The Government, does not consider that the goods supplied in the course of the rendering of these services are suitable subjects, at least at this stage, for the imposition of sales tax and, accordingly, does not propose to ask Parliament to charge them with tax.

The next item amounts to £17,000,000 per annum and is represented by beer and other such beverages, tobacco, cigarettes, films, &c., all of which classes of goods are already subject to special duties of customs or excise and which are considered to be proper subjects for those imposts rather than sales tax. Whatever extra taxation the Government considers these goods can or should bear should, it is thought, be imposed as duties of customs or excise.

The field is thus further reduced by £78,000,000 to £313,000,000. So that the maximum amount by which the field could be expanded is £98,000,000.

The goods making up this £98,000,000 have been exempted by successive governments for one of four main reasons, viz.,

  1. To avoid taxing foodstuffs and goods which directly increase the cost of living, such as tea, coffee and cocoa, pastry, scones, footwear, &c., £24,000,000.
  2. To give assistance to industries which otherwise might have to receive direct help, viz., agricultural machinery, mining machinery, building materials, equipment for the fishing industry, £48,000,000.
  3. To avoid taxing articles used in medical, educational, charitable, philanthropic and religious activities, £12,000,000.
  4. To obviate the necessity for taxing the containers used to market exempt goods; to place manufacturers’ consumable aids on the same footing as raw materials; and to avoid taxing small manufacturers, £14,000,000.

The alternatives facing the Government were, therefore, the re-imposition of sales tax on the goods which had been exempted for the reasons stated with a relatively small increase of rate, or to obtain the whole of the requirements by a somewhat sharp increase of rate.

The Government has chosen the latter course in the belief that the claims to exemption of the goods constituting the available £98,000,000 indicated in the aforementioned categories are sufficiently strong to justify increasing the rate further before bringing them back into the taxable field. One cannot, of course, commit oneself to any statement of what the war effort may ultimately require of us, and it may be that any further revenue to be obtained from sales taxation may well have to come from the goods which now enjoy exemption.

There are many in the community, and indeed some in this committee, who have strongly urged the imposition of a low rate of tax on the whole available field. I hope that the dissection which I have now made will make it clear that whilst the present form of sales taxation is retained on the statute-book such a course is not feasible. There are others in the community who advocate a multiple turnover tax at a very small rate. I do not propose here to thrash out the relative virtues of each form of tax. Suffice it for me to say that all competent experts who have inquired intothe incidence of multiple turnover taxes are convinced that there are greater disabilities from every one’s point of view in that form of taxation than in the form which we have at present. It is proposed that the new rate shall come into operation as from to-morrow.

It has been necessary, of course, to take this prompt action, following upon my earlier announcement, in order that trade may not be dislocated by the events which would ensue from any delay between the date of the announcement of the Government’s intentions and the date when those intentions became effective.

I remind honorable members, as is customary in these circumstances, that there are provisions in the machinery of the existing law which will fully protect vendors of goods who are required to pay tax at the higher rate as from the commencement of business to-morrow. Vendors will be able to recover the additional 2&1/3 per cent. from any customers who have not paid, when the bills become law. If the bills do not become law, vendors will be able to obtain refunds of the additional tax paid by them.

Goods sold on or after 3rd May, 1940, under agreements entered into before the 3rd May, 1940, will be subject to tax at the higher rate, but vendors are authorized to recover the additional tax from their customers by virtue of existing provisions which deem agreements to be altered accordingly.

Contractors whose contract prices are based on the 6 per cent. rate will be similarly authorized to increase their contract prices by the additional 2&1/3 per cent. tax reflected in the cost of taxable materials purchased by them on and after the 3rd May, 1940.

The new rate will apply to all taxable transactions and operations in goods effected or done on and after the 3rd May, 1940, and will apply also in respect of goods imported on and after that date.

I conclude by saying that the increase now proposed is due wholly to the unprecedented war expenditure which falls on the Government. In times of peace such a proposal would not be made, and I record the view that relief from this heavy rate should not be delayed one minute longer than is dictatedby the paramount necessity to prosecute the war to a successful issue.

Progress reported.

page 484

TARIFF PROPOSALS 1940

Customs Tariff Amendment (No. 1) ; Excise Tariff Amendment (No. 1) ; Customs Tariff (Special War Duty)

In Committee of Ways and Means:

Mr SPENDER:
Minister representing the Minister for Trade and Customs · Warringah · UAP

– I move - [Customs Tariff Amendment (No. 1).]

That the Schedule to the Customs Tariff 1933-1939 be amended as hereinafter set out, and that, on and after the third day of May, One thousand nine hundred and forty, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected in pursuance of the Customs Tariff 1933-1939 as so amended. [Excise Tariff Amendment (No. 1).] That the Schedule to the Excise Tariff 1921-1939 be amended as hereinafter set out, and that on and after the third day of May, One thousand nine hundred and forty, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Excise be collected in pursuance of the Excise Tariff 1921-1939 as so amended. [Customs Tariff (Special War Duty).] That, in addition to the Duties of Customs collected otherwise than in accordance with the Act passed to give effect to this resolution, there be imposed on and after the third day of May, One thousand nine hundred and forty, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, on all goods (other than goods covered by Item 229(c) in the Schedule to the Customs Tariff 1933-1939) entered for home consumption on or after that date, a special war duty of Customs at the rate of ten per centum of the amount of the Duties of Customs so collected on such goods. The tariff proposals that I have just introduced are complementary to the budget. First, they provide for an increase by 3d. a gallon of the customs and excise duties on petrol, benzol and similar spirit, the rates on imported petrol being increased from 8d. to11d. a gallon, excise on petrol distilled from imported crude oil from 6½d. to 9½d. a gallon, excise on petrol from Glen Davis shale from1d. to 4d. a gallon, and excise on benzol from 2½d. to 5½d. a gallon. It is anticipated that the increase of 3d. a gallon will yield additional revenue to the amount of approximately £3,300,000 per annum on the basis of a reduced consumption during 1940-41. Secondly, a new customs duty to be known as the customs (special war duty) is being imposed. This special duty represents a superimposition of 10 per cent. of the duty, including primage, otherwise payable. For example, if ordinary duty and primage amounted to £100, a further amount of £10 wouldbe payable as special war duty. The special war duty will not apply to petrol, the duty on which has been substantially increased under the first measure to which I referred; nor will it apply to those imported goods which are free of both duty and primage. The special war duty is expected to yield £2,000,000 during the coming financial year. Progress reported. {: .page-start } page 485 {:#debate-23} ### QUESTION {:#subdebate-23-0} #### GOVERNOR-GENERAL'S SPEECH Address-in-Reply. Debate resumed from page 467. {: #subdebate-23-0-s0 .speaker-KF9} ##### Mr GREEN:
Kalgoorlie -- I desire to discuss the gold tax, which is of special importance to Western Australia, but is important also to the other gold-mining States. The tax, which was imposed on the 15th December last,but was made to operate from the 15th September, is designed to take half of the increased value of gold over £9 an oz. The present price of gold is £10 13s. 3d. an oz. so that the tax amounts to 16s. 7£d. an oz. To show how heavily this presses upon, the mining companies, it is only necessary to point out that the tax, if it had operated for the whole year, would have yielded last year in Western Australia £1,011,446, out of a total available dividend of £1,337,000, and Western Australia produces between 70 per cent, and 75 per cent, of all the gold won in Australia. The Treasurer **(Mr. Spender),** in his budget speech, reminded, us that it was not proposed to increase the gold . tax, though taxes on other industries were tobe substantially increased. I remind honorable members, however, that there is no other tax which absorbs anything like the proportion of the available dividend that is absorbed by the gold tax. It is well known that there is a tendency amongst gold-mining companies, at the requests of the shareholders, to pay dividends whenever, possible. Therefore, tho common complaint is, that when companies have won all the gold readily available, they have no financial reserves left with which to prosecute a search for further deposits. At the present rate, the gold tax absorbed no less than 15s. lid out of every £1 of profit made by the gold-mining companies last year if it had been in operation for the full period. I recognize that further dividends have Been paid during the last three months, so that the figures which I have cited do not strictly represent the present position, but it cannot be denied that at least 75 per cent, of the available dividends for the next financial year will be absorbed by the gold tax. I have no desire to be parochial in regard to this matter, hut the fact is that Western Australia depends very largely upon gold-mining. It has the smallest population of any of the mainland States - only 470,000-r-whilst its area is greater than that of Tasmania, Victoria, South Australia, and New South Wales combined. It cannot afford to be taxed to the extent of 75 per cent, of the profits of the only industry in the State that is paying. Droughts have reduced the number of sheep in the pastoral areas of Western Australia from between 5,000,000 and 6,000,000 to less than 3,000,000. In proportion to the population, the percentage of wheat farmers in Western Australia is three times higher than the acreage for the other wheat-growing States, but recent years have been disastrous for these producers, either because of crop failures, or because of low prices. Therefore, the wheat industry is not paying, and the State must depend very largely upon the gold-mining industry. I challenge the Treasurer to disprove any of the statements I have made. Western Australia is recognized as one of the needy States, the others being South Australia and Tasmania. Las; year, the Commonwealth Grants Commission recommended a grant of £995,000 to South Australia, and one of £595,000 to Western Australia. Tha) was so much to the good, but then the Commonwealth imposed the gold tax, which absorbs the greater part of the profits of the gold-mining companies. This is like taking the last pound from a needy man, and then, as a gesture of generosity, giving him back 12s. The peculiar injustice of this tax i* that it bears just as heavily on those companies which are making no profits at all, or even operating at a loss, as upon those that are able to pay dividend?. There is no other civilized country, so far as I know, in which a. tax is imposed on production as such, instead of on profit. Among . uncivilized communities, whenthe law of the club prevails, it may bt? the practice to take a man's lubra or hisgoods from him by force, according towhether the greatest store is set upon beauty or wealth, but in civilized countries such drastic methods are not usually applied. I propose to place before the House particulars regarding the position of three important gold-mining companies in Western Australia, not at present showing a profit, and to show how they have been affected by the gold tax. The first is the Mount Magnet gold-mine. It was previously known as " Hill Sixty ", and is situated about 480 miles north-east of Perth, up towards the centre of Western Australia. A strange thing about most of the gold-mines in Australia. is that they are situated in arid parts of the country that are of little use for any other purpose. It is in such areas that the richest gold deposits are found. That applies particularly to the large auriferous areas in Western Australia. No crops' will grow in that country, though it will support a few sheep. The Mount Magnet Mining Company was the pioneer in the treatment of low-grade deposits. It owns large, low-grade lodes, and it is on such deposits that the gold-mining industry in Australia must in future depend. The very rich lodes have been largely worked out. People often ask why no great gold discoveries have been made in Western Australia since the first discoveries of some years ago. The reason is that the gold prospector of past years looked for the gold-bearing outcrop, those rocky formations thrust up from the bowels of the earth, and bearing the precious metal so desired by men, particularly in time of war. In the Mount Magnet mine, the lode averages a width of 25 feet, and those acquainted with gold-mining know that to be very large. The great Wiluna lode was 35 feet. The ore reserves at present known to exist at Mount Magnet amount to 316,000 tons. Next year the tonnage may be greater. The average return is 8£ dwt. a short ton, which is very low in comparison with what was considered necessary before the increase of the price of gold. On the Golden Mile, prior to the introduction of the new methods that have now been adopted, 10 dwt. ore was considered unpayable, but to-day the Big Bell mine is working profitably on 3 dwt. or less dirt. The Mount Magnet company has been working on *Z%* dwt. a short ton, but in order to operate a big lode successfully on such a small average yield, mass production is necessary. The main shaft lias been sunk 400 ft., and the ore body is now being developed at that level. Since the present company took over the Mount Magnet mine in 1932, it has been working two properties adjacent to the battery - the St. George and Western Option - on both of' which there are large bodies of ore. The St. George, which was acquired two years ago, and the Western Option mines were purchased out of revenue, and it was therefore unnecessary to make any call upon the shareholders. Pumps, winding engine and air compressor were acquired in the same way. The company has, therefore, three large ore bodies on which to operate, and it is now producing about 6,000 tons a month. The company proposed to obtain more capital by selling additional shares on the London market, but owing to the uncertainty of the international situation, the scheme had to be abandoned. The company has, therefore, to work on a comparatively small output, which, however, when compared with the output of other mines, might be considered fairly large. This company started crushing operations in December, 1935, when the return was 4 dwt. 4 gr. a ton; in 1936 it was 4 dwt. 3 gr., but in 1939 it had decreased to 3 dwt. or a little over oneseventh of an ounce a ton. In 1939 the company produced 59,608 tons of ore, and up to the present has treated 252,395 tons of ore for a return of 38,277 oz. of gold, valued at £257,806 sterling or £322,287 in Australian currency. The point which I should like the Treasurer to consider is that whilst a profit of £29,386 sterling was made between 1935 and 1938, when the grade of the ore was about 4 dwt. 4 gr., the loss last year, when the return was 3 dwt., was £4,944 sterling, or approximately £6,000 in Australian currency. Last year the company reached a stage at which it was unprofitable to continue operations owing to the size of its plant and the grade of the ore being treated, but the management realized that with an improved plant much better results would be obtained. In consequence of the gold tax and the grade of the ore being treated, an actual loss of £12,348 was incurred, half of which was due to the gold tax. It seem? monstrous that under the Government's policy a company which is showing a loss of thousands of pounds should have to bear this heavy tax. When, by the original operations the rich ore had been worked out, the township of Mount Magnet was practically deserted; but the activities of this company and similar shows in the locality livened up the town, and to-day it is a hive of industry. The company employs over 100 men, and as it is said that every miner carries five other persons on his back, the property alone supports approximately 500 persons. Fully £50,000 is spent annually on wages and stores. I ask the Treasurer to take these facts into consideration and not to destroy the goose which lays the golden eggs. The actual position of these companies can be ascertained from their books, and the tax should be remitted to "those which are working at a loss. Under the present capitalistic system neither mine-owners nor any one else, whose main object is to make profits, will continue to conduct unprofitable undertakings. If these mines should discontinue operations, the country will lose, not only the gold, but also the revenue which it collects in various forms. I now wish to refer to the Youanmi mine, which is 60 miles from the Mount Magnet mine, in country in which practically nothing else can be produced. This mine was first worked between 1911 and 192-2 by an English company, but its capital became exhausted and it closed down. In 1934 another English company took it over, and tested the deposits by diamond drilling, and so far these operations, which cost .£60,000, have proved successful. When the company acquired the property in April, 1935, the show was thought to have been worked out, but as a result of the introduction of modern machinery the company has been able to restore order from what was previously chaos. When the properties wore acquired by the present company the mine had been under water and entirely neglected for fourteen years. Although the company was formed in April, 1935, not until the autumn of that year was dewatering commenced, as the necessary power plant had to be obtained from England. Both shafts have been provided with steel head gear and electrically driven winding engines, and the mine i3 fully equipped with rock drills and all other necessary plant. With this object in view the company has expended to date £112,'855 on development and £20,346 on additional plant, the cost of which has been defrayed out of revenue, with the result that no dividend has yet been declared. Every increase of costs decreases the ore reserves of a mine and therefore its life - a vital matter with a State such as Western Australia, where the gold-mining industry is its life's blood. The means to counteract the rise of costs which seems inevitable is the treatment of greater tonnages, which in its turn calls for more expenditure on both development- and additions to milling capacity. These conditions could be satisfied had the mine the full benefit of the increased price of gold. The natural increase of the output of gold which would result would bring additional direct and indirectrevenue to the Commonwealth, the employment of more labour, and expenditure in Australia greater than the gold tax. The incidence of the tax bears very heavily on a mine such as the Youanmi, which has not yet made any return to its shareholders. This company has put back much of its revenue into the mine in the form of development and plant with the objective of increasing the production of gold in the near future. I feel sure that when these facts arc brought to the notice of the Treasurer he will not hesitate to extend some form of relief. The mine employs men at a rate which the miners union say is fair for such a remote district. Moreover, the companies controlling these properties, which are usually situated in arid districts, are of great benefit to tlie community, as. all their requirements have to bc brought from coastal areas. To dato the mill has treated 235,1S3 tons of ore for a yield of 55,910 oz., having a total value of £519,806. Tho capacity of the mill, which as designed could treat, 10,000 tons a month, by alterations and additions has been increased to 14,000 tons. It has been the policy of the company to bring the reserves to a figure which will enable this tonnage to be milled at the earliest possible date. The amount expended on dewatering operations was £44^000, and since the imposition of the gold tax about five months ago the company has paid £7,412, or at the rate of £21,192 per annum. The company has not paid a dividend, and the installation of a larger plant is essential if the most satisfactory results are to be obtained. It should be apparent to every one that it is impossible to continue to work propositions of this nature if the gold tax has to be paid. {: .speaker-F4T} ##### Mr Fadden: -- Are all of them lowgrade shows? {: .speaker-KF9} ##### Mr GREEN: -- They are big lodes of low-grade ore. Many low-grade shows could be worked at a .profit but for the gold tax. The Youanmi mine is not in such an unsatisfactory position as the Mount Magnet mine, but it has not paid a dividend for years. A classic example is provided by Wiluna Gold Mines Limited, which, at the beginning, found it was impossible to extract a further ounce of gold by the ordinary methods, because of the refractory nature of the ore. In 1911, when I first visited it, only fifteen men were employed at the Wiluna mine. The services of Australian and American experts were secured, and a new method of treating the ore was finally evolved. After boring had revealed large reserves, plant costing £l,000,00u waa installed, and the State Government built a railway running for 120 miles at a cost of £120,000 in order to facilitate the work of the company. An enormous quantity of gold was produced, but although the company has not paid a dividend for the past three years, and. is, in fact, losing money, it will bc called upon to pay something like £50,000 in gold tax this year. Expert opinion is that the company will be unable to continue operations if it has to pay gold tax as well as the additional £10,000 a year caused by an increased duty on crude oil. Further work will be impossible when the ore now in sight, and estimated to last for two and a half years, is exhausted unless the gold tax be remitted in their case. The management of the mine has always been . in good hands, and the present manager is a man from Broken Hill, an Australian with wide mining experience. The East lode, which was the principal source of ore, has become impoverished; there is at a depth of 2,000 feet a lode assaying 2.7 dwt. This would be the lowest grade of ore worked profitably anywhere in Australia. It is said that the Wiluna company believes that if additional costs were not imposed, it would be possible to develop the mine below the 2,000 feet level. I intend to send to the Treasurer **(Mr. Spender)** letters dealing with this matter because so far he is apparently not prepared to give any assistance whatever, despite the fact that there is no logical reason why help should not be given. This matter was raised previously, but no attempt was made to reply to my representations. The Government's attitude is the height of folly. I only wish that the Treasurer knew the district of which I am speaking as well as he knows his electorate of Warringah, because I am sure that he would be quick to appreciate the points that I have made, and would take action in the interests of the industry and of Australia generally. In the limited time left at my disposal, I shall deal briefly with the Japanese menace in the waters to the north and north-west of Australia. People in the north-west are greatly perturbed because the pearling grounds are being rapidly denuded by the Japanese, and I suggest that the honorable member for the Northern Territory **(Mr. Blain)** would have been wiser had he confined his remarks last night to matters such as this which vitally affect his electorate instead of running amok and tackling almost every subject on earth except those of direct concern to the people whom he represents. During the past seven or eight years Japanese luggers have operated along thousands of miles of our coastline north of the Northern Territory. Their boats formed veritable armadas, and were three or four times as large and as numerous as the Australian vessels. As a result those waters have been completely denuded of shell. In this connexion, attention should .be paid to statements made by Captain Gregory, who has interests not only at Broome, but also at Darwin. It was stated that the Japanese stripped even the seed or " chicken " shell and transported it to beds in the Marshall Islands, which are held under mandate, so that when the Australian fields are depleted the Japanese, owing to their depredations, will still have a supply of shell. No longer is it possible for Australians to make a living on the northern pearl beds, and the devasting Japanese hordes are now turning their attention to the north-west coast of Western Australia. Darwin, being now a military and naval base, may be able to survive without the pearling industry, but Broome is not so fortunate, and if the Japanese are permitted to continue their depredations the Australian pearling industry will be ruined. Surely some agreement can be made with the Japanese Government, Undoubtedly such an agreement would have to be reached before Australian fleets would be permitted to fish in Japanese or even Chinese waters. At a later stage I 3hall deal with this matter at greater length, and in the meanwhile I shall communicate with the authorities with a view to ascertaining why the sound suggestions made by Captain Gregory for dealing direct with the Japanese Government in Tokio cannot be adopted. I am writing to the Government on this matter. {: #subdebate-23-0-s1 .speaker-JOM} ##### Mr BEASLEY:
Leader of the Australian Labour party (nonCommunist · West Sydney -- The GovernorGeneral's Speech is a rather restricted document in that it deals with only a limited programme of legislation for this session. But paragraph 10 of the Speech refers to the activities of Communists in this country and I feel impelled to say something about that matter, particularly in view of the position which I and my colleagues in this House occupy. During the last few months this subject has assumed vast importance, and has caused greater public concern than ever before in the history of this country, and for that reason, no doubt, the Government felt obliged to include some reference to it in the Governor-General's Speech. I do not feel called upon to discuss the Government's proposals, but it is of vital concern to myself, my colleagues, and the political organization to which we belong, that our position should be clarified. We feel it to be our duty to inform honorable members, and the people of their electorates, of the facts of the position that has developed. Because of our close association with our own political organization we are satisfied that the Communist party now controls the policy and domestic affairs of the Labour party in New South Wales. {: #subdebate-23-0-s2 .speaker-JNX} ##### Mr BARNARD: -- The honorable member knows that that is untrue. **Mr. SPEAKER** (Hon. G. J. Bell).The honorable member for Bass is not in order in making that assertion. {: .speaker-JOM} ##### Mr BEASLEY: -- I repeat that circumstances have arisen in New South Wales to-day which definitely establish that the Communist party is controlling the policy and domestic affairs of th? Labour party. The process of usurping that control has been spread over a long period of years, but developments, have all been in accordance with a well-defined plan. It is apparent that such procedure must cause a conflict between the Communist party and the Labour party for the control of the masses of this country, because that control is the object of both parties. The Labour party, on the one hand, believes that it has an inherent right to assume this responsibility, and its purpose is to bring about social and industrial reforms by legislative action, [t believes that its duty is to devise means whereby there will be a proper and even distribution of wealth in this country, and a guarantee of economic security for everybody. In short, tho Labour party stands for social justice. On the other hand, the Communist party claims that it has the same objectives as the Labour party, but the methods by which it proposes to accomplish those objectives are i-evolutionary ones which the Labour party does not support. The Labour party's policy is diametrically opposed to the procedure laid down by the Communist movement and, as a result, a conflict has raged for a number of years. It is to the tactics and strategy employed in this fight that I propose to direct my remarks. {: .speaker-KRH} ##### Mr McHugh: -- Beware of following Judas ! {: .speaker-KLL} ##### Mr Makin: -- Judas at least went out and hanged himself. {: .speaker-JOM} ##### Mr BEASLEY: -- It appears that some honorable members are not anxious to permit freedom of speech and a fair examination of this matter in the light of facts which are as well known to them as they are to my colleagues and myself. {: .speaker-KLL} ##### Mr Makin: -- The honorable member has already had more consideration than he deserves. {: .speaker-JOM} ##### Mr BEASLEY: -- No matter what interjections arc made, I do not intend to be deterred in the slightest from carrying out the task which I feel impelled to undertake in the interests of this country, my organization, and its supporters. The activities of the Communist party arc not confined to Australia; it is a world-wide organization and its policy for any country is not determined within that country. Communists all over the world take their directions from ; a central pivot in Moscow, and adopt whatever procedure that central authority may decide upon. In recent months the activities of the Communist movement in various parts of the world have been given much greater prominence than in the past, and in Australia, the conflict with the Labour party has reached a critical stage. The Labour party believes that it should be free to determine its oWn policy, and should not be subjected to outside influences; it believes that its policy for Australia should be based on Australian ideals and sentiments, and that the Australian character should be knitted into whatever decisions it is called upon to make. It is impossible for the Labour party to give allegiance to, or support in any way, those individuals .who, by subversive methods, are endeavouring to force an alien policy upon the Australian people. Many methods are employed by the Communist party in order to secure the leadership of the masses, and to remove the Labour party from its rightful position. In 1931, unemployment had assumed serious dimensions in New South Wales. Industrial activities in that State being more extensive than in any of the other States, unemployment constituted a grave problem. The State Government of the day had greater difficulties than the governments in the other States in trying to meet the needs of the thousands of men who were being discharged .from private undertakings. These men were, in effect, put upon the streets, and no Government could ignore their financial plight. At that time, the Lang Government was in power in New South Wales, and had to carry the responsibility of caring for the displaced workers. In giving effect to the legislation rendered necessary by unemployment it aroused the opposition of private financial interests. Taxation had to be imposed of a character that had not previously been levied. It was considered that the interest payments then demanded of the State Government could not be met, and, because of the action which the Lang Government found it necessary to take at that period, it was strongly opposed by private vested interests. Up to that stage the Lang Government, and preceding governments holding similar political beliefs, had been responsible for social legislation more advanced than has marked the development of other States. **Mr. Lang's** regime brought about the introduction of child endowment and widows' pensions, which have been a marked feature of the effort to relieve the plight of many who had badly needed assistance for a considerable period. The workmen's compensation laws passed at the instance of that government were until recently also of a more advanced character than those operating in any other part of the Commonwealth. **Mr. Lang** secured the leadership of the masses because of the reforms which he introduced. These were of great benefit to the people, who naturally accorded him their support,, because they realized that he had shown a desire and a practical application to help them in their difficulties. That was the position until the commencement of the intrigue of the Communist party to secure leadership of the Labour party. Anybody who happens to have the support of the masses, however, becomes, in effect, public enemy No. 1, from the point of view of the Communist party. This conclusion is reached by a very simple process of reasoning, because, if the Labour party continued to do its job by giving effect to the reforms necessary to safeguard the interests of all of the people under its care, it must prevent the Communist party from capturing the leadership of the masses. The struggle reached the stage at which the Communist party was able, through its activities among the larger trade unions, to secure a degree of support that it had not formerly obtained. It set out to organize in such a way as to control not only the conferences of the Labour movement, through the trade unions, but also the strategic points of Labour organization. This is in keeping with the minority movement practice in foreign countries. The Communist party works to secure control of strategic points, such as wireless stations and other means of contact with people in outlying parts' of the country so that the message of the genuine leaders of the Labour movement, can be prevented from reaching the people. By obtaining control at these points, the Communist party is able to label the Labour leader of the day as a reactionary or a social-Fascist, or to give him some other titles commonly found in Communist jargon. In New South Wales, the Communist party set out to secure control of the Labour newspaper and wireless station, and to carry on its activities through the various trade unions. In order to secure control of the Labour newspaper it obtained the support of vested interests in New South Wales. Proof of this is readily available, since the Bank of New South Wales advanced over £45,000 as security in order that this newspaper might pass into the hands of the section against whom the Labour movement had been engaged in political warfare. The Bank of New Zealand carried an overdraft of £18,000, and it was the only bank in that State outside the banking ring to make an advance of that kind. While the opponents of the Communist party were controlling the paper they could not secure any assistance from the ring which the Bank of New South Wales controls; yet when the change of control took place an advance of £45,000 was made by the Bank of New South Wales on an almost valueless asset. {: .speaker-KX7} ##### Mr Ward: -- What was the company's bank when the honorable member was a ' director? {: .speaker-JOM} ##### Mr BEASLEY: -- The honorable member would be wise if he restrained himself. If I have to answer the honorable member I shall, but I am not anxious to do so at , this stage. *Honorable members interjecting,* {: #subdebate-23-0-s3 .speaker-10000} ##### Mr SPEAKER: -- There are too many interjections. {: .speaker-JOM} ##### Mr BEASLEY: -- I am not anxious to engage in a personal argument, or to make rejoinders that could easily be made. {: .speaker-KX7} ##### Mr Ward: -- The honorable member may say what he likes. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable mem- ber for East Sydney is out of order. {: .speaker-JOM} ##### Mr BEASLEY: -- Developments took place in New South Wales up to the point where there was an amalgamation of the "rights" and the "lefts", in order to permit this control to move in the direction in which I claim that it has moved to-day. I am not going to argue . that the " rights " thought that this process would result in handing the whole of the control over to what they might regard as the " lefts " ; but it was a process in which the " rights " used the " lefts " in order to accomplish their purpose. They forgot that the " lefts " were equally using the " rights ". I am glad that all honorable members who sit on this side of the chamber are present to hear my remarks. It shows that the interest in this matter is great, and, no doubt, before I have finished they will be able totake the story into their own States, probably with a determination on their part at least to keep the Labour party " on the rails " and free from control by the Communist party and an influence which all genuine Labour supporters have declared it cannot carry in any circumstances. Honorable members on this side may be willing to undertake that task. {: .speaker-KYC} ##### Mr Pollard: -- What did the honorable member get from the National Union campaign fund? {: .speaker-JOM} ##### Mr BEASLEY: -- Did not the honorable member for Ballarat **(Mr. Pollard)** say that he would not sign the national register card? {: .speaker-KYC} ##### Mr Pollard: -- That is correct. {: .speaker-JOM} ##### Mr BEASLEY: -- Did he sign it? {: .speaker-KYC} ##### Mr Pollard: -- That is my business. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member for Ballarat is out of order. {: .speaker-KYC} ##### Mr Pollard: -- So is the honorable member for West Sydney, He has never been in order. {: .speaker-JOM} ##### Mr BEASLEY: -- The stage was reached at which a conference of trade unions was held in Sydney. This was the point at which the Communist party was to challenge its opponents in control of the Australian Labour party, because it had obtained sufficient power in the trade unions to be able to call a conference in order to determine the policy of the political movement. The conference was not summoned to discuss industrial matters, but to determine the Australian Labour party's policy. Such a conference was entirely out of order, according to the constitution of the party. The duty of those who had charge of the party's affairs was to regard such a conference as not entitled to deal with the party's policy, but certain members of the New South Wales State Parliament attended this conference and defied the ruling body. Following upon their attendance, disciplinary action was taken which resulted in those gentlemen breaking away from the official party and setting up an organization of their own. That party flourished in certain quarters for some time. The interesting point about the matter is that in the hey-day of its development no reference was made to the break-away in quarters in which are now heard denunciations of myself and others. The Communist control of the trade unions had reached the stage to which I have already referred, and after the break-away organization took place in the various electorates in order to build up .electorally what had been accomplished industrially. In the break-away section was a group of nien who probably felt that they had a just grievance. I do not think that it is possible to conduct a political organization so smoothly that the ambitions of all who desire to serve can be satisfied. Iu Labour politics, particularly, this would be extremely difficult, not only in New South Wales, but throughout the Commonwealth. Therefore, it may be properly said that some of the men (broke away because their positions had been affected, or because they had not made the. progress in the party which they had expected. They could be said to have had just grievances, but in that break-away the nerve, centre was the 'Communist organization. The Communist party as it was known formerly- disappeared, but was revived as the Heffron Labour party. Abundant : proof of these facts can be obtained. These new -Australian Labour party branches were the nuclei upon which the next development took place. As they gathered momentum they sought recognition by the federal body of the Labour movement. Generally speaking the federal organization had never, been friendly towards the State party in New South Wales. I have no desire .to go into that phase of the history of the matter. {: .speaker-KLL} ##### Mr Makin: -- It would be inconvenient. {: .speaker-JOM} ##### Mr BEASLEY: -- No. I recognize that gentlemen now sitting beside the honorable member on the front Opposition bench figured in those incidents ; and they have declared that, if a similar set of circumstances arose to-morrow, they would act again as they did on that occasion. I have no doubt that they feel now, as they felt then, that they could not support reductions of pensions and wages. They did what they should have done. The Leader of the Opposition **(Mr. Curtin),** in a statement which he made to the press rather suddenly before anybody had said anything about him at all, told us about things which happened long ago. If he desires to be personal, I, too, can be personal. {: .speaker-KLC} ##### Mr Mahoney: -- I have to fight for him. {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member for Denison **(Mr. Mahoney)** is out of order. {: .speaker-JOM} ##### Mr BEASLEY: -- The honorable member for Denison says that he has to fight for the Leader of the Opposition. I also have to fight for those who have joined with me, and I have been in at least as many fights as the honorable member. The claims for federal intervention gradually took definite shape, and eventually it was decided to call a unity conference in New South Wales. Prior to the holding of that conference, however, the federal executive met in Canberra and laid down a basis of representation at the proposed unity conference. I took part in those discussions. That conference resolved that representation at the proposed unity conference should be according to the rules of the State party iu New South Wales. I emphasize that, that decision was strictly in order, because the State party in New South Wales was a t least constitutionally a part of the general federal organization and, therefore, 'was entitled to such recognition. That was the decision arrived at by the federal executive. However, the Communist interests which were opposed to that decision refused to attend the unity conference. They did not want the representation to be according to tlie rules of the New South Wales State party at all. Those interests called a meeting at which they decided to boycott the unity conference. The interesting part of matters at this stage was the readiness which the federal executive displayed in meeting the wishes of those interests. It decided to alter the basis of representation at the unity conference as these interests desired. Apparently - and I have to say this now in defence of my own position in this matter - the basis originally decided upon for the holding of these talks would have enabled the State party to achieve a considerable measure of success, notwithstanding the Communist penetration of the Labour party. But the intention was to take from the State party in New South Wales the control which it had exercised in this regard for some time. When the unity conference was held the federal **president, Mr. Fallon,** and others associated with him on a credentials committee, refused to allow a number of delegates to attend. The committee declared that those people belonged to another political organization, namely, the Communist party, and were opposed to the Labour party. However, on the new basis the right to be represented was extended to bodies of all kinds and sizes and to various mushroom branches throughout New South Wales. For instance, a delegate was admitted as a representative of the Queanbeyan branch of the Heffron party, although no branch of that party existed in that centre, whereas at the same time the Queanbeyan branch of the Australian Labour party had up to 50 members. {: .speaker-N76} ##### Mr Menzies: -- What has become of the Heffron party now? {: .speaker-JOM} ##### Mr BEASLEY: -- I shall come to that point. It was upon that basis that the unity conference was held, delegates being admitted on all kinds of claims to be present. This decision caused resentment amongst bona fide members of the Labour party who had worked over a long period of years in building up the party in New South Wales. That conference elected an executive which consisted of an entirely new set of officers, with the result that the control of the party in New South Wales was handed over almost entirely to the Communist party. That is the position which I and every one of us is obliged to face at the present time. {: .speaker-KLC} ##### Mr Mahoney: -- I know nothing about it. {: .speaker-JOM} ##### Mr BEASLEY: -- The honorable member will know something about it whenI have finished my speech. Mr.Martens. - They succeeded where the honorable member for West Sydney failed. {: .speaker-JOM} ##### Mr BEASLEY: -- Up to that time we at least succeeded in keeping Communists out of the party. There can be no doubt about that. Up to that time we were able to keep the control of the party out of the hands of those who control it to-day, and whose sympathies are not with the Labour party at all. If any criticism is raised as to the operation of a dictatorship within the party at that time, I point out that in view of these developments, when we were faced with formidable forces, whose methods consisted of lies and misrepresentation, some form of dictatorship was necessary even within one's own party if it was to retain its original ideals, sentiment and character. The Communists on the new executive set out immediately to consolidate their position. Numerically at this stage they were in theminority, but the point I stress is that through having their members in offices such as the general secretary and office staff they were able to control the party. The next stage in these developments occurred when preparations were being made for the holding of the Easter conference, which was to decide finally in whose hands the control of the party should rest. The methods employed by the Communist party at that time are worth mentioning. At the Easter conference the rules which were laid down at the unity conference were entirely departed from, with the result that representation was given to what were called assemblies, otherwise known as electoral councils. Consequently, a district which previously was represented by two or three delegates obtained eight and nine delegates. A situation soon developed which made it perfectly obvious that the Easter conference would be entirely unconstitutional, having regard even to the rules previously laid down by the federal executive. It was also perfectly obvious that the new system of representation had been designed in order to transfer the control of the party for all time to those who up to that stage had not quite succeeded in gaining entire control, but who had made considerable progress towards that end. It was at this serious stage that I undertook discussions with the prominent leaders of certain political groups and trade unions. I have no desire to mention the names of gentlemen other than those who have since attacked me. I consider that I am entitled to mention their names because they have rushed into print in an endeavour to blacken my political character just as certain honorable members of this House have launched interjections at me in the course of this speech for the same purpose.I *am* entitled to defend myself. These persons who took advantage of the columns of the press to abuse me can have no just complaint if I reply to them. What I said at the meeting at the Australian Hall dealt solely with the problem that had arisen in the Labour party. To summarize my speech, I referred to the failure of the party leaders to deal with the Communist element within the party itself, and also within certain trade unions. I also drew the attention of the audience to the course which the Communist party leaders had seen fit to take in connexion with international policy. [ *Leave to continue given.]* Among those with whom I discussed the situation that had arisen was **Mr. McKell.** {: .speaker-KYC} ##### Mr Pollard: -- What about **Sir Keith** Murdoch ? {: .speaker-JOM} ##### Mr BEASLEY: -- One thing is certain- {: .speaker-KYC} ##### Mr Pollard: -- And **Mr. Essington** Lewis ? {: .speaker-JOM} ##### Mr BEASLEY: -- I would not discuss anything with the honorable member, for he is not worth it. {: .speaker-KYC} ##### Mr Pollard: -- I suppose that the honorable member also talked to **Mr. Trautwein.** {: .speaker-10000} ##### Mr SPEAKER: -- Order ! The honorable member for Ballarat must not interject. {: .speaker-JOM} ##### Mr BEASLEY: -- The men to whomI spoke belonged to the political groups or the factions which could not be said to be the section with which I was associated. I suggested to them that steps should be taken to gather together the best elements of the different groups of the Labour party inNew South Wales in order to consolidate the movement. I realized that persons who first of all were genuinely Labour men may differ on details within the party, but be quite honest in their attitude. Certain honorable members who are interjecting will probably appreciate the position taken by **Mr. McKell.** He said to me, in effect, that the circumstances under which the Australian Labour party might be called upon to carry on the government of this country were of great importance. When a party undertook administrative duties it should have behind it, he said, a body of men - rank and file and officers - who had not sworn allegiance to any other political organization than the one to which they had given their public support. In any other circumstances the Labour party would be in an almost impossible position. No doubt **Mr. McKell** appreciated the position in the Railways Union and the difficulties which must necessarily arise with men like **Mr. Ross.** It would be very difficult, he declared, for the Labour party to carry out the duties of government in such circumstances. I offered the comment that a government would he in an intolerable position, and that therefore his duty at that stage, even from the point of view of his own political preservation and his right to exercise his authority, was surely to help to install in the executive and official positions men free from the Communist party who would work for the party's good, no matter what the circumstances might be. I talked to certain prominent trade union leaders in the same way. I am justified in making these remarks because I have been accused of having acted with premeditation, and of having paid no regard whatever to the necessity " to keep the party together ". It has been said that I am not concerned for what has occurred, and that I had no desire to avoid it. Perhaps the gentlemen who have made such remarks will later regret them. Unfortunately those to whom I addressed myself were not in a position to guarantee that they could do anything, although they knew something should be done. The position was that they did not know how strong their forces were, or how far they could go. They were, in fact, in a quandary. The leaders of the trade unions and political groups to which I am referring are generally able to determine, with some degree of accuracy, the nature of the conferences with which they are connected. They are able usually to judge the character and composition of a conference, and how it is likely to vote on major questions. Unfortunately these men, including **Mr. McKell,** who were supposed to be in charge ofthe Easter conference were not in that position. They could not say who was who or what was what. That was proved conclusively on Good Friday morning soon after the conference first met. We all know that delegates were admitted to the conference as accredited Australian Labour party delegates who had been refused admission to the unity conference by **Mr. Fallon** on account of their associations with the Communist party. This was the first time in the history of the Labour movement, to my knowledge, when no official list of accredited delegates was available. {: .speaker-KLC} ##### Mr Mahoney: -- Did the honorable member object? {: .speaker-JOM} ##### Mr BEASLEY: -- I was not a member of the conference. {: .speaker-KLC} ##### Mr Mahoney: -- Did any of the honorable gentleman's friends object? {: .speaker-JOM} ##### Mr BEASLEY: -- I have never known of a previous Labour conference at which delegates were accepted without their names being recorded, but on this occasion they were accepted *en bloc.* The interesting point is that, although the chairman of the conference held the authority of the federal president of the party to dislodge from the conference any delegates who had been refused attendance at the previous conference, no action was taken in that way. {: .speaker-KZF} ##### Mr Lane: -- There must be some " crooks " at the top. *The honorable member for Denison interjecting,* {: .speaker-10000} ##### Mr SPEAKER: -- The honorable member for Denison **(Mr. Mahoney)** must cease interjecting or I shall have to take action. {: .speaker-JOM} ##### Mr BEASLEY: -- I am not saying anything about " crooks ". I am simply discussing the battle - and I can call it that - for strategic positions at the conference. There was a struggle between the two political groups, the Communist party on the one side and the Labour party on the other, and the Communist party was successful. I am quite prepared to admit that such struggles are likely, but in this case I was sorry to know thatno help was forthcoming from certain quarters from which we were entitled to expect it. The next development at the conference occurred when the time arrived for the appointment of a committee to consider the international situation and foreign policy. It was then obvious that the organization of the conference was in the hands of Labour's political enemies. When the nominations were submitted it was obvious that the General Secretary, **Mr. Evans,had** been working underneath **Mr. McKell** and other trade union supporters of the Australian Labour party; and the real power in the conference was about to be displayed and an alliance between the head office and the Communist party was about to show itself in practical form. *Sitting suspended from 6.15 to 8 p.m.* {: .speaker-JOM} ##### Mr BEASLEY: -- The committee that was appointed to report on the Labour party's foreign policy consisted of **Mr. Ross,** of the Australian Railways Union, who had not been permitted to attend the unity conference at which the federal president had presided; another man named Gollan, and **Mr. Hughes,** who is president of the Trades and Labour Council. Those three men undoubtedly attended the Easter conference in order to give effect to the Communist party's war and foreign policy. **Mr. McKell,** the leader of the New South Wales Labour party, was associatedwith the committee in an advisory capacity, and I understand that he advised it to adopt the policy which has been endorsed by the Federal Labour party in this House. But, of course, the committee did not want that policy. It wanted to implement the Communist party's foreign policy, and as the people throughout Australia know, it succeeded in committing the Easter conference to the " hands off Russia " resolution. **Mr. McKell** addressed the conference on the following day. Many people who believed that the " hands off Russia " policy was diametrically opposed to the interests of the Australian Labour party, believed that he would denounce the resolution and seek to have it rescinded. But such was not the case. I put it to all those who have an interest in the success of the Labour movement, that the passing of this Communist resolution caused more harm politically to the Australian Labour party than any other episode in its history. My answer to the attacks which have been made upon me and my colleagues in this new non-Communist Labour party, to the effect that our action has damaged Labour's prospects at the next election, is that the greatest damage *that* has ever been done to the movement was done by Messrs.Ross, Gollan and Hughes, who were responsible for the carrying of the resolution in question. My colleagues concur in that. I, therefore, fail to understand why attacks have been launched against myself and my colleagues instead of against those men. Members of the Opposition in this House should now be directing their violence, if I may use that term, against those Communists who have caused so much embarrassment to the Labour party not only in New South Wales but also throughout the Commonwealth. {: .speaker-KLC} ##### Mr Mahoney: -- We have repudiated that resolution. {: .speaker-JOM} ##### Mr BEASLEY: -- I shall deal with that interjection later. According to reports published in the press this morning, the Leader of the Opposition used the term " renegades " in his references to myself and my colleagues for the action which we have taken in the Labour movement. I hand that epithet back to the honorable gentleman with all the vigour Ipossess, and I invite him to direct his attack against those renegades who were permitted to enter the Easterconference, although they had no right todo so. A State executive was elected at that conference. Its membership of 32 includes only eleven men who do not represent the Communist party or support Communist policy. That is an appalling state of affairs in the Labour movement. The honorable member for Denison has said that we have been told to fight the Communist menace from within. It is obvious that the honorable gentleman fails to understand or appreciate the position which actually exists. {: .speaker-KLC} ##### Mr Mahoney: -- The honorable member ran away; he should tell the truth. **Mr. SPEAKER (Hon. G. J. Bell).Order!** I shall name the honorable member for Denison if he persists in interjecting. {: .speaker-JOM} ##### Mr BEASLEY: -- Immediately this executive was elected it set out, without hesitation, to justify this new policy to the full. It did not recant. Instead it went straight out into the electorates in order to turn the people in favour of the resolution carried at the Easter conference. **Mr. Evans,** the general secretary of the conference, and **Mr. Hughes,** the senior vice-president of the Australian Labour party, went to the northern districts and spoke in the Newcastle and Cessnock areas in justification of this new foreign policy. They fought for it in public. That showed quite clearly where they stood. Naturally, their action caused a stir in the Labour movement. The " hands off Russia " policy was almost universally repudiated by Labour supporters. Branches of the Labour party throughout the State, and trade unions one after the other, passed resolutions disowning the new foreign policy. I say to the honorable member for Hindmarsh **(Mr. Makin)** if he will listen- {: .speaker-KLL} ##### Mr Makin: -- The honorable member is a renegade. {: .speaker-JOM} ##### Mr BEASLEY: -- I hand back that remark with double effect. The point I wish to stress is that the men who sponsored this new policy at the Easter conference, and who continued to justify its adoption after it had been repudiated, are still in control of the Labour party. And these are the men to whom I was asked to pledge my loyalty, to give an undertaking that I would obey their direction, and concur in their policy although I, as well as the Leader of the Opposition, and other important members of the Labour movement, had condemned it. [Further *leave to continue given.]* Following upon the repudiation of the " hands off Russia " resolution, it became necessary to test the feeling of the movement on the matter. Members of the federal executive from all States hastened to Sydney to deal with the problem, because they realized to the full the important effect it would have on the future of the Labour movement. I believe that manyof them understood the full implication of the resolution. I know that the Leader of the Opposition did, because I had a long discussion on the subject with him in Melbourne. We both realized the danger attached to it. I give him the credit of being alarmed about the situation. I fully believe that he did not approve of the resolution. He considered that the situation in New South Wales was serious and required very drastic action - not the "whitewashing" action of merely carrying resolutions, but action of a character that would strike right at the seat of the trouble and remove it entirely from the movement. When the federal executive met in Sydney, nearly all of the federal parliamentary members expressed their opinions to their leader. I shall not discuss those opinions unless circumstances should arise which would warrant my doing so. To put it frankly, however, those members considered, in common with myself and many others, that the only way in which the party could be returned to its proper place in the estimation of the electors was to take control of the party from those men who were responsible for the " hands off Russia " policy. State parliamentary members of the party carried a resolution asking for a very close in-: vestigation of the credentials of delegates who attended the Easter conference, but, so far as I am aware, an investigation was not made. Such an inquiry would have revealed the fact that the conference had been attended by men who had no right to do so. The federal executive's meetings lasted for some days. I have not had access to the records of its proceedings, but according to statements published in the press, which I have had confirmed from reliable sources, the Leader of the Opposition expressed to the executive the same views that he had given to me. Those views were not accepted by the executive, however, and I believe that was, in effect, an expression of lack of confidence in him as leader of the federal parliamentary party. When we learned that certain subjects were being discussed by the executive, a number of federal parliamentary members, including myself, petitioned the meeting for permission to address it in order that we might express our opinions. That request was refused. The executive finally decided to direct the State executive to expunge from its records the infamous " hands off Russia " resolution. That decision was made on the Friday. On the following day, **Mr. Denford,** a prominent member of the State executive, addressed the Robertson Federal Electoral Council of the Labour party, and successfully urged it to endorse the foreign policy enunciated at the Easter conference. He went to great pains to tell the council what the State executive intended to do to myself and others who had refused to support the conference resolution. A panic resulted in the ranks of the Labour movement. On the following Wednesday, a special meeting of the State executive was summoned in an endeavour to secure support from quarters which were apathetic, if not hostile, to its Communist policy. A form of pledge was handed to State members of Parliament with the intimation that, if they signed it, they would receive official endorsement for seats which, in some instances, no longer exist. In the redistribution of electorates in New South Wales, some of the old constituencies have been eliminated and the State executive actually had the audacity to issue endorsements to members for seats in Parliament while their electorates have ceased to exist. This panic effort on the part of the Communist-controlled executive was to try to stem the tide of opposition to them. The decision to expunge the " hands off Russia " resolution from the records of the Easter conference was made on a Wednesday. On Friday of the following week, at the Australasian Council of Trade Unions Congress, **Mr. Hughes,** the senior vice-president of the Trades and Labour Council, and **Mr. Glasson,** of the Wool and Basil Workers Union, who had actually voted for the deletion of the resolution, reversed their stand and voted in favour of it. Perhaps the most telling indictment of the pro-Russian policy is the statement by **Mr. Lloyd** Ross, undoubtedly the principal mover in the whole scheme, who wrote in the Sydney *Daily Telegraph* of the 21st April - >Room 32 - that is the Australian Labour party room - was worth a retreat; but no retreat can alter the outlook of the rank and file. The resolution to expunge the " hands oft Russia " policy from the records was allowed to be passed only because the policy of the Communist party is to agree to any resolution, or to sign any pledge, if by so doing the party can gain its objective. In order to secure admission to conferences representatives of the Communist party signed pledges in which they did npt believe, and they agreed to cancel the pro-Russia resolution simply because their strategy is to agree to anything if it will help to give them control over the Labour movement. As I have told supporters in my electorate, it is easy to understand the attitude of the Communists in this matter. No reliance can be placed upon men of this type and character. It was tlie duty of the federal executive to deal with them effectively and not merely to carry a pious resolution asking for the expunging of certain records. Since the record was expunged assemblies and branches of the movement have endorsed the foreign policy of the Easter conference. Only last Saturday an assembly at Thirroul endorsed the resolulution which the federal executive directed should be expunged. Those are facts which we who have taken a stand in this matter think that the people ought to know. **Mr. Denford,** who is now on the executive of the Australian Labour party, was not admitted to the conference presided over by **Mr. Fallon** last year. This state of affairs is not peculiar to Now South Wales. In Western Australia two years ago the State executive took immediate steps to remove a man who was a member of another political organization - the Communist party. It did not heat about the bush. Similarly, in Victoria the State executive has taken drastic action. Only on last Labour Day did the executive in that State remove from the business-paper of a women's conference certain motions which were in conflict with the policy of the party. That was done in order to prevent those matters from being discussed by people who would probably carry embarrassing resolutions. They also took steps to expel a number of persons from the movement. That was done on evidence contained in minutes of the Communist party on which their names appeared. In Tasmania, not long after the Ogilvie Government came into office, **Mr. Morrow,** a member of the Railways Union, was dealt with. Apparently, he was sent there to create difficulties, but the Tasmanian executive took definite action. Similar action was taken in connexion with the Western Australian miners. The Australian Workers Union in Sydney had two delegates on the council -Messrs. Jefferies and McPhillips - but they were withdrawn. **Mr. McPhillips** is at the present time secretary of the Australian Labour party branch in the Cook electorate. The position in regard to the Australian Workers Union in Sydney is borne out. by an answer given by the Attorney-General **(Mr. Hughes)** to a question in this House. {: .speaker-JTY} ##### Mr Archie Cameron: -- The honorable gentleman should tell the House what the Australian Workers Union did in Kalgoorlie. {: .speaker-JOM} ##### Mr BEASLEY: -- If the Australian Workers Union believes that the situation warrants action, why has it singled me out for attack? {: .speaker-KYC} ##### Mr Pollard: -- The honorable gentleman has run away. {: .speaker-JOM} ##### Mr BEASLEY: -- The honorable member accuses me of having run away. If ever a man tried to find a way out of the situation which had arisen, I did. I make that claim definitely. {: .speaker-KLC} ##### Mr Mahoney: -- The honorable gentleman ran out on his colleagues. {: .speaker-JOM} ##### Mr BEASLEY: -- That charge cannot be sustained. No doubt I shall be charged with all sorts of things. Accusations of various kinds will he made against me. My record in the movement cannot be besmirched by any attacks that will be made by those who follow me in this debate. The answer to any such charge is the fact that my own electorate has endorsed my action in relation to the Labour party; 95 per cent, of the rank and file have endorsed my stand in this matter, and my own electorate council, with only one dissentient, approved of my action a week ago. In this matter they are better judges than any one else can possibly be. The facts which I have given to the House reveal the conditions that prevail in the Labour party. For many years I have been actively associated with the trade unions, and associated with many conferences, but there is no justification for the charges which have been laid against me, and are likely to be repeated to-day. I am aware of the position of the Labour party in Great Britain and elsewhere, and have watched, like many others, the actions of the Union of Soviet Socialist Republics; but I alongwith others should never have believed that Russia would line itself as one of the chief aggressors in Europe and under Stalin rain down upon innocent women and children death in such devastating methods as happened in Poland and Finland. Time will not permitme to bring before the House the situation confronting the Labour movement, not only in the Commonwealth, but also in Great Britain, France and elsewhere. I cannot understand why men, who I believe are capable of fighting against the intrusions of communism more stoutly probably than I am capable of doing, should engage in a barrage of interjections in this House to-day which can only be regarded as evidence that they either approve of the Communist control of the Labour party or have not the courage to fight it. {: #subdebate-23-0-s4 .speaker-L07} ##### Mr LAZZARINI:
Werriwa .- Having listened to the speech of the honorable member for West Sydney **(Mr. Beasley)** made under the privilege of Parliament, and whose remarks, as recorded in *Hansard,* cannot be made the basis of a charge of libel, I wish to make it clear at the outset that whatever I shall say to-night I am willing to repeat on the public platform. I challenge the honorable member for West Sydney to do the same. It is easy for him, from his place in this chamber, to make charges against members of the party to which ho previously belonged. When an attempt was made to broadcast similar remarks, permission was refused on the ground that there was danger of a charge of slander being sustained. The honorable member knows that his remarks, as recorded in *Hansard,* cannot be made the ground for a charge of libel. The courts of this land have held that it is libellous to call a man a Communist unless his association with the Communist party can be proved. It is easy to take refuge in a coward's castle and make wild assertions against men who cannot defend themselves. It has been said that the Communist party and the activities of Communists forced the federal executive of the Australian Labour party in New South Wales to call a unity conference. The facts are that men and women in the Labour movement in New South Wales asked the federal executive to destroy the Communist element which was endeavouring to use the very methods by which Stalin does his deadly work. When the movement attempted to rid the party of its dictatorship, the electors in two byelections, one of which was in the Waverley electorate, which had been a Labour stronghold for many years, elected men who were alleged to be Communists. The federal executive realized that something had to be done with one man who, notwithstanding that he had had behind him the prestige and support of the Labour movement, could not win a by-election for his party. When during those tragic five years I saw one section of the party slandering another section, I swore an oath to myself that never again would I leave the Australian Labour party unless it be to retire from politics altogether. That oath I intend to keep. I wish that I could raise before honorable members opposite a mirror which would enable them to see not only their own reflections but also the shrunken and ugly things which they call their souls. For several days honorable gentlemen opposite, from the Prime Minister **(Mr. Menzies)** down, have, with nauseating repetition, talked of Communist influences in the Labour party. Not a word about such influences was said before the war began. They want to associate communism with the Labour party, and to prove that Communist influences are dictating a " go-slow " policy in' connexion with the war effort. They are not so greatly concerned with the war policy of the Labour party as with associating that party with communism. On public platforms during the Corio byelection campaign, as well as in this chamber from the very commencement of this session, accusations of Communist influences in the Labour party have been levelled against the Opposition. To-night, when the honorable member for West Sydney rose to speak, Ministers and supporters of the Government flocked into the chamber and with loud guffaws applauded a man who supports a policy which, from their point of view, is more extreme than communism itself. The honorable member for West Sydney is a staunch supporter of **Mr. Lang,** who, for several weeks in his publication, has demanded the withdrawal of Australian troops from Europe, and has said that Australia should not provide a man or a shilling. That is the policy to which the honorable member for West Sydney subscribes. About six weeks ago, **Mr. Lang** addressed a meeting in Sydney at which the honorable member for West Sydney also spoke. One of his chief heelers in this Parliament - I refer to **Senator Armstrong** - said that the Labour party should do its utmost to stop any man from volunteering. Yet, to-night, honorable members opposite applauded the honorable member for West Sydney because they thought that his remarks might cause them to gain a political advantage. The right honorable member for Cowper **(Sir Earle Page),** who said a short time ago that he did not care a damn about elections because he was chiefly concerned with winning the war, was a most attentive listener to the honorable member for West Sydney, because he was most keen to derive a paltry political advantage from the occasion. Honorable members opposite know that what I am saying is true; they cannot deny it. There are some people in this country who would erect a scaffold and cut off the head of the King if he stood against vested interests. Such an attitude is a disgrace to this national Parliament and a .reflection on the fair name of Australia. Notwithstanding that the nation is in desperate straits, honorable members opposite cheer a man who at other times they will howl down. Their only concern is to gain a political advantage which will save them from tlie anger of the democracy because of their mismanagement of the war and of economic and social conditions generally in this country. They think that they will secure a new lease of life, so that they may be able to continue to support the monopolists, the profiteers, and the financial thugs that they represent in this country. For this purpose, they will ally themselves with anybody. I predict now that if Russia were to range itself on the side of the Allies, the Prime Minister and Billy Orr would find themselves on the same recruiting platform. I am reminded of the penetrating wisdom, which applied not only to his own generation, but also to all generations, embodied in the statement of **Dr. Johnson,** that the plea of patriotism is the last refuge of scoundrels. Labour has always fought Communists. I have fought them whilst the honorable member for West Sydney sat cheek by jowl with them trying to force them into the Labour movement. The general principle of branding Labour as the agent of revolution, the Communists, the Industrial Workers of the World, or any other organization, is not a thing of to-day, or of yesterday; it goes back to the days of the initiation of Labour, to the days of the growth and the development of the Labour movement in thiscountry. In 1890-91, a great industrial rebellion and revolution took place in this country against the sweating halls which then existed, in this fair land. When the attempt was made to legislate for the restriction of hours and the betterment of conditions, the chairman of the employers in Melbourne said : " This kind of legislation never did a country any good. England has allowed unrestricted sweating, arid has built up a nation unparalleled in industry. Yon cannot win a war without killing a lot of men; you cannot carry on industry without breaking up a lot of men". The Labour movement was beaten and battered and left quivering. Those who witnessed the dissolution conceived the idea of political action, and from that day to this there has been a repetition of lies, calumny, and misrepresentation, because those who are opposed to ns know that once the people learn the truth they will not live for a day in this democratic land of Australia. I could continue in this strain for a long time. I can remember the bogy of the " Socialist tiger ". I can recall even the little figure of the right honorable the Attorney-General **(Mr. Hughes)** appearing on hoardings in the garb of a ferocious bandit, or something of the sort. He and the late AndrewFisher were depicted as pulling the child from the mother's breast. It was said that Labour would disrupt the marriage tie - the liars ! - and would tear the child from its mother's breastliars again! This went on all of the time. To-day it is revived by the honorable member for West Sydney. The Attorney-General, now a member of the Cabinet, was once a revolutionary Socialist. He, **Mr. D.** R. Hall, who later became Attorney-General in an antiLabour Government in New South Wales, and one or two others, had a little school of revolutionary Socialists which met in Darlinghurst. They were told by the Labour movement, "If you want to preach revolution, you can do so, but not inside the Labour movement". They were branded as traitors. The late W. A. Holman was a member of this House for a while. As a young man he said on the floor of the State Parliament of New South Wales that he hoped that the Boers would win the South African war, and that the British forces would be annihilated. We had to carry him on our backs for a while, and had to try to explain that Labour did not support that attitude, although it did not support the Boer War. This man would have been hanged if those in authority at the time had had their way. Holman was put in gaol, but was released as the result of an appeal. His photo remained in the "rogues' gallery " for ten years, and was used as a weapon in the fight against Labour. It could not be removed from the "rogues' gallery " until Labour made him Attorney-General, when he had it removed himself. Even with that record, he was taken into the arms of the party that sits opposite. He was made Premier of New South Wales, and had he so desired could have obtained the highest titles in the land. Thus has the party opposite picked up all of the Labour rats ; and it will pick up some more directly. We had in the ranks of the Labour party Tom Walsh and **Mrs.** Walsh. The attempt was made to deport the husband. Members of the police force were sent to raid his home when his wife was within three weeks of her confinement Now Tom Walsh and **Mrs. Walsh** are honoured and cheered when they appear on the platform of the United Australia party in Sydney. I make these observations merely in order to show how ready arc honorable members opposite to take from Labour those who are rats and renegades, with the object of fouling the nest of Labour. I come now to the latest person or persons to join the ranks of the detractors of Labour. I say that the honorable member for West Sydney has done more than any 50 men in New South Wales to leave the door wide open for Communists to obtain entry to the Labour party. I fought the Communists while he was fighting on the New South Wales executive to prevent them from being expelled from the Labour party. This man has been linked with more unsavoury associations - as he terms them - than has any man in this chamber or any ten or twenty men in New South Wales. He began as a non-unionist in industry. He refused to join the Electrical Trades Union in Victoria, when he was working as a fitter's assistant in a power house at Werribee. He said that he and his family were opposed to trade unionism. He worked at Port Pirie as a non-unionist. When he applied for a job at Cockatoo Island dockyard, and could not obtain it unless he was a unionist, he wired to the secretary of the Electrical Trades Union and asked to be advised as to what steps he should take in order to become a member of a union. {: .speaker-KZF} ##### Mr Lane: -- He has been a friend of the honorable member's for a long time. {: .speaker-L07} ##### Mr LAZZARINI: -- He has not. I tolerated him - no more. He knows that, and so does his executive, which paid the expenses of men to fight me in the selection ballot. They sooled on these men because they wanted Lazzarini to have time to work in his garden after the next elections. We shall see about that. The honorable member says that he is out to fight the Communists. I tell him that on his present executive he has two exCommunists. I am prepared to repeat on a public platform whatever I say in this House. I challenge him to deny any word of it, and, if he cares to do so, to take me to the courts. I say that the honorable gentleman has on his executive a man named Lionel Leece, late secretary of the Communist party and one of the chief agitators in the Communist movement. He has always been associated with the honorable member, and is always slinking round with a view to causing a disturbance. When I spoke in the Domain on one occasion on behalf of Labour, I was heckled by him on behalf of the Communist party. So I repeat that the honorable member is merely continuing old associations when he has these people associated with him in his party. Then we have the secretary of the Australian Railways Union, **Dr. Lloyd** Ross, who, singularly enough, is secretary of the same movement as that of which the late Arthur Chapman, alleged to be a Communist, was secretary. I do not say that the late gentleman was a Communist; but, without wishing to be disrespectful, yet in order to indicate that he was so inclined, I tell honorable members that I heard one of the " comrades " describe his funeral as a " revolutionary funeral " - a plain coffin, wrapped in a red flag, with " The Red Flag " being sung while he was being incinerated at the crematorium. While the *Labor Daily* was struggling for its very existence as the mouthpiece of the Labour movement in New South Wales, Chapman and a few others staged a street stunt, picked up all the riff-raff and, led by the honorable member for West Sydney, conducted a street demonstration against that newspaper. Yet that honorable member comes here and casts aspersions on men like myself and other gentlemen who have fought the Communists. Go down to the South Coast and ask whether I have ever refused to lock horns with these gentlemen. It is only within the last few days that there have been such a lot of Communists about. The recent municipal elections in Brisbane have shown how many Communists there are in that city. It will be found that the Communists lose their deposits whenever they go to the polls. The Minister for the Interior does not refuse to accept their £25 because H might come from Russia. I am not letting any secrets out of the bag when I say that there is one difficulty associated with the Labour organization. We have a rule that a trade union affiliates with the Australian Labour party on its membership. It is not possible to question every member of a trade union. I have seen members of the trade union movement led astray by silly humbug. I have seen sitting outside polling booths trade unionists who are so stupid, and so ignorant of their own interests, as to hand out "how to vote " cards issued by the United Australia party and United Country party. {: .speaker-JTY} ##### Mr Archie Cameron: -- I do not doubt it. {: .speaker-L07} ##### Mr LAZZARINI: -- It is true. But, by reason of their affiliation with the trade union movement, they have the right to say at the pre-selection ballot in my -electorate whether I or somebody else shall be the selected candidate for that electorate. It is no secret that that has always been the case in the Labour party. The world knows it. Because of that we always have a rule, which was operated and obeyed at the unity conference and at the Easter conference - the records are there to prove it - that no delegate could get to a Labour party conference without signing the pledge and platform of the Australian Labour party, and without making a declaration that he belonged to no other political party. That solemn declaration had to be witnessed by two members of the executive or two officials of the party. Whether a man represented a trade union or the Australian Labour party it mattered not. Nevertheless, from 1924 to 1926, when the honorable mem'ber for West Sydney was president of or associated with tho Trades and Labour Council at conferences, either he or someone on his behalf moved a stock resolution the words of which were to this effect: - >That the trade union movement should have representation at the Australian Labour party conference and have the right to elect its own representatives irrespective of what political party they belong to. The resolution -which was championed by the honorable member was the first insidious attempt to allow Communists into the Labour movement. I have myself heard the honorable member demand that the trade union movement be given the right to elect Communists to take part in the deliberations of the Australian Labour party. About 1925 or 1926 the charge was levelled at a meeting of the executive of the party in New South "Wales that one member of the executive and five or sis others associated with the party were Communists, and a motion was moved that they be expelled from the party. The leader of the opposition to that resolution, and the man who stood up and fought for Communists to be allowed to remain in the party, was none other than the honorable member for West Sydney, who now says that he is out to fight to the death to rid the Labour movement of Communists. Than the honorable member and his leader outside, there was no one more responsible for the infiltration of Communists into the party. This man who is dressed in armour and avowed to kill the Communists told my own brother and other Labour members in the Legislative Assembly of New South Wales that if they did not vote for a man known to be a Communist, they would be disciplined. That man who was put in the panel for election to the Upper House of New South Wales - not by **Mr. Lang,** but by his secretary - was one who had been in this country hardly five minutes, and others needed an interpreter to know what he was saying. We come to the famous " hands off Russia " resolution. That resolution was stimulated, aided, and abetted by the honorable member for West Sydney and his ilk to make an excuse for the creation of the new party which had already been formed in essence. I was on the platform. So was the honorable member for East Sydney **(Mr. Ward)** who wanted to oppose the resolution and to point out what it meant. I told him that I intended to support him. The honorable member for East Sydney has already spoken in this debate, but at the first opportunity he will bear out what I say. There is, however, a rule in the Australian Labour party, a good rule, that members of Parliament cannot be delegates to party conferences and may speak only if invited to do so. The reverse used to be the case and nobody but members of Parliament ever had the opportunity to speak. Had we been allowed to speak we could have pointed out what the resolution meant. Lloyd Ross would never have been heard, but for the fact that Alderman E. C. O'Dea demanded that he be heard. On the subject of O'Dea, what do honorable members think of a man who, on Good Friday, when the banks were dosed, cashed a cheque for £65, in order to get his delegates to the conference and then, when the banks opened on the Tuesday, had his cheque returned endorsed, " No funds to meet it " ? It was by means of that cheque that O'Dea got his men to the conference in order to vote for the " hands off Russia " resolution. That is the sort of thing that honorable gentlemen opposite cheer at. They condone it because they reap political benefit. {: .speaker-KZX} ##### Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936 -- Who is Ernie O'Dea? {: .speaker-L07} ##### Mr LAZZARINI: -- O'Dea of the Shop Assistants Union. {: .speaker-KZX} ##### Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936 -- What is his party ? {: .speaker-L07} ##### Mr LAZZARINI: -- He is a member of the executive of the party to which the honorable member for West Sydney belongs. I have stated the facts and I defy contradiction. The honorable member for West Sydney talks about management of conferences. We do not " manage " conferences. Conferences were " managed " in the old days when only " yes " men could get the call from the president. This is the position : I say emphatically that Lloyd Ross would never have spoken at the conference had it not been for Ernie O'Dea demanding that he bo allowed to do so. The resolution itself would never have been put before the conference but for the fact that **Mr. P.** J. Keller, who is now secretary of the breakaway party, demanded that the whole of the resolution be put *in globo,* after the agenda committee had removed it from the agenda on the ground that it concerned foreign affairs and was to be dissociated from defence. {: .speaker-KZX} ##### Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936 -- Who is Keller? {: .speaker-L07} ##### Mr LAZZARINI: -He lived in my electorate for a long time. Go down the South Coast and ask the hoys. They will tell you who he is and what he is. He belongs to the new party. He is now one of the great exponents of anti-communism, but I never heard of his being referred to as anything else than a " Com " or a " near Com " on the South Coast. He embarrassed me once by taking the chair for a notorious Communist, Ned Kavanagh, and others. When the "hands off Russia " section was deleted, Ernie O'Dea jumped up from where he was sitting in front of Lloyd Ross and they both yarned together. Then Keller demanded that Lloyd Ross be heard. To prove that that is so, Lloyd Ross opened by saying, " For **Mr. Keller** to demand that 1 be heard, at the conference reminds me of ' Come into the parlour said the spider to the fly.' ". Lloyd Ross, like a goat, went into Keller's parlour. More adherents of the new party voted for the " hands off Russia " resolution than did other delegates. Why? Because they had to have the resolution carried; otherwise they would have had no excuse for the party in process of formation. Now they are out to break the Labour party. It was the Communist element which joined with the honorable member for West Sydney in forging the weapon that would help to smash the party. We have heard a lot about Russia. The Russian propaganda is dangerous. Communism is a thing to which no person who has Christian faith could ally himself. To say that I am allied to Communists is an insult, because I take second place to no man in my profession of trying to be a Christian and in my subscription to the Christian faith. I have with me a publication which was written when Russia was knocking Christianity and everything represented by Christianity more even than to-day. Russia's slogans were anti-Christ. The Marxist religion is " Chloroform the worker ". I have no time to go into the intellectual basis on which communism is founded, but no one who subscribes to the teachings of Marx and Engels could do other than deny the existence of God, and could not conform to the ethics of Christianity, because to the Marxists there is no such thing as the ultimate right or ultimate truth. Tho Marxists base their reasoning on the dialectics of Hegel and others who preceded him: Marxism is a mixture of thesis, antithesis and synthesis. *[Leave- to continue given."]* No man could ever flirt with communism without flirting with atheism. I have here a photographic reproduction of an article in the *Communist* - they were honest then, they did not call it the *Workers' Weekly* - which was written on the 7th November, 1922, by one, John Beasley. It reads as follows : - >Attempting to comment upon the wonderful achievement of the Russian workers in overthrowing capital domination in their country forces one to acknowledge the fact that words fail to give the desired impression. When we consider just briefly the enormous power wielded by capitalism in our own midst, it forces the most biased mind to acknowledge that the Russian revolution is the moat wonderful accomplishment ever recorded in the anno ls of history. {: .speaker-JOM} ##### Mr Beasley: -- Who is the author of that hook? {: .speaker-L07} ##### Mr LAZZARINI: -- Never mind. This is a photographic reproduction. The article continues - >In spite of military pressure (backed by financial interests) from all points of the compass, they have maintained their entity mid in such a way that they not only' command the respect and admiration of their own class, hut also of those who have been their, most formidable enemies. > >By that I mean to infer that the leading diplomats in the last European incidents (that of the Near East) acknowledged that no final and satisfactory settlement could be arrived at without Russia being taken into account. > >Workers of other lands more especially those of our own country should watch with keen interest the every-day developments of Russia's new order of society, profit by their experiences, and in doing so set themselves determinedly to accomplish within a very short period that measure of emancipation which the Russian workers now enjoy. {: .speaker-JOM} ##### Mr Beasley: -- Who is the author ? {: .speaker-L07} ##### Mr LAZZARINI: -- This is a photostatic reproduction. {: .speaker-KIX} ##### Mr Hutchinson: -- Yes, but who is the author ? {: .speaker-L07} ##### Mr LAZZARINI: -- This book was written to do the very job that the honorable member is doing to-night. {: .speaker-JOM} ##### Mr Beasley: -- You still haven't told us who the author is. {: .speaker-L07} ##### Mr LAZZARINI: -- A man named Ellis is the author. {: .speaker-JOM} ##### Mr Beasley: -- Ellis, the then secretary of the Country party! {: .speaker-L07} ##### Mr LAZZARINI: -- All right, honorable members may laugh, but let me remind them that fools sometimes rush in where angels fear to tread. As I have said, this was written to do the very job that the honorable member set out to do to-night. It was written, not to prove that the Communists have captured the Labour movement to-day, but that it had captured the party of which the honorable member was then the nominal leader. I am quoting from a photostatic copy of an article in *The Communist.* It was written by the honorable member, and I will give him all the opportunity he likes outside this House to take action for libel against me. This article was written to prove the capture of the Lang party by Communists, instructed from Moscow. During the week-end; I was talking to a little lady who was a member of the executive for years with the honorable member for. West Sydney. She said that he was always known by the name of " Red Beasley ", and she declared that she was ready to repeat that in the honorable member's own electorate. Here is my final word : Labour's record of legislative activity in this country stands. No party that attacked Labour measures as they were going through Parliament in any of the States has ever, when it subsequently got into power, repealed a measure of any importance placed on the statute-book by a Labour government. Never has any Labour government done anything except in conformity with the policy which the party has always advocated. The Labour party has always maintained that there is only one way in which to rectify social wrongs, namely, to educate men to achieve their ends by brains, instead of force. The Labour party knows that there is much that needs reforming in our present system, that there is a great deal wrong with capitalism, but it believes that violence only breeds violence. It has steadfastly advocated the ballot as a means of reform, rather than the bullet. Whoever says differently of us lies consciously and maliciously in order to gain political advantage. He brands himself as the prince of liars, worthy to be ranked with Ananias. The Labour party pins its faith to the old formula - The golden mein is God's delight, Extremes are hateful in His sight, Hold to the mein, or justify Nor anarchy nor slavery. Mr.ROSEVEAR (Dalley) [9.3].- In the ancient Roman Senate, when some one got up to advocate a new line of thought, or to put forward a point of view that was unpopular with the majority, the others resorted to the policy known as vituperatio - the policy of vituperation, which consisted in attacking the man rather than his policy. Many great menwere destroyed in that way. It is appropriate that some one of the type of the honorable member for Werriwa **(Mr. Lazzarini)** should be chosen for this task at this time. {: .speaker-KMZ} ##### Mr Martens: -- He did an excellent job, too. {: #subdebate-23-0-s5 .speaker-L08} ##### Mr ROSEVEAR:
DALLEY, NEW SOUTH WALES -- Whetheror not the honorable member did a good job, the fact remains that there are certain aspects of this case which cannot be disguised or disposed of by vituperation. Above all, the honorable member's charges cannot in any way apply to me. I have never been known as " Red Jack ", nor as an associate of Communists. Today, because I have refused to associate with Communists or a State executive dominated by Communists, I have been refused selection by the executive for the next election. The price I was asked to pay for selection was that I should support the action of the executive without question. Even if we had accepted selection under those terms, the executive might under a new rule, without laying any charge or giving any reason, chop one's head off whenever it chose. Even if the much-maligned Beasley and Lang had accepted the bribe, and subscribed to the oath of allegiance to the executive, one of the conditions of their acceptance was that they should discontinue to refer in the newspaper *Century* controlled by them to the penetration of the Labour party in New South Wales by the Communists. They were to be given to understand that, unless they used their position as directors of that paper to prevent it from continuing to write against communism, they would go overboard. {: .speaker-KX7} ##### Mr Ward: -- The honorable member means that they were required to cease attacking the Labour party. {: .speaker-L08} ##### Mr ROSEVEAR: -- The position is as I have stated it, and that was the price that Lang and Beasley were to pay for selection. I have heard honorable members asking, " What are you getting out of this exposure?" That is cheap criticism. Anything said in this House must bo said in the hearing of all honorable members, and I fail to see much difference between the action of the honorable member for West Sydney in attacking the New South Wales executive of the Labour party in the presence of the United Australia party and Country party members, and the action of the Leader of the Opposition **(Mr. Curtin)** in maliciously attacking, in the columns of the anti-Labour press this morning, some of the most loyal men in the Labour movement. In the anti-Labour press the honorable member referred to me, along with my colleagues, as a renegade, because I have taken my political life in my hands in support of my principles, because I have refused a bribe to renounce my opinions, because I believe that if communism is not fought and defeated in the Labour party in New South Wales, it will destroy the Labour party all over Australia. I am told that I am a renegade because I have refused to take the bribe of a free run into Parliament. The honorable member for Werriwa said that the formation of this party was contemplated a long time ago. I give him the lie to his teeth. This situation could have been avoided if the Federal Labour party's executive had insisted upon the application in New South Wales of a policy that would have effectively brought the control of the party in that State into line with the system operating in the other States. Instead of that, however, it shirked the job, and " whitewashed " the controlling authority in New South Wales. Reference has been made to the famous " hands off Russia " resolution. I do not say for one moment that all of the delegates to the conference, or even half of them, had Communist sympathies, but I do say that the party managers who stacked the conference had control of a blind following who probably did not know the real implications of what they were voting for. The facts cannot be denied. **Mr. Lloyd** Ross, the notorious Communist and secretary of the Australian Railways Union, was denied admittance by the federal executive to the unity conference, but he showed up at the Easter conference which passed the " hands off Russia " resolution. The same can be said of **Mr. Gollan. Mr. Hughes** was not in the same category, but he was one of the committee with Gollan and Ross which drew up the so-called war policy of the party. Two of those men possess academic degrees; one is a high school teacher. One of them has had experience in drafting thousands of resolutions, and is well acquainted with the value of words. Those men came to the conference with a report that they knew their pliant majority would accept blindly without examining too closely. They said first that they were against imperialist wars, by which they meant that they objected to troops being sent overseas. They declared themselves to be opposed to the sending of troops overseas a second time, and then, in the tail of the resolution for the third time, they committed themselves, not to "hands off Russia", but to " No attack on Russia ". Of course, it is obvious that if no troops are sent overseas, no attack can be made on Russia or on any other country. All this was in line with the " hands off Russia " doctrine preached by the Communist party in Australia for the last two or three years. Those who framed the resolution knew the value of words, and knew how those words would be used against the Labour party. There can be only one explanation for the use of those words which involved a third repetition. Those who used them were either stupid or they were treacherous but I have already shown that they were not stupid; therefore, they must have been treacherous. The trap was laid because they had a majority. Throughout the length and breadth of Australia the political damage which that resolution would do to the federal party was fully appreciated. The Leader of the Opposition, who charges me with being a renegade, should say whether at that meeting of the federal executive he was or was not in favour of shooting out the State executive lock, stock and barrel. Was it not his desire to have the executive thrown out. He should be candid enough to tell the people why. The honorable member for Werriwa said they were not all lilywhite Labourites. He knew their antecedents and the way they had fought in the political life of this country and said that the sooner we got rid of them the better it would be for the movement. To-day he defends them and has pledged his loyalty to them to save his political skin. He further said that it was useless throwing out the resolution if we did not throw out the people responsible for it. That is what the Leader of the Opposition and the federal executive failed to do. Notwithstanding that they saddled the movement in New South Wales with an executive for twelve months which the Leader of the Opposition said should be thrown out, lock, stock and barrel. Because we were not prepared to pledge ourselves to such an executive in order to get a seat in this Parliament we are told by the Leader of the Opposition in the capitalist press that we are renegades, and because we would not tolerate such conditions we are outside the Labour movement. The Leader of the Opposition said in a statement supplied to the press " There have always been excuses made by renegades who wish to divide the workers ". I want to know - the Leader of the Opposition can use my statement in the antiLabour press to-morrow if he desires - his reason for wishing to throw out the State executive if it is as clean as the honorable member for Werriwa suggests. The honorable member for Werriwa, in that vituperative temperament which fits him for the job, attacked the honorable member for West Sydney, but I remind the House that for six years when he was outside the Federal Labour party he was closely associated with the honorable member for West Sydney. Now, when it suits him, he has signed the pledge of the party until it suits him to switch his allegiance again. In fact, the honorable member for Werriwa, in the presence of every New South Wales member of the party, said, in Sydney, that the only chance of Labour winning a seat was to shoot out these people lock, stock and barrel. Although that statement was made on the 17th April, on the 24th April the honorable member saved his political skin by signing an oath of allegiance to an executive which he said should be thrown out of the movementQuestions have been asked as to where we "get off" to-day. The honorable member for Werriwa speaks of his allegiance to the defence policy of the Australian Labour party. He says that he is in line with the policy of the Labour party, but I challenge him to deny that he was one of the few members who did not assist the Labour party to win the Corio by-election. He did not participate in that campaign because he did not agree with the policy enunciated during the campaign by the Leader of the Opposition. What defence policy does the honorable member support? {: .speaker-KRH} ##### Mr McHugh: -- He did not desert tha patty. {: .speaker-JOM} ##### Mr Beasley: -- He did, because he did not participate in that by-election. {: .speaker-L08} ##### Mr ROSEVEAR: -- I' should like to know what defence policy the honorable member for Werriwa does support. He was against " the hands off Russia " policy and said it must be wiped out, because no one could win a seat until that resolution had been rescinded. One week after an Australian Labour party electorate organization in New South Wales had ordered that the resolution be expunged from the records, the Bulli Labour party, in the centre of the honorable member's electorate, re-affirmed the "hands off Russia " policy, and last Saturday seven branches of the Australian Labour party in the northern part of the electorate, after denouncing the resolution, joined the new party. According to the press the honorable member for Werriwa, speaking in the Domain a few weeks ago on a mixed platform of Communists and Labour speakers, said that it would be a good thing if the capital cities of Australia were bombed by the enemy because work would then be provided for the unemployed. I should like to know on what policy the honorable member proposes to fight the next election. Is he going to support or repudiate the " hands off Russia " resolution, or is he going to tell the simple souls in Werriwa that it would be a good thing if the capital cities were bombed in order to provide work for the unemployed ? He professes loyalty to the Leader of the Opposition and, possibly at his behest, carried out his dirty little job to-night. Only a few weeks ago he had a different opinion concerning his leader, because he refused to assist the party in the Corio by-election, and actually used his influence in an endeavour to get the federal executive of the party to force the Leader of the Opposition to enunciate a different defence policy to that which he had announced in the campaign during that by-election. Last Monday night, when the secretary of the party in New South Wales came to my electorate council, he suffered a very heavy defeat. Amongst other things he referred to the end of the Scullin Government's regime which he said was the greatest piece of treachery in the annals of the Labour movement, Five members of the party were implicated on that occasion, but three of them have now signed the pledge of loyalty. It was said that those concerned were responsible for the greatest piece of scabbery in the history of the party. It is claimed by the honorable member for Werriwa that Lloyd Ross was led into a trap, and that it was a case of the spider and the fly. The very fact that he was lod into a trap was the greatest political exposure of modern time, and an indication of what can happen at such conferences. Had his opponents gone from one end of New South Wales to the other denouncing him for associating with Communists without this evidence few would have believed them. The Labour movement in New South Wales desires to be placed on the same footing as every other branch of the Labour party in the Commonwealth. Reference has been made to a man named Green, who, about eighteen months ago, found his way on to the executive of the Labour party in Western Australia. Immediately it was discovered who he actually was, he was thrown out of the movement, and rightly so. A fortnight ago the Victorian executive decided to investigate the activities of those in the movement who were Communists or who associate with Communists, in order to clear them out. In Tasmania, as- the honorable member for Denison **(Mr. Mahoney)** interjected, they cleared out men who tried to make it impossible for the Labour government to carry on. It is time that honorable members on my right took stock of the position. They will have to do so sooner or later, and they will not remedy or improve the position by referring to those who are fighting this menace to the Labour party in New South Wales as renegades. It is the responsibility of all those associated with the political or industrial side of the movement in New South Wales to do as is being done in the other States, and to realize the importance of the representations made by two of the highest officials of the Australian Workers Union, who asked the Government to amend the Commonwealth arbitration laws in order to ena'ble a union to refuse the nominations of Communists for executive positions. That is an indication of the way in which this menace is viewed by one of the greatest industrial organizations in Australia. I am not affected in the slightest degree by the attack made upon the honorable member for West Sydney, and I suppose thai a similar attack will be made upon mc. It is preferable to state the facts here, because they will be incorrectly recorded in the anti-Labour press. It is useless for honorable members on my right to speak to me about a lack of courage, and to say that I should fight within the movement. Will they defend the Communist controlled New South Wales executive in their own electorates? Had the Leader of the Opposition displayed courage and said that he is the leader of the party and must be obeyed, there would be no difficulty in New South Wales to-day. Had he, as leader of the party, taken- a firm stand against these people he would have increased his prestige in the party, and the position would not be as it is to-day. I am prepared, despite the cheap gibes, to risk -my political future in cleaning up the Labour movement, and removing what is regarded as a menace to the political and industrial section of the party. Wherever a Communist places his leprous touch there is trouble for the "workers. These people have entered the movement and by a policy of terrorism are endeavouring to destroy all that for which we have fought for years. . It is time some one undertook the job, and we are prepared to do it, regardless of what is coming to us. Some are afraid that if they speak against these sinister influences, they will lost their seats. We are anxious to place the Labour movement on a stable footing, and to free it from the white-anting tactics of people such as those who have got the control of the movement in New South Wales. We have no quarrel with the branches of the movement in any other State of the Commonwealth. We would be pleased to be on the same basis as they are and thus be able to clean out Communists. The only way to get them out is to throw them out. Had the federal executive done the job, the position would not be as it is to-day. {: #subdebate-23-0-s6 .speaker-JTY} ##### Mr ARCHIE CAMERON:
BarkerMinister for Commerce · CP -- The date is the 2nd May. On the 2nd March, the Labour party, our official Opposition, won what, I believe, will be in effect its last election victory for some time to come. On that occasion, one might reasonably have believed because of the way in which the Labour party sang its own praises, that it was headed for Parnassus, and by the way it planned it was headed for Mount Olympus - in this case the treasury benches. Time and again, it has been shown that as soon as the Australian Labour party comes face to face with the realities of a wartime situation, it must crack in pieces. It is founded on a policy which can never withstand the impact of wartime conditions. It could not stand up to them in 1914-18, and there is no reason to believe that it could stand up to them to-day. We have heard in this chamber to-night talk the like of which has not been heard for 20 years or more, and the end of which no doubt we have not yet heard. There is a demand on the part of everybody in this country for the suppression of certain insidious elements in our midst - elements which did not arrive here after the outbreak of war but whose presence and nefarious activities here were well known long before the war. These things were well known inside the Labour party of this country and were challenged inside that party, but were never dealt with by it. One of the truest statements ever heard in thi* House was the one made to-night by the honorable member for Dalley **(Mr. Rosevear),** who said that when the onus was placed on the Leader of the Opposition **(Mr. Curtin)** the other day to clean up the Labour party, and put it on an Australian basis by absolutely expelling from it every one of these disruptive elements which hpknows, as well as the honorable member for West Sydney knows and we on this- side know, to be in it, the honorable gentleman would not face the task. He simply blinded his eyes, and did no more than say in this chamber that it was a matter for the Government to prosecute the Communists if it had anything against them. I say it was a matter of the internal organization of the Labour party. If the Labour party aspires to govern this country, particularly in time of war, surely to Heaven we are entitled to expect that it should be able to govern itself. But apparently it cannot. {: .speaker-KRH} ##### Mr McHugh: -- I point out that there were once four parties amongst the present ministerial supporters. {: .speaker-JTY} ##### Mr ARCHIE CAMERON: --Not many days after the outbreak of war, there was only one party. I also point out to the honorable member, in case he has forgotten, that he and I were members of another Parliament. I remember him as a whip of the greatest Labour party that the South Australian Parliament has ever known. But that party went to the electorate and came back only four strong. Once again, when the Labour party felt the impact of conditions of unusual stringency and emergency, it could not withstand the shock, ft is not made to withstand such shocks. {: .speaker-KRH} ##### Mr McHugh: -- The Labour party successfully governed this country for a long time. {: .speaker-JTY} ##### Mr ARCHIE CAMERON: -- It could not govern it at the present time. We have heard much talk in the past of *esprit de corps.* One might describe the debate to-night as an excellent example of *esprit de* discord. Although, the honorable member for West Sydney may not thank me for saying so, I consider that be has done a great service to this country by pointing out to the party of which he is a member, and to the country which is about to vote, the perils that lie in trusting a party which, in New South Wales at any rate, is white-anted by Communists. {: .speaker-KX7} ##### Mr Ward: -- When is the Minister going to clean the Fascists out of his own party? {: .speaker-JTY} ##### Mr ARCHIE CAMERON: -- I would not clean any one out of my party to make way for the honorable member for East Sydney. It is evident that some honorable members opposite will he wanting to change their allegiance before long, because conditions within their own party will not allow them to maintain their present positions. The honorable member for West Sydney and his colleagues have taken a definite course; they have stood on the principle of internal management. We know now where they stand, and the electorate knows where they stand, but it can only fear that the position which honorable members of the official Labour party attempt to occupy is not one that they would like, but is rather one which they are forced to take by those elements which controlled the conference held in Sydney last Easter. The speech made by the honorable member for Werriwa **(Mr. Lazzarini)** was remarkable, and I put it to the honorable member, particularly because he did bring into the debate his own Christian principles, that if there has been a change of principles by honorable members, it is hardly a sin to which he should call attention, professing what he does. I remind him that one of those who stood by and consented to the stoning of the first martyr, Saint Stephen, became the greatest of the Apostles. So, when face to face with the realities of the situation with which this country is confronted, the Labour party has acted exactly as I and every member on this side expected it to act: it has been unable to face up to the situation, and produce the measures and maintain a course which would entitle it to the respect and the confidence of the people of this country. In regard to Australia's participation in the present war, I invite honorable members opposite to speak their minds, as some of them spoke some time ago when discussing the raising of forces for defence purposes. There are as many opinions among honorable members opposite on the subject of participation in the war, and on the manner of raising man-power for the defence of this country, as there are fingers on my hand. Some members of the Labour party, who, if prepared to say what is in their minds, souls and consciences, would declare that this country should be 100 per cent, behind Great Britain in any theatre of the war where Australian troops were wanted. There are men, who, if the same test were applied, would say as I have said many a time, that every able-bodied Australian man should be trained and armed to defend his country. What a glorious somersault was performed by the Leader of the Opposition a few days ago! Last year honorable members opposite talked themselves hoarse to prove that Australian troops should not be sent out of the Commonwealth to defend Papua, New Guinea, or any of the other islands. Butwhen the question of the territorial integrity of the Netherlands East Indies arose recently, what did the Leader of the Opposition say? He urged that Australian troops should be quartered at Darwin and Wyndham, and so be in a position to exercise an influence on the course of events in the East Indies. What did he mean? He meant, but was not game enough to say, that he has changed his mind, and now thinks that it may be necessary - presumably if he were Prime Minister he would act accordingly - to send troops for the defence of the Dutch possessions in the East Indies. That is the only interpretation that can be placed on his statement, and the onus is on him to rise in this chamber and take a definite stand on the despatch of Australian troops overseas. I do not expect he will do so. As he cannot eventake a stand with regard to the internal troubles of his party, it is unlikely that he will lay down a policy for the guidance of this country. I rose simply to call attention to the utter futility of any suggestion that this country in time of war can be entrusted to the tender mercies of the party constituting the Opposition to-day - a party which does not even know its mind on its own internal arrangements, and is prepared to tolerate within its ranks men whom I know, and honorable members opposite know, to own allegiance to a country other than Australia. {: .speaker-KRH} ##### Mr McHugh: -- The honorable member should talk, after the way in which he condemned the Prime Minister a few months ago. {: .speaker-JTY} ##### Mr ARCHIE CAMERON: -- I say I am merely amused by the remarks of the honorable member for Wakefield. I. know his Gaelic exuberance of spirit, and his elasticity in the use of interjections. My presence in this Ministry needs no explanation. The attitude of the Country party has always been that there should be in the Ministry during this time of crisis, not only members of that party, but members of the Labour party, sharing the responsibility of government. But honorable members opposite are not game to enter the Ministry, and as good citizens of Australia should do, bear their portion of the burden. The country will judge them as I judge them; it will say that if they are not prepared to accept portion of the responsibility, then they are not fit to be entrusted with the whole. {: #subdebate-23-0-s7 .speaker-KYC} ##### Mr POLLARD:
Ballarat .- It ill becomes the Minister for Commerce **(Mr. Archie Cameron)** to cast aspersion; on the loyalty of the Labour party, and its attitude towards the present conflict, having regard to the fact that during the debate on international relations in this chamber on the 9th May last, he made a speech which shows that he does not believe in the justice of the cause of the Allies, and, therefore, is not a fit and proper person to be a Minister of the Crown. His words were - >Thenthere is the subject of grievances. We shall not get a clear understanding of whatis wrong in Europe until we have investigated the grievances under which the governments of the various countries believe their people to be suffering. Let us consider first the position of Poland, one of the great European powers with which we are endeavouring to make an alliance. The people of that country, so far as I can understand the situation, ought to be more than a satisfied community. But against Poland Germany certainly has grievances. Incorporated in Poland is the free city of Danzig, with an entirely German population, and a strip of country known as the Corridor, which, while giving Poland access to the sea, severs Germany from East Prussia. It includes former German areas containing valuable mineral deposits and the highly industrialized Upper Silesia which is German inevery respect. Thus it will be seen that Germany has grievances which may well lead to an armed conflict with its neighbour, Poland. These difficulties can only be overcome by methods which I shall not discuss to-night. But I have to ask myself whether the British Commonwealth is going to considerthat the retention by Poland of certain territories that are German in every respect, is a question on which British lives are to be sacrificed and British wealth dissipated in a war against Germany for the protection of Poland's interests. {: .speaker-JTY} ##### Mr Archie Cameron: -- That was a very good prophecy. {: .speaker-KYC} ##### Mr POLLARD: -- It ill becomes the Minister who made that speech to cast aspersions on the loyalty of my party and its attitude to. the war. {: .speaker-JTY} ##### Mr Archie Cameron: -- I did not mention loyalty, but I said a good deal about the inability of the party to obtain cohesion among its members. {: .speaker-KYC} ##### Mr POLLARD: -- The Ministerwas very emphatic in his statement that my party was not fit to handle the war situation. With his henchmen he was loud in his applause of the attacks by the honorable member for West Sydney on the Australian Labour party. {: .speaker-JTY} ##### Mr Archie Cameron: -- I did not mention the name of that honorable member. {: .speaker-KYC} ##### Mr POLLARD: -- But his face radiated pleasure, and so did those of his comrades sitting near him. I have not the slightest doubt that, if a member of the Labour party had made a speech such as that delivered by the Minister on the 9th May last with regard to the international situation, a demand would have been made throughout Australia for his resignation from a Ministry; but, because the Prime Minister desires, by hook or by crook, to continue to direct the affairs of the Commonwealth, and because he could retain office only by taking the Leader of the Country party into the Ministry, the Minister's speech in May last on the international situation is now forgotten. My mind goes back to the remarks of the Prime Minister at theCorio by-election, when he asked, " What will Hitler say if the Labour party wins Corio ?" But what will Hitler say when some of his henchmen draw his attention to the speech that the present Minister for Commerce made on the 9th May last? If it be fit and proper for the honorable gentleman and his associates in the Cabinet to cast aspersions on the Australian Labour party, claiming that it is dominated by the Communist party and is disloyal, it is fair for me to say that the present Government has within its ranks Fascists of no mean standing. One almost forgets that the subject under discussion is the Speech of His Excellency the Governor-General.I mention the Speech in passing, and note that, owing to the lack of meat in it, the debate has been diverted to uninteresting and unimportant matters. It is regrettable that, owing to the fear that they may be accused of being Communists, too few men have had the courage to demand that complete freedom of speech should bepermitted during this war.We know that the voices of Cameron and Thorby have been raised loud in the land, demanding that this man and that should be disposed of for having said something with which they do not agree. I may not hold views similar to those expressed by many people. I do not agree with many things said by the Minister for Commerce, but, war or no war, the most precious heritage we as Britishers have to-day is the right to express our opinions in no uncertain manner. {: .speaker-K2A} ##### Mr Rankin: -- Even if traitorous! {: .speaker-KYC} ##### Mr POLLARD: -- No matter how unpalatable our opinions may be to others, human progress has been made only because men have been courageous enough to take the risk of being called traitors. Let me tell honorable members something about the Communists in the Country party. Militant farmers, who are members of the Country party, have threatened to strike unless they can obtain a payable price for their wheat. They say that they are not prepared to grow more wheat unless the Government will guarantee them a payable price. They are not accused of being Communists and traitors, but those terms are applied to the coal-miners and the engineers on the coal-fields, who have nothing but their labour to sell. The miners, we are told, should be silenced. I see practically no difference between the Attitude of the militantfarmer and the Communist or the Labourite. Each has the right to express his opinion and to fight for the retention of that right. The Minister for Commerce, for the sake of place and pay, is prepared to forget the opinions expressed by him a year ago. He now participates in the direction of the Australian forces overseas, which are attempting to subjugate people whom he has admitted have just grievances.I have a great respect for him personally, and regard him as an efficient administrator; but, in the circumstances, I consider that he is not fit to discharge the duties now entrusted to him. He visited Western Australia recently and, according to the *West Australian* of the 22nd February last, the following motion was carried at Katanning: - >This meeting of the No. 1 Wool Zone Council, believing that the Federal Country party has allowed the Federal Government to acquire Australian wheat and wool under conditions wholly unacceptable to producers, and has made no effective attempt to obtain justice for them, can no longer support that party. According to the principles enunciated by the Minister's party, the people at Katanning ought to be suppressed. The Minister, speaking at that town, said - >After **Mr. Lyons's** death came a Government headed by another able man, **Mr. Menzies.** > >A Voice. - He is too clever. {: .speaker-JTY} ##### Mr ARCHIE CAMERON: -- All the Country party members walked out of office last April- And walked in again recently, of course - >That should be remembered before any one talks of putting portfolios before principles. > > **Mr. Cameron** said that the value of wool on the market last year was not 13½d., and as soon as war broke out there was a complete rupture of shipping facilities. At no stage was the Country party a party to the negotiations between the Commonwealth and the British Government. > >A Voice. - You could have put the Government out. {: #subdebate-23-0-s8 .speaker-JTY} ##### Mr CAMERON:
Minister for Commerce · BARKER, SOUTH AUSTRALIA · CP -- Putting out the Government would not have changed the agreement. An average of 13½d. in the circumstances is a very fair figure. (Noisy dissent.) Continuing, **Mr. Cameron** said that without control the wool would have been used by our enemies. It was part of the policy of his party that there must be grower control. Despite the fact that the honorable member has been Minister for Commerce for some months now he has not inaugurated grower control of wool marketing. {: .speaker-JTY} ##### Mr Archie Cameron: -- That has been done. {: .speaker-KYC} ##### Mr POLLARD: -- Since the outbreak of war, the marketing of wool has been handled by the Central Wool Committee. {: .speaker-JTY} ##### Mr Archie Cameron: -- The policy is the policy of the Government ; the Central Wool Committee is purely an administrative body. {: .speaker-KYC} ##### Mr POLLARD: -- I have had some experience of what is happening in connexion with the marketing of our wool to-day. I hope that the Minister will control the policy of the committee more effectively than the Assistant Minister **(Senator McBride)** has so far done. The Assistant Minister has been the mere creature of the committee. I am informed that he is a substantial shareholder in Elder, Smith and Company, Limited. The Central Wool Committee is largely dominated by the big woolbroking firms. If the Minister does not change the control of wool marketing to growers, he should resign. It is the Government's duty to investigate the charges that have been made in this House against the committee. I do not suggest for one moment that the Assistant Minister **(Senator McBride)** is corrupt, but I say definitely that when conflict occurs between the wool-buying associations and others involved in the appraisement of wool he may be biased towards those interests with which he is financially associated. {: .speaker-JTY} ##### Mr Archie Cameron: -- By the same reasoning I am very biased towards the small grower, because I, too, am a small grower. {: .speaker-KYC} ##### Mr POLLARD: -- The Minister's predecessor **(Senator McLeay)** bungled the meat contract. After the last session of this Parliament he accused me in this connexion of having made a despicable attack upon him in this House. It was obvious that he had been stung by my remarks, and that what I had said was true. I offered to substantiate my charges at any time or place chosen by him, but he was not man enough to accept that challenge. I propose now to deal with the question of communism. I regret that any individual should be so weak as to fail his party in a time of crisis, and for some reason, which I cannot understand, join forces with his lifelong political enemies. {: .speaker-JLZ} ##### Mr Anthony: -- That is not fair to the honorable member's friends. {: .speaker-KYC} ##### Mr POLLARD: -- It amuses me to hear the honorable member for Richmond refer to these people as my friends in an attempt to defend the attitude which they are adopting. I have no doubt that in order to gain a political advantage in the future honorable members opposite will quote extensively from the remarks of the honorable member for West Sydney **(Mr. Beasley),** but they will not have very much to say about the war policy advocated by the honorable member and his leader, **Mr. J.** T. Lang. This is what **Mr. Lang** has said about Labour's war policy - >For a very long time, and particularly during the last half -century, the world has been faced with the conflicting interests of expanding imperialism. The conflict does not take place over the actual frontiers of any of the existing empires. It happens because rival-imperialism is out to assert its influence over certain portions of Europe which are usually referred to as independent nations. > >That is the only kind of war which confronts the world. It is a form of war that, no matter who wins or who loses, will keep recurring, and it is the kind of war in which the sacrifice of Australian lives is futile and inhuman. Such a war is not one of aggression against us; it is at best a preventive war, and does not justify the sacrifice of the lives of our young people. With those sentiments, I confess, I largely agree, but, at the same time, I say that it ill becomes the honorable member for West Sydney who subscribes to them, to take such strong exception as he has exhibited towards the notorious " Hands off Russia " policy. I have always admired **Mr. Lang,because** I recognize that he and the party which he once led have been responsible for placing on the statute-books of this country some of the most humanitarian legislation this country has yet enjoyed. It is equally true that in the hey-day of his youth as a member of the Labour party the AttorneyGeneral **(Mr. Hughes)** did some ofthe best things that have been done in the interests of this country. It seems inevitable that a time must come in the lives of certain political leaders when, for some reason or other, they fall out of step with their party and break with it. When political leaders choose to follow such a course, they can no longer expect to retain the allegiance of the rank and file of their party. When they make mistakes of this kind they cannot expect their erstwhile colleagues to follow them into the mire. Much has been said concerning the red menace of communism. I have taken a life-long interest in politics. I have studied the developments of communism and other " isms ", and have closely observed the trend of various political movements. I am convinced that there comes a time in the life of every political movement when the rise of some unorthodox, vigorous element within its ranks has a beneficial effect, because it gingers up the dunderheads, and brings to the forefront the urgency of doing certain things for the good of mankind as a whole. This is inevitable in the interests of progress and I hope that it will continue. One force counteracts the other. What is wrong with the United Australia party to-day? Why is it losing election after election? The reason, of course, is that it has utterly failed to capture the imagination of the youth of this country. Communists are growing in strength because they appeal to the imagination of the young. It is possible also that there are some reactionaries in the Labour party who are not progressive enough to escape what I shall call the psychology of timidity. Communism, and the menace which it may be, can be destroyed only by the development of a progressive spirit in other political parties. The moment this Government adopts a sufficiently comprehensive policy of true progress, which has as its purpose the uplifting of the masses, the removal of destitution, and the abolition of injustice, the need for a Labour party, a Communist party, or any other reform party will cease to exist. I do not intend to tear my hair or to work myself into a rage because a Communist is discovered here or there. {: .speaker-JPN} ##### Mr Blackburn: -- And generally discovered by an ex-Communist ! {: .speaker-KYC} ##### Mr POLLARD: -- That is so. The view that I express was once held by the Honorable J. T. Lang himself, for, speaking in the Granville Town Hall in 1934, he said- >This " red menace " and Communist bogy is made an election catch cry by Labour's opponents- of whom Beasley is now one - in an endeavour to create a stampede among the electors and thus divert attention from the real issues. The **Mr. Lang** who now joins in a babel of faked fury against Communists is the same **Mr. Lang** who wrote in his book *Why I Fight* the following pregnant passage : - " There are those in the community who develop hysteria "- that again is true of Beasley to-day- {: .speaker-10000} ##### Mr SPEAKER: -- Order! The honorable member should refer to another honorable memberby his electorate and not by his name. {: .speaker-KYC} ##### Mr POLLARD: -- I shall endeavour to observe the rule, sir. **Mr. Lang** wrote - >There are those in the community who develop hysteria at the very mention of the word Russia, and there arc also the astute politicians who regard the development of that hysteria as their passport to a Parliamentary seat and are prepared to sacrifice national interests to the maintenance of that hysteria. That is undoubtedly true of the honorable member for West Sydney, and he has delighted our political opponents by the course of action he has seen fit to take. I am not unduly perturbed about these things, particularly as, when I look around this chamber, I observe that not one member of the Australian Labour party is a Communist. Amongst our number there arc many, it is true, who are tolerant enough to concede to others the right to discuss any particular ideology they espouse provided it does not involve resort to personal violence. The Labour party believes in allowing the free expression of opinion according to conscience. I sincerely hope that we shall not reach the stage when such a spirit of intolerance will develop as will threaten the right of free speech or free expression of public opinion through the press. After all, we are members of an educated democracy in which every boy and girl is obliged to attend school to learn to read and write, and to develop the capacity to think and reason in order to be able to make a choice between good and bad. Surely we have developed sufficient strength of character in our young Australians to cause them to choose the good, even though it be unpopular, in preference to the bad. I am confident that as the result of the development of our educational system our Australian democracy will always choose the good and reject the bad. I hope that other honorable members will contribute to this debate to such purpose that the members of the Government will go home nursing a very sore head indeed. {: #subdebate-23-0-s9 .speaker-KCM} ##### Mr DRAKEFORD:
Maribyrnong -- It was easy to see that the nature of the debate immediately before dinner to-night caused a great deal of enjoyment to honorable members opposite, for they filled the benches on their side of the House as soon as they realized that a Labour party quarrel was being ventilated by the honorable member for West Sydney which might have the effect of helping the ministerial parties. That, of course, is what they are chiefly concerned about. It may be that occasional outbursts of this kind among the representatives of the working classes are inevitable, but the only section of the public which will appreciate them is that represented by honorable gentlemen opposite who are noted for their endeavours to resist advancement and to prevent progressive legislation from being placed upon the statute-book. Those honorable gentlemen always welcome divisions in the ranks of the greatest political party in this country, however such division may be procured, because in situations of that kind they have been able again and again to escape extreme political peril which they have seen ahead. Honorable gentlemen opposite realize that unless a division can be caused in the ranks of the Labour party at this juncture, they would soon lose control of the treasury bench and duplicate measures had to be taken to prevent it, if possible. {: .speaker-KLL} ##### Mr Makin: -- I wonder what they pay for it? {: .speaker-KCM} ##### Mr DRAKEFORD: -- I do not know whether they pay anything for it, but I can quite understand that it is a pleasure for them to promote such discord. Naturally, as a life-long advocate of Labour's policy, I regret that this division has occurred. It is not the first' time a division has occurred at a critical time, but I believe that the Labour party will rise, phoenix-like, from the ashes of these fires, as it has done previously, for it is recognized as the most potent force in our political life. The Labour party, even to-day, is the largest political party in this Parliament and that fact should not bo overlooked. It is very necessary for our opponents to sink their own differences in order to present a solid front to Labour. The parties represented in the Government have their differences, of course, but they seem to be more successful than the Labour party in concealing and sinking them, even if this involves, as it has done, the sinking and sacrificing of their political principles as well. It was ludicrous to hear the Minister for Commerce **(Mr. Archie Cameron)** accuse the Leader of the Opposition **(Mr. Curtin)** to-night of having failed in his duty; but that honorable gentleman, who is the most accomplished political gate-crasher that this country has known, should look to himself. That he is a political gatecrasher was shown by the manner in which he became a member of the present Ministry. We know very well how he turned his battery upon the Government some time ago and "waged relentless "war upon it; but since then he has been able to overcome his principles and become a member of the Cabinet. The honorable gentleman is, as we all are aware, no respecter of the right of free speech. He showed that clearly by the way in which he used the alleged " red " bogy to justify his high-handed actions while he was Postmaster-General in a previous Government. His conduct in forcing a certain broadcasting station off the air caused a great deal of comment. The Bishop of Armidale, for example, referred to the matter in the following terms: - >To cut a station off the air like this is a most extraordinary thing to do. Its, is utterly undemocratic. I don't think the people will put up with this sort of thing too long. The people of Corio showed clearly that they did not stand .for that sort of thing, But every possible means must be adopted by honorable gentlemen opposite to create and widen any division that becomes apparent in the ranks of the Labour party. For that reason they have welcomed the desertion of the Labour party by the honorable member for "West Sydney **(Mr. Beasley)** and his five colleagues. In .fact, they are delighted at it. I have no desire to attack that honorable member personally, but I must say that I am both sad and resentful that they could not have remained with us at a critical time like this, and supported the principles for which we stand. The Minister for Commerce on more than one occasion has said things that are provocative. He declared not long ago - >Complete unity iu the Commonwealth Country party depends on ... a complete cessation of the campaign of intrigue and underground engineering which has marred the party during the post four years. It should be noted that he was then speaking of his own party. The honorable gentleman, must bc accorded the distinction of being a. good judge of intrigue and underground engineering, because he himself has been successful in that kind of activity over a long period of years. {: .speaker-JTY} ##### Mr Archie Cameron: -- The honorable member is writing a good reference. I do not mind. {: .speaker-KCM} ##### Mr DRAKEFORD: -- The Minister bad no right to attack the Leader of the Opposition for his alleged failures, because the only way in which the honorable gentleman could gain admission to the Government of the country was by battering the United Australia party until it was willing to admit members of the Country party rather than release its grip of the treasury bench. Government supporters would not be so ready to criticize the Leader of the Opposition if they realized how he had exercised patience, perseverance and ability over a long period in order to solidify the movement and hold the Labour party together. There are, I am afraid, honorable members on this side who have just separated themselves from the main body of the Labour party who are associated with people who were never very anxious to have unity re-established in the movement. I speak from personal experience, because I have attended many federal conferences of the Labour movement, and was a representative of Victoria appointed by those conferences on unity committees consisting of a delegate from each State and six members of the New South Wales party. Of the six men representing New South Wales at those unity committee meetings, I knew of only one who showed any real desire for unity. Even when unity was achieved, in spite of the efforts of the Federal Labour party, true harmony did not exist. In December last, I visited a district in New South Wales at the invitation of the Hume and Riverina Electoral Council. I expected to see there some evidence of unity between the main factions of the Labour party, because arrangements had been made for **Mr. Lang** and the honorable member for West Sydney (M.r. Beasley) to speak from the same platform as **Mr. Baddeley,** the Deputy Leader of the Opposition in the Parliament of New South Wales, and several of his colleagues, including Messrs. J. Cahill, W. Carlton, and J. Arthur, Members of the Legislative Assembly. Shortly before that time, however, **Mr. Lang** had been deposed from the leadership of the Labour party in New South Wales, and it appears that from then onwards Labour's chances of unity in that State were negligible. These meetings were held by the Hume and Riverina Electorate Council, but at no time during that week, which covered a week-end, did **Mr. Lang** or the honorable member for West Sydney appear on the same platform as **Mr. Baddeley** and his colleagues. lt has been said that this split in the Labour movement has occurred spontaneously, allegedly because the faction now led. in this Parliament by **Mr. Lang** and the honorable member for West Sydney, had become dissatisfied with communistic influences in the Labour party. Government supporters must be well aware that that statement is absolutely incorrect and kas been made for political purposes. They know this, because they have had ample opportunity to read the platform and declarations of the Labour party, and the attitude of the party is in accordance with its declarations. The party does not permit its members to speak from the same platform with Communists. If any man- discloses himself as a Communist, he is refused membership of the party. {: .speaker-JTY} ##### Mr Archie Cameron: -- What happens if Communists do not disclose their political affiliations? {: .speaker-KCM} ##### Mr DRAKEFORD: -- I venture to say that there are within the ranks of the Country party some men who would have resented being found dead in the same political grave as the United Australia party some time ago; but to-day they are anxious to remain iu partnership with that party. {: .speaker-JTY} ##### Mr Archie Cameron: -- There is freedom of choice. {: .speaker-KCM} ##### Mr DRAKEFORD: -- Of course. There is also the temptation of a portfolio held out as a bait to members of the Country party. The honorable gentleman himself yielded to that temptation. In order to make clear the Labour party's attitude to communism I shall read to honorable members the declaration made by the federal executive of the party in 1937, when the Communist party applied for affiliation with the Labour party. **Mr. Fallon,** vice-president of the executive, presided at the meeting. The report states - >At the Sydney meeting of the executive correspondence was received from the Communist party seeking affiliation with the Australian Labour party. Subsequently your executive unanimously adopted the following in reply to the Communist party: - " The Australian Labour party hereby refuses affiliation to the Communist party, and dissociates itself from the policy, methods, and propaganda of the Communist party and all its auxiliary organizations. It declares the Communist party to be an anti-Labour political organization. It declares, furthermore, that the Communist party is in direct conflict with the policy, platform and constitution of the Australian Labour party. Membership of the Australian Labour party is obtainable by every person who supports its principles and policy, and who is not a member of any other political party or any subsidiary body connected therewith. It is by membership of the Australian Labour party alone that a united front can be presented by the workers of the Commonwealth towards the forces of war, Fascism and reaction generally." > >The 1038 meeting of the federal executive decided to re-affirm the above decision. That is a very definite declaration of where Labour stands. That reportwas adopted by the" federal conference of 1939, at which the honorable members for West Sydney and Dalley were delegates. As long ago as 1926, a federal conference of the Labour party declared that no Communist should become a member of the Labour movement, and that resolution has stood ever since. I emphasize that the position to-day is that no member of the Labour party is permitted to appear on a public platform in company with any person who is an acknowledged Communist. This desire of Government supporters to put on the Labour party the brand of communism, because communism is believed to be a revolutionary force, does not stand logical examination. It is merely a political dodge on the part of the Ministry with the intention of destroying Labour's chances of securing, at the forthcoming early elections, a mandate to govern the country, a task which the Minister for Commerce has declared to-night to be beyond the powers of this party. I put it that when it was realized that there was a danger of a split occurring in the Labour movement, the Government and its supporters welcomed the formation of the new party led in this Parliament by the honorable member for West Sydney as being certain to improve the Government's prospects. Declarations which frequently have appeared in the newspapers clearly state the attitude of the Labour party towards communism. If any confirmation of those declarations be required, I have in my hand a. printed statement giving in detail the reasons why the Labour party is not prepared to join the Communist party in a united front. The Labour party was asked to do so in 1935. The reasons for its refusal were so definitely stated that no one could say that any affinity exists between the two organizations. Like the honorable member for Ballarat **(Mr. Pollard),** I do not suggest that there is nothing good in the ideals of the Communist party. I believe that some of the proposals of the Communist party are good, and I am confident that some Government supporters, who are a little more advanced and democratic in their thinking than their colleagues, will subscribe to this view. But irreconcilable differences of opinion arise over the methods to be adopted to reach the desired objective. The Labour party makes it clear that it will achieve those ends by the employment of constitutional methods. It believes in using ' the electoral machinery of this country at the ballot-box in order eventually to secure the passage of legislation to improve the standard of the social life of the community. lt has been said by the Minister for Commerce that a Labour government could not administer the affairs of Australia in wartime. In answer to that accusation, I refer Government supporters to what is happening in New Zealand. It is true that the Labour parties of Australia and New Zealand differ regarding the sending of troops overseas, but there is a tremendous difference between what the Labour Government of New Zealand and the Commonwealth Government are doing for social improvement. In New Zealand money is being subscribed free of interest. Have honorable members heard of the Commonwealth Government asking for that to be done? Its moneyed friends would be too resentful of such a step. Already £5,000,000 has been offered the Government of New Zealand, because the 'people of that Dominion realize that they have iu office an idealistic government, which is determined to lift them out of the slough in which they have been over a long period of years under anti-Labour governments, and to bring about a new social order. The United Australia party and the United Country party realize that if the Australian Labour party were given control of the Government, with a majority in both Houses, the kind of legislation which it would enact would be such that the people of Australia would never again want any other form of government, unless it should be something even more advanced than the Labour movement. {: .speaker-KIX} ##### Mr Hutchinson: -- What would be the good of social services if the Government did not protect the country? {: .speaker-KCM} ##### Mr DRAKEFORD: -- New Zealand is protecting the country. It has a population of only 1,600,000 yet is spending £33,000,000 on war services; it has also announced that it does not intend that social services shall suffer in the meantime. Therefore, it is providing another £30,000,000 for the improvement of social services during the war. Similar provision could be made in Australia; but no such proposition has been made by supporters of the Government during this debate. The GovernorGeneral's Speech and the speeches of honorable members opposite have been entirely barren of constructive suggestions in that direction. All that the Government has in mind is the successful carrying on of the war effort. Whilst the Labour party throws itself wholeheartedly behind the Ministry in its war effort, although it differs from the Government on some matters of principle, it has done its share in assisting ministers *by* offering constructive criticism and suggestions in an endeavour to help the Government as much as it is possible for one party to help another of different political opinions. The criticism of the Minister for the Navy is entirely unwarranted. It is unbecoming a Minister to criticize the opposition leader who has done a splendid job, as is recognized by the people of Australia generally. I regret that it is necessary to refer to some of the things mentioned by the honorable member for West Sydney. I point out that although the Leader of the Opposition not only participated in but also led the efforts to bring about unity - efforts which were ultimately successful - there were some who were willing to accept unity only if their section had the leadership. So long as leadership was within sight, if not actually within their grasp they were willing that there should be unity. In view of what happened in December last, I can only say that the suggestion that the recent action was spontaneous is not supported by the facts. As an indication of what is going on, the honorable member for West Sydney claimed that the Bank of New South Wales had advanced on overdraft the sum of £45,000 in order to keep the *Daily Nevis* going, and from that he deduced that the Labour party was receiving money from sources which usually support the opponents of Labour. He went on to say that the purpose was to keep Communist principles before the public. As a matter of fact the *Century* has been carrying on for a considerable time at a loss. I should like to know where the money is coming from. {: .speaker-KX7} ##### Mr Ward: -- Last year the loss was £13,000. {: .speaker-KCM} ##### Mr DRAKEFORD: -- No one seems to know where the money that keeps it going comes from. {: .speaker-KLL} ##### Mr Makin: -- The United Australia party provides it. {: .speaker-KCM} ##### Mr DRAKEFORD: -- The Bank of New South Wales would not willingly assist the Labour party, which is one of its greatest critics. The suggestion is just too silly; but if it did advance money, it did so in order to create dissension in the Labour movement. The honorable member for Dalley **(Mr. Rosevear)** came to the rescue of the honorable member for West Sydney. I am sorry to have to differ from the honorable member, because he has a great deal of ability, which has frequently been displayed in this House. It is a pity that in future that ability by reason of hi3 allegiance to the breakaway section will have to be used to attack those with whom he was previously associated. Although the honoroble member voiced his determination to support the honorable member for West Sydney and the new group which was announced to-day, he evidently entertained some doubt as to what attitude he should adopt. It is clear that he would have liked to see the difficulties overcome without any division of the party. {: .speaker-KZX} ##### Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936 -- He took ten days to make up his mind. {: .speaker-KCM} ##### Mr DRAKEFORD: -- The honorable member apparently found it difficult to make up his mind. I cannot but believe that the honorable member for West Sydney and those asociated with him are not concerned greatly for the workers. I do not know whether it is true, as reported in the press, that the new party proposes to give its second preferences to the United Australia party, but if the statement be true, it would seem that United Australia party influences have been at work to cause the breakaway. There are indications of political bargaining. {: .speaker-KX7} ##### Mr Ward: -- Only by causing a break.away from the Labour party could the United Australia party hope to retain office. {: .speaker-KCM} ##### Mr DRAKEFORD: -- That is so. I do not think, however, that the workers will he misled. I imagine that it will be difficult to induce them to cast their second preferences in favour of their political enemies. That there is a strong determination on the part of a small section to smash the Labour party is clear from the formation of the new group. As to the statement of the honorable member for Dalley in .connexion with the influence exercised by industrialists within the party, I point out that at the 1939 Federal Labour conference he himself was in favour of contact between the two sections of Labour. I do not suggest that he voted deliberately for communistic influences, but he has no right to suggest that others did so. On the presentation of a report by the executive, a motion to appoint industrialists to the advisory committee of the Federal Labour party was moved. The honorable member for Dalley supported that motion, as will be seen from the following extract from the official report of the proceedings of the conference: - **Mr. Rosevear** supported the motion. There should be a contact between the recognized authority of the industrial movement and the political movement. While each could speak for itself, there should not be two voices - especially on the eve of an election. The saddest thing of the last federal campaign was that in the closing fortnight, the Leader of the United Australia party was able to say that when the Labour party opposed his policy it opposed the policy of the Australasian Council of Trade Unions. It was all right to talk of the position in Western Australia, but that also meant that Nationalists and Communists were within the party as unionists. It appears that there is no great objection to Nationalists being in the party; the objection is to undeclared Communists. [ can speak only for my own organization. I have the honour to be federal president of the locomotive engineers, an organization with nearly 11,000 members in the Commonwealth. I say emphatically that there is not, and never has been, any Communist direction in that organization. There is no justification for the reasoning that, because a prominent railway-man in another organization brings forward a certain proposal, that proposal represents the view of railway-men or of trade unionists generally. From a long experience of trade unionism, I can say that, although there may be in the movement some men who are undeclared Communists, few of them who have declared that they are Communists have reached an executive position. It may be true that a few unionists desire them to be there: but the suggestion that within the Labour movement there are many organizations dominated by Communists is entirely without foundation. Although I believe that the honorable member for Dalley was wrong, he certainly was more temperate in his statements than was the honorable member for West Sydney, but his arguments were unwarranted. Like the honorable member for Ballarat **(Mr. Pollard)** I had not intended to participate in the debate, but when the Minister for the Navy gloats over differences within the Labour party, merely because such differences increase his prospects of a long ministerial term, it is the duty of members of the Labour party to place things in their proper perspective. I am sorry that the honorable member for West Sydney has allowed his desire for leadership to induce him to break away from the Australian Labour party and from the leadership of a man who has performed most capably in ' difficult circumstances. Criticism of that honorable gentleman's leadership by one who knows the facts is entirely ungrateful, and indicates a miserable refusal to recognize the merits that he knows our leader possesses. I am astonished because, only a fortnight or three weeks ago, immediately before this Parliament re-opened, I listened to a speech by the honorable member for West Sydney at the eight-hour day celebration in Melbourne. {: .speaker-KLL} ##### Mr Makin: -- After the Easter conference had been held in Sydney. {: .speaker-KCM} ##### Mr DRAKEFORD: -- That is so. The honorable member for West Sydney spoke in a public capacity, and was the last speaker at the function. He pleaded strongly for loyalty by the workers to the leaders of the party and to its parliamentary representatives. In excellent style, he stressed the absolute necessity for solidarity within the ranks of Labour, so that it might gain political office, and thus be enabled to give legislative expression to Labour's ideals. I believe that the honorable member, and perhaps some of those who are associated with him - for whom I have had a high personal regard - have been led away from their principles by an irresistible desire for leadership. Boiled down, that seems to be the position. Both the honorable member and **Mr. J.** T. Lang apparently believe that unless they can lead the Labour party, in both the Federal and State spheres, it will move in the wrong direction, and that when they are leading it all is well with it. By their actions they are assisting the United Australia party. It would seem that the honorable member for West Sydney has his eyes fixed on something which ho thinks he might achieve in the distant future. The position may be summed up in the following lines: - >In some predestined second birth, > >Part of the cosmic plan, > >He will return again to earth, > >To be a laundryman. I regret that the present situation has arisen. I believe that, notwithstanding this breakaway, this party will eventually emerge stronger than it has ever been and in the very near future, in spite of the hopes of those honorable members opposite who expect to gain an advantage from the present rupture, will govern this country as it ought to be governed. Whilst I grant that the Government is intent on doing certain of the things which I know ought to be done, I consider that the proposals outlined in the Governor-General's Speech fall far short of what can reasonably be expected in the circumstances that exist to-day. I deplore the absence of any mention of constructive measures in relation to social benefits. Simply to say that, at this time, we shall concentrate entirely on a huge war effort, and neglect those matters which for a long period of years have demanded attention, is to fail to recognize what is absolutely essential for the progress and protection of this country. Every sincere man on both sides of the Parliament must deplore the absence of a constructive programme of social reform. I know of many things that could have been attempted. There is some talk of the honorable member for Parramatta **(Sir Frederick Stewart)** bringing down a new measure in respect of national insurance. Whether that is really intended, or is merely window dressing, I do not know; I am dissatisfied with what the Government has done since it has had complete power. In saying that, I am not unmindful of the difficulties under which any government, in the present state of world affairs has to operate. In addition to its proposals relating to the prosecution of the war, however, it should bring down progressive legislation which would show to the people of this country that the ideals which it expresses on their behalf are real and worth fighting for. I hope that even now something of the kind will be attempted; otherwise, the Government will leave itself open to the charge of having completely failed in its duty to the people of Australia. Debate (on motion by **Mr. Spurr)** adjourned. {: .page-start } page 522 {:#debate-24} ### HOUR OF MEETING Motion (by **Mr. Fairbairn)** agreed to- >That the House, at its rising, adjourn until to-morrow, at 10.30 a.m. {: .page-start } page 522 {:#debate-25} ### PAPERS The following papers were pre sented: - >Lands Acquisition Act - Land acquired - > >For Defence purposes - Fremantle, Western Australia. > >For Road purposes - Darwin, Northern Territory. House adjourned at 10.46 p.m. {: .page-start } page 522 {:#debate-26} ### ANSWERS TO QUESTIONS *The following answers to questions were circulated: -* {:#subdebate-26-0} #### Postage Stamp Selling Machines {: #subdebate-26-0-s0 .speaker-KF9} ##### Mr Green: n asked the PostmasterGeneral, *upon notice -* {: type="1" start="1"} 0. . Is it a fact that representations have been made by the honorable member for Kalgoorlie for provision for a stamp machine for the busy post office atKalgoorlie, and that he has been advised that only a limited number of these machines has been supplied, but that it is intended to install one at Kalgoorlie when the second supply becomes available? 1. When is it considered likely that this second supply of stamp-selling machines will be on hand? {: #subdebate-26-0-s1 .speaker-KWC} ##### Mr Thorby:
Minister for Health · CALARE, NEW SOUTH WALES · CP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. Yes. 1. The second supply of stamp-selling machines will not be available for some months, but, in the circumstances, steps are being taken to provide a machine for the Kalgoorlie Post Office from the maintenance reserve. {:#subdebate-26-1} #### Shipping Freight Rates {: #subdebate-26-1-s0 .speaker-KF9} ##### Mr Green: n asked the Minister for Commerce, *upon notice -* {: type="1" start="1"} 0. What were the pre-war freights for (a) wheat approximately per bushel, and (b) flour per ton, from Australian ports to the United Kingdom? 1. At the present time, what are the freights to Great Britain for. those commodities ? 2. What were the pre-war freights, and what are the present freights, on the same commodities to Japan? {: #subdebate-26-1-s1 .speaker-JTY} ##### Mr Archie Cameron:
CP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. Pre-war freights from Australian ports to the United Kingdom were: (a) approximately10d. sterling perbushel for wheat, and (b) 33s. 9d. per long ton for flour. 1. Present freight rates can be taken as double the pre-war figures. It should be noted that sales are being made on an f.o.b. basis, and that freight is therefore a matter for the buyer. 2. Freights to Japan for some time before the war broke out were on a nominal basis only for wheat and flour, as shipments were infrequent, but 6½d. sterling per bushel for wheat and £1 sterling per ton for flour can be taken as representative figures. Since the war, shipments have been on an f.o.b. basis with the rates not revealed, but present freights can be taken as approximately double the pre-war figure. {:#subdebate-26-2} #### Monitions Factories Employees {: #subdebate-26-2-s0 .speaker-KZX} ##### Mr GEORGE LAWSON:
BRISBANE, QUEENSLAND · FLP; ALP from 1936 n asked the Minister for Supply and Development, *upon notice -* {: type="1" start="1"} 0. What is the total number of government employees engaged in the manufacture of arms, munitions and the like in the various States? 1. What is the total amount of salaries and wages paid to such employees? {: #subdebate-26-2-s1 .speaker-KV7} ##### Sir Frederick Stewart:
Minister for Social Services · PARRAMATTA, NEW SOUTH WALES · UAP -- The answers to the honorable member's questions are as follows: - {: type="1" start="1"} 0. The total number of employees engaged by the Department of Supply and Development in the manufacture of munitions is - Victoria, 8,850; New South Wales, 1,450; total, 10,300. 1. The total amount of salaries and wages paid annually to such employees is - Victoria, £2,132,000; New South Wales, £340,000; total, £2,472,000. The above particulars relate only to employees of government munitions establishments at Maribyrnong, Footscray and Lithgow. Information is not available in the department as to the number of employees or wages paid at armament annexes, aircraft and aero engine factories, and at the many other private establishments carrying out defence contracts, nor is it considered practicable to. obtain such information. {:#subdebate-26-3} #### Sydney General Post Office Inquiry : Legal Expenses {: #subdebate-26-3-s0 .speaker-KX7} ##### Mr Ward: d asked the Prime Minister, *upon notice -* >What was the total amount incurred in connexion with the Sydney General Port inquiry, 'including the legal expenses paid on behalf of the present Postmaster-General **(Mr. Thorby)** and the legal expenses ofH. G. Whittle and Company Proprietary Limited. {: #subdebate-26-3-s1 .speaker-N76} ##### Mr Menzies:
UAP -- The total amount paid by the Commonwealth Government in connexion with theRoyal Commission on the Sydney General Post Office contract was £2,291 16s. {:#subdebate-26-4} #### Appointment of Industrial Inspectors {: #subdebate-26-4-s0 .speaker-KHL} ##### Mr Holloway:
MELBOURNE, VICTORIA y asked the AttorneyGeneral, *upon notice -* >When will he be able to finalize the appointment of the industrial inspectors, promised some time ago, for the purpose of policing the Arbitration Court awards? {: #subdebate-26-4-s1 .speaker-DQC} ##### Mr Hughes:
Attorney-General · NORTH SYDNEY, NEW SOUTH WALES · UAP -- It is expected that the appointments will be made at an early date. {:#subdebate-26-5} #### Censorship {: #subdebate-26-5-s0 .speaker-KHL} ##### Mr Holloway: y asked the Minister for Information, *upon notice -* {: type="1" start="1"} 0. Are there any uniform principles upon which the officers of the Censor's Branch carry out the work of newspaper censorship? 1. Is it permissible for quotations from current *Hansard* debates to be struck out of newspaper publications ? 2. If so, why is not *Hansard* also refused circulation ? {: #subdebate-26-5-s1 .speaker-N76} ##### Mr Menzies:
UAP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. Yes. 2 and 3. *Hansard* can only be censored by the Parliament itself, but reproduction of any report in *Hansard* is open to censorship by the wartime censorship authorities. {:#subdebate-26-6} #### Canberra: Housing {: #subdebate-26-6-s0 .speaker-JNX} ##### Mr Barnard: d asked the Minister repre senting the Minister for the Interior, *upon notice -* {: type="1" start="1"} 0. How many 4, 5 and6-roomed houses have been erected in Canberra during the past three financial years? 1. How many are in course of construction? 2. How many applicants are on the waiting list for houses of these sizes? {: #subdebate-26-6-s1 .speaker-K4X} ##### Mr Nock:
Minister without portfolio assisting the Minister for the Interior · RIVERINA, NEW SOUTH WALES · CP -- The information is being obtained. {:#subdebate-26-7} #### Postal Department: Canberra Employees {: #subdebate-26-7-s0 .speaker-JNX} ##### Mr Barnard: d asked the PostmasterGeneral, *upon notice -* {: type="1" start="1"} 0. How many temporary employees are engaged in the Postmaster-General's Department in Canberra? 1. How many permanent positions are there in his department in Canberra which have not been filled? 2. How long have these positions remained vacant? 3. Does he intend to fill them ; ifso, when ? {: #subdebate-26-7-s1 .speaker-KWC} ##### Mr Thorby:
CP -- Inquiries are being made and advice will be furnished to the honorable member as soon as possible. Townsville Aerodrome. {: #subdebate-26-7-s2 .speaker-K4X} ##### Mr Nock:
CP k. - The honorable member for Herbert **(Mr. Martens)** asked a question, *without notice,* yesterday in regard to a telegram he had received from **Mr. W.** T. Conn, of Townsville, stating that **Mr. Conn** understood that his tender for the reticulation section of the electrical installation at the Townsville aerodrome was the lowest and that it was proposed to give the contract to a Brisbane contractor who did not tender for the work. I am now in receipt of advice that the tenders are at present being considered by the Works Director but that no tender has been accepted. {:#subdebate-26-8} #### Army Motor Trucks {: #subdebate-26-8-s0 .speaker-KVN} ##### Mr Street:
UAP t. - On the 18th April the honorable member for Brisbane **(Mr. George Lawson)** asked the following questions, *upon notice -* {: type="1" start="1"} 0. How many privately-owned motor trucks have been hired and are being used by the department at Brisbane? 1. What officer or officers of the department were responsible for the hiring of the trucks? 2. What method was adopted by the department in the selection and hiring of the vehicles ? 3. How many trucks were hired from (a) individual owners, and (b) companies trading in motor trucks. 4. What arc the names of the owners of the hired trucks? 5. How many of the trucks are owned by returned soldiers ? 6. For what period have the trucks been hired? 7. What is the weekly, daily or hourly rate paid by the department for the hire of the trucks ? 8. Are owners receiving any other payment in addition to the hiring rate? If so, what is the amount of the other payment? I am now in a position to inform the honorable member as follows:- {: type="1" start="1"} 0. 158 hired vehicles were in use as at the 18th April, 1940. By the 19th April, 1940, the number had been reduced to 48.. This figure will be progressively reduced during the current week, as units complete their training. 1. The Staff Officer, Mechanical Transport, and the Ordnance Mechanical Engineer, Northern Command. 2. After quotations had been called for by the District Contract Board, per -medium of advertisements in local newspapers, all vehicles quoted for were brought in for inspection and test by a qualified non-commissioned officer of the Australian Army Service Corps or Australian Army Ordnance Corps. 3. Of the 158 vehicles, 138 were hired from individual owners, twelve from motor-trading firms and eight from carrying firms. 4. The following schedule shows particulars of the vehicles andnames of their owners: - {: type="1" start="6"} 0. No record is available, but it is estimated that approximately60 per cent. of the vehicles hired were from returned soldiers. 1. The periods of hire varied from 3 to 21 days. 2. In 46 cases the hiring was at a weekly rate ranging from £2 10s. to £9. In the other 1 12 cares the hiring was at a daily rate ranging from £1 to £1 13s. There were no hirings at hourly rates. The actual ratespaid were dependent on the value and capacity of the vehicles. 3. No payment is mode totheowners other than the hiring rates. Communist Literature. {: #subdebate-26-8-s1 .speaker-DQC} ##### Mr HUGHES:
NORTH SYDNEY, NEW SOUTH WALES · NAT; IND NAT from 1929; UAP from 1931; LP from 1944 s. - On the 23rd April, the honorable member for Watson **(Mr. Jennings)** drew my attention to a sample of Communist literature that was being distributed in the letter-boxes ofpeople in Sydney, and asked whether anyaction would be taken to stop future distribution. I then replied that I was of opinion that its distribution should be prohibited, and that I would do what I could to stop it. I am now in the position to informthe honorable member that the National Security (General) Regulations havenow been amended (StatutoryRules 1940, No. 71) to prevent the distribution of such literature. It is now necessary for a person desirous of distributing or circulating any pamphlet, " dodger ", &c., containing any information relating to the war, or the defence of the Commonwealth, to obtain a permit. The honorable member may rest assured that permits will not be issued to distributors of subversive propaganda.

Cite as: Australia, House of Representatives, Debates, 2 May 1940, viewed 22 October 2017, <http://historichansard.net/hofreps/1940/19400502_reps_15_163/>.

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