16th Parliament · 1st Session
Mr. Speaker (Hon. W.M. Nairn) took the chair at 2.30 p.m., and read prayers.
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– Will the Minister for Commerce make the necessary inquiries to ascertain under what conditions the firm ofW alter Haughton and Company Proprietary Limited, of Brisbane, is stacking wool for the Commonwealth Wool Committee? Is this company receiving payment under contract, or on a percentage basis? Ifit be on contract, what was the contract price, and on what grounds was the company’s tender based?
– I shall be very pleased to make inquiries and report the result of them to the honorable member.
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Policing of Industrial Awards
– Has the attention of the Minister for Labour and National Service been drawn to the fact that trade union officials are not permitted to enter munitions annexes except during meal hours, and consequently are unable properly to police industrial ‘ awards during working hours? Is the honorable gentleman prepared to see that these officials have access to munitions annexes, as they have to docks and shipyards, in order that they may police such awards?
– I am not familiar with the position that prevails at present in connexion with the munitions annexes. In the government munitions factories in Victoria the arrangements in respect of the visits of trade union officials have worked very satisfactorily. I shall submit an inquiry to my colleague the Minister for Munitions to sec if arrangements may be made along the lines suggested.
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– I have received from constituents letters directing attention to the report of a speech by the Prime
Minister, published in the daily press of the 11th November, in which the right honorable gentleman said that onone occasion he had made a speech on the danger of government by regulation, but had come to know better. As these remarks appear to be causing some misgiving in the community, and in view of the apparent inactivity of rankandfile members of the Government parties, will the right honorable gentleman, for the purpose- of achieving greater- efficiency and the more expeditious handling of parliamentary business, in addition to ensuring that the democratic rights of members generally will be preserved, consider the setting up, through the Australian Advisory War Council, of the committee system which isoperating successfully in other countries, notably in the United ‘States of America and New Zealand, such committees to deal especially with the administration of the War effort and to consider national security regulations before they are promulgated ?
– The matter of the possible further use of committees has engaged my attention for some time, but I am not yet in a positionto make a statement concerning it As to the appointment of a committee to deal with regulations in particular, I may say that already one such committee is functioning in the Senate. The suggestion ofthe honorable gentleman will receive consideration.
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Mr. HARRISON laid onthe table report and recommendation of the Tariff Board on the following subject : -
Tobacco and tobacco manufactures.
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– I ask the Prime Minister: Is it a fact that Hermann Homburg M.L.C., of South Australia, a former Attorney-General and a prominent member of the Liberal-Country party of that State, has been interned? If so, in view of the statement of the right honorable gentleman in this House yesterday, that “ it was not the policy of the ‘censorship to refuse to disclose any facts except when their disclosure wouldbe of assistance to the enemy,” will he explain why the’ press of Australia were prevented from making any reference to this- matter ?
– To the best of my knowledge, the gentleman referred to by the .honorable member- has been interned. It is true: that-the censorship has issued the direction that it is contrary to the public interest that the name -of any interned person -should be published.
Later:
– Will the Prime Minister explain why the Commonwealth Government deems it necessary in the public interest not to disclose the names of persons who have been interned, or any particulars concerning such Gases, whereas in Great Britain, which- is in much greater danger from the internal activities of enemy aliens, no such suppression is considered to be necessary, as instanced by the publication of news of the internment of Captain Ramsay, Sir Oswald Mosley and many others? Will the Prime Minister explain how the publication of such facts, would bc against the public interest ?
– I cannot answer as to what the practice is in Great Britain. I can well understand that in the House of Commons, which has considerable control over the privileges of its own members, it would be indeed difficult to conceal the fact that a member of that House had been interned. I am not aware that it is the practice to publish the name’s of internees in Great Britain.’ ‘ It would appear to me to be undesirable to give publicity -to the identities of people who have been interned, seeing that their internment may arise from subversive activities, but may equally well arise from the desirability, in1 some circumstances, of protecting them. We cannot, in my opinion) publish the names -of internees indiscriminately so that people may draw conclusions with reference to their conduct which may be quite’ unwarranted, and therefore the practice has been, and is, not to publish the names ‘of internees.
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– Does the Minister for Labor and National Service intend to have a further conversation with trade union representatives in relation to the proposed new conciliation, legislation before final drafts of it are submitted for enactment?
– Proposals are at present in course of being framed, ‘by way of regulation, in the Department of the Attorney-General. The matters involved were -fully discussed by the representatives of the Labour party on the Australian Advisory War Council, who had before’ them the’ views of the’ Trade Union Council. If, however, there is any specific matter which the Trade Union Council desires to bring to my notice, 1 shall be very glad to receive any representations which it cares to make.
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– Owing to the inability of the Prices Commission to prevent the continual raising of the prices of necessary commodities, will the Minister responsible for the administration, of the matter consider the appointment, through the Commission, of men and women to police the prices that are .being charged to-day ?
– I cannot accept the suggestion of the honourable member that the Prices Commission is entirely ineffective; the facts are to the contrary. If it be necessary to consider the making of additions to the staff of the Commission, I shall give consideration to the views expressed by the honorable member.
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– Is the Minister for Commerce able to say when a passenger steamer will be placed on the run between Sydney and Hobart, as only by this means are many people able. to travel to Tasmania during the tourist season, and the airways are quite inadequate to cope with the traffic offering? Should not Tasmania, being isolated, be given some consideration in fixing the schedules of the ships that are running on the Australian coast?
– This matter is receiving the consideration of the Government.
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. - by leave - The House will recall that, when early in August my predecessor describedthe general situation abroad, he did not attempt to disguise the difficulties with which the British Empire was surrounded. At the same time, he emphasized our full confidence that, by resolute decision and vigilance in all our affairs, those difficulties would be surmounted. The situation is essentially the same to-day, but with the important difference that our position, so far from deteriorating, has shown signs of improvement. While it would be unwise of me to say that the tide of our fortune hasturned, there are indications that the balance of forces has moved definitely in our favour and that each day the resources of the Empire, and of its friends, are being marshalled in increasing strength to the task of victory. Above all the magnificent resistance of the people of the British Islands to the German air attack has brought renewed hope to those nations of Europe which are now prostrate at the feet of Nazi Germany, or which are struggling to maintain a precarious neutrality.
Because of its particular concern for Australia, I shall deal first with the situation in East. Asia and the Pacific. There have been three main phases in the course of events in the Far East in the last year First, the period of several months during which the situation was governed by the declared policy of the Japanese Government of “noninvolvement “ in theEuropean war, and of regard for the status quo of the Pacific region; second, the clear enunciation of Japan’s intention to utilize present opportunities for the furtherance of the idea of a “new order” in East Asia; third, and most recent, the actual alinement of Japan with the Axis powers in a military, economic and political pact.
We’ have seen one major consequence of the present trend of Japanese policy in the military occupation of parts of IndoChina in disregard of the declared desire to preserve the status quo. None can say how far this process may extend, nor have official Japanese spokesmen ‘themselves ever set precise limitseither to the political objects of the “new order” or to its territorial implications. The terms “ Greater East Asia “ and the “ South Seas “ are clearly elastic. This change of policy has caused serious concern to the Commonwealth and other countries committed equally with Japan in maintaining the status quo in the Pacific. It necessarily involves a review of our own policy.
The House is justified in expecting from me an assurance that, should our own Empire interests in the Pacific be prejudiced or endangered, the Government will, in full collaboration with the British Government, take appropriate measures to deal with any situation that may arise. It is not my intention now to attempt an examination of the motives behind present Japanese policy. Ican only say that the United Kingdom Government has done everything in its power to persuade the Government of Japan that the reasonable aspirations of Japan need not conflict with the principles of British policy.
We in Australia have a vital interest in the stability of East Asia and the Pacific, and we feel that this interest should be common both to ourselves and to Japan. At the same time we have obligations to China. It will be recalled that on the 17th July the British Government, after full consultation with the Commonwealth and the other Dominion Governments, undertook to close the Burma road to the passage of war materials for a period of three months in the hope that this period would be utilized for discussions leading to a wide settlement in the Far East.
It must be said, however, that Japan evinced no inclination to enter into such discussions. The United Kingdom Government felt that it could no longer reconcileits action in closing the Burma road with its obligations to the Chinese Government and its declared policy of keeping open all normal channels of trade. Great Britain accordingly declared its intention not to renew the Burma road agreement at its expiration on the1 8th October. This step was taken with the full concurrence of the Commonwealth Government.
As for particular Australian policy, the Commonwealth Government has given a clear sign of its confidence that relations, with Japan can still be adjusted on a basis of mutual respect and goodwill, by the despatch of Sir John Latham as first Australian Minister to Tokyo. We hope that the Japanese Government will shortly announce the reciprocal appointment of a Japanese Minister to Australia.
The firm and sympathetic attitude adopted by the Government of the United States of America has been of immeasurable assistance to the Commonwealth Government in the formulation and application of its Far Eastern policy. The Australian Minister at Washington has kept the Government fully aware of the attitude of the United States of America on all matters pertaining to the Far East and the Pacific,- and has had important discussions with members of the Washington Administration on questions of common interest. These discussions are still continuing, and are likely to reach an advanced stage now that Lord Lothian, the British Ambassador, has returned to his post in Washington.
This is an appropriate occasion for me to refer to the visit of the Thai Goodwill Mission to Australia, which concluded with the departure of the mission two days ago from Brisbane. The friendly relations which exist -between this country and Thailand and which are now of long duration will, I feelsure, be evenmore firmly strengthened as the resultofthis visit, which has been a gratifyingsuccess.
As regards “the general “situation in Europe, the House will recall that at the time when my predecessor reviewed the position early in August, he pointed out that ample evidence existed for the view that Germany was contemplating a largescale offensive against Britain.
The ascertainable facts were that for many weeks large numbers of troops had been concentrated in and near the ports of Germany and German-occupied countries. Reconnaissance by the Royal Air Force had revealed heavy concentrations of shipping in those ports, including some thousands of self-propelled barges. The German air attack was increasing in intensity. In fact, everything pointed to an early attempt at invasion by sea and air.
The crisis was reached in midSeptember, when all the auspices were favorable for a German attack, andwhen shipping and troop concentrations reached their maximum. What happened was a crushing defeat for the German air force as the result of which hundreds of German aeroplanes met destruction in Britain and in the surrounding seas. The achievement of German air superiority over the Channel and the English coast remains an essential condition precedent to any attempt at invasion.
Since September, the German air attacks have continued with changed tactics, and considerable damage has been done, not only in London, but alsoin certain large provincial cities. The approach of winter will make the civilians’ lot a hard one, butthey have met and faced this attack with unyielding courage, unimpaired morale, and an even greater determination to bring about the triumph of democracy and all for which our civilization stands.
I can state positively that the work of the factories and foundries of Britain has been surprisingly little impeded in proportion to the violence of the German raids, and while it would be idle to deny the serious import of the large-scale renewal of the German U-boat campaign, vast supplies of food and war material’s have continued to reach British ports under the protection of the Navy.
As an answer to the indiscriminate attack on British civilian life, the Royal Air Forcehas dealt heavy blows on Germany’s invasion ports and at her industrial centres. The information received by the Government leaves no doubt of the devastating effects of these raids on Germany.
Much has been said and written of a possible diversion of Germany’s main offensive from western Europe to southeastern Europe. Be this as it may, no alternatives can reduce the constant and major threat to Germany’s vital war production centres from British air attack. For this reason alone it should not be assumed that the danger of invasion of the British Isles is past. Indeed, there is reason to believe that high German officials feel that Germany can never win the war until Britain is actually invaded and overrun. From the known state of German preparations, an attack on either a small or a large scale is possible at any time of favorable weather, even during the winter. Probably Hitler’s plans, as always, provide for a number of alternatives, the choice amongthem to be madeas best opportunity offers. It is clear all the samethat the failure of the blitzkrieg against England has brought some revision of Axis policy. Inparticular it has stimulated a vast diplomatic activity on the part of Berlin andRome.
In south-eastern Europe, Rumania is already within the sphere of German political influence and intensivepressure is being applied to Bulgaria. In western Europe the position in Spain has given rise to aflood of rumours and conjec- tures, but little of substance is known definitely except that an increasing number of Spanish people aredetermined not to come under Nazi domination. The appointment of Senor Suner as Foreign Minister for Spain and the recent meeting between Herr Hitler and General Franco naturally aroused fears of a more intimate relationship between Spainand Germany as a possible preludeto the German occupation ofSpain in preparation for an attack onPortugal and Gibraltar. There is reason to believe, however, that Hitler’s conversation with General Franco was not as productive of results as Germany might have wished, and I hope thatI may not be considered optimistic inbelieving thatFranco will do his utmost to preserve Spain from further ravages of war by remaining aloof from the conflict.
Germany has also attempted to persuade France to join with the Axis powers in presenting an unbroken front in western Europe. It has since become known that the German proposals have been responsible for a division within the French Government, and there is no evidence to show that the proposals for German collaboration have so far been accepted. Notwithstanding the continued hostility which the Vichy Government hasdisplayed towards GreatBritain, it is difficult to believe that France will go so far as to enter the Axis camp unreservedly, or even allow Germany the use of French bases and the French fleet. Meanwhile, the Free French movement, with General De
Gaulle as ‘its leader, has thrown itself wholeheartedly into the war on the side of the Allies and has continued to receive encouragement and assistance from the Governments of the British Commonwealth. It has been joined by a number of prominent individual Frenchmen and it haswon signalsuccesses in West Africa and in the Pacific, where we in Australia havefollowed with satisfaction the spontaneous demonstrations by the populations of the French Pacific colonies which, have culminatedin the establishment on New Caledonia, Tahiti and the New Hebrides ofregimes determined to continue the struggle against Germany.
As regards Russia, the results of the meeting between Molotov and Hitler in Berlin arc not yet known. If the Nazis run true to form, Ave shall probably never know until faced with some new and sudden development. It is likely, however, that Russia has agreed to nothing contrary to the policy of cautious selfinterest which Stalin has so far observed during the war. On the other hand, in spite of ‘further German penetration in the Balkan region which might have been thought to menace Russia’s interests and natural aspirations, there hasbeen no apparent weakening of the relationship between the two countries which was established by the Russo-German agreement oflast year. We may perhaps t ake some comfort from the fact that Britain’s relations with Russia have not openly deteriorated and thatthe Russian attitude towards us and our cause, however negative and incalculable, is sit any rate not positively hostile.It is to be hoped the Soviet Government may yet take a long-range view and be convinced of the inevitable clash of interests between Russia and Germany which will surely result from Germany’s eastward extension.
We in Australia are directly affected by the attitude of Russia. We must not overlook the fact that Russia is a Pacific power and that any new relationship entered into between Russia and Japan may have far-reaching consequences in our own quarter of the world. Meanwhile, theBritish Government has not relaxedits effortsto bring about a tangible improvement of Anglo-Russian relations. Certain proposals having this objective were made to the Soviet Government towards the end of October. These proposals were of three kinds. Firstly, there were proposals for an Anglo-Russian trade agreement. Secondly, there were proposals for a settlement by compromise of various questions arising out of the Soviet annexation of territories, having due regard to the obligations of the United Kingdom Government. : Thirdly, there were proposals of a general political character relating to Anglo-Soviet relations during and after the war. All these proposals are still under consideration by the Soviet authorities.
It has been suggested, as I have said, that revised Axis plans of attacking the British Empire envisage a German drive through Rumania and Bulgaria in combination with an Italian attack on British naval and land forces in the Mediterranean and Egypt. If this be the case, it is possible to imagine that the German dictator must be watching with ill-concealed impatience the slow progress made by his ally towards the fulfilment of the Italian objective. The Italian advance into Egypt is still at a halt on the fringes of the western desert. It is here that Australian forces are occupying advanced posts. Italian naval forces in the Mediterranean showed a marked disinclination to give battle with the British Mediterranean fleet, in spite of their superior numerical strength. This numerical superiority has now been reduced to inferiority as the result of the brilliant action Ky the fleet air arm at. Taranto on Armistice Day, and of subsequent action by the Royal Air Force.
The whole House will, I know, rejoice with mc in the just retribution which has overtaken Italy in its attempt to overrun Greece. Let me remind honorable members of the full story of Italian duplicity and falsehood which is revealed with such devastating clarity by this completely unprovoked attack on a small and peaceful neutral state. On the 30th September, 1939, a few weeks after the outbreak of the war against Germany, letters were exchanged between the Governments of Italy and Greece confirming the good relations existing between the two countries. In re-affirming Italy’s desire to see the inauguration of a further period of friendship, understanding and mutual confidence between the two countries, the Italian Minister at Athens expressed the hope that both Governments would at no distant date be provided with an opportunity to give more tangible shape to their relations. In May of this year the Italian Minister again assured the Greek Government that Italy had no aggressive aims in the Balkans. On the 10th June, the day that Italy entered the war, Mussolini said, “I solemnly declare that Italy does not intend to drag other peoples who are her neighbours into this conflict. Let Switzerland, Yugoslavia, Turkey, Egypt and Greece take note of these words”. Yet now, with cynical disregard for the sanctity of the plighted word, which exactly copies the wellknown pattern of his Axis partner, Mussolini has loosed his jackals on what he no doubt regarded as easy prey. To his own astonishment, and to the delight of friends of Greece throughout the world, the Greeks have not only repulsed his troops, but have also driven them in confusion from their own bases, and in so doing have captured many prisoners and great quantities of supplies and war material. The entire Greek front line is now well inside the borders of Albania, and at the moment the likelihood of a successful Italian counter-attack appears remote. The success achieved by the Greek army and air force, with the assistance of the Royal Air Force, has obviously presented the Allied forces with a very favorable opportunity for inflicting further discomfiture upon Italy.
At the same time our successful ure of this opportunity will depend in a large measure upon our ability to maintain and . increase our assistance to the Greek forces and this again will have to be considered in relation to our needs on other war fronts. Furthermore,- the possibility of direct German military assistance to Italy cannot be overlooked. For the moment Germany seems to be concentrating upon its great diplomatic offensive in support of its “ new order “. In this offensive it has scored obvious successes in” Rumania, Hungary and Slovakia, but at the same time* it has undoubtedly met with some checks. It is by no means certain that Bulgaria will commit itself to our enemies, and I think that this view is supported by the recent denial from Berlin that Germany expected Bulgaria to join the Axis. Similarly, the resistance of Yugoslavia to German pressure seems to be stiffening under the encouragement of Greece’s success. Meanwhile,British diplomacy in the Balkans has not relaxed in its efforts to thwart Germantactics at every turn. The House is by now aware of the statement in the British House of Commons two days ago by the UnderSecretary of State forForeign Affairs, Mr. Butler, that the British Government would guarantee the integrity and independence of Bulgaria after the war, provided that in the meantime Bulgaria, did not . directly or indirectly assist the enemies ofBritain.
In the Middle East in general we may confidently look forward to thetime when the balance of air and military strength againstus is redressed. The Government of Turkey has continued to express towards us that sympathy and friendship which has marked the’ attitude of Turkey from the time of its great leader, Kemal Ataturk. It hasfirmly resisted all German threats and blandishments, and has expressed inthe most unequivocal terms its opposition to Axis designs upon the Balkans.
In conclusion, I may remark that the whole of the first year of this war has been notable for the difficulty of forming precise judgment -on itspolitical, asdistinct from its military, aspects. All along there have been many unknown factors of great importance, and this remains the case to-day. With respect particularly to Soviet Russia and Japan a very great deal depends on a small fluctuation one way or the other ofthe diplomaticbalance held by the belligerents. The outlook for the immediate future cannot therefore be given in terms of black and white any more than it could at the beginning of the war. All that can be said is that it is prudent to provide against the worst and not to assume even yet that the British Empire and its Allies have passed through the hardest days of trial. It is our responsibility to ensure that Australia’s contribution in the theatres ‘of war, over and above the necessities of home defence, is forthcoming intime and with the maximum possible weight. As the months have gone on, the cause for which we are fighting has become even more clear. The intolerable regime of bad faith and oppression which Germany and Italy are seeking to fasten on Europe must and will be shattered. The -British Commonwealth, its allies and its friends will go on until the task is accomplished. The principles at stake have beenstated many times on behalf ofboth the British and the Allied Governments. They remain more “firmly our objective than ever. Briefly stated,they emphasize the united resolution of ourselves and our allies to prosecute the war withthe utmost vigour until victory is won, and they envisage a new world inwhich peace and contentment are secured not by coercion under tyranny but by the spontaneous collaboration of freepeoples.
Mr.CURTIN (Fremantle- Leader of the Opposition). - by leave -Ido not intend to debate the statementof the Minister, but I submit that when it is deemed that a statement on international relations, as construed by the Department of External Affairs, should be submitted to the House, it should be presented in such a form as to permit honorable members to debate it. To merely read a statement on a day which, by arrangement, has been set aside for other business, is to serve no very useful purpose, even though it may be thought necessary for honorable members to indicatetheir mind upon the matter sub mitted in order that the Government may be guided by the views expressed. It is, of course, merely a waste of time to read statements of the kind unless the House is givenan opportunity to express its views on what is stated, and, in. particular, upon what is implied in the statement. I readily agree that there are certain relations, as between Australia and theUnited Kingdom or, through the United Kingdom, or, alternatively, independently, as between Australia and Japan and the United/States of America, which cannot even be fully canvassed in the House. But insofar as the House is informedon these matters by the Government, it-appears to methat the information becomes of very little service to the House, and of even loss service to the Government, unless the Houseis permitted to indicate its mind to the Government on the facts stated and the policies more or less implied in such statements.
– The Minister could have moved that the paper be printed.
– That is so. I could move such a motion myself, but I prefer not to do so in the present case, for, as the honorable member for West Sydney (Mr. Beasley) will have noticed, the statement, except in one or two features, did not in any way advance the understanding of the House as to the true position. I suggest to the Prime Minister (Mr. Menzies) that the proper course for the Government to take in such a matter as this is to set aside a day upon which honorable members will be afforded an opportunity to indicate their views on the subject of foreign relations.
– I shall do so at the first opportunity.
– If that course le followed, honorable members will he enabled to prepare themselves for the debate which may, of course, still be introduced by the Minister for External Affairs. I accept the assurance of the Prime Minister that my suggestion will be followed.
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– As the statement just made by the Minister for External Affairs omitted all mention of an important engagement which has been described as the Dakar incident, I wish to know from the Minister whether he intends to make any comment upon that subject, or’ to afford honorable members- an opportunity to discuss it, in order that we may ascertain how far Australia was committed to the affair? As honorable members are aware, the House of Commons debated the incident”.
– The undertaking given by the Prime Minister to the Leader of the Opposition will ensure honorable members of an opportunity at a later date to debate the subject.
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– In relation to tho dissemination of information -by the Department of the Navy, I ask the
Minister for the Navy why, although on Thursday, the 21st November, no reference was made in the broadcasts of the Australian Broadcasting Commission at 12.50 p.m., and subsequently at 1.35 p.m., to the loss of a minesweeper, the news was broadcast at 1 p.m. over the B-class station 3XY, which, I understand, is controlled by the United Australia party? Where did that station obtain its story? I wish to know also how it happened that in connexion with the sinking of certain ships -by mines, the Melbourne Argus stated, no doubt from official sources, that only one ship had been sunk, whereas the Melbourne Sun announced that two ships had been sunk? How came it that the Melbourne Argus declared that there was no truth in the announcement that two ships had been sunk, whereas the statement of the Melbourne Sun was afterwards admitted to be true?
– I am not in a position to dispel the difficulty in which the hon’ora’ble member for Melbourne finds himself in regard to the broadcasting of news. I am not quite clear how the broadcasting stations were informed on this subject or from what authority their information was derived. “ I shall make inquiries into the subject. I am certainly not responsible for general press statements. The statements which I myself have made, and which I have given to the press, have been prepared by the Department of the Navy, and although they may- have been somewhat belated, and may have fallen short of what the honorable member thinks proper, they at least had the merit of accuracy.
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– Is the Treasurer able to inform me when he proposes to bring down the bill dealing with the excess profits. tax, which is an integral part .of his ‘budget, or whether it has yet been determined that such a ‘bill should be introduced ?
– The bill will be brought down as expeditiously as possible.
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– Is the Minister for the Army prepared to give consideration to the granting of free transport facilities by omnibus to members of the defence forces on leave, when transport facilities by rail are not available?
– The subject of transport facilities for troops is presently engaging my attention.
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– I ask the Prime Minister whether, in view of the Treasurer’s statement that an inquiry will be made into the premature disclosure of information contained in the budget, it is proposed to constitute a royal commission to make the investigation? Willthe investigating authority also be requested to inquire into the premature disclosure of the Cabinet’s decision in regard to the establishment of wet canteens ? Does the Prime Minister consider that the premature disclosure of such information is very serious?
– All that I can say at the moment is that I shall discuss with my colleague the matters raised by the honorable member.
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– Has the Minister for the Navy a statement to make about the reported sinking of the Port of Brisbane and the Maimoa in the Indian Ocean? This matter has been referred to in the press, and, surely, the House is entitled to some statement.
– I am sorry that I have no additional information to that which appeared in the press. It appeared in the press before it was mentioned here because the news came to hand last night and was immediately given to the press. It must be very evident that these happenings in distant seas take place when none of our observers are present. Uncertainty must remain in our minds. All that I can say is that it appears that the Port of Brisbane was sunk, that three boats were launched, that two with members of the crew and passengers were picked up by the raider and that one escaped detection and was picked up later by our own vessel and brought into Fremantle.We have no knowledge whatever of the Maimoa except that a lifeboat from it was seen by the cruiser and picked up. It is assumed that the crew and passengers were taken on the raider. As the honorable member will readily see, we have no means of checking that.
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– Is the Minister for Commerce aware that householders in the suburbs of Sydney, and, I suppose, elsewhere, are being charged11s. a bushel for inferior wheat for fowls, whereas prime milling wheat sells for as low as 3s.6d.? Will the Minister take action through the Prices Commissioner to ensure that this unwarranted exploitation of householders is stopped ?
– If the honorable member will give specific instances to the Prices Commissioner I am sure that the matter will be dealt with.
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Christmas Leave: Free Passes
– Does the Minister for the Army know whether it is intended to give Christmas and New Year leave to members of the Australian Imperial Force? If so, will they be allowed free travelling facilities to and from their home States ?
– An announcement has already been made that members of the Australian Imperial Force in Australia will be given eight days of leave over that period. I shall give consideration to the second part of the honorable member’s question.
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– Is it a fact that the apple and pear growers were promised an extra1s. a case for fruit which measured up to a high standard ? If so, when will that money be distributed?
– I presume that the honorable member refers to the new scheme ?
– No, to the old.
– Under the old scheme the rates payable were fixed on a flat rate basis and there was no discrimination as regards size, except that a minimum size was prescribed.
– Will the Assistant Minister for Commerce look up the records and see whether a promise on the lines set out in my earlier question was made by his predecessor?
– Yes.
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Cream Transport Wagons
– In view of the hardship imposed on dairymen by the decision of the Fuel Advisory Committee of Victoria not to permit the entry of cream transport wagons to farms, will the Minister for Commerce give consideration to bringing pressure to bear on that board to alter that decision?
– That matter is under the control of the Minister for Supply and Development, to whom I shall referthe honorable member’s question.
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– I ask the Acting Leader of the Country party whether he can indicate when the official leader of the party in this House willbe appointed? Is the inability to appoint a leader owing to thefact that the Country partyis,as stated by the former leader (Mr. Archie Cameron), “a stew of simmering discontent “.
– Order !
– That, like the house hold budget, is a domestic matter.
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Motion (by Mr. Menzies)agreed to -
That the House, at its rising, adjourn until 10.30 a.m. to-morrow.
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Mr.MAKIN. - Is it the intention of the Minister forLabour and National Service tohave a detailed survey made of the abilities of the registered unemployed, or is he content to accept the mere registrations themselves asindicating the way in which those persons could assist in the war effort? Many of the unemployed have more qualifications than one,and the registrations give meagre details.
– The Department of Labour and National Service is new and at present we are engaged on organization. A researchbureau, which acts in collaboration with research officers in the
States and which is under the control of the Commonwealth Statistician, keeps under constant view the registrations at labourbureaux. It is hoped that, when thenew department gets into full swing, we shallbe able to engage the services of the unemployed much more than in the past and that we shall also be able to make an accurate assessment of their ability. The matter isverymuch in the mind of the department.
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– Does the Prime Minister propose to adopt the practice that has prevailed in the past ofmaking an extra grant of money in order that relief workers may be given an additional week or fortnight’s work prior to the Christmas season ?
– I shall discuss that matter withmy colleague.
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-I ask theMinister for Commerce whether the Commonwealth Government is controlling and operating the German merchant vessel thathave beenseized in Australian waters?
– Four enemy vessels have been taken over and are being operated by the Commonwealth Government. What their nationality was I am not at the moment able to indicate.
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– I ask the Minister for the Army whether it is true, as reported, that thesum of 9s. a week is allowed for the children of internees whereas only 7s. aweek is allowed for the children of men serving with Australia’s fighting forces?
– I am not aware that that is the case, but I shall make inquiries and give ananswer to the honorable gentleman to-morrow morning.
– Is the Prime Minister aware that a former German subject, who has been a naturalized Australian for the last 26 years, has been interned and that his wife and children living in the Newcastle district have been denied sustenance by the Government of New South Wales because the wife possesses amotor car, although she has not sufficient money to purchase petrol for it? Is it right that tl is woman and her family should be allowed to starve merely because she 13 in possession of a motor car? Dependants of enemy subjects are not necessarily responsible for any subversive activities that may be carried on. What is the system of maintaining dependants of internees-? Will the Prime Minister explain how- and by whom they- are maintained ?
– I am not aware of the case referred to by the honorable member, but if, afterwards, he will give me the name of the internee–
– I have written to a Minister oh this subject and have received no reply.
– The honorable gentleman did not write to me. If he will remember to what .Minister he did write, X shall discuss> the matter with that Minister and furnish a reply.
– I wrote to the AttorneyGeneral.
page 259
Motion (by Mr. Menzies) - by leave - agreed to -
That so Hindi of the Standing Orders be suspended as would prevent, before the Address-in-Reply is adopted, the resumption of tlie budget debate.
page 259
In Committee of Supply:
Consideration resumed from the 21st November (vide page 91), on motion by Mr. Fadden -
That the first item in the Estimates under division I. - The Senate - namely, “ Salaries and allowances, £8,17G “, be agreed to.
/ - The circumstances in which this country finds itself are not entirely without precedent. Australia wa§ at war a little more than 25 years ago and thus we have some experience as a nation, and the Government has some knowledge as a government, of the problems that war causes. There” has been a vast development of this nation since the first world war came to an end. That development enabled us to discharge a very great part of the obligations which the country had incurred while engaged in the war from 1914 to 191S. I “have used the expression “ a very great part of the obligations “. We were able to engage in the rehabilitation of those who fought. We were able to defray all of the costs of government. Additional taxes were imposed on the people. But the extraordinary feature of the immediate post-war condition was thai the capacity of the nation to m’aintain great armies in the field and to operate, the ordinary economic processes of the country was far greater than had been indicated by any pre-war estimate. In fact, had anybody prior to 1914 said that the expenditure which this nation incurred in that war could be contemplated for any other purpose, no subscription to any such declaration would have been made by the leaders of the community. Similarly, if two, three, or five years ago, any Treasurer had suggested that the astronomical sum which the Government now proposes to use for the defence of this country in. the war in which we are engaged could be made available for the development of this nation or any other peace-time operation, no representative critic of -the Government, and most certainly no honorable gentleman who sits on the treasury bench to-day, would have said that thesuggestion was at all feasible. It is beyond the capacity of normal man to measure the expenditure that we -are incurring, so vast is it. As the result of the great increase of productive capacity, and the enormous additions to man-power which science is continually conferring, the physical capacity of Australia to sustain life and to provide for the continuation of industry will be relatively unimpaired even though we are called upon to find these staggering sums. Wars are fought with physical things. They are fought by labour power, with guns, aeroplanes, bombs, ships, docks and factories. When all is said and done, they are fought by human beings, using raw materials in various ways. Wars are not fought with money. As a matter of fact, we shall fight Hitler, not with a cheque book, not by printing notes, not by the wizardry of bookkeeping, but by maintaining the physical health and strength of the men and women of this country and of all the countries on whose side we are fighting. Bread, meat, butter, guns, bombs and aeroplanes - these physical instruments which man’s power, drawing on mother nature, enables him tobecome possessed of, are the actualities of war. If they were not, I venture to say that it would have been utterly out of the question for the German Nazi Government, ‘-having regard to its post-war financial condition, to develop the amazing warlike capacity which it now exhibits. Therefore, the Labour party, looks at this matter undeterred by figures in a book, undeterred by the noughts which may appear in balancesheets. It says that this country will defend itself with flesh and blood, with materia things, physical things, with the products of nature, and with the manpower of the country. It says that we shall use the banks as an accounting system, that we shall use moneyfor the measurement of services rendered and as a means to give to those who render- service some evaluation of their relativity to all other persons in the community. So I see no basis upon which I can compare this budget with anyof its predecessors. It would be futile for me to say that the expenditure in such a year was so much, and that we got so much. Whatever amount is required to organize ‘the men and women of this nation for its defence, no financial difficulty would prevent theLabour movement from organizing them for that purpose.So long as life subsists and industries exist, so long as there are factories, farms, transportation systems, and those things which are the body of the economic structure ofthis nation, then we say that there are no financiallimits in respect of the organization of the economic condition of our countryand the services of ourcountry, and of theiruse by the men and women ofthis country. Those men and women will provide theproduction of thiscountry. The men will provide the fighting forces, and the women will provide the healing, nursing, nurturing, and sympathetic services.
Upon that predicate, this country can organize a maximum effort. It is a conception such as I have endeavoured to expresswhich led the CommonwealthLabour Conference to say that, as this Avar means so much in respect of the preservation of all that we have andvalue, and of the attainment of those objectiveswhichwe hope to realize in the future, Labourwill give its all. That is a simple statement, without reservationandwithout ambiguity: Labour will give its all. But Labour also says quite candidly that this nation, too, shall give its all; that no section of the community shall be allowed to escape the obligation to give its all.
There must be no holding back. Men andwomen mustwork inworkshopsand factories. We mustendeavourto treat them justly. We mustsee that every legitimate grievance that theyhave is fairly and promptly examined and that their treatment shall be, commensurate with the volume of our resources, in proper relation to the treatment accorded to the rest of the community ofwhich they are a part. There would be nofairness if, as the result of general policy, some personswere allowed to make themselves prodigally rich at the expense ofthe rest of their fellows and to the detriment of the maximum effort which the nation is called upon to make. If any one thingstood outmore strikingly than another in an examination of all thatwas involved in the -management of the firstworldwar, itwas that,whilst slogans of equality of sacrificewere tocsined from a thousand platforms, that war created anew class of profiteers, and gave rise tonew opportunities to gain a sectional advantage in contrast to the satisfaction of the real interests of the nation. If on thisside of the House, or elsewherein this country, there are those who are apprehensive of a possible repetition of that unfair and unequal arrangement, then atleast theyhave history as a precedent fortheir fears. I suggest that there isnow sufficient intelligence in the community toremoveany such causeswhich may be overcome if regarded -fairly. So my outlook, in principle, in respect of this stupendous bud- get, is, first, that the amountwhich the Governmentasksthe Parliament tovote for theconductofthewasisanamount which this Parliament ought to vote.
TheOppositiondoes not seek to reduce by asingle -shillingtheprovisionwhich the Government in itswisdom regards as necessary in order that the programme in relation tothe conduct of thewar may beadequately carried out in the financial year that we are considering: Honorable gentlemen opposite would regard as utterly impracticable the provision of this staggering sum of £186,000,000 for water supply schemes’, for housing, or for other constructive purposes of peace, yet it appears in this budget, and the Opposi- tion accepts it. In all probability there will be a certain amount of waste. Possibly, reductions could be made in certain directions. But it is hot our view that we should be pedantic or finicky in this matter. I frankly acknowledge that a general who could shorten this war by three weeks or three months would save the country far more than all the accountants and all the shrewd business managers whom we could organize to our aid. So I am not going to be unduly meticulous in my scrutiny of the expenditure involved in this stupendous task of improvising the great variety of new services which are inevitable in the organization of a country for purposes of war. Last year we spent, in all, £55,000,000. The Government says that it needs for this year £186,000,000. That means that an additional effort represented by over £130,000,000 is involved in the task that confronts us this year compared with last year. It is, indeed, a staggering sum.
I propose to deal with this matter entirely as a problem of what is the best and most equitable way in which to find this vast sum of money.When I have dealt with that, I shall ask the House to consider if there are not, in the national interests, certain essential things which we ought to do in order that our country might be the more unitedly organized for the purpose of carrying on this truly crucial struggle. I find that the Government proposes, in short, to increase what is described as the taxes to be imposed on the country. And it proposes to increase both direct taxation and indirect taxation. The sources available to it have no doubt been pointed out by those in the Treasury and the Taxation Department who have studied very deeply the subject of how to get money from the public, but there are certainly valid principles which ought to govern the extraction of money from the community.
The first and vital principle is ability to pay, and that relates to the general principle of taxation. Then, we must consider how we shall construe ability to pay. Are we to deal with the margin, or with thetotal fund available? I submit that there are certain restrictions upon taking everything in the community, unlesswe have an entirely socialist state. In the absence of such a state, we must leave each individual with a certain amount of purchasing power for the acquisition of those things which are essential to his existence. He must be able to provide for his whole household. He must, in short, have some standard of life assured to him. In that the state will not provide for him, it must leave to him out of what he has the amount required for the discharge of his imperative obligations. Well, we have done that. Hitherto, in all taxing systems, there has been, in regard to direct taxation, an exemption which varies from place to place and from time to time. The Commonwealth fixed the exemption at £250.
I draw attention to the fact that, since the last war, the burden of direct taxation has been greatly increased on the lower ranges of income, and conditions are very different now from what they were when this Parliament first imposed direct taxation during the last war. Somewhere about 1929-30, the State governments of Australia found themselves in very serious financial difficulties and, in order that they might balance their budgets, they imposed direct taxation upon incomes which never previously had been subject to taxation in Australia. Many of the governments imposed taxation at the source - wages taxes and the like. As the result, there were brought into the tax field a great mass of small incomes. After these taxpayers had paid their taxes, they were left with so little for the amenities of life that it is fair to say that the crisis of depression in this country, so far as governments were concerned, was met very substantiallyby those in receipt of the lower and middle incomes. It might be said that the workers were called upon to make a very substantia] contribution towards meeting the problems of the country which had become acute as the result of the depression.
It is onthis very substantial field of State taxation on the lower ranges of income, that the Commonwealth Government now proposes to superimpose a great deal of new taxation. It proposes to do this directly and indirectly. It proposes to reduce the exemption from £250 to £150,andalso to increase heavily , the burden of indirect taxation. It proposes to take £74,900,000 in the form of indirect taxation, and £51,400,000 in the form of direct taxation. That means that, comparing it with the last complete . year of peace, income tax receipts are to jump from £11,800,000 to £40,000,000. The land tax is to increase - from £1,400,000 to £3,100,000. There is a new gold tax, which is to produce nearly £1,500,000. It is estimated that the receipts from sales tax will increase from £9,300,000 to £20,000,000. Excise duties on beer andtobacco are to yield more and, in addition, the customs duty on tobacco is expected to yield an additional . £1,000,000. I know that the effects of indirect taxation on various classes of the community are very hard to measure, and it has been the practice to regard them as measurable only in per capita terms. I am not satisfied that that is a completely fair way to judge the incidence of thisproposed taxation, but I do not think that a better way can be found. There are 40,000 persons in Australia with incomes of £1,000 a year or over. They will pay £20,000,000 in direct taxation, and £7,000,000 in indirect taxation, a total of £27,000,000.
Mr.Menzies. - The honorable gentleman isassuming that every one will pay the same amount in indirect taxation.
Mr.CURTIN.- I acknowledge that it will not work out on a strictly per capita basis, but it is possible to make a stab at it by saying that, broadly speaking, the burden of sales tax, for example, in relation to the lower income groups, will be reflected in the cost of necessities, while the yield from what are commonly called luxurieswill come, in the main, from those in the higher income, groups. But I decline to regard beer and tobacco as luxuries. I do not say that they are necessities, but the man who spends money on tobacco and beer in moderation is merely enjoying some of the amenities of life - an additional comfort. In the same way, a woman who does not smoke, but who saves up to buy a vacuum cleaner, is giving herself one of the amenities of life. In many working-class homes, where there is abstinence from expenditure, there is a choice of indulgences. Thus, aman, instead of smoking or drinking a few beers, may save up and buy a radio, or a vacuum cleaner, or a refrigerator, or even a piano. Therefore, I refuse to regard the possession of a refrigerator or. a vacuum cleaner by a working-class family as an example of the high economic standard which prevails throughout the community. The truth is, that the possession of such comforts is the result of abstinence from other things which are, after all, commonplaces according to our way of life. Therefore, when I accept the per capita system as the only way in which to measure the burden of indirect taxation, I am in good company, because no statistician can measure it accurately in any other way. Thoughwe may hold the idea that only the rich can run motor cars, the fact is that there are hundreds of working men who, by saving up, and by incurring an obligation in respect of their future incomes, do in fact purchase and run motor cars. In any case, if man’s genius has placed some beneficial device at the service of the community, is it to be assumed that only the rich or well-to-do should be able to take advantage of it? Surely not!
Therefore, I return to my contention that the per capita method of measuring the burden of indirect taxation is at least more accurate than any other way.I agree that there may be somemathematical inaccuracy involved, but only in the way of emphasis. Thus, when I say that the 40,000 taxpayers in receipt of an income of £1,000 a year or more will contribute by way of direct and indirect taxation a total of £27,000,000, I am as accurate as any one else can be. Also, when I say that 310,000 taxpayers in receipt of a total income of £143,000,000 will pay £8,000,000 income tax and £15,000,000 in indirect taxation, that is as near the truth as any one canget. Incomes under £400 a year total £517,000,000, but that has to be divided among 2,500,000 persons. Thisgroup will contribute £5,000,000 in income tax, but no leas than £50,000,000 in indirect taxation.
In addition, they are also contributors to “Sta te income tax.” I shall riot go into . that matter, other than to raise’ this point: The Treasurer said that lie could not step up any further the taxation on higher incomes, because in Queensland the rate on the high incomes is so high that it would be ‘ economically unsound to increase the Federal rate of tax beyond that now proposed. Thus, he fixes the limit, for State and Federal tax combined al .’14s. in the £1, this limit being determined by the high rate of taxation in Queensland. That is the theory. “Well, why not apply that argument to the high taxation on the lower incomes in South Australia? If Queensland is to set the limit in respect of what shall be imposed on the higher ranges of income, surely South Australia should set the limit in respect of the lower ranges of income.
As a matter of fact the income receivers in the five other States are spared income tax. State and Federal combined, because of the high taxation imposed by the Government of Queensland. In Victoria, New South Wales and South Australia the higher ranges will contribute less to this nation in State and Federal income tax than will those in Queensland. How does the Treasurer square that general argument with the position that obtains in respect of the lower ranges in South Australia? His tables disclose that in South Australia the tax in the lower ranges in respect of any of the categories in the tables will be more than will be the case in any other State. By adding these sums together I find that those who have incomes below £400, who number 2,500,000, will contribute probably £55,000,000 to this budget; those who have incomes between £400 and £1,000 will contribute about £23,000,000, and those who have incomes in excess of £1,000 will contribute £27,000,000. I am not surprised that that table is correct because the whole theory is that, if the Treasurer is in difficulties and has to get the money, he can get it only by bringing into the field the great number of those who have previously been outside it. You cannot go up; you have to step down. During the depression that was true of every country in the world. It was true of the State Governments and also of the Federal Government; and it is trite now in war-time. Every difficulty that the nation faces financially involves a new subscription to the maintenance of stability of the State, and this - can be obtained only by imposing a-new or additional burden upon those oni the lowest rung of the ladder.- On this, occasion the Government proposes to reduce the exemption. A worker in South Australia receiving £200 a year will now have to pay £12 plus £4 in State tax.
– Only if he is single.
– Yes, but why all this talk about single men? The age at which men marry is rising. We know, too, that there are economic, social and other factors which time does not enable me to deal with here to-day. But the argument that the single man is overpaid or wastes his money is, I venture to say, utterly fallacious. The single man is preparing for matrimony. While it may be said with truth that a good deal of money is spent by single men in horse racing and in hotels, I venture to say that those who have given special attention to the social aspects of this question will find that there are as many married men in hotels and on- the racecourses on Saturday afternoons as there are single men. This attempt to treat the single man as though he has no obligations either to himself, his family, or to the future is absurd. Single men in Australia have family obligations. What happens when they marry is merely that there is a change in the form of their family obligations. In thousands of homes single men defer marriage with the consent of their fiancees because of the effect that marriage would have in the separation of the family unit and the reduction of its economic resources. I paid some attention to this matter as a member of the Royal Commission on Child Endowment or Family Allowances, and I say frankly that, to regard a single man as other than a potential head of a family, &3 a potential husband and father, with all the obligations that that implies, is to mistake altogether the whole nature of the problem. When you come ‘to work it out, thousands of men who are riot young men, but who, in fact, are single men none the less, have responsibilities either for relatives or younger brothers and sisters.You cannot gauge family responsibilities by a mere classification of men intosingle and married. That applies also to women. There are many young women who have mothers or dependants to care for. This budget by and largeproposes to deal with the same conjugal situation, but to deal with it this year in the lower ranks of income much more drastically. The budget has not altered the family relationships in Australia. It has not increased thenumber of single men or lessened the number of married men. The Government simply says that whatever they are it proposes to impose thisnew taxation upon them. By doing that it is making a direct hit at what are essentially the physical requirements of thepeople, namely, food, clothing, shelter and the maintenance of arobust vitality with which to maintain the vast strength of this nation for the purpose of wagingthe strugglewhich the nation has to fight. There can be no analogy whatever in a tax of £6 on an income of £156, and a tax of £2,500 on an income of £5,000. The assumption that, having regard to all the circumstances, the graduated steps are equitable, can only be followed when the exemption is started at a sufficiently high figure to ensure that there will be no physical sacrifice on the part of those brought into the tax field. Sir Richard Acland puts it this way-
The rich man whose income tax increases so as to reduce his income by25 per cent. is sacrificing far less than the poor man whose purchasing power is reduced by 10 percent. Sacrifice is a physical, not a financial, affair. There is no physical pain connected with the writing of a cheque to the Treasurer for the very largest amount. The sacrifice only begins when a man cannot purchase what he could have purchased if he had not paid the tax. From this point of view aman whose income before the war was £100.000would sacrifice almost nothing if his taxation rose to £95.000, or19s. in the pound.
In every human essential one can live just as goodalife on£5,000 as on £100,000. One’s housemay be smaller, but everyone sleeps in aseparateroom. One’s staffmay be smaller, but there is still someone else to light the fire. In comparison with this, amere 5 per cent. reduction in the purchasing power of a working family is immediately reflected in themostdefinite physical privation and pain. This isthe moretrue since the considerable number of chargessuchasrentandinsurance are fixed and a 5 per cent. reduction in the total income means thereforeperhapsa15 per cent. reduction in the sum available for food.
Every inquiry made in Australia has disclosed that any re-adjustment of the expenditure of the household must be affected by reductions of two items, namely food and clothing. There can be no re-adjustment in respect of house rent, which is almost arbitrarily fixed. House rents may fall, but they have not fallen yet, and the experience of wartime is that with the concentration of large numbers of men in camp, the separation of families and the drift to the capital cities, rents in the capital cities will tend to increase, notwithstanding any measures which the Government may take to deal with rent fixation. There can be, then, no re-adjustment of the household budget on the basis of reducing the rent charge. Therefore, the reduction of the exemption is in itself, a penalty upon those who are least able to stand any new contribution.
Having regard to the rates of wages, the amounts which the Statescollect are, I venture to say,already sufficientlyhigh, and I believe that the Government, by adhering to the arrangement that has stood in respect ofthe exemption, may well beable to find the requisite with which the finance the war.Ido not propose to examine the income taxrates bill, which is a separate measure ; I merely say that throughout the whole of this budget there has been a failure on the part of the Government to appreciate how grievously the capacity and vitality of this nation tofight this war may be impaired bypushing taxation on the lower ranges of income. We imperil the real physical resources of thisnation when we attack the standard of life in the homes of the great massesof the people.
While theGovernment has made it plain that it is opposed to the imposition of wage reductions during the war, it imposes this tax system. During the time of the depression, both things were done, the States imposed direct taxation, and there were cuts in wages. During the last war there were no cuts in wages, but extraordinary increases were made in the cost of living and there was a long lag beforeattemptswere made to readjust -wages.Now, during this war, the Government seems to believe that there can be no salvation for it and no resources open to the Treasurer without invading the standard of living of the great masses of the people. That is not our conception of an all-in war. That is not the view that Labour takes as to how to get the requirements with which to carry on the tremendously valuable services necessary in a time of struggle which involves everything. I said last night in support of -the loan measure that it was a proposition which invited those who have material possessions to lend them to the Government. May I put it to the committee that the man who works in the factory, who spends his wages in the maintenance of himself and his family, and the man who. serves in the forces, who has nothing else but himself to offer -and whose pay and allowances are sufficient only for’ the needs of himself and his family, give their all to their country. But what of the rest of the- community? They have their liberty and their personal possessions to defend; not only their proud heritage but also their material interest is at stake. What of their property and wealth ; what of their accumulated savings; what of their stake in this country? These are far greater than those of a man who has only his wages. The landlords of Australia have not only their liberty but also their ownership of their land to defend. They know that if Australia should’ go down in this struggle their land, which has given them power over their fellow Australians, will no longer be theirs, for it will be taken from them and given to the conquerors who will come to our shores. But when Australia has won the war their land will continue to remain in their possession.
Let me ask what will become of, say, the shares in the Broken Hill Proprietary Company Limited if Australia should be defeated in this struggle? As it is, these shares are actually increasing in value. I pay tribute to the significance of the Broken Hill Proprietary Company Limited as an economic factor; hut is it essential, or necessary, that this Government should draw upon the lower range of incomes, to the point of compelling the wage-earners to make great sacrifices, while it leaves substantial incomes in the hands of shareholders of such companies as the ^Broken Hill Proprietary Company Limited? That is not equality.
I do not desire to go into -detailed figures at the moment, but it seems to me that to ask a man who is receiving a wage of £5 to make a substantial direct contribution each week towards the financing of the war and to leave the man who has a higher income with a- substantial margin is most unjust. Men with incomes in excess of £1,000 will still .have money available to invest in war loans even after they have paid the taxes which the Government proposes to inflict upon them. In effect, the Government is saying to one section of the community, “ We shall tax you to such a degree that you will have nothing whatever to spare while to another section of the community it is saying, “‘We shall tax you heavily, but you will still have some money to invest in war loans and the like “. It is improbable that wage-earners on the lower range of salaries Will be able -to invest even in war -savings certificates, but persons on the higher range of incomes will still be ‘able to put their money into war loans. The effect of this will be that such individuals will be laying the basis for -a perpetual claim upon the resources of this country after the war is won. -They will become creditors of Australia. In my view the only persons who should be creditors of the nation after the war are those who have served in our fighting forces or in our factories. Such men -will have spent themselves’ in either active service or industry, and I put it quite frankly that they -are the people” to whom the nation should be in debt.
The schedule of taxation which the Government has submitted indicates, on the very face of it, the need for reexamination. In the last analysis the policy which the Government is pursuing, of burdening people on the lower range of incomes, must be de’structive of the maximum effort of our people’ to fight and win the war.
I shall on a later occasion state my views on the war-time company taxation policy of ‘the’ Government. A bill to give effect to a policy of this character was introduced into ‘the Parliament about a year ago and not proceeded with, and another bill Was later introduced and deferred, presumably, on “account of - the inability of theGovernment to give effect to its declared intentions. I understand that it is now proposed to secure £4,500,000 by means of the war-time company tax. I shall be glad to hear the details of the Government’s scheme in this regard.
In theview of the Opposition, the budget, proposals should also be reconsidered with the object of ensuringbetter treatment of themen whoare serving in our fighting forces and also of their dependants. The claims of these persons should. be sympathetically considered. Liberal treatment should be. accorded the dependants of the men who are serving in the forces, for upon them will ultimately depend the health, strength and vitality of the physical resources of the nation.
Another important sectionof the community which is entitled to more generrous. considerationby the Government is our invalid and old-age. pensioners. The rate of pensionpayable to thesedeserving persons has fallen behind in consequence of thechanged conditions in our national life. After an examination of this subject,the party whichI have the honour to lead declaredto the country at large, during the electioncampaign, that in its view the rate of pension should be increased.I have.only to point to the increased number sitting behind me; and to the reduced number supporting the Government to indicate that the country supportedthe viewthat Parliament shouldtreat our pensioners more liberally thanhithero.
Mr.Hutchinson.-I do not think that one vote was altered by that consideration.
Mr.CURTIN.-If the honorable member holds, that view he willat least, be prepared toadmit that the. people of this countrycannotbebribed and that no one would attemptto bribe them.
Mr.Hutchinson. - Didthe Leader of the Opposition attempt to. do so ?
Mr.CURTIN.-I didnot.At the moment.Iamsimplyindicatingthat,in our view, the membersoftheForces and their dependants, and also our invalid andold-agepensioners should be treated more liberally.The proposals the Labour partyputforwardinthatconnexionwere apparently regardedasfairbya very largesection of the community.
We also made certain submissions in respect of the wheat-growers. The Government has now indicated that it regards our conception of fairness to the wheat-grower as reasonable, for it has practically adopted it.No doubt it hasbeen influenced, by whathappened at thegeneral elections, though it may also have in mind, : at the moment, . the by-election in the Division of Swan. It is of no use for honorable members opposite to talk about bribes.
Anychanges of our social standards must have a very definite relation to the capacity of the country to wage this war. . In my resistance of -all attempts to reduce our social standards I have had in mind the necessity to preserve and, if possible, to improve the strength and standard of our family life; for it rests with the greatmasses of the people of this country to provide the units of service in our fighting services and factories. I have sought, and I still seek, to strengthen our family life by endeavouring to overcome certain existing weaknesses. One of these is the inadequacy of the invalid and old-age pension. We should make it possible for the aged people of our community to maintain their lives at a reasonablestandard of living. We should also make it practicable for our soldiers and their dependants to live according to reasonable standards.
The Government has talked a good deal about . central banking credit and has declared that it will deal reasonably with this aspect of our economic system. The Labour party agrees that there are limits to the use of bank credit, but italso holds the view that there is a limit to the effective use of the power to tax beyond which no government can safely go. That limit is reached when people are left without a margin over and above. physical requirements. When that point is reached the danger arises of shattering the morale and potential quality of the units of our national life. We are often told that if business men are taxed beyond certain limits they will not invest, and that, if they do not invest, the streams of employment will evaporate.I can understand that argument in principle, but I can also appreciate the dangeroftaxing theworkingmantothepointat which he loses all hope of everacquiring any status as a, creditor ofthe nation. The Government is proposing to inflict a very heavy burden on some of these people and, to make sure of getting the money, it is arranging to stop it from wages and salaries. There can be no “ Abraham’s Brothers about the workers, in respect of their obligations. It will be a staggering burden for a man earning £4 10s. a week to have to carry a tax of 7s. 6d. a week, and for a man earning £5 a week to have to carry a tax of 16s. a week. Workers organize their living according to the amount of money that they customarily receive. If a sudden shortage occurs in their receipts theyare immediately faced with the necessity to revolutionize their outlook, and are in fact compelled to do without things which day by day and week by week have been really necessaries of life to them. That is not the position of the well-to-do. Any re-adjustment which such persons make in their way of living may have some relation to their available resources but does not involve a change of the class of house in which they live. The well-to-do will not be compelled, by these taxation measures, to move into poorer and meaner houses or to alter their regimen, or to do without a doctor in the case of sickness or to hesitate to spend money with a chemist in case of need. Yet all these things are implicit in the effect of the budget upon the poor people of this community.
For these reasons and . also for others which I shall not enlarge upon at the moment, the Opposition considers that this budget should be reconsidered. The Prime Minister was kind enough to write me a letter some little time ago in which he outlined the views of the Government in regard tosocial standards. He said, among other things -
We should aim atthe maintenance of the highest living and social standards consistent with a full national war effort.
I agree with those sentiments, and I put it to the right honorable gentleman that it should be practicable for the Government to obtain some guidance fromthis committee in regard to the relation of our national war effort to the maintenance of the highest standards of living. Surely it is reasonable for us to discuss this important subject with aview toarriving at a united view. The issue should not depend upon the arbitrary declaration of either one political party or another. What we need in Australia is a maximum and cohesive national effort for the preservation of our national life. Ifthe Government says : “ This is the budget we propose, and we do not care what the committee feels about it “, it is not of much use for the Opposition to put its view forward. In the letter which the Prime Minister wrote to me, and in my reply to it,the view was emphasized that efforts should be made to ascertain exactly what the Government would like to do and exactly what the Opposition would like to do.
The result of the elections was such as to make it clear that neither one party nor the other is of sufficient strength to be inflexibly rigid in its outlook upon the mechanics that should be applied to bring the war to a successful conclusion. I therefore submit that there should be a disposition on the part of honorable members of all parties to discuss the budget fully and adequately so that the Governmentmay ascertain the precise views of the committee on the subject.
The Labour party does not wish to deprive the Government of. a single shilling which it considers to be necessary for the successful conduct of the war. The money must be found. We say, however, that there may be certain items of expenditure which couldbe reduced, though at the moment we are not in a position to indicate them. The. Government itself may be contemplating reductions of , expenditure in certain departments. Government supportersmay also be able to indicate ways andmeans of reducing expenditure. Very good . There is great scope for exploration of this whole subject, and in order that Parliament may be given a full opportunity to examine it I move -
That the words agreed to be omitted and the word “ postponed “ inserted in place thereof.
This amendment, if carried, will be regarded as an instruction to the Government -
That the whole of the amount required for the conduct of thewar be provided and that the following adjustments in the budget be made: -
That the exemption in the income tax be not reduced as indicated;
That theincidence of the income tax be revised toincreasethe tax rates on . thehigherrangesofincometo offset the proposals relating to the lower ranges of income;
That the proposed war-time company tax be revised. to ensure that the large companiesbearagreatproportionate burden than the small companies;
That the pay -to -soldiers and the provision for their dependants be increased;
That old-age and invalid pensions be increased; (f) That a further payment be made to the wheat-growers in respect of the No. 2 wheat pool;
That, in respect to financial policy generally, the resources and functions oftheCommonwealthBankbeusedto the limit of. safety, and, in order to provide against inflation, the private tradingbanks be regulated on the basis ofthe report of the Royal Commission on Banking in order to prevent them building up a superstructureof bank credit on the monetary expansionarisingfromwarcondi- tions. [Leave to continue given.]
– How much more would the honorable-gentleman pay to the wheatgrowers from the No. 2 pool?
Opposition Members. -Sixpence
Mr.Menzies.-what,no advance on sixpence! .
– I shall return to that. AsI said, thePrime Minister wrote a lettertome . I hadpreviously written to himaletterinwhichIsetout various matters of policywhichIfeltimpor- tant.Someofthosemattersaresetout intheamendment.Wesaythatthe statutory exemption of income from tax should not be reduced.Fromthe arguments thatIhaveadduced,theLabour party feels that the reduction should not be made. But,will the Prime Minister say that there isnoalternative between the proposition which he advances and leaving the exemption where it is?
– Is the honorable member’s party going to be adamant on all of its demands?
Mr.CURTIN.- That pulls both ways. With adisposition to work these things out, I would be disposed to say in respect of what can and what ought to be done, “ if you give me a choice of alternatives, I shall consider them “. I am here to make this Parliament workable; I am here to endeavour to do the best I can to have carried out the programme which resulted in substantially increased support being given to us by the electors, but I hope that I am sufficiently realistic to say that here is a country that felt that there was excellent merit in parts of the programmes of each party. It did not adjudicate as between the parties. It has not determined this budget. The honorable gentlemen sitting on your right, Mr. Chairman, know that their supporters would like to see features of this budget reconsidered. They know that it is a staggering burden to impose upon the community in total, but, on some sections of the community, so grievous as to be intolerable: We ought to have the assurance that the wishes of the Parliament in respect of this matter can be taken into account.
I have not put in this amendment the whole Labour programme. Ishould have liked to put child endowment in it. I left it out, because I felt that it would be very difficult now to ask Parliament to institute a new social service. Widows’ pensions are in like case. I am endeavouring to preserve such social services as we have and I shall be glad if we can provide and maintain them. I hope that later we may be able to devise additional social services.I regret very much that that part of the programme was one which I left- out: when framing the amendment;. . I left it out because I was not merely goingto throw the whole thing to the Government andsay, “ Here isthe whole programme “. I have narrowed down to the limit.It is obvious that the pay of soldiers and provision for their dependants ought to be increased. That much isclear. It must be obvious that the cause of - the invalid and old-age pensioners is very strong. That must be clear too. That isthe second social service. Then the complaint made about the No. 2 Wheat Pool is one which has impressed honorable gentlemen on this side of the House and, to some degree, honorable gentlemen on that side. Those are three features which will cast an additional burden on the Treasury. I could have asked for very much more.
It may be that the Treasurer will say, “If we deal with some of those things, we cannot give you all you ask “. Before I or the country passes judgment on that, we should at leastknow what is the actual proposition of the Government. If the Prime Minister says that the Government cannot do any more, that this is’ the limit, that these taxes must go on, that the workers ‘must pay them, that there is no practicable variation of the schedules, that what the Treasurer said must stand, and that it cannot and will not change one single thing, that is not the way in which to formulate a budget in time of war in a country which desires to spread the burden of sacrifice equitably and as logically as can be done. I put it to the PrimeMinister that this, amendment is one which invites serious consideration, and constructive criticism.
We are anxious to find the money to carry on the war, and we are anxious to maintain the health and strength of our people. We are not terrifiedby astronomical figures in a budget. I ‘remind the committee of what I said earlier, that figures, when all issaid and done, are astandard of measure and are not the real thing itself. Labour, flesh and blood, men and women,and physical things that men and women producefromanother earth are the things upon which war is fought and upon which society is maintained. This would have been an incredible budget, from the point of view of Australia, for any other purpose than war. It is an amazing thing that in the whole history of Labour’s attempts to improve social order and bettersocial services the constant and unvarying attitude has been not that we shall not do it, but that it is impossible to do it, and that stark ruin would face the country if it were contemplated. I do not believe that stark ruin faces us in this country, unless we lose the war, for our capacity for organization and development of the country will be as great in five or ten years as it everhas been in thepast. Each generation of Australians will be as resourceful as those whohave preceded it. While the physical elements arehere, ploughs, harvesters, machines for the factories, locomotives,automobiles - while those things are here, and men and women, the economic life of Australia can be not only maintained but also,freed from the interruption of war, amazingly developed and expanded. That ismy belief in thefuture of Australia. I believethat itis bound up,in peace and in war, to the utmost degree in finance and men and women mixed. But human values are more important than the material values that could be put into the scale. Labour is more important than wealth and life than riches. The preservation of the standard of little children and old men has as good a claim as has the leaving ofmargins to those who will spend them in cabaretsand on all kinds of enjoyment which -we do not need in war. There is at one end of the scale a class in penury and at the other a class which does not know what to do with its money. We can wage this warwithouthavingeither of those classes. I, therefore, ask that the Government give consideration to this point of view, which is related to ‘the patriotic belief that the men and women of Australia, givenmeans of reasonablesubsistence during this struggle, will see the struggle through to the day of victory.
Mr.MENZIES (Kooyong- Prime Minister) [4.40]. - The committee has listened to an admirablestatement of Labour’s traditional social and political policy in very few respects changedfrom the earlier expositions of that policy, which I heard when I was a great deal “younger. Where ordinarily one might listen with great interest to an academic discussion on a number of these matters, “the principles with which this committee and thepeopleof Australia will be concerned to-day are just how far and how urgently we can marshal the resources of this country to win the war, which, at this moment, is full of clanger and difficulty. There is, after all, a marked distinction - and it is mere idleness to pretend that it does not exist - between the policy and, indeed, the philosophy of members on this side and the policy and philosophy expounded at this moment and in these circumstances by the -Leader of the Opposition (Mr. Curtin). That difference manifested itself very clearly at the general elections. I have never agreed with those who say that there is no difference of policy here. There is great difference of policy,and never was it more manifest than at the general elections, and again to-day when the Leader. of the Opposition has, with one or two exceptions, reproduced, for the benefit of honorable members, the policy speech which he submitted to the people of Australia.
– “We are to hear the right honorable gentleman’s policy speech now.
– I propose to make a few glancing references to my own policy speech. It is one which the honorable member for Ballarat (Mr. Pollard) should remember, for, but for a trifling accident, he would not be here to-day. The difference, . about which I take pleasure in reminding some honorable members, is that we said, and say, that nothing should stand in the way of this country’s doing everything it can to defend . itself and to contribute to the success of its allies in this war.
– We all say that.
– Yes, I notice that is repeatedly said, but, if honorable members opposite contradict that in the next sentence by saying, “ W e said ‘ all ‘ but we did not mean all ; we meant ‘ all after we have given ourselves a few handouts, or after we have conferred uponourselvesa few more benefits ‘ “. I say that that is a curious interpretation of the meaning of the word “all”.: The Leader of the Opposition said, in the course of his remarks, as I noted his phrase, “ For this war, Labour will give its all”.What does that mean? He went on to make a considerable speech, which I listened to with very great interest as I always do. He described to us many times why labour, if he means by “ labour “ the group of people in Australia on the smaller incomes, should not be asked to pay anything in the form of income tax. I heard the honorable gentleman go on to say that labour, meaning by thatthe same class, should not be asked to accept this burden or that burden. What then did he mean by saying that labour would give its all? You cannot give your all without giving something.
An Honorable Member. - All that they can afford.
-And if the answer is that they can afford nothing, then am I to take it - I shall be glad if the honorable gentleman will enlighten me - that giving all means giving nothing.
– They are giving indirectly.
– The honorable member for Wimmera (Mr. Wilson) might have another look’ at that statement.
– The right honorable gentleman should be careful or he will also offend the Chairman of Committees (Mr. Prowse).
– The right honorable gentleman needs to be careful. The honorable member for Wimmera is his majority of one.
– I am almost under two fires, Mr. Prowse, because I can scarcely affront the honorable member for Wimmera without affronting you. There is another subject in which the honorable member for Wimmera is deeply interested, butI want to say this to him now, that I have no advance to make on 3d. a bushel for wheat in the No. 2 Pool.
The real issue of this budget is whether we are to. concentrate on doing the job in this war and distributing its costs as fairly as possible and its inevitable losses as fairly as possible, or whether we are to wander into delightful side paths thinking in terms of profits and gains. The problem was very well put in an article published in theRound Table in September of this year, in which war finance was discussed.
– A good conservative journal.
– I do not know whether it is conservative or radical, but what I am about to quote seems to me to be an adequate statement of the truth. I believe the honorable member for Corio (Mr. Dedman) will agree with me when he hears it. It states -
It is surely clear that a government is merely a directive agency and intermediary, not an omnipotentfairy godmother–
We are not omnipotent, we are not fairy, and we are certainly not godmothers - that wars are fought by the people for the people; that every one is receiving a part of his pay in defensive armaments and national defence instead of comforts and consumable goods; and that to give up nothing in purchasing power is merely to secure something for nothing at the expense of others?.
That, I believe is an admirable and concise statement of this problem. As my colleague, the Treasurer (Mr. Fadden), has pointed out to the committee, this country is in process of diverting 20 per cent. of its resources to the pursuit of this war. When it does that, is it to be imagined that there will not be sacrifices to be made by the people? Every honorable member will agree that we cannot pay the staggering cost of this war by any airy theory. Everything that we do in this war, just as everything that we do in time of peace, must be paid for bysomebody somewhere or other, and the real argument is not therefore whether or not we should spirit this cost out of existence. The real question is: How shall we distribute this cost fairly so that it will lie with even justice, so far as we can make it do so, on the shoulders of the people of the community. Let mestart with that. In doing so, I exclude the theory, of which I have heard some hints in various- quarters, that, after all, if we use the monetary systemwith skill nobody need pay andthere need be no burden to place upon the shoulders of anybody. Idismiss that.
– Who said that?
– I am sure the honorable gentleman has heard it said. Has henever heard the proposition?
– I haveheard the right honorable gentleman refer to it, but I want to know who said it.
– I have heard it said by a certain honorable senator, forone.
– It has not been heard in this House.
– I have heard statements remarkably like it in this chamber. I have heard propositions in thisHouse that were essentially those of the inflationary monetary school.
– Another bogy.
– It is a bogy that has become a sad reality before to-day.
– A nightmare.
Mr.MENZIES.- I take my taciturn friend’sphrase; it has been anightmare to the people in the community who have been least able to sustain it. I propose to say something more about it later.
Let me remind honorable members that this budget is in itself essentially a compromise budget. It is no conservative financial document. I say that quite seriously and I believe that most people in Australia will agreewith me. After all, what did we do when we approached the problem of making this budget?
– Yes, what did you do?
– If the honorable gentleman would be good enough to listen occasionally, he would hear some things that would illuminate his mind. This budget is, I suggest, essentially a radical one in its approach to the financial problem. In framing this budgetwe increased to a staggering ‘degree the direct taxes to be paid by those already within the field of direct taxation.
– What will you do next year ?
– It is all very well for my noisyfriend to chatter about this . matter. I say to him that to that great class of people in Australia who have beenpayers of Commonwealth income tax inthe past, this budget comes notas the gentle zephyr, as honorablemembers opposite would have usbelieve, but with all the force of agale. The taxes that have beensubstantial enough in the past in their viewhavebeen trebled in one hit. Nobody with the slightest conception of the incidence of taxation canhave any doubt that on a great class of Australians this budget will fall with revolutionary force.Itwill alter the whole of their socialhabits.
Mr.Curtin. - Does the right honorable gentleman really say that the higher rates of income tax have been trebled ?
– Iam talking about taxes on the middle higher range, on which the rate is trebled. It is impossible to treble the rate of an already substantial tax without makingbig inroads upon the ordinary habits of life of the people who pay that tax. I donot suggest that this shouldnothave been done; I am one of those who are in process of doing it.But to discuss this budget as if we are in some way -sparing the rich or the moderatelywell-to-do and coming down with violence on the poor is utterly to falsify its real effect. It imposes on those who pay the higher rates of income tax burdens of a kind that have never even been dreamed of in Australia by any government, conservative or radical. Is there a word spoken on behalf of those people? No!
A complaint is made because we have taken a field of incomes up to £400 a year, previously untouched in substance by the Commonwealth Government, and have brought it into the area of taxation.We have said : “ We cannot hope to sustain the burdens of this war without laying some burden upon every body in Australia according to his means “. What is this field of taxation? 1 repeat what honorable members well know: In the last financial year the total of individual personal incomes was £745,000,000 and of that sum £517,000,000 was earned by those who received under £400 a year. Of that great sum of £517,000,000we have in the past taken, at the most, £100,000. What is the Government proposing to do by this budget? It is proposing to make a total levy of 1 per cent. on that great income group of £517,000,000. It is proposing to add millions and millions of pounds to the taxes paid by people who are already taxpayers; but because it, proposes to take £5,000,000 out of £517,000,000, it is told that this is a crushing budget which violates all sound principles, and that; forsooth, it is to regard itself as having put forward a conservative document, about which it ought to be running round saying, “ Well, if you are not prepared to make it £5,000,000, are you prepared to make it £4,000,000 or £3,000,000?”- in other words, an auction in exactly the opposite direction from the auction referred to a few minutes ago.
– The people in that group pay £50,000,000 a year of indirect taxes.
– With great respect, I do not accept that proposition. If the honorable gentleman assumes that each individual in Australia pays the same amount of indirect taxes, I cannot agree with ‘him. An enormous volume of customs duties is collected in Australia. On what commodities? They are largely luxury commodities. Are these commodities bought by the people on the basic wage? Has the honorable gentleman investigated the sales tax and its incidence? Does that bear heavily on the necessaries of life? On many occasions this committee has gone to great pains to see that it does not do so and the consequence is that wehave avoided taxes on the necessaries of life. We have reduced the direct impost to a minimum. It is a small impost to lay upon that vast sum of money at a time like this. We have stepped up on to the higher income earners a degree of taxation which, I repeat, will bring about the most drastic changes of the habits of life of tens and scores of thousands of Australians.
– There are only 40,000 people with incomes of more than £1,000 a year.
– The middle incomes, for the purposes of this budget, are between £400 and £1,000 a year. If the honorable gentleman would give himself the melancholy satisfaction of running his eye over the table of taxes and comparing it with the existing table for the middle income group, he would see that people in that group will have their habits of life very materially changed. Nevertheless they will say, if I understand my fellow countrymen at all, “All right, if that burden is to be carried, we are prepared to carry our share of it. We do not like it; we may never in our lifetimes recover from it, but we prefer to make any sacrifice rather than lose everything that matters to us “. Yet, when we come to this large sum of £517,000,000 and say that we shall take 1 per cent. of it, we are encountered by a hostile motion like that proposed by the Leader of the Opposition. It was moved, no doubt, with a view to testing the position of this House in relation to the Government. It is a challenge, and I accept it.
Government Members. - Hear, hear.!
– Paragraph c of the amendment, dealing with war-time company tax, the Leader of the Opposition has not, for reasons he has indicated, elaborated. I do not propose to say anything about it. No doubt there may be arguments on that itemin point of detail. Very many honorable members may have their own views in point of detail. What we want is to secure, by an equitable system of company tax, the sum stated by my colleague, the Treasurer.
The Leader of the Opposition went on to indicate that the pay to soldiers, and the provision for their dependants, should be increased. I remind honorable members that since the original announcement and the raising of the Australian Imperial
Force, there has been an increase of soldiers’ pay by the addition of1s. to the def erred pay. I would also inform honorable members, including the honorable member for Ballarat, that in this very budget, which I am sure he has not read, there is provision for an extra 6d. a day in respect of dependent children.
– What about the single men? Seventy-five per cent. of the men are single.
– The Leader of the Opposition, and unquestionably one of his followers, have said to us, “ You ought to increase the actual pay of the soldier himself “. Nobody can dismiss this problem merely by saying, “ There is the risk of the soldier; this is the value we place upon it in terms of money “. That cannot be done’.No rate of pay could be prescribed by any government which would be adequate as a measure of that risk. Following the practice established in Australia in the last war, we have made in respect of the pay of our troops provision which is at least as’ liberal as that made anywhere in the world, and immeasurably more liberal than in most parts of the world. With reference to the pay of the soldiers, let me say that in due course the great bulk of it will be made abroad. Already we have many thousands of men abroad. . The war bill overseas for this financial year - it is referred to. in the budget speech - is £43,000,000. This budget does not itself make provision for the £28,000,000 to be expended in the second half of this financial year. There is provision for the first £15,000,000, but no provision for the succeeding £28,000,000. This sum, of course, is constantly growing. So great are our difficulties that we have been compelled to do what has been done before to-day, namely, look to the British Government for assistance in financing these overseas obligations. What is the British Government? The British Government consists of the British people, who to-day in all grades of income are paying more than anybody in Australia is being asked to pay; people who are being asked to submit to risks of which we are completely innocent at this moment. Am I, as the Leader of this Government, togo to those people and say to them, “ Will you provide an extra few millions so that we may, at your expenseand inconvenience, be able to say that we have raised the pay of our forces overseas ? “ I have no desire that a state of affairs should recursuch as we have witnessed before, in which the Government of Great Britain would feel that itwas under someobligation to write off the liabilities of this Government to it.
– We are not suggesting that.
– What the honorable gentleman is suggesting is that this overseas liability of£43,000,000 in this financial year should be augmented. At some stage inthis debate I should like the honorable member so to develop his views as to showjust how this proposal may be financed without imposing some additional obligation and burden on the British people.
The next proposition contained in the amendment is that invalid and old-age pensions should be increased. The Leader of the Opposition did not elaborate his reasons for that proposition. I have madea close study of the history of the old-age pension, in order to see just how far a case exists at this stage for a change of the pension. I have found that the pension of £1 first came into operation in October of 1925.
– An election bribe.
– I do not know whether the honorable gentleman is right or wrong.
The CHAIRMAN (Mr. Prowse).The honorable gentleman is frequently wrong, and the Chair will take notice of him if he persists in interjecting.
– You need not worry about the honorable member, Mr. Prowse, because he knows enough about the history of the old-age pension to realize that whenever it has been raised the rise has been made by the party which sits on this side of the House. However, it became £1 in October of 1925.
– AUnited Australia party government took the property of the pensioner in 1932.
– In 1925, the index figure in respect of food and groceries, based on 1911 and equated to 1,000, was 1.820. The last quarterly figures showed the index figure to be 1,684. In other words, equating the old-age pension to the cost of living figures of the Commonwealth Statistician, on the basis of £1 in October, 1925, it is now worth £11s. 7d. Honorable members suggest that the cost of living is rising. It may be, but fortunately very slowly. It must rise some distance yet before it will reduce the pension below the value at which it stood when it came into existence.
– On what regimen is the right honorable gentleman working - the basic wage regimen?
-The figures are all related to each other ; they are all equated to 1,000 in 1911. Each of those figures is compiled on the same basis and. deals with the same commodities, therefore the comparison is a f air and proper one. Of course, no member of this committee has any desire to bear down the frugal standard of living of an old-age pensioner. If we find in course of time, and we certainly shall if some of the inflationary arguments advanced to-day are given effect, that the cost of living is rising so greatly as to make the present pension an unfair one, then this Government will not need to be told that the position of the old-age pensioner ought to be reviewed.
– Where is the money to be obtained?
– The honorable member should devote a little more of his time than he does to reading about these matters and making himself thoroughly acquainted with them. If he so desired, I should be willing to place at his disposal the services of tie head of the Treasury, so that he might undergo a complete course of elementary training in the matter of public finance .
The Leader of the Opposition next advocated, with novery great spirit, I admit, to his credit, a further payment of “ x “pence to wheat-growers in respect of the No. 2 wheat pool. I suppose that one of these days, when I am Leader of the Opposition, or, failing that, a backbench member, silent and respectful like my friends on the back benches in this chamber, I shall know something about the enormous advantages of being Leader of the Opposition. If my colleague the Minister for Commerce (Sir Earle Page) is asked’ how much the No. 2 wheat pool can stand, he cannot satisfy himself and other honorable members by saying “an increase “. But that can be said by a member of the Opposition. We have to announce what is to be done. Of course, as is frequently the case, he who sits on the Governmentbench has to find the money. He cannot live in a world of rhetoric, but must live in a world of facts, and say - as my colleague said the other day - “ We had a look at the No. 2 wheat pool and found that the overdraft already was £13,000,000. Certain sales have been made and the wheat has not yet been paid for. Certain additional sales are in prospect.” When handling the wheat business, one must always live a little like Mr. Micawber, and hope that something will turn up, particularly a buyer with money. I emphasize “ a buyer with money “. Allowing for all of these things, and taking into account the substantial risk of a considerable loss on this pool, a loss that has to be borne by the Government, we have announced a further payment of 3d. a bushel, which itself will take £2,450,000. I do. not know whether my friend the Leader of the Opposition drafted this paragraph before or after we made our announcement. I should love to cross-examine him on it.
– The right honorable gentleman knows that, unlike some of those who sit behind me, I rarely interject.
– I appreciate that. Paragraph g is one in respect of which I made an interjection to the Leader of the Opposition while he was speaking, but unfortunately time went on -and he was not able to reply to me.
– The right honorable gentleman will be told about it later.
– It will then be too late for me.
-I think that the right honorable gentleman knows what it means.
– I wish that I did. I greatly admire the literary style of paragraph g, and believe that two guesses would suffice to enable me to say who wrote it. I shall read it to honorable members - .
That, in respect of financial policy generally, the resources and functions of the Commonwealth Bank be used to the limit of safety, and in order to provide against inflation, the private trading banks be regulated on tlie basis of the report of tlie Royal Commission on Banking, in order to prevent their building up a superstructure of bank credit on the monetary expansion arising from war conditions.
I say without any reserve whatever that I have nothing but admiration for the man who wrote that paragraph. All that” I can do is to go to the limits of safety myself in my interpretation of it, and saythat insofar as I understand it I agree with it, and insofar as I do not understand. it - which is to the extent of about two-thirds - I await the lucky day when I shall be illuminated by the honorable member for Bass (Mr. Barnard), or some other interpreter. I shall read the sentence with which I- agree. It is this -
That, in respect of financial policy generally, the resources and functions of the Commonwealth Bank be used to the limit of safety.
I agree with that, and say that anybody who looks at this budget, anybody who studies these financial proposals and considers all of their financial implications, will at once agree that we are already using these credit facilities to the limit of safety. This is not an occasion on which the Government, standing on one side of tlie road, says, “ No, we have a conservative approach to this matter “, while the Opposition, on the other side of the road, says, “ We have a liberal approach. Let us meet in the middle, and walk down the road “. I say that this Government has applied, and is applying, the most liberal policy in regard, to utilization of credit resources that has ever been put into effect in Australia, and it has done this with such skill and success that the results economically have teen most remarkable.
If honorable members will consider the structure of this budget, and of our finances generally, they will note two things of economic significance. One of the postulates of the financial year is the raising of loans in total to the tune of £80,000,000. The other is, of course, that the defence expenditure can be stated in fixed terms at -this stage of the financial year. Now, does any honorable member imagine that no liability is to be imposed on the central banking structure by the raising of £80,000,000 for loans, particularly in the face of the heaviest taxation that has ever been imposed in the history of Australia? I do not want to elaborate this matter. There are some things which do not need underlining, hut I say to honorable members that, if they look at that item, they will be able to reconcile it with that, portion of the paragraph with which I have expressed my agreement. If they will look at the budget speech, ‘they .will see that the estimated defence expenditure for the year is £1S6,000,000. Every time the War Cabinet meets it sanctions expenditure on the war - thousands of pounds, hundreds of thousands; sometimes millions. I do not for one moment imagine that my colleague, the Treasurer, will be able at the end of the financial year to say, “Wasn’t it marvellous? I estimated our war expenditure at £186,000,000, and that is just what it has turned out to be “. There you have a figure which is obviously subject to all the expansions of emergency, but it cannot be decreased. I repeat, therefore, that the Government has made the most liberal approach to the problem of central banking’ finance that could possibly be sanctioned by those responsible for financing the country. If we have not gone beyond the limits of safety, we have certainly approached them.
I do not know how far everybody, in Australia appreciates the significance of real intiation. I am not now talking of inflation as if it were a bogy. I am speaking of that state of affairs when everyone is substantially employed, when the resources of the country are employed to the full, and when you suddenly subtract from the total national resources a big percentage in order that you may engage upon the production of - instruments of war. What happens then? A problem is created which you cannot solve by increasing purchasing power - to use a cant phrase. All that is achieved by increasing purchasing power without increasing production is to raise prices. Any government which inflated credit at a time when prices were rising, or when they were already reasonably high, and when the great bulk of the population was in employment would, with its eyes open, be imposing on the working people of Australia the most iniquitous of all forms of taxation; because inflation, when it goes beyond a proper point, is a flat rate tax on every pound in everybody’s pocket or purse, a flat rate tax on the deposits standing to the credit of people in the savings banks and on their insurance polices and superannuation benefits. I hope that nobody will bc foolish enough to imagine that the pathway of inflation is the pathway to justice. . If the so-called easy method of financing this war is to be adopted, somebody else must adopt it. I can imagine no grosser injustice to the people of a country that is fighting for its life than, deliberately to snatch away from them, the value of those tokens with, which they purchase their living.
– Who suggests that?
– Nobody consciously suggests it at this stage. I do not imagine that any honorable .member will say, “I am for inflating the currency;’ I am for destroying the value of money”. Of course not, but I say that if a policy, however honestly held and vigorously expressed, has as it3 inevitable result the devaluation of the currency, I am not concerned with the motives- of the man who puts forward ; I am concerned with the result. I say that we may find ourselves with some measure of this kind of thing before wc have finished this struggle. We may have a .greatly depleted standard of living before we finish this struggle, but we are not to be taken into that- condition before it is necessary, merely because it appears to offer an easy way out. There is no easy way out of this war, and there is no easy way out of the problem of paying for this war.
Mr. MAKIN (Hindmarsh) [5.241.- The Prime Minister (Mr. Menzies) indulged in some mock heroics in the course of the speech which he has just delivered, but he has been very far from convincing, and in. nothing was he less convincing than in his attempt to impress upon the people, of Australia the tragic effect which, according to him, would follow the adoption of certain financial proposals .advocated by the Opposition. Having made this attempt, he then went on to say that, in certain extremities, the. country might be compelled to adopt that . very policy. It seems dear to me that the right honorable gentleman has, this afternoon failed to appreciate the responsibilities of his position as Prime Minister. In the country he has. tried to make it appear that he is anxious to unite all sections of opinion for the furtherance of our common war effort. He has sought to create the impression that he is willing to consider the point of view of parties other than his own. Yet when the Opposition puts forward certain proposed amendments of a constructive character he is adamant in his ‘ refusal even to consider them. He absolutely refuses to listen to reason; his word must be the final word. He is not concerned ‘at all with what anyone else may ‘think on these subjects, which so vitally affect the living conditions of every section of the community. It is well that’ the people of Australia should understand this unwillingness of the Prime Minister and his Government to heed’ the opinions of the Opposition.- If there is any place where, at a time like this, opposing .points of view might be reconciled, surely it is in the national Parliament, more .especially when the’ two opposing parties are, as now, practically equal. In the circumstances, the Opposition has the right to have its opinions considered. This .afternoon the Opposition put forward constructive proposals designed to make the budget a more just and equitable one, bait the Prime Minister refuses to compromise. Obviously, he wishes to protect vested interests, to shield those in receipt of. higher incomes from the. full impact of war finance. The Prime Minister is running away from his obligations. He evinces a desire to abdicate from the responsible position, which he occupies because it is becoming somewhat uncomfortable for him. We have a right to expect something -more constructive’ than the speech of the Prime Minister in reply to the Leader of the Opposition (Mr, Curtin”). The Opposition has -gone to the very limit in seeking to reconcile conflicting opinions on these .subjects, and to unite the nation in its war effort, but the Prime Minister expects all the concessions to be made by the one side, and that not his. “Though serious hardships are being endured by those on lower incomes, and by the farming community, he is unwilling to face realities His statement that this is a radical budget will be regarded as ludicrous by the people of Australia. Does the right honorable gentleman think that they will relish being told that a budget, imposing such severe penalties is a radical budget? He went on to say that sacrifices would have to.be made by all sections of the community. We were prepared for that, but we were not prepared to be told that unequal sacrifices would be demanded from one section of the community. It is apparent that the Government is unwilling to exact equally increased taxation from those who, by reason of their wealth, enjoy a privileged position in the community: The economic effect of this drastic proposal will force married women, who otherwise would not think of competing in the industrial field, to seek employment in order to supplement the family incomes. Its detrimental effect on the whole structure of our national life will continue to be felt for years to come, lt will upset the very basis of the Australian, home life.
I draw attention to the sneering way in which the Prime Minister attempted to dismiss the representations of the Leader of the Opposition as to the incidence of this taxation proposal on the lower income groups. The right honorable gentleman sought to convey the impression that taxpayers in receipt of incomes below £400 per annum, whose aggregate income amounts to £517,000,000, pay only £100,000 by way of Commonwealth taxation. He said that it is proposed to exact £5,000,000 from this income group. On .the face, of at that seemed’ a fair proposition; but, as the Leader, of the Opposition pointed out this afternoon, taxpayers in the lowest income group already contribute in indirect taxes no less than £50,009,000. The contention by the Prime Minister that the people in the lowest income group were not making a just contribution to the revenues of this country was misleading. The right honorable gentleman then sought to ridicule the basis on which the Leader of the Opposition made his calculations in respect of indirect taxation. He had said that these cal culations could only be made on a per capita basis. All recognized economists agree that the only basis on which to make a computation of this kind is that used by the Leader of the Opposition this afternoon. It will be seen, then, that those on the lower ranges of income are already contributing their fair share of the .revenues of this country. The Prime Minister failed entirely in his attempt to answer the convincing case put by ‘ the Leader of the Opposition this afternoon.
Early this month the Prime Minister was entertained by great industrialists, business men and bankers at the Hotel Australia.. The right honorable gentleman is generally at his best after he has enjoyed a. sumptuous repast, but after he had been dined and wined with extraordinary generosity by , these wealthy people, he indicated that he would throw out a challenge to the people in regard to common sacrifice for a greater war effort. The right honorable “ gentleman said -
The time has now come to pay the price. We have had a good deal of fun and a pretty good time for a. number of years.
The members of his audience no doubt had had a pretty good time, but. the working classes have had a very difficult time for many years. In recent years, hundreds of thousands of men and women in this, country have been deprived of the ordinary necessaries of life because of prolonged unemployment. The right honorable gentleman continued -
Whatever burdens people may think, they have assumed ‘since the- beginning of the war, let them assume those burdens which will come.
It ‘is’ obvious that the taxation proposalsin the budget are but a first instalment of what is contemplated. Apparently we are to- be prepared for even greater burdens to be placed on those whose parliamentary representatives sit on this side of the. chamber, from whose ranks the Government recruits its fighting forces and the skilled workers,, men and women, who are engaged in the manufacture of munitions of war and war material with-, out which the fighting services could not survive. The Prime Minister proposes to exact further sacrifices from that already overburdened section of the community, even to their very last shilling. The right honorable gentleman said that those enjoying privileged positions in the community will have to change their ordinary habits of life. The only effect that this increased taxation will have upon the wealthy people is that they will perhaps be prevented from attending club functions as often as formerly, and, maybe, will have to give up ownership of a few racehorses. At any rate, it will mean” but a modest curtailment of their pleasures. To the working man, however, it will mean straitened circumstances and the cutting down of the household budget for food and clothing. Honorable members on this side of the chamber do not quarrel with the ideal of a maximum war effort by the Australian people. We realize that this will involve sacrifices, but we say that the burdens should be apportioned fairly and equably over the whole community. The Australian people will willingly accept additional burdens if they are satisfied that they are fairly and equably imposed and that there is no extravagance in expenditures provided for out of the public purse, but there is a feeling of dissatisfaction at the way in which the Government is dealing with the situation.
I echo the regret of the Leader of the Opposition this afternoon, that, at a time such as this, no attempt has been made by the Government to bring down a measure dealing with war-time company tax. The Government has clearly shown an unwillingness to take any notice of the fact that certain big industrial organizations in Australia are making huge profits at present. If any cognisance at all has been taken of this fact by the members of the Ministry they have, apparently, been unable to impress upon their supporters the need for drawing substantially upon these profits in order to assist in financing the nation’s war effort. The Labour party holds the view that these big industrial organizations should be obliged to contribute towards the nation’s financial needs in a way commensurate with the profits that they are making.
One striking aspect of the budget is that it does not contain one line which suggests that the Government is actuated by a desire to improve the social standards of the people. As the. honorable member for Melbourne (Mr. Calwell) has suggested, the effect of the budget will be ruinous because its deflationary aspects must grievously damage the economic fabric of the nation, and bringupon our people a visitation similar, in many respects, to that which they suffered dur-. ing the depression. Personally I have no doubt whatever that the after-effects of a budget like this will be disastrous, and I feel quite sure that certain supporters of the Government will accurately gauge its possible effects upon the public mind.
The Prime Minister sought to belittle the soundness of the claim that the Labour party is making for -an increase of the rate of invalid and old-age pension. The infirm and aged people of the community who rely on this source of income have, in their day, rendered wonderful service to the nation. As they are our pioneers and have undoubtedly passed through great privations they are fully entitled to all that we can do for them in their years of retirement, for they did much to preserve for us the heritage which we now enjoy. The argument of the Prime Minister that the decreased cost of living since the rate of pension was fixed at 20s. is equivalent to 1s. 7d. in the £1 may seem convincing to him and to some of his followers, but it is not convincing to those of us who know the conditions under which the pensioners live. Many of these people have no homes of their own, and are obliged to expend approximately half their pension to meet their housingcosts. Invalid and old-age pensioners need more nourishing food than people in the prime of life, but the regimen upon which they have to subsist is very often such as to keep them in a continuous condition of undernourishment. It is difficult to understand why, in such circumstances as these, the Government should display such a marked unwillingness to increase the rate of pension. These infirm and aged people are entitled to a definite improvement of their standard of living and the Labour party intends to do its best to secure it for them.
The amendmentof the Leader of the Opposition also brings under review the position of members of the fighting services and their dependants. The Government has definitely failed to meet its obligations to these people. In fact, in one respect, it has been guilty of a most contemptible action. Some .time ago, as the result of an agitation in this House for an increase of pay to the members of these fighting forces, the Government promised that an extra ls. a day would be granted as deferred pay. At the outbreak of the war it was indicated that allotments made by members of the services overseas would, be paid on a sterling basis, but when the rate of deferred pay was increased the Government varied its policy and provided that only two-fifths of the deferred pay would be provided on the sterling basis, and that the remaining three-fifths would be payable in Australian currency. That change of policy had the effect of wringing out of the pockets of the soldiers abroad 9d. out of the extra ls. a r]ay that had been provided. This was a most unjust and inequitable arrangement, and, in my opinion, was a most serious breach of faith. Yet the Government has shown the same unwillingness to remedy this complaint as it has to meet the other demands that the Opposition has made. Surely it is not too much to ask that the dependants of the men who are to-day fighting abroad for our liberties should be enabled to live under social conditions commensurate with those of their fellow Australians.
The Prime Minister, in the concluding part of his speech this afternoon, attempted to ridicule the paragraph of the amendment of the Leader of the Opposition which related to the ultilization of the credit resources of the nation t,1 rough the Commonwealth Bank to such limits as would not impair the financial safety of the nation. In view of the remarks, of the right honorable gentleman I direct attention to a most illuminating statement made by the present Minister for Commerce (Sir Earle Page) when he was Treasurer in the Bruce-Page Government in 1924. I refer to an extract from a speech which that right honorable gentleman delivered on the 13th June, 1924, when moving a motion for the second reading of the Commonwealth Bank Bill. The passage is particularly interesting as indicating the financial racketeering that was permitted in connexion with the financing of the last war, and for which the private banking insti tutions were responsible. As the remarks had relation to the use of the credit resources of the nation they are appropriate to the present discussion. The passage appears on page 1268 of Vol. 106 of Hansard, and reads as follows :–
At this early stage of war finance, a step was taken which never had .been explained . fully., i refer to tlie fact tha.t the Government gave to the banks the right to get three pounds in notes for every sovereign presented by the banks at the Treasury. ‘J wo out of every three pounds of notes so issued weretreated as a loan to the banks, which were required to pay interest at the rate of 4 per cent, per annum, and to repay the principal not later than twelve months after the end of the war. The reasons for granting these rights to the banks are not recorded, and no good purpose would now be served by surmizing what the reasons were. Without being unduly critical of action taken during a period of great anxiety, however, I am permitted to say that this three to One arrangement was more doubtful in character than any other net of war finance. The grant by banks of accommodation by way of overdraft or otherwise makes money available for credit to current accounts and fixed deposits in banks. That is to say, increase of advances entails increase of liabilities. Banks usually keep on lending money until their liabilities are four or five times as much as their cash reserves, but here we see that the banks were given the power, first to multiply their gold reserves by three, and then to keep on lending until the multiplied reserves formed the base of liabilities equal to twelve or fifteen times as much as the original holdings of gold.
The right honorable gentleman on that occasion certainly made some most interesting disclosures concerning the extent to what the private banking institutions were permitted to traffic in the nation’s credit resources. Yet this afternoon the Prime Minister saw fit to enter upon a defence of the private banks. He even went so far as to say that if the national credit resources were drawn upon, as the Labour party desires, a highly dangerous situation might arise. In fact, he went so far as to convey the impression that the proposals of the Labour party were as dangerous as dynamite.
The procedure described- by Sir Earle Page in the Hansard passage that I .have just read was endorsed by the national government of the day, of which the present United Australia party Government is the successor. Yet we heard nothing from Government supporters at that time, about the danger that the procedure might be to the financial stability of tlie nation. All the time the private tanks were fleecing the public by the issuing of credit - a national asset - on which they obtained a rich “ rake-off “. The additional notes were advanced to the bank. The .banks lent them to their customers by way of overdraft at higher rates of interest, and the customers, in turn, advanced the money so obtained to the Commonwealth onloan at still higher rates of interest. The backing of the private banks by the Commonwealth strengthened their positions because it guaranteed their solvency. There is no reason why various greatly neede’d public works should not be financed through the medium of the Commonwealth Bank. That policy would not ruin the country because assets would be created, and they would remain as security for the. advances made. An excellent opportunity exists to utilize the credit resources of the nation, without any danger whatever of inflation or the other evils hinted at by the Prime Minister this afternoon. On the contrary, the people of this country could bc saved from some of the heavy burden of the huge interest bill which otherwise must accumulate. Although, in the language of some newspapers in this country, this is a staggering budget, or a hard-Jutting budget, it is as nothing compared “with what future budgets will be if the Government’s policy is continued. I do not say that Australia will never need to raise loans, but I do say that a substantial amount can be provided through the agency of the Commonwealth Bank for reproductive public works in various parts of the Commonwealth. For instance, the manufacture of munitions requires electric light and power, water, and other services. These public utilities could well be financed through the Commonwealth Bank. The flotation of loans beyond what is necessary merely adds to the burden of interest which the people have to bear. The utilization of the credit of the nation within sound limits, through the Commonwealth Bank, would make unnecessary some of the (heavy burden of interest which otherwise will have to be paid. If, as the years pass by, more and more interest has to bc paid on loans, the difficulties of the people will be accentuated, and incursions will be made into the living standards of the people. That is something not only to be deprecated, but also to be resisted with all the efforts possible. The Government fails to recognize its obligations to the Australian people. Its attempt to create a privileged class which shall be immune from its legitimate liabilities shows that it has no proper’ conception of its responsibilities. The Government seeks to shelter those who are able to make the greatest contribution towards the national effort required for the defence of this country. It seeks, as it always does in critical times, to place burdens on the workers, to lower their standard of living, and to require of them sacrifices that the wealthy section of the people is not asked to make. That being so, we on this side are convinced that the Government’s financial proposals have not tlie endorsement of the Australian people as a whole. The great flood of telegrams which .the Opposition has received from people throughout Australia is convincing evidence of not only the unpopularity of the budget but also the awakening of the conscience of the electors. The Opposition will resist the imposition of unfair levies upon those who are least able to bear . them, while others, who are better able to contribute towards the nation’s war effort, are left comparatively free. It is significant that, so far, no legislation to impose a war-time companies tax has been introduced into this Parliament.
– A bill for that purpose will be introduced by the Treasurer to-morrow.
– We have heard similar stories before. Why should such measures always . be left until the last moment? On a previous occasion, only the insistence of the Opposition forced the Government to introduce similar legislation that it was loath to bring forward. And even when it was brought forward, there was a reluctance to implement it. The Government cannot escape from its obvious duty. If some people are making huge profits when the nation i3 in the toils of war, and fighting for its very existence, those people will have to disgorge their illgotten gains, and thereby relieve the burden on the backs of less-favoured persons in the community. I shall vote for the amendment moved by the Leader of the Opposition, whom I compliment upon the eloquent and convincing way in which he presented his case. I am confident that his amendment will find universal endorsement from those who wish to serve the nation well and ensure that in every phase of the nation’s war activities the maximum effort shall be made on a just basis.
Silting suspended from 6.10 to 8 p.m.
.- We have now had from the Government side two ^speeches in support of the budget, the first being the speech of the Treasurer (Mr. Fadden). Now I think that all on this side will agree that he is entitled to great sympathy for the task that has been imposed on him. There ‘was in the old days of the Roman civil law a curious kind of inheritance which the heir could not disclaim. It consisted of assets and liabilities and when the liabilities exceeded the assets it was called damnosa haereditas. That is the legacy which the Treasurer inherited from his two predecessors in the office of Treasurer in the last twelve months. It made his task difficult, but he is extremely cheerful about it and, without quoting “from his budget address, I can say that he is anxious to spend more and more and more. He says that we can “ count on “ the expenditure rising to £15,000,000 a month. I want our attitude to be perfectly clear. As the Leader of the Opposition (Mr. Curtin) pointed out, this party stands solidly for every portion of the war effort of the Australian nation. But that does not mean that there should be the slightest extravagance or waste in the expenditure of this huge sum. These are not merely figures: they are figures in one sense, but they represent assets, savings, material things which it has cost untold labour to produce, and. whatever differences of opinion there are, let us agree on this: the committee and the country will expect from the Treasurer such superintendence of departments that waste will be reduced to a minimum.
The importance of .the financial proposals is not limited merely to the current year. That is one of the reasons why the Opposition has brought down positive suggestions for the consideration of the committee. It is impossible to look at these figures and visualize the situation which they will create without saying that this budget, if it be adopted in its entirety, or even if it be amended as we suggest, will affect the distribution of .the real burden as between groups of the Australian nation not only for this year, but also for “the next generation. Is it not right in these circumstances that we should see that our view is embodied in the budget? The proposals contained in the amendment moved by the’ Leader of the Opposition should be seriously considered by the Government. This is a test budget. The budget of next year - I suppose that we shall have another budget in. a few months’ time - will be on the pattern that this Parliament fixes upon the present occasion.
Having congratulated the Treasurer, as one does,- foi- the work that he has performed in the budget, one next turns to the speech in its defence made this afternoon by the Prime Minister (Mr. Menzies). We all agree that it was an extremely skilful and witty forensic effort. Yet, like some of the other brilliant forensic efforts of the Prime Minister, it seemed to show this spirit: that, after all, what he said to-day to the committee did. not matter very much. Either all was to be successful and he would win, or all was lost. It did not matter very much, he threw the arts of persuasion to the winds. His chief argument was to rely upon that passage in. the Treasurer’s speech which, is the crux of the argument, in favour of placing the hurdon of the taxation on the lower incomes or middle incomes to the degree which 13 now proposed. It is a very plausible argument. The argument is that incomes over £1.000 total in the aggregate £85,000,000, and incomes from £400 to £1,000, £143,000,000, but that those “wealthy” classes of the community which have what are called the lower in- comes under £400, actually have the -audacity to have a private income of £517,000,000; and they are to be asked to contribute only £5,000,000 to the tax assessments of the nation.
That is’ the argument. It is plausible; but. is there .any substance in it? I submit that it. 13 fallacious in many respects. The first fallacy is that the principle of ability to pay is recognized by the Treasurer (Mr. Fadden) in his speech; and it does not need radical or socialist economics to invoke such a principle. It is a- well-established liberal principle, and- one could quote ‘the great liberal statesmen of England of last century from. Gladstone down, who vindicated the principle of ability to pay. That principle, however, is not a principle applicable to a group; it i3 applicable to the individual. To take an extreme case, one may as well say that, if a nation consists of 20,000,000 persons, whose income is £1 each and who are practically penniless, they have an aggregate income of £20,000,000. A few hundred tax-payers, by comparison, might have an income of only £5,000,000 or £10.000,000, but their income per capita might be anything from £10,000 to £100,000 a year. The same argument would justify having recourse to the fund of £20,000,000 belonging to the group, simply because there is £20,000,000 in it. You have to examine more closely; you have to ascertain the average income of each person in the group. “What result do you obtain if you do that?
The Leader of the Opposition suggested another answer which is equally effective. The impressive figures produced, no doubt, from the infinite resources of the Commissioner of Taxation omit altogether to take account of indirect taxation, and the Leader of the Opposition suggested what the figures would be if indirect taxation had been included. He suggested that, the higher income earners paid only £7,000,000 in indirect taxes, the middle income £15,000,000, and the lower, who have the huge income of £517,000,000. no less than £50,000,000.’ The Prime Minister criticized that. He said, “ You cannot look at this on a per capita ‘basis “. It is not suggested that you can, from the point of view- of mathematical accuracy, but the figures must, be fairly accurate, because what the Prime Minister has overlooked is that in the lower income group, the average family is larger and, therefore, indirect taxation, regressive in its tendency, especially in relation to necessary commodities, is relatively higher for each family, and for ‘each income tax payer, than in the. middle or higher income groups. So, if the per capita system be not adopted, you must take account of what I have just mentioned. But there i.s a broader answer to that argument. The whole basis of the budget is that we live in times of grave emergency: We are facing the crisis of a war. Our imagination is powerless to deal with those situations which are mere commonplaces’ on the other side of the world, at any rate until the people of Australia are faced, with this budget. Is not this the principle to apply in such a time i If we compare Ourselves to a beleaguered garrison or a beleaguered city we would try to meet the onslaught by sharing alike. We would not look at what was taken from each citizen ; we would look at what was left to each citizen after needs were satisfied and defences prepared. If we do that, omitting indirect taxation, we -find that after Commonwealth income tax is satisfied, there is left to the unfortunates in the higher-income group an average income of £1,650 per annum, and that the middle-income earners have left, after income tax is satisfied, an average income of £440 per annum. But the lower income earners have left after this payment of £5,000,000 proposed by the Treasurer an average of £4 a week, and if indirect taxation be taken into consideration, £1S4 a year, which is less than the basic wage in any State of the Commonwealth. I think that that i3 the way in which to approach the. problem. The question is one not so much of dealing, therefore, with what is taken, but of seeing how the burden rests after income tax is paid.
The Prime Minister was very critical of the attitude of the Labour party. The Leader of the Opposition said that Labour had given and was willing to give its “ all “ in this war. The Prime Minister suggested that that ideal could not. be carried out unless direct taxation were imposed, as I understand his argument, on every section of the community..
I do not think that is a fair interpretation of what was said by the Leader of the Opposition. Sacrifices in war are not merely financial sacrifices. The men in the factories make them. Has not the great army of labour in this country contributed to the fighting arms of the nation? Is that not the test to apply? To say that there is some inconsistency in what we say to-day is unworthy of the right honorable gentleman. We have a duty and are resolved to perform it. How can we be expected to do that duty without a determined and resolute effort to get some of our ideals and policy carried into effect? That, I think, is the chief criticism that one might pass on the Prime ^Minister. He spoke as if he had come hack from the people with the overwhelming mandate for which he asked. He did. not. He has to face a peculiar situation in this Parliament, a situation which has not arisen for very many years and, as I and other members suggested on the Address-in-Reply, that means an attitude of fair compromise at least. I doubt whether the Prime Minister showed the slightest tendency to compromise in his speech to-day.
The most amusing portion of the right honorable gentleman’s speech was h£s attempt to deal with paragraph g of the amendment moved by the Leader of the Opposition. The light honorable gentleman read’ it out, but with his forensic gifts he is able to read out a simple and direct proposition in such a way that it assumes whatever meaning, or absence of meaning he desires. Surely there can be no difficulty in understanding the proposition. It reads -
That in respect to the financial policy generally, tlie resources and finances of the Commonwealth Bank be used to the limit of safety. .
That there is a limit of safety is agreed by all Australian economists who have dealt with this matter. I shall quote one sentence from an article written recently by two Australian economists, Professor Walker and Miss Margaret Riley, and published in the Economic Record of Australia and New Zealand -
But evidently borrowing is going to loom large and in practice this will involve an expansion of bank credit. To avoid inflation of prices. «a soon as full employment is approached, steps must be taken to control the advances of the trading batiks, but it is doubtful whether the measures adopted up to the time of writing are adequate for this purpose.
In fairness, I must add that this article was written in December, 1939, but the principle emphasized in that statement is the principle implicit in paragraph g. The Prime Minister was facetious in his speculations as to who might be the author of that paragraph. The author, as all of us on this side of the chamber know, is a right honorable gentleman whose reputation in finance is not excelled by any one in the Commonwealth or the British dominions. Is not the experience of the war of 1914-18, referred to by my colleague the honorable member for Hindmarsh (Mr. Makin) this afternoon, sufficient justification for drafting the paragraph -in its present form ? The budget makes it perfectly plain that a considerable amount of borrowing will be indulged in during the next twelve months. If so, the question for determination is not whether or not there should be borrowing, but who should be the lender. Should the lender be the Commonwealth Bank - the people’s bank - or should the lending be clone by the public? Who are the public? They include people with savings, but they include also the trading banks. There is no doubt, if - the experience of the last war is repeated, that the trading banks, the liquidity of which is emphasized: in the budget, will be ready and willing to advance money to persons so that they may invest it in loans floated by the Com- monwealth. It was that system, uncontrolled by regulation or direction, or voluntary abstinence on the part of -the trading banks, which led to tha tremendous inflation during the last war. For that reason, the ‘Labour party now asks that the credit resources of the Commonwealth Bank be utilized. We admit that it is unlikely that these resources will be exploited ‘to the maximum degree, but we contend, that the people’s bank should be the lender. There is nothing revolutionary about “that. It is a plain proposition., but the Prime Minister has not answered it, and rather affects not to understand it. I think that, out of respect for him, we should rather infer that ha understands the proposition quite well but does not agree with it. Apparently he does not agree that the business of trading banks should be regulated. In times of war, in fact in all times of national emergency, whatever obtains in normal times, those financial corporations, like other corporations, must be submitted to regulation in the interest of the people. Every word in the proposition is based on our past experience, and upon the recognized views of leading Australian economists, as I understand them. Obviously oneneed not pursue the facetious suggestion made by the Prime Minister that we should have a study circle of which an honorable senator of the Opposition, whohas done a great deal to popularize the views which he holds, should be a member, and that this elementary proposition ‘should be discussed and explained. The paragraph constitutes a vital feature of our attitude towards war finance. In the war of 1914-18, the only voice raisedagainst the system of finance then employed was that of an honorable gentleman whose death we mourned only a. few days ago, Mr. Frank Anstey, the then honorable member for Bourke. That gentleman roundly condemned the financial methods while no one else was condemning them. After the war, when the matter was remitted to study and the judgment of history, there was no voice that did not condemn the system. If we are to rely on “ private” borrowing, we are perilously near the same position to-day. It is the road towards inflation, and all the evils that inflation might bring. The Labour party wishes to avoid those evils, and the Prime Minister need not spend another minute of his timein denouncing them. ‘At the same time, we wish to utilize the credit of - the people through the Commonwealth Bank.
– Does that mean credit expansion by the Commonwealth in addition to the liquidity of the trading banks ?
– I cannot answer for the precise application of the proposition, but I admit that it does not exclude private” borrowing. If borrowing must be embarked upon three avenues are open. Money may be borrowed directly from the trading banks, from the public which includes trust companies, insurance companies, and mortgage companies, or from the Commonwealth Bank. It is the desire of the Labour party that the resources of the Commonwealth Bank be availed of to the fullest possible degree. If that be done, the overwhelming burden of interest referred to by the honorable member forWannon (Mr. McLeod) in relation to one section of the community will not ruin the next generation of farmers.
There are many other aspects of the budget with which I should like to deal, but, of course, I am unable to elaborate all of them to-night. I have emphasized the necessity to alter the incidence of the income tax, which, as the figures I have read show, bears too heavily on the lower range of incomes. The Treasurer has pointed out that income tax in New Zealand is heavy, and, as the Minister has referred to that country, I should like to deal further with the taxation system existing there. To the best of my recollection, in New Zealand the tax on company profits is graduatedfrom 2s. 6d. in the £1 to8s. in the £1, varying with the amount of profits. Also, I understand, that the exemption on personal exertion income is fixed at £200.
– There is no exemption at all. All exemptions have been cut out.
– I shall not endeavour to correct the Treasurer, but I read the budget speech made by. theTreasurer of New Zealand, Mr. Nash, and I understood that the exemption was still £200. However, what is more important is the fact that social security legislation was amended at the same time to extend endowment to an additional child, and this has lessened the burden on a large group of income tax payers, the additional endowment being equivalent to an exemption.
– That is the reason why the exemption was cut down. It was a case of robbing Peter to pay Paul.
– At any rate that concession was provided for in the same budget that contained the new taxation. If New Zealand is to be cited as a model for income tax legislation, then the system in operation there should be applied in full. But I do not think that the Treasurer would be willing to tax company profits to the same degree as they are taxed in New Zealand.
Dealing with the incidence of taxation, the Economic Record which I have already quoted, SayS something which I commend to the ‘ attention of the Treasurer - .
In comparison, with, for example, the United Kingdom tax system, tlie high income groups would be let off very lightly.
That, of course, refers to an earlier budget, and I am not relying upon that part of the statement.- The article continues -
The explanation which tlie Treasurer gives, the uneven level of State taxation, is difficult to accept.
Then follows a discussion on the legal question. At this stage, I should like to interpolate that I do not think that the obstacles to uniformity of income taxation throughout Australia, mentioned either in an earlier speech of .the Treasurer or in subsequent speeches, would now prevail. It should be possible to devise a system, so that in respect of the same income, the burden on the taxpayer would be the same from one end of Australia to the other.
– That is now being investigated.
– From a national point of view it is only right that that should be done, and I am glad to hear the Treasurer say that investigations are being made. There is no legal difficulty presented, although it would be difficult to work out in practice.
The statement by Mr. T. W. Swan, the economist, continues -
In the United Kingdom, of course, it may be necessary to impose low income taxes simply because the high incomes are already squeezed almost dry - but this is by no means the case in Australia.
I do not propose to ‘deal at length with all the propositions contained in the address of the Leader of the Opposition. We have pledged ourselves in relation to soldiers’ pay and provision for their dependants, and to the invalid and old-age pensioners and the wheat-growers. Elected as we are to the National Parliament, we cannot do less than our duty to the country. It is of no use for the Prime Minister to dismiss the whole subject by saying “ There are vital differences between us.” If there are vital differences, what is the verdict of the people? The Prime Minister cannot claim a clear verdict against Labour; in fact,’ it might fairly be said that the two parties are in perfect equipoise in this chamber. But the Prime Minister’s attitude does not reveal an understanding of the way in which the problem should be approached. It would not be fair to say even that the right honorable gentleman has half a mandate, because, having regard to the popular vote, the election figures for the .House of Representatives indicate that lie has 48 per cent, of ‘a mandate. But it is of no use to elaborate on that. The will of the people as expressed in a large increase in the number of Labour representatives in this House is that the principles contained in the Leader of the Opposition’s amendment should be given, effect to, and that at least some attempt should be made to hammer out the differences existing’ between the Government and. the Opposition.
– Then, why not a national government?
– I cannot see the relevance of that interjection to the position with which I am dealing. If a discussion on a national government is embarked upon, there will no doubt be differences on matters of policy and difficulties of a more serious character might arise. I do not intend to be lured away from the thread of my argument. The Prime Minister said iri effect, “ This is a radical, a compromise budget.” Taking those words at their face value, it is logical to infer that the Prime Minister’s meaning was that the budget now before honorable members is not the one he would have introduced had he been returned to power with an overwhelming majority. I take it, therefore, that if members of this House are sent back to face .the electors again, the Prime Minister and his supporters will then tell the people that they favour a budget even less favorable to the poorer classes of .the community than the present one. I do not know how much further the right honorable gentleman would have gone had he been returned with a large majority, but apparently the “ compromise “ budget, of which he now boasts, would not have been put before honorable members. The people, if they are given an opportunity to vote on this subject, will have to judge not on the compromise budget presented by the Treasurer - that might even receive a friendly reception - but on the budget that would have been brought before the House had the Prime Minister not been so ready to compromise with the Labour party.
– It is a protective compromise.
– The Prime Minister called it a compromise budget; it might have been merely a phrase used- in the course of debate, but the inference to be drawn from what he said is that it would be worse if his party had triumphed.
Another feature of the budget is -the sale3- tax provisions. Sales taxes were imposed as emergency measures years ago, but they have been perpetuated and have increased continually until now the rates rise from 5 per. cent, to 10 per cent, and 15 per cent. That is a crushing burden to place on the trade and commerce of this country. In spite of the attempt that has- been made through the list of exemptions to obtain a workable scheme - and I think that -the Treasurer has made an effort to distribute the burden equitably between the various groups of taxable commodities; - that form of taxation should not be regarded as a permanent feature of our fiscal system. When a sales tax is introduced the public pays even more , than the actual amount of tax because it is collected from the consumers by means of increased prices charged after the date of collection of the tax. The sales tax recalls the old verse-
Vice is a monster of so frightful a mien, As to be hated needs but to be seen; Set seen too oft, familiar with her face, Wo .first endure, then pity, then embrace.
By developing the sale3 tax principle to such a degree, the Government ha3 shown that it wishes sales taxation to remain a feature of the fiscal system of this country for an indefinite period.
Then there is the war profits tax. The bill to implement this imposition has not yet been brought down; I do not know why that if so, because this tax is one of the methods of obtaining, revenue set out in the budget. The Wartime (Company) Tax Assessment Bill, which came before Parliament during ‘last session, represented the .most extraordinary system of taxing profits in’ wartime that has ever been submitted for the approval of any parliamentary .body. .It had nothing to do with the. war: It simply provided that, if companies made more than a certain percentage of profit on shareholders’ funds, consisting of capital and reserves, -a certain tax was to be imposed on the excess. It merely represented a new form of company taxation.
– No ; that system has been operating in Queensland for years.
Mr.- EVATT-. - It is a new form of company taxation, as distinct” from war taxation. As the Treasurer knows, it had no relation to the war. Although a company might have made greatly increased profits as a direct result of the war, under the bill it might not have been required to pay a penny of tax. No attempt was made to differentiate between the nature of the profits made by each company. If the figures that have been shown to me are correct, many powerful companies and combines in Australia which’ had been careful enough to conduct their internal affairs in the way best suited to them, would have escaped this tax. altogether. The Broken Hill Proprietary Company Limited, which made a profit of just under £1,000,000 in respect of last year’s operations, would not have been required to pay anything.
– Only the taxation officials could know whether a company would be liable to taxation.
– My contention is based on the statements issued by public companies showing their profits, less taxes It is almost certain that my statement 13 correct.
– There is a big difference between published profits and taxable income.
– I should be surprised if its taxable income would come up to the point at which this special tax was intended to commence, and I think the Treasurer -would be very surprised also. The same thing would have applied to corporations, other than the Broken Hill Proprietary Company Limited making very great profits which nevertheless bear a relatively small relation to shareholders’ funds. On the contrary, small companies which had not managed their affairs so well but had made a higher percentage of. profits, negligible in the aggregate, would have been taxed at a very high rate. I hope that if this systemof taxation is to be adopted the Treasurer will consider the imposition of a true tax on war profits, namely, profits which have been made as a result of the war. I agree with the Treasurer that during the last war a comparison of the pre-war standard of profits with the war-time standard of profits did not always give a true result. That was condemned by the taxation commissioner in 1922. But because that method failed, it is not necessary that this other system should be adopted. That is one of the propositions that the Leader of the Opposition hasput to the Committee. That the proposed company taxation be reviewed in order to ensure that the large companies bear a greater proportion of the burden of tax than the smaller companies.
– Graduated taxation ensures that result.
-No. The graduated system of taxation is an effective principle in relation to war profits, only when you have ascertained what the war profit is. In some countries a tax of 100 per cent. is levied. But the first thing to do is to find out what profits are attributable to war-time conditions. I see no reason why the Government should not establish tribunals to ascertain what profits are made by companies as an “outcome of the war. It may well be that their profits remain the same as in peace time and are not attributable to war-time conditions, but, on the other hand they may be substantially helped by the war. Similar problems arise in regard to hundreds of overseas companies operating in Australia. If that source of revenue were exploited there would be a large addition to the credit side of the Treasurer’s budget. Incidentally, income from that quarter would help to provide an answer to the Prime Minister’s question: “ Where can the Labour party obtain the money necessary for the carrying out of the undertaking it gave to the soldiers?” The situation should be reviewed from that stand-point.
To sum up the position I suggest, first, that the budget is deflationary; that it will reduce consumption and purchasing power in relation to commodities which we possess in over-abundant quantities the reduced consumption of which will not help our war effort. Secondly, I suggest to the Treasurer that there is no effective legal impediment to a rate of income tax operating uniformly in effect throughout the Commonwealth. This suggestion should be examined carefully because, if put into effect, it would ensure a more equitable distribution of the taxation burden as between the different States. Finally, I say that the budget is regressive. I use that word in the sense that the budget bears unfairly upon the lower groups of incomes. It is hard to call by the name of “income” the earnings of workers receiving the basic wage and less. A man in receipt of the basic wage rarely earns that average basic rate over a period of twelve months, because he is not employed continuously throughout the year. Any person with any sensitiveness to the English language, when told that an annual earning of £200 was a man’s “ income “, would , reply : “ That is not income ; it is a wage. It is ex hypothesi less than the living wage fixed by the courts.” Taxation which bears heavily upon those wage-earners is regressive. It is no answer to say that it is not indirect taxation. We do not attack indirect taxation merely because it is levied indirectly. Under indirect taxation the person who pays the tax to the Treasury passes on the burden to some one else. The question is, who finally bears that burden. Direct taxation can be just as bad as indirect taxation, and if it is aimed directly and openly at this almost helpless group of the community on the dower income scale, it is certainly worse. This group of taxpayers has had an onerous burden placed upon it in recent times through the State taxation systems. It is a group which, by and large, has contributed for the benefit of the Australian nation the soldiers who are defending us to-day. It is not necessary for the purposes of this war that they should be asked to pay directly any more than they pay already in the form of indirecttaxation to the Commonwealth and direct taxation to the States.
The amendment moved by the Leader ofthe Opposition should beaccepted. Wemean business. We strongly urge its adoption. It was not moved merely in order that a useless debate might be held on the subject. We believe that the people of the country support our demands. They do not embody all. of the demands or suggestions with which we facedthe electors, but at least we are entitled to insist on those points just as much as any honorable member is entitled to insist on action being taken for the benefit of some group of the community whom he wishes to serve. Our proposals are designed to serve not a small group of the community but a great majority of the Australian people. I ask the committee, and particularly those honorable members whose vote will determine the fate of the Government at this critical stage inour parliamentary history, to consider carefully the issues at stake and then to vote in favour of the amendment moved by the Leader of the Opposition.
– The motion that we have before us to-night goes very much deeper than would appear on the surface. This Parliament will go down in history as, up to the present time, the mast remarkable one that this Commonwealth has ever elected. It is a fifty-fifty Parliament. There has been a lot of skirmishing, shadow-sparring and political lovemaking since the result of the elections became known. We have seen this manoeuvring result in the formation of what its sponsors are prepared to call the Advisory WarCouncil. We understood that from the consultations of this body was to arise a certain degree of forbearance and co-operation between the Government and the Opposition. But since its formation some extraordinary things have taken place, and not the least extraordinary occurredin this chamber in the last few hours. It is a very old and good rule that a government shall not introduce a budget into Parliament until it has decided what are the vital requirements of the country for the year ahead and what methods it will recommend to Parliament in order to supply those requirements. In this case we have seen several departures from that important principle. I say with very great respect that, had some of those alterations of outlook and policy been made about three months ago, the constitution of this Parliament to-day would be greatly different from what it is.
I have no doubt that the honorable member for Barton. (Mr. Evatt) will soon make an impression on this chamber, but for much of the time he was speaking he was under the grave disability of addressing the committee in the absence of the “jury”. The. honorable member for Wimmera (Mr. Wilson) took his seat some time after the honorable member commenced his speech. Indeed, I was afraid that the Government had lockedup the honorable member for Wimmera, at least for the night. However, he has now returned; and it is hardly necessary for meto point out that a great deal of what I have to say will be addressed to him, in view of the very important position he now occupies, and the very grave responsibility which fate has cast upon his shoulders in this Parliament.
– I do not feel it in the slightest.
– Some people do not feel greatness when it is thrust upon them; that is a matter of individual temperament. The main issue in this debate upon which we embarked to-day is that the Opposition has come out fairly early in its true colours. . I am glad of that. . Those honorable members who before and since the outbreak of war, consistently advocated the formation of a national, government, must now recognize that that is an utter impossibility. It is not possible to reconcile the differences of outlook, methods and objectives which have been disclosed in the speeches made by honorable members on both sides of the chamber, even during the last couple of weeks. The Opposition to-day must adopt the attitude that it is here, either to assist the Government, or to displace it, with the object of carrying on the business of this country, and prosecuting our war effort in the way in which it thinks best. I have no quarrel with that view. I merely say that we have to face certain facts. Ever since the outbreak of war, a tendency has been apparent upon the part of many people, even in this Parliament, to burke facts, which, nevertheless, must be faced and overcome before any nationalgovernment in this country can make a proper approach to the problems of the war;
Much has been said in this chamber only lately about the necessity for preparing for the peace that is to come after the war. The Opposition, apparently, has gone in for sheep raising, and it has had a good lambing. We- have heard some bleating during the last few days, but it is about time we knew exactly where we stand, because some- of the little bleats which have come from the other side grate on the ears of many members on this side. For instance, we have heard praise of that delectable country, Soviet Russia, and of Moscow and its methods. Such talk does not go down with me. Perhaps, if another election be held the Opposition will have something to say about that; and if the Opposition wants the Government to make another appeal to the country it will no doubt take such steps as will bring about an election. We have .heard a lot from the .other ‘side, during the last two or” three days, about what is wrong with the world. The Opposition wants to remedy the evils afflicting the .world. I do not mind honorable members opposite having their heads in the -clouds so long as their feet are on the ground occasionally; and there is nothing so effective ‘ as a little responsibility in bringing such people to earth. The Opposition has proposed an amendment. From my observation of the political qualities of honorable members opposite during the six years I have been a member of this Parliament, I can. only say that, although the Opposition in the past has constantly attempted to embarrass, irritate, and pinprick the Government, it will again run true to form and baulk at the responsibilities of office when it actually comes to displacing the Government. If the influx of the new merinos among honorable members opposite has altered their outlook, no doubt Parliament and the country will be extremely pleased to know ‘what they are about’. If their present bid for p’ower be genuine, Parliament must consider their political history. It is only by paying regard to the history of parties, persons and movements, that we are enabled to gauge what they are likely to do in the event of responsibility being thrust upon them cither by their own deed, or by the wickedness of misfortune.” Since the outbreak, of war, some stormy scenes have occurred in” .this; chamber, during debates on the origin of the war, and as to how we can best play our part in it. Those of our ‘friends opposite who “were here before the recent “ lambing “ voted against the sending of troops to New Guinea, or the sending of troops, munitions, men, aeroplanes and any other war material to help New Zealand,” They also voted against the despatch;, of the Australian Imperial Force to tlie near East. That vote took place on the 5th December last year. Honorable members on this side are delighted to learn of this great change of mind and heart on the’ part of the Opposition. The honorable member for. Batman (Mr. Brennan) for instance, is now subdued and silent on the wisdom, or otherwise, of Australia’s participation in the terrors Of war. That change is pleasing to honorable members on this side, because we cannot forget that “Joy shall be in heaven over one sinner that repenteth, more than over ninety and nine just persons, which need no repentance “. The record of the Opposition in’ relation to the prosecution of the war is such that no honorable member who holds the views which I, and other honorable members, including the honorable member for Wimmera, hold, can dare to take the responsibility of tipping the present Government out of office, at the risk of putting in a government composed of men “ of unknown qualifications. Since the “lambing” we have heard only a bleat apiece from the new recruits to the Opposition; we do not know what . might be the composition of the team which might succeed the present Government. I do not suggest for one moment that some criticism cannot justly be. levelled against the Government. Criticism can be fairly levelled against any government, particularly in a time like the present. But at this stage I ask honorable members opposite who were here in the days to which I refer, to cast their minds back to the occasion when the supply and development legislation was being put through this Parliament. I then clearly forecast the conditions which exist in this chamber to-night. I pointed out to honorable members opposite that if this country ever became involved in war, or if an enemy ever threatened Australia,, we would have to be prepared to permit of inroads upon oursocial standards and living conditions. Such a development is made inevitable inthe circumstances. Just as the Scullin Government, during the depression years of 1930-31, was obliged to make inroads upon the social standards of Australia, so will the Curtin Government, if it takes office within the next few months, be obliged to do the very things which the Leader of the Opposition now proclaims that he will notdo. We cannot conduct a war, and, at the same time, maintain our normal social standards, or the standard of personal expenditure which a people maintain in peace-time. War is waste; the waste of material in this war is greater than has ever been the case in any previous war. We cannot incur such waste at an ever-increasing rate, and, at the same time, contend sincerely and honestly that we shall improve the social standards of the community. That is impossible. Only the other day, the Leader of the Opposition outlined his conception of how the Government should conduct its war effort. He declared that our social standards must be improved, and old-age pensions increased, and that the workers and wheat-growers are entitled to further assistance. I say quitefrankly, both as a wheat-grower, who will receive the extra3d. a bushel, which I did not expect, and as one who knows more about the accounts of the wheat pool than any other honorable member in this chamber, that by granting the extra 3d. a bushel, the Governmenthas exceeded the limits of sound finance, so far as the second wheat pool is concerned. By making that payment, the. Government will incur a fairly heavy risk for the taxpayers of Australia.
– Why is it granting that additional 3d.?
– I leave it to the honorable member to answer that question for himself. Much has been said about justice being done to the old age pensioners, the workers, and the farmers of Australia. To-day our farmers are subject to the rigours of drought, and handicapped by increasing costs, as well as by the knowledge that close relatives are with, or are about to join our fighting forces overseas. But despite all their difficulties the lot of any sections of our community is not comparable with’ the lot of similar sections of the people in Great Britain, Norway, Denmark, Belgium, Holland, Greece, France and Poland. No section of our community is subjected to bombing day and night; and none of our workers is subject toany of the injustices which are inflicted by the German invaders upon the workers of any of those countries which I have just named. In view of these facts, all the talk of honorable members opposite that they are prepared to occupy the treasury bench, and, at the same time, pledge themselves to conduct this war and maintain our social services on the scale envisaged by their leader, grates upon the ears of honorable members on this side, particularly when we recall conditions which existed in this chamber less than a year ago. The Opposition’s change of. mind and heart is beyond understanding. No doubt, we shall take some time to get used to it. . If honorable members opposite continue to talk in that strain, sooner or. later conditions will be brought about under which they will change places in this chamber with us on thisside. I have never been in opposition in this Parliament, but I should be extremely delighted to have that experience for three months. If the Opposition should displace this Government, I feel confident that Australia would secure a national government within six months at the outside, because honorable members opposite would not be very long on the treasury bench before a wide track would be wornacross the green carpet of this chamber to the room of the new Leader of the Opposition. Mr. Curtin would constantly be going back and forth begging Mr. Menzies to come in and prop up his Government in order to prevent it from being pulled down by Mr. Curtin’s own supporters. If the Labour party assumes office it will undoubtedly be wrecked very quickly on the realities of the situation which it will be called upon to f ace. It will be shattered, as it was in1930-31. Honorable members opposite could not stand up to the conditions they would , have to face. They cannot produce these additional social services. They cannot cope with the terrific war effort that is needed, with every body turning from the avocations of peace, such as the making of plough shares and the growing of apples and wheat, to the production of munitions which will be blasted away in Egypt or elsewhere. They cannot do these things and at the same time maintain the existing standard of social services in this country. I say more than that; I say that the leaders of the parties which sit opposite know that they cannot do these things.
What exactly is meant by this move in regard to the budget? Let us examine the two speeches that were delivered to-day from the Opposition benches. We heard the honorable the Leader of the Opposition, who doubtless will soon be a right honorable member, say that finance does not matter a hang, that wars are fought, not on finance, but on the organization of men and materials. I grant that. But in the same speech tie honorable gentleman had quite a lot to say about that finance which, he averred, is unnecessary. Finance, after all, is a matter of method, and method is a very important factor in the conduct of any operation.
The honorable member for Barton’ to-night dealt almost exclusively with finance, and the effect which certain financial measures will have upon the well-being of the people of this country. I lay this down to the Parliament - and it cannot be controverted by the Opposition, the Government, or any other authority - that if we are to be successful in this war, if we are to win it, we must have men armed and trained in place, in being, and above all in time, fully equipped to deal with the military situations that may arise from day to day. We are having a fairly easy time at present. There has been a cessation of activity on the part of the German armies in Europe. That state of affairs may last for the next few months. But during the period of this inactivity in actual operations, the enemy is not inactive in regard to training, and above all in planning. We have seen that the Italian army has moved into Greece, without any success so far, and that it has been stationary on the North African coast. The time may come when Greece will be overwhelmed; ‘ Let not this, Parliament think that everything is as it- appears to be over there. There has been a lot of discussion in the press as to how operations are progressing in the Near East. Doubtless, in time, theother side Will have its innings, and things may not go as well as we expect. These considerations have to be borne in mind by every member of this Parliament when a vote is cast in the division which must be taken as the result of the submission of this amendment. It is a very extraordinary amendment, and it was moved in a most extraordinary way. A time-honoured procedure of Parliament is to deal with the Address-in-Reply before proceeding with any other business. I sympathize with honorable members opposite. They desire to air their views, and to make sure’ of having their first littleflutter in this place. Whether they prove to be doves or moths will depend very largely on the vote that they record after they have made their speeches. I am afraid that at present their wings resemble those of the moth rather than those of the dove. This matter of war, and the defence of this country, cannot be successfully faced if due regard be not paid to the industrial conditions” of this country. In this respect, too, the Opposition is making a rod for its own back. If honorable members opposite think that they can enlist men for the Army, the Air Force, and the Navy, and send them overseas, while continuing to raise higher and higher the rates of pay and the conditions of labour under which industrial activity is conducted in this country, they are making another very serious mistake for which they will surely pay. There are no fixed hours of work, and no overtime, in any of the armed forces; they work, they fight at any hour of the day or night that they are called upon to do so. With them, Sundays and holidays do not count, and they do not. even observe Eight Hours Day. The leaders of industrial labour in, this country have fallen down on their job, and it is about time that some gentleman from the Opposition had a serious heart-to-heart talk with them and told them quite frankly what the position is.
Mr. Pollard interjecting,
– It is all very well for the honorable member for Ballarat to interject. His fingers get very close- to the soil as do mine. He is one “who holds quite a few private views, which he expresses now and again. He is a little -thorny ; but even the briar has its use3. If honorable members opposite attain to. office, I ask them, in view of the lackadaisical attitude they have adopted in relation to industrial matters since the outbreak of the war, to conjure up for themselves a picture of what their fate will be. Early, in this year there was a coal strike in New South Wales. So far as I am aware, not a member of the. Opposition was sufficiently concerned to visit the coal-fields in order to try to settle that strike ; that was left to the head of the Government. Neither the Leader of the Opposition nor any of the great industrial leaders of Sydney or Melbourne, so far as I can gather, followed the example of the Prime Minister. Every member of the Opposition knows the position that I always adopt. When I think that the wheat-growers, the wool-growers, the apple-growers, or any others are asking too much, I tell them so. Every member of the Opposition knows that to be true, and. some of them have been present when I have expressed my views. The leaders of the party opposite have not taken the responsibility in regard to the industrial position which I have taken in relation to the agricultural position, and I make bold to forecast that they are not likely to do so. Recently, the hospital ship Manunda was prevented from sailing by one of the most wicked strikes ever experienced in this country. The men demanded to be paid in sterling. .In the Department of Commerce may be found records which prove that the leaders of the engineers union said that their men were entitled to extra compensation because of the anxiety suffered by their wives and families while the men were serving overseas. What about the wives and . f amilies of members of the Australian Imperial Force, the Royal Australian Air Force, and the Royal Australian Navy who are serving overseas? These men on the Manunda were not in any worse position ; they were not in as bad a position as the members of the fighting services. Industrial labour in this country must seriously consider whether it is desirable that the method of government which’ we now enjoy should survive. If not, by organizing a few strikes, by preventing the production of munitions, and by -holding up coal supplies, it will bring into being conditions conducive to the occupation of this country by gentlemen who will not discuss industrial problems with those whom the trade unions are pleased to elect as their leaders, for in such circumstances the industrial organization of labour as we know it to-day would disappear and be replaced by another system. This act has been enacted under our very eyes on the continent of Europe during the last twelve months, and it is being continued by the occupation of certain countries to the north of Australia while this Parliament is sitting. Every honorable member, even those constituting the Opposition, dreads the arrival of a cable announcing that certain Dutch possessions to the north of Australia have been the object of the attention of certain foreign powers. It is time that the Opposition closely scrutinized its policy. If the people of this country think that the Opposition can. better serve them than the present Ministry under the system of government under which we live, and of which many persons are supposed to be very proud, that is their concern, but they must not squeal at the inevitable result. It is impossible to draw -two pints from a one-pint mug. This fantastic expansion of credit cannot be continued while maintaining, the present standards of solvency, the stability of the debt structure, and the relationship that exists bet-ween one section of the community and another. If the people wish to have a very interesting time financially, industrially, and militarily, .the means to do so are provided in the seven or eight items which comprise the amendment to the first .line of the Treasurer’s budget. Those who will be sorry for the carrying of this amendment will be, not only honorable, members opposite, who will have the task of giving effect to the -proposals contained in it, but also the poor, deluded, misguided- hundreds of thousands who will suffer without being able’ to rectify the mistake that they made on the 21st September last: It is a misfortune for this country that we should be placid in the position in which we find ourselves to-day- with a legislature .almost evenly divided, almost unworkable, and without that forbearance, that spirit of’ give and take, which should exist in the present circumstances.
– What about the animosities in the Country party to which the honorable member has directed attention?
– My relations with the Country party have nothing to do with this chamber. I assure the honorable member for Reid that before he has been here very long he will learn that I am well able to look after myself, and that I could probably look after him also should he happen to get into trouble. If he has any doubt on that score, I invite him to consult the honorable member for East Sydney (Mr. Ward), who has had some experience of me. The present is an occasion on which- this Parliament has open tq it the adoption of one of two courses. I say to the Opposition that either it must give co-operation to the Government which is now in office, by which I mean that it must surrender to the Government of the day a very large proportion of its ideas, or it must take the .responsibility of giving effect to what it regards as a better policy than has been put forward by the Government.
As the House is now constituted a terrific responsibility rests on the shoulders of the honorable member for Wimmera. His electorate and mine adjoin, and we have many problems in common. I hope that when the vote is taken he, holding the balance of power, and occupying the position of a jury in this interesting case, will prove true to the very good, hard, Scotch nationality that he owns, that he will be over here with the other members of the Highland gang, and that he will maintain the situation as it should be maintained in the interests of the country, for the successful prosecution of the war, and for the promotion of the welfare of the district which he has the honour, the privilege and the responsibility to represent to-day.
.- The reproof of sin by Satan is only a circumstance to the pleas which were made .by the honorable member for Barker (Mr. Archie’ Cameron) for the formation of a national government, and for preserving a united front for the purpose of winning the war. If the Labour party had agreed to participate in a national government, the honorable member would have wrecked the Ministry, in 24 hours, in the same way as he wrecked the Country party which he led, and two governments of which he was a member. He also referred, doubtless in an endeavour to placate many of his constituents, to the attitude adopted by members of the Labour .party towards the war. Shortly before the outbreak of hostilities, the honorable member wa3 opposed to Great Britain resorting to war, and in a speech which he delivered on the 9th May, 1939, he played up to persons of German extraction in his electorate. Speaking on the subject of international relations, he said - - Then there is the subject of .grievances. We shall not get a clear understanding of what is 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 bc 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 Germ’an areas containing valuable mineral deposits and the highly industrialized Upper Silesia, which is German in every 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 consider that 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.
After haying expressed himself so favorably towards Germany in respeot of the root causes of the present war, the honorable member now ha3 the audacity to accuse the Opposition of being guilty of a change of front towards it. Earlier, - he declared in no uncertain terms that a European war was not worth the sacrifice of British lives, or what was more “important to him, the sacrifice of British wealth. But so profoundly has the international situation altered during the last twelve months that the Labour party was justified in changing its attitude towards the war. The party is always prepared to adapt itself to changed conditions.
Before dealing with the budget, I desire to reply to some of the remarks this afternoon by the Prime Minister (Mr. Menzies). He endeavoured to laugh put ‘ of court “the amendment submitted by the Leader of the Opposition (Mr. Curtin),’ and out of tho present serious position he tried to make a cheap joke. There are more men of great ability on this side of the House than there are occupying the Government benches. His jeers arid gibes ill become a man of his status in this Parliament and in the community. He Stated that the Government proposed to use a large amount of bank credit to finance war expenditure ; but the right honorable gentleman is prepared to take that course only because he could not avoid doing so. He is making a virtue of necessity. Hitherto the powerful interests that he supports have resisted any attempt to use the national credit for this purpose. Had it not been for the persistence of the Labour party, the Commonwealth Bank would never have been established. Although it was created for the express purpose . of achieving certain objectives, it has been consistently handcuffed and shackled in its operations. The right honorable gentleman endeavoured, without success, to trot out the old bogy of inflation. I have heard the story so often that I am heartily sick of it. Whilst the Government will allow private banking institutions to inflate the currency at their own sweet will, the Prime Minister is not prepared to permit the people’s bank to provide the credit necessary to meet our heavy war expenditure. Metaphorically speaking, the right honorable gentleman strains at a gnat but swallows the camel of private banking inflation without the flutter of an eyelid. This kind of inflation is fifteen times greater than that which the Labour party suggested should be created by the Commonwealth Bank. Does the right honorable gentleman know that the total amount -of legal currency in the hands of the banks is £31,000,000, and that upon that basis they create, by an inflationary process, a credit of approxi- mately £200,000,000? If the Commonwealth Bank attempted to expand credit to a similar degree, the right honorable gentleman would condemn it as being hopeless inflation.
The right honorable member for Cowper (Sir Earle Page), who has been described as “Australia’s tragic Treasurer “, placed in the hands of the private hanks a powerful weapon to enable them to rob the primary producer, whom the -Country party misrepresents in this Parliament. He gave to the private banks the right’ to draw from the Commonwealth Bank notes for till money, at 4- per cent., in order’ to finance the seasonal marketing of wheat and wool. The associated banks then charged the primary producer interest on the credits that they inflated against their right to draw notes. For their own part, they never took a note nor paid a penny in interest. That statement may be verified by reference to Hansard. The only way in which we can mobilize our resources is by putting the private banks out of business. “Their con. trol of- the expansion of credit should be terminated ; such powers should reside wholly with the national institution. If the war should continue for another two or three years, the national debt of the Commonwealth will be increased by £2,000,000,000. Does the Government propose- to withdraw from the conflict, if the financial institutions assert that no more money is available to finance operations ?
Whatever the cost, we- must continue to prosecute the war until we achieve victory, and we. can meet the bill only by mobilizing our resources through the expansion of credit by the Commonwealth Bank. Surely the Government does not propose to load on to the shoulders of the general public another heavy burden of debt arising out of war necessities ! The Leader of the Opposition stated that the Government would not dare to allow methods of orthodox finance to interfere with the financing of the war. Honorable members opposite repeat glibly the statement that we are fighting for the preservation of our democratic mode of life, for the traditions of the British race, and for the privileges which our ancestors won in Magna Charta. Regardless of the cost, money terms must not stand in the way. We are fighting for the things -that we hold very dear, such as tho right of freedom of speech, and of worship. When those fundamentals are at stake, the profits of the banks matter not one whit. If our armed forces are successful against the enemy, we shall retain .those privileges that are . so precious to us. The day may come when the honorable member for Barker, and the wealthy interests that he represents, will have to realize that Australia is prosecuting a war, as they remind the workers on every possible occasion. The honorable member declared that the budget was a radical, document. If that be true, I should like to see a conservative one, lt violates every principle of taxation that has been laid down by economists, and imposes a burden of tens of millions of pounds upon the shoulders of those least able to bear it.
The Treasurer (Mr. Fadden) had the audacity to declare that the increase of the excise on tobacco, which he described as a luxury, was justified. When the worker has been deprived of a few more of his enjoyments, he will be left wilh practically nothing. The Prime Minister stated that even the poorer classes have to make sacrifices in this time of emergency, but the worker has always made sacrifices in his method of living in order that the profits which he has earned may enable a fortunate few to live in luxury. lt is wicked to expect a person in receipt of £150 a year to make a sacrifice in money terms. The expenditure on two entertainments which have been held in this building of late would maintain for several months a number of families earning the basic wage. That kind of spending is common enough. The right honorable gentleman declared that the middle class may be forced to change some of its habits of life, but it would be of greater advantage if some of the wealthy were compelled to change some of their ways- of living. Whilst they patronize expensive cabarets and picture shows in the large cities, thousands of persons live in dire poverty. The man in receipt of £150 a year will make the physical sacrifice if he gets an opportunity to enlist in the fighting services, but he is not in a position to make a monetary sacrifice, because he receives substantially less than the bare subsistence wage. The Government had the effrontery to declare that a single man earning £4 a week is able to pay this tax. Most honorable members here are fathers of families, and I ask them what sort of a future are they looking forward to for Australia. Of what use is’ a wage of even £4 a week to a man if he cannot put some of it by in order to acquire a home of his own?
I support the amendment, moved by the Leader of the Opposition (Mr. Curtin). I particularly approve of that part of it which asks that old-age pensions be increased. The Prime Minister (Mr. Menzies) can make comparisons with the conditions of 1911 as much as- he likes. Ho may talk about weighted averages, but the fact remains that the whole structure of our economic lives is totally different now from what it was in . 1911. Things that are necessary now were not even thought of then. The Prime Minister says that we cannot afford to increase old-age pensions; yet in Britain, which is being bombed and blasted every night, the Government has been able to increase social services by as much as 30 per cent. The British Government, realizes that the stamina of the people must be maintained, so that they can stand up to the physical and nervous shocks which they have to endure. It is not waiting- until the war is over in order to provide a better order of things; it is taking action now. In some instances, an increase of 9s. a week has been made in Great Britain, and if the British Government can do it, so can we.
Replying to the request that, soldiers’ pay he increased, the Prime Minister said that no monetary reward could compensate the soldiers for the sacrifices that they are making; and then, by an extraordinary twist of logic, he seems to assume that, for that very reason, we ought to give them as little as we can. I cannot remember any industrial award that ever came out of an arbitration court that did not grant higher rates to men whose worked involved danger to life and limb. Could any occupation be more dangerous than that of a soldier fighting on the battlefield? Gould anything be more hazardous than the occupation of those lads who go up into the air to repel an enemy? Yet they do not receive even the basic wage. It is an everlasting disgrace to this Government that men who are fighting for their country should be paid less than the basic wage.
This budget, instead of tending to relieve our ills, will aggravate them. It will be responsible for much distress and suffering. Under it we shall not even be able to maintain our present standards, poor as they are. The Government .proposes to tax the small earnings of -the poor in order that the rich may escape the burden they should bear. Of what use -is it to talk of equality of sacrifice. . If you take 10s. from the man who receives only £4 a week, it represents much more to him than if £2,000 a year is taken from the man who receives £5,000 a year. There is no real basis of comparison between the two cases. The Prime Minister has said that every body must make sacrifices at this time. I agree, and if men are unable to make monetary sacrifices, they can serve their country in other ways.
I shall not dwell on the Government’s proposal to borrow £80,000,000. I am opposed to the principle of the thing, but I recognize that while this Government is in power there is no way by which it can be avoided. The Prime Minister talked a good deal about inflation. I maintain that inflation is produced only when there is an excess of purchasing power in comparison with production, but the expenditure of these huge amounts for war purposes must in itself tend to bring about inflation. I do not say for a moment that it is not necessary to expend this money, but the fact remains that . thousands and thousands of men are being taken out of industry and engaged upon the production of munitions, goods which are of no economic value to the community. Thus there are fewer people engaged in useful production, but everyone, munitions workers, as well as producers, will have purchasing power. This cannot be avoided, and the only way to avert the threatened danger is by effectively controlling prices. The Government says that it is already doing this, but in fact, it is not. A few days ago my wife. ordered half a bushel of wheat from the grocer with which to feed a few fowls that we run in the back yard. When it arrived it was of the very worst quality, and yet for that half bushel we had to pay 5s. 6d. That is at the rate of lis. a bushel, and the Price-fixing Commissioner must be either ignorant or careless to allow that kind of thing to go on. The farmer probably received only 2s. 3d. or 2s. 4d. for his first-class milling wheat, yet householders have to pay lis. a bushel for feed wheat of the worst quality.
It should he possible to make much more use of the- Commonwealth ‘Bank to finance -our public activities at this time, because we have a Price-fixing Commissioner when, if he did his job properly, could prevent a rise of prices. All through his budget speech the Treasurer spoke of rising prices, as if they were inevitable, but what is the Pricefixing Commissioner there for? I know that we cannot control the price of imported goods, but I am convinced that excess profits are being made even on them. Before this wai- is over, the Government will have to revise its opinions on methods of national finance. It proposes to raise £180,000,000 ‘by loan, but there is a fund of only £31,000,000 from which to raise it. Where is the money to come from? The simple fact is that there is no money in this country to borrow. It is all a matter of crossentries in a book. The raising of this money will, in fact, amount to inflation. There is not enough currency in Australia to provide till money. Because the Government will not provide enough legal currency there is a vacuum which the private banks fill by the issue of their own cheque currency to the amount of £2,000,000,000. There is no reason why the Government should not put the private banks out of business altogether. Let it say that, after a certain date, no private institution can use the cheque system in order to expand credit. The private banks have merely usurped this power. The system goes hack to the time when the joint stock banks of England took the matter into their own hands by issuing their own credit currency. Nobody knows what inflation or deflation is practised by the banks until there comes about a tremendous rise of prices, or until there is a depression. Holden., a director of the Bank of England, addressing the students of Oxford University, asked what caused the depression. Then he answered his own question by saying that the private banks had caused the depression by calling .up .overdrafts and refusing advances. That is not my statement, but the statement of one of the foremost banking authorities in England. A proper expansion of currency is necessary iri order to get the nation’s work done. Timber, iron and bricks arc liabilities while lying in mills and yards; but, by their conversion into houses, assets would be created, and the debt incurred in the process could be extinguished after a period to be determined.
Perhaps the strangest passage in the budget speech was the statement by the Treasurer that certain restrictions of consumption, for example, through import licensing and petrol rationing, had reduced consumption and facilitated saving. In my electorate, however, petrol rationing has dislocated industry and thrown men out of work. Men who have carried on small businesses by means of motor lorries have come to. me, almost in tears, because their businesses have been ruined. Being unable to continue their rounds, they have had to accept the dole. Reduced consumption has always resulted in depression. History shows that, where despots have levied heavy tribute, the living conditions of the people have been correspondingly bad. I believe that this budget will place many thousands of men and women on the unemployed market. Last month, the Sydney Morning Herald published photographs depicting housing conditions at Port Kembla, and, at first glance, one might well imagine that they related to a bygone age. On the south coast of New South Wales, many of the huts in which thousands of workers in my electorate are compelled to live are the only things that offend the eye amid seme of the grandest scenery God has created. The Minister for Social Services (Sir Frederick Stewart) has promised to visit the Port Kembla district, and I hope that he will carry out that undertaking.
It was reported recently that whole stacks of wheat had been destroyed by mice. I saw two truckloads of wheat brought to the railway station in my home town, and, when the tarpaulins were removed, the wheat was found to be seething with mice. If some of the men who are now unemployed had been put to work in building additional silos for the storage of wheat, much waste could have been prevented. In view of the drought conditions now prevailing, and the possible scarcity of wheat under war conditions, it is quite conceivable that every bushel available will be required, for use either in Australia or in other parts of the Empire.
Speaking in Sydney recently, the Minister .for the Army (Mr. Spender) issued a grave warning regarding the critical situation that has arisen owing to the loss of British ships through enemy action. Why does not the present Government adopt a vigorous policy of ship construction in this country? Facilities for building vessels are available in many parts of Australia, and an adequate supply of them might well prove a decisive factor in determining whether the British. Commonwealth of Nations shall emerge triumphantly from the present world war. The Cockatoo Island dockyard was almost given away to a private firm, which leases it at a very low rental. That establishment ought now. to be utilized for ship construction. Similar facilities are available at Walsh Island and in South Australia.
When addressing the Millions Club on the 25th November, the Minister for the Army said that Australia’s obligation to the men who would return from the war was not only to give them preference in employment, but also so to plan the social fabric that it would afford them the right to work. The only social fabric that this Government appears to be constructing to-day is a heritage of debt that will lead Australia into financial difficulties much more rapidly than after the last war. The preference that will be given to returned soldiers will probably be the right to take pick and shovel jobs. The social fabric should be so designed that everybody in the community would benefit, not only the soldiers, but also those who are required to remain in Australia to manufacture munitions and other things required for war purposes.
As a result of the budget, a depression will set in even before the war is over.; yet no attempt has been made to visualize the productive possibilities of Australia. As the Minister for the Army has admitted, the budget aims at keeping the economy of the country static, but I am satisfied that it will contract it. Budgets such, as this merely contemplate living from, day to day, without attempting to devise a long-range plan. It will be most unfortunate for Australia if a change of government does not soon occur. TheOpposition is the only section that realizes the necessity, for expanding the economy of the country, and increasing its wealth .production, so that Australia may make. ‘.its proper contribution to the progress of the Empire in the years -that lie ahead. Unless’ “this Government is prepared tq deal in a practical way with the pressing problems, that confront the nation, and to do it with greater vision than it has displayed up to the present time, a change of government should take place without delay.
.- The budget speech made by the Treasurer has .two features - it deals with the raising of money and .the expending of money. Insofar as it deals with the expending of money, it has been very adequately dealt with by my leader. I wish to say something about its proposals for the raising of money. Particularly do I wish to refer to the contrast which honorable members opposite, especially the Prime- Minister, endeavoured ,to make between the debt policy which they advocate and. the credit policy advocated by honorable members on this side of the chamber. In my view the budget is bad for three reasons : First, because it seeks to .raise’ increased- revenue by borrowing; secondly, it seeks to augment the revenue by indirect taxation; and, thirdly, because it seeks to raise increased revenue by lowering .’the statutory exemption from income , tax. The traditional .attitude of .the Australian Labour party to war finance is set out in plank seven of its .platform, which provides that naval, and military expenditure shall beallocated from direct taxation. Implicit in. that is the belief which I hold, and. which I think is held generally- by the Labour movement, that those who have the most to lose by the conquest of Australia’, are those who own Australia. Should .this country be attacked the liberty, of privileged, and , unprivileged people, rich and poor alike, would be. at stake. If .this country w.ere conquered each would lose his liberty but in dif ferent degrees.’ “Where there is economic inequality there cannot be equal enjoyment of liberty. The liberty of the poor and unprivileged is a much smaller, much weaker thing than the liberty of the privileged. Those who have economic power have- not only that power in full but also the full enjoyment of civil and political liberty. Those who have economic weakness are denied the full enjoyment of civil and political liberty. Consequently, those who own Australia have “at :”stake not only their, economic power, but; also a much. fuller and greater measure of civil -and political liberty than those who have no privileges. I do not for one moment underestimate the diminution of liberty which would be suffered by the poor .and unprivileged people of Australia if this country were conquered. -But to the economically powerful, civil and political liberty means immensely more- than it means to the economically weak. Economic ii: equality brings in its train civil and political inequality - “ for whosoever hath, to him shall be given; and whosoever hath not, from him shall be taken away even that which he seemeth to have “-. This creed is the basis . upon which, plank seven of the Labour parry’s platform stands. More recently the party came face to face with the need for hurriedly making preparations for the defence of Australia on a scale unprecedented and previously unthought of. There being no accumulated fund for defence, the party had to contemplate the hasty raising of funds. - It did not turn to borrowing, but to the use of credit.
Internal borrowing seems to ‘ me to differ from external borrowing in a very important way. People speak of external borrowing and internal borrowing as if they were the same thing with the. same effect. By external borrowing we get control of funds which we could not get by taxation, whereas by internal borrowing, we become possessed of funds which we could get by taxation. The policy of external borrowing is one which I believe in the long run to be injurious to Australia, but for reasons different from those which make_ internal borrowing hurtful. External borrowing gives the overseas, lender control of our own domestic policy, such as we saw exercised an Queensland .not long .ago. It is dangerous because it enables tlie overseas lenders to force .us to import -goods which we could manufacture ourselves. For these reasons a long-term policy of external borrowing is dangerous. Internal borrowing is in a different position. By internal- borrowing we take funds which are under our control and which we ‘ could take by taxation. The difference between the policy of the Labour party and that of the combined United Australia party and United Country party is that the Labour party seeks to finance the war without leaving to future generations a legacy of debt. It seeks to carry on the war by taxation which’ will, of course, impose no interest burden in the future, and by using the credit of the community in such a way that no interest burden will be imposed on it. This means, of course that- we call upon tlie banks to create credit-money. The Government agrees that that must be done; but in that direction we go further than the Government because we believe that what the Government does not propose to get by interest-free taxation it should get by interest-free credit. We believe that future generations should not live and- die forever hag-ridden by an incubus of debt. We resent the burden of debt which we inherited from the last war, and with that resentment it would be unfair for us to impose such a burden on future generations in order to finance our Avar effort. The Government says that its objection to such a policy is “that it is better to pay interest than to have inflation. A very dismal picture of the results of inflation was drawn by the Prime Minister. Whether that be right or wrong it is an argument which the Government is not entitled to use because, its borrowing policy will give us both inflation and an interest charge for the future. Inflation is a condition in which the income and expenditure of the public increase more rapidly than do the quantities of purchasable commodities or’ services. Taken by and large, the Quantity theory of money is unimpeachable. I agree that the policy which I support tends to inflation because any war-time financial policy except taxation tends to inflation; but the Government’s policy equally tends to inflation, and, moreover, demands that we shall pay for the war not only by increased prices but also by interest. Objection may bc made to both policies, on the ground that they -expose the community to the danger of inflation. That i3 the only objection that can be offered to the policy of the -Labour party. But to the policy of the Government we -may make the further objection that it will impose a perpetual burden of interest upon the people.
Bart of the Government’s borrowing will be from trading banks, but the banks will not lend from their deposits. They will create credits for the purpose, and thus bring into existence money which previously did not exist. So soon as this credit performs the functions of money, it actually is money. So soon as the credits are created, whether by way of loan or of interest, and the money is distributed among the people by way of remuneration for sen’ ices or goods, it increases the income and expenditure of the nation, and unless there is a corresponding increase of purchasable goods and services there will be inflation. But the Prime Minister and the Treasurer say : ‘ “ You will not get inflation by our borrowing policy, because –our borrowing will be from the public, and we will borrow from the savings of members of the public, which savings would other-wise be available for some other investment. Therefore there will be no inflation.” I could agree with that view if borrowing from the public were the only form of borrowing and if it would end with the first transaction. If the transfer of the citizens’ savings were the end of the transaction, there would not be any inflation. If all we obtained by borrowing was obtained from the people’s savings which they actually possessed and which they would otherwise invest in some other form of industry, there would not be any inflation. But it is not proposed that the borrowing shall be from individuals only. It is proposed that we shall also borrow largely from the trading banks. When we borrow from that source, new money is created, specially and on purpose, to be lent to the Government, but even as to that portion which may be borrowed from individual lenders, inflation may begin.
The experience of the last war showed Very clearly that when a man drew his money out of a bank and lent it to the “Government there came into existence a new form of property which did not exist before. The lender, in fact, obtained from the Government a security or an instrument which pledged the Government to repay him with some added interest, Such a pledge is the most valuable form of property that can exist in a country at such a time.. Harvests may fail, crops maybe unsaleable, businesses may fail, stock may be unsaleable.; but the Government’s promise that it will repay a loanis something which is not subject to the vicissitudes of the weather and the risksof ordinary business. It is something which will stand as long as the nation stands. Therefore to the bank it is the most desirable form of security that can he obtained. It is much better security for a bank to have than acres which may become unproductive, or crops which may never be reaped, or businesses which may fail, or stock which may never be sold. When a private lender obtains a Government bond he also obtains something which can become the basis of additional credit money. So the old rhyme may be adapted -
Great loans have smaller loans upon their bucks to bite ‘em,
And these again have smaller loans, and so ad infinitum.
Upon the security that John Smith gets arises a pyramid of credit. It becomes the basis of future credit. When helends£1,000 to the Government his private bank will lend him more money on the security and that may be made the basis of securing a new pledge from the Government, which pledge may, again, become the basis for additional credit money. So the business may go on indefinitely. Or the creation of credit may start at the other end, as we saw it start during the last war. A bank may say to John Citizen ; “ Why do you not take up a Government security ? “ He may say, “ How can I, I have only £10 “. The bank may then say to him, “ We willlend you some money which will make it possible for you to.’ pay the Government £100.” The bank lends him £90 of newly created credit money for the purpose, and so the foundation of another pyramid is laid. That seems tome to be the answer to the contention of the Prime Minister and other honorable gentlemen opposite. Our choice is not between inflationary credit issues and non-inflationary borrowing. It is a choice between two policies, either of which may lead to inflation”, but one ofwhich will impose upon future generations a burden of debt from which they will never.be able to escape, while the other will not impose upon future generations any such burden. The borrowing policy which the Government proposes to adopt will most certainly be inflationary in both its direct and indirect results. If the borrowing is from the private banks, Government pledges will be given which will become the basis of future credit creations. I do not think that we should raise money by credit from the Commonwealth Bank alone. The Government at present has unlimited power to control banking. In my view action should be taken to make it impossible for the trading’ banks to take advantage of the exigencies of the nation, and to prevent them from pursuing an inflationary policy in their own interest.
My second objection to the policy of the Government relates to the raising of money by indirect taxation. It is a simple matter to demonstrate the unfairness and inexpediency of indirect taxation. By indirect taxation the Government merely takes from the community whatit could take by direct taxation. The sums which it is proposed to raise by the sales tax, for example, could be raised by direct taxation. Treasurers resort to indirect taxationpresumably because the taxpayers are supposed not to feel it. When a man is asked to pay an extra penny or 2d. or 3d. in the £ in income tax he knows he is paying it, whereas indirect taxation commends itself to financiers who follow the old Frenchman who declared that the art of taxation was to pluck the goose without making it cry. . The more efficient the tax gatherer is, the less outcry will the goose make and the more feathers will be extracted from it. It is, in my view, unfair to impose indirect taxation upon the community. I believe that if money is to be raised by taxation the method adopted should be such as will permit every man to know exactly what he is paying. We have to remember, also, that the first impact of the sales tax falls upon the seller. The seller finds himself in the position of facing a diminished demand for his commodities, largely because of the effect of such taxation. He, of course, must pay the sales tax, although he may never dispose of his commodity. .He may hold stocks which, tlie people may never desire, because of the heavy burden of tax to which they are subject. Tlie seller may be unable to pass the tax on to the consumer at all. Let us consider the position of a seller of books, since we are proposing to follow the example of Britain. In Britain, opposition was offered to the proposal and the application of the Purchase Tax to books was abandoned. The price of books in Britain has increased, because the price of the -materials used in their maintenance has . increased. Freights have increased, and I’ am informed ‘ that war-time marine insurance has increased by 50.0 per cent. All of these are. burdens upon the person . who, in Melbourne, Sydney-, Adelaide or Brisbane, is importing English books for re-sale. As a rule, he pays the sales tax when he gets the books, but he may never dispose of them. That is a matter which we can discuss when we are ‘ dealing specifically- with sales tax measures.
A further difficulty about indirect taxes upon any commodity is that tlie imposition increases prices . and tends, therefore, to diminish the consumption of the commodity. Anything that tends to diminish the consumption ‘of a commodity tends to diminish, the opportunities for employment for the people who produce iti In a circuitous way the burden of indirect taxation falls upon the persons who work in industry. For instance, the imposition of a sales tax of 10 per cent, on books, the wholesale value of which is 15s. or more, must cause unemployment to numbers of people in a trade which, normally works short time.
My third and last objection -is that the budget proposes to lower the e’xemption from income taxation. “We have always considered that there should be a certain- level below which direct taxation should not fall. Especially have we always believed that the basic wage was something which should.be exempt from taxation. I strongly suspect that the opportunity. afforded by the war is being used, not merely to resort to temporary expedients but also to effect a permanent change in the system of taxation. The reduction of the exemption is justified on tlie ground that most of .the persons who will pay taxes are single men and women. The Government says that the class of persons who are to be reached - persons with incomes under .. £400 - have over £500,000,000 between them, and will be called upon to pay . £5,000,000, whereas previously they paid only £100,000. Married men are told that the exemption will” not affect them, because the Government is after the unmarried wage earners, who are described as persons living in the lap of luxury, because they receive a big wage which is based on the assumption that they are married and have wives and children to support. My experience is that there are very few single wage ‘earners in receipt of £3 a week who have no financial responsibilities. Many of them contribute to the maintenance of the family home, provide for their aged parents, or assist to maintain and educate their younger brothers and .sisters. Others are making provision for the time when they themselves will marry and have families. Do they not constitute a class which is worthy of the sympathetic consideration of the Government? In my opinion the worst thing about this proposal is that, once the exemption is reduced, it will remain at the lower amount indefinitely. We were reminded this afternoon that the sales tax was introduced as an expedient in a time of crisis, on the understanding that when the crisis passed it would be removed. However, it would appear that, like the poor, the sales tax is always with us. Indeed, the tax becomes heavier as time passes. I- fear that the new tax on the basic wage-earner will ‘become /permanent.
Any country which believes itself to be in danger may either resort to class taxation and ra class fiscal policy, such as this Government proposes, or adopt the principle .of human solidarity and say that every one in the community shall be entitled to a f rugal living, and that’ the service and resources of .all- shall be used for communal purposes in order to resist the general . danger. The first principle is capitalist, the second is socialist. The party with which I am associated stands for the socialist principle.
Progress reported.
page 302
– I desire to inform the House that I have this day issued the writ in connexion with the by-election for the Swan division, and that the dates fixed are those which were announced in the House on the 21st November.
page 302
.- I move -
That the House do now adjourn.
In doing so, I intimate that next week the House will sit on Tuesday, Wednesday, Thursday and Friday.
. -I draw the attention of the Minister in charge of the House to the deplorable state which prevails in connexion with the control of technical education in -this country. According to this morning’s Melbourne Argus the number of students who are seeking entrance to the State technical institutions in Victoria is about twice the number of the vacancies which exist in the schools. We have reached such an impasse that, unless something is done quickly by the -State and Commonwealth Governments to remedy this deplorablestate ofaffairs the lot of the rising generation will be even more unhappy than has hitherto seemed likely. According to this newspaper report, 7,000 candidates will present themselves for examination next Thursday for entrance to the technical schools in Victoria. Many of them will be unable to begin their course next year because of lack of accommodation. Allowing for examination failures it is estimated that at least half of that number will not be admitted. At Brunswick, in the electorate of the honorable member for Bourke (Mr. Blackburn), where accommodation shortage is intensifiedby conducting classes of Royal Australian Air Force trainees, only about 250 of the 500 candidates can be accepted. This year the Preston school, in the electorate of the honorable member for Batman (Mr. Brennan),is overcrowded with 870 students. At Collingwood, in the electorate of the right honorable member for Yarra (Mr. Scullin), between 400 and 500 will be examined, and onlyabout half that number will be accepted. It is unlikely that any new students will be admitted to Swinburne Technical School if the Education Department’s decision to close adjuncts to the school is enforced. At present, nearly 200 students attending that institution are accommodated in two shops, a former bank, . and a hall. If any new students are admitted boys from Peel-street State School, Kew, will be given first preference. In an intensely industrialized area and large engineering centre, the Footscray Junior Technical School, with 700 students, has long been at the limit of its accommodation. About 400 students will sit for the entrance’ examination, but there will be only about 200 vacancies. Probably 400 boys will sit for the examination for admission to the Essendon Technical School. Between 200 and 250 will be admitted. Although this is a new school, taking the place of the old West Melbourne Junior Technical School, a cottage has already been converted intoa makeshift, pattern-making and aircraft workshop.
From that doleful story will be seen the tragic mess into which technical education in Australia has been allowed to degenerate. The problem must be tackled immediately if we are to provide for technicians, even for our war effort. The technical schools are being used by the Royal Australian Air Force and other branches of the armed forces, and if we are to provide skilled technicians to take over the control and servicing of industry in the years which will follow the war, which, please God, will be- ended in our favour, additional provision must be made at once.
As a resultof this war many heavy industries will be established in Australia which would never have been established but for the fact that Europe is . ‘ in flames. It is demonstrably true that we should not have had the; opportunity to manufacture aeroplanes, aeroplane engines or even motor car , engines and other equipment associated with those industries, had it not been of primary importance to the British Commonwealth of Nations for Australia to be converted into a huge engineering workshop and made the arsenal of the Pacific. It is a matter of fact that certain vested interests in Great Britain would never have allowed these industries to be started in Australia but for the exigencies of war. We must face the situation, and I suggest to the Assistant Minister (Mr. Collins) that he urge upon the Treasurer (Mr. Fadden) that it is fitting that the Commonwealth Government should subsidize all technical schools throughout Australia on an attendance basis to enable them to purchase the necessary additional equipment needed to provide for the growing youth of this country, to equip them for the battle of life and to enable them to serve Australia to the best of their capacity. If it be necessary to make economies in the budget to achieve this purpose, the amount provided for the more orless useless Department of Information should be reduced and the saving diverted to the utilitarian and patriotic purpose of providing better technical equipment inour schools. That is necessary if our young Australians, who may form the third Australian Imperial Force, if this country should ever be attacked after this war, are to be enabled to serve their country in industry, before and during such a war. It is also necessary in order to preserve this country from the plight in which it found itself at the outbreak of the present war when there was a shortage, not only of equipment and blue prints, but also of skilled, engineers, fitters and. turners as well as everything else that is required for a successful war effort and for the general well being of a nation.
– The Estimates contain provision for £200,000 to be expended on technical education.
– I want an additional £200,000 atonce.
Mr.DEDMAN (Corio) [10.35].- I shall address myself to a question of considerable importance affecting the relations between the Government and the workers of this country. It has been well emphasized on two or three occasions to-day that our war effort depends mainly on labour power. My purpose now is to object as strenuously as I can to certain pin-pricking activities against the workers. Recently in my electorate on two occasions the homes of workers were visited by detectives acting under the National Security Regulations. Their premiseswere searched for subversive literature. I point out as has been pointed out before that, if there be fifth columnists in the community, they are not to be found in the ranks of Labour. As inFrance, they will be found in the class represented by those on the Government benches.
In the first instance,detectives visited the home of Mrs. Nelly Patterson, secretary of the Sunshine branch of the Australian Labour party. They searched her house and found nothing on which they could base any charge. They searched every cupboard and confiscated letters concerning her activitiesas secretary of the branch. That was some time ago. A fortnight ago to-day detectives visited the house of. Mr. Frank Deakin, of Geelong, again, presumably, in search of something to connect him with the Communist movement. He was subsequently asked whether he belonged to the Communist movement and his answer was “ No “. Proof that his answer was correct lies in the fact that he addressed meetings for me, not. only at the general election, but also at the by-election at which I was first returned to this House. At that by-election I was opposed by a Communist candidate.
The Government and its officials should be. more careful in making raids on workers’ homes. The detectives visited Mr. Deakin’s home at 11.30 a.m. when he was away at work. They interrogated his wife in an overbearing manner, as to his political philosophy and confiscated a number of books and pieces of literature which they found in his house. The detectives also confiscated a number of books published by the Left Book Club. Most honorable members, I am sure, are familiar with the class of publication issued by that organization. All I can say is, that if it is an offence to possess such books-, the detectives Would make a good haul in my own home. In passing,I recommend publications of this kind to honorable members generally. One book issued bythe Left BookClub entitled The Town that was Murdered, tells how capitalism in England destroyed the shipbuilding industry in the town of Jarrow-on-Tyne. If that industry were still thriving in that town it would prove of immense value to Great Britain to-day. I can see no reason why the publications of the Left Book Club should be confiscated. The detectives also seized a number of copies of The Left News, which is a pamphlet issued in connexion with the activities of the Left Book Club. Since the outbreak of war The Left News has consistently condemned the communistic outlook. I cannot understand why books of this kind should have been confiscated in an endeavour to establish sympathy on the part of Mr. Deakin with communistic activities. Other publications confiscated included The Catholic Worker. The detectives also seized a number of letters in connexion with the Labour movement. Most of these letters began with the address “Dear Comrade”, and the detectives informed Mrs. Deakin that such letters proved that her husband” was connected with the Communist organization. The officers also confiscated a number of letters in connexion with the co-operative movement. Most honorable members, I believe, view with favour the ideals of the co-operative movement. The confiscation of such literature cannot possibly be justified.
– Are these books still retained by the department?
– Yes. They also seized a copy of the official publication of the Victorian Chamber of Commerce, and The Communist Manifesto. It is general knowledge that The Communist Manifesto was first published 93 years ago. Here again I can only say that if the detectives raided my house they would make a good haul of such’ publications. On the day after they seized this literature Mr. Deakin, in company with Mrs. Brownbill, M.L.A., attended the detective office, where he was questioned as to his political philosophy. The most reprehensible feature about the incident, however, is that the detectives told Mr. Deakin’ that they had treated him very leniently in visiting his house in. his absence, because had they accosted him at his work, he would have been sacked. The foreman at the cement works at which Mr. Deakin is employed is satisfied that he is a first-class worker. He is a member of the engineering union, and bears a . good character. The whole of his educational and social background is excellent. In his younger days he was interested in the boy scout movement, and was one of a panel from which the famous explorer, Shackleton, selected a sea scout to accompany his expedition to the South Pole. Mr. Deakin is interested inwelfare work of every description. He possesses a Red Cross certificate, and intended taking up air-raid precaution work in Geelong. The effect of this treatment on aman who is engaged in work of great importance in contributing his bit to our war effort is deplorable. Who will blame him if, following this incident, he said: “ Well, if this is the kind of thing that we are fighting for, I am not interested any longer in helping this Government in its war effort “. I condemn, with the utmost vehemence at my command, action of this kind on the part of Commonwealth Investigation Officers. The detectives still retain all of the literature which they seized in Mr. Deakin’s home, and he is at a loss to know how he can regain it. They also retain the literature which they confiscated from the secretary of. the Australian Labour party at Sunshine.
– They have taken similar action in many other cases.
– The least the department can do in cases of this kind, in which no evidence of subversive activity is found, is to return all literature seized, and forward an official apology to the persons concerned. Only by such action will the Government induce the workers of this country to maintain their maximum effort in industry.
– I undertake to have an investigation made into the matters raised by the honorable member.
Question resolved in the affirmative.
page 304
The following paper was presented : -
Meat Export Control Act - Fifth Annual Report of the Australian Meat Board, for year 1939-40, together with statement by Minister regarding operation of act.
House adjourned at 10.48 p.m.
page 305
The following answers to questions were circulated: -
d asked the Prime Minister, upon notice -
When is it anticipated that the dockyard will be completed?
– The answers to the honorable gentleman’s questions are as follows : -
r asked the Minister for Social Services, upon notice -
– The answers to the honorable member’s questions are as follows : -
d asked the Minister repre senting the Minister for Munitions, upon notice -
– The Minister for Munitions has supplied the following answers : -
Ma chine-gun Carriers.
y asked the Minister representing the Minister for Munitions, upon notice -
Is it a. fact that the work of manufacturing machine-gun carriers, which has been carried out at the Newport Railway Workshops, Victoria, has again been held up because of the failure of those responsible for the supply of plate? If ho, will he see that regular supplies of this necessary raw material are kept up so that this urgent work can be pushed on without further delay?
– The Minister for Munitions has supplied the following answer : -
Difficulties associated with the production of steel plate, particularly the heavy demand upon reserve stocks of alloys, necessitated the development of a material which could be manufactured entirely with local materials. This has been accomplished. This change of steel was followed by a re-design of the carrier, and it is now being put upon a mass production basis which will enable large quantities tobe produced in the very near future.
n asked the Prime Minister, upon notice -
Is it proposed to consolidate the National Security Regulations, or any class of them? If so, when?
– It is the practice, when sets of National Security Regulations become difficult to interpret by reason of frequent amendments made thereto, either to re-make them as was clone in the case of the National Security (Prices) Regulations or to consolidate them as has been done in the case of the National Security (General) Regulations, copies of which are now available. Consideration is being given to the re-issuing or consolidation of other sets of National Security Regulations which have been amended f requently.
Money-lending : Protective Legislation.
l asked the Prime Minister, upon notice -
In view of the fact that in some States there is no satisfactory legislation dealing with money-lenders, pawnbrokers, or in respect of hire-purchase agreements, will he give adequate protection to Australian citizens in regard to these matters by regulations under the National Security Act?
– The matter referred to by the honorable member appears to be one for the States concerned.
Non-official Post Offices.
d asked the Minister representing the Postmaster-General, upon notice -
What allowances arc paid for services rendered at the following non-official post offices: - Antill Ponds, Cullenswood, Fitzgerald, Hayes, Mount Nicholas, Tunbridge, Dulverton, Kimberley, Lemana, Powranna, Spreyton, Wiltshire Junction, Apsley, Dromedary. Glenora, Lowdina, National Park. Tea Tree, Exton, Lebrina, Nabowla, Relbia, Tunnel, Berriedale, Epping Forest, Granton, Mangalore, Plenty, Westerway, Howth, Leith, Oaks, Rocky Cape, Western Junction.
– The desired information is being obtained and will be made available to the honorable member as early as practicable.
d asked the Minister for Commerce, upon notice -
Ballarat Flax-Growers Association for representation on the Commonwealth Flax Production Advisory Committee?
– The answers to the honorable member’s questions are as follows : -
l asked the Treasurer, upon notice -
When dealing with the recommendation of the Advisory Board on CapitalIssues on two applications submitted for capital extensions for phenol production in Australia, one by an all-Australian company, the other by an American company allied with an Australian company, does the Treasurer propose to consult Cabinet?
– The National Security (Capital Issues) Regulations confer upon the Treasurer the power to give approvals to applications made under those regulations. It is not the practice to refer such applications to Cabinet.
Tobacco.
l asked the Minister for
Trade and Customs, upon notice -
Will ho have tobacco declared a commodity for the fixation of a minimum price, in order to protect the trade?
– Draft regulations giving the Commonwealth Prices Commissioner power to fix minimum prices are in course of preparation. When they are in operation consideration will be given to the suggestion of the honorable member.
l asked the Treasurer, upon notice -
– The answers to the honorable member’s questions are as follows : -
Postage Rates.
n. - Yesterday, the honor able member for Werriwa (Mr. Lazzarini) asked if the PostmasterGeneral would inquire as to whether the positing of certain printed matter in sealed envelopes ‘bearing an embossed 1½d. postage Melbourne stamp was legitimate ?
The Postmaster-General has provided the following answer for the honorable member’s information : -
The postal article referred to by the honorable member is quite in order. It was posted scaled under the departmental permit mail system which enables printed matter to be so posted at printed matter rate of postage, one penny . per four ounces, plus a fee of one half penny.
Before any item of printed matter can bo posted under this system it has to be submitted for departmental examination and adequate provision is made under the regulations to prevent any abuse of the system in the direction of forwarding in sealed envelopes printed matter other than that authorized to be so transmitted.
The postage paid indication on the envelope is also in order, the arrangement being a common one between the department and large posters of newspapers, periodicals and other printed matter. Adequate safeguards arc also in force in connexion with this arrangement.
Unshrinkable Wool - Use of Frenen Process.
Mr.Menzies. - On the 22nd November the honorable member for Cook (Mr. Sheehan) and the honorable member for New England (Mr. Abbott) asked ques tions, without notice, relating to a process discovered at the McMaster Laboratory in Sydney for the production of unshrinkable wool. The honorable member for Cook asked whether the Government would insist that its use be confined entirely to Australia and not handed over to the manufacturers of Leeds and Bradford, whilst the honorable member for New England asked whether, in view of the fact that the discovery which was developed at the McMaster Laboratory was largely made possible through funds subscribed by wool-growers, the Government would take steps to see that the right to use the process was made available to overseas manufacturers with a view to increasing the use of wool.
In reply to the honorable members desire to say that laboratory experiments conducted by the Council for Scientific and Industrial Research have shown that the Freney process may possess certain advantages over similar processes which have been developed in other countries. The practicability of translating the laboratory results into commercial practice has not yet been demonstrated, and with that object in view semi-large scale tests are now in progress. Until these tests are completed, no opinion can be expressed regarding the commercial application of the process, or regarding the economics of the process as compared with other processes.
If the results of the semi-large scale tests are successful the council does not propose to take steps to restrict the use of the process to Australia. A description of the process, together with results of laboratory experiments, has already been published in the council’s quarterly journal. In this connexion, I may say that the Woollen Industries Research Association at Leeds has not only furnished the council with information regarding the Woolindras process developed by that association for preventing shrinkage in wool, but has also arranged to send, free of charge, a complete Woolindras plant for demonstration purposes in Australia.
Alleged SubversiveStatements.
– ‘Yesterday the honorable member for Melbourne (Mr. Calwell) asked me the following question, without notice -
Was an officer of the Commonwealth Investigation Branch present at the Returned
Soldiers Congress when alleged subversive statements were made, and were any inquiries instituted by the branch subsequent to the appearance of these subversive statements in the press?
In reply to the honorable member, 1 desire to say that no officer of the Commonwealth Investigation Branch was present at the recent annual congress of the Returned Soldiers League. In view of the fact that steps have been initiated in other quarters to investigate the matter, no action is being taken by Commonwealth authorities at the present juncture.
Fuel Storage.
r. - Yesterday the honorable member for Bendigo (Mr. Rankin) asked me a question, without notice, as to whether underground storage tanks were being provided for petrol and other liquid fuels.
I am now in a position to inform the honorable member that the Minister for Supply and Development has furnished the following reply to his question : -
Preparations are being made for the construction of additional petrol storage capacity in twenty inland towns, the location of which is being arranged with the oil companies, who are to turn over the stock from time to time to avoid deterioration. I understand that excavation for the first of these tanks has commenced, or will shortly commence, at Bendigo.
Manufacture of Mines.
r. - Yesterday the honorable member for Corio (Mr. Dedman) asked me a question, without notice, as to whether steps would be taken to expedite the production of mines at the Ford Motor Company’s works at Geelong.
I am now in a position to inform the honorable member that the Minister for Munitions has supplied the following answer to his question : -
The honorable member can be assured that the production of mines is being developed with due regard to the stocks in hand and in relation to the programme generally.
Olympic Park.
r. - Yesterday the honorable member for Batman (Mr. Brennan) asked the following question,without notice -
In view of the serious inconvenience caused by the parking of largo numbers of cars for export on the Olympic Park, an area which has hitherto been used by the Athletic Asso ciation for its legitimate purposes, will the Minister for the Army take steps to have the cars parked elsewhere?
I am now in a position to inform the honorable member that it is anticipated that it will be possible to vacate the Amateur Athletic Sports Ground adjoining Olympic Park early in December. This will enable the ground to be resumed by the Amateur Athletic Association immediately thereafter. bowen Aerodrome.
– Yesterday the honorable member for Herbert (Mr. Martens) asked the following question, without notice -
The late Minister for Air (Mr. Fairbairn) advisedme that the Civil Aviation Department had taken over the Bowen aerodrome and that certain lands had tobe resumed and the runways extended. Can the Minister advise me if anything has been done in this matter?
I am now in a position to inform the honorable member that the Bowen aerodrome has been taken over by the Commonwealth. The matter of extensions and improvements to the aerodrome is now in hand.
British Shipping Losses.
s. - Yesterday the honorable member for West Sydney (Mr. Beasley) asked me the following question, without notice -
Does the Prime Minister consider it expedient to make to this House a statement arising out of a report that appeared in the Sydney Sun of the 21st instant in reference to the very grave losses that are being sustained by British shipping and the need for further material aid to be given to enable such losses to be minimized, but particularly the statement that the new President of the Board of Trade, Captain Oliver Lyttleton, has given to the Australian High Commissioner a preliminary outline of the various measures that will be further discussed with him?
I have now perused the press report to which the honorable member referred. I have not yet received any official advice from the High Commissioner, London, of discussions with the President of the Board of Trade referred to in the report.
The Government is seized of the necessity of maintaining shipping tonnage for the carriage of commodities and is considering what action can most suitably be taken.
Cite as: Australia, House of Representatives, Debates, 28 November 1940, viewed 22 October 2017, <http://historichansard.net/hofreps/1940/19401128_reps_16_165/>.