House of Representatives
3 December 1940

16th Parliament · 1st Session

Mr. Speaker (Hon. W. M. Nairn) took the chair at 3 p.m., and read prayers.

page 348


Report and Balance-sheet.

Minister for Defence Co-ordination · KOOYONG, VICTORIA · UAP

– I desire to inform honorable members that copies of the report of the directors and of the balance- sheet of Commonwealth Oil Refineries Limited for the year ended the 30th June, 1940, have been placed on the table of the Library.

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– I ask the Prime Minister -

  1. Has he received a document with the title The People’s Declaration, containing the signatures of Australians drawn from every walk of life and every part of the Commonwealth ?
  2. Is the purpose of this declaration to keep the standards of the nation high, by the people practising in their homes and businesses those principles of honesty and unselfishness which must form the foundation of a healthy Australian national life?
  3. Will the right honorable gentleman lay the document on the table of the Library, so that it may be perused by honorable members ?

– I have received this document, and I shall comply with the request of the honorable member to place it on the table of the Library.

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Special Christmas Leave


– I ask the Minister for Air whether members of the Royal Australian Air Force who are at present in Australia will enjoy the eight days special leave which it is proposed to grant to members of the Australian Imperial Force ?

Minister for Air · INDI, VICTORIA · CP

– Particular consideration has been given to the matter of Christmas leave for members of the Royal Australian Air Force, especially those who are engaged in a training course in connexion with the Empire air scheme. It has been found that, due to the comprehensive nature of this scheme and to the succession of short courses involved, it is not possible to give eight days Christmas leave to all members of the Royal Australian Air Force who have enlisted under the scheme, butwhere it is possible to do so without dislocating the series of short courses an which the men are engaged, that will be done.

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– Will the Prime Minister state why, last week and to-day, there has been in the House of Representatives a departure from, but in the Senate an observance of, the timehonoured practice of Ministers of the Government refusing to answer questions or to transact any other business while a motion of censure upon the Government remains undecided ?


– I am not aware that the practice referred to by the honorable member extends to what is not, in form, a. motion of censure. I assure the honorable member that my colleagues in the Cabinet would gladly defer the answering of further questions until a decision had been reached on the amendment of the Leader of the Opposition to the budget proposals of the Government.

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Extension of Term of Office


-Will the Prime Minister state when the Government arrived at the decision to recommend an extension of the term of office of the present Governor-General ? Does the right honorable gentleman regard it as proper that a dying government should make such a recommendation ?

Mr James:

– Dying? It is dead!


– Was any consideration given by the Government to the appointment of an Australian citizen to the office of Governor-General? In view of the drastic nature of the budget for the present financial year, does the Government propose to reduce lavish expenditure incurred in the maintenance of this office?


– I cannot tell the honorable member the exact date on which this matter was considered. The Government accepts full responsibility for the decision that it made. It considers that an extension of the term of office of His Excellency is very appropriate, and believes that, in having arrived at that conclusion, it has reflected the opinion of the overwhelming majority of the Australian people. The Government is also of the opinion that nobody can regard the way in which the GovernorGeneral’s establishment is conducted in

Australia, and the duties of the office are discharged, as involving lavishness or display of any kind.

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– Two weeks ago, I asked the Minister for the Army if it were possible to grant free railway passes to soldiers performing garrison duty when on leave. The honorable gentleman then said that the matter would be considered, and promised that a statement upon it would be made last week. Has the Government yet considered the matter? When will the honorable gentleman be prepared to make a statement upon it?

Minister for the Army · WARRINGAH, NEW SOUTH WALES · UAP

– I regret that I am not yet able to reply to the honorable member. I am considering a number of anomalies which exist in connexion with the travelling concessions granted to members of the different forces in the various States. This involves communication with the States, which own the railways. The honorable member may rest assured that so soon as I am able to furnish him with a reply I shall do so.

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Conference with Prime Minister.


– I draw attention to a report which appeared in the Sydney. Daily Telegraph of last Saturday, stating “ Mr. Menzies has gone to Melbourne, where he is likely to confer with the National Union on the situation. The National Union is the body which collects and controls the funds of the United Australia party “. In order to relieve the minds of honorable members, will the right honorable gentleman state whether or not there is any special significance in that report, and whether the National Union is in any way connected with the Government of Australia ?


– I am sorry to disappoint the honorable member, but I did not go to Melbourne to confer with the National Union, nor did I see that union or any member of it while in Melbourne. The only really important conference was that which I had with Mr. Bradman and Mr. Fleetwood-Smith.

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– Has the attention of the Prime Minister been drawn to a paragraph in the Tasmanian newspapers of Thursday last reporting Mr. Cosgrave, the Premier of that State, as having said that shipping restrictions now contemplated would cut Tasmania’s exports by two-thirds? If the right honorable gentleman has seen the report referred to, has he any comment to make regarding the contemplated action? If he has not seen the report, will he inquire whether the statement is accurate or otherwise, since it is causing concern among the people of Tasmania?


– I have not seen the report, but I shall be happy to inquire regarding its accuracy, and to discuss the matter with my colleagues.

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– Has the Minister for Labour and National Service given consideration to the suggestion made by me on numerous occasions regarding the establishment in Sydney of offices for the recruiting of labour for the munitions annexes ?

Minister for Labour and National Service · FAWKNER, VICTORIA · UAP

– Steps have now been taken to establish in Sydney an employment bureau for munitions workers similar to that set up in Melbourne. Applications will be made on the munitions application form A and a special officer has been made available, who will interview applicants at the bureau. At the same time, the owners of munitions annexes and contractors have been asked to notify the bureau of their requirements of labour, so that their needs may be supplied in the most effective manner practicable. I may mention that similar arrangements are being made in other States, so that it will be possible to make the fullest use practicable of the reserves of man-power available for munitions work.



– Who is the person handling employment in the munitions industry in New South Wales and where is the bureau located?


– Instructions have been issued for the appointment of a special officer who will be attached to the New

South Wales Government Labour Bureau. I shall find out the precise details as to the name , and address of the officer concerned. I have some forms in my possession which might be of use to the honorable member.

Mr Morgan:

– I hope the Minister will expedite the appointment, because there aremany people in New South Wales anxious for work in the munitions industry.

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– As I have received several inquiries relating to the operations of the Barley Board, will the Minister for Commerce state whether the whole of the barley acquired by the board has yet been disposed of, and whether the board intends to make a final payment, in order to settle up accounts with the growers ?

Minister for Commerce · COWPER, NEW SOUTH WALES · CP

– I understand that the whole of the barley held by the board has not yet been sold. The board has recommended a further payment to the growers, and the recommendation will be considered by the Government almost immediately.

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– Has the Prime Minister been informed that Mr. MacKenzie King, the Prime Minister of Canada, with one of his Ministers, is on his way to England to attend a conference? If the conference relates to the suggestion that has come from the United States of America that, in return for 50 destroyers, Canada would be willing to grant a corridor through its territory to Alaska, does the Prime Minister consider that Australia should be represented at a gathering that will deal with such a vital matter of Empire policy?


– I have no information on the matter raised by the honorable gentleman. I point out that, of course, there would be great difficulty at the moment in anybody representing Australia at any conference overseas.

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– I refer the Prime

Minister to a statement published in the Sydney Morning Herald to-day regarding a principle to be followed, in the application of thecensorship. Is it a fact that, under the pretext of saving anxiety to friends and relatives, important news that has no bearing upon national security has been, and is being, unduly delayed, and in some cases suppressed?


– The answer is in the negative.

page 351




– Following up the question I addressed to the Minister for Commerce last week with regard to the quality of fruit which, although unfit for human consumption, was shipped from cool stores in Melbourne to the Sydney market, I now draw the attention of the Minister assisting the Minister for Commerce to the fact that similar shipments have been made this week from Melbourne to Sydney. I was offered, at1s. a case, fruit which had cost the Government 8s. a case to place on the market. Will this practice be permitted to continue?

Minister without portfolio assisting the Minister for Commerce · RICHMOND, NEW SOUTH WALES · CP

– I shall have inquiries made regarding the matter. I understand that the fruit complained ofis portion of last season’s Tasmanian crop, and that, owing to the adverse seasonal conditions in Tasmania last year, fruit which appeared to be in sound condition when placed in cold storage quickly deteriorated after removal from the stores.

Mr Frost:

– ‘Why send rotten fruit from Melbourne to Sydney, and pay the freight on its carriage?


– Inquiries are now being made as to the extent to which the present practice is justified.

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– Has the Prime Minister noticed a report in the Melbourne Argus of yesterday, attributing to Mr. Hogan, the Minister for Agriculture in Victoria, the statement that men who went on strike for more than award rates were worse than Shylook, and were helping Hitler ? Is the right honorable gentleman aware of the fact that Mr. Hogan enteredpoliticsby means of the fame achieved by him in leading strikes in Western Australia during the last Avar?


– On the whole, I think that the answer is “ No “.

page 352




– Is the Minister representing the Minister for Supply and Development yet in a position to state whether any increase of the reserves of petrol in Australia has resulted from the petrol rationing scheme?


– Inquiries will be made regarding the matter, and an answer will : be supplied to the honorable member.

page 352




– Will the Minister for the Army state whether itis a fact that it hasbeen decided to establish wet canteens in militia camps for officers only? Can he give the reason for this discrimination? Does he intend to extend the privilege of wet canteens to all ranks?


– The decision of the Government with respect to restoring a privilege which existedhas no relation to the general subject of wet canteens in militia camps. For many years the officers’ and sergeants’ messes have enjoyed theprivilege of having liquor at their messes. That privilege was, I understand, taken away under a misapprehension as to the legal position. Members of militia camps are volunteers. The Militia are called up under Part IV., section 6’0 of the act, which relates, not to universal training, but to the obligation to serve in time of war. In view of the fact that the privilege had been withdrawn under a misapprehension, I see no reason why it should not be restored.

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– Many electors received “ please explain “ notices for having failed to vote at the general elections owing to the failure of the Government to print a new electoral roll. In view of the fact that the burial service of this Government will probably take place this week , is it intended to issue a new electoral roll forthwith?

Minister without portfolio assisting the Minister for the Interior · HUME, NEW SOUTH WALES · CP

– I shall place the honorable gentleman’s question before the Minister for the Interior and obtain the necessary information for him.

page 352




– Can the Attorney-

General tell me whether any ban has been placed by the Government on the importa tion or possession of books issued by the Left Book Club?


– Not to my knowledge, but I shall make inquiries and let the honorable gentleman know the result.

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– Can the Minister for the Army inform me of the terms of the commission of those persons who have been appointed to hear appeals against internment?


– The tribunals are merely for the purpose of disposing of appeals as they occur. There is no period of tenure in respect of their office.


– Is it a fact that one Krawinkle, the son-in-law of the interned Hermann Hamburg, Member of the Legislative Council of South Australia, was himself interned and then released on bond, and is still at liberty? Can the Minister for the Army say whether the Government considers that aliens in the community who are considered to be dangerous subjects should be allowed to be at liberty and whether it believes that a bond meets the situation?


– The predominant consideration in our approach to all these questions is the security of the nation. The tribunal set up to deal with naturalized and natural born British subjects who were interned, dealt with the case of Krawinkle and after having heard the evidence, made a strong recommendation to me that he should be released on conditions. The tribunal’s view, with which I agree, was that if that were done the safety of the Commonwealth would be ensured. He was accordingly released on conditions.


– Will the Minister for the Army tell me what reason exists for the appointment in New South Wales of three tribunals to deal with the appeals of unnaturalized interned aliens, whereas there is only the one tribunal to deal with the appeals of naturalized aliens ?


– Originally, one tribunal was appointed to deal with the appeals of naturalized British subjects and British subjects who were interned. When the appointment of a tribunal to deal with the appeals of unnaturalized internees was under consideration, the delay that had taken place in dealing with appeals by naturalized subjects and British subjects came to my notice. Consequently three additional tribunals were appointed, the desire being to rid tribunals of arrears, so that there would be no delay in dealing with appeals.


– In view of the recent statement in the press by the Minister for the Army that many interned aliens might be found to be perfectly good citizens and he did not think that the public conscience would be shocked by giving them speedy trial, I desire to know whether he is aware of the fact that there is such an accumulation of appeals from naturalized aliens that there is no possibility of an appeal being heard within three or four months. In view of the fact that it is possible that many of these people are perfectly good citizens, is the Minister prepared to have further tribunals appointed in order to dispose of appeals by naturalized aliens?


– As to the alleged statement by me, I said nothing like it or remotely like it. As to the subjectmatter of the question, the tribunals will deal with the applications of all persons interned by the Australian Government irrespective of whether they are British subjects, naturalized British subjects or unnaturalized aliens.


– Can the Minister say what fees will be payable to the commissioners who will sit on alien appeal tribunals and whether any fees will be payable to them by appellants?


– I have not the exact information at hand, but my recollection is that each commissioner will be entitled to draw £5 5s. for each sitting day of the tribunal. The answer to the second part of the honorable member’s question is “ No “.

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– In view of the fact that soldiers cannot get prompt payment of sustenance allowances, will the Minister for the Army inform the House of the exact functions and activities of the business manager for the Army? “Will his duties involve the inauguration of a proper accounting system for payments and allowances to soldiers and their dependants, with the elimination of red tape and irritating delays?


– So far as I recollect the terms of the appointment, they have no relation to the subject-matter of the honorable member’s question, but if ho will submit to me any complaints I shall have them investigated immediately.

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Allowances to Dependants


– Will the Minister for the Army see that there is allocated to the wives of members of the Australian Imperial Force who have left for overseas and in respect of whom separation orders in favour of their wives have been granted, not only the amounts set out in the court orders, but also sufficient to pay arrears on court orders?

M!r. SPENDER. - I can give no undertaking, but I am prepared to consider the matter with a view to seeing how far the honorable member’s wishes can be acceded to.

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– Is it a fact that the Government has decided to abandon the air force training school at Southern Cross, Western Australia, because of the prevalence of dust storms ? If so, can the Minister for Air say whether the services of the experts who advised the Government to select this site have been retained or whether appropriate action lias been taken with regard to them?


– The Government has decided not to proceed with the service air-training school at Southern Cross in Western Australia but to establish the school at Geraldton in that State. I understand that the Southern Cross site was examined by persons who are believed to be best able to report on the suitability of suggested sites and that they reported that it met a!l of the requirements. However, the abnormally dry season in that area - the rainfall has been only five inches whereas the average rainfall for the district is ten inches - made conditions unsuitable for the establishment of a flying school, as the dust would cause undue wear of engines and make flying conditions unsafe. Accordingly, the school is being transferred to Geraldton.

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– Has the Government given consideration to the conversion of the railway between Broken Hill and Port Pirie to the standard gauge in order to enable iron ore to be brought from South Australia to New South Wales, and also materials going in the opposite direction to be carried by rail in view of the danger to sea-borne traffic from mines and raiders?


– The matter referred to by the honorable gentleman has engaged the attention of the Government at various times in the past. I do not know what the present position is, but I shall bring his question under the notice of the Minister for the Interior and inform the honorable member of the result.


– Can the Minister representing the Minister for the Interior say whether in order to ensure safety in the event of attack, instructions will be given to convert the 3-ft. 6-in. gauge railway between Broken Hill and Port Pirie to 4-ft. 81/2-in. gauge in order that New South Wales rolling stock may be used on the Commonwealth Railways which are reported to be suffering from a shortage of rolling stock?


– I shall place the honorable member’s question before the Minister for the Interior and let the honorable member have a reply later.

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– In view of the fact that employed persons will pay taxes weekly throughout the year, whereas selfemployed persons who will be liable for similar amounts will not pay their taxes until the end of the year, will the Treasurer give an undertaking that employed taxpayers will be allowed a rebate equivalent to interest on the amount paid in advance? The Treasurer’s predecessor gave an undertaking that this would be done but no action appears to have been taken.


– I am not prepared to give the undertaking asked for, but if the honorable member will place his question on the notice-paper, it will receive consideration.


– Does not the Treasurer think that it is unfair that persons who are supposed to have sufficient financial resources to pay their taxes at the end of the year are to be allowed to accumulate interest whereas poorer persons will be required to pay their taxes by instalments throughout the year?


– It is a matter, not of what I think, but of Government policy.

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– Has the Minister for the Army received any report, oral or written, from either the commanding officer of the camp or the officer in command, Southern Command, as to why men returning to the Darley camp from leave are not permitted to use the bus service which runs to the camp? If so, will he inform me of the nature of its contents ?


– The answer to the first part of the honorable members question is “ No “, and therefore no answer to the second part is required.

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– When does the Minister for Trade and Customs expect to he able to furnish information setting out the reasons for the resignation of Mr. McCullock, the Deputy Prices Commissioner for New South Wales?

Minister for Trade and Customs · WENTWORTH, NEW SOUTH WALES · UAP

– I was under the impression that the honorable member had been furnished with the information for which he asks. The services of Mr. McCullock were made available to the Commonwealth by the Government of New South Wales, which asked that he be released so that he might again take up his duties with the State. For that reason he relinquished his duties as Deputy Prices Commissioner on the 30th June last.

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– Is the Prime Minister yet in a position to say whether a reply has been received from the Government of New Zealand to the representations of the Australian Government regarding the refusal to permit Australians to return to Australia, and the conscription of Australians in New Zealand ?


– No reply has yet been received from the Government of New Zealand.

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– In view of the fact that numbers of imperial pensioners now residing in Australia suffer hardship because of the inability to obtain money from Great Britain, will the Commonwealth Government consider the granting of temporary relief to them, until remittances from Great Britain come to hand ?


– I am not familiar with the subject, but I shall be glad to look into it and to see what can be done.

page 355

BUDGET 1940-41

In Committee of Supply:

Consideration resumed from the 29th November (vide page 341), on motion by Mr. Fadden -

That the first item in the Estimates under division I. - The Senate - namely, “ Salaries and allowances, £8,170 “, bo agreed to.

Upon which Mr. Curtin had moved by way of amendment - that the words “agreed to” be omitted and the word “ postponed “ inserted in place thereof - . . . as an instruction to the Government (vide page 267).


.- In discussing the budget proposals in the light of the challenge contained in the amendment moved by the Leader of the Opposition (Mr. Curtin), I shall deal with matters of broad policy rather than the detailed financial proposals outlined by the Treasurer (Mr. Fadden). The only guiding principle that should govern this Parliament in considering these or any other proposals at present is the stark, naked fact that we are at war and that the life and property of every citizen in the community are at stake. We have been at war for fifteen months, and any person who with an unbiased mind analyses the position as it is to-day cannot come to any conclusion other than that Australia must do a very great deal more than- it has done up to the present if we are to play our full part in the struggle. The budget as presented by the Treasurer reveals for the first time the scope of the plans of the Government with regard to the war effort. The estimated cost of war preparations for the coming year is £186,000,000 as compared with an actual expenditure of £55,000,000 for the year ended the 30th June, 1940. This represents a very big expansion and will add largely to the load to be borne by the people. When this expanded programme is translated into activity as production of goods, its repercussions will be felt throughout the economic, financial, and business structure of the community. A rapid change of this magnitude cannot be effected without some hardship. The transfer of so many workers from the production of ordinary peace-time goods and services to the production of war materials, coupled with the loss of those taken out of industry for the fighting forces, can result only in a very steep decline of the quantity of ordinary peacetime goods and services on the market. The reduced standard of comfort occasioned by the absence of these goods from the market, or the fact that they go up in price - in either case the effect on the people will be the same, for they will have to buy less and be able to consume less - will be the’ measure of the real sacrifice made by the nation. As the war effort is a government-controlled activity the sacrifice will show up in exact proportion in the accounts of the Treasury. Reduced consumption, therefore, is the field from which the Government must reap its wartime taxation. If we accept this as a basic truth - and we have to do so - we must realize that we have to make sacrifices now or be in danger of losing everything we have. Considering that, it should not be hard to convince the people of Australia that they must approach this problem in a co-operative spirit, each determined to do his fair share towards reaching the common goal of victory. All the evidence points to the likelihood of this war being of long duration. It is imperative that the taxation or financial proposals that we adopt to-day as the foundation of our financial war-time structure should be sound in principle, equitable in their impact upon the people, and, as far as possible, elastic enough to be capable of expansion without alteration of method so that the people may be able to estimate what provision to make to meet the increased load that must be placed upon them as our war-time activities increase. My reactions to the budget proposals are, from a general point of view, favorable. Certainly some sections of the community may think that they are harder hit than others; but I believe that, in framing these proposals, the Treasurer has attemped to place the burden with equity and endeavoured to raise the money where it is collectible. The honorable gentleman has kept in mind the guiding principle of ability to pay, and the heavier burden has been placed on those in the higher bracket of income-earning capacity. One side of the problem, however, has not been properly tackled and though it cannot be dealt with now should receive attention in the near future. I refer honorable members to the following paragraph in the Treasurer’s budget speech : -

The taxation rates imposed by States have been respected in framing the proposed Federal rate. This has very considerably hampered Commonwealth taxation at all points of the scale, because of the great variation in State rates. It is a matter for consideration whether under the increasing pressure of war we shall be able to maintain this principle. Some greater uniformity in State income taxation may become a war-time necessity.

It is obvious that this taxation, the reasonable limit to which is referred to in the next paragraph as being 14s. in the £1. will apply only to the State of Queensland. The explanatory schedule which was circulated by the Treasurer for the enlightenment of honorable members shows that a person receiving an income of £1,500 a year in a lowest taxed State will pay 12 per cent, less than his neighbour in the highest taxed State. When the income rises to £5,000 a year the difference will be 15 per cent., and when it reaches £10,000 a year the difference will be 24 per cent. It is obvious that that field has not been properly ploughed. The words, “ Some greater uniformity in State income taxation may become a wartime necessity “ in the Treasurer’s budgetspeech sound suspiciously like defeatism. We are at war fighting for our lives, but we are still trying to get along by the out-moded tools which hampered us even in peace-time. The time has come to make a thorough survey of Australia’s financial resources so that we may equalize the tax burdens on the people. We should not continue a procedure which, at all points, hampers ihe application of equitable taxing methods. As I see the position, the people of Queensland have been somewhat profligate, and have wasted their substance, so that they are able to provide only, let us say, one sword, or gun, or aeroplane, or whatever we may care to take as the unit. In the other States greater resources may be tapped, and we should commandeer what we need of the help that is available. The position to-day is so serious that we should not permit anything to prevent us from making our maximum all-in war effort. Certainly our war effort should not be based upon the capacity of the weakest elements in our community, but it seems to me that the Government’s proposals are founded upon that basis. I should like to see, for once at any rate, a really national effort. If this be made it will undoubtedly put us a jump ahead in the game, and we have never beer there yet. If by equalizing the burden of taxation we may increase the load where there is capacity to bear it, we shall undoubtedly get a jump ahead, and this will give us a reserve to call upon if an emergency arises.

The amendment of the Leader of the Opposition made reference to soldiers’ pay. That point has been covered to some degree by the provision of an additional 6d. a day for children, making the total amount ls. 6d. That will prove to be a very great relief to the families to which, it will apply; but that concession does not cure the complaint. A married soldier with children leaves his wife 3s. a day out of the 5s. a day which he may draw, but that is sufficient to provide his family with, only the bare necessaries of life. The class of people to whom I am now referring are in the cleft stick in which all persons with fixed incomes find themselves, and it is proposed to place u lion them new and high indirect taxation by means of the sales tax and customs imposts, as well as the additional income tux. I should like the Government to look at this question in the light of the practical, needs of the situation, in order to see whether a satisfactory remedy may not be applied to this trouble.


– Hear, hear !


– Although the Government may feel that it cannot accept the amendment of the Leader of the Opposition in globo, it could, I think, hold out a hand in the direction I have indicated. Surely some means can bc devised to grant relief to these people.

The point to which I have just referred relates to only one of many social problems which the Government will find on its hands as the result of the taking of plenary powers under the national security legislation in order to ensure th*> making of a maximum war effort. An axiom that should be borne in mind is that power brings responsibility. Now that the Commonwealth Government has decided, through its newly-established Ministry for Labour and National Service, to encroach, upon the fields which, hitherto, have been the close preserves of the States, such as the fixing of wages in certain respects and the providing of certain social services, it will find itself being held more and more responsible for the well-being of the people. I cannot see anything but good coming out of this development.

Having decided that a maximum war effort must be made, the Government should now recognize that a prerequisite is industrial harmony. Only industrial harmony can make possible a maximum war effort. Consequently the Government should set on foot a thorough investigation of, and real research into, the causes of industrial friction, so that disputes may be settled before they reach the breakdown stage, which leads to strikes and other interferences with the war effort.

There is one glaring weakness in our industrial machinery to which I was surprised that the Leader of the Opposition did not direct attention, seeing that he and his party declare that they stand for the worker. This weakness is the cause of one of the worst social diseases in Australia. I refer to the absence of any relationship between the basic wage system and the obligations borne by family men with larger families than those provided for in our basic wage machinery. In Victoria provision is made in the basic wage for two children in a family. In South Australia and Queensland, three children in a family are provided for, and in New South Wales, only one child. The condition of poverty that exists in the homes of workers with large families may well be likened to a festering sore. The trouble should have been cured years ago. Only in New .South Wale1!, where a. child-endowment scheme is in operation, has any real attempt been made to cure, this complaint. Fortunately, 40 per cent, of our population resides in that State. The troubles that arise from our failure to deal with this problem undoubtedly lie at the root of a great deal of our industrial unrest. We shall never have contented workers and industrial harmony while the spectre of starvation throws its shadow over the home of the worker with the large family. Having in mind a budget of the proportions of that which is now before us, I am of the opinion, after careful consideration of the problem., that it would not cost a very great deal, relatively, to give effect, to an Australia-wide child-endowment system similar to that in force in New South Wales. Our national security legislation affords the best opportunity that any Commonwealth government has ever had to deal effectively with this subject. The New South Wales child-endowment system, which operates upon the birth of the second child in a family, cost approximately 10s. a head of the population, and resulted in the distribution last financial year of £1,337,020 in respect of 46,842 claims. I do not think that it would cost more than £2,000,000, including the cost of administration, to apply such a scheme throughout Australia. If we could cure this serious complaint at that cost it would be an excellent thing for the country.

When the practicability of forming a national government was being discussed recently by party managers, the Government submitted a proposal which included the following three suggestions : -

That wo should aim at the maintenance of the highest living and social standards consistent with a full national war effort.

That every proper step should be taken to secure the fullest co-operation of the trade unions in the industrial problems arising out of the war.

That preparations should be constantly in hand for the period of post-war re-construction, provided of course that those preparations do not subtract from the immediate problem of defending the national integrity of Australia and of the other British countries of the world.

Child endowment is closely related to those proposals. Seeing that the Government put such propositions forward, I consider that it should now make a wellplanned and determined effort to establish a nation-wide system of child endowment for the dual purpose of speeding up our war effort and effecting industrial harmony.

Mr Stacey:

– Has the child-endowment scheme brought about industrial harmony in New South Wales?


– It would do so in time, for, in my opinion, it would create a united people who could face the future trusting in one another. If the Government put into effect the programme which T visualize, a feeling of mutual trust and confidence would be established between the two sections that are at present so seriously divided. It is useless to deny that workers fear that their employment will not be secure from week to week, and that if they “become sick, they will never overtake their financial loss. Such fears are founded upon experience, and could be removed if political leaders and representatives of employers and employees, at a round table conference, attempted to solve the problem. Having in mind the powers now vested in the Government under the National Security Act, I am sure that such difficulties could be overcome. Then the national war effort would be accelerated, and the maintenance of peace in industry would instil in the workers a spirit of the deepest loyalty. In making that statement, I do not suggest that the workers are not loyal at present; but my suggestion, if given effect to, will enable them to carry on from week to week in the knowledge that their position is secure, and that they are a recognized part of the war effort.

I should have liked to see the amendment handled a little differently. Instead of being submitted in the form of a challenge by the Leader of the Opposition, and being accepted as such by the Prime Minister, it could, with advantage, have been drafted in a more acceptable manner, and received by the Government with less hostility. The Prime Minister and the Leader of the Opposition have attended meetings . of the Advisory War Council and evolved a formula for working together in order to make Australia’s war effort proceed without interruption. In the circumstances the Government could have taken the view that the contentions of the Leader of the Opposition had merit, and as such, should not be accepted as a challenge. I fear that this debate will undermine the morale of the people not only of Australia but also of Great Britain and the other dominions. If the amendment forces the country into the chaos of another election, it will materially affect the Empire’s war effort. The value of morale is enormous, and Britain needs from Australia a vitalizing message that the people of this country are united in their efforts to assist the Motherland in the terrible trial that it is enduring. Unfortunately, the attitude of some honorable members will have the reverse effect.

I do not desire to criticize the Government, but I wish to explain my reactions to this debate. Being a new member, I have not yet acquired the habit of accepting philosophically any rapid changes of the political situation. The thought occurred to me that the amendment provided the Government .with a golden opportunity to adopt a broad policy towards the war effort, not only in respect of that part which concerns the operations of the armed forces, but also the whole structure required for swinging the united energies of the Australian population behind the struggle. We are woefully uninformed on many matters. Up to date, I have heard no statement from the Government upon its proposals to bring into the war effort those thousands of people who wish more effectively to eontribute to it. Although the budget now indicates to them that their money can be used, they desire to give more than that. According to statements made in the House, we lack sufficient numbers of workmen to enable the shipbuilding industry to be developed in Australia. In my opinion, there must be thousands of men who are willing to be trained to engage in such a calling, but at present they are employed in “ reserved occupations “. Finally, no mention has been made of plans to utilize the womanpower of Australia in order to release men who are required to widen the scope of the war effort. If such plans can be evolved, and if we can sink our differences of opinion, this budget of £186,000,000 will look small in comparison with the effort that Australia is capable of producing. The figure seems colossal to-day, because wa compare it with the puny effort which we made last year. But no one in war-time can accurately estimate what the position will be twelve months hence, and no honorable member will assert that a budget of £186,000,000 is the maximum effort that Australia can achieve. Vast untapped resources of man-power are waiting to be harnessed to the war effort, and they can be utilized to advantage if we avail ourselves of the combined brains and ability of honorable members. In the recent election campaign I pledged myself to endeavour to bring about unity of the parties in order to form a national government The people desire such an administration, because in no other way can the Commonwealth carry its fair share of the load that the war has imposed upon the British Empire. This afternoon references were made to stoppages in industry. As the honorable member for Barton (Mr. Evatt) said recently, there is always a cause for industrial disputes. In my opinion, such causes are not difficult to discover, and may be easily removed if we only take the trouble to seek the solution.

The success of the loan programme this year depends upon the willingness and ability of the public to invest their savings in the various Commonwealth loans which will be floated. With the increased taxation imposed under the budget, it is evident to me that the savings will not be so prolific as they have been. In spite of the heavier taxes, the Government should assist the flow of money in to the savings of the people. One means by which this object may be achieved, with excellent results, is through an examination of the spending of money by public bodies with a view to reducing the financial burdens of taxpayers. If an investigation were undertaken of the expenditure of all public bodies, from the Commonwealth Parliament to municipal councils, a rich vein would be found, which, if exploited, would pay handsome dividends in the form of savings left in the pockets of the people. Although the Commonwealth Government has taken action, through the Loan Council, to restrict the borrowings of State governments and local governing bodies, I know from experience that ever so many little subterfuges are used by those concerned to avoid making the economies which are required by the reduction of their loan allocations. One State government is retaining its unemployment tax in spite of the fact that its registered unemployed are reduced to an insignificant number. Some municipal councils, by the use of trust funds, are spreading their expenditure over a period of years. They are using bank overdrafts, and increasing valuations. All sorts of little ways of evading the issue are resorted to. There is a strongly-entrenched feeling in Australia that there is no imminent danger to this country, and that economies and sacrifices can well be put off until some time in the distant future. That feeling must be rooted out. Surely honorable members of this House realize, if any one does, that Australia is in imminent danger - that the whole Empire is in imminent danger. Nothing has been reported, so far as I can recall, that gives us any reason to believe that we are in a better position now than we have been at any stage since the beginning of the war. I know that we shall win if we work resolutely for that result, but we must not just go around saying that we will win, and then refuse to make the necessary sacrifices. We must make the people realize that only a maximum war effort will be sufficient, and this Government must give the lead.

I do not think that we shall be able to achieve our maximum effort if we retain the present system of voluntary lending for war purposes. At the present time, only those people who, out of a sense of loyalty, subscribe to war loans are helping in the war effort. I am in favour of the system of compulsory lending that has been introduced in the sister dominion of New Zealand. That system is the answer to those theories, in regard to central banking credit, of which we hear so much at the present time. By means of compulsory loans, every citizen throughout Australia would be immediately harnessed to the war effort, for the reason that he was a citizen. He would have to subscribe to the war loans in the same way that he must pay his taxes, and there is no reason why he should not do so if he is able. We cannot hope to win unless there is an all-in war effort in regard to both loans and taxes.

Lot me conclude by making this prayer to this Parliament, and to the Government: I exhort them to think nationally in regard to our war effort both at home and overseas, and to forsake all sectional interests. Be strong and resolute in giving the guidance for which the people are pleading, and be fearless in placing the load where it can be carried. If we do that, we shall finish this conflict with a healthy, thankful and united people, who will face the future with trust in their Government and with some hope in their hearts.


.- In supporting the amendment moved by the Leader of the Opposition (Mr. Curtin), I take the opportunity to congratulate the honorable member for Henty (Mr. Coles) on his very thoughtful first speech in this House. With much of what he said, we all can, I think, agree. I was pleased to note that he, far from desiring to delete any of the paragraphs in the amendment, would add another, namely, one providing for a system of child endowment. I assure him that that matter has not been overlooked by honorable members on this side of the House. As a matter of fact, it was one of the features of the policy speech of our leader, and, given the opportunity, we shall do our utmost to put it into practice. I agree with the honorable member for Henty that the man with a large family is very unfairly treated. I am reminded that Sir Raphael Cilento, Director of Health in Queensland, said recently that in the average British community, a married man falls below the basic wage with the birth of his third child, and goes further below with the birth of each succeeding child. He does not commence to recover until the eldest child is fourteen years of age, when it is assumed to be able to earn. , Sir Raphael also said that a nation is dying which has not an average family of3.6 children. It therefore behoves the Government to encourage in every way possible those who are bringing large families into the world. Their earnings should be supplemented in order to enable them to feed, clothe and educate their children, so as to enable them to grow up to be good citizens.

The amendment of the Leader of the Opposition is clear and definite, and I do not think that any fair-minded person could take exception to it. As its several points are so important, I propose to set them out in detail. They are -

That the whole of the amount required for the conduct of the war 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 the incidence of the income tax be revised to increase the tax rates on the higher ranges of income to offset the proposals relating to the lower ranges of income;

That the proposed war-time company tax be revised to ensure that the large companies bear a greater proportionate burden than the small companies ;

That the pay to soldiers and the provision for their dependants bc increased ;

That old-age and invalid pensions be increased;

That a further payment be made to the wheat-growers in respect of the No. 2 wheat pool.

In the course of a recent broadcast, the Leader of the Opposition said -

The wheat-growers are deserving of an advance of6d. a bushel in respect of the No. 2 Wheat Pool. Many of them are in dire straits for want of money for immediate needs.

The final paragraph of the amendment reads -

  1. That, in respect to 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 the basis of the report of the Royal Commission on Banking in order to prevent them building up a superstructure of bank credit on the monetary expansion arising from war conditions.

The amendment is very reasonable, and I am sure that if honorable members opposite were free to ignore the decisions of their respective parties, they would be prepared to support it. The overwhelming majority of honorable members believe in their hearts that it is reasonable. I appeal to honorable members opposite to consider the amendment on its merits.

I congratulate the honorable member for Darling Downs (Mr. Fadden) upon his election as Acting Leader of the Country party, and his elevation to the very important position of Treasurer. All of us, I am sure, sympathize with him in his acceptance of the responsibilities of his office in the present difficult times. He enjoys the distinction of having introduced a record budget which provides for raising £150,000,000 of revenue and £80,000,000 from public borrowings for the ensuing financial year. The budget constitutes the heaviest financial burden yet imposed upon the people of Australia. It will bring about deflation and depression, and will practically ruin many thousands of people in this country. In the circumstances, it is only natural that we should find a sharp divergence of opinion between the Government and the Labour party as to how the war can best be financed, and in respect of the incidence of taxes which must be imposed in order to raise revenue for war purposes. We on this side desire to organize the nation in a top-gear war effort; in that aim we give place to no other party. However, we hold views very different from those of the Government as to how the inescapable burden should be apportioned. Whilst I was much impressed by the very reasonable statement made by the Treasurer in introducing the budget, I was also surprised at the flippant, intolerant and dictatorial attitude adopted by the Prime Minister (Mr. Menzies) when he was replying to the Leader of the Opposition. The right honorable gentleman had the audacity to refer to my leader’s speech as an academic discussion. From Labour’s point of view, this is a bread-and-butter subject. It transcends in importance any other issue now agitating the minds of the working people of Australia. The Prime Minister emphasized the wide difference between the outlook and policy of the Labour party and those of the Government. Yet only a few weeks ago the right honorable gentleman said that both the Opposition and the Government should, and could, unite in the formation of a national government on a fifty-fifty basis. If, as he now declares, such a wide difference exists between our respective parties, on what terms could we then have formed a national government? The fact is, of course, that at no time has the Prime Minister’s view, or the policy of the Government party, been acceptable to honorable members on this side and vice versa. We cannot participate in the formation of a national government of the kind suggested by the Prime Minister without sacrificing our policy and our principles, and every promise we made to the people of Australia during the election campaign. In view of the right honorable gentleman’s persistence in his present uncompromising attitude towards the amendment now before the committee, how could we expect any concession from him as leader of a national government ?

Mr Archie Cameron:

– If the Government is prepared to compromise, is the Opposition willing to join in the formation of a national government?


– We are aware of the terms on which we would be asked to join a national government. Our stand in that respect has been clearly expressed by our Leader. Although the Prime Minister’s speech was an able oratorical effort, he displayed an intolerance of the view held by more than half the members of the committee, and ignored the feelings of an overwhelming majority of the people of Australia. In addition, he slammed the door against cooperation with Labour. His attitude savoured too much of the dictator. He has flatly refused to compromise with the Opposition, and has accepted our Leader’s amendment as a challenge. He did not attempt to debate the various points raised by our Leader. In fact, he sneered at many of them, and merely brushed others aside. He can rest assured that the amendment was not moved merely for the sake of opening a debate on this issue; it was moved because we are in earnest in our desire to obtain some concession for over half of the people of Australia whom we represent in this Parliament. If the amendment had been accepted in the proper spirit, and the Government had made some attempt to meet our requests, the present crisis;, which has arisen over the budget, would have been averted. The Prime Minister says, however, that he will stand or fall by the budget in its present form. Because he has adopted that attitude, he has aroused criticism by some honorable members sitting on the Government side of the chamber. The honorable member for Martin (Mr. McCall), according to a report appearing in Saturday’s newspapers, said -

We must be prepared to accept at least part of Labour’s policy which received endorsement of over half of the electors. Mr. Menzies fails to appreciate that the Government can carry on only with the support of the party rank and file. Therefore the Government should not have made a definite decision about standing or falling by the budget until after it had heard the views of party members. At least half a dozen members are opposed to certain features of the budget.

Mr Brennan:

– The honorable member for Martin will never be in the national government.


– It is very evident that he is not the white-haired boy with the Prime Minister. However, he is, apparently, a very discerning young man, who is prepared to voice the opinion of not only himself, but also a number of his colleagues who, though opposed to the budget, are not able to express their views because of party discipline. I say without fear of contradiction that a big majority of ministerial members are in favour of the amendment moved by the Leader of the Opposition. The honorable member for Robertson (Mr. Spooner), who has had years of experience as a cabinet minister in New South Wales, and is looked upon as a man of great ability, said on Friday last -

I fear that the new tax burden will freeze Australia’s industrial effort, reduce employment on the home front, and cause deflation. I do not believe that the whole of the amendment should be brushed aside as unfit for consideration.

Of course, the honorable member expressed himself as mildly as possible. He did not like to make a straight-out attack upon his leader. Nevertheless, his speech shows that he sharply disagrees with the Cabinet on the budget proposals. These proposals have been roundly criticized by many newspapers which invariably support the Government. On the 28th November last the Melbourne Argus published the following -

There is still room for much difference of opinion as to whether the sacrifices have been equitably apportioned on the basis of that “ ability to pay “ which the Government has adopted as its watchword and which is generally accepted as the basic principle of taxation. The new and most dramatic feature of the taxation proposals is the widening of the field to bring in a large body of small income earners who have hitherto been exempt from federal income tax.

Mr. M. J. Pettigrove, honorary secretary of the Federal Taxpayers Association of Australia, made the following comment in the press last Wednesday -

The immediate effect of the withering blast of new taxation upon poisons earning salaries and wages will be rigid economy in private spending.

I believe that statement to be right. The practice of rigid economy would mean decreased expenditure, less money in circulation, a lower purchasing power, and the infliction of great hardships upon many thousands of people throughout Australia. The Prime Minister, in the rather arrogant attitude that he adopted, played the role of one who had received an overwhelming mandate from the electors of Australia. What do the figures in relation to the last federal elections indicate? The Government lost seven seats in the three largest States of Australia. The United Australia party candidates for the House of Representatives polled 1,207,000 votes; candidates representing the Australian Labour party polled 1,860,000 votes; candidates representing the Country party polled 535,000 votes; and independent candidates, 272,000 votes. These figures do not take into account the division of Kalgoorlie, in “which there was no contest. It will thus be seen that a big majority of the electors of Australia voted for Labour candidates for the House in which this matter is to be decided.

The honorable member for Barker (Mr. Archie Cameron), to whose speeches I always listen with great interest, last week made rather satirical references to the Opposition. The honorable gentleman had quite a lot to say in regard to the alleged lack of unity in the ranks of the Opposition, and to its decision to refrain from participating in the formation of a national government. The honorable gentleman must admit that there is far greater unity among honorable gentlemen who sit on this side of the House than there is in the ranks of Government supporters. During the weekend we have read doubtful eulogies of the Government by some of its ablest and most fearless members. I call to mind that very cutting letter which was sent by the honorable member for Barker to the present Acting Leader of the Country party, after the honorable member had led that party for over twelve months and had been associated with it in the House of Representatives for seven or eight years. He must have known it inside out, and this is what he said in the course of his letter -

I assumed leadership at a time when disruption, doubts and divided counsel ruled the party, and when the country had just accepted the hazards of war. Everlasting intrigue and manoeuvring for personal advantage reached its zenith in ruptures of the seal oi cabinet secrecy, which must ultimately make any Minister’s position inside either a party or a cabinet untenable. No party can function if its internal state is a stew of simmering discontent, spiced by insatiable personal ambitions and incurable animosities. … I deeply regret that the events of the last week were a public renunciation of the joint policy of national unity and united action which the Country party unanimously authorized the Prime Minister to make on its behalf, which I repeated on your behalf to Australia and the world and have reiterated since the election. That call to unity was unheard or unheeded in the party’s own room. Australia expects something better and the times demand it.

The gentlemen to whom the honorable member there referred are those whom we are invited to join in the formation of a national government. The honorable member found that he could no longer associate with them, and having walked out of the party room he roundly condemned them as a band of intriguers who sought to promote personal ambitions while the country was at war. It would be far better for us never to enter a national government containing gentlemen of that character, than to risk having to do as the honorable gentleman had to do, namely, walk out of the Cabinet and denounce them.

The Prime Minister, with the air of a professional advocate, and in -his best style, claimed that this budget i3 essentially a radical document. The right honorable gentleman made that statement with a ring in his voice which would make the political tyro believe that he really meant every word of it. He further claimed that the taxation scheme had been worked out on an equitable basis, and that it would make inroads upon the ordinary habits of all sections of the people. I believe that there will not be equality of sacrifice under this budget. Because my party holds that view, it supports the amendment of the Leader of the Opposition. Even after payment of tax, those who are on high incomes will still have ample to enable them to ‘live in luxury compared with the great mass of the people whom we on this side represent. What are the ordinary habits of the basic wage-earner, compared with those of the wealthy section of the people who, the Prime Minister said, would make as great a sacrifice? Is the man on the basic wage, who is now being severely hit by high indirect taxation, able -to satisfy his wants to the same degree as do those who will still have high incomes even after the taxes provided for in the budget have been extracted from them?

The Prime Minister, while admiring the wording of paragraph g of the amendment, sneered at it and threw it aside as though it were beneath his contempt. I submit that a close examination will disclose that it is a masterpiece of phraseology, and that the proposal which it embodies might safely be given effect in the interests of the people of Australia. In view of the remarks of the Prime Minister concerning it, I direct attention to a statement by the present Minister for Commerce (Sir Earle Page), as Treasurer in the Bruce-Page Government, on the 30th June, 1924. Moving the second reading of the Commonwealth Bank Bill, the right honorable member for Cowper then said -

At this early stage of war finance, a step was taken which never had been explained fully. I refer to the fact that the Government gave to the banks the right to get £3 in notes for every one presented by the banks at the Treasury. Two out of every £3 of notes so issued were treated 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 surmising what the reasons were. I consider that this three to one arrangement was more doubtful in character than any other credit of war finance. The granting by banks of accommodation by way of overdraft or circulation makes money available for current accounts and fixed deposits in banks. . . . 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 reserves formed the basis of liabilities equal to twelve or fifteen times as much as the original holdings of gold.

That statement shows the advisability of adopting the proposal contained in paragraph g of the amendment, which reads -

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 the basis of the report of the Royal Commission on Banking in order to prevent them building up a superstructure of bank credit on the monetary expansion arising from war conditions.

In view of its election pledges, the Labour party could not disregard banking and monetary reform. In the course of his policy speech at the opening of the election campaign, the Leader of the Opposition said -

Three related monetary measures must be taken so that industrial and economic preparedness, which are the essenceof national defence and security, shall be assured. They are -

  1. 1 ) National control of banking and credit, to ensure its adequacy in putting to work the idle hands the Government failed to employ in peace-time and in using the full physical and manpower resources of the nation to carry on the war.
  2. National control of interest rates, to keep to the minimum the monetary and capital costs of the war and production and industry generally.
  3. National direction of investment, so that existing activities and proposed activities will not be permitted to follow expenditure of capital on lines not helpful to the war effort and the post-war reconstruction.

The Commonwealth Bank is the logical instrument to function for effecting these monetary measures and for providing the machinery for post-war reconstruction.

Banking and monetary reform is a very important matter, and it must become increasingly important as time goes on.

The Prime Minister strongly resented criticism of the fact that the taxation proposals of the Government unfairly cover the field of incomes up to £400 a year, thus bringing into the taxation field 700,000 persons previously not taxed by the Commonwealth. The right honorable gentleman very unfairly stated that in the last financial year the total individual taxable income was £747,000,000, of which £517,000,000 was earned by those who received under £400 per annum, and from whom the Government has taken in the past approximately only £100,000. It is but fair to say that, included in that income field of £517,000,000, are invalid and old-age pensioners, war pensioners, and many thousands of persons who receive small incomes from investments in property. Many of these persons have salaries not within the taxable range at all, and will be exempt under the £150 limit imposed under the present taxation proposals. It is quite unfair, for comparison purposes, to argue that only the insignificant amount of £5,000,000 is being taken from the huge income field of £517,000,000. The bulk of the £517,000,000 is not taxable income and embraces pensioners and others. In the course of his speech, the Prime Minister said that taxes that had been substantial enough in the past, in the view of the Government, had been trebled in one hit, and that nobody with the slightest conception of the incidence of taxation could have any doubt that, on the great class of Australians, this budget would fall with revolutionary force. It would. he said, alter the whole of their social habits. Does the Prime Minister say that the ‘budget proposals will alter the social habits of the rich ? I shall show that, after they have paid the taxes now proposed, they will still be able to live in what will be luxury in comparison with the circumstances of their less fortunate fellow citizens receiving about £400 per annum.

It is estimated that, before the introduction of these new taxation proposals, 430,000 taxpayers were contributing taxes to the Commonwealth Treasury, and tb at the number will, as the result of this budget bc increased to 1,080,000, an increase of 650,000. It will mean that in the £150 to £400 per annum salary range, there will be 8.20,000 taxpayers, although previously there were only 100,000 tax.payers in that class. In the £400 to £1,000 a year salary class there will be a total of approximately 220,000 taxpayers and in the class over £1,000 per annum there will be 40,000 taxpayers. Comparing the taxes to be borne by a taxpayer without dependants, as distributed by the Commissioner of Taxation, one finds that the man receiving £200 per annum, who paid nothing under the 1939-40 provisions, will pay from £4 to £5 in Commonwealth tax under the present proposals. The man with an income of £250 paid no income tax in 1939, but he will pay from £S to £9 under the 1940-41 proposals. This represents an average increase of 850 per cent. The taxpayer on £350 per annum paid £1 to £2 in 1939-40, but, under the present proposals, he will pay from £17 to £19, an average increase of 1,100 per cent. The man on £400 a year, who paid from £3 to £4 in 1939-40, will now pay from £22 to £25, an increase of 552 per cent., and the man on £500 a year, who paid £6 or £7 in 1939-40, will now pay from £34 to £39, an increase of 462 per cent. The taxpayer receiving £2,000 a year will be left with a balance of £1,292, if he pays the lowest State tax, or £1,2.23 if he pays the highest State rate, after Federal and State taxes have been met. The Commonwealth tax increased from an average range of £93 to £107 in 1939-40 to £472 to £542 under the 1940-41 proposals, an increase of 405 per cent. A man receiving £3,000 a year will be left with a balance of £1,718 if he pays the lowest State tax or £1,589 if he pays the highest State tax, after meeting Federal and State taxes. This represents an average increase of the Commonwealth tax of 360 per cent. The taxpayer on £5,000 a year will be left with £2,308, after paying the Commonwealth tax and the highest State tax, and this impost will represent an average increase of 255 per cent. A man receiving £10,000 per annum paid from £1,000 to £1,900 in Commonwealth tax for 1939-40, but under the present rates he will pay from £2,600 to £3,900. After paying the proposed Commonwealth tax for 1940-41, plus the highest State tax, he will h ave left £3,428. After paying the proposed Commonwealth tax for 1940-41 and also the lowest State tax for 1939-40, he will have left £4,721 per annum. Nobody can say truthfully that this taxpayer will feel the hardship to the same extent as will those in the lower ranges of income who have to watch carefully every £1 expended by them during the year. Even without this extra burden of taxation, these persons have great difficulty in making ends meets.

The increase of the tax on men in receipt of £10,000 per annum amounts to only 125 per cent., whilst the increase is as great as 1,100 per cent, in the case of some of those in receipt of the smaller incomes. The man on an income of £20,000 a year will have his tax increased by 70 per cent., but on the average, he will have £7,700 left. A man on an income of £40,000 a year will, on the average have £15,000 left. His increase will be 52 per cent., as compared with 1,100 per cent, in the case of a man with a salary of £350 a year, 552 per cent, in the case of a man with a salary of £400 a year, and 462 per cent, in the ease of a man with. £500 a year. Therefore, much of the talk about the rich man feeling the hardship of these proposals as much as the individual on the smaller income will not bear investigation. Mr. Richard Ackland, a member of the British House of Commons, in his book Unser Kampf, wrote -

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 a man whose income before the war was £100,000, would sacrifice almost nothing if his taxation rose to £95,000, or 19s. in the pound. In every human essential one can live just as good a life on £5,000 as on £10,000. One’s house may he smaller, but everyone sleeps in a separate room. One’s stove may be smaller but there is still someone else to light the lire. One’s car may be smaller but it still goes. One’s sons may not go to a public school, but why should they if they cannot win the open scholarships,

The illustration is applicable to Australia a3 well as to Great Britain. A feature of the policy speech of the Leader of the Opposition was the advocacy of increases of soldiers’ pay and allowances. The Prime Minister, in the course of his speech last Thursday before this committee, stated -

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 anywhere in the world, and immeasurably more liberal than in most parts of the world.

That statement is not correct, if we take into consideration the allowances given to wives and dependants of soldiers. Before he entered the Ministry, the Minister for Commerce said that this matter was dear to his heart, and the honorable member for Barker, on the 6th November, 1939, went so far as to say that the men in our fighting forces should be as well paid as any men in private industry. His exact words were -

In respect of military pay and allowances, when the Government tells the fighting men of this country that they and their dependants are to receive a lower standard of living than those who are engaged in private industry - say the manufacture of munitions - it is adopting a policy which I feel sure will not be acceptable to the general community.

I take it that the honorable member for Barker still holds those views. Let us examine the rates of allowances to wives and children in three great dominions -

Canada, Australia and New Zealand. The allowance for a wife in Australia is 3s. a day or 21s. a week; in Canada it is 4s. 9d. a day, or £1 13s. 3d. a week; and in New Zealand it is 3s. a day. The rate for each child is ls. 6d. a day in Australia, ls. 8d. a day in Canada, and ls. 6d. a day in New Zealand. In Canada the allowance to the wife of a soldier is. much more generous than here and in New Zealand.

Mr Hutchinson:

– Has the cost of living in Canada gone up?


– The cost of living generally in Canada is, I think, on a par with that in Australia. But for the fight by members of the Opposition for an increase of the allowances of soldiers and their dependants, the rates would not be nearly so high as they now are. The original proposals of this Government were very niggardly. When the Government was challenged on the floor of this Parliament, it agreed to increase the payments. Although it decided to grant the soldiers in the Militia Forces Ss. a day, it took steps, after the war broke out, to reduce their allowance to 5s. a day. I believe that the Government would have been defeated on that issue; but, when pressure was applied in this Parliament, it yielded, as the result of strong representations by the Opposition and certain ministerial members who considered that the welfare of the soldiers was a matter above party bias. The soldiers remember that the Labour party advocated an increased allowance in the course of its negotiations with the Government after the elections, and I believe that that is the reason why the Government increased the allowance in respect of children by another 6d. a day. But the Government has not gone far enough. We believe that this is a matter on which it should have conferred with the Leader of the Opposition, with a view to meeting a very reasonable demand. The Labour party advocates the payment of 7s. a day and ls. deferred pay, whilst the Commonwealth Government will not go beyond 5s. a day, and 2s. deferred pay. At first it proposed ls. deferred pay; but, in order to appease the Country party, which had not then been taken into the Cabinet, and was about to support the Opposition’s proposal for 7s. a day the Government backed down, and increased the deferred pay by ls. a day. That is still the Government’s policy, but the soldier will not receive that increase until he returns from the war. We should pay to members of the Australian Imperial Force at least 7s. a day and ls. a day deferred pay. The Labour party is pledged to that. The total amount provided by the Government for a man with a wife and one child is 80s. 6d. a week. The amount proposed by the Opposition is 87s. 6d. - a small increase which is reasonable in all the circumstances. We should like to go very much further and we think that the Government should go further.


– What would the Opposition’s proposal cost?

Mr Anthony:

– About £10,000,000 per annum.


– I do not believe that. I do not say that the Assistant Minister is trying deliberately to mislead the committee.

Mr Anthony:

– Sixpence a day extra to the wives of soldiers would cost £1,000,000 per annum.


– The soldiers are the men who are making the greatest sacrifice in the war. They have given up their jobs and their farms to go overseas to accept death, if necessary, in the defence of their country. If the concession we advocate would cost a million or two more, would we not be justified in paying it? [Leave to continue given.] I do hope that the Government even at this late hour will reconsider our proposal in regard to extra pay for soldiers and their dependants.

One may approach the question of war finance best by consideration of the effect of the last war on national currencies. Without exception, every nation involved in that war was faced with a disastrously inflated currency at its termination. England financed the war by the rigid application of conservative economic principles - taxation and borrowing. Yet it did not escape a condition of inflation and, in addition, its people were faced with a burden of national debt, internal and external, which had not been liquidated at the beginning of this war. Up to the 30th June of this year Australia had paid £312,000,000 in interest on war loans, and still owes £265,000,000 in war debt. To-day the public debt is £1,341,000,000. Twenty years ago it was £766,000,000. I wish to draw the attention of the committee to the fact that at no time during the past 2S years has the public debt been less than in the previous year.

The Treasurer has told us that this is not a time when we can look with safety to any considerable expansion of credit. But his policy of borrowing is one which is calculated to expand the credit of the nation indefinitely, for it expands the credit of all the lenders. The scrip they hold constitutes a tangible asset which can always be realized upon up to a certain proportion of its face value, and, in addition, the interest paid thereon increases their credits.

Under a policy of finance by borrowing, money borrowed goes into circulation. The interest paid also goes into circulation. No one will argue that, if this money were obtained by government credit expansion through the Commonwealth Bank, it would go into circulation any faster than under the Government’s present method of borrowing and paying interest. The effect on the amount of currency in circulation would be precisely the same in either case, with the exception that, if the money were borrowed from the Commonwealth Bank, any profit made thereon would go back to the people.

The financial system that has been in operation in this country for many years is to a very large extent obsolete, and should be adapted to meet present-day conditions. It requires reforming; there is room for improvement. The Labour party is the only party with a reform policy. But the Labour party is pledged to do that only to the limits of safety, as was pointed out by the Leader of the Opposition.

Some time ago the Federal Government appointed a Royal Commission on

Banking. The members of that commission were highly competent men. The Labour party had nothing whatever to do with the selection of the personnel of that commission, but I believe that they went about their work in a fearless and businesslike way. They went to all States of Australia and took evidence from all sections of the people in a position to throw light on this important subject. The investigations, I understand, cost £20,000. The commission submitted a report. What has been done with that report? It was shelved by the Government. We have asked from time to time that the Government implement the recommendations of that royal commission, which was not of our choosing but was appointed by the Government. The Government, for its own reasons, and because of its affiliations with the private banks, finds it inexpedient to adopt any recommendation made by the royal commission. It is not allowed to do so.

The Treasurer, before he assumed his present position of responsibility, stood for credit expansion, as will be seen from the following statement he made in the House of Representatives on the 22nd September, 1939:-

I do not propose to discuss the general principle of credit expansion, but the Government, with the assistance of qualified persons, should make a proper survey of the position in order to sec to what extent this method of finance can be employed.

Mark these words -

To the extent that it is used, increased taxation may be avoided, for high taxation must necessarily bring about dislocation of industry. It is unavoidable overhead expense that is reflected in the industrial life of the community.

The Treasurer said that when he was a back-bencher and free from the shackles of office. Apparently he has forgotten what he said.

I believe that the wealth of any country is determined by the industry of its people. The intelligent application of human effort to natural resources produces the real national income of any country, and this must be the basis of any form of credit expansion. The Labour party is in favour of mobilizing the credit of the country and using it for and on behalf of the people, both during a period of war crisis and under conditions of normal development. I strongly urge that the Government make greater expansions of credit through the Commonwealth Bank. As I said previously, I realize that this cannot go on indefinitely, but there is no doubt that the Government can with safety carry out such a policy. If it will carry out the recommendations of the royal commission, it will destroy any fear of this dangerous inflation to which it refers consistently as an excuse for heavy borrowing and excessive taxation.

I believe that we should plan during the war for the aftermath before its problems burst upon us. This was a matter dealt with by the Federal Labour Leader (Mr. Curtin) in his letter to the Prime Minister a few weeks ago, in which he briefly urged the planning of post-war reconstruction in order to ensure the recognition of the rights of men and women to enjoy the fruits of honest toil and in order also to facilitate the repatriation of the men in the forces and to avoid dislocation of trade.

The problem is now being considered in Canada, where it is proposed to establish a Ministry of Reconstruction while money is available, equipping it with a full-time Minister and a team of experts, and giving to them the job while the war is still on of studying the implications of the peace and the disarmament that will come some day. Every aspect of repatriation, rehabilitation and re-employment will be fully considered. Here in Australia this problem is not receiving the consideration which it deserves. It is a matter of order of priority and our energy should be bent steadfastly towards such a war effort as will give the best possible return from the huge sums expended. We must improve our organization, eliminate waste and delay, wipe out circumlocutory methods adopted by some of the red-tape hampered Commonwealth departments, and apply ourselves to this job wholeheartedly. Members of the Opposition will stand for that. But while doing that we cannot overlook our responsibility to consider the problem of post-war reconstruction which will also embrace the necessity for childhood endowment and national housing schemes in order to give greater security _ to the great mass of the working people who are prepared to bring up good Australian families. I firmly believe that the budget in its present form is against the best interests of our people. Labour does not question the proposed total expenditure on defence; it believes that it should be increased rather than decreased, provided a good return in the forms of more bombers, more units for the Navy and greater production of munitions is assured. Labour wants every Australian port to be fortified and every other effort made to make the 3,000,000 square ‘ miles of this country absolutely safe for the 7,000,000 people now here and those who will flock to our shores when the war ends. We believe that the sharp reduction of the spending power of the masses will have a sharp deflationary effect, will increase unemployment and suffering, and will inflict hardship on many thousands of people. That is why the Opposition is wholeheartedly against the budget and in support of the amendment.


.- The budget now before the committee provides for the colossal expenditure of £269,000,000, of which £150,000,000 is to be provided from revenue and £119,000,000 out of loan. The total amount is nearly double the expenditure for last year. However, I believe that the people of Australia who will be called upon to meet this staggering bill will regard it as being in the nature of national insurance, because they know that if we go down in this struggle, we shall lose our all. A difficult problem confronted the Treasurer and his advisers when they sought to devise ways and means of raising the necessary revenue to meet this huge expenditure. It is easy to find fault with the proposed taxation measures, since they will mean not only sacrifice but also hardship in many cases. I do not favor some of the proposals of the Government, but I realize that mere criticism is futile unless a practical alternative can be suggested. Under the amendment of the Leader of the Opposition (Mr. Curtin) more, not less, taxes would be levied.

Mr James:

– Only on those who can bear the burden.


– I am disappointed to find that, notwithstanding the huge war expenditure, no reduction of ordinary governmental expenditure is contemplated. An examination of the budget discloses that in regard to those items the expenditure of last year is to be exceeded. I am convinced that a thorough overhaul of the various governmental activities would reveal means by which considerable economies could be effected. If the situation which now confronts the country had to be faced in our private businesses, there would be no alternative but to reduce expenditure in other directions. In the absence of a Public Accounts Committee, I urge that a committee representative of all parties in this House be appointed to undertake a detailed examination of the budget, with a view to curtailing the proposed expenditure. It is the duty of the Parliament to satisfy itself that all of the expenditure proposed is fully justified. That cannot be done effectively during the course of a budget debate, first, because time will not permit, and secondly, because we have not before us the information necessary to enable an exhaustive examination to be made. I repeat what I have said before, that if the Parliament continues to pass budgets without a detailed examination of the proposed votes it will fail to discharge one of its principal functions, namely, the control of the public purse. In view of the huge expenditure contemplated, it is the duty of honorable members to take more than a passing interest in the budget.

The Government contemplates imposing much heavier direct taxation than in former years. Indirect taxation, covering such items as customs and excise duties and sales tax, yielded £6S,000,000 last year. This year the Government hopes to derive from that source £74,000,000 - an increase of 10 per cent. Direct taxation, covering income tax, land tax and estate duties, is to be increased by 150 per cent. Last year that source of revenue provided £21,000,000; this year the yield is estimated at £51,000,000.

Mr Conelan:

– It is not enough.


– The honorable gentleman will have difficulty in obtaining more from that source. In the past, the Commonwealth Government has relied largely on indirect taxation for its revenue, but it is clear that in the future it will be compelled to trespass to a greater degree upon the field of direct taxation. Before the war, the total amount of direct, taxation levied by the Commonwealth amounted to £12,000,000 a year; this year, it is proposed to obtain £51,000,000 from this source. That amount equals the total direct taxes levied by the various States, and is an increase of over 400 per cent. This encroachment upon the field of direct taxation will seriously embarrass the State governments, which have practically no other sources of revenue. It is an aspect of our national economy which should not be overlooked, because the State governments are charged with the responsibility of dealing with the domestic affairs of the nation, and they must have sufficient funds to meet their obligations. I agree with the honorable member for Henty (Mr. Coles) that there is need for a national outlook in. connexion with our financial problems. In view of the ever-increasing commitments of governments and their serious effect upon our national economy, there is urgent need for greater co-ordination between the Commonwealth and State Governments in the raising of revenue- to meet their requirements. It appears to me that the most effective way to deal with this problem would be the adoption of one common budget, to cover the whole, of the commitments of the Commonwealth and the States, and the creation of one central financial body to raise the necessary revenue. If that were done, a complete picture of our financial situation could be presented ;. a comprehensive survey of our national resources could be undertaken, and taxation measures could be so arranged as to ensure an equitable distribution of the burden. The present system is unsatisfactory in that it permits overlapping and duplication. For instance, the people of Australia have to pay two lots of income tax and land tax, as well as two lots of probate and estate duty. There is danger that the competition of the Commonwealth with the States in the field of direct taxation will impose on some sections of the community more than their fair share of the burden.

Mr Calwell:

– Would not the. honorable member’s proposal lead to unification?


– Under our present system a taxpayer in Victoria pays more federal income tax than does a man with a similar income in Queensland, but the Queensland taxpayer pays more to the State than does the Victorian. I realize that my proposal for greater co-ordination between Commonwealth and State Governments involves a radical change, but the demands on governments to-day are so great that drastic action is called for if we are effectively to control national affairs. We have already proved the advantage of unified action in connexion with the raising of loans and the control of public borrowing in Australia. What would be the effect on interest rates if the State governmentsand the Commonwealth Government were still competing in the loan market as they did formerly? For many years, I have urged that, borrowings . by semi-government bodies should be controlled by the Loan Council, and I am glad that that objective is partially achieved to-day under the national security regulations. We should have a national outlook upon our financial, economic and social problems, and not view them from the stand-point, of any individual or State.

Notwithstanding that the budget proposes to increase the land tax by 100 percent., suggestions that it should be increased still further have been made. I point out that, in addition to the taxes levied on land by State governments,, heavy levies are also made by . local governing bodies. The total taxes imposed on land in the Commonwealth amount toover £17,000,000 a year. Of that amount, £3,000,000 is collected by the Commonwealth, and £1,500,000 by the States;, whilst the revenue of the various local, governing bodies from this source amounts, to £13,000,000. -I emphasize that the. local governing bodies have to rely upon this tax for their revenue.

Mr Calwell:

– Is the honorable member aware that not all local governing bodies tax the unimproved value of land, but take the annual valuation as a basis:?’


– Indirectly, all of those imposts are levied on the land. Local governing bodies are being called upon to provide more and better facilities in order to meet modern requirements, and therefore the Commonwealth Government, in making its own financial arrangements, should not overlook their claims and the claims of the States. I. have always contended that the levying of taxes on land should be left to the local governing bodies. An examination of the Commonwealth Year-Booh reveals that, because those bodies are not able to obtain sufficient revenue from direct taxes on land. they are .forced to supplement their incomes by obtaining subsidies and grants from various .governments. That is a dangerous principle. Every public body should be charged with the . responsibility of raising the revenue which it expends. Until recently the Commonwealth has paid for and on behalf of the State governments more than it levied in direct, taxation. That, I submit, is not a wise policy. I have emphasized these points to-day because the position is so acute and the future so precarious that we have to be prepared to take a broad national view of all the problems’ to which I have referred.

I propose now to refer briefly to the Post Office - a public utility of which the Government and the people generally may well .be proud. It is not only the largest business undertaking in _ the Commonwealth but also, I believe, the most efficiently conducted. Its annual turnover is about £1S,000,000. After making provision for sinking fund payments of approximately £1,250,000, its operations have resulted in annual profits ranging from £1,500,000 to £2,000,000. I wish, specifically, to comment on the unsatisfactory arrangements for financing the Australian Broadcasting Commission. Under present conditions, this body receives a proportion of the listeners’ licence-fees each year. I am strongly of the opinion that it should be placed on the same basis as other governmental activities and departments, and that its requirements should be budgeted for each year,. At present the Australian Broadcasting Commission receives approximately 9s. from each listener’s licencefee; and it is apparent that in the past it has been doing its best to expend its income during the financial year in which it is collected. The commission should submit a budget of its requirements each year, which should be placed before the members of this House in order to enable them to examine in detail the proposals for the ensuing year.


– It is an independent commission.


– It was constituted an independent commission by the Parliament, and it is the duty of honorable members to see that it functions properly

I regret that it has not been possible to form a national government. 1 do not blame anybody for the failure of the negotiations, but I believe that we shall be failing in our duty to the electors if, even at this late stage, we neglect to make serious efforts to make this Parlia cut workable. If we are called upon to face the electors at an early date it will not only be a grave reflection on the personnel of this Parliament, but also a blow at the very parliamentary institution itself. It is the duty of honorable members to see that they carry on the job for which they were elected. What a tragedy it is that Australia’s war effort should at this critical time be jeopardized by the threat of another election. I appeal to honorable members to get together in an attempt to overcome the present difficulties so that the forces of this country may be utilized to the full at this critical stage of its history.


.- This budget is what I expected from the reactionary and unimaginative gentlemen who sit on the Government benches. During the last session of the last Parliament I listened to a tedious address delivered by the present. Treasurer (Mr. Fadden) who was then Assistant Treasurer, the greater part of which was taken almost word for word from the works of the economist, Adam Smith. Adam Smith died 150 years ago, and there has been as much discovered in the realm of economic science during those 150 years as there has been in the realm, say, of medical science. Any treasurer who formulates his budgetary proposals oh the basis of the economics of Adam ‘Smith is just as guilty of reprehensible conduct as would be a doctor who preformed an operation to-day without taking into consideration the discoveries of Lord Lister and other eminent men who have made valuable contributions to medical science during the last 150 years. Professor Keynes, one of our most brilliant modern economists, speaking of gentlemen in the position of the Treasurer, used these words -

Mcn in authority, who hear voices in the air, are usually distilling their frenzy from some academic scribbler of a few years back . . Practical men who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.

The principles on which the Treasurer has founded his budget are defunct. At the outset, let me say that I approve of every penny of expenditure in connexion with our war effort, but, like the honorable member for Robertson (Mr. Spooner) I am very doubtful whether the Government can expend all the money for which it has budgeted. If honorable members will look at the history of estimated expenditure for the war right from the beginning of the conflict to date, they will find that this Government and the one that preceded it have always over estimated their expenditure. On occasions, it has been found possible to expend only one-half of the estimated amount up to a certain date. This practice has one very acute consequence. The honorable member for Robertson has said that taxation is deflationary. I do not entirely agree with the honorable member. Taxation in the normal course of events is not deflationary at all ; it simply means that the Government instead of the individual has money to expend; but if the Government takes the money from the individual and does not expend it within the time proposed, obviously, then, people are thrown out of private employment before the Government itself is in a position to provide work for them. The Government should have budgeted for the raising of so much money by taxation and so much by the issue of national credit, but in addition some proportion should have been budgeted for as a deficit, so that if the Government should discover that its expenditure was not going ahead sufficiently it would have this elastic item to fall back on.

Mr Anthony:

– The item “ credit expansion “ is sufficiently elastic.


– I do not agree with the honorable gentleman. The Government would have been well advised to budget for a deficit of from £3,000,000 to £4,000,000. I have said that I approve of every penny of expenditure which the Government proposes in connexion with the war effort. This country is engaged in a war in which we have tq strain every nerve and sinew if we are to achieve victory. Our war effort is a matter of work to be performed, services to be rendered, labour in organization and administration, labour on the farms, labour in the factories, labour in the Army, the Air Force, and the Navy, the labour of -

The sailor, the stoker of steamers, the man with the clout,

The chantyman bent at the halliards putting a tune to the shout,

The drowsy man at the wheel, and the tired look-out.

This unimaginative budget makes no attempt to marshal in our war effort the great potential labour force which is available in this country. Labour for our war effort can come from two sources ; first, from the labour power now idle or wastefully employed and, secondly, by diverting labour from non-war production to defence activities. The correct method of financing the first is by the use of bank credit. To finance the second, we must resort either to taxation or to loans. It is, of course, axiomatic that the second source should not be resorted to until the possibilities of the first have been exhausted. In this connexion I propose to cite two authorities, the first a Canadian economist who has written with regard to economic conditions in Canada. Let me say first, however, that the tempo of the Canadian war effort is very much greater than ours. That is due in part to the lassitude of this Government in the past, and also technical factors; to the fact that the Empire air scheme is concentrated in Canada, and also that next door to and at the disposal of Canada are all the reserves of tools and machines in the United States of America. Nevertheless, a Canadian economist has written about the Canadian war economy of to-day in the following terms: -

The real resources which may be used in war production can be mobilized by increasing production, reducing consumption, minimizing all unnecessary capital outlays and by allowing capital to be actually depleted. All taxing, rationing and borrowing devices serve one or more of the four objectives referred to. Bui. Canada is still in the stage when it may increase the supply of war goods by the first device - that of an increase in production. Wu may produce more war goods by increasing the effectiveness of existing plant and labour, by working additional shifts, and by exploiting all other unused capacity, including unemployed labour and those voluntarily “ unemployed “ - many women, older people and so on.

The honorable member for Henty (Mr. Coles) made some reference to this point.

In support of my proposal that idle and wastefully employed labour resources should be more fully utilized, I quote the following extract from the Economic News. issued by the Queensland Bureau of Statistics, of which Mr. Colin Clark is the editor : -

An essential concurrent to the plan for a maximum war effort would be the rationalization of industries producing and distributing consumers goods and services so that the smaller volume required would be supplied at prices no greater than those of to-day and in such a manner as to save the maximum of labour.

We should not lose sight of the fact that there are still in Australia to-day more than 100,000 unemployed persons. In this connexion the Treasurer said in his budget speech -

There are still some unemployed, but the task of bringing them into work becomes progressively more difficult and now calls for special measures of training, transfer and rehabilitation rather than general financial stimulus.

Where, in the budget speech, is any proposal made to train, transfer or rehabilitate these persons? Until such action has been successfully taken it cannot be said that the idle labour resources of this country are being fully utilized.

To illustrate the useful employment of labour, I invite honorable members to consider the case of a farmer who, with his two sons, is working a farm property. He and one of his sons may decide to work a little harder and so release the other son for other employment. By the utilization of bank credit that son could be profitably re-employed without any damage whatever to the community at large.

The references by the honorable member for Robertson (Mr. Spooner) to tax collecting provide me with an illustration of the wasteful employment of labour. If all Commonwealth and State taxes could be collected by the Commonwealth authority, which could pay to the States their requisite proportions, I have no doubt that the work could be done by about half the number of persons now engaged in it. It must be obvious, therefore, that if more than that number of persons now find work in this field, they are being wastefully employed. By the use of bank credits we could undoubtedly employ them usefully in other avocations.

Our banking services provide still another case in point. The purpose of all economic activity is to produce goods or services for the community with the lowest possible expenditure of human energy. In no service which the community obtains to-day are so many men wastefully employed as in the banking services. If we had only one bank - the Commonwealth Bank - with branches in all towns and districts which required them, I have no doubt that the service could be maintained with the employment of half the number of persons now engaged in providing it.

While I am on this subject, I shall refer to the fallacious belief which many people hold that the trading banks are in competition with one another and that thereby they are able to give better service to the community than would be given if only one bank were operating. There is no competition whatever among the private banking companies. In most States the private banking companies have formed themselves into associations; but, apart from that fact, the very processes and methods by which banking is conducted to-day must eliminate competition. If a hank in a particular area applies a more liberal policy than other banks in the same area, it must automatically apply a less liberal policy than other banks in some other area. If the Bank of New South Wales applies a more liberal policy than the other banks in, say, the Dubbo district, it simply means that its ratios of cash to deposits and deposits to advances are detrimentally affected, and this can only be corrected by a less liberal policy in some other district. Because there is not, and cannot be, any competition between private trading banks there is a clear-cut case for making the Commonwealth Bank the only bank in the community, thereby releasing labour that is wastefully employed at present in other banking institutions. If that course were adopted we should be able to make a more effective war effort than is practicable at the moment.

Let us consider the position in relation to governmental activities. There never was a stronger case than there is to-day for the complete abolition of State Parliaments. Can Australia afford during a war of the intensity of this one to retain the services of more than 600 persons as politicians when it is obvious to every body that a considerably smaller number would do the work at least as effectively as it is being done at present? Some change in the governmental policy of this country is long overdue and if it were made now, many men who are to-day wastefully employed in political activities could be released for effective war work.

Mr Duncan-Hughes:

– The honorable member is overlooking the fact that the residual legislative powers lie with the States.

Mr Anthony:

– Would the honorable gentleman be prepared to advocate the abolition of State Parliaments?


– My point is that we should adopt some other system of government which would require the services of fewer legislators, so that many who are so employed at the moment could be released for other useful work. If this course were taken, a great deal of the present overlapping in Commonwealthand State affairs could be avoided. Ibelieve that honorable members on both sides of the committee will agree that, in consequence of the present division of constitutional power in the Commonwealth, many men are wastefully employed. The difficulties of the present situation could be overcome if they were resolutely and unitedly faced. By the use of central hanking credit facilities many men now wastefully employed could be usefully employed, and the tax burdens of the community could be greatly reduced.

Our welfare in peace-time and our productive capacity in war-time alike depend, fundamentally, upon the labourpower of the country. Less sacrifice would he necessary by every body if we could use our man-power moreeconomically than we are doing at present. Yet as soon as the Labour party makes a proposal that the credit resources of the nation should be utilized through the Commonwealth Bank, the Government gramophone begins to blare out something about the bogy of inflation. I shall attack that bogy. Australia is less vulnerable to inflation, but also more vulnerable to deflation than almost any other country of the world. The reason for this is to be found in our economic structure. Inflation means the increase of prices due to a too plentiful supply of money. Deflation means a fall of prices due to a too-marked scarcity of money. The price of many items of goods in Australia is fixed not by local supply and demand, but by the prices that prevail on the overseas market. Butter provides us with a good example. Every one knows that butter is sold on the London market at a lower price than on the Australian market.

Mr Paterson:

– Not always.

Mr Anthony:

– And not to-day.


– Generallyspeaking, it is so. However, for my present purpose, I shall not refer to to-day’s prices, for abnormalities in the present position would make it difficult to follow them. My figures will refer to about eighteen months ago. At that time Australian butter was sold on the London market : at 1s. per lb., but the price on the Australian market was1s. 6d. per lb. About 50 per cent, of our production at that time was being sold locally and about50 per cent, was being exported overseas. The net result to the producer was a price of about1s. 3d. per lb. If, by the use of centralbanking credit we had put the then unemployed to useful work and had thus increased local purchasing power to the extent that 60 per cent, of the butter produced was consumed in Australia, involving the sale of only 40 per cent, overseas, it would have meant a return of ls. 3d. per lb. to the producer, although the, quantity sold on the local market could have been priced at less than ls. 6d. per lb.. In this case expansion of credit would have meant the very reverse of inflation. What I have, said of butter could apply to many other products in relation, to which there need be no fear whatever- of inflation. These, remarks also- have a bearing on a very large number of the items in the regimen on which, the basic wage is fixed. I say quite frankly that I am not concerned as to whether the policy I am advocating would involve an increase of the price of, say, fur coats, pianolas, or other luxury goods. I am concerned only .about its effect upon the goods required by the worker.

The members of this Government, and also its appointees to the Commonwealth Bank Board, have always been deflationists. As a matter of fact, during the last twelve months, the Commonwealth note issue has increased by £10,000^000. In September of last year the note issue totalled, in round figures, £49,000,000, and in September of this year it had increased to £60,000,000, an advance of roughly 20 per cent. There has also been quite a large expansion of credit, most of winch, unfortunately,, has been- due to the operations of the trading banks. But, in spite of these facts, prices have not increased in Australia in any marked degree, and very little evidence of inflation is to be found. In fact, it may be said, in general terms, that such increases of prices as have occurred have been due to the iniquitous increases of the sales tax and to other non-monetary factors. The policy of the Commonwealth Bank, which is directed, by the political friends of the Government, has always been one of deflation. The Royal Commission on Monetary and Banking Systems in Australia criticized the failure of the directors of the Commonwealth Bank, to expand the national credit during the depression, indicating that the outlook of the board was definitely deflationary. Paragraph 547 of the commission’s report stated :

In our opinion, it would have been better bad the expansion in central bank credit come earlier. It should have been’ undertaken as m matter of policy when there was* a serious contraction in London funds at the end of 1929, and should have been continued on a larger scale in 1930, when there was a loss of gold from the Australian banking system.

In paragraph 554’, the Commonwealth Bank Board was again criticized for having, delayed the increase in the rate of exchange. Such an increase would have been of incalculable benefit to primary producers, but through their tardiness and deflationary outlook, the directors of the Commonwealth Bank cost the man on the land many millions of pounds.

Mr McCall:

– They increased the rate of exchange only because external influences compelled them to do so.


– That is true. When the Bank of New South Wales, on its own initiative, raised the exchange rate, the Commonwealth Bank was forced to follow suit.

The administration of the Commonwealth Bank during the last ten years is open to trenchant criticism. I am o£ opinion that the sooner the present directors of the institution are removed from office and the control of the bank is vested in a governor, the better it will be for workers and farmers alike. The Chairman of the Commonwealth Bank Board, Sir . Claude Reading, persevered throughout the depression with a policy of deflation, which caused a. fall of prices because of the lack of purchasing power in the community. But the price of an article which is produced by a monopoly is not affected by a deflationary policy, because it is not fixed in accordance with the law of supply and demand. It is the highest possible amount that the monopolist can wring from the consumer. Sir Claude Reading was chairman of directors of a powerful tobacco monopoly; and the price of tobacco was entirely unaffected, by the hanking policy which he assisted to put into effect. Such a state of affairs is disgraceful and the sooner directors of the Commonwealth Bank, who are interested, in private enterprise, are removed from office, the better it will be for the community.

The Government’s proposals for the utilization of bank credit are, in my opinion, entirely inadequate because, they make no provision for marshalling idle labour power and wastefullyemployed labour power. Moreover, the expansion of bank credit, as contemplated in the budget, will be undertaken by the private banks which will make a handsome profit out of the transaction. Through the actions of this Government, the private banks are “sitting pretty” and are ready to create credits to the value of many millions of pounds. An excellent analysis of the position of the private trading banks at the present time can be obtained from the October issue of the Monthly Review of Business Statistics, page 32. In the third quarter of 1939, the trading banks held government and municipal securities to the value of £21,000,000. By the third quarter of this year, that amount had advanced to £43,000,000, an increase of £22,000,000. During the same period their cash has increased from £31,000,000 to £39,000,000, whilst treasury-bills, which stood at £19,000,000, have now risen to £34,000,000. In all, their total assets have increased by £45,000,000.

Mr Anthony:

– Has credit been expanded by that amount?


– The banks, as I stated, are “ sitting pretty “, ready to create millions of pounds of credit.

Mr Anthony:

– The banks have already expanded credit to the amount mentioned by the honorable member by the purchase of Government securities and municipal bonds.


– The Assistant Minister, considers that this position has resulted from the expansion of credit by the private trading banks. I do not admit that; but the Assistant Minister’s remarks, if correct, are an admission that the Government has permitted such expansion to be made by the private banks when it should have been effected by the Commonwealth Bank. The Monthly Review of Business Statistics also quotes the proportion of various categories of assets held by the private trading banks to the total amount of their deposits. During the year ended the 30th September, 1940, their “cashtodeposits “ ratios have advanced from 9.86 per cent, to 11.50 per cent., whilst the ratio of cash plus treasury-bills to deposits has increased from 15.86 per cent, to 21.34 per cent. Those figures prove my statement that the Government’s activities have been deliberately directed towards enabling the private trading banks to create millions of pounds. Whatever, expansion of credit is implicit in this budget, the private banks will effect it. The Commonwealth Bank will be associated with it in only a minor degree. Lest some honorable members opposite consider that my statements are not founded upon fact, I quote from the Encyclopaedia Britannica in order to demonstrate how the private trading banks are placed in such a wonderful position to create credit. An article entitled “ The Money Market “ reads -

On this foundation of legal tender money and credit at the central hank the other banks (the “ commercial banks “ as they are sometimes called) build a larger structure of credit by buying securities and making advances to their trade and general customers . . . When a central bank makes advances or buys securities it creates deposits for itself, because whichever of the commercial banks receives the credit so created will add it to its balance at the central bank; but when a commercial bank makes advances or buys securities it creates deposits possibly for itself, if the cheques drawn against the new credit that it makes are handed to its own customers who pay them into their accounts with it, but more probably for one of its rivals who, however, are at the same time creating deposits for it.

Whenever the central bank creates new credit, or issues new notes, such as the amount of £10,000,000 to which I referred earlier, it establishes a foundation on which the private trading banks can build up a pyramid of credit and make a huge profit. This practice is euphemistically referred to as “ increased liquidity “. One of the proposals contained in the amendment submitted by the Leader of the Opposition (Mr. Curtin) was designed to obviate the possibility of private trading banks creating this large volume of credit and making a profit out of it. Such a practice received the consideration of the Royal Commission on Monetary and Banking Systems, which recommended -

The Commonwealth Parliament should legislate to provide that the Commonwealth Bank Board, with the consent of the Treasurer, may require every trading bank to keep with the Commonwealth Bank a deposit of an amount not less than a percentage, specified in the requisition, of the liability of that bank to its depositors in Australia.

Mr Baker:

– All private trading banks should be abolished.


– I agree. In order to make better use of the labour wastefully employed in competing banks the Commonwealth Parliament should abolish all private trading banks. In making that statement, I do not advocate confiscation. Their assets should be purchased at a fair valuation, and the banking services of the community should then be undertaken by one institution only, namely, the Commonwealth Bank. The utilization of that organization for the creation of credit would give to the Government much greater power than it now possesses for either inflationary or deflationary programmes. Curiously enough the Government, which immediately raises the cry “ inflation “ whenever central bank credit is mentioned, is invariably silent about the possibilities of inflation through private trading banks. “Within the structure of those institutions there exists a potentiality for inflation far in excess of that which would flow from any expansion of credit that might be made through a central bank.

Sitting suspended from 6.15 to 8 p.m.


– There is only one other point which I desire to make about the Government’s proposals. It is true that the use of a certain amount of bank credit is implicit in those proposals, but in regard to the financing of .marketing operations by the Commonwealth Bank, there is no special creation of bank credit implied, over and above that which obtains in normal circumstances. In the ordinary marketing of our primary produce the banks do expand credit; chey do create money on the strength of the tangible assets represented by the produce.

The only difference between the Government’s waT-time proposals in this regard and the ordinary peace-time procedure is that, in war-time, the advances are made by the Commonwealth Bank, while in peace-time they are made through the private trading banks. Let me refer particularly to the financing of the operations of the Barley Board. In peace-time, the middle-men buy up practically all the barley produced by the farmer. After he receives his return the farmer can then pay his rates and interest, and hi3 other usual commitments. Practically all the barley produced in Australia is consumed here, and I believe that the Commonwealth Bank should assess the total value of the crop and buy it outright from the farmers on the basis of that assessment. If that were done, the farmers would be able to meet their commitments as they fell due. Under the present system, the farmers receive a first advance of so much a bushel, and then have to wait several months for the balance. Even now they have not received their final payments for last year’s crop.

As I said earlier, I approve of the total war expenditure proposed by the Government, but I disapprove of its methods of raising the money. The Government’s proposals for the utilization of bank credit are inadequate, and it is entirely wrong that the private banks should be entrusted with the work of creating the bulk of that credit. Since I believe that the Government’s proposals for the utilization of bank credit are inadequate, it follows logically that I must also disapprove of the Government’s proposals for the raising of money by loans and taxation. I believe that the Government proposes to raise too great a proportion of the money necessary to meet war expenditure by those means. I said at the outset that our war effort was essentially a matter of labour power. There are two methods of obtaining this labour power: The utilization of idle labour, and of labour now unprofitably employed, and the diversion of labour from its peace-time activities. Labour in the first category should be financed out of bank credits, while that in the second category should be financed out of loan and taxation. I bracket loans and taxation because the proceeds of both come necessarily from the samesource. If money is available to be lent, it is equally available to be taxed. When I made that pronouncement on a previous occasion, the honorable member for Gippsland (Mr. Paterson) said that it would be a physical impossibility to do as I proposed. I defy him to cite any authority who does not agree with the proposition I have enunciated. The fact is that both loans and taxes come out of current income. [Leave to continue given.] From Professor Pigou’s work, Economics of Welfare, I quote the following:

The sources from which it is possible for real funds for abnormalexpenditure to be drawn are much the same under loans as under taxes . . . This matter is examined in detail, and it is found that the reactions of the fact of the loan method are likely to be somewhat more injurious to the national dividend of the future than the reactions of thefact of the tax method. The excess of damage under the loan method is enhanced by the effects of thefuture taxation which it implies . . . An important factor inthe choice between loans and taxes for financing abnormal expenditure is the comparative effect on distribution. This matter is discussed as regards distribution between the present and future generations. And, more elaborately, as regards distribution among different members of the presentgeneration. It is concluded that, when the abnormal expenditure is required to finance a war. distributional considerations suggest taxes.

Another authority, T. W. Swan, an economist writing in the Economic Record of Australia, for June of this year, said -

The choice is mainly a question of incomedistribution, both now and after the war, since, in general, it is truethat if the purchasing power is available to be borrowed it is available tobe taxed.

A further proof of the proposition that if money is available for loan it is also available for taxation is found in the figures relating to the national income. These figures which I am about to quote were prepared for me by an officer of the statistician’s branch, so that there is no doubt of their authenticity. For the year 1938-9, Australia’snational income was £788,000,000. Private consumption for that year - that is, what the people spent on their current needs - amounted to £582,000,000, leaving a surplus of £202,000,000. For the year 1939-40, the nationalincome amounted to £863,000,000, andprivate consumption amounted to £624,000,000, leaving an unexpended balance ofapproximately £240,000,000. Thus in 1938-39 there was £202,000,000 and in 1939-40 £240,000,000 available for public consumption, taxation and private investment. The corresponding figure for 1940-41 will be approximately £300,000,000 which is high enough to allow of this £186,000,000 budget being raised from current production and still leave a surplus in the hands of individuals. The Government proposes to raise £80,000,000 in loans. Some of this is to be providedby the private trading banks, and some is to come from the public. I wish to emphasize that the raising of loans can be a far more inflationary method of finance than the creation of credit ‘by the Commonwealth Bank. Let us consider this example. Suppose I were tolend £200 to the Government.

Mr Ward:

– The honorable member would be a “ mug “ if he did.


– Any surplus which I possess the Government ‘can have without borrowing; it can have it as a free gift. If I invested£200 in war bonds the Government would have that money to spend, and I would have that much less. Assuming that I am a farmer, I might, at some subsequent time, want to put up a new fence. I have not the ready cash, and so I go to the banker and say to him, “ Here is security worth £200. Will you advance me £100 in order to do some fencing ? “ He considers the application and grants it. I pay the money to a contractor, who builds the fence. The contractor may then have that £100 as a surplus over his current requirements, and he promptly invests it in war bonds. Thus, £300 worth of war bonds havebeen bought out of theoriginal £200. It is curious that the Government should emphasize the dangers of inflation through the use of Commonwealth Bank credit, but completely ignore the danger of inflation through the raising of loans. I am opposed to borrowing for thepurpose of financing the war. I believethat no person inthecommunity, whether he be rich or poor, is entitled tobuild up claims against future production when men are prepared to sacrifice their entire future, even their lives, in defence of their country., It is a standing disgrace to the wealthy members of the community that they have contributed only about £500,000 as a free gift to’ the war effort. The men of the services are fighting to protect the interests of us all, and it is disgraceful that the wealthy members of the community, mainly the older people, the “ would to God brigade,” who say, “ If only I were younger I would be fighting, too,” are not prepared to give the fighting men the equipment with which to fight unless they, in turn, are given claims against future production. I condemn the Government’s loan proposal in toto. Those with surplus incomes are utterly lacking in patriotism. If I have any surplus income, I will give it to the Government free of cost in order to provide arms for the men who fight for me. I have done it before, and I will do it again.

Another objection to the raising of money by loan is this : The war will be won by work done and services performed. If a man merely lends money to the Government, the prospect of receiving in the future a fixed income for doing nothing will rob him of the incentive to work, and thus tend to reduce the total of our war effort. Again, since the section of the community which will lend the money will be the elderly section this will result in a transfer of claims against future production from the younger to the older generation. Generally speaking, the older people have finished with family commitments, whereas the younger people have families to support. Therefore, it is utterly wrong to allow this transfer of income and claims over future production to the older people at the expense of the younger people. The honorable member for Barton (Mr. Evatt) declared that under the budget proposals the financing of the. war will determine, to a large degree, the distribution of national income for the next generation. That is an understatement of the position. These proposals will determine the distribution of the national income probably for the next century. During the last war, the wealthy sections of the Australian community loaned £300,000j000 in order to provide equipment for our soldiers. During the 25 years since the last war, we have paid in interest on that amount a total of £305,000,000 or at. the rate of £235,000 a week. At the same- time we have not paid back one penny of the principal.. The. bondholders who subscribed that money during the last, war still retain their bonds, and their claim over future production. Spread over 25 years, this- means that we have paid approximately £235,000 each week, in interest on loans raised during the last war. This money has been taken out of the community by wealthy people who did not have sufficient patriotism to provide this money free of interest for the equipment of our soldiers in the last war.

Shortly after the outbreak of this war, the Prime Minister (Mr. Menzies) declared that we must build a new social order. When he made that statement, the right honorable gentleman must have been speaking with his tongue in his cheek, because the loan proposals now before the committee embody the foundations of a social order more vicious and iniquitous, and more lacking in justice than any social system of which the people of this country have even dreamed. If these proposals be carried into effect, the claims of the wealthy section on production after the war, through the increase of taxes in order to meet the interest bill and repayments of loan money, will be so great that all of our schemes for child endowment, housing, marriage loans, widows’ pensions and so on, in which the honorable member for Melbourne (Mr. Calwell) and all honorable members on this side are so interested, will go by the board. Because the claim of the wealthy section against future production will be so great, no money will be available to implement such schemes. At the outbreak of this war, 17 per cent, of our national income, representing a sum of £136,000,000, was being paid each year-to these people. For these reasons, I condemn the Government’s proposals for the raising of loans internally. A strong case, however, can be made out for’ the raising of loans externally, particularly in the United States of America, because by such means we could ease the strain on dollar exchange, and also facilitate the purchase in that country of machinery of which we are in need at the present time.

The incidence of the taxes embodied in the budget proposals will fall most heavily on the lower income groups. The Prime Minister has endeavoured to create in the mind of the community the impression that he is the Churchill of Australia. I advise the right honorable gentleman to examine the taxation proposals of the Churchill Government and to compare them with those of his own Government. He will find that theChurchill Government is taxing the wealthy people in Great Britain to a much greater degree than they are being taxed in Australia and the lower incomes not nearly so heavily as this Government now proposes to tax them. I have made comparisons along these lines, in respect of incomes of a man with a wife and two children, and have embodied them in two graphs, which I shall now explain to honorable members. I ask leave to have the two graphs incorporated in Hansard. [Leave granted.] [Further leave to continue given.]

The first graph shows a comparison of the taxes paid in Australia and in Great Britain on incomes up to £20,000. The horizontal scale represents the amount of income, and the vertical scale the amount of tax. The horizontal line represents the incidence per capita of an indirect tax. “With indirect taxes, the tax per capita in respect of a taxpayer with an income of £100 is exactly the same as in respect of an individual with an income of £20,000. I protest against the Government’s proposals in respect of indirect taxation, particularly its proposal to continue, through the medium of the budget, the iniquitous flour tax. Dealing with the incidence of indirect taxes, the Prime Minister said that these taxes are levied on certain luxury items in respect of which the rich paid much more than the poor. That is certainly not the case, so far as the flour tax is concerned; indeed, the reverse is the case, because rich people can switch from bread to some other article of food on which no tax is imposed. On the other hand, the poorer people are obliged to eat bread. In addition, the poorer people are doing their duty by A.ustralia in having larger families, whilst it is well known that the rich, generally speaking, do not have large families. Consequently,, the incidence of the flour tax bears much more heavily on the people with low incomes. Reverting to the first graph, I point out that the vertical line drawn through the £1,500 income point shows the amount of tax which would be imposed assuming that the Government took everything above £1,500. It. will be evident that the steeper the curve, the more it approaches the ideal of the Labour party; the more flat the curve, the nearer it approaches in its incidence to the incidence of the indirect taxes which Labour condemns and which the Government approves. The continuous black line represents the incidence of taxation in Victoria, taking Federal and State income tax combined on the basis of the budget, proposals, and the dotted line represents the incidence of taxation in Groat Britain. From the latter line, we see quite clearly that the British Government is imposing tax at a far steeper rate of progression on higher incomes than is the case in Australia. I also point out that the British Govern^ ment takes in taxes 40 per cent, of the national income for war purposes, whereas under these budget proposals, we intend to take only 20 per cent, of the national income by way of tax for war purposes. If the incidence of taxation is as regressive as I have explained, at a time when we propose to take only 20 per cent, of the national income for war purposes, how much more vicious is it likely to be when we shall, perhaps, he obliged to take from 30 per cent, to 40 per cent, of the national income?

The second graph is even more important than the first. The explanation which I have already given in respect of the first also applies to the second, except that the second graph refers to incomes from zero up to £800. Income is represented on the horizontal scale and the amount of tax paid on the vertical scale. The dotted line shows the incidence of tax in Great Britain and the continuous black line the incidence of all income tax as in Victoria. It will be seen that in Victoria a taxpayer with, a wife and two children pays tax on an income of £150, whereas in Great Britain tax is not payable on incomes below £350. The British taxation proposals do not coincide with ours until the £400 level is reached, and thenceforward, the rate of tax in Britain rises much more steeply on higher incomes than is the case in Australia. I have already demonstrated that comparison in the first graph. The incidence of the Government’s income tax proposals is most vicious, and will bear very heavily on the working class.

I protest against the proposal to increase the sales tax. Instead of increasing that tax, the Government should increase the rate of estate duty. Very good reasons exist for imposing a higher tax on inherited estates. After all, the inheritor comes into possession of an estate by virtue of the fact that men are prepared to offer their lives in defence of the country in which the estate is situated. If it were not for the patriotism of our soldiers, Hitler or Mussolini could . simply walk in and take such property. This is an ample justification for the State taking a good slice out of the estate.

In. addition, the war effort is an effort of work and services to be performed; but in -view of hi3 prospects of inheriting a large income in the future, a person who hopes to inherit an estate has no incentive to work at all. We know that, in many cases, persons who expect to inherit a wealthy estate waste their substance in riotous living before actually gaining possession of their inheritance. Therefore, not only from the point of view of equity, but also from the point of view of incentive to work, strong reasons exist for increasing the rate of estate duty in preference to increasing the rate of sales tax.

Summarizing what I have said, I repeat that I support the amendment moved by the Leader of the Opposition. As the Prime Minister has refused to compromise with the Opposition, I condemn the budget for the following reasons : First, its failure to use sufficiently the credit of the nation for the conduct of the war; secondly, its failure to prevent private trading banks from performing what credit creation is implicit in the budget; and, thirdly, because the total sum involved in the combined loan and tax proposals is too great. Fourthly, I condemn m toto the “Government’s loan proposals. This war should be financed by means of taxes, in so far as that is necessary, after bank credit has been utilized. Fifthly, I condemn the increase of indirect taxes, and suggest instead an increase of estate duty. Above all, I condemn the failure of the Government to bring forward budgetary proposals which would enable it to marshal the potential labour-power -of this country in order that the war may be carried to a successful conclusion.


.- It is quite apparent that there are in Australia many persons, including perhaps some members of this Parliament, who do not realize that a war is in progress. If they do, they show no appreciation of the seriousness of the .international position, or of the fact that the enemy is already within Australian waters, that those waters have been mined with disastrous results, that ships have been destroyed, or that our own kith and kin have been murdered off our own coast. Some honorable members opposite do not appear to realize that bombs are raining on our kinsmen in the very heart of the Empire to which all of us should be proud to belong. They do not appreciate the fact that the enemy to-day controls the whole of the European coast from Norway to the Pyrenees, and that, within a few moments, his death-dealing bombers may again be raining down death and destruction on our kith and kin in the heart of the Empire. There is a definite call to every member of this community to make some .sacrifices. Certain persons are incapable of understanding that we cannot live at the high standards which prevail in times of peace. Unpleasant though it be, I suggest that there are many luxuries and non-essentials, the consumption of which will have to be .curtailed for the common good, in or.der that we may be able to make our best war effort, because we are fighting for om* very existence. Recent tragic events have brought the war closer to our .shores. Let us remember that, unless .the whole of the weight of the dominions is thrown behind Great Britain, victory may be difficult of achievement. We .are approaching the most crucial period in our history. We are up against a monstrous tyranny, a ruthless, powerful, unscrupulous, treacherous, and, may I say, unchristian foe. The people of those countries which have been ravished by Hitler’s armies have been deprived of all of their sacred rights. Their religion has been smashed, their homes have been commandeered, their property has been confiscated, their churches have been profaned, and every thing near and dear to them has been violated. Everything that we have is at stake in this great contest. Yet we are unable to achieve that measure of unity which is essential to ultimate victory. When will some persons realize that “ United we stand, divided we fall “ is a truism? There is a definite call for a united effort by an all-party government.

The emergency requirements of to-day surely demand that all -sections of the community, and all parties in this Parliament, shall think nationally, and forget for the time .being the wornout, moth-eaten, party tactics which are designed merely to score off one another? If ever there was a period in our history in which we should be united, it is to-day. Yet what do we find? The Opposition has resolutely refused to join in a national government; it has failed to cooperate in the vital work that has to be done, but criticizes every action that the Government takes. It is true that, at the recent elections, the electors refused to give to either party a mandate to exclude the other party from a share of the government of this country. The deadlock that the vote apparently caused is visible only when viewed through the spectacles of party politics. It cannot be denied that at the recent elections the people, by an overwhelming majority, expressed the desire for a parliament pledged to a vigorous prosecution of the war. We cannot achieve that vigorous prosecution of the war and give our undivided attention to the only factor that matters until we have some semblance of unity among the political parties both inside and outside of this Parliament. Fighting, as we are, for our life, Australia calls for national leadership. As leaders of the nation, we are expected to put aside party politics, party prejudices, personal ambitions and suspicions, and to unite in the service of our country. Surely we cannot be unmindful of the seriousness of the outlook in the Pacific! Decisions of enormous consequence may have to be made in the very near future, and it would be not only shameful, but also bordering on treachery and treason were we to allow our common interests to be sacrificed on the altar of party prejudices. Doubtless there are causes for complaint. I am not satisfied with all that the Government is doing, or is failing to do. I suggest, however, that we have reached the stage when we must subordinate all other considerations to the making of a maximum war effort. We must not allow anything to stand between us and the realization of our country’s needs. This does not prevent constructive criticism. Indeed, I shall be found indulging in some of that criticism before I have concluded my remarks. A good deal of criticism has been levelled at the budget which we are now discussing, but I confess to having heard very little that is constructive. After all, the war must be financed. The bare fact is that the war must be won, and that we must pay for it. Money has to be raised for this purpose. Why do we not take a calm 8nc dispassionate view of the matter? It is the duty of this Parliament to raise the necessary money with the least possible disturbance of business, keeping our eye to the principle of equality of sacrifice. No one is anxious to impose taxes, which are always unpopular; but we cannot flinch from our duty simply because wha’t we do may be unpopular. We must risk momentary unpopularity in order to serve our country’s needs, because the alternative to the raising of the necessary money is too horrible to contemplate. If we lose the war, we shall certainly suffer much more than the inconvenience of the staggering burden imposed upon us by the budget.

The amendment of the Leader of the Opposition (Mr. Curtin) provides for an enormous increase of expenditure. Certain of the suggestions of the honorable gentleman have some merit, and in normal circumstances I should support them; but we are living in most abnormal times, and the only suggestion which honorable members opposite can put forward with a view to raising the necessary money is further to extend credit, recourse to which would make this budget more inflationary than ever. After all, the amendment is no more nor less than a re-hash of the policy speech which the Leader of the Opposition delivered’ at the beginning of the last election campaign. The honorable gentleman has stated that he has received no mandate to give effect to the policy which he then enunciated. Whilst realizing the evils of both inflation and deflation, I suggest that this budget represents an endeavour to preserve a balance between both of those evils, and that the ill effects will, in neither case, be excessive. The budget provides for a blending of taxation, loan money, and extension of credit. It may be unpleasant, but it is necessary, because, as I have already said, the alternative is too horrible to contemplate. Quite a lot has been, and will continue to be, said with respect to the banking institutions, extension of credit, inflation, &e. I remind honorable members that ever since the first public bank was founded in Venice in the middle of the twelfth century, banking institutions have been conspicuous targets for attack in times of adversity. 1 have no brief for such institutions, and frankly say that our financial system is by no means perfect; but I claim that any change of our banking and monetary systems must be brought about in an orderly way, by evolution, and not by revolutionary methods. The existing system is not all that could be desired, but nevertheless I am not prepared to jettison it until it can be said definitely and assuredly that there has been evolved a better system in which the people have confidence ; because the very existence of banking depends upon the confidence of the community Many countries have tried inflation as a remedy for economic ills, and sooner or later all of them have returned to a more sound and stable currency. While the experiment was in progress, the people of those countries suffered different degrees of hunger, destitution, strife, and the complete breaking down of their social and living standards. Inflation has been tried in France, Russia, Germany, Austria, Belgium, Italy, and Argentina, the result in every case having been disastrous to all classes of the community. There is no reason to believe that the result would be any different were the experiment tried in Australia. I commend to honorable members generally the very lofty sentiment expressed by the right honorable member for Yarra (Mr. Scullin) when Prime Minister of the Commonwealth. He definitely and strenuously opposed inflation when it was suggested during his term of office. His words were -

To create credit for £20,000,000 for loan work is unsound, and I expect the banks to refuse to do so. Such a proposal means permanent inflation which could not be cheeked as is implied and would demand further inflation. All this talk about creating credit and inflation is most damaging. Since inflation was suggested efforts are being made by mcn in England to withdraw their money from Australia as they would lose by payment in a depreciated currency. Depreciation in currency would decrease values of savings banks deposits, property would increase in price, there would be a rush to sell bonds for investment in property and financial panic may result.

The use of bank credit must gradually lower the value of money, raise prices, and affect the poor more severely than those in moderate circumstances or the rich. During the last war, inflation ruined the middle classes in Germany. France and other countries have had the bitter experience of an inflated paper currency. Britain is a sound country financially because it operates under a sound financial system, and that, I think, will prove one of the important factors in bringing victory to the British Empire.

Some honorable members are in favour of a new order in economics, the outstanding feature of which is the conversion of the national credit into cash. I assure honorable members that the national credit has already been cashed to an amount of £1,300,000,000 by the mortgaging of the national wealth, involving a huge interest bill; but we are told that under the proposed new economic order, the cashing process is to cost the Government nothing or very little. As none of our financial reformers will plead guilty to advocating a quest for the impossible “ something for nothing “, the cost, presumably, will reach the public in the form of a general depreciation of the value of all incomes, including wages, of all investments, including savings bank deposits, and certainly of the standard of living. I refer honorable members to the views expressed by a financial wizard who was regarded some years ago as a leading disciple of the Labour party. I speak of Mr. E. G. Theodore, who was formerly Premier of Queensland and is an ex-Treasurer of the Commonwealth. When Premier of Queensland he said -

Australia should make every effort to maintain a sound money basis. The world has had many salutary lessons of confusion caused by unstable money. Trade is paralysed, commodity prices soar sky high, wage standards are lost and national bankruptcy ensues. It is a misconception to think that by adding paper to currency any additional wealth is created. To merely pay higher wages in paper achieves only disappointment, as the purchasing power of paper money will be less than the purchasing power of gold by the amount which corresponds to the extent of the inflation. By inflating the currency wo get into a vicious circle. Once the issue of paper exceeds the currency requirements of the community the value of money is depreciated, and commodity prices commence to soar. None suffers more than the workers because their wages are paid on the assumption that commodity prices are in gold and not inflated paper prices. Wages are always less than they should be in countries that practise inflation.

Dr. W, T. J. Harris of Randwick, New South Wales, has shown how Germany suffered during the inflationary period after the last war, and I shall refer to his personal experiences in that country. Every country that adopts a policy of inflation has clone exactly as honorable members opposite suggest should be done to-day. At first, inflation is applied only to a ‘Small degree, but the practice grows at such a rate that it eventually becomes unmanageable. On his return from Germany a few years ago, Dr. Harris said - “ I have never seen so much misery in my life as I saw in Germany during the period of currency inflation, I was in Germany in 1921 when currency inflation was at its zenith. Once one got aw.ay from the quarters where foreigners, who had money to spend, congregated, conditions were appalling. Affairs were in a chaotic state, and one scarcely knew what would happen next. Uncertainty and instability held undisputed sway, and the mark fluctuated to a most extraordinary degree. One day a 50,000,000 mark note might be worth fi, while the next day its value would perhaps not exceed sixpence. Amidst all the confusion it was the working and middle ‘classes -which fared worst. When I arrived in, Germany the mark stood at 5.000 to £1, while six or eight weeks later it stood at 38,000,000,000 to £1.

Wage-earners suffered great hardships owing to the inflation. Those on monthly salaries fared even worse than those who drew their wages weekly. Salaries were reviewed each week or month. A man engaged at ft monthly salary of £50 might find at the end of the -month when he drew his money that it was not worth more than ls. A cabinet-maker or piano-polisher engaged at a wage of 200,000 marks a week would probably find that when he received his wages they were not sufficient to buy 31b of butter. Nobody knew what the price of an article would be from one day to another. The man who had something to sell could protect himself to some extent by raising the price of the article in accordance with the slump in the value of the mark, hut the wage-earner had to wait for his wages, and when he received them found himself a week behind the price movement.

T saw bread queues in Berlin three miles long, and thou three-quarters of a mile of the queue, after waiting twelve hours, would have to go without as there was no more bread. Butter and sugar were unprocurable. ‘Bus fares were 5,000,000 marks or more a section. After my experience in Germany I do not want to sec currency inflation here.”

Kent-fixing was tried by the Government. A tenant’ desired a few minor bathroom repairs. The landlord refused to have them done. The tenant reported the matter to the Government, who ordered the landlord to have them carried out. The repairs cost the landlord the rentals of a terrace of twelve houses for five years. The postage stamp used by -the landlord in replying to the Government cost the rental of one house for eighteen months.

The first week I was in Berlin, it woe a veritable nightmare. I did not know what was .going to happen next - whether I was going to get my dinner free or what it was going to COSt. The man working for a wage ‘got it in the .neck’ all the time. He had nothing to eat, nothing to wear, and could not afford to go anywhere. I have seen working-men - not unemployed, but menin constant work - going round t-he garbage tins at the rear of hotels picking out food to eat. Never .have I seen so many beggars. They were to be seen in every street. The idea of currency inflation was to inflate only a little, yet ‘this is the extent to which it went once it started. It would mean a terrible plight for Australia if currency inflation .were adopted.” 1 agree with Dr. Harris that currency inflation would prove most disastrous in Australia.

The people of Tasmania are astounded and indignant that a national government has not been formed. They regard a truly national government as one consisting of representatives of all of the political parties and all of the States. There is no law to say that all of the States shall be represented in the Cabinet, but under an unwritten law, based on parliamentary usage, it is regarded as advisable that governments should be so constituted. Why the request for Tasmanian representation in the Cabinet was ignored is beyond my comprehension. Tasmania is an integral part of the Commonwealth, but, apparently, it is regarded with suspicion, and looked upon as a foreign country not fit to be represented in the counsels of .the nation. Had it not been for the loyalty of the Tasmanian electors to the present Government, a government such as this could not possibly have been in office to-da.y. However, the only reward that Tasmania has received for greatly increasing its support of the Government ha3 been the proverbial “kick in the pants “. Whilst I am solidly behind the Government, and will give to it all the support of which I am capable, I am in duty bound to express on the floor of this House the views of the people of Tasmania, since these cannot be directly stated in the Cabinet room. Tasmanians are entitled to share with the other States the general benefits due to Commonwealth expenditure, but up to the present they have been denied a fair and equitable share of that expenditure. So long as this position, is unaltered, a high financial grant to the small State of Tasmania will be absolutely necessary. It is not receiving the fair share of defence expenditure that one would expect, nor is it getting the encouragement that it has a right to look for in the development of its industries.

A survey should he made of the resources of Tasmania, and, particularly, of its deposits of oil shale, clay containing aluminium and magnesium, iron ora deposits and other minerals used in the production of munitions. Tasmania has lost many thousands of its young people because of the inability of that State to provide suitable employment for them. This difficulty has been aggravated by the exodus of many thousands of munition workers to other parts of Australia. The small island State has large engineering plants of which good use could be made. It. is tragic that these should be working only half time, when a. cry for an increased supply of munitions is heard.. The production of fuel oil in Australia- is essential in these critical times. I urge the Government to cooperate with the Government of Tasmania in this matter, in order to enable the oil shale deposits on the north-west coast of Tasmania to be developed. A Labour government which favours the development of the deposits is in office in that State at present, and this work is being, held up. The potentialities of the oil shale fields of Tasmania are enormous. In 1934 an expert from the United States of America made an examination of Australia’s possibilities with regard to oil production, and, after a thorough examination of various fields, he recommended the development, of the oil shale deposits at Latrobe. He took back to the United States of America a sample parcel of 35 tons of oil shale, which yielded approximately 45 gallons of oil from each ton of shale. Mr. L. J. Rogers, the Commonwealth Government Fuel Adviser-,, in a report dated 1932- on the Latrobe deposits, stated -

This property is estimated to contain approximately 3’,000i000 tons of oil shale, and has been-, proved te a;n extent which, justifies mining, operations.

The Tasmania, Geological Survey Mineral Resources Bulletin,* estimates, the contents at 3,500,000 tons, taking into consideration partly proved and possible extensions.

The report continued: -

The- economics of the company’s proposals were predicted upon an estimated yield of 45_ gallons of crude oil per ton of shale by using the retorting process developed by Mr. Jacomini.

The results of commercial scale tests conducted at Newcastle in such process, on average quality oil shale from New South Wales leases of Standard Oil Company of Australia Limited, indicate that such a prediction was justified.

It has frequently been said, and probably will be repeated, that the development, of the Tasmanian oil shale deposits would prove an economically unsound proposition. But I point out that many commodities produced in Australia are not manufactured on a commercially payable basis. At all costs we must win the terrible conflict in which the nation is engaged, and every gallon of oil produced in our own country will result in a saving of dollar or sterling exchange, plus the cost of freight from overseas. When oil is urgently needed for the Royal Australian Air Force or for naval and military purposes, we should not hesitate to encourage its production in Australia, even though the work might not prove commercially profitable. Some commodities are produced in Australia, on other than a commercial basis, and it is highly imperative that oil should be produced. Suppose for one moment that oil supplies from overseas were cut off through the intervention of some foreign power. Where would we be then? To use a colloquialism, we would, be “ up the pole “. The Commonwealth has shown a good deal of sympathy, because it has remitted £40,000 duty on the plant imported for the development of the Latrobe works. An honorable member interjected,. “What is the Government doing?” I remind him that some difficulty has arisen because the State of Tasmania controls the leases of the land which contains the shale. Such leases are essential for the successful development of these fields, and I urge with all the emphasis at my command that the Commonwealth Government take the matter up with the Tasmanian State Government with a view to combined action being taken for the development of this necessary commodity.

I now make a plea for the primary producer, the man who is tilling the soil and the man who is actually behind the gun in this terrible conflict. I have been in public life in this country long enough to grasp the fact that rural prosperity is the real basis of State prosperity. The primary producer is entitled to a fair deal along with every other worker in the community. It has been said with full justification that land is the fountain from which all prosperity flows. When the primary industries experience a lean time so also does the industrial worker and the city business man. Those engaged in rural activities are performing a national service. From them come the provisions without which our soldiers, airmen and sailors would be useless. They should be given every assistance and encouragement. The home front is just as important as the fighting front. The primary producers are entitled to more sympathetic consideration, and their lot should be made more attractive and profitable.

The first thing I suggest in order to improve the lot of the primary producers is the provision of improved telephonic facilities. There is greater need for reasonable lines of communication in sparsely populated areas than in the metropolis. Yet we find the people in the country districts at a distinct disadvantage as compared with those in the city areas both as regards costs and hours of service. I urge that in rural areas the PostmasterGeneral (Senator McLeay) give favorable consideration to the extension of hours and a more equitable scale of charges for installation and rentals. I suggest that a standing, or a joint committee, if he wishes, of this Parliament be charged with the duty of inquiring into telephonic facilities in country districts.

Another matter causing a great deal of concern to the primary producer is the fact that he does not enjoy the same protection as some other people in our Rightly, we have arbitration courts, wages boards and other tribunals to protect the standard of living of those engaged in secondary industries and customs duties to protect manufacturers from outside competition. But what of the primary producer? He must have suitable markets found for his products and a, fair price. Just as the tribunals determine a fair living wage for the workers in secondary industries so should a fair living wage be determined for the primary producers. That can be achieved only by fixation of a minimum price for their products. Production is regulated by price in the same way as is consumption. The farmer will produce whatever he thinks will show him a profit. The control of production by the regulation of the prices offered to the farmers would enable them to devote their land to crops which would give the best return. The guarantee of & minimum price should be for the duration of the war and three years thereafter. This would make production more efficient and cheaper because the farmer would plan for a period of years instead of continually changing his programme in order to chase higher prices. The time has arrived when something must be done; otherwise this country will face chaos when the war is over. Farmers and their employees are being absorbed in war work. When this work is finished thousands will be thrown into the ranks of the unemployed unless they can be employed on the land.

I regret that no mention was made in either the budget or the GovernorGeneral’s Speech of measures which the Government proposes to adopt in order to meet post-war problems. We must prepare for reconstruction after the war. A new order will be built in Australia and Empire trade must first be developed. There is ample scope in this direction for action. In Great Britain there must be enormous marketing possibilities. Sir John Orr, in his report on the Nutrition Commission’s report, said -

Fifty per cent, of Great Britain’s population is underfed. If the population could consume half an ounce a day per head of butter and meat, they would need 10,000,000 boxes of butter and 15,000,000 carcasses of lamb a year more than they consume now.

That is an illustration. The same remarks apply to other commodities. It should be the aim of Australia to provide those additional commodities. Now is the time to make preparations to meet postwar problems, which will be with us sooner or later.

In a long-range plan to place primary industry on a sound basis, two things are essential : Stabilized prices of primary products at a payable level, and a mortgage bank to take over existing mortgages and debts and to make money available at a low rate of interest.

The Government would be well advised to give attention to subversive activities in our midst. Unquestionably, sinister influences are at work to hamper our war effort and upset the morale of our people. This is no time to shield disloyalty, whatever be its source. I am no respecter of persons in this regard. There must be no distinction made between persons who utter disloyal statements or who perform disloyal acts. All must be treated alike. We cannot allow the serpent of disloyalty and sabotage to rear its ugly head. Patience and tolerance have reached their limit. We are fighting for our very existence, and those engaged in subversive activities must be dealt with. This is no time for kid-glove methods. The disloyalists, anti-Australians and anti-Britishers enjoy the freedom of Australia which the British flag affords them. At a semi-public meeting in Tasmania a. few months ago, one individual said -

I um proud to support the first socialist fatherland in their fight against Finland.

Honorable members know the atrocities that were committed in Finland. The same nian recently published the following in the correspondence column of a newspaper in Tasmania -

Returned soldier wonders if I share with Jehovah’s Witnesses a dread of fighting for my country. I have no country. I call no nian master. Why should I? Why should I voluntarily fight?

He enjoys all the benefits of this country although he disclaims it.

The Tasmanian State Government and municipalities have directed the attention of the Commonwealth to certain acts of disloyalty, but no action has been taken and I want to know why. It is true that we are fighting for freedom and it may be paradoxical for me to say that there is too much freedom in Australia to-day. Some people claim licence to indulge in all sorts of anti-British propaganda.

Those engaged in subversive activities talk of freedom - freedom for what? Surely not freedom to take away lives and liberties of others, or freedom to organize strikes and throw the war machine out of gear. Again I impress upon the Government the need to give serious consideration to the subversive activities that are going on in Australia. The “ fifth column “ was almost solely responsible for the downfall of the countries in Europe which have been overrun by Hitler. Those countries were infested by disloyalists, and who will say that disloyalists will not do the same job of work in Australia if the opportunity offers. It is the duty of this Parliament to remove that opportunity and to rid Australia of the menace of disloyalty.


.-1 labour under something of a difficulty in the fact that, but for a trifling intermission, I follow the scholarly and analytical address delivered on the budget by the honorable member for Corio (Mr. Dedman). I have no intention of attempting so comprehensive and thorough examination of the matters involved. I first take leave to congratulate the honorable member for Darling Downs (M.r. Fadden) upon what is a somewhat accidental though happy translation, by way of promotion, to the position of Treasurer of the Commonwealth, where he may expect to occupy, during this period at all events, a position of conspicuous unpopularity. He himself, in opening his address, made reference to the unhappy distinction which fell to the lot of the Prime Minister (Mr. Menzies), who delivered a temporary budget statement in September last year. The Treasurer then went on to refer to his own unfortunate task in having to introduce a budget of £150,000,000 as compared with the £100,000,000 budget of - the Prime Minister. Still I think there was a note of pride in his speech. In spite of all his labours and apprehensions, I believe that he felt like a lady who had qualified for the King’s bounty. I grant, however, that I have known much less capable men than the Treasurer to have greatness suddenly thrust upon them.

This discussion is based upon the budget for 1940-41 and as every one knows is a general discussion upon the first item. The amendment moved by the Leader of the Opposition (Mr. Curtin) seeks to- modify the- exactions proposed to be made on the- common people, and correspondingly to- increase those to be made on the highly privileged section of the community. The amendment also proposes an amelioration of the hardships of those who enjoy less than a sustenance wage, whether as ordinary workers or as soldiers. Its concluding words advocate an extension to an undefined degree of the principle of bank credit, which the honorable member for Corio examined with such masterly thoroughness. There is also- a reference to companies - a more technical matter to which I do not propose to make further reference at this stage.

I accept the amendment for two simple reasons. First, because I entirely agree with its substance; and, secondly, because, fresh from the electors, and endorsed by a very large majority as .a member of this Parliament, I am pledged to give effect to a policy such as that included in the amendment. The Prime Minister accepts the amendment as a challenge, and is most uncompromising about it. If the right honorable gentleman is to make a stand in this matter - and he cannot well avoid doing so-he ought to have given notice of so radical a change of policy on his part, because, according to my long and observant experience, it has always been his practice to make a bold stand when the gun is presented to him, but to retire gracefully, with offers of suitable concessions, as soon as he is convinced that the trigger is likely to be pulled-. In this instance, the fact that the honorable member for Barker (Mr. Archie Cameron) is sitting behind’ him, instead of on his flank or as a member of his Government, probably makes a difference.

Some people appear to be under a misapprehension as to the functions of the Parliament. In. my humble opinion, the Parliament is a deliberative assembly which is charged with the duty of discussing and. considering particular lines of national policy in regard to both civil and military matters. Not all of us in this Parliament are military geniuses. There is, I regretfully admit, an unconscionably large number of military geniuses here, but I hasten to add that I do not- claim to be one of them. It should be borne in mind that the- enlistment of men, the deployment, of troops, and the making, of munitions, are, in the last resort, the work, of experts. On the other hand, the maintenance of the social structure, the preservation of a just balance between different sections of the community, and the finding- and elaboration of facts,, are tasks that properly fall to the Parliament. I take leave to point, out that these are matters and duties- which continue alike in peace and in war, and whether the war be long or short, they continue not only as things necessary to be done, but also, particularly at the present time, as an essential part of the war effort. Mere extravagant rhetoric or bathos if it proves anything at all in favour of the enemy, proves that, like conscience, he makes cowards of us all. Therefore I urge that we should get on with the special work that, pertains to the Parliament - the work of social reconstruction, the maintenance of the: standards of life, the preservation of the rights of those- who through age or infirmity, are eligible- for a small pension, as well as those who are struggling to maintain families on. small incomes, or have no incomes at all. We owe a duty to those who are struggling to fill a place in society, nowithstanding that their condition is not much better than that of their fellows in Great Britain, where, according to the honorable member for Wilmot (Mr. Guy) 50 per cent, of the children are undernourished.

On the 2nd December, 1935, the then Minister for Defence (Sir Archdale Parkhill) delivered a speech in his electorate which he subsequently repeated in this chamber. It was a very important address on defence and entitled him- to more generous treatment than was accorded to him by ‘his successor, who, in defiance of the practice of this chamber and the dictates of fair play, most unjustly criticized him from the back ministerial bench.. Sir Archdale Parkhill adumbrated a defence scheme which was to cost a little over £5,000,000- in 1934-5, something over £7,000,000. in 1935-6 and a little under £7,000,000 in the following year. The aggregate expenditure for the three years was. estimated at £19,518,616, which at that time was regarded as ‘a staggering sum. We listened *o him with bated breath, because it seemed to us that the raising of that rooney would involve an enormous .effort on the part of the people of Australia .so indeed we were told. However, events moved rapidly, and it was not long before we heard the then Treasurer (Mr. Casey), who now occupies a .safe nook in a friendly neutral country, tell the House that the Minister for Defence should be given -a blank cheque in order to prepare for the defence of this country. Even in the present year the Prime Minister draws a distinction - in my opinion not a very logical or hopeful one - between the moneys which must be raised for an indefinite period, and to an indefinite degree for war purposes, and other moneys which may be raised for social ‘services if they can be spared. I understood the Leader of the Opposition to say that the winning of the war was a matter not merely of money, but rather of men and materials. I suggest that if, and as long as, our social structure is to continue, money must remain the index of our capacity to maintain, our fighting forces in the field, as well as our social structure at home. It is an index, nothing more. That fact seems to be recognized in this budget. It seems to be implicit in the figures that I have mentioned as to the draught made -on our resources from time to time. According to the present budget, we propose to exhaust .20 per .cent, of our resources - a greater percentage by far than in any previous year - in defending (his country. All that I am urging at present is that it seems clear that there has been, is now, and probably will continue to be, a regular and rapid increase. If that be so, it seems to me desirable that we should face the facts courageously and honestly, and that we should not hesitate to express what is in our minds. Mere wishful thinking will serve no useful purpose. I have already suggested that rhetorical blatancy of which we have occasional, if not frequent, examples in this chamber, serves no useful purpose. So I say that, .comparing our achievements over the whole field of warlike operations since the beginning of the war, with the objectives as stated in Great Britain, which have been accepted in this country and which, as far as I know, have never been in the slightest degree varied, there is no proof whatever as to whether or not we shall have exhausted our resources bofore we have won the war. It is, therefore, a curious thing that in this budget of exact estimates and forecasts of probabilities and likelihoods, there is no point suggested as to when Ave are likely to have won the war. I know that it cannot be exactly stated, and that at the most it can be estimated only after consultation with other parts of the world particularly Great Britain as to what we have done, the prospects of the future, and the extent of our resources in relation to our aims. Nothing of the kind, however, has been attempted though it is very important. I point out that the time of winning the war must necessarily be antecedent to and not after the exhaustion of our resources. Time is of the essence of the contract. This is one of those cases where one is inclined to quote the couplet -

Oh, the little more, and how rauch it is! And the little less, and what worlds away!

It must be evident that, by maintaining our recent rate of progressive increase of expenditure in conducting the war according to orthodox finance, we must in a very few years have exhausted our resources. That statement can be criticized only on the ground that it is a truism. It has not,, however, been stated in anything that we have heard from the treasury bench up to the present. Even those who favour a wide expansion of credit agree that we cannot live for ever on fighting. The budget is more or less a mathematical proposition. The rhetorical part of the Treasurer’s address in which he appealed to our fears and ‘emotions, while entirely suitable for one of those after-dinner speeches with which some of the great feasts in the city habitually culminate, and eminently suitable at a recruiting rally where emotion always takes precedence over judgment, is entirely out of place in a budget speech. The truth is that the budget is a mathematical proposition, just .as is the proposition that four minus four leaves nothing, .and it serves no useful purpose for the Treasurer to say that four minus four, which usually leaves nothing, in the particular case and under Providence, we hope, will leave five. In the light, of these somewhat chilling comments, J. can express no wonder when the Treasurer says that the need for courage to face such a task is evident. The honorable gentleman may be as game as a fighting cock; he is certainly as amiable as a curate at a mother’s meeting. Indeed, his courage may be as great as that of his late leader, the honorable member for Barker who has always enjoyed a reputation for courage and candour. The honorable member for Barker has developed lately a characteristic even more marked than those which I have mentioned, namely, that distinction of great nobility and capacity for making new fronts against new enemies, as honorable members may have observed. The only distinction I would draw between the honorable gentleman and the great Boer general Christian De Wet is that Christian De Wet always fought the same enemy, whereas the honorable member for Barker is usually at home whether he is driving the political stiletto between the ribs of his friends or putting it into the paunch of his enemies. However, his candour and courage still remain. That is why I propose to quote him as an authority. The Deputy Leader of the Opposition (Mr. Forde) also quoted him this afternoon, but there is a chance that some of my constituents may read the speech of their representative and may not read the speech of the Deputy Leader of the Opposition. Writing to the Acting Leader of the party of which he was quite recently a member, and which he supports in an oblique kind of way from the back bench, the honorable member said -

Everlasting intrigue and manoeuvring for personal advantage reached its zenith in ruptures of the seal of Cabinet secrecy which must ultimately make any Minister’s position inside either a party or a Cabinet untenable. No party can function if its internal state is a stew of simmering discontent, spiced by insatiable personal ambitions and incurable animosities. No leader can lead successfully if he must devote most of his time to outwitting rivals, or to be outbidding them for support, or to watching every footfall lest he stumble on a mantrap or a mine. None of my time has been so spent. If ambition must bc fed at all costs, it must also devour even what it professes most to cherish.

The secretary of the Country party, the honorable member for Wide Bay (Mr. Corser) replied and heaped coals of fire on the head of the honorable member for Barker. He praised him; he thanked him; he applauded him. As a lawyer, I point out to you, Mr. Deputy Chairman, that when a person refuses to plead when charged with a criminal offence, as the Country party was charged by the honorable member in the words that I have quoted, it mav be taken as a plea of not guilty. But in a political case of this kind, especially where a refusal to plead is accompanied by a testimonial to the accuser, it may be taken, I think, to amount to a confession. Therefore the Country party can, without any lack of charity on my part be regarded as standing convicted on its own confession of everything that the most ingenious and truthful of its members and its late leader could say about it. There I leave the Country party for the moment, stewing in the juice to which the honorable member for Barker referred. I have not the time to tell you, sir, nor would 1 harrow your feelings even if time were of no consequence, what the honorable member for Barker has said on other occasions about your leader, the Prime Minister. I merely point out that there is more than one stewpot in this Parliament of which we were not all aware. In his speech, the honorable member deigned to notice me, but he mistook my meekness for weakness, a mistake easily enough made, but often fatal. Prom what I have said it will be apparent to everybody that the courage required for facing the budget is not so great as the courage required for facing the honorable member for Barker. As to the budget itself, and more particularly as to the revenue side of it, I must say that there is disclosed the splendid resilience of big business. The budget shows the confident belief that the vicarious sacrifices which the Government proposes to make, in the loss of lives and desolation of homes, and in the writing down of wage standards and of Christian standards generally, not to mention the world-wide destitution and disease that inevitably follow in the path of war, will all, in the view of those engaged in big business, be compensated for sooner or later by bigger and better profits and the further accumulation of unusable wealth and luxury. That seems to me to be obvious. Indeed in this connexion the budget agrees with business records in general. It will be found, on reference to those records, that share quotations are on the whole excellent. In this respect I commend to the attention of honorable members the speech delivered last week by the honorable member for Kennedy (Mr. Riordan) as it contained some notable illustrations of this point. The chain stores are, on the whole, flourishing. The cormorant emporiums are in a like condition. The steel trusts, insofar as their operations relate to the manufacture of weapons for the destruction of human life, are yielding unprecedented profits to their shareholders, though I must remind the honorable member for Flinders (Mr. Ryan) and the honorable member for Barker (Mr. Archie Cameron) that there are certain difficulties in obtaining a few chains of fencing wire from the Broken Hill Proprietary Company Limited, -or a few sheets of iron from the galvanized iron manufacturers, in order to keep the rain from the heads of working-class families.

Mr Pollard:

– And from the hens in the hen-houses !


– Much more important things than hens need to be kept dry. If we look after the people, the hens will be looked after. Substantial profits are still being obtained from the wholesale chemist businesses insofar as they relate to the sale of poisons or to products made from formulas stolen during the last war. Business is not so good, however, in relation to the retailing of curative medicines. The sale of articles which must be retailed at prices not higher than 2s. 6d., but are commonly worth not more than 6d., are showing a rapid and satisfactory turnover.

It is strange that the reference to articles which must be sold at not more than 2s. 6d. should remind me of the interesting, and, on the whole, admirable speech delivered this afternoon by the honorable member for Henty (Mr. Coles). I do not know why I should, at this point, be reminded that I enjoyed, and, for the most part, agreed with the speech. It lacked bathos, and displayed no attempt at rhetoric. But it also avoided the practice followed by the honorable member for Barker of thinking out a joke one week and passing it off in Parliament as a brilliant impromptu the following week. There was no sob to be detected in the voice of the honorable member for Henty.

I notice that in the year which ended on the 30th June last, it was anticipated that our revenue from customs and excise would yield a little more than £45,000,000, whereas in actual fact it yielded a little less than £54,000,000. I remind honorable members that the greater part of this huge sum was obtained from taxes, in general, upon the working-class people whom it is now proposed to tax, in particular, through the sales, the income tax, and other taxing methods. With a national income of about £863,000,000 it is thrilling to find that slightly more than £500,000 has actually been given to the Government! We have heard, at one time or another, from practically every honorable member opposite - and it may be true - that we are fighting for our very existence. Indeed, from one point of view, it may be said that we are fighting for more than our lives. In the light of that fact, and as the result of the united bellowing of propagandists, members of Parliament, and newspapers, a microscopic fraction of 1 per cent, of the national income, not to mention the capital, which belongs to the rich, has been donated as a free gift to ward off this greatest of all imaginable calamities ! The Government has expressed itself as being very grateful for this microscopic gift. The Treasurer voiced in the budget his deep appreciation of it. All that I can say is that the gratitude seems to be out of all proportion to the value of the gift, and will bring very little consolation to those who have not, but are expected to find, money for the purposes of the budget.

The honorable member for Barton (Mr. Evatt) very well summarized last Thursday, and the honorable member for Capricornia (Mr. Forde) stated in conclusive and detailed elaboration to-day, that it was not a matter of what we have to give, but of what we would have left.

If only that consideration were remembered as the great and chief cannon of taxation, it would help to illuminate: alike the minds of future Treasurers and even of the working-class people.

The numbers, as disclosed in the- budget, of those who are prepared to lay aside without interest a modicum of their unwanted wealth to assist in winning the war is slightly larger than the number of those who are prepared to make free gifts. The amount of money represented under this heading, up to the end of June last, was little more than £3,000,000. It has since swelled to the relatively not very impressive sum of £5,000,000. At least this is a comforting sign to some people of the confident belief and hope that the money-lending business will still go on in the old familiar manner after the war has passed, into history.

Real enthusiasm, however, is manifest in the budget in relation to public loans. The Treasurer stated that, during 1930-40, two public loans were raised on the Australian market. The first of these, floated in March, 1940, was for £18,000,000, issued at par with interest at 3$ per cent, per annum for five years or 3-J per cent, per annum for ten to sixteen years. Of this amount approximately £8,000,000 was for defence purposes. The balance was for the ordinary loan programmes of the Commonwealth and State Governments. The second loan, which was solely for war purposes, was- raised in May. 1940-. It was for £20,000,000 at par, with interest at 2f per cent, per annum for five years or 3^ per cent, per annum for 10 to 16 years. [Leave to continue given.] Both loans were fully subscribed. lt is proposed that, during the present financial year, there shall be a total borrowing, as indicated by the honorable, member for Corio, of £80.000,000’, of which £50,000,000 is to be raised during the unexpired part of the year. When it is remembered that interest on the savings banks’ deposits, chiefly of the poor, is at present less than 2 per cent., it is not difficult to understand why the rich people in the community greedily embrace the opportunities of the open loan market to invest their otherwise unusable- surplus wealth. This is an unanswerable argument in favour of the view that the money lenders feel that after the war the moneylending business will go on as usual. The truth should be told, in this matter,, and it is that neither the rich nor the poor believe the- calamity howlers, and refuse to take at face value what is said by them. They feel that’ there will still be rich and poor, indeed there will be still richer and poorer, still exploiters, and exploited, after the war is over. The rich regard this as an entirely desirablestate of affairs. The poor,. I regret to: say,, seem to regard it as inevitable, although, as one of the poor, I cannot concur in this view.

There is another class of the community which must be considered. Youth must be served. It is the nature of youth to be happy and hopeful. It is the function of society to depress-, distress, cheat, and rob youth of its natural inheritance. But hope still springs eternal in the human breast - especially in the breast of tha young. Youth rejects the philosophy of despair. It rejects the hypocritical pretensions of self-appointed seers and birds of ill omen who for their own evil purposes prognosticate evil to others. Youth rejects the theory that’ their fate is determinable by methods of bestiality and chicanery. Intuitively; youth throws- aside this view. Like Invictus, youth thanks whatever gods there be for their unconquerable Souls

However, the budget indicates clearlythat the rich are not. disposed to give or even to lend their money without, interest. They are not so outspoken as the Leader of the Opposition who has stated that he is prepared to give all. I am sure that my leader will not mind if I qualify his statement by saying, that’ there- are some things that some people, are not prepared to give. Some are not prepared to give their souls in order to win the war. That is a. notable fact. Others require to know much more about it before they are prepared to give their all. They desire to know- how far the follies of. the past are to be repeated’ in the future; whose interests are– to- be served, and to what degree;;, and how farracial pride, ambition and’ greed: will enter into this matter. Before they pledge the best things in life, they will demand to know how far the worst things* in life are the motive for the sacrifice; which they are called upon to make. The rich are living in the high hope and in the wellfounded belief that things will go on as usual. They believe that more strongly than they believe in the Apostles’ Creed itself, because their faith is founded on history and experience. They believe that just before the breaking point is reached, just before our resources are exhausted, the war will come to an end. They believe it not as economists and financiers, and not even as philosophers, but intuitively, because it has always been so.

Dining this debate on the budget, a great deal of argument has been heard about the relative merits of loans, credit and taxation, but the truth is that if the war is to continue until the calamitous conclusion foreshadowed by the Government is reached, it will be a matter of little difference whether the struggle is financed from taxation or from credit or loans, for the very simple reason that, in the words of Hanrahan, “ We shall all be rooned “. I do not imagine that it will be so. Quarrels between nations can be stated in domestic terms, just as finance can be expressed in terms of domestic economy. It may happen that neighbours, who are farmers,become involved in a feud one with the other. This illustration was suggested to meby the honorable member for Gwydir (Mr. Scully). The dispute commences with a few hard words. Then the wives are seen to turn up their noses at each other as they pass, and the children quarrel with each other. So the feud goes from bad to worse, until one night the rails are let down and cattle wander on to the neighbour’s crop. The trouble then extends a little, and a match is set to a crop. All this time the mortgagee looks on, profiting by the passions of the combatants, and ready to lend up to acertain point on the intrinsic value of the basic security, until all the improvements are destroyed, wells are poisoned and so on. Then the mortgagee steps in, turns the screw and will advance no additional money. A kind of sullen toleration between the warring parties is then created. At this stage, the mortgagee, who has exploited the passionsof the combatants until their resources are exhausted, proceeds to exploit their necessities in the reconstruction or refurnishing of the farms. As it is with individuals,so it is too with nations. In all history, the result has been the same. The fight ends just before resources are exhausted, because the end of all international conflicts is dictated by high finance all over the world.

I trust that the amendment submitted by the Leader of the Opposition will be carried. I support it for reasons which I explained briefly at the beginning of my speech, and although I do not look for any revolutionary changes - I do not refer to the state of the Parliament - to arise from the carrying of the amendment, at least it points an accusing finger at the persons who ought to he accused, condemns the Government where it ought to be condemned, and suggests lines of amelioration and betterment for the people consistent with the best effort that we can make to support overseas our stricken friends who, save for the blatant propagandists are unheard by us in their agony,but for whom each and all of us have the very deepest sympathy.


, - Before analysing the amendment submitted by the Leader of the Opposition (Mr. Curtin), I desire to say that no one regrets more than I do the circumstances that have caused me to represent the division of Wakefield. The late Hon. Charles Hawker, who represented the constituency for so many years with such great credit not only to himself but also to the whole of Australia, was from his youth my life-long friend. I have nothing to say against his successor; but I declare without hesitation that Australia has rarely received a more severe blow than it did when Charles Hawker was killed in a tragic air disaster near Melbourne.

Having listened to this debate for some days, I am now wondering, as I have often wondered before when I have been in Canberra, about the reality of it all. I ask myself whether it is possible that we here can be so far detached from the feelings of the people as one would imagine fromthe speeches to be the case. I was glad to hear the concluding words of the honorable member for Batman (Mr. Brennan), because they brought us, to some extent, on common ground,but his utterances were directed principally against the rich of this country. From the remarks of the honorable member one would imagine that Australia is a country in which the rich spend their time grinding down the poor. In point of fact, any person who, like myself, has travelled in many lands, knows that conditions in Australia are equal to those of the most advanced nations.

Mr Martens:

– No; only the conditions enjoyed by the rich.


– That is the kind of interjection which makes the formation of a national government so difficult. This bitter spirit obtrudes into the debate, as honorable members heard in the remarks of the honorable member for Batman (Mr. Brennan) and in the interjection of the honorable member for Herbert (Mr. Martens). I say emphatically that while a country has bad rich, it will also have bad poor. I have no reason to believe that the rich of this country are any worse than the rich of any other country. It is these acrimonious and unnecessary remarks which make it so difficult for the people to pull together at a time when unity is so necessary.For some time past I have been travelling about my district, which is of a very large area, larger, indeed, than Italy, but somewhat smaller than France. I have attended a number of war rallies in my own State, and everywhere I was impressed by the desire of all sections of the community that Australia should make a united war effort. I was sent to Parliament to ensure, if possible, a more vigorous war effort than we have hitherto achieved. I was also aware of the desire of those who attended these meetings - and they were big meetings too - that there should be a national government, that all sections in the Parliament should pull together for the benefit of the whole community, as has been done for some time in Great Britain. There was also a desire that equal sacrifices should be made by all sections of the community. For that reason many Labour men, who would normally vote for Labour candidates, voted for me. Now, when I come here two and a half months after the election, I am very conscious of that same sense of unreality to which the honorable member for

Barton (Mr. Evatt) has referred. Instead of our war effort being more vigorous, it is more feeble than when the elections were held, and that is the message which I must send back from here to my electors. What is the reason? It is because the Prime Minister, who has been doing his best to induce the various groups in this Parliament to work in unison, has hitherto failed.

Mr Falstein:

– He has failed with the members of his own party, too.


– That may be. I do not suggest that any party is perfect. I am not here to make points, but to tell the electors what is the position, and I say that we are further behind than we were three months ago. We shall have nobody but ourselves to blame if we are overtaken by that retribution which has been threatening us for some years past, and which is much closer to us now than when I was last in Parliament. All over Australia there are strikes for quite unnecessary reasons. Their purpose is not to relieve hardships imposed by the rich upon the poor. Those responsible for them are holding up production at a time like this because of some trivial claim for higher pay.

Mr Falstein:

– And, of course, the employer is never to blame.


– I do not say that, but in this particular case the employer is not to blame.

Mr Falstein:

– When it comes to a specific case, he never is.


– I know what the man in the street thought of the coal strike six months ago, and I can imagine what the general public think of those who, by striking, are holding up our war effort at the present time.

Mr Falstein:

– What about the men who are working twelve hours a day in the munitions factories?


– Well, and have not the workers in Great Britain for long been working even longer hours ? For years past we have been claiming equality with Great Britain, and the other units of the Empire. Well, surely the possession of equal rights carries with it equal obligations and liabilities at a time when the whole Empire is threatened.

Mr Falstein:

– We have not adopted the Statute of Westminster.


– I know that, and it is a good thing that we have not, but the fact that we have not is no fault of certain honorable members opposite. Several days ago I picked up a newspaper, and read in large headlines that an English town had been raided by 100 German bombers which made a continuous attack lasting over several hours : An important town in the west of England had suffered its worst raid of the war. On the same page, in somewhat smaller type, I read this heading, “ Curtin on tax burden “. There we have the two sides. There we have the record of smashing blows against Britain, if not every night, at least at frequent intervals. Every second or third night one big English town is severely bombarded, while here we are talking and wasting our time over details of the budget, and whether somebody is to get some little advantage out of it one way or the other. I suggest that we ought to do as much in Australia as they are doing in Great Britain. Perhaps we ought to do more, because up to the present we have done so much less.

Had it been a normal budget, I should have had something to say in detail about its various features. Probably I should have said something about the land tax, and immediately my friends opposite would have said that my interest in the matter was due to the fact that I am affected by the land tax. I do not approach the matter in that way. I would point out, however, that the land tax hits a great many persons who are suffering the effects of a very severe drought. Personally, I hope to be able to pull through, but in my district there are thousands of people who are in a bad way because of the bad season. I do not give the Commissioner of Taxation much chance of getting the land tax out of them, and this does not seem to be an opportune time to increase it. I am not grumbling. Every body must be prepared to pay his share, but, just as it is impossible to get blood out of a stone, so it will be impossible to get revenue from many of those who are suffering as the result of drought. When we must pay such enormous sums for war purposes, I can see no particular reason why we should impose upon ourselves a further burden of £4,000,000 in respect of public works, including post offices. No honorable member can suggest that in recent years the Postal Department has been starved, The reverse has been the case. I admit that that department is rendering good service ; but, surely, in a time of crisis, when we are obliged to expend more lavishly in order to ensure our very existence, we should not expend our money unnecessarily.

I object to differential rates of sales tax. Three different rates are proposed. Big firms which can afford to employ specialists to attend to such work can manage under such a system, but every honorable member knows that the sales tax is an intense worry to the smaller man in business. This proposal will make it still more difficult for the smaller man to make out his sales tax returns. Whilst I do not intend for one moment to oppose the Government on this, or, probably, any other issue arising out of the budget, I regret the imposition of differential rates of sales tax.

I shall support the budget principally for three reasons.First, it is a genuine move towards winning the war. I was elected to this Parliament in order to help as much as I possibly could in that respect. Certainly, I was not elected to this chamber merely to make humorous speeches, for which task, indeed, I am, perhaps, ill equipped. In the present crisis no honorable member should occupy his time in that way. Secondly, I support the budget because, as I read it, and I have studied many budgets in the past, it is a genuine challenge of sound finance against unsound finance. It represents a fair balance between the various ways of raising money, by loan, by taxation and by credit expansion. In that respect the budget seems admirably balanced. Of course, all of us have the satisfaction of knowing that no budget is introduced into this Parliament in the framing of which experts, who know a great deal more about finance than honorable members, have not played a part.

Mr Ward:

– The representatives of big monopolies, for instance.


– That does not necessarily follow. I know of some professors of political economy whose political point of view is rather on the side of Labour. It is useless to gibeataman merely because hehas ability, or, for that reason, to suggest that he is actuated by some ulterior motive, or has some dirty idea at the back of his mind. Normally, people are not built like that. There are, no doubt, financial experts of every shade of political opinion. I do not sneer at a professor of political economy merely because he happens to hold Labour’s political beliefs. He is entitled to his political point of view, whatever it might be. At the same time, however, I do not expect honorable members opposite to sneer at the opinions of a professor of political economy who happens to disagree with Labour’s politics. I listened with interest to the honorable member for Corio. I should not recommend him to go in for inflation if he has any concern for his salary, because it is well known that those on fixed salaries suffer most from evils of inflation.

Mr Ward:

– Will the honorable member explain inflation?


– I do not propose to go into a dissertation on banking at this juncture. However, if the honorable member wants to see the effect of inflation I recommend him to study economic conditions in Austria following the last war. He should read C. A. Macartney’s book Social Revolution in Austria. If he does so he will obtain a good idea of the evils of inflation. If he wishes to study the dangers of inflation nearer to home, I point out to him that during last week-end when I walked past the great Savings Bank Building in Sydney, I could not help recalling how, ten years ago the Commonwealth Bank had to take over that institution in order to save it from crashing owing to the threats of repudiation on one side and inflation on the other. People who have any doubt whatever about the soundness, or unsoundness, of financial methods would be well advised to read what happened in this country in 1931-32. I remind the honorable member that at. that time I was a member of this Parliament; and I have spoken on inflation, and kindred subjects, on many occasions before he had the honour of entering this Parliament. When listening to the fluent speech of the honorable member for Corio I was also struck by the fact that, although he condemned the Government’s proposal to borrow internally - and he seemed to condemn nearly every proposal connected with the budget - he suggested that we should be welladvised to float loans externally, mentioning in particular the United States of America. What chance would we have of floating loans in the United States of America, or any other foreign country, if we subscribed to the financial methods advocated by the honorable member?

The third reason why I support the budget is because it is a genuine attempt to spread the sacrifice involved evenly and fairly over the whole of the community. Whilst taxes are to be levied on incomes of a lower level than previously in this country, they are not so severe as those applying in New Zealand. The Treasurer (Mr. Fadden) in his budget speech, said, “ From the circumstances of the case the full strain comes on us here very suddenly.” All I can say on that point is that it is our own fault if the strain comes on us suddenly, because, quite obviously we did not make the preparations which we should have made many years ago. However, I shall have something to say on that subject at a later stage.

Mr Falstein:

– Such as the conservation of petrol supplies, for instance.


– HUGHES. - We should have applied petrol rationing very firmly months ago. The budget, I repeat, attempts to spread the sacrifice involved as equitably as possible over the community as a whole. After all, a rate of 14s. in the £1 for Federal and State tax combined, on higher incomes, is a fairly strong beginning.

Mr James:

– The people with the higher incomes have more left to live on than the man on the basic wage.


– The honorable member’s interjection reminds me of the statement which I heard in this chamber a few days ago, that the budget will make the rich richer and the poor poorer. That assertion laughs itself fight out of court. Any one who says that a tax at the rate of 14s. in the £1 will make the rich richer, condemns his own argument. The real truth is that for years past we have been living in a country in which more has been done for the poorer sections than has been done in any other country of the world; whether it be in connexion with old-age pensions, Arbitration Court awards, or constantly rising tariffs. In conjunction with Arbitration Court award’s, the same thing is apparent, from babyhood to the hour of death, namely, that the conditions of the poorer sections of the community are as good in Australia as in any other part of the world. Yet, in a time of the greatest emergency, when the whole of these benefits may collapse, and the Government suggests that a small rate of tax shall be imposed on the lower incomes, there is this outcry from Labour members, “ Where is this equality of sacrifice ? Where is this “ allin “ of which we have been told ? The honorable member for Corio (Mr. Dedman) said, “ We want to strain every nerve and sinew in order to win the war “. If does not seem that every nerve and sinew is being strained when it is suggested that the smaller people, on incomes only beginning at £150 a. year, should1 not pay a penny by way of direct, tax. That is not making a great effort, of nerve and sinew.

Mr James:

– Boloney!


– The honorable member may state the position in his own elegant way.. Then there is the honorable member for Barton, who says that the Opposition stands behind the whole of the war effort. That, is the position, I fear, only so long as certain supporters of honorable gentlemen opposite do not have to make any contribution to the war effort. That is not my idea of an ail-in war effort, nor is it the idea of those whom I represent. I have in my electorate 55,000 constituents, who represent all sections of the community, yet since this budget was presented a fortnight ago I have not received a letter of protest from one of them. They are much more prepared to stand up to the collar than are many constituents of other representatives in this chamber ; not that I blame those representatives for d’oing what they can for their constituents. The result of all of these benefits I have mentioned has been the promulgation of the idea that no obligations rest on the people^ with small incomes. Such an argument cannot be sustained in a time like the present. We are all under the obligation to serve, whether ifr be in the military, the industrial, or the monetary sphere. Why has this taxation suddenly become so heavy? It has been perfectly obvious for years that there was; every likelihood of another war. I feel that it is my duty to remind the committee that for years a handful of us repeatedly told the Commonwealth Parliament and the country that they must prepare for war. In the first speech that I made in Parliament in 1922, I said that we could not expect to escape further wars. The BrucePage Government for years carried out a certain degree, of defensive preparation. Then those preparations began to decline, until the Scullin Government more or less abolished them.

Mr George Lawson:

– Why?


– Partly, I think, because it desired to do so. I am well aware that it had to impose severe restrictions on its expenditure generally, owing to the financial condition in which it found itself, but was that a reason for hitting defence- in greater degree than any other activity, or for abolishing universal training, which had served Australia so well in the. last war ? I pay tribute to my friend, the. honorable member for Barker, in this respect. During recent years, there have been in the Commonwealth Parliament men who have repeatedly addressed themselves to this question. When I was a member of another branch of the legislature up to two and a half years ago, interest was taken in the matter only by about a handful of members, including. Senator Sampson, who I am glad to see is returning to the Senate, Senator Brand, the honorable member for Barker, the late honorable member for Wakefield (Mr. Hawker) and the ex-honorable member for Bendigo (Mr. E. P. Harrison). We told both Houses that the present conditions would arise, and that we should prepare to meet them. What success attended our endeavours to persuade Parliament, and particularly members of the Labour party, who in those days suggested’ that we were blood-thirsty militarists, who wanted to plunge this country into war, notwithstanding the fact thatmost of us had served in the last war, and certainly did not want another? Had our advice been heeded, Australia would have been in an infinitely better position than that in which it found itself to carry on this war. The following figures give the expenditure on defence from the year 1926-27 to the year 1936-37 : -

Mr Calwell:

– A depression year.


– Very likely ; but the depression was not felt all of the time. The figures for subsequent years were as follows: -

One of the principal reasons for the existence of this Parliament, as is made abundantly clear in the ‘Constitution, is that it shall defend this Commonwealth and the States of which it is composed. I have shown how that has been done. I have heard some critical remarks about the honorable member for Barker. That honorable member will at least be remembered as one who, when this country was approaching the present crisis, spoke constantly of the need for greater war preparations.

What distresses me a great deal is the fact that, even now, honorable members do not seem to have learnt their lesson. Apparently they do not realize what is taking place on the other side of the world, or, if they do, they do not seem to care about it. I desire to be fair, but I must say that I have heard speeches on this budget, even from my own side of the House, which struck me as indicating over-concentration on comparatively unimportant matters. I agree to a great extent with the honorable member for Wilmot (Mr. Guy), who urged that the winning of this war is almost the only thing that matters at the present time.

Although the honorable member for Batman remarked that “- neither the rich nor the poor believed the calamity howlers “, I can at least point to the fact that what I have said for nearly twenty years about the defence needs of this country has been proved true. There is justification now for urging this Parliament to bestir itself. The war situation generally may not be getting worse, but the dangers confronting Australia are coming closer to us. There is an old saying, “ When your neighbour’s house is on fire, you had better look to your own “. I suggest to honorable members opposite - and I have friends amongst supporters of the Labour party - that this is not a time for mutual revilings and bitter exchanges. There should be no suggestions about members on this side of the chamber who happen to enjoy a different degree of affluence from others. Australia will pull through its troubles if it is given a reasonable chance. The people are not to be blamed if they are unable to pull together ; the fault lies with their leaders. I am not referring to the Prime Minister or to the Leader of the Opposition, but to the whole of us collectively.

In dealing with our foreign policy, I have always advocated that we should be at least civil to foreign countries. Australia has done what it could to obtain trade treaties with other nations, but it seems to me that the trade diversion policy adopted and the tariff barriers erected some time ago were unwise as well as irritating to nations bordering the Pacific. In my opinion, it would have been advisable also to permit more migration.

Before I recently returned to this Parliament, I watched its work closely, and wondered how soon it would get on with the real job in hand, but what did I see? Shortly before the war began a national register was introduced. The only important information that might have been obtained by means of the cards issued was the military experience of the persons concerned. All of the other details that it was essential to know were already obtainable from taxation returns. Many men in Australia have had military experience of which we have no record; but owing to the omission from the register card of a question on that matter, a good opportunity to collect useful information was lost.

Mr Ward:

– Why was a wealth register desired at that time?


– I suppose that the Government wished to know the extent of the wealth of Australia, but it was essential, from a defence point of view, to ascertain what military experience people had had at a time when very few men were trained for service. A list of reserved occupations was drawn up in 1939, and, instead of showing who were to go to the war, masses of pages of reserved occupations indicated the classes of citizens whose services were considered to be so valuable that they could not be spared for service in the defence forces. That is not the proper way to fight the greatest military power the world has ever known. Germany is strongly entrenched, and its strength was being spread abroad, whilst the intentions of two or three other powerful nations have not been disclosed. The only way in which to meet force is by the employment of force. Against a nation such as Germany, it is necessary to employ its own weapons and to fight it relentlessly. As the honorable member for Corio said, we should put every nerve and sinew into the contest. In a speech delivered by me about five years ago, I read a translation of a poem written some 2,000 years ago. My object at that time was to awaken the public to a sense of its responsibility, and, for the same reason, I shall quote the lines again. They are a translation from a Greek poem by Alpheus of Mitylene, who, looking upon the ruins of Mycenae, said-

We seek a hero’s birthplace, and what does yet remain?

A mound perchance that hardly breaks the level of the plain;

And such I found Mycenae where lonely lieth she,

More lonely than a rock that stands beside a lonely sea:

A thing for hinds to point at. And here an ancient said,

Where once Mycenae’s gold was stored, to-day the goats are fed.

We may find ourselves in a similar position in Australia unless we bestir ourselves as a nation, and take a fair share in the task now confronting the Empire. If this Parliament were alive to the dangers with which we are confronted, there would be no such talk of the details of taxation measures. We should not be worried whether a little more tax should be taken from one section and a little less from another. The taxation proposals of the Government would be agreed to with all reasonable expedition, and with a minimum of criticism. I could find cause to criticize these proposals if I desired to do so, but I do not; because at no other time in our history has it been necessary to respond to such an urgent call as has now come to every citizen to help to defend our Empire. Then again on the question of man-power, if this Parliament did what, in my judgment it should do, it would apply complete conscription of man-power for service within Australia or outside Australia.

Opposition Members. - What about wealth?


– Wealth is always conscripted under the taxing power which this Parliament possesses. Does any one suggest that this is a volunteers’ war, that we have the right to ask hundreds and thousands of young men to go and do the job which is everybody’s job? This war, as the honorable member for Corio said, will require every nerve and sinew that we have. It is grossly unjust that we should have whole families of young men going to the war and other families of young men doing nothing. This is the nation’s job and the nation should carry it out.

With that I leave the subject to-night. In spite of a certain number of interjections which recognized the fact that I have spoken in this Parliament before, I give my thanks to the committee for the kind, way in which it has listened to me.

Progress reported.

page 401


Coal, Oil and By-Products Proprietary

Limited - The People’s Declaration - Air Raids Precautions

Motion (by Mr. Collins) proposed -

That the House do now adjourn.


.- I direct the attention of the House to a matter of extremely urgent importance to Australia and the Empire, particularly in relation to our war effort and to home defence. It vitally affects our security and our very existence is involved, because in a mechanized army oil is allimportant. Whoever controls fuel supplies will win this war. I have charges to make against the Government whel] I shall prove by facts. I am pleased that the Assistant Minister (Mr. Collins) is present, because I feel confident that he will assist me. I should like the Treasurer (Mr. Fadden) and, if possible, the Prime Minister (Mr. Menzies) also to be here, because the charges I intend to make warrant their attendance. We have heard from the other side of the chamber platitudes about unity and winning the war, but I direct attention to an application by a proposed company known as Coal, Oil and By-Products Proprietary Limited for a permit to raise a capital issue. This company proposes to raise £5,000 to instal a commercial unit to operate, by low temperature carbonization, on coal and shale deposits near Berrima, adopting the Edwards retort and process as covered by Commonwealth Letters patent. The works would be established on a working colliery and nearby shale areas. No money from the capital proposed to be raised would be used for mining purposes. The proposed capital named, £5,000, is now lying in the office of the solicitors of the company and in a trust account with the Bank of New South Wales. Not one penny was needed from the public. The syndicate has expended nearly £1,700 in the last few months and has been paying £90 a week in wages to carry on demonstrations and testing work as the result of which it is prepared to install a commercial unit. The people concerned cannot proceed further as a syndicate. Two months ago this company applied to the Treasurer for permission to proceed with its operations. After that its members made several inquiries by letter, telephone and personal attendance and also by representations through honorable members including the honorable member for Eden-Monaro (Mr. Perkins) and the Assistant Minister (Mr. Collins), who personally know some of the gentlemen concerned. They also received several questionnaires from the Treasury to which they replied, apparently quite satisfactorily. The department then asked whether the people concerned would permit a demonstration before Mr. Rogers, Commonwealth fuel expert. They willingly did so, because they welcome any investigation of their project. Mr. Rogers made the test a week ago and from their observations, those concerned thought that everything was quite in order. Last Thursday they saw Treasury officials at Canberra and were advised that the report by Mr. Rogers was expected in the next mail. They still thought that -everything would be in order, but on the Saturday they were astounded to receive a letter, the reference number of which was C. 23960, from the Treasury, stating that their request for registration had been refused. They came to Canberra to-day at the request of the honorable member for Eden-Monaro, to interview the Treasurer, but he could not see them, as he was otherwise engaged. To-night they saw the Assistant Treasurer, and he informed them, I am told, that he had inquired into the matter and that everything was quite all right, because Mr. Rogers’ report was favorable, the test having shown that 37 gallons of crude oil to the ton can be produced and that the coke is satisfactory. The Assistant Minister added that the Treasurer was trying to get the application through. Then he was told that he would be surprised to know that the Treasury had turned down the proposal last Saturday. He said, “ It is incredible, I cannot understand it “. Later the honorable member for Eden-Monaro saw the Treasurer who promised to-do his best in the matter. Just prior to raising this matter on the adjournment I was informed that the people concerned have been told that if they waited one minute the Treasurer would sign his consent. I am concerned, not with individuals, but with the national aspect of this matter, because of the urgent need for obtaining petrol supplies in this country. I want to know what sinister influence is controlling government policy in this matter. Are we still under the old jungle law which in the past prevented companies from investing their capital in the search for flow oil in Australia? Are those tactics to operate in war-time as well as in times of peace? Surely our desperate position calls for something different. I draw attention to the following article in the Sydney Sunday Telegraph of the 29th September, 1940 : -

page 403


It’s Easy to make Petrolfrom Coal.

Australia faces stringent petrol rationing from next Tuesday.

People are asking why has no attempt yet been made to extract oil from the vast deposits of coal in this country.

While we temporize with the problem Britain is producing oil from coal in large quantities.

British lighting planes now defending England are flying on petrol made from coal oil.

The petrol - called coalcne - is made simply and cheaply as a by-product in the manufacture of high-grade coke.

The company which makes the petrol, Low Temperature Carbonization, Ltd., has had an extraordinary success since it began production a few years ago.

In 1935 the original shares of the company, nominally valued at£ 1, were considered to be worth £200 each, and even at this figure returned a dividend of 17 per cent.

The company is privately financed and neither seeks nor obtains assistance from the British Government.

Early in 1933 the Royal Air Force, after exhaustive tests of coalene, ordered bulk supplies and found the fuel so satisfactory that in 1935 360 machines in 20 squadrons were using it as a normal supply.

The number of fighters and bombers now using the fuel is not disclosed, but it is far in excess of this five-year-old figure.

Honorable members know the dislocation of industry that the rationing of petrol has caused. Thousands of workers have been thrown out of their employment and many business people have been ruined. I am informed that at the request of the Department of Supply and Development the major oil companies propose to restrict the quantities of petrol to be supplied to distributors, in order to conserve the nation’s petrol supplies. That is a new reason for the rationing of petrol. Previously, we were told that rationing was necessary in order to save dollar exchange and, later, the reason given was the losses resulting from the sinking of tankers. This is a most important matter. It is extraordinary that the Government will not take action to extract oil from coal as has been done in Germany for some years. Huge supplies of oil have been obtained there from this source. The Government is not content with failing to encourage the development of this project; it is actually discouraging development, particularly by small producers. Although an agreement entered into between the Commonwealth Government and the Government of New South Wales of the one part and a company operating atNewnes of the other part, provided that the two governments would contribute the major portion of the capital, a report, which incorporated the opinion of Mr.Rogers the government fuel expert, pointed out certain disadvantages associated with the scheme. The report stated -


  1. The usual hazards involved in the development of an industry which cannot be started in a small way, but must proceed rapidly to full production.

The company to which I have referred intends to operate immediately at Berrima. The plant is already in operation, and extensive testa have been carried out in the presence of many people. Over 300 persons have seen for themselves what is taking place.Representatives of the local press and of local government organizations are convinced that the plant will he an acquisition to the district and to the State.


– I am not sure. I understand that during the public demonstrations which have been carried on for about twelve weeks the recoveries from coal havebeen at the rate of from 33 to 38 gallons of crude oil to the ton, and from131/2 to 14 cwt. of smokeless fuel or coke. From shale recoveries over 100 gallons of crude oil to the ton have been obtained, the petrol recovery being 57 per cent. Kerosene and diesel oil have also been obtained from the residue. The company operating at Newnes expects to produce from shale only about 80 gallons of crude oil to the ton with 45-48 per cent, petrol recovery. The company to which I have referred possesses 3,387 acres of freehold property and has available 40,000,000 tons of coal and many years supply of shale. It is, therefore, no mean concern. Moreover it has received assurances from an independent oil company that its products will be purchased. For obvious reasons, I cannot give the name of the company but I can say that it is not a concern connected with, tlie major oil combine. The following letter has been received from the company -

Further to the writer’s conversation with you of the 13th, we confirm that subject to the matter of price and quality being standard we are prepared to enter into contract with you for your total output of benzol and diesel oil up to any quantities that you can produce. As you know we are an independent company entirely free from the operations of the majors and are in a position to govern our own organization. When the time arrives we shall be glad to confirm our financial stability, but in the meantime if you want confirmation wc refer you to our bankers . . .

Some time ago the honorable member for Werriwa (Mr. Lazzarini) pointed out in this House that a project at Mittagong was held up, and registration of the company and consent of capital issue disallowed, following a report by Mr. Rogers. Ultimately, following representations made by the honorable member for Werriwa, consent was given. Honorable members will see that influences are at work to hold up the production of oil in this country. The following extract is taken from the Sydney Sunday Sun: -

page 404


Mittagong Shale Oil Plans

The whole petrol situation in Australia is on the verge of such changes that developments will be revolutionary.

That claim by the State Government’s Bureau of Information and Development, is based on reports of experts on the Mittagong shale oil field which will go into production in about ten days.

Tests made by Sydney University and the Mines Department give 60 per cent, recovery of refined motor spirit from crude oil.

Official tests also reveal that it is equal to the highest grade petrol on the market.

From the launching of the Bureau by the Minister for Labour and Industries (Mr. Gollan), it has nursed the shale oil project at Mittagong, and the Under-secretary (Mr. C. J. Bellemore), anticipates that it will ultimately absorb considerable numbers of unemployed.

Six Retorts at Work.

Six retorts will be in operation in ten days’ time, and it is proposed to establish batteries of these on various shale leases throughout the Commonwealth.

Mr. Richard Thompson, M.L.C., economic adviser and commercial consultant to some groups interested in shale oil production, said yesterday that his interests had already expended more than £20,000 on experiments, without Government assistance, in developing units suitable for decentralized production.

Mr. Thompson added that the Mittagong company had patented the Gotting retort which does not involve a cracking process, and which can be built for a few hundred pounds.

Experts pointed out yesterday that the Gotting process has eliminated coagulation, which has been one of the major difficulties of shale oil production.


Bureau officials are proud of the fact that the Mittagong production is 100 per cent. Australian and that no licence-fees for royalties will be paid for overseas patents.

Keenest interest in motoring circles is centred on the possible effect of Mittagong supplies on petrol prices.

It is claimed that initial costs of the units are so slight that the petrol can be produced at a sensationally low price.

No hint of what the price will be has been released, but the company, which has a nominal capital of £10,000. has its containers all ready for production.

Mr SPEAKER (Hon W M Nairn:

– The honorable member’s time has expired.


.- This afternoon I asked the Prime Minister (Mr. Menzies) whether he would lay on the table of the Library two volumes of The People’s Declaration that had been presented to him by the Moral Rearmament movement. Accompanying the volumes was a letter addressed to the Prime Minister, which reads as follows : -

On behalf of those men and women who are working for the moral and spiritual rearmament of .their nation, I have great pleasure in presenting to you and to the members of both Houses of the Federal Parliament this evidence of a new spirit of unity and co-operation throughout Australia.

These two volumes of The People’s Declaration contain the signatures of Australians drawn from every walk of life and from almost every corner of the Commonwealth. It is from amongst such people that the core of an inspired public opinion will be formed which will stand the test of any crisis. They aim’ to keep the standards of the nation high by practising in their homes and businesses those principles of honesty and unselfishness which must form the foundation of a helpful Australian national life, and which will bc a constant counter to the subversive forces loose in the world to-day.

We respectfully ask you as our Prime Minister to accept these volumes and to make them available to all members. They may find encouragement in the knowledge that there is an ever-increasing number of people who are learning to sacrifice their selfishness for the sake of their nation instead of sacrificing their nation for the sake of their selfishness.

This movement has gained a considerable impetus, not only in Australia, but also in Great Britain and the United States of America. If honorable members will examine the volumes now in the Library, they will find that its Australian adherents represent people in all walks of life. The following paragraphs from a letter recently received from the United States of America indicate the growth of the movement in Great Britain and the United States of America: -

Among the leaders oE American political life who backed the launching of moral rearmament in Washington were the Secretary of State, the Secretary of War, the AttorneyGeneral (who made a moving statement from the Catholic point of view), and several other members of the Cabinet, also the Majority and Minority leaders of the Senate and the House of Representatives, and among many others eight members of the Foreign Affairs Committee, including Senator Borah.

J lie statement of the Speaker of the House that moral rearmament is a “bulwark of the democratic traditions, and a basis of unity throughout the nation “, and the statement of President Roosevelt that the scope of moral rearmament must be world wide, sum up the convictions of responsible people over here.

The initiative of these American leaders received splendid support in messages from representatives of eleven parliaments, including a striking statement from 236 members of the House of Commons, as well as from leading British industrialists, and from the chief figures of British labour.

The following cable message was recently received from Mr. Ben Tillett, the grand old man of the British Labour party: - Labour and trade union movements had their origin in divine discontent with the existing social order and their main appeal has been made on ethical grounds. Moral rearmament is the present expression of that spirit. By its acceptance, the noblest cooperative ideals in life and in industry can be realized. Your convention is meeting at a moment when great sacrifices are being made for freedom and democracy. You can once again give a lead to millions and encourage them to break with a discredited past, and set about the task of founding a new world based on God’s eternal standards, absolute honesty, purity, unselfishness and love.

That outstanding testimony conies from a man whose name has been a by-word in Great Britain for many years. I commend the basic principles upon which these volumes are founded, and I invite honorable members to peruse them.


– I protest against the futility of the Government’s policy in relation to air raid precautions. As honorable members know, the task of providing protection for the civilian population has been entrusted to the various State governments. Unfortunately, however, they have merely tinkered with the job. I represent a constituency comprising 100,000 souls. These people live in a densely populated district yet nothing has been done to protect them against the dangers of attack from the air. It is shameful that the Government should have made such paltry provision in the Estimates for air raid precautions. It is the responsibility of this Government to provide air-raid shelters at least for the protection of those living in the thickly-populated areas of our capital cities. If a squadron of enemy planes arrived over Sydney there would be a great public outcry against the failure of the Government to provide adequate protection for the people. Last week the honorable member for Wakefield (Mr. Duncan-Hughes) stressed the necessity for adequate preparations in Australia to meet the contingencies of war. Australia must be prepared to face all the dangers inherent in its participation in the war, and adequate precautions should be taken for the protection of the civilian populations of all the great cities of the Commonwealth. The Government should immediately undertake the building of bomb-proof shelters in the eastern suburbs of Sydney which, in addition to being thickly populated, are most vulnerable to attack. Work should hr commenced immediately on the construction of shelters in the electorates of Wentworth, East Sydney, Cook and Watson. The building of bombproof shelters in the eastern suburbs of Sydney is long overdue. In fact a vigorous policy for the provision of air-raid shelters is needed throughout Australia.

Another matter to which the Commonwealth Government in consultation with the Government of New South Wales, should give consideration, is the advisability of putting in hand at once the construction of the proposed eastern suburbs railway. For a considerable period every parliamentary candidate for a constituency in the eastern surburban area of Sydney has advocated the construction of the eastern suburbs railway. This work would not only contribute towards the solution of serious transport problems, but would also, I consider, serve a vital defence need. If this Government is to manifest any semblance of responsibility for the utterances of its supporters, it should take action along these lines.

One consideration that honorable members opposite are apt to overlook in connexion with this war is the importance of protecting human life. It seems to me that more attention is heing given to the protection of property than to the protection of human life, although the statisticians tell us that every Australian child is worth about £2,000 to the nation. Surely, the protection of human life is at least as important as the protection of property. I again request the Assistant Minister (Mr. Collins) to bring these matters under the notice of his colleagues.

Assistant Minister · Hume · CP

in reply - The matter referred to by the honorable member for Reid (Mr. Morgan) relating to proposed activities at Berrima was brought under my notice by persons interested in the project who requested me to place it before Cabinet. This I did. The Treasurer has assured me that the subject will be fully considered. The remark of the honorable member for Reid that I said that everything would be quite all right is not correct. Decision in such matters rests with the Treasurer, and not with an Assistant Minister.

Question resolved in the affirmative.

page 406


The following papers were pre sented : -

Commonwealth Public Service Act -

Appointment of A. C. I. Warner, Department of Health.

Regulations (Parliamentary Officers) -

Statutory Rules 1940, No. 229.

House adjourned at 11.24 p.m.

page 406


The following answers to questions were circulated: -

Bounty on Wheat

Mr Langtry:

y asked the Minister for Commerce, upon notice -

In view of the refusal by the Government to make an immediate advance of Gd. per bushel on the No. 2 wheat pool, will the Minister pay a straight out bounty of 10s. an acre on all land on which the crop has completely or partially failed this season?

Sir Earle Page:

– The two questions are separate and distinct. The advances made and about to be made on the 1939- 40 harvest amount to 3s. 51/2d., less rail freight. As to the failure of the 1940- 41 harvest, the Commonwealth Government took the initiative in consulting the States in regard to drought relief, and arranged a special loan of £2,770,000 to enable the States to assist wheatgrowers who are unable, unless assisted, to carry on because of the effects of the drought.

Taxation Exemptions

Mr Langtry:

y asked the Prime Minister, upon notice -

Is it a fact that this Government and the Lyons Government have given taxation exemptions in respect of the following items to the extent indicated, viz: - land tax, £8,000,000; property tax, £16,000,000; company tax, £5,600,000; life assurance companies, £4,500,000; shipping companies £150,000; or a total of £34,250,000?

Mr Menzies:

– The amounts stated by the honorable member represent in respect of the items mentioned, the cumulative effect over the years 1932-33 to 1938-39 inclusive, of the reductions in those taxes made by the Government in the immediate post-depression years, in order partly to give relief from the emergency taxation imposed during the depression and partly to assist industry generally in recovery from the effects of the depression.

Bran and Pollard

Mr Harrison:

n. - On Friday, the 29th November, the honorable member for Ballarat (Mr. Pollard) asked me the following question, upon notice -

Is the price of £6 per ton fixed by the Prices Commissioner for bran and pollard, based on the cost of production; if so, will the Minister make available the individual items involved in arriving at this price?

In fixing the prices of bran and pollard, which are by-products of the milling industry, consideration is given to costs in the industry as a whole. Any change in the prices of bran and pollard is accompanied by an adjustment of the flour tax or an alteration in the price of flour.

Overdraft Accounts

Mr Fadden:

n.- On Friday, the 29th November, the honorable member for Watson (Mr. Falstein) asked the following questions, upon notice -

  1. Is it a fact that the Commonwealth Bank has entered into an agreement with the private trading banks whereby customers of those banks cannot transfer their overdraft accounts to the Commonwealth Bank?
  2. Is it also a fact that the private banks charge6 per cent, on ordinary overdraft accounts whereas the Commonwealth Bank charges 41/4 per cent, for similar accommodation ?
  3. If these are facts, will the Treasurer give consideration to issuing a regulation under the National Security Act to dissolve this agreement and, by reducing the rate of interest, assist those persons affected to meet the heavy taxation foreshadowed by the Government ?

The answers to the honorable member’s questions are as follows : -

  1. No. The policy of the Commonwealth Bank with regard to competition with the trading banks was stated in evidence before the Royal Commission on the Monetary and Banking Systems in Australia in 1936, as follows : - “ As a general rule, current account business and new advance business (where another bank customer is not already indebted to such bank) is accepted. Other bank advances arc not generally disturbed unless facilities that might reasonably be expected by the public are not being provided. The business of municipalities and other semipublic bodies is accepted readily “.

This policy still applies.

  1. Interest rates charged by the private banks are not published but as from the 1st July, 1940, all rates in excess of 51/4 per cent, per annum were reduced by1/4 per cent, per annum, and the National Security (Capital Issue) Regulations prevent any increase above the rates which were current on the 13th October, 1939.
  2. See answer to 1.


Mr Harrison:

– On Friday, the 29th November, the honorable member for Ballarat (Mr. Pollard) asked the following questions, upon notice : -

  1. Is the drug sulphanilamide manufactured in Australia?
  2. If so, what price is charged to retailers of this drug?
  3. What price is charged to local retailers for the imported drug sulphapyridine (M. and B.693) ?

The answers to the honorable member’s questions are as follows : -

  1. No.

    1. Sec answer to No. 1.
    2. £1 4s. 9d. per bottle of 100 tablets; 6s. 4d. per bottle of 25 tablets.

Case of Mr. Hermann Homburg

Mr Calwell:

l asked the Prime Minister, upon notice -

  1. Was any request made by any honorable member of the Commonwealth Parliament for the release from internment of Mr. Hermann Homburg, M.L.C., a member of the Liberal Country party in the South Australian Parliament ?
  2. If so, which honorable member?
Mr Menzies:

– The answers to the honorable member’s questions are as follows: - 1 and 2. So far as can be ascertained, there is no record in Commonwealth departments of any request being made. aplleand Peak Acquisition Board.

Mr Pollard:

d asked the Minister for Commerce, upon notice -

  1. What salaries and allowances are paid to the personnel of the Apple and Pear Acquisition Board?
  2. What salaries and allowances are paid to the personnel of each of the State Acquisition Committees?
  3. What are the total salaries and allowances paid to each of the personnel to date?
Sir Earle Page:

– The answers to the honorable member’s questions are as follows : -

  1. The chairman of the Marketing Committee receives a salary of £1,450 per annum and travelling expenses at the rate of £1 10s. per day, when absent from home overnight, and fares. Members of the Marketing Committee are paid fees at the rate of 15s. 9d. per halfday and travelling expenses at the rate of £1 10s. per day, when absent from home overnight, and fares.
  2. Members of State committees are paid on the same basis as members of the Marketing Committee.
  3. Total salary, fees, expenses and fares paid under 1 and 2 -

Marketing Committee -

The undermentioned members of State committees are also officers of the State Committee and, since appointment, have not received fees :- Queensland, J. C. Arkell, market superintendent, at £9 12s. 4d. a week, and E. Ii. Donaldson, secretary, at £10 a week; South Australia, P. R. B. Searcy, State superintendent, at £500 per annum; Tasmania, L. S. Taylor, State superintendent, at fee of i2 2s. when engaged on work of committee.

Tasmanian Shipping Services

Mr Guy:

y asked the Minister representing the Postmaster-General, upon notice -

  1. When does the contract between the Commonwealth Government and Tasmanian

Steamers Proprietary Limited respecting the shipping and mail services to and from Launceston, Melbourne and the north-west coast of Tasmania, terminate?

  1. When will the matter be reviewed, and will the Minister give honorable members representing Tasmania an opportunity of conferring with him before finalizing another contract?
Mr Fadden:

– The Postmaster-General has supplied the following answers: -

  1. The term certain of the contract with Tasmanian Steamers Proprietary Limited for the Bass Strait mail services expires in March, 1945.
  2. I have no doubt that when the renewal of the contract is receiving consideration, the Postmaster-General would be pleased to receive any representations which Tasmanian members might desire to make in the matter.

Status of High Commissioner

Mr Conelan:

n asked the Prime Minister, upon notice -

Is it usual for Australian High Commissioners accredited to London and Ottawa or the Australian Minister accredited to Washington to offer opinions, advice or instructions on the domestic affairs of the countries in which they represent Australia, such as that uttered recently by the High Commissioner for the United Kingdom in Australia (Sir Geoffrey Whiskard) “that Australians will have to spend less.”?

Mr Menzies:

– In the existing circumstances and having regard to his official position, it is not thought that the reported remarks of the High Commissioner for the United Kingdom in Australia (Sir Geoffrey Whiskard), to which the honorable member refers, are in any sense improper.

Australian Broadcasting Commission : Overseas Broadcasts

Mr Calwell:

l asked the Minister representing the Postmaster-General, upon notice -

  1. Is it a fact that certain persons employed in the foreign languages sections of the Australian Broadcasting Commission are exinternees and/or persons suspected of activities on behalf of certain totalitarian countries?
  2. By whose instructions are certain persons referred to in paragraph 1 permitted to broadcast directly into the microphone, instead of from a record, as prescribed by the regulations?
Mr Fadden:

– The Postmaster-General has supplied the following answers: -

  1. The credentials of all persons employed in connexion with the short-wave sessions operated by the Australian Broadcasting Commission on behalf of the Department of

Information are in the first instance fully investigated by Military Intelligence authorities, and no person is given access to the microphone either directly or by means of recordings who has not first been approved by Military Intelligence.

  1. Only British born persons broadcast directly into the microphone while persons not of British birth are permitted to broadcast only from recordings after those recordings have been checked against the approved script.

Apple and Pear Marketing Committee

Mr Hutchinson:

n asked the Minister for Commerce, upon notice -

  1. What has been the total cost of operations of the Apple and Fear Board from its inception to the nearest convenient date?
  2. How much of this amount represents administrative expenses?
  3. What has been the total receipts of the board to the nearest convenient date?
  4. What quantity of apples and pears have been sold to date, and what quantity of last season’s crop remains to be sold?
Sir Earle Page:

– The following is the information in respect of the operations of the Apple and Pear Marketing Committee as at 31st October, 1940: -

  1. £2,624,375.
  2. £50,874.
  3. £2,155,315.
  4. Sales, 6,592,096 cases; stocks, 710,114 cases.

Wool Sales

Mr Sheehan:

n asked the Minister for Commerce, upon notice -

Is he in a position to state whether any money from the re-sale of Australian wool to neutral countries by the British Wool Control Board has been paid to Australian woolgrowers?

Sir Earle Page:

– No. There can be no such payments until all the wool acquired under the wool purchase scheme has been finally disposed of.

Housing at Port Augusta.

Mr Collins:

s. - On the 22nd November, the honorable member for Grey (Mr. Badman) asked the following question, upon notice -

  1. What area of land was originally acquired by the Commonwealth Railways at Port Augusta on the opening of the cast-west railway?
  2. Of the total area acquired how much was set aside for building blocks?
  3. What is the number of houses which have been erected for officers and employees of the Commonwealth Railways?
  4. What is the number of building blocks at present available for building purposes on land acquired by the Commonwealth Railways?
  5. Is it the intention of the Government to make sufficient funds available for building homes at Port Augusta to meet the demands of Commonwealth Railways’ employees who are seeking homes?

I am now in a position to supply the following information : -

  1. 432 acres, of which 10 acres were transferred to the local corporation for road and other purposes.
  2. 35 acres.
  3. From 70 to 75.
  4. Any capital expenditure appropriation that can be made available for residential accommodation will be devoted to improving housing conditions between Port Augusta and Kalgoorlie, where men at some locations are at present under canvas.

Canteen Orders.

Mr Spender:

r. - On the 27th November, the honorable member for Griffith (Mr. Conelan) asked me for information regarding the fees charged on canteen orders purchased for members of the fighting forces overseas.

I am now able to convey to the honorable member the following information : -

The Australian Defence Canteens Service, which is a section of the Department of the Army, controls the issue of canteen orders. These orders are available at post offices at the following costs: -

The amount of commission, which is fixed by and credited to the Australian Defence Canteens Service, is at the same rate as that charged as poundage on postal notes within the Commonwealth. This commission is not regarded by the Defence Canteens Service as sufficient to cover the cost of the service.

The Postmaster-General’s Department is paid at the low rate of 10s. per centum for acting as selling agent.

Salisbury Munitions Works.

Mr Spender:

r. - On the 29th November, the honorable member for Hindmarsh (Mr. Makin) asked a question, without notice, as to what were the proposals with regard to the housing of employees at the munitions works to be erected at Salisbury in South Australia. I am now. in a position to inform the honorable member that the Minister for Supply and Development has furnished the following reply : -

No special arrangements are being made for housing employees at the Salisbury munitions factory, as it is expected that transport facilities will be provided by the South Australian Railways.

Petrol Rationing.

Mr Spender:

r. - On the 29th November, the honorable member for Griffith (Mr. Conelan) asked me a question, without notice, as to -

  1. What was the cost of implementing the petrol rationing scheme?
  2. What would be the cost each year? and
  3. What would be the saving in sterling and/or dollar exchange?

I am now in a position to inform the honorable member that the Minister for Supply and Development has furnished the following reply: -

The annual cost, chiefly for employment in State offices, is estimated at about £100,000. plus the services of the Post Office. A saving of one-third of pre-war consumption would be worth about £5,000,000, which is landed cost and can be converted into sterling or dollars at current rates.

Mr Spender:

– On the 29 th November, the honorable member for Melbourne Porta (Mr. Holloway) asked a question, without notice, as to whether shipments of petrol to Australia have fallen off since the introduction of the petrol rationing scheme, and if so, how is it proposed to increase reserves of petrol in Australia. I am now in a position to inform the honorable member that the Minister for Supply and Development has furnished the following reply: -

No. Imports are being maintained to accumulate stocks from reduced consumption.

Magnesium Industry.

Mr Menzies:

s. - On the 21st November, the honorable member for Franklin (Mr. Frost) asked me a question, without notice, as to whether I was in a position to make a statement in regard to the production of magnesium from the dolomite deposits in Tasmania.

I now desire to inform the honorable member that it is understood that the Australian Magnesium Company Limited,

Hobart, Tasmania, has carried out preliminary investigational and experimental work with the object of producing metallic magnesium from dolomite occurring in Tasmania, and that it proposes to raise capital to erect a works to produce the metal. The company’s advisers are presumably concerned as to whether it would be likely to find markets for the magnesium if and when it produces it. The Government’s advisers consider that those connected with the company are wise in exercising caution in regard to the marketing end of the proposition, of course assuming that their planning for production is soundly based. On this aspect no comment is made other than that I amadvised that magnesium production from dolomite is more difficult than production from magnesite. The Commonwealth’s present magnesium requirements are primarily associated with the provision of materials for aircraft manufacture, bombs, &c.

The Broken Hill Proprietary Company Limited has announced that it will produce magnesium from magnesite in a plant now being erected at Newcastle. It seems likely that, if and when the Australian Magnesium Company Limited enters upon production, both it and the Broken Hill Proprietary Company Limited would have to find export markets for the bulk of their production. No one can foretell the marketing conditions, regarding demand or price, which will then obtain. The Broken Hill Proprietary Company Limited, I am informed, has ascertained that the United Kingdom cannot undertake to accept its surplus production when its plant comes into commission next year.

Munitions Annexes - Policing of Industrial Awards.

Mr Spender:

r. - On the 28th November, the honorable member for Dalley (Mr. Rosevear) asked a question, without notice, as to whether it was a 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.

I am now in a position to inform the honorable member that the Minister for

Munitions has furnished the following reply to his question: -

The practice in regard to the entrance of union officials to munitions factories and annexes has always been and still is that they are allowed’ to enter during meal periods when the men are off their machines, and in cases where the work on specific operations requires investigation in conjunction with departmental officials, they are admitted in working hours. The unions, however, appoint employees in the capacity of shop stewards, who watch the interests of their members in their respective shops, and who report to the union any matter which appears to need the attention of union executives. This system has worked very satisfactorily for many years inmunitions factories and it is not proposed to make any change.

Defence Forces at Darwin.

Mr Spender:

– On the 22nd November, the honorable member for East Sydney (Mr.Ward) asked the following question, without notice: -

Will the Minister for the Army inform me whether it is intended to pay members of the Home Defence Forces serving at Darwin, and in other appropriate Commonwealth territory, the usual tropical allowance? I should also like to know whether such personnel will receive deferred pay at similar rates to those which apply to the members of the Australian Imperial Force and whether the provisions of the Repatriation Act will also apply to such forces?

I am now in a position to inform the honorable member as follows : -

It is hot intended to pay tropical allowance to personnel appointed to or enlisted in the Permanent Military Forces, on or after the 6th October, 1939, or to members of the Citizen Military Forces and Garrison Battalions. Such personnel are paid at Australian Imperial Force rates and conditions. Deferred pay does not accrue to Home Defence Forces and is not payable for the Australian Imperial Force until after embarkation for service abroad. Personnel appointed to or enlisted in the Permanent Military Forces on orafter the 6th October, 1939, members of the Citizen Military Forces and Garrison Battalions performing continuous full-time duty are covered by the provisions of the Repatriation Act. Personnel enlisted in Permanent Military Forces prior to the 6th October, 1939, are provided for under the Commonwealth Superannuation Act.

Selheim Military Camp.

Mr Spender:

r. - On the 29th November, the honorable member for Kennedy (Mr. Riordan) raised a question regarding the establishment of a military camp at Selheim, near Charters Towers, Queens land, and asked that the erection of a camp at that place be commenced immediately.

I am now in a position to inform the honorable member that survey and other preliminary measures have been undertaken for a “tented” camp at Selheim, and it is anticipated that the camp will be completed by the middle of March, 1941. The unit which will occupy this camp totals 1,000, and will be called up for training about the middle of April, 1941.

Cite as: Australia, House of Representatives, Debates, 3 December 1940, viewed 22 October 2017, <>.