House of Representatives
9 December 1940

16th Parliament · 1st Session

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

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Faked Press Photograph


– Has the attention of the Prime Minister been drawn to a photo graph of this chamber published in the Hobart Mercury of the 5th instant? If so, does the right honorable gentleman agree that the photograph has been altered so as to make it appear that many Ministers and members were absent from the chamber at a time when practically all of them were present? Does the right honorable gentleman also agree that the purpose of the publication of this faked photograph is to injure this parliamentary institution in the eyes of the people? If so, what action does he propose with a view to protecting the Parliament against such subversive tactics?

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

– My attention wag directed this morning to the publication to which the honorable member has referred. The newspaper is the Hobart Mercury of the 5th December. Under the caption “ Two Cities “ it contains two photographs;one headed “London” shows a bombed building ; and the second headed “ Canberra “ purports to be a photograph of this chamber. There can bo no doubt whatever that the second picture is a gross piece of fraud. Unhappily, this kind of campaign against Parliament - inspired, I presume, by those who are opposed to the parliamentary system - has been carried on for some time. This photograph is the grossest example of this kind of propaganda I have seen. So gross is it that one finds it difficult to believe that the proprietors of this newspaper could have known of it, and one can onlyassume charitably that they themselves have been imposed upon. The photograph, as honorable members will realize when they see it, was taken on the opening day of the session, at a time when Mr. Justice McTiernan, as the Deputy of the Governor-General, sat in the Speaker’s chair. His Honour does not appear in the photograph, but his associate, standing to the right of the Speaker’s chair, does. The photograph also shows the Clerk of the House and the Clerk Assistant. The Clerk is actually on his feet reading the Commission of Mr. Justice McTiernan. At that moment, every Minister, and all honorable members with the exception of three who had not at the time arrived in Canberra, were in the House. As a matter of fact, as the photograph shows, because the faking was not done with complete success, arranged around this table were the oath forms with the Bibles lying on them. The swearing-in was just about to commence. The photograph has been fraudulently altered ; every person was eliminated from the picture except my colleague, the Minister for Labour and National Service (Mr. Holt), who no doubt was selected on account of his beauty and his loneliness at the time. The faking is nothing but a gross breach of the privileges of this House. Whoever prepared the fake for printing deliberately eliminated every figure except that of the Minister for Labour and National Service, and its publication, in conjunction with the English photograph, was intended to create the impression that, at a time when London was being bombed, members of this Parliament were too lazy, too unpatriotic, or too indifferent to attend to their duties in Parliament; consequently, only one Minister is on view, and no honorable members.

Mr Frost:

– That newspaper also published the statement, “ Curtin Fiddles While London Burns.” The right honorable gentleman, or some of his supporters, approved of that.

Mr Makin:

– The newspaper ought to be prosecuted.


– What may be done in relation to this matter is a problem to which, in the few minutes at my disposal, I have not been able to find an answer, but I am giving it my immediate consideration. I shall have great pleasure in conferring with other leaders of parties in this House with respect to it because, at a time like the present, any move to discredit the institution of Parliament cannot be too strongly resisted. Where an attempt to discredit Parliament goes to the length of the fraudulent alteration of a photograph taken in this chamber, it presents itself in the guise of a public scandal, and whatever measures can be taken to deal with that kind of thing certainlywill be taken.


– Will the Prime Minister place a censor in the office of every daily newspaper in Australia at the cost of the proprietary in order to prevent subversive actions of the kind recently perpetrated by the Hobart Mercury ?


– I shall give consideration to the request.

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– Is the Minister for Air aware that Leading Aircraftman Percival

Reed was oourt-martialled at the Woolloomooloo recruiting depot of the Royal Australian Air Force last week for having written a letter to the AttorneyGeneral, and that he has since been discharged from the Royal Australian Air Force? Was the decision of the courtmartial first referred to the Minister for his approval ? Did the head of the Royal Australian Air Force consult the honorable gentleman before he came to this drastic decision? Does not the honorable gentleman consider that the decision was too drastic for the offence, if any, committed ?

Minister for Air · INDI, VICTORIA · CP

– I was not aware that this court-martial had been held until I read the account of it in a newspaper a couple of days ago. I made immediate inquiries, and learned that this aircraftman wrote a letter to the Prime Minister, and a further letter to the AttorneyGeneral. This action constituted, prima facie, a breach of certain air force regulations. I understand that the appropriate officer - who, I believe, is the commanding officer of the central area - summoned the aircraftman to him for the purpose of cross-questioning him, and perhaps of taking certain disciplinary action. At least he communicated to the aircraftman the knowledge that he had been guilty of an offence. In fact, the aircraftman was charged with the offence. I understand that, acting within his rights, he elected not to have the charge dealt with summarily by the appropriate commanding officer, but preferred to take his stand before a court-martial; consequently, it was upon his initiative that the court-martial was held. I understand that the decision of the court-martial was that he be discharged from the Royal Australian Air Force.

Mr Archie Cameron:

– How can a court-martial be held in a matter of this description, without the consent and knowledge of the Minister?


– I confess that if there be a requirement for ministerial approval to be obtained for the holding of a courtmartial, I am not aware of it.

Mr Archie Cameron:

– Have a look at the regulations.


– I am prepared to do that.

Mr Beasley:

– How was possession of the letter sent to the Attorney-General obtained, seeing that that right honorable gentleman said last week that he knew nothing about it?


– The letter was addressed to the Attorney-General, and was referred to my predecessor, I believe, a few days before the personnel of the Government was changed. It was referred to the appropriate officials of the Department of Air for inquiry.

Mr Forde:

– Which official was responsible for the action taken?


– I am not in a position to name any official who could be described as the person responsible for the action taken. I am concerning myself at the moment with the circumstances in which this charge was proceeded with withoutbeing referred back to the Minister for Air. I shall be glad to inform honorable members, in due course, of the result of my inquiries.

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– Is the Minister for Commerce in a position to furnish me with an. answer to the question I asked recently as to the conditions under which the firm of Walter Haughton and Company Proprietary Limited is stacking wool for the Central Wool Committee?

Minister for Commerce · COWPER, NEW SOUTH WALES · CP

– I understood that the information sought by the honorable member had been sent to him. I shall see that he receives it to-day.

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– In view of the statement by the Prime Minister that the Advisory War Council had given consideration to the formation of an allparty government, and that no good purpose could be served by discussing the matter in this House, will the right honorable gentleman consider the desirability of having it discussed fully at a conference in the near future?


– I assure the honorable member that, in my experience of the Advisory War Council, it is a most appropriate body for arranging exchanges of opinion between the leaders of the various political parties. In fact, the Council has done very useful work on more than one occasion by providing opportunities for such exchanges of views. Consequently, it seemed to me that that was the body before which it was appropriate to raise the subject referred to by the honorable member. If any other steps can be usefully taken at any other time I shall not hesitate to take them.


– Having regard to the lack of success which has attended the efforts of party leaders to form a national government, will the Prime Minister consider widening the scope of any future consultations with the idea of including some of the rank-and-file members of the various parties?


– The honorable member will perhaps permit me to say that I sometimes wonder whether these observations in regard to the formation of a national government are being made with the object of bringing one about, or in order to embarrass me as leader of the Government.

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– Has the attention of the Attorney-General been drawn to a public notice in the press to-day in these terms : -

Anti-Jewish Association. - All persona desirous of joining this association please communicate immediately with Duncan Cameron, Third Floor, 11c Castlereagh-street, Sydney.

As associations of this kind are generally the forerunners of Fascist organizations, will the Attorney-General instruct the Investigation Branch of his department to inquire into the activities of this association ?


– My attention had not been drawn to the advertisement, but the matter will be investigated. My attitude towards such an association would, I think, be entirely acceptable to the honorable gentleman.

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– In view of the sinking of ships on the Australian coast, and the extremely loose way in which information of value to an enemy is being bandied about in this country, will the Prime Minister state whether it would be possible to have a special discussion, if necessary at a private session of this Parliament, so that honorable members might speak their minds on one or two matters that come undertheir notice from day to day?


– I shall be glad to give consideration to the honorable member’s suggestion.


– Can the Minister for the Navy give to the House any information regarding reports which, I understand, are current, of further losses of shipping on the Australian coast? I understand that some development has occurred during the last 48 hours.


– I have no information apart from that which appeared in the press this morning, and which has been supplemented by a further statement ‘by me in the evening press in these terms -

The British overseas vessel which was mined in South Australian waters on Saturday night is still afloat, and is making for an Australian port in charge of tugs. The master and four men are on board the ship Sixteen other members of the crew are assisting in the tugs. The remainder of the crew, 42 men in all, are being taken to the mainland in another vessel. It is expected that they will reach port about 4 p.m. to-day (Monday). It is now known that there was no loss of life, but two men were slightly wounded in the explosion.

Mine-sweeping operations are proceeding with all despatch in the area affected, in order that normal traffic may resume as early as possible.

Honorable mem’bers may, perhaps, complain that further information was not afforded by the Navy Board. The board has supplied me with the following statement of the reasons which actuated it in withholding from publication the exact locality of a ship’s sinking by a mine and the name of the vessel concerned : -

page 578


The enemy lays mines in a number of what Ite considers strategic points. While we do not know what other areas he has chosen, te does not know, unless we tell him, which of the areas we have discovered.

If we tell him, we tell him where we have been routeing ships. He will know that we will avoid the discovered areas for a time, and will be able to form some idea of where we are likely to make changes in routeing and of new areas in which he may operate with reasonable chances of success.

He knows what mines he has laid in a particular area. If we tell him we are sweeping that area, we tell him where we have concentrations of sweepers. We also give him the chance to estimate when wc will have cleared it, so that he may return and lay more mines there if necessary. We have not sufficient sweepers to keep them at work in any one area indefinitely.

page 578


If a ship is sunk by a raider, as in the case of Maimoa and Port Brisbane, the raider knows what ship he has sunk. As soon as it is reasonably clear that the raider has had time to get that information to the enemy there is> no reason for us to withhold the name of the ship. The enemy has the authentic information he needs, and the release of the name by us does not help him.

When a neutral ship is sunk by a mine, as in the case of City of Rayville, though the mine cannot tell the enemy the name of the ship, the neutral country has no reason to withhold the name of the ship, and is bound to .publish it immediately. The enemy has his authentic information. There is no reason for us to withhold it.

But when a British or allied ship is sunk by a mine, the enemy, though he may know that a ship has been sunk, does not know what ship it is - whether a twenty-year-old tramp, or a modern 20,000 ton liner. We must not give him authentic information on the point. It is in our power to keep the information from him. In his searching to find it out for himself, there is always the possibility that our counter espionage may get on the track of his agents here. Furthermore,, we do not want to let him know what type of ship we have operating on our coast, or to enable him to learn the results of his operations in our aggregate loss of tonnage.

page 578


The two main points which we have withheld are not of vital interest to the general public but they are of vital interest to the enemy and may lead to further losses. We should tell him nothing that will help him in any way. Eventually information of a sort will filter through to him. But it will lack authenticity, and he will be unable to place reliance in it. And we must try to keep him in doubt and uncertainty.

page 578




– Since Tasmania will not participate in the distribution of the extra £1,000,000 which the wheat-growers are to receive as the result of the compromise on the budget, will the Treasurer arrange for the allocation of £20,000 in order to compensate small fruit-growers in Tasmania, most of whom have lost their entire crops this yeal ?


– The question relates to a matter of Government policy. It will he considered by the Government.

page 579




– Will the Minister representing the Minister for Supply and Development furnish such information regarding Commonwealth war requirements to interested organizations as will enable them to consider the practicability of submitting tenders for the production of war requirements in country garages and small workshops?

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

– I shall be glad to discuss the matter with the Minister for Supply and Development, whose answer I shall make available to the honorable member.

page 579




– Is it the intention of the Government to call up for training in the MilitiaForce, men in age groups between 24 and 30 years?


– That matter will be considered by the War Cabinet this week, and an announcement will be made shortly.

page 579




– Has the Minister for Social Services submitted proposals to Cabinet for the extension of social services in Australia? If so, have they yet been considered by Cabinet?

Minister for External Affairs · PARRAMATTA, NEW SOUTH WALES · UAP

– I have not yet made any proposals to Cabinet; but I am in consultation with certain State authorities with a view to their preparation.


– The Minister was reported in the press this week-end as having said that, if Cabinet would not consider his views regarding an extension of social services, he would resign. I desire to know whether he believes that his proposals will be rejected, or whether he was merely making a threat.


– If the honorable member will again peruse the newspapers, he will see that it is not even suggested that I have made the statement referred to. In any case, the statement is not true. I am prepared to await the result of my submission to the Governmentbefore I even think of any such action.

page 579




– In view of the facts that about 30,000 skilled workers are stated to be required for the munitions industry, and that there are still over 100,000 unskilled workers unemployed in Australia, many of whom are anxious to obtain employment in the munitions industry, what practical steps, if any, is the Government taking to cope with the situation ?

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

– The first step is to analyse the available sources of manpower, and this is now being done in the Department of Labour. I hope to have some definite proposals to put before the Government soon.

page 579




– On Friday last, I asked a question about certain enemy internees and received the following reply from the Minister for the Army : -

I know something of the case to which the honorable member has referred. No member of the Government, nor any other member of this House, was concerned with the application to have a certain person released from internment. An application for his release was made to me by some one outside Parliament, and I refused it.

In my question I did not refer to any particular person. As a matter of fact, I had in mind two former members of the Italian air force who are now interned in Australia. They had been closely associated with certain Ministers, and I understand that strong representations were made to the authorities for theirrelease.


– I knew that the honorable member’s question referred to two Italian airmen. However, no application was received for the release of two Italian airmen, though two had been interned. I repeat that no honorable member on the front bench, nor any honorable member of the House, was concerned in the making of an application for the release of either of these men. The application was made by the employer of one of them. I called for the file, perused it, and refused the application.

page 579




– Has the Minister for the Army decided to defer action under Statutory Rule No. 269, which refers to the control of aliens, until the House has had an opportunity to pass judgment on it?


– To an earlier question by the honorable member on the same subject, I have already answered “ No “.


– Can the Prime Minister say whether the proposals for the control of aliens, which are contained in Statutory Rule, No. 269, represent the considered view of the Government? In view of the notice of motion appearing in my name on the notice-paper, does he not think that the issue of that statutory rule should have been withheld until Parliament had expressed its opinion on this most extraordinary proposal?


– Although the regulations represent the decision of the Government, I shall discuss with my colleagues the honorable member’s suggestion. He will appreciate the fact that tribunals have already been set up under the rule in question.

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– Recently, the Prime Minister informed me that the Government was considering taking action to bring into the taxing field Commonwealth bonds which are now tax free. Does he expect to be able to make a decision on this matter before Parliament goes into recess?


– The Government does not propose to submit any financial proposals to the House other than those now before it.

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– Can the Minister for Trade and Customs say whether any complaints have been received of a shortage of galvanized roofing iron and fencing wire in Tasmania; if so, what steps have been taken to overcome the shortage?

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

– I shall see that consideration is given to the honorable mem’ber’s question and that a reply is forwarded to him.

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– Has the Minister for Trade and Customs yet submitted to Cabinet the request of the deputation which waited on him recently in Sydney for the re-establishment of the shipbuilding industry at the Walsh Island dockyard, and, if so, with what result?


– I assured the deputation that I would discuss with the Prime Minister the representations made to me. I have not yet done so, but I hope to be in a position to do so shortly.

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– Has the Treasurer granted the application of Timbrel’s Proprietary Limited to the Capital Issues Board with respect to the manufacture of phenol ? Further, can he say whether a decision has yet been arrived at in relation to a similar application by the Monsanto Company? If bo, what is the nature of that decision?


– The matter is at present under consideration.

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– In view of the recent shipping losses off the Australian coast, and the heavy strain on the Minister for the Navy, who is also the Attorney-General, will the Prime Minister consider re-arranging the portfolios in order to provide that the Department of the Navy shall be separately administered, as are the other Service Departments?


– I assure the honorable member that the distribution of work among Cabinet Ministers was well considered at the time that it was made.

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– In view of the fact that, for hygienic purposes, troops stationed at Darwin are issued with shorts and tunics, will the Minister for the Army authorize the issue of similar uniforms, instead of long trousers and tunics to troops in Queensland, at least while on leave, if not when in camp?


– I shall be glad to consider to what degree the honorable member’s request can be acceded to.

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– Is the Assistant Minister for Commerce in a position to say when the payment of an additional ls. a case for apples and pears is to be made ? Can he say whether the failure of about 400 growers to reply to a questionnaire is delaying payment, and whether it will be possible to pay this money to the growers before Christmas as many of them are in need of it?

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

-Consideration has been given to this matter and authority given for the payment of an extra ls. a case to those growers who are entitled to it.

page 581


Motion (by Mr. Menzies) agreed to-

That the House, at its rising, adjourn until 2.30 p.m. to-morrow.

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– In view of the great volume of work to be dealt with in the limited time at our disposal, I ask honorable members to limit to half an hour each day the time devoted to questions without notice. It is not proposed to answer further questions without notice to-day.

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BUDGET 1940-41

In Committee of Supply:

Consideration resumed from the 6th December (vide page 563), on motion by Mr. Fadden -

That the first item in the Estimates under Division I. - The Senate - namely, “ Salaries *nd allowances, £8,170”, be agreed to.


.- When the debate was adjourned on Friday I was comparing the costs of shale-oil mining at Baerami and at Glen Davis. The shale-oil industry at Glen Davis, or Newnes, as it was previously called, was started when the Scullin Government made £100,000 available to assist the enterprise, with a view to absorbing some ‘ of the unemployed coal-miners in other districts. However, the application of the rule that only men from the western district shall be employed in that district prevented miners from other parts of the State .from obtaining employment there. Although the shale deposits at Baerami are in the electorate of Robertson, they are close to the district which I represent, and many miners from Muswellbrook and other centres could find useful employment there if the deposits were properly exploited. At this time particularly, when the nation is at war, we should do everything possible to make Australia self-contained in respect of oil supplies. When the Minister for Social Services (Sir Frederick Stewarts) returned from a trip overseas in 1934, he presented a voluminous report on his investigations of the extraction of oil from coal and shale. So convinced was he that this was an economical process that he delivered lectures in many centres, and criticized the Government for not taking action to extract oil from coal by the hydrogenation process, which had proved so successful at BillinghamonTees, England. At the time the honorable gentleman’s advocacy of this process was given a good deal of publicity. At the invitation of the local council, he visited an important centre in my electorate, and in the course of his address, subjected the then Government to a good deal of criticism for its inaction in this matter. Now, however, that he is again a member of the Cabinet, he appears to be silent, for nothing has yet been done to obtain oil from this source.

The withdrawal of the amendment which had been moved by the Leader of the Opposition (Mr. Curtin) has robbed my punch of some of its force. The raising of the exemption from £150 to £200 will, in some slight degree, lighten the hurden of taxation on persons in receipt of lower incomes; nevertheless, a person without dependants who is in receipt of only £3 17s. a week will come within the drag-net provisions of the Government’s proposals. Incidentally, I am of opinion that a person who wholly maintains a dependant over the age of 16 should be allowed, for income tax purposes, to claim the deduction of £50, which is permitted in respect of a dependant under the age of 16. Many young men and womenthrough no fault of their own, are without employment, and have to rely upon their parents for support. In such circumstances, the Government should recognize that the parents are carrying a heavy financial burden, and afford them such relief as I have suggested.

During the last great stoppage in the coal-mining industry, the Prime Minister (M.r. Menzies) informed me that he was prepared to establish special tribunals for the purpose of fostering more harmonious relations between the employers and the men, but he declined to do so while, figuratively speaking, a revolver was held at his head by the miners on strike. He assured me, however, that, so soon as the men resumed work, he would give favorable consideration to my representations. Months ago, the men returned to their employment, and now, more trouble is threatening the industry. The cause of this unrest is most unfortunate. Judge Drake-Brockman, whom the Government appointed to make a new determination of working conditions, was not conversant with the intricacies of coal mining, and though I sincerely believe that he was strictly impartial, he was not competent to make an award for the industry. The psychology of the miner is such that, if he knows that the arbitrator has an intimate knowledge of the working conditions, he will good-naturedly accept’ the determination, but he will not be satisfied with the adverse findings of an arbitrator who is unfamiliar with the conditions. If the Government put into operation the Industrial Peace Act, which enabled the coal-mining industry to function harmoniously for years, this vexed problem would be solved. In addition to a central tribunal, local boards could be created in order to deal with small disputes, and in that manner, much of the distressing trouble, which so often besets the industry, would be obviated.

The Government’s appeal for greater production from the coal-mines can easily be achieved. Although the owners have asked the men to work a second shift, that is unnecessary while a number of thoroughly-equipped mines remain closed. If the Industrial Peace Act were again to operate, the central tribunal could arrange for the more equitable distribution of work among the mines. At present, J. and A. Brown Limited work the Pelaw Main, Richmond Main, Stanford Main Nos. 1 and 2 and Abermain collieries, and leave the South Seaham pits idle for many weeks. The West Wallsend and Killingworth mines have been closed for years. If those pits were working continuously at full pressure, many men would find employment, and production would be considerably increased. Unfortunately, the Government has neglected to avail itself of the wide powers conferred upon it by the Industrial Peace Act, and when a strike occurs, it severely condemns the miners for taking direct action.

In this period of national emergency, when Great Britain urgently requires more vessels in order to offset its heavy losses, the failure of the Government to re-open the Walsh Island Dockyard is, to me, incomprehensible. Recently, a Commonwealth Minister declared that no skilled tradesmen were available to undertake the building of ships, but such a statement is obviously incorrect. Most of the shipwrights are now employed as carpenters in coal mines, where they repair skips, erect structures for accommodation on mining property, and install the timbering in the mines. Whenever I urge a Minister to impress upon Cabinet the importance of re-opening the Walsh Island Dockyard, he refers me to a colleague, who, in turn, directs me to interview a third, until finally, I complete the ministerial circle. Nobody seems to be interested. When the honorable member for Newcastle (Mr. Watkins) and I introduced a deputation to the Minister for Trade and ‘Customs (Mr. Harrison) in Sydney last week, he gave us a little encouragement, but stated that he thought that shipbuilding for naval purposes, was a matter for the Minister for the Navy (Mr. Hughes). I should not be at all surprised if, when we attempt to pin him down to his statements, he “passes the buck” to the Minister for the Navy. Where it will end, I cannot guess. The people of beleagured Britain is now subjected to rigid rationing of food, and more ships are desperately needed to bring to them supplies from the United States of America and the dominions. Australia, which is an integral part of the British Commonwealth of Nations, has, at Walsh Island, a dockyard which built ships second to none in the world; but it is idle. Any shipbuilding that is carried on in the Commonwealth is undertaken at

Sydney or Whyalla, though Newcastle may be truly described as the “ Birmingham of the Southern Hemisphere “. All the raw materials and labour required for the construction of ships are available there, but these resources are not utilized. For some obscure reason, they are transported to other centres hundreds of miles away. That is wasteful and uneconomic. There can be no argument against the building of ships at Newcastle. In the last two years there has been deputation after deputation to the Government on this subject. Even before the war there was agitation for a revival of the shipbuilding industry at Newcastle. The Walsh Island Dockyard is owned by the State Government, but it will do nothing, apart from indicating its willingness to leave the dockyard to the Federal Government. It prefers to “pass the buck “ to the Commonwealth. Ship after ship is going down off the Australian coast. I can visualize ships being built to scour the seas for the raiders which lay mines in the shipping lanes. The talk about rendering our best services to Great Britain is largely lip-service. We have more than enough of the commodities that Great Britain requires but not sufficient shipping space to send them abroad. For example, our wines are lying here with British orders unfulfilled because shipping space cannot be provided for them. In answer to a question in this Parliament recently, I was told that wines had no priority over other commodities.

The CHAIRMAN (Mr Prowse:

Order ! The honorable member has exhausted his time.


– This is the eighth Parliament in which I have had the honour to take part - I have sat on both sides of the chamber - but this is the first of those Parliaments in which the members of the Government and the Opposition supporters have been so finely balanced. The Government chose the 21st September, the equinox, the time when day and night are equal throughout the world, as the date for the election of this Parliament, and, apparently, the people thought fit to carry the idea a little farther by creating a sort of political equinox, in this chamber of the Parliament at least. I do not claim for any party, not even the one to which I belong, a monopoly of enlightenment; nor do I ascribe to any other party an environment of complete darkness. I have been here long enough to know that we all can learn something from each other. Here we are in a “ fifty-fifty “ war-time Parliament expected by the people who sent us here to make it work, if necessary, by each advancing a part of the way to meet the other. After a period of great travail we succeeded in doing that, at least to a degree, in this budget. At a time like this, and especially in a Parliament constituted as this is, the best way in which to make Parliament work is to co-operate in an all-party government. The compromise achieved in this budget could have been more easily secured by that means, and I still hope that a national government will be attained. I should like to see the Leader of the Opposition (Mr. Curtin), the Deputy Leader of the Opposition (Mr. Forde), the right honorable member for Yarra (Mr. Scullin), for whom I have great respect, and other leading members of the Labour party sitting on this side and taking their share of the responsibility of government in war-time with members of the party to which I belong and members of the United Australia party.

Such a government could devote far more time to the war effort, because much less time would be wasted on party politics. Some people think that if we had such a government criticism would be stifled, but I do not believe it. A government with a large majority can find plenty of critics among its own supporters. Healthy criticism of a national government would not be lacking, if it were warranted. I was a member of the Bruce-Page Government for three and a half years, and of the Lyons Government for over three years, and it was on rare occasions indeed that decisions were come to and matters were settled on party lines. If we had a national government many in the community might be surprised to find the degree to which decisions would be reached on a basis of justice and equity, almost without regard to party politics.

It is, perhaps, owing to our remoteness from the major scenes of conflict in this war, that some people seem to be incapable of realizing the extent to which we in Australia are going to be affected by this war. Apart from a few losses of ships by mines and raiders off our coast, this war is to some people simply a conflict raging in another hemisphere. If they could actually witness the havoc wrought in London, Coventry, Southampton, Birmingham and Dover and on the Merseyside, and could be present at the mass funerals of civilians killed by bombs, they might see things in their proper perspective. Many do not appreciate the menace to Australia implied in the far-reaching scope of the insensate Nazi ambitions about which we have read a good deal. I quote briefly from a statementby Hitler which I came across recently. It seems to put in a few words this man’s code of ethics, if he has any, and also his ambitions. Hitler said this -

Some generals want to behave as knights. I have no use for knights. . . . This war will be unbelievably bloody and grim. My motto is, “ Destroy by every means “. Socalled international laws will not check me. . . . One is either a German or a Christian. You can’t be both. Germany will be Germany only when it is Europe as well. We, as the true chosen people, shall become the masters of the earth.

Hitler lets us see that if the Germans ave to be the chosen people, all those not of German birth are to be regarded in the future as merely helots, serfs and bondsmen to their Teutonic masters.

Mr Duncan-Hughes:

– Chosen by whom?


– Chosen by his Satanic majesty. In contrast to that statement, shortly after France capitulated, a distinguished American, Colonel Breckenridge, Under-Secretary for War in a previous administration of the United States of America, pointed out that Great Britain was now standing alone for freedom in this struggle, and said -

The last bastion between America and the legions of hell is Great Britain. She is the mother of liberty. Kill her and not even the chisel of Satan incarnate can remove that fact from her epitaph.

Those are strong words, but not too strong. I do not myselfbelieve that Britain has reached the epitaph stage; nor do I believe that it will reach it for centuries to come, if the Dominions do their part. More than anyone else in modern history, this man, Hitler, has aimed at the destruction of human liberty. Masquerading in the mantle of national socialism, this man has destroyed German trade unions, confiscated their funds and turned the skilled workers into mere robots. The Fuhrer’s word not merely supersedes German law; it is German law under a system of absolute despotism. British sailors, soldiers and airmen are risking their lives to defeat this monstrous system. Yet we allow our own war effort to be hindered from attaining full momentum by wasting time and energy in trying to score political points against one another.

The one outstanding task before this Parliament is to put our whole weight into bringing this war to a successful conclusion. Compared with that, everything else seems insignificant. Party banners are small flags to-day compared with the Union Jack. It is true that, to make our whole war machine work with maximum efficiency, all sections of the community must be treated justly. The amended budget is proof that this Parliament as a whole recognizes that. But for us to concentrate on social reforms and things of that kind to-day, almost to the exclusion of tho great task before us, seems to me like a man top-dressing his lawns and tending his roses while his house is on fire. There are some misguided people who think that by unlimited inflation we can escape the necessity for making financial sacrifices in war time, and there are so-called leaders who do little to disillusion the people on this point. No one who has given the budget the most cursory perusal can fail to realize that credit expansion is already being considered to a degree never previously contemplated. My own view is that when the Government is taking from the community all that can be safely extracted by taxation and loans at low interest rates, essential national credit expansion may be employed as supplementary to, but not in substitution for the old methods of finance. I propose now to read an excerpt from a speech delivered by Dr. Schacht, the eminent German finance expert, who, I suppose, did more than any one else in Germany to provide the millions with which Germany paid for its re-armament. Addressing the Economic Advisory Board of the German Academy, Dr. Schacht said -

Classical economic theory permits money creation only when the goods in circulation have already been increased, and it forbids a financing of production and especially a large credit expansion over a short period of time. This theory postulates the existence of a liberal economy, the basis for all classical economic thought.

I believe he used the word. “ liberal “ in the semi-political sense -

In such an economy a great increase in the money in circulation leads necessarily to price and wage increases and thus to a strained state of affairs which in the end causes an economic depression. But National-Socialism introduced in Germany a state-regulated economy which made it possible to prevent price and wage increases. This did away with one of the main objections to a financing of production through credit. And so credit was used to produce a greater volume of goods, and the only problem which remained was the determination of just how far this money creation could go. For money creation by the State always contains the seed of excess which leads to inflation. The fact that newlycreated money would be covered by newlycreated goods was not the only point; the type of goods also had to be considered. Simply expressed, the problem was an follows: The credit money, made available for the ii.rma.ment programing, produced a demand for consumption goods, in so far as it was paid out in the form of wages and salaries. However, the armament manufacturers deliver military goods which are indeed produced hut not consumed. This leads to two conclusions: First, care must be taken that in addition to armament production, a volume of consumption goods is produced which is sufficient for the needs of the population, including all those working for rc-armament, and secondly, the less is consumed, the more workers can be allotted to armament; this, however, leads to greater consumption and thus to increased labour requirements on the part of the consumption goods industries. Thus standard of living and extent of re-armament stand in inverse relation to each other. The less I consume, the more I save, and the more I save, the more I can spend on armaments. This means that armaments in the final analysis can be financed not through money creation but only through savings.

We must be prepared to put up with certain restrictions in war time. I am one of those who supported to the full the proposal that petrol should be rationed during the period of the war, but I do not agree that the rationing scheme is being operated justly. Particularly do I think it wrong that there should be no discrimination between the ration granted to the private car owner in the city and that granted to the man in the country. Right at his door the city oar-owner has buses, trams, electric trains, and other means of transport. The country dweller has none of these facilities, and very often lives miles away from the nearest railhead and township. I am, however, more concerned about the effect of the scheme on the truck owner - the man who carts timber, lambs or wool to the railhead, or cream and milk to the butter and processing factories. He is doing essential work which must be carried on continuously and, if it be found as time goes on that he requires a more generous ration than that allotted to him to-day, he should get it at the expense of the private car-owner in the city.

Reference has been made during this debate to the encouragement of the manufacture of producer-gas units in Australia. I learned the other day from a man who drives a two-and-a-half ton truck equipped with a producer-gas unit that his total fuel costs for a journey of over 160 miles, including the cost of a little petrol at the start, amounted to only about 6s. To cover the same distance with a petrol-driven truck would cost 26s. The only obstacle to the greater use of producer-gas units is their initial cost, which is still much higher than it need be. I am prepared to support the granting of a bounty for the production of these units on two conditions, first, that they comply with a high standard of efficiency, and secondly, that they are sold at a price fixed by the Commonwealth Prices Commissioner after taking into consideration the amount of the bounty. We have to-day a large untapped fund which was built up by special taxes imposed on imported motor chassis for the purpose of paying a bounty on motor engines produced in this country. Owing to the war the proposal to manufacture motor engines in Australia has been shelved, and the diversion of a small part of the fund for the encouragement of the production of producer-gas units would be a sound proposition.

Mr Beasley:

– That fund has been tapped and drained ; it is no longer in existence.


– At a time such as this, every effort should be made to bring about a reduction of the cost of producergas units in order to encourage their greater use by motorists as a means of reducing the importation of petrol and conserving overseas funds.

In season and out of season, the honorable member for Hunter (Mr. James) has advocated Government assistance for the establishment of plants for the extraction of oil from coal. There is a good deal of both black and brown coal in my constituency, and I hope the time will soon come when production of oil from both those varieties can be embarked upon as a commercial venture. I submit, however, that everything should be done in the proper order of priority - flow oil first, shale oil second, and oil from black and brown coal third and fourth respectively, because flow oil is cheaper than shale oil, and shale oil is cheaper than oil produced from coal. The time is ripe for a bolder policy on the part of both the Commonwealth and the States in connexion with the production of flow oil. There is at one place in Australia where substantial quantities of flow oil have been proved to exist and where, by means of small experimental undertakings, 150,000 gallons of crude oil have already been obtained and sold commercially - I refer to the Lakes Entrance field in Victoria. It is true that crude oil obtained there does not contain free petrol, but it does contain other constituents of equal usefulness. It contains about 40 per cent, of good diesel oil, and 45 per cent, of lubricating oil ; the remaining 15 per cent, is bitumen of a quality so high that it is greatly sought after by the Country Roads Board of Victoria. In fact, that board is prepared to take 500,000 gallons of crude oil annually, without the bitumen having been extracted from it, for use as a flux in roadmaking The question may be asked : If oil can be produced commercially at Lakes Entrance, why is not private capital forthcoming for its development? The reason is that it is a low pressure field, and the extraction of oil presents very substantial difficulties. Considerable capital is required, and that has not yet been found.

In a report upon the Lakes Entrance field made by the Commonwealth Oil Advisory Committee in December, 1938, the amount of oil existing there was estimated to be at least 150,000,000 gallons. The report also said that the difficulties of extracting the oil had been added to by the fact that many old bores had been put down carelessly and had gone right through the oil strata into water; considerable expense would be involved in remedying the old mistakes before the field could bc put into a suitable condition for production, but such expenditure would be worth while. Unfortunately, before any action could be taken on that report, the prospects ofthe Lakes Entrance field were damned by a further report made by the same committee that 41,000,000 gallons would be a better estimate than the original one of 150,000,000. The second report was based on a. misinterpretation of a report made by Mr. Croll, of the Mines Department of Victoria, who tested samples of the Lakes Entrance glancouite for permeability, porosity and saturation. Dealing with permeability, the facility with which fluids such as oil flow through the glauconite, he expressed the opinion that the degree of permeability at Lakes Entrance was quite favorable. In regard to porosity - the percentage which the volume of void space or pores bears to the total volume of the material- - his finding was that the Lakes Entrance material had a porosity of 10 per cent. It was in connexion with Mr. Croll’s finding in relation to saturation that the misinterpretation to which I have referred occurred. Petroleum technologists use the term saturation to indicate the total pore space actually containing oil. Mr. Croll found that 1 per cent, of the total weight of glauconite consisted of oil. If oil weighed as much as rock, bulk for bulk, that would mean that 10 per cent, of the pore space would be oil filled, but the specific gravity of oil is much less than that of the rock - .96 as compared with 2.6 - so that the oil really filled 27 per cent, of the pore space. Mr. Croll intended to convey that in his report, but unfortunately, some interested people thought that he meant that only 1 per cent, of the pore space contained oil, instead of 27 per cent. The

Commonwealth Oil Advisory Committee apparently interpreted the report to mean that 10 per cent, of the space contained oil and revised its estimate of the oil content of the field. I do not blame the committee for that, because having read Mr. Croll’s report, I admit that its wording is capable of that construction, hut Mr. Croll himself has since pointed out that his report was intended to convey that the .oil amounted to 1 per cent by weight of the total weight of glauconite, and that 27 per cent, of the volume of the voids in the glauconite were oil filled. That means 4£ gallons of oil to the cubic yard, and as the Lakes Entrance field covers up to S square miles, with strata 30 to 33 feet thick, it can be readily appreciated that there must be many million barrels of crude oil in that area. The unfortunate misinterpretation of Mr. Croll’s report, and the revised estimate which followed it, had a most discouraging, and indeed a damning, effect on the prospects of the field, and I consider that the. Oil Advisory Committee should revise its amended estimate which was based on wrong premises. The time is ripe for a bolder policy in the development of our oil fields. Quite properly, we are developing the oil shale at Newnes, and in doing so, the Commonwealth Government is sacrificing 5£d. on every gallon of petroleum produced there. That sacrifice amounts to approximately £400 for each man employed in the industry, or practically double his wages. However, it is the right thing to do, particularly in war time. But I point out that on 10,000,000 gallons which National Oil Proprietary Limited hopes to produce in the first year of production, the Commonwealth’s sacrifice of revenue will amount to £230,000. For one-third of that expenditure, the Government could put the Lakes Entrance oil-field into a condition which might enable an enormously greater prize to be won. Lowpressure fields have been successfully worked in other parts of the world by sinking shafts in the same way as shafts are sunk in mining. Shafts are taken right down to the glauconite and then widened into chambers of considerable size. From these chambers horizontal drilling is carried out. The advantage of that method is that the bores run horizontally wholly in the oil stratum, whereas vertical bores sent down from the surface may travel through 1,000 or 1,200 feet of rock, clay and sand, and then be in oil-bearing material for only 20 or 30 feet of their depth. The former method is being successfully employed in other parts of the world, and I see no reason why it should not be attempted at Lakes Entrance. It would cost very little to obtain a report on this field by an overseas oil production engineer with experience of low-pressure fields. Probably America would be the best country to go to for such advice. It would not be necessary to bring the engineer to Australia if all available data, including that in the hands of private companies as well as of the Government, were sent to him. That could be done and should be done at once, and I hope that such action will be the precursor of a bold policy of development should the report of the engineer warrant it. It would be worth while to spend a substantial sum of money to prove whether a rich prize in oil can or cannot be won in Australia. We cannot afford, in war time, to leave an issue of this importance in suspense.

In conclusion I reiterate my earlier remarks respecting the wisdom of placing in office an Australian Government representative of all the parties in the Parliament. It is my firm conviction that if Australia is to make a worthy contribution towards the winning of this great struggle for liberty and the survival of our democratic institutions, it needs an administration representative of all the people. I earnestly urge upon the members of the Labour party, and also honorable gentlemen sitting on this side of the committee, if they need any urging, that at a time like this we should put all our party differences into cold storage, and keep them there. They could be brought out again, if that was thought desirable, after the war has been won.


.- I shall not speak at any length, and such criticism as I shall offer of the Government’s policy will, like that offered by my colleague, the honorable member for Ballarat (Mr. Pollard), be actuated by a spirit of friendship and be, I hope, of constructive value.

The affairs of this country have been administered for a good many years ‘by anti-Labour governments. At the moment a good deal is being said publicly about the desirability of achieving national unity, making a national effort, and setting up a national government. One thing quite obvious is that this Government and its predecessors in office during the last few years have failed to take adequate steps to prepare Australia for a time of danger such as the present. The Prime Minister (Mr. Menzies), in replying to the speech by the Leader of the Opposition (Mr. Curtin) on the budget, said that wars are fought by the people for the people. My knowledge of history has convinced me that wars are fought by the people, but I cannot agree that they have been fought entirely for the people, because irrespective of what nations may be said to have won a war, the peoples of all the nations engaged have been worse off after than they were before. I can only hope that in respect of the present war the Prime Minister’s words may prove to be prophetic, and that after we have won this struggle a new social order will be established throughout the world which will be a true benefit to the common people and a real reward for the sacrifices that will have been made.

In my maiden speech in this Parliament in 1935 I advocated the adoption of adequate defence measures for Australia, and stressed the importance of a powerful air fleet. I also urged that steps be taken to establish the large-scale manufacture in Australia of aircraft and aircraft engines. -I expressed the view, too, that, our industrial organizations should be placed upon a footing of preparedness for war. I said that aircraft stations and seaplane bases should be established at numerous points on our coastline. Having regard to our population and financial resources at that time, I believed that that was the most effective defence policy that could be adopted. I believed that it would result in economy in respect of both human life and financial resources. Five years have elapsed since that time, but the steps taken by this Government and its predecessors in office to establish aircraft bases around our coastline are still most inadequate to enable us to face an emergency. In fact, so little has been done that I have wondered, at times, whether our governments have really been sincere in their declared desire to provide for the defence of Australia and the security of its people.

The honorable member for Hunter, (Mr. James), in his concluding remarks this afternoon, referred to the position at Walsh Island, Newcastle. For a number of years ships of high quality were constructed at Walsh Island. Many of them are still operating in our coastal trade. In 1931 an anti-Labour government suspended shipbuilding operations at Walsh Island, and disposed of the shipbuilding plant and equipment there at a figure which justifies the view that they were given away. A good deal of the equipment that was sold to private enterprise is in profitable use to-day in various parts of New South Wales. A floating dock at the island, which cost approximately £800,000, is being practically dragged to the bottom of the ocean by the weight of the barnacles attached to it. At any rate, it is not in use.

We have heard a good deal from this Government, about equality of sacrifice. What do honorable gentlemen opposite mean by that term ? Would it be said that a person who lends £1,000 to the Government in order to help our war effort is making a sacrifice equal to that of another person who offers his life in the country’s service? We should ensure that every section of the community is required, as far as practicable, to make an equal sacrifice. People in all walks of life should bear their fair share of the burden of the war effort. Yet, to-day, more than 100,000 people in New South Wales are still without employment, although I have personal knowledge that a number of factories in my own district are not operating at anything like their full capacity. This makes me ask whether the Government really desires to organize the country for a maximum war effort. Ministers should endeavour to inform their minds more adequately concerning our industrial affairs. Honorable members on this side of the chamber who seek information from Ministers by the asking of questions are well aware from the replies they receive that on numerous occasions the Ministers are seriously illinformed. The answers appear to be furnished by departmental officers or by other persons who have access to a certain amount of information but certainly do not know all the facts.

I suggest that if the Government desires to secure the full co-operation of honorable members on this side of the committee, so that a united and maximum war effort may be made, it should coopt some of us who have comprehensive and detailed industrial knowledge. The honorable member for Hunter has a wide knowledge of coal-mining; the honorable member for Melbourne Ports (Mr. Holloway) has a comprehensive knowledge of industry generally; the honorable member for Maribyrnong (Mr. Drakeford), has had a long experience of transport matters; and, if I may be permitted to say so, I have a wide knowledge of the steel industry of New South Wales. We all are prepared to place our capabilities at the service of the Government in order to ensure the full utilization of the industrial resources of the nation, so that a maximum effort may be made to bring the war to a successful conclusion.

The honorable member for Gippsland (Mr. Paterson), expressed the view that the rationing of petrol was absolutely necessary. Probably, in existing circumstances, that is true; but that, in itself, reveals the short-sighted policy of antiLabour governments over the last few years. The honorable member for Hunter, and other honorable gentlemen on this side of the committee, have been urging year in and year out, that active steps be taken by governments to develop the production of oil from coal, shale and other available resources in this country. We have also advocated the construction of numerous storage tanks in well-distributed centres throughout the country. Had. that policy been applied, there would have been no need to restrict either the public or private use of petrol. Moreover, ample petrol would also have been available for training the various arms of our fighting forces. Australia’s first arm of defence should be the Royal Australian Air Force. The fact that the country has insufficient aircraft to carry out adequate protective coastal patrols has been demonstrated by the numerous sinkings of merchant vessels in the last few weeks. It is useless to cry over spilt milk, but I urge the Government to increase to the limit the rate of production of aircraft and engines and the training of the personnel to man them. I urge also the acceleration of shipbuilding. About nine months has elapsed since the Townsend report on shipbuilding was presented to the Government. Honorable members on this side of the chamber have endeavoured to obtain copies of the report, but were told that this could not be done as it was departmental only. The Government, despite its claim to be seeking national unity, treats honorable members on this side of the chamber as if we lack common sense and are not so loyal as Government supporters. That is altogether wrong. We should be told more of what this country is doing and is capable of doing, in order that, we may help to extricate it from the tangle iu which it is involved. Much has been said about the formation of a national government and the encouragement of a united effort by the people; we are anxious to promote a common war effort, but we have no wish to become associated with honorable members opposite in a national government that would not put into operation a truly national policy for the benefit of the people. If the Government wants to secure the full co-operation of the Labour movement and the nation as a whole it must first engender a feeling of confidence in the minds of the people. It cannot do this unless it gives to the workers a definite assurance that, while they are working long hours in the munition factories and other war-time establishments, industrial magnates and financial institutions will not be allowed to reap a. harvest of profit.

Mr Bell:

– A national government could do that.


– I do not agree with the honorable member. As I have already said, the Prime Minister, when he invited the Labour party to join in the formation of a national government, did not propose the adoption of any national policy for the benefit of the people as a whole. “We are just as seised of the danger of the position that confronts Australia as are the members of any other political party, and nobody could be more loyal to the nation than we. If the Government honestly wants to obtain the full co-operation of the men and women of Australia, it must not continue to treat them like school children. It should take members of the Labour party into its confidence so that we may know the actual state of the nation’s defences.

Mr Duncan-Hughes:

– Even honorable members on this side of ‘the chamber do not know that.


– Supporters of the Government have been told a great deal more about Australia’s war effort than members of the Labour party.


– Vital defence information is not available to us; in the interests of the country it should remain secret,


– If that be so, more secret sessions of Parliament should be held in order that honorable members might be told the truth about the war effort. ‘For many months the British Government has been warning this Government of the danger which faces the Empire, due to serious losses of shipping and commodities. Only recently the British Government said, in effect, Build ships wherever you can in Australia, because, at the moment, we are losing vessels at a faster rate than we can build them “. The people of the Mother Country may not be facing actual starvation as the result of the shipping losses, but unless something be done to remove the danger they will be in a serious plight before long. Should that happen, we in Australia will have to suffer with them.

The Prime Minister said in his budget speech that wars were fought by the people for the people. I hope that, when we win this war, a new order of society will arise in which there will be a more equitable distribution of worldly goods, a better understanding between the nations, and the same freedom of the individual as exists here to-day. TI the Government will play the game and prevent the making of profits from war industries, the people will also play the game and give their all. We shall be fortunate indeed if we maintain existing standards of living and come successfully through this conflict into a new era of peace and prosperity.


.- In my brief speech I shall appeal not only to the Parliament, but also to the people of Australia, for a united war effort. In September there was a federal election, the result of which we all know. The electors of five of the six States of the Commonwealth returned to Parliament a fair majority of government supporters. It would have been better for Australia had a majority of the people of New South Wales also seen eye to eye with the Government. However, these troubles can be overcome. The Government and the Opposition parties were returned in almost equal numerical strength, and, consequently, the Parliament is now practically unworkable. That difficulty cannot be overcome merely by the Opposition forming a government. Throughout the election campaign the people as a whole asked for the formation of a national government, and every member of my party promised that if returned he would strive to achieve that end. I advocated the formation of a national government, and I had the honour to be returned by the biggest majority yet recorded in my electorate. I appeal once more to honorable members opposite to join with us in the formation of a national government. I hope that before Parliament adjourns for the recess an agreement will be reached by all parties on that point. Unlike many honorable members, I made no promises during the election campaign, except that if returned I should help the government in the prosecution of a sound war effort. All of my political colleagues in South Australia made a similar promise and all of them, with but one exception, were elected with big majorities. Following the election the Prime Minister (Mr. Menzies) invited the Leader of the Opposition (Mr. Curtin) to enter into negotiations for the formation of a national government. The right honorable gentleman possessed full power from this party to do just as he thought fit in that respect. I know that he earnestly desires the formation of such a government. The Leader of the Opposition, in response to that invitation, interviewed the Prime Minister, hut he could not agree to any of my leader’s proposals unless they were approved by his party, representatives of the trade unions, and, most unfortunately, the honorable member for Barton (Mr. Evatt). I am particularly sorry that the attitude of the Opposition toward those proposals was influenced to a- large degree by the honorable member for Barton. I regard the Leader of the Opposition as one of the most sincere men who have ever been elected to this Parliament. Unfortunately, the Labour party refused to approve of the formation of a national government, and, consequently, further discussions on that proposal were useless. Subsequently the Prime Minister accepted the Labour party’s suggestion for the formation of the Advisory “War Council. He did so because he could see no alternative. A section of the press contended that, in order to achieve a national government, the Government should have accepted every plank of the Labour party’s platform. The Government, of course, could not agree to that. However, I believe that if the Prime Minister were told by the Opposition that it is prepared to meet him within reason, a compromise could be arrived at. But the Opposition insists that the Government only should make concessions. Obviously no agreement can be reached on that basis. I still entertain hopes for the formation of a national government and I believe that many honorable members opposite hold the same view. In the present circumstances, this Parliament cannot work effectively until a national government is formed. I believe that much good will result from the operations of the Advisory “War Council. Indeed that body has been responsible for the spirit of compromise which has already characterized, to some degree, deliberations in the Parliament, and it has thus enabled us to carry on at least for the time being. The “War Council, however, shares none of the responsibility of government, and, consequently, it cannot serve as a substitute for a national government in which all parties would shoulder a common responsibility. I have not the slightest doubt that many honorable members opposite have the experience and ability to share that responsibility. To-day the people of Great Britain are living in a hell upon earth. Not only London, but also towns from one end to the other crf Great Britain are being mercilessly bombed, and daily thousands of people witness the killing of relatives and fellow citizens. They are appealing to the peoples of the dominions to stand by them in their ordeal, but disappointment must- fill their hearts when they learn of the position in this Parliament. So long as the present conditions be maintained, our war effort will be seriously hampered. At a time like the present, Ministers should be enabled to devote the whole of their attention to the administration of their respective departments. When every one in Great Britain is doing his best in the defence of his country, we are not standing up to our obligations to the Empire. Since the outbreak of war thousands of workmen in this country have participated in strikes, whilst to-day thousands more are threatening to strike. Such a state of affairs is a disgrace to Australia. Each citizen must realize that in this war a responsibility rests upon him. The Australian working man is as efficient as any to be found elsewhere. I base that view on my long experience as an employer. I have employed at least as many men as any other employer in South Australia, and I have found that the Australian worker is eager and willing at all times to do the work he has in hand provided he be left alone. My policy, as an employer, was to be honest with my men and thus win their confidence. I was always willing to listen to any of their complaints, and I insisted that whenever they had a grievance they should not hesitate to place the facts before me. On only one occasion throughout my long experience did I encounter trouble with .an employee, and that was towards the end of my career, when I was employing 100 men on a big job on the west coast of South Australia. I was paying the men well over the ruling rates of wage?. Every one was working happily. A union official was sent from Adelaide four weeks in succession, by the boat which visited that locality, and he had discussions with the men. I had 40 men, each of whom had a dray, and I employed another 40 men to load the drays, making the total number of employees on that section 80. The work on which they were engaged was the carting of stone for the construction of a wall into the sea. The average load occupied threequarters of an hour for the lead. After the union official’s fourth visit, one of my employees came in at 11 o’clock, tipped his load, took his horse out of the dray and fed it. The foreman at the tip asked the reason, and was told that there was not sufficient time to take another load before lunch. The employee thus had an extra hour for lunch. If each employee had taken two hours instead of one hour for lunch, 80 hours would have been lost. I believe that other honorable members would have acted as I did in the circumstances. The foreman asked me to give him permission to dismiss this employee, and I granted his request. On the following morning, a stop-work meeting was held and I was told to reinstate that man or all of the men would cease work. I replied that I had acceded to the request of my foreman, and gave them 30 minutes to consider the matter. They said, “ “We do not want 30 minutes “. I left them for that period, and upon returning was told, “ He is on or we are all off “. I said, “ You are all off “ ; and they went to the office and were paid off. Many of those men were 100 miles from their homes. Some of them remained in the town for a fortnight, and others drifted away. Eventually, their spokesman asked me if they could return to work. I immediately replied, “Yes, at the ruling rate of pay you would receive from any one else. You have been receiving much more from me.” There was some argument, but the men returned to work. During the ensuing week, some of them drifted away, but the remainder worked well, and I subsequently restored the old rate of pay to them. “Why did that union official induce those men to hang up this work, when there was no cause for dissatisfaction? They were receiving the best terms that workers could obtain in any part of Australia. If the men in different industries were not influenced by agitators and, I am sorry to say, sometimes by members of Parliament, a far better job would be done in Australia.

The Australian workman, if left alone, will do as good work as any workman in the world.

I refer honorable members to the appeal made by Mr. Bevin to the people of the British Empire, in which definite mention was made of Australia. We were told of the experiences through which the people of Great Britain are passing, of the way in which the workers are shouldering their responsibility, and of the assistance which is being given to the Government by the Labour party. The appeal was directed especially to the Australian people, and I hope that they will take notice of it. Each individual must do his best to discharge the responsibility that rests upon him. For the year 1939-40, the expenditure budgeted for was £45,000,000 in Australia and £10,000,000 overseas. Prior to the collapse of France, it was suggested that the amount for 1940-41 would be £75,000,000, but that collapse altered the outlook entirely, hence the colossal defence provision of £186,000,000 in the present budget. It is the duty of every one to help to provide that sum. If the people be left alone they will face the task joyfully. It is a sacrifice that we must make. We are thousands of miles from the seat of war, and God forbid that it should come to our shores. So long as the theatre of operations remains where it now is, all men and women in Australia should give to the utmost of their capacity.

There has been a good deal of complaint from the Opposition in regard to the proposal to tax those who are receiving a low rate of wage. I have not had one protest from my electorate in reference to this matter. Prior to the compromise, a man with a wife and two children, earning £6 a week, was to be exempt from tax. That also was the position of a man, with a wife and one child, who earned £5 a week, and a single man who earned £150 a year. The statutory exemption is now to be raised to £200, and I am sure that those who are to be asked to contribute will willingly do so. It behoves us to refrain from stirring up trouble, and to help the people to assist the nation. We are proud of the action of the New Zealand Labour Government, which has gone much further than the Commonwealth Government proposes to go. In that dominion there is no statutory exemption, the man on even the lowest wage being obliged to pay tax. Even the pensioner is taxed, and has not complained. There would have been no complaint in Australia if the people had been left alone.

Mr Curtin:

– Does the honorable member consider that New Zealand is not pulling its full weight because it has not a national government.


– I consider that it is pulling its full weight. It is setting us a wonderful example, which we might well follow. During the coming year a good deal of the expenditure which so far has had to be incurred in building and equipping factories for the manufacture of war requirements and aircraft will be avoided ; consequently, a larger sum can be devoted directly to the manufacture of munitions, which are so badly .needed. During the last war, our soldiers were provided only with their uniforms, the balance of the equipment, including guns and ammunition, being supplied by Great Britain. To-day the story is quite different; we have had to equip in Australia those who have gone overseas, and also help New Zealand to equip its troops. Millions of pounds worth of munitions have had to be sent to the Mother Country. During this year we may be in a position to increase the quantity, and I am sure that this will be done ungrudgingly. “We also have to send goods of many kinds to India and other parts of the Empire.

The honorable member for Newcastle (Mr. Watkins) spoke of the need for increasing the production of aircraft. We all are in agreement with that. I remind honorable members of the Opposition that within two years of the receipt in Australia of the first blue-print for the construction of aircraft, the first aeroplane was in the air. The United States of America took six years to construct its first aeroplane.

Mr Conelan:

– How long ago?


– Many years ago. This was a wonderful achievement on the part of the Australian workmen and those who had charge of the operations. The aeroplanes since built reflect great credit on all concerned. A considerable time was needed to make a start with many annexes, and to equip factories with the machinery and tools required. Even those machines and tools had first to be made. Neither Australia nor Great Britain was in a state of preparedness at the outbreak of hostilities, nor is the United States of America to-day, but if the matter be considered reasonably it will be admitted that quite a good job has been done. I remind the honorable member for Melbourne (Mr. Calwell), who so frequently interjects, that we are Britishers and live under the protection of the British flag. I invite him to show that he, too, is a Britisher. To the people of Australia, generally, and to all honorable members, I say, “ For God’s sake let us sink all party differences and push on with the war effort that is expected of us by those who sent us here”.

Mr. FROST (Franklin) [5.5Q. - I listened with interest to the honorable member for Adelaide (Mr. Stacey), who made a plea for a national government. The honorable gentleman also criticized the workers of Australia.

Mr Stacey:

– No; I said that, if left alone, there were no better workmen in the world.


– The honorable member referred to SO draymen and loaders whom he had employed. The men considered that they were not getting a fair deal, and, when they ceased work, the honorable member stood on his dignity. They were nearly 100 miles away from their homes, and they had no means of going there so apparently he starved them into submission. He remarked that they walked about for a fortnight, after which he put them back into employment at reduced pay. That is the kind of deal that the workmen would receive if a national government were formed, and the honorable member were a member of it. I am in favour of conciliation and round-table conferences for the settlement of industrial troubles.

I shall leave to the experts the problem of financing the war expenditure. I am heartily in accord with the Leader of the Opposition (Mr. Curtin) that the lowerpaid section of the community should not be so heavily taxed as was originally proposed by the Government. The proposal to reduce the income tax exemption figure to £150 was much too drastic. I a in glad that a compromise was reached for its reduction to £200. Many single men have heavy financial obligations; amongst them are those who contribute to the maintenance of their parents and other members of their families.

Tasmania has been hard hit as a result of the war. One of its main industries is that of fruit growing which provides a great deal of employment. During the first two years of the last war, orchardists in Tasmania were able to export their surplus fruit; but, in the two following years, owing to the loss of shipping, exports ceased and the fruit was allowed to rot on the ground. The available shipping space was required for the carriage of meat, butter, and other commodities that were considered to have prior claims to the accommodation. The growers in Tasmania received no compensation for their losses during the war, and, at its conclusion, they were able to export a limited quantity of their fruit. In 1920, docks in England were congested with foodstuffs such as butter and tinned meat, and, although fruit was required, the Tasmanian growers were not permitted to meet the demand fully because of restrictions due to shipping contracts operating in other parts of the world. The limited quantity of fruit which the growers were able to export commanded substantial prices, but the major portion of their crops was left to rot, and that occasioned heavy loss. I hope that a similar experience will not befall the fruit-growers during the present war. The Apple and Pear Acquisition scheme saved the industry last season, and I hope that the scheme will operate again in the coming season. If it does, I shall certainly do all that I can to make it successful.


– Does the honorable member contend that the growers need it?


– Yes, 90 per cent, of them do. The remainder of the orchardists live in particularly favorable districts, but the quantity of fruit produced by them is comparatively small.

Mr Anthony:

– Even their prospects would be destroyed if the whole of the crop were thrown on the market.


– Yes. Some varieties of fruit excel in certain districts. The growers in Tasmania produce the largest quantity to the acre, and the best quality of fruit grown in Australia or in any other part of the world. In California, I have seen huge crops of very clean fruit, but its flavour was not equal to that of the Tasmanian article. I object to a comparatively few growers harassing the Government, and trying to make the acquisition scheme unworkable. Some growers on the mainland, who have been prosecuted for breaches of the regulations, have alleged that, although they received 2s. a case for their fruit, they did not know that it then became the property of the pool. I am pleased to say that the growers in Tasmania approve of the action taken by the Government to assist the industry.

Mr Beck:

– This industry is vital to Tasmania.


– Yes ; a great deal of capital is invested in it.


-hughes. - Why should fruit be allowed to rot on the ground? Could it not be fed to pigs?


– Thousands of bushels of apples were given to pigs last year, but many orchardists could not afford to buy pigs merely to consume waste fruit. In recent years, Tasmania lj as exported about 3,500,000 bushels of apples annually, and the capital invested in the industry amounts to over £5,000,000. The growers total 2,500, and the number of persons employed in the industry is 25,000. There are 27,000 acres of apple and pear land under cultivation, and 25 per cent, of the timber cut in Tasmania is used for hardwood fruit cases. Therefore, I urge the Government to give favorable consideration to the claims of this industry.

Tasmania produces over 90 per cent, of the black currants and raspberries grown in Australia. The holdings of the growers of these fruits are small, and are located mostly in mountainous districts. In 1935, the crop of berry fruits was a bountiful one. The processing firms thought that they would be unable to deal with the whole of the crop, with the result that over 1,000 tons of raspberries was allowed to fall to the ground. In that year I visited England, and the first merchant I saw in London asked me if there was much raspberry pulp in Tasmania. As the market in England and Scotland was bare of that commodity in that year, I urged upon the Government that that 1,000 tons of raspberries should be processed and shipped overseas. If the surplus could not be processed, then production would have to be reduced next year. However the Government would take no action, and £50,000 was lost to the industry. The last pulp I saw sold was put on the market by Humphrey Frost, whose premises are near the Smithfield markets. He sold five tons at £40 sterling a ton. After I left England in October, the price rose still higher. In 1937 conditions were similar, but the Minister still refused to give us the necessary assistance, and the fruit was allowed to rot. Now we need all the berry fruit we can get. There was a good market for it this year, but the unseasonable blizzard which occurred in October destroyed over 50 per cent, of the crop. During the first week in November, I went through a number of plantations and learned that growers, who usually produced between 30 and 40 tons of black currants, would this year have to buy fruit with which to make jam for their domestic use. They are people of a good class, and the Government should do what it can to assist them. In one family which I visited there were eight children, and the father and mother - ten of them sitting at the table.

Mr Bell:

– They should get a share of the £1,000,000 for the relief of the wheatgrowers.


– I will not say a share of it, because I believe that the wheatgrowers need it all, but the Treasurer should make available at least £20,000 for the assistance of the fruit-growers. It would be no hardship for him to do that, ‘and they are as much entitled to assistance as are the wheat-growers. Fruit growing is their only means of livelihood, and this year their prospects of a decent return have been destroyed.

I have always maintained that the soldiers’ pay is not adequate. As the result of the budget compromise, the sepa ration allowances have been increased, but the soldiers, in comparison with the ordinary workers, are still badly paid. Recently I visited the Maribyrnong munitions workers, and saw men working there for £7 and £8 a week. Even girls are receiving £4 and £5 a week. I do not begrudge it to them, because I know they have to work bard during long hours, and they earn their money. However, the soldiers marching up and down on sentry-go outside the factory, carrying rifles with fixed bayonets, receive only 5s. a day. Why the tremendous difference? Of course, I will be told that the soldier receives his food, housing and clothing free. That may be so, but anyone who has ever been in camp knows that there is a good deal of expense over and above the items provided. The soldier should receive at least the basic wage. As I said to one of the munitions workers, if there was a raid at Maribyrnong, the workers would get into the shelters, but the soldiers would have to stand and face what was coming.

Mr Bell:

– Would the honorable member agree to raise the taxes in order to pay the soldiers more?


– Yes, if necessary. Of course the honorable member for Darwin (Mr. Bell) is a colonel, and a colonel’s pay is high enough. If one goes to Victoria Barracks, one is stumbling all the time over colonels and captains. In fact, there is a saying that if you can find a private there you can win five “ bob “.

The Government is budgeting for tremendous expenditure on the production of war materials, and we know where the bulk of the money will be expended. It will go to Victoria and New South Wales. Well, we do not object so much to that.

Mr George Lawson:

– South Australia is getting some, too.


– South Australia is coming in for a little bit, but there are facilities there for producing war material. Otherwise the money would not be expended there. I have heard people in New South Wales say that we should concentrate all our heavy industries at Newcastle. I point out, however, that at Newcastle there is only the coal ; all the limestone must be brought from Tasmania, and the iron ore from South Australia. I have no objection to Newcastle retaining the industries it possesses, but it is now reaching out for new industries which could very well be established elsewhere. We have been trying for some years to establish in Tasmania an industry for the production of magnesium, and many of the initial difficulties have been overcome. Now, the Broken Hill Proprietary Company Limited wants to grab the industry. The Tasmanian company was started in 1934. It controls large deposits of dolomite, from which magnesium can be produced more cheaply than from any other material. The Broken Hill Proprietary Company Limited is trying to produce magnesium from magnesite. It is conducting experiments to this end, but has not yet proved that they will be successful. However, it has stated that it is putting up a plant to manufacture magnesium, and the Tasmanian industry is to be sacrificed. If the Broken Hill Proprietary Company Limited is unable to make a success of the venture, the industry will be handed back to Tasmania. That was what happened with electrolytic zinc. It could not be produced economically on the mainland because its smelting entails the use of a great deal of electric power, and the hydro-electric power in Tasmania is much cheaper than is the power available on the mainland. Much electric power will also be needed in the production of magnesium from dolomite, and we know that there is a big market for magnesium in Australia and in other parts of the world. I maintain that the Government should allocate to Tasmania some of its huge war expenditure. At the present time, .the best of our tradesmen have to come to the mainland in search of work. If an enemy raider were to destroy the munitions works at Maribyrnong and Newcastle we should have no others to fall back upon. In Tasmania, we are generating hundreds of thousands of horse power of electric current, and some of it could very well be used in the production of munitions.

Mr Anthony:

– Does not the honorable member think that there might be difficulty in transporting the munitions to the mainland in certain circumstances ?


– That may be; but it would be just as difficult in those circumstances to get from Tasmania the materials necessary for the making of munitions on the mainland. The only zinc smelters in the Southern Hemisphere are situated in Tasmania. That State also has the largest copper mine in the Commonwealth and produces practically the whole of Australia’s output of copper as well as large quantities of silver, lead, tin and other minerals. It also has a harbour which is second to none in the world.

Mr Bell:

– At Burnie?


– I had in mind the harbour in the Derwent. I should have no objection to the magnesium industry being established at Burnie. I do not say that it should be in my electorate; I urge only that it be established in Tasmania. The electrolytic zinc works were established in my electorate only because that is the most suitable place for them. During the last war, the price of carbide rose to over £80 a ton; in fact, carbide was unprocurable. Now, there is a factory in Tasmania which produces all of Australia’s requirements of this commodity. That was made possible because Tasmania is well supplied with electricity and has the best lime deposits in the world; the proportion of lime is as high as 9S per cent, or 99 per cent. A pure article is necessary for the production of high-grade carbide.

Mr Duncan-Hughes:

– The Tasmanian product is of high quality.


– That is so. It is superior to the carbide which was imported from Scandinavian countries before the Australian industry was established. But notwithstanding the high grade of the Tasmanian product, its price has not been increased ; and it will not be increased. When the manager of the company sought protection against dumping, he said that, if given the whole of the Australian market, he would guarantee that the price of carbide would be reduced. His company was given a monopoly but, unlike other monopolies, it did not raise the price of its product; instead, it honoured faithfully the promise made to the then Minister for

Trade and Customs (Mr. Forde) and reduced the price by about £2 a ton. The price has remained practically constant although the quality of the carbide has improved.

Tasmania has ako commenced the manufacture of newsprint recently. Honorable members know that newspapers to-day are smaller than they were before the war.

Mr George Lawson:

– Some of them are still too big.


– At Burnie in Tasmania, where the finer classes of paper are made, there is a factory which produces about 20,000 tons of paper a year. The manufacture of newsprint is now being undertaken in the Derwent valley. This industry has been, established in Tasmania. That State has natural forests and a rainfall sufficient to ensure continuous supplies of suitable timber and fresh water. Nevertheless the industry was not established there without much opposition from monopolies which would have flooded the market and crushed the Australian enterprise in its infancy. Had it not been for the efforts of the late Premier of Tasmania, Mr. A. G. Ogilvie, the manufacture of newsprint in Tasmania would not yet have commenced. The Government of Tasmania aided the enterprise by granting it financial assistance, supplying cheap power, and helping it in other ways. There is a representative of the Government on the company’s directorate. Some of the £186,000,000 which the Commonwealth Government proposes to expend during the next twelve months could be expended more profitably in Tasmania than on the mainland, because of the existence in the island State of cheap hydro-electric power. The Government of Tasmania is prepared to assist in every way in the establishment of suitable industries in that State.

I had thought that before this the Commonwealth would have undertaken a shipbuilding programme in Tasmania. Some of the excellent wooden ships which were constructed in Tasmania many years ago are still in use. Tasmania has timber suitable for building ships and also trained artisan’s capable of making them, and, as Australia is short of ships, this opportunity to build them should not be lost.

Mr Holloway:

– Mine-sweepers could be built in Tasmania.


– Wooden ships of up to 500 tons could be built there quickly. Such vessels would be of great assistance to the Commonwealth in the immediate future. They could be used in the interstate trade.

Mr Anthony:

– Are men available to build them ?


– Yes. I do not know why this industry has not been revived in Tasmania. It may be that the Commonwealth has preferred to build iron vessels, particularly warships and sloops; but there is no reason whatever why wooden vessels should not be built in Tasmania. The necessary slips, timber and labour are available. If funds were made available, vessels of twice the size of those which now carry timber to Adelaide, Brisbane, Newcastle and other places could be built. Unless something be done quickly, trained men may not be available, because Tasmanian artisans are continually forced to seek work on the mainland.

Some years ago a number of honorable members visited England as members of the Empire Parliamentary Association. On an occasion when Mr. Anthony Eden was speaking to us, some one interjected, “ What about sending troops from the Dominions ? “ Mr. Eden replied that he did not think that any more expeditionary forces would be sent from the Dominions; in the event of another war, the position would be entirely different from what it was between 1914 and 1918. He stressed the wisdom of the Dominions becoming selfsupporting in every way; to that end we should have our own factories for the manufacture of clothing and food as well as munitions. Although the present Prime Minister of Australia was the leader of that delegation, he does not appear to have done anything on his return. The Government of the day waited for something to turn up. Unfortunately, something did turn up, and Australia was found unprepared. The British Government evidently expected war and realized that in that event Great Britain might have difficulty in assisting the Dominions. In fact, Mr. Eden said that even two years might elapse before assistance could be sent to us. He did not doubt Britain’s ability to help the Dominions eventually, but he said that Ministers at Home would be greatly relieved to know that the Dominions were able to protect themselves. It is useless at this stage to cry over spilt milk. We should, however, be active now. Every member on this side is prepared to do his utmost to serve the best interests of his country. There are some who say that that can best be done by the formation of a national government. We on this side do not believe in the formation of a national government at the present time.


– The honorable member’s time has expired.


.- I. for one, do not believe that a monopoly of brains and common sense exists either on this or on the other side of the House, and I cannot understand why all the discussion about the formation of a national government should not bear fruit. Sooner or later, we must have such a government. Honorable members should recognize that fact, and devote the whole of their energies to the expansion of the war effort. To date that effort has not been so effective as it would be if all were prepared to co-operate.

The Government proposes to raise by many means, including heavy taxes imposed oh all sections of the community, the colossal sum of £186,000,000. The Leader of the Opposition (Mr. Curtin) declared that, if given the opportunity, he would expand national credit within safe limits, and the Prime Minister (Mr. Menzies) made a similar remark. What I desire to know is. who will be the arbiter of what constitutes a safe limit?

Mr Drakeford:

– The government of the day.


– I should be reluctant to see the finances of the country left to the whims of politicians. Men who have been trained as bankers know the safe limits within which the national credit may be expanded, and though I realize that there are experts on banking policy on both sides of the House, I prefer to leave the decision to the bankers. All honorable members have their own opinions as to what constitutes equality of sacrifice, and they are entitled to them. But if every body is genuinely interested in winning the war, all sections will gladly bear some part of the burden, and the budget is designed to that end. Statements that the budget will have a deflationary effect, I cannot accept. When the enormous sum of £186,000,000 begins to circulate in Australia, it will usher in for the workers a period of prosperity unparallelled in the history of the country. Never before has such a colossal sum been put into circulation in the Commonwealth in twelve months. I fail to see how deflation or depression can possibly occur during the spending of that money. At the same time, this opens up a subject of vital importance to the smaller States. As the honorable member for Franklin (Mr. Frost) pointed out, most of the money will be expended in the more populous, highly industrialized States. Although collected on a petcapita basis, it will hot be spent on that basis, with the result that the smaller States, unless industries be established within their borders, will be faced with stark depression. The Government must give urgent consideration to that matter. In Tasmania, very few secondary industries are capable of assisting the war effort. As the honorable member for Darwin (Mr. Bell) and the honorable member for Franklin have already dealt thoroughly with the importance of the magnesium industry, I shall content myself with endorsing their remarks. Such industries as that are absolute necessities to Tasmania and offer the only means by which that State can assist the war effort.

The remarks of the honorable member for Franklin about shipbuilding have my support. It is rather unfortunate for me that I happen to follow him in this debate, because I do not desire to repeat his statements upon this subject. Shipbuilding is another matter to which consideration must be given, as Tasmania is well equipped to carry on that part of the war effort.

Mr Frost:

– The honorable member and I are good Tasmanians.


– That is true. Last week the interstate passenger liner Canberra was held up in Sydney because some members of her crew were not aboard at the hour at which the vessel was scheduled to sail. I am prepared to agree that mistakes are liable to occur on both sides. No one is always right, or always wrong. But severe action should be taken against irresponsible men who delay the departure of ships by not presenting themselves at the proper time for duty. Honorable members opposite could assist in overcoming such vexatious delays.

A few days ago, I listened with interest to the remarks of the honorable member for Kennedy (Mr. Riordan), who, in his very commanding way, cited staggering figures of the profits and reserves of “ big business “. Very conveniently, I thought, the honorable member forgot to mention the returns of the Colonial Sugar Refining Company Limited, until I drew the information from him. He seemed to regard that enterprise as a public benefactor, contending that it made its profits not from, sugar but from other industries associated with its sugar activities. In my opinion, the Colonial Sugar Refining Company Limited is one of the biggest of the commercial octopi in the Commonwealth.

Mr George Lawson:

– The honorable member for Kennedy admitted that.


– He was significantly reluctant to cite the figures relating to the company’s activities. It exacts a toll from every grocer and distributor of sugar in Australia, inasmuch as the retailers make a loss of 1 per cent, on every ton of sugar they sell.

Mr George Lawson:

– That statement is incorrect.


– I can substantiate it. Naturally, no loyal Queenslander will admit it. The company has established enormous reserves, which are probably greater than those created by any other big business concern in Australia. For obvious reasons, Queensland representatives are bound to protect the sugar industry. I should probably speak in its favour if I were placed in the same position as the honorable member for Brisbane (Mr. Lawson), but that does not make the position right.

Mr Drakeford:

– Queensland assists the jam-making industry in Hobart.


– I do not think so.

Mr George Lawson:

– More jam from Hobart is consumed in Queensland than in any other State.


– I know that Queensland representatives condone the activities of the Colonial Sugar Refining Company Limited; but when they are criticizing “ big business “. they should be consistent and include that company in their remarks.

Although Parliament has been in session for three weeks, no important business has yet been transacted. The general debate on the budget is still proceeding and the Estimates have yet to be passed. As every honorable member knows precisely the attitude that he will adopt towards the budget, I urge each one to curtail his speech and not to delay the Government’s legislative programme. In my opinion, the committee is wasting valuable time. Let us get on with the worthwhile task of governing the country.

Melbourne Ports

– Although some of the sting has been taken out of this debate by the compromise effected by the party leaders during the protracted negotiations last week, there still remain in the budget a number of evils which, before the complementary bills are passed, should be ironed out. The public are not surprised that the budget should be an extraordinary one, and that Estimates of revenues and expenditure are out of all proportion to anything previously known in the Commonwealth. They recognize that the abnormal times and the vital issues involved make such an historic budget inevitable. But they are surprised that the Government has failed to adopt new methods to meet the revolutionary changes, that it stands flat-footed in a most conservative manner and makes no bold progressive moves. This is the time for the Government to throw aside its slavish subservience to private enterprise and its wholehearted determination to ensure that the interests of private enterprise shall remain sacrosanct. Unfortunately, the budget contains nothing to make one believe that the Government has departed from its fixed policy of implementing the desires of “ big business “. Furthermore, the people are not surprised at the heavy sacrifices that acceptance of the budget will entail. Every one must expect to make greater sacrifices, because of the greater needs of war time; but people think that the sacrifice demanded has not been spread equitably over all sections, and that evils and anomalies exist in the proposals for collecting the money, and the manner in which the Government proposes to make the burden bear upon the people, regardless of the elementary principle of taxation - ability to pay. I disagree with the statement of the honorable member for Denison (Mr. Beck), that there is no danger of the budget causing a depression or deflation. The contention that the Government can subtract i£60,000,000 of spending power from the community, without causing some degree of depression is economically unsound. Although £186,000,000 will be spent in Australia during the current financial year, the Government must first collect that colossal sum from the people in little more than half that time. The spending power of the people will be considerably reduced and much disorganization must be caused by this sudden fall of demand. I contend that the budget involves unnecessary and uneconomic sacrifice. To take from pensioners, soldiers and basic wage-earners, money which is bespoken before they receive it, and spent as soon as received, is definitely uneconomic. If the Government taxes those sections their demand for goods and services will immediately be reduced. Purchases of goods or services are governed by the wages of the purchaser and, if people are excessively taxed, their spending power is immediately curtailed. Prices fall and deflation begins, and continues with snowball like effect. That occurred in the last depression, which was artificially created, but, once created, could not be stopped, and its momentum increased as the years went by. We were only emerging from it on the eve of this war. Insufficient consideration has been given to the possibility of taxation reducing the. spending power of the mass of the people. If the answer to that is “We knew and intended that”, is such a policy economic? It is not. It is wrong to tax people whose income is spent as fast as it is earned. It is also unjust, because they have insufficient to maintain more than a decent standard of living. It is uneconomic, because it results in less business, less prosperity and a general depression.

It has been said that taxation in Great Britain and other places in the British Empire is heavier than in Australia, but is it not true that Britain learnt a lesson from the last war? Half way through that war Britain decided that it was not getting the best results from the workers. Production of munitions had been left absolutely to private enterprise, but the Government decided that it had been robbed by exploiters who had charged double and treble the cost of shells and other war needs. It immediately took over the munition plants, operated them, as State enterprises, and increased pay and improved conditions. Better results followed. That experience taught Britain not to make the same mistake this time. Whilst it may be true that the British Government has taxed the middle income groups, as well as the “tall poppies “ in the community, it is also true that in the same process, at the same time and in the same budget, it increased the pay and improved the general conditions of the people. Pensions were increased by 20 per cent, and allowances to those who are living on Government relief also were increased. Britain did that, not because its Ministers had a change of heart, but because it was economically sound to do so, being the only way in which to achieve the best results. Britain had to call into work, as we shall have to do, people who had been only casually employed. Because they had been only casually employed, they were not physically fit to do work. The British Government knew from experience in the last war that the people had to be made fit and that they must be contented if they were to give the best results. It was because of that that the Conservative party called to its assistance leaders of industry like Ernest Bevin, who raised standards in the lower social strata, the most conservative Ministers consenting because they knew that their old inconsiderate methods had failed. No place has been found in this budget for any policy like that. On the contrary the budget as originally presented attempted by taxation to cut the wages of men on £3 odd a week. Yet the Government hopes that those men who are taxed not only directly but also indirectly will be able to give the best results in the munitions industry and in other war work.

Mr Anthony:

– No one in munitions industries receives £3 odd a week.


– No, but the Government wants more men in those industries and the men who will be recruited for that work are not fit.

Mr Guy:

-Has the honorable member any figures comparing the purchasing power of money in this country with that in England?


– No, but the figures are published month by month and the honorable member can easily obtain a comparison. I know what is in the back of his mind; there has been an increase of the cost of living. Without seeing the actual figures, I know that that is so. In England prices are controlled under a system similar to that which operates in Australia but prices have risen and will continue to rise. I commend the Government for what it has done towards controlling prices in this country. It is not a perfect system - no one could expect it to be perfect - but it has been successful to a great degree. Nevertheless, the cost of living has risen. One of the most disgusting features in the unwritten pact made between the Government and the Opposition last week is the fact that the people on fixed incomes, the pensioners, have been put on an unjust basis from which the automatic adjustments of pension rates will be made.

Mr Anthony:

-The whole object of the budget is to prevent the cost of living from rising.


– Yes, but the cost of living will rise and the basis upon which the pensions adjustments will be made leaves the pensioners 9d. a week on the wrong side of the ledger. Already, since that basis was fixed, prices have risen - those of cigarettes, tobacco and matches, for instance.

Mr Anthony:

– The purchasing power of the pension is greater to-day than when it was fixed at £1.


– But even at 21s. the pension is at least 9d. a week below what it should be on the basis of the increased cost of living.

Mr Anthony:

– That statement is not borne out by the cost of living index.


– If the Assistant Minister will look at the index again he will see that my calculation is not more than a farthing or a half-penny out. By this time next month, when the new taxes are fully in operation, the pensioners will be another ls. or so worse off. The Labour party promised the pensioners 25s. a week. We arrived at that figure by a calculation of the present cost of living and an estimate of the rise, which, in spite of all regulations, will continue. At the conference last week we asked for a minimum increase of the rate of pension by 2s. 6d., but it was refused, and I object to the failure of the Government to adjust pensions to meet existing conditions.

Sitting suspended from 6.15 to8 p.m.


– Before the intermission for dinner, I was endeavouring to show that in certain respects this budget is unjust, uneconomic, and unnecessarily harsh. It is unnecessarily harsh because of the short space of time into which the collection of taxes is to be squeezed. A great many people agree with me that it will be impossible for the Government to expend the taxes as quickly as it proposes to collect them, and in that way the Government will impose unnecessary hardships upon those who can afford to pay. It is unjust in its incidence because it will lower the living standards of those in the low-income group. The people of other countries have revolted against governments which have lowered the basic or minimum living standards of the people, and the people of Australia will take appropriate action against this Government for its failure to protect the living standards of this country when the opportunity is offered to them. The budget is uneconomic because, by proposing to collect taxes from those whose incomes are so low that they are compelled to spend every penny they earn as fast as they get it, and thus the legitimate tax field is reduced. If we take away a large part of the income which a man regularly spends, we immediately curtail his spending power, his demand for goods and services, and retard the development of business and commerce generally. The deflation which must result from such a short-sighted policy will make every business man run for cover. The only way in which .the business man can meet this shrinkage of turnover is to dispose of the services of some of his employees. He is compelled to cut costs in every direction. But every newly unemployed man added to the already large number of unemployed creates more and more unemployment, and so the snowball of deflation gains in momentum as time goes on. The people of Australia demand new methods to meet these new circumstances. They say that inflation is the greatest bogy ever raised to intimidate them, that deflation is the greatest evil, and that stabilization is our greatest need. For 100 years they have been blindfolded by the supposed science of banking, but now they say that they will not be ‘held any longer in thrall by the out-moded orthodoxy of the past. The smokescreen has been, blown away, and they demand something more than the pap upon which they have been fed during the last century. Although they do not deny the evils that attended the period of overinflation in post-war Europe, they refuse to’ be intimidated by those who in their own interest constantly raise the bogy of inflation in Australia. So great was the depreciation of the German mark after the last war that I .was able te buy in a London street a 50,000 mark bill for 6d. No such artificial inflation is ever likely to occur in Australia because no body of people here would conspire to create the circumstances that existed in Germany after the last war. Inflation, then, does not frighten us, but, on the contrary, deflation fills us with fear. And I see in this budget all the possibilities of deflation. “ I have thought for many years that the greatest evil in Australia is the inferior complex of many of’ our people which makes them decry .their own country. Prime Ministers, Ministers and politicians generally seem to be afraid to take any radical . step. They are constantly thinking how much better things are ‘ done in the older countries, and, consequently, create an atmosphere of lack of confidence in the security- of their own country. They have no patriotism, no pride in the achievements of their own people. They even damn with faint praise the security behind their own great national institution, the Commonwealth Bank. Let us consider for a moment how- the great money lenders of the world determine the security of a country which may require loans. On what do they base their estimate of a country’s worth? They rely to a large extent on the reports issued by the New York group of bankers, which show the various countries in the world in order of their financial stability. During the last 30 or 40 years, Australia has never been lower than third in these lists. The United States of America is nearly always placed on top with Canada and Great Britain equal second. I have had occasion to show these records to the judges of the Full Bench of the Arbitration Court in order to rebut the attempts by employers in this country to lower the credit of Australia in the eyes of the world by maintaining that even the smallest increase of wages would create chaos and endanger the stability of this country. How is the assessment of a nation’s worth arrived at? The investigators ask what sort of people we are, what is our general standard of education and technical knowledge, what is our past history, what are our engineering achievements, how many miles of railways have we constructed during the 100 years of our history, how many millions of pounds have we invested in the provision of reservoirs and in water conservation, and how many miles and what kind of roads have we built ? The answers they get are something like this : We have the longest span of railway in the world, the longest span of telephone wires, and. the best schemes of water conservation; we throw out beam messages from this country to others over great spaces of ocean. The investigators take into ^consideration the advances that we have made in the science of engineering, evidenced by the construction of such engineering achievements as the Sydney harbour bridge; they inquire into the condition of the primary producers of this country, the type of grain they grow, what it costs to put in the crops and take them off, the kind of agricultural machinery we use, and thetechnical knowledge of the rural workers.

These are the factors upon which they arrive at an estimate of a country’s worth as a possible borrower. Why, then, should we not call upon the Commonwealth Bank to release credit, as my leader says, within the limits of safety? There has never been any doubt in the minds of people outside Australia of this country’s stability. Some of us are not nearly so loyal to our own country as we should be. When I went abroad I watched the engineers in Trance dismantling submarines, I saw the dairy farmers in Switzerland, I watched men at work in the great factories in England, in order to see if I could learn something. I tried to see how Australians compared with those engaged in similar occupations in other countries, and I found that in every way Australians were their equals, if not their superiors. Why should we be afraid of the Commonwealth Bank, the people’s bank, the only bank in the world, which, at the outbreak of the Great War in 1914 did no close its doors? At the outbreak of the Great War even the Bank of England had to take a holiday until the Chancellor of the Exchequer gave it permission to issue notes. The private banks of this country admitted that they could not meet unaided the stress and strain of war. At the outbreak of war, there was a panic in this country as in most countries. Every body knew that there would be a rush on the private banks, but the Commonwealth Bank saved the situation. As to the part played by that institution at the outbreak of the Great War I do not ask honorable members to accept my word. I refer them to The Commonwealth Bank of Australia, a brief history of its establishment, development and service to the people of Australia and the British Empire, written by C. C. Faulkner. Dealing with activities of the Commonwealth Bank at the outbreak of war Mr. Faulkner writes -

No ona living could tell what would be the effect upon finance of the declaration of a European war. Serious writers had prognosticated sheer panic; they had given detailed reasons why every banking institution must collapse in a wallow of utter chaos; the banks were to be rushed by every depositor. The Commonwealth Bank ‘devised one simple plan to deal with the hypothetical rush - extra tellers were put on and were given orders to pay out with the utmost promptitude. The effect was wonderful; the few persons who, in fear of losing their savings, presented themselves at the branches of the Commonwealth Bank, were paid so speedily that there was no time for a crowd to collect. In a few hours everything was normal.

And this is the most important part -

With the knowledge that the Commonwealth Bank was firm, and that it would stand behind the other banks, the Australian public was satisfied. There was no further rush on the banks.

Mr Guy:

– The author does not say that all the private banks closed their doors.


– At that time a conference of private banking interests was summoned. When the then Commonwealth Treasurer asked those who attended that conference if they could meet the Government’s requirements they said that they could not, and when asked if they would co-operate with each other to form an amalgamation of banks, they again said, “ No “. The Treasurer then asked the then Governor of the Commonwealth Bank, Sir Denison Miller, if he could do what the other banks had failed to do, and he said in effect, “ Yes, I can give you all the accommodation you require to meet any emergency”. His promise was carried into effect. I do 11Ot suggest, as many others have, that all the funds provided by the Commonwealth Bank during that period were made available without interest. During the succeeding five years, from the 1st July, 1915, to the 10th June, 1921, the Commonwealth Bank issued ten loans, aggregating £250,r72y000, the flotation cost of which was only 5s. 7d. per cent, whereas the average cost in England and elsewhere in Australia per medium of the private banks, during the same period, was from £2 to £2 10s. per cent. The important lesson to be learned from those figures is that loans totalling £250,000,000 were raised and the interest on them, ranging from 4 per cent, to 6-J per cent., went into the Commonwealth bank, thus remaining, as it should, the property of the people. Had that £250,000.000 been raised in the usual way, the interest charges on over £200,000,000 would have gone to the private banks. That is the vital difference. . If this Government which every body claims should be loyal and united, were to do its duty in this time of great national emergency, it would follow the example of the Fisher Government and obtain a large portion of the finance for the successful prosecution of the war, through the Commonwealth Bank. I do not suggest that there is no need for taxation. Some taxes must be imposed, but a better balance than exists at present could be established between the three methods of raising revenue - taxation, loans, and credit expansion. Obviously it would be unfair not to tax those who can afford to make substantial contributions towards the cost of the war. I favour a wellbalanced scheme of taxation involving substantial contributions by those who are able to pay, but also providing an equitable statutory exemption to protect those on lower rates of income. The Commonwealth should use the Commonwealth Bank in order to facilitate the carrying on of Government services. Apparently it will not do so. That is one of the fundamental differences between the policy of the Labour party and that of the Government. It is one of the greatest obstacles in the way of forming a national government. If such a government were formed, a split would occur on the question of how money to finance the war could best be raised. It is inevitable that some loan money must be raised, but the methods employed have always been a bone of contention. If individuals wish to continue to deal with private banks that is their business, but it is the responsibility of the Government to transact its business through the Commonwealth Bank, so that the interest paid on the loans and other benefits may be conserved in the interests of the country. The only alternative is to pursue the present dangerous course which may lead to disaster. If the orthodox financial methods are continued, the gigantic task of repaying the principal, plus the heavy burden of interest, will continue to be placed upon the shoulders of the people. A portion of the interest so paid will go overseas and some of it will remain in Australia, but the effect of the whole process will be to squeeze our economic resources unduly, and eventually they will become unproductive. Such a policy is not revolutionary and involves only an orderly and progressive revision of our banking system. Yet, arguments advanced by honorable members on this side of the chamber have been described by Government spokesmen as ridiculous, In that connexion, the worst offender has been the Prime Minister (Mr. Menzies). The Treasurer has said that the Government intends to utilize the three sources available - namely taxation, loans, and issue of credit - but he has refused to say to what degree each of those avenues is to be explored. He has been questioned by us on numerous occasions but he has not said the degree to which the Commonwealth Bank is to be used. In effect, the Prime Minister said, “ Some people on the other side of the House apparently believe that money can be obtained by merely, turning on a number of taps and letting credit run like water “. That is not the argument of the Opposition. The Labour party realizes that national credit is the life blood of the economic system, and that it cannot be used in a chaotic and foolish way. Credit cannot be produced by turning on taps ; spending power cannot be created by starting printing presses and going to sleep and allowing them ‘to run. Such statements are childish and nobody can be expected to believe them.

I should like to quote the words of that, eminent gentleman whom even the honorable member for Wakefield (Mr. DuncanHughes), would not dare to suggest was not an authority. I refer to Sir Basil Blackett, who was a highly respected director of the Bank of England, for some years was Chancellor of the Exchequer, and represented the British Government in India. Speaking only a few years ago about the lessons to be learned from the last war, and of the poverty, crime and prostitution which still abounded in Great Britain when that country was endeavouring to emerge from the financial depression, he said -

What might be called the natural currency arrangement for an independent sovereign state would be a local currency, owing its internal purchasing value to management by or on behalf of the state, and so managed and controlled as to retain approximate])’ the same purchasing power from year to year and from decade to decade, external trade being; provided for by appropriate machinery which did not disturb internal stability.

The same opinion is held by many who have studied this problem, and it is generally agreed that there should be a properly managed currency to meet all the requirements of the community. No doubt it will be asked, “ How are we going to ensure that it will not be out of hand ?” The answer has been given so many times that the question should not now be asked. What did the Scullin Government do? That Administration propounded a scheme to raise £18,000,000, of which amount £6,000,000 was to assist the farmers to sow their crops, and £12,000,000 was to be used to arrest the downward trend of prices and to put 50,000 married men to work for a period of twelve months. That was all that was involved in the Scullin Government’s proposal, yet it was described as dangerous inflation. I was associated with the Scullin Government at that time, and I know something of what happened. Statistical records were searched in order to obtain the index figures at the time and the most evenly balanced conditions, namely, the highest standard of living, the lowest number of unemployed. The ideal figures were those for 1929 because they showed the most universal period of prosperity, and the Scullin Government decided to take those figures as the mean level upon which to balance its programme and bring about economic stability. It was hoped that the 1929 figures could be fixed as a signpost to prosperity, in order that corrective action might be taken either above or below those figures when matters seemed to be getting out of hand. The idea was that when figures rise above the 1929 level, it would be time to retract and to build up credit until normal conditions were restored. Such a system of economic control would be in operation in every part of the world to-day had not purely party political considerations prevented its adoption. I do not say that in a derogatory sense, because we are all guilty to some degree, but because of selfish considerations, the issue of credit which could have stopped the depression was not carried out, and the downward trend of prices was unchecked. Every one knows that falling prices are bad economically, because nobody will purchase on a falling market owing to the fear that a competitor may purchase next day at a further reduced price. So every body stops buying until the downward tendency can be arrested ; then every body wants to buy because of the fear that prices may rise rapidly. [Leave to continue given.]

We should be loyal enough to our country to use the Commonwealth Bank. The credit of Australia is as high as that of almost any other country of the world. It is far higher than that of most countries. I have indicated the test by which credit resources may be measured, and have shown that Australia stands in a most favorable position. This emphasizes the justice of my claim that the Government should use the Commonwealth Bank as we desire it to be used.

I confess to great disappointment at the attitude of the Prime Minister on this issue. I have the highestregard for the ability of the right honorable gentleman. I have known him intimately for 15 or 16 years, and hav« learned to appreciate the skill with which he deals with public questions. But I must admit that his attitude on this question was the only one that the interests which he represents would permit him to adopt. No other course was possible for the right honorable gentleman if he were to abide by the wishes of the people who control the party that he leads. Although” great difficulties would be encountered by our financial magnates if any other policy were applied, honorable members on this side of the committee are absolutely convinced that with careful management the Government could make more effective use of the Commonwealth Bank in connexion with the raising of loan moneys internally. It is unfortunate that the parties which support the Government are pledged not to depart from strictly orthodox procedure. They are completely circumscribed by the political boundaries of their respective parties. They are in duty bound to preserve the sacred rights of private enterprise in banking as in other business activities. They do not desire the general public to know the degree to which the resources of the Commonwealth Bank are being used, for they know very well that if the facts became public the people would insist upon even greater use being made of this great instrument of public finance. If loans were raised through the Commonwealth. Bank and interest paid to the bank, that interest could be used again as the backing for additional loan moneys. In this way the resources of the bank could be drawn upon now for war purposes and, after the war, for public works. Every time even such a relatively small amount as £100,000 is obtained from the Commonwealth Bank the preserves of the private banking institutions are encroached upon, and the monopolists, who hitherto have controlled the money market, are made somewhat more fearful of the future, hence their determination to prevent at all costs the Commonwealth Bank from being used. Yet it is the credit of the people at large which is being drawn upon, and that credit is sound. It has been most unfortunate that the private banking institutions have been able to put a stranglehold upon the credit resources of the nation, but it will be tragic if this Government is not prepared to show evidence of some progressive thought in this connexion.

We are not asking for a sudden revolution in economic policy. We say that the time has come when the private money monopolists must have their power curbed. Year after year these interests have drawn heavily upon the credit resources of the nation. The Soullin Government tried to introduce a progressive move in this connexion, but unfortunately, when in power, its opportunities to do so were severely limited. This Government has a splendid chance to make a bold forward step in monetary reform. The people’s bank represents the visible and invisible assets of the nation, and there is no reason why the Government should not make use of it. What happens when .an application is made to a bank for a -loan ? Let us assume f or-.a. moment -that the Assistant Minister (Mr. ‘Collins), who is sitting at the table, is an. applicant. We shall assume, too, that, having conducted his farming or grazing business for many years -with success, he has suddenly been- overtaken by a visitation of Providence .such as famine, a fire, or a drought, and has -found himself in great need of money. No doubt he would go to the bank for a loan. The bank would inquire into his history. After learning that for a score or more years he had been successful in his agricultural and pastoral activities it would advise its manager in something like the following terms : “ This is the kind of man to whom the bank may safely lend money. He is the best security we can have. He has made a success of his operations in the past and may be trusted to do so again in the future.” All the bank requires is protection. Men whose financial history has been satisfactory do not find difficulty in obtaining .accommodation from a bank to tide them over a period of misfortune.


-hughes. - What happened throughout the nineteenth century?


– The honorable member must surely know what happened in those calamitous days. There is no need to . go further back than the nineties. Many honorable members know from bitter experience of -the terrible disaster that overcame the country at that time. Most of the private banks were authorized, in those days, to issue notes. I well remember the miners of Broken Hill having their pockets stuffed with great wads of valueless notes issued by the private banking companies. Business firms would not cash them. The stationmaster :at Broken Hill would not .accept Commercial Bank notes from me in payment of amy railway fare, from Broken Hill to Adelaide. It was known that there was nothing behind the notes.- Although, at that time, the private banking companies had a complete monopoly of the note issue, their notes- were little better than waste-paper. Birt since the Commonwealth Bank has -assumed control of the - Australian note issue an entirely different situation has .-emerged. Our notes are valued as; token .money because the Commonwealth Bank stands behind them, and the. Government stands behind the .Commonwealth Bank, Some people would have ais. believe.?. -that”, there is something supernatural about money. But students -know, .that all money is man-made in conformity with:, certain legal .enactments..; This Parliament; makes the laws relating to money, and: it.” may therefore be” said that Parliament makes the. money. -. It decides- whether gold-, silver, tin, bronze or paper shall be used for currency purposes, and in respect of paper money it determines the volume of notes that may be issued from time to time. Money is merely a medium of exchange. It is the bridge between production and consumption. It is the means by which people are able to purchase the goods they need from their fellowcitizens who manufacture or produce the goods. Much of the trouble in the world to-day is due to the fact of the pole representing production having little relation to the pole representing consumption.The bridge has broke down. It is for that reason that the Labour party requests that more use shall be made of the resources of the Commonwealth Bank. We believe that the Commonwealth Bank, having the Government behind it, is an instrument by which we may meet not only the financial needs of the war, but also our financial needs after the war. If the money we wish to borrow were obtained from theCommonwealth Bank and the interest paid to it, that interest would be the basis of further lending. If this method of public finance were used we should not endanger our standard of living, for the people would not be called upon tobear an excessive burden of interest.

I have already shown that certain loans raised through the Commonwealth Bank cost only 5s.7d. per cent. While I was studying this subject I came across a letter written to me on the 2nd August, 1934, by the then Secretary to the Treasury, who, by the way, is now the Governor of the Commonwealth Bank, Sir Harry Sheehan. I had asked a question of the Treasurer of the day, Mr. Casey, concerning the cost of raising a £ 12,000,000 loan. I wished to know the brokerage and underwriting costs, and also how much the loan would cost the people of Australia in interest during its fourteen years’ currency. I had a great deal of trouble in obtaining the information I desired, “ butultimately the Treasurer gave the Secretary to the Treasury permission to supply the information. I am dealing, at the moment, with a loan of only £12,000,000,. which is “pocket money ‘’ in comparison with the amount ofloan money envisaged in this budget. Itis,infact, what theAmericans would call “ small change “. The letter I received from the Treasury read as follows : -

I have your note of the 23rd July, 1934, asking for the total cost of the recent £12,000,000 Commonwealth loan.

The final figures are not available, but the total expenses amount to approximately £84.800. Any variation of that figure will be very slight. These expenses work out at 13s.10d. per cent. on the total of the loan.

Although that loan was raised in the depth of the depression, the costs involved were only 13s.10d. per cent.. The letter continued -

Assumingthat no portion of the loan is repaid before the date of maturity of the loan in 1948 the total amount of interest payable during the fourteen years for which the loan was issued will be about £5,650,000.

The real point is that in 1948, when the present loan matures, a fresh loan will be floated, probably for another fourteen years, during which an additional £5,650,000 may be paid in interest. It will be seen, therefore, that during the two fourteen-year periods an amount practically equivalent to the total amount of the loan will have been paid in interest, and the principal will still be owing.

I do not blame the private banking companies for carrying on this business. So long as our present procedure continues it is legitimate business. I blame the Government for allowing this great vital service to remain in private hands. Bank directors, shareholders/ and managers are in the money business just as boot manufacturers, sugar manufacturers and others are in their respective businesses. It is all trade. The Government should not permit this procedure to continue, for it will mean that excessive costs will be piled up for the future. The public is being called upon to carry an interest burden that must ultimately crush it.

The budget is objectionable because it forces the payment of moneys much too quickly. It requires that vast amounts shall be raised before they can possibly be expended. It bears heavily upon people in the low-income ranges, and on the lowest rungs of the social ladder. It is unjust and uneconomic. It will, in my view, cause a shrinkage of about 80 per cent. of the spending powerof the people. It will freeze credit and generally cripple industry. For all these reasons the budget is unsound. The Labour party believes in a properly balanced scheme of taxation. I would not allow people who have the capacity to pay taxes to go scotfree. Money is necessary for the conduct of the war, and for the maintenance of public works, and it must be obtained. It cannot all be obtained from taxation. Some of it must be borrowed, but such borrowings as are essential should be made through the Commonwealth Bank and thus save the people millions of pounds in interest which now goes to the private banks.

Mr Stacey:

– I wish to make a personal explanation. After I had concluded my speech this afternoon the honorable member for Franklin (Mr. Frost), who followed me, said in his opening remarks that on certain contracts that I had carried out I had starved men into submission. As the remark was both uncalled for and untrue I ask that it be excised from Hansard. It is not the kind of remark that we would expect to hear from the honorable member for Franklin, and I think that, upon reflection, he will agree that it was unwarranted.

The CHAIRMAN (Mr J H Prowse:

– The Chair has no power to order excisions from Hansard.

Monaro · Eden

– I listened with interest to the remarks of the honorable member for Melbourne Ports (Mr. Holloway) but I disagree almost entirely with what he said. This is by no means a pleasant budget. No man in this chamber or anywhere else in the country could read the document with any degree of pleasure ; but it is not unsound, for it meets the urgency of our present situation. The honorable member for Melbourne Ports said that some of the budget’s provisions are unnecessarily harsh. I say that none of them is unnecessarily harsh. Although all of us dislike the severity of the proposals many of them came as a pleasant surprise to people who had expected something much worse than is the case. It is all very well for honorable members opposite to plead for the low income-earners. If this were a time of peace all of us would agree that they should be spared. But this is a time of war when harsh measures must be taken. Heavy taxes have been imposed in other parts of the Empire, and, if Australia is to play its proper part in this war, the budget presented in this Parliament next year will be even more harsh than the present one.

Much limelight has been cast upon Parliament during the last few weeks. All of us have met people who have said that they are disgusted with what has been happening in Parliament. But, in the course of my movements in .Sydney and in my own electorate during the last few days, I have learned that the great majority of the people hold a totally different opinion from that expressed by the critics. The bulk of the electors say that Parliament has justified its existence. Parliament is intended to be a place in which men holding different views meet to exchange their opinions in a straightforward manner, and come to conclusions in order to serve the people who elected them in the best possible way. If this Parliament were a committee of a football club, or some other organization, there would still be wrangling at its meetings and decisions would have to he made in the light of the different views expressed by representatives. One man said to me yesterday, “I have been a close student of Parliament for 50 years, and I have never seen a Parliament that justified its existence more than the present Commonwealth Parliament”.

Mr Calwell:

– What a man!


– I agree with the honorable gentleman. What a man - what a right-thinking man ! Thirtyseven men were elected to this Parliament in .September to implement one policy and 37 others were elected to implement another policy. It is only natural therefore, that there should be differences of opinion and heated arguments. But these differences have been amicably settled, and there must be relief throughout the country now that agreement has been reached. A week ago I would have made a different kind of speech in this debate. I should have been obliged to support the budget then brought forward, but thanks to the Advisory War Council, common sense has prevailed on both sides and a compromise - perhaps not a very pleasant one - has been made. It is a much better budget than the average person expected. Many people think that because we have been wrangling in Parliament we have not been doing the job for which we were elected. But our job is to thrash out our differences and war or no war, Parliament must continue its sittings in order to implement the verdict given by the people at the polling booths. I believe that we have done a very satisfactory job in the circumstances. .Some compromises have been made. On the one hand, they are not nearly so extensive as honorable members opposite wish; but, fortunately, honorable members have appreciated the position and have accepted it with the best possible grace. On the other hand, the concessions that have been made are far more sweeping than some honorable members on this side of the chamber were prepared to make. But they also have realized the position, and are prepared to yield in some degree to the demands of the Opposition in order that the best service may be given to the electors. I see no justification for the howl that has gone through the country for the formation of a national government. People who raise that cry remind me of the famous advertisement depicting a baby reaching for a cake of soap, the caption of which is “ He won’t be . happy till he gets it”. But what do they want? I do not say that we should not form a national government as was done in Great Britain ; but the people of different countries have different ideas, and it is possible, under the present arrangement, for the Commonwealth Parliament to do the job for which it was elected. The Labour party, as it is quite entitled to do, has opposed the formation of a national government. Even if that party were represented in a national government I doubt whether the results achieved would be any better than those achieved by the Parliament as at present constituted. The Australian Advisory War Council has done good work. It has not satisfied every member of the Opposition, and it has not satisfied every honorable member on this side of the chamber; but it has come to conclusions which the Parliament proposes to adopt and therefore it has amply justified its existence. People are asking, “ What will happen next week “ ? We do not know. Last week we did not know what would be happening to-day. Some thought that an election would be held, and others thought that the Labour party would be in power. Neither of these two things has happened. An amicable decision has been reached. Certainly there has been a split within the Labour party, but an agreement has been made, and that is what Australia needs. To endeavour to form a national government in the present circumstances would be like trying to mix oil and water. It cannot be done. Greater, compromises would be necessary if a national government were formed. It might be highly desirable to have a national government and sink all party differences, but Australia’s war effort has not suffered by reason of the fact that this Government has continued in office. What the Government has done reflects great credit, not only on itself, but also on the whole Parliament. I give credit to the Leader of the Opposition (Mr. Curtin) for the part he played in the discussions which led to the compromise. The honorable gentleman said that the Opposition would not put any stumbling-blocks in the way of the Government’s war effort. His party’s actions were as good as his word. If we were not prepared to debate our differences it would be time for us to get out. I am pleased that Parliament has proved itself to be workable in spite of what the critics have said. Those critics are very much out of step with the people as a whole. The illustration which was published in a Tasmanian newspaper, to which reference was made in Parliament earlier to-day, shows that the enemies of our democratic system are attempting to create an erroneous idea in the minds of the people regarding Parliament, not only by words, but also by pictures.

Mr Ward:

– There is another side to it.


– There may be; but the job which Parliament was elected to do is being carried out faithfully and well by all honorable members.

We all know what Hitler represents. One of his most efficacious stratagems is to destroy the faith of the people in their parliamentary institutions and their political leaders. Such tactics have been employed in Australia ever since the present Prime Minister (Mr. Menzies) took office. . Even to-day we occasionally hear people saying that the Prime Minister is not a popular figure.


– Neither he is.


– He is decried by the honorable member for East Sydney (Mr. Ward) and a few others. But remove the Prime Minister and what do you do? You help to destroy our own government and our own country. The same methods were tried out in Canada some time ago, and, prior to the general election in that dominion, there was no more unpopular man in the country than Mr. Mackenzie King, the Prime Minister. No doubt many loyal people were innocent parties in spreading damaging propaganda which was originated by the Nazis. Fortunately, the Canadian electors were too wary, and Mr. Mackenzie King was elected by the biggest majority on record. In Great Britain, no .sooner had war started than the enemies of the Empire began to attack and jibe at the Prime Minister, Mr. Neville Chamberlain. Whispers went about, and eventually his enemies succeeded not only in having him removed from office, but also - and there is no doubt in my mind on this point - in hastening his death. Subversive stories are easily spread from one to another. Any Australian who engages in the spreading of such propaganda helps to pull down his own parliamentary institutions. I am not -a champion of the Prime Minister in particular, but I am a champion of this great institution - Parliament. To-day men are fighting overseas to save our democratic parliaments from being dragged in the dust. The critics of Parliament are playing the game of the fifth columnist. They are little better than those who betrayed France. That country was destroyed by the kind of propaganda which destroys faith in governments. The Nazis made the French people lose faith in their Government, and now the French nation is powerless. We in Australia, whatever our political beliefs may be, can agree on one point : That we shall defend this Parliament and the democratic principles which it represents. We must shut down on any critical attacks on the parlia mentary institution. I have no sympathy for any critics of Parliament, whether they decry honorable members on this side of the chamber or honorable members of the Opposition. Honorable members opposite have been elected by the people, and if they have any faults, then their constituency has faults ; if their views are foreign to me, then the. views- of their constituents are foreign to me. They have been elected to speak for their constituents and they have a right to do so in this chamber. Once we destroy this Parliament, we destroy our country, that is what Hitler would do.

I have altered my views on .the subject of old-age pensions recently. A few months ago I would have said that it was impracticable to increase old-age pensions beyond £1 a week. A former Treasurer said that it was impossible to find sufficient money to provide for .any increase. But to-day we have a Treasurer who has ‘brought forward a budget of £186,600,000, and I have been converted from my old way of thinking.’ A year or so ago a very small part of the amount now to be appropriated would have gone a long way to lighten the load of the old-age pensioner. But with a war in progress, the compromise made last week will meet the case temporarily. After this war, I trust that there will be a new deal for the world, and I hope that the under dog will receive a better deal than he is getting to-day. In tha circumstances, an increase of the oldage pension by ls. a week is very satisfactory indeed, particularly when it is remembered that taxes have been imposed upon pensioners in New Zealand and Canada, whilst there is no tax on them in this country.

Throughout my recent election campaign I did not advocate any increase of the soldiers’ rates of pay. We cannot pay our soldiers enough. If honorable members decided to take a soldier’s rate of pay and give to the soldiers our rate of £1,000 a year, they would still be underpaid, because they are offering their lives - all that God has given them - in order to save their country from oppression. Money will not compensate them for that, and they do not ask for money. They have volunteered for love of their native land and of their people. Their patriotism has taken them to war. They do not want union rates and union hours. They are willing to fight as long as they can draw breath in order to defeat the menace to our Empire. I repeat that not once during my election campaign did I advocate a higher rate of pay for soldiers. This country cannot afford to pay them more. If we agreed to pay soldiers higher rates we could not train and arm the numbers that we need, and, in consequence, we could not play our part in the Empire’s fight for freedom. In any ease, we must remember that we can never payour soldiers their true worth to - us. The decision to increase allowances to soldiers’ dependants is a very fair- compromise.

I refer now to the agreement that has been made to raise the proposed income tax exemption from £150 to £200. I have not yet met a man earning a wage of £150 a year who. asked to be exempted from taxation. At all events, the Government has compromised, and proposed to raise the minimum taxable income to £200. I am afraid that nextyear that minimum will have to be reduced. An erroneous impression exists in the minds of many people that when the lower incomes are taxed the higher incomes escape. That is not true. For instance, when the man. with an income of £1,000 a year is heavily taxed he is immediately forced to economize, and-, in most cases, he does so by dismissing an employee. Perhaps, it may he a housemaid, a chauffeur or a groom. Consequently heavy taxes cannotbe levied on high incomes without adversely affecting those on lowincomes. No system of taxation has yet been devised wherebypersons at the bottom rung of the income ladder are enabled to escape the incidence of heavy tax levied on higher incomes. That will always be the case regardless of the political colour of the government responsible for the taxes.

Mr.Brennan. - There must be something wrong with the system.


– Human nature is not perfect and we cannot expect a perfect system of taxation.We are told in the Bible that the poor will always be with us. The honorable member for

Melbourne Ports declared that the new taxes would inevitably reduce the standard of living of the great masses of the people. Of course it will. The standard of living of our people generally is being greatly reduced. Many people, however, do not realize that fact. It is obvious that the standard of living of persons with incomes ranging from £400 to £800 is being greatly reduced. These people include shopkeepers and proprietors of amusement halls. At the same time the standard of living in the average home is also being greatly reduced. Such a development cannot be avoided in a time of war. Fortunately we have escaped the actual terrors of war. We have not been bombed like the unfortunate people in Britain. So long as we can escape such horrors, every one in this country should be prepared to give his all in our war effort.

I am unable to compliment the Government on the present scheme of petrol rationing. I support the rationing of petrol, because I realize that we must conserve our stocks. I feel sure that any government, in a time of war, must ration’ petrol. At the same time, however, I hope that in future the Government will make a better job of the matter than this Government has done. Moving around the country I have found that the present rationing scheme has hit hardest the man who requires petrol in order to earn a livelihood. I refer particularly to. the small business man. Many people, including taxi-drivers in Goulburn, are allowed only sufficient petrol to enable them to carry on their businesses for four days a week. They secure their additional requirements principally because of the charity of other people who are allowed much more petrol than they need. These people hand in their tickets to the garages which pass them on to the tradespeople who are not allowed sufficient petrol.

Mr Ward:

– I thought that no one was permitted to transfer ration tickets.


– I know that that practice is followed. One finds that in many country towns the administration of the schemeissimply farcical. I have made representations to the department in about 50 instances. Most of those cases have been adjusted, ibut during the last few days I have been advised that several applications for increased allowances have been refused. I know that these particular applicants are fully entitled to an increased allowance. The point I make is that under any scheme of rationing the greatest consideration should be shown to the consumer who requires petrol in order to earn a livelihood. Of course the time may arrive when even this class of people will be obliged to do without a proportion of their essential requirements. But at present many consumers are allowed much more petrol than they require, whilst others are denied sufficient to enable them to earn their livelihood.

Under the budget proposals the Government seeks to raise £186,000,000 by taxation. The vast majority of our people have made up their minds that this revenue must be obtained. However, much uneasiness exists as to whether the money will be wisely expended. Several cases of wasteful expenditure have come to my knowledge, and I intend to bring them under the notice of the members concerned. I do not propose to advertise them by giving the details here. I urge the Government to avoid wasteful expenditure. People will not mind so much if their standard of living be reduced, and they are asked to make sacrifices, provided that they are assured that the money raised through taxation is not wasted. I cannot understand why trains are crowded with soldiers who live in New South Wales being sent from Sydney to Seymour, or with men who live in Victoria being sent from Melbourne to Sydney and Brisbane. Obviously, much economy could be exercised in that direction. The same observation applies to the construction of many buildings. In one case a public committee was assured that a certain building would not cost1d. over £1,000, but the committee has now been asked to foot a bill of £1,600 to cover the cost. Incidents of this kind tend to raise doubts in the public mind as to whether or not wasteful expenditure is being incurred. In view of the heavy taxes to be imposed, the people expect the Government to watch expenditure carefully.


.- I listened with interest to the Treasurer’s budget speech, and also to the arguments advanced by honorable members on this side of the chamber in favour of the abandonment of the present chaotic system of finance. To thosp arguments, honorable members opposite replied only with abuse. They adopted the practice often followed on the public platform of making certain charges against opponents without attempting to prove them. They simply claimed that honorable members on this side advocated inflation, but made no attempt to examine the propositions advanced by my colleagues. They then proceeded to paint a horrible picture of the evils of inflation. No honorable member on this side has advocated inflation. It is a matter of argument as to what inflation actually involves. Honorable members opposite agree that inflation does not occur until a preponderance of purchasing power is confined to a limited quantity of goods. We on this side are opposed to inflation. We have pointed out that conditions in this country differ completely from those prevailing in Great Britain. I quote the following from the Canberra Times of the 1st December: -

The Minister for Food (Lord Wootton), in a speech this evening, said: “We must live harder, using home produce to the maximum and importing only the necessary supplementary stocks from the foods already bought and now lying about the world.

We need more ships and we must increase the usefulness of ships by at least 10 per cunt. We cannot afford to bring in things that are not essential to the war.

That is why I have cnt out imports of all fruits, except oranges, and all canned fruits. My Christmas-box to you is an undiminished meat ration which, however, will be smaller in the near future. You may also receive less bacon, from time to time, than you can now obtain.”

We do not desire to establish a similar state of affairs in Australia. In Australia we produce an abundance of consumable goods, and, consequently, we should do all in our power to increase the purchasing power of the community. Do honorable members opposite desire that the flour now stored in the bins of our mills be wasted, or that the foodstuffs now accumulated in our stores be allowed to rot? Before we can market our produce we must increase the purchasing power of the community. Honorable members opposite contend that that power should be reduced. They say that we must tighten our belts. Is it logical to expect a man to put forward his best effort in handling a rifle, or as a worker in a munitions factory when, although we produce in abundance the foodstuffs required by his family, we refuse to expand the credit of the community in order to enable him to’ buy those commodities? That is the policy which honorable members opposite describe as inflationary. If the purchasing power of the community exceeded the amount required to purchase consumable goods, we should be justified in taxing the community’s excess income in order to balance our budget. Honorable members opposite stand by the law of supply and demand. That is the law of orthodox finance. However, it can hardly be applied under existing conditions in this country where we have an abundance of the necessaries of life, whilst, at the same time, the purchasing power of the community is insufficient to purchase such commodities.

The budget proposals can end only in chaos. I shall not attempt to amend them, because they cannot be made workable. The budget, in its effect, is punitive. Whilst it will inflict hardships on a section of the community, it will fall very lightly on that section of the community which has been favored throughout history by the prototypes of honorable members opposite. That section which always has to bear economic stresses and strains will be obliged to carry the heaviest burden imposed by this budget. Tor instance, the flour tax will be paid principally by the consumers of bread who are mainly the workers and their families. A glance at the menu of the average family shows that whilst one full meal a day is provided the morning and evening meals consist principally of bread. Thus the flour tax is indirectly a tax on the worker. The following circular was sent to a. baker by the Commissioner of Taxation : -

The Sales Tax Exemptions Act 1935-40 has been amended to bring into the taxable field the following goods which were previously exempt .from tax, and which now will bear tax at 5 per cent, on and from 22nd November, 1940:-

Pastry, scones, buns, cakes and mixtures or articles made from mixtures substantially similar to any one or more of those from which bread or any of the preceding articles are made, but not including biscuits.

The flour tax, in its incidence, hurts the family which can least afford to pay it. Then, a further tax is imposed, with the result that there is built up a pyramid of taxation, and very little is left to the man on the basic wage with which to purchase his living requirements. That is what happens in every walk of life. The man on the basic wage has to bear impositions which tax his gross income. If the gross income of a company were taxed, how long would it last? Is there any company that is more important to ihe community than the family company - the basic wage earner, the tradesman, the producer, and their households? Yet tax is imposed only on the profits of companies whose existence depends on profits.

Immediately these proposals were brought down the leading newspaper of New South Wales, the Sydney Morning Herald, published in its commercial columns an article describing the way in which the commercial world had responded. The shares of all of the leading companies are quoted at a premium; inspite of the super tax imposed on companies, there are no sellers of shares. That illustrates the reaction of the business world to the tax. Companies will continue to make a profit so long as the present system of financial anarchy is permitted, and those who occupy the treasury bench are representative only of the profit-making class.

Let us consider how the Government proposes to keep down wages. The following report was published in a newspaper which, by no stretch of imagination, can be expected to do anything to injure this Government or to help the workers : -

A move may be made to induce the Federal Government to invoke war-time emergency powers to establish fairly generally the principle of fixing maximum as well as minimum wage rates.

It has been customary in the past to fix the minimum wage to be paid, and the amount awarded has always been the lowest on which an employee could live and an employer could pay. Now, in pursuance of the recognized principles of orthodox finance, in order to keep constant the relative positions of supply and demand, the Government has to resort to taxes or loans, and if that process will not keep down the purchasing power of the community, the wages earned will have to be limited. It is not suggested that the number of hours worked shall be limited. Power is given to the Government under the National Security Act to instruct a man to work at a certain place for the number of hours considered necessary by the person in charge of the plant. These proposals are punitive. They are designed to take everything from one section of the community and to give everything to another section. The result can only be financial anarchy.

The Treasurer (Mr. Fadden), explaining why the budget proposals should be passed, advanced certain arguments which I regard as illogical. A government which asks for such wide taxing powers as are implicit in this budget should be judged on past performances. What has been the performance of this Government in the matter of the wheat pool? Under its emergency powers, it acquired all the wheat produced in Australia. The Department of Commerce has supplied me with figures which I am prepared to accept as reliable. These show that, on the 16th November, 1940, the quantity of wheat which had been acquired and delivered totalled 195,000,000 bushels,, of which 37,000,000 bushels represented a carry-over that will not be consumed in the present year, and the prospects of marketing immediately are not very bright. In time of war that is not a huge surplus. In .fact, it is necessary to carry over from year to year sufficient for home consumption. The quantity consumed in Australia annually is not very much greater than that figure, and in view of the prospects in relation to the present crop, we shall probably be able to consume practically the whole of it. The Government has made much of what it has done for the wheat-farmer. I submit that all of it has been done under pressure. Already, it says, there is an overdraft of £13,000,000, which will be increased to £15,000,000 as the result of what it regards as generous treatment of the wheat-farmer. The figures supplied to me by the Department, of Commerce show that the amount advanced to the farmers, and the expenses paid by the Wheat Board, total £33,000,000 to date. A further advance of 3d. a bushel, equal to £2,500,000, will make the total £35,500,000. The Wheat Board has collected £20,000,000, leaving £15,600,000 to be collected in order that the accounts may be balanced. The responsibility for the collection of the outstanding amount rests with the Government, to which the board must account. At 4s. a bushel, the price which the crop realized, that 40,000,000 bushels will realize £8,400,000, leaving 35,000,000 bushels to be accounted for. At 3s. 6d. a bushel, this would represent £6,000,000, which would just about balance the accounts. We should inquire as to where that £6,000,000 has gone. If we were prepared to concede that the Government had reasonably discharged its responsibilities in the past, we would trust it with the budget, but it ha3 not done so. I shall give one illustration. The Wheat Board, the servant of ‘ the Government, has handled £36,000,000, of which £6,000,000 has gone astray. To-day, I spent a fair amount of time in the Department of Commerce, which supplied me with certain figures. Other figures it refused to let me have, on the ground that it would not be in the interest of the country to make them public. Of that £6,000,000, about £5,000,000 is accounted for by sales made by the Wheat Board along ordinary business lines. The purchasers of this wheat have taken possession of it, and a certain time after it has been delivered to the countries to which it has been sold, the Wheat Board will be paid for it. I shall not cavil at that. Some of the purchasers can be relied upon to meet their obligations, and the money can be collected from them; but there is an amount of about £1,000,000 for wheat sold to a potential enemy. No further sales are to be made to that particular purchaser except on a cash basis. If all of those sales to European purchasers were OK, and that £1,000,000 is collected, the board will have the full amount of £6,000,000, and the accounts of the No. 2 wheat pool will be balanced. Yet the Government has made a lot of noise concerning what it has done for the wheat-farmer! Every bushel of wheat held by the board has been sold, except roughly, 40,000,000 bushels, which, I claim, should be stored in this country in time of war against a possible emergency. Ever since this Parliament has assembled, the Labour party has been endeavouring to get the highest possible return for the farmers.

Mr Rankin:

– Did not the wheatgrowers’ organization urge the Government to sell wheat on credit?


– Certainly. That is a recognized business principle, but it is a different proposition from selling wheat to a country from which there would be no chance of collecting the cost. The sale of wheat to the value of £35,000,000 has been effected by the board at a cost of £4,215,000. If the Government’s record with regard to wheat is typical of what is taking place in other directions, it is clear that it is not fit to administer a budget providing for such colossal expenditure as that now proposed. The sum of over £4,000,000 to which I have referred includes freight and agency charges, but there is another charge which the farmer himself has to meet. I refer to the cost of wheatsacks and the cost of gathering and carting the wheat. The return to the farmer does not exceed 3s., yet a royal commission stated a few years ago that wheat could not be produced at a profit under 3 s. lOd. a bushel. It has been contended that, owing to the heavy 1939-40 harvest, the farmer improved his position, and should now be able to accept a reduced price for his wheat. He is told that the wheat sold on the home market will provide a sufficient return to enable him to cover his production costs, but the return for wheat in the No. 2 pool will leave him with ls. a bushel below the cost of production. In administering the apple and pear acquisition scheme, the Government lost £750,000. How much did the orchardists lose? Granny Smith apples are now fetching £1 a case on the Sydney market, yet the maximum price that could be paid to the growers under the scheme was 5s. a case. If a private firm carried on business in that way, it would be charged with profiteering.


.- Since a compromise on the budget has been reached by the Government and the Opposition, a number of matters which loomed large until recently have now lost much of their significance. A budget providing for an expenditure of £186,000,000 could be justified only in time of war. Australia, as part of the great British Empire, is fighting for it3 existence. Although much objection has been raised in this chamber to certain features of the budget, the burdens have, on the whole, been cheerfully accepted. A minority has protested loudly, but the great working and middle classes have lodged practically no complaint. I have just returned from a visit to my own electorate in which a large industrial section resides, and I heard no criticism of the budget. I agree with members of the Opposition that some of the large and wealthy companies which try to escape taxes as far as possible deserve no sympathy. Since they have most to lose, they should contribute heavily to the country’s needs.

This budget makes one realize that, despite the tremendous expenditure that will be incurred, much of it will be expended on munitions and will yield no tangible results. Therefore, it is important not only to win the war, but also to build up our primary and secondary industries in such a way that, after the war, our fighting men and the Australian people will lose as little as possible of the standard of living previously enjoyed by them. We hope that it will soon be possible to provide them with even better social conditions than have ever previously been experienced in Australia. If that cannot be done, we shall wonder whether it was worth while sending the flower of our manhood overseas to give their lives for the ideals we hold dear. I believe that- Australia has a great future, and that we should not wait for the conclusion of the war to prepare for the great problems of repatriation and reconstruction. Water conservation, for instance, is a matter of tlie greatest importance. It is regrettable that rivers are allowed to empty millions of acre feet of water into the sea year after year, although great areas inland need irrigation. The unemployed should be building reservoirs and irrigation channels. A government that does nothing to conserve water fails in its duty. It would be tragic if young men, on their return from the war, were again permitted to occupy holdings in the Mallee country or in the western Riverina, where they would probably be doomed to eke out a bare existence, finally being forced to give up their homes and accept the dole, thus becoming a burden on the community when they should be its greatest asset. Some of the most fertile country in the world is held in Australia in very large areas, but the time has come when the selfish interests of large land-owners must be overridden for the benefit of the people generally. Although I do not favour confiscation, or anything approaching it, full use will have to be made of such land. It will be required, not only for our returned soldiers, but also for migrants from Great Britain and northern European countries, who, I believe, will come to Australia in large numbers, seeking safety and security, rather than remain in Europe where a madman, such as that in Germany to-day, can in a few days or hours destroy everything they hold dear.

Another matter of vital importance to Australia is the standardization of railway gauges. Such an undertaking may involve too heavy a burden while the war is in progress, but it is one of the great works that could be put in hand as a repatriation measure as soon as the war is ended. If the present attack on our shipping is increased to a serious extent, and if our coastal shipping is held up or destroyed by enemy raiders - approximately 90 per cent, of our interstate trade is sea-borne - one can readily imagine the hopeless congestion that would be occasioned at break-of-gauge stations such as Albury.

It is gratifying to know that, even at this period when extraordinarily heavy taxes are to be imposed on the people, the Government has made money available for the assistance of the gold-mining industry. An amount of £150,000 has been placed on the Estimates for the development and encouragement of the goldmining industry. The Government has also made available to Victoria during the last five years £105,000 for mining development. A proportion of this money is to he expended upon exploring for new fields, and upon the further development of old ones on the great auriferous belt extending from Bendigo and Ballarat right through to Ararat. At a time like this, when gold is probably just as valuable to the Empire as are munitions, it is very gratifying to find the Government prepared to give this measure of practical assistance to an important industry. When gold was worth about £4 an ounce, the eyes were picked out of. the reefs, and the rest was left, because it did not pay to work the deposits. Now, with gold at its present high price, all these reefs can probably be worked at a profit. The North Deborah Company was floated at 2s. a share; today those shares are worth 96s., and the company has paid over £100,000 in dividends. The gold exported from Australia helps to provide dollar exchange, so necessary at present in the purchase of vital munitions of war. There are five great lines of reef in the Bendigo district. In a report to the Commonwealth and ‘State Governments on the main Bendigo gold-fields, submitted by Sir Herbert Gepp, then consultant on development to the Commonwealth, and Mr. Baragwanath, Director of Geological Survey in Victoria, the following passage occurs : -

We are of opinion that the work as recommended (i.e., the development of selected areas on the Nell Gwynne and Deborah lines of reef ) , is fully justified under existing circumstances and may lead to a marked mining revival in the main Bendigo field. In any case, expenditure is justified on existing knowledge and will make considerable contribution towards the settlement of the question as to whether the side lines at Bendigo carry sufficient gold to be economically developed.

Included in the areas then selected and recommended for development were those now embraced within the holdings of the Central Nell Gwynne, Deborah and North Deborah Mining Companies, which have since been promoted, opened up and developed, with the following aggregate results to the time of writing, riz. -

Capital paid in cash - £76,375.

Ore mined and crushed - 188,351 tons.

Gold production - 84,591 or.

Dividends paid - £367,775.

Capital expenditure (exclusive of development) : -

Plant and machinery - £63,000.

Reserves - £25,000

Those three mines have repaid the Conimon wealth and State Governments over and over again for all the money expended in their development. There are still great reserves of low-grade ore to be developed in Victoria and other parts of Australia. Therefore, I am glad that the Government has seen fit to make this money available, in spite of the heavy demands upon its finances.

We are at present raising and training forces for the defence of Australia; in addition to the Australian Imperial Force, which is to serve oversea. Classes from the 20 to 25 years of age have been called up, and are being taken into camp for three months’ training. Some of them are already in camp, and others are going in very soon. Men who completed their three months’ training last year are now “ A “ class reservists, and they are to be called up for the last twelve days of each three months’ camp for further training. 1 am convinced, however, that the Government will not get the worth of its money out of them under that system. It is obvious to anyone who has had experience of soldiering that one cannot expect men coming in green for their twelve days’ training to hold their own with young fellows of from 20 to 21 years of age, fit and well fed, who have been training hard for two months. They would be unable to stand up to the long marches, and any attempt to make them do so would result in large numbers going out of action with sore feet and other disabilities. The same applies to the mounted arm, because horses coming into camp green would not be able to take their places alongside the hard fed and regularly exercised horses of the men who had been in camp for months. I suggest, therefore, that the reservists should be taken into camp for not less than a month if they are to receive the maximum benefit of the tactical training. Actually, men coming into camp for twelve days’ training would only be a hindrance to the general training scheme, and they themselves would benefit very little. It takes longer than twelve days to get men ready for hard training.

More should be done in the way of providing cheap electrical power in Australia, and the Commonwealth Government should bear a considerable portion of the cost. The Commonwealth has invaded practically every field of taxation, so that the States can no longer be expected to shoulder the full responsibility of water conservation and the provision of electric power. Cheap electricity should be supplied, not only to the cities, but also to the farms. I am convinced that if this were done it would tend to stop the present drift of population from the country to the cities.

Much has been said recently upon the subject of a national government. I believe that we must have a national government in Australia if we are to put forth our maximum war effort. I do not care who leads such a government, so long as he can obtain a sufficient following to form a stable government, and has the confidence of the people.


– If the honorable member for East Sydney can win the confidence of the people of Australia, which I doubt very much, I would not object even to him. I believe that a national government must be formed, and that those members of Parliament who seek to prevent it will be cast out of Parliament by an enraged public at the first opportunity. The public will believe that such men are seeking merely their own interests, not caring for the welfare of Australia or the Empire, nor for those liberties for which we should be prepared to fight and die.

The honorable member for Calare (Mr. Breen) was disposed to criticize the Wheat Board for selling wheat on terms to certain countries. The wheat-growers’ organizations in Australia have urged the Government to sell wheat on terms, even to Japan. Even the man whom we are told is the particular representative of the wheat-growers, the honorable member for

Wimmera (Mr. Wilson) has himself advocated the same thing. The wheat was not given to the Japanese. Half the purchase price was paid in cash, a quarter is to be paid in twelve months, and the remaining quarter in eighteen months. That information was furnished to me by the Department of Commerce. I have not much time for the Japanese, and I believe that some day we shall have to fight them; but if there is any hope of avoiding that, it can be done only by trading with them and treating them decently. Therefore, I believe that the Government is justified in what it has done.

Several nights ago the honorable member for Corio (Mr. Dedman) criticized theflour tax. He is a great believer in a home-consumption price for every article manufactured here, and in an Australian standard of living for every one except the primary producers.

Mr Pollard:

– That is not true.


– The honorable member described the flour tax as iniquitous, and said that it would be abolished as soon as the Labour party was in power. Evidently, therefore, he believes that, while the people whom he represents are entitled to an Australian standard of living, the farmers are not.

Mr Ward:

– Not if it means taxing the poor.


– Can any one be poorer than the wheat-farmers in the Mallee? Some returned soldiers have been struggling up there for twenty years, and are just as poor to-day as any one in the honorable member’s electorate.

The honorable member for Kennedy (Mr. Riordan) attacked monopolies. I say to him and to his party that the fiscal policy which the Labour party supports has created the great monopolies to which they now object.

Mr Ward:

– Does not the honorable member believe in protection?


– Yes, in reasonable protection. The honorable member especially attacked the cement companies, yet I remember his making a most eloquent plea for those very companies. He declared that if Parliament adopted the recommendation of the Tariff Board, and reduced the duty on cement, thousands of men would be put out of work. To-day he complains bitterly because the cement companies are making profits.

Mr Martens:

– -The honorable member for Kennedy was not a member of this House at the time the cement duties were under review.


– I think he was. I remember when the recommendation of the Tariff Board in regard to wool was turned down, reference was made to the cement companies. Even if the honorable member for Kennedy did not refer to them, other members of. his party did. They “ squealed “ at the thought of effect being given to the Tariff Board’s recommendation on the ground that it would put lots of men out of work. To-day they “ squeal “ because these companies have made huge profits. I say that they have made those profits at the expense of the primary producers of Australia.

Mr Ward:

– A government which the honorable member has supported has been in office for many years.


– The leader of the non-Communist Labour party (Mr. Beasley) was reported in the Daily Telegraph last week to have said that he would not agree to any money being made available for farm relief. If, misled by propaganda issued on behalf of the Opposition, primary producers have imagined that they would get assistance from the Labour parties, surely the statements of the honorable member for Corio and the Leader of the non-Communist Labour party must now convince them that they have been leaning on a broken reed.

Mr Pollard:

– The honorable member is misrepresenting the honorable member for Corio.

Mr Ward:

– What about reducing the interest on their mortgages ?


– The only way by which the primary producers can hope to have the interest on their mortgages reduced, and they themselves be given security of tenure, is for the Government to establish a mortgage branch of the Commonwealth Bank. Long before I entered this Parliament I advocated the establishment of such a branch, and I believe that this Government will take steps in that direction.

I am not satisfied with the amount payable to soldiers and their dependants, but I am glad that the Government has agreed to the suggestion of the Leader of the Opposition that the payments should be increased.

Mr Pollard:

– There would have been no increase but for the Labour party.


– There are others besides the members of that party who have the interests of the soldiers and their dependants at heart. Some people object to paying soldiers for the work that they do and the risk that they undertake, both while on active service and in respect of earning a livelihood in industry after the war. In 1914, when the basic wage was £2 13s. a week, an unmarried private was paid £2 2s. a week ; to-day the basic wage is £4 2s. a week, but an unmarried private receives only £2 9s. a week, so that the position of the soldier to-day is much worse than it was in 1914..

Mr Pollard:

– The same applies to pensioners.


– These men are entitled to greater consideration. The reason why soldiers have always been underpaid is that in the dark ages, five or six centuries ago, nations enlisted mercenaries to fight their battles, and gave them merely sufficient to keep them alive, forcing them to depend on looting enemy cities or ransoms from the relatives of important captives in order to get anything more than a bare subsistence.

Mr Pollard:

– The Menzies Government has continued that policy.


– Many people say that soldiers cannot be paid for the risks that they have to face. In- my opinion, that is a poor argument. A soldier is as much entitled to consideration as is the worker in a munitions factory, or a trade unionist in any industrial concern. There are some trade unions’ which are blackmailing the people of this country. Some of their members are employed at Deer Park, where they recently struck work and demanded an extra 2s. 4d. a day above the £1 6s. that they received,, notwithstanding that probably not more than one in five of them is a competent tradesman.


– The honorable member does not know anything about conditions at Deer Park.


– The honorable member for MeLbourne Ports (Mr. Holloway) said that the Government was belittling Australia because it suffered from an inferiority complex. No man that knows Australians can accuse them of selfeffacement. Although I believe that we have in Australia workmen and soldiers equal to the best in the world, I do not think that we are quite as good as we are inclined to think we are. Certainly, we have never shown any inferiority complex either in industry or in war; and I believe that we never shall do so. The honorable member for Batman (Mr. Brennan) said a few days ago that, possibly, conditions were inclined to make cowards of us all. The honorable member himself made a most cowardly attack on the former member for Corio (Mr. Casey), who, he said, now occupies a safe nook in a friendly neutral country. That is a shocking thing to say of a returned soldier, whose record will stand close investigation. The honorable member for Batman said that, although the people of England were undoubtedly suffering, we heard no complaints except those made to us by blatant propagandists. Probably, in the opinion of the honorable member, that term covers men like Mr. Ernest Bevin, trade union leader and Minister for Labour in the national government in Great Britain, a man whom I believe is one- of the greatest statesmen in the British Empire at the present time.

Mr Ward:

– The fact that the honorable member approves of Mr. Bevin makes me doubt him.


– I feel confident that if Mr. Bevin heard that the honorable member supports him he would be so disgusted that he would commit suicide. Mr. Bevin said recently -

I speak as a workman and a trade union leader who, all my working life, have served our great movement, and to the working people of Australia I say I took office in this Government to help to do my utmost in the field of production. I have had. to ask my friends and colleagues to undertake some heavy responsibilities to give up cherished rights; and they have done it, hut they shall not suffer.

It we are doing this right at the centre of this total war, I am confident that it is not asking too much from our fellow-workers in Australia to do their utmost in the field of production.

You do not have to suffer air attack or take any physical risk, but every ounce of extra energy put out. every extra, steel bullet you produce, or shell you turn, or aeroplane you complete, or ship you build, is shortening this war, and is a contribution to the ending of this awful nightmare and tyranny.

Mr Ward:

– How many ships are being built by the Government which the honorable member supports?


– As the result of the policy of this Government, Australia has produced millions of rounds of small arms ammunition, which has been used in the defence of London against German air raiders. Our factories have also manufactured shells, guns, and a large quantity of ammunition not only for the British Army but also for the British navy. Until France crumpled against the invader, our factory hands and the Government possibly laid down on the job a little, but now they are doing splendid work. If honorable members inspect the Small Arms Factory at Maribyrnong, they will realize that our engineers and workmen are doing great work to assist the Empire. That is what every man in Australia should be doing to-day. The people of England are fighting our battle. Women, children and old men are suffering that we may be free. When I 3ee the irresponsible attitude adopted by some Australians, I sometimes wonder whether the sufferings of the British people are worth while. Our workers must be prepared to strain every nerve to produce munitions, guns, ships and aeroplanes, and Australia must send a. continuous stream of young men to theatres of war. Our airmen, owing to the conditions under which they live and fire trained in this country, should be the best in the world. With our man-power and material, we must help the British in their battle for freedom, for the preservation of the Christian religion, and in fact for everything that we cherish in this fair land. If we fail in this critical time, we are not worthy of the sacrifice that the heroic British people are making.


.- I protest against the budget, because it makes no genuine attempt to utilize the credit resources of the nation. The few concessions that were extracted last week from the Government are not substantial as these heavy impositions proposed will be continued for years. The finan cial war, which the Labour party fought last week, to secure concessions for invalid and old-age pensioners, soldiers, and the poorer sections of the community was, in my opinion, just a3 serious as is the war which the British Empire is waging against the aggressor nations thousands of miles away. Whilst the present gigantic struggle between nations may terminate in six months or two years, the financial war will continue indefinitely. For that reason, the few concessions that the Labour party gained last week are of little consequence. I regret that the Government did not grant to invalid and old-age pensioners and to soldiers the full amount of the increase sought by the Labour party. Australia owes a great debt to the pensioners, many of whom pioneered the development of this country, and to the soldiers who are prepared to lay down their lives in order to preserve for future generations rights and privileges that Australians hold so dear.

I regret also that the Government did not make a more substantial concession to wheat-farmers. Like the honorable member for Bendigo (Mr. Rankin), 1 understand the hardships that have been endured by the man on the land. In the Mallee years ago, settlers carted water for considerable distances when they were developing their holdings. To-day, their sons have been compelled to seek other occupations, because they despair of ever making a success of agriculture. Even if they worked 24 hours a day, they would still fail. But all that is in danger is not lost. The Commonwealth Bank could solve the problem. The Labour party realizes that the war must be won by the British Empire, and that, in order to prosecute the struggle, colossal sums of money are required. The Leader of the Opposition (Mr. Curtin) explained, with commendable fairness, that he was not quibbling at the expenditure of one farthing which the Government requires in order to conduct the war; the matter in dispute relates to the manner in which the Government proposes to finance it. In my opinion, every farthing should be provided by the Commonwealth Bank. The Bank Board and Treasury officials should have been called in for consultation, not last week, but twelve months ago. No additional taxes and loan moneys are required in order to increase invalid and old-age pensions and the pay of the members of the Australian Imperial Force. This view is supported by eminent financial authorities. Let us take heed while there is still time.

A deflationary budget such as this will cause a disastrous depression, the effects of which may be more serious than the depression of 1931, when poverty and misery caused bankruptcy and many suicides throughout the country. Nobody should be taxed. If a man has been clever or fortunate enough legally to amass money, he is entitled to retain it. In the words of one writer : “ Yesterday has gone; forget it. Todayis here; use it”. The money which the Government will extract from the wealthy will be taken out of circulation, causing serious repercussions in commercial and industrial spheres. If people have not any money, they cannot purchase goods and services. Without money, a man can die of starvation by the roadside. Two years ago, Dr. Harvey Scott, after inspecting many schools throughout Australia, reported that 40 per cent, of the children were suffering from malnutrition, which is only another word for starvation. What the effects of the budget will be upon the domestic economy of persons in receipt of lower incomes, I dare not think. Australia was practically bankrupt before the outbreak of war, and conditions will be a thousand times worse when £186,000,000, which the Treasurer proposes to raise this year, is taken out of circulation. If the war should last for five years, Australia will not be able to finance its expenditure from taxation and loans. We should get the money from ourselves, in a perfectly simple and reasonable manner. If .1 had £1,000 in one pocket, I should not attempt to borrow a similar sum from a bank because I should be obliged io pay interest. The same reasoning applies to our national economy. Although our war expenditure could be financed by the Commonwealth Bank expanding the national credit, the Government proposes to obtain much of the required money from the loan market. A few days ago, I asked a perfectly reasonable question and I was entitled to a proper reply, but did not receive it. I asked the Treasurer to disclose how much money has been subscribed by the private banks since the outbreak of war, and the answer was that the private banks did not wish to make the figures public. In those circumstances, I have come to the conclusion that up to the present the private financial institutions have provided nearly every penny of the loan money with which the Government has financed the war. For that money, the Government is paying interest at the rate of 3i per cent, or 4 per cent, per annum. If my suggestions were adopted, the necessary finance could be secured from the Commonwealth Bank free of interest. The Royal Commission on Banking and Monetary Systems in Australia, which inquired exhaustively into this subject at a cost to taxpayers of £22,000, recommended a procedure similar to that which 1 now advocate. The Government should adopt the report of that commission. The eminent financial authority, Sir Reginald McKenna, declared that those who control the credit of a nation hold in their hand the destiny of the people. I am opposed to this budget, because it places the country at the mercy of the private banks when the money we need can be obtained from our own institution. I appeal to the Prime Minister (Mr. Menzies’) and the Treasurer (Mr. Fadden), who hold the trump cards, to reconsider the Government’s financial proposals. Actually Australia has a credit balance of £3,000,000,000, but the Government refuses to use one penny of that amount to reduce the financial burden imposed upon us during the present crisis. The public is entitled to know why.

Men more experienced in parliamentary life than I have already dealt with the incidence of the proposed new taxes, but we all know where the burden will lie heaviest. It will be the small man who will suffer, and I am afraid that there will he an upheaval if these taxes are imposed. The people will stand a certain amount, but not too much. What, would be the position if the people said, “We won’t stand this”? The Government should not forget that many men are working twelve and fourteen hours a day to keep the munition* industry going. We are supposed to be fighting for security, but the new taxes will deprive the workers of securityand we shall have to face another depression. On polling day at the last general elections voters were asked by Mr. King O’Malley to vow -

By the altar of their God, the tombs of their ancestors and the cradle of their own children, never to vote for any parliamentarian that would refuse to use the power of the Commonwealth Bank.

I commend those words to the people.


. -This budget would be more aptly described as a “ lose-the-war “ rather than a “ winthewar “ budget, because it is based on wrong principles. It has been said that men, munitions and materials are required to win the war, but there is need for something more than that - spirit. There is nothing positive either in the Government’s policy or in the budget which will so grip the masses of the people to produce that spirit. As a man thinketh, so is he.

In boxing the victor is usually the man who leads. That was well illustrated in the contest between Louis and Schmeling for the world championship. That contest was won six months before it took place. Schmeling went to the ringside to observe his opponent training. He noticed his weaknesses and planned to win on a knock-out, a right hook to the jaw.. The Government has no plan on which to win this war; it has no idea how to proceed. The budget is based on fear. The very words of the Treasurer (Mr. Fadden) were, “Are you’ alarmed?” That is enough to paralyse the community. How can we achieve victory in such a spirit ? Our cause must be based on some objective which will inspire the masses to ultimate victory. We will not win it by fear and a deflationist spirit. The Governmenthas already retreated to a degree by accepting some of the suggestions made in the amendment moved by the Leader of the Opposition (Mr. Curtin), but it has not gone far enough. It must reverse its whole policy and create social justice in the community. The Sydney Sun recently stated -

It will be necessary, sooner or later, to drop the idea that the only legitimate expenditure on defence is that which is spent directly on guns, aeroplanesand bullets. The best defence of a country is the defence offered (with the aid of armaments) by a healthyand contented working population keen, to fight for the preservation of that happiness.

Industrial discontent and upheavals- are due to the conditions under which the workers live,and as this article states -

Medical authorities show that accidents and negligence occur most when the workers ace tired and exhausted.

There is the same demand for social justice in Great Britain. I referthe committee to the following article in the Sunday, Telegraph: -

Our side hashardly begun the job that will win this war, according to leading British liberals. They admit Britain is fighting the fight of her life trying to stall off starvation, but insist the surest way to win would be to. adopt immediately a policy that would win 100;000,000 allies in Europe . The job, they say, is to show by actual example what Britain is fighting for, so all Europe will say as quickly as possible, “ to hell with Fascism; let’s fight for what the. English. are getting “ Some of the tycoona. naturally want to retain their privileges and the power of their money. So they strongly oppose any move to abolish privilege, to ditch the status quo, and to put their money to national work for the whole community. But on the left, many ordinary people believe that to fight for the old England is not enough. They want to fight for a new England and a better democracy in which they won’t be pushed around by whoever comes by money in the present system.

The same spirit is displayed in Australia by those who talk about the need for industrial conscription. Only a few days ago we were informed by cable that there has been a demand for compulsory powers over the workers of Great Britain. A London cable message, dealing with the debate in the House of Commons, read -

The call for a stronger effort on the homefront, which characterized the debate in the House of Commons yesterday, underlined a good deal of the criticism indicated a few daysago.

Indeed’, there was in yesterday’s debate what the Lord President of the Council, Sir John Anderson, himself described as “ an undercurrent of questioning “ of the adequacy of the Government’s organization to deal with war problems.

Lord Winterton said he wanted compulsion in many things and spoke of the necessity for compulsion in the training of people for the arms industry. He said that there was. a “ long jam “ in many respects on the homefront of untrained labour and undeveloped resources. “A real offensive”, he said, “must take place in the shipyards and workshops of Britain, the Dominions and the United States, of America. Mr. Bevin (the Minister for

Labour.) lost a great opportunity last week. Why did he not say to the workers that, while he and they had hadsome big lights against the employers in the past, the biggest fight now was the fight against time, and to make it our ally and not that of the Germans? Why did not Mr. Bevin say to the workers that they must accept compulsion where it was needed because theirs was the greatest fight of all? If Mr. Bevin had made that appeal, he would have met with universal support, but, in fact, he made a very different speech. He said that we could not order civilians about like soldiers. That might he true, but it was a very dangerous argument to use “.

Sir John Anderson, replying for the Government, said that the testas to whether compulsion should be used was whether it would give results and would be applied where it was the best and most appropriate method.

Sir John Anderson hinted ‘that compulsion might be applied “ in tackling the most vitally important and urgent task of reconstruction of the industrial centres which have been subjected to very heavy aerial attack “.

On the one hand there was a demand for compulsion, and on the other a request for social justice. The Daily Herald, however, was not satisfied that the excess profits tax was actually restricting dividends from war industries, and it cited firms whose war profits have strikingly increased, including, in the engineering trade, Dennis Brothers, whose dividend was up to 133 per cent.; Handley Page, up to 44 per cent. ; Raleigh Cycle, up to 25 per cent.; and also B.S.A., Associated Equipment, and A. C. Cossor, whose profits were increasing. The people of Great Britain are just as uneasy as we are, because no definite war aims have been stated. The old order is fighting to maintain the status quo ; but until a definite statement ofwar aims is made the spirit that will win victory will always be lacking. In his book The Commonsense of War and Peace, Mr. H. G. “Wells, in asking us to think carefully about the true meaning of the war, wrote -

Too many people have only a vague idea of what we are fighting for. We are all ridiculously at sixes and sevens, because so many people, who set up to be leaders of thought, prefer to be eloquent and demonstrative when they ought to think.

We cannot make any hopeful plans for restoring order to the world until we know the real nature of its disorder.

When a man is sick he goes to a doctor who understands the nature of his complaint. Is it likely when the people wish to remedy the ills that beset the workers that they will seek counsel with the reactionary representatives of vested interests who know nothing of what the workers complain? Only to the Australian Labour party, which understands the requirements of the workers, can the people look for social justice. We have only to analyse the iniquitous record of anti-Labour administrations in both Federal and State spheres during the last quarter of acentury to see how little they understand the needs of the workers. Anti-Labour governments sacrificed the Australian Commonwealth Line of Steamers, which had saved the primary producers of Australia hundreds of thousands of pounds. If that line had been retained the primary producers would not be so concerned to-day about the future of the export industry. Dealing with the shortage of shipping a few days ago, Sir Thomas Gordon said -

Plans havebeen made to provide greatly increased storage space in Australia for primary produce. This is to meet the early possibility of strict curtailment of export shipments, owing to lack of tonnage.

Theloss of so many ships including several in our own coastal waters is hound to have a seriouseffect on Australia’s exports, some of which are of a perishable character. Britain may soon have to adopt the policy of sending many of her ships to countries closer to her own shores for supplies, thus avoiding the long voyages to and from Australia. We shall then have much of our exportable primary produce on our hands. To meet the possibility of this situation, increased storage will be provided.

The difficulties that will confront the primary producers in the near future can be directly attributed to the failure of anti-Labour governments in the past to formulate a progressive shipbuilding policy. The same apathy towards the needs of the people was exhibited by the anti-Labour administration responsible for the sale of the woollen mills which would have saved the workers of this country millions of pounds. AntiLabour administrations have sabotaged the people’s bank and the industrial arbitration system, both of which were set up by a Labour government. In the field of aviation the same sorry story must be told. In the person of the late Sir Charles Kingsford-Smith we had the greatest air pilot the world has ever known, yet the Government of the day saw no merit inhim and would not offer him a decent job. Sir Charles was compelled to eke out an existence barnstorming and pioneering new oceanic routes, and eventually went to a watery grave. In the same way, anti-Labour administrations have failed to go ahead with the exploitation of our coal-oil resources, and have been content to play into the hands of the wealthy oil combines. When an application was made by a group of persons for approval to register a company for the development of our coal-oil resources, it was refused by the Treasurer. Anti-Labour administrations have consistently failed to implement their promise to introduce a national health insurance scheme. The Lyons Government expended over £1,000,000 on the preliminary work of a health and pensions scheme, only to scrap it on the ground that it would prove too expensive. In NewSouth Wales, antiLabour governments were responsible for the sale of the government brickworks, theState Monier Pipe Works, and the metal quarries, and they sacrificed to the wealthy insurance companies the State Government Insurance Office, which at the time of its sale was making handsome profits, as well as performing a very useful function in curbing the rapacity of the private companies. They were also responsible for starting rumours which resulted in the Government Savings Bank of New South Wales going on the rocks. Their policy has always been designed to pawn this country in the interests of the overseas bond-holders. Now, in this budget, the Commonwealth Government proposes to impose a crushing burden of taxation on the poor and middle-class sections of the community and on small companies. Recently I received a letter from a building society which pointed out that the new sales tax proposals will add £30 to £40 to the cost of the home of an average wage-earner.

We are passing through a crisis to-day which I firmly believe will bring us to a better order of society in which we shall overcome the grave disorders inseparable from capitalism and vested interests. The solution of our difficulties is, in my opinion, the co-operative movement which has been tried in other parts of the world with great success, particularly in relation to farming operations.

In 1923, the Parliament of New South Walesplaced upon its statute-book a masterpiece of legislation entitled the Cooperation Act, which was drafted after an exhaustive examination of the cooperative laws of other countries of the world. Section 6 of the act reads -

  1. A. society may be formed as a society for promoting the economic or social interests of its members, or as an association or union for facilitating the operations of such societies, that is to say, a society may be formed as a society, association, or union of any one of the following kinds: -

    1. a rural society ;
    2. a trading society:
    3. a community settlement society;
    4. a community advancement society;
    5. a building society;
    6. a rural credit society;
    7. an urban credit society;
    8. an investment society;
    9. an association of co-operative societies;
    10. a union of co-operative associations.
    11. A society so formed shall be deemed to be a co-operative society and to have all the privileges, powers, rights and duties by any law conferred or imposed on co-operative societies.

A society so formed may promote cooperation for the improvement of conditions of rural or urban life, and encourage and assist in the formation of co-operative societies.

This shows that the framers of the measure had in mind a widespread improvement of social conditions. Some honorable members opposite, particularly of the Country party, who realize that the old order is passing but do not see where they are heading, would be welladvised to examine that act, especially as it relates to rural activities. Unfortunately, this admirable piece of legislation was never put into force in any fullblooded way, the reason being that it did not suit the vested interests behind the political party in power in New South Wales. Practically nothing was done to give effect to the act until 1936. Just prior to that time the then Premier of New South Wales, Mr. Stevens, who had been in office for five or six years and had allowed the measure to remain a dead letter on the statute-book, made certain promises in connexion with housing reform. Later he went abroad and was afforded opportunities to investigate extensive housing reform schemes in Great

Britain where the common people were solving their own housing difficulties. The capitalist system had done absolutely nothing to improve housing conditions. But while the great captains of industry had been concerning themselves only with the making of profits for themselves and their shareholders small groups of working people had formed themselves into building societies. Prom small beginnings, this movement had assumed immense proportions and under its auspices about £140,000,000 a year was being expended in the construction of workers’ homes. Mr. Stevens observed what was being done, and was informed that these societies had accumulated such large sums that they were actually lending money to governmental and semi-governmental bodies for the purpose of building homes and undertaking slum clearance schemes. Upon his return to Sydney, Mr. Stevens took an interest in the launching of a number of building societies. These societies naturally looked to the Commonwealth Bank to finance them, but they received such unsympathetic treatment that they soon turned to private banks from which they were able to obtain about £14,000,000 in a couple of years. Subsequently the Commonwealth Bank was induced to take a small interest in the activities of the societies and advanced about 10 per cent, of the funds made available to them. In the early stages of the scheme, when it was thought that the Commonwealth Bank would be willing to grant assistance, money was offered to the building societies at 4£ to 4f per cent, by the private banks, but shortly after it was announced that the Commonwealth Bank would not take a very active part in the scheme, the interest rate was raised by the private banks to 5 per cent.

A couple of years ago, I was asked by the Association of Co-operative Building Societies of New South Wales to make representations to the then Commonwealth Treasurer, Mr. Casey, on its behalf. I did so in an honorary capacity, and pointed out to him that the great proportion of the money that had up to that time been made available to the building societies, had come from the private hanking institutions. I told Mr. Casey that the building societies considered that they were entitled to more sympathetic treatment from the Commonwealth Bank. The first thing Mr. Casey said to me was, “How did they get past the Loan Council and get £10,000,000 ? “ He was more concerned about the Loan Council than about the building societies. I pointed out to him that the building societies were in the same position ah private companies, and could go on the open money market for finance when it suited them to do so. Mr. Casey was impressed by my submissions and asked me to make a concrete proposal. I spent part of my Christmas holidays delving into statistical records in connexion with housing schemes throughout the world, and subsequently I demonstrated to Mr. Casey that about £20,000,000 a year would be needed for housing purposes throughout the Commonwealth. I told him that in New South Wales alone, £5,000,000 a year was needed to make advances to individual home buyers. That had been established through the operations of the building societies then in existence. These figures were confirmed by the Economic Adviser of the Bank of New South Wales. The Housing Board of New South Wales pointed out two or three years ago that in the Sydney metropolitan area alone, at least £30,000,000 was required to replace slums, and to put sub-standard houses into habitable condition. Those figures take no account of the growth of Sydney’s metropolitan area since that time. Those proposals by me were shelved. In the meantime tie Commonwealth Bank has assisted a few societies, but nothing substantial has been done in that direction. I take this opportunity to deal with the operations of the Commonwealth Bank. An examination of the bank’s profits during recent years shows clearly that that bank is not functioning in the interest? of the people as it was intended to do by its founders. From the 30th June, 1932, to the 30th June, 1937, its profits from general banking declined from £231,;524 to £180,540, or a decrease of £50,984; profits in the rural credits department declined from £34,57.6 to £27,783, or a decrease of £6,793; and profits in the note issue department declined from £1,022,436 to £409,312, or a decrease of £613,124. The bank suffered this decline of profits during a period of prosperity. In 1937 most businesses, reported improvements in their trading position. The honorable member for Corio (Mi-. Dedman) informed us that during the last twelve months the value of the assets of private banks in this country had increased by £45,000,000. The comparison afforded us by these figures shows clearly that to-day the Commonwealth Bank is not functioning in the interests of the people.

I now propose to deal with the cooperative movement. In its issue of the 30th November last the A.B.C. Weekly stated -

It took a year of Japanese invasion to make China realize fully that she faced a changed world. Nowhere were the changes more sweeping than in the vital field of productive industry.

Already, in 1038, most of what remained of China’s great industrial and banking centres (located along the vulnerable coastline and on the main inland waterways) had been occupied by the invader. China realized with desperate urgency that in the still unoccupied areas she must build’ anew - that she must build immediately for economic security both for the hazardous present and for, the as yet, undetermined future.

It was in the midst of this crisis that the idea was conceived of building up a war-time industry for China in small decentralized units, with the co-operative system as. a basis of organization.

It was a bold idea that involved something like this: First, to set up workers’ cooperatives for the immediate production of essential consumer goods. Then to link the co-operatives together into district federations. Last, to expand these federations, into state and national groups.

Each federation had to be provided with an efficient marketing and supply agency,, so that small-scale industry could be given large-scale buying and selling facilities.

Co-operative treasuries- must be provided as well to carry out the necessary finance, and lay the basis for an ultimate link-up with existing credit and consumer movements.

So it was planned to build up the social life of the Chinese people around their work - to have the federations look after the education of co-operative members’ children, set up health and recreation centres and relate them to their national’ requirements in a very real way through their own collective livelihood.

Chinese Industrial Co-operatives are best known abroad by the name of “Indusco “.

As a people’s movement, as well as a- business, Indusco has sought help and support wherever it could find it. Friends abroad in the Philippines, in America and in England, have helped with funds which have gone towards assisting refugees to travel to those parts of China where work can be organized, and training them when they get there.

China to-day is already preparing for the slumps and depressions of to-morrow. She must carry on- with this titanic struggle for. the stabilization of one-fifth of mankind, in the vital interest of her own 400,000,000, and in the interests of all of us.

The turmoil that started in Manchuria in 1931 has already taken a toll of lives greater than the whole population of the Australian continent. Its repercussions are being felt more and more widely every month throughout the nations of the Pacific. But all its effects have not been entirely destructive. In China it has welded the people together in a way that would have seemed unthinkable twenty years ago.

In planning for the future, we should be well advised to follow the example set by China. We should be much more concerned with China’s efforts in the social and economic sphere, than with fears of violence at the hands of another neighbour in the north. China offers a vast market for our primary produce. The United States of America recognizes China’s value in that respect. Recently that country granted additional credits to China.

In the development of our war industries, we have an excellent opportunity to apply the principles of co-operation. In our munitions industry men are working twelve hours a day. They should be given some voice in the control of that industry. Here is an instance in which the principles of co-operation in industry could be applied with benefit to the workers and to the nation as a whole. The workers and employers should be brought closer together, and this can be achieved only by giving to the workers representation on the directorates. The Government has power under the National Security Regulations to implement such a reform-. Employees in all large’ industries should be given the right to elect at least one director to the boards, of management. In addition, they should be given a share of the profits of their industry. By encouraging co-operation in this way we can strengthen our war effort, and ensure the maintenance of peace in industry when the wai* is over. Honorable members have already pointed out in the course of this debate, the deplorable conditions under which the workers at Lithgow are obliged to live. Their grievance could be remedied if the Government embarked on a housing scheme, the finance for which could readily he made available through the Commonwealth Bank. I point out that New Zealand has provided £20,000,000 for the construction, of suitable homes for workers. That amount has been made available at a little over 1 per cent. Finance for housing and finance for war purposes fall within different categories. A sound housing scheme would also tend to strengthen the community spirit. The worker would be enabled to pay off his home, within from 15 to 20 years, at the end of which period, the sum now normally paid to the landlord would become available for ordinary household expenses. A housing scheme would also enable employment to be increased because over 100 .trades are dependent upon the building industry. If a sum of £20,000,000 were made available each year for a housing scheme that sum would be turned over at least half a dozen times, and thus as ranch as £120,000,000 would be placed in circulation. Recently, I saw a photograph which showed .that, no less than 600 persons are interested directly and indirectly in the construction of one home. It would have a considerable effect on employment in the community. That is borne out by a comparison of the employment figures for New South Wales and Australia during the last three or four years. For the .second quarter of 1986, the unemployment figure for New South Wales was 12.8 per cent, of the total number of workers in that State. For the whole of Australia also the figure was 12j8 per cent. In 1937, however, when the co-operative housing movement had begun in New South Wales, it fell to 8.’2 per cent, in the State, compared with 9.7 per cent, for the whole of Australia. In 1938 it fell to 5.1 per cent, in New South Wales, and to 8.6 per , cent in Australia. In li939 it fell to 4.2 per cent, in New South Wales, and rose slightly to 8.9 per cent, in Australia. As the result of that co-operative movement, the figure for New South Wales was only one-half that of the Commonwealth in the last year. In addition to employment being provided throughout the community, we would also have a happy .and .contented people. I urge .the Government, in planning future policy, to give consideration to the co-operative movement in relation not only to industry, but also to housing and farming. It would provide a solution of many of our present difficulties.


– Even at this late hour, I desire to make a few remarks concerning the extraordinary budget now under consideration. I describe it as extraordinary, because it is a record budget in the history of the Commonwealth Parliament. It provides for an expenditure of £186,000,000 for defence, and approximately £84,000,000 for civil services such as works. Of the £186,000,000 provided for defence, £143,000,000 is to be expended in Australia. I have no complaint to make against expenditure for defence purposes. The Labour party is fully in accord with that particular expenditure, and with the efforts of the Government to prosecute the war to a successful issue. But, in common with other honorable members on this side of the chamber, I protest against the methods by which the revenue needed is to be raised and expended. I disagree with the attitude adopted by the Government, .particularly during the last twelve months, in regard to defence expenditure. Complaint has been voiced against the sad neglect of Queensland in this matter. I have raised the subject on more than one occasion in order that I might learn what expenditure was to be incurred in Queensland, and the purposes to which it was to be applied. Prior to the last general elect-ions, I asked a series of questions to ascertain whether the Government had fulfilled its promise to establish in Queensland, and particularly in the capital city of Brisbane, annexes for the manufacture of arms and munitions. I asked where those annexes were situated, and whether any other establishments were engaged in the manufacture of arms and munitions, but, unfortunately, was kept waiting for at least five or six weeks for a reply from the responsible Minister. By that time the elections were being fought. The week in which the campaign opened in Queensland, the daily press published the statement that the Commonwealth Government had appointed Colonel D. Evans as chairman of the Munitions Board, and that he was then engaged in making a survey, not only of government workshops, but also of private establishments in order that Queensland might be given its share of the manufacture of arms and munitions. The report went on to say that Colonel Evans had made a complete survey, that his report and recommendations were being forwarded to the Munitions Board in Melbourne, and that the public of Queensland could rest assured that within a very short time that State would receive its share of defence expenditure on the manufacture of arms and munitions. Almost simultaneously with the publication of that press report, it was also learned that Mr. W. J. Smith, who, I understand, is employed by the Commonwealth Government as inspector of munitions, visited Brisbane and informed the public that certain contracts had been let, and that further contracts would be let within two or three weeks in that city. The Minister for the Interior made a statement, in which he pointed out that Queensland was receiving a fair share of the defence expenditure. He published certain figures in the press, with the object of verifying the correctness of his statement. On the 16th September, just prior to the general elections, in order to throw out a 3moke screen, he said -

More than £20,000,000 will be spent by tlie Commonwealth Government, and thousands of men will be employed on defence works in all States before June 30 next. Thus amount, it n-as officially stated to-day, represented more than double the total spent in the past three years. It would be devoted mainly toward such works as military camps, naval docks, aerodromes and new munition plants.

The expenditure was being spread as evenly as possible to provide a maximum of employment in all States. This was shown by the following distribution of the expenditure : Victoria. £4.327,282: New South Wales, £5,59(1,550;’ South Australia, £4.217.348; Queensland, £1.383.818 ; Western Australia. £1.194.008; Tasmania. £225.887: Northern Territory, £1,072.112.

It will be seen that Queensland has been sadly neglected from a defence expenditure standpoint, compared with other States, particularly the State of South Australia. I listened very attentively to-day to the speech of the honorable member for Adelaide (Mr. Stacey), and also to that of the honorable member for Franklin (Mr. Frost). The honorable member for Franklin particularly complained of the small amount being expended in Tasmania. He made no complaint concerning the amount to be expended in South Australia, because, he said, it has the necessary workshops, facilities and materials to carry out the work. I do not begrudge, nor do the people of Queensland begrudge, South Australia receiving a fair share of the expenditure, but we contend that some consideration should be given to a State like Queensland, particularly in regard to the manufacture of arms and munitions. At an early stage the Government made a survey of the factories and engineering workshops, particularly the government railway workshops. The Government of Queensland was faithfully promised that an annexe would be established at the Ipswich railway workshops. At the request of the Commonwealth it made available the services of one of the most competent employees of those workshops, who occupied the position of draughtsman. That officer was sent to England to obtain first hand information in relation to the manufacture of arms and munitions, in order that, upon his return to Australia, he would be in a position to carry out work for the Federal Government in the Ipswich railway workshops. That trip cost the Commonwealth, approximately £1,000. The following paragraph appeared in the Brisbane press just after the survey had been made by Colonel Evans, and later by Mr. W. j. Smith, who said that contracts would be let, work would be commenced immediately, and employment would be found for the people of Brisbane: -

Sent on a special tour of British workshops to study manufacture of Beaufort bombers, Mr. J. H. Hirst has returned to Queensland to find his services are not required. “ The Commonwealth Government has apparently wasted £1,000 on giving me a good time “, he said to-night.

Mr. Hirst has gone back to his draughtsman’s job at the Ipswich railway workshops.

The original programme was altered, apparently because the expense of sending the parts south for assembly might not be justified.

However, Adelaide is still making parts and sending them to Sydney.

If a workshop could be established at Adelaide, and the parts sent from Adelaide to Sydney for assembly, why could not Brisbane be treated similarly?

The cost of transit from Brisbane to Sydney would not be so great as from Adelaide to Sydney. Therefore, the Government has not carried out its promise to the people of Brisbane.

I enter astrong protest against the taxation proposals contained in the budget. They are most unfair in their incidence, because they will affect the lower-paid sections more seriously than those on the higher ranges of income. It has been stated by the Prime Minister that the sales tax will not affect the basic wage-earner, or the invalid and old-age pensioner,because foodstuffs are exempt from sales tax. The honorable member for Hunter (Mr. James), however, recently showed that hundreds of items that were previously exempt now carry sales tax, thus touching the pockets of every section, particularly the people on the basic wage. Whilst I realize that an agreement was reached between all parties in respect of the income tax exemption figure, I regret that the Government could not see its way clear to raise the exemption to the former level of £250. I am disappointed over the compromise reached regarding the invalid and old-ago pension. The Government could easily have increased the allowance to at least 22s. 6d. a week. On many occasionsI have taken up the claims of the old pioneers, and have done everything in my power to help them. The Treasurer stated in his budget speech that the total sum required for invalid and old-age pensions was slightly below the normal figures. He said -

Invalid and old-age pensions are expected to cost £17,100,000 compared with £10,459,000 last year. This increase is rather less than normal - a fact which reflects the improvement in employment and incomes during the past year.

The increase of the cost of pensions this year is only £641,000. I do not agree with the Treasurer that employment has increased during the last twelve months. I do not know whether he meant that employment among invalid and oldage pensioners had increased. The invalid pensioners are not allowed to accept employment, and the great majority of them are unable to work. I say very definitely that this Government is not responsible for any reduction of unemployment in Queensland. The credit for that belongs entirely to the State Government. If Queensland were given a larger share of defence expenditure employment might be found for many more men. In my opinion, the fact that the total pensions bill has not increased by as much as usual, is due to the instruction of the Government to deputy commissioners for pensions to tighten up on all claims.

Sir Frederick Stewart:

– There never has been a more generous pensions administration than at the present time.


– Hundreds of pensioners have visited me during the last eight or ten months to complain of their treatment. Some who had been receiving pensions for years have had them cancelled because the department said they were not totally and permanently incapacitated for work. I know for a fact that they are unable to work, and they must now rely on their friends for support, or seek public charity. I know also that hundreds of applications for invalid pensions have been rejected, even though they were supported by the certificates of two or more doctors. However, the Government referee stated that the applicants were not totally and permanently incapacitated, and so the applications were refused. To-day, the department is rejecting as many applications and cancelling as many pensions as it can, in order to save the Government a paltry few pounds. It is a scandalous thing that the Government should seek to reduce its expenditure at the expense of those unfortunate persons who are not able to earn a living for themselves. Evidently, the Government does not care what becomes of them.

I had intended to ask the Government to apply the increase of1s. a week to service pensioners as well as to old-age and invalid pensioners, but I have just been informed that the Government proposes to do this. I am very pleased to hear that. I have received a telegram from the Returned Sailors and Soldiers Imperial League in Queensland asking me to press for the increase. There is no doubt that the service pensioners are entitled to it.

Several soldiers have interviewed me recently to complain of their treatment at the hands of the authorities, and I have communicated with the Minister for the Army (Mr. Spender) in regard to the matter. They enlisted in the railway unit and, upon being medically examined, were classed as fit. After a period of training in a military camp, they were put on a transport, and believed that they were going directly overseas. After the vessel had left Australian waters, it was recalled, and the men disembarked at Perth, where they remained for four months, when they were again medically examined. As the result of that examination some of them were discharged as medically unfit for active service. They claim that, as they left Australia, they should be classed as returned soldiers, but, on their arrival in Brisbane, their application to the department for deferred pay was rejected. These men left Sydney in the belief that they were to go abroad ; they actually did leave Australia. I have received from the Minister the following reply, which I regard as unsatisfactory : -

I acknowledge receipt of your letter of 13th November, 1940, inquiring on behalf of Mr. J. Major, secretary, Incapacitated and Wounded Soldiers’ Association of Queensland, as to whether Mr. E. Johnston, of 128 Jamesstreet, New Farm, Brisbane, is eligible for deferred pay. I desire to inform you that as Mr. Johnston was disembarked at Perth, he is not deemed to have embarked for service overseas.

It is regretted, therefore, that his claim for deferred pay cannot be allowed.

There are several other cases similar to that of Mr. Johnston, which I hope the Government will reconsider, because, in my opinion, these men, having left Australia, are entitled to deferred pay.

Recent happenings in Queensland regarding the release of aliens from internment camps have caused a storm of protest. Chief interest centres on an Italian doctor who was naturalized in 1938 and held a fairly high position in the social life of Brisbane. I . understand that at the time of his arrest he was the head of the Fascist movement in Queensland, and the agent of Mussolini, and ‘Was actively associated with a Fascist club which ‘ included a number of persons whom he is said to have duped. At the outbreak of war he and some of the other members of the club were interned; but immediately after the last Commonwealth election he was released. His release caused such a stir that the subject was raised in the Queensland Parliament by Dr. Watson Brown, the Independent member for Gregory, who asked a number of questions, to which the Minister for Health and Home Affairs, who also controls the Police Department, replied. Apparently, an attempt was made to throw the blame for the release of this alien doctor on the State Government of Queensland instead of on the Commonwealth Government. I shall read from a Queensland newspaper, what purports to be an extract from the Queensland Hansard -

Replying to Dr. Watson Brown, M.L.A. (Gregory), in Queensland Legislative Assembly, on Wednesday of last week, and referring to interned Italians, Chief Secretary Hanlon said: - “We have to consider these things calmly, and we must place responsibility for these things where it rightly belongs.”

The facts relating to the doctor about whom the honorable member complained are these: as he said, the man was naturalized in 1938. So far as the law of the State of Queensland is concerned, that man is a naturalized British subject, and this Parliament cannot legislate for some British subjects and not for others. Under the Constitution, any subject of the King, whether he is naturalized or natural-born, is entitled to the franchise, and the protection and privileges of the law of this country.

But that does not prevent the authorities responsible for the safety of this country from taking steps to keep any such person, if he is dangerous, from doing any harm to our community. At the outbreak of war with Italy that gentleman was interned.

He was picked up by the police on the instructions of the Commonwealth Investigation Branch, who must have known something about him to have instructed the Queensland police’ to arrest him. The police promptly did as they were asked. They arrested him and delivered him to the military authorities for internment. He was interned, as were a large number of other people, and, day by day, at the request of the Commonwealth Investigation Branch, people who are regarded as dangerous, irrespective of nationality - and I emphasize that-are being picked up and interned. The Queensland police, on instructions of the Government - this will be acknowledged by the federal authorities - are giving the fullest possible service, to the Commonwealth authorities in their efforts for the protection and safety of this country.

In fact, I think I am right is saying that the Prime Minister expressed his gratitude to the Premier of this State for the manner in which the Queensland police had performed a very difficult and at very trying task.

Once these . people are handed over to the Commonwealth authorities, officials of the

State Government have nothing more to do with them. A large number of aliens interned are naturalized and unnaturalized. During the recent ‘federal election campaign - and this H a tiling to which I want to draw the attention of the House - it came to our knowledge that members of the Federal Government party were assuring these people that if they - the Government party - were returned to power their internment would only be until the elections were over, and then they would be released. (Opposition interjections.) Honorable members opposite supported those candidates. They were South Queensland candidates.

As I was saying, that information came to the knowledge of the Commissioner of Police and representations were made to me that 1 should pass on to the Commonwealth authorities a recommendation not to allow the discharge of interned people as there was n special tribunal to investigate all such cases, and it was available to all aliens who cared to appeal to it.

The Queensland police were conscious of the fact that any such weakening of the regulations would endanger the safety of the country. The regulations were made to provide for the safety of the country, and the Queensland police and the Queensland Government knew what a weakening of authority it would be if these men were released. They knew the dangerous position that would be created, not only among the aliens, but also among Australians. The Queensland police made representations against the release of these people, but numbers of them were released immediately the elections were over.

If those statements are correct, the position is scandalous. This person was interned because of his subversive activities, but was released a few days after the general election without appearing before the tribunal. Other members of the. Fascist Club who were interned have not yet been given their freedom. As I indicated earlier, a promise was made by certain members of Parliament that this man would be released if the Menzies Government were returned. Such a state of affairs is wicked, and I appeal to the Government to institute an inquiry into the accuracy of the statements.

Mr Ward:

– What members of Parliament made that promise?


– That is what I .desire to ascertain. The Minister for the Army (Mr. Spender) should make immediate inquiries and announce the identity of the members concerned.

Mr Spender:

– Does the honorable member refer to Dr. Battaglia?


– Yes.

Mr Spender:

– I investigated his case, and have directed that certain action should be taken.


– I am pleased to hear that. I hope that the Minister will also ascertain the identity of the members who promised that this man would be released if the Menzies Government were returned.

Mr Spender:

– He was not released as the result of any intervention by members. An advisory committee, which inquired into the matter, recommended his release.


– If that is so, the Minister for Health and Home Affairs must have been misinformed when he made his statement in the Queensland Parliament.

Mr Spender:

– A mistaken statement, perhaps ! I can show the honorable member the Advisory Committee’s recommendation.


– I shall be pleased to see it. Surely the Minister for Health and Home Affairs would not make such a statement without good ground for doing so, particularly as it concerned the Commissioner for Police and departmental officials. I am gratified to learn that the Minister will inquire into the matter and have it adjusted satisfactorily. [Leave to continue given.

For some months the Government has appealed to housewives to conserve aluminium-ware, because this metal is scarce and is required for the manufacture of war material. Recently, I listened to a talk by Dr. Goddard from a B-class broadcasting station in Queensland. Accusing the Government of failing to develop certain mineral deposits, he stated that within 30 miles of Brisbane there were large deposits of bauxite, which could be developed at low cost. He declared that, accompanied by competent mining enginers, he inspected the deposits and was in a position to assert that road workers employed by the local municipality were using bauxite to fill in potholes. Such a statement should be investigated. In Canberra a few weeks ago the Queensland Minister for Mines told me that his department was satisfied that there were bauxite deposits in the locality, but did not know whether they were capable of commercial development. He said that that was a question not for the State Government but for any company which wanted to exploit the field or for the Commonwealth Government whose need for aluminium was so great. I hope that the Commonwealth Government will do its part.

I have been told that deposits of shale oil in Queensland are richer even than those at Glen Davis. One deposit is 30 or 40 miles from Brisbane, another 20 miles from that city and a third in central Queensland. The companies that are operating those fields have approached the Commonwealth and State Governments for assistance. I understand that the former Minister for Supply and Development (Sir Frederick Stewart) was asked to provide them with the same assistance as is given to mining ventures, namely, exemption from income tax until they are able to operate profitably. The Queensland Government was asked to abolish the royalty and it responded by reducing the amount of the royalty by 8 per cent. and exempting the company from all taxation until twelve months after oil is produced in payable quantities. The Queensland Government is satisfied that the oil is there in commercial quantities. We know what this Government has done for Glen Da.vis and it should at least assist the Queensland companies by acceding to their request. Whatever oil is produced will be of assistance in the defence of Australia.

Progress reported.

page 632


Faked Photograph of House of Representatives - Limitation of Question Time - National Security Regulations : Prosecutions and Appeals. Motion (by Sir Frederick Stewart) proposed -

That the House do now adjourn.

East Sydney

.- In answering a question to-day the Prime Minister (Mr. Menzies) described as a fraud a photograph which appeared in the Hobart Mercury beside a paragraph describing the counting-out of the House on Wednesday last. I have since looked at the newspaper, and I agree that the photograph is a fraud; it was probably taken when members were being sworn in on the opening day of the session, and the figures of all honorable members opposite, except the Minister for Industry and National Service (Mr. Holt), were obliterated. But even though the photograph be a fake it accurately depicted what took place on Wednesday, because when I directed the attention of the Chair to the state of the House, that Minister was the only honorable member of the Government parties present. I hold no brief for the Mercury. AntiLabour newspapers have always distorted not only photographs but also the speeches of Labour members. Nevertheless, the allegation by honorable members opposite that the photograph represents an attack on parliamentary institutions as such and democracy, is stretching the facts. Much of the criticism levelled against this parliamentary institution to-day is due to the fact that Ministers and some members neglect their duties in this chamber. Reflections are made not upon democracy but upon the present situation in this House and the Government which happens for the moment to occupy the treasury bench. It is the responsibility of the Government to maintain a quorum in this chamber. It is a reflection on the Government, and on the honorable member for Darwin (Mr. Bell) who raised this matter, that, after such a long recess and at a time when Ministers are claiming that Parliament has such urgent business to perform, and when they are appealing for the cooperation of all parties, only one Minister should be left in the chamber to listen to the debate.

Tuesday, 10 December 1940


– The honorable member may make his excuses in his own electorate. I am stating the facts plainly because I believe in being fair in these matters. I and the members of my party owe nothing to the Hobart Mercury, or to the anti-Labour newspapers generally.

The honorable member for Denison (Mr. Beck) has interjected, but I have not heard him protest when the anti-Labour newspapers distort the speeches of Labour members in order to create a false impression. Honorable members opposite become desirous of protecting our democratic institutions only when reflections are cast upon the present Government and the way in which it conducts its business in this chamber.

This morning the Prime Minister stated that for the rest of the sittings questions without notice will be limited to half an hour. Why should this restriction be imposed? The whole of to-day has been taken up in fruitless discussion. Every honorable member knows well that when the amendment moved by the Leader of the Opposition was withdrawn no division would take place on the question “ That the first item in the estimates be agreed to “. That motion will now be carried on the voices. Therefore, all the speeches that follow the withdrawal of the amendment are so much beating of the air, and the more important work of Parliament is being neglected. Provision was made in our parliamentary procedure for the asking of questions, because it offered an opportunity to some honorable members to ventilate in the Parliament matters of public importance. It is wrong for the Government to permit this fruitless discussion of the budget to continue when the rights of honorable members to ask questions on matters of urgent importance are to be restricted. I hope that the Prime Minister will reconsider his decision. It is possible that, by the limitation of time for questions, some honorable members will be unfortunate enough not to get the call. Within that short space of time not many questions can be asked and answered, and the time may be encroached upon by Ministers who frequently make lengthy prepared speeches in reply to questions inspired by the Government.

Certain charges have been brought against members of the community for utterances which are said to contravene the National Security Regulations. When the National Security Bill was before the House I bitterly opposed it, and I am quite satisfied now that I took the right stand. But we were given assurances by the Government that the regulations to be made under the act would be so drafted as to cause the least possible interference with the liberties of the people. Although the Government stages a pretence that charges and appeals are heard according to British principles of justice, which include public trial, I direct the attention of honorable members to the means adopted in New South Wales to circumvent the law in the case of the appeal lodged against a conviction for a breach of the regulations by Mrs. Johnston. When this case came before the court members of the New South Wales police force occupied the whole of the space in the public galleries before the doors of the court were opened for the admission of the public, and by this means the New South Wales Government was instrumental in having the case heard in camera.

Mr Morgan:

– The presence of the police no doubt exercised an influence on the conduct of the case generally.


– That is so. It is evident that when people appeal against convictions recorded against them for breaches of the National Security Regulations they are not fairly and justly treated. If appeals are supposed to be heard in open court it is wrong for the New South Wales Government to use its police force to crowd out the general public. If the Commonwealth Government is sincerely anxious to cause the least interference with the liberties of the people, I hope that it will take up this matter with the New South Wales Government, which is of the same political colour, and see that there is no recurrence of this sorry happening. I trust that the Commonwealth Government will inform the State Government that its police force has more important duties to perform than preventing the general public from, being admitted to courts to hear trials or appeals.

Minister for External Affairs · Parramatta · UAP

in reply - I shall bring the honorable member’s remarks under the notice of the Prime Minister.

Question resolved in the affirmative.

page 634


The following papers were presented : -

Defence Act - Regulations - Statutory Rules 1940, Nos. 272, 273.

National Security Act - Regulations - Statutory Rules 1940, Nos. 257, 259, 261, 262. 263, 264, 265,266, 267, 268, 269, 270, 271.

New Guinea Act - Ordinances of 1940 -

No. 11 - Superannuation (No. 2).

No. 12 - Immigration.

No. 13 - Execution of Instruments.

No. 14- Medical.

No. 16 - Customs Tariff.

Papua Act - Ordinances of 1940 -

No. 13 -Justices.

No. 14 - Probate and Administration.

No. 15 - Land.

War Service Homes Act - Regulations - Statutory Rules 1940, No. 274.

House adjourned at 12.9 a.m. (Tuesday).

page 634


The following answers to questions were circulated: - purcellengineeringcompany.

Mr.Morgan asked the Minister for

Trade and Customs, upon notice -

Is it a fact that the Purcell Engineering Company Limited, of Auburn, has substantial orders from other parts of the British Empire for the delivery of machine tools?

As the Department of Supply and Development has failed to take any substantial portion of this company’s output, will the Minister take steps to lift the restrictions against exporting imposed on the company by his department, and grant the necessary export licences so that the company may assist the war effort of other British dominions and at the same time provide employment for Australian workmen by keeping its works going?

Mr Abbott:

asked the Prime Minister, upon notice -

Will he say whether the Government is taking any action to investigate the Murru- rundi-Temi oil shale deposits to see if it is practicable to work them?


Mr Watkins:

s asked the Prime Minis ter, upon notice -

  1. Is it essential (a) to Australia’s safety; (b) to assist Great Britain in this war; and (c) ill our own economic interest, that Australia should build its own ships now and in the future?
  2. If so, why does the Government require another investigation ?
  3. Does the Government intend to proceed with a shipbuilding programme?
Mr Menzies:

– The answer to the honorable member’s questions is as follows : - 1, 2 and 3. The Government is fully alive to the necessity of maintaining adequate shipping tonnage for the requirements of the Empire. All existing shipyards which are fully equipped for shipbuilding are at present being used for the construction of naval craft and will be so engaged for some considerable time. The Government is keeping the matter of merchant shipbuilding under constant review having regard to the availability of shipyards, engineering facilities and skilled workmen.

Fares of Munition Workers.

Mr Spender:

r. - On the 5th December, the honorable member for Darling (Mr. Clark), asked, without notice, whether consideration would be given to the payment of railway fares of engineers and others who consider that they are qualified for employment in the manufacture of munitions, to enable them to travel from country centres to the places where the examination of applicants for such employment takes place.

I am now in a position to inform the honorable member that the Minister for Munitions has furnished the following reply to his question: -

Railway fares are not payable to applicants to attend at employment bureaux for interview, as full particulars of qualifications may be provided on the application forms or by written reply to questions asked by letter.

Mr Spender:

– On the 5th December, the honorable member for Maribyrnong (Mr. Drakeford), asked,without notice,whether the Government had yet considered the question of airraid shelters for employees of munitions establishments at Maribyrnongand elsewhere, and for the residents of districts in the vicinity of such works. If not, would the Government, in view of the likelihood of such works being the first object of an air attack by the enemy, give the matter early and favorable consideration.

I am now in a position to inform the honorable member that I have received the following reply from the Minister for Munitions: -

The functions of the Department of Munitions in respect of air-raid shelters apply only to factories under Government control, and earnest attention is being given to this matter. compensation to defendants of Deceased Soldier.

Mr Spender:

r. - On the 6th December the honorable member for Lang (Mr. Mulcahy) asked, without notice -

Early this year, Lance-Corporal H. W. Mulliner was killed at the iniltary camp at Liverpool, and the Government offered to his parent a solatium payment of £50. Is the Minister for the Army aware that the department, before paying the £50, asked the parents to indemnify the Government against any further claim?

I am now in a position to inform the honorable member that authority was issued for payment of £50 to the nextofkin of the late Lance-Corporal Mnlliner through the Deputy Crown Solicitor as an “ act of grace “ payment. A form of release containing an indemnifying claim would be drawn up. I have directed that the indemnity will not be sought or obtained, and the Deputy Crown Solicitor has been informed accordingly.

Militia: Christmas Leave.

Mr Spender:

r. - On the 6th December the honorable member for East Sydney (Mr. Ward) asked, without notice -

Will the Minister for the Army say whether it is a fact that leave without pay has been granted to members of the Militia Forces who are now in camp, over the Christmas period; asthese men were compelled to leave their employment in order to go into camp and will be without funds over Christmas, will the

Minister take the necessary action to see that they receive their military pay for the period?

I am now in a position to inform the honorable member that provision has been made for Militia Forces to be granted eight days’ leave with pay during the Christmas holiday period. With a view to avoiding congestion on the railways, the actual days of departure and return will be determined by formation commanders in consultation with the railway authorities. milkforsoldiers.

Mr Spender:

– On the 5th December the honorable member for Hunter (Mr. James) asked, without notice -

Will the Minister for the Army state whether it is a fact that the supply of milk by the Beauthorne Company to the Rutherford military camp for morning tea has been cancelled as from the 7th of this month?

I have now ascertained that, owing to the difficulty in ensuring that fresh milk is retained in its pure state in camps during the summer months, its issue to troops has been discontinued. Tinned full cream, powdered, and condensed milks are issued to comply with the requirements of the approved menu. This arrangementhas been made on the advice of competent medical authority. In addition, icecream is issued three times weekly during summer. This ensuresthat the vitamin content of the menu is maintained.

Potatoes for Army Consumption.

Mr Spender:

r. - On the 5th December the honorable member for Griffith (Mr. Conelan) asked, without notice -

Is the Minister for the Army aware that two truck- loads of Kew Zealand potatoes, which arrived in poor condition, were condemned by an inspector in Brisbane as unfit for human consumption, and subsequently were sent to Redbank camp for consumption by the troops undergoing training there; will the honorable gentleman see that a similar occurrence is prevented in the future?

I have now ascertained that the two truck-loads of potatoes in question were sold through the Department of Agriculture. They were not condemned and were in good condition although not perfect in appearance. The potatoes were examined and tested before purchase by two experienced supply officers, one of whom is a qualified food inspector, and were found to be very satisfactory. No part of this foodstuff was wasted atRedbank camp.

Release from Australian Imperial force.

Mr Spender:

– On the 6th December the honorable member for Eden-Monaro (Mr. Perkins) asked, without notice -

Will the Minister for the Army state when theauthorities will be in a position to deal more expeditiously with persons desiring to leave the Australian ImperialForce owing to changed personal circumstances, or for reasons of public importance!

I am now in a position to inform the honorable member that special discharge depots have been established in Sydney and Melbourne to deal with discharges efficiently and with despatch, as it was found that Australian Imperial Force units did not deal with these questions expeditiously.

The grounds for applications for discharge are often vaguely expressed and appear to be based on the desire of the applicant to evade the service he has sworn to undertake. In other cases, applications are made by wives without the soldiers’ knowledge. Investigation as to whether the basis of the application is sound or not takes time, especially if it is not well founded, or if a soldier delays in deciding whether he does or does not want to be released.

Australian Broadcasting Commission: Engagement ok Artists.

Mr Morgan:

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

Will he state if there is any truth in the Sublished statement of the former Postmastereneral (Mr. Thorby) that the services of Australian artists have been dispensed with by the Australian Broadcasting Commission in order to effect economy and offset the disclosed loss on the A.B.C. Weekly?

Mr Fadden:

– The Postmaster-General has supplied the following answer . -

I have no knowledge of the statement referred to. Assuming that the honorable member’s question relates to Davidson’s Band, it may be mentioned that, although for some time past the Australian Broadcasting Commission has employed two complete dance orchestras, it had been giving consideration to a reversion to the former practice of using one only. Negotiations are, however, now in progress with a view to using Davidson’s Band for a specific session. The commission’s decision was not in any way related to the operations of the A.B.C. Weekly.

Cite as: Australia, House of Representatives, Debates, 9 December 1940, viewed 22 October 2017, <>.