House of Representatives
2 October 1941
16th Parliament · 1st Session
Mr. Speaker (Hon. W. M. Nairn) took the chair at 2.30 p.m., and read prayers.
page 625
TOBRUK GARRISON
Mr SPEAKER:
– I have received from the Prime Minister a letter stating that a reply has been received from General Sir Thomas Niamey, General Officer Commanding the Australian Imperial Force in the Middle East, expressing on his own behalf and on behalf of all ranks under his command, appreciation of the message of congratulation sent by the Commonwealth Parliament to the men of Tobruk. Sir Thomas Blarney embodied in his reply a special message of thanks from Major-General Morshead on behalf of the personnel at Tobruk.
page 625
WAYS AND MEANS
(Grievance Day.)
Question - That. Mr. Speaker do now leave the Chair, and that the House resolve itself into a Committee of Ways and Means - resolved in the negative.
page 625
BUDGET 1941-42
In Committee of Supply:
Consideration resumed from the 1st October (vide page 617), on motion by Mr. Fadden -
That the first item in the Estimates, under Division No. 1 - The Senate - namely, “ Salaries and Allowances, £8,470 ‘’, be agreed to.
Upon which Mr.CURTIN had moved, by way of amendment -
That the first item be reduced by£ 1.
Mr FADDEN:
Prime Minister and Treasurer · Darling Downs · CP
– A week ago this day I produced, on behalf of the Government, and consequently, the people of Australia, a record budget for the consideration of this Parliament. That budget set out the methods by which the Government proposed to raise in this financial year the amount of £322,000,000, including £217,000,000 for the special purposes of war - purposes designed to ensure the security of this country, through collaboration and co-operation with the other units of the British Empire and with our allies. The Government had given the maximum degree of deliberation to such ways and means of obtaining that colossal sum from the 7,000,000 people of Australia as would cause the minimum amount of dislocation, and would distribute requirements and sacrifices equitably throughout every section of the community. It considered, and still considers, that this objective is attainable by means of the proposals embodied in the budget. It appreciates that the provision of £217,000,000 for the extraordinary and inescapable requirements of war necessitates a departure from peace-time conditions; in other words, facing the stern realities of war, we must recognize that peace-time conditions cannot be maintained and sacrifice avoided. The diversion of more than 20 per cent, of the national wealth production to the activities of war is inescapable. This amount has been calculated, not by the Government, not by the treasury officials, but by experts in matters of defence who are attached to our own services, in collaboration with the experts of the other members of the British Commonwealth of Nations’, consequently, it is the irreducible minimum required for the safety of Australia and the successful promotion of the cause which we have been compelled to uphold. It is not a pleasant task, it is not a happy responsibility for me as Treasurer to have to ask the people of Australia to provide such a huge sum; but they must recognize to the fullest degree that there is no avoidance of the obligation if we are to retain our constitutional form of government, our freedom, our standard of living, and all those other conditions which are at stake in this war.
The budget that I presented on behalf of ray Government propounded certain schemes for the raising of the revenue that we need, and all that the Opposition proposes is to increase rather than reduce our responsibilities. Yesterday, the Leader of the Opposition (Mr. Curtin) was not able to voice one constructive criticism which would enlarge the war effort in the direction needed. He was not able to attack, or he did not attack, the fundamental principles upon which the budget has been prepared. His first and foremost proposition is that the members pf the fighting services shall receive a higher payment out of this year’s financial resources, involving an additional expenditure of £6,000,000; whereas the Government, whilst recognizing that the fighting forces are entitled to the utmost consideration, financial and other, which a grateful government can bestow, has suggested post-war credit by means of extra deferred pay. The Government is not unmindful of what is due to these men. It has not shirked its responsibility, nor has it overlooked the necessity to provide the utmost that a grateful nation can bestow upon those who are risking their lives in our defence. Compensation for the risk that they take, and the civil privileges and advantages that they sacrifice in order that this nation may be protected, cannot be measured in terms of money.
Mr Curtin:
– Is that the reason for making inadequate payment to him?
Mr FADDEN:
– I suggest to the Opposition that there are methods of bestowing consideration on the fighting men of this country that will be of greater advantage to them than those measured only in terms of money. The best consideration that the Opposition can show for them, and the best cooperation that it can give, is to back them to the utmost by supplying them with the maximum quantity of equipment as expeditiously as this nation can provide it. The responsibility rests on the Opposition, and particularly on those members of it who have influence with the trade union movement in Australia, to see that there is as little dislocation, strife, and discontent as possible, in order that work in the factories may proceed without interruption, and that the soldiers may be adequately and expeditiously equipped. But brushing aside sentimental and patriotic considerations, I shall discuss this matter on the commercial basis chosen by the Leader of the Opposition. The honorable gentleman stated yesterday that under the present proposals a soldier’s wife, with two children, will be paid £3 10s. a week, and that that sum is less than the basic wage. He has either misunderstood the position or has been misled. The sum of 70s. mentioned by him is not comparable with the basic wage, nor is the case presented by him supported by the facts. The facts are that 70s. is the cash payment made to a soldier’s wife and her two children, but no living’ expenses of her husband, by way of food, clothing, and pocket money, are taken into account. The latter items amount to at least 20s., and, therefore, the correct comparison should be 90s. a week for the soldier, his wife and two children, as compared with S6s. a week paid to a worker on -the basic wage. In addition to the 90s., the soldier receives 14s. in cash and 21s. in deferred pay. bringing the total payment to £6 5s. a week, which is 40 per cent, higher than the basic wage. In addition, the soldier’s wife receives 5a. a week by way of child endowment for the second child. These facts and figures provide the true comparison of the basic wage with the soldier’s pay. The Government is concerned with the welfare of the soldiers and also with that of their dependants. The Leader of the Opposition stated yesterday that the Government had increased the pay of the fighting men and their dependants by progressive methods on six occasions. Of course it has, and it will increase their pay 60 times, if the circumstances warrant such action, and if the Government is capable of doing it. This is not the first time that the Opposition has made sentimental play on the claims of the soldiers and their dependants. At the last elections, it offered, on behalf of the people of Australia, to pay to the soldiers 8s. a day, but it was defeated at the polls. It is noteworthy that that offer of 8s. has now been reduced, by virtue of the Leader of the Opposition’s speech yesterday, to 6s. a day.
Yesterday the Leader of the Opposition stated that the budget should be amended to provide for an increase of the invalid and old-age pensions, because it was not sufficient for the pensioner under present conditions. An interjection brought forth the reply that he would increase the pension to 22s. 6d. a week immediately. I draw attention to the fact that the sum promised yesterday by the honorable gentleman, as a result of the budget presented by the Government, 13 2s. 6d. a week less than the sum which the honorable gentleman promised at the last elections. The history of the parties now in power with regard to pensions will stand investigation from any angle. What the present Government and the parties associated with it have done with the invalid and old-age pension can be read in the statute-books of this Parliament. The first increase of the pension was made by a Labour government led by the Attorney-General (Mr. Hughes), and every increase that has been given since has been due to the action of governments of the same political colour as that of the present Government. I shall have a word or two further to say with regard to pensions. Although the invalid and old-age pension now amounts to fi ls. 6d. a week, the actual payment increases in accordance with increases of the cost of living, and this guarantees pensioners against rising costs on account of the war. The June index figure relating to the cost of living is set at 1000, and if the cost of living rises to 1005, the pensioner will be entitled to an additional 6d. a week, which will automatically increase the pension to £1 2s. a week. At the last elections the Labour party promised to increase the pension to £1 5s. a week and bow doe3 the Leader of the Opposition reconcile that promise with his statement yesterday that he would pay £1 2s. 6d. a week immediately? I claim that the correct position with regard to this matter is indicated by the survey that I have made. The invalid and old-age pensioner lias nothing to fear from this Government. It lias always looked after him, and nobody knows it better than the pensioner himself. His support and his vote are not to be bought at the expense of a maximum war effort, because he will contribute his just and reasonable share of it.
I pass on to the statement made by the Leader of the Opposition as to the objective of the Labour party. He said that his party was concerned about social organization. Of course it is, and so are the parties which form the Government; but the difference between us is that we have definite proof to back up our assertions, because we have a better record of the practical application of social organization than has any other government since the inception of federation. Let us deal first with the basis of all wealth - primary production. What has this Government done for primary production? It has stabilized the wheat industry by providing a guaranteed price for wheat. It has provided in the present budget £1,400,000 for the apple and pear acquisition scheme. It has provided storage for the unexportable surplus of primary products. It has stabilized the cotton industry and it has encouraged and increased the production of flax in Australia.
Mr Scully:
– What about the wool industry ?
Mr FADDEN:
– The position with regard to wool is now under discussion with the British Government, but the Commonwealth Government has stabilized the price of wheat, and has provided storage capacity for the exportable products for which shipping cannot be found to-day. Therefore, we have nothing to be ashamed of in regard to the stabilization of rural industries. We have directed and controlled investments, and taken steps to ensure that people are not allowed to run riot on the economic side of the war effort. Regulations have been gazetted to prevent the flight of capital from the country, and to control its use within Australia. We have controlled interest rates so effectively that to-day they are lower than at any time in the last 25 years, in fact, since the last war. The rate of interest on short-term government loans is down to 2£ per cent, for five years, and 3£ per cent, for fifteen years or more, these rates being the lowest, I repeat, for the last 25 years, despite the fact that we are in the throes of the greatest conflict in the history of the nation. We have controlled prices and profits.
Mr Ward:
– What rot!
Mr FADDEN:
– It is not rot; the facts speak for themselves. Wholesale and retail prices have increased less in
Australia than in any other country in the world, and materially less than in our sister dominion, Kew Zealand. We intend to control profits and prices still more effectively. I have outlined, in the budget, a method by which this is to be done, and if any loop-holes are dis.covered in that method, they will be closed. We have improved the machinery for handling industrial disputes, which are now dealt with expeditiously by industrial tribunals, as is well known to every honorable member of this House. The most reliable indicator of the value of the Government’s financial policy is to be found in the employment figures, and there is more employment in Australia to-day than ever before. Last, but not least in the system of social organization, is the fact that the Government placed on the statute-book a child endowment scheme - an achievement that will always stand as a monument to its work.
The Leader of the Opposition objects to the Government’s proposals for financing the war on the ground that they bear un airly, and too severely, upon incomes in the lower ranges. Side by side with this objection, he advances the proposal that a further £6,000,000 should be raised for soldiers’ pay, and an additional £1,000,000 for pens-ions, a total of £’7,000,000. He did not suggest any way by which this additional revenue was to be raised. He merely said that we were attacking incomes that should not be attacked ; in other words, that we were proposing by our financial policy to impose hardship upon certain sections of tho community. The Leader of the Opposition said yesterday that to impose taxation on persons with an income of not more than £300 a year would be to inflict hardship. I shall give him the benefit of the doubt, and assume that he probably referred to persons with one dependant, so that the taxable income would be £250. If we were to exempt from tax all incomes of £250 and less, we should have to forgo £15,000.000 of revenue. Thus, the Leader of the Opposition asks us to increase our expenditure by £7,000,000, and by way of financing this added expenditure, I suppose, he suggests that we should reduce our revenue from the lower ranges of income by £15,000,000, leaving a gap of £22,000,000. He offered no other suggestion as to how this gap should be financed. We must realize that this amount of £22,000,000 would have to be found somewhere. Where is it to be found? The total income of persons whose individual incomes artless than £400 a year is £560,000,000.
Mr Curtin:
– I was discussing the Government’s compulsory loan proposal, not its tax proposals as such.
Mr FADDEN:
– I do not know whether the Leader of the Opposition would prefer the money to be raised as a straight-out tax. However it is raised, the fact remains that it is a deduction from income. If he would prefer thai the Government take the money as a tax. let him, on behalf of his party, say so. But let nic proceed with the story. It is noteworthy that this total income of £560,000,000 represents an increase of £70,000,000 over what the person? affected were earning at the outbreak of tho war, and is £40,000,000 more than they earned in 1939-40. Of this amount of £500,000,000, the Government is asking for only £10,500,000, or 1.9 per cent, of the total. Thus, even after we take £10,500,000 out of last year’s total income, there remains to the taxpayers a residual advantage of £30,000,000 as compared with the previous year. How can it be claimed, therefore, that their standard of living will be impaired, or their capacity to pay reduced? Of this £10,500,000, we are asking Parliament and the country to allow us to take £6,500,000, not as taxation, but as a loan which will represent to the taxpayers a post-war credit, a saving for the future against unemployment and dislocation duc to the re-orientation of industry after the war. We are prepared to pay interest on this money. From this financial reservoir of £560,000.000, we are seeking to draw off £10,500,000, or 1.9 per cent., as a contribution towards this year’s war effort of £217,000,000, and of the £10,500,000. no less than £6,500,000 is to become a savings bank account for the future. Wherein lies the hardship in such a scheme? Let us consider these proposals in relation to what has happened in Kew Zealand. The Leader of the Opposition -aid that the New Zealand Government had adjusted its methods of finance in such a way that.it had annulled the compulsory loan - provisions. Of course, it has, but why? I have before me a copy of the last New Zealand budget, and I find that the New Zealand Government, with an essential war expenditure of £71,000,000, which may be compared with our war expenditure of £217,000,000, has financed it in this way-
And what is the national security tax? It is a tax at a flat rate of1s. in the £1, irrespective of income and without exemptions -
Loans, raised not in New Zealand, but from the Government of the United Kingdom - overseas borrowing ! - will provide £81,000,000, and loans in New Zealand only £10,000,000. All of those items make up the £71,000,000 of receipts budgeted for. The flat rate national security tax will contribute £10,000,000 and overseas borrowings £31,000,000 - 41,000,000 of the £71,000,000 which has to be found ! Let us compare the national security tax with our scheme. It must not be forgotten that New Zealand has a Labour Government. A tax of 1s. in the £1, if imposed in Australia, would take £28,000,000 from the people in the lower range of incomes whose earnings will this year aggregate £560,000,000. Again, I emphasize that the £10,000,000 which the New Zealand national security tax will yield this year is not a loan but a straight-out tax, which is not repayable. Compare the fact that a similar tax in Australia would take from the earners of incomes of less than £400 per annum £28,000,000 with the fact that from those people we intend to take only £10,000,000 of which £6,500,000 will be held for them as a post-war credit. It is not necessary to pursue that matter any further in order to make responsible members appreciate that this budget is fair and equitable and that, if it can be faulted in any way, it is because it does not dig sufficiently deep into the pockets of those in the lower ranges of income. That is its only fault. Nobody who compares the £28,000,000 which could be raised from among the low-wage-earners by the imposition of a tax similar to that imposed in New Zealand with the £10,000,000 which the Government proposes to collect from them can deny that this budget is a wage-earners’ budget. More could be said, but no need exists for me to dwell further on the taxation aspects of the budget, because I have given sufficient facts to convince all of those who advocate an all-in war effort that we are dealing equitably with every section of the Australian community. If we are to have an all-in war effort, surely the people with a wage fund of £560,000,000 should be required to contribute something to that effort, and surely, that contribution is low when it amounts to only £10,000,000, of which £6,500,000 is represented in savings for the future. No matter from which side comes the searchlight of criticism and investigation of the Government’s proposals, the Government is shown to he wholeheartedly sympathetic in its proposed treatment of the wage-earners of this community.
Another matter which was dealt with by the Leader of the Opposition is the Government’s proposal to institute compulsory savings. The Government has advanced that proposal for two reasons. Its first reason is to alleviate, as much as possible, the burden of taxation, because we realize that entire reliance on taxation in order to obtain with expedition the amount of money required to prosecute this war might have disastrous effects. The post-war credit scheme has undeniable advantages, and the fundamental advantage, which is the second reason for the proposal, is that it is a definite movement towards post-war reconstruction. After the war there will be a falling off of munitions work and general defence activity. Nobody would be so defeatist as to believe that for all time we shall have to maintain at its present level expenditure on defence. The sooner we have a post-war credit system the sooner we shall be able when the time comes to take care of the transition from defence activities to civil activities, as we have to transfer now from civil activities to defence activities. So by means of the compulsory savings plan we are asking individuals to contribute a minimum of £20,000,000 towards post-war reconstruction - a sort of nest-egg for the future. This is to come out of increased incomes due to increased productivity. A fact to be remembered is that whilst £560,000,000 is the aggregate income of persons earning under £400 a year, that amount is increasing and, as a result of the expenditure under this budget, it may rise by £100,000,000 by the time that these people are required to make their national contribution. Consequently, nobody, no matter how bigoted or biased he may be, can argue that we propose in any way to lower the living standards of the wage-earner or the purchasing capacity of the community. I repeat that the aggregate income of people earning less than £400 is to-day £40,000,000 higher than it was twelve months ago, and £70,000,000 higher than it was before the outbreak of war; in all probability, before this year ends, the increase will reach £100,000,000.
Of the four points advanced by the Leader of the Opposition I have completely answered three. The only remaining point with which I have to deal is his attack on the banking system. He declared that the agreement which has been entered into between the Government and the trading banks was not worth the paper it was written on.
Opposition Members. - Hear, hear!
Mr FADDEN:
– The Opposition says, “Hear, hear!”. That implies that the party does not trust any of the responsible senior officers of the Commonwealth.
The Treasury is obliged to superintend this agreement. The Commissioner of Taxation is also linked up with the supervision, because he has to issue certificates under that agreement. The Commonwealth Government is itself a party to the agreement, and the Commonwealth Bank Board has to carry it out. Moreover, every member of this Parliament can assist in ensuring that the agreement is honestly and conscientiously carried out, because the trading banks are required to publish their figures every month. Therefore, if vigilance is lacking in the Government itself, in the Treasury, and in the Taxation Department, and if the Commonwealth Bank does not do its job every member of the Opposition can himself ensure that the undertaking is honoured. If we bear in mind that the undertaking is an integral part of the budget, the method of checking and policing it in order to ensure that it is honestly and honorably observed is the responsibility of every honorable member.
Mr Calwell:
– The only difference is that the Government did not introduce it by regulation.
Mr FADDEN:
– Of course it is! The honorable member believes in compulsion. Whilst he does not believe in compulsory loans, he believes in compulsory unionism. If we have no compulsory loans, we shall have no unionism for which to fight.
The Government views with pride the undertaking which it has obtained from the trading banks, an undertaking which guards against the very weaknesses which the Leader of the Opposition emphasized yesterday. Every honorable member can check the method in order to see whether the undertaking is being honorably observed.
The arrangement which was entered into for the purpose of controlling surplus deposits, and diverting them into the banking system in order to enable us to bridge the gulf of £122,000,000 provides an effective control of profits. Lest any misconception exists, I point out that the published figures disclose that profits of the trading banks since the outbreak of war have been approximately 4 per cent, on shareholders’ capital. Will any honorable member contend that that rate of profit is excessive? If it were, it would be remedied as the result of the undertaking that the Government has obtained from the trading banks. Yesterday, the Leader of the Opposition cited figures to show certain increases of deposits and a felling off of advances, and argued that the banks had surplus money to invest in government securities. Of course they have ! Those figures are not disputed. It is for those very reasons that the undertaking was insisted upon: and as the result of its operation, undue profits and a slackening of control, such as happened during the last war. will not occur during this war.
An Honorable Member. - What will be the rate of interest?
Mr FADDEN:
– The rate of interest will adjust itself, because it will not exceed pre-war standards of profit. If we control profits, we control everything which contributes to them. By that means, the cheapest money possible will be made available to the Commonwealth Government, and through the Commonwealth Government to the Treasury, and through the Treasury to the taxpayers.
I feel confident that I have adequately answered the criticisms which the Leader of the Opposition levelled at the budget yesterday. The honorable gentleman did not suggest one alternative for making easier the raising of the vast sum contemplated in the budget, or for distributing the burden more equitably, if it be at all inequitable at the present time. All that the Leader of the Opposition did was to add to the problems associated with the budget, by advocating revisions of proposed expenditure, totalling £22,000,000. Instead of having, with the assistance of the banking system and the loan market, to bridge a gulf of £122,000,000, the Government, under the scheme propounded by the honorable gentleman, would have to find £144,000,000. The honorable gentleman wanted the Government to increase expenditure in one direction by £6,000,000 and in another direction by £1,000,000, and to reduce revenue from income by £15,000,000. This additional £22,000,000 had to be found somewhere, but, most significantly, the Leader of the Opposition did not provide the “somewhere”, or suggest the “ somewhere “. Consequently, the only result of his speech was to add to the Government’s difficulties. I am confident that the committee will reject the instruction to the Government to redraft the budget, because no means can be found for improving it. But honorable members have heard conclusive evidence that it could be made a worse budget, and the Government will not be associated with a worse budget.
Mr FORDE:
Deputy Leader of the Opposition · Capricornia
– Rising to support the amendment, I repeat the statement of the Leader of the Opposition (Mr. Curtin) that the world, and, in particular, our enemies, should know that whatever happens as the result of the vote that will be taken upon this amendment, it will not in any way affect the unanimous resolution of the Australian people to prosecute the war to a successful conclusion. If Labour should take office, there would be no slackening of the war effort. On the other hand, there would be a definite quickening of the defence tempo, and a speeding up of the defence preparedness of Australia. I listened with considerable interest, and with some amusement, to the election speech which the Prime Minister (Mr. Fadden) delivered. Whilst he shed some crocodile tears for the soldiers and their dependants, he would treat them differently from the munitions manufacturers, who, operating under the cost-plus system, are paid, not on a promissory-note basis, but immediately. The proposal of the Government, under which the payments to soldiers will be placed on a “Kathleen Mavourneen “ basis, does not represent equitable treatment of men who are prepared to sacrifice even their live in order to defend the freedom of this nation. The Prime Minister’s endeavour to justify the most reactionary budget which has ever been introduced in this Parliament failed lamentably. In its niggardly and parsimonious fashion, and invariably giving priority to the interests of the wealthy, the Government asks a soldier’s wife and two children to be satisfied with the payment of £3 10s. a week, which is less than the basic wage, assuring them that after the war they will receive further consideration in the form of deferred payments. Such treatment is unworthy of this great Australian nation. I shall not discuss at length the details of payments to soldiers; that matter was adequately dealt with yesterday by the Leader of the Opposition. The Prime Minister said that the Government was able to borrow short-term money to-day at 2 per cent, interest. I remind him that many thousands of primary producers and home-builders of this country are paying up to 6 per cent, for borrowed money. What has the Government done about that? Nothing. In one part of his speech the honorable gentleman said that, as the result of the arbitration machinery it had set up, the Government had succeeded in settling industrial disputes; in another part of his speech he said that industrial disputes are rampant in Australia to-day. The honorable gentleman cannot have it both ways. The Leader of the Opposition was justified in his contention that great injustice would be done- if people in the lower income ranges were forced to contribute to the finances of the country by way of compulsory loans money that they required to purchase the necessaries of life. The Prime Minister endeavoured to reply to the criticism of the Leader of the Opposition in that respect by saying that if national contributions were not demanded of those in the lower income ranges some other means would have to be found to make up the loss of the £15,000,000 involved. As a matter of fact, the total national contribution proposed to be extracted from those whose earnings are below £400 per annum is not £15,000,000 it is £6,500,000 voluntary loan, plus £4,000,000 taxation. The honorable gentleman also claimed that of the £560,000,000 earned by those in the lower income ranges approximately £70,000,000 was additional to what those persons were earning at the outbreak of war. The additional £70,000,000 is accounted for by the increase of employment as the result of our huge war and defence expenditure. To-day, many who were previously on the dole or in intermittent employment are now fully employed. Until they secured regular work they were unable to purchase even the necessaries of life. Is it not unjust that, before they are able to furnish their homes decently and clothe and care for their children, the Government should step in and take from them what little margin they have? In endeavouring to justify this preposterous budget the Prime Minister compared Commonwealth taxation with thai imposed in New Zealand. As was to be expected, however, he failed to paint a true picture of Australian taxation by citing the figures of the combined Commonwealth and State taxation. If State taxation be taken into account it will be found that the total taxation levied in Australia is far in excess of that levied in New Zealand. I oppose this budget because it is reactionary and deflationary, and sets out to take money out of the pockets of those who cannot afford to give; because it makes no provision for an immediate increase of the payments to soldiers and their dependants; because no provision is made in it for the immediate increase of invalid and old-age pensions; because the Government ha.= failed to tax war profits of the wealthy corporations on a sufficiently drastic scale; because the budget perpetuates orthodox methods of finance and ties us for the duration of the war to the existing profit-making private banking institutions that dominate the Government; because it provides for contributions to compulsory loans by those on the lower income ranges, thus reducing the standard of living of the masses of the people without any regard to equality of sacrifice and the equitable distribution of the national income; and, finally, because it does not make provision for rural reconstruction and the immediate establishment of » mortgage bank as a department of the Commonwealth Bank to provide longterm loans at a minimum rate of interest to struggling primary producers.
Mr Spender:
– It does provide for such a bank.
Mr FORDE:
– It does not. I shall deal with that in detail in a moment. I ask other representatives of country electorates whether this is a poor man’s budget, a struggling farmer’s budget, or a budget designed to protect the interests of tinprivate financial institutions and the profiteering corporations of Australia. It is well that every honorable member in this chamber should put that question to himself. Is it not a fact that the borrowers of money from the private banking institutions, whether they be small business men or primary producers, have ro pay up to 6 per cent, to the private banks according to the risk, and that these struggling small business men and primary producers will be forced to lend money to the Commonwealth Government under the compulsory loans scheme, at 2 per cent, interest, which will not be paid immediately, as interest is paid to the banks at the rate of 5i per cent, to 6 per cent, but at the conclusion of the war? Is this equality of sacrifice? The banks get up to 6 per cent, interest at once whilst the Government proposes that the struggling primary producers and business men shall be forced to lend money to the Commonwealth Government and get 2 per cent, on a “ Kathleen Mavourneen “ basis. In many instances struggling primary producers and small business men will have to borrow money from the banks at 6 per cent, and lend it to the Government at 2 per cent.
Mr Spender:
– The national contribution will be payable out of income.
Mr Curtin:
– A taxpayer has to pay up to S per cent, on what he owes, but be will get only 2 per cent, for what he is in credit by way of national contribution.
Mr FORDE:
– Honorable members know that many struggling farmers throughout Australia have to pay almost the whole of their incomes to ‘the private banks in order to satisfy the demands in regard to their overdrafts. They are allowed out of their earnings only what i3 needed to enable them to purchase the bare necessaries of life and to carry on their farms.
I propose now to deal with certain aspects of the budget with which time did not permit my leader to deal yesterday. At present a married man with a wife and child in receipt of an income of £250 per annum pays no income tax; but he pays indirect taxation. Under the compulsory loan proposal such a man will have to make a national contribution varying from £4 to £9, according to the State in which he lives. Already he probably pays about one-third of his earnings in rent and what is left is sufficient only to purchase the necessaries of life for himself and his family. Apart from the question of financing the war, and considering this matter from the point of view of diverting expenditure from non-essential goods to war purposes, there is no justification for exacting a national contribution from such a man. It will not result in preventing him from spending on luxury goods, because after paying house rent all his earnings are already expended in the purchase of the necessaries of life for himself and his family. Once a system of compulsory loan is introduced, no one can say where it will end. It can, however, be said that people will not continue to make the voluntary contributions which they are now making for war purposes. There will not be any gain to the Commonwealth. As an instance of what is likely to take place, I mention that a friend of mine, who is now paying 10s. a week in the purchase of war savings certificates and is paying 6 per cent, interest on the money borrowed for the purchase of a home, has told me in a letter that, if legislation providing for compulsory loans be enacted, he will be forced to cash his war savings certificates. I have no doubt that thousands of -other individuals in Australia will be forced to do likewise. In the face of such a prospect, was the Government wise to decide on a system of compulsory loans, particularly when it knew that that system had been discarded by the Government of New Zealand and had also been roundly criticized by Sir John Simon in the British House of Commons? In my opinion, the Government made a grave blunder when it decided to establish a system of compulsory loans. The result, of this decision will be that the Government will not get anything like the £15,000,000 which it hopes to receive in addition to voluntary contributions on the same basis as last year.
The Prime Minister, in his budget speech, referred to the intention of the Government to establish a mortgage bank, and it would bt well if I were to recount the history of this proposal. In 1937, the then Prime Minister (Mr. Lyons) and the Minister for Commerce (Sir Earle Page) promised to establish a mortgage branch of the Commonwealth bank. Mr. Lyons said -
The Government had hoped to bring in a bill to establish this mortgage bank branch of the Commonwealth bank in the last sitting of Parliament, but unavoidable delays made it impossible.
That was in 1937. Delays have been occurring ever since. The right honorable gentleman went on to say -
The Government will lose no time in introducing such a measure early in the life of the new Parliament.
When he said that, he had in mind certain members of the Country party who were demanding the establishment of a mortgage bank for the purpose of making long-term loans to primary producers at low rates of interest. I emphasize that that promise was made, not four weeks ago, but four years ago. Like many other promises of the Government, it has not been fulfilled. Notwithstanding that the present Prime Minister said that legislation to establish a mortgage’ bank would be introduced as early as practicable, I hold the opinion that he has no intention to do so, because the establishment of a mortgage bank on proper lines would definitely cut into the business of the private trading banks, and they certainly will not tolerate that. We shall probably have a repetition of what happened when a former Commonwealth Treasurer (Mr. Casey) was chided by honorable members on this side of the chamber with not having given effect to the recommendation of the Royal Commission on Banking. He then =aid -
I have conferred with leading executives of private banking institutions in Australia, and the concensus of opinion among them was that it- is not wise to implement the recommendation of the Royal Commission on Banking.
That is why that recommendation was never implemented, and why the present Government will not establish a mortgage bank.
Mr Spender:
– A mortgage bank will be established immediately.
Mr FORDE:
– The Government must be judged on its past performances. The only way by which a mortgage bank on proper lines will be established immediately as a department of the Commonwealth bank to make loans on long terms at minimum rates of interest to primary producers of Australia, will be by changing the Government. It is true that in November, 1938, the Government of the day did introduce a bill designed to set up a mortgage bank. On the 9th May, 1939, the present Minister for Air (Mr. McEwen), not at that time a member of the Government, asked the then Prime Minister (Mr. Menzies) whether the Government intended to proceed with the bill which still remained on the noticepaper. The honorable gentleman was temporarily out of the Cabinet, and it is significant that he was most active on behalf of the primary producers. He wanted a mortgage bank to be established at once.
Mr Curtin:
– If the Minister for Air were again out of the Government he would once more become active in advocating the establishment of a mortgage bank.
Mr FORDE:
– Yes. If he were again on the cross benches he would be most vigilant and active on behalf of his constituents, and would urge the early establishment of a mortgage bank.
Mr McEwen:
– The hill to establish a mortgage bank was introduced when I was a member of the Government.
Mr FORDE:
– Since the honorable member has transferred from the cross benches to the ministerial bench he has lost his enthusiasm for a mortgage bank to serve the interests of primary producers. In other words he has since sat back snugly and complacently.
Mr McEwen:
– The honorable member is talking drivel.
Mr FORDE:
– Mr. Lyons, when Prime Minister, said that it was the intention of the Government to proceed with that measure during the session in which it was introduced. That was three years ago, but the bill was not proceeded with. Eventually it was dropped altogether. Although the Country party held half the seats in Cabinet it did nothing. Now, the present Treasurer has resurrected it on what is probably the eve of an election. I am the last person in this chamber to impute ulterior motives to the Treasurer in connexion with his budget speech, but honorable members generally may decide for themselves why the promise to establish a mortgage bank has been repeated at this stage. It may be well to bring before honorable members again some planks from the platform of the Labour party in this connexion. That platform includes the following : -
The extension of the function of the Commonwealth Bank to provide for Rural Credit Branch for the purpose of assisting land settlement and development; the granting of relief to necessitous primary producers against the ravages of drought, fire, flood and pests, and the establishment of a grain and fodder reserve against periods of drought.
If we take that declaration in conjunction with Labour’s financial policy it will be seen that provision is made for agricultural development by means of loans issued at nominal rates of interest. Labour’s platform goes on -
A national credit advisory authority will be set up to collaborate with the Government and the bank to plan the investment of national credit and thus utilise to the fullest extent the real wealth of Australia.
The objects to be attained include -
- To finance the building of homes and to adjust mortgages at present existing to present values by amortising private mortgages and replacing them with loans issued under the authority of the Commonwealth Bank.
I ask members of the Country party to bear that in mind, and to listen to this further extract from the platform of the Labour party, and to compare itwith the empty platitudes of the alleged Country party platform -
- To plan future agricultural development with loans issued at nominal rates of interest to promote closer settlement and to effect complete adjustments of existing farm mortgages.
Mark those words ! They show that the Labour party’s policy provides not only for the development of primary industries, but also for the adjustment of existing farm mortgage commitments. This does not mean that any mortgage bank established by the Labour party would take over from the private banks all kinds of bad business investments without also putting into operation a Commonwealth reconstruction department in order to deal with the rehabilitation of rural industries generally. The Royal Commission on Monetary and Banking Systems, after dealing at length with the subject, recommended that a mortgage bank, or banks, should be established in order to provide facilities for fixed and long- term loans. That recommendation was made not yesterday, but years ago. Governments of the same brand as the present one have been in power for many years, but they have never attempted seriously to pass legislation giving effect to the recommendation. The scheme has always been shelved. Had this Government and its predecessors been earnest in their protestations, a mortgage bank would have been established years ago. Nevertheless, honorable members opposite are now holding out a promise, like a bunch of carrots, with the purpose of inducing some honorable members to yield to their blandishments. In the course of bis budget speech, the Prime Minister said that the Government proposed to introduce, as soon as practicable, legislation to establish a mortgage bank. But this promise was hedged about with “ ifs “ and “ buts “, and conditions and contingencies, that left the impression that this Government’s record will be similar to the record of the Lyons-Page Government, which promised to implement such legislation in 1937, and the record of the present Minister for Air, who was most active in his advocacy of the proposal in 1938, but who, when he was elevated to the Ministry, sat back on the front bench in comparative ease and security and lost his earlier enthusiasm. In 1939, the then Prime Minister (Mr. Lyons) said that legislation for the establishment of a mortgage bank would be introduced to Parliament during that session, but nothing “was done. The Country party was taken into the composite Ministry over two years ago, but nothing has yet been done to put such a measure on the statute-hook. I have set out clearly the Labour party’s policy for the establishment of a rural credits branch of the Commomwealth Bank. The name applied to it does not matter provided that it has no objectionable features and is sympathetically administered.
When the Labour party takes over the government of this country, it will take action promptly to establish a mortgage bank, as a department of the Commonwealth Bank, in order to assist primary producers with long-term loans at a minimum cost. It will also insist on the Commonwealth Bank Board establishing branches of the mortgage bank wherever necessary throughout Australia. Furthermore, it will take steps to ensure that the legislation enacted for this purpose shall contain no provisions which might give the private financial institutions an opportunity to secure control of the mortgage bank or to have any decisive voice in its administration. Some fears of this sort were entertained regarding the legislation that was introduced some time ago. I’n addition to a mortgage bank, the Labour party will also set up a rural reconstruction department in order to rehabilitate rural industries, in the meantime giving to primary producers ample protection against foreclosures. Honorable members on both sides of the House are aware that recently there have been numerous foreclosures on farms, with the result that hundreds of struggling primary producers, after having devoted nearly a lifetime of work and their entire savings to their farms, have had to trek to the cities in order to seek employment in munitions factories and other industries, thus bleeding the rural areas of much needed population. The Government must seriously consider the problem of adjusting the debts of primary producers who, as the result of over-valuation, and losses due to falling prices for primary commodities, are unable to offer to the banking institutions adequate security for loans. Rural reconstruction work must he of a permanent character. The policy of this Government and its predecessors of making limited sums available for relief has only prolonged the agony of the farmers and aggravated the instability of our primary industries. The doling out of comparatively small amounts year by year, in order to apply a patch here and a patch there to rural industries, has served only to sap the morale of the primary producers.
The Labour party is the only political party that will bring about definite Government control of the activities of the private banks, because it is the only party that is free of any embarrassing alliances with those institutions. We must judge of the Government’s intentions in regard to the establishment of a mortgage bank by its past performances. We cannot afford to wait any longer for action to be taken. Australia is at the cross-roads.
Finance is playing an. increasingly important part in the prosecution of our war effort, and it is necessary that our fighting men and munitions workers should be fed with the products of our farms. We must not allow the primary producers to leave their farms and flock to the cities. Our situation calls for bold action by the Commonwealth Government, and 1 believe that only a Labour government will implement the recommendations of the Royal Commission on Monetary and Banking Systems in order to control the operations of the private banks. Honorable gentlemen opposite have always defended the private banks, and during the last economic depression they told us that the banks were giving a wonderful service to the people. But we found on investigation that the amalgamated balance-sheets of the trading banks, for the ten normal years between the end of the war of 1914-18 and the depression - the years 1920 to 1929 inclusive - reported profits of £46,000,000 and dividends of £33,000,000. These reported profits gave an average return on paid-up capital over the 10 years of 14.86 per cent. The dividends paid averaged 10.61 per cent, on the paid-up capital. The three London-controlled banks, with their head offices, their boards of directors and the majority of their shareholders overseas, do more than one-third of the banking business of Australia, and send approximately one-third of their dividends abroad. London, therefore, wields a considerable influence over Australian finance. In the ten normal years from 1920 to 1929 inclusive, the reported profits of these three banking companies totalled £16,000,000 and their reported dividends, at rates ranging from 10 per cent, to 15 per cent., totalled £12,000,000. I am prepared to concede that these private banks have rendered some service to Australia, but they have been well paid for it. The powerful influences of these private financial interests, which support this Government, wish to keep Labour out of office, for they fear that a Labour government would implement the recommendations of the Royal Commission on Monetary and Banking Systems. They also fear, and rightly so, that the Labour party would remove the shackles laid upon the Commonwealth Bank by the private banking institutions, and so permit it to become an active competitor with the private banks. They fear, too, that a -L’abour government would, establish a central reserve ‘bank which would perform the true functions of such a bank, thus giving the Commonwealth Bank greater freedom to trade. All of these fears are well grounded, for a Labour government would undoubtedly make it possible for the Commonwealth Bank to render, at a lower charge, a better and more generous service to the people of Australia than that now being rendered by the private banking institutions. For these reasons, the private banking institutions are totally opposed to Labour.
I wish to state briefly Labour’s policy in relation to the wheat industry. We consider that a guaranteed price should be paid to the farmers for their wheat, and that the. price should be .fixed on a quota basis. The price should be on a much more generous scale than the present inadequate guaranteed rate. The Labour party also stands for producer control of all boards associated with the orderly marketing of our primary products. If a Labour government assumes office, it will take steps, without delay, to reconstitute the Australian Wheat Board and to provide for the annual election of representatives of producer organizations. This is very necessary. ..On the 21st August, Senator McBride, in reply to a question by a member of the Senate, stated the personnel of the Australian Wheat Board. The names indicate clearly that the board is mainly representative of vested interests and of the private financial institutions of this country which farm the farmer. The members are Sir Clive MacPherson, C.B.E. ; Mr. IE. G. Darling, whose interests in big business are well known; Mr. J. S. Cameron, managing director of Louis Dreyfus and Company; Mr. J. Gatehouse, Mr. R. C. Tilt, Mr. G. W. Walker, Mr. R. Hamblin, all seven of whom represent vested interests; Mr. IS. E. Field, Mr. D. L. Clarke and Mr. F. J. Cullen. Mr. Clarke is an individual wheat-grower of South Australia, who was hand-picked because it was said that he had some special qualifications. He was not elected by the wheatgrowers. In my opinion, Mr. Cullen must be placed in the same category. I have asked the representatives of primary producers on this side of the chamber whether’ they agree with these statements; and they have informed me that they do. Mr. Cullen became a member of the board., not by election of the wheat-growers, but on selection by the Minister for Commerce (Sir Earle Page). Of course, we all know that persons selected for positions by that right honorable gentleman are sometimes kicked out, and that his nominees are not always successful in their service. I do not find fault with Mr. Field. I consider, however, that the Australian Wheat Board, which is charged with the duty of marketing the wheat of many thousands of Australian fanners, should be an elective body. The members should not be picked in some, hole and corner way because they may 6e relied upon to comply with the demands of the representatives of vested interests, who dominate the board. If a Labour Government assumes office, it will take steps to provide that the members of the board shall be elected annually. It will in fact, be fearless in taking all necessary steps to provide that the wheat-growers of Australia shall be given better representation on the board. The Labour party will also undertake to provide that producer representation shall be the governing principle in relation to all marketing boards. To put it in another way, the Labour party will cut the dead wood out of these boards and arrange that the men who really do the work in our primary producing industries shall be given the opportunity to elect their own representatives on the boards dealing with their produce. I am sure that, you, Mr. Chairman, as a primary producer, will agree with this policy.
I wish now to make a few observations concerning the wool agreement. In view of the increased cost of producing wool in this country, the basis of the agreement, in the opinion of the Labour party, is. due foi1 reconsideration. A Labour Government would take . up with the British Government immediately, the question of a revision of the prices being paid for Australian wool, with the object of securing an increase.
A Labour Government would also take active steps to ensure a more effective decentralization of the war industries of this country. For far too long the country districts of Australia have had to submit to the gradual withdrawal of their trained workers, who are being attracted to the capital cities in order to engage in war work. This denuding of the country districts of their skilled labour is serious. I represent a large country district and I know of the ill effects of this policy. I am sure that other representatives of country areas will support these views. I speak with considerable feeling on this subject. Our war industries should be decentralized. A Labour Government would carry out every promise of such decentralization made by the present Government, and it would also supplement, on a broad basis, the policy of decentralizing not only industries either directly and indirectly connected with the war, but also other industries wherever practicable. This subject is of the utmost importance to this country.
It should be remembered that a Labour Government not only established the Commonwealth Bank, which, admittedly, was the sheet anchor of Australian finance during the last war, but also has done everything possible to expand the influence of the bank. “We believe that the Commonwealth Bank could be utilized to a much greater degree than hitherto in order to provide finance for war works and also other reproductive works. Credit should be made available, within safe limits, not at high interest rates, but at nominal rates, in order to assist in the development of this country. I was glad to notice in the report of the Commonwealth Bank for the half year ended the 30th June, 1941, that the bank had made a profit over that period on the note issue alone of £673,344 and that its profits on other activities had totalled nearly £402,000. What would it matter if the Commonwealth Bank were paid a fair rate of interest seeing that the whole of its profits remain in the country and that one half of them are devoted to the liquidation of the public debt? That is not so with the private banking institutions. The Government claims some credit for its action in freezing the money which would have flowed into the coffers of the private trading banks as a result of the Avar effort, *Ut what about the increase of £47,000,000 which has already flowed into those coffers since the outbreak of war? What is the Government going to do about that? Obviously it does not intend to take any action.
In conclusion I stress my emphatic opposition to this budget. The Labour party is opposed to it because it is reactionary and deflationary. It strikes at the masses of the working people - the low wage earners of this country - because it does not take adequate steps to obtain some of the profits now being made by wealthy corporations which, therefore, are, not being asked to contribute a fair share of the cost of defending this country.
Mr McEWEN:
Minister for Air · Indi · CP
– I listened carefully to the speech of the Deputy Leader of the Opposition (Mr. Forde) because I was interested to hear what the honorable gentleman would say concerning the budget proposals which affect the war effort of this nation. I was amazed, as no doubt many other members of this chamber were, that in a speech occupying 45 minutes, not one word was said about the war effort.
Mr Forde:
– Nonsense!
Mr McEWEN:
– Not one word. The Deputy Leader occupied at least 33 per cent., and probably 50 per cent., of his time in dealing with the establishment of a land mortgage bank, outlining the policy of his party on this matter, and making imputations against myself, and the party of which I am a member. My record in connexion with the establishment of a land mortgage bank is clear. I moved in this Parliament for the establishment of a royal commission on our monetary and banking systems. The royal commission was set up, and it recommended the establishment of a land mortgage bank. I was a member of the Government which introduced a bill into this chamber to set up a mortgage bank, and that would have been enacted but for the death of the then Prime Minister (Mr. Lyons), and I am now a member of a Government which gives to the people of this country an assurance that there will be a mortgage bank. My continued interest in this proposal is on record and my sincerity cannot be doubted; but I say to-day that, important as the establishment of a mortgage bank undoubtedly is, it is a matter of secondary importance in comparison with the organization of the war effort of this nation. I do not intend to occupy the time at my disposal by exchanging diatribes with the Deputy Leader of the Opposition on a matter such as that. The truth is that, having heard the Government’s budget proposals, and having occupied the recent adjournment of Parliament with caucus meetings in an endeavour to crystallize its views, the Labour party has decided to challenge the existence of this Government. Honorable members opposite have decided to attempt to replace the Government with one formed from their side of the House, without the prior formality of an. election. That has been made clear by the Leader of the Opposition (Mr. Curtin), the Deputy Leader of the Opposition, and others. Just what does that mean? The Labour party lias shown quite clearly that it recognizes the existence of fundamental differences between its policy and the policy for which we on this side of the House stand. Its spokesmen have said on many occasions that they believe in the continuance of the party system of government, even in a time of emergency; that they believe in the democratic principle that the decision of a majority shall prevail; and that this country should be administered by a government formed by the party or parties securing a majority at the elections. Yet, in face of such declarations, the Labour party now seeks to abrogate those very principles by attempting to displace the Government which has mo-re supporters in both Houses of Parliament, and to replace it with an administration which, at best, could not be described as a democratic representation of the people of Australia. That is the simple truth of the matter, and upon what grounds does the Labour party take this stand? Its members seek to take advantage of an ancient parliamentary practice, in accordance with which, the Speaker, who is elected from the Government side of the House, is without a deliberative vote. I put it to honorable members opposite that they are talking with their tongues in their cheeks when they say that they stand for the principles of democracy while, at the same time, they are abrogating the very essence of those principles, by attempting to seize power without the formality of an election. I have no doubt that they will not be permitted to do so. So much for the parliamentary ethics of this situation.
The real essence of this debate is in the Government’s budget proposals, which, in the words of the Leader of the Opposition himself, present the problem of the ways and means of war. Surely an examination of that problem does not entail a long discussion of the establishment of a mortgage bank, the price of wheat, or the rate of old-age pensions. It entails a discussion of the major principles underlying the conduct of the war; the magnitude of our war effort; the number of men who are to be put into uniform to fight overseas, or in the defence of this country; and the vast industrial background which has to be set up as an essential prelude to a full war effort. Those are the problems entailed in the ways and means of war, and they are problems which a discerning eye should examine in the light of the tabulated figures contained in the budget. Those figures translate into terms of pounds, shillings and pence the Government’s policy in regard to this country’s war effort. They indicate the magnitude of that effort; the number of men to be enlisted; how they are to be disposed; the munitions and instruments of war which are to be put into their hands; what proportion of these requirements can be manufactured in Australia, and what proportion has to be secured from overseas, either by purchase, or in accordance with the terms of the United States of America of the lease-lend programme. Those are the important features of the budget, but what has been said by the Opposition party in respect of these things which undeniably are the fundamental issues confronting this nation? Nothing. Certainly the Deputy Leader of the Opposition has said nothing. What did the Leader of the Opposition say? He said that the Labour caucus had met in solemn conclave and, as a result, the attitude of the Labour party had been crystallized in certain respects. He said in effect, “We challenge the policy of the Government. We challenge this document which is a presentation of the ways and means of war “. But on what grounds do they issue that challenge? They claim that there are four points of disagreement. First, they disagree with the Government because it proposes to put ls. into the soldiers’ pay-books rather than into their hands, fs that, vital? Honorable members opposite say, “We challenge the Government because it does not propose, as we would, to add to the old-age pension rate”. They do not explain that twelve months ago they proposed that the old-age pension rate should be £1 5s. a week, and that ro-day they have dropped the amount to £1 2s. 6d. a week. I pass that by, however, because it is not fundamental to our war effort. They challenge the propriety of f.he Government seeking to oblige persons on lower taxable incomes to make a loan >f a few shillings a week to the nation in order to aid in the conduct of this struggle which means everything to us. Surely that is fundamental to our war effort! The Leader of the Opposition himself has stated that in Queensland, where a Labour government has been in power for many years, a person in the lower wage range contributes towards the cost of building roads and bridges a :ax of £7 a year; yet the honorable gentleman has challenged the right of the Government of the nation to ask the same taxpayer to lend to it, at interest, an amount of £4 a year for the management of the war effort ! These are points upon which the Opposition bases its right to attempt to seize power while still being ;n a minority in this legislature.
The fourth point of the Leader of the Opposition dealt with some doctrinaire financial policy. Surely in these days of crisis such issues are not sufficient to justify the dismissal of a government from office, and its replacement by members of a party which at best has not a majority in either branch of the legislature ! Not one word has been said by honorable members opposite in respect of the addition of one man to the fighting forces, or the subtraction of one man from them. Not one word has been uttered in favour of the addition of one bullet, one gun, one aeroplane, or one ship, to our available war resources. Apparently, all of these things are insignificant compared with the important matters of adding ls. a week to the old-age pension, of putting an extra ls. in the hand instead of in the pay-book of the soldier, and of adopting some doctrinaire financial policy. I believe that the people of this country, as well as the members of this committee, will properly evaluate the basis upon which this challenge has been made to the Government, well as the policy for which this Government stands and which it will continue to implement day and night so long as it lasts. What would be the effect of presenting to an Australian soldier in Tobruk this charter upon which the Opposition party seeks to be given the right to govern Australia in these days of our peril? Does the man who is held in Tobruk feel that it is more important that he should have an extra ls. placed’ in his hand instead of having it entered in his pay-book, than that he should have numbers added to his combatant strength there? Does he think it more important that there should be an addition of ls. to the allowance of an old-age pensioner, than that he should have more aeroplanes to aid him to withstand the attacks of the enemy? What must, what would, be the thought of a young Australian in England, as he was about to step into his Spitfire to go out against the enemy, f he were to read that a body of politicians in Australia were seeking to dis.n] Ss from office the Government which had managed the Avar effort of this country, in order to replace it by a government which had pronounced as it? most important intention the implementation of these matters which deal with shillings and doctrines rather than with men, arms and munitions? I have not the slightest doubt of what would be the valuation by our fighting men abroad, and the considered conclusion of the people of Australia, when they had measured, not alone the policy of this Government but also its record of achieve- ment, and had compared that record with the proposals of the Opposition. I am concerned with adding, as fast and as effectively as we can, to the strength of those brave Australians who are risking their lives abroad in defence of all that we have and uphold.
Mr Conelan:
– Change the government, and that will be done.
Mr McEWEN:
– There is no need to change the government in order to aid the men abroad. What they want is greater safety, by an accretion to their numbers. Has the honorable member ever stood upon a recruiting platform and invited an Australian to add one to the number of men abroad?
Mr James:
– There are more men offering than the Government can equip, particularly in the Royal Australian Air Force; they are waiting in my electorate for a call-up.
Honorable members inter jecting,
The CHAIRMAN (Mr. Prowse).Order ! I ask honorable members to refrain from interjecting.
Mr Forde:
– The honorable member for Griffith offered his own services.
The CHAIRMAN:
– The Deputy Leader of the Opposition is distinctly disorderly. He should set a better example.
Mr Forde:
– I made only one interjection.
The CHAIRMAN:
– The Deputy Leader of the Opposition interjected in the course of my remonstrance to other honorable members. I ask him to set a better example to the committee.
Mr McEWEN:
– I do not desire to provoke honorable members. But I am entitled to give expression to my thoughts a lid beliefs. In every victory gained in this war, whether by our enemies or our own side, the decision has not been reached by any feat of arms in the field, but was pre-determined by the weight of material produced and aggregated, and by the number of men enlisted and trained, during the period of pause prior to the particular engager ment. At the present time, apart from the air arm of the Empire, we are in such a period of pause; our mcn are not engaged in active hostilities. It is my sincere belief that, the intensity of our preparations, both in the recruitment and training of men and in the production of instruments of warfare, will determine the result of the next engagement in which our men are involved.
Mr Watkins:
– Thought should have been given to that years ago.
Mr McEWEN:
– I have stood in my place in this Parliament on many occasions and advocated greater preparations. The honorable member for Newcastle has shared my belief. I know full well that it is on record that not all of his colleagues have shared it; the record 13 to the contrary. Therefore, at this very moment, while we are here in safety, the intensity of our preparations will determine the success or failure of the next engagement in which our men are to be involved. What is to be the measure of our concentration upon this matter? It would appear that at least some of us are prepared to devote words and thoughts to matters which are not relevant to the furnishing of our men with the maximum quantity of equipment. I place in that category every word uttered by the Deputy Leader of the Opposition. The record of industrial disturbance in this country shows that outside of this Parliament there are nien who are not completely concentrated on the production of *hose instruments .of war, lacking adequacy of which our men cannot properly defend their lives, let alone win this struggle and bring peace to us. We should strain every resource towards this end. During the present period of pause in actual hostilities we should concentrate our attention upon the factory and the foundry. What is being said and done in thai respect by honorable members opposite who claim that they have a special right and privilege to speak for the men who are engaged in the factory and the foundry? The honorable member for Hunter (Mr. James) chided me a moment ago that there was not sufficient equipment for members of the Royal Austraiian Air Force. That is true.
Mr James:
– It is definitely true.
Mr McEWEN:
-Sad to say, it is true. But I direct the attention of honorable members to the fact that’ last week 1,000 men in the Commonwealth Aircraft Corporation’s works in Melbourne ceased work for 24 hours.
Mr James:
– Why?
Mr McEWEN:
– Because of an alleged grievance, the merits of which I do not argue. There is arbitration machinery - the chosen machinery of the Labour party - to hear and deal with industrial matters. It is not for me to say whether the men are right or wrong. I am content to abide by the decision of the established judicial tribunal. No men have the right to do what these men did last week, when 1,000 of them ceased work for 24 hours because of an alleged grievance. No men have the right to meet, as they did subsequently, and decide by ballot that for the ensuing fourteen days none of them would work over-, time. No men have the right to say that, if their grievances are not settled to their satisfaction within a specified period, they will go on strike and thus prevent men of the Royal Australian Air Force from being supplied with a number of aeroplanes. Who on the other side of this chamber has challenged the propriety of the action taken by these men? Not one. Who has said that it is wrong, while men are fighting in the trenches, for other men to refuse to work overtime ? Who has said that, while there is judicial machinery for the settlement of industrial disputes, men should not threaten to strike - not only threaten, but actually do these things; that they should not attempt to put pressure upon governments and employers in order to obtain higher wages and an alteration of the conditions of labour, by denying to our men in uniform a certain number of aeroplanes, shells and guns, the shortage of which caused many Australian lives to be lost in Greece and Crete?
Mr James:
– Are the workers to make all the sacrifices?
Mr McEWEN:
– The Opposition cannot talk its way out of its responsibilities. It claims as its special privilege the right to speak on behalf of the workers. It knows that a strike occurred in a gunforging factory in Newcastle, as the result of which fewer guns have been supplied to the Australians in the fighting line. It knows that there have been recurring strikes at the Lithgow Small Arms Factory, as the result of which fewer rifles, Bren guns andVickers guns have been produced, causing shortages which can never he overtaken. It knows that strikes have occurred in the brass foundry of a munitions factory in Melbourne, as a result of which fewer shells have been provided for our men overseas to fire at the enemy, thus causing a diminution of their capacity to defend their own lives. Have honorable members opposite stood up and told these men that they ought to go back to work?
An explosives . factory is being built in a certain country town in Victoria. It has been in process of construction for many months, and the machinery to equip it is lying on the site. The completion of the building is being delayed because the Victorian branch of the Building Trades Federation forbids its members to work overtime. Do honorable members opposite agree with that? If they do not, why do they not say so? If they do agree with it, why do they not tell the people of Australia that they do?
Mr Drakeford:
– The honorable member says that whether it is true or not.
Mr McEWEN:
– It is undeniably true.
Mr Drakeford:
– That is a mere assertion.
Mr McEWEN:
– Nothing of the kind.
Mr Holt:
– I appealed to the federation to allow the men to return to work, in order to complete the construction of the factory, and it refused.
Mr McEWEN:
– Yes ; it turned a deaf ear to the Minister. If members of the Opposition believe in that, they should have the courage of their convictions and say so. Does the Opposition suggest that the people of Australia desire a government that believes that pressure, involving the denial of warlike material to our fighting men, should be used for the purpose of gaining an industrial advantage? If honorable members opposite do not believe in these things, why have they not the moral courage to tell the workmen of this country who are engaged in these recurring industrial disturbances-
Mr James:
– The Minister for Labour and National Service never goes to the workers representatives for advice; he always goes to the “ bosses “.
Mr McEWEN:
– I do not believe that. An attempt is being made by the Labour party to seize the reins of government while it is still without a majoritv in either branch of the legislature. That, in itself, is an abrogation of democratic principles, but I pass that by. I claim that the record of the Opposition proves that it is not entitled to govern this country. It has no such right for the reasons that I have mentioned and for many more that I could state.
Mr Frost:
– This Government has had an opportunity and has fallen down on the job.
Mr McEWEN:
– What I have stated is the truth, and the facts speak for themselves. What would be the power behind the throne if the Labour party were to attain office? We had a reminder only last week, when the leaders of certain industrial organizations wrote to the political leader of the Labour party and told him that they would he prepared to exercise their influence to minimize industrial disturbances if the Labour party were prepared to seize the reins of government.
Mr Blackburn:
– No; they did not say that at all.
Mr McEWEN:
– I should not like to trust my memory so far as to be positive as to the words used, but my clear recollection is that that was the general purport of their communication. Whatever it was, it was of such a nature as to lead the Leader of the Opposition to say that he would not be blackmailed by these people. But undeniably they would be the power behind the throne if a Labour government took office. Therefore, I contend that on the performances of the Labour party, and on the attitude of the industrial labour leaders, that party is not entitled to seize office in Australia. I believe in the democratic system of government. When, at the polls, Labour can persuade the people of this country to send it into this House with a majority, of course it should govern, but the present attempt by the Opposition to seize power is no more than a trick to exploit the fact that one member on this side of the chamber is, by the rules of this Parliament, denied a deliberative vote.
I do not believe that this Government should attempt to justify its right to continue in office merely by denouncing the Opposition. Criticism is legitimate, but that of itself is not sufficient to justify the Government’s continuance in office. It remains in office, by the will of the people, on its own record. It has marshalled the military resources of the Commonwealth in a manner that does credit to all concerned. There are between 400,000 and 500,000 Australians in uniform to-day, and that is a creditable record. There is a background to that army which is a revolutionary industrial achievement.
Mr Holloway:
– It is almost a miracle.
Mr McEWEN:
– To all concerned 1 give credit, but that great effort has been organized by the executive acts of this Government. It would be a poor message of hope to our troops abroad to tell them that the Government which has achieved these things had been dismissed from office by a challenge based upon a promise to put an extra ls. a day in a soldier’? hand instead of in his pay-book. Our fighting men would derive little encouragement from being informed that in this hour of our crisis, a change of government had been brought about by a challenge which rested substantially on a promise to give the invalid and old-age pensioner another ls. a week. It would indeed be poor comfort for our men abroad if they were to read that, while they were prepared to leave their peace-time occupations and risk their lives for a few shillings a day, the Government had been turned out of office because it proposed to oblige people in the lower wage group? to lend a few shillings a week for the purpose of the national war effort. I believe that that message will not go to our men overseas.
I feel sure that the people will have a clear vision of the realities of the war needs of Australia, and will appreciate that the fundamental issues at stake are whether we shall retain the ownership of this country, whether those children attending school to-day shall grow up to be bond or free, and whether the government in power after the last shot ha? been fired shall be backed by enough authority to determine .the immigration policy of Australia. Defeat would mean the loss of the right that we have enjoyed to regulate the number of foreigners who come here. If we were to lose that right there would quickly be in influx of southern Europeans which in one decade would change the whole ‘composition of the Australian people. At the worst there;might be an influx of Asiatics which would cause the loss for ever of very thing for which we have struggled. These are matters which we should bear 11 mind. If the Labour party challenges this Government regarding the right to manage the affairs of Australia by saying that the present war effort is inadequate, that is a legitimate challenge to issue, and me to which the Government should reply ; but if the Opposition suggests that the Government should go out of office because of a story about putting an extra shilling a day into a soldier’s pay-book instead of into his hand, or because it proposes to regulate contributions to the war effort by imposing a compulsory loan instead of depending on voluntary contributions of a few. shillings a week for war savings certificates, there is no case for the Government to answer.
Mr BEASLEY:
West Sydney
– Of all honorable members, the Minister who has just resumed his seat should be the last to pose as a champion of democratic government, for his party has “ gate-crashed “ in this Parliament on the system of democratic government for many years. In a house of 74 members, the Country party holds only twelve seats, yet it complains of an attempt by the Opposition to seize power! That party has secured office by trickery, and by the exercise of all the underground methods that could possibly be employed, ever since it has been in existence. And yet the Minister for Air (Mr. McEwen) rose in this committee and talked about democracy, and democratic control of government, and the rights of the people when, although his is the smallest party in Parliament, and represents the smallest number of electors, it has six members in the Cabinet! If the Minister had reflected for a moment he would have realized that he might very well have dispensed with, that argument.
Mr McEwen:
– How many members were in the. honorable member’s own party ?
Mr BEASLEY:
– Never mind how many there were. On this side of the House to-day there are 36 members pledged loyally and solidly to support their leader, and that cannot he said of honorable members on the other . side. The present Government is a minority government. The honorable member for Henty (Mr. Coles) does not bear allegiance to the Government; he is an independent. The Government is flouting the will of the people, and is holding office in defiance of the principles of democracy.
The Minister for Air charged the Deputy Leader of the Opposition (Mr. Forde) with having devoted much time to the subject of a mortgage bank, and very little attention to the war effort. Well, if we are to confine the discussion to the war effort, let me remind the Minister that the people of Australia are straining at the leash to turn him and his Government out of office. It is not necessary for us to go over again the tragic experiences of the Australian Imperial Force in Greece and in Crete owing to lack of equipment. Had it not been for the efforts of the Labour party, which fought year after year for the establishment of Australian industries, we would not even yet be in a position to manufacture a single gun. The Minister for Air knows that his party was always opposed to the policy of local manufacture. He and his colleagues never wished to see secondary industries established in Australia. They never wanted to have workshops for the training of skilled artisans. They took the opposite view, and it is to the Labour party, even though it has sat in opposition for so long, that the credit must go for the fact that Australia is in so good a defensive position as it is to-day. During the nine years that this Government and similar governments have been in office, the policies of the nation have been shaped by the influence of the private banking institutions, with the result that thousands of men were denied the opportunity to prepare Australia for the great crisis through which it is now passing. Every time the Opposition suggested that roads should be built, or other strategic works put in hand, it was met with the argument that no funds were available. In the same way, the thousands of boys who left school during the last nine years were denied opportunities to learn trades; but of what inestimable value their services as skilled workmen would be to Australia to-day! For whatever deficiencies there are in our war effort, the responsibility lies wholly with anti-Labour governments. We have done more to place Australia in a position to furnish its own arms, equipment and instruments of mechanized warfare than has any other party in the history of this country.
We are prepared to face the position in regard to industrial disputes. The Minister for Air plunged deeply into the spite of party polities when he raised this issue. During the last two years honorable members on this side of the House - and I myself can claim to have played no small part - have done a great deal to adjust industrial disputes, and to remove misunderstandings that might never have arisen if an honest attempt had been made to understand the point of view of the industrial workers. Regarding the dispute at Fisherman’s Bend, the Minister for Labour and National Service (Mr. Holt) will have to explain the failure of Judge O’Mara to issue within a reasonable time an award for the engineering industry. Despite the holding of stop-work meetings, and despite the exercise of whatever influence we have been able to bring to bear, the framing of the award has been delayed month after month, until nearly twelve months have elapsed since the original application was made. This amounts to downright provocation, and is typical of what has caused much of the unrest among workers since the outbreak of war. I shall not sit quietly while Ministers slander the hundreds of thousands of industrial workers who have made a tremendous effort to provide war equipment so that this country may be placed in a position to defend itself. Let us not forget that in the ranks of the fighting services are thousands of the relatives of the workers whom the Minister so glibly condemns. Every sensible person recognizes that disputes will occur in industry from time to time. It is impossible to prevent them; the important thing is to know how to deal with them, so that they may be settled quickly and fairly. As the honorable member for Maribyrnong (Mr. Drakeford) pointed out, the delay in the completion of the factory at Ballarat is not wholly due to the workers in the building trade. I know that there is a shortage of necessary material, including copper rod and brass, for the installation of electrical equipment.
Mr McEwen:
– Explain the embargo on overtime.
Mr BEASLEY:
– The Minister tried to argue that the hold-up was due to the employees in the building trade.
Mr McEwen:
– That is substantially true.
Mr BEASLEY:
– I deny that. I know that many of the workers engaged on the construction side, particularly the electrical workers, cannot get the necessary raw material. Thus the Minister has told only half of the story. The Minister for Air, answering the charges of the Deputy Leader of the Opposition, declared that this was on record and that was on record in reference to the Government’s interest in the mortgage bank proposal. My complaint is that the Government has put plenty on record, but has accomplished very little. This lias been a paper government almost from the beginning. There have been any number of memoranda, reports and inquiries; it is true that the Government may have placed something on record about a mortgage bank. That is its usual procedure, but it has not done anything more. If the Government wants to go before the people on its war record, we are ready to meet it at any time it cares to make the appeal. Those honorable members who were present when the secret meeting of members was held, and who listened to the report of the Minister for the Army (Mr. Spender), need no further evidence to decide this important issue. We are prepared to fight the Government on the question of the war effort, and to argue r.he matter on the platform with the Minister for the Army.
Mr Spender:
– I am prepared to meet the honorable member at any time, and al any place he likes.
Mr BEASLEY:
– If the Minister for the Army will go to the country on his own report to the secret meeting we are ready to abide by the decision of the electorate. I have dismissed, I believe, effectively, the arguments of the Minister for Air, and I come now to the point? taken by the Prime Minister (Mr. Fadden). The Leader of the Opposition has been challenged to put forward specific alternative proposals to the Government’s budget. I remind honorable members, however, that the Leader of the Opposition has not had access to those documents, a study of which is necessary in order to decide whether an expenditure of £322,000,000 this financial year is required. Of the money budgeted for last year, £16,000,000 remained unexpended at the end of the financial year, and I have still to be convinced that it is necessary this year to raise £322,000,000, or that the Government is competent to expend that amount. Another aspect is this : the budget figures show that cash balances at the end of last financial year amounted to £2,000,000. I submit, when all income nix due last year has been paid, the cash balance available will be much more than £2,000,000. That disposes of the argument that the proposals made yesterday by the Leader of the Opposition would increase by £22,000,000 the amount of money which the Government will have to raise from all sources of revenue in order to meet war costs and all other items of government expenditure in the current year.
Mr Curtin:
– The amount of increased expenditure for this year to which I committed this party yesterday is far less than the unexpended revenue of last year.
Mr BEASLEY:
– Exactly. We have not been given the true figures. The Leader of the Opposition, therefore, was entitled to deduce from our limited knowledge of what happened last year that more than sufficient will remain unexpended this year to cover the cost of increasing the soldiers’ pay and’ invalid and old-age pensions.
Mr Anthony:
– That argument is weak.
Mr BEASLEY:
– It might be stronger than the Minister would care to have it if the facts were known, as they will bc made known when this party supplants ihe Government in office. The Government’s whole case is fictitious.
The cry “ equality of sacrifice “, heard constantly from Government supporters, implies that every body will be called upon to accept a certain social standard and that sacrifice will be evenly spread throughout the community. The falseness of that implication can readily be shown. In order to show how spurious it is, I need only cite the inequalities of the war-time company tax, which, it is common knowledge, has failed completely in its objective, because balance-sheets of all of the large companies, whether they be engaged on war production or not, show that, in the last financial year, their profits increased enormously, whereas the situation of primary producers and small business men was the reverse. The basis upon which “ capital “ is determined for the purposes of the war-time company tax has not been laid down, perhaps because it is too difficult to arrive at a definition. The smaller companies have had no opportunity to build up reserves or water stocks, and consequently, when the 8 per cent, standard was applied, they were hard hit, but the larger companies were able to escape. Banks, insurance companies, shipping companies and breweries have all availed themselves of the means to make themselves immune from the tax. If the wartime profits tax originally proposed by the Government had been accepted, the amount collected last year would have been negligible. When last year’s bill was remitted to a parliamentary committee, that body recommended that the only way in which the measure could be made to accomplish what was intended was by the imposition of a super tax of ls. in’ the £1.
Mr Scullin:
– And that has brought in more revenue than the other portions of the tax.
Mr BEASLEY:
– Yes. The right honorable gentleman was a member of the committee which was appointed to examine the war-time taxation of companies, and he knows that little or nothing would have been raised by the tax as originally proposed. The sole contribution of a large number of companies to war-time profits tax is the super tax of ls. in the £1, which was put into the legislation at the last moment. For two years or so the larger companies have been hiding their profits and, thereby, depriving the Government of taxes that ought to have been collected. Examination of the balance sheets of certain companies in New South Wales will prove the truth of my contention. Those balance sheets show that not more than 50 per cent, of the profits of those companies has been distributed and that the balance has been paid to what they call “ depreciation “ and “ reserve of taxation “ accounts. The Broken Hill Proprietary Company Limited is a good illustration. That company’s disclosed profit in 1940-41 was £969.279, which is very much below its real profits, and it received £204,716 from interest and dividends from some subsidiaries compared with £159,342 in the previous year. The tendency all the time is for those profits to rise steeply. The profit disclosed was made after providing £456,330 for depreciation and £1,050,000 for taxation. The provision for taxation was £400,000 more than that made in 1940. This company now has a depreciation reserve of £2,106,445 and a taxation reserve of £1,963,076. Thus a total of more than £4,000,000 is stowed away by those two methods of hiding excess profits. Can these methods of evasion be considered consistent with equality of sacrifice? Can those figures be reconciled with the Government’s proposals to take £10,500,000 from people whose earnings range from £300 to £400 a year? The balance-sheet of the Colonial Sugar Refining Company Limited bolsters my argument that the answer to both questions is a decided “ no The disclosed profit of the Colonial Sugar Refining Company Limited in 1941 was £1,054,331. It’ paid a dividend of 8* per cent., and its reserves to-day amount to £6,033,757. I contend that those companies have no right to sink their profits into reserve accounts and that the money in those accounts should be classed as surplus profits and taxed heavily. That is what the Labour party would do. I could cite many different companies in support of my argument, but I shall content myself with directing the attention of the committee to the textile industry in which there has been recent unrest. The profits of a Melbourne company, Eastaugh Limited, were 150 per cent, greater in 1941 than in 1940. The balancesheets of all of the textile companies tell the same story. The psychological effect of that on the workers engaged in the textile industry can readily be imagined. Their employers increase their profits by more than 150 per cent, in one year, but they still have to work long hours and, in many instances, under adverse conditions. Is it any wonder, then, that they begin to ask questions? Is it any wonder that they ask for an amelioration of their conditions and a greater share of the extra return that their employers are earning when they know that the prices of their necessaries of life are constantly increasing, far more rapidly than their wages? The workers have no “ cost-plus “ system which will guarantee to them, as it does to their employers, that every increase of their costs will be met by the Government. The contentment of the workers is a prerequisite to the smooth working of the war machine. In order to ensure the continued contentment of the workers, and to obviate the minor disputes which arise in industry, a courageous government, such as would be provided by the Labour party, would take a firm stand against profiteering and exploitation. The menand women in industry know what i? happening. They can bo hoodwinked no longer. They also know that for nearly ten years they have been on the breadline or worse off because of the failure of governments, Commonwealth and State, to furnish the opportunity for them to provide for themselves and their families. The situation must be faced and the only persons competent to face it are those who are not tied, as are members of thiGovernment parties, to big business and private banking, and are free to take the action which the country demands that will ensure a 100 per cent, war effort and that our soldiers both at home and abroad shall be fully equipped.
For a long time I have been convinced that Australia is governed not by the group of honorable gentlemen on the treasury bench, but by people outside Parliament, people over whom Parliament has no control. We can never achieve the democracy for which our troops are fighting until democracy i.brought right into Parliament and until the country can work on a programme based on decisions made by men within this Parliament, not by men in no way answerable to the electors, in the financial houses of the country. It is because of the manipulations of people behind the scenes that, out of this war, companies are able to make profits ranging from 8 per cent, to as high as 22 per cent. This Government is prepared to let that state of affairs continue, but the people are not.
I contras’t the ineffectiveness of Australia’s war-time company tax with the step which has been taken in the United States of America to limit profits to 6 per cent, for the duration of the period of emergency which has been declared in that country. That decision was announced by the Secretary of the Treasury on the 26th September last. It was vital that I should raise this aspect in order that Parliament and the country might know exactly what the Labour party thinks about it.
It is appropriate that, on this occasion, I should raise again the matter of the taxation of dividends. Many residents of Australia draw big dividends from investments which they have made outside Australia from capital which they have earned within Australia. Those dividends are exempt from taxation in Australia. As the result, the investors are able to take full advantage of the security which the war effort of Australia affords to them, but more important than that, the Commonwealth is maintaining in Malaya an army that will, if the war spreads to that region, provide military protection for r-heir investments. “Whilst we do that, they draw from investments in Malaya dividends upon which they do not pay one penny of tax as a contribution towards the cost of defending the area. Is that equality of sacrifice?
Mr Rankin:
– The troops have been sent there for strategic reasons.
Mr BEASLEY:
– I am not discussing strategic reasons for the disposition of our forces. The Australian Imperial Force, Royal Australian Air Force, and armoured units have been stationed in Malaya because its security is vital to the defence of Australia. But while we defend our country at that point, we also protect substantial investments in that quarter of wealthy Australian enterprises. Why should they be relieved of the obligation to pay Commonwealth tax upon dividends derived from that source? If the Australian public were given an opportunity to express an opinion upon it, I have no doubt about their answer. Business concerns in this category include Burns Philp South Seas, a subsidiary of Burns, Philp & Company Limited, Morris Hed.strom (Australia) Proprietary Limited, Emperor Gold Mining Company Limited, the Colonial Sugar Refining Company Limited and so on.
Mr MCCALL:
MARTIN, NEW SOUTH WALES
– Does the honorable member say that their investments abroad are not taxed by the Commonwealth Government ?
Mr BEASLEY:
– Yes. In addition, many large companies, particularly banks and insurance companies, derive interest from Commonwealth bonds upon which tax is payable at the rates which prevailed in 1930. In that year, £466,000,000 was converted at the rate of income tax which then existed. But the position of !he nation has altered radically since that une. No longer at peace as in 1930, Australia is now fighting for its existence. In order to assist in meeting the mounting ar expenditure, the rate of income tax has been increased by at least 75 per cent, compared with the rate of 1930. So why should those investments be allowed to escape the present rates? I have a list of influential companies and the percentage of their dividends that is not subject to the present rate of tax because these dividends are paid from the 1930 Commonwealth conversion loan -
The exempt percentages considerably reduce the effective rate - particularly on larger incomes. These special privileges should no longer operate. Undoubtedly, the Government will attempt to rebut any contention with the statement that in 1930 the Government entered into an agreement with the bondholders that the rate of tax to which their investments were then subject would not be varied in the future. That is not a satisfactory answer. If the Government be sincere in its efforts to ensure equality of sacrifice, it should give to these enterprises an opportunity to convert their investments in order to place them on the same basis as other taxpayers. Such a proposal would be only reasonable in this period of emergency. If the Government be reluctant to force the bondholders to make a greater contribution to the war effort it should put them to the test by asking them voluntarily to convert their holdings. Possibly my advocacy will be countered with the statement that income above a certain figure derived from this source will be classed as national contribution; but as those moneys will earn interest at the rate of 2 per cent, the companies will gain an advantage from making a national contribution. Whichever way we look at it, they have a distinct advantage over the average taxpayer.
Another serious anomaly is the difference between payments which taxpayers are called upon to make under two headings, namely, income from bonds and income from property. The income from most Commonwealth loans, if not all of them, is exempt from State income tax, including social services tax and unemployment relief tax, which the States in recent years have been obliged to introduce. That indicates the extremely sheltered position of these people. Undoubtedly, they occupy a favoured place in the financial structure of Australia. They enjoy special concessions. After all, their obligation to the country should be greater than that of the worker who has only his labour to sell to a factory, and who holds no gilt-edged securities. His only income is that which he receives in hi.s pay envelope from week to week. But from his small earnings a substantial amount of tax is to be taken, whilst the sheltered class will be permitted to escape. The accompanying table illustrates the amount to be paid by a taxpayer receiving income from 1930 bonds and another taxpayer who receives his income from property: -_
Is that equality of sacrifice? Does that meet the budgetary problem in a fair manner? No wonder the Leader of the Opposition declared that an examination of the financial structure of Australia, and a survey of all the commitments into which the Government has entered, are imperative. If we were to study the problem from the standpoint of human values and equality of sacrifice, a vastly different story would be told in the Parliament of the Commonwealth, and the budgetary position would be substantially altered. The present budget does not ensure equality of sacrifice. For many years, the low wage-earners have been harshly treated by successive governments of the United Australia party and United Country party, whose approach to the problem is entirely different from that of the Labour party. Their advisers deal with matters on a basis which suits the interests that they serve. For years, we have striven to alter the position. In season and out of season, we have tried to educate the public in order to effect an adjustment. If ever in the history of Australia the time was ripe to make the change, it is now. The people are ready for it. They know that the game has not been played fairly, and that the dice has been loaded against the masses. In the masses, I include apart from workers in industrial areas, all those who are engaged in rural production on small farms, owners of small businesses, and small manufacturers. The last named have felt the power of monopolists through their ability to control raw materials and the support given to them by financial institutions. War has made the monopolists infinitely stronger than they were in peace. Their power must be fought. Whatever the result of the vote upon this amendment may be, the fight must continue, because people are weary of the conditions that have existed for so long, and are ready and willing at the earliest opportunity to change the whole course which Australian politics have followed, particularly during the last two years.
The Leader of the Opposition aptly described the document which contains the undertaking given by the trading banks, as not being worth the paper upon which it is written. Letus examine precisely what is happening to this wealthy and influential section. As the result of the operations of the Capital Issues Advisory Board the banks’ ordinary avenues for investment, which were so profitable to them in peace-time, are no longer open to them. Their reserves and deposits are growing rapidly. Since the outbreak of war, more than £40,000,000 has drifted back into their hands. I remind honorable members that the Commonwealth issued credit for the purpose of assisting war production, but it has filtered back into the coffers of the private banks, which re-lend it to us, and charge us interest upon our own money. Some men and women have long fought this practice, and I pay due credit to their persistency in the face of ridicule. They exposed a system which in the past was regarded as a mystic arrangement beyond the comprehension of the- average person. Now, the position is being analysed, and the wealthy banking institutions fear a public revulsion when all the facts are revealed. Deposits have reached such a point that the banks are compelled to do something.
I direct attention to another glaring anomaly between the treatment of banking institutions and the treatment of the general public. Deposits received from the trading banks are to be placed in a special war-time deposit account for a term of six months. But the Government will not commence to repay the compulsory contributions made by the workers until after the conclusion of the war.
Mr HUTCHINSON:
DEAKIN, VICTORIA
– The deposits of the banks will be renewed.
Mr BEASLEY:
– Do we know that they willi Six months hence the banks have the right to discuss with the Commonwealth Bank Board the disposal of the deposits. A similar right is denied to the average taxpayer. Incidentally the repayment of national contributions will not be made after the war. The Prime Minister has already announced that it would be unwise to make repayments immediately hostilities ceased, and to put into circulation amounts which had been accumulated as the result of the application of the system of forced loans. Consequently, repayments are to be “staggered” over a period. In those circumstances, it is not correct to say that the money will be repaid after the war. It will he repaid as the private banks permit. This will not mislead men and women who will be compelled to make national contributions. Apparently the forces behind the Government have determined that for all time there will be a “ deadline “ for workers. When a depression overtakes us and it becomes necessary to impose financial restrictions, wages are arbitrarily cut and unemployment is forced upon the workers. It cannot be denied that the conditions of the workers have been at a low level fr, om 1929 onwards. For nine years many of the workers did not have the opportunity to furnish their homes comfortably and could not buy the things they needed to make life more enjoyable, but now. when they have a chance to accumulate small savings, they are told by the Prime Minister that they must not buy luxuries - an extra blanket to put upon a child’s bed, the little extra furniture needed to make their homes more comfortable. In peace or war there is a ‘*’ deadline “ for the workers of Australia. It seems to be the order of the financial and professional advisers of the Government that the workers shall never be permitted to enjoy the social standards which every man and woman should be entitled to enjoy. These same advisers and professors who pushed us into the depression of 1929 would do so again now. I refuse to be a party to this budget. I am proud of the stand of the Leader of the Opposition in regard to it and every member of his party will loyally fight behind him to the end on this issue, the greatest that has ever confronted the people of Australia.
Sir CHARLES MARE (Parkes)
-
- 27]. - One is inclined to ask how history will record the deeds of this Parliament. By our deeds we shall be judged. For the last year or two, while this National Parliament has been occupied with politics and our heroes have been fighting for the rights and liberties of the people of this country, the workers have been claiming the protection of their privileges and, at the same time, have not been prepared to support the Government to the degree necessary to ensure an all-in wai- effort. The soldiers of Tobruk say “ Gome over here and argue with Jerry, not with the Government at home which is doing so much to help us win the war “. I congratulate the Treasurer (Mr. Fadden) on the introduction of this budget, the appalling figures of which present a tremendous total equal almost to the total amount raised for the purpose of financing Australia’s war expenditure in the Great War. I do not propose to offer criticism or suggestions as to the various items included in the budget. I feel sure that every honorable member will agree that, in the preparation of a budget involving such an immense amount of money, the Government has been faced with a tremendous task and has tackled it in an able and efficient way. I have heard it said by members of this Parliament and by the people, particularly those who might be expected to be called upon to pay greatly increased taxes and to make additional sacrifices, that they looked forward to the presentation of this budget with fear and trembling. When the budget was presented a week ago and the people had an opportunity to realize its effect upon them, the concensus of opinion was that the Government had made a particularly good job of its task. Taxes are always unpopular. Even members of Parliament object to being taxed. Some people believe that we are exempt from the payment of taxes; but that is not the case. The taxes which are imposed, upon the people generally are also imposed upon members of Parliament. Taxes, I repeat, are unpopular, and I feel sure that if the members of all parties were to get together they could do much to relieve the people of the burdens of excessive taxation. The huge bill for the conduct of the war has to be met, and it is our duty to see that the burden is shared by the community as equitably as possible. I remind the honorable member for West Sydney (Mr. Beasley) that all of the problems which he mentioned during his speech, the filching of the privileges and the rights of the workers and the alleged difficulties and dangers that confront them, might be overcome if he and the members of his party would join forces with honorable members on this side of the chamber in the formation of a truly national government. By refusing to entertain the invitation to form a national government, in the interests of the country, the honorable member and the members of his party are doing a disservice to the people whom they claim to represent. The deliberations of this Parliament should be confined solely to the furtherance of the war effort and the conservation of the privileges and rights of the people generally. That can be done only if the members of all parties co-operate to elect a national government and a national leader, and bend their energies solely to the solution of the great problems that confront us. I do not agree with some people who say that governments or the leaders of governments should not be changed. I subscribe to the principle that the Parliament should have the right to change its government or its leaders at any time. A national government should be elected by the Parliament itself. I remind honorable members that during the last war Mr. Asquith, who was then Prime Minister of England and a member of the Conservative party, was displaced by Mr. Lloyd George, a member of the Liberal party. In this war history has repeated itself; the Labour party and the Liberal party joined forces and displaced the late Mr. Chamberlain in favour of Mr. Churchill. If Parliament, in its wisdom, declares Smith to be a better leader of the Parliament than Brown, it is Brown’s job to see that Smith is appointed. In the Old Country the opposing political forces have been welded together, with the result that the government has now but one ambition. one desire, one resolve, namely, to win the war. Should we not follow that admirable example? Should not the opposing political parties in this country join forces in order to help our fighting men, those engaged in our munition factories, and the people generally, by wise leadership and by finding the funds necessary to do the work that has to be done? I have been as frank a critic of the Government as has any other honorable member of the Parliament. I trust that my criticism has been of a constructive nature, because I believe that constructive criticism is helpful. I do not deny the right to anybody to submit proposals which have for their object the betterment of the lot of the people generally. However, we are now facing the greatest crisis in our history. “We have to provide the huge financial resources required for the conduct of the war. In his budget speech the Treasurer propounded his schemes to meet the problem which confronts us, and I believe that we would do much better if we agreed to the budget first, and then discussed seriatim the various proposals of the Government to raise the necessary revenue to conduct the war when the appropriate measures are brought before us. When they are introduced every honorable member will have an opportunity to present his views in regard to the methods proposed for the raising and expending of the money. It may be possible, by useful and constructive criticism, to improve them. Notwithstanding the remarks of honorable members opposite, the Treasurer has made an honest attempt to spread the burden of financing our war obligations as equitably as possible over every section of the community. If any section has been missed, it is the duty of honorable members to point to it and to see that every member of the community is obliged to accept his fair share of the burden. In common with other honorable members of Parliament I have visited munitions works throughout Australia where the needs of war are being produced, and the various camps where our young men are being trained for the fighting forces. I defy anybody to say that every man, woman and child in Australia is not proud of Australia’s war effort. The splendid Empire air training scheme is now bearing fruit. I believe that
I am light in saying that already the number of men expected to be placed in Air Force training camps by next March has already been exceeded by nearly 100 per cent. Our young men have displayed a wonderful spirit in voluntarily offering their lives in the service of their country. The Leader of the Opposition (Mr. Curtin) has laid great emphasis on the voluntary recruiting system, voluntary contributions to loan funds and voluntary purchases of war savings certificates; but I remind him that in a democracy there should be no such thing as a voluntary system, because when the existence of a democracy is threatened and the privileges and rights of its people are endangered, every man should be called upon to face his responsibilities. For that reason, I am a whole-hearted conscriptionist as regards both manpower and wealth. I would not conscript man-power without conscripting wealth.
Sir George Bell:
– Wealth is already well conscripted.
Sir CHARLES MARR:
PARKES, NEW SOUTH WALES
– The Leader of the Opposition is prepared to go farther than the Government proposes to go. Although he objects to compulsory loans on the part of some of his supporters, he does not object to taxing the “ tall poppies “ who he alleges exist in the community. Indeed, he would go so far as to impose a capital levy on them. On a number of occasions I have visited New Zealand. The honorable member should go there if he would learn the reactions of the people to the proposals of the Government. I do not wish to decry the Labour Government of that dominion. I believe that in many ways it has done a good job of work, although I do not agree with some of the taxation measures which it has introduced - -but when the Leader of the Opposition says that he would “ lop the tall poppies “ by conscripting their wealth, I say that in a democracy every man must face up to his responsibility. No excuse can absolve a man from doing so. I would apply the same principles to a member of parliament as to the man in the street. I know, to my sorrow, of great numbers of people who are applying for exemptions from military training either on their own behalf or on behalf of others. I receive more letters on the subject of keeping men out of camp than on all other subjects put together. I do not believe in such applications, for I am of the opinion that no man who is physically fit to serve his country should be exempted from so doing. And even if he be not physically fit, there are other ways in which his services can be utilized, such as in the manufacture of essential goods, or in clerical positions. Thi* work of many able-bodied men who now sit on office stools could be done by girls or partially disabled men. I do not believe that in a democracy a man should have the right to abstain from serving that democracy from which he obtains the privileges that he enjoys. I join with the Minister for Air (Mr. McEwen) in urging members, of the Opposition to appeal to the workers of Australia. I have found the workers of this country a loyal body of men who are just as keen to win the war as are the members of the party to which I belong. The trouble is that their alleged leadership is wrong. If there be troubles in our arbitration system, if grievances exist and the Arbitration Court is reluctant or slow to deal with them, this Parliament should insist that the claims of the men should be heard and decided. Unless we do so, we are not living up to our responsibilities as members of the national parliament. I repeat that if Labour would join in forming a national government, many of the difficulties which have been mentioned here to-day would be overcome. A national government would be able to evolve its own financial policy. There would be no stifling of criticism, but there would be no carping criticism, for it would behove the members of all parties to evolve a sound and workable policy of finance. I appeal to Labour leaders, not only in the Parliament, but also outside the Parliament, to act promptly. The German steam-roller is pushing its way across the Ukraine, and the war is now nearer to Australia than it was last week. Australia can best be defended in countries overseas. If we merely meander along, discussing party politics and whether Smith or Jones should lead the country, we are not doing the right thing by our ally. In the past, some of us have criticized the Russian form of government; but that subject is not a matter for discussion to-day when the Russian people are spilling their life’s blood in order to protect themselves and us. The German army is the greatest military organization that the world has ever seen, and God help the democracies if it advances much farther. While it is pushing its way farther into Russia, we discuss the budget introduced by the Treasurer. I agree that it is our right to do so, and that the Opposition has the right to say that neither the right honorable member for Kooyong (Mr. Menzies) nor the honorable member for Darling Downs (Mr. Fadden) should lead the country. If some one else is better fitted to lead the country in these dangerous times, let us get together and decide who that leader shall be. Many honorable members, including myself, have boys at the front, and the letters which we receive from them tell us what they have had to endure.
Mr Pollard:
– Many of us on this side have boys there who do not agree with the honorable member’s view.
Sir CHARLES MARR:
– I have a boy in the famous Sixth Division, and I know from him something of what that division has had to endure. These men are defending our rights and privileges, and they are entitled to all that we can do for” them. Whatever their rates of pay they cannot be adequately compensated for the offer of their lives. This country has the obligation to stand by its fighting men and their wives and children at home. In the centre of my electorate there is a committee which looks after the interests of the dependants of sailors, soldiers and airmen. It is our job to do the same thing. I do not object to the dependants of soldiers receiving all that this country is able to pay to them. We are proud of the work that Australia has done in the manufacture of munitions, but I repeat that the famous Sixth Division would have done better had it been more adequately equipped. Members of the Advisory War Council know that it was not adequately equipped. This country has done marvellous things, but the greatest effort of which we are capable is not- possible while there are strikes or lockouts. If the fault lies with the Government, or with the Arbitration Court, or with the employers or the employees, it is our job to see that those faults are overcome. While we are being defended by the men overseas, we spend our time discussing whether the budget should or should not be increased by a few million pounds. What would that matter if we lost the war? We are gambling with the rights of posterity.
Mr Archie Cameron:
– And the honorable member for Wimmera (Mr. Wilson) holds the stakes.
Sir CHARLES MARR:
– I regret that the honorable member for West Sydney (Mr. Beasley) is not in the chamber for. me to remind him of the time when he said that not a man should leave this country to fight overseas, and that the men already overseas would be brought back if Labour got into power.
Mr James:
– Can the honorable member prove that the honorable member for West Sydney said that?
Sir CHARLES MARR:
– Yes, but 1 prefer to forget such things. There are many things of which we could remind each other. I suppose that honorable members opposite could remind me of the things I have said in the past. I shall accept the blame for them without being reminded specifically of what I have said. Let us, however, forget the past. If I have done any wrong to the honorable member for West Sydney let it be forgotten.
Mr Rankin:
– It was not the honorable member for West Sydney, but the honorable member for Dalley (Mr. Rosevear) who said that no men should be. sent overseas.
Sir CHARLES MARR:
– What matters now is that we present a united front,
Mr Riordan:
– That is what the Communists say.
Sir CHARLES MARR:
– We, the chosen representatives of the people of Australia, should set an example by showing a united front.
Mr Lazzarini:
– There is no united front on the Government side of the chamber.
Sir CHARLES MARR:
– In the last war, the British House of Commons passed Mr. Asquith by in favour of Mr. Lloyd George, and in this war, it preferred Mr. Churchill to Mr. Neville
Chamberlain. Since Mr. Churchill has been the leader of the House of Commons, there has been co-operation by all parties in the House. I commend that attitude to members of this Parliament.
Mr James:
– The Government parties have shot out their brains.
Sir CHARLES MARR:
– If the honorable member for Hunter (Mr. James) and honorable members generally think that the Minister for Defence Coordination (Mr. Menzies), because of his great ability should be the nation’s leader, then let him be elected as leader by a vote of the Parliament.
Mr James:
– A minority section put it
Liver the majority.
Sir CHARLES MARR:
– I remind the honorable member that Mr. Menzies offered himself as a sacrifice; he offered to resign the Prime Ministership if the Leader of the Opposition (Mr. Curtin) could do a better job.
Mr James:
– All the time he was being shot, at by his own party.
Sir CHARLES MARR:
– He played a noble part. By his action in resigning lie said, in effect, “ If the Leader of the Opposition can lead this Parliament better than I am leading it, I am prepared to stand aside and let him do so “.
Mr Curtin:
– That was a perfectly genuine and proper offer, but government supporters insisted that when I would not take on the job, someone else should do so.
Sir CHARLES MARR:
– I agree that the Leader of the Opposition would make a good leader. If the honorable gentleman would stand up in his place and say to this National Parliament that Labour is prepared to join forces with other parties in the Parliament for the duration of the war, and that the Parliament should elect its own leader, then if he were elected leader, I believe that members on this side would willingly get behind him in order to present a united front to the world. The Government’s plan of taxation proposes to distribute the burden equitably over all sections of the community. I have even heard some honorable members opposite say that this is a “darned good budget “ and much better than what they expected. I know that I, in common with most Australians, looked forward with fear and trembling to the production of the budget.
Mr James:
-What about taking £11 from an income of £150?
Sir CHARLES MARR:
– I shall discuss that when the appropriate item is under consideration. That will be the proper time to suggest alterations of the Government’s proposals. The budget cannot be dissociated from our war effort. Even in glancing quickly at the Estimates, I noticed some items of civil expenditure which, in my opinion, should be eliminated for the duration of the war. The safety of everything that we hold dear in this country depends upon our war effort.
Some honorable members have spoken a bout the taxing of dividends from investments outside Australia, and the honorable member for West Sydney has said that huge incomes derived from investments in tin mines in the Malay States and other overseas enterprises are not subject to taxation; that is an erroneous statement. I was a member of the government which enacted legislation to provide for the taxing of income received by Australian citizens from other parts of the world. Until that government took action, income from investments outside Australia was exempt from taxation. But for some years past even people who have investments in Great Britain are taxed. If the rate of tax applicable to their dividends in Australia is higher than the British rate, they are obliged to pay to the Commonwealth the difference between the amount assessed in Great Britain and the amount assessed here. Therefore, it is wrong to say that Australians who have investments overseas do not bear their fair share of taxes. No doubt the honorable member for West Sydney made the misstatement inadvertently, but it is only hoodwinking the workers to tell them that the “ tall poppies “ are not taxed to the full because they have investments abroad. Only recently I examined the Canadian legislation, which is much more severe than our own. It provides that all income from investments representing more than 8 per cent, of the capital employed shall be taxed up to 85 per cent., the balance to be retained for amortization purposes if the money can be so applied.
I refer now to voluntary loans. The Leader of the Opposition said that Australia has reason to be proud of the amount which has been contributed to the war effort through the purchase of war savings certificates. I give to the working people all due credit for this effort. War savings certificates to the value of several millions of pounds have been bought. However, I am opposed to the voluntary system of contribution, even through the purchase of war savings certificates. I favour compulsory saving. Every body should bear a fair share of the nation’s financial responsibilities in time of war. I am amazed at the fact that millions of pounds have been deposited in savings bank accounts in the last two years. This money could be applied to our war effort by means of the purchase of war savings certificates. To a limited degree many of the depositors are making contributions through a special scheme. But why should those who do not contribute take credit for what the others ha vedone ? They are no better heroes than some honorable members of this House who take full credit for the wonderful deeds of our fighting men overseas. People say that one volunteer is worth half a dozen pressed men. I believe that that is true.
Mr Duncan-Hughes:
– The honorable gentleman could not say that of New Zealand.
Sir CHARLES MARR:
– I commend the Government of New Zealand, because one of its first actions after the outbreak of war was to re-enact legislation that was placed on the statute-book during the war of 1914-18 for the partial conscription of man-power. It did the only just thing that it could have done when it placed upon the men who have the least personal responsibilities the first obligation to serve either at home or abroad. We should do the same thing in Australia. Unlesswe introduce some form of conscription now, we shall be forced to do so when the enemy comes farther south. It is all very well for people to stand on soapboxes and say that we are not at war with the world and that we can defend our shores with a few hundred thousand men. We have seen other countries crushed by the Nazi steam-roller, although they had millions of men to fight in their defence. The defence of this country is based primarily on our Navy and our Air Force. If we lose control of the seas we might as well put up the shutters.
Mr Duncan-Hughes:
– And our cities are most exposed.
Sir CHARLES MARR:
– That is true. The Deputy Leader of the Opposition (Mr. Forde) said that a. lot of our war industries should be moved inland. I agree with him. Last week I read that Great Britain and the United States of America, ha ve introduced a policy of decentralization, which makes use of every small garage and workshop. By this means each of these establishments is enabled to make some article required for defence, with the result that the work is so distributed that the bombing of large centres cannot disrupt the munitions making organization. The decentralization of munitions manufacturing is essential. While I was passing through Melbourne a few days ago I saw the magnificent aircraft factory that has been established at Fisherman’s Bend. As I looked at the buildings I thought how useless that locality was a few years ago. The Lyons Government, took the first step towards encouraging the establishment of aircraft manufacturing there. I believe that the company was under contract to produce 40 ‘planes within two years. It has far exceeded the contract requirements, for well over a thousand machine? have been manufactured up to date. That is a highly creditable performance. I trust that the record of that factory, as well as of others elsewhere, will not be impaired by labour troubles. If the Arbitration Court is dealing with industrial grievances in too dilatory a manner, I trust that the workers will not interrupt production by ceasing work. Our policy should be to produce all we can as fast as we can. For Heaven’s sake let us not permit any impediments in our industrial arbitration machinery to hinder production. If undue delays are occurring in the adjustment of complaints, it should be the job of this Parliament to find a means to overcome them.
Fisherman’s Bend is the location of « great achievement, but if that area should be bombed our aircraft industry might be seriously damaged. I consider that it is bad policy for us to concentrate such activities in one area. Everything possible should be done to decentralize them. It would be a great thing for Australia if similar works could be established, even though on a smaller scale, in widely separated districts. Under such a policy the danger of bombing raids to the continuity of industrial operations would not be nearly so great.
I wish to emphasize the need for the adoption of a comprehensive housing policy. I have heard questions asked in this House from time to time relative to the building of homes for munitions workers, but why limit such a policy to one class of the community? We should set in motion a comprehensive scheme for the construction of homes for all workers. The safety and health of the people should be the first consideration of both Commonwealth and State Governments. The provision of comfortable homes for the workers will lead to tindevelopment of a happier and a more contented community.
Mr Frost:
– The honorable,.gentleman has been saying that for about ten year? : but he has not done much about it.
Sir CHARLES MARR:
– The worker? are much happier now in relation to their housing than they were when I first began to agitate for the adoption of a comprehensive housing policy. Something has been said in the course of this debate about the use of credit. In my opinion an issue of fiduciary notes for the purpose of financing a home-building programme would be well justified. The Government would be well advised to proceed systematically in this connexion rather than spasmodically. If a housing programme were financed by fiduciary notes the regular repayments of interest and principal would allow the. notes to be gradually withdrawn from circulation as the owners of the homemet their commitments.
Mr Ward:
– Why did not the honorable member do something about it while he was a Minister.
Sir CHARLES MARR:
-I tried very hard to promote such a scheme, for I believed then,’ as I believe now, that the happiness of the workers contributes towards efficiency in their activities. I hold that view in relation to workers in private, as well as in government, employment. If the workers receive decent wages in continuous employment and enjoy reasonable living conditions it is all to the good.
This budget is a child born in troublous times, but I trust that it will pass through its infancy safely and ultimately reach full development. The consensus of opinion, so far as I have been able to judge, is that the budget is extraordinarily good. I congratulate the Treasurer upon having introduced it. I regret that reference has been made in some speeches this afternoon to the fact that the honorable gentleman is the leader of the smallest party in the Parliament. That, in my view, is unfair criticism. I remind the honorable member for West Sydney that he once led a magnificent party of five members in this House. It should be our endeavour to make the best use of the abilities of every honorable member. The honorable member for West Sydney and others on his own side of the chamber, as well as some honorable gentlemen on t his side who are not in the Government, have abilities which could be used with great advantage in the service of the country, and my desire is that the maximum use shall be made of the capacity of every honorable member.
The CHAIRMAN:
– The honorable member’s time has expired.
Sitting suspended from 6.13 to 8 p.m.
Mr DEDMAN:
Corio
.- This budget is twice as reactionary as that introduced by the Treasurer (Mr. Fadden) last year. It is so full of inconsistencies and injustices that, in the words of Macbeth, I wish that I could “ plead like angels, trumpet-tongued. against the deep damnation “ of it. I feel that I am quite unable to express adequately my disapproval of all th at is in it. The Treasurer criticized the Leader of the Opposition (Mr. Curtin) for not having proposed anything constructive, and for having suggested the addition of £6,000,000 to the budget. Not only doI propose to expose the fundamental economic fallacies in the budget, but also, to a certain degree, to be constructive in my outlook. In view of the deterioration of the situation in Russia, he is a fool who does not see that there is a desperate urgency to mobilize our manpower and resources for the defence of this country. To some degree that mobilization could be effected by financial methods, but also it could be effected by other means - negatively by the rationing or prohibition of the use of resources and man-power for the production of nonessential requirements, and positively by She conscription of man-power and of wealth. The Government has conscripted the young manhood of this country for the defence of Australia, and I see no reason why the wealth of this nation also should not be conscripted. In spite of the fact that the Government has all the necessary power, there is nothing in this budget which would indicate any intention to conscript wealth. The degree to which man-power and resources of Australia are required for our war effort, is envisaged in a total war expenditure dur- i ng this financial year of £217,000,000. I should like the committee to set aside for a moment all thought of that £217,000,000 as a sum of money. I should like it to look at the matter in this way: That expenditure envisages the use of a certain volume of our resources, labour-power in the war effort. When I consider the proportion of total resources of labour-power and materials which will be left after what is necessary for the expenditure of this £217,000,000 taken out, I ask myself is it possible out of the remainder to maintain for the people on low incomes the standard of l iving which they now enjoy. I answer that, question with a resounding “yes”. There is no excuse for the Government to subtract in any way from the welfare o f the people in receipt of low incomes. I believe that the Government’s proposals, which are purely financial in character, will not succeed in effecting that diversion of man-power and resources which the Government hopes to bring about. I believe also that there are other methods which the Government could employ which would provide the necessary man-power and resources envisaged in an expenditure of £217,000,000 on our war effort, and still leave the standard of living of the low wage earners untouched. This question of diverting man-power depends, of course, on the war programme which we contemplate. I realize that resources cannot be diverted from peace-time requirements in a moment. It requires time. I realize also that there are technical difficulties and bottle-necks here and there. Therefore, of necessity, the diversion of man-power must be carried out in a progressive manner. I take it that this £217,000,000 represents the maximum degree to which the Government can utilize man-power and resources in the present financial year. I may mention, however, that, although Parliament, with the support of the Opposition, voted a certain sum of money last year for the conduct of war, of that sum £16,000,000 remained unexpended at the end of the last financial year. At the end of the current financial year the Government will find itself in a similar position. The Government proposes to bring about the diversion of manpower and resources by means of taxation, compulsory loans, and voluntary loans. First, I cannot understand how the Treasurer has arrived at the proportion to be raised by means of taxes, and the proportion to be raised by other means. He speaks vaguely of maintaining a balance between taxation and loans, but he spoke in the self-same way last year, and whereas taxation this year has increased by only 4J per cent, as compared with last year, loan commitments have increased by 50 per cent, Therefore, if there was a proper balance last year, obviously there is not a proper balance this year. Secondly, the Treasurer says that he has arrived at the amount of money to be raised by means of taxes with due regard to the fact that the imposition of taxes disturbs industry. That statement is entirely misleading. A tyro in economics knows that exactly the same disturbance to industry is caused by loans. Therefore, in making that statement the Treasurer is misleading the people. In my opinion, too much of the money to be raised i.s to come from loans. Let us consider for a moment what the position will be at the end of this financial year, even if the war lasts no longer than that, Thi.financial year we are adding £122,000,000 to our total loan indebtedness. Last, year we added £S5,000,000. If we include the compulsory loans with these, figures we got a total addition to our loan indebtedness, last year and this year, of £232,000,000. Interest on that sum at 3 per cent, means an annual commitment of £7,000,000. It can be seen, therefore, that up to the end of the current financial year, we are adding an annual commitment of over £7,000,000 or £140,000 a week in interest alone. What prospect is there of a new social order after this war if we are to be called upon to pay £140,000 a week to the bondholders who are merely lending the wherewithal to arm our soldiers in this war? Consider those figures in relation to the last war. During the last war the wealthy people of this country, who were prepared to provide only the wherewithal to arm our fighting men, advanced to the Government by way of loan, £300,000,000. To date, on that amount, we have paid £305,000,000 in interest alone. We have not repaid a single penny of the capital indebtedness, although we have been paying interest at the rate of £235,000 a week. Add. to that sum the £140,000 a week which will be included by the end. of this financial year, and we can sec what hope there is for a new social order when this wa’r is finished, even if it ends in that time. Considering all the deprivations of goods and services the people of this country have to suffer now, the war should be paid for now in accordance with the principle of equality of sacrifice. Apart from that aspect of the matter, in my opinion the Government’s proposals to obtain this money will not result in the release of man-power and resources which it expect”. To prove that, I should like to point out what will be the position of industry under conditions of declining demand, because that is what the Treasurer hope; for; that is the purpose of the proposed taxes. I wish to refer to a statement made by Alderman Crick who, I understand, was connected with the notorious organization, the Australian Democratic Front, According to a newspaper report, Alderman Crick said some days ago, “When the Government has taken the contributions which it wants from i:ne. I will have £1,700 left. Where will I find the money to pay for the servants which I have kept in the past?” Such abysmal ignorance and economic illiteracy could only come from an individual associated with honorable members opposite. That statement merely indicates appalling ignorance of what the effects of the proposed taxes and compulsory loans will be. I wish to quote from a book entitled The Structure of Competitive Industry, which was prescribed at the Melbourne University as a text book for the course on “ Industrial and Financial Organization”, which is part of the studies for the degree of commerce. Incidentally the dean of the faculty of commerce at the Melbourne University is now an economic adviser to the Government. As the passage which I wished to quote is much too lengthy, I have summarized it as follows: -
When demand for an article declines, every producer wants to continue producing. If bis works become idle, he still has to meet overhead costs such as interest and rent, but’ has not to pay (or labour and raw materials. The latter are known aB prime costs. Any price, therefore, which clears prime costs and enables some contribution, however small, to be made towards interest’ and rent - which he would have to pay in any ease - will bc an inducement to continue in production. A decline in demand will therefore be met by a decrease in price, up to the point where bare prime costs are covered; only then will the producer give up, and turn his hand to something else.
Let me illustrate this by a concrete example. Mr. X is a holiday guesthouse proprietor with £10,000 invested in his guest house, and employing ten servants. The Treasurer hopes that the community’s purchasing power will be so cut down by compulsory loans and taxation that its members will have less to spend on holidays, and consequently the guest-house proprietor will dismiss some of his servants, who will thus be made available for the war effort. What actually happens? In fact, the guesthouse proprietor reduces his tariffs and keeps his business open. He continues to employ all his ten servants until he can barely meet his prime costs; that is to say, the costs of the labour involved and the food that he has to serve. So long as he can pay a sum, however small, towards meeting the interest on the capital he has invested in the business, he will continue to run it. One takes it that in hia labour costs is included remuneration for his own services. My point is, that the first effect of taxation or compulsory loans is, not to release any man-power but to take from the Government money which otherwise would be subscribed; because one can well imagine that the profit derived by the individual from his business would be invested in a war loan. Instead of closing down and dismissing his servants, thus freeing them for the war effort, in effect his profits are cut down and this money is no longer available to the Government. That is the immediate effect. This example brings out two points. The first is, as I have said, that no man-power will be immediately made available, and that in fact the Government will suffer. The second point is, that industry will continue to function, even though profits are not being made. If the Government were to ask me bow I would frame this year’s budget, I would say that if it were to allow to companies a little more than was sufficient to cover their prime costs, and were to take the balance of those millions of pounds of profits which they made, industry would still continue to function.
Mr Spender:
– The question that I would ask the honorable member is, how would he make the man-power available?
Mr DEDMAN:
– I shall reach that point, if the Minister will give me time. It is perfectly’ true that that man-power will be made available at a later stage. What happens then? Take the industry in which G. J. Coles and Company Limited is interested. I am sorry that the honorable member for Henty (Mr. Coles) is not in the chamber. That industry covers a number of firms, with G. J. Coles and Company Limited, Woolworths Limited, and other large-scale concerns at the top, and getting smaller and smaller until the one-man units arc reached. All of them are engaged in the industry of distribution. Taxation and compulsory loans eventually force out the least efficient man in the business. When that happens, the man-power which he has employed becomes available; but the goodwill in his business, and the capital which he has invested - largely specialized capital, because it is invested’ in shop fittings, on which he cannot realize at that particular time - are lost to him for ever: At the point at which he is forced out of his business, he still has some trade left. That trade passes to the other firms which remain in the industry. So this process of squeezing out the marginal producer goes on, and all the time it does so it adds to the business of those who are left in the industry.
Let us turn to the third principle enunciated by the Treasurer when making his budget speech, namely, that in any sacrifice that has to be made there should be the principle of equality. Where does that principle apply in the operation of the system of taxation and compulsory loans, when all the time it is squeezing out the smaller people, destroying their capital and the goodwill of their businesses, and adding to the businesses of those who are left in the industry ? The profits of G. J. Coles and Company Limited for the last two or three years demonstrate exactly what has been happening. Three years ago, I believe, its profits were £233,000. In the following year, they were £244,000, and last year they were £260,000.
Mr Spender:
– On the same capital?
Mr DEDMAN:
– On the same capital ; and the dividend was 17-J per cent. I am not blaming G. J. Coles and Company Limited; it is part and parcel of the profit-making set-up of industry at the present time. Probably it occupies its present position because it is extremely efficiently managed. But if the Government were to take the whole of that company’s profits, the industry would still continue to function so long as it could make its prime costs. If the honorable member for Henty supports the amendment moved by my Leader, I shall think that he is one of the greatest-hearted gentlemen I have ever met.
I leave that aspect of the problem for the time being. The first principle which the Government has enunciated is. that all of our labour power should be fully used. When I consider the record of this Government in respect of the full use of the labour power of this country, I am driven to say that it is impossible for any one to conceive of its being able to implement such a policy. Look at its record from 1932 onwards. I have been studying a work produced by Mr. Colin Clark, head of the Queensland Bureau of Statistics, in which he gives particulars of the national income from 1932 onwards. In a table which one may find at page ‘76 of his work, he gives in one column the number of unemployed for every year from 1932 to 1938, and in another column, the income produced per person in work. Assuming that the unemployed were capable of producing goods at the same rate as those in work, if you multiply their number by the output per person in work you get an accurate estimate of the goods and services which this country has lost, due to the incompetence of honorable members who sit on the Government benches, and their failure to implement the policy of the full employment of labour power in which they now purport to believe. The full table is as follows: -
Table SHOWING Value of Goods and Services Lost to the Community by Reason of Unemployment Due to Wrong Financial Policy.
Mr Harrison:
– Has the honorable member in his possession figures showing the loss of goods due to strikes?
Mr DEDMAN:
– That is a mere drop in the ocean, compared with this, as the honorable gentleman will see in a minute or two. The table shows that, because of the failure of the Government to adopt a financial policy in conformity with the principle which it now accepts, the community was deprived of goods and services the value of which, between 1932 and 1938, aggregated the colossal sum of £S82,000,000. If the unemployed had been only half as efficient as those who were in work, we would still have lost goods and services to the value of over £400,000,000. Yet this Government says that it is prepared to implement a policy for the full employment of labour! Take an even later figure. Very shortly after I first entered this House, the honorable gentleman who is now sitting at the table on the Government side (Mr. Spender) introduced a supplementary budget, in which he made the statement that we were nearing the full employment of our resources of labour-power. I have obtained the relevant figures from the Commonwealth Statistician; they are these: In May, 1940, 2,157,000 persons were employed in this country. To-day the number is 2,300,000. Allowing for 43,000 young people actually coming into industry in the intervening period, there is a difference between the two figures of 100,000 persons, at the time when, according to the Minister, we were nearing the full employment of our labour resources ; in other words, there were actually 100,000 unemployed.
Mr Spender:
– - A large number of those were unemployable.
Mr DEDMAN:
– If they were unemployable then, bow can they be employed to-day?
Mr Spender:
– A large number of those who were unemployed at the outbreak of war are still unemployable, and a large number have enlisted in the meantime. The honorable member has not made allowances for that.
Mr DEDMAN:
– The Minister has missed my point. After making allowance for young people coming into industry, the number of persons working to-day is 100,000 greater than the number in May, 1940, when he made the statement that we were nearing the full employment of our labour resources. The principle upon which the full employment of labour resources can be achieved is, that wherever there are unemployed men or resources, the central bank, in this case the Commonwealth Bank, should make money freely available up to the point at which such persons are fully employed. Through the instrumentality of the Commonwealth Bank, a credit base has been established, on which the private trading banks have created new credit to the amount of many millions of pounds. The Government has borrowed that money from the banks at a high rate of interest, and has used it in order to put people to work. The statistics of the trading banks show clearly what has happened. The Monthly Review of Business Statistics, No. 47, issued by the Ac-ting Commonwealth Statistician, for August, 1941, shows that government and municipal securities and treasury-bills held by the trading banks in 1939 amounted to £47,000,000, whereas to-day they amount to £102,000,000. Therefore, the value of government securities held by the trading banks has increased by £55,000,000, in the last two years. In addition, the Commonwealth Bank’s indebtedness to the trading banks has increased by £11,000,000, and the government securities held by the Commonwealth Bank itself have- decreased by £7,000,000. That shows that the financial policy of the present Government has been to put the community and the Commonwealth Bank into pawn with the private trading banks. There are those in the community who still deny that the trading banks create credit, but the Bank of New South Wales has made the following admission in one of its monthly circulars : -
Not being able to borrow existing money, the banks came to the Government’s aid by creating new money.
Later in the same circular, the following sentence occurs -
Every, month new money must be created to keep governments going.
There we have it straight from the horse’s mouth ! The Bank of New South Wales admits that the trading banks can create money and have done so.
I am encouraged, by reason of events in Great Britain, to persevere in my advocacy of the financial policy of the Labour party, which considers that in order to obtain a maximum war effort it is necessary to nationalize the banking system. On the 4th March last, the President of the Board of Trade, Mr.
Lyttleton, introduced into the House of Commons regulations dealing with what he termed the concentration of industry. The problem which he was considering, was that mentioned by me earlier in my speech, namely,- the effect on industry of declining demand. The honorable gentleman said that it was necessary, in order to obtain a maximum war effort, that each branch of industry should be organized so that the best use could be made of labour power iu it. Following the introduction of the regulations into the House of Commons, Dr. Paul Einzig, one of the world’s foremost authorities on banking and editor of the Financial News, wrote in that journal that the principles enunciated by the Board of Trade should first be applied to the banking system itself. I have not been able to obtain a copy of the Financial News in which that statement appeared, but I shall quote the following extract from an article on the matter published in the Statesman, and Nation -
I am glad to see that Or. Paul Einzig, in the money columns of Hie Financial News. takes up my plea for “a concentration of production “. He applies the Board of Trade principles to the banking world. He suggests first, the amalgamation during the war of the city banks engaged in foreign business; secondly, a rationalization of the big ‘joint stock banks involving a “drastic reduction in the number of their superfluous branches”. The result would be not only a great saving in overhead charges (which are much higher than they should be), but :t big release of man-power for the fighting services. Competition between the “big five” banks is a fantastic anomally kept alive only by the feeling; among bank directors that they must “ introduce “ accounts to justify their own excessive emoluments as directors. According to Dr, Einzig the increase in bank overhead charges is largely responsible for the Treasury’s reluctance to press for a reduction of the bank rate and other loan rates.
Having made a study of the manpower employed in connexion with banking, I am satisfied that if the banks were nationalized, 6,000 employees could be released for the war effort. The President of the Board of Trade in Great Britain suggested that a concentration of industry could be brought about by an amalgamation of firms engaged in particular industries, and he enunciated that the principle of compensation, not confiscation, should be applied in bringing about this result. I suggest that the same principle should be used in regard to the banks in Australia. In the quotation that I have made, there was a reference to interest rates, I point out that although, in Australia, these rates have been reduced by 25 per cent, since the outbreak of the war, the reduction has been made in a very clumsy manner, which has been of great benefit to certain individuals. The redaction has been brought about by the purchase of securities on the open market. That has forced up the price of those securities and has consequently reduced the effective rate of interest. As I explained in a speech made in this chamber some time ago, if the value of a £100 bond bearing interest at the rate of 4 per cent, is forced up to £107, the effective rate of interest falls below 4 per cent, The value on the market to-day of certain issues of Commonwealth bonds of a total face value at the outbreak of the war of £379,000,000 is £29,000,000 greater than it was at that time. That is the appreciation in the capital value of those bonds due to the action of the Government in reducing interest rates. A similar appreciation has occurred in the share capital of many firms engaged in industry. In other words, the wealthy sections of the community which own bonds and shares have a far greater claim on the future production of this country than they had at the outbreak of the war. Mortgage interest rates have not fallen to anything like the same degree as have general interest rates. The August issue of the Monthly Review of Business Statistics gives the following as the rates of interest on first mortgages; -
In the last few months, the rate has been down to 5.5 per cent. It has been reduced by one-tenth of 1 per cent., whereas the general interest rate has fallen by 25 per cent.
The only feature that I can find to commend in the budget proposals of the Government is that it intends to set up a mortgage bank, but far more important than that is the policy of the Government with regard to interest rates. If the interest rate on mortgages had been reduced to the_same extent as the general interest rate, the wheat-growers would have been able to effect an annual saving of .2,800,000. That calculation is based on the indebtedness of the wheat-farmer3, amounting to £200,000,000, at current mortgage interest rates. Unfortunately, I have been unable to 3ay, in the time available to me, all that I should like to have said in condemnation of this budget. The principal point that I have tried to make is that the Government will not be able to release the man-power and resources which it expects to make available by the financial proposals that it has announced. If the production of this country were organized on an efficient basis by a process similar to that in operation in Great Britain, the Government could release the man-power required for our tremendous war effort that is envisaged in the proposed expenditure of £217,000,000 without interfering in any way with the standard of living of the people on the lower incomes. I suggest to the Government that that is the method by which the war effort should be organized. Instead of asking for sacrifice by people on the lower incomes, a sacrifice should be imposed ruthlessly on vested interests. Until such a sacrifice is made, no government will be able to obtain the maximum war effort, which all of us regard as essential.
Mr PATERSON:
Gippsland
– I have listened as I always do with the greatest interest - and, I may say, even respect - to the opinions expressed by the honorable member for Corio (Mr. Dedman), but I do not agree in any way with the conclusions he reached as the result of his analysis of this budget - far from it. Thi3 1941-42 budget is remarkable both for its colossal war expenditure figures, and for the originality of method employed to meet the liabilities in view. Unlike the honorable member for Corio, however, I congratulate the Treasurer (Mr. Fadden) upon the great effort he has made, and I see no justification - quite the reverse - for the hostile amendment moved by the Leader of the Opposition (Mr. Curtin). I believe that if wo are to meet the tremendous demands of this war, and win it, no section of the community can escape some measure of hardship. When, two years ago, the Commonwealth budget first passed the £100,000,000 mark, we thought we were dealing in big figures, but this year we are proposing to expend more than double that amount for war purposes alone, and more than three times that amount in all. In order to provide the £322,000,000 which this budget seeks to obtain, it will be necessary to raise £46 per head of population. No less than £31 per head of population is to be diverted for war purposes, or approximately one-quarter of our national income. This simply cannot be accomplished unless the burden is shouldered by the whole community, and every one makes sonic appropriate sacrifice . A welcome feature of this mammoth budget is the fact that the Treasurer has refrained from giving an additional turn to the screw of indirect taxation, such as sales tax. That is all to the good from, the point of view of keeping down the cost of living, especially to the poorer people. The Leader of the Opposition would have been quick to blame the Treasurer had any increase of sales tax been imposed. 1 have heard him do so before, but we heard no word of praise from him on this occasion because the Treasurer refrained from imposing an increase. The Treasurer had to face a very big problem, and one difficult of solution in his task of extracting for the war effort the maximum amount which evm-y citizen can Ikreasonably expected to provide - that is. the unequal burden at present carried by citizens in the six different States due to the wide variation in the severity of State taxation. The Treasurer’s first attempt to get over this hurdle in collaboration with the States was unsuccessful. Perhaps, as a Victorian, I may be pardoned for saying that I am not altogether surprised at its failure, but the method adopted in this budget to solve the problems will be generally acclaimed throughout Australia as a wise compromise. .Every Australian, irrespective of the State in which he resides, will make, in the first place, the same national contribution in relation to his income After the Commonwealth and the State Governments have taken their taxes from this contribution, any surplus remaining will he regarded as a war loan to be paid buck after the war with savings bank interest added. The Commonwealth tax burden will, for the first time, be the same in adi States. It has varied in the past because of the exemption of the mount paid in State taxation. Where State taxation was heaviest, Commonwealth taxation was lightest. Now it will depend on the severity of the State taxation how much will be left of the taxpayers national contribution to be used as a Commonwealth war loan. In the State which taxes most lightly a larger proportion of the national contribution will be used for war purposes, and a citizen of the more lightly taxed State will contribute more to thu war effort than his less fortunately situated brother in another State, but he will at least- have the satisfaction of knowing that he will still benefit from the prudent management of his State’s finances by finding himself a larger holder of Commonwealth war loans after the war. Such enforced savings may be very useful to citizens during the transition period from war-time to peacetime activities, i do not think that any better method could have been devised to overcome the hitherto insoluble difficulty of widely varying State taxation.
Mr Conelan:
– What rot!
Mr PATERSON:
– It is true. The Leader of the Opposition tried as unsuccessfully as did the honorable member who just interjected to throw cold water on the scheme, but he was unable to bring forward any effective argument against it. He said that he did not like compulsory loans. Does anybody like them? Does anybody like taxation? Do we like war? I do not think that any of us do, but we simply must go through with it to-day. The Leader of the Opposition particularly disliked the levying of taxes or compulsory loans, however small, upon the smaller incomes. So do we all, but can we escape it? I say definitely that we cannot. Can we get all we need to-day from the middle and higher incomes? Again, I repeat, we cannot. Let us examine the position : Largely, no doubt, because of war expenditure, Australia’s gross national income this year is expected to be not far short of £1,000,000,000. I say gross income, because it includes various items not available for spending in the ordinary way, such, for example, as the annual value of homes occupied as dwellings. That represents a part of income because it makes payment of rent unnecessary, but avc do not get the actual cash to spend. There are other items such as dividends paid overseas, but I do not want to go into the matter in too great detail. The net national income, that is, the amount which will be available to enjoy and spend as personal income by the people of Australia this year, is estimated to reach about £875,000,000. How much of that huge sum is in the hands of the well-to-do? How much of it belongs to those of small or, at least, modest means? The Leader of the Opposition hesitated to say just where comfortable circumstances began, and I should have the same hesitation. He could not say whether he would put the figure at £400 or £500 or £600 a year. The Treasurer took the lowest figure, £400, and gave us some information in respect of that. I propose to take that figure also, but I shall avoid, as far as possible, going over the arguments so ably advanced by the Treasurer. I shall base my argument upon last year’s figures, because this year’s figures are only estimates. Last year, Australia’s total net income amounted to £800,000,000, and statistics reveal tha* 290,000 Australians received incomes of £400 a year or more. The total income received by this relatively small, fortunate section of the community was £240,000,000. Therefore, if the Treasurer appropriated every penny of the income of those who received £400 a year or more, leaving them with no income whatever, he. would still not have nearly enough to meet the requirements of this budget, and this takes no account of State budgets. Let us now consider an alternative. Suppose the Government said, “ We will take, not every penny of all incomes of £400, but every penny over and above £400 “. Well, the total amount above £400 a year enjoyed by the more fortunate Australians is £124,000,000, only a little more than one-third of the Commonwealth’s requirements for this budget. The cold fact is that, of the estimated net Australian inco-ne of £S75,000,000, more than two-thirds will be in the pockets of people in receipt of incomes of less than MOO a year - and that is a good thing, too. The unpleasant but inescapable duty of the Government at a time like this is to take from that field of lower incomes as much as can fairly be given up. The maximum war effort can, I believe, be attained only with the help of the savings of every section of the community. I know that there are those who will say that there is no need for sacrifice either in the way of tax or of loans, and that every penny required for the war effort can be obtained free of cost from the Commonwealth Bank. I receive reams of literature to that effect, and I am sure that ‘ other honorable- members do also. Suppose the Commonwealth Bank were to hand the Treasurer untold millions to-morrow, would that of itself add one gun or one aeroplane to our war equipment? The Leader of the Opposition, perhaps unwittingly, himself answered those arguments yesterday when he said that the war effort was really limited by our physical capacity rather than by finance. That is perfectly true. Employment to-day is so general that the only means by which we can substantially improve our war effort is to divert human energy from .non-essential production to war production, to transfer labour and capital from the one activity to the other. The only effective way I know of achieving this end - and in this T differ from the honorable member for Corio - is to divert the public’s surplus purchasing power from normal channels to war channels. That can be best done by taking that surplus in the form of taxes or loans for- war purposes. By reducing the demand for luxury or nonessential goods and services some of the labour engaged upon producing them is set free for war industries. As the number engaged in our fighting forces and on the production of munitions increases, the need for this, transfer of personnel will become greater and greater. This can never be accomplished merely by national credit expansion. There must be as great a diversion as possible from peace-time to war-time production. Tn my opinion, that cannot be disputed, and the only question which emerges, and upon which there appears to be a difference of opinion between the Opposition and the Government, is the point at which, or the size of the income at which, surplus spending power begins. So far as I can see, no fixed Plimsoll-line will fit all cases; but whatever view we may adopt, it must be generally conceded that during a war waged for our very existence as a free people, when unprecedented sacrifices are inescapable, we shall be compelled by sheer necessity to fix the exemption line at a much lower level than wc contemplated in peace-time. The budget, proposes that, in respect of a single person without dependants, no tax will be levied on the .first £100 of income, although the Labour Government in New Zealand takes the first £10 as tax.
Mr Curtin:
– That is for social security.
Mr PATERSON:
– Five per cent, of the money is for social security, and 6 per cent, is for national security. The Commonwealth Treasurer proposes to take 1.9 per cent, of the huge sum of money which is in the hands of people who receive less than £400 a year, whilst New Zealand takes 5 per cent, for national security or for war purposes, and 5 per cent, for social security. I am indebted to the Leader of the Opposition for his interjection. A single person, without dependants, in receipt of £150 a year, has to meet a national contribution of £11 2s., of which £7 is already taken in the highest taxing State. Therefore, the added burden is only £4 2s., and that is a loan. Is that such a terrible thing to do in war-time to a single person without dependants? From a person earning that income the New Zealand Government takes £15, all of which is tax. When the money is paid, the taxpayer, speaking metaphorically, kisses it goodbye. He never sees it again. In Australia, a substantial part of the original levy of £11 2s. will be returned to the individual after the war.
Mr Ward:
– That is only a trick. The money will never be repaid.
Mr PATERSON:
– To the honorable member for East Sydney (Mr. Ward), everything is a trick. He could not put his trust in any one. I would rather be betrayed than be incapable of perfect trust.
I shall compare the position of a person without dependants, in receipt of an income of £150 in Australia, with that of a person in the United Kingdom and in New Zealand. In Australia the total national contribution paid by a person in receipt of that income, which embraces State taxation, is £11 2s., part of which is a loan. In Great Britain, the tax on earned income is £17 18s. and on unearned income £22 14s., and after the war the taxpayer will be returned only a relatively small part of it. In New Zealand, the tax is £15, of which none will bc returned after the war. Australia thus treats a person without dependants, in receipt of £150, much more generously than does the United Kingdom and the Labour Government of New Zealand.
A taxpayer without dependants in Australia who earns £300 a year will have to meet a national contribution of £44 8s., of which in the lowest taxing State £25 will be returned to him ultimately as war loan. In England the tax is £66, which is 50 per centhigher than the tax in Australia, and a much smaller proportion of it is represented by post-war credit. In New Zealand, the tax on earned income is £44 and on unearned income £49, but none of the money will be returned after the war. For a person with a dependant wife and two children in receipt of £300 a year, the national contribution, in Australia is £11 2s. and in the highest taxing State it merely adds to the person’s tax £3 8s., all of which is loan. In view of those comparisons, it is obvious that the Government is treating the small income earner with a great deal more consideration than is shown to him either in the PiStol dominion of New Zealand, or in Great Britain.
The Leader of the Opposition declared that the system of compulsory savings
may reduce the present demand for war savings certificates. That is true. It may do so, to some extent. But whereas at present this form of saving is confined to only a proportion of those who are able to save, the compulsory system will bring in many who never save a penny. This compulsory saving will be a godsend to many persons, especially to young people who are receiving good wages but who spend their money freely without thought of the morrow. After the war, tens of thousands of people will rise up and thank the Treasurer for making them subscribers to Commonwealth loans. These loans will be refunded to people who marry, and machinery will be established to deal with hardship cases. Could we reasonably ask for anything more than that?
The Leader of the Opposition tried to belittle the agreement between the Commonwealth and the private banks. I venture to say that if the honorable gentleman himself had secured such an agreement, he would have been proud of it, and it would have figured most prominently in the literature of the Australian Labour party as one of the greatest achievements of Labour in connexion with banking. But because the agreement cannot be faulted, it is vaguely disparaged. I hold no brief for the private banks. 1 am a great admirer of the Commonwealth Bank. But we have listened to many loose, wild statements about the private banks. The attacks on those institutions may be more impressive than the facts; but facts go much further than abuse. Security price indexes, published in the August issue of the Monthly- Review of Business Statistics by the Acting Commonwealth Statistician, disclose that of all groups of shares, the private banks alone show a tremendous fall since 1928-29-
- am no apologist for the private banks, but those are facts. Whatever are the means by which the profits of the banks have been curbed, they are evidently pretty satisfactory in view of the facta which are revealed by the Acting Commonwealth Statistician.
In my opinion, the accumulation of deferred pay will be of the greatest possible benefit to the soldier on his return, or to his dependants in the event of his non-return. The Leader of the Opposition was hardly fair when he compared soldiers’ pay with the basic wage, because he omitted to take into consideration the fact that a wife who is maintaining a home and one or two children saves a little in household expenditure because the soldier is fed and clothed by the Government. Whilst no figure can be placed upon the value of a soldier’s services to-day, we should be fair in making economic comparisons. For the wife and three children of a soldier, the total amount provided either in immediate pay to him, deferred pay, and allowances to his dependants, with the addition of 10s. 6d. representing the value of his food, is £6 16s. a week. That compares favorably with the basic wage.
To-day, invalid and old-age pensioners receive 21s. 6d. a week, but the Leader of the Opposition contended that if the Labour party were in office, pensions would be immediately increased to 22s. 6d. I remind the honorable gentleman that it is highly probable that pensions will automatically reach 22s. in the very near future because it requires a rise of only three or four points in the cost of living figures to effect that increase. In the circumstances, there appears to be very little in the suggestion of the Leader of the Opposition.
This afternoon, the honorable member for West Sydney (Mr. Beasley) referred to the gigantic conversion in 1931 of internal loans bearing interest of 5 per cent.,51/2 per cent, and even 6 per cent., to 4 per cent. At the time, the then Prime Minister (Mr. Scullin) gave an undertaking in the prospectus that the tax on such converted stock would not later be increased beyond the rates which then prevailed. Looking back on what Parliament did on that occasion, I regret that we did not have the foresight to include a proviso that the undertaking would expire if or when war broke out again. Such a provision could have been inserted withoutdamaging the prospectus, but the honorable member for West Sydney, like myself, did not think of it at the time. Whether it was a wise undertaking or not, it was determined by the Labour Government that the tax on those bonds which were voluntarily converted to 4 per cent, would not be increased beyond the then level.
Mr.Roseve ar. - In doing that, did we not depart from the terms of the previous prospectus ?
Mr PATERSON:
– I cannot say. When the honorable member for West Sydney was speaking, I could not help wondering whether the right honorable member for Yarra (Mr. Scullin) shares his view that the undertaking which he gave ten years ago should be repudiated now. It seems to me that the Government is goingas far as possible short of repudiating the undertaking given by the right honorable member for Yarra by taking the difference between the 1931 tax and the present tax as a compulsory loan. The honorable member for West Sydney also referred to Commonwealth loans being immune from State taxation. He seemed to look upon it with some degree of regret, although he did not make himself clear on the point. I have, also heard the honorable member for Werriwa (Mr. Lazzarini) deal with this point. It seems to me that both honorable gentlemen will appreciate that there are two excellent reasons why such loans are immune from State taxation. The first - and I regard it as the more important of the two - is that if the States were allowed to tax Commonwealth loans, the Commonwealth and not the taxpayer would have to pay the State tax. As honorable gentlemen opposite have stated that they disapprove of compulsory loans, presumably they have in their minds voluntary loans for the future, but so long as loans are voluntary the man who is proposing to be a subscriber to a Commonwealth loan, when deciding whether to put his money into a loan at a certain rate of interest, will take into consideration the tax to be imposed, and will agree to invest his money at a rauch lower rate of interest if assured that no State tax will be imposed. If a State tax were imposed it would simply mean that the bondholder would expect a higher rate of interest before he would be prepared to invest his money, and that the Commonwealth, in effect, would pay the State tax. Do honorable members think it desirable that the States should impose taxes which the Commonwealth would be compelled to pay? The second reason why Commonwealth loans should remain free of State taxes is because it is highly desirable that Commonwealth loans should be of equal value as an investment in all States. That would not be the case if widely varying State taxes could be imposed upon them. They might be of less value in Queensland, for instance, than in Victoria. It is highly desirable that they should be free of State taxes. The important point, however, is that if State taxes were imposed on Commonwealth loans, the Commonwealth, in effect, would pay every penny of it.
In conclusion, T consider that this is a wise budget for our present circumstances, and is as fair as is humanly possible. Nothing could be perfect in that respect. The honorable member for Corio said that he believed in conscription of wealth. All honorable members on this side of the chamber do in war-time. If a maximum income tax rate of 17s. 6d. in the £1 does not constitute conscription of wealth, I do not know what does. This Government takes 17s. 6d. in the £1 from the big man, but very little from the small man, very much less than does the Labour Government in New Zealand, or the allparty Government in Great Britain. The revenue from taxation and loans in this budget is to be used for the express purpose of the diversion of labour and energy from non-essential industries to war production. That is most needed in Australia to-day, and I believe that the methods proposed are the best means to achieve that end.
Mr ROSEVEAR:
Dalley
.- I support the amendment moved by the Leader of the Opposition (Mr.
Curtin), “That the first item be reduced by £1 “ on the principle that, while agreeing that the expenditure requisite for a maximum prosecution of the war should be provided by Parliament, the committee is opposed to the unjust methods prescribed by the budget, declares that they are contrary to true equality of sacrifice, and directs that the plan of the budget should be recast to ensure a more equitable distribution of the national burden. The first matter the committee should consider is the question surrounding the amount requested by the Government in this budget. The Government has budgeted for a total of £319,000,000, of which £217,000,000 is for war expenditure and £102,000,000 for. non-war expenditure. Very little reference has so far been made to the question as to whether that amount of money is really needed. As an answer to the amendment proposed by the Leader of the Opposition, the Treasurer (Mr. Fadden) attempted to make great capital out of the fact that whilst the Opposition proposes to restrict certain avenues of taxation and to that degree limit the revenues of the Government, it also proposes to increase expenditure. The honorable gentleman said : “ How can that bt- done within the terms of this budget? “ We challenge the obnoxious taxes and the forced loans and we ask for their removal. Contrary to the attitude of the Government, we are prepared to make cash concessions by way of increased pay to soldiers and by an increase of invalid and old-age pension rates. The committee should first, satisfy itself that the budget figures truly represent the requirements of the Government. If we can destroy faith in those figures, it may easily be argued that we can at the same time reduce these obnoxious burdens of taxation and bestow the benefits that we have planned. A perusal of the budget speech and the Estimates does not enable us to analyse thoroughly the figures that have been presented in the budget. In the speech delivered by the Treasurer to-day, - I noted his great anxiety toshelve responsibility for those figures. One would have thought that, after the months which the honorable gentleman has had to prepare his budget, he would have been able to vouch for the figures cited by him; but in his speech to-day, he placed responsibility for them on the heads of the departments, the service chiefs and on representatives of other parts of the British Empire. The Opposition frankly admits that it is not in a position to check these figures, nor is it in a position to know whether the Govern ment is committed to any further expenditure that would warrant the increase provided in this budget over and above what was provided in the budget last year. With all the data at its disposal, the Government itself does not know. If it does know, why was it necessary for the Treasurer to state that lie proposes to review the budget situaliOn within the next three months That decision may have been prompted for two reasons: One, wishful anticipation as to the benefits the Government might receive from the United States of America under the lease-lend legislation, and the other the fact that past experience has demonstrated to the Treasurer the utter unreliability of budget figures. The scant mention made in the budget of the lease-lend proposals of the Government of the United States of America does not, by any means, tally with the elaborate preparations made by i.he Government to receive whatever benefits it might receive under that legislation. It might well be that the uncertainty in the Treasurer’s mind is due cither to the unreliability of the figures in the last two budgets or to the fact that he has budgeted below his needs and is waiting a favorable report from the Minister for Commerce (Sir Earle Page), who, we notice, is diverting from his route to Great Britain in order to visit i he United States of America. Let us examine the unreliability of past budget figures. We find that ‘£28,000,000 was unexpended- at the beginning of the last financial year and that at the end of the last financial year there was an unexpended balance of £16,000,000. This linteresting because £186,000,000 was set aside for war purposes, of which £143,000,000 was to be expended in Australia and £43,000,000 overseas. The remarkable fact is that although the full quota for war purposes was expended overseas, no less than £16,000,000 remained unexpended in Australia, although this Government. ‘ had complete control of the war programme in this country. In the last two budgets, the revenue was £45,000,000 in excess of expenditure. That fact leaves a very grave doubt as to the basis of the present computation of the Government, and it leaves considerable scope for the amendment moved by the Leader of the Opposition. As I have said, the Opposition is notaware of any new commitments and the Government has not informed the committee of any new expenditure that would warrant the great increases postulated in the budget. In any case, the whole of the budget would be due for serious review on the part of a Labour government. I suggest that there should have been a clearer explanation by the Treasurer of the need for this additional money. We have passed through the worst stages of preparation for war production, the construction of factories, and the planning and financing of the necessary plant. We have had to make costly experimentsby trial and error, but most of the difficulties have been overcome. Now we have reached the stage when uneconomic, practices, such as the cost-plus system,, should be eliminated from our war effort. In the absence of specific reasons for the increase by £47,000,000 of war expenditure. I suggest’ that there is a possibility that the position has been seriously overstated, particularly as we have had evidence of errors totalling £45,000,000 in the Estimates of the past two years. It is simply a mathematical calculation that since the budget estimate is greater there may easily be an even greater margin of error. The Treasurer claims that if Labour would remove the means ofraising £15,000,000 and would increase expenditure by £7,000,000. it ought to submit a plan to the Parliament showing how the position would be mct. Labour will not permit any theoretical hurdles to be erected by its political opponents, nor does it propose to erect those hurdles itself. The country’s war effort would be due for a drastic overhaul ifLabour assumed office. The Labour party does not accept the view, which apparently is held by honorable members opposite, that the country’s war effort can be measured by the size of the budget.. We claim that there is ample room for economies in connexion with the profligate waste that has taken place during the last eighteen months. Big business is “ in the saddle” in the munitions industries, and bas dug deeply into the revenues of this country. Some drastic steps must be taken to prevent this daylight robbery. There must be a recasting of the budget and a survey of Australia’s commitments, as well as a drastic alteration of the burdens that have been imposed on the people. If the Treasurer has any doubt as to Labour’s capacity to carry out such a plan, I suggest that it can easily be tested by giving the Labour party the .opportunity to govern the country.
Labour is particularly concerned with three major problems - first, the successful prosecution of the war ; secondly, the prevention of an economic collapse in this country; and,’ thirdly, post-war problems. Labour does not need to be told by its opponents what is at stake in this war, for it knows that wherever Fascism has been able to take control, the first attack has been against organized labour, both political and industrial. “We on this side realize what the losing of the war would mean to the workers of this country, and for that reason we do not need to be told by the Government of the absolute necessity to win the war. We know what has happened in other countries. But I suggest that if we are fighting for democracy we must have nothing to do with the Gestapo methods that have been tolerated by the Government. Recent disclosures in connexion with secret funds and the method of distributing government moneys through dubious channels have done much to destroy the confidence of the Australian public in this Government. Moreover, the treatment that has been meted out to working-class organizations has been the cause of industrial unrest. It ill becomes the Treasurer to preach to the unions on the subject of the necessity to rid the country of industrial unrest. I suggest that many of the causes of unrest would be removed if the Government were to pay more attention to the people who are exploiting the war effort for their personal gain both in an industrial and financial sense. The Government might deal more firmly with those people in the community who are profiteering in connexion with, the necessaries of life. As the Treasurer cairns that his Government is in complete control of profiteering, I suggestthat he should undertake a day’s shop:*ng, in which event he would discover how ineffective the methods of his Government have been in protecting tb, people against profiteering. A Labour government would be able to preserve that co-operation between the Government and the workers of this country which is indispensable for a major wai effort. We are pledged to give even assistance to the Empire and our allies but our first responsibility is to ensure the safety of our own people.
The Leader of the Opposition has told us that the Labour party is prepared to pledge itself immediately to increase the invalid and old-age pension by ls. a week. That statement has been construed by government supporters to mean that that ; all that the Labour party is prepared to do. We on this side are not unmindful of the fact that at the last elections Labour pledged itself to raise such pensions to £1 5s. a week. I believe that by effecting economies in certain directions we could give to the pensioners a greater amount without making further exactions on the people. Much has been said by honorable members opposite as to what governments of the political persuasion of the present Government have done for the pensioners. I remind them that the lowest ebb that has been touched in recent ears by the pensioners was the responsibility of a government composed of the present Government parties. When pensions were reduced to the lowlevel of 15s. a week, there was no economic justification for the reduction. Legislation was introduced by the parties forming the present Government to seize the property of pensionersafter their death, in order to reimburse the Government for amount? paid to pensioners during their lifetime. Whatever concessions have been given to the pensioners have been given only as the result of public opinion. Only as the result of a compromise with the Opposition in the early days of this Parliament was a sliding scale fixed on the basis of the cost of living and inserted in the Invalid and Old-age Pensions Act.
The Treasurer made much of the fact that a non-Labour government had introduced a scheme of child endowment, but I suggest to the honorable gentleman, and members of his party, that if the Government had had a clear majority in this House, legislation providing for child endowment would not yet be on the statute-book. The pressure exerted by the Opposition forced the Government to introduce a scheme of child endowment. I remind honorable members opposite : hat nearly twenty years ago a Labour government in New South Wales gave to i he people of that State the benefit of a child endowment scheme. With one hand this Government has given to the people if this country a system which provides for a payment of 5s. a week in respect nf every child except the first, but now it proposes to remove the income tax exemption allowed in respect of those children on whose behalf child endowment is paid. All of those things have an irritating effect on the community. If we are to obtain the maximum war effort oil the home front, the Government must show greater sympathy with the aspirations of the people.
The Treasurer, in referring to the fact that the Labour party favours fin immediate increase of the payments to members of the fighting forces, said that we cannot measure in terms of money the -m-vice rendered by the fighting forces. The same thing was said to-night by the honorable member for Gippsland (Mr. Paterson), and I have no doubt that (.very other government supporter who speaks will use exactly the same phrase. If that be the true position, why does the Government place so low a value on the services of the fighting forces that it pays to them less than the basic wage? I suggest that the Government should get some new catch-cry in that connexion. I repeat the statement of the Leader of the Opposition that every concession that has been granted to the fighting forces and their dependants has been due to the influence of the Labour party in this Parliament. The proposal of the Government to increase the deferred pay of soldiers is an insult to our fighting forces. Faced with rising costs of living, the soldiers and their dependants need money now, and should not have to wait until after the war. Government supporters who may object to an immediate increase of the pay of soldiers involving the expenditure of an additional £6,000,000 a year, should compare that amount with the “ rake-off “ which the private banks, financial institutions and munition makers will obtain during the next twelve months. They should compare the sacrifices made by the members of the fighting forces with those of the people who are exploiting the country in order to make greater profits for themselves. The Prime Minister described the proposed increase of the deferred pay of soldiers as a gesture by a grateful Government to the members of the country’s fighting services. It is easy to make that gesture so long as those who make it know that some future government will have to foot the bill. The subject of compulsory loans and that of deferred pay for members of the fighting forces will constitute real problems in the future. The honorable member for Gippsland (Mr. Paterson) said that the deferred pay of soldiers will prove a godsend to them after the war, but can he guarantee that the money will be paid to the men? Both he and the Treasurer predicted difficulties after the war. and hinted at a depression more serious than any which this country has yet experienced. Neither honorable gentleman undertook that this money would be paid to the soldiers in a period of depression. I fancy that they realize something of the difficulties that may have to be faced.
The next point to which I wish to refer is the prevention of the economic collapse of this country. I suggest that that is perhaps a more deadly peril than enemy action. The Government has committed itself to orthodox methods of war finance; it is determined to tax and borrow till it “ busts “. We are told that it is prepared to make a judicious use of bank credit. According to press reports there was a fight inside the Cabinet between the supporters of the Treasurer and of the Minister for Defence Co-ordination (Mr. Menzies) on the Subject of the further expansion of bank credit. If there was such a fight, it was only make-believe, because in. the past both of those gentlemen burnt their bridges behind them on that subject. They have always claimed in this House that they believe in the prudent use of bank credit, but they have also qualified that by saying that we have already reached the dizzy limit of such a policy. In spite of this we are told that the real struggle for leadership of the Government parties was on the subject of the extension of bank credit. Much has been said in praise of the banks by the-Treasurer, the honorable member for Gippsland and others. They have referred to the great work that these institutions have done during this war. It is well, therefore, that I should review the part that the private banks have played in the war finance of this country. The facts are - and I have evidence of this from men who are anxious to take part in the war effort - that the banks are not prepared to take the slightest risk in making advances to war industries, and that the Government is still compelled to guarantee the repayment of such advances. Although the banks will take no risk in assisting the war effort, they are prepared to collect whatever profits may accrue from their investments to the List penny. If the businesses to which they make advances fail, then the Government must pay the piper. The Treasurer has made much of the fact that he has a firm agreement with the banks. It is strange, therefore, that he, who is usually the champion of these institutions, announced in the budget speech that he had taken precautions against the making of excessive profits by them. He said -
The hanks have important functions in the community, particularly in time of war. However well they discharge their functions, there is a real danger that under certain conditions they may make excessive profits out of war finance; and that danger must be guarded against . . . Nevertheless there is a possible danger for the future. Our finance in the next few months will require a good deal of temporary accommodation and a necessary precautionary measure will be to remove any danger of secondary expansion by the trading hanks, and so guard against any excess banking profits. I have given a good deal of consideration to the question of” the best method of doing so. My conclusion is that the most effective measure is to require the banks to keep in a special deposit account with the Commonwealth Bank any increase in their funds due to war finance.” As a further check on the efficacy of this arrangement, the banks should furnish a certificate from thu Com missioner of Taxation (who has access to all the facts) showing the relation of their profit-: (before the payment of federal taxation) to their profits before the war. This method will in addition contribute- to the stability of the financial system generally in that it would supply a check if such is required to any tendency to over-trade on the part of the banks.. . . 1 shall have all the data before me upon which to judge its effectiveness and should it be necessary the Government will not hesitate to invoke the National Security Act to ensure the results required, namely, the prevention of secondary expansion by the trading banks, and an assurance against excessive banking profits.
Those are the institutions which Government supporters tell us are the financial godfathers of Australia. As the honorable member for Corio (Mr. Dedman) has suggested, the Government could exclude the private banks from all of it? financial negotiations in connexion with the war effort, and could use the credit resources of the country through the medium of the Commonwealth Bank. However, I am frank enough to admit that, before thi3 could be done we might have to remove the reactionary Commonwealth Bank Board, which dominates the policy and hamstrings the activities of that bank to-day.
The Treasurer to-day laid great stress on the subject of national income in order to show the capacity of the people to carry the burden of the proposed new taxes and compulsory loans. He pointed out that the national income for 1941-42 is estimated at £1,000,000,000, and claimed that this justified the optimism expressed in the budget. But when we compare that estimate with a total of £925,000,000 for 1940-41, and a total of £794,000,000 for the year preceding the outbreak “of war. we find that the honorable gentleman’s claims are deceptive. Many people, who are now earning incomes that are included in the estimate of the national income for the current year, are nor covered by the budget proposals. They have secured employment only in the last twelve months, and they suffered many years of idleness previously. Whilst it might be of some comfort to the man who will have to produce the next budget to know that the national income for this year is expected to total £1,000,000,000. that fact is of no assistance whatever in finding a solution to the present budget problem. It will be noticed also that the increase of the national income this year is not so steep as it has been in previous years, despite the fact that there has been a great deal of hectic expenditure as the result of wartime conditions. I believe that this is evidence of the falling off of actual wealth production in the primary industries and the non-war secondary industries. The country is faced with a reduction of output from the primary industries, and with extreme difficulty in marketing their products. Nevertheless, this Government has determined on a policy of restricting what are termed “ non-essential industries “. It has never professed to say just what these non-essential industries are, but we assume that they are industries not directly concerned in war production. The facts that I have disclosed should cause the Treasurer to think seriously of the future, because our real wealth is produced from the primary industries, which are on th? wane, and from the secondary industries, which the Government appears to be determined to destroy. Our wealth production governs our capacity to pay for the war effort. Ever since the exPrime Minister (Mr. Menzies) announced the policy of the Government, there has been a sustained attack upon the socalled non-essential industries, and the Treasurer, in his budget-speech, referred gleefully to the restrictions that have already been imposed upon those industries, and to those that are to come. War conditions have both limited the means of marketing our primary products and increased our capacity to expand our secondary industries. They have brought about a shortage of shipping, and they have caused a shortage of foreign exchange; these facts have combined to prohibit the importation of many goods that this country needs. This has given to the secondary industries an opportunity to expand and for new industries to be established in order to provide those goods which we previously obtained from foreign countries. But the determination of the Government to prevent this expansion from taking place is apparent. It has confessed that it is not in a position to aid primary producers to market their commodities, and it has shown its readiness to take from the people by means of heavy taxes, the purchasing-power that they might use to foster the secondary industries whose expansion it has restricted and which, in some cases, it has threatened to close down. In effect, the Government is restricting the development of real wealth production, and is limiting the capacity of the country to withstand the taxation that is necessary to meet our increased war commitments. At the same time, it is destroying potential fields for the post-war absorption of labour. With the gradual failure of our primary industries, and the extinction of many secondary industries, we shall have nothing left but our war industries. The Treasurer to-day painted a gloomy picture of what will happen to the industries and the workers of this country when the war ends. He pointed, out, quite rightly, that when war ceases, the demands of the war industries will cease also. Tens of thousands of men and women will be thrown out of work. The honorable gentleman used that as a justification for his plans for deferred pay for soldiers and compulsory loans. I contend that the financial and economic policy of this Government ‘accentuates the very dangers which the Treasurer professes to fear. The honorable gentleman to-day made great play on the fact that he was proposing to extract only £10,500,000 of new taxes from a section of the community which earns £530,000,000 annually. It is interesting to analyse this section of the community. The honorable gentleman did not tell the committee how many people actually comprise this group. I have here figures prepared by the Commonwealth Statistician, which show that for the year 1940-41 the number of persons whose incomes were between £1 and £200 a year was 1,354,000, and their earnings averaged £150 a year. The total income of that group earning £3 a week and less was £203,000,000. Then there is another group earning between £200 and £300 a year, and it comprises 1,000,000 people, whose average income is £250 a year. That group earns approximately £250,000.000. Those figures show that the greater proportion of that group does not come within the taxable range, and that, therefore, the incidence of the taxation will fall on a group which numbers less than half of the section described by the Treasurer. In an attempt to prove that this Government was generous in its budget proposals, the honorable member for Gippsland referred to the fact that in New Zealand there is a flat tax of ls. in the £1 under the social services legislation. As usual, the honorable member merely juggled with figures. He said that this money was taken from the people of New Zealand, and that they never saw it again, whereas portion of the money that this Government proposed to take from the workers would be repaid to them after the war. That is not the true position. The- people of New Zealand who pay this social services tax are entitled to enjoy any or all of the following benefits that may apply to them: - Widows’ pension, orphans’ pension, family benefit, miners’ benefit, unemployment benefit, health benefit, hospital benefits, maternity benefit, free medical attention, sick benefit, old-age and invalid pensions, and universal superannuation. That list is substantial. The Treasurer and the honorable member for Gippsland have suggested to the people of this country that the Government of Now Zealand was taking money from the people of that dominion and not giving them anything in return for it, but the Commonwealth Government, whilst intending to abstract the so-called national contribution for them, would repay it after the war.
Mr Harrison:
– Many people in Australia receive benefits of a similar character to those paid to the people of New Zealand without paying any tax.
Mr ROSEVEAR:
– It is true that our invalid and old-age pensioners receive their pension without making a direct contribution towards it, but our people do not receive many of the other benefits available to New Zealand residents.
Mr Harrison:
– The honorable gentleman has merely set up an Aunt Sally.
Mr ROSEVEAR:
– Nothing of the kind.
Mr Harrison:
– Child endowment is paid in Australia.
Mr ROSEVEAR:
– That is true but what the Government is giving with one hand in that connexion it is taking away with the other hand by discontinuing the tax exemption for all children after the first in a family
The Treasurer in attempting to support the application of the compulsory saving plan to people in the income range of less than £8 a week said that this section of the community had enjoyed an aggregate increase of £70,000,000 in its income in the last year. I cannot understand those figures, for it has been stated that the total increase of the national income in Australia for that period was only £75,000,000. Has the Treasurer the audacity to contend that 2,709,000 people in this country who received less than £8 a week last year had an aggregate increase of £70,000,000 of income, although the total increase of the national income during the same period was only £75,000,000? It is beyond belief that the poorest section of the community should have received £70,000,000 out of £75,000,000!
Let us look again at this proposal for compulsory loans. I atn struck by the fact that in propounding this scheme the Government has acted upon the advice of the professors who advised the governments that were in office during the depression years. Those gentlemen advised the adoption of the Premiers plan, and advocated the reduction of wages in order to curtail spending power. They argued that if the workers had less wages they would, not be able to buy luxury items such a.s wireless sets and the like. No%v that the workers are enjoying a little more of the national income because work is more plentiful than formerly the same learned gentlemen are contending that the workers should not be allowed to spend their money as they might wish to spend it. Apparently the professors do not believe that the workers should enjoy any of the amenities of life. It is incontestable that if the Government proceeds with its compulsory loan policy it will make it impossible for people to continue to purchase war savings certificates. During the last twelve months £23,000,000 was received by the Treasury through the purchase of war savings certificates, and £64,000,000 was obtained from loans raised in Australia. A large proportion of the money voluntarily contributed for the purchase of war savings certificates came from people in the lower range of incomes who found that they had a little money available for investment. The Government is now .proposing to come between these people and their investments, and to insist upon them making compulsory contributions. By this means the Government will undoubtedly defeat its own ends. The CHAIRMAN (Mr. Prowse).The honorable member’s time has expired.
Mr HUTCHINSON:
Deakin
.- A war-time budget is not an ordinary document. This budget has been described truly by the Leader of the Opposition (Mr. Curtin) as the ways and means to wage war. In such circumstances it could quite properly be expected that those who challenged the ways and means proposed by the Government to raise the money to wage war, and who, by their challenge, might involve the nation in the big expense of a general election, would submit some alternative means to raise the money. At any rate, in discussing a war-time budget, ideas somewhat different from those enunciated in attacking an ordinary budget might be expected. In normal times, when we deal with a budget of about £100,000,000, we are quite prepared to accept merely destructive criticism from the Leader of the Opposition and his followers, but in war-time, when we consider a budget of more than £300,000,000, and when we face a. war expenditure of £217,000,000. as against a normal peace-time defence vote of from £3,000,000 to £4,000,000, we have a right to expect that our critics will support their destructive remarks with some constructive ideas and offer some alternative means of raising the necessary revenue. That expectation is certainly justified in connexion with a motion of censure. The people of Australia had every right to anticipate that when the Leader of the Opposition made his attack he would say, in effect, “The Government is going the wrong way about doing its job. We would go the right way about it if we were given the opportunity to do so. We propose to do this and that.” But no such submissions have been made to us. Therefore, the people of Australia are not in a position to judge as between the Government and the Opposition. The Leader of the Opposition based his attack upon the Government on four main arguments, but he did not attempt, nor have any of his followers attempted, to explain in any detail how the Labour party would conduct the affairs of the country, or raise the revenues necessary for government purposes, if it were placed in a position to do so. As a matter of fact, the Leader of the Opposition hh. actually suggested that the budget should be loaded with additional charges aggregating no less than £22,000,000. He has said that the Labour party would gran an extra ls. a day to the soldiers, and an extra ls. a week to pensioners. These two items alone would involve 1 an additional expenditure of £7,000,000, and all that the honorable gentleman or his followers have said about ways and mean:? of raising that amount has been to offer some vague comment about possible additional economies. Labour governments have not been noted for reducing public expenditure. Only under extreme pressure have they ever done so. The rather vague allusions that we have heard to economy are, therefore, not a satisfactory indication of how additional funds are to be raised. In the circumstances, Mr. Chairman, I appreciate that you were ;> little mystified by the remarks of this nature made by members of the Opposition, and I can understand you receiving them with that long, slow smile of yours. If economy is to be practised, in what directions would honorable members opposite subtract from this budget? The increase of normal expenditure is made up almost entirely of increased social services. No less an amount than £14,384,000 has been added to the normal expenditure for child endowment and increased payments to invalids and aged people. Would honorable members opposite suggest that expenditure should be reduced by interfering with those services? No. The suggestion cannot be made. The Opposition can rest assuredthat before the Government brought downthis budget,itcombedthe whole expenditure of Government departments over and over again, to unsure that not, one unnecessary penny would have to he found by the people of Australia under war conditions. Therefore, the extraordinary position is that the Government of a country at war has been threatened because of its budget, but not one suggestion has been made in regard to how the Opposition would finance the country. The honorable member for Dalley (Mr. Rosevear) suggested that the Estimates contained in the budget are not true Estimates, but are merely the result of wanderings of the gentlemen who are, the heads of staff of our war departments. I ask the honorable member for Dalley if his party were in office, and had, in its turn, to devise means of raising the revenue required to run this country at war for a year, would he or any of his colleagues be in a position to contradict the heads of these departments in regard to their estimates of war expenditure? Would they be able to do that any more than honorable members on this side of the House can do it? I think not. Therefore, I accept the statement by the Treasurer that the amount involved in this budget is the irreducible minimum that must be found to carry on the affairs of this country, and our fighting services during the current financial year. If acceded to, the suggestion put forward by the Opposition that an extra1s. be paid now to the soldiers would not mean an increase in the total payment to our fighting men. It would simply mean a difference in the method of payment. The Government’s proposal is that an extra1s. should be given in the way of deferred pay. The only difference is that this country’s commitments to its soldiers would be increased now instead of at the end of the war. There is no difference in the total sum which soldiers would receive. The only question at issue is whether the soldier should have the extra1s. now or after the war. The desirability of having the additional payment made now instead of after the war is, I am sure, an arguable question amongst the soldiers and their wives and families. Many a little business was started by means of deferred pay and war gratuities given to soldiers at the conclusion of the ‘last war.
Mention has been made of the pay received by a. soldier with a wife and two children, but I do not think that any honorable member has yet placed before the committee the facts in this regard. First of all, the soldier receives 5s. a day. Then, in accordance with the proposal contained in the budget, he will get 3s. deferred pay. As a result of last year’s budget, an extra1s. a day living allowance was granted to a wife with one child or more, and he gets 3s. a day for two children and 3s. a day for his wife. The cost of keeping a soldier in food is estimated at1s. 5d. a day so that his total payment is 16s. 5d. a day or £5 14s. l1d. a week, and, in addition, his clothes are provided free. I do not think that any honorable member desires to see our soldiers placed upon a commercial basis, but as that basis has been chosen by the Leader of the Opposition, I quote these figures to prove conclusively that the allowance paid to a soldier with a wife and two children is considerably higher than the basic wage. A man with a wife and four children would receive an additional £11s., making a total of £6 15s. l1d. a week, and in addition he would receive child endowment, so that his total remuneration would be £7 10s. l1d. a week. Australia is not niggardly with its fighting men. No doubt, every honorable member would like to do more for them, but the indisputable fact remains that Australia is doing more for its soldiers than is being done by any other country. That is something of which we can all be proud. In the future, it may be possible for us to do still more.
The Opposition has been shown up in rather a bad light in regard to pensions. At the last general elections - only twelve months ago - the Labour party fixed £1 5s. as the minimum amount that should be paid to invalid and old-age pensioners.
Mr Duncan-Hughes:
– Some candidates said that it should be £1 10s.
Mr HUTCHINSON:
– That is so. One section of the Labour party advocated a minimum of £1 10s. weekly. An increase of pensions to £1 5s. would involve an additional commitment of something like £3,500,000, and- an increase to £1 10s. would require an additional £8,500,000. However, the suggestion now is that pensions be increased by ls. a week. If there ever was clear evidence of the true attitude of honorable members opposite to the pensioners, it is to be found in the difference between the Labour party’s proposals at the last elections and now. Obviously, the pensioners are regarded as pawns in a political game, to be bought if possible. It is high time these unfortunate people were put on a more dignified- pedestal than that envisaged by the Labour party.
In dealing with the matter of compulsory loans, which forms a major part of the budget, I shall endeavour to reply to many of the points raised by the honorable member for Dalley. Three principal methods are available for the financing of any war. The first is taxation, whether direct or indirect; the second is by means of voluntary loans; and the third is by bank credit inflation. I understand that those three methods are acceptable to the honorable member for Wimmera (Mr. Wilson). They were accepted during the last war, and what was the result of their use? The position that then existed is well known to every honorable member. Prices constantly rose, wages continuously chased prices, and additional inflation was pumped into the economic system. The wage-earner emerged from the process with the worst experience of all. If those three methods were again pursued, the worker would once more be led into making undue contributions and undergoing extreme hardships, which could be avoided if more sensible measures were employed. A further result of the high prices caused by voluntary loans and inflation during the last war was the breeding of profiteers; because the person who makes goods available for .civil consumption reaps the advantage of high prices and is able to contribute largely to Government loans. Thus a limited number of the people of this country had placed in their hands deliberately the great wealth represented by Commonwealth bonds. I cannot see any reason why we should not learn the lessons taught by the last war. It should be possible for a government to devise better and fairer means of financing the present war. I believe that the budget we are now considering - which, far from being orthodox, as the honorable member for Dalley has suggested, is most unorthodox - paves the way for the adoption of successful measures for the raising of revenues for war-time operations, avoiding the economic collapse which would follow excessive doses of taxes, and at the same time establishing a basis for reconstruction in the post-war period.
Let me put the present position in respect of the employment situation in Australia, and give the data which the Government had to take into consideration when framing the budget. We know that employment has been so stimulated that the increase of the number of employees between August, 1939, and 1941 was 153,000. The figure must by now have reached from 160,000 to 170,000. The largest part of this additional employment has been in factories associated with the war effort; only 2.7 per cent, of the increase since the outbreak of the war has taken place in factories which supply civil needs. This means that the quantum of civil needs available to the country has not been expanding in the same ratio as the number of men employed and the national income; the latter will jump this year to £1,000,000,000. According to figures given to the committee this afternoon, the lower wage-earner has already benefited from the increase of the national income by an amount of £60,000,000. Exports have risen from £136,000,000 in 1939 to £153,000,000 this year. The amount of the note issue has been raised, and bank deposits have been increased by £40,000,000. It is plain that, under the budget now before the committee, additional bank credit will be created to an amount of approximately £60,000,000. This means that there will be every tendency for the prices of goods to be pushed upward. Over 22 per cent, of the national income will go to satisfy the needs of war. Hundreds of thousands of our men are being withdrawn from occupations which supply the needs of the civil population, and are now manufacturing goods for war purposes. Unless there is to be inflation of prices, one of the following three methods must be adopted : First, price fixing ; second, rationing, -which seems to be favoured by the Leader of the Opposition; and third, the system of compulsory loans adopted by the Government. The problem that the Parliament and the Government have to face is to strike a balance between the ever-growing expenditure and the quantity of goods to be bought. If the first method, that of price-fixing, be accepted, we shall be confronted with the great difficulty that will arise when the full effect of the increase of the national income becomes apparent. There are a dozen and one ways of circumventing price control, and eventually that system will be defeated. There is another factor. An expansion of the national income, concurrently with a lower production of goods, and the pegging of prices by means of pricefixation, does not have the effect of curtailing purchases. This, in turn, would lead to a shortage of goods. Therefore, an attack on the position by means of price-fixing alone would prove most unsatisfactory.
The next method, that of rationing, has been suggested by the Leader of the Opposition. Here again we are confronted with the great difficulty of putting into operation a system of rationing which would be fair and equitable. All of us know how difficult the rationing of petrol supplies has proved to be. An attempt to ration a wide variety of articles would produce a tremendously costly administrative problem. That would cause endless discontent. As the tastes of individuals differ greatly, any rationing system would be bound to interfere with the normal habits of the people and would, be most unpopular. I now come to the third possible method, that of obtaining by compulsory loans .the balance between money available and the total goods available. The difference between this method and the voluntary system is that under the Government’s proposal we are sure to obtain the money that is needed, and I claim that it is the more equitable system. It is true that thousands of people voluntarily purchase war savings certificates and subscribe to government loans, but it i3 equally true that thousands of others do not. Frequently those who purchase war savings certificates or subscribe to Com- monwealth loans are less able to do so than individuals who subscribe to neither, but obtain much more satisfactory dividends from money invested in other ways. I am in favour of spreading the burden as equally as possible over all sections of the community. Only by making every individual “ do his bit “ can we obtain a maximum war effort, which I believe every democratic country will have to achieve before victory is finally won. The introduction of compulsory loans will also contribute materially to post-war reconstruction. It will be no more difficult to find money in order to repay these loans than to return a similar sum of money raised by voluntary loans, but the value of the money to the individual lenders in the post-war period will be inestimable.
One of the main objections which the Opposition has raised to the budget is that the Government proposes to raise money by means of compulsory loans from persons in the lower income groups. The whole burden of its argument is that in some mysterious way the rich can be made to carry the greater part of the burden, but I propose to submit figures to show that, if all the money of the socalled rich were taken, it would provide only a small proportion of the total sum demanded by the Government in the budget. The incomes of persons in receipt of £1,000 a year and upwards total £95,000,000 ; those receiving between £400 and £1,000 a year earn £145,000,000, and those in receipt of under £400 a year, who constitute the great bulk of income earners, are paid £560,000,000. There is probably a more equitable distribution of wealth in Australia than in any other country, and the fact that only £95,000,000 is earned by persons in receipt of incomes of over £1,000 a year shows that the budget requirements of the Government could not be met by imposing heavier sacrifices on the socalled rich. Persons in receipt of incomes of £150 a year are treated very generously in Australia in comparison with persons on a similar income group in New Zealand. It, is true that £11 2s. a year is to be loaned by single persons earning £150 a year, but in New Zealand the contribution by persons receiving a similar income amounts to £15 a year. Although a considerable proportion of that sum is used for providing social services, the larger part of it is taken by way of taxes. In Great Britain, a person earning £150 a year contributes £17 9s. There is every reason to suggest, therefore, that this is a wageearner’s budget. It is futile to suggest that we could obtain the money required to finance the war from any particular section of the community. All sections must contribute, and those earning the greatest proportion of the national income are those in receipt of incomes under £400 a year. I agree with the Treasurer that the Government has been particularly generous in this matter, and that if it had relied on the creation of greater amounts of credit, it would have lowered the purchasing power of every working man. Without price control, prices would continue to rise, and wages would never keep up with the increase of prices. I suggest that this budget is the most carefully conceived ever presented to the National Parliament. The Opposition has not offered a satisfactory alternative to it, and has not been able to attack it on sound lines. In the circumstances I maintain that the action of the Opposition has not assisted the war effort, nor has it promoted Australia’s good name overseas. When I heard the Leader of the Opposition, in his broadcast speech last night, suggest without qualification that every person in Australia earning £150 a year would have £11 2s. taken from him under this budget, I deprecated such complete misrepresentation. I have no doubt that a good deal of the industrial unrest in Australia to-day is due to misrepresentation of the Government’s financial policy. I listened to-day to the honorable member for West Sydney (Mr. Beasley) talking about the high profits made by companies, but he told us nothing, and I am sure that he has said nothing on the subject outside, either, of the incidence of taxation on companies and on individuals, and of the excess profits tax which was worked out by a committee representing both sides of this House. The workers are constantly told by honorable members opposite that somebody is getting at them, that more money is being made now than ever before, and this naturally creates discontent in their minds. I believe in fair criticism, and if we had more criticism that was loyal to the country and to our war effort, we would undoubtedly be in a stronger position to-day. Debates like the present serve only to weaken our war effort. The war to-day is approaching another climax. We have received a plain warning from the Prime Minister of Great Britain that Russia cannot be expected to stand indefinitely against the Germans. Help is needed urgently and speedily. What will be the position if Russia collapses? When winter sets in in the north, we may expect a renewal of enemy activity in the south, and that will bring the war closer to us. In the face of these dangers there must be an end to party political wrangling. National unity can be achieved only when there is an end to thissort of disturbance. Therefore, the moving of an amendment such as that now before the Chair, with its threat to plunge the country into an election, does a grave disservice. The Opposition has challenged the budget without putting forward any constructivealternative. This is the best and most equitable budget that has ever been presented to this Parliament. It will finance the war effort and prevent economic collapse. It will maintain, as far as possible, the value of the worker’s £1, and will do what is possible at this stage to minimize the difficulties that may arise during the postwar reconstruction period. As such it deserves the approbation and support of every honorable memberof this House.
Progress reported.
page 679
PAPERS
The following papers were pre sented : -
Lands Acquisition Act - Land acquired for Defence purposes -
Mortlake, New South Wales.
Mount Gambier, South Australia.
Nowra, New South Wales.
National Security Act - National Security (General) Regulations - Orders - Inventions and designs ( 148 ) .
Northern Territory Acceptance Act and Northern Territory (Administration) Act-
Ordinance - 1941 - No. 14 - Inspection of Machinery.
Regulations - 1941 - No. 11 (Medical Benefits and Hospitals Ordinances).
House adjourned at 10.45 p.m.
page 680
ANSWERS TO QUESTIONS
The following answers to questions were circulated: -
Department of Information : Payments to Newspapers
Mr Forde:
e asked the Minister representing the Minister for Information, upon notice -
- Is it a fact that the Government is paying the newspapers of Australia approximately £80,000 a year to publish news supplied by the Department of Information?
- If so, will the Minister make a statement to the House giving the reasons why the payment of such an amount is necessary and at whose request it was made?
- Did the newspapers refuse to publish information supplied by the Department of Information if such a subsidy were not paid?
Mr McDonald:
Minister for External Territories · CORANGAMITE, VICTORIA · UAP
– The Minister for Information has supplied the following answers : - 1 and 2. No subsidywhatever is paid to any newspaper to publish news supplied by the Department of Information.
- No.
Child Endowment
Mr Conelan:
n asked the Minister for Social Services, upon notice - : 1. What was (a) the estimated number of children in each State who would receive endowment, (ft) the estimated cost in each State, and (c) the estimated total cost?
- What is (a) the number of children for whom child endowment has been claimed in each State, (b) the total number in Australia, (c) the cost in each State, and (d) the total cost for Australia?
Sir Frederick Stewart:
Minister for External Affairs · PARRAMATTA, NEW SOUTH WALES · UAP
– The information is being obtained and will be supplied to the honorable member.
Mr Holloway:
y asked the Minister for Social Services, upon notice -
- Is it a fact that, under the Child Endowment Act, where the parents have separated and each has taken control of members of their family, more than one child under sixteen years have been refused endowment payment?
- If so, will he take action to have the anomaly removed?
Sir Frederick Stewart:
UAP
– Subject to the provisions of the Child Endowment Act, endowment is payable in respect of each child in excess of one maintained by the claimant. The contingency mentioned in the question was carefully considered by the Government when the legislation was being prepared, but it was felt that any departure from the principle of maintenance of more than one child would give rise to inequalities of treatment. There is no intention of amending the Child Endowment Act at present.
Munitions Production in Country Centres.
Mr Spender:
UAP
r.- On the 25th September the honorable member for Wannon (Mr. McLeod) asked, without notice, whether a report had been received from the technical advisers who visited country towns in Victoria in order to inspect facilities in these towns for the production of war materials.
The Minister for Munitions has furnished the following reply: -
The manufacturing capacity of country towns has been the subject of a continuous investigation by the Boards of Area Management in each State of the Commonwealth. The reports of their technical advisers indicate that, generally, the manufacturing capacity of country towns has not been suitable for the class of work offering. However, in Victoria, an arrangement has been concluded whereby the Victorian Automobile Chamber of Commerce has undertaken to organize simple engineering work, and so far under this arrangement orders to the value of £74,000 have been placed. Some 16G garages and workshops are taking, or are about to take, part in the scheme, and deliveries to the value of £6,000 have already been made.
Defence Requirements : Motor Cycles
Mr Morgan:
REID, NEW SOUTH WALES
n asked the Minister representing the Minister for Supply and Development, upon notice -
- In view of the urgent need by Army authorities for motor cycles for home defence as well as for overseas units, what steps have been taken to meet such requirements?
- Is it a fact that local manufacturers have expressed willingness to assist the Government in the establishment of an Australian industry for the manufacture of motor cycles; if so, is any action contemplated therewith?
Mr Spender:
UAP
– The Minister for Supply and Development has supplied the following answers : -
- It is understood that army requirements are being fully met by supplies arranged through the British War Office.
- Local representatives of British manufacturers have expressed willingness to assist, and discussions have taken place here and in England with a view to Australian manufacture. No further action is contemplated at present because engineering capacity and equipment will be fully occupied with work of higher priority, such as armoured fighting vehicles.
Cite as: Australia, House of Representatives, Debates, 2 October 1941, viewed 22 October 2017, <http://historichansard.net/hofreps/1941/19411002_reps_16_168/>.