House of Representatives
10 September 1942

16th Parliament · 1st Session

Mr. Speaker (Hon. W. M. Nairn) took the chair at 2.30 p.m., and read prayers.

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– . Was the Minister for War Organization of Industry correctly reported in the Sydney Sun of the 8th September, in which he is alleged to have said that the general principles upon which the wool industry would be rationalized hadbeen decided upon, and that regulations were being drafted? If so, can this be taken as an indication that the Minister does not propose to honour his undertaking to consult with representatives of the industry concerned?

Minister for War Organisation of Industry · CORIO, VICTORIA · ALP

– I have not seen the report to which the honorable member refers, but it is true that the general principles upon which the rationalization of the wool industry will be based have been decided upon. It is also true that the regulations to give effect to those principles have not yet been drafted. Any representations which the interests concerned may like to make willbe heard by me.


-In to-day’s issue of the Canberra Times the Minister for Commerce is reported as having said that the Government was not contemplating any move to compel growers to reduce their flocks. Will the honorable gentleman inform me whether his announcementmeans that the declaration of the Minister for War Organization of Industry, that “ in the event of voluntary co-operation failing to achieve this objective, the Government would contemplate other measures “, no longer represents the policy of the Government?

Minister for Commerce · GWYDIR, NEW SOUTH WALES · ALP

– The statement that I made to the press was published correctly, and represents the policy of the Government. I adhere to the statement regarding the sending forward for dehydration and canning of sufficient quantities of mutton for the fighting services, as outlined by the Minister for War Organization of Industry.


– I direct the attention of the Minister for Commerce to the following report in the Adelaide Advertiser and Brisbane Courier-Mail of the 4th September, dealing with the rationalization of the pastoral industry : -

Mr. Scully, while admitting that the grazing industry had not been consulted on the rationalization, stated that his department was not responsible as the matter was completely within the jurisdiction of Mr. Dedman’s department.

Was the Minister correctly reported in those newspapers?


– No.

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– In view of the report of the committee which inquired into the administration of defence canteens, will the Attorney-General indicate to the House what action he intends to take?

Attorney-General · BARTON, NEW SOUTH WALES · ALP

– That matter is now being considered, and will be decided within the next 24 hours.

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Minister for Aircraft Production · BARKER, SOUTH AUSTRALIA · ALP

– Is the Prime Minister yet in a position to answer the question which I put to him last week regarding the position which the right honorable member for Cowper (Sir Earle Page) occupies as an alleged member of the War Cabinet, and a few other odds and ends?


– Any comment which honorable members may feel disposed to make on that matter -would be relevant during the debate on international affairs.


– Will the Prime Minister lay on the table of the House the paper, or a copy of the paper, from which he read a statement in this chamber last week regarding the position, of the right honorable member for Cowper (Sir Earle Page) in relation to he Government?


– Last week I made an announcement to the House in precise term’s. I had a note in order that 1 might correctly state the matter concerning which I desired to inform honorable gentleman. What I said was that the right honorable member for Cowper had been -co-opted by myself as a member of the Advisory War Council and would attend meetings of the War Cabinet to assist the Government to dpa! with war matters.

Mr Anthony:

– Only when invited, or all the time?


– Only when there were matters before the War Cabinet on which the right honorable gentleman, by reason of his work in London and the United States of America, would be able to assist the Government with his experience and advice. 1 made that very clear. The right honorable gentleman’s position in the War Cabinet in relation to myself, if I understand the position correctly, is precisely that which he occupied -in the British War Cabinet as the representative of Australia. He was there to state a view. The right honorable member said last night that he did not vote as a member of the British War ‘Cabinet. In fact, no votes were taken.

I desire to express my indebtedness to the right honorable member for Cowper for the magnificent way in which he has assisted this Government, and the previous Government, in the very difficult and exacting work that devolves upon a Commonwealth administration in war time.

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– I wish to ask the Minister for the Army a question regarding the release of men from military service so that they may take part in seasonal operations in primary industries. I recently received the following reply from the Director-General of Man Power to representations on behalf of one man: -

The arrangements made with the Army authorities regarding the granting of seasonal leave arc such that I would not be justified in requesting that an exemption be made in any specific case, and I am, therefore, unable to accede to Mr. Monaghan’s request.

Am I to understand that a general policy has been laid down in regard to releases from the Army, and that it will be of no use in the future to make representations on behalf of any one?

Minister for the Army · CAPRICORNIA, QUEENSLAND · ALP

– The procedure is that when a release from the Army is desired for seasonal work, application is made to the commanding officer and to the man-power officer for the district, who considers the circumstances and makes a recommendation to the commanding officer. This recommendation is then given immediate consideration. I know that commanding officers have come in for a lot of criticism for not releasing men, but, as a member of the War Cabinet, I may state that the advice of our military experts is such as to cause the Government to hesitate before allowing thousands of additional men to be released from the Army. We arc in dire need of more fighting personnel. Plans have been prepared for a military establishment of a certain strength, but not all the necessary men have been called up. Already, 15,000 men have been temporarily released from the Army to assist in seasonal work in primary industries, and there is a limit beyond which we cannot go, having regard to the safety of the country, which must he our first consideration. Commanding officers never release men except upon the favorable recommendation of an official of the Department of Labour and National Service. Evidently, in the ease to which the honorable member has referred, a favorable recommendation was not made.

Mr Wilson:

– What, is the new arrangement referred to in the letter?


–To the best of ‘ my knowledge, there is no new arrangement. The instruction is that man-power and tip tiona! service officers must consider every application, and make a recommendation to commanding officers. shall be glad to inquire further into the position, and advise the honorable member later.


– Whilst admitting the powerful arguments that the Minister has advanced for the retention of men in the Army, I ask him to make the necessary arrangements so that a reasonably prompt decision will be reached regarding applications for the release of men to undertake urgent work. Not infrequently, an application passes backwards and forwards from the applicant and those who make representations on his behalf, and the various authorities concerned, for more than three months, without a decision being reached.


– If the honorable member will bring specific cases to my notice, I shall inquire into them and inform him of the result.

Mr McEwen:

– I have written to the Minister on the subject.


– I shall call for a report on the delays alleged to Grave occurred in considering applications for the release of men from the Army. Honorable members should understand that when an application is made, an officer of the Department of Labour and National Service examines it and submits a report on it to the commanding officer. In many cases, the replyhas to be in the negative.

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Employment of Bookmakers and


– There is a suspicion that certain persons such as bookmakers, bookmakers’ clerks, jockeys and turf commission agents are avoiding their obligations to serve under the Defence Act, or in labour corps. In the light of that observation, can the Minister representing the Minister for the Interior say who was responsible for the appointment of Mr. Peter Cruise, turf commission agent, and Mr. Angles, who also is connected with the turf, to the Sydney office of the Allied WorksCouncil? What are their duties, their ages and qualifications, and did they themselves apply for the jobs or were they appointed by somebody else? Will a statement be made to the House, based on the national register, setting forth the number in Australia of turf commission agents, bookmakers, jockeys, and others of like class; and also, what has happened to them regarding the call-up for service with the armed forces, or under the Allied Works Council?

Minister Assisting the Treasurer · WERRIWA, NEW SOUTH WALES · ALP

– I shall place the honorable member’s question before the Minister for the Interior, who may choose to prepare a statement for submission to the House.

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-Has the AttorneyGeneral yet reached a decision regarding the representations which I made to him for the appointment of a conciliation commissioner to hear the complaints of employees of the mines rescue stations, and of theColliery Staff Association, among whom there is much discontent in the absence of an Arbitration Court award? Has the Attorney-General yet reached a decision regarding the payment to mine workers of the penalty rate when they worked on May Day instead of Labour Day?


– It appears that, under the State authority, employees on mines rescue stations are unable to have their claims considered by a State tribunal, and it has now been decided to appoint a commissioner to deal with the matter.

Mr James:

– Who is the commissioner?


- -Mr. Connell. My colleague, the Minister for Labour and National Service, has signed the necessary papers. A decision has also been reached for the holiday rate to be paid in the district when the holiday was taken on May Day in lieu of Labour Day, but the condition is imposed that the ordinary rate shall be paid for Labour Day, which occurs next month. The effect of the decision is that men will have the benefit of one holiday rate during the year.

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– Will the Department of Trade and Customs consider the advisability of registering smokers, and introducing a scheme for rationing tobacco so as to ensure an equal distribution of available supplies? Under the present system, some persons are able to obtain considerable quantities of tobacco whilst others have none.

Minister for Supply and Development · WEST SYDNEY, NEW SOUTH WALES · ALP

– I shall have pleasure in bringing the honorable member’s question to the notice of the Minister for Trade and Customs.

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– I ask the Prime Minister whether it is a fact that, towards the close of the last parliamentary period, Cabinet decided to review the whole position of the Department of Information three months from that date? “Will the right honorable gentleman inform me whether the review has yet been made? If it has not, will he, before he takes action, consider the advisability of referring the matter to a parliamentary committee representing all parties, for investigation and report?


– The answer to the first part of the question is “ Yes “. The review has not yet been completed, and [ shall consider the honorable member’s suggestion when I conclude the review at the end of the three-months period.

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– “Will the Prime Minister ask the Postmaster-General to give favorable consideration to the proposal that members of the women’s auxiliary services shall receive the benefit of the concessional postal rates that have been granted to male members of the fighting forces?


– Cabinet has reviewed the matter, and has reached a decision. The Postmaster-General, I am sure, will shortly be in a position to make an announcement.

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– “Will the Treasurer inform me whether the position regarding the grant to Tasmania, which was recommended by the Commonwealth Grants Commission, has been clarified ? In view of the controversy that has arisen, will the honorable gentleman make a .statement on the subject to the House?


– The position is perfectly clear; nothing remains to be clarified by Cabinet or the Treasury.

Mr Beck:

– Has the position regarding the telegram announcing that Tasmania would receive £S00,000 been clarified?


– Yes. The Commonwealth Grants Commission made a recommendation, which the Government proposes to adopt, for the payment of grants to certain States, and Tasmania will receive £575,000. The Prime Minister notified the Tasmanian Government, by telegram in code, of the sum that was to be paid. An investigation disclosed that the telegram was lodged correctly in Canberra, but by some mischance, the figure of £800,000 reached the Tasmanian Government. All that need be said about it is that between the lodgment of the telegram in Canberra and its arrival in Tasmania, some one, as human beings do, made a mistake.

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– Can the Minister for the Army tell me whether there is any truth in the very popular rumour that Sir Bertram Stevens has .been called up for medical examination in order to determine his physical fitness to use a pick and shovel with the Allied “Works Council? If not, why not?


– The men employed by the Allied “Works Council are. called up by the Council, not by the Army, and I refer the honorable member to the Director-General of Allied “Works.

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– Will the Treasurer take steps to avoid the shocking delay in the settlement of accounts owing by Commonwealth departments and services? I include in that category the Allied Works Council, the Department of Supply and Development, and the services generally. For the information of the Treasurer I can tell him that one metropolitan representative of one of those departments has suggested to a creditor that foe should keep on pestering him so that he may keep on pestering the Treasury.


– When the Leader of the Opposition was Treasurer he issued an instruction that a schedule should be prepared for him of all delayed accounts.

That practice is being continued. As late as the day before yesterday I went through the list supplied and, seeing that some accounts have been delayed for a considerable time, I gave instructions that they should be immediately met. If there are any specific cases, I shall be glad to follow the example set by the Leader of the Opposition during his tenure of office and investigate them so that the public will have no cause for dissatisfaction.

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– -In view of’ the importance of New Guinea to the defence of Australia, and in view of the significance of the happenings in New Guinea, will the Prime Minister arrange either to visit that area himself or for one of his service Ministers to go there in order that the Government might be more fully advised of the actual position in that battle zone? Will he follow the practice of the British Governmnent in that regard - the British Government has a representative of the British Cabinet in Cairo in the person of Mr. R.i G. Casey - by providing for one of his junior Ministers to be stationed in New’ Guinea while the present conflict there lasts?


– The operations that have been conducted in New Guinea in association with the general war position in Australia are under the control of the Commander-in-Chief of the Allied Forces in the South-west Pacific area, General Mac-Arthur, and the Commander of the” Allied Land Forces, General Blarney. I consider that I am fully acquainted with all the circumstances of the New Guinea operations. There is nothing that I could do by being on the spot which would give to the commanders greater ability than they already possess. I am quite satisfied that to the maximum of the resources available the operations in New Guinea will be waged by the Allied forces there in a manner which will win the admiration of the people of Australia. I do not know what the result will be, but I am convinced that nobody outside the commanders of the gallant Allied forces engaged in those operations could- contribute anything materially useful in the efforts that they are making.

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– In view of the lack of information which the primary industries have regarding what is expected of them in the way of production, will the Minister for Commerce amplify his statement made on the 24th August, in which he said that production targets for 1942-43 had been fixed? Will he make those production targets available to the various industries so that they shall know exactly what to aim at? In particular, I ask him to announce the production targets for butter, cheese, condensed milk, dried milk, mutton, lamb, beef, pig meats and eggs as soon as possible.


– I shall supply a fully detailed answer to the honorable member’s question, hut I take this opportunity to tell him that there is full coordination between the Commonwealth authorities and all State Departments of Agriculture. The primary industries have been organized to produce to their full capacity. Those industries do know what is required of them. In many instances, definite contracts have been entered into through the Departments of Agriculture and the Department of Commerce and- the Department of Supply and Development, for different forms of primary production. It is absolutely incorrect to say that there has not been a marshalling of primary production. That matter has been attended to most thoroughly by the Department of Commerce and the Department of Supply and Development. Nothing has been left to chance.


– In view of the statement by the Minister for Commerce that nothing was being left to chance in the field of primary production, and that there was complete co-ordination and planning between his department and- the Department of .Supply and Development in regard to primary production, will the Minister inform the House whether it is a result of planning that pig numbers in Australia are now 20 per cent, below what they were last year; that the quantity of eggs on the market this month is 30 per cent, below what it was in the corresponding month of last year; and that, in fact, no substantial supplies of butter, cheese or pig meats are now being sent to the

United Kingdom? If these are the results of planning, will the Minister endeavour to bring about a reversal of the present position?


– The honorable member’s question takes my mind back to the not distant past when he was assisting the Minister for Commerce. During his term of office there was a complete collapse of the pig industry throughout the Commonwealth unparalleled in our history, and as a result, the Department of Commerce was condemned by all those engaged in that industry. Since the Labour Government has assumed office, the position has improved, considera’bly, and I personally have received congratulations from the Australian Pig Council. In addition, letters have been received from various pig industry councils in different parts of Australia stating that this Government has done more for the pig industry than had any other government. To the other matters mentioned by the honorable gentleman, that answer applies with equal force.


– I remind honorable members that the purpose of questions is to elicit information. Questions such as that just asked by the honorable member for Richmond (Mr. Anthony) are plainly argumentative, and induce argument in reply. In future I shall disallow such questions.

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– Several honorable members have asked questions about the re-organization of the Army Hirings Branch. The particulars are set out in the following statement which, with the consent of honorable members, I shall incorporate in Hansard: -

Since the outbreak of war the provision of accommodation of all kinds for all the services and all Commonwealth departments has, in general, been handled by the Hirings Directorate in the QuartermasterGeneral’s Branch, Department of the Army. On the outbreak of war with Japan and the arrival in Australia of the United States Forces, a considerable increase took place in the demand in all States for buildings and land for use of the services including the American

Forces. The requirements have extended to all kinds of properties including office accommodation in the cities, premises for hospital accommodation and land for camps, artillery ranges, and aerodromes. Operational requirements have necessitated the handing over of properties for service use often at very short notice, and as a general rule a spirit of cooperation and helpfulness has been manifested by the property owners concerned. The large expansion of the defence requirements for the use of property imposed such a heavy strain on the small hirings staffs at the military head-quarters in the various States that it was found for a time impossible to dispose of the settlement of all claims as promptly as was desired. In some cases a good deal of the time of the hirings staffs was occupied in negotiations on claims which appeared to be unreasonable. In other cases complications had arisen owing to the unusual nature of the claims, and in some instances it was apparent that agreement could not be reached by negotiation and that appeals would require to be referred to a compensation board.

I therefore appointed a departmental committee to consider delays which had occurred, and to submit proposals for improvement of procedure. Officers were despatched to several States for the purpose of conferring with State military head-quarters, the local hirings officers and with members of Parliament and property owners who had experienced difficulty in having claims adjusted. The hirings staff was also increased to enable outstanding claims to be dealt with in a minimum of time, and the results of this step have been apparent in a substantial decrease of the number of these claims.

It was apparent, however, that the volume and variety of hirings work had expanded so rapidly that additional machinery was desirable. The Government therefore decided to set up under the Minister for the Army a Central Hirings Committee at Land Force Headquarters, Melbourne, and local committees in each line of communication area, except that in which the central committee would be sitting.

Regulations which are about to be promulgated will be known as the National Security (Hirings Administration) Regulations and will empower the central committee and the local committees to deal with certain cases involving the use of land and buildings during the period of the war under regulations 53, 54 and 55 of the National .Security (General) Regulations. It is contemplated that the Hirings Service of the Army shall continue generally as an executive organization to handle hirings for . all services and departments, ‘but. that the committees shall handle certain matters of policy and determine what compensation is to be offered.

The Central Hirings Committee will consist of three permanent members, namely an independent chairman, a representative of the Treasury, and the Director of Hirings - who is the Army officer at the head of ‘the Hirings Service under the Quartermaster-General - or, in his absence, an appointee of the Quarter.masterGeneral. In addition, when any hiring or proposed hiring for any service or department, or an order or proposed order prescribing the standards of accommodation for services or departments, is being considered1, a representative appointed by each department concerned, shall be a member of the committee. Provision is also made for the central committee to co-opt for any meeting a representative of any department which the committee considers1 is concerned or affected.

The local hirings committees which will be set up in each line of communication area, and in any other area where it may be necessary, will comprise similar personnel to that of the Central Hirings Committee, except that the chairman of the Central Hirings Committee will be a member, and when- present will be chairman, of all local hirings committees. Similar provision is made for representation of services and departments when hirings or proposed hirings in which they are concerned are under consideration.

It is intended that the central committee shall lay down certain general principles covering hirings, so as to give effect to the Government’s policy concerning the use of property for defence purposes. Among other things, the committee may prescribe the standards of accommodation to be provided for the services and departments.

In order to relieve Ministers of the necessity for dealing personally with a multitude of details concerning hirings. provision will be made in the regulations for all committees to have some determinative and recommending functions. These functions will, however, be subject to any direction which may be given by the Minister.

Provision has also been made for the Minister to decide whether the whole or a part of the regulations should operate in any areas of Australia. In general, they apply everywhere unless ‘ excluded by him, except in the case of emergency control areas, where nothing applies unless he specifically so directs.

It is provided in the regulations that the central committee shall undertake the duty of assessing the compensation to be offered to a claimant, but in order to avoid unnecessary centralization of authority, with consequent delay, provision is made for the central committee to delegate power to local committees, to any member of itself or a local committee, to persons authorized to carry out hirings, or to .any member of the hirings service. It is proposed that the central committee should deal only with large claims and with such small claims as may involve principle. Where the owner of any property which is used for defence purposes is dissatisfied with the amount of compensation fixed by a hirings committee, or by any delegate, he may apply to a compensation board, which will be set up in each line of communication area. The board will consist of a police, stipendiary or special magistrate as chairman, a qualified practising accountant, and one other person who will usually have a knowledge of land values. Rules have been made providing for a proper hearing .before any such board, with legal representation if desired. The claimant or the Crown, if dissatisfied with a determination by a board, may appeal to the appropriate court.

The National Security (General) Regulations, insofar as they deal with compensation, are to be amended to bring the existing provisions into line with the proposals mentioned.

The new organization, when it commences to function, will be able to deal promptly with hirings problems as they arise. It will assist the services and other departments by providing the machinery for meeting their needs, and will be of assistance to members of the public whose properties are affected by war-time requirements.

Mr. J. B. Tait, a barrister, who is also a qualified accountant and who has specialized in business matters in the Supreme Court of Victoria, has been appointed chairman of the Central Hirings Committee. The Treasury representative will be Mr. Victor H. Evans, a former district finance officer of the Department of the Army. The third member will be Lieutenant-Colonel Davey, Director of Hirings. The personnel of the local committees and compensation boards to be set up in each line of communication area are now under consideration, andwill be announced shortly.

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– In view of the impossibility which many dairy-farmers find in producing butter at the present price, can. the Minister for Commerce say when an increased price is likely to be granted?


– I referred to that matter yesterday in answer to a question asked by the honorable member for Richmond (Mr. Anthony). The whole matter is now under consideration. We are doing all that is possible to expedite a decision.

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Re-organization of Security Service - Restrictions upon Individual Li berty - Procedure for Investigations - Classification of Aliens - Internment of British Subjects: Australia First Movement.

AttorneyGeneral · Barton · ALP

– I recently promised the House that I would make a statement on security matters in general, and also refer to the cases of twenty British subjects, sixteen in New South Wales and four in Western Australia, who were ordered to be interned in the month of March last.

Before I refer to these cases I should explain that, in March last, there was a re-organization of the Security Service throughout the Commonwealth. War Cabinet decided that in view of the imminent danger from Japan a widening of Security functions was desirable. Chief alteration was the appointment of a Director-General of Security for Australia and six Deputy Directors, one for each of the States of Australia. On the Director-General and the Deputy Directors very wide powers were conferred. It was arranged in March that under the re-organization the service should be administered by my colleague, the Minister for the Army, during my absence abroad. I assumed responsibility only last month.

In time of war the success of Security Service must depend upon full cooperation, not only of the Army Intelligence Branch, but also of all other Commonwealth and State instrumentalities, including the police forces, the Commonwealth peace establishment, the Commonwealth Investigation Branch, and officials in all government departments.

To discuss all these questions of security a conference was held here on Saturday last at which there were present the Director-General, all the Deputy Directors from the six States, representatives of the statutory committees, representatives of the Army, and the intelligence branches of all the fighting services.

I now turn to the general question of restrictions upon the libertyof persons within Australia, whether natural-born British subjects, naturalized British subjects of enemy origin, naturalized British subjects of friendly origin, or aliens. Broadly speaking, the accepted policy in relation to restrictions upon liberty of movement is and should be as follows : -

  1. The aim and sole justification of all restrictions upon individual liberty is to prevent injury to the war effort of the country, not to punish the individual. In short, the objective is preventive rather than punitive. This objective is clearly embodied in the existing regulations. The sole ground for restricting liberty is that the individual, if left unrestricted, might prejudice the successful defence of this country against the enemy.
  2. The second principle is that individual liberty is to be restricted only if there is a real danger that the individual will act in a way that prejudices the war effort. Therefore, restrictions if imposed should be imposed only to an extent sufficient to prevent the evil, full internment being reserved for cases where the possibility of injury to the nation is undeniable.

The difficulty lies in the application of these general principles to the infinite variety of circumstances, in the individual cases. Let me illustrate: The fact that a person is a natural-born British subject is a factor which should tell strongly in his favour. Neither in Britain nor here does such a fact establish immunity from the operation of the regulations. Then again, as between aliens naturalized and aliens unnaturalized, the fact of naturalization is a factor in the alien’s favour, On the other hand, it may possibly be shown that naturalization has been obtained as a mere cloak. In a word, all the circumstances of the particular case have to be weighed carefully.

It follows that there cannot be any absolute right of public trial in these cases of restriction of liberty. In most cases it would not be possible to prove that the accused person had committed a specific offence. Guilt of a specific offence is not the test to be applied. The test to be applied is whether the restriction is reasonably necessary to prevent the possibility of serious injury to the war effort. Again it is prevention, not punishment, which is the objective. For instance, the fact that an individual has been convicted even of a serious war offence will not in itself warrant restrictions on liberty after the legal sentence has been served. Equally, the fact that an individual has been acquitted on a specific charge should not necessarily give him an immunity from detention if there is solid ground for it.

Above all, it is absolutely essential that the facts of each individual case should be fairly, fully and impartially investigated.

There have been numerous instances of delay in dealing with many individual cases. The main cause of this is the very great increase of the number of internees occasioned by the extreme peril into which Australia was thrown by the Japanese threat of invasion.

I asked the chairman of the statutory committees for suggestions for improvement in procedure and, with the approval of the security chiefs, the following steps, all aiming at greater expedition, will now be taken: -

  1. In many cases delay has arisen because, even after a recommendation by a committee, the matter has gone back to Military Intelligence or a Deputy Director of Security to invite comment upon the committee’s recommendation. As a result, the final decision has been postponed, often for a considerable time. In future, the Deputy Director of Security must place his views on the case before the committee and before it makes its recommendation.
  2. The recommendation thus arrived at will have to reach the Minister within 48 hours of its being made.
  3. Even then, a Deputy Director of Security may advise against acting on the committee’s recommendation, provided clear, tangible and cogent reasons are given within the. same period of 48 hours.
  4. So far as is practicable the preliminary procedure of application for leave to object will be abolished. This will get rid of the double hearing which, of course, causes delay.
  5. So far as is compatible with security, it will be the committee’s duty to make sure that the person objecting knows the substance of what is suggested against him.
  6. Power will be taken to constitute additional committees and to enable committees from different States to act in aid of each other in hearing the evidence of witnesses. Committees will be given power to change the venue of the hearing and magistrates may be directed to hear the evidence of witnesses who cannot conveniently attend the main hearing.
  7. Power will be taken to enable any case to be investigated afresh by a committee if a further independent investigation seems warranted.

The next matter to which I wish to refer is that of restrictions upon aliens and alien enemies in respect of their moving from suburb to suburb, reporting to police stations, possession of certain chattels and similar restrictions. This matter was fully gone into at the recent conference. It has been decided that so far as possible the question of making restrictions less or rnore rigorous should be determined not upon a mass basis but upon an individual basis. It is considered that it would be wrong to lay down too rigid a general rule.Conditions vary greatly from State to State and within each State. For that reason, the Deputy Director in each State is being given power to administer the restrictions, having regard to local circumstances, keeping steadily in view the necessity for taking no risk in doubtful cases.

It is proposed to set up machinery to classify aliens in a number of categories according to their degree of reliability and trustworthiness. Such a system has been devised in Great Britain and a great deal of material already exists to enable an independent committee to perform a similar function here. This will greatly assist the administration of security by sorting out the cases. For the purpose I propose to appoint a committee of undoubted ability and impartiality with assistant State or local committees.

The last matter to which I refer is the question of the internment of twenty British subjects in March last. Normally such matters cannot well be discussed publicly but in this instance there has been concern and agitation, and, in the public interest, it is better to make the position perfectly clear.

First of all, it has to be remembered that the peril of invasion confronting Australia in March last was very real. At this critical moment, it was reported to the Minister for the Army that four persons in Western Australia were conspiring for the specific purpose of assisting the Japanese in the event of their invading the western and north-western coast. The report was so circumstantial that Military Intelligence in Western Australia felt impelled to suggest internment not only of the four persons from Western Australia but also of the persons associated in everyState with what was called the Australia First Movement. Action was taken forthwith. Both in Western Australia and New South Wales internments were effected at the order of the Minister. The total number belonging to the class was twenty-four in Western Australia, sixteen in New South Wales.

I deal first with the Western Australian cases. The names can be mentioned publicly because the four persons concerned were charged publicly with having conspired to assist a public enemy, namely, the Japanese empire. They were tried before the Chief Justice of Western Australia at a hearing lasting sixteen days. Two of them, Bullock and Williams, were convicted and sentenced to three years and two years imprisonment, respectively. The two remaining persons, Quicke and a Miss Krakouer. were acquitted. The evidence admitted indicated a plan to welcome the Japanese invader. For instance, a proclamation was prepared for the purpose of issuance after Japanese landings. It stated, inter alia : -

Proclamation of National Socialist Government of Australia. Men and Women of Australia: To-day a new Government assumes control of your destinies. Your Government brings with it an entirely new system based upon a negotiated peace with Japan and thenceforward peace and economic security for our nation and people. Henceforward the destiny of Australia will be guided by the single dominating thought and slogan of Australia First, which is the name of the political organization introducing the National Socialist system to this country.

Friendly policy towards Axis. Firstly - a friendly policy towards those governments known as the Axis powers.

Fourthly - abolition of the White Australia Policy.

Seventhly - abolition of all forms of democratic organizations, to include trade unions, and the restriction of religious institutions not giving 100 per cent, support to the National Socialist Government.

Twelfthly - those persons opposing the National Socialist system, or any person found committing sabotage, will be summarily shot.

An armistice with Japan has been declared and terms are to be arranged by an armistice commission, terms of peace will be negotiated at the earliest moment.

The Australian nation is ordered to lay down its arms. Regulations will be gazetted at once to enforce this decision. Any national disobeying this order will be summarily shot.

The nation will be governed by decree, and parliamentary democracy has ceased to function. The Japanese Army of occupation will maintain law and order until such times as the Government feel that the new system has been safely established.

Subsequently this draft proclamation was amended in certain respects, but in substance the seditious and traitorous objectives so apparent from its terms remained unaltered. For instance, the amended proclamation said -

Men and women of Australia: The Curtin Democratic Government, and those persons comprising the Opposition in the Democratic Jewish Parliament are traitors and warrant contumely of a free people. You are therefore warned that any act, word or deed committed by you and which is calculated to assist them to avoid the penalty they so rightly deserve for plunging this country into torture and misery will bring upon yourselves the death penalty without trial.

There was also some evidence from which the jury could find that plans were toeing made - (1) te contact the Japanese Army in various parts of Western Australia, (2) for the establishment of a provisional government, and (3) to assist the enemy by sabotage at selected places. i

As I have stated, two were convicted and the other two were acquitted. There was an appeal to the Court of Criminal Appeal. In delivering judgment, Mr. Justice Dwyer suggested that the acquittal of the two was possibly due - (1) to the jury’s sympathy with Krakouer as a woman under Bullock’s influence, and

  1. to the fact that Quicke had dissociated himself at an early stage from the plan. His Honour described the plan as “ a very grave conspiracy “. It appears that the Chief Justice stated that he thought that on the evidence all four should have been convicted.

All that need be added is that one of the two persons acquitted withdrew his appeal against internment and the other who persisted with the application was refused leave. It is perfectly plain from the evidence that despite their acquittal it would be utterly wrong to release the two persons.

I pass from the Western Australian cases to the sixteen New South Wales cases. Seven of these were dealt with recently by a committee which recommended that the internment be commuted to restriction in the case of five, but continued in the case of two other appeals. As I have already informed the House, effect has been given to the recommendations.

It is reasonably clear that there was no guilty association between the Western Australian conspirators and the sixteen New South Wales internees. This does not mean that there was no . association at all, because there was. For instance. Quicke wrote to Miss Krakouer as follows : -

I have had a letter from the Australia First Movement (Sydney). I gather they are willing to consider the formation of a branch of the movement in this State. lt appears to me that if matters do not develop along the lines at present anticipated, then it might be advisable for ins to have this second string to our bow. It could do no harm, and we would then be prepared for any eventuality.

My suggestion is that we immediately get in touch with the A.M.F. and invite them to send a representative to Perth to publicly launch a branch of the movement here. This need not in any way interfere with our present plans.

There was some other correspondence between several members of the two groups, but, as Quiche’s letter itself indicates, there is no evidence that the Australia First members in New South Wales were parties to the specific plan which the conspirators in Western Australia were fomenting.

But that brings me to the crucial point in relation to the nine internees of the Australia First, movement in New South

Wales. These nine persons demanded a public trial, and either did not appeal at all to the committee, or else withdrew their appeals before their completion.

Having made a preliminary investigation of all these cases I thought it desirable that there should be a full investigation of all the facts, and reports in relation to these nine persons. The Director-General of Security, the Deputy Director of Security for New South Wales, the officer in charge of Military Intelligence in New South Wales, an Assistant Director of Security at Canberra, and the Principal of Security Service, who deals with internments, were consulted. They joined in a recommendation upon which I decided to act.

In four of the nine cases full internment will continue. In relation to three of these four persons, I shall place before the House extracts from letters for which one or other of them is responsible.

These extracts strongly suggest the conclusion that the persons concerned were not friends of Australia but enemies of Australia, and were ready and willing to take advantage of enemy successes to support any movement for seizing power from the constituted authorities.

While the movement was called “ Australia First” the detestation which some of these persons had not only for Great, Britain and the United States of America, but for Australia as well, seems quite evident.

In the remaining five cases it has been decided to commute the internment to an order imposing restrictions with varying degrees of severity. Those joining in the recommendations were impressed by the fact that many were probably unaware of the objects of the inmost group, and by other special factors such as age. In one case, however, the case against the internee was very flimsy indeed.

This group of cases is an illustration of the principles which seem to me to be applicable to the question of restrictions in general. The internments were effected in a time of acute national danger. There was solid ground for fearing that the conspiracy subsequently proved as a fact in the Western Australian courts was extending to the eastern States. The three or four leaders of the New South Wales group were spreading propaganda calculated to obstruct the war effort. Their private opinions were disclosed only to those in the inmost group. This fact has only emerged after most careful subsequent investigation.

I can assure the House that, whilst I yield to no man in my desire to protect the civil rights of persons in Australia, there are times of crisis when the safety of the people as a whole must override ordinary court procedure. The public can rest assured that restrictions will be imposed or lifted with sole regard to the nation’s safety. Equally, they may rest assured that the Government will do its utmost to give to each person involved in a restriction order every reasonable opportunity to expose the fact that a mistake has been made.

page 156


I lay upon the table the following paper : -

Statement by the Attorney-General relating to Security matters generally and the internment of twenty British subjects in March, 1942. and move -

That the paper be printed.

Debate (on motion by Mr. Spender) adjourned.

page 157




– I asked the Prime Minister last week about the set-up of the Sydney office of the Allied Works Council, and he undertook to make investigations and report the result to the House. Have those investigations been made, and what has the right honorable gentleman to report?


– My recollection of what occurred last week is that I made a quick investigation’, and forwarded to the honorable member an interim reply.

Mr Rosevear:

– That was only one question, in regard to a magistrate.


– That was all the information I could obtain at the time. I am not yet in a position to advance the matter further. I have asked that the information be provided for me, but point out that the Allied “Works Council is engaged intensively in the task of getting through all the work it has to do. If there is any delay it is not because of unwillingness to provide the information. The same remark applies to my own part in getting it.

page 158




– I direct the Treasurer’s attention to a problem that has arisen following the decision of the Government with regard to rents. Many property owners are now receiving higher municipal valuations, although the returns they can secure from their properties are fixed by Government regulation. The effect of this is not only to create an added burden on them, but also to deprive the Commonwealth Treasury of revenue, as their payments of rates are a deductible expense in connexion with their properties. Have representations been made to the Treasurer in this matter, and has he any action in mind to meet the position ?


– I have had, I think, two representations in the form of letters from people in different States, who point out that although, generally speaking, the States have been keeping to normal taxation, a number of municipal councils are increasing the rates over and above those that applied prior to the war or even prior to last year. I am having the matter investigated. It will be apparent to the honorable member that to decide that a semi-government instrumentality shall or shall not do certain things would be to take rather a drastic step, but the matter is being considered by the Government.

page 158




– Can the Prime Minister tell the House what decision he arrived at in connexion with to-day’s deputation of racing men on tie subject of the restriction of racing?


– The matter is not sufficiently advanced for a statement to be made to-day.

page 158



Restrictions in. Western Australia - Rents.


– In view of the reply the Minister for Commerce gave just now to the honorable member for Richmond, is he in a position to advise the House under what conditions wheatgrowing will be permitted to continue in Western Australia next year? Will it be on a one-third reduction basis, or on the licensed area, or according to the amount of superphosphate that will be available?


– The future production of wheat in Western Australia and other States of the Commonwealth is to be discussed at the meeting of the Agricultural Council to be held the week after next in Canberra, when representatives of the States will be present.

Mr Marwick:

– The Minister should remember that fallowing is proceeding now.


– I expect that superphosphates will be a determining factor. In view of our knowledge that supplies are not available, it is only reasonable to expect a voluntary curtailment of the areas to be sown, simply because of the lack of superphosphates.


– Is the Minister for Commerce aware that since the announcement of the new wheat plan, financial institutions such as banks, trustee companies, and others have been increasing the rents of wheat-growing properties in new agreements ? In the interests of growers, and in order to ensure that the benefit of the scheme shall not be offset in that way to the disadvantage of growers, will the Minister discuss with his appropriate colleague or colleagues the question of issuing a regulation to prevent this practice?


– I have received information from trustworthy sources that there ha3 been an inclination on the part of the institutions referred to by the honorable member to take advantage of the stabilization of our primary industries since this Government assumed office. I shall take the matter up with the Treasurer and the Attorney-General to see whether protection cannot be given along the lines indicated by the honorable member.

page 159



Timber - Water Supplies - Stoppages


– Can the Minister for Supply and Development say whether there is any truth in the rumour that there is a considerable shortage of pit timber, and of water for laying the dust in mines? Roth are very essential for the safety of the miners. 13 the shortage of timber brought about by the call-up for the Army of men who were cutting pit timber? 1 If that is so, what steps is the Minister taking to enable some of them to be released to cut pit timber, and what attitude is he or his department taking generally to see that there are adequate supplies of this commodity, which is essential f6r the safety of the men in the mines?


-s-It is a fact that there has been a shortage of timber in some cases. No reports have been received of the water shortage referred to by the honorable member, but the shortage of timber is due to an accumulation of conditions which have manifested themselves in many ways, relating not only to man-power but also to transport facilities. The matter is being watched almost daily by the Coal Commissioner. The fact is that our coal production is at a very’ high level, which I am very pleased to announce, but the other matter is important and will be watched very closely.


– Can the Prime Minister state if it is a fact that four coal-mines were on strike in New South Wales yesterday, and that a, strike at the Pelton mine was authorized by the Northern Board of Management ? If such authority was given for the strike, does it mean that the Government cannot take appropriate action against those concerned?


I regret that I am unable to say precisely what was the position in New South Wales yesterday at the Pelton mine or any other mine. I have asked the Minister for Supply and Development (Mr. Beasley) to inform me of the exact position. It is true that the newspapers were put on my table this morning as usual, but, unfortunately, I have not had an opportunity to read them. I should like to emphasize, however, that so far as I know the relevant National Security Regulations have been enforced in all instances where breaches of the law have occurred, and I have no doubt whatever that the Attorney-General will see that that practice, which is also the policy of the Government, is continued.

page 159




– Last week I asked the Treasurer if he had heard of an announcement by a Minister in the New South Wales Government that a State land tax on rural lands in that State ‘ was contemplated, and whether he considered this proposal wise, in view of its effect upon Commonwealth finance at this stage. I now ask the Minister whether he has yet had an opportunity to look into the matter. Will he consider not only its effect upon Commonwealth finance, but also the fact that taxpayers who pay this new land tax will be able to deduct the amount from their income returns, with the result that the Commonwealth will really be paying a substantial portion of the State land tax?


– I am having an examination made of the point the honorable member raises. As I said before, any. interference with a State tax, however it may be applied, is a matter of government policy, and I should not answer the question, except to announce government policy after it has been given consideration.

page 159


Motion (by Mr. Chifley) agreed to -

That leave he given to bring in a bill for an act to amend the Income Tax Assessment Act 1936-41 as amended by the Income Tax Assessment Act 1942, and for other purposes.

page 159


Motion (by Mr. Chifley) agreed to -

That leave be given to bring in a bill for an act to amend the War-time (Company) Tax Assessment Act 1940-41.

page 160


Message recommending appropriation reported.

In committee (Consideration of Governor-General’s Message) :

Motion (by Mr. Chifley) agreed to -

That it is expedient that an appropriation of revenue be made forthe purposes of a bill for an act to make provision for the grant of financial assistance to States, and for other purposes.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr. Chifley and Dr. Evatt do prepare and bring in a bill to carry out the foregoing resolution.

Bill presented by Mr. Chifley, and read a first time.

Second Reading

Treasurer · Macquarie · ALP

– I move -

That the bill be now read a second time.

The purpose of this bill is to give effect to arrangements made by the Governmentwith the States consequent upon their agreement to vacate the field of entertainments tax for the purpose of allowing the Commonwealth to impose its own tax. The bill provides for the compensation of the States for the balance of the current year and also for the annual compensation to be paid during the period for which the act will be in operation. When the Government invited the States at the recent Premiers Conference in Melbourne to vacate the field of entertainments tax it proposed to compensate the States on the average of their annual collections for the two most recent financial years during which their taxes were in operation, namely, the financial years 1940-41 and 1941-42. This basis of compensasation was similar to that recommended to the Government in the report of the Committee on Uniform Taxation in respect of income tax, and was adopted by the Government in its measures implementing the recommendations of that committee. The Government is of the opinion that it is a reasonable and proper basis for the payment of compensation.

The States, with the exception of Tasmania, were not prepared at that conference to agree to the Commonwealth’s proposals, and asked that those proposals be put in writing so that the ‘State governments could give further consideration to them. That was done, and the States eventually agreed to vacate the field, but some of them made representations to the effect that the compensation payable should be upon the basis of the State revenue derived from entertainments tax for the financial year 1941-42 instead of the average for that year and the previous year. The Government gave consideration to this request and while adhering to its opinion that the basis proposed by it was reasonable, it decided, in view of the relatively small amounts involved in the change of basis, to grant the requests. Therefore, compensation will be paid to the State governments upon the basis of the revenue derived by them from their taxes on admissions to entertainments for the year ended the 30th June, 1942. The bill provides in the first schedule for the amounts payable to the States for the balance of the current financial year, provided they cease to collect taxes under their acts as from the date the Commonwealth provisions come into operation.

The second schedule provides for the payment of the annual amounts for each year during which the act shall be in operation. The amounts payable annually are as follows : -

Queensland derived no revenue from an entertainments tax, and consequently provision for compensation to that State under the arrangements made is not necessary.

It is proposed, as I have previously remarked, to introduce the Commonwealth tax on a date to be fixed by proclamation, and it is expected that the five State governments concerned will cease collecting their entertainments taxes as from that date. Upon the assumption that this will be so, and that the proclaimed date will be the 1st October, 1942, compensation for the balance of the current financial year amounts to £574,341, and will be paid to the several States as follows: -

The amount is, in each ease, three-fourths of the total amount payable in a full year. The Government may be charged with over -generosity in the matter of these grants. If it had compensated the States on the average of the years 1939- 40 and 1940-41 - the years chosen by the Uniform Tax Committee as a basis for income tax compensation- the total amount of compensation for a full year would have been about £700,000. If it had compensated the States on the average collections during the years 1940- 41 and 1941-42, the, total amount of compensation would not have exceeded £750,000. Instead, it proposes to compensate the States on the basis of the relatively high revenue year 1941-42, without any reduction on account of the savings in costs which the States will obtain from the lifting of their taxes. For the current , year, there has been no attempt to reduce the annual amount by more than the revenue of an average three months of, the 1942 year. But as an offset to the foregoing, it has to be borne in mind that, in the first year, the States may be called upon to repay taxpayers amounts collected in respect of stamped tickets purchased in advance. They may also’ have to refund tax paid on lump-sum payments by members of clubs, societies, &c, on entertainments which will not eventuate until after the Commonwealth tax commences to operate and which will then become liable to Commonwealth tax. The bill provides that the act will operate for the duration of the war and one year thereafter.

Debate (on motion by Mr. Fadden) adjourned.

page 161

BUDGET 1942-43

hi Committee of Supply: Consideration resumed from the 2nd September (vide page 33) on motion by Mr.

Chifley -

That the first item in the Estimates under division I. - The Senate - namely. “ Salaries and allowances, £8,660 “, be agreed to.

Darling. DownsLeader of the Opposition

– The traditional role of a parliamentary Opposition, as defined by Lord Randolph Churchill, is “ to oppose everything ; to propose nothing; and, if possible, to turn out the Government”. However, in the present extreme war emergency, the Opposition feels bound to adopt a more constructive role, and consequently it stands for the fullest co-operation with the Government in every measure which we consider will further the effective prosecution of the war. Whilst Labour’s first budget, which was introduced shortly after the present Government came into office, failed to measure up to the realities of war, the Opposition was willing to concede that actually Labour had not had an opportunity to frame a considered financial policy. But Labour has now been in office for eleven months, and consequently, it cannot be excused for failing to measure up to the realities of present-day war-time finance.

The Opposition’s main objection to the budget is that it fails to recognize, and neglects to face courageously, the realities of Australia’s present dire emergency. We on this side object no less strongly to it because it impends unnecessary difficulties during the period of reconstruction, which, we ardently resolve, shall be a period when our fighting forces particularly, and our people generally, shall be adequately rewarded for their strenuous efforts and sacrifices during the war. As to the magnitude of the expenditure proposed for war purposes, we offer little criticism; we realize that total war is a costly business. If there be no waste or extravagance, and if expenditure be allotted in correct proportions to the service and munitions departments according to the everchanging demands of war, we care not a rap what the total of war expenditure may be. Indeed, the higher the total, the better, if total expenditure means the maximum employment of resources for war and their most effective allocation and use, and the hastening of the day of victory. Australia demands a maximum war effort, and it is the responsibility of the Government to ensure that that demand shall be met.

At the outset, I emphasize that in presenting a budget involving such an enormous expenditure the Government owes a duty to the people to ensure that full value is received for every shilling of war expenditure. Our available resources are so limited in relation to urgent needs that extravagance must be avoided. For security reasons, the expenditure of the Departments of Navy, Army, Air, Munitions, and Aircraft Production, is shown in one grand total of £415,000,000; details are given of items aggregating the balance of only £25,000,000. For this reason the Government is under an even greater obligation to the House, and to the people of Australia, to pay increasing attention to the elimination of waste, and the correct allocation of expenditure. The Opposition is determined to exercise the strictest vigilance over war expenditure because waste and extravagance can have no place in a total war effort.

In considering various features of the budget, I shall begin by dealing with its main deficiency. The Treasurer has estimated, on the basis of the “ current level of expenditure with provision for known commitments “, that war expenditure will amount to £440,000,000 in the current year, and he has warned us that “ the experience of last year may be repeated and the figure consequently exceeded “. Yet, knowing this, he has made definite provision’, by taxation and otherwise, for only £140,000,000, leaving a dangerous gap of £300,000,000, and probably more, in the monetary defences of Australia. Where does the honorable gentleman propose to secure the financial reinforcements to close this gap? In a table, which he included in his budget speech, this deficiency of £300,000,000 is described as “Deficiency (to be financed by loans, &c.)”. Particular notice should be taken of the letters “ ite. “, for I shall have something to say about them later.

The Treasurer went on to say -

The amount of loans required this year is large, but its provision is not impossible.

Last year we doubled the receipts from public loans and got £120,000,000. If we double them again we shall get £240,000,000, which will take us a long way on our journey. It will leave £60,000,000 to be provided from savings bonds aud savings certificates. This is about the British rate of contributions to small savings, and, with our higher wages, should he capable of accomplishment.

Let us, for a moment, consider the reasoning by which the honorable gentleman reached his optimistic estimates. He said -

We doubled the receipts from public loans last year; if we double them again we shall get £240,000,000 this year.

How can the Treasurer possibly justify these estimates? Certainly, the experience of last year provides no justification for them. The capacity of the loan market is variously estimated as between £150,000,000 and £200,000,000, which is far short of the £300,000,000, or more, that will be required. It is misleading for the Treasurer to give the face value of war savings certificates, as he has done. According to the Commonwealth Statistician the net receipts to the Treasury from war savings certificates were only £8,790:601 last year, after allowing for redemptions. This is considerably below £13,194,000, the face value of certificates taken, up, which the Treasurer mentioned. Does this figure of £8,790,601 offer much hope for the raising of seven times as much by the sales of war savings certificates in the current year, when, in the same period, the Treasurer hopes to double subscriptions to war loans, notwithstanding the admittedly high level of subscriptions last year?

To prove the failure of the public to respond to the war savings certificate campaign, I cite the following figures: -

Surely these figures do not give the Treasurer any ground for optimism.

Let us turn to a consideration of Commonwealth finances for the year which closed on the 30th June last. The final accounts revealed that the Commonwealth met £319,500,000 of war expenditure, and £101,400,000 of expenditure for purposes other than war, on the basis of 50 per cent, of loan money and 50 per cent, of taxation.

In return for almost nothing of a permanent monetary value to us, the ‘Government borrowed £210,000,000, on which we, during our life-time, and our children during theirs, shall have to pay interest. The fact that this £210,000,000 was raised by loans and treasury-bills rather than by those means, plus additional taxation or national contribution from the lightly taxed members of the community, who are great in number, and who figure largely in the consumption as well as the production of goods in Australia, means that during 1941-42 the people were allowed to retain great spending power, which should have been devoted to the war effort. This is every body’s war, and ethically, every body should pay.

Apart altogether from the ethics of the case, there is an inescapable economic factor. We shall pay, whether we arrange it so or otherwise. If we arrange to pay for war as we go, we know where we Stand, and the sacrifice can be equitably spread. If we do not so arrange it, we shall pay by inflation indiscriminately and heavily, and economic confusion will add misery to the deflation that is born of inflation. During the last financial year, the Government had1 ample evidence of the inevitable results of the financial policy it had chosen to pursue. It had poor support for the war savings certificates campaign, and, though it was able to fill the loans it offered to the people, it finished the year with an increase of £78,400,000 in. the amount raised by the simple, but inflationary, process of discounting treasury-bills with the Commonwealth Bank.

The Government has complained of an orgy of spending and has made numerous appeals to the people to be more temperate in their living arrangements. Instead of receiving a worthwhile response, it has witnessed the dubious spectacle of note-hoarding at an unparalleled rate and of deposits flowing into the savings banks at a record level. The premature disclosure of the Government’s clothesrationing plans was followed by the greatest orgy of unnecessary spending in the nation’s history. Again, appeals by the Prime Minister were ignored. Apparently, black markets have since become a major problem for the ‘Government. The rationing of a great variety of necessaries, a3 well as of luxuries, has also become imperative. Much of this commodity rationing would not have been necessary had the Government done the straightforward, sincere and sensible thing and rationed money in the hands of the great body of consumers.

Higher incomes have been taxed almost savagely, but the huge volume of spending power in the hands of the section of people which receives about 70 per cent, of the total personal incomes earned in the Commonwealth is practically untouched.

Already, the record volume of spending power in the hands of the people is infected with inflation, and, as we shall see, there ls every prospect of the disease ‘becoming worse. Both the Prime Minister and the Treasurer must surely now admit frankly that the voluntary system has proved an utter failure. Upon coming into office, the Prime Minister quite rightly said that there were thousands upon thousands of persons in Australia who had resources open to them to save something, to lend something, and to give something. Not only the number of persons, but also the resources available, have increased considerably in the eleven months the present Government has been in power. The response of .the people must therefore be sadly disappointing to the Prime Minister.

That the voluntary system has been a failure is admitted in an official government publication which I have just received. This is what it says -

It is apparent that millions of men and women have not yet subscribed to government war loans. While they may_ have bought war savings certificates and national savings bonds, they have not done so to the limit of their capacity.

Slowly but surely, it must he becoming apparent to the Prime Minister that, if the Government is to have all the money it needs to wage war, his views on the compulsory raising of money will have to undergo the radical change that his and Labour’s policy on several other matters has undergone.

  1. propose now to refer to the current financial year. This year the Government seeks to borrow £300,000,000. How can this action be reconciled with the attitude adopted towards the borrowing proposed in my budget last September? It was then proposed that £25,000,000 should be raised by national contribution, and £.122,000,000 by loans from the public and banking system. The latter was not disguised by using the word “ etcetera. “ as the Treasurer did in this budget.

Evidently some members of the present Cabinet have changed their- opinions on borrowing. The Minister for War Organization of Industry, for instance, said of my proposed borrowing -

In my opinion, too much of the money to he raised is to come from loans . . . 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?

And the present Attorney-General also had something to say on my proposed borrowing. His main criticism of my budget was as follows : -

The adoption of its principles would tend to destroy all hope of building a greater and happier Australia. What would happen to schemes in respect of housing, rural development, re-establishment of primary industries, and the improvement of our general standards of living, the development of education, child welfare and the like, if such a budget were to characterize Australian economy during the next two or three years? A crushing burden of debt which would be too great for Australia to hear is threatened.

The Attorney-General added that he “ was not so optimistic as to think that a satisfactory economic structure can be erected on a foundation of public debt and interest”. He went on to say -

In making nui- financial proposals to the country, we shall take rare not to create a burdon of debt which would crush our children and our children’s children, but we shall do something to make Australia a ‘great and prosperous nation.

That is what members of the Government, which has just brought down this unrealistic budget, had to say only a year ago concerning my proposals to raise £25,000,000 by national contribution., and £122,000,000 by loan. Yet to-day, they ask Parliament to approve their proposals to borrow, without safeguards, an amount which is at the very lea3t twice as much as that which my government then proposed. The Government has learned nothing, or has chosen to turn a deaf ear to the obvious warning provided by the experience of last year.

The budget now before the House is infinitely worse than the previous one brought down by the Treasurer. Whilst no one will quibble at the size of the budget, even though war expenditure is estimated to cost us at least 8s. in the £1 of the national income, there is every reason for dismay as to the form the budget takes. With an expenditure of £12S,000,000 greater in view, an even more perilous financial course is to be pursued. This year, the portion to be met out of revenue is not even 50 per cent. - it is down to 46 per cent. Loans are to increase from £210,000,000 to £300,000,000. At this rate our national debt will very soon exceed £2,000,000,000. This Government’s financial policy is probably the most questionable feature of our entire war effort. In effect, the Government fixes an enormous but justifiable figure for our war effort, and then proceeds to put economic obstacles in the way of achieving that effort.

It is not only the Government’s own war programme that is affected. Fighting, as we are, or should foe, a total war, the budget, involving directly more than half of the national income, becomes the key to the pattern of all private industry and finance. The remainder of the national income is largely influenced by national security regulations, as well as by the Government’s centralized economic policy. If Government finance crashes, all industry crashes. I insist that we are running grave risks of this happening. Since the war began, our £5 note will buy only £4 worth of goods, and this in a country where, unlike Britain, we produce nearly all the essentials of life within our own shores.

This moves me to observe that the Government has not shown much confidence in its ability to fill the breach in our financial defence by me’ans of loans from the public. The Treasurer said -

Whatever direct controls are established . . the excess spending power must be transferred to the Government to pay the fighting forces and for the labour and materials used in producing munitions and war supplies. This is the financial price which must be paid. Whilst relying, to a large extent, on the voluntary efforts of the people, the Government is resolved that its payment will not be evaded.

Then we have the Prime Minister’s threat that if the people do not respond adequately, the Government intends “ to ration everything”. Rationing is no financial solution. It certainly makes resources available, but the money still must be found. With everything rationed, people may still hold on to their money. Where, then, is the Government to obtain its financial requirements? It would appear that the money ,is to be provided, by the Central Bank. There will be an infiltration of treasury-bills and treasurynotes into the gap in our financial defences.

Actually, last year, £78,428,000 was provided by treasury-bills discounted with the Commonwealth Bank, whilst £5,596,000 was financed :by the temporary use of treasury balances. This had the effect of increasing the money supply. From October, 1941, when the Government came into power, until the end of July of this year, notes in the hands of the public increased by no less than £30,000,000. Some idea of the magnitude of this increase of £30,000,000 worth of notes in the hands of the public is afforded by comparison between its occurrence in a few months and the fact that, in the four years from the end of 1937, to the end of 1941, notes in the hands of the public increased by only £24,100,000.

In a few months, the Government has been responsible for increasing the notes in the hands of the public by no less than 51 per cent., even though at the beginning of its term of office the note issue had reached a high level1 as the result of a liberal credit policy. Between the June quarter of 1941, and the June quarter of 1942 - period’s which I have chosen in order to avoid seasonal influences - current accounts in all banks, including the Commonwealth Bank, have increased by over £37,000,000, or nearly 20 per cent., to a record figure of £225,500,000. These two items, together with coin, have been described as the “ active stock “ of money. At the same time, what is called the “ reserve stock “ of money has also been increasing. If this reserve stock of money be drawn upon, the effect is similar to the creation of new money.

The items in the “ reserve stock “ have increased as follows: Savings bank deposits for October, 1941, until June, 1942, by £10,112,000; and from June, 1941, to June, 1942, by £21,480,000 Other, bank deposits bearing interest, that is to say, fixed deposits, have fallen between the June quarter of 1941 and the June quarter of 1942 by £12,856,000. The reduction of fixed deposits, together with the increase of current account deposits and notes in the hands of the public, tends to confirm my opinion that the public has been drawing upon its “ reserve stock “ of money in that period, thus ‘assisting inflationary tendencies. These figures are eloquent of the inflationary tendencies that have been stimulated by the Government’s financial policy since it took office. If that be the amount of inflation which has occurred in the last financial year, how much more will occur in the present year as the result of the Government’s policy?

Even if the public were to subscribe the very large sum ‘ of £200,000,000 by way of voluntary loans, that would still leave £100,000,000, and probably more, to be financed by credit expansion. However, it is unlikely that the public would provide (the whole of the £200,000,000 from current incomes. lt is almost certain that a large proportion of the money would come from the savings of the people. To this degree, the weight of money leading to inflation would be in excess of the £100,000,000 of new money which is needed on the assumption that the public subscribed voluntarily the large total of £200,000,000. It has been said that it is appropriate for the Government to borrow from the central bank amounts equivalent to the special war-time deposits of the trading banks. This contention reveals a gross ignorance of the purpose for which these deposits were established. The reasons for the special war-time deposits were explained in my budget last September.


– Will the Leader of the Opposition tell me who made that suggestion ?


– The suggestion appeared in the press, and I repeat it as a warning.

Mr Chifley:

– It did not emanate rmm me.


– The principal reason was to prevent a secondary expansion of credit. If the belief is accepted and acted upon by the Government, that these special war-time deposits of the banks with the central bank afford a basis for further Government borrowing from the central bank, the whole object of the scheme .will be rendered null and void. The inflationary orgy will exceed even its present bounds, because the Government will be indulging in not only a primary, but also a secondary expansion of credit.

I shall now refer to the operations of price-fixing and rationing. It is generally agreed that the Prices Commissioner and his staff have performed useful service in preventing profiteering and in regulating the increase of prices, which has occurred since the war began. Index numbers are far from perfect, but they are the only available record of price movements. For the pre-war year of 1938-39, the weighted average for the six capital cities of the retail prices of “ food, rent, clothing and miscellaneous “ was 894. In July of this year, the relative figure was 1,050. This means that in July, retail prices, according to the price index, were over 17 per cent, higher than they were in the last pre-war year.

By comparison with prices movements in other countries, this represents a considerable achievement by the Prices Commissioner. However, he cannot correct the faults of financial policy. If the Government will not do the obvious thing, and remove the excess of money incomes over the available civilian goods, the Prices Commissioner must go warily in limiting price increases. Otherwise, he is likely to drive essential industries out of production by making it impossible for them to cover their increasing costs.

It is evident that while only a few items are rationed and a banked-up flood of spending power remains, the flood will flow towards the goods and services that are not rationed. Production will be diverted to these goods; even the consumers may not really desire them. While the Government leaves taxable capacity untouched and persists with excessive credit expansion, it is driven towards greater and greater regimentation of every part of our lives in order to avoid the catastrophe of uncontrolled inflation. We have witnessed the process day by day, and now we are being threatened by the Prime Minister that if we do not respond to his appeals for austerity, the Government will proceed to “ ration everything “. We are in grave danger of becoming not only the arsenal of democracy in the South-west Pacific but also an “ arsenal of bureaucracy”, to use the phrase that an American writer applied to his own country. The Opposition joins issue with the Government regarding its interpretation of the functions which rationing should fulfil in our war and post-war economy. J. M. Keynes, the English economist, has described the object of a well-conceived policy of rationing as follows : -

Its purpose is not to control aggregate consumption, but to divert consumption in as fair a way as possible from an article, the supply of which was to be restricted for special reasons.

If the article is not a conventional necessity or one of general consumption, the end is reached most easily by allowing a rise in the price of the article, the consumption of which we wish to restrict, relatively to other articles. But if this article is a necessity, an exceptional rise in the price of which is undesirable, so that the natural method of restriction is ruled out, then there is a sound case for rationing.

Honorable members on this side of the House are as anxious as the Government that the poorer man shall not receive less of the necessaries of life than his rich neighbour. We whole-heartedly approve the degree of rationing which ensures this. Keynes further states -

Shop shortages and queues lead to great injustices of distribution, to an abominable waste of time and to a needless fraying of the public temper. If by a miracle the method was substantially successful, so that consumption was completely controlled and consumers were left with a significant fraction of their incomes which they were unable to spend, we should merely have arrived by an elaborate, roundabout and wasteful method at the garni’ result ae if that fraction of their incomes had been deferred from the outset.

This sums up perfectly the attitude of the Opposition towards the Government’s financial policy. However stringent may be the direct controls, the excess of spending power remains. This invisible inflation represents . a deadly menace to Australia in the post-war period. The prolongation of unnecessary restrictions upon our lives after the war, through a failure to face and solve our war problems as we go along, would be intolerable. As the result of its approach to the financial problem, the Government is storing up trouble for the future and is in a real sense making posterity pay for the present faulty financial policy. Surely every Australian civilian is prepared to pay a safety insurance premium to cover his very existence, and all his possessions. As the Treasurer (Mr. Chifley) has said -

Effort and sacrifice of comfort by civil population is the least part of t’he price. Many in the forces, many of the nation’s sons, pay the supreme price of war. No financial price compares with that. i

Surely no civilian will begrudge provision of some of the finance necessary for the proper equipment of our fighting men. Surely, too, the people are eager and willing to take up the burden of finance which may arise from concessions and exemptions to our fighting forces. But what do we find? So little does the Government appreciate the patriotic feeling of the great mass of our people, and their willingness to pay the financial price, that it is not even asking the most numerous section of the population to pay the insurance premium by way of a direct contribution to the cost of the war. The Government’s timidity and lack of offensive spirit is out of harmony with the fighting temperament of the great majority of Australian people. Figures that I gave to the House last year showed that wage and salary earners had received marked increases of income, particularly the group earning up to £400 per annum. When the income of a. man in these lower ranges increases he is fortunate enough to receive a marked increase of net income, and does not feel the burden of taxation very greatly. Many young men and girls, who have been technically trained by the Government, have moved up from the class of unskilled to that of skilled workers, and get commensurate increases of income. They are not asked to contribute anything by direct taxation. In this, the fourth year of the war, tens of thousands of people have greater net incomes after they pay their taxes than they had when the war began. In Australia to-day, 2,780,000 income earners, with incomes up to £400 per annum, receive in the aggregate £590,000,000 out of a total of £850,000,000 received by all income earners. Those are the minimum figures. I have requested the Taxation Department and the Treasury to supply me with up-to-date statistics on the subject. I do not accept them as correct, because, if the figure used by me two years ago, namely, £800,000,000, was correct, there must have been an increase of more than £50,000,000.

Mr Paterson:

– Is that the taxable income ?


– No, it is the income of the people and it is entirely distinct from the national income. The Prime Minister has used the figure more than once and I used it when I said that the wage fund in Australia had increased by £150,000,000 since the outbreak of war. I do not know how that figure can be reconciled with the increase of only £50,000,000 that I am asked to accept. However, for the sake of presentation, it is accepted, but it can be regarded by the House and the country as the minimum. This represents approximately 70 per cent., according to an official estimate, of the total taxable income of Australia. Yet, the income-earners receiving up to £400 per annum are being called upon to pay only 3.9 per cent, of their income by way of direct taxation. The figure of £590,000,000, which is the aggregate of incomes received by this class, represents a very large proportion of the national production, or of what amounts to the same thing, the national income. In terms of resources, 70 per cent, of national income represents a vast field of labour and materials which can be drawn upon for national defence. Yet,

I repeat, only 3.9 per cent, of these resources is being taken by direct taxation, leaving a balance of 96.1 per cent. The Government, through uniform taxation, has actually reduced taxation payable from these lower incomes, a field which the States, even before the war, had the courage to tax to a greater extent. At the same time, the Government has conferred additional benefits mainly on this class by more liberal social legislation. The Government has let the moneybirds out of the cage by uniform taxation, and is now chasing them back through the austerity campaign. My proposal to apply a national contribution scheme would not have let this revenue escape. Nor would residents of the States have suffered. They would have had a nestegg for the post-war period, backed by the whole of the financial resources of Australia, as are the bonds the Government is now selling, and the £60,000,000 worth of war savings certificates that it hopes to sell, and this nest-egg would have been made available to them probably long before the maturity date of long-term loans. The Government has not hesitated to tax severely other ranges of income which represent the use for consumption of a much smaller aggregate of labour and materials available for war purposes. Incomes of £1,500 and over in Australia aggregate £69,000,000 of income. Out of this the earners must pay under uniform taxation 52.9 per cent, in direct taxation, leaving a balance of 47.1 per cent. Incomes of £1,001 to £1,500 per annum in Australia aggregate £31,000,000. Of this the earners must pay 25.8 per cent, in direct taxation, leaving a balance of 74.2 per cent. The 270,000 incomes of £401 to £1,000 per annum aggregate £160,000,000. Of this the earners must pay 15 per cent, in direct taxation, leaving a balance of 85 per cent. If the whole of the remaining net income of persons earning over £1,000 a year were taken from them, only £55.5 million would be raised. Even if only half of their remaining net incomes were levied, it is extremely likely that their taxable capacity would be greatly reduced and much less than £27,750,000 would be raised. Whichever way the situation is looked at, the groups receiving incomes up to £1,000 a year and particularly the group receiving incomes up to £400 ia year, are the repositories of the remaining taxable capacity, and the greatest consumers of the remaining labour and materials which can be diverted to war purposes.

A striking difference in the distribution qf direct taxation is revealed by comparing these ‘figures with those for the United Kingdom to which we look for assistance. A single .man in Australia with an income of £200 pays a tax of £7 18s. per annum. In Britain, a man on a similar income pays more than four times as much tax, namely, £32 10s., of which £10 16s. 8d. is a post-war credit. In Australia, a single man earning £4!00 per annum pays £57 6s. as ta’x, whilst in Britain a man on a similar income pays nearly twice as much, namely £111 2s. 6d., of which £23 6s. 8d. is a post-war credit. The tax payable in Australia by a single man earning £3,000 a year is £1,599. In Britain a single man on the same income pays £1,462, including £60 postwar credit. Prom these comparisons, it is clear that the severity of Australian taxation exceeds that of the highly taxed British people in the higher ranges of income. In the lower ranges of income, however, Australians pay much less than their kinsfolk overseas. There is need for a clearer recognition of the unpalatable fact that the sacrifices of total war cannot be avoided whatever financial shifts be employed.

Make no mistake about it, the Government’s (financial and other policies involve sacrifices for all groups of incomeearners, even though it may choose surreptitious means to disguise them. My proposal to come into the light of the day and apply these sacrifices more through direct contribution by the earners of lower incomes is very much to their advantage. Their real sacrifice will be more, equitably spread than under the Government’s policies, and they will benefit no less than will other sections of the community by the avoidance of a chaotic: situation which involves great peril ro Australia, not only during the war, but also in the period of reconstruction which must follow the war. In these days, when all available man-power should bf directly applied to war purposes, the roundabout policies of the Government are absorbing too much of the time and energies of members of the Government, their advisors and the growing staffs of public servants which are needed to administer and to police their measures. Once again, I must emphasize the superiority of the method of national contribution over the alternatives applied by the Government. The advantages in favour of national contribution’ may be summed up as follows : The necessary finance is secured directly from current incomes. We are using resources , now to fight for war, and we must draw off incomes now in order to pay for the, use of these resources. It is not sufficient to draw upon the money savings made in some past period; this, as I have already indicated, can result only in inflation. National contributions can be levied exactly and equitably on the people who are best able to bear them. They do not require thu hectic stimulus of inflation for their success. In addition, national contributions ensure that the people who will most need savings to tide them over the difficult period of reconstruction after the war shall be provided, when the time comes, with the savings they need. Moreover, when the stimulus of war production is removed, spending by the people from these savings will help to ensure that we shall not emerge from the war into a period of economic stagnation. The Government, during the course of the debate on my budget a year ago, demanded to know how the national contributions which I proposed could possibly be repaid. Surely, it cannot now believe that it is impossible to repay them, when it is seeking through voluntary loans an amount which is twelve times as great as the national contributions then proposed. In just the same way as government loans are backed by the whole of the financial resources o;f Australia, so the lenders of national contributions acquire one of the soundest, if not the most sound, investments in the country. The refusal of the Government to accept t,he method of national contribution can be ascribed only to political considerations. It opposed the method in the oast, and now it is afraid to admit its mistake, and to introduce the method into its financial policy. The principle underlying national contributions is fully conceded by the Government in the crediting of deferred pay to soldiers. If it is necessary to treat our soldiers in this way, why is it not sound to apply the same principle to our civilian population that is not now contributing its fair proportion, and is not subject to the same dangers and sacrifices as are our fighting men? The Government avoids the use of a novel method of finance fully adapted to the needs of modern war and designed to share the burden equitably. I predict that sooner or later, and probably much sooner than many people imagine, the Government will be driven by the pressure of events to have recourse to a national contributions scheme. In contrast, the Government is floundering up to its neck in inflation, while crying plaintively for austerity.

Before I conclude, something must be said about the vague proposal in the budget to go to the country on a referendum to transfer greater powers to the Commonwealth in order to assist in the task of post-war reconstruction. The inclusion of reference to this in the budget scarcely seems any more relevant than some of the other “ padding “ which has been used to disguise the budget’s main deficiency - the yawning gap, or “the Great Australian Bite” of £300,000,000 to which I have directed attention. Much more evidence than is given in the budget is required to convince us of the urgency of the proposed referendum. The Government is not putting first things first, if in this, Australia’s most critical hour, it devotes valuable time to a constitutional issue affecting the period of reconstruction, when we have not yet done all that is necessary to ensure security from foreign aggression. If the Government were to pay half the attention to its financial policy that it appears to be giving to controversial constitutional issues, it would do much to alleviate the post-war difficulties which its constitutional measures seek to remedy. No doubt constitutional and many other changes will be required in order to safeguard post-war reconstruction, but there is a time and place for everything.

This budget is a failure, because it lacks the spirit of offence, without which we cannot throw back the enemy. It grossly misjudges the willingness and ability of the largest section of the Australian community to accept cheerfully the sacrifices required’ for a successful all-in war effort. It endangers the whole structure of Australian economy, and jeopardizes the prospects of post-war reconstruction. Never before in the history of Australia has it been so necessary as it is at present to sink all differences and join hands in a common effort. To this end there must be a pooling of resources, a sharing of knowledge, and the closest possible team work.

Three years of war have imposed a particularly severe strain upon Australia. There is little likelihood that this strain will he eased or relieved. On the contrary, it is likely to become more severe. Intensification of the Strain of war must be accompanied by an intensification of the strain imposed upon the government of the country. More than that, the responsibilities of government increase enormously. And there is a growing feeling that, if this war is to be prosecuted with the ‘maximum degree of efficiency, all sections in the Parliament should share in that increasing responsibility.

Nine months ago- shortly after Japan entered the war and long before the international . situation wa,s anything like so critical as it is to-day-^- I emphasized that no one party could possibly do all that was requisite to be done in the interests of Australia in the conditions in which we found ourselves. To-day, with a full recognition and appreciation of the services the Prime Minister has rendered to Australia during the most critical period in its history, I say that no one party can speak for a united Australia and give the requisite all-in war effort, particularly having regard to the financial policy that we are asked to accept. The Prime Minister has been insistent in his appeals for unity in the fight against the enemy. I fully endorse that appeal. At the same time I am firmly of opinion that the people should be given a lead in this Commonwealth Parliament. The gravity of the war situation is such that the Government of Australia should consist of the best brains available, irrespective altogether of party political considerations. “What matter.” to-day is not political parties or consequences or repre- cussions, but the winning of the war. Therefore the administration in control of the affairs of the Commonwealth has a responsibility to make certain that everything possible is done to give the nation a 100 per cent, all-in Avar effort in order to hold the title deeds of this country. There can be no weak links. If there are, and these links are allowed to remain, or are not strengthened, we shall surely pay the price. What has to be borne in mind is that the Government in power in the Commonwealth Parliament at the present time represents approximately fifty per cent, of the population of this country. Is the remaining fifty per cent, to be denied a voice in the war-time administration, and to be deprived of proper trusteeship and guardianship in its hour of need ? Therefore, 1 say most emphatically that no one party is qualified to govern this country in the circumstances that confront us. What is wanted is ah all-party war administration. Its political composition could be forgotten, and every member of it could concentrate wholly on winning the war.

With such a government in power, the people could be assured that the finance necessary to fight this war would be raised by equitable means, and that their future, especially financially, would thereby be secured and assured. Furthermore, such a government, composed as it would be of men with experience in industry and of men from the other side of the House with experience in industrial affairs, would be able to formulate and implement an effective war-time policy. I have discussed this budget on a. non-party basis, and I hope in a not ungenerous manner. For the sake of Australia I urge the Government to give close consideration to the dangers which are inherent in the budget. This is no time for saving face or for stubborn resistance to measures designed to assist ‘ the war effort and the task of reconstruction. We should get together and co-operate in the interests of Australia, of our Allies, the people we are fighting with and fighting for, before the day grows too late and the night too dark.

Minister for Health and Social Services · Melbourne Ports · ALP

– Whilst listening to his specially prepared essay on the budget - very carefully and cleverly prepared, too - I could not help ‘thinking that the Leader of the Opposition (Mr. Fadden) had his tongue in his cheek most of the time he was speaking. He made some very sensational charges. He not only said that the Government had failed, but he also said that the people had failed. Yet the people have not failed to respond to every appeal made to them by the Government. I think the whole of the righ t honorable member’s attitude can be understood by the last two or three paragraphs of his speech, in which he let the cat out of the bag. There are two things that the members of the Opposition are still smarting under, and have been smarting under for nearly three years past: One is the failure of, their continued efforts to get a national government, and the second, felt particularly by the right honorable member, is our refusal to accept his policy of compulsory loans.

Mr Beck:

– The Government may yet have to accept it.


– KEt may ; no one can be sure of what is in the future. Everything that we have asked for, the people have cheerfully given, and we have more faith in them than to expect to be forced to resort to compulsion. The Leader of the Opposition refers, every time he speaks, to the failure of the Government, because they have not adopted his scheme of compulsory loans. It is because he is smarting under his failure to have that particular part of his policy adopted, and because the members of the Opposition generally are smarting under our refusal to accept a national government, that they cannot ‘give, as I believe they want to give, that whole-hearted cooperation which would secure the 100 per cent, unity that we require. They are still fighting for those two faddish ideas, and in any circumstances they will continue fighting for them. They are not satisfied that they can give complete cooperation and secure complete unity unless they get a national government.

Mr Rankin:

– It is working well in New Zealand. ‘


– It does not matter where it is working well. The last government was composed of two parties who failed to agree; yet honorable members suggest that we could do better with a government representative of three parties. When the Leader of the Opposition said that the Government had failed, I could hardly believe that he meant it. We have only to look back a short nine months, to the time when the right honorable member for Kooyong (Mr. Menzies), then leading the Government, was succeeded by the gentleman who has just sat down. Their parties handed over to us this problem, because it was too difficult for them to handle, and when they did hand it over the present Government was faced with an empty cupboard. I remember going about that time to two or three large military camps in Victoria, including Puckapunyal. It had been necessary to collect rifles, so that there would he sufficient to go round among the handful of reinforcements being sent forward.

I am surprised that the Leader of the Opposition did not take into consideration, temporarily at any rate, the circumstances obtaining to-day as compared with those prevailing when the last budget was introduced. The position has changed completely. The right honorable gentleman made no attempt to deal with the budget at all. He emphasized the value of his own proposal for compulsory loans, but he did not criticize the budget. He said at the outset that the Opposition was prepared to stand up to every penny of increased expenditure contemplated by the budget, no matter how heavy the demands due to war might be. When speaking at public meetings he admitted_ that the Government had made a good job of the problems associated with war-time expenditure. How, “therefore, can he now declare that both the Government and the people have failed ? Every public loan has been fully subscribed, and war savings certificates have been issued in greater numbers than were thought possible. There is no justification for the allegation that the people have failed.

Mr Anthony:

– The Government should not fail the people.


– It certainly will not fail. It is making the position of Australia stronger every day. The principal thing about which the Opposition is upset is that the public recognizes that this Government is dealing with the war problems more effectively than did the last Ministry, and that it has not failed.

Two or three outstanding proposals in the budget are objected to by the Opposition. First there is the scheme of uniform taxation. Most members of the Opposition are opposed to that. They also object to the proposal by the Government that alterations of the Constitution should be made in order to give increased powers to the Commonwealth in certain directions. The Leader of the Opposition should admit that the Government did right in making an early pronouncement as to its views in that regard. Surely it is not now suggested that the Government should wait until the last moment and then spring its constitutional proposals upon the people. The Governments of the States and also the members of this Parliament are entitled to notice of the intentions of the Commonwealth Government with regard to amendments of the Constitution. Despite the dismal predictions of the Leader of the Opposition, it is necessary for the Commonwealth to retain some of the powers that it has taken with a view to providing for the post-war period. At the outbreak of the war I forecast that as the war proceeded the budget would inevitably increase year by year. Everincreasing supplies of food and munitions are required for the conduct of the war, and nobody should be surprised to find the budget mounting by many millions annually. We must aim at having greater stocks of food, munitions and war equipment of every kind at the end of the war than at any other period, if we are determined fully to safeguard the interests of our people. The Government is endeavouring to prevent the invasion of this country, and surely nobody will complain of the heavily increasing cost of that effort.

The Leader of the Opposition referred to the opinions of Mr. J. M. Keynes, but did not mention that Mr. Keynes, in his last broadcast, pointed out that there was no monetary problem that could not be solved. Within recent months Mir. Keynes has declared thathousing programmes and all kinds of works of reconstruction during the postwar period can be carried out, and he has said that the bolder those schemes are the better. The right honorable gentleman did not mention the statement by Mr. Keynes that there would be no difficulty in obtaining the necessary finance; he spoke only of his fear of inflation. But Mr. Keynes said that there would be no danger of inflation so long as we adopted a long-range programme and did not make the pace too fast. He declared that if the physical resources of the people were not exceeded there would be no danger whatever of inflation.


– He did not say anything of the sort.


– He did. I have in my office a copy of his remarks which I shall ask some subsequent speaker to quote. Every body knows that the number of people engaged in civil occupations is being reduced from day to day and from month to month. More and more people, both male and female, are being transferred to the fighting services and to war production, and that process will continue. Despite the objection of the Opposition, the Government must continue the rationalization of industry, which involves the closing of some industries and the forcing of people into occupations that they have never previously followed. These things are distasteful, but they must be done. I cannot understand why honorable members who declare that they desire the Government to meet the war position squarely make complaints about interference with the business and private convenience of the people. No Government would dream of introducing some of the proposals contained in the budget were they not necessary to meet the exigencies of war. I make no bones about predicting that the position will become worse and worse as the war continues. Why should we put all our eggs in one basket? We are wise to leave some fields for future exploitation, if necessary. Apparently, the Opposition is fearful and dissatisfied because we have not reduced taxes to a minimum and forced down the standard of living. But there has been no need for the Government to cut into the economic conditions of the workers. When the necessity arises, the workers will have to face these things, but so long as the Government is able to carry on without taking that action, it will do so. Standards of living are not being forced down in Great Britain and in other countries involved in this war. In fact. they are being improved.

Mr Spender:

– If purchasing power diminishes, the standard of living must also go down. ,


– tin Great Britain, the United States of America, and Canada, the living standards are being improved at a much faster rate than is the case in this country. Those countries have found that it pays to increase social services and the economic standards of the people,, upon whom rests the responsibility of producing the goods necessary to carry on this war. Halfstarved people are not good workers. Therefore, so far as this Government is concerned, the economic conditions of the working people will not be touched until such action is absolutely necessary. We shall have no hesitation in facing these things when they must be faced, but there is no need to face them now. We are getting along all right as we are. I make no apology for, supporting this budget, and I am confident that the people of Australia will respond generously to the appeal that is being made to them. In fact, I predict that some honorable members opposite will be astounded to learn how many hundreds of thousands of bondholders there will be in Australia at the end of next year. Probably 500,000 or 606,000 basic wage.earners will become war .bondholders this year or next year as 1 a result of the Government’s appeal, and I am confident that we shall obtain all the money that we require without resorting to compulsion as is suggested by the Opposition. Many members would prefer that government bonds should be the exclusive perquisite of the rich. What does it matter how the money is obtained so long as the full amount required is available? Surely if the Opposition honestly desires to cooperate with the Government in its war effort it should not object to money being obtained by voluntary methods. I do not know of any one in the community who is being overlooked. Every one is suffering, but apparently honorable members opposite desire to make a compulsory <;ut in the wages of workers who are now employed for twelve or fourteen hours a day in war industries.

Mr Paterson:

– We do not.


– If the Opposition proposals were carried out, the standards of living of these people would be seriously impaired. The fact is that they will be taxed under this , budget I agree with the Leader of the Opposition that the workers of this country are earning higher wages to-day than they have ever earned, but those higher wages, which are the result of excessively long hours of work, are being taxed. There is hardly a worker, male or female, who will not pay taxes under this budget; no one will escape.

One of the greatest problems confronting the Government to-day - this is a matter on ‘which the assistance of the Opposition should be forthcoming - is that of obtaining sufficient man-power for war requirements. Every available male and female must be employed to the fullest capacity if we are to meet the position. Many more employees will have to be taken from non-essential industries to fill in the many gaps that exist in our war production and in the fighting forces.

Mr Archie Cameron:

– By bringing in compulsory unionism the Government is not attracting volunteers.


– Nearly all the men who have gone to New Guinea, Darwin and Townsville are unionists.

Mr Marwick:

– I have 22 relatives over there and they are not unionists.


– Then they are living on the proceeds of what other people have won for them.

Mr Spender:

– That is the argument, that is always used by the Minister and his colleagues.


– I point out to the honorable member for Warringah that his union is one of the strongest in Australia.

Mr Spender:

– AH of its members join voluntarily.


– That is not so. I recall on one occasion endeavouring to secure the services of one of the honorable member’s colleagues in an industrial case at the Darlinghurst Court. He apologized to me and said : “ It does not matter about my fees. I can wait for months or years, but I am obliged to demand the daily refresher “. That gentleman was a King’s Counsel.

I cannot find anything in the speec.ii of the Leader of the Opposition that calls for answer. As party propaganda it was an excellent speech, but unfortunately it did not deal at all with the present situation. I am satisfied that the Government has the confidence of the country, and that the people are well satisfied with this budget. I am sure that they will put their money into the loan and so assist this Government to carry on successfully Australia’s part in this war as it has done during its ten months of office. For the Leader of the Opposition to assert that the Government and the people have failed is ridiculous in view of what has been achieved during the last year. I do not wish to deny any credit to the previous administration because I realize that it was responsible for laying some of the foundations, but th, revolutionary changes that have taken place during the last ten or twelve months have been almost a miracle. When the history of the war is written this chapter will read like romance.

Mr Spender:

– Why does this budget not put into effect the policy of obtaining interest-free loans from the Commonwealth Bank? Honorable members opposite have advocated that course for the last two years.


– That is a fair question, because I recall asking it myself when the honorable member for Warringah brought down a previous budget in this chamber. The answer I received was : “ I can assure the’ honorable gentleman that I view this matter in the same way as he does, and I am doing the best I can “.

Mr Spender:

– What is the Minister’s answer ?


– My answer is this : The present Government is obtaining more money from the Commonwealth Bank, and therefore is paying more interest back to that institution, than any other government has ever done.

Mr McEwen:

– Is the Government obtaining interest-free money?


– That also is a fair question, .and I am glad that it has been asked. We are not getting interestfree loans, but the money that we are getting is at a lower rate of interest than has been charged in the past. Also, the interest is being paid to a government bank, instead of to private institutions.

Mr Spender:

– But the rates were fixed by the Government in which I was Treasurer.


– That does not alter the truth of my statement. It does not matter whether interest-free money is being obtained or not. We have never contended that the money could be obtained free of interest. We have always maintained that so long as the money was obtained from the , Commonwealth Bank and interest paid to that institution, it was merely being taken out of one government department and paid into another. Some of the things in the budget to which the Opposition strongly objects will be popular with the people. Among them is the system of uniform taxation. A few years ago it would have been thought impossible to institute this system, but it now has; the sanction of law, and I am certain that the public, including big business men, will never go back to the old arrangement. In saying that, I do not suggest that they will not have an opportunity to revert to the old order: the Government will keep its word in that respect. But when the people realize the benefits of the more scientific method of collecting taxes, and the prevention of waste and overlapping that it will mean they will never allow the old system to be reintroduced. On the Opposition benches are many who have advocated plans for post-war reconstruction and have stressed the need for an alteration of the ConstitutionSuch persons cannot now object to the Government’s proposal to alter the Constitution, unless it be that they wish to be the persons to bring about the alteration. There is nothing in the budget for which I wish to apologize, and I am confident that the people of this country will accept it cheerfully; they will provide all the money that the Government asks them to provide. Should the war still be in progress next year, the next budget may involve an expenditure of twice as much money as is contemplated for this financial year. If so, the money will have to be found, and I have no doubt that the people will rise to the occasion.


.- Before dealing with the budget itself I wish to compliment the Leader of the Opposition (Mr. Fadden) on the excellent speech which he delivered this afternoon. On numerous occasions I have advocated the construction of a railway to bridge the gap between Alice Springs and Birdum, a distance of approximately 600 miles. During the depression I constantly advocated that i unemployed persons should be given employment in extending the railway 100’ miles south from Birdum. I pointed out that the necessary materials, including rails, steel sleepers, and dog spikes, were on the spot ready for use, and that all that was necessary was sufficient labour to do the work. I had in mind the possibility of Australia being at war and in danger of invasion. I foresaw what has actually happened, and I wished to be prepared in advance by having available means by which troops and material could be transported from one part of Australia to another. Unfortunately, my representations were not heeded. I regret that there is not a railway line across the continent from north to south.. I am aware that during recent months a considerable mrt of money has been expended in the construction of a road1 to Darwin, but, that road will not stand up to heavy traffic, because along its route are places where there is practically no foundation on. which a road capable of carrying heavy traffic can be laid. The disregarding of my warning has had serious results.

Between Broken Hill and Port Pirie there is a stretch of about 160 miles of railway of 3-ft. 6-in. gauge. If that line were of the standard-gauge of 4 ft. 8£ in., there would be a continuous line of standard-gauge from Brisbane to Kalgoorlie. That weak link between

Broken Hill and Port Pirie means that the quick transport of men and materials from one side of the continent to the other is impossible. The Government would be well advised, even at this stage, to convert that length of railway to 4 ft. 8-J in. gauge, if only by the laying of a third rail. Apart from alterations at stations and bridges, the cost of laying a third rail would not be great.

South Australia is in difficulties because of a shortage of coal supplies. In the past, similar shortages have occurred, but not, as now, through lack of transport. The war has so interfered with shipping as to make most difficult the carriage of sufficient coal from New South “Wales to the other States, with the result that a considerable tonnage of coal is carried by rail to South Australia. This coal is forwarded via Broken Hill, but the breakofgauge there means that it has to be retrucked before being sent on to Port Pirie, where it has again to be reloaded for forwarding to Adelaide. That entails added cost as well as slower delivery. We do not know how long the war will last; it may end in one year, or four years may elapse before peace is declared. The danger of an invasion of Australia has not passed, and therefore I urge that the railway between Broken Hill and Port Pirie be converted to the 4-f t. 8-£-in. gauge. The work would not occupy many months. Germany has shown the value that it places on railway lines of communication ; in countries occupied by German troops, hundreds of miles of railway have been laid. Notwithstanding our difficult financial position, I urge that this work be proceeded with.

Unlike the Leader of the Opposition, I had not time to make a close analysis of the budget, but it appears to me that the Government’s proposals involve inflation to the amount of at least £200,000,000. In my opinion, that could be prevented. Many people in Australia to-day have more money to spend than at any previous time in their history. The community in general has more money to spend than at any time I can remember. High wages are being paid. I have nothing whatever to say against that. No one has ever heard me speak against the payment of high wages. When I was in business, I always paid high wages, and my men were satisfied and contented. I believe that all except about 1 per cent, of the workmen of Australia would gladly accept the principle of compulsory loans, and so accumulate post-war credits. An amount of about £600,000,000 is earned annually by persons in receipt of £400 a year or less. This huge reservoir of wealth lias so far been left almost untouched by direct taxation. I believe that if an average of £25 a year were taken from these people, they would not object. If a reservoir of £500,000,000 were taxed at that rate, it would yield £50,000,000 to the Treasury and there would be no complaint by the contributors. As things are. the- spending of that money to-day is leading to inflation.

I wish to say a few words about price fixation. I congratulate Professor Copland on the good work that he has done hitherto in controlling prices, but from now on I believe that he will have an impossible joh. It is impracticable to fix prices on a satisfactory basis when wages are continually rising. Commodity prices and currency must be kept on an even keel. When too rauch .money is available for spending, as is the case at present in Australia, product-ion costs increase and currency values immediately soar above commodity prices; and that procedure continues- until the bubble bursts. That has already happened in ‘Belgium, Germany and many other countries, and financial disaster has overtaken their people. It. will also happen in Australia unless proper steps be taken to meet the situation. I therefore urge the ‘Government to give earnest consideration to the application of a system of post-war credits.

Clothes rationing has been adopted in Australia, ‘but, unfortunately, six or seven weeks’ notice was given of the impending restriction. It was quite wrong of the Government to give such notice, because it gave people who had money an opportunity to buy stocks, whereas people who had no ready money available could not do so, and were obliged to wait until clothes coupons were issued. They were thus not able to replenish their supplies as were the people who bought stocks* immediately prior to the introduction of rationing. The clothes rationing method adopted in Great Britain should have been applied here. Under that system people were informed on a certain date that 25 of their coupons marked “margarine” could be applied for the purchase of clothes. The Minister for War Organization of Industry (Mr. Dedman) thought it wise te inform men that in the future they would not be able to wear waistcoats and also win the war. After six weeks of restricted buying, I noticed that the Minister himself wore a couple of new suits. I noticed also to-day at the hotel where he stays that he was wearing a victory suit; but it had a. waistcoat! Several of his friends, I understand, spoke to him about it, with the result that he changed his clothes. Many people in South Australia refer to the victory suit as the “ Dedman dud “. That is the general idea of it. Clothes rationing was not a sufficiently effective method to adopt to prevent people from spending money, and I do not think that it will have the result of diverting money to war savings certificates or war loans. We must bear in mind that high incomes in Australia have been taxed almost to the limit. Moreover, the Government, at one stage, proposed to apply a policy the effect of which would have been to debar people from receiving their incomes from sources previously available to them to which I shall refer later.

The Government is now asking the people to contribute to the £100,000,000 victory loan, and the Treasurer has said that this year’s contributions of that nature may be doubled next year. I fail to see how he can expect any such result. He would be far wiser, in my opinion, to introduce a system of compulsory contributions to war loans, and, as I have said, all except about 1 per cent, of the people would gladly accept such a policy if it meant the accumulation of post-war credits. T direct the attention of honorable members to a sensible article which appeared in the Sydney Daily Telegraph on the 8th September on this subject. I quote the following paragraph from it:-

Mr. Curtin seeks to save Australia from disaster by talking to the people about their duty, the need for sacrifice. The simpler way ii. to take the money from the people in compulsory loans before they are tempted to waste it on luxuries. That would give us real austerity

I agree with those sentiments, and I believe that the majority of the people of Australia also agree with them.

The Leader of the Opposition made a comparison this afternoon between the taxation of incomes in certain ranges in Australia and similar taxation in England. I direct the attention of honorable members to the following figures, which show the rates of tax on specified incomes in Australia and Great Britain : -

Those incomes are mostly in what we describe as the lower ranges. The Treasurer would have been ,wise had he taken steps to tax lower incomes in Australia to a greater degree than has been proposed. If the people were obliged to contribute towards post-war credits they would find the money very useful in the post-war reconstruction period. It was on its policy of post-war credits that the Fadden Government : was defeated, yet I believe that the time is not distant when the present Government, or any government that may succeed it, will have to apply such a policy in this country. Large sums of money are being wasted at present , on luxury, or unnecessary, spending in Australia, notwithstanding that the Prime Minister has called, again andi again, for rigid economy in spending. ( The Government should set an example of economy. Six years ago, the then Government budgeted for an expenditure of £^0,000,000 ; to-day, the cost of social services in Australia, including all pensions, is £72,000,000. We cannot afford that while the war is going on. The Government has appointed too many committees of one kind or another. They are expensive and cumbersome, and many are also useless.

Mr Beck:

– Would the honorablemember cut them out? ‘


– I would certainly reduce the number of committees. The reports which they present from time to time are merely pigeon-holed. Moreover, nearly every government supporter has a paid job. Nothing of that kind happened when the party of which I am a member was in power.

I do not know what the position is in other States, but in South Australia a man is not permitted to buy paint for the interior of his house, though he may buy paint for the exterior ; yet, for four nights last week, nine men were at work painting the ceiling of the dining-room of the Hotel Kurrajong. The work was not necessary, and the cost was probably between £100 and £120 as I understand that the men would receive double time. I have been told that the Government is putting down in the Hotel Canberra a very nice carpet at a cost of £950, and this at a time when the Minister for War Organization of Industry (Mr. Dedman) i« telling the people that they will have to wear suits without vests in order to save wool. The Government should not ask other people to make sacrifices until it is prepared to make some itself.

The Prime Minister has said that petrol is the lifeblood of Australia, and I agree with him. I propose to cite some instances of the extravagant use of petrol by members of the Government. I shall not mention names, though I can supply the names if necessary. During the last session of Parliament., a Minister took a car to Melbourne, and brought back his wife and family in it, afterwards driving them around Canberra. Later, he took them back to Melbourne in the cai-.

Mr Calwell:

– Was it fitted with a cas producer?


– No ; it was petrol- driven. The following week, another Minister took a government car to Melbourne, where he picked up his wife and two daughters, and returned with them to Canberra. His wife stayed here for a week, and I am. not sure whether or not she was sent back to Melbourne in a government car, but. I know that the two daughters, who stayed in Canberra for some time longer, went back to Melbourne by car. I ask honorable members whether that is right. During the last parliamentary recess, an Assistant Minister went to Western Australia, where he used a military car in which, I understand, he travelled more than 2,000 miles in the south-western part of the State. He travelled at the taxpayers’ expense, and used petrol which is badly needed for other purposes. For my part, during the last eighteen months, I have returned my petrol licence with three-quarters of the coupons undrawn, and thousands of other persons have done the same. The Minister for Labour and National Service (Mr. Ward) came to South Australia a few weeks ago by car. I do not know whether he came by car all the way from Sydney, but I know he travelled by car from Melbourne to Adelaide, notwithstanding the fact that there is a train service which he could have used. How can the Government justify its requests to the people for economies while that sort of thing is going on?

Some time ago, it was proposed that the South Australian Housing Trust should erect 500 houses to accommodate war workers. The houses were badly needed. However, the undertaking was held up because the Commonwealth refused to remit sales tax on certain building materials. Eventually, the proposal was dropped, and the Commonwealth Government decided that it would build 600 houses. Under the original proposal the cost to the Commonwealth was to be £150,000 for 500 houses. The Commonwealth is now building 600 houses which will cost £185,000, and they are just houses. In fact, it would not be too much to say that they arc only sheds, .and various municipalities are asking the people to sign petitions protesting against the erection of houses of that kind in their areas. The houses are unlined, and have no fireplaces. There is a cooking stove in each house, but no other fireplace, and one sot of wash troughs to every four houses. No sanitary arrangements are provided. The houses are simply dumped down in paddocks, and in wet weather the ground is churned into mud. The people will freeze in winter and roast in summer, and the rent for these so-called houses is exactly the same as the Housing Trust proposed to charge for ‘the comfortable, well-built houses which it erects. After the war, these Commonwealth houses will be pulled down, and the material sold as junk for practically nothing.

I am glad to note that the Government has abandoned its proposal to limit profits to 4 per cent. When the proposal was first announced, the Government was inundated with protests from all parts of Australia. Had it been gone on with it would have worked grave injustice. Take the case of a small company formed some years ago with a capital of £10,000. The business grows, and eventually the company may employ 100 men, and its income becomes considerable. If the Government’s scheme for profit limitation had been put into operation, the permissible income of that company would be £400, but if the company is allowed to make a profit of, say, as much as £10,000, the Government will collect £5,000 in tax at a rate of 10s. in the £1. If the Government had persisted with its intention to limit profits to 4 per cent., the business would have been crippled.

I opposed the legislation to introduce a uniform income tax, because I considered that it would not be beneficial to Australia. In my opinion, the manpower that will be released from State taxation offices for war work will not be considerable. The uniform income taxis the first step towards unification. Admittedly, the majority of people in New South Wales, regardless of whether they support the United Australia party or the Labour party, believe in unification; but many people in other States are opposed to it. After the introduction of uniform taxation, the Labour party will presumably attempt to put into effect another plank of its platform by abolishing the Senate. The socialization of industry will then follow. It has already been advocated by the Minister for Labour and National Service and his view has the support of many honorable members opposite. I challenge them to name one government enterprise which, conducted as a business proposition, has paid its way.

Mr Barnard:

– The Commonwealth Bank.

Mr Baker:

– The Post Office.


– The Post Office is the only exception. The next step will be the nationalization of banking which, some honorable members opposite contend, will be of advantage to Australia.

The Minister for War Organization of Industry (Mr. Dedman) believes that money can be picked off olive trees; L strongly disagree with his views on finance. Further implementing its policy, the Labour Government will then abolish the Commonweallth Bank Board, and this great national institution will then be controlled by politicians. To prevent such developments, honorable members on this side of the House must exercise great vigilance.

During the last parliamentary period, the Opposition urged the Government <o amend the Defence Act for the purpose of enabling members of the Australian Military Forces to serve in theatres of wai- outside the Commonwealth and its territories. As honorable members arc aware, at the present time only members of the Australian Imperial Force, who are volunteers, may lie sent abroad to fight the enemy. This restriction creates a serious anomaly. The Japanese, who are advancing in New Guinea, are probably opposed by Americans, the Australian Imperial Force and the Militia. The American troops in Australia arc conscripts. We have welcomed them with open arms, and they are assisting to defend our great country. When the long-awaited offensive against the enemy is launched, shall we allow the Americans to take it unaided ? 1 1 urge the Government to reconsider its policy regarding this matter. Under the present law, the Commonwealth Government would be debarred from sending the Australian Military Forces to assist New Zealand, if our sister dominion were attacked. Before it is too late, the Government should amend the Defence Act in the manner I have suggested.

The Minister for the Army (Mr. Forde) has declared repeatedly that when the Labour party was in opposition, its members extended to the Government every possible assistance. I deny that statement. I heard the honorable gentleman remark, after certain legislation had been passed : “ The Labour party has wrung this legislation from the Government,, and will wring more from it.” Was that a helpful attitude? The honorable gentleman al.°o asserted that the Government formed by the United Australia and United Country parties did nothing to enable Australia to pay a valuable part in the conduct of the war. That statement also is incorrect. The previous Government constructed more than the foundations for a gigantic war effort; it built the foundations and the walls, put on the roof, and finally furnished the house. The Labour Government was fortunate enough to reap the benefits of the hard work that its predecessor had done. Without that preliminary work, the Labour Government could have done nothing. Adequate recognition should be given to the previous Administration for its efforts. It is shameful that a Minister, or a private member, should state publicly that “ twelve months ago, nothing had been done, but look what the Labour Government has achieved “. Whilst the Opposition is prepared to assist the Government to achieve a maximum war effort, honorable members on this side of the House must reject many of the proposals contained in the budget.

Various suggestions have been made for reducing the consumption of. liquor. I consider that if the ‘Commonwealth Government prohibited “ shouting “ in bars, the consumption would decline by 50 per cent. If a man drinks by himself, he is generally satisfied with onn glass of liquor. If he is accompanied by half a dozen friends, they have a round of drinks. The imposition of a ban on “ shouting “ would remove this temptation.

After the outbreak of war, members of the United Australia party and the United Country party consistently advocated the formation of a national government, because the best brains in Parliament should be in the Cabinet when the country’s very existence is imperilled. The right honorable member for Kooyong (Mr. Menzies), when Prime Minister, offered to the Labour party one-half of the portfolios, and ro stand down from the Prime Ministership if he were not personally acceptable. No more generous offer could have been made, and had it been accepted, as it should have been, the war effort and all other things in Australia would be on a far better footing. I still recommend a national government and hope that some day the proposal will be accepted.


.- I congratulate the Treasurer (Mr. Chifley) on his budget and his speech in presenting it. In the circumstances the budget is an excellent production. I do not say for one moment that it is all that we should wish it to be. We would prefer that circumstances made possible a budget that provided only for the peace-time needs of the country, but wo have to face the realities of the situation. We are living in days of war, a war forced upon us, but none the less a. war in which we must continue until victory is achieved.

Mr Archie Cameron:

– A war which a lot of the honorable member’s colleagues said was not coming.


– The honorable member for Barker (Mr. Archie Cameron) was one of those who criticized the policy of the Labour party in regard to having this country protected from the air. He pooh-poohed the idea of a sky black with aircraft; it was sheer nonsense to talk about having aircraft for the defence of this country. But what have the years produced and what are the lessons we have learned from this war?

I do not propose to worry any further about interjections from the honorable member for Barker. I propose, instead, to deal with the contention by the Leader of the Opposition (Mr. Fadden) that the cure for all the ills of the Australian people is a national government. It seemed that that part of the right honorable gentleman’s speech fitted very badly into the main body. As far as he was concerned there was nothing good in the budget. It was all wrong. It was based on wrong premises. It provided for inflation. It did not provide for the raising of sufficient money by taxation, post-war credits and so on. Then, in conclusion, he said “ Although we do not agree with your monetary policy, at the same time we think we ought to have a part in the government of the country”. Oil will not mix with water, and I believe a national government composed of members from both sides of this chamber would be quite hopeless when matters of policy arose. I think that the present set-up is the nearest to the ideal set-up that we can get in this country at the present time.

Mr Beck:

– Do you think that the people are so divided as all that?


– I do not think that the people are divided at all. The present set-up provides for an Advisory War Council. So successful has that council been, if we can accept the words of the Opposition, that it was strengthened by the inclusion of the right honorable member for Cowper (Sir Earle Page) on his return from abroad. Evidently, the Opposition agrees that the council has done good work and that it is functioning smoothly. In spite of that, we have the Leader of the Opposition saying that the whole set-up is wrong and that we ought to have a national government.

Mr Beck:

– Half of the honorable gentleman’s party did not want the right honorable member for Cowper to be included in the council.


– Our party accepted his inclusion. I do not. propose to use very much time on criticizing the Leader of the Opposition. He has his own views and I assume that he speaks for the Opposition on this matter. Nevertheless, I insist that the present system is the best that can be produced in the circumstances.

Mr Beck:

– By the present Government.


– That may be. The honorable member for Adelaide (Mr. Stacey) talked of inflation to the amount of £200,000.000. We have always had this talk about inflation and the use of currency and so on. It takes my mind back to the depression when we did not have a shilling in this country to expend on anything. We had thousands of people out of work, including good tradesmen who had never been out of work before. We had all the material and resources needed to give work to them - work which would have been reproductive. But no, we were told by the then Government, which was composed of many honorable members who now sit in the Opposition that we had no money. We could not build homes for the workers. We could not undertake the clearance of the slums which are a blot on this young country. We could not do anything except pay a dole to people. But, when war came, we could find £1,000,000 a day to spend on it. The two sets of facts cannot be reconciled. The plain truth is that the whole situation is governed by the productive capacity of the people. That is the only factor that is preventing a greater war effort in this country to-day. That is the only reason why we have to ration commodities and clothes,do without vests, and wear “victory suits”. There is a. shortage, and so that every body, whether rich or poor, shall get a share there must be rationing. In war-time no other policy can be applied. I do not say that everything is perfect. Many mistakes have been made. The Prime Minister frankly admitted that last night, but he went on to say that , when the tempo increases as it has increased in the last two years, it is inevitable that waste will take place, and that we shall not get the full value for every pound that we spend. It is all very well to be critical because we have not hada full twenty-shillings worth for every pound that has been spent, but honorable members knowthat we shall not be able to get full worth in the future if the pace continues as it has done during recent years.

The Leader of the Opposition (Mr. Fadden) this afternoon quoted a broadcast statement by Mr. J. M. Keynes, the noted English economist, and the Minister for Health and Social Service (Mr. Holloway) made an off-hand reply without any notes or documents before him. I obtained for the Minister the report of what Mr. Keynes had said, but he did not have an opportunity to quote from it during his speech. I therefore propose to read the whole report in order to show what Mr. Keynes actually did say. This extract is from The Listener of the 2nd April, 1942.


What Can We Afford to Spend?

Now letme turn buck to the other interpretation of what my friend may have had at the hack of his head - the adequacy of our resources in general, evenassuming good employment, to allow us to devote a large body of labour to capital works which would bring in no immediate return. Here is a real problem, fundamental yet essentially simple, which it is important for all of us to try to understand. The first task is to make sure that there is enough demand to provide employment for every one. The second task is to prevent a demand in excess of the physical possibilities of supply, which is the propel meaning of inflation. For the physical possibilities of supply are very far from unlimited. Our building programme must be properly proportioned to the resources which are left after we have met our daily needs and have produced enough exports to pay for what we require to import from overseas. Immediately after the war the export industries must have the first claim on our attention. 1 cannot emphasize that too much. Until wo have rebuilt our export trade to its former dimensions we must be prepared for any reasonable sacrifice in the interests of exports. Success in that field is the clue to success all along the line. After meeting our daily needs by production and by export, we shall find ourselves with a certain surplus of resources and of labour available for capital works of improvement. If there is insufficient outlet for this surplus, we have unemployment. If, on the other hand there is an excess demand, we have inflation.

To make sure of good employment we must have ready an ample programme of re-stocking and of development over a wide field, industrial, engineering, transport and agricultural - not merely building. Having prepared our blue-prints, covering the whole field of our requirements and not building alone - and these can be as ambitious and glorious as the minds of our engineers and architects and social planners can conceive - those in charge must then concentrate on the vital task of central management, the pace at which the programme is put into operation, neither so slow as to cause unemployment nor so rapid as to cause inflation. The proportion of this surplus which can be allocated to building must depend on the order of our preference between different types of project.

With that analysis in our minds, let us come back to the building and constructional plans. It is extremely difficult to predict accurately in advance the scale and pace on which they can be carried out.

Now this is the important point: -

In the long run almost anything is possible. Therefore do not be afraid of large and bold schemes. Let our plans be big, significant, but not hasty. Rome was not built in a day. The building of the great architectural monuments of the past was carried out slowly, gradually, over many years, and they drew much of their virtue from being the fruit of slow cogitation ripening under the hand and before the eyes of the designer. The problem of pace can be determined rightly only in the light of the competing programmes in all other directions.

Mr. Keynes says that our capacity is limited only by our resources. I agree with this, and agree also that the first thing to do is to concentrate on winning the war. The next most important thing is to prepare for post-war reconstruction.

I presume that I, as chairman of the Social Security Committee, am expected to say something on this subject, in which I have been interested for some time. I was one of (lie members elected to the committee established by the right honorable member for Kooyong (Mr. Menzies) when lie was Prime Minister. The subject is most interesting and absorbing. The committee has presented four reports, and I am pleased to see that the Treasurer has embodied in his budget a fair slice of the recommendations in the first of them. The whole of the recommendations of the committee, despite the fact that it is composed of members from both sides and from both Houses, have been unanimous. It is gratifying to see that the Government is not prepared to wait until the conclusion of the war to improve our social services. Unlike the honorable member for Adelaide (Mr. Stacey) I would not be a party to robbing the poor to pay for the war. I agree with the honorable member for Parramatta (Sir Frederick Stewart), who said, in reply to an interjection by somebody on his own side of the House, e: You would deprive the widows to pay for the war “. I am glad to know that those unfortunate sections of the community are being catered for to a greater extent than formerly. I believe our postwar reconstruction will need to be attended to in a much greater degree than has been attempted in the past. I am reminded of what President Roosevelt said to the International Labour Conference held in Washington in 1941. There he used these words -

We are planning not to provide temporary remedies for the ills of a stricken world; wc arc planning to achieve permanent cures - to help establish a sounder life . . . We have learned too well that social problems and economic problems are not separate watertight compartments in the international field, any more than in the national sphere. In international, as in national affairs, economic policy can no longer be an end unto itself alone. It is merely a means for achieving social objectives.

A realistic approach suggests that the whole of our planning, both social and economic, should be centralized in a ministry of social security. In that passage President. Roosevelt clearly demonstrated

What he had in his mind for the conclusion of the war. I believe, as many in other countries believe, that we must undertake some of these social reforms now. We cannot wait until the war is concluded before we start to implement them. That brings me to the question of what we are going to do now with regard to post-war planning. I believe that we cannot set about this too soon. I realize that we cannot actually make plans for some of the tilings we should like to undertake, but at least we can prepare now for such planning, so that later we shall be able to see in clearer perspective some of the problems that will confront us.

The winning of the war is not the only problem that should be visualized by honorable members. After all, are we not seeking a higher average standard of living than has been experienced in the past? At present some have too much and others too little. I agree entirely with Mr. Keynes that what we do for the community should be limited only by our capacity to produce and distribute the good things of life among the people. All such ideas as the belief that we have not the necessary money to give these benefits to the people will have to go overboard after the war if our democratic civilization is to endure. If we do not tackle these social problems successfully, the democratic system will not withstand the acid test to which it is being put. We cannot approach the problem of post-war reconstruction too soon. I do not agree with the honorable member for Adelaide that parliamentary committees that have been investigating certain problems should be abolished. He said that the reports of some of the committees had been pigeonholed, but that is not so. He resigned from a committee because he had a dispute with the Prime Minister of the day.


– He thought that the committees were too costly.


– A committee becomes expensive only if the work that it does is not worth while. If it presents useful reports, its work is helpful to the Government. Would any honorable member suggest that the work carried out by the Joint Committees on Rural Industries and Broadcasting has not been justified? A bill recently passed by this Parliament, dealing with broadcasting, embodied almost the whole of the recommendations of the Joint Committee on Broadcasting, and the proposals in the measure were approved by both branches of the legislature.

Mr Scullin:

– That is also true of uniform taxation.


– I am grateful for that interjection. Uniform taxation is now a feature of the Australian economy, and I hope that it will be a permanent feature of it, for I am certain that it is welcomed by the people generally. Under the scheme, some citizens will pay more tax than in the past, but at least they will not be subjected to the .irksome method of having their incomes assessed and taxed by both Commonwealth and State governments.

I hope that the Government will soon take up the subject of ,post-war planning. Next to’ the winning of the war, it is the most important problem. With my friend, the honorable member1 for Flinders (Mr. Ryan) and others, I am frequently considering this problem. The Treasurer (Mr. Chifley) informed me only last weekend that he had read and studied all of the reports of the Joint Committee on Social Security. I hope that some of the proposals recommended by that committee will be implemented. I desire to see a post-war planning committee appointed, and composed in such a way that it will keep ever before its mind the objective of post-war planning, namely, the social benefit of the community as a whole. In our approach to post-war reconstruction, we must have men directing the campaign who are realists - men with both feet on the ground. The committee’s reports should be carefully prepared, and not filled with meaningless words. Article 7 of the Atlantic Charter cuts almost entirely across the policy that Australia has adopted for many years with regard to tariffs, but we must lay the foundations now for post-war reconstruction and enlist the services of men with a sympathetic approach to the problem. We must have men who will plan this work so that we may absorb people rapidly into reproductive works nt the conclusion of the war.

The fourth report of the Joint ‘Committee on Social Security is of greatvalue, and I believe that it is the committee’s best report, because it suggests practical ways of approaching one aspectof the problem, namely, housing. Evidence has been submitted to the committee that a proper housing scheme would absorb 25 per cent, of the unemployed in the early post-war years; but I do not desire housing to be considered merely from the point of view of its employment value. It should be considered because of its social value. It would provide homes that would be owned by the occupants. The money required to build the houses would be provided at a moderate rate of interest, so that the dwellings could be purchased within a reasonably short period. Such houses should provide all modern conveniences. One of the problems to be solved will be the clearance of slums, and financial provision will have to be made in that regard. I hope that the Government will soon accept the recommendations of the committee and appoint a housing planning authority that could draw up a scheme suitable for this vast continent, so that when peace comes the labour and materials will be available, and localities selected so that a start may bc made immediately.

I trust that ere the next budget is presented we shall have achieved a just peace, based on the true doctrine of the Lowly Nazarene, justice and righteousness.

Mr. PATERSON (Gippsland) 13,51].- There are some things in the budget and in the budget speech of the Treasurer (Mr. Chifley) which one must commend; there ave, however, omissions., particularly in regard to taxation, which one must condemn. So far as the new heavy taxes on entertainment, tobacco, alcohol, &c, are concerned, I can find no fault, nor could any reasonable mail find fault at a time such as this, but while such taxes lend a certain amount of colour to the Government’s austerity recommendations, the equally conspicuous omissions from the budget lead one to the conclusion that it is as much a timidity budget as an austerity budget - timidity, which, if persisted in, will inevitably lead this country along the road to inflation. For some people, the war means sacrificial service. This applies particularly to our young men of the Army, the Navy and the Air Force, who are serving in the front line. For some others, it means greatly diminished net incomes, and, for the man on the land, particularly, it very often means long, laborious hours of toil, with insufficient assistance, to carry on the essential work of food production. Then for some others, the war means much higher incomes and far greater spending power than they have ever had. Admittedly it is not easy to achieve a general condition even remotely approaching real equality of sacrifice, but surely a greater effort in that direction could have been made in this budget. I am not one of those people who go so far as to say that no one should be better off because of war conditions, because we all know that there are some people who have had such a lean time for such a long time that some improvement of their economic circumstances is most desirable. No rightthinking man or woman begrudges that improvement, but surely there are many people not in that category who are better off because of war conditions. It is difficult to obtain exact figures relating to the national income and its composition, but I do not think one would be far wrong in assessing Australia’s national income for the current financial year at £1,000,000,000 in round figures. I do not consider that to be an overestimate, in view of the tremendous war expenditure which must be reflected in almost every avenue of life. .Of that £1,000,000,000, probably £700,000,000 will be in the hands of people earning £400 per annum or less, and the remaining £300,000,000 will be in the hands of the more fortunate individuals whose incomes exceed £400 per annum. “ Hit the big man “ is a popular cry, and it is only right, that the “big man “ should be very heavily taxed under present conditions: but even if two-thirds of all incomes exceeding £400 per annum were confiscated by the Government - it will be admitted that that would be a drastic step - the yield would amount to little more than one-third of the amount required by the Treasury to provide for war and ordinary services. Therefore, what is called in popular parlance, “ socking the big man “ is hopelessly inadequate as a means of providing for the needs of the Treasury. Some fairly substantial contribution must be obtained from people in receipt of incomes of £400 per annum or less if the war is to be financed on a basis which will enable us to escape the worst effects of inflation. In that £700,000,000 which I estimate will go into the pockets of people on incomes of up to £400 per annum this year, there is an immense reservoir of spending power. Judged by war-time austerity standards, probably £100,000,000 of that sum represents surplus spending power, and unless that money or much of it is diverted to the war effort, we can never hope to wage what is called “ total war “. There are some well-meaning souls, who say, “ Why tax at all?”, or “Why borrow at all?” There are some individuals who say that the Commonwealth Bank could make hundreds of millions of pounds available without charge, to pay for the conduct of the war, and that every one could live comfortably in possession of his full income to use as he pleased. Of course, the Commonwealth Bank could do that; it could make available £100,000,000 tomorrow, but what the advocates of this course fail to realize is that the creation of £100,000,000 of new money would not of itself provide one more ship, plane, gun, tank or shell. Such war-time essentials can be provided only by human skill and human labour. We shall not have secured the nation’s maximum concentration on war production so long a3 that £100,000,000, which I estimate as surplus spending power, is left in the hands of the people to purchase nonessential goods and services which keep too many workers employed in nonessential industries.

Sitting suspended from 6 to 8 p.m.


– We can increase further our war effort only by the transfer of human energy from non-essential industries to essential industries. This can most easily be brought about by diverting the maximum amount of surplus spending power to the war effort. Money diverted in this way becomes effective, whilst credit expansion is useless for the purpose so long as other supplies of money are in circulation and are being used for other things. We cannot get the concentration of labour and war effort in such circumstances. In peace-time I believe that it is right to keep the tax exemption levels high, because that tends to make the whole community more uniformly prosperous; but in war-time we cannot do that and at the same time attain a full war effort. Yet that is being attempted in the budget, despite (its high-sounding phrases about austerity and sacrifice. If the problem presented by this huge aggregation of surplus spending power is not courageously tackled, no price-fixing system, or rationing method, can save the Australian people from the evils of inflation. In dealing with surplus spending power in the hands of those on the lower and middle incomes. I prefer to see it taken by the Treasurer as a postwar credit than as a straight-out tax. In this connexion I compliment the Leader of the Opposition (Mr. Fadden) on his excellent speech this afternoon. We do that with our soldiers to the amount of 14s. a week. We make them lend to us compulsorily 2s. a day, whether the soldier be a private or a noncommissioned officer. Higher ranks lend more. Why not apply the same principle to civilians1? Why is the system, good for the soldier, but not for the civilian? If it be a good thing to compel a soldier to leave a portion of his modest pay in the Treasury till after the war, with advantage to our present-day war finance and benefit to the soldier later when the war is over, what is wrong, with a system of post-war credit for the benefit of war funds now, for the avoidance of inflation now, and for the ultimate advantage of our civilian population when the war ends? I cannot see why what is good for the soldier in this connexion can possibly be bad for the civilian. The Minister for Social Services (Mr. Holloway) said this afternoon that he hoped to see after the war a tremendous number of the working people in this country as ‘bondholders because of their investments in war savings certificates and Commonwealth loans. We all wish to see that, but how many more there would be with a post-war credit system in operation! It is true that a proposal for post-war credit was rejected by this Parliament in 1941, but that is no good reason why the proposal should be similarly treated in 1942 when inflationary tendencies are being revealed in the rising costs of living and of production. In all earnestness and sincerity I urge the Treasurer not to close his mind to this proposal to establish a system of post-war credits along the lines of the system in operation in England and elsewhere. I am aware that numbers of people in comparatively humble circumstances have contributed well to war savings certificates and war loans, but others have not done so, and will not do so although they have money to spare. Many young .people of both sexes are earning big wages to-day, but unfortunately some of them have no thought for the morrow. The time may come when they would thank the Treasurer if he compulsorily made them bondholders by bringing in a system which would give to them post-war credits. The money would Gome in useful when this country has to pass through the transition period between war-time activities and peace activities. Do what we will in preparation for that time of transition, we shall then be confronted with a tremendous task. That task will be rendered easier if as many as possible of the citizens of this country have substantial post-war credits to help them. Until this is done a dangerous volume of unrestrained spending on non-essentials will continue, with inflationary effects. I realize that there are some people with special commitments who would suffer hardship if a system of post-war credits were imposed upon them, but I believe that reasonable provision could be made for exemptions in deserving cases. I cannot believe that the Treasurer and his colleagues do not know the danger that the Government is running in connexion with this matter. Unfortunately the Government is not yet willing to treat the symptoms with good wholesome medicine, because of the fear that the medicine might prove to be unpalatable. There is more timidity than austerity in this budget.

Speaking of the Australian Food Council, the Minister for Supply and

Development (Mr. Beasley) said that that body had done good work in ensuring that we shall have adequate supplies of good food of different kinds. As one who has been on the land for years, I believe that an extra pair of hands on many farms would be more effective in ensuring a continuance of production than would result from half a dozen men sitting round a conference table. I fear that unless something more effective than has yet been attempted in order to relieve the situation on many farms is done, the position will become worse owing to the depletion of labour and that we shall find ourselves unable to supply to Great Britain half of the dairy produce that that country requires from us. I frequently receive letters saying that dairy herds are being reduced in numbers owing to the incapacity of the limited number of persons left on the farms to milk the cows. Old people on dairy farms are trying to do the work of young people.. In many of our butter factories the position is indeed acute. Managers of some factories do not know how they will be able to process all the milk and cream that is offering. We should not waste good food. The production of essential food should be given a number one priority in any country’s war-time programme. There have been some extraordinary decisions in connexion with applications for exemptions of men from military service in-order that they might work on farms.

Mr Lazzarini:

– Only recently the honorable gentleman wanted every one in the country to be conscripted.


– Every person in the community should be doing the job for which he is most suited. Many persons would be of greater service to Australia by doing the jobs for which they have been trained than by becoming spare parts in the military machine. I should like to see as many men trained as possible, but we cannot feed the Arm’ and in addition the men of Allied countries and the civilian population, and send food overseas, unless our farms arc kept reasonably well supplied with labour. I shall cite one illustration of the extraordinary decisions that are given in connexion with applications for the release of men from the Army to help on farms. It relates to a farmer who had met with a serious accident in which a leg was dislocated at the hip socket. He will be practically a cripple for some time, but he has a chance to get well if he can rest the leg. There is no opportunity for him to rest because of lack of labour to assist him on his dairy farm. He therefore sought the release of a young man whom he had formerly employed. The man-power authorities very strongly supported his request for the young man’s release for six months, but the application was rejected by the military authorities. I could understand the rejection of the request on the ground of military necessity, because obviously the commanding officer must have the last word in these matters; but I was told that although it was freely admitted that his retention in the Army would cause hardship, that hardship would be suffered, not by the trainee but by his employer; and because no hardship was suffered by the trainee he could not be released. That is carrying matters to an absurdity. I could have understood a decision which started that, on account of the urgent war situation, the man was needed where he was, but the reason given was most absurd. The price factor has also a lot to do with the retention of labour on farms. As the prices for butter do not enable dairy-farmers to compete with the wages offered to men in other employment it is extraordinarily difficult for them to retain labour on their farms. I believe that if overtime rates had to be paid for Saturday afternoon and Sunday work on dairy farms on the same basis as in secondary industries, it might be impossible to sell butter retail at less than 2s. 6d. per lb. This is a matter which will have to be looked into. I hope that the report by the committee which was recently set up to advise the Government in these matters will soon be in our hands, and I trust that its recommendations will be wise ones.

Another factor which is reducing production on dairy farms is the shortage of superphosphate. In many districts where the farms are small it is possible to maintain the herds only by frequent applications of superphosphate to the soil. We all realize that there is a real difficulty in this connexion because the sources from which we previously obtained phosphate rock are not now available, and inferior rock has to be shipped tremendous distances. ‘ We are getting less phosphate rock than formerly and moreover, it is of inferior quality. Therefore, I hope that everything possible will be done by the Government to ascertain to what extent deposits of phosphate rock exist in this country, and whether they are worth developing. We know that we have some deposits of low-grade phosphatic rock. These are not comparable in quality with those of Nauru and Ocean Island or even of those of the place from which we are now getting the rock, ‘but we may be driven to use them. I hope, therefore, that the Government is doing everything possible to survey such resources as we possess.

I wish .to say a few words concerning the superphosphate bounty which is being paid by the Government. On account of the extremely high price of phosphatic rock to-day, owing to the cost of transport to Australia and of difficulty of obtaining supplies, it is inevitable that a much smaller tonnage of superphosphate will be used this year by farmers. Consequently a bounty at the existing rate would involve the Government in much less expenditure than was incurred under the old conditions. I ‘therefore suggest to the Treasurer that it would be of great assistance to- the farmers if the Government would continue to pay the same aggregate amount in bounty as it is paying at present. This would mean a larger bounty per ton, but I believe that the expenditure would be well justified.

I wish to refer to two essential war-time commodities which I should like to see produced in greater quantities in Australia. I refer to aluminium and oil. ,

To-day we are fabricating aluminium ingots which we import. The material is being manufactured into aircraft parts and other essential war-time requirements. So far, however, we have made no aluminium from our own basic ore, which is known as bauxite. The Prime Minister, in an admirable speech last night, referred to our shipping difficulties and to the necessity to avoid long haulages in ships of even essential com modities, and to discontinue altogether the haulage of unnecessary items. Bauxite is present in substantial quantities in Gippsland. It has been used for many years for the production of sulphate of alumina, required in paper-making and for the clarification of water supplies. The bauxite, however, is equally suitable for the manufacture of aluminium. Some doubts have been expressed as to the quantities available, but these have been completely dispelled by the recent discovery of enormous quantities of even higher grade bauxite than that formerly known to exist in Gippsland. I understand that there iconsidered to be a minimum of 1,000,000 tons available. Probably the deposits contain several million tons. According to the Commonwealth Controller of Mineral Production the quality of this bauxite is the finest in the world. The new deposits are right alongside a a bitumen highway and only a mile and a quarter from a railway line, and so are most accessible. They contain from 55 to 60 per cent, of alumina with about 30 per cent, of moisture. The moisture can be easily removed, and when it is removed a very high percentage of alumina is left. The bauxite contains very little silica or iron. It is very desirable that there should be a low percentage of silica for it combines with the alumina with wasteful results. I am told that the bauxite in the deposit0 in Arkansas, United States of America, is regarded as A grade if it contains not less than 55 per cent, of alumina, and as B grade if it contains between 50 and 55 per cent, of alumina. The A grade bauxite must contain not more than 7 per cent, of silica and the B grade not more than from 7 to 15 per cent. These percentages apply to the ore after it has been washed. Our percentages in Gippsland are slightly better than those before the ore has been washed or before anything has been done to it. The worst bauxite that we have discovered in these recent finds is equal to the B grade Arkansas bauxite, but the larger part of it is somewhat better than the average A grade Arkansas material. I hope that something will be done in a big way in the near future to convert these deposits into aluminium. Attempts have been m.ade in the past to question the quality of Australian bauxite. It was said that it was not quite suitable for the production of aluminium. I believe that such statements were made by people who desired .Australia to remain dependent upon the imported ingots. Such disparagement of Australian bauxite cannot be continued since the recent discoveries in Gippsland, for both quality and quantity are now definitely known to be available there.

There Ls a most extraordinary “ tieup “ of the aluminium industry. Aluminium interests in the United States of America, Canada, Great Britain and Switzerland have been combined in a kind of international carte!. As honorable members are well aware, I am a simple, guileless and quite unsuspicious individual; yet I cannot help feeling that certain aluminium interests in other countries are not anxious that Australia should be equipped to produce this valuable metal from its own bauxite deposits. I believe that the Minister for Supply and Development (Mr. Beasley) is doing his best to ensure the development of this industry, but I sometimes wonder whether the advice he is getting comes from entirely disinterested sources. The honorable gentleman told me a day or two ago, in answer to a question, that much difficulty was being experienced in obtaining equipment from overseas to work our bauxite deposits, so that we may produce our own aluminium. I wonder whether an attempt is being made to prevent the necessary equipment coming to Australia except on conditions determined by the international combine.

I believe profoundly in private enterprise, but things are done at times by powerful combines which tend to discredit it. I wish to see our bauxite deposits developed, right to the aluminium stage, by an Australian company entirely free from overseas domination. I hope that the Government will bo able to take steps to achieve this desirable end speedily. Even when we. need less aluminium than we need to-day, we shall still need a great deal. Light metals are coming into increasing use. I look forward to the day when we shall bc able to produce all of our own aluminium. I hope that, at least, we shall be able to manufacture up to the alumina stage where the ore is available in Gippsland, for coal and water supplies are at present there in abundance. I understand that for the later processing a huge volume of electric power is required. That also should be available in Gippsland, because the principal Victorian source of electric power is not far distant from these deposits. If the volume of power available there is inadequate, owing to the present heavy overloading for other purposes, there should be no need for us to wait for the development of hydro-electric supplies .because I have learned that in the United States of America aluminium is successfully processed by means of gas-fired diesel electric generators and gas-fired boilers. I hope that we shall be able to develop our resources in this direction without delay. Unfortunately this war may last for several more years. It would be a splendid thing for Australia if during that period we could develop our bauxite deposits to the stage that would make us independent of supplies of aluminium from overseas.

I come now to the subject of oil production. A situation has arisen in relation to the Lakes Entrance oilfield which seems to me to be prejudicial to our prospects of producing oil as successfully and as speedily as might otherwise be practicable. For the information of honorable members I shall briefly review the history of the development of these oil resources in Gippsland. Early attempts were made to secure oil at Lakes Entrance and it was proved that oil existed there in considerable quantities. A. substantial sum of money was expended by various small companies in conducting more or less experimental operations, with the object of producing oil but difficulties were encountered owing to the fact that the deposit was of a low-pressure character. Up to a few years ago about £150.000 had been spent in attempts to develop these fields. Then, a small company, known as the Austral Oil Drilling Syndicate, took over

  1. number of leases from other companies that had spent a good deal of money in unprofitable operations. This small syndicate inspired with courage and determination, drilled several bores to a depth of from 1,200 feet to 1,300 feet and proved the existence of considerable quantities of .heavy oil suitable for fuel, diesel and lubricating purposes. The oil also contains about 15 per cent, of bitumen which the Victoria Country Roads Board was prepared to purchase in almost unlimited quantities. Nearly four years ago (be then Commonwealth Oil Adviser, Dr. “Wade, made a report to the Govern ment on the results achieved up to that time and stated that probably the best procedure to adopt would be to apply artificial pressure to this field. It was suggested that by pumping great pressure down a given bore, the oil would be forced up into other adjacent bores. It was stated, however, that a fairly large area would need to be brought under one control in order to make this procedure practicable. It would be unsatisfactory, for example, to apply pressure to a bore belonging to one company if the result would be to force the oil into the bores of other companies. It was recommended that arrangements be made by neighbouring leaseholders to combine1 in one company, and a promise was given that if this procedure were adopted, some government assistance would be forthcoming for the proposed application of artificial pressure. Considerable, expense was incurred by the Austral Oil Drilling Syndicate in making arrangements with other leaseholders as advised by the Government. When that stage was reached, the Commonwealth geological advisers apparently changed their minds concerning the quantity of oil available and the prospects of obtaining payable supplies by the pressure method;. Meanwhile, great progress bad been made in the application of a new method to lowpressure fields in other! countries and particularly in the United States of America, where many low-pressure fields had been brought into profitable production. The problem had been solved by the sinking of a shaft into the oil-bearing strata and excavating a kind of working chamber at the bottom of the shaft from which bores were drilled horizontally around the bottom of the working chamber. It was demonstrated that bores drilled horizontally, somewhat like spokes going out from the nave of a wheel, would have thu effect of tapping the oil-bearing strata along their whole length, whereas one bore drilled vertically to a depth of say 1,300 feet might tap an oil-bearing stratum for only about 25 or 30 feet. When information came to hand of what was being done in the United States of America in this direction, the Austral Oil Syndicate suggested that an expert, should bo brought to Australia from America or from Canada to advise the Commonwealth Government on the probable value of the process in relation to our oilfields. The then Minister for the Interior, (Senator Foll), agreed to this proposal and Messrs. Ran ney and Fairbank visited Australia. They examined the field, and also the abundant and carefully prepared data placed at their disposal by this small syndicate, and came to the conclusion that there was a field from which oil could be successfully obtained by the system of shaft sinking and horizontal drilling. Accordingly, they recommended that this form of exploitation be practised, and expressed the opinion that many millions of barrels of oil would be obtained in that way. The Commonwealth Government and the Victorian Government decided to assist the syndicate by granting it. a loan of £50,000, the company to pay the amount back out of subsequent profits. However, before the company could raise necessary capital the Government announced its intention to limit profits to 4 per cent. Of course, the company, and the Government too, realized how hopeless it was to attempt to raise capital for a proposition of this kind under those conditions. Therefore, the Commonwealth Government decided to finance drilling operations, the estimated cost of which was £150,000, of which three-quarters was to be found by the ‘Commonwealth Government, and onoquarter by the Victorian Government. The syndicate had already expended £40,000 on the field, as has been verified by the Government’s own investigators. It is admitted that the syndicate raised £44,000, and expended £40,000. One would have thought that, when the Government proposed to expend £150,000, it would have been only fair to take into consideration the £40,000 already expended by the company, to place it alongside the amount of £150,000 to be provided by the Commonwealth and the VictorianGovernments, and to agree that the syndicate should share with the two governments in the distribution of profits at least in proportion to the amount of capital which it had devoted to the enterprise.
Mr Holt:

– That would have been the minimum of justice.


– The enterprise could not have come to a successful conclusion but for the pioneering work of the syndicate. Now, when it is exploited, it may return a yield of many hundreds of thousands, or even millions, of pounds. The Government has taken control of the syndicate’s leases, and its equity in the enterprise has been fixed in arbitrary fashion by the Commonwealth and VictorianGovernments at £25,000, so that it may be regarded as having a seventh share in the total capital of £175,000. If the syndicate had lost faith in its enterprise, and wanted to sell out to the Government, then the Government might have been justified, in the circumstances, in driving the hardest bargain it could. But, the syndicate had not lost faith; it wanted to share the risks of the enterprise. If it failed, the syndicate was prepared to lose its money, but if the enterprise proved successful, the syndicate which had pioneered the work, felt that it ought to share with the ‘Government in the ensuing profits.

Mr James:

– How many gallons is it estimated that this field can produce?


– Already 150,000 gallons have been brought up in the course of experimental work, and it is expected that many millions of barrels can be recovered.

Mr Morgan:

– Perhaps the Government thought that the £40,000 had been unwisely expended by the syndicate.


– Noattempt was made to assess the equity of the syndicate in a fair manner. [Extension of time granted.] The Commonwealth, moreover, proposes to have the right at any time to acquire the whole of the syndicate’s rights and interest for £25,000. I suppose that, if the project turns out to be successful, the Government will acquire for £25,000 the whole of the syndicate’s interests, whereas if it be unsuccessful, then the Government may leave the syndicate to lose its £25,000. Such a proposition reminds me of the old saying, “ Heads I win, tails you lose “. Under the control of the syndicate’s manager great progress has been made. A large power-house has been constructed, roads have been made, a big electric power unit has been installed, men’s changing-rooms have been erected, and a beginning has been made with the sinking of a shaft. In addition, huge derricks have been erected. Everything that was done under the direction of this man met with the approval of the Commonwealth’s advisers, yet because he was not prepared, in view of the very unsatisfactory proposal made to his syndicate, to sign on as an employee of the Commonwealth, he has been passed out, and a new manager has been appointed in his place. This new manager is reputed to be an excellent mining man, but he has no knowledge of oil, so far as I know. The syndicate sought, reasonably I think, to have a minority voice in the conduct of the enterprise. It asked that if a. committee or board of control were appointed to represent the Commonwealth and the State Government, it should also be represented. This was refused, yet this is the syndicate which brought the enterprise to the stage-

Mr Rosevear:

-Where it could not carry on any longer.


– No, that is not true. The present Government, by announcing its proposal regarding the limitation of profits, destroyed any chance which the syndicate might have had of raising the capital it required.

Mr Lazzarini:

– The syndicate was finished. If the Government had not assisted, it could not have carried on.


– I do not believe that for a moment. This enterprise is being controlled by Mr. Newman, Commonwealth Director of Mineral Supplies - a man with much experience of mining, but no knowledge of oil - Mr. A. C. Smith, of the Department of Supply and Development, and Mr. George Brown, of the Victorian Mines Department. They are all very capable men, but none of them knows anything about oil. Neither, for that matter, does’ the engineer in charge, whereas the previous manager and engineer had learned a great deal about oil. There is a grave risk that, without the active help of the syndicate - and it is practically precluded from giving this help in an effective form - the success of the enterprise may be prejudiced. I am not blaming the Minister, who has acted according to the advice given to him, but I believe that he has been advised unwisely. I urge the Government to reconsider the proposed agreement with thesyndicate and to deal more justly with it, so that the great value of the syndicated knowledge and experience may be availed of.


.- I believe that the Government will succeed in raising the money for which provision is made in this budget.

The people in my constituency produce three-fifths of the sugar grown in the Commonwealth, and at present they are having a very lean time. Sugar, to-day, is more important than at any other time in the history of Australia. The American people have lost one of their greatest sugar producing areas, and Java is no longer available to the Allied Nations as a source of supply. Sugar has been rationed for various reasons, one of which is associated with difficulties of transport. Various overseas countries want sugar from Australia. Many men are required to harvest this year’s sugar crop, to say nothing of planting the cane for next year’s crop. Other primary industries also need labour. The Government is exhorting the people to grow more vegetables and cotton and tobacco, but there are not enough men available ‘to do the work. Though it may be necessary, as the Prime Minister (Mr. Curtin) has said, to use every available man for the defence of the country, those men will not be of much use unless they are fed, and they cannot be fed unless sufficient labour is available to produce foodstuffs. I shall read to the House a summary of the man-power position in North Queensland. The information was supplied to me from various areas in my electorate. It is as follows : -

South Johnstone Co-operative Sugar Milling Association Limited.

Full supply of labour to carry on with three shifts in mill. Only shortage being cane-cutters. Owing to lack of cane-cutters crushing is at a very reduced capacity, which means increased costs, in turn reflecting on growers. Only difficulty with regards to mill labour will be for rush loading of sugar when interstate boat calls at Mourilyan Harbour. In the past have been able to call on casual labour.

Herbert River Cane Growers’ Association, Ingham

Cutting strength for 1941 was: Victoria, 495; Macknade, 452; total, 946. Few men below average but in the main classified as 100 per cent, competent. Cutting strength this year is: Victoria, 455; Macknade, 380; total, 835. Impossible to harvest the crop were it not for the fact that farmers and their sons who normally do not cut cane were now working as cane-cutters, in addition to 100 aborigines from Palm Island. Crop being harvested at complete expense of 1943 crop; 120 men are from 45 to 67 years. Cutting strength of aborigines much below normal efficiency. Militia releases included in cutting 74-34, Victoria; and 40 for Macknade. Position’ of labour in Victoria mill reasonably satisfactory. Sufficient labour to work three shifts. Labour position bad at Macknade. Working two shifts and insufficient labour even for that. Output of cane good but at the expense of next year’s production.

The aborigines who were brought from the Palm Island Mission station are, with few exceptions, practically useless for this kind of work. Speaking as one with a knowledge of the industry since 1907, I know that they have never been able at any time to secure employment as cane-cutters. The report continues -

Mourilyan Mill, Mourilyan

Mill-hands employed at present crushing, two shifts daily only, as there are insufficient cane-cutters available to supply sufficient cane for three shifts, 141 ; additional mill-hands, who would be required if working three shifts, daily, 45; total required for three shifts,. 186. Exclusive of permanent staff of nineteen. Proserpine Co-operative Sugar Milling.


Number of mill-hands now engaged is 193. fifteen below number usually employed.. Greatest difficulty is shortage of enginedrivers and mechanics. One hundred and! seventy cane-cutters signed on, 30 still needed. Approximately 80 per cent, of cutters employed are experienced, remaining 20 per cent, inexperienced and too old.

Tully River District Cane Growers’ Executive

Cutters normally required, 483; shortage, 167; experienced cutters working, 256; inexperienced cutters working, 73; number in excess of required number, 13. Shortage as above, 167; less number in excess in few gangs, 13; total shortage, 154. Note. - Number in excess of required, thirteen, is explained that because the gang was weak, more men had to be put in order to endeavour to get out the allotment of cane.

Tully Co-operative Sugar Milling Association Limited Factory.

Three fitters short - previous employees in Army Ordnance - impossible to replace these tradesmen. Six men Short in tramway maintenance department. One locomotive driver andfireman short, i.e. one crew, but owing to decreased tonnage of cane being delivered, this docs not present hardship. Have been able to fill full complement of men on all other station. Reduced crushing rate due to the small quantity of cane being delivered means that costs going to be high in comparison with previous years. Ordinarily able to pick up 20 to 30 men for emergency sugar loading but now impossible.

Cane Growers’ Association, Mackay.

Man-power has recommended to Army release of 260 cutters for Mackay area. Recommendation made 21st August, to date only three released. Executive consider release being unduly delayed. Men urgently required both cutting and planting. Manyinstances growers harvesting own crop, therefore neglecting plantings for 1943. If labour not available immediately, will be too late for plantings. Best period of season will be lost. Ayr District Cane Growers” Executive.

Local mills obtaining almost full cane supply at expense of field work. Hundreds of workers required for field work in cane, cotton, potatoes, &c. Boys from school have been picking potatoes during vacation. Farmers’ wives are helping in cane-planting. Boys of fifteen years up to men of 70 cutting cane. Many doing very unsatisfactory job. If men who are out of camp can be held until season ends, 1943 crops of different items of agriculture will get fair treatment. Potato production will hardly exceed 2,000 tons this year. Cotton probably not exceed 15,000 bales. These two commodities would have been doubled if man-power available.

No one will contendthat cotton and sugar are not most necessary commodities. The shortage of potatoes has become acute. I have received the following letter, dated the 4th September, from the manager of the Tully Co-operative Sugar Milling Association Limited, Tully: - 1 have to thank you for your letter of the 24th ultimo, contents of which have been duly noted, and although appreciating your efforts very much, on our behalf, I wish to point out that we are still 105 men short of the number promised by the man-power to us in July in Brisbane, and actually 200 short of the number we had last year.

These people have excellent grounds for complaint. Early this year, they were assured that a certain number of men would be made available to the industry, but the promise has not been kept. Unless our supplies of food are plentiful, our soldiers will not be able to resist the enemy successfully. We cannot expect them to exist, like the Japanese troops, on a dehydrated ration that must be soaked in water before it is eaten. No one wants to see our soldiers and our civilians starve. The munitions workers have to be fed; they cannot produce the sinews of war if they have to live on thin air. I warn the House that we cannot rely on women, children and old men to produce our requirements of food. Men must be made available to do this essential work in Queensland. If their services be withheld, our supplies will collapse. No excuse can be advanced for a shortage of man-power in the industry, and the present difficulty should have been foreseen before the undertaking was given that the men would be made available. I realize that the Government has been guided by its so-called expert advisers. In my opinion, we would be much better off without a good deal of their expert advice. But when they give an assurance that men will be made available on a certain date and within three weeks they have to repudiate their promise, the industry is seriously disorganized.

Although I know that the suggestion will not be popular with many people, there is a source of labour that can be tapped, namely, the large number of internees from my constituency. Until I have examined their files I shall not be satisfied that they were justly interned. I have a definite opinion as to the reason why some of them were arrested. Whoever picked them out was a pretty good picker. There is not one active alien supporter of the Labour party in the Herbert electorate who is not now in an internment camp. Some of the men from my electorate, who have been interned, were responsible for collecting considerable sums of money for patriotic purposes. A few months ago, a man travelled to an internment camp on the same train as his son who had returned from the campaigns in Libya, Greece and Crete. Some people declare that all Italians in Australia are disloyal and hostile to the Allies, but what can we expect when we treat them in sucha manner? Honorable members opposite asked the Prime Minister to explain the action that the Government proposed to take against the “ dagoes “, as they call them, in Innisfail who called out “Viva Italia “ and gave the Fascist salute. But some members of the Australian Military Forces said to women i who were crying bitterly because their husbands and sons were being taken to an internment camp : “ It will not be long before you are all down there; that is where you all belong.” In my opinion, the men who said that are just as bad as the worst Italians ; but [ am sure that they were not typical members of the Australian Military Forces,

Following are the records of a few mcn who have been interned :

Felix Reitano- Resident in this district about 40 years. One sou in Australian Imperial Force overseas; arte rejected as medically unfit for Australian Imperial Force, now in Militia forces. One son in Volunteer Defence Corps, and one working farm. Wife, Scotch. Assisted War Savings Certificates campaign.

After having been a primary producer for some years, this man established himself as a real estate agent, and he has never been in trouble with the police. In every respect, he is a good citizen. When such a man is interned I am justified in believing that someone other than the Investigation Branch of the Army is responsible for the arrests. For example, a young man in Ingham was called up for military service and he decided to send his young wife to live with either his mother or her mother and requested Reitano to sell his furniture. Another “ joker “ who I think is one of the “ pimps “ for the Investigation Branch, said to me: “Is it not strange that young Armstrong should ask a “ dago “ to sell his furniture for him ? “ I replied that the young man evidently considered that he would get a better deal from the Italian than he would from the complainant, and I believe that my remark was the truth. The record of another internee is as follows:-

Steve Delia Mattea- Here about 30 years. Volunteered with Australian Forces in last war. Excellent citizen. Particularly honest and open. Son also interned. Son arrived Australia at age of two years. Son has one child and pregnant wife.

Can ton i Bros. - Three brothers working farm; all interned, leaving women and children only. People of good character - quiet and orderly.

Cinelli- Two sous in Australian Imperial Force, one at Port Moresby and one was overseas.

Vitale- Volunteered with Australian Imperial Force last war. Accepted, but peace declared before leaving Australia.

Rebino Bros, (three). - One in Militia, was volunteer member before war. Other two are on farm, one being member of Volunteer Defence Corps. The two on farm have been interned. All arrived Australia under five years of age. Two married to British girls.


– There is a tribunal, but the proceedings occupy a considerable period. After an appeal is heard, the decision is not announced for about a month or five weeks. Other cases are : -

  1. Jj. Roati- Previously interned, appealed and released. Now re-interned. Son also. Son arrived Australia very young. Roati left Australia during last war and joined Italian Army, returning after war, now in ill-health.

He is in ill-health because of aftereffects of the last war, when he fought with the Italians, who were then Britain’s allies.

  1. Pavetto- Interned at outbreak of war. Appealed and was released. Now re-interned with two sons. Active in Cane-growers Organization. Voluntarily assisted in raising money for War Savings Certificates.
  2. Parravicini- Here since 1907. Active in raising war funds with Pavetto. Considered good loyal citizen.

Many of the people who subscribed that money are interned. I do not care if they are interned, provided they ought to be, but I am doubtful whether more injustice than justice has not been meted out to them. When these men are arrested they are taken to Brisbane and confined in a place too small to hold them before being sent to the internment camps at Cowra or Barmera. They are taken from North Queensland to places where the people are prejudiced against them because of their nationality. Because Italy is at war against us, they have to suffer. It is impossible for them to arrange for witnesses to appear on their behalf when they appeal. In short, they get nothing like a fair deal. Many of them could, with advantage to Australia, be released, not perhaps, unconditionally, but under guard to undertake farm work.

Many of them do not care if they do not go back to harvest cane, but they do not think that they should be treated as they are being treated and left in internment camps. I concede that a few days ago some Italians were fined because they refused to accept certain conditions. Some people said that they should be shot, but the men concerned are not foolish, they are intelligent, and they know what their conditions should be, for they have lived under those conditions in this country for many yearsAt any rate, the number mentioned was small. The men about whom I am concerned have done nothing except agricultural work all their lives. They came here from (agricultural settlements in Italy. I should not say that they were chased out of the country by Mussolini, but, at least, they got out because they did not want to have anything to do with him, or any of his tribe. These people want to protect their assets. I say that in the teeth of people in my own electorate. Some persons have said that the internees’ farms should be taken from them and given to returned soldiers, and that after the war the Italians should be sent back to Italy. The difficulty in that respect is this: There are 500 cane farms in the Ingham district. Three thousand men from Ingham have enlisted for active service. If all come back fit. there will be six men asking for each of the 500 farms. The suggestion is too absurd for words. Apart from that aspect, good use could be made of these men, and a lot of the trouble that faces primary producers, particularly in the farming areas, would be overcome, because they would have available to them men who know the job- In that respect they are different from a lot of men who are to-day serving in sheltered industries. One of them is Mr. P. Cruise, whose name has been bandied about this Parliament. Mr. Cruise is a professional punter, not for the working class, but for men like Mr. Frank Packer and Sir Sydney Snow. He invests their money for them at the race-course. This man was not only taken into the Allied Works Council in order to keep him from being called up for military service, but also promoted, and God only knows what he knows about industry.

There has been a controversy about curtailment of horse and dog-racing. For my part, I do not care whether racecourses are closed, but I realize that many people derive enjoyment on Saturday afternoons at race meetings. The Prime Minister, in pressing for a curtailment of racing, is actuated by the necessity to conserve man-power, but I put it to the right honorable gentleman that most of those out of uniform whom he will see at race meetings, are in sheltered industries. I have a friend who is very annoyed at the suggestion that there should be further curtailment of horseracing. He looks forward to a Saturday afternoon at the races. He says that the Prime Minister is making a mistake if he thinks that by closing down on the sport he will be able to ensure that those people of military age who are associated with racing shall be called into the military forces. He declares that they are all in protected industries, at Bryant House, with the Allied Works Council, or in munitions factories. I know that the books of factories are checked by inspectors and that the inspectors do their work honestly, but all they have to go on is the wages sheets, and I know three or four young bookmakers who operate regularly at race meetings, but work at. factories sometimes only for a day or so a week. They spend two days a week at the Lakes Golf Links to keep themselves in good nick for the day or so that they work at the factories and for tha Saturday afternoon that they spend calling the odds. I know that these people cannot be called up, because they have obtained for themselves positions in sheltered establishments, especially the Allied Works Council and Bryant House. Even if race-courses are closed, these men will not be called up unless they are combed out of their sheltered positions. I know one young bookmaker who spends five and a half days in khaki and Saturday afternoon in mufti, shouting the odds at race meetings. I do not attend race meetings frequently, but I know many who attend regularly and they have informed me that he is still operating. I have seen him operating myself. He is a soldier five days a week and a bookmaker at the week-end. I do not know how he manages it. I. do know, however, that there are thousands of other young men who would be called before their commanding officer if they were seen in civilian clothes, and, like “ Maxie “ Falstein, confined to barracks for not behaving themselves. This man appears to be privileged to change from khaki to mufti on Saturday afternoons for betting purposes.

Mr Collins:

– Does ,he train during the other five days?


– I do not know, but that is the position. I have in my possession information which cannot be contradicted. The man who gave it to me does not go to race meetings, but he knows a great many of ,those who do. I know of one bookmaker who is registered as an expert dyer. A friend of mine at the Bondi Bowling Club1 said in reference to this man, “ It is too funny for words. He puts himself down as a dyer, and the only thing he has ever dyed is his fingertips.”

Mr Paterson:

– I know of one bookmaker who truthfully described himself as a brass finisher.


– Doubtless he was. The information that was given to me is as follows: -

At the present time it is not the working men on small incomes that are avoiding military service. They are under control wherever employed where inspectors, unions and all employers are responsible.

The proposed further reduction in racing will not to any extent bring about big results for getting additional man-power.

The evils the Government wants to clean up arc the big city clubs and golf clubs, bookmakers and starting price men of military age, and also the number of clerks and runners they employ in the racing business. At present they enjoy exemption from service by devious means. For instance young eligible men are employed in great numbers in all types of industrial factories, also laundries and clothes cleaning concerns, anything for which exemption can be claimed as an essential industry. They are on the factory payrolls aud may only work a few hours per week. If inspectors call they are notified by telephone and stand around machinery to leave the impression that they work all day like other employees. They pay for the privilege and very often find their own salaries bo as to appear on the weekly pay-roll.

Buying small interests in industries is a racket that has been going ‘on ever since the demand and combing out for more man-power.

Another favourite ruse for racing men is to join a union and get work on the wharves as tally clerks. Many other types of jobs are taken on the hourly pay basis; lots of these men work only a few hours each week. The whole idea is to bc available for the racing each Saturday.

A great number of men employed in the newly-created government jobs are favoured by friends and others, and in this way avoid military service.

The Prices Commissioner, Rationing Board, Supply Department and allied works are a few where racing men could be released from for military call up.

Ordinary inspectors have not the entry to clubs or facilities for getting in touch with men of military age who are avoiding their duty to the country, because of the money and friends to help them.

As the position now stands the Government is powerless and these men will avoid service for all time. There is a way of getting hundreds, if not thousands, of men into the Army which I will explain to you later.

The way to which he referred is, of course, pulling these people out of reserved occupations.

I have heard the Minister for the Army (Mr. Forde) talking about how to obtain the release of men from the Army. I should like to know how it is that the son of one farmer in a certain district has been able to obtain his release in order to assist his father, whereas the son of another farmer in the same district, who is working about the same area of ground, has been refused release. The son of the man who was released told me that another man who was released from military service was a casual worker who takes a job wherever he can get it, and is not employed in any particular industry. With all due deference to the Minister for the Army, I say that he is Minister for the Army only in name, and that actually little notice is taken of him by the “ brass hats “. I was instrumental in having released from the Australian Military Forces a young man who was a primary producer operating on a large scale. He is of more use to the country outside the Army than in it, because he grows the beef and mutton which we so urgently need. The Minister for the Army said to me that, if the man-power authorities recommended this man’s release, he would undertake that he would be released. After full inquiry, the man-power authorities recommended his release. An officer at Victoria Barracks, Sydney, who was formerly a 6s. 8d. solicitor and who, accordingly, knows all about primary production, said to me, “ If one or two politicians are interested in a person that makes no difference to the Army”. I am not interested in this person. I do not know him personally, but 1 do know what he produces and how effectively he does his job, and that he is of more value to Australia in doing that job than he would be walking around a military camp doing fatigue duties because an officer did not like him. The Minister for th« Army gave distinct instructions that that man was to be released. The Army did not take any notice of him. Eventually, the Minister had to get in touch with the man in charge of the Military Forces at Victoria Barracks, Melbourne. The officer in charge of the Ingleburn camp said to this man, “ You will not get out of here if I can help it “. Why? Because he wrote to a member of Parliament. This man is now looking after five stations for his father. Every one of his overseers has enlisted. He did no try to get out until the last overseer was about to be called up for the Royal Australian Air Force. This man is prepared, without any cost to the Commonwealth, to do everything he can to assist the Department of Commerce and the Department of Supply and Development in achieving their objectives in the way of providing food for the Military Forces and the civil population. A man of that sort is of more value to the Government than any ten experts, I do not caro who they are. -


.- It has been said on, I believe, good authority that the road to hell is paved with good intentions. After listening to the Treasurer’s (Mr. Chifley) speech, it may be said with equal truth that the rosy road to inflation is strewn with good precepts. What could be .better than this statement in the Treasurer’s speech -

Expansion of bank credit, therefore, without a corresponding capacity to expand production, would increase purchasing power without increasing the supply of goods and services. Increasing the volume of money without increasing the supply of goods for civil consumption not only creates the danger of inflation, but it sets up serious competition between demands for civil goods and demands for war requirements.

I can quite believe that those words are not very acceptable to the Minister for War Organization of Industry (Mr. Dedman) or the honorable member for

Maranoa (Mr. Baker), but I do know that they give or should give quite a lot of hope to all those who believe in1 the principles of sound finance. I do not propose to traverse the ground so admirably covered this afternoon by the Leader of the Opposition (Mr. Fadden). I wish, however, to make some comparisons between the proposals in the budget and the steps that have been taken in other countries in the British Empire, particularly Great Britain and our sister Dominion of Canada. Our proposals this year show a war expenditure of £440,000,000, which is admittedly a conservative figure, and, after providing certain moneys from revenue, we are faced with a deficit of £300,000,000, which the Treasurer proposes, I think with a great deal of optimism, to meet by loans from various sources. He says very light-heartedly that he got £120,000,000 last year, and can easily double that amount this year, and so obtain £240,000,000. I have no fault to find with his arithmetic, which is quite excellent, but I do find fault with his optimism, because I see no grounds at all for believing that the £240,000,000 is at all likely to be raised this year in our loan markets. The experience of all honorable members here, and of a good proportion of the public as well, is that the money obtained last year was raised only with the greatest difficulty. Politicians, lord mayors, generals and all types and sorts of people went around the country shouting to the populace to subscribe to these loans. Up to a late hour the last loan, which was the most important, was greatly under-subscribed, and only at the last moment was it slightly oversubscribed. What reasonable grounds are there for assuming that we can raise this large amount of loan money this year! The second means of raising money is by war savings bonds and certificates, and here again the Treasurer shows extraordinary optimism, because he hopes to raise £60,000,000 by that method. What grounds are there for that hope? If we look at the past and judge by that, aa we must, what is likely to happen in the present and the future, there are no grounds at all. In the year before last we raised £13,000,000 by war savings bonds and certificates. This year the net amount dropped to £9,000,000. In the samo proportion in this corning financial year, we ought to be able to raise not more than £6,000,000. T do not suggest that the amount will drop so low as that, but I see no reason to believe that it will rise by ten times that amount, to reach the mm of £60,000,000. We are therefore at the moment faced with the necessity of finding this large amount of bank credits to make up the deficit. So far as the loan market is concerned, various estimates have been made of the amount likely to be raised,’ running from £150,000,000 to £180,000,000. Personally, I incline to the smaller figure of £150,000,000, which will leave £150,000,000 to be found by bank credits. In addition there are two other items which will inflate the actual financial position. I refer first to the overseas balances, moneys1 accumulated in London, some of which are disbursed to the Australian people by way of payments for wool, butter, cheese, and other commodities. A reasonable estimate of that money ought to be about £9,000,000, and a further addition to our credit system here will be the expenditure of the American forces, which again has been estimated fairly accurately at something like £10,000,000. So that, in addition to the £150,000,000 which we are likely to have to produce ourselves, another £19,000,000, or say £20,000,000, must be included, making £170,000,000 in all. On top of that conies last year’s addition to our credit, which is roughly £80,000,000. This means that for the last twelve months and the coming twelve months we shall have’ £260,000,000 of fresh money in the country without any goods or services to balance it. If that is not going to produce a system of inflation, what is’* The signs are already present. We have indications of black markets, and the rise of prices in the retail trade. To one like myself, who went through all this before when I was in Germany, the indications are very noticeable if one looks around. I therefore say that, the Government should at. least, attempt to face up to the situation and try to stop the beginning of an inflation, which may perhaps before the year is out turn into an avalanche.

Let me turn now to Great Britain, which has had enormous financial problems to deal with, as we have had our selves. There the expenditure on war this year is 60 per cent, of the national income, as compared with roughly 44 per cent, in this country. I say 44 per cent, because I take our national income this year to be in the neighbourhood of £1,000,000,000. I know a smaller figure has been given, but all the evidence I can get and the figures I can obtain indicate to me that £1,000,000,000 is a better figure to take as our national income than £850,000,000. Compare last year’s figures in Great Britain with last year’s figures here. The total war expenditure last year in Great Britain was £4,766,000,000 sterling, of which £2,074,000,000 was raised by revenue and £1,986,000,000 by war bonds and certificates, making a deficit or balance of £700,000,000 which was found by bank subscription, presumably by means of bank credits such as are used here. The proportion ‘ of bank credits to loans in En g 1 a li d is exactly 35 per cent. Last year, we in Australia had a war expenditure of £320,000,000. The revenue devoted to the Avar was £127,000,000, and advances and treasurybills and balances raised £84’,000,000. which was equivalent to 62 per cent, of our loan moneys. In other words we relied less on loans and more on bank credits to almost double the extent that Great Britain did. This year it is quite clear from the figures I have quoted that the position is going to be worse. In other words, we are going faster towards inflation even than we did last year.

I turn now to another set of figures, those of Canada, our sister dominion. Canada has financed herself very largely out of revenue, to a far greater extent than has Great Britain and to an infinitely greater extent than we have. The gross expenditure in Canada last year, translated into Australian currency, was £541.000,000. The amount obtained from revenue was £423,000,000. leaving a deficit of £118,000,000. The war expenditure was £3S6,O00,00O, of which 50 per cent, came from revenue, including moneys spent by Canada on behalf of Great Britain. The House is no doubt aware that Canada has behaved in a most generous and sensible way in helping Great. Britain, not only militarily, but also financially. Last year Canada advanced Great Britain £29,000,000 worth of gift food and munitions, and £20,000,000 of loans free of interest, and in addition took up to the amount of £9,000,000 a number of securities in Canada which were owned by people in Great Britain. If one takes all those gifts or loans out of the war account, Canada last year financed her war expenditure up to 78 per cent, out <>f revenue. If Canada could do that, I submit that we should ourselves be able to go much further towards financing our war expenditure out of revenue and rely to a far less extent on the issue of bank credits.

I know that the Government is abnormally sensitive to criticism, and that any remarks made by the Opposition, especially outside the House, are usually met with retorts from Ministers or their supporters to the effect that this Government has done all the work in this war and is responsible for the present advance in our military position, and, that if it had not been for this Government, Australia would have been in peril of going down the drain. In these days, whether the Opposition is criticizing the Government, or the Government is criticizing the Opposition, we must rely mainly on truth. It is no use pretending things for any purpose at all. The one thing we must try to achieve is to work out in an objective fashion a solution of the very difficult problems which are facing us. Therefore, it is well that the country should know that what is being done to-day is not entirely due, in fact I doubt if it is even mainly due, to the actions of the present Government. It is rather due to the foundations laid by the previous Government. The Minister for the Navy (Mr. Makin) said recently in Adelaide, in effect, that there was no realization of the danger which faced Australia until the Curtin Government took office. That statement is very far removed from the truth. Such utterances are most injurious to our general position, to unity, and to the prosecution of our war effort. The Minister for Social ‘Services (Mr. Holloway) said on the 2’7th August, 1941, just before this Government came into power, as reported on page 189 of Vol. 16S of Hansard -

T do not join with those who say that Australia lias failed in its war effort. I know something of the organization of industry, and when we compare what has been achieved with what we previously thought to be possible, we realize that somewhat of a miracle has been wrought. Australia is now manufacturing arms and munitions, light and heavy equipment and scientific apparatus, which 13 being used on every battle-front.

That statement has been repeated in this House on several occasions by members on the government side. The country should know what the Opposition has done in contributing to the successful prosecution of the war.

Mr Conelan:

– The honorable member would send all of our troops overseas.


– Many of them have already gone.

I turn now to a subject which I consider to be of great importance. Why the subject of post-war reconstruction has been raised in connexion with the budget is, I think, a mystery. I cannot see the relevance of reconstruction to the financial arrangements for the coming year; but I welcome the announcement because it gives me an opportunity to offer a few remarks on this important matter. To-d.ay the main consideration is to wage war with all our might and strength, but a consideration that comes only second to that is that we must formulate plans for the post-war period. Most people agree that the problems of postwar reconstruction are a great deal less obvious and therefore more complicated than those facing us to-day. The war problems are at least direct, whilst the post-war ones are in many cases complicated and hard to understand. These therefore require most careful and comprehensive planning. Most people agree that the preparation for a post-war programme is one of the things that are essential to victory. One of the failures of democracy in this country and in. most other British Dominions - in fact, throughout the world - is that we have not studied our problems from the spiritual aspect. The time has come when we must give much more attention to it than we have in the past. The Atlantic Charter, with its four freedoms, of course, contains a. message of hope to a great many people, but at the same time if; is so general in its outlines that the ordinary man in the street wonders what it is all about. The ordinary citizen, when, he thinks of these problems, asks: “ How will it affect me, my family and my future?” He wants to know something more definite as to what will result from the great principles laid down by Mr. Churchill and Mr. Roosevelt.

The idea of reconstruction means something different to various people in different positions. Some regard it as signifying therepatriation of soldiers and the return from a life of war to a life of peace. Others regard it as being something in the nature and direction of building a new Jerusalem in our sunny land. Others regard reconstruction as a return to pre-war conditions. A fourth class of people regard reconstruction as the building of a brand new world or order. Between the first and second class there is no conflict of ideas at all. The demobilization of men and the return to peace conditions is not inconsistent with the idea of a new Jerusalem, but between the third and the last-mentioned class there is a vast difference. The dictionary meanings of reconstruction areto build again, or construct again “, and “ to construct anew “. Between ‘those two definitions and the people who accept one or the other, there is a definite conflict of view. In my opinion, reconstruction means something between a return to peace and the starting of a new and better order. Many honorable members no doubt have thought about this subject, and some have gone into it fairly deeply. Those who have done so realize what an enormous problem reconstruction actually is. Those who regard it as merely the demobilization of troops and bringing them back to civil life, or the change over from war to peace, look upon it as not so wide in its scope, and therefore presumably somewhat easier to deal with. I contend that the aims of reconstruction are the achievement of a national unity through a social and economic structure designed to secure equality of opportunity and service for all classes. I believe that that is the underlying basis of any form of reconstruction that we as a Parliament may wish to undertake. Reconstruction does not consist solely in bringing troops back into civil life, nor does it mean solely bringing back munitions workers to peace industries. It connotes, as the Treasurer said, the physical development of our country, linked up with expanded production and increased population. It means, according to the Treasurer, the material advancement of Australia. To me, however, it implies a great deal more than that, and I think that it means much more to a great many other people. The failure of democratic civilization has been that it has placed all the emphasis in the past on material gains. We have taught our people in the schools that the first object in life is to earn a living, make money and improve our financial and material condition in society.

Mr Baker:

– Has the honorable member heard about the golden rule?


– I have, but it is not often preached. We have to submerge to some degree the material idea and get into our minds the fact that money is not so important as service.

Mr Lazzarini:

– Production for use instead of profit?


– The Minister is now going back to the material view. How is the ideal to which I have directed attention to be achieved ? Not through ordinary trade union rules or the ordinary procedure in business. The only method by which it can be achieved in this or any other country is by education. Those who have studied the history of Russia and Germany over the last fifteen years will have realized what has been done in those countries in that respect. In Germany, the youth has been taken from earliest infancy into the schools and educated in the Nazi philosophy, not to turn out boots or tons of coal, but to follow the precepts laid down for them by their Nazi lords and masters. A similar thing has happened in Russia, where the emphasis is placed on the idea of cooperation and service. The effect of that education is shown to-day in the great fight being put up by the Russian soldiers in their opposition to the hordes of Hitler. Not long ago I read an article by a Frenchman named Jean Jacques Blanche, who had artistic affiliations and was a friend of the Russian ballet producer named Diagheleff, whom he met in London with a Russianprince with whom he was friendly. The latter had been exiled from Russia after the revolution and had left the members of his family behind. At a theatre in London one night the Russian prince said to Diagheleff, “ I have two sons coining to-night. They have escaped from Russia and have come to Bee me”. Shortly afterwards two half-starved and ill-clad youths aged fourteen and fifteen years respectively arrived and were introduced to Diagheleff. The lads looked around and obviously disapproved of everything that was going on. They were given a good meal and a suit of clothes, but the next day they said to their father, “ We do not like this life. We are used to hardship and cooperation, not to the life led in this country “. They went back to Russia, and as far as I am aware are still there. That shows how education can transform the whole outlook of individuals if applied strictly. I do not suggest that we should adopt entirely the Nazi or Russian principles, but I do suggest that we should adopt them insofar as they would meet our own conditions and adapt them to our own needs. Unless we do that we shall never achieve the unity which we need now more than anything else and have needed for many years. Education, therefore, is one of the subjects that must be taken up in dealing with post-war reconstruction.

Having given the background I shall now fill in the general outlines, and I shall begin with organization. We cannot deal with the enormous problems confronting us unless there be proper organization. The problems should be dealt with under three headings. First, we should formulate the chief problems with which we have to deal, secondly, the bases for future economic and social development, and thirdly, we should study the considerations to be borne in mind in the framing of policy. In regard to the first question, it is true that some of the problems are known to us already. For instance, there is the question of repatriating the men who will be discharged from our fighting forces; the problem of converting industries from a war-time basis to a peace-time basis; and the absorption in normal peace-time avocations of the workers now engaged in our war industries. Various estimates have been made of the number of people involved in this problem. Figures ranging from 50,000 up to more than 1,000,000 have been quoted, but I believe that the task will not be nearly so extensive as most people imagine. In the first place, we must bear in mind the fact that a large number of men who are now in the forces will be re-absorbed in their former jobs. Some may even go back to the banks if the Minister for War Organization of Industry (Mr. Dedman) permits the banks to remain. Also, a large number of women will return to their ordinary employment, and many men will go back to their farms. Therefore, taking the problem as a whole, I think that it will be found that the actual numbers of workers to be re-absorbed will not be nearly so great as is generally believed. On the other hand, even if work has to be found for only 200,000 or 300,000 people, the problem will be a formidable one. Other questions which come under the same heading include the general development of industries. To some degree, of course, that is bound up with the task of converting industries to peace-time production, but industries generally must develop along lines which have been definitely laid down. Then there is also the question of a public works programme which in itself is a big matter. It seems to me that, the public works projects must be used mainly to take up the slack in employment until men can be re-absorbed into peace-time industries. Another large question concerns the economic welfare and social security of the people, including housing, health and social insurance and the regulation and distribution of incomes in relation to the needs of families and individuals. Finally, there is the problem of constitutional adjustments. The basis for planning future social and economic developments may be divided into four parts. First, a sur.vey of labour and resources; secondly, the degree of expansion considered suitable and desirable for various industries, including rural industries; thirdly, decentralization of industry; and, fourthly, the problem of population. The decentralization of industry is a matter of great importance. Instead of having all our industries concentrated, as they are today, in the metropolitan areas and the coastal regions, it is in the interests of the country to see that they are spread to the internal areas, not only for security reasons, but also to provide assistance for the rural industries in those areas. The problem of population which was touched on by the honorable member for Warringah (Mr. Spender) last night, also is an enormous one. I cannot go into it fully at this stage, but I suggest to honorable members that it is a question which is worthy of considerable study. Considerations which must, be borne in mind in framing a policy for’ the future include such matters as international economic policies - the policies of foreign countries which impinge upon our own policy, including, of course, lease-lend agreements and any other such agreements that may bc arrived at. Consideration must also be given to trade outlets, and to political problems. These matters do not complete the list by any means. One could go on adding to it almost indefinitely. 1 come now to the third and concluding portion of my remarks, namely, what has the Government done, and what does it intend to ‘do with regard to these matters? As honorable members are aware, the reconstruction division of the Department of Labour and National Service has been dealing with this question for some time, and numerous committees have been set up. In fact, no less than hine interdepartmental committees have been working on the problem, and in addition there have been numerous sub-committees, some of them governmental, and others belonging to trade unions and other like societies. The reconstruction division is composed almost entirely of public servants. In other words, it is an interdepartmental committee. I understand that its personnel numbers fifteen, which is a very unwieldy committee. It has not met very often, nor has it progressed very far in the work assigned to it. That is one reason why the whole reconstruction programme is so far behind what it should be. Much more drive is required if the problem is to be tackled in an efficient and expeditious manner. The preparatory work carried out so far is small, or at least the results achieved have been far short of what is desirable. In fairness to members of the committees I should like to state that they have given a lot of time to this work, and their failure to achieve results has not been due to lack of enthusiasm ; it has been due to the fact that members of the committees are mostly departmental officials who are occupied with their normal departmental work and have little time or opportunity to devote to this problem. Any one who has worked on an inter-departmental committee knows what is likely to happen. Such a committee meets when it is able, which is not very often, and even when it does meet, usually some members have to fly to their own particular jobs with the result that work is very intermittent and haphazard, and it is difficult to achieve definite results. To deal with this question, therefore, I suggest to the Government that a full-time body should be set up. It should consist of two or three, or at the most five members, who should, if possible, be drawn from civil life so that they can devote their whole time to the job. In addition, they should have a reasonable background of knowledge to enable them to deal with this question and get a move on. The Treasurer has said that the matter has been considered by a committee of the Cabinet, which has given its “ special “ attention to these problems. What is meant by the word “ special “ I do not know ; but there can be no doubt that the problem does require special attention, and here again the objection which I raised in connexion with the inter-departmental committee applies with equal force. Members of a cabinet committee or subcommittee have no time to devote to the solution of this problem, and I repeat again that a committee of full-time members should be set up, to operate under the supervision of a Minister, who should have a special portfolio for flat work, and to whom its report would be made. I hope that the Government will see its way clear to do as I have suggested. Another feature of this matter is the fact that the work of various committees engaged upon an examination of the reconstruction programme hae lacked co-ordination. I could give many instances of that, but I shall content myself with one. At the present time three committees are studying the question of rural development after the war. There is the Joint Committee on Rural

Industries, the Repatriation Committee - which is dealing with this problem to some degree - and the Tariff Board. The work of these organizations overlaps, and there is a great deal of confusion with a consequent reduction in real effort.

There is another point which arises when one is considering this question of planning. It is truly said by many people who are interested in the problem that they have no time to deal with the matter because they are already engaged on their own work. Also, the question is asked, how can we plan for the future when we do not know what the future is to be? The reply is that, in the first place, it is necessary to plan now, because if we wait until after the war there will be no time for planning. It is useless to say that we must wait until the position is stabilized. Those who have any recollection of what took place after the last war know that things were no more stable in 1920 than they were in 1919, nor were they any more stable in 1921 than they were in 1920. It is necessary to start planning now and not wait for to-morrow, because to-morrow will never come.

The budget foreshadows the taking of a referendum to give the Commonwealth powers to deal with post-war reconstruction, but why that is to be done I do not know. I know of nothing that would justify the taking of a referendum at present. Obviously, one cannot confer on a problem until one knows what it involves. It is impossible to draw up a plan now for post-war reconstruction, because the preparatory work has hardly been started. In fact, the surface of the task has been barely scratched. Therefore, if the Government puts to the country by means of a referendum the question of giving the Commonwealth added powers to deal with post-war reconstruction, it is seeking power to deal with something which at present is neither more nor less than a vacuum. Before any referendum can be taken on such a wide question, we must at least know where we stand, and the purpose for which the powers are wanted. The present proposal is equivalent to a man going into a bank and asking for £10,000; then, when the bank manager asks him why he wants the money, he replies, “ You will have to trust me. I have some marvellous ideas about what I can do with this money “. That is exactly the position of the Government to-day when it proposes to ask the people of this country for powers to deal with something about which it knows - I use these words advisedly - absolutely nothing. On the question of constitutional reform I have ideas, like every body else. The Constitution was framed 42 years ago, and there can be no doubt that many aspects of it are not applicable to modern conditions. The time will come when changes will have to be made. I believe that the future will show that what is required is centralized power for the Commonwealth and decentralized administration for the States, but the time for the consideration of these questions has not yet arrived. I cannot understand why the Government should want to put the proposals to the people at the present time, when the nation should concentrate all its efforts on winning the war, in order to secure n sound foundation for the structure which we hope to build in the future. Our secondary purpose is to design that structure. That will take much time, thought and energy; but until it has been designed there is nothing that we can do. I regard any attempt to rush in to make revolutionary constitutional changes at this time as an action little short of madness. [Extension of lime granted.] The proposal of the Government will merely cause confusion among the people; it will distract their attention from the supreme task of organizing to win the war.


.- I listened attentively to the Leader of the Opposition (Mr. Fadden) while he addressed the committee this afternoon, and must confess that I was astonished at his remarks. His whole speech was an attack on the budget, and yet he appealed for the formation of a national government. He said that the Labour Government had proved to be a total failure. That was a remarkable statement to make, because the right honorable gentleman should know that the Government has done the greatest job for the people of Australia that has been performed in this country’s history. No other government could have done a better job in so short a time. We all know the position which confronted Australia when the present Government took office. In this connexion, I compliment the independent members of this House for giving to the Labour Government an opportunity to prove that Labour oan govern in wartime. Although the electors did not give that opportunity to the Labour party directly, the two independent members whom they returned to this House did so. Those gentlemen knew what had been going on behind the scenes, and their support of the Government will stand to their everlasting credit. In my opinion, had a Labour government not been in office we should not be discussing the budget in this chamber to-night, but would have been in the hand3 of the Japanese four months ago. Before the Coral Sea battle, Australia was very close to defeat, but the forceful arguments of the Prime Minister (Mr. Curtin) and the pressure that he brought to bear on the United States of America, brought assistance in time to save this country. En the light of the facts, I cannot understand why the Leader of the Opposition should have said that the present Government had failed. I am not an experienced politician, and, therefore, I may not know the right honorable gentleman’s motive in speaking as he did; but when a man says that he will co-operate with the Government in order to prosecute the war with the utmost vigour and then speaks as the right honorable gentleman spoke to-day, I can only say that he is not “ fair dinkum “. I do not agree with everything contained in the budget, but, in the circumstances confronting us, I regard it as a fine effort on the part of the Government. I do not like loans which bear interest, because I believe that if people have money to put into war loans they should; do so without expecting interest in return. If ever there was a time when money should be lent to the Government free of interest it is now. Those who wish to make loans to the Government free of interest may do so voluntarily.

The Leader of the Opposition advocated the formation of a national government, but I tell him that the members of a government which could not govern this country satisfactorily in peace-time could not assist in doing so in war-time. The previous Government, which was unable to conduct the affairs of the country satisfactorily in times of peace, now wants to become a partner with the Labour Government in time of war. It cannot be done. A government which failed in times of peace would be a failure now.

The primary producers are the backbone of any country. “Were it not for them the rest of the community would go hungry. The Leader of the Opposition told us that shortage of money made it impossible to pay higher prices for primary products. That was at a time when we were budgeting for an expenditure of £100,000.000 a year. To-day we are budgeting on the basis of an expenditure- of £600,000,000 per annum. When I first entered this chamber the present Leader of the Opposition said that there was not sufficient money available to establish a mortgage bank in order to lighten the burdens on the primary producers. Nevertheless, a mortgage bank will soon be an established fact in this country. We have heard a good deal lately about inflation. The cry was the same ten years ago when £18,000,000 was needed to assist wheatgrowers and to provide work for the unemployed. The proposal of the Scullin Government to raise £18,000,000 f0 those purposes was regarded as an attempt at inflation. We were told that if the Government succeeded the country would be ruined. . Last year, we were told that the country was on the verge of inflation, and that we should be ruined within twelve months if a Labour government were placed in power. No honorable member opposite has even condemned legislation which caused hundreds of thousands of people to be hungry and homeless. Babies in cradles were denied woollen clothing notwithstanding that our sheep produced large quantities of wool ; biscuits were not available, although our wheat silos were full. Honorable members of the Opposition want us to forget these things and to perpetuate the old financial system. During the last twelve months legislation which had not previously been introduced into any Commonwealth Parliament was brought forward to deal with banking. The private banks create money out of nothing,, and then they invest the money in war loans and draw interest on the amount so invested. A few days ago there was a deputation of fruit-growers, who wanted an open market for citrus fruit to allow them a payable price for their product to relieve them of debt as at present the industry is in a hopeless condition. It is time that the workers had homes of their own; but even now this Government has only been able to bring in legislation 100 years behind the times. It would have brought in more uptodate measures if it had had a majority in Doth Houses of Parliament, but as this te not so it is limited in what it can do. In these circumstances it is ridiculous for honorable gentlemen opposite to condemn our financial policy.

We have been told by the Opposition that the workers should be heavily taxed. 1 do not think that the workers should be taxed at all, for they are constantly taxed in their labour. Many of them are working day and night in munitions factories and the like, and they are doing their fair share towards winning the war. It is hard to understand why the Government should give them their money with one hand and take it away with the other. If a man has £10,000 a year and £9,000 of it is taken away from him he still has a good living left. If the Government needs further revenue it should impose higher taxes on the rich. It may he true that wages are high in these days, but the cost of living is also high. There “is very little of a man’s wages left by the time he has paid his rent and provided for the immediate needs pf his wife and family.

The people must realize that a big alteration is needed in our financial system. We talk glibly about a new order, but such talk is hypocrisy unless it implies a willingness to do everything possible to achieve a new financial system. Orthodox financial methods will never get the country out of its difficulties because orthodox finance is responsible for our present financial position and the system must be changed if we are to obtain relief. So long as loans are floated at high rates of interest we shall continue to pile up an increasing public debt.

The only way out of the financial moras* is for the Government to draw upon national credit. If the existing financial system be correct, then I am a Chinese with the face of an Australian. It is downright stupid for us to continue our present financial procedure. How in the name of God can we expect to get anywhere if we continue our present procedure? If a man owes £1,000 to-day and he borrows £1,000 to-morrow in order to repay it, and has to meet an additional interest charge, how is he to do so without getting further into debt?

Mr Hutchinson:

– Who is doing the borrowing ?


– I say there should be no borrowing. The Government should draw upon national credit for its needs. No money was borrowed by the Labour Government which was responsible for the construction of the transAustralian railway. In our 150 years of national history the Labour party has had a majority in both houses of the National Parliament for only five years. It showed during that brief time what could be done by modern financial methods. When God gave us Australia 150 years ago, we found ourselves in possession of an undeveloped country without roads or railways, and free of debt, or any other impediments. We should remember that we did not buy Australia. God gave it to us, as He has given us the sun, moon and stars, and the harvests of nature. Financial experts and party politicians have done the damage that now needs repair. If we wish to build on a sound foundation we must remedy the defects of our financial system. What can be done in war-time to find money can also be done in peace-time. If we are to have a new order, we must wipe the financial slate clean and make a fresh start. There is no other way to success. A man who borrows money in order to meet a mortgage on his property is only accumulating debts and so long as he borrows he must increase his debts for he must pay interest plus the principal.

These are not normal times. The honorable member for Gippsland (Mr. Paterson) said something about lean times, but whatever the times may be we shall still have our mouths to fill and our families to shelter. The depression was entirely unnecessary and should never have been allowed to occur. But the development of this country could have been continued in the depression years if the Government of the day had had sufficient courage. Money can be found now for necessary defence works, and it could have been found then for necessary national developmental works. The Prime Minister (Mr. Curtin) told us last night, in one of the most interesting speeches that T have ever listened to, that we had spent £14.000,000 in road construction during the past few months. Why could not money have been found for such a purpose during the depression? Yet in those days skilled and unskilled men, and professional men and artisans alike, were thrown upon the national scrap-heap. They were told that there was nothing for them to do. We must avoid anything of that description in the future. To-day, things must be done that are unpalatable to us. We must do things that we would not dream of doing in peace-time. Nevertheless, many of the things that we are doing now ought to have been done long ago.

I am glad that, in the last six months or so, we have not heard very much about the place of gold in the national economy. Gold has been a curse to the world. It should be confined to ornamental uses. To-day, no one can tell how much gold is locked up in the vaults of the banks or elsewhere. In fact, it does not matter what quantity of gold is there, for gold is of no use to fill a man’s stomach or to keep him warm at night. We shall not achieve a satisfactory new order unless we abolish the so-called gold standard for all time. I hope to see a world federation of the 28 Allied nations which will operate under a common monetary system. Why should the Australian £1 be valued differently in New Zealand, America and Great Britain? I did not believe that this was a “dinkum” war - I considered it a financial racket - because of certain statements made by Mr. Montagu Norman, of the Bank of England ; but I believe that we have learned something with the passage of the last three years. The men who fought on Gallipoli in the last war helped to win that war. but unfortunately we lost the peace. I hope that our men in the Middle East, and in the islands of the Pacific, and at other battle stations will win both the war and the peace on this occasion, and that when the war ends, and the dark clouds that now hover over us are dispelled, we shall have a land fit for people to live in. I hope, also, that our financial needs will be met, not by the private banks for their own benefit, but by the Commonwealth Bank for the national well-being. We want no more international financiers from Brazil, France, Germany or elsewhere. Australia is capable of financing its own national activities. It is practically financing its own war effort now. If the soldiers who are fighting to keep Australia free wish to go on the land after the war, they should not be treated as were the soldiers after the last war, who were placed upon the land in circumstances in which they had no chance whatever of being successful. It was impossible for them to live and rear their families in contentment and peace. Life on the land is, in too many instances, little better than slavery. In the dairying industry, for instance, mothers and wives and daughters have to go out in the early morning milking cows, sometimes wading through slush up to their knees. It is no wonder that that industry, like the wheat industry, is slipping back. After this war is over, let us not sell the land to the soldiers; let us give it to them at a very low rent, and before we hand it over, let us see that it has water ‘ on it, and a home, and electric light. This can be done if we monetize the wealth of Australia. Of what use is it to put poor men on land which is over capitalized and pay high rates of interest when it will be impossible for them to make that land pay at the price which they can get for their products? Land should be priced according to the value of ite products. We should clear the land and hand it over to the soldiers or whoever will go on to it, and the products of the land should be put on the market for the benefit of Australia and of the world. Until that is done, we shall not be able to check the drift of population from the country to the cities. Under our present rotten system of finance, it 13 practically impossible for most farmers to be successful. After striving for years, too many of them finish up bankrupt and broken hearted. I hope that, at the end of this war, we shall have a Labour Government which, through the Commonwealth Bank, will finance our national enterprises in the interests of the people as a whole and forever abolish poverty in a land of plenty.


.- This budget contains a lot of “ ifs “. The Treasurer (Mr.Chifley) said that if we were able to double our loan raisings this year, and if investments in war savings certificates were increased sevenfold, we should just about be able to get through by utilizing the national credit to the extent of £60,000,000. Presumably, if we fail to do these things, we shall be faced with the prospect of inflation to the extent of over £200,000,000. If that should happen, the finances of the country will collapse, because it will be impossible to control prices. So far, the system of control has succeeded in keeping prices at a reasonable level, but. it will be impossible to go on doing this if the expansion of credit is permitted to continue unchecked. Therefore, I trust that the Treasurer’s expectations regarding the raising of money will be realized.

I entered this House one year and nine months ago as the result of a by-election, during which I advocated the formation of a national government during time of war. I still believe that we should have a national government. It is unfair and unreasonable that the representatives of fewer than 50 per cent, of the people should be governing the country, while the representatives of the majority of the people have no voice in the Government. It is deplorable that we are deprived of the services of some of the best intellects in Parliament during this time of national trial. There are men on the Opposition benches with many years of ministerial experience, and their services should be availed of.

It is sheer hypocrisy for the Government to ask the people to make sacrifices when it is not prepared to make any sacrifices itself, nor to abate its policy in any respect. Members of the Government insist that they shall continue to be free to play the party political game, and they are still trying to impose their policy upon the people. As a matter of fact, the burdens of the war are not being equitably borne at the present time. Those engaged in the production of war materials are being paid much more highly than in peace-time. I do not begrudge them their wages, but I point out that thousands of persons who are producing essential foodstuffs are receiving only £7 a month. In Western Australia, practically every client of the agricultural bank is on this dole of £7 a month on the average.

Mr Ward:

– So that is what is left after the banks take their cut.


– Yes, and it may happen in the near future that the mortgage bank will take over their liabilities. Something must be done to keep farmers on their holdings. During the last two years, 512 holdings have been abandoned in Western Australia by wheat-farmers and dairy-farmers. That must not be permitted to continue. In various rural areas, shops and other buildings are literally falling to pieces because the depletion of the population has caused a reduction of business. If the Commonwealth and State Governments do not make an attempt to preserve these towns, much of the outback country will become a wilderness. When the Minister for Social Services (Mr. Holloway) was speaking this afternoon, he claimed that practically all our troops are unionists, and I interjected that 1 had in our fighting forces overseas 22 relatives who were non-unionists.

Mr Ward:

– Approximately 95 per cent, of our troops overseas are unionists.


– That statement is rubbish. Replying to my interjection, the Minister for Social Services implied that those 22 men probably earned their living at the expense of unionists. He is a very honorable and fair-minded man, and I know that he would not intentionally cast any reflection upon them. That brings me to this point, that before men and women can obtain employment in a factory producing war materials, they must take out a union ticket, and contribute to the funds of the Labour party, whose policy may be diametrically opposed to their own political beliefs.

Mr McEwen:

– Which of the four freedoms does that embrace?


– This is evidently a new one. If the Government persists with this policy, the day will not be far distant when pastor alists who sell their wool to the Government will be compelled to take out a union ticket. I object strongly to the enforcement of this rule. The Government is reluctant to compel the workers to contribute to the improvement of the country’s financial position and the stimulationof our war programme by a system of post-war credits, but military deferred pay is undoubtedly a form of post-war credit, and it bears no interest. For the Government to ask people to make sacrifices, when it is not prepared to play its part, is sheer hypocrisy.

So far as the austerity campaign applies to some of our larger cities, I sincerely hope that it will prove most successful; but there are many thousands of people in the rural areas of Western Australia who have led a most austere life for years, and the only thing that will be new to them will be the application of the word “ austere “ to their normal way of life. In Western Australia, the word “ austerity “ may be applied with justification to the whole of the State, and to most of the people. Western Australia has been given a raw deal in the allocation of war work, and in shipping. For example, shipping space which has been made available, has been badly allocated. During the past few months, 417 complete gas-producer units were landed in Western Australia, although that State is the home of the gas producer. Pederick gas producers, which were patented in Wagin, are now being shipped to Western Australia from Adelaide. The 417 gas producers occupied sufficient space for materials for 8,040 units. Although the manufacturers of gas producers in Western Australia are on the verge of bankruptcy, complete units are pouring in from the eastern States. Then again, 600 tons of salt were landed in Western Australia, though residents of the north-west have not received any tinned fruit, jam, or vegetables for months.

Mr McEwen:

– That is most serious.


– Although the Minister for Labour and National Service almost invariably claims that the newspapers misreport him, I accept the published statement that when the 600 tons of salt were landed in Western Australia, 300 tons of salt were on Rott- nest Island awaiting shipment to the eastern States. In addition, 500 tons of eastern States flour were landed in Western Australia.

Mr Dedman:

– That illustrates the “efficiency” of private enterprise.


– It is the responsibility of the Commonwealth Government to ensure that every foot of shipping space is used to the best advantage.

Mr McEwen:

– A cheap sneer at private enterprise does not cover up the inefficiency of the Government.


– That is true. The acreage sown with wheat in Western Australia has been reduced by one-third, and every country siding in the State has stacks of wheat. But until six weeks ago, the flour-mills had been idle, and yet 600 tons of flour was brought from the eastern States. I have also been informed that 35,000 carcasses of mutton were imported, because of the lack of reserves in cold store, but evidently no one bothered to ascertain whether supplies could be obtained from country areas. My district could have supplied the metropolitan area and the Army with sufficient mutton to meet all requirements for five weeks. A considerable number of the 35,000 carcasses were so fat that butchers were asked to remove some of the fat before the meat was offered to the public.

Mr Harrison:

– Everything gets fat in the eastern States.


– I wish that the eastern States would keep their meat. Western Australia can produce excellent mutton. I contend that shipping space has been allocated unjustly, and that influence has been used to acquire space on vessels, to the detriment of essential industries. The annexe at the Midland Junction railway workshops, which has been engaged on important war work, closed down on several occasions because of lack of materials; but a ship which berthed at Fremantle brought from Queensland several thousand empty cartridge boxes that could have been made at Midland Junction. In war-time, it is the responsibility of the Government to utilize shipping space to thebest advantage. The Midland Junction workshop has been idle on many occasions because of a shortage of materials.

Mr Chifley:

– The very good reason for that shortage is the problem of shipping.


– The articles which I have mentioned have been brought to Western Australia in ships at periods when the workshop has been without the materials which it needs to fulfil its orders. Another instance of the way in which shipping space is wasted is to be found in the fact that a substantial quantity of foodstuffs manufactured by Kellogg (Australia) Proprietary Limited, which are packed in bulky containers, was shipped to Western Australia whereas it could have been replaced by oatmeal and many other kinds of concentrated foods.

Mr Chifley:

– Ships have arrived at different ports with cargoes which appear to bc unnecessary because, as the honorable member knows, they have been diverted, for reasons which it is needless to elaborate, from the ports which they were originally destined for.


– Producer-gas units have been coming into Fremantle from Adelaide in large quantities in the last two months. There is no excuse for space being occupied by producer-gas units when the materials needed to keep the Midlands J.unction workshops operating are not arriving.

Mr Anthony:

– Are producer-gas units manufactured in Western Australia ?


– We had 4,200 producergas units in Western Australia before the eastern States knew what producer gas was.

Speaking on the Supply Bill (No. 1) 1941-42 on the 25th June, 1941, I told the Government of certain deposits of superphosphate in Western Australia. I have mentioned the matter since and I take this opportunity to do so again, because it is essential that action be taken to exploit these deposits, owing to the fact that we have lost our main source of supply and are having increasing difficulties in maintaining the importation of even the limited quantities that we are now obtaining. The Government of Western Australia tested at Dandaragan, in Western Australia, a bed of coprolite underlying which is a stratum of highly impregnated phosphatic rock. I understand that in that deposit there is sufficient phosphatic rock to provide one year’s supply of superphosphate for Western Australia. Nearby are more than 40 caves, some of which were examined in 1908 by a noted Norwegian geologist, Dr. Goeizel, whose report stated that the caves contained thousands of tons of high-class guano. I know that the guano would be of no use in the growing of wheat, but it would be of great use in the country which is represented by the honorable member for Forrest (Mr. Prowse). When I spoke on this matter last year, I named the islands just off the coast on which there are large quantities of guano. I know that there would be difficulty in exploiting the deposits on some of the islands to the north, but there are deposits nearer to the south which could be easily worked. I visited some of those islands in 1928. They were stripped of most of the “ live “ guano in the last 25 years of the last century, but in the last 40 years they have been rejuvenated and to-day great quantities of guano could be taken off them. All users of artificial fertilizers will be severely rationed this year, and, if we can get 100,000 tons of fertilizer from somewhere, it is the responsibility of the Government to set about doing so. The islands on which guano is to be found are Browse Islands, the Lacepede Islands, the Abrolhos Archipelago, Montebello Island, Barrow Island, Bernier Island, Dorrie Island, Dirk Hartog Island, Bedout Island, Carnac Island, Beagle Island,- Jones Island, Stewart Island and the Black Hawk Reef. Those islands are on the north-west coast, but substantial deposits of guano are also known to exist to the south-west near Esperance, in the Recherche group of islands, and elsewhere. No guano has so far been taken from the islands near Esperance, and I think that a lot could be taken from there in safety. The islands are fairly close to the coast. There are deposits from which fertilizer could be obtained in other parts of Australia. Near Coolgardie, for instance, there are deposits of a substance, the technical name of which I cannot, for the moment, remember, which are worthy of thorough testing to establish its value as a fertilizer. I appeal to the Government to do something in this matter, lt may be many years before we shall be able to obtain supplies of phosphate from our customary main source of supply. It may not be possible much longer to obtain supplies from our present sources overseas. The difficulties in the way of importing the phosphate are increasing month by month. It is therefore our immediate responsibility to investigate all local deposits in order to ascertain what use we can make of them.

Progress reported.

page 209


Aliens: Acquisition of Property - Tin Production - Income Tax Evasion - Australian Army: Sentences. Motion (by Mr. Chifley) proposed -

That the House do now adjourn.


– I bring before the House a matter that concerns the Attoney-General (Dr. Evatt) and the Minister ‘for Labour and National Service (Mr. ,Ward). I am concerned about the infiltration of aliens into certain districts’ of Victoria. I refer now particularly, to the southern end of my electorate. The Silvan area, which is particularly concerned, is part of the Shire of Lilydale. This infiltration has been going on now for some considerable time, and is continuing. The aliens who are gradually occupying farms and adding to their existing holdings in that particular area are ;men who could not be said to be friendly to this country during a time of war. They are mostly Italians, many of whom do not speak the King’s English, and have arrived in this country only of late years. They are, as I say, gradually occupying property after property, and extending the acreages of their existing farms. , So seriously is this matter viewed that I have been communicated with by the Shire of Lilydale, and asked to raise it in the House, and at the same time to press for a most searching investigation into the problem. I have also been furnished with two copies of lists of cases which it is considered ought to be thoroughly investigated, to ascertain whether the National Security Regulations governing the transactions are being complied, with or evaded.

The Lilydale police have been interviewed by a representative of the Shire Council, and the council has been informed that, so far as their investigations have gone, the allegations may be perfectly true, because the men who are allegedly leasing the properties simply state that they are renting them on the share principle, which the police have no means of disproving. The Shire Council states in its letter to me -

The continued increase of enemy occupation of properties in the area is most serious and disquieting, and anything short of a searching investigation into the transactions regarding the land is to betray our own boys serving in the various theatres of war.

There seems to be a good deal of dummying going on in this area, because in some manner or other the enemy aliens appear to be evading the regulations. The cases which I propose to bring before the Attorney-General are given in the documents in quite a fair amount of detail. The Shire Council suggests that if necessary the National Security Regulations should be amended so that land of over an acre in area shall not even be rented to an unnaturalized alien. Even if this should mean depriving the aliens of their land, they could be drafted into labour battalions and made to work for their adopted country instead of being allowed to thrive and grow prosperous while our own boys are away at flic various war fronts.

Mr Calwell:

– A number of aliens in this country belong to anti-Fascist clubs. Does the honorable member make any distinction?


– The whole question, and in particular these two sheets of cases, should be thoroughly investigated by the Attorney-General’s Department. Here is a particular case relating to part of CrowD Allotment 39a, Shire of Lilydale. The owner was a man called Bennett, of High-street, Malvern. The occupier was George Cooper, an airplane factory worker for the past six months. The property was leased with the option of purchase five years ago. Notice to quit was served early in July and Cooper walked out on the 25th July, when he secured a house at Mount Evelyn. In the interim an unnaturalized father and son, whose names are given, entered the property and began working the land. It was purchased officially by another Italian on the 26th June, 1942, and this man has since signed a statutory declaration to the effect that, being unable to make a living on 20 acres bought in 1939, he had to increase the area by buying this other allotment. In this particular district, where berry fruits and vegetables are grown, a typical block is 20 acres, and no grower can possibly work it without at least two assistants and many casual workers to assist in harvesting. If this Italian was unable to make ends meet on his own 20-acre block, how did he obtain £700 to purchase the other? The shire council gives me full details, with the names of the solicitors for the purchaser and other parties interested. I have two pages of almost similar cases. I can assure the House and the Government that the matter is serious, because discontent is rife, and rightly so, in those areas.

Mr Forde:

– Are the men referred to naturalized British subjects?


– Many are not. Another point that is causing a good deal of discontent is that, after the last callup of men for the Military Forces, the area has been practically denuded of man-power. The farmers’ sons have enlisted or been called up, and the question of carrying on their properties is to-day a very big one. The only relief that seems possible to them is from the Women’s Land Army, which entails problems of accommodation, and so on. That is the case from the point of view of the Australian farmer, who has constantly before him the unhappy spectacle of the unnaturalized alien on the next block, with all his old labour available, able to go ahead steadily as if we were still in the days of peace. It is not very difficult to realize that in those conditions the unnaturalized enemy alien is in a most happy position. There is an acute shortage of vegetables, people are being encouraged to grow them, and the price they will receive is going to be good. Quite apart from that aspect, berry fruits to-day sell reasonably well. Therefore, the man who is able to continue to work his farm is on an exceptionally profitable Basis, purely and simply because there is a war on, and these aliens are in the happy position of being on a sure winner, with an assured income and a high standard of living.

Mr Pollard:

– Is not the problem whether they are subversive or dangerous? If they are subversive they should be shut up; if not, they should be allowed to live like decent men.


– That is a matter that requires immediate attention. In the opinion of the shire council, which is a responsible body, many of these people are not favorable in their sentiments towards Australia.

Mr Frost:

– Are they not producing a commodity that is wanted in Australia ?


– I shall come to that in a minute.

Mr Forde:

– They are subject to callup in the labour companies if they are in the age group.


– I am aware of that. The shire council says that the steady infiltration of aliens into the Silvan district, unless stopped, will lead to the whole district being handed over to aliens “whose sympathies quite frankly are with our enemies “. Those words of the shire council should be treated very seriously by the Government.

Mr Pollard:

– Perhaps one councillor has not been able to sell his fruit.


– The honorable member should not try to treat the matter humorously.

Mr Frost:

– Is that letter from one councillor or more than one?


– It is signed by the shire secretary on behalf of the council. This is therefore an official communication from the shire council.

Mr Pollard:

– Is it objecting to Italians competing with other citizens?


– It objects to the infiltration of unnaturalized aliens under various pretexts. This is believed to be against national security regulations, as these aliens are said to have sentiments in favour of the enemy. The Lilydale police have investigated some of these cases and as far as they can ascertain these foreigners are leasing their properties on the share system; but the police have been unable to do anything in the matter. It can be said, of course, that these aliens are producing something of value to the nation.

Mr Forde:

– They are subject to a call-up.


– But most of them are still on the land.

Mr Forde:

– Then they must be over the age for service.


– Not all. The attitude seems to bethat as they are growing something of value they may as well be there as anywhere else. Many Australian farmers, whose employees have been called up for service and who have been left without assistance, have been told that their only hope of relief lies in an appeal to the Women’s Land Army. These aliens, however, can carry on as easily as in the days of peace, with the additional advantage that the prices of their products will be infinitely higher than those received under peace-time conditions Soldiers are now employed in cutting firewood. Surely some of the farmers’ sons would have been better employed on the land growing commodities of value to the nation, leaving the wood-cutting to be done by some of the aliens who are profiting from the war.

Mr Forde:

– Cannot the Australian farmer obtain exemption for his only son?


– At the last call-up many strange things happened. Sometimes cases are investigated and relief is given, but frequently the manpower officer seems to think that his main job is to get men for the Army. On some large properties in my own district only one man has been left.

Mr Forde:

– If these aliens are growing vegetables, would , the honorable member take them off the land and put them into labour companies?


– To-day they are receiving better treatment than our own people. I shall hand details of various cases to the Minister, and I hope that a searching investigation will be made.


– I spoke on the matter mentioned by the honorable member for Deakin (Mr. Hutchinson) on the motion for the adjournment of the House some time ago, and the Minister for the Army (Mr. Forde) promised to investigate complaints similar to those voiced by the honorable member. In the last war the Italians were our allies, and communications were received from the Government of Italy with a view to an increased migration of Italians to Australia. A certain quota of migrants was agreed upon. When the right honorable member for Yarra (Mr. Scullin), as Prime Minister, called upon Mussolini, he informed the Duce that the Italians in Australia were good citizens and they were received as such. They leased land and became naturalized, not because they desired to be Britishers but because it served their purpose to become naturalized. They are not our allies now ; they are our enemies. Whether naturalized or unnaturalized, they cannot be trusted to give this country a fair deal, but they have burrowed themselves into various parts of Australia by purchasing or leasing land. The Government requires potatoes for the Army, and has called for contracts. At Waroona, one of the potato districts of Western Australia, 75 per cent, of the contracts have been obtained by foreigners, both naturalized and unnaturalized, and they will do well out of the business. Many Australian farmers cannot accept these contracts because their sons and workmen have joined the fighting services. It is not a pleasant thing to know that a foreigner who belongs to an enemy nation is making a good profit because Australia is at war with his country. With him it is a case of “ Heads I win and tails you lose”. I have submitted correspondence to the Government on this matter, and I have received a long letter from the Prime Minister (Mr. Curtin). I listened patiently last night to the Prime Minister in his remarks on the war situation and on the manpower position. According to him, the Army must be retained intact. He said that that was most important. Our sons in the fighting forces are paid 6s. or 7s. a day, yet Italians are demanding £1 a day for hay-making and the like, and are disinclined to work on dairy farms when asked to do so.

Mr Pollard:

– They are splendid workers.


– I agree. In some respects they put our own people to shame. I ask the Government to grapple with this problem as with a nettle. I suppose that we cannot put these aliens into the fighting line, but we should compel them to work under conditions similar to those which apply to our own sons. In this connexion I do not blame the present Government more than I blame its predecessor. This matter is causing a great deal of resentment among soldiers, particularly those whose fathers are unable to carry on the farms in their absence. Following remarks which I made on this subject some time ago, I understand that an inquiry has been made and that certain information in respect of aliens has been tabulated, but the position is not entirely satisfactory and I ask the Government to take the necessary action.


. I.’ direct attention to the necessity for the Government to do something to stimulate the production of tin in this country. Prior to the entry of Japan into the war the great bulk of the tin requirements of the British Empire and the United States of America was drawn from Malaya, but with the loss of that country to Japan its tin deposits are no longer available to the United Nations. Australia has never been a great tin producing country, although it did have an exportable surplus of tin until recently. Owing to the increased demand for this metal for the making of munilions more tin than ever is required, but there is a diminishing supply owing to the unprofitable price paid for this metal. The present price of tin is profitable in some districts but not in others with the result that there is a decline of production. The tin industry is a protected undertaking; men engaged in tin mining are exempt from the military call-up, but that fact has not prevented the drift of a large number of men from the Tingha, Torington, and Emmaville districts of New South Wales to more profitable jobs with the Department of Munitions and the Allied Works Council. Most of the tin mined in Australia is won by small groups of miners, but it is not possible for them to continue to produce this metal at the prices now ruling. One would have thought that in the matter of such importance as the production of tin the control would be in the hands of the Department of Supply and Development which needs the product, and with the Controller of Metals Production, Mr. Malcolm Newman, a most competent man with a wide experience; but neither Mr. Newman nor the Minister for Supply and Development (Mr. Beasley) is in a position to stimulate tin production unless the Prices Commissioner agrees as to the price. I have brought this matter before the Prices Commissioner, as well as before the Controller of Metals Production. I raise it now in this chamber so that should there be any shortage in the future it will not be because the Government was not warned. I am convinced that unless prompt action be taken many men now engaged in tin mining will leave the industry never to return to it.

The control of aliens i3 a matter of some importance to many districts in Australia, including the district of Richmond. When the honorable member for Deakin (Mr. Hutchinson) was speaking the Minister for the Army (Mr. Forde) asked by way of interjection, whether these persons are not liable to be called up for national service. The point is that a great majority of the Australians who enlisted did so before persons engaged in rural industries were granted a general exemption from military service in April last. Many sons of farmers enlisted in the Australian Imperial Force, or were otherwise called up for service, whilst aliens were not called upon for the labour corps until a month or two before the general exemption was granted. The consequence is that in many districts aliens in the same military group as farmers’ sons who have been called up have remained undisturbed. This has caused great dissatisfaction in many districts, because aliens have been able to enjoy the higher prices and better conditions which have resulted from the diminished quantity of goods available. There has also been a certain amount of tax evasion by these aliens. I have reason to believe that they sell their products in small parcels to several different agents and cash their cheques at the stores as soon as they get them. They keep no record of their transactions and submit no, taxation returns. This may be true, too, of some Australians, but I am informed that it is a fairly common practice among aliens. I have no specific cases to bring to the notice of the Government, but my information was provided by[ reputable people. I suggest that the taxation authorities should investigate the matter.

Mr Calwell:

– The taxation authorities have been chasing tax dodgers of all nationalities for several years.


– I am aware of that fact, but there are special reasons why individuals of the class to whom I refer should be brought to book. If necessary, special regulations should be framed to cover these cases. All i aliens should be called upon to keep proper books of accounts whatever may be the volume of their transactions.

There is good ground, also, for special attention to be paid to other tax evaders in the community, particularly now that taxes are imposed at such high rates. I have had my attention directed to the fact that many professional men, such as doctors and dentists, ‘are not giving receipts in these days for money paid to them, and consequently the money they receive cannot be traced.

Mr Coles:

– Are we a nation of “crooks”?


– I make no such accusation. I simply emphasize the need for the authorities to keep a sharp lookout for tax evaders. If dishonest people in the community evade their taxes, the honest people will be required to contribute larger amounts to the revenue. The matter requires the fullest investigation.

Mr Calwell:

– Is the honorable gentleman able to say whether it is true that certain doctors are in the habit in those days of giving their services free in certain cases, so that their income will not become taxable at the heaviest rates ?


– I do not know whether that is so or not. I am aware, however, that certain people make no effort to increase their income beyond a certain figure, because to do so would involve them in heavier taxation. I understand that some individuals who have been earning an income of, say, £3,000 a year, are not at all disturbed in these days if their income does not exceed £1,000 a year. I realize the difficulty of meeting the situation, but I suggest that special regulations could be framed to deal with the worst cases.


.- I bring to the notice of the Minister for the Army (Mr. Forde) certain matters affecting the administration of his department. I am aware of the need to maintain discipline in the forces, but I am informed that in certain cases harsh sentences have been imposed upon soldiers for offences which do not call for severity. Great distress has been occasioned to some parents by reason of the fact that their sons who have been called up on reaching the age of eighteen years or thereabouts, have been sent away to forward battle stations. I brought a case of the kind to the notice of the Minister a day or two ago. I wish now to bring to his attention the treatment meted out to a young man who had lived in a sheltered home. He fought in Libya and was in Tobruk during its seven months’ seige. He enlisted when he was a little more than seventeen years of age. After his seven months service in Tobruk, he was granted two days’ leave. His pay- book showed that he had a credit of £57 at the time. Unfortunately, he did not return to his unit in two days, but was absent for nine days, and it seems that during that period he altered his paybook so that it showed a credit of £59. At that time he was just over eighteen years of age, and had not long left hospital after an operation for hernia. On his return to his unit he was required to appear before a military tribunal, and was sentenced to twelve months’ imprisonment. In the meantime he was transferred back to Australia. When his ship arrived at Durban he and five or six companions who were ordered to be detained on the ship went ashore to see the city. Apparently their guard went with them. They were absent for 24 hours. Subsequently this man was court-martialled and a Major Courteney sentenced him to another twelve months’ imprisonment. On his arrival in Sydney he was sent to Long Bay gaol. I have no information about the offences for which men are generally imprisoned at Long Bay, but, I ask the Minister for the Army to inquire whether Long Bay is a proper place for this young man to be sent, and whether the offences of which he was found guilty justified such a vicious sentence. I do not know Major Courteney, but I am informed that he gives very little attention to the cases brought before him and is accustomed to sentence prisoners to six, twelve or eighteen months imprisonment for minor misdemeanours without giving them the opportunity to state their case.

Mr Beck:

– That cannot happen at a court-martial.


– I know that courts.marital in Australia are very fair, and that a man charged with an offence has a better chance of getting off if tried before a court-martial than if tried in a civil court. However, I do not know anything about courts-martial held on board ship. I believe that the sentence imposed in this case was a vicious one, having regard particularly to the fact that this young man had served for seven months at Tobruk, and was only eighteen years of age when he left there. Upon my application, the Minister was good enough to have him removed to a prison farm, where he is now serving his sentence. That is not so bad, but I still think that the sentence was too heavy, and that it ought to be reviewed. I have here a letter from a man, not a relative of the soldier, but a man who fought in the last war, and who now holds a responsible position in New South Wales. This man, Mr. Brock, said that he visited the soldier last Sunday, and learned from him that there were five other soldiers in prison, all of whom had served together at Tobruk. One of them is serving his sentence in Goulburn Gaol. The major in question has the reputation of being a very hard man, and a strict disciplinarian. I recognize that we must have discipline in the Army, but I think that men who went through the hell of Libya are entitled to special consideration. I understand that two of the men referred to have been sentenced to four years’ imprisonment. I do not know why ; they may have committed serious crimes, but the offence of the young men who left the ship at Durban, when all his comrades had been given leave, and possibly his guards also, was not so serious as to -warrant imprisonment for twelve months. The Minister should review these sentences, and take steps to ensure that men who have served in Libya are allowed to return to their units, where they are needed so much. Surely, in the light of their overseas’ experience, such men are invaluable. This friend, who visited the young soldier in prison, states that, instead of being in prison, he should have been examined by a medical doctor “with experience in the study of nervous conditions. Writing of the young soldier, he states -

He was one of the gallant few repeatedly chosen to patrol and penetrate the enemy lines each night outside the boundary.

He is only a youngster after all - not yet nineteen years of age. I trust that the Minister will look into his case, and see what can be done.

Minister for the Army · Capricornia · ALP

– The honorable member for Deakin (Mr. Hutchinson) and the honorable member for Forrest (Mr. Prowse) referred to enemy aliens being allowed to continue in occupation of their farms.

Mr Hutchinson:

– I was referring to the action of some aliens in acquiring land within recent months.


– If the honorable member will supply me with a list of names, together with a statement whether the persons are naturalized British subjects or not, I am sure that the AttorneyGeneral will have the cases inquired into by officers of the Security Department. This problem is not easy of solution. I found, when I became Minister for the Army, that, while Australians were being called up for military service, there was no call-up for friendly aliens, refugee aliens and enemy aliens. I had a national emergency regulation promulgated, giving friendly aliens and refugee aliens a fortnight to enlist in the forces or in a labour unit, and providing that, if they failed to do so, they would be liable for call-up if they were of a suitable type. Of course, we could not have in the military forces, or in a labour unit associated with the military forces, men whom the Security Department regarded as doubtful. In addition, some thousands of enemy aliens were’ called up and drafted into labour units. To-day, they are working for the same rate of pay as the Australian soldier.

The enemy aliens were men against whom the authorities had no evidence of participating ia subversive activities, but they happened to be in vulnerable areas, and we received complaints that Australians were being called up for military service whilst these men were permitted to remain on their farms. We considered that it was only right that they should be called up, in the same way as was every man within that serving age group. Of course, many of the aliens were beyond the age limit for military service, and even the age at which they could be utilized for hard work. Many of them are to-day engaged in vegetable-growing, or poultry-farming. When the food problem became acute in Australia, officers of the Department of Labour and National Service, who “vet” these persons before they are called up, decided that it would be better in the national interests to allow them to grow vegetables than to place them into. labour battalions to dig trenches or construct roads.

Mr Prowse:

– Would it not be better to allow them to remain on that work, but subject them to special taxation?


– On that subject I should have to obtain the opinion of the Attorney-General (Dr. Evatt) ; but I assume that it would be unconstitutional to impose a higher rate of tax on one citizen, because of his nationality, than on another citizen engaged in the same occupation.

Mr Prowse:

– The suggestion has been made that they should work on farms at the award rate, but should receive a soldier’s rate of pay, the balance being paid into consolidated revenue.


– The honorable member has raised this matter t on several occasions amd I know that he is very sincere in his desire that these! aliens shall not derive any advantages compared with the average Australian.

Mr Prowse:

– That is the point.


– I ordered an investigation of the position in certain districts to which the honorable member directed my attention previously. Had I known that the matter would be raised this evening, I would have brought the relevant file into the House and given the honorable gentleman some more facts. However, I shall examine the case to-morrow and communicate with him at a later date.

The honorable member for Richmond (Mr. Anthony) emphasized the necessity for encouraging additional tin production in Australia. This important matter will be brought to ‘the notice of the Minister for Supply and Development (Mr. Beasley).

The honorable member for Lang (Mr. Mulcahy) takes a keen interest in the welfare of returned soldiers, and in repatriation matters generally. Whilst I must admire his great sympathy for young men who are sentenced by a court martial to imprisonment for having been absent without leave from the army, I cannot hold out any hope of being able to alter the process of the law. If men were to be permitted to be absent without leave with impunity, the efficiency of the army would be so reduced that the forces would become a mere rabble.

Mr Pollard:

– The Minister should review any savage sentences.


– When savage sentences are brought to my notice, I refer them to the Judge Advocate-General, and obtain his views upon them. As Minister for the Army, it would be wrong for me to interfere with the process of the law in dealing with persons who are absent without leave or who commit serious offences. I shall inquire into the circumstances of the cases which the honorable member mentioned, and will furnish him with a reply at a later date.

Question resolved in the affirmative.

page 215


The following papers were presented : -

Land Tax Assessment Act - Applications for relief dealt with during the year 1941-42.

National Security Act - National Security (General) Regulations - Order - Control of paraffin wax.

Northern Territory Acceptance Act and Northern Territory (Administration) Act - Ordinance - 1942 - No. 8- Registration.

House adjourned at 11.45 p.m.

page 216


The following answers to questions were circulated: -

Rural Indebtedness

Mr Calwell:

l asked the Treasurer, upon notice -

What is the estimated total amount of rural indebtedness, including the debts of all sections of agriculture?

Mr Chifley:

– An estimate of the total amount of rural indebtedness, including the debts of all sections of agriculture, is not available and cannot be prepared because figures cannot be obtained for indebtedness in respect of private mortgages and unsecured loans against implements, superphosphates, oil, stores and supplies generally.


Mr Spender:

r asked the Minister for the Army, upon notice -

  1. What is the purpose of and the grounds for the promulgation of Statutory Rule No. 369 of 1942, providing that permission may be granted to internees to perform work whether inside or outside the place of internment?
  2. Does the regulation extend to all internees of whatever character or is it confined to any specific class of internees, and, if so, to which class?
Mr Forde:

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

  1. Statutory Rule No. 369 of 1942 was promulgated in order to provide express authority for the voluntary employment of internees on works other tuan those in connexion with the administration, internal arrangement and maintenance of internment camps, which, under sub-regulation (2) of regulation 6 of National Security (Internment Camps) Regulations, they can be compelled to perform. The new regulation is not the result of any change of policy in regard to the employment of internees, but is declaratory only, being designed to overcome any possibility that the existing method by which internees are employed might be queried on the ground that it was unsupported by express authority.
  2. The regulation extends to all internees, but, being of a purely permissive nature, it can be confined to such volunteers as it is considered advisable.


Mr Calwell:

l asked the Minister representing the Minister for Trade and Customs, upon notice -

Will he amend the relative regulations under the National Security Act to compel persons or firms found guilty of profiteering to display notices in their shop windows announcing the fact and stating the penalties imposed?

Mr Beasley:

– The Minister for Trade and Customs has undertaken to give full consideration to the suggestion made by the honorable member.

Payment of Allotments to Dependants of Servicemen

Sir Frederick Stewart:

asked the Minister for the Army, upon notice - .

Has consideration been given to the many requests submitted to the Minister for a variation in the method of payment of allotments to dependants of servicemen?

Mr Forde:

– Representations have been made to me from several quarters to amend the present system in regard to the payment of military allotments to dependants of members of the forces to provide for payment to be made by cheque.

This matter has been given much consideration by the department both during the last war and the present war as to the most efficient manner by which payment of allotments and dependants’ allowance could be effected. From some points of view, payment by cheque would be more acceptable to the allottees, but it is the considered opinion of departmental officials who have seen both systems in operation that the present system for the payment of allotments has greater advantages to the allottees than would be the case if payments were made by cheque. This is particularly applicable in the case of allottees living in districts in which banking facilities would not readily be available. In all the circumstances, it has been decided that any disturbance of the present procedure would not be in the best interests of the allottees.

Uniform Taxation - Constitution Alteration Referendum

Mr Guy:

y asked the Prime Minister, upon notice -

Can he state whether the Attorney-General was expressing government policy when he publicly stated that the Government would seek to make uniform taxation a permanent feature of Australian finance?

Mr Curtin:

– The answer to the honorable member’s question is as follows: -

  1. What the Attorney-General said was that the Commonwealth Parliament should have undoubted legal power to decide that uniform taxation throughout the Commonwealth should be a peace-time as well as a war-time measure and that it was by nomeans certain, having regard to the varying reasons of the judges in the recent case that the Commonwealth Parliament would be deemed to retain such legal power after the termination of the war.
  2. The whole question ofthe scope of the proposed constitutional referendum is now under preliminary examination by the Attorney-General. The House will have the fullest opportunity of discussing on a nonparty basis the questions which should be submitted to the people of Australia for the purpose of enabling the Commonwealth to deal effectively with a national programme for post-war reconstruction, which as was pointed out in the recent budget speech, covers a wide field of activity which, inthe absence of a constitutional alteration, will he closed to the Commonwealth at the end of the war.

Royal Australian Airforce: Payment or Personnel Abroad

Mr Guy:

y asked the Minister for Air, upon notice -

Why is it that money being sent to members of the Royal Australian Air Force abroad is subject to exchange, whilst money sent to members of the Australian Imperial Force abroad is not subject to such exchange?

Mr Drakeford:

– All remittances to members of the Australian Imperial Force, as well as to members of the Royal Australian Air Force, are converted into the currency of the country in which they are serving at the current rate of exchange.

Australian Imperial Force: Removal of “ Australia “ Badges

Sir Charles Marr:

asked the Minister for the Army, upon notice -

I preface my question by stating that when a large body of the Australian Imperial Force returned to Australia, certain commanding officers instructed that the word “ Australia “ was to be removed from their uniform. In some cases the men declined to do so and therewas a great outcry. ‘Certain men were crimed and fined. 1 would ask the Minister whether he will give favorable consideration to reviewing these penalties?

Mr Forde:

– I desire to inform the honorable member that on the 22nd May, 1942, a General RoutineOrder A.38 was issued by the Commander-in-Chief, directing that “ Australia “ shoulder titles were not to be worn by members of the forces within Australia and its territories. On the 24th July, 1942, that order was cancelled by General Routine Order A.252, which provided that all members of the Australian Imperial Force, whether serving with Citizen Force units or otherwise, will wear “Australia” shoulder titles on both shoulders when in uniform within and outside Australia. While the original general routine order was in force, several cases occurred of soldiers deliberately disobeying commands issued to them pursuant to that general routine order to remove their “Australia “ shoulder titles, and disciplinary action was taken against those soldiers, after every opportunity had first been given to them to comply with the command. Their offence was the failure to obey a lawful command, an offence which the honorable member, as a military man, will appreciate strikes at the very root of discipline. The mere fact that an order is subsequently cancelled does not in any way excuse disobedience. It would not be fair to the majority of the unit if such disobedience were to be condoned and the efficiency of the Army would suffer. Consequently, no remission of penalties imposed in such cases can properly be made.

Acquisition of Homes at Townsville and Bowen.

Mr Martens:

s asked the Minister for the Army, upon notice -

Is the Minister in a position to say when compensation will be paid for homes taken over in Townsville and Bowen?

Mr Forde:

– I stated yesterday that after the entry of Japan into the war there was an ‘immediate increase in the requirements of the various services. The volume of work that these urgent requirements imposed on the Hirings Service temporarily proved beyond the capacity of the existing establishments. Action was quickly put in hand to remedy. The establishments have now been enlarged and more efficient machinery exists to deal with this matter. The result of this is shown in the rapid decrease in the number of outstanding claims. On the 31st July, 350 claims were outstanding in Queensland, and on the 31st August, only 100 - a decrease of 250. Urgent action is proceeding to reduce this number and complete a settlement in all cases with the greatest possible expedition.

Cite as: Australia, House of Representatives, Debates, 10 September 1942, viewed 22 October 2017, <>.