House of Representatives
21 November 1946

18th Parliament · 1st Session

Mr. SPEAKER (Eon. J. S. Rosevear) took the chair at 10.30 a.m., and read prayers.

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Adair Macalister Blain made and subscribed the oath of allegiance asmember for the Northern Territory.

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Motor Vehicles


– I hold in my hand a photograph published in the Brisbane Telegraph of the 12th November, which shows a number of motor trucks and cars arriving in Brisbane aboard the vessel Eastern. The letterpress states that a number of these vehicles were bought by a Melbourne dealer at an islands disposals sale for £1 18s. each. Is the Minister representing the Minister for Supply and Shipping aware that army vehicles were sold to dealers by the Commonwealth Disposals Commission in the islands at £1 18s. each 1 If so, can he explain why vehicles which must have cost the Australian taxpayers thousands of pounds were sold for a mere pittance? Will he also state what margin of profit above the freight and repair charges the dealers who have purchased such vehicles will be allowed to make ?

Minister for Defence · CORIO, VICTORIA · ALP

– I shall ask the Minister for Supply and Shipping to prepare for me a statement giving the information which the honorable member desires. When I have received it, I shall place it before honorable members.

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Australians in Japan.


– A paragraph concerning the Australian force in Japan, published in the press this morning, headed “ Australians accused of worst behaviour “, and under a London dateline, reads -

British troops are the best behaved and Australians are the worst behaved in the Tokyo area, according to a high Japanese police official who is quoted by the correspondent of the Daily Mail.

The official alleged that crime statistics in Tokyo jumped in May and September when two Australian units were on guard duty in the city.

Will the Prime Minister inquire from the General Officer Commanding, Australian Force in Japan, as to the truth of this allegation, and ascertain who was the high Japanese official who made it - he appears to one to be a war criminal - also, whether the reporter checked the information before giving world release to such a hurtful statement, which is calculated to cause a rift in the good relations of Empire forces in Japan? If the accusation against Australian soldiers in. Japan is as untrue as that made against our Victory Contingent in Gibraltar-


– Order ! The honorable gentleman may not debate the matter.


– Will the Prime Minister make a protest to the British Prime Minister against this continual- and irritating belittling of Australian, servicemen by a section of the British Press?


– My attention has been drawn to a news item somewhat similar to that quoted by the honorable member. I have no knowledge of the existence of such a state of affairs, and have had no reports to that effect. I shall inquire into the matter.

I shall assume, in the first place, that the best authority to consult as to the behaviour of the Australian troops in the British Commonwealth sector is the commanding officer, Lieutenant-General Robertson. I shall -make all possible inquiries, and let the honorable member know the facts.

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National Quiz Competition


– In view of the fact that the Government has expended a considerable sum of money on campaigns designed to attract cash to Commonwealth loans, will the Treasurer inform the House why the winners of the National Quiz Competition held in connexion with the Second Security Loan received cash instead of bonds?


– I must confess that I have not given a great deal of thought to the matter from the aspect mentioned by the right honorable gentleman. I understand that the cost of raising the present loan in proportion to its amount will be much less than that of previous loans. The fact that a conservative newspaper like the Sydney Bulletin, which is a great supporter of the honorable member for Barker, said it regarded the quiz contest conducted by the Commonwealth loans organization as an excellent idea, is evidence that the competition was generally appreciated. I shall inquire why cash was issued as prizes instead of bonds, .and shall advise the honorable member of the result.

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– It has been held by the taxation authorities in Melbourne that turpentine, in respect of which a reduction of sales tax has been announced, includes only mineral turpentine, such as that marketed by the major oil companies, but does not include a substitute which fills the same purpose and is produced in Australia. Will the Prime Minister give consideration to the inclusion of the locally-made substitute in the list of goods on which the sales tax is to be reduced ?


– The fine distinction mentioned by the honorable member has not previously been brought to my notice. I presume that his attention has been drawn to it by somebody with technical knowledge on the subject. I shall have the matter investigated, and shall inform the honorable member of the result.

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Loss of Mail Matter - Telephone Services


– On the 11th November, a mailbag containing papers of consequence was stolen in the Frankston area. 1 do not suggest that this is other than an isolated instance, but I ask the Minister representing the PostmasterGeneral whether, in such cases in future, the department will make a public notification of the loss, so that the people concerned may have warning that papers in which they are interested may not roach their destination ?

Minister for Immigration · MELBOURNE, VICTORIA · ALP

– I shall ask the Postal aster-General to take note of the request of the honorable member. If interference with mailbags could be prevented, the honorable member would not be asking so many questions about the pillaging that is occurring.


– I have received complaints from those fortunate enough to obtain telephone connexions, some of them medical men, that their names do not appear in the telephone directory, the stated reason being that the books are issued only once a year. They have expressed the opinion that supplementary lists should be issued. I have taken the matter up with the Postmaster-General and he said, that, because of the shortage of paper, and because no one would look at the supplementary lists in any case, it was not proposed to issue them. I now ask the Minister representing the PostmasterGeneral to convey to his colleague that this refusal is unbusinesslike and that in the main cities, at least, supplementary lists should be issued.


– I thought that all the complaints were coming from people who could not get telephones, but if some who have been fortunate enough to obtain them still have good cause for complaint in that their names are not included in the published directories, I shall ask the Postmaster-General to see what can be done to remove the cause. I understand that telephone directories are published half-yearly, not annually, as mentioned by the honorable member. Should the reason for the non-publication of supplementary lists be a shortage of newsprint, I know of ways and means by which quantities of paper could be obtained and put to better use than at present.

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EXPORT - Storage - Cornsacks - Seed.

Postmaster-General · BARKER, SOUTH AUSTRALIA · ALP

– Will the Minister for Commerce and Agriculture inform me whether the embargo on the export of oats imposed by his predecessor is still in force? If so, does ho intend to keep it in force?

Minister for Commerce and Agriculture · BALLAARAT, VICTORIA · ALP

– There is no embargo on the export of oats.


– When was it taken off?


– There is no embargo, but the export of oats is subject, to the issue of an export permit.


– Will the Minister for Commerce and Agriculture ask the Barley Board to make arrangements for the receipt of oats into the stack, because oats held in the paddock are subject to heavy loss?


– I shall Dry to make the arrangement suggested by the honorable member.


– Requisitions for 700 cornsacks for use in the bagging of barley which were lodged on behalf of two of my constituents have been refused on the ground that the Barley Board has no record of any barley sown this season. As barley crops are nearly ready for harvesting will the Minister for Commerce and Agriculture immediately investigate the matter with a view to releasing the sacks without delay?


– I am aware that the sack position is exceedingly acute because of the difficulty of obtaining adequate supplies from India. I know nothing of the particular cases mentioned by the honorable member. If he will furnish me with the details, I shall be glad to consider whether I can overcome the difficulty.


– Will the Minister for Commerce and Agriculture cause an early survey to be made to ascertain the quantity of oats and barley seed likely to be available for next year’s sowings? Having regard to the drought in Queensland, where there is no seed at all, and to the sparseness of the crops in New South Wales, will the honorable gentleman make arrangements for the necessary supplies to be made available in, both of those States in order to enable winter fodder to be grown, and ensure that dairy men, who are entirely dependent upon such feed for their stock in winter, shall be given priority in the allocation of supplies, in order to prevent diversion of the grain for use in the feeding of race-horses, as has happened in the past?


– The yield of the grains mentioned by the honorable member is constantly under survey by the Department of Commerce and Agriculture, as is also the equitable dispersal of supplies throughout Australia. Should it become necessary to move grain from one State to another the honorable gentleman may rest assured that the department will do its best to ensure deliveries in adequate quantities at the right time. It is not possible to ensure complete efficiency in regard to seed delivery for these crops.

Postmaster-General · BARKER, SOUTH AUSTRALIA · ALP

– Will the Minister for Commerce and Agriculture inform me whether he, or his predecessor, refused applications for permits to export oats from Australia?


– I have no doubt that, in order to ensure that adequate supplies of oats required for feed purposes should be available, my colleague refused unjustifiable permits for the export of oats, and I shall continue that policy in future.

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– Persons sending food parcels to Great Britain often find it difficult to pack them securely to the exact weight prescribed in the scale of charges issued by the PostmasterGeneral’s Department. Will the Minister representing the Postmaster-General endeavour to have this scale of charges amended to conform with normal postal practice, that, is, by charging at a rate per pound or ounce, and not by weight groups, which, by their nature, frequently penalize donors whose parcels exceed the set weights by a few ounces?


– I shall ask the PostmasterGeneral to consider sympathetically the representation of the honorable member. It is not always the responsibility of the Australian authorities to determine the weight or size of packages. In the past, the British authorities have prescribedthe maximum weights of parcels which they will receive. However if it is merely a matter of charges at this end, I shall ask the PostmasterGeneral to negotiate with the British authorities in order to see what can be done.

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– It is reliably estimated that the 1947 apple and pear crop in Tasmania will be light, and will be followed by a heavy crop in 1948. In view of the present shipping shortage, and the probable shortage of shipping space in 1948, it will he difficult for all growers to market their fruit in that year. The previous Minister for Commerce and Agriculture stated that the apple and pear acquisition scheme would probably be retained to cover the 1947 fruit crop. Can the Minister for Commerce and Agriculture say whether this decision has, in fact, been made? Does the Government intend to extend the duration of the acquisition scheme to cover the 1948 apple and pear crop?


– It has been decided to make the regulations under the Apple and Pear Acquisition Act apply to the 1946- 47 crop, but so far it has not been decided to make them apply to the 1947- 48 season.

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Shortage of Feed


– Last week, I referred to the shortage of feed for stock and poultry in Queensland, and the Minister for Commerce and Agriculture, after explaining some of the difficulties in maintaining supplies, undertook to endeavour to have the quantity allocated to Queensland increased.-Can he now state what quantity has been added to the Queensland supplies, and is he in a position to make a detailed statement on the subject?


– I shall endeavour to obtain the information sought by the honorable member.

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– Having regard to a recent report in the Queensland pres9 that a floating mine was discovered near the Great Barrier Reef, will the Minister for the Navy inform the House of the action taken by the Government to ensure that shipping in Australian waters shall be free from the danger of enemy mines sown during the war ? Further, has the Minister any knowledge of the number and locations of mines sown in Australian waters during the war, and can he say how many floating mines have been found in Australian coastal waters during the last six months?

Minister for the Navy · KENNEDY, QUEENSLAND · ALP

– This is a matter in which I have an interest as the representative in this House of the electors of the constituency of Kennedy, as well as in my capacity as Minister for the Navy, lt is true that mines have been washed ashore in the vicinity of the Great Barrier Reef. They have been disposed of by the Mines Disposal Squadron. At the present time three vessels are operating in the waters between Cairns and. Townsville, and up to date about 200 mines have been destroyed by them. As the mines are fitted with a device which renders them harmless when they break adrift, there is no danger to shipping. Information relative to the number of mines sown in and around the Barrier Reef during the war period will be obtained and furnished to the honorable member.

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Land Settlement of ex-Servicemen : Loxton Irrigation Area - Living Allowances for ex-Service University Students - Training of Electrical Linemen - Building Trades.


by have -On the 13th November, and again yesterday, the honorable member for Barker (Mr. Archie Cameron) asked whether I would look into the question of the land settlement of ex-servicemen on the irrigation area at Loxton, on the Murray, in South . Australia. I have done so and find that the facts are not as he stated. The Loxton proposal was originally examined by the Commonwealth on the 6th September, 1945,

Hnd discussions were held in Adelaide with the State authorities at. that time. The proposal was formally submitted by the State to the Commonwealth for approval on the 23rd November, 1945, and further discussions were held in Adelaide on the 16th January, 1946. The Commonwealth formally approved of the project as suitable for war service land settlement on the 14th February, 1946, subject to an adequate acreage of plantings for the Loxton proposal being allocated to South Australia at a forthcoming conference of Commonwealth and State Ministers. On the 16th April, 1946, the Australian Agricultural Council agreed to total plantings of 9,000 acres for South Australia, and on the 31st April, 1946, the Director of War Service Land Settlement advised the South Australian Director of Lands that the condition in .regard to allocation of plantings had now been- met. It is quite clear that the Commonwealth isnot holding up the development of the Loxton area.

Mr Archie Cameron:

– Rats !

Mr. SPEAKER (Hon. J. S. Rosevear).

Order ! The honorable member must not use such expressions in this chamber.


– Last night, when speaking on the motion for the adjournment - unfortunately in the absence of theMinister for Post-war Reconstruction - I referred to hardship being experienced by university students doing reestablishment training courses, because of the inadequacy of their allowances under the training scheme. In particular, I mentioned the delay in the payment of the travelling allowance of 5s. « week, the delay in some cases extending over some months. Will the Minister take action immediately to remove that hardship, and will he look into the matter as a whole ?


-The honorable member errs when he says that I was not in the chamber when he spoke on this subject last night. I was here and heard what he said. I know something about the matter, although I have not all the facts at my disposal at the moment. I shall make a statement on the subject at the earliest opportunity.


– On two occasions, 1 have asked the Minister for Post-war Reconstruction for information regarding approximately 100 ex-servicemen in Brisbane who require vocational training as electrical linemen. These men are waiting for employment, and their services are required for the erection of lines in order that certain districts may be supplied with electricity. Can the Minister indicate whether his department has yet reached a decision on this matter? Will he endeavour to announce that decision before honorable members consider this year’s estimates of expenditure for the Department of Post-war Reconstruction? If he has not made a decision by then, the matter must be fully ventilated.


– The honorable member for Moreton has endeavoured to make it appear that the vocational training of those ex-servicemen is being held up by the Department of Post-war Reconstruction. The fact is that the law of Queensland provides that no individual shall be eligible to be employed in electrical undertakings unless he has had at least two years’ training. That hurdle had to be crossed before any plans could be made for the training of ex-servicemen in this trade. The problem has now been settled between the Department of Post-war Reconstruction and the Government of Queensland, and, very shortly, the men will commence their training. No avoidable delay has occurred.


– I ask the Prime Minister a question in relation to the position of young ex-servicemen who desire to be trained as operatives in the building trades. Representations have been made tome that young men who have had some building experience in the Army and the Air force are told, upon being discharged from the services, that they have no chance of commencing a training course in less than six months, or even longer in some instances. Is the Prime Minister able to reconcile this apparently inexplicable delay on the part of the Government in arranging the commencement of those training courses with its separate decision to hasten the immigration of skilled building operatives from overseas?


– Order ! The question is out of order. I have repeatedly pointed out that honorable members must not invite a Minister to debate a question by asking him to reconcile one decision with another.If the Minister chooses to answer the part of the question regarding delays in training, he will be in order.


– The rate at which ex-servicemen are taken into the training scheme depends upon a number of factors. The position is very thoroughly investigated before decisions are made, and these decisions are based upon recommendations made by an industrial committee upon which ex-servicemen’s organizations, employers and employees are represented. Among the factors taken into consideration are the availability of accommodation for trainees and the availability of staff to train them. A great deal of the training - in fact, nearly all of it - is undertaken in technical colleges. Honorable members will readily understand that it is impossible for technical colleges to take in extremely large numbers of ex-servicemen at the one time. Moreover, even if it were possible to take in immediately all of the men who are offering, the result would be that a very large number of men would be dumped on the building trades employment market all at once. The industry could not absorb such a large number. There must be an even flow of trainees through the technical colleges, because accommodation is not available for all applicants in the technical colleges or in the extensions to them which the Government has provided. The Commonwealth Government has allotted £1,000,000 for extensions to technical colleges in order that this sort of training may be stepped up. I assure the honorable member that everything possible is being done to create an even flow of trainees, not only into the building industry but also into other industries. The total number of ex-servicemen receiving reconstruction training benefits is over 90,000. That is a far, far bettor figure, in relation to the numbers that we had in our armed services, than has been achieved in any other country.

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Legislative Council


– In view of the fact that before the recent elections the Prime Minister promised the people of the Northern Territory that the Government would establish an advisory council in the territory, as distinct from an elective executive, or legislative council, will the Minister for the Interior say when it is intended to hold the election in respect of the proposed council, and when does the Government intend to nominate its representatives on that body?

Minister for the Interior · KALGOORLIE, WESTERN AUSTRALIA · ALP

– The Government has decided to establish an elective legislative council in the Northern Territory, and steps are already being taken to amend the ordinance with a view to defining the zones which will return members to that body. The idea is that the proposed legislative council shall be representative of the various interests in the Northern Territory, and zones are now being surveyed in order to achieve representation on that basis.

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Mentone Aerodbome


– The site selected for the establishment of the aerodrome at Mentone includes very valuable agricultural land. Has ‘the Minister for Civil Aviation taken into consideration the effect which the resumption of such land will have on Melbourne’s present vegetable supplies? It is estimated that the loss of this source will reduce present supplies by at least 160 tons a week. Is the Minister aware that some of this land was recently acquired at a cost of £400 an acre? Will he give an assurance that land-holders whose areas are resumed will be fully compensated? Was the local council consulted before this site was selected? Has the Minister fully explored the possibility of obtaining an alternative site? If not, is he prepared to do so.


– All possible sites at Mentone were investigated before a final decision was reached. It is true that a portion of the land which will be resumed is highly productive, but I do not think that the proportion of such land is as great as the honorable member implies. I assure him that the officers of my department thoroughly examined the matter before reaching a decision. A. thorough examination was made of all possible sites, and full consideration was given to the effect of the proposed resumption upon present land-owners. One reason why the site in question was selected was that its resumption would cause the least disturbance to homes in the neighbourhood. The officers sought to avoid dislodging people from their homes unnecessarily. It will take some time to develop this aerodrome, and in the early stages no persons living in the neighbourhood will be disturbed. As to the compensation which will be paid to persons who willbe dislodged when the programme is under way, their rights are fully protected by the Lands Acquisition Act, under which valuers are appointed to determine the real v.ailue of land to be acquired, and any land-holder who disagrees with their valuation may submit the matter to arbitration. I assure the honorable member that thorough investigations were made, but I am quite prepared, as Minister, to see that any matters which are causing dissatisfaction shall receive consideration or be explained by those who have recommended the adoption of this site.

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Speech by Mr. J. A. Beasley - Mort’s Dock Dispute.


– Last week I asked the Prime Minister whether he had noted a. statement made by the Australian High Commissioner in the United Kingdom, Mr. Beasley, that sinister forces were causing industrial unrest in Australia. I then asked the Prime Minister whether Mr. Beasley was expressing the views of the Commonwealth Government, and, if so, what action did the Government propose to take against the sinister forces. The Prime Minister, on that occasion, promised to examine the statement and advise me whether Mr. Beasley’s remarks coincided with the Commonwealth Government’s policy. I now ask the right honorable gentleman whether he has examined the remarks attributed to Mr. Beasley, and, if so, will he furnish an answer to my question?


– What I indicated in my reply to the honorable member for Wentworth last week was that 1 was not prepared to accept, as being complete and correct, the press reports of Mr. Beasley’s remarks, but I assured him that I would obtain the exact text of the speech. Accordingly. I sent a cable to Mr. Beasley asking him to let me have a copy of his complete speech. When that arrives, I hope to be able to answer the honorable member’s question.


– In view of the position that has developed on the Balmain waterfront as the result of the action of the Metal Trades Employers Federation in deciding to close down all workshops in this locality, which will cause thousands of workers to lose their employment, in addition to- those who are already out of work as the result of the closure by the management of Mort’s Dock, is the Prime Minister in a position to make a statement of the facts to the House ? Has the Prime Minister received any requests from the secretaries of the trade unions concerned? If so, will he state the nature of these requests?


– The difficulties that have arisen in connexion with this matter are being examined by the Ministers concerned, and I am not prepared to make a statement at this stage. In regard to the second portion of the honorable .member’s question, I have received a telegram from Mr. Origlass, who is secretary of a trade organization in Sydney, requesting that the Government take over the works concerned. I am not in a position- to make any statement as to what action the Government is likely to take on this matter. The whole position is being examined, and when it is possible to make a definite statement I shall let the honorable member for “West Sydney have a reply to his question. division of import procurement.


– Many difficulties face Australian importers who desire to buy goods from Great Britain, because of the system of licensing which is controlled, by the Division- of Import Procurement. Can the Minister representing the Minister for. Trade and Customs inform me when the licensing of imports from Great Britain or other countries in the sterling area will be abolished? When will he review the operations of the Division, of Import Procurement, whose activities should have substantially declined since the termination of the war?

Mr pollard:

– 1 shall be glad to refer the honorable gentleman’s question to my colleague, the Minister for Trade and Customs, and ask him to furnish the information.

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– It would appear from the public announcement in relation to the proposed guided projectile experiments in Central Australia- that a definite decision has now been reached by the Government on this matter. In view of the wide concern about the likely consequences of these experiments, will the Prime Minister tell the House what precautions will be taken to protect the lives of persons in the affected areas, and. also to protect properties which may be within range of the projectiles?


– Shortly, 1 shall make a statement to the House on a number of defence matters, and when I do so, I shall deal with the point raised by the honorable member.

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– Has the Minister for Immigration read a statement by a Mr. Frank Browne in the publication Things I Wear, in which, after referring to an American and his Australian wife who lavishly entertained high Australian officials during the war, the writer said that the wife had come to Australia for a trip, but that the husband’s passport had been held up in the United States of America ? Is it a fact, as alleged, that the Minister ordered facilitation of the passport concerned, and that an Australian official in Washington forwarded a report of the American Federal Bureau of Investigation showing that the gentleman was anything but a. leader of. the local Band of Hope? Will the Minister inform the House of all the circumstances of this matter.?


– I did not see that excerpt from the very interesting publication, Things 1 Hear, but. I shall peruse a copy’ of the issue in which it appeared. I. read the publication regularly and with very great interest. It is published, 1 understand, by a member of the Liberal party in New South Wales. It contains very candid criticisms of quite a number of things other than the matter mentioned by the honorable member. If the article has been accurately quoted, all I can say is that the gentleman concerned has mixed a little fad with a lot of fiction. The story is, like most stories, based upon hearsay evidence that does not always accord with the facts.

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– Has the Prime Minister read the remarks made by the Premier of New South Wales, when submitting his budget in the State Parliament yesterday, regarding the amounts of contributions that are made by the Commonwealth Government to the funds of the State? The total amount is over £7S,000,000. Will the Prime Minister give to the House the exact figures of the amounts supplied by the Commonwealth Government to the Government of New South Wales, and indicate how much of the total is supplied for specific purposes in accordance with agreements, and how much the State Government is free to spend in any way that it may wish?


– I have not read the budget speech delivered by the Premier of New South Wales yesterday. I understand that the right honorable gentleman has asked me to inform him of the amount of money which is paid by the Commonwealth Government to the Government of New South Wales in various ways, either by way of tax reimbursement or Federal Aid Roads grant, or by way of contributions made for other purposes.

Sir Earle PAGE:

– That is so.


– I do not know whether I can go into the details of expenditure, but I shall endeavour to obtain the information and supply it to the right honorable member as soon as possible. T assume that the figures for the past year will be sufficient.

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– Can the Minister for Commerce and Agriculture tell me the conditions, if any, under which the export of clover seed, particularly to New Zealand, will be permitted during the next few months?


– I shall inquire into the adequacy of supplies of clover seed for our own requirements, and having ascertained the position will determine the conditions under which exports will be permitted to New Zealand or any other country.

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

Second Reading

Prime Minister and Treasurer · Macquarie · ALP

.- I move-

That the bill be now rend a second time.

When the Ministers of State Act was amended in June, 1941, it provided for an increase of the number of Ministers of State from eleven to nineteen and of the annual remuneration from £18,600 to £21,250, but limited the operation of the increases to the period during the continuance in operation of the National Security Act. As honorable members arc aware, the National Security Act will expire on the 31st December next. The purpose of the bill, therefore, is to continue the present ministerial numerical strength beyond that date. The principal reason, given by the Prime Minister of the day in 1941, necessitating the increase of the number of Ministers, was the desirability of eliminating the post of Assistant Minister - there were five Assistant Ministers in 1939, prior to the war - and to impose on every Minister the duties of a Minister of State, with responsibilities for a Department of State. Such a reason applies in peacetime as well as in war. Reviewing the position in the light of the present postwar period, it is considered that the continuous growth of Commonwealth activities, with their administrative responsibilities, and the many additional calls, compared with pre-war years, upon the time of Ministers, provide full justification for a continuance of the present number of Ministers.

Our association with international problems will need from time to time the presence of Commonwealth Ministers at international conferences. Experience since the cessation of hostilities lias stressed the desirability of representation at ministerial level at the more important conferences, if the Australian point of view is to be adequately expressed.

The provision of relief for Ministers who are absent overseas, and at other periods when short breaks are desirable and necessary, must come from within the Cabinet ranks. In, all the circumstances, the Government considers that the maintenance of the present number of Ministers is fully warranted.

Debate (on motion by Mr. Menzies) adjourned.

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Message recommending appropriation reported.

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

Motion (by Mr. Lemmon) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a hill for an act to grant and apply out of the ConsolidatedRevenue Fund sums for the purposes of financial assistance to the States of South Australia.. Western Australia and Tasmania.

Resolution reported.

Standing Orders suspended ; resolution adopted.

Ordered -

That Mr.Lemmon and Mr. Pollard do prepare and bring in a bill to carry out the foregoing resolution.

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

Second Reading

Mr. LEMMON (Forrest - Minister for

Works and Housing) [11.22]. - I move -

That the bill be now read a second time.

The purpose of the bill is to authorize the payment, during the current financial year, of special grants aggregating £3,670,000 to the States of South Australia, Western Australia and Tasmania. The payment of these grants was recommended by the Commonwealth Grants Commission in its thirteenth report which was tabled recently. Further copies of the reporthave not yet been received from the Government Printer, but they will be made available to honorablemembers before the debate on the bill is resumed.

The principle adopted by the commission over the years is that special grants should be designed to meet the financial needs of the States to the extent required to enable them to carry on with reasonable efficiency. In interpreting this principle of financial needs, the commission has taken into account each year the financial position of the claimant States relative to that of the non-claimant States. In the last five years reviewed by the commission, the non-claimant States have enjoyed budget surpluses. After taking account of the fact that these surpluses were primarily due to Commonwealth war finance, the commission in each of its last five reports decided that the financial needs of the claimant States would be adequately met by the adoption of a balanced budget standard as the measuring rod for the first approximation to the grants. After calculating the amount required to give to the claimant States a balanced budget, the commission makes adustments to the amount so calculated in order to take into account such factors as the relative severity of taxation in the claimant States, and the relative liberality of their services compared with those of the non-claimant States. In this way, some relativity is preserved between the standards of revenue and expenditure in the claimant States and the standards in the non-claimant States.

Because the results of the States’ budgets on which the commission bases its calculations are not available for some time after the close of the financial year, the grants calculated by the commission for 1946-47 have been based in the first instance on the budget results of the States in 1944-45. Where necessary, the commission has then recommended additions to the grants so assessed, in order to bring the grants into linewith the prospective financial needs of the States in 1946-47. Full details of the commission’s methods and calculations are given in the thirteenth report.

The special grants recommended for payment this year are in each instance higher than those paid last year. The details are -

For the information of honorable members, I shall now refer briefly to the present position of the finances of South Australia, Western Australia and Tasmania. The finances of those States deteriorated in 1945-46, but substantial deficits were avoided by the Commonwealth making additional financial assistance amounting to £2,133,000 available under section 6 of the States Grants (Income Tax Reimbursement) Act 1942. The principal factor responsible for the decline in the finances of South Australia and Western Australia in 1945-46 was the decline in the net revenues of the business undertakings, particularly the railways, whilst in Tasmania expenditure on social services substantially exceeded the previous year’s provision.

In 1946-47, under the revised basis of taxation reimbursements, South Australia will receive an additional £1,000,000, Western Australia an additional £740,000, and Tasmania a further £296,000, a total increase of £2,036,000 in respect of those three States. On the other hand, under the revised legislation, which became effective this year, the States will no longer be able to seek additional financial assistance under uniform tax legislation, an avenue through which South Australia, Western Australia and Tasmania received in 1945-46 additional financial assistance amounting to £2,133,000. The total amount which will be received by those States in 1946-47 under the uniform tax legislation will therefore be £97,000 less than in 1945-46.

After considering this and other items in the States’ preliminary budget forecasts for 1946-47, as well as seasonal prospects and other economic factors affecting the finances of the States, the Commonwealth Grants Commission is satisfied that special grants aggregating £3,670,000 are required to meet the budget needs of South Australia, Western Australia and Tasmania in 1946-47. In each year, since the establishment of the commission in 1933, its recommendations have been implemented by this Parliament. After careful examination, the Government proposes that the commission’s present recommendations should be adopted.

Debate (on motion by Mr. Menzies) adjourned.

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Bill presented by Dr. Evatt, and read a first time.

Second Reading

AttorneyGeneral and Minister for External Affairs · Barton · ALP

by leave - I move -

That the bill be now read a second time.

The purpose of this measure is to ask Parliament to authorize a gradual and orderly transition of our national life from what may broadly be termed war-time conditions to those appropriate to peace. It seeks to do this by giving effect for twelve months to certain regulations and orders made under the National Security Act 1939-1943, which would otherwise be terminated with the parent act on the 31st December, 1946. That such farreaching legislation as the National Security Act should have been introduced by the parties now in opposition and strengthened subsequently by the Labour Government, was essential and, indeed, inevitable. It was essential as the framework within which, and the instrument by which, Australia organized itself for survival and victory in conditions of total war. During the war years, few of our day-to-day activities were unaffected by national security legislation. In the greatest of all our national emergencies, the act served its purpose. Now it has run its full time and is to disappear.

But many of the emergency conditions which the temporary legislation was created to control have not terminated. The difficulty and duration of a national post-war transition are affected by the length of the war, and the degree of human and economic mobilization at home, arid of economic dislocation abroad. This time we have undergone a six-year war. Our position- as the bastion, base, and supply and food source for so much of the Pacific war, and our role as an objective for actual invasion by the enemy, have involved Australia in a degree of human and economic mobilization quite unparalleled in World War I. Moreover, world dislocation and devastation were on a scale and over an area beyond all comparison with the catastrophe of 1914-18. In these circumstances, a simple, or short transition from war to peace conditions in Australia was not to be expected.

With the cessation of hostilities, it has been possible to remove, and the Government has lost no time in removing, or, where it could not remove, at least in relaxing, a very considerable number of war-time controls. Even prior to the cessation of hostilities, a committee under the leadership of the honorable member for Eden-Monaro (Mr. Eraser) had assisted me in. cutting down and simplifying numerous controls and. .regulations. Every Minister and department has for eighteen months been under an obligation to report regularly to Cabinet, through ,my colleague the Minister for Post-war Reconstruction (Mr. Dedman), on progress made in eliminating controls, and on. reasons for retaining the remainder? Honorable members will recall that the call-up, man- power direction, control of new manufactures and many other major war-time restrictions were dropped promptly after the cessation of hostilities.

Tn that way the Government kept faith with Parliament and with the people of Australia, who entrusted national security powers to it, and in so acting the Government was confident that it served the national interest. The Government also judged it necessary early this year to fix the termination of the operation of the National Security Act at the 31st December, 1946, in order to give to the general public an- assurance in that regard, and to ensure that any powers which might still be required would be brought under the review of Parliament itself. That is now being done. But with an equal sense of responsibility, and after careful weighing of all the trends and circumstances, the Government announced that termination of all controls under the National Security Act on that dato could not be effected without the gravest, danger to the nation al welfare.

If there be any who have doubts, I suggest that a short study of economic developments in the United States of America between the 30th June last, when the original Office of Price Administration Act lapsed, and the recent lifting of practically all remaining controls, will induce very sobering reflections. After the final abandonment of price control in the United States of America, except in relation to rents, sugar and rice, wholesale prices for many articles jumped between 10 per cent, and 70 per cent, in a single day. Prices of rayon goods, for instance, rose from 20 per cent, to 25 per cent, overnight, with prospects of another increase within a fortnight. General Motors announced a $100 rise in the prices of all cars immediately. In the United States of America, between 1914 and 1920, the food prices index rose from $102 to $235; but” between 1939 and last week it was reported to have risen from $89 to- $273, most of the rise occurring since the 30th June, 1946, without any suggestion that the limit has yet been reached.

The bill before the House, with the details set, out in its schedules, extends for twelve months from December, 1946, provisions which, in the considered opinion of the Government, are necessary to ensure a continued smooth -transition from war to peace. At the same time, some regulations and orders are listed for operation in 1947 which are included under this bill foi- reasons other than economic. In some cases these will later be incorporated in whole or in part in normal legislation. I refer to such regulations as those on disposal of Commonwealth property and on patriotic funds. In those cases, it is proposed to allow time until Parliament can deal with necessary legislation next year. In other cases, regulations are retained for the time being because the matters with which they deal are certainly disappearing, at least in their present form, but will not be out of the way by the end of December. I refer to such regulations as those dealing with treatment of prisoners-of-war, the women’s services, and discipline of the war-time forces. A third group involves the preservation of rights to certain pensions, including compensation and allowances for which other legislative provision has not yet been made.

One more general point should be mentioned at this stage. Certain acts specified in the third and fourth schedules, and dealt with in the body of the bill, require amendment because of the termination of the National Security Act insofar as they make reference to, or are in some way dependent for their proper or continued operation on, the currency of the National Security Act. In some instances these are matters of major import. In one case, at least, namely, the Ministers of State Act, it is proposed in the present session to introduce a new bill to eliminate dependence in existing legislation on the duration of the National Security Act. In other cases, the opportunity has been taken to amend legislation where this is necessary. For example, sections 78 and 79 of the Crimes Act forbid the making of sketches and plans of any prohibited place. It is proposed to amend these sections by prohibiting the photographing of these places. I might mention in passing that the Government intends to present to Parliament amending legislation to remove certain obnoxious provisions of the Crimes Act.

The constitutional foundation for legislation giving force for a further twelve months to the provisions of certain of the .regulations originally made under the National Security Act is, of course, the same as that which was invoked to support the National Security Act, namely, the power in paragraph (vi.) of section 51 of the Constitution, which is usually referred to as the “defence power “. The scope of this power of the Commonwealth is very wide in time of war and, as has been pointed out by several judges of the High Court, does not shrink to its normal peace-time dimensions immediately on the cessation of hostilities. The high-water mark of the extent of this power was pointed out in clear terms by Mr. Justice Isaacs in Farey v. Burnett, 21 C.L.R. 433.

The defence power may be exerted in times of [; but so far only by way of preparation. Actual defence, and all that it connotes, comes only when we are at war. War creates its own necessities, proportioned to the circumstances, and not mensurable in advance of the occasion; and defence is only complete when it meets .those necessities, whatever they may prove to be.

A war imperilling our very existence, involving not the internal development of progress, but the array of the whole community in mortal combat with the common enemy, is a fact of such transcendent and dominating character as .to take precedence of every other fact of life, lt is the ultima ratio of the nation. The defence power then has gone beyond the stage of preparation; and passing into action becomes the pivot of the Constitution, because it is the bulwark of the State. Its limits then are bounded only by the requirements of self-preservation. It is complete in itself, and there can be no implied reservation of any State power to abridge the express grant of a power to the Commonwealth.

The doctrine there enunciated has been referred to by other J Justices from time to time and, although some qualifications may, perhaps, be said to have been engrafted on to it, it remains substantially true to say that the extent of Commonwealth power is almost limitless in time of war. The “ defence power “ does not, as Latham C.J. points out in Dawson v. the Commonwealth (1946 A.L.R. 461, at page 464) cease instantaneously to bc available as a source of legislative authority with the termination of actual hostilities. He states -

The power is not cut off as with a guillotine. ‘.I he defence power includes not only a power to prepare for war and to prosecute war, but also a power to wind up after a war to restore conditions of peace - gradually if that is thought wise, and not necessarily immediately by the crude process of immediate abandonment of all Federal control. The fact that certain conditions have been created by the exercise of the defence power is itself a fact which is relevant to the validity of a continued or further exercise of that power.

Support is lent to this view by the following remarks of Mr. Justice Dixon, at page 468, in the Dawson case : -

To place a country on a footing to take an adequate part in such a war as that through which we have passed requires a co-ordinated and systematic series of measures which must re-shape the economy of the country. It is impossible to suppose that the defence power will suffice to authorize the retention of such a legislative fabric so constructed throughout a long and indefinite period of peace. But it is apparent that the change back from a war economy to an economy appropriate to peace is a task calling for further measures of a legislative nature, and the defence power, in my opinion, is not insufficient to authorize laws for that purpose. The power must in consequence also extend to sustaining for some reasonable interval of time the laws and regulations in force at the end of hostilities so as to enable the Legislature to proceed with the task. The whole edifice does not collapse at once simply because the necessities which call it into being have passed. Further, among the things that are incidental to the power must he the fixing by the Legislature itself of some reasonable time during which the Regulations adopted for war are to continue in force, while the steps are taken that are considered necessary for the remission of the community to an order proper to peace.

I should point out that in three cases recently the High Court upheld the National Security Regulations then in question on the ground that their continued operation was necessary for assisting in the “ winding up “ of the war effort, or in re-establishing ex-servicemen in civil life. They were Dawson v. The Commonwealth (1946 A.L.R. 461), in which the validity of the land sales control provisions of the National Security (Economic Organization) Regulations was upheld ; Miller v. The Commonwealth (1946 A.L.R. 469), in which the share control provisions of those regulations were held to be valid; and Blair v. The Commonwealth, not yet reported, in which regulation 30a of the National Security (War Service Moratorium) Regulations was upheld. This regulation relates to the issue of warrants to grant possession of unoccupied premises to returned servicemen.

Accordingly, the regulations, which are by this bill declared to be in force, include those which are necessary to enable the winding-up of current war-time activities to be effected. Power is taken to repeal those regulations during the period of their operation. It is considered that these provisions are within the defence power as expounded by the majority of the justices of the High Court. A document has been prepared setting out all the regulations and orders concerned, and this will be placed before the House. The power to revoke, repeal or amend regulations will still reside in the Governor-General, but it will not be the same power as was exercised under the National Security Act itself. Although the power under that Act relates to a number of specific matters, it also covered any power which, in the opinion of the Governor-General, was necessary or expedient for the better prosecution of the war. It was indeed a very wide power; it could not have been wider. Although under this bill, if passed in its present form, the Governor-General will have the power to amend regulations, the statute will embody a provision that the power in respect of regulations shall be limited to the subject matter of the regulations which the Parliament will approve.

Mr Beale:

– What is meant by the words “ in, respect of “ ?


– The words are taken from section -51 of the Constitution. In substance, the phrase means that the Executive must deal with the subject-matter dealt with by the regulations which, ex hypothesi, will pass muster in the Parliament. It cannot go outside those matters. I agree with the honorable member for Warringah (Mr. Spender.) that that is a big power, but the Government thinks it necessary to retain that power. Every amendment so made by the Governor-General will be brought before the Parliament, and the power of either House to consider any such amendment, in addition to the power it will exercise in dealing with this bill-

Mr Beale:

– It will only be by disallowance.


– That is an important power.

Mr Beale:

– The right honorable gentleman has stated that all the regulations will be before the House when the bill is debated.


– Yes. “

Mr Beale:

– Will there be a full opportunity to debate them, having regard to the enormous number of regulations ?


– I regard the bill as of supreme importance, and I expect that it will be fully debated, and that no honorable member will have cause to complain of lack of opportunity to deal with it.


– We shall probably be asked to consider it at an all-night sitting.


– I do not doubt that there will be ample opportunity to review the whole position. If the legislation is passed, Parliament will give its imprimatur to the legislative provisions contained in these regulations. It is improbable that every regulation will cease to have effect at the end of 1947. Some of the economic regulations, as, for instance, those dealing with prices control, will probably have to be continued beyond that time. At the Premiers Conference held last August, it was agreed that control of some matters should continue for three years.

Sir Earle Page:

– Would that involve reference by the State Parliaments?


– The present bill does not. It is based on the defence power, but the arrangement at the Premiers Conference was that there would be such a reference or, alternatively, that the bill to be passed by each State Parliament should be in a form agreed to by the Commonwealth and the States.

Mr Fadden:

– What will be the position of a State such as Queensland,, which has already referred certain powers?


– Four States referred powers in respect of certain matters to the Commonwealth for a limited period. Those powers will be exercisable only by the Commonwealth Parliament. They have not yet been exercised. The Government does not propose to exercise those powers, because two States did not refer powers to the Commonwealth.

Mr Menzies:

– If any question of the validity of the act arose in Queensland, the Commonwealth Government would be able to call in aid the reference by the Queensland Parliament?


– That would require special legislation.

Mr Spender:

– This legislation will apply to the whole of Australia.


– That is so. It will operate throughout all Australia, whereas a reference upon which there was legislation. by the Commonwealth Parliament, would operate only within the borders of the State concerned. If we limit it to four States we shall have chaos. For instance, if control over prices were confined to four States, an impossible situation would arise. The powers sought in this bill will be exercised throughout Australia.

In surveying the range of regulations for which parliamentary approval is sought for 1947, I divide the list given in the first schedule into eight groups, though there will be many instances of overlapping

  1. Regulations providing the basic structure for orderly economic transition.
  2. Regulations supporting marketing schemes.
  3. Regulations supporting rationing schemes.
  4. Industrial regulations.
  5. Regulations requiring to be retained pending legislation.
  6. Regulations preserving rights to pensions, allowances, &c.
  7. Regulations with military and security functions.

    1. Miscellaneous regulations.

Let me say a little about each of these ‘ groups.

The key group is that network of economic controls which keep inflationary pressure upon prices and costs in check, and consequently ensures not only justice as between persons, but also a flow of resources as far as possible to essential, rather than non-essential needs, and in general preserves a balance within the economy under the abnormal stresses of the post-war transition. The principal sets of regulations in this group are those covering price control, wage control, rent control, and the control of land values, capital issues and interest rates. At the Premiers Conference in August last this group of key controls was discussed with the State Premiers, who were in agreement that they should be continued for some time. Next year, the Government will introduce bills to continue antiinflationary controls - prices, rent, land values, and capital issues - beyond the 31st December, 1947.

Mr Hughes:

– Would not control over wages include control over working hours ?


– Yes. It always has done so.

Mr Hughes:

– Then this Parliament will be able to make a law in relation to a 40-hour week.


– The right honorable member must cease interjecting.


– Those bills will be in accordance with the decisions of the August Premiers Conference that, the anti-inflationary controls should continue to be exercised on the basis of Commonwealth legislation and appropriate complementary State legislation. First amongst these controls is price control proper. All parties, I believe, are agreed as to the necessity for continuing this control until such time as the supply of goods has caught up with the demand. Without it, there would almost certainly be a rise of prices, probably a considerable rise, in most fields, and this would gather a cumulative effect. Since the war began we have been successful in holding prices down, and also in maintaining a fair relationship between costs and prices in different fields, but .while the present wide gap between supply and demand remains there can be no general relaxation of the measures by which this success has been achieved. Rent control is a special aspect of price control and is made necessary by the great shortage of housing. Progress is being made in the housing field, but a long period must elapse before the supply of housing becomes adequate to the community’s need. This is a world-wide difficulty caused find aggravated by war, and it is significant that rent control almost alone of American controls lias been retained to the present. I am sure that very few who know the housing situation would wish rents to be left free to unfettered competition here in Australia.

But prices and rents cannot be held in check unless costs too are controlled. Hence a measure of wage control, regarded as a corollary of a price control scheme, is contained in the present Economic Organization Regulations. The object is to ensure a fair distribution of returns and to keep real wages in line with the nation’s productivity. These regulations are retained, but they will not remain unamended. Already the Government has relaxed the wage-pegging regulations in force at the end of the war, in order to permit the Commonwealth Arbitration Court to make variations in the standard hours and the basic wage. Indeed matters dealing with these subjects ii re already pending in the court. Although the measure before the House continues the selected regulations in their present form, it will permit of their amendment from time to time, subject to the Parliament’s power of disallowing any amendment. In this connexion I remind the House of the Prime Minister’s intention to make further relaxations of the wage-pegging provisions as and when circumstances permit that to be done. These particular provisions are at present under review.

Control of land values also clearly belongs to the group dealing with orderly economic transition. In the economic history of Australia the tendency for land values to boom in times of prosperity has been all too familiar. A period of favorable returns for producers leads to excessive bidding up of property values. Speculation develops, indebtedness grows, and costs impose a burden that cannot be supported if and when post-war prices and incomes decline. The result is often a desperate situation, necessitating long and painful readjustments. There can be little doubt that conditions are now present under which, in the absence of controls, past experiences of this kind could easily be repeated. The measure also contains provisions for the continuance of the pegging of values of land for taxation purposes at the 1939 level.

Strong competition for limited resources is a feature of the post-war situation, and it is this which necessitates the continuance for the time being of the capital issues control. Obviously, it is in the interests of the community that resources should be concentrated upon essential production and not be diverted to speculative and unnecessary enterprises. Capital issues control operates in the field of new investment and regulates the registration of companies, the issue of. share capital and the making of calls upon shares and the making of loans upon mortgages other than by way of normal bank overdrafts. In other words, it regulates the main channels through which the savings of the public are actively sought by investors, and endeavours to ensure that those enterprises will be fostered which would contribute most to the output of essential services and commodities. During the war, particularly in the later stages, the control was made very strict. Since the end of the war it has been relaxed considerably, though capital transactions which are clearly unsound or speculative, or which threaten to create excessive capacity in particular fields of production, are still prohibited. But under present conditions when there is great competition to start ventures of all kinds this selective function is essential and should be continued for the time being. There was general agreement at the Premiers Conference in August that the control of capital issues should continue for at least three years and that it must be applicable to all States if it is to be made effective. It was agreed, further, that the control should apply not only to issues of capital but also to mortgages and interest rates generally. Extended power to control interest rates is regarded as vital. During the war period a notable reduction has been accomplished over practically the whole range of interest rates, and it is our purpose now to consolidate that important gain so that the economy can derive the full benefit of it through the transition period. In the period which followed the 1914-18 war high interest rates imposed a heavy burden upon industry as well as upon public finance. We do not want that experience repeated. Power to regulate bank interest is contained in Commonwealth banking legislation. To complement this, power is required to cover transactions outside the banking field.

The second group of regulations, under which war-time marketing schemes were organized, includes the apple and pear acquisition, Barley Board, tobacco leaf, dairy produce acquisition, egg industry, food control, potatoes, wheat acquisition and wheat industry stabilization regulations. There are several reasons for extending the currency of these regulations until the 3] st December, 1947: First, the Commonwealth must keep faith with primary producers. The apple and pear growers of Tasmania and Western Australia would be in a hopeless state if control were not continued until refrigerated shipping space lost during the war is made good and once more makes possible disposal of surplus production. Second, contracts have to be honoured : thus, the forthcoming barley crop in Victoria and South Australia is very largely under contract to the Commonwealth, which must have power to control its marketing. Third, the price stabilization and control schemes are dependent on continuance of some controls in this group; hides and leather, rabbit skins and tobacco are examples. Fourth, the Commonwealth has to honour certain contracts made in war-time with Great Britain. Thus we are under the necessity of implementing our contracts for the sale of dairy produce to Britain. Fifth, in some cases negotiations are under way but not completed with the States for agreed schemes of organized marketing. Thus, in the case of the egg industry, the Australian Agricultural Council is evolving, but has not completed, a particular scheme. Sixth, the Commonwealth has continuing obligations on the supply side, particularly in the case of food, towards the British Commonwealth Occupation Forces in Japan. For this reason, we believe it to be necessary to continue a limited section of the Food Control Regulations. Seventh, the Commonwealth has in one important instance at any rate - the wheat industry - itself passed wheat marketing legislation and is now awaiting passage of complementary legislation by the States. Until that State legislation has been completed emergency powers require extension.

The third group comprises provisions dealing with rationing and allied matters. After most serious consideration, Cabinet decided that the present rationing of clothing and food should be continued into 1947. The reasons are two-fold. In respect of tea and clothing, Australia is dependent on supplies from other parts of the world. In respect of sugar, butter and meat, Australia, has an obligation to help to alleviate the intense shortages in other countries, particularly the United Kingdom. The policy of the Government has been to relax clothes rationing as soon as it is in the interests of the public to do so, and during last year reductions were made in the coupon ratings of woollen piece goods and women’s clothing, whilst coupons were removed from knitted underwear, knitted outerwear, hosiery, headwear, footwear and minor articles such as handkerchiefs, collars and ties. Further relaxations will be made as circumstances permit. With regard to tea, there is still a severe world shortage, as the Netherlands East Indies, one of the principal producing countries prior to the war, is still out of production. As to sugar, butter and meat, production in Australia is ample to meet all domestic requirements without restriction, but large quantities of these goods are required for export to Great Britain, where there is a very severe shortage of essential goods - a shortage even greater than during the war years. Besides the rationing regulations proper, there have also to be considered the hide and leather, jute control, tinplate, land transport (motor car), liquid fuel control, rabbit skin, and tea control regulations, all of which were related in war-time to the problem, of the best distribution of scarce commodities. To remove them now, while the effects of war-time dislocation are still strongly present, would be to give rise to acute instability and hardship. i.n the industrial group I should especially refer to the female minimum rt tes, industrial peace, and the shipping co-ordination regulations. As in the case of regulations included in other groupings, it is hoped that, as time permits, Parliament will be asked to enact in substantive statutes those parts of these regulations with which this Parliament is competent to deal. Meanwhile it is essential for the successful industrial reconversion of Australia that fundamental provisions under these regulations should lie retained. The industrial peace regulations, for instance, are still being widely relied upon by the Government, the Arbitration Court and conciliation commissioners. The regulations provide a means of bringing to the notice of the court and the Minister for Labour any matter which is likely to result in ian industrial dispute. They also permit the appointment of conciliation commissioners in excess of the three provided for in the current Arbitration Act. These regulations are used by the appropriate Minister to refer industrial disputes and matters direct to the court or the conciliation commissioners for hearing and settlement. As a result of this many awards have been made .and are still in force. Many determinations have been made under the regulations, which cannot immediately be deprived of their basis without the gravest results. The Government is now exploring the extent to which some at least of the extensive war-time modifications in industrial relations machinery can, within the terms of the Constitution, be grafted into. Commonwealth peace-time legislation. It is intended to amend the Conciliation and Arbitration Act with a view to improving and extending the procedures of conciliation and also accelerating the arbitration process. However, while transitional difficulties remain intense it would be inviting industrial chaos to allow all these regulations to lapse in December.

The fifth group relates to provisions pending legislation. Some of the matters to be temporarily covered by National Security regulations and orders will be replaced by legislation during 1947. I instance the control of animal diseases, disposal of Commonwealth property, industrial property, minerals and patriotic funds regulations.

The sixth group relates to rights to pensions, allowances and compensation. From the point of view of many Australian individuals and families this group is of vital importance. It includes the whole or part of the benefits and compensation sections of the Civil Constructional Corps compensation, civil defence workers and war injuries compensation regulations, the war service moratorium regulations, the war damage regulations, the medical benefits for seamen, and the claims against the Commonwealth in relation to visiting forces regulations. Clearly, as our social service legislation is consolidated in the coming months it will be possible to incorporate in it the provisions and obligations under some of these regulations. In some cases the regulations will be covered by special legislation. The Commonwealth Government naturally has no intention of going back on its undertakings and obligations in these instances, and hence cannot allow the regulations imposing them to lapse until alternative provision is made whenever necessary. Small adjustments have already been made in some to bring them up to date, and they will be regularly reviewed to ensure that with the passing of time anomalies and injustices do not creep in.

In the next group, military and security, there are certain regulations of such a character that continuance of them is essential to cover some phases or other of the final demobilization period, the interim and occupation forces period, and the period of clearing prisoner-of-war, and alien control arrangements. We shall, for instance, still have a few members of the women’s services, to whom existing regulations apply, on strength in the first months of 1947. Certain disciplinary and other related matters applicable to the remaining war-time and occupation forces require the retention of sections of the National Security (General) Regulations for the time being. Some important regulations governing prisoner-of-war and enemy alien detention camps have to be maintained until sufficient shipping has been provided to return the men held and so remove the need for such regulations.

During 1947, I believe, the regulations in this group can be rapidly reduced by repeal or revocation. If in future any message of alien control were necessary which is not provided for already under our immigration laws it will be provided for by normal legislation which Parliament will have full opportunity to scrutinize. I have already explained that for eighteen months a regular check has been made with a view to the progressive reduction of regulations. It is not easy to give any precise idea of this process of reduction by means of mere bald statistical tables of the degree to which controls are being removed1 by the present bill, as the operation and effect of individual regulations vary considerably. For example, regulation 59 of the National Security (General) Regulations gives a Minister practically unlimited power over industry, and the removal of this one regulation is, from this point of view, of more importance than the retention of a host of others which are concerned with lesser matters.

Nevertheless, some general idea can be obtained from the following facts: At the 2nd September, 1945, 157 sets of regulations were in operation. These sets included the National Security (General) Regulations and the National Security (Supplementary) Regulations, which contained 141 and 121 individual regulations respectively. The present bill proposes to continue 61 sets of regulations in whole or in part and to remove 104 individual regulations from the general regulations and 79 individual regulations from the supplementary regulations.

Under one regulation alone - regulation 59, general regulations, to which I referred just now - there were 131 orders listed as being in operation on the 2nd September, 1946. It is proposed to continue only four of these 131 orders.

In conclusion, I stress again to honorable members that when I say it is proposed to continue this, or that, I am speaking of a bill which allows of only a twelve months’ continuance of any regulation or- order. During that period periodical reviews will continue and many regulations will be discontinued as 1947 progresses. None of the matters covered by this bill will be capable of continuance beyond 1947 without being embodied in specific legislation approved by this Parliament. That is as it should be. We must see that the difficult period of transition and reconversion after total war proceeds without dislocation and unnecessary suffering. At the same time, the democratic Parliament’s supreme rights are maintained. This bill restores to Parliament its right and power to review the whole question of the continuance of Commonwealth emergency legislation for the purpose of covering a part of the period of transition. I am sure that in the exercise of its undoubted rights of criticism and review, the Parliament will also give the most favorable consideration to the Government’s proposals.

In order to assist the House, I have caused to be prepared, first, a short statement of the purpose for which the temporary continuance of each scheduled regulation or order is required (vide Appendix “A”). Secondly, I have had prepared a statement in summary form of the regulations which will ‘be discontinued (vide Appendix “B”). This statement also shows in summary form the regulations which have been repealed since the cessation of hostilities on the 2nd September, 1945. I take this opportunity to thank the officers of my department and those of my colleague, the Minister for Post-war Reconstruction (Mr. Dedman) for their assistance in the very difficult work of preparing these appendices, which, with the permission of the House, I shall incorporate in Hansard.

page 429


Notes on Regulations Continued in Force by the First Schedule. (Regulations are referred to by their subjectmatter title and the administering department is shown in parenthesis.)

Agricultural Aids. [Commerce and Agrieulture.)

These regulations authorize ‘the Minister to exercise wide powers over the manufacture, purchase, sale, distribution and use of agricultural aids. During the war years orders were made under them with respect to fertilizers, bran and pollard, feeding meals, hay, straw, chaff, nicotine sulphate, oil meal, rotonone and wheat.

Agriculturalproduction. (Commerce and Agriculture. )

These regulationsmake provision for a Director-General of Agriculture whose position and functions it is necessary to maintain in view of the Commonwealth’s continued interest in the restoration of rural industry and the expansion of food production for supply to the United Kingdom and elsewhere.

Aliens Control. ( Immigration. )

These regulations require every alien resident in Australia to register and produce certificates of registration on demand, and impose restrictions on the movements of aliens. Part V. authorizes enemy aliens to he detained.

There are certain aliens awaiting deportation on whose movements restrictions are imposed under these regulations and aliens on arrival in Australia are still obliged to register with the authorities for security reasons. A bill dealing with certainforms of control of aliens is to be introduced next year. Continuation of the regulations is required pending the passage of this bill.

AppleandPearAcquisition.(Commerce and Agriculture.)

These regulations set up the Australian Apple and Pear Marketing Board and provide for the acquisition of apples and pears.

Apples and pears are being acquired in Western Australia and Tasmania and the crop in the coming season will be acquired in these two States. Apples and pears are likely to be in over supply and as adequate refrigerated shipping space is unlikely to be available, it is essential that this control be continued for the forthcoming crop.

Australian Barley Board. [Commerce and Agriculture. )

These regulations set up the Australian Barley Board and give it powers over purchase and disposal of barley and powers over distribution of other feed grains delivered to the Commonwealth. The main barley States are Victoria and South Australia, and the position in these States is that most of the forthcoming crop is under contract to the Commonwealth Government and acquisition of the balance will be necessary in order to ensure control of marketing of barley. The two States concerned are negotiating for a permanentmarketing scheme. Unless some such scheme is brought into operation in the meantime, the regulations will be needed until about November, 1947.

Australian Tobacco Leaf. [Commerce and Agriculture.)

These regulations provide for an Australian Tobacco Board with powers over tobacco leaf.

Although State conferences have been held with the industry to determine a satisfactory marketing scheme for marketing leaf it has not been possible to achieve this as yet. It is intended to confer with State governments in this regard in order to ascertain whether the necessary complementary legislation, to enable control over the industry to be exercised in future, will he implemented by the four States concerned. Until a satisfactory permanentmarketing scheme has been evolved, the existing marketing scheme should be continued.

The maintenance of the marketing schemeis also important from the viewpoint of price control. It is not practicable to control prices under the Prices Regulations becausein the absence of the Australian Tobacco Leaf Regulations sales would take place by auction and the existence of numerous qualities and grades of tobacco would cause great administrative difficulties.

Beep Shortage. (Commerce and Agriculture.)

These regulations authorize the sale for human consumption of Werribee beef, if the Minister for Commerce has certified that because of the shortage of beef it is necessary that this beef should be so sold, and if each quarter of the beef is branded to indicate that it is Werribee beef. The regulations are being continued pending consideration of the possibility of State legislation on this subject.

Board of Businessadministration. (Treasury.)

These regulations provide for a Board of Business Administration whose functions are to advise concerning proposals for expenditure by servicedepartments, to advise generallyon business and accounting aspects of the administration and organization of the service departments, and to make such specific reports and inspections as are referred to it.

In view of the need for close scrutiny of service requirements and expenditure in the next twelve months, the continuation of the board under these regulations is required.

Boot Trades Dilution.(Labour and National Service.)

The dilution arrangements made with regard to the boot trades during the period of hostilities have not been wound up although it has been possible to terminate dilution arrangements made in other trades - e.g., blacksmithing, boilermaking, engineering. In particular the position of apprentices requires protection by the extension of these regulations.

Capital Issues.(Treasury.)

These regulations represent one aspect of the Government’s system of control to prevent inflation. They include provisions regulating formation of companies and the issue of capital by them, provisions dealing with securities, mortgages and other charges, and provisions relating to deposits and interest rates.

Some relaxations have been made in the control. Companies may now be formed with a capital of £10,000 or less without approval and the capital of existing companies may he increased by £10,000 each year without approval. Mortgages up to £1,500 and at a rate of interest of 4¾ per cent. or less on first-class securities are also permitted. The biggest relaxation is probably that in the general policy administered by the Treasury which adapts itself to the general economic conditions existing from month to month.

At the Premiers Conference held in August, 1940, the following decision was recorded: - “ There was general agreement that the control of capital issues should continue for at least three years and that it must be applicable to all States if it was to be made effective. It was decided that the Commonwealth should pass appropriate legislation relying at the outset on its defence powers, but eventually on State action applying the Commonwealth law in each State individually. The control should apply not only to issues of capital but also to mortgages and interest rates generally.”

Chance of Name. (Immigration.)

These regulations apply only to enemy aliens and prohibit enemy aliens from changing their name without the consent of the Minister for Immigration.

As with the Aliens Control Regulations, continuation is required pending the passage of a bill to be introduced next year.

Claims Against the Commonwealth in Relation to Visiting Forces. (AttorneyGeneral. )

These regulations enable any person who is resident in Australia and who considers that he has just claim against a member of a visiting force to make against the Commonwealth a claim for the like amount and in the like form and manner as he would have been entitled to make if the member had been a member of the defence force of the Commonwealth. Claims under these regulations are still being made and it will be necessary to retain these regulations for the benefit of Australian citizens so long as there are in Australia establishments of overseas forces.

Coal-mining Industry Employment. (Labour and National Service.)

These regulations deal primarily with the settlement of craft union disputes in the coal industry.

Under the Coal Industry Act 1946 interstate disputes and intra New South Wales disputes affecting non-excepted members of the Miners Federation will be dealt with by the Industrial Tribunal established under that act. The continuance of the Coal Mining Industry Employment Regulations is desirable pending the proclamation of the Coal Industry Act and the working out of permanent arrangements in relation to industrial matters not covered by the Coal Industry Act.

Control of Animal Diseases. (Health.)

These regulations confer powers on the Department of Health over animals and carcasses, &c, on board vessels in Australian ports. Continuance of these regulations is desirable pending the re-enactment of the more important of them in permanent legislative form.

Dairy Produce Acquisition. (Commerce and Agriculture. )

These regulations set up a Dairy Produce Control Committee and give the committee powers over the acquisition and disposal of dairy products. At the present time, the Commonwealth has obligations to Great Britain with respect to the exportable surplus of butter and cheese. It is proposed to introduce early in 1947 legislation dealing with this subject and the present regulations are required to be continued until this legislation is passed.

Disposal ofcom mon wealth Property. (Supply and Shipping.)

These regulations set up the Commonwealth Disposals Commission and confer necessary powers on it. There still remain considerable quantities of surplus material for disposal and the continuation of the Disposals Commission is therefore necessary at least for a period of twelve months.

Economic Organization. (Treasury and (Part V.) Labour and National Service.)

Parts III. and IIIA. contain the regulations which control sales of land, &c, by prohibiting transfers without the consent of the Treasury. They are one of the instruments by which the Government’s policy against inflation is carried out. There is general agreement that it is necessary to control the price of land and houses at the present time. This is particularly so in the case of land being acquired by or on behalf of ex-servicemen. The matter was discussed at the Premiers’ Conference held in August last and the Premiers there requested that the Commonwealth should pass legislation to continue these controls pending the passage by the States of complementary legislation.

Part IV. enables interest rates to be regulated in order to ensure the continuation in the transitional period of the beneficial reduction of interest rates which was accomplished during the war.

Part V. contains the regulations which control wages as a corollary of price control. Amendments have already been made in the regulations to enable the Arbitration Court to deal with the question of standard hours and basic wage and the hearing of these matters is in progress. further amendments are under consideration.

Koo Industry. (Commerce and Agriculture.)

Several proposals regarding the future marketing of eggs have been considered by the Australian Agricultural Council, which requested the Commonwealth Government to continue the existing marketing control until 30th June, 1947, before which time it was anticipated that legislation would probably be enacted by several States to give effect to a Commonwealth-wide marketing scheme. The egg export season will have finished early in 1947, and it is probable that the continuation of the regulations until 30th June next will enable the Controller of Egg Supplies to complete the operations of the existing scheme.

Enemy Property. (Treasury.)

These regulations provide for a Controller of Enemy Property and the appropriate handling of property owned by enemy subjects and enemy companies. The continuance of these regulations is necessary until provision is made for the disposal of the property at present held by the Commonwealth.

Evidence. (Attorney-General. )

The only regulations remaining in force under these regulations are Nos. 18 and 19. Regulation 18, which was inserted on the 18th April, 1945, is to the effect that no provision contained in any order made in pursuance of power given by any regulation under the National Security Act, and which operates to assist the prosecution to discharge onus of proof that a person charged with an offence arising under any such order has committed that offence, shall have any force or effect. The general effect of regulation 19 is that, a person may be obliged to answer questions orally by virtue of the National Security Act or any order, &.c, made thereunder, even although the answers might tend to incriminate him. The answers given by him’ shall not be used in evidence against him.

External Territories. (External Territories.) (Including regs. 2 and 3 of Statutory Rules 1945, No. 205.)

Under these regulations, the former Administrations of the Territories of Papua and New Guinea, with their legislative councils, administrators, judiciary and all other officials are suspended, and the leave, salary, superannuation, and other rights of the officers thus suspended are safeguarded. They also ensure the continuity of the laws of the Territories and provide the authority for the creation and functioning of the Australian Kew Guinea Production Control Board which promotes and controls the production of copra, rubber and all other primary products in the Territory and any industry therein, and arranges for the purchase and transport of all products of the Territory with a view to securing maximum supply.

At present the Territories of Papua and New Guinea are jointly administered by the Provisional Administration established under the Papua-New Guinea Provisional Administration Act1945. This Administration, as its title implies, is temporary only, and until the permanent form of administration is determined, it will be necessary to retain the External Territories Regulations.

Female Minimum Rates. (Labour and National Service. )

These regulations provide for the payment to females employed in any occupation which is declared to be a vital industry of not less than 75 per cent. of the corresponding minimuni male rates. The Government has already indicated its intention of retaining the provisions of these regulations after the end of this year. Should the regulations lapse without alternative provision being made the result would affect the wages of 40,000 females, and would have serious consequences for the maintenance of employment and production in vital industries requiring female labour.

Food Control. (Commerce and Agriculture.)

These regulations provide for a ControllerGeneral of Food and give the Minister and the Controller-General powers to control growing, production, manufacture, processing, distribution, disposal, use and consumption of food, foodstuffs, fertilizers and fodder. A very extensive use was made of these regulations during thu period of hostilities. lt is not proposed to continue the control nf growing, production, manufacture and processing of foodstuffs after the end of the current year but it is necessary to continue control over distribution. This control over distribution is necessary in order that the Government can carry out its undertaking to supply troops in Japan and elsewhere and to retain control over table fats and oils in world short supply. Some manufacturers are not anxious to supply Army contracts at present when the civilian and export market is highly profitable. (Note. - The National Security (General) Regulations are administered by departments appropriate to the subject-matter of individual regulations.)

General Regulations Nos. 1. 2 and 3.

These are formal and relate to citation, parts and definitions.

General Regulation No. 11.

Under the bill, only sub-regulation (3a.) is being retained. This provides that “ a person shall not use any appliance in such a way as to cause interference with the transmission or reception of communications by wireless telegraphy “. It is proposed to amend the Wireless Telegraphy Act at a later stage to include the provisions of this subregulation.

General Regulations Nos. 25 and 26.

These regulations relate to the restriction of movements, &c, of suspected persons. They are not being continued, but the effect of existing orders under them is being temporarily preserved as an adjunct to the Aliens Control Regulations.

General Regulation No. 31a.

This regulation deals with the unauthorized possession or sale of uniforms and badges and prohibits persons from using, wearing or having in their possession any uniform, badge or emblem to which the regulation applies.

The particular badges which it is desired to protect are those set out in sub-regulation (5a), viz., returned from active service badge, female relatives’ badge, mothers’ and widows’ badge, Australian merchant navy badge, returned from active service badge (1914-18 war).

General Regulation No. 37.

This regulation makes special provision regarding the disposal of bodies where there is reasonable cause to believe that the body is that of a person who has died in consequence of war operations. Bodies requiring interment are still being found in operational areas.

General Regulations Nos. 54, 55aa and 55a.

Regulation 54 authorizes the Minister for the Army to take possession of any land and make use of it for public purposes. This power is not being continued, but the effect of previous orders made under the regulation is temporarily preserved. Regulation 55aa provides for the assessment of compensation in respect of Commonwealth improvements on any land used by the Commonwealth under General Regulations 53, 54, or 55, and subsequently acquired by the Commonwealth. Regulation 55a preserves the Commonwealth’s property rights in any fixtures, &c, placed by the Commonwealth on such land.

General Regulation No. 57.

Sub-regulations (1.), . (1a.), (1b.) and (3.) of this regulation provide for the requisitioning of any property (other than land, and including ships and aircraft) and are not being continued. The remaining sub-regulations, which it is necessary to continue, relate to the administration and return of property already requisitioned.

General Regulations Nos. 60b to60g (inclusive) and 60j to 60m ( inclusive ) .

These regulations make provision for the claiming and assessment of compensation in respect of loss or damage suffered by any person by reason of action taken under certain other general regulations.

General Regulation No. 66.

This regulation, with the amendments proposed in the schedule, makes provision for the handling, conveyance, stacking, and storing of service munitions. In view of the large quantities of surplus service ammunition and explosives still to be dealt with, the retention of war-time safety and other arrangements is essential.

General Regulation No. 69a.

Only sub-regulation (1.) is being continued. This exempts members of the forces from jury service.

General Regulation No. 73.

This provides that a person shall not knowingly furnish false information in answer to any question asked under, or in any claim or statement made in pursuance of regulations and orders in force by virtue of the Defence (Transitional Provisions) Act 1946.

General Regulations Nos. 84, 87, 88, and 91.

These regulations contain technical provisions in relation to legal proceedings and administration.

Guarantee. ( Treasury. )

The effect of these regulations is that the Treasurer may -

  1. guarantee the repayment to the Commonwealth Bank of any loan made by that bank to any person, and
  2. where the loan has been made by a trading bank and the guarantee to that bank has been given by the Commonwealth Bank - indemnify the Commonwealth Bank for any payments which the latter may have to make under its guarantee to the trading bank.

The Treasury is still giving these guarantees and many of the primary produce boards operate in this way - they receive theirfinance from the Commonwealth Bank for a season and the Treasury guarantees the bank.

Hide and Leather Industries.(Commerce and Agriculture. )

These regulations establish an Australian Hide and Leather Industries Board with power to purchase hides and to control the appraisement and export of hides.

There is at present an acute world shortage of cattle hides and yearling and calf skins and leathers. This shortage is expected to last for at least another year. It will be necessary to continue these regulations while the overseas prices of hides and leather continue to be greatly in excess of those operating in Australia. Control is necessary to avoid dislocation of the industry which would be bound to follow if the regulations were lifted at the end of this year.

Industrial Peace. ( Labour and National Service. )

The purpose of these Regulations was primarily to widen the operation of the machinery provided by the Commonwealth Conciliation and Arbitration Act, and in particular to overcome the limitation imposed in peace-time on the Commonwealth Arbitration Court in dealing with intra-state disputes. The regulations are still widely used and have contributed much towards increasing the flexibility of the Commonwealth disputes machinery.

Regulation ]0 provides a means of bringing to the notice of the court and the Minister any matter which is likely to result in an industrial dispute, whilst certain conciliation commissioners (other than three who can be appointed under the Commonwealth Arbitration Act) owe their appointments to regulation 14. The regulations are used by the Minister to refer industrial disputes and matters direct to ‘the court or the conciliation commissioners for hearing and settlement. As a result of this many awards have been made andarestill in force. The regulations were added to from time to time for specific purposes such as the making; of the dairying industry awards and orders in respect of wheat and certain other cereal harvesting work.

Continuance is desirable pending consideration of permanent legislative arrangements, and inparticular the introduction of a bill to amend the Conciliation and Arbitration Act.

Industrial Property. (Attorney-General.)

These regulations authorize the use of certain inventions by the Commonwealth, authorize the Commissioner of Patents to prohibit the publication of information with respect to patents or designs, and include provisions for the protection of persons disclosing inventions to the Commonwealth.

It is proposed to deal with certain of these matters by permanent amendments to the Patents Act and regulations are continued temporarily accordingly.

Internment Camps. (Army.)

These regulations provide the authority under which internment camps are established and administered. At the beginning of November,1946, there were about . 1,000 internees held in Australia and it was expected that about 500 internees would still be in Australia by the end of the year and that all of these would be removed from Australia by 31st January, 1947. It is unlikely that these regulations will be required beyond that date.

Jute. (Supply and Shipping.)

These regulations enable the Minister to appoint a jute buyer who is authorized to buy on behalf of the Commonwealth jute and wool packs, cornsacks and other jute goods.

World demand for jute goods is greatly in excess of supply and government purchasing and allocation of jute and jute goods through the Commonwealth jute buyer will therefore need to continue into next year. The shortage of cornsacks is particularly acute.

In addition to these regulations the bill provides by schedule for the continuance of the Jute Goods Order which controls the distribution of jute goods.

Landlord and Tenant. (Works andHousing.)

These regulations establish the machinery of the Fair Bents Courts and. otherwise provide the means whereby the control over rents is exercised. As rent forms such a large proportion of the expenditure of the working man, this control is one of the most critical of all controls imposed by the Government.

At the Premiers’ Conference held in August last it was unanimously agreed that these controls should be continued, and that if necessary State legislation should be enacted complementary to that of the Commonwealth.

Liquid Fuel. (Supply and Shipping.)

These regulations provide the legal basis for the petrol rationing scheme. It has not proved possible to discontinue petrol rationing by the end of December. 1946, and it is necessary to continue some measure of control into 1947. Considerable relaxations of the rationing scale have already been made.

Maritime Industry. (Supply and Shipping.)

The Maritime Industry Commission was set up under these regulations in order to secure the adequate and efficient manning of Australian ships and the improvement and safeguarding of conditions of employment in these ships. Its activities have covered a wide field and the commission will need to be continued until its future can be fully reviewed.

Medical Benefits for Seamen. (Supply and Shipping. )

These regulations authorize payments, on behalf of Australian seamen who have suffered war injury, for medical, surgical and hospital treatment, maintenance and free passage home. They also authorize payment of funeral expenses to dependants of these seamen. It is important to ensure that these benefits are not destroyed.

Military Forces. (Army.)

These regulations provide, inter alia, for the appointment and promotion of officers who are not graduates of the Military College, the suspension of the provisions requiring officers to pass examinations prior to appointment, subjecting to military law civilians accompanying the forcesoutside Australia, supply of liquor at canteens, and automatic allowances to dependants. Many of the regulations are still required to apply in respect of the occupation forces in Japan.

Minerals. (Supplyand Shipping.)

Legislative authority is necessary for the retention of certain of the activities of the Bureau of MineralResources and the Controller of Minerals Production, particularly in regard to the conduct of the Dorset Flats tin dredge project in Tasmania, which is operated by the Controller under the powers conferred by these regulations, and the Mr Bischoff tin mines.

The State of Tasmania enacted the Mr Bischoff Tin Mine Agreement Act 1945, which, amongst other things, authorized the carrying out of agreements between Tasmania and the Commonwealth for the joint operation of the Mr Bischoff Tin Mining Company, and under these agreements the Commonwealth is liable to continue mining operations under the provisions of the National Security (Minerals) Regulations. Claims requiring consideration by a compensation board might also arise and the preservation of the compensation provisions of the regulations is also necessary.

Munitions. ( Munitions. )

These regulations set up the Department of Munitions and define the functions of the department and the Minister. They also establish the Board of Factory Administration and define its functions. They will he amended before the end of the year to include functions previously carried on by the Department of Aircraft Production. Permanent legislative provision on this subject will be made in due course.

Naval Charter Rates. (Navy.)

These regulations provide that the Naval Charter Rates Board shall fix fair charter rates and establishment charges for vessels on requisition.

It is not proposed to charter any additional vessels but certain vessels will remain on requisition after thu 31st December, operated by the Australian Shipping Board. Continuance of these regulations is therefore necessary for the time being.

Naval Forces. (Wavy.)

These regulations permit retirements, appointments, promotions and transfers in circumstances not covered by the Defence Act and the Naval Defence Act. They ore required to cover personnel of the interim forces, pending amendment of the acts mentioned.

Patriotic Funds. (Repatriation.

These regulations place the general supervision of patriotic funds under the control of the Repatriation Commission. They were discussed at conferences of Commonwealth and State Ministers in September and November, 103!), and the concurrence of Premiers obtained. There are still funds requiring administration and the Repatriation Commission is arranging to have the matter considered hy the Premiers at the earliest opportunity. Pending these discussions the re-enactment of the provisions contained in the regulations is necessary.

Potatoes. (Commerce and Agriculture.

These regulations provide for the establishment of an Australian Potato Committee with powers of control over potatoes corresponding to those given in respect of other primary products.

The Commonwealth Government has already undertaken .to continue marketing of potatoes and it will be necessary to continue the operation of the regulations until the whole of the l!)40-47 crop has been disposed of. Growers and Commonwealth and State officials arc nonconsidering what steps are necessary in order to set up a proper peace-time marketing organization. Potatoes are an important item at present in the Government’s price stabilization scheme.

Prices. (Trade and Customs.)

These are the regulations under which the Prices Commissioner operates. There is general agreement that price control must continue for some time to come. At the August 104ti Premiers Conference, it was agreed that thu States would enact any necessary complementary legislation.

Prisoners of War. (Army.)

These regulations provide the authority under which prisoners of war camps are established and administered. At the beginning of November, 1940, thorp wore 14,700 prisoners of war held in Australia and it was expected that about 0,300 prisoners of war would s.till be in Australia by the end of the year and that all of these would be removed from Australia by the 31st January, 1947. It is unlikely that these regulations will be required beyond that date.

RABBIT Skins. (Commerce - and Agriculture.)

These regulations establish an Australian Rabbit Skins Board with power to purchase rabbit skins and to control the appraisement of these skins.

There is an acute shortage of rabbi.t skins and this is creating difficulties in the felt hal trade. The continuation of the control is necessary to prevent dislocation within the industry.

Rationing. (Trade and Customs.)

These regulations provide the basis for the consumer rationing of clothing, tea, butter, sugar and meat. It is necessary to continue these rationing schemes in order to ensure fair distribution until present shortages have been overcome, and to enable Australia to meet her commitment for supplies to the United Kingdom.

Requisitioned Cargoes. (Trade and Customs.)

Certain activities of the Requisitioned Cargoes Committee under these regulation* will continue after the 31st December, 1940. For example, settlement of general claims, storage of goods, treatment of unsaleable goods under options exercised or to bo exel cised by claimants, issue of shortland! ug certificates, settlements of claims by and against the United Sta.tes and Dutch authorities, invoicing, collection nf moneys. lend lease matters, general accountancy and finance authorities, Ac.

Salvage. (Works and Housing.)

These regulations provide for the acquisition and disposal of salvage clothing, rags, &c, by the Salvage Commission. Thu flow from the Army, .the Royal Australian Air Force, Munitions and other government instrumentalities is large and disposal through this channel should be continued while anything like the present volume continues. It is anticipated that the services and. other suppliers will be sending material through in large quantities for another six months or so.

Shipbuilding. ( Munitions. )

These regulations provide for the establishment of the Australian Shipbuilding Board, which was responsible for building merchant vessels during the period of hostilities. The Government has already announced that it proposes to establish the shipbuilding industry in Australia on a sound basis and for that purpose will in due course introduce permanent legislation. These regulations are continued pending the introduction of that legislation.

Shipping Co-ordination. (Supply and Shipping. )

These regulations give authority for the establishment, amongst other things, of the Australian Shipping Board and the Stevedoring Industry Commission, and under the latter the various waterside employment committees.

The Government proposes to introduce a bill covering the establishment of a Stevedoring Industry Commission for the peace-time control of the waterside industry. Until this legislation is enacted the continuance o£ the relevant section of the present regulations is necessary.

In view of the shipping position around the coast the provisions regarding the requisitioning of ships and the establishment of the Australian Shipping Board must also be retained. At a suitable time, legislation proposing the establishment of a permanent Commonwealth shipping authority will be introduced, replacing this section of the regulations.

Staffs of War-time Authorities.(Commerce and Agriculture.)

The regulations provide for rates of pay and allowances to members of staffs of various boards and commissions set up within the food control and war-time marketing organization. Most of these boards and commissions will continue for some time during 1947 and their activities have been mentioned elsewhere, for example, the Australian Barley Board, the Wheat Board, and the Potato Committee. These regulations are necessary as they govern the working conditions for their staffs. References to organizations such as the Field Peas Board and the Vegetable Seeds Committee, which are no longer functioning, have been removed.

Superphosphate Industry. (Commerce and Agriculture. )

Phosphate rock supplies are still extremely short and it is known that years will elapse before Australia’s normal sources of supply, namely Nauru and Ocean Island, can be restored to normal working conditions. Superphosphate is essential to Australian agricultural production generally.

World supplies are allocated on an international basis and these regulations provide a local basis for the distribution of Australia’s share through State Departments of Agriculture on an equitable basis to farmers. (Note. - The Supplementary Regulations are administered by departments appropriate to tile subject-matter of individual regulations.)

Supplementary Regulation No. 1

This regulation gives the name of the regulations.

Supplementary Regulation No. 3

This regulation provides that evidence before industrial tribunals may be given in camera. Although the need for it has diminished there are some industrial activities which make the continuance of the regulation desirable.

Supplementary Regulation No. 4

This regulation deals with references in agreements to a Minister, department, officer or body, and provides that where an agreement in relation to defence has been entered into and subsequently the functions of the department are allotted to another department any reference in the agreement to the Minister, department, officer or body shall be read as a reference to the new Minister, department, officer or body. In view of the substantial transfer of functions between depart ments during the war, some of which affect provisions appearing in the bill, the regulation needs to be preserved.

Supplementary Regulation No. 11

This regulation authorizes the GovernorGeneral to issue commissions to aliens or to enlist them in the Defence Force. As a number of aliens are continuing to serve in the Defence Force, particularly with the Royal Australian Air Force, it is desirable to retain the regulation. The disappearance of the authority under which the appointments and enlistments of aliens were made would affect the jurisdiction over these personnel.

Supplementary Regulation No. 14

This regulation deals with the powers of the High Court in relation to the control of firms and corporations in respect of which the court has appointed a controller under the Trading with the Enemy Act 1939-1940. The court can authorize payments for the sustenance and maintenance of members of such a firm or corporation. There are firms still subject to the control of the High Court and payments need to be made in respect of them.

Supplementary Regulation No. 16

The regulation prohibits an employer from dismissing or prejudicing an employee because the employee has appeared as a witness or given evidence in proceedings before any body appointed under the National Security Act. The same protection shouldbe afforded witnesses in proceedings under regulations retained by virtue of the Defence (Transitional Provisions) Act 1946.

Supplementary Regulation No. 18

This regulation restricts compensation payable for death or incapacity of a member of the defence force to cases where death or incapacity is directly attributable to his employment as a member of that force. The regulation should be preserved until demobilization is completed.

Supplementary Regulation No. 33

This regulation provides for the command of naval, military and air forces when acting together. The situations which the regulation is designed to meet are still obtaining in the British Commonwealth Occupation Force, therefore the regulation is being retained.

Supplementary Regulation No. 38

This regulation affects the operation of the Trading with the Enemy Act 1939-1940 by empowering the Minister for Trade and Customs to prohibit trading with certain unincorporated bodies on the ground that it would constitute trading with the enemy within the meaning of the act. Five unincorporated bodies were declared by the Minister under this regulation and its preservation is required until normal trading activities can be resumed.

Supplementary Regulation No. 47

This regulation permits members of the forces suffering from mental disorders to be treated at institutions for the care of such patients notwithstanding any State law requiring a person to he certified to be insane before reception to an institution. It would be undesirable to require certificates of insanity for members of the forces who require temporary treatment for mental disorders incurred through war service.

Supplementary Regulation No. 40

This regulation provides that where the High Court appoints a body corporate to be the controller of a firm under the Trading with the Enemy Act 1939-40, the powers and functions of the body corporate shall be enlarged accordingly. Under this provision the Commonwealth Bank has been appointed controller of the Yokohama Specie Bank, whose activities are being wound up. This task cannot be completed before the end of the year.

Supplementary Regulation No. 52

The regulation enables Powers of Attorney to be executed by members of the forces under the age of 21 years. Members of the forces under 21 years of age are expected to be serving overseas or in outlying areas after the 31st December, 1940, and therefore the regulation will be required.

Supplementary Regulation No. 57

This regulation provides for the postponement of the poll of growers required under the Apple and Pear Organization Act 1938 for the election of members to .the Australian Apple and Pear Board constituted under that act. It also postpones the necessity for the board to submit an annual report. When the National Security (Apple and Pear Acquisition) Regulations were introduced setting up the Australian Apple and Pear Marketing Board, the former board ceased to function. As the National Security (Apple and Pear Acquisition) Regulations are being retained, the provision is being preserved.

Supplementary Regulation No. 58

This regulation empowers the Minister to prohibit work in the vicinity of aerodromes. It is essential to maintain the existing standards of safety over approaches to aerodromes, particularly those now being used as scheduled stopping places on regular air services and the measure is being continued until other action can be taken.

Supplementary Regulation No. 02

This regulation authorizes the Registrar of Trade Marks to refuse to register as trade marks or designs any word or group of letters specified in the regulation on any representations of a badge or emblem relating to the Royal Family or the Royal Arms, and the arms, flags, &c, of the Commonwealth or State, &c. The words and groups of letters appearing in the schedule concern the defence forces and auxiliary defence bodies. Consideration will be given at a later stage to permanent legislation.

Supplementary Regulation No. 63

This regulation enables certain officers of the naval, military or air force to administer oaths, take affidavits, and attest documents for members of the defence force and certain other forces. A considerable number of persons to whom the regulation applies will continue to serve next year in outlying areas or overseas.

Supplementary Regulation No. 80

This regulation enables the Attorney-General to make arrangements for the administration of affairs of persons missing as a result of war operations. A considerable number of cases has been dealt with under the regulation and action will be necessary in many of them next year.

Supplementary Regulation No.- 90

This regulation enables female persons to be eligible to become members of the Amalgamated Engineering Union in Australia. During the war, females were engaged in large numbers on engineering -work and until they are no longer employed on work of this type it is necessary to provide coverage for their membership.

Supplementary Regulation No. 91

This regulation makes it an offence for any person to invite or induce another to pay in advance any amount in payment for the purchase of any record of war service without the consent of the Attorney-General. The regulation assists in protecting relatives and friends of ex-servicemen from exploitation in such transactions.

Supplementary Regulation No. 94

This regulation prohibits a Commonwealth officer or contractor converting to his own use property belonging to the Commonwealth or incurring unauthorized expenditure against the Commonwealth. The Attorney-General is authorized to take action to recover the amount of the expenditure or value of any property involved. The regulation was particularly valuable during the war when the functions and expenditure of the Commonwealth Government were greatly increased and it is being continued until conditions become more normal.

Supplementary Regulation No. 96

This regulation enables trustees, without breach of trust, to make advance subscriptions to Commonwealth loans, in cases where they are authorized to invest money in Common-, wealth Government securities. The regulation is being preserved as the Commonwealth Government is still financing war expenditure by means of loans.

Supplementary Regulation No. 100

This regulation contains an evidentiary provision to the effect that the production of the Gazette shall be prima facie evidence of any instrument or copy of an instrument set out therein. The provision largely obviates the necessity of producing original instruments in legal proceedings. Its operation is being extended to include instruments made under the Defence (Transitional Provisions) Act.

This regulation provides that bronze coins shall not be deemed to be coins made and issued otherwise than in accordance with the Coinage Act1909-1936 merely because they do not contain tin. The measure was introduced owing to the scarcity of tin and the retention of the regulation will continue this war-time economy.

This regulation restricts the expression “ deferred pay “ appearing in section60L of the Superannuation Act to the deferred pay referred to in regulations 548 and 549 of the Air Force Regulations. While deferred pay continues to be paid under ‘ the Air Force (War Financial) Regulations, a provision of this nature is necessary.

This regulation prohibits a person from having unlawful possession of licences, ration tickets and other ration documents issued under National Security Regulations. Regulations dealing with various forms of rationing are being retained and this provision is consequential.

This regulation provides for payment in lieu of recreation leave to dependants of deceased officers of the Commonwealth Public Service. Leave of many officers accumulated during the war. There is no possibility of all accumulated leave being worked off before the end of the year.

This regulation preserves the superannuation rights of airmen of the Permanent Air Force who are appointed to the Citizen Air Force. The provisions are being retained to provide for those members of the Royal Australian Air Force who were members of the Permanent Air Force and joined the Citizen” Air Force and are now serving with the Interim Air Force with commissioned ranks in the Citizen Air Force.

This regulation provides for the execution in Australia of the unexpired portions of sentences imposed on members of the Royal Australian Air Force while serving with a home or dominion force outside Australia. The regulation was introduced when members of theRoyal Australian Air Force began to return to Australia in substantial numbers. Members ofthe Royal Australian Air Force will still be attached to the Royal Air Force next year.

This regulation provides that where a person is authorized to enter or inspect any land or premises under any National Security Regulations, he must be authorized in writing and produce his authority on demand. It is a desirable safeguard in the public interest and the regulation is being retained.

This regulation provides for the appointment of a Commonwealth Loans Director.

This regulation authorizes the AuditorGeneral to have full and free access to all accounts, books, documents and papers in the possession of any authority established or appointed under the National Security Act’ or regulations. As such authorities willbe in existence next year the regulation is being retained.

This regulation provides for the custody of property in Australia belonging to any power which has surrendered to the allied powers, pending its disposition in accordance with any terms of peace with any such power. Terms of peace are still to be made with powers whose property is now held in custody.

This regulation provides for the disposalof any unclaimed property after it has been held by the service departments for twelve months or more. A substantialquantity of unclaimed property will need to be disposed of next year.

Australian tea requirements are still subject to allocations from the United Kingdom Government and it is likely that any removal of existing control would have the result of Australia’s present quota being reduced. Some control of distributionis essential because of the very substantial direct subsidy made by the Commonwealth.

Tinplate Control. (Supply and Shipping.)

These regulations provide for the establishment of a Commonwealth Tinplate Board which is generally responsible for the supply of tinplate and in particular may purchase and acquire tinplate.

Tinplate is in very short supply and control over purchase, allocation and end-use of tinplate will need to be carried on for some time after the end of this year although commercial importations of tinplate will be resumed as early as possible.

In addition to these Regulations the Control of Tinplate Order - originally made under regulation 59 of the General Regulations - is continued by the second schedule. This has been done in order that our supplies of tinplate may be distributed and used in the best possible manner.

These regulations provide for the establishment of the War Damage Commission and the War Damage Fund. Money is still held in this fund and claims still exist which have not been finalized. These regulations have specific application to expropriated properties in New Guinea.

It has not yet been possible to determine the fate of certain New Guinea residents who are missing as a result of the Japanese invasion. Until this has been done, it is necessary to retain these regulations which provide the authority for (the issuance of death certificates.

War Service Moratorium. (AttorneyGeneral. )

These regulations provide for the protection of servicemen and their dependants in a variety of ways. Parts 2 and 3 which related to mortgages and agreements for the purchase of land and the prohibition or suspension of proceedings have been incorporated in the Reestablishment and Employment Act 1945 which provides that the regulations shall cease to have effect. Part 4 deals with life insurance policies of members of the forces. Part 5 contains the provisions relating to rent and tenancies and gives to members of the forces and discharged members of the forces special privileges relating to the letting of dwellings and farms. This protection should be continued.

Wheat Acquisition and Wheat Industry Stabilization. (Commerce and Agriculture. )

The Wheat Acquisition Regulations provide for the establishment of the Australian Wheat Board which is empowered on behalf of the Commonwealth to purchase and sell wheat. The Wheat Industry Stabilization Regulations provide for the establishment of a. Wheat Industry Stabilization Board with the duty of advising the Minister and the Australian Wheat Board on matters connected with the stabilization and control of the wheat industry.

The wheat-growing industry is at present being carried on under the supervision of these boards and the 1940-47 crop is being acquired by virtue of the powers contained in the acquisition regulations.

The Commonwealth Parliament made provision last session by passing the Wheat Stabilization Act 1940 for a permanent scheme to provide stability in the wheat industry. This act however needs complementary legislation to be passed by the States and until the States take action the present regulations will be needed.

Wine Industry. (Trade and Customs.)

Pending consideration of permanent legislative arrangements in consultation with the States continuation of these regulations is desirable in order to protect the interests of growers with respect to payments for wine grapes purchased for domestic consumption. Prices for wine grapes purchased for export are governed by the Wine Export Bounty Act.

Women’s Services. (Defence.)

These regulations prevent members of the women’s services being tried by court-martial or from sitting as members of courts-martial and also define the conduct which is prohibited to members of the women’s services. Continuation is necessary while the women’s services remain in being.

page 438


Notes on Orders Continued in Force by the Second Schedule.

Agricultural Machinery Order.

This order provides for control over various types of agricultural machinery. The supply of tractors is still insufficient to meet requirements and it is proposed to continue the control only insofar as it relates to distribution of tractors.

Control of Essential Materials Order.

This order authorizes the Controller of Materials Supply to regulate the distribution of materials which have been specified as essential. These materials include most base materials used in engineering and building industries - e.g., iron and steel sheets, copper and copper alloys, nickel, aluminium, manganese, zinc, asbestos.

Control of Footwear ( Styles and Quality ) Order.

The existing control under this order includes provision for the branding of footwear, the maintenance of the quality of footwear produced (which incorporates registration of producers and the submission of samples) and also the submission of monthly figures of civilian footwear production. Under the control, the quality of footwear has, in general, been maintained at pre-war standards. The relaxation of this control might lead to the production of shoddy types of footwear and it is desired to retain the control in order to afford the opportunity for fuller discussion with the State governments regarding the incorporation nf the present provisions, or ones similar to them, in State legislation.

Control of Tinplate Order.

The Control of Tinplate Order is being retained in order to maintain control over the end use of tinplate. The quantities of tinplate at present reaching Australia are not equal to our requirements, and control over the end use of tinplate, after being in abeyance for some months, was therefore restored on the 1st July, 1940. Under this control, tinplate may be used only for certain purposes as specified in the order, its use for any other purpose being subject to the issue of a special permit. The issue of a permit depends upon such considerations as whether the product can be packed in a substitute container, and the degree of essentiality of the product. The objective is that tinplate should be used only where circumstances make its use essential.

Jute Goons Order.

The orders issued in respect of jute goods provide for control over the manufacture, importation, purchase, sale or distribution of jute goods.

The world’s supply of jute goods is inadequate to meet world demands, and every country consuming jute has found it necessary to continue some form of control so as to keep consumption within the quantities available. Australia has given an undertaking to the

Indian Government that all possible economies will be effected in the utilization and the use of jute and jute goods and fo enable these economies to be made, it is necessary to continue some measure of control.

Control of New Commercial Motor Vehicles Order.

Controlof New Motor Cars Order.

These orders establish a permit system of control over the distribution of new motor vehicles. Requirements for these vehicles are so greatly in excess of the supply that some system of priorities is necessary.

Orders Under Regulation61 of the National Security (Supplementary) Regulations.

These orders set out words and groups of letters such as Air Force, Army, Defence Force, Civil Defence Council, Royal Australian Air Force, Royal Australian Navy, Australian Imperial Force, and prohibit their unauthorized use in connexion with any trade business or profession.


Notes on Amendments of Certain Acts Madeby Third Schedule.

In general, these are formal amendments in order to preserve in force the provisions of certain acts, where these provisions would otherwisebe affected by the termination of the National Security Act or by the transfer of the authority for certain regulations or orders from the National Security Act to the Defence (Transitional Provisions) Act. This applies to the amendment of the Black Marketing Act, the Papua-New Guinea Provisional Administration Act, the Patents,Trade Marks, Designs and Copyright (War Powers) Act, the Women’s Employment Act, and the Wool Realization Act. The two cases in which the amendments are more than formal arc noted below.

Crimes Act 1914.

Sections 78 and 79. - General regulation No. 19, which is not being continued, provides for the prohibition of photography of prohibited places. Section78 of the Crimes Act makes it an offence to make a sketch, plan, model or note of a prohibited place and section 79 makes it an offence to communicate any such sketch, plan. &c, to other persons. The amendments extend these sections to include “ photograph “.

Section 80. - General regulation No. 4, which is not being continued, extends the list of prohibited places defined in section SO of the Crimes Act. The amendment of section SO makes provision for including detention barracks, prisoner-of-war camps and internment camps. It was considered that other places specified in regulation 4 as being prohibited places should not bc retained in the Crimes Act.

Section 89. - General regulation No. 7, which is not being continued, prohibits a person unlawfully entering any vehicle, aircraft, &c, used for any of the purposes of any service of the King or the Commonwealth. Section 89 of the Crimes Act forbids trespassing on property used for naval or military purposes. The section is being amended to include “air force “ purposes.

Postand Telegraph Act 1901-1934.

Section64. - General regulation No. 13b provides that originals and copies of telegrams canbe destroyed by the Post Office after having been held for twelve months. Section 64 of the Post and Telegraph Act provides that the period shall be two years. The amendment substitutes the twelve-month period for the two-yearperiod on the ground that insufficient storage space is available to keep records for a longer period, and that retention for longer than twelve months is in any case unnecessary.



Additional Pensions and Allowances to Seamen. (Note. - The effect of these regulations is being preserved by amendment of the Seamen’s War Pensions and Allowances Act 1940. See clause 11 of the bill.)


Agricultural Machinery.

Air Force.

Aircraft Production.

Alien Doctors.

Allied Forces.


Army Inventions.

Building Operations.

Cash Orders and Hire Purchase Agreements.

Chinese Seamen.

Civil Constructional Corps Compensation.*

Civil Defence Workers’ Compensation.*

Coal Control.

Conscientious Objectors.

Contracts Adjustment.

Debtors’ Relief.

Emergency Supplies.


Evacuated Areas.

Exchange Control. (Note. - It is proposed that substantially similar regulations will be madeunder the Banking Act 1945.)

Field Peas Acquisition.

Fire-arms and Explosives.

Gas Cylinders.

Gas Masks.

Hirings Administration.



Land Transfer.

Land Transport.



Marine War Risks Insurance.

Meat Export.

Meat Industry.

Meat Industry Control.

Medical Co-ordination and Equipment.

Metal Foil and Paper.

Metal Moulding Trades.

Mobilization of Electricity Supply.

Mobilization of Services and Property.

New Guinea Industrial Peace.

Petroleum Products Distribution.

Repairing and Docking of Ships.

Shipwrights’ Trade Dilution.

Subversive Associations.

Supply of Goods.

Timber Control.

Universities Commission.

Values for Land Tax. (Note. - Appropriate amendment of the Land Tax Assessment Act 1910-1940 is being made by clause 12 of the bill.)

Vegetable Seeds.

Venereal Diseases and Contraceptives.

Volunteer Air Observers Corps.

Volunteer Defence Corps.

Wages of Seamen Detained by the Enemy.

War Contributions.

War Damage to Property - Extension of Contribution Period.

War Injuries Compensation.*


Aliens Service.

Allied Works.

Australian Advisory War Council.

Blacksmithing Trades Dilution.

Boilermaking Trades Dilution.



Cold Store.

Commonwealth War Housing Trust.

Dried Fruits Acquisition.

Electrical Trades Dilution.

Emergency Control.

Engineering Trades Dilution.


Flour Industry.

Gas Producer.

Gold Excise.

Housing and Accommodation.

Internal Combustion Engines.

Liquid Fuel Bulk Supply.

Man Power.

Overseas Children.


Protection of Bulk Oil Installations.

Racing Restriction.

Radium Control.

Salvage Board.

Shearing of Sheep.

Sheet Metal Trades Dilution.

Shipping Requisition - Additional Compensation.

Standards of Lighting.


Substitute Fuels.

Supply Certificates.

Tobacco Rationing.

Western Australian Alunite Deposits.

Wine Marketing.

Debate (on motion by Mr. Menzies) adjourned.

page 443


BUDGET 1946-47

In Committee of Supply: Consideration resumed from the 20th November (vide page 405), on motion by Mr. Chifley -

That the first item in the Estimates under Division No. 1 - The Senate - namely, “ Salaries and Allowances, £8,870 “, be agreed to.

Upon which Mr. Menzies had moved, by way of amendment -

That the first item be reduced by £1. as an instruction to the Government - to withdraw the budget and redraft it so as to include reductions in taxation upon personal incomes.


.- The speech by the Attorney-General (Dr. Evatt), to which we have just listened, indicates how grudgingly the Government proposes to surrender the major economic controls which it has acquired under the extraordinary and abnormal conditions of war. That is in line with the grudging reluctance of the Treasurer (Mr. Chifley) to surrender any of the tax-gathering capacity, which, also under the abnormal and extraordinary conditions of war, he set in motion. In fact, I consider that it would be more appropriate if we were to describe the financial document which he presented to honorable members as a “ grudgit “ rather than a budget. We find ourselves up against the familiar situation which has characterized every Chifley budget, or “ grudgit “, as I prefer to call it, in which ostensibly he gives us some remission of tax but after we have sat back and examined his benign proposal, we find that we are being mulcted in a greater volume of tax than ever before. This budget is no exception to its predecessors. The cold hard fact remains that the Australians will continue to be the most heavily taxed people in the world. On his own conservative estimate the Treasurer proposes to collect from taxation this year £348,000,000 which is approximately £50 a head for every man, woman, and child in the Commonwealth. I invite the Treasurer to indicate any other country in the world, English speaking or otherwise, where anything corresponding to this impost of taxation per head of the population remains. These abnormally heavy rates of tax are being continued in a period of peace. There is no excuse about the needs of war on this occasion. There is no excuse that a great section of , our adult-working population is devoted to the destructive tasks of war. Indeed, the people have returned, as the Prime Minister proudly proclaimed, to the productive tasks of peace. Therefore, the Treasurer’s Budget statement is at the one time a claim of success and a confession of failure. Approximately 523,000 men and women have left the services and gone into civil production, and their numbers have swollen the ranks of tens of thousands of workers who were formerly engaged in war-time activities. But what is the result? The best that the Treasurer can offer is a minor remission of sales tax.

To point the matter rather vividly, I direct the attention of honorable members to the peak period of our war charges, namely, 1943-44. According to the Treasurer’s statement, in that year we reached the peak expenditure of £548, 000,000 for war purposes. Receipts from taxation amounted to £303,000,000. This year, war charges have been reduced to £110,000,000, or approximately onefifth of what they were in 1943-44, but, according to the Treasurer’s estimate, taxation collections will amount to £348,000,000, or £45,000,000 more than he found necessary in the peak yea-r of war expenditure. It is small wonder that to-day Australia has a sick economy. The production pulse is sluggish, and instead of prescribing for it a stimulating tonic of tax reduction, the right honorable gentleman offers us a starchy diet of meat pies. “What are some of the symptoms of this malady which is affecting the Australian economy at present? They must be obvious to all honorable members. First, there is the serious lag of production, despite those greatly augmented labour forces which we have at our disposal for peace-time purposes.

The Treasurer claimed that exservicemen are now back in the field of civil production; yet I invite him to produce any manufacturer in the Commonwealth who is not experiencing greater difficulty to-day than he did in the war years in getting the necessary components for the articles that he makes. In almost every line of production, these difficulties are no less, and, in most instances, they are even greater than they were in the most difficult period of the war.

Contributing factors, of course, are the serious shortages of fuel and power, which are affecting every State. The shortages of fuel are, in the main, the result of the failure to acquire adequate supplies of coal, and they have been accentuated by transport difficulties, which in turn are the result partly of a lack of fuel and power, and partly of the industrial dislocation that has upset our economic life. One of the more serious aspects of these transport hold-ups has been the slow movement of our shipping between ports, and the slow turnabout while the vessels are actually in port. These matters have led to a flourishing black-market in many of the commodities that are in short supply, a hold-up of housing, and, as I mentioned, the go-slow in shipping. We are told that there is a shortage of man-power in Australia, but the shortage is one of man effort rather than, of man-power. Indeed, the shortage of man effort has been confirmed by our experiences since the conclusion of hostilities. The potential is there. The productive capacity is there. The man-power, quite clearly, is there, because more people are engaged in our factories than ever before - about 20,000 above our war-time peak and some hundreds of thousands above the numbers engaged in factory production in the prewar period. Yet these shortages persist!

So I turn to what has been the major factor contributing to our shortages, and that is the nation-wide industrial dislocation which we have experienced in recent months. In order that we may see this industrial situation in proper perspective, I shall place on record a few simple facts relating to it, because honorable members on both sides of the House express conflicting views about it. Honorable members opposite claim that the Labour

Government has a much better record of peace in industry than we had when we were in office. Others declare that these industrial disturbances are merely an inevitable feature of the transition from war to peace, and that they are occurring in “ all’ parts of the world. Therefore, I propose to cite a few of the facts. I do not claim that the political parties on this side of the chamber, when in office, had an unblemished record in industrial matters. We know that there were many stoppages from 1938-39 onwards, and that there were many serious hold-ups and enormous losses which reduced production below the leved of which the country was capable. The worst year after 1931, and before the present Government took office, was 1940. when, as the honorable member for Hunter (Mr. James) reminded us, we had a protracted strike on the coal-fields of New South Wales. In that year, approximately 1,500,000 working days were lost through industrial disputes. According to the Statistician’s figures, the number of disputes in that year was 350. In the Labour Government’s regime the worst year recorded up to the present year, which I think will set a new record, was 1945, when 2,100,000 working days were lost, and industrial disputes totalled 945. So, if we are to throw stones at each other in regard to this matter, I am. entitled to draw attention to the fact that in our worst year, 1,500,000 working days were lost in a total of 345 disputes, whereas in 1945, with Labour in office. in five State parliaments, and in the Commonwealth parliament, there was an all-time record number of disputes, namely 945, and a loss of 2,100,000 working days. But a solution of the problem will not be assisted by hurling accusations at each other because of our failure to deal with these matters in the past. I turn now to Great Britain to see whether there is any substance in the story that we in this country are no worse off than people in other parts of the world. In 1945, in Great Britain, there were difficulties, it is true. The number of working days lost in that year was 2,800,000. Setting that figure .against the 2,100,000 days lost in this country in the same year, and taking into account that Great Britain has about seven times the population of this country, it will be seen that, proportionately, we have been losing working jays at about six times the rate at which they have been lost in Great Britain,; and E repeat that this year, according to our common experience, new record figures for industrial disputes and days lost will be established. It is true that the situation after the last war was very much as it is to-day. We had a series of industrial hold-ups, and .a heavy loss of working days; but there are unusual features in the present situation which already have been referred to by the honorable member for Reid (Mr. Lang), and again yesterday by the Leader of the Opposition (Mr. Menzies). Some of our most serious industrial disputes of recent times have not been strikes against capitalistic employers, but against government instrumentalities and government-controlled concerns, and they have not been strikes against allegedly unsympathetic governments, but against instrumentalities controlled by State Labour ministries, and by this Commonwealth Labour Government. So, the old story that there cannot be industrial peace under any government but Labour, and that socialism would be the complete answer to our industrial difficulties, has been exploded once and for all.

Mr Falstein:

– But some of those governmental authorities were appointed by anti-Labour governments and consist of the political nominees of those governments.


– I do not think that anybody in this chamber will accept that as a valid criticism, and. I advise the honorable member for Watson (Mr. Falstein) not to go deeply into that matter; if he does he will find that the score adds up rather more liberally on one side than on the other. The fact remains that in several States of the Commonwealth, Labour governments have been in office for many years. I refer particularly to Queensland, Western Australia, Tasmania, and coming closer to home, New South Wales. There has been ample opportunity in those States for any government, if it believed that a State instrumentality was being conducted unsatisfactorily, or was obviously antagonistic to its employees, to replace the controlling personnel of that instrumentality with men who, from the point of view of the government concerned, would be considered more satisfactory.

Mr Falstein:

– With hostile upper houses in New South Wales and Victoria - what rubbish!


-I do not think that the honorable member for Watson does any great service by attributing blame in that way. I believe that an accurate analysis would place the blame upon the administrations themselves, and not upon the instrumentalities that function under them.

Another unusual feature about this matter has become more evident in the last few weeks or months - the organized retaliation that bodies of employers are setting up against these developments. T state these things as factors in the picture that we have to study, and I draw the attention of the committee to this undeniable fact: Our arbitration system which has been endorsed by the people of Australia by vote, over and over again, and which is the official policy, I believe, of all political parties in this country other than the Communist party, has come under attack by the organized forces of communism in those unions dominated by Communist leaders. These individuals have set out to smash the arbitration system and to sabotage it as a worth- while institution in- this country. It is an unhappy fact that our arbitration system has not. worked satisfactorily during the last few years, and the principal reason is that it Iia?, not received the full backing of the governments for its decisions. An industrial law, no less than any other law, is impotent unless it is backed by the authority of the Government, and carries its own sanctions for breaches of it. A law without a sanction is futile; but that has been the situation. Our arbitration laws have been defied with impunity and challenged with success, with the result that we find to-day, bodies of employers, convinced that they cannot look to the governments or to the Arbitration Court for protection, relying upon such strength as they can muster by their own organization to resist what they regard as direct action by their opponents. We on this side of the chamber make our position quite clear. We condemn direct action, whether by organizations of employees or employers. Either way, it is a breach of the law and should be stamped out by any self-respecting government. There should be no place in this country for the so called “ right to strike “. There is no more justification for a right to strike than there is for a right to murder, to steal, or to violate any other law of this country.

Mr Edmonds:

– Or a right to lock out.


– Exactly. Employers and employees alike have obligations to the people of this country, and if Parliaments establish independent and impartial tribunals and enable them to function efficiently and to give decisions speedily, there is no justification in principle or in practice for a right to strike or a right to lock out. I have often heard the late Mr. Justice Higgins quoted favorably by honorable members opposite. la his volume -A New Province for Law and Order he stated this situation accurately and satisfactorily. He wrote -

There should be no more necessity for strikes mid stoppages in order to obtain just working conditions than there was need for the Chinaman of Charles Lamb to burn the house down whenever he wanted roast pork. The arbitration system is devised to provide a substitute for strikes and stoppages, to secure the reign of justice as against violence, of right as against might - to subdue Prussianism in industrial matters.

How is it then, that we hear to-day the claim that the worker’s last and only weapon is his right to strike? Surely that is an echo of the days when these conditions did not exist; when arbitration tribunals were not functioning. Surely that is one of those political catch-cries that have been handed down through the ages. Do honorable members opposite, who claim that they stand by the system of arbitration and back the authority of our tribunals, condemn this assumption of a right to strike? Do they declare it to be an anachronism, something that belongs to a barbarous past? Of course not! The Prime Minister himself, the leading citizen in authority in this country, proclaims that the workers have a right to strike, and in approving that right he approves, by implication, the employers’ right to lock out. How can we hope to maintain authority and industrial justice in Australia when the law of the jungle is sponsored by the head of the Australian Government? What of the right to work? Whenever a few men exercise the right to strike, they deprive many others, perhaps thousands, of the right to work. The exercise of that weapon by the miners on the coalfields of New South Wales has deprived many thousands of men in Victoria of the right to work, because Victoria cannot get fuel or gas without coal. I do not say these things in condemnation of the working men. I can well understand their feelings of frustration and their growing belief that direct action can provide the only remedy for the ills from which they suffer. They see around them rising prices, flourishing black markets, and costly houses. They feel that they are getting nowhere fast, and they have decided that now is the time for them to ‘ hop in for their cut “. If the courts gave decisions promptly on matters which arc the subjects o of grievances, and if those decisions were backed by the Government, we should have some hope of maintaining law and order in the industrial field. The Government’s supporters ask us what we would do if we were in office. I have already said something of what, we in opposition would do if we were in power. We would endeavour to enforce the rule of law. I referred earlier to the worst industrial loss that an anti-Labour Government sustained when 1,500,000 working days were lost in 1940. I remind the Government and its supporters that the government, of the day fought that issue on the simple question of whether the decision of the full Arbitration Court should be observed or not. The court had given a decision with respect to the coal-miners. The miners had resisted it by going out on strike. It would h have been a imple m matter for the Government to do what this Government has since done time after time. It could have given 4 Sl surrendered the authority of the court, and paved the way for innumerable other disputes. Instead of doing so, it fought out the issue. We had very little trouble on the coal-fields for years after that, and industrial production generally greatly improved. This issue of the enforcement of industrial law and order must be fought out again sooner or later unless our system of government is to degenerate from a form of democracy to a form of anarchy.

Insistence upon the rule of law would -not be enough. That would be a comparatively slow process. Other treatment must be applied if the workers are to be made to respect the Government and the authority of the courts, after all the years during which the courts have been relatively powerless to settle industrial troubles. I believe that any government with clear vision would demonstrate to the working men its intention to deal courageously with the very serious difficulties with which they are contending at present. For a start, T would concentrate on the problem of housing. The workers see prices rising beyond the reach of their wages. Houses are becoming dearer. They see no prospect in the future, near or distant, of being able to get the things that they want most of all - security and good homes. The Government should bring to this problem of housing the same drive that we brought to our munitions programme during the war. No achievement in Australia during the war was more spectacular than the expansion of industrial production to meet the demand for munitions. I am convinced that, properly handled, the housing problem could be solved in an equally spectacular manner. Success cannot be achieved by the methods of the present Government. It will not be achieved while the Government withholds from both employers and employees all reasonable incentive to work and produce. What did we do during the war in order to increase munitions production? We obtained the services of one of Australia’s leading industrialists, Mr. Essington Lewis, and asked him to direct the munitions programme. We asked him to choose leaders from the various fields of secondary production so that we might secure their co-operation and support. Thus we had directors of all branches of munitions production, a director of labour, and other men who were willing to help the Government, both in the national interest and because they had confidence in the man placed at the head of the organization. We must do something along those lines if we are to achieve the results in house construction for which the country is crying out. We must have at the top a man who is capable of dealing with the multifarious problems that will arise. He in List be capable of commanding the co-operation and support of other men who are leaders in their own fields of production - men who produce bricks, plumbing appliances, cement, house fittings, and- all the other things that are needed to build a modern home. The pattern was laid down by a war-time anti-Labour government, and this Government must imitate it in order to be successful. The Government’s record in respect of housing is pitiful. New Zealand has been rauch more successful than Australia in this respect, and in Great Britain house construction is going ahead by leaps and bounds. This Government’s programme is sluggish, and entangled in a mass of bureaucratic red tape. The leaders of industry who should be placed at the top of our construction organization have not yet been asked to help. In any case, the Government will not secure from the people of Australia the effort that it requires unless it provides an adequate spur. During the war. we had the spur of patriotism, and employers and employees gave of their best in the national, interest. That spur if insufficient to-day. We need now the encouragement which through the ages has made nien put forth their maximum efforts, namely, the incentive of personal gain and personal advantage. Without that - and the Treasurer made clear in his budget statement that he is not attempting to provide it this year - we shall not achieve the production effort of which this country is capable.

Sitting suspended from 12.45 to 2.15 p.m.


– In the few minutes remaining to me, I do not propose to cover any new ground, but 3hall merely summarize the points that I have endeavoured to make. The first point is, that we have in Australia to-day an ailing economy. The symptoms of the malady are all too obvious and all too serious. Predominant among them is the nation-wide industrial dislocation, which has had the effect of slowing up transport, depriving us of adequate supplies of fuel and power, causing a hold-up of shipping particularly, and generally retarding the productive capacity of the country. This industrial dislocation is based on factors that have been discussed in this chamber on many occasions, outstanding among them being the effect of high taxation and the sense of frustration which has led both employer and employee to believe that they are not getting an adequate return for their labour. Honorable members who sit on this side of the chamber believe that industrial dislocation has been more widespread and more serious than it need, have been, because of the Government’s failure to enforce industrial law, and ite refusal to back up by its own authority and with such sanctions as it could have mustered, the decisions of our industrial tribunals. This has convinced militant unions that they can more successfully achieve their aims by direct action; and organized bodies of employers in various States, having despaired of the Government applying its authority to the decisions of the Arbitration Court or of the court being able to solve the problems presented to it, have in turn taken direct action against their employees by means of the lock-out. In order to remedy this situation, the Government must be prepared to enforce the rule of law with the sanctions which a government would normally apply. But the rule of law cannot easily be applied to-day, having regard to the need to get public opinion behind the Government if its legislation and its sanctions are to have any real weight. If the Government is prepared to enforce the rule of law, it must adopt at the same time measures which will convince all sections of the people that they will receive a fair deal. The most convincing and spectacular way in which the Government could do this to infuse a real drive into the housing programme - a drive such as we were able to secure in respect of our spectacular munitions programme during the war years. If this is to be done, the- support of capable industrialists who are leaders in that field of construction must be obtained, and a real incentive must be given to the Australian economy if we are to secure that production which we know is possible but is not forthcoming to-day. Nobody can feel satisfied that we are getting from any section of the community to-day the output or the effort which we know it is capable of giving. There is no- shortage of labour, male or female; the figures given by the Treasurer furnish ample evidence of that. Thousands more are engaged in our factories to-day than were engaged at the peak of the war years, and hundreds of thousands’ more than were engaged in pre-war years. Yet the production of many commodities is lagging behind the demand for them, and is below the peak that we were able to reach during the war years, when so much was directed towards the needs of war and many thousands fewer were engaged in our factories. The Prime Minister has told us that a golden era is opening up to us The use of the description “golden” is perhaps significant. Gold is a precious metal, not merely because of its intrinsic value but also because it is rare and hard to obtain, and because great risks have to be taken in order to acquire it. We can reach the golden era. of which the Prime Minister has spoken only if we work hard and take the risks which are normally associated with any great period of development. It is asking too much of human nature to expect extra effort to be made and risks to be taken in time of peace unless commensurate rewards are offered. Consequently, if the Treasurer is prepared to adopt a realistic approach to the problem, and is determined to cure the maladies which afflict our economy at the present time, he- must give- to the people n.s early as practicable such a measure of tax relief as will represent a real tonic for them. I do not entertain very much hope that the amendment which my leader has submitted will receive the support of this committee. The amendment is in general terms, and calls for the recasting of the budget in order to provide for an all-round substantial reduction of tax on incomes from personal exertion. No Government speaker has so far shown any inclination to adopt such a course; and, having regard to out experience in such matters, we do not expect any early softening of the heart of the Treasurer. If the Government does not propose to afford relief in this direction, I shall give to the committee before the end of this budget debate, the opportunity to adopt an alternative reform which would give very much needed relief to those families which are .finding it difficult to carry on with the incomes they are receiving today, namely, the adoption of a child endowment payment in respect of the first child, provision for which is not made under the child endowment scheme at present. [ believe that those people who to-day are feeling lethargic and apathetic require a real stimulus in order to give nf their best. We need that best if we are to take advantage of the tremendous opportunities that are open to us. The Treasurer told us in his budget state-, ment that favourable opportunities exist for an export trade. Already we have fumbled some of those opportunities by moans of the factors that I have mentioned. We had a wonderful opportunity ro enter the markets of Singapore and neighbouring countries, including China. We have certainly “ missed the bus “ in Singapore, because goods from Britain and America have been pouring in there as well as into the Chinese ports.- The great opportunity which awaited Australia has .been lost, certainly temporarily and perhaps forever. I point out to the Treasurer that whereas to-day we insist that the Australian market must first be satisfied, other- countries which have had a longer experience in such matters, and ]’. believe have greater wisdom, are setting aside a proportion of their production in order to develop their export markets. The present period is critical in that regard. Opportunities which are presented at certain stages of a nation’s history and development do not always recur. We had such an opportunity at the conclusion of the war, and to a degree we have it to-day; but if we insist that the Australian market must first be satisfied, and do not encourage exporters to set aside a proportion of production in order to obtain a footing in those markets, we shall find that they have been lost to us forever.

I believe, and I am sure that my belief is shared by all honorable members on this side of the chamber, that the document presented to us by the Treasurer will impose for an unnecessarily long period those weighty burdens which oppressed us during the war years. They are causing stagnation in our economy. If that fact be not realized, and if remedial action be not taken, for so much longer will our entry to the golden era spoken of by the Prime Minister be delayed.


.- The debate on the budget is properly said to be the most important that takes place in this Parliament during the year, and the reason is obvious. The budget is the instrument by which the Parliament determines the distribution of the national income and prescribes the kind of economic organization under which the people are expected to live during the fiscal year. In other words, they must relate their own problems to the economic control exercised by the Government. One of the most important aspects of the budget is the means whereby the Executive raises the money with which to fund the expenditures undertaken by it for the purpose of policy and for financing the programme determined to be the best in the interests of the country. The most obvious class of revenue is that obtained by means of levies on individuals, which are called income tax on personal exertion and property. There are many kinds of taxes, as may be seen by a perusal of the budget. I am not directing my remarks immediately to those imposts, but to the taxes that fall directly on individuals. I am disappointed that no relief has been given in the budget to basicwage workers. I reject entirely the reasons which have been advanced by members of the Opposition as to the need to grant relief from taxation to people in the higher income groups. The budget might well have provided for the exemption from income tax of workers in receipt of the basic wage. These are the people who are most in need of a real increase of wages. If the income tax were lifted from them, the cost would not be passed on to the community in the same way as a direct increase of wages would be. An exemption, rather than a general reduction, is desirable, because’ it would be the least inflationary method of granting relief to a. section of the community which has only its labour to sell in the industrial market.

Many crocodile tears have been shed by honorable members opposite when advocating the scaling down of taxation rates. It is claimed by members of the Opposition, that that would give an incentive to increased production. I disregard that argument entirely, for it will not bear examination. From my contact with the workers in my own electorate, and with representatives of various trade unions in Sydney, what is gnawing most at the vitals of the workers, and most inclining them to slacken their productive efforts, is that their employers and other groups are, they say, failing to observe what members of the Opposition urged the Government to enforce against the workers, and that is the rule of law. The largest body of people in the community who are disregarding the rule of law are those with a good deal of money who are causing black markets to flourish. We arc not paying attention to proper price regulation, or to those who are endeavouring in every way to defraud the Government by evading taxes and customs and excise duties. If the’ administration of the Taxation Department were in proper shape, a great deal more money than at present would be collected in taxes from people in the higher income groups many of whom are not subject to any supervision in respect of the taxation returns which they are required to furnish. I refer to people who do not work for wages or salaries, and are, therefore, not subject to the check which is exercised over persons whose employers furnish to the department returns showing the income of their employees. There are people other than salary and wage-earners who, during the recent war period, failed to furnish proper returns of their income, ind they are still neglecting to do so. It is rather unfortunate that the examining staff of the Taxation Department should be so depleted as not to be able to make a proper investigation of this leakage. If such an inquiry were conducted, the position would be found to be different .from, that indicated by the Leader of the Australian Country party (Mr. Fadden), who has frequently said that a large amount of money, of which an account has been taken, is owing to the department. I say that a great deal of money is owing to the Government, and that no account has been taken of it.

In saying that people in the lower income groups should be entirely exempt from income tax, my object is not merely to place in their hands money which they badly need to meet the high cost of living. According to the Commonwealth Statistician, the taxpayers in receipt of less than £200 a year number 4S7,649, or 24.8 per cent, of the total number of taxpayers. Therefore, it is apparent that, if they were relieved of income tax, one fourth of the staff of the Taxation Department could become available to investigate the returns of taxpayers who have evaded their just dues for years. If anything has caused a slackening of production, it is the fact that the workers have for a long time been aware of the wholesale evasions of income tax.

Mr Bowden:

– Instead of speaking in general terms, why does not the honorable member name a few of the culprits?


– I am prepared to take a sample of taxation returns in the higher income brackets furnished to the department and have an investigation of them made. If my allegations are incorrect I shall withdraw them, but I am so confident in the matter that I have no reason to fear that a withdrawal would be necessary. The complete exemption from income tax of those in the lowest wageearning group would not necessarily have the effect of increasing production. Many persons receiving less than £200 a year are in receipt of pensions. They include sufferers from silicosis, those receiving workers’ compensation, and superannuated persons. Although they are obliged to pay income tax, they are not eligible to receive the old-age pension because of the other income which they receive. The group also includes persons in receipt of pensions for which they have contributed during their working lifetime.

Therefore, it is obvious that the contention of the members of the Opposition that a reduction of income tax would lead to an increase of production is without foundations. I suggest that taxation should be examined by a parliamentary committee, and that it should consider State taxation as well as Commonwealth taxation. In the terms of the uniform income tax agreement, the Commonwealth will this year pay £39,3S9,000 to the States to reimburse them for having vacated the income tax field. Last year, the amount paid was £32,000,000. The total amount which the Commonwealth will pay this year to the States under the agreement is £58,462,000, but that includes reimbursement in respect of taxes other than income tax. Yesterday, the New South Wales Treasurer presented his budget to Parliament, providing for a small surplus, about £15,000. The parliamentary committee, when considering whether persons on low wages should be exempt from income tax, should consult with the States, which are receiving from the Commonwealth £58,000,000 a year - about one-sixth of the taxation income in this year’s Commonwealth budget. Early in the new year, the Arbitration Court will probably make its determination on the application for a new basic wage. At the present time, the basic wage-earner is liable to pay x shillings income tax. If the new determination provides for an increase of £1 a week in the basic wage, the wage-earner will then be liable to pay x shillings, plus something more, income tax. I suggest that the parliamentary committee, in conjunction with the State authorities, should examine the possibility of wholly exempting ‘basic wage-earners from income taxation, and also those who draw not more than £200 a year in salary or other income. The Commonwealth Commissioner of Taxation supplied to me a set of figures showing that the total cost of such an exemption would be £13,000,000 in a full year, which would also cover the cost of a. tapering exemption on incomes between £200 and £600. The return from income tax for this year is estimated to amount to £151,000,000, and a further £5.1,000,000 is collected under the social service tax. Thus, it is evident, that the conces sion to basic wage-earners could be made at a cost to the Commonwealth of only 10 per cent, of its receipts. If a plan were worked out in consultation with the State governments, a parliamentary committee on taxation mightwell feel justified in recommending this concession, which could then be granted at a cost of less than 10 per cent, of the receipts.

Last year, Parliament passed an aci which had the effect of bringing life assurance companies under government control. It did not provide for the establishment of a government life assurance office such as that in New South Wales, but merely regulated the manner in which the assets of companies - and they total £300,000,000 according to the figures of the Commonwealth Statistician - should be distributed in the event of certain contingencies arising, and in particular in the event of the contingency assured against, namely, the death of the policy-holder. This phase of the nation’s economy is so important, and looms so largely in the platform of the Australian Labour party, that we should immediately cause a Commonwealth insurance office to be established ; or, even before considering such a step, the Government should assume complete control of all insurance companies in Australia. The vastness of the operations of the insurance companies merits close investigation, as does the great financial power which they wield. Some aspects of the activities of these companies to which attention has been drawn by royal commissions have been rectified legislatively, but there are others which should be given attention. I refer particularly to those which have an actuarial basis. For instance, life assurance premiums are calculated on the basis of tables which are outmoded and have no real applicability in Australia. Australian companies are working on United Kingdom tables for the period 1924-1929, yet figures supplied by the Commonwealth Statistican over a long period of years show that the expectation of life in Australia is from three to five years more than those tables indicate. That means that life assurance companies in Australia are collecting premiums for from three to five years longer than the risk warrants. These and other matters justify the immediate implementation of the platform of the Labour party in respect of life assurance. There is no constitutional hindrance to the establishment of life assurance business by the Commonwealth Government. The Government has already entered the field of air transport, and it should enter the field of life assurance. I urge the Government to put the policy cif the Labour party into operation without delay.

Some progress has been made towards the attainment of the Labour party’s objective in regard to banking, but not sufficient has been achieved, and what has been done falls far short of the nationalization of the banking system which is the party’s ultimate objective. The only way to eradicate some of the vicious banking practices in this country is to remove completely private operators from the field. During the life of this Parliament the Government should proceed to nationalize banking.

Mr White:

– What does the honorable member mean when he speaks of vicious hanking practices?


– I shall be pleased to answer that question because I am sure that it was meant to be intelligent. In the past, the private banks in this country manipulated the national economy to such a degree that they embarrassed any government which pursued a policy contrary to that which suited their purpose. That remark applies to all governments, not merely Labour governments. In other words, banking was conducted by the banks in the interests of the banks instead of by the elected representatives of the people in the interests of the people.

Mr White:

– That is purely imagination on the part of the honorable m ember.


– Every honorable member agrees that the control of prices is desirable. If we had not in operation such a good system of control as we have had, and if that system had not been administered with determination, many people who now enjoy goods and services could not have afforded to buy them. Nevertheless, I believe that, in addition to controlling prices, we should have had a Bureau of Standards to control the quality and the quantity of goods offered for sale. In many instances evasion of prices control has been effected by offering for sale goods of inferior quality. Manufacturers find little or no difficulty in manufacturing an article to a price, and that policy has been pursued, by many Australian manufacturers to such a degree that prices control has, in some measure, been circumvented. Besides the lack of proper control over the quality of the goods offered for sale, there has been no proper control of quantity. For instance, before the war an A.P.C. powder contained a certain quantity of powder, but to-day, although the price remains the same, or has been increased, the quantity of powder supplied for that price is less. Another well-founded cause for complaint in regard to the Prices Commission is the long delay which takes place in fixing prices. A person who goes to the counter at the office of the commission and asks for a determination as to the price that he may charge for certain goods, may hear nothing of his application for several months. That kind of thing tends to cause stagnation in business. It would be an advantage if special officers were appointed in each capital city to deal with such applications promptly. In this connexion I speak, not of goods which are in process of manufacture, but of goods already manufactured. I realize that, in respect of the former class of goods, investigation by an accountant may be necessary to ascertain what price should be fixed. Another complaint in relation to price control is that magistrates treat offenders too lightly. Too many persons who contravene the regulations have been let off with light fines. There should be a provision that offenders in certain categories shall be given terms of imprisonment without the option of a fine. The lightfines inflicted have not acted as a deterrent. Indeed, many offenders merely regard the fines imposed on them as being equivalent to a licensing fee. It would appear that certain groups of people have readier access to senior officers of the department than have others. For instance, the proprietors of two Sydney newspapers - the Sunday Telegraph and the Sunday Sun - recently were permitted to increase the price of their publications from 3d. to 4d. When I made inquiries in order to ascertain whether their applications were lodged in the ordinary way in which traders generally have to deal with “the department, namely, over the counter at the office of the commission in Sydney, I learned that the matter was settled at Canberra. The prices of all newspapers may be determined by one officer in Canberra - I do not know - but it seems extraordinary that, having regard to all the circumstances relating to the fixation of prices for newspapers, and for these newspapers in particular, the companies concerned should’ be able to obtain an immediate decision on an application for the fixation of a new price. Whether the increase of per cent, is justified I do not ‘know ; I would be surprised to learn that it is. Apparently, in fixing the new prices the Prices Commissioner has ignored the fact that the half-penny is a unit of currency in this country. An increase of one half-penny would have represented an addition of I63 per cent, to the price hitherto prevailing. Already these newspapers have refused to take returns from their agents, and they have increased their advertising rates. It is true that the cost of newsprint has increased, but this has been offset by the increase of advertising rates. I do not know how the Prices Commissioner is able to justify a 33-J per cent, increase of the price of these two newspapers, especially having regard to the fact that both companies concerned, Associated Newspapers Limited, and Consolidated Press Limited, made substantial profits and paid large dividends last financial year. Some inquiry should be made into the method of approach to the Prices Commissioner by the representatives of these companies and into the celerity with which they were successful in obtaining the fixation of the higher price.

I propose now to deal with some phases of the activities of the Repatriation Department. One of the largest factors retarding the rehabilitation of ex-service men and women, as far as the Repatriation Department is concerned, is the existence of repatriation commissioners. In my view the ministerial head of the department should accept full responsibility for all things done by his executive officers. Some will suggest no doubt, that

Ministers .are subject to political and other pressure, but nevertheless, electorally, they have to accept responsibility for the administrative acts of their officers. It is most desirable that the Repatriation Commission be abolished and that all problems relating to repatriation be left finally in the hands of the Minister. We know that in existing circumstances the Minister is unable to do anything in the matter, that he may only be guided by the determinations of his commissioners. It would also be a desirable innovation if a few ex-airmen were appointed to the department, which seems to be dominated at present by old soldiers, not of the war just ended but of the 1914-18 war, who’ seem to be more concerned about hanging on to their jobs than about helping applicants for repatriation benefits who cannot help themselves. I believe that not even one exairman has been appointed to the various repatriation tribunals established under our repatriation legislation. It is indeed desirable that persons with’ air force service be given an opportunity to serve their country again in a field to which they alone can bring understanding of the problems of their former colleagues of the Royal Australian Air Force.

What I have said may be summed up very briefly. In regard to the budget, there should be a complete examination of the incidence of income tax upon those in the lowest income group. The method by which such an examination could best be made might be determined by a committee of members of this Parliament in consultation with representatives of the States which have, or which may be prevailed upon to have, a financial interest in the matter. A reduction of the burden of direct taxation upon those in the lowest income group, and particularly the exemption of that class, would have the effect of placing in the hands of those who need it most a real increase of wages; it would enable them to purchase goods and services which they cannot otherwise obtain, and it would have the further advantage of reducing by approximately 25 per cent, the amount of work which the Taxation Department is at present called upon to perform. Such surplus staff as the department would then have could be diverted to the examination and investigation of returns furnished by taxpayers in the highest income groups which are not at present, and have not been over the war years, subjected to the checks which have been imposed in respect of those received from salary and wage earners. I believe also tb at I have made in general terms a case for the establishment of a government insurance office and for the nationalization of banking, for some reform of the methods of price control, and for the abolition of the Repatriation Commission.


.- I am sure that every one welcomes the frank and logical criticism that has fallen from the lips of the honorable member for Watson (Mr. Falstein) in relation to government policy and administration. I trust that we may more frequently hear such frankness from honorable members opposite. It is rather a coincidence that criticism of this kind should come from honorable members opposite following so closely upon the election of two independent labour members to this chamber, namely, the honorable member for Bourke (Mrs. Blackburn), the loss of whose husband, the former honorable member for Bourke, a man distinguished for his independent outlook, we all mourn, and the honorable member for Reid (Mr. Lang). 1’ am glad to welcome the honorable member for Watson to the ranks of honorable members on this side of the chamber who have made a case for the reduction of income tax.

Mr Falstein:

– The right honorable gentleman is endeavouring to put me in a false position.


– The case for the immediate reduction of income tax, especially as it applies to those in the lowest income group, rests upon physical, or financial, and psychological grounds. Even if the revenue were to suffer as the result of a reduction of income tax the psychological effect would be sufficiently important to warrant it. The records of this Parliament and of the country show, however, that government revenue does not necessarily suffer by a substantial reduction of the tax levied upon those in the personal income group. During the war the world suffered in two ways. It suffered, first, mental damage, and, secondly, material damage. We must restore both if we wish to make the world anew; and I believe that the repair of the mental damage is at the moment the more important of these tasks. We in Australia are fortunate that the same means by which we can repair the mental damage will, at the same time, enable us to a very great degree to repair the material damage. The mental damage is apparent throughout the world. It is illustrated in the ill-mannered discussions before the United Nations which are reported in all countries, universal strikes and industrial and political discord. Strikes are occurring in Australia without any real reason. Many excuses are given, but no real reason for them is offered. Men are asked ‘to strike in order to gain a 40-hour week, but as the result of such strikes thousands of other men are thrown out of employment and do not work at all. Employees are asked by Communist leaders to strike in order to get more wages. Yet, if the same men are asked to work overtime they refuse because they say that most of the additional money they would earn would disappear in taxes. Therefore, the reduction of taxes will benefit the nation psychologically and financially. Psychologically, it will put the patient in the right frame of mind for permanent treatment. It will give the will to work to every’ one from the highest to the lowest. Financially, the whole case for a further reduction of taxes is that by providing an incentive it will expand the base of production and, consequently, widen the field that can be taxed by increasing the wealth of the community as a whole. Accordingly, a reduction of taxes does not necessarily decrease governmental revenues. Reduction of taxes should not be regarded as a gift to any section of the community. It is not charity to any particular class. It is not a bribe which is offered to any particular party. It is just plain common sense and hardheaded business. Our immediate problem is to alter the psychology of discontent among the workers, producers and the people generally by inspiring in them a desire and will to increase production. But the budget makes no attempt to achieve this objective. The Australian Country party’s plan is to reduce taxes, particularly income tax, and to ensure the prosperity and progress of our land industries because ample production will wipe out restrictions and rationing queues. Thus we shall effect a remarkable psychological transformation among our people as a whole. The Government’s plan of maintaining existing high rates of income tax in order to give this money back in expensively administered social services has failed to alter this psychology. This policy may keep the Government in. office for a time, but, ultimately, it will destroy both the Government and the nation. On every hand we see strikes, not against private employers or bosses who are supposed to be exploiting the workers, but against the Government itself and Government instrumentalities, that is, against the public themselves. Gradually, a general industrial paralysis is spreading over the whole of the community owing to shortages of supplies and the inability to finish properly any job that is undertaken. Dr. Dalton, the British Chancellor of the Exchequer, spoke on this aspect only last week. He said that he was convinced that a reduction of direct taxes under present conditions should take priority over reductions of indirect taxes as the former would more quickly restore the will to work. He added that the present high income tax rates were a greater discouragement to productive effort than taxes on commodities. Yet this budget removes only the taxes on some commodities ; it does nothing to remove the tax on incomes. Secondly, we must increase the purchasing power of money in Australia and thus wipe out rationing and black marketing by stimulating the production of the land industries, thus providing in adequate measure the essentials of life, food and clothing, which are at present in short supply. That, is the only way in which this problem can be solved. Price fixation, or rationing, will not solve it. Ft can only be solved by the production of ample supplies. By that means a better balance will be struck between our domestic expenditure. The latest report issued by the Commonwealth Statistician shows how purchases and supplies of food and clothing have got out of balance, In 1923-27 the aggregate expenditure on food shown in the basic wage regimen was 39 per cent., and- that on clothing was 23 per cent., whereas in 1944-45 the aggregate expenditure on food was only 33 per cent, and that on clothing was 28 per cent. That change is due to the higher cost of clothing. Expenditure in respect of rentals and miscellaneous items remained practically static during the period I have mentioned. The cost of clothing has risen so much that, expenditure on food has decreased by 6 per cent. The Government says that it cannot afford to reduce income tax. I recall that when I was first elected to this chamber nearly 30 years ago the then Treasurer, Sir Joseph Cook, said exactly the same thing, that, his Government could not afford to reduce taxes. But what happened. Following World War I. the then high rates of taxes were increased. That policy resulted in increasing deficits because of the operation of the law of diminishing returns. When Mr. Bruce and I formed our coalition Government we faced up to the problem of the reduction of taxes, and during the next five years we reduced the rates of income tax by 70 per cent, below the peak rates operating during World War I. At the same time, we raised the exemption for a single man to £300, and increased the deductions allowable in respect of a taxpayer’s children. Under our rates a man with a wife .and four children did not pay income tax unless he earned as much as £700 a year. We made that concession deliberately because we realized that taxpayers in the lower ranges of income expend relatively much more on goods subject to indirect taxes than a taxpayer earning, say, an income of £1,500. We took the view that the class of taxpayers who spent more proportionately on good; subject to indirect taxes should be relieved of income tax. The result of that policy was to give to the people an incentive to increase production ; and the fact of the matter was that as income ta.x was reduced government revenues rose accordingly. The present Government says that it has pruned its estimate of revenue from taxation by £61,000,000, but we find that its actual revenue last year decreased by only £4,000,000; and whilst it claims that it gave a concession of £21,000,000 in respect of taxation revenue, we find that last year its revenue from that source actually increased by £15,000,000. The Government’s claims in that respect are sheer nonsense; because the only thing that matters are the rates of taxes and their incidence. All the other arguments used by the Government are mere windowdressing. Not only did the Bruce-Page Government reduce income tax, but it found also that as the result of the incentive thus given to increase production it was able to reduce indirect taxes. That is even more remarkable to-day, because a new indirect tax - sales tax - was later introduced; by the Scullin Government. One extraordinary feature is that if -a man earning £7 or £8 a week is allowed a remission of direct tax of £1 a week, he will expend more money on such commodities as tobacco and beer than he did previously, so that returns from indirect taxation increase. When the Bruce-Page Government was in office, the receipts from direct and indirect taxation increased, and we were able continually to reduce taxes. At the same time, the budget carried additional charges, including £6,000,000 a year for the National Debt Sinking Fund. I established the fund. It still operates, and has paid off nearly £200,000,000 of war debt. We imposed an additional charge on the budget of £:”>, 000,000 by increasing old-age pensions bv 5s. a week to meet the general rise of the cost of living. Apart from that, we were able to pay out of revenue £9,000,000 for the building of three cruisers, and establish and endow the Council for Scientific and Industrial . Research with an amount of £750,000, which carried it through the economic depression and enabled it to do most valuable research work for Australia. We also started a radium bank with which to fight cancer, and paid an additional £8,000,000 a year for war pensions and the cost of repatriation. Our budget also bore an extra £3,000,000 a year as interest charges as the result of the decision to convert into a taxable debt over £300,000,000 of our war debt which had been raised on a tax-free basis. In other words, I altered the system of taxfree loans to taxable loans, so that the rich would not get more advantageous interest rates than did the poor. These reductions of tax also reduced the Commonwealth’s administrative expenditure. The number of persons who paid income tax was reduced from 782,000 to 231,000, and the cost of income tax administration was reduced by £250,000 annually. Hundreds of thousands of individual? were relieved of the worry of preparing returns. To-day, the number of persons who pay income tax, is approximately 2,023,000. If the exemption were substantially raised, between 500,000 and 600,000 persons would bc relieved of the obligation to submit returns and pay tax, and that would make for substantial governmental economies.

In the period to which I refer, primary production prospered. The dairying industry doubled its production, and the number of persons employed in it increased from 60,000 to- 120,000. The dried and canned fruits, wheat, and meat industries all showed a similar improvement as the result of the reductions of tax, which assisted development and gave to primary producers a remunerative price for their products. A most important feature was that the effect on industry was just as striking. In six years the number of factories increased from 17,000 to 21,000, whilst the number of employees in them rose by 72,000 from 395,000 to 467,000. The value of land, factory buildings and equipment increased by £74,000,000 - from £145,000,000 to £219,000,000. Wages rose by £20,000,000 a year. All those indicators of prosperity were traceable to the removal from workers in the” lower ranges of income of the liability to pay income tax, and general reductions of tax. After the world-wide economic depression, we restored employment in Australia by similar means.

Lessons of governmental treatment of the depression point the same moral. The way out of our present difficulties is to reduce taxes and lift agricultural buying power. The attempt to combat depression by heavy direct taxes, reduction of the exemption rate on small incomes, reduction of the pensions rate, savage indirect taxes, and the inauguration of sales tax failed to arrest the decline. The first great aid to recovery caine through letting the Australian exchange rate slip to its real level. This gave the Australian farmer and exporter £1.35 Australian for what was sold in Ling-land for £100 sterling, which maintained Australian equities in farms- and homes and saved Australia a bigger deflation than we actually had.. The second’ great’ aid was the lifting of the borden of excessive import duties, imposed in the depth of the depression, ofl! the Australian cost of liVing: and Australian, prices. The tariff schedule recognized that the 25 per cent., exchange discount was a protection to local industries, and therefore should be taken into account in determining the protective duties by the Tariff Board. Reduction of taxes, the establishment; of the home consumption price for- major primacy products, and the special consideration gwen to the farming price structure through government aid brought back full factory employment.. The number of workers rose from 287.915. in. 1981-3-2 to 426,934 in 1939-40. These two experiences indicate that we must do two things to ensure our recovery, and to help us in our task of feeding the world, and building- up our share of international! trade. The first isi to reduce- taxes so as to give an. incentive to the worker in every, calling. The second is to ensure payable prices to i be- farmer by the maintenance of the existing exchange advantage;, and stabilized prices- to make- certain full consumption of primary products.. Rural prosperity guarantees a full market to the industrial worker and full employment of the whole nation, with maximumproduction. Primary producers and those who distribute their produce constitute at least 50 per cent of the people who are able to buy manufactured goods. Honorable members should not forget, that during the world-wide economic depression, the nadir of unemployment in- alT countries coincided with the lowest prices for all major1 products of the soil. As’ I stated’, the lesson which we should’ learn from the period immediately after World War I., and the period immediately after the world-wide economic depression, has the same moral”. The way out of our present difficulties is to’ reduce taxes. The Treasurer can do- that, audi the result will bc to’ increase the- purchasing power of the people. The retention of heavy direct and indirect taxes, including sales tax will be a serious error. We must reduce taxes in order to provide an incentive for people to work.

I propose now to compare the position after World War I. with that after World War II. At present, the population of Australia, is approximately 7,500,000; at the end of 1921, it was 5,500,000. Thus the population has increased by slightly more than one-third. In that, period, our war debt has increased by nearly £1,500,000,000- from £60 a head in 1921 and £45’ a head in 1939, to £237 a head! to-day. That is. to say, our wai1 debt per capita,- is approximately four times as great to-day as it was twenty-five years ago. Intereston the war debt has increased from £16,600,000 to £44,000,000 a year. In my- calculations, I have omitted State debts, which are represented to a large degree by reproductive assets, and Commonwealth works debts, which are also, regarded’ as reproductive assets. War pensions- have risen from £7,000,000 to £14,500,000 a year, and the cost of social services’ from £5,500,000 to £68,000,000. Total Commonwealth expenditure has risen from £76’,000,000 a year to £404.000,000 a year. Just before the outbreak of World War II., Commonwealth expenditure was £98,000,000 a year. Simultaneously, the national income, in money terms, has practically doubled since the end of World’ War I., rising from £546,000,000 to £1.247,000,000, and has increased by 50 per cent, since the beginning of World War II. In dealing with national income, I am taking into consideration what possibly could have been produced by the 200,000 servicemen who at that time were not demobilized. To sum1 up, if we eliminate the self-balancing services like the post office and the railways, we find that both social service payments and1 the present war interest charges exceed the total tax receipts of the Commonwealth in 1920-1921. The increases- of expenditure on three items alone, namely, social services, war interest, and war pensions1, when added together; double the1 total Commonwealth tax revenue receipts in 1939. The problem’ eon-fronting Australia to-day is clear. To make conditions as tolerable for individuals as they were before the war - I am sure that every honorable member of this committee wishes them to be better than they were before the war - we must at least double our national income as quickly as possible by doubling our production, and, to double our production, we need a combination of factors which must be dovetailed into one another, and must work together. The most pressing need is for a reduction of income tax to bring about a will to work and an altered psychology. Then we must have more people in this country to work. We shall no!: achieve any large-scale migration to this country unless we make it attractive in a number of ways. We must make it more attractive for the investment of local and overseas money. We must have increased production of primary products, and improved industrial equipment for our farms, mines, and factories. In the first five years after World War I. we imported to this country plant and equipment for new industries to the value of approximately £70,000,000 or £S0,000.00. There is another reason why we should not be too hasty in saying that our exchange rate should be altered, merely because we happen to have some millions of pounds in our London fund. There are many things that we must buy for this country in the form of industrial equipment that we cannot make here either because of the time factor, or because of technical difficulties. Another important need in this country is for universal availability of water and power. We must have an assured supply of electricity in all parts of the country by linking up all our power resources in one big grid. We must have efficient communication by road, rail, air, sea, and telephone. All these things necessitate expenditure; and that expenditure must be given high priority because ultimately our capacity to pay pensions and other social services will depend upon the production of wealth. We must also have progressi ve agriculture, stabilized by reproductive and constant returns. We must have a streamlined arbitration system. Our arbitration system is now the envy of the world, but it is slow in operation. There are on ‘both sides of this chamber, but particularly on the Govern- ment side, many men who, all their lives, have been interested in this very matter. The time has come for us to get down to the task of making our arbitration system as efficient a machine as we can possibly make it. If we do that, we shall be able to remove much of the present-day incentive to strikes, and we shall be able to destroy the capacity of Communist leaders to hold up industry at will. Another vital necessity in this country is a more realistic basic wage index. I have seen what has happened in New Zealand. In that country, the number of commodities upon which the basic wage is calculated has been increased to approximately 115, but when one come? to examine the matter closely, one find.that although transpositions have taken place, the ultimate result is the same, because a fundamental ‘ condition of a basic wage must be its ability to buy an ample quantity of goods. No matter how the method of calculation may be juggled, the basic wage will not be adequate until it can supply commodities at reasonable prices.

If we are to attract migrants to thicountry, particularly from those lands in which sound national insurance schemes operate to safeguard contributors agains! periods of financial adversity, we too must have an efficient national insurance scheme, entirely independent, of currell! revenue. One of the first actions taken by the Commonwealth Government - and it was a Labour government - during the depression was to reduce old-age pensions to 17s. 6d. a week, and also to reduce maternity allowances.

Mr Fuller:

– The right honorable gentleman reduced old-age pensions to 15s. a week.


– That is noi correct. If the honorable member for Hume (Mr. Fuller) will examine the records he will find that I voted with other members of my party for the restoration of the former rate. Social services will be cut again unless we reorganize our entire social service system so that it will be completely independent of current budgets. Finally, we must have a complete elimination of waste in governmental and private activities by every conceivable means. To-day I asked the Prime Minister what was happening to money that was being allocated by the Commonwealth to the States. I wanted to know if there was any “ follow-up “ of those payments, and whether the money was being spent by the States on the duplication of services already provided by the Commonwealth, or- whether the Commonwealth itself was duplicating existing State services. I thought that u very good labour office service was operating throughout New South Wales, but I understand that Commonwealth labour offices are now being opened everywhere. Will the Commonwealth Employment Service wipe out the State Employment Service of New South Wales or will it be a duplication of it? These questions should be answered. The Commonwealth is raising hundreds of millions of pounds in taxes and then shovelling the money out to the States, but not exercising any control over its expenditure. We have a definite responsibility in the matter, and now that we have several former members of State parliaments in this chamber, we should be able to hear some informed criticism.

There are three magnets that can ensure a rapid improvement of our economic position. The first magnet that can be used as an incentive for the consummation of all the preliminary requisites to which I have referred, is a reduction of taxes, because only by reducing taxes can we increase the will to work. Secondly, we must have constantly progressing rural purchasing power, and thirdly, immediate preparations must be made for the supply of abundant water and power, and cheap sites for industrial development. In the present troubled state of the world, even large American undertakings are willing to come to this country and my information is that these organizations ask for three assurances. They say, “ Tell us where we can ger 10,000 horse-power, an abundant supply of water- 10,000,000 or 15,000,000 gallons a day - and cheap land, so that we can undertake our factory development plans on a big scale and establish a big community settlement, which will keep our employees satisfied in their work”. They will not come to Australia and say to us : “ Will you have this ready for us in five years time?” They will come to us and say: “ What can you do about it now ? “ It is of the most urgent importance for us to clear our -minds on this matter at the earliest possible moment. We should use to the full the water resources of Australia which, unfortunately, are lamentably small in comparison with those of other countries. I have examined this subject with the assistance of expert officers of the Commonwealth and the States, and I have discovered that the total rate of flow of water in Australia is about 60,000 cubic feet per second. Of this, about one-fifth is in the MurrayDarling system, about one-third is in the Mary River in Queensland to the north, exclusive of the Darling system, more than one-fourth is between Gympie and Newcastle on the coast, and one- tenth is between the Hawkesbury River and the Snowy River. We should be concentrating on water conservation in those regions. Experience in America can give us a lesson in this respect. Already in the huge area of the Mississippi Valley, where one would imagine the water supply to be unlimited, big cities are turning away secondary industries because the water supply is insufficient for their needs. Other cities in the same area are curtailing industrial development because they cannot provide water for the domestic needs of an increased population. The first thing to do is to reduce taxes, especially on individual incomes, thus giving to the workers an incentive to produce more goods and a general impetus to industrial development throughout Australia.


.- The budget is the Government’s prospectus for the year. It sets out the Government’s programme of finance and displays its administrative activity. In the circumstances, we reasonably expected that provision, would be made for an adequate measure of tax relief. Instead, the Government has made some trifling and disappointing reductions of inflationary taxes, such as sales tax, excise duties, and primage. The only other item is a reduction of onepenny a gallon in the petrol tax. In fact, the Government has laboured and brought forth ,a mouse. The granting of such meagre concessions at a time when there should be a marked reduction of direct taxes indicates that the Government is devoid of imagination and has lost contact with the people. That isundeniable.

Mr Lemmon:

– It is undeniable that the honorable member and his friends lost contact with the electors at the recent elections.


– It is amazing what the people will vote for, and it is true that the Prime Minister (Mr. Chifley) obstinately refused to promise tax reductions, but will any supporter of the Government say that a reduction of direct taxes would not be better appreciated than the reduction of indirect taxes that nas been made? A reduction of direct taxes definitely gives the people the incentive to work. The working man sees a greater sum in bis pay envelope each week if direct taxes are reduced, and he is free to spend the extra money in whatever way he wishes. Under the Government’s concessions, a few items will benefit from the sales tax reductions and people will only be able to buy a little more of those goods.

The Government must accept a great deal of the blame for our present industrial troubles. It has shown weakness in dealing with the instigators of industrial unrest and has abdicated in favour of a few ‘Communists. Also it has mistaken the real causes of the trouble, apart from the agitation of the Communists. Mr. Justice Davidson stated in his report on the coal industry that much discontent was due to the fact that men did not want to work overtime because they knew that they would be ‘” working for the Treasurer”. That is a well known fact. Had the scale of tax on overtime earnings been reduced, as I suggested during the budget debate last year, that would have been an incentive for greater effort in industry. If we are to secure adequate production of goods which are in short supply, direct taxes must be reduced. The Government cannot continue tododge the issue. Had the Prime Minister been a yogi sitting in contemplation on the banks of the Ganges month aftermonth, he could not have been further outof touch than he is with the viewsofthe people an regard to taxation. Had he talked with working men in any wage group,to members of ; any profession, or to householders,hewouldhave discovered that a reduction of direct taxes is necessary and is the only means of bringing prices and wages into closer relationship. As it is, his meditations have given rise only to a miserable reduction of indirect taxes that could have been achieved by the passage of a minor bill at any time. The right honorable gentleman has made a few sales tax exemptions. This tax was introduced by the Scullin Labour Government during the ‘depression. Its continuance will take us back to depression conditions again, because of its repressive effect on the buyingcapacity of the public, unless we take stock of the situation ‘and make drastic cuts.Some of the reductions that have been made are good and some are bad. For instance, meatpies and vinegar have been exempted. The Prime Minister considers these to be exemptions of national importance.

Mr Lemmon:

– Should we leave the tax on those items?


– No, but I shall tell the Minister some items from which sales tax should have been lifted. The two commodities which I mentioned should have been exempted long ago. When sales tax was introduced in a minor way at the rate of2½ per cent., there weresome strange anomalies. Many of them have been removed, but the others still exist. There has never been a proper revision of the sales tax ‘schedules. When the tax was introduced a man who bought sandwiches in a cafe had to pay sales tax,but if he orderedthe ingredients on separate plates he did not lave to pay sales tax. Some classes of pastry goods were taxable and others were not, although the shopper mightcarrythem away in the 3amc bag. That nonsensical kind of taxation only harassesthe people and annoys them. Sales tax, which has increased in some instances fromthe original rate of 2½ per cent. to arate of 25 per cent., is a most punitive formof taxation. It has detracted from the value of working men’s wages over the years. This LabourGovernment, which says that itisaclassgovernment andstands for the welfareof the working people, and whichbears the magic teg of “Labour which has ‘earned it votes which it ill deserved, ought to ensure that the purchasing power of wages is raised to the proper level instead of perpetuating inflationary taxes. Many classes of goods could be exempted from sales tax. I note that stores imported on aircraft engaged on overseas air services will, under governmental agreement, be exempt from sales tax. Nevertheless, sales tax is imposed upon aircraft. Recently, a young Englishman who served in a Spitfire squadron in Australia,, returned to England, and then decided that Australia might be a good place to live in - as it should be - decided, to come here to make his home. He flew to Australia with his wife and children in a. Proctor aircraft which he intended to use for an air taxi service. He had been in. Australia only a few days when he was visited by an official and told that he must not remove the aircraft from its hangar because sales tax on the machine had not been paid. He pointed out that had he waited, for a year and taken advantage of the Government’s free service, as a serviceman, he could, perhaps, have come out without cost to himself. He also stated that he had been put to considerable expense in coming to Australia in that way. I placed the matter before the Treasury, and was told that sales tax is payable at the Customs House on. imports - as it should be, if it is payable in the country on domestic production. I understand that there is on the Treasury estimates a sum which enables the Government, if it so desires, to make a payment which, in its opinion, is demanded by justice. I represented to the Treasury that such a payment should be made in this case but do not yet know whether my submission has been accepted. It is anomalous that a man who intended to settle in Australia should be tripped up by a tax of that kind because of his inability to pay the sum demanded, and be forced to say that he would be obliged to fly back to England or on to New Zealand and settle in that dominion. I have mentioned this case in order to prove that this is an irritating tax. which should be closely scrutinized. Many more exemptions from it should be granted.


– Is the serviceman referred to by the honorable member the one who charged fares to people he brought with him?


– I believe not. Even if he were, I do not think that that would make any difference. An artisan who brought a kit of carpenter’s tools to Australia would not be charged duty or sales tax. Nor should a man who comes here to make a living by means of civil aviation. The Government has given very little consideration to the real issue. It could have made a definite all-round reduction of direct taxes, and thus ensured contentment in. industry. Instead of doing that, it has adopted pettifogging methods, granting exemptions here and there. Some of them, undoubtedly, are worthy ones. The exemption in respect of paints wil L assist the building industry.. But. sales tax is still imposed on hardware and other building materials, and this has the effect of keeping up the cost of building. The Government might have been a little more generous in granting exemptions from sales tax. It has been obstructive, and ‘the Treasurer has been obstinate, in regard to taxation generally.

Because of the manner in which trade is being hampered and baulked, we may again be heading for a depression. I do not say that lightly. Our trade is disorganized. If there is any policy at all, it is haphazard. Controls are hampering all operations. In the matter of imports, the tariff should be the regulator and the guide. Trade should not be cluttered up with war-time/- controls. The Division of Import Procurement was set up as a branch of the Department of Trade and Customs, and: the offspring has outgrown the parent. It still controls imports from the United Kingdom, and elsewhere. Certain items are badly needed, yet people are unable to purchase their requirements of them because they cannot be imported without the approval of some remote official in the Division of Import Procurement. Hundreds of restrictions are imposed. Some of them were lifted after a good deal of pressure had been exerted on the Government by the Opposition, but many of them still operate. A firm wishing to import an article has to supply many copies of the particulars to the Division of Import Procurement, and then await the approval of an official, who may or may not grant it. The tariff, which is the law, should he the only guide as to whether or not imports should be allowed. I make the reservation that some sort of regulation may be necessary in respect of imports from America, because of the necessity to conserve dollars ; but there is no reason why restrictive action should be taken in respect of imports from sterling countries. This division, which should have been abolished or whittled down considerably, is holding up two-way trade between this country and the United Kingdom. Firms wishing to export to other dominions minor items such as dripping and fats have to wait au inordinate length of time for departmental approval. The time has come when these shackles should be removed from trade, so that the enterprise of the merchant might be stimulated and trade might recover. Not only is trade being hampered, it is also being lost. I cite the ban on Dutch shipping. I know that honorable members opposite say, “ That is not our fault “. But they are responsible for the government of this country, and by allowing a few men on the waterfront to decide what Australia’s foreign policy shall be they bring down Australia’s good name, and it will be besmirched for years. The matter is vital not only to manufacturers and merchants but also to the working men of Australia. A press paragraph on the subject reads -

America has now acquired a virtual monopoly of trade which would have put many millions a year into the pockets of Australian traders, manufacturers and wage earners. Apart from this loss of export trade, we have also sacrificed the chance of obtaining much needed imports. The seamen tell of an American vessel which, having unloaded supplies at Sourabaya, Macassar and Batavia, took back to the States an enormous consignment of raw rubber. America is selling what it has to sell and buying what it wants to buy from the Netherlands East Indies.

That is a country which is at our back door. Our trade with it is held up completely by a lawless group of men, with whom the Government has not been able to cope.

Mr Haylen:

– Does not the honorable gentleman, as an ex-Minister for Trade and Customs, agree that much of the diffi- culty that is associated with trade to the Netherlands East Indies is due to the “ shoddy “ which manufacturers have sent over there from this country after having been heavily subsidized by various governments ?


– The present Government has subsidized the manufacture of textiles. Although the prices of textile; are fixed in Australia, I understand thai, they are not fixed for export; consequently, people can make “ shoddy “, send it overseas, and obtain for it better price? than are paid for quality textiles sold in Australia. To-day, it is impossible to buy a suit length, and one may have to wait up to six months for a suit. Ye hundreds of thousands of yards of textilesare being exported from Australia.

Mr Scully:

– That is not correct.


– 1 refer the honorable gentleman to an answer to a question which I asked on the subject. From it he will see that 800,000 yards went to Russia. Our next biggest customer is New Zealand, and another big customer is Palestine. Whilst we should encourage our export trade, wc should not export money by sending om of this country manufactures that have been subsidized. That shows how foolish is the trade policy, if any, of this Government. It has not grappled with the matter, and runs away when faced with a difficulty, with the result that our trade is thoroughly disorganized. I have mentioned the Division of Import Procurement. The Government has not lessened the power by any official in that division to prevent imports. It has not interfered with the rebellious waterside workers who have prevented the sailing of ships that would have carried not only goods but also medical supplies to distraught people in the Netherlands East Indies. We had the spectacle of Dutch children having to load the ships, and of a pilot being refused in Melbourne for Tasman, which was named after the great navigator who was the first to touch the shores of Australia. He would turn in his grave if he knew that thi; country had refused the services of a pilot for a. ship carrying his name which had sailed with other vessels against the Japanese during the war. No enemy mi lion would be treated in the way that e have treated the Dutch. The present Government has shown, not only weakness, but indifference to our trade interests. Despite the high prices now being received for our wool, the Government will be heading for a depression if it does not lay down a trade policy. No declaration has been made by the Prime Minister regarding Empire trade preference. That policy has operated in both directions since 1932 under the Ottawa Agreement. In 1930, at the beginning of the financial and economic depression, the United States of America introduced the Hawley-Snoot tariff which was so high that it drew the gold of the world to that country; but, as it did not bring any goods, it helped to precipitate a world depression. Great Britain, however, set an ex-ample in 1932 by summoning a conference of representatives of the British dominions and securing the Ottawa. Agreement. Australia’s exports to Britain then went up with a bound. Britain had always taken about >Q per cent, of our exports, and in some oases they rose to 90 per cent.

Mr Thompson:

– Mostly raw material.


– Of course; but we hope that our secondary as well as our primary industries will be developed. Britain had been selling more to foreign markets than to Empire countries, but it set an example to the world by encouraging trade within the Empire. The United States of America and other countries have tried to break down that trade reciprocity, but the action of Great Britain helped the world out of an economic crisis. After years of trade dislocation during the recent world war, we have had no indication from the Government whether it intends to pursue a tariff policy which has greatly benefited Australia from its inception. Great Britain has fulfilled its part of the contract, but that cannot be said of Australia’s attitude to Britain. In 1938-39. we sent about 90,000 tons of butter to the Mother Country, but last year we exported to it only about 50,000 tons, although Mr. Bankes Amery had =aid that Britain would provide shipping to lift all of the food that Australia could supply. We are not giving Britain adequate supplies of food, although flour and bread there is rationed. Britain made some millions of pounds available to supplement its butter supply, but it did not get the butter it needed.


– The money was put into government revenue.


– Yesterday the honorable member for Barker (Mr. Archie Cameron) asked a question bearing on the matter, but did not receive an answer. The Minister is just as far from the truth now as he was when he talked about the export of textiles. I refer him to the statement which was published in Hansard regarding butter exports to Great Britain. It is not surprising that he was relieved of the portfolio of Minister for Commerce and Agriculture and given a sinecure.


– The honorable member must refrain from such observations.


– The Estimates show that, when he was Minister for Commerce and Agriculture, £200,000 was made available to farmers in Western Australia who were required to refrain from growing wheat while Europe starves. I draw attention to a question which I addressed to the Prime Minister a fortnight ago, and which I had to ask a second time in order to obtain an answer. I had pointed- out previously that the other dominions had adopted a generous attitude to the Mother Country. I said that New Zealand, with a population about equal to that of Victoria, had made a gift to Great Britain of food to the value of £1,000,000, and that other dominions had also made gifts or monetary adjustments favorable to Great Britain. The present Government has never made a gift of a pennyworth of food to the people of the Motherland. All foodstuffs supplied have been sold at the highest price. Any help which the people of Britain have received from Australia has been, made available through the generosity of the people of Australia, who have generously despatched hundreds of thousands of parcels to ‘their kith and kin. A fortnight ago I asked the Prime Minister whether, as a Christmas gift, the Government would make a substantial quantity of food available to Great

Britain, as that would be am appropriate family gesture. The Prime Minister replied -

Consideration .has been given to the matter, but as such a gesture would not in any way increase ‘the food supplies being forwarded to Great Britain, or add to the supplies available, it was decided not to adopt the honorable member’s suggestion. 3.1 we adopted the policy of the Governmnent we should say to our children at Christmas time that as the intrinsic value of the gifts we could offer to them is low, we shall not give them any presents at all. The Prime Minister has supplied a miserable answer which is of no assistance whatever.

Mr Scully:

– The honorable member is .a great man.


– The Minister at the table who, during the war years, was in control of the export of food, ‘should be ashamed of the attitude which he has adopted over the years.


– I ask the honorable member to obey an earlier direction from the Chair or resume his seat. He should refrain from encouraging interjections, and should deal with the. subject before the committee.


– I thought that interjections were disorderly. I have referred to the subject of taxation and have expressed regret that direct taxes have not been reduced and that indirect taxes, such as the sales tax, have not been sufficiently reduced. I have referred to the nebulous nature of the Government’s trade policy, but the people do not know how they stand with regard to Empire preference. Our foreign trade with the Dutch has been held up, and we have not taken an adequate share in the task of supplying food to the people of Great Britain. I should also like a statement from the Government as to its defence policy. No less than. £220,000,000 has been allocated for defence, and one would wonder where the money is to be expended. We have no army in Australia to-day ; there is not a battalion that could take the field in the event of war.. There is no squadron in th© Royal Australian Air Force which is operational, and yet this huge sum of money is being expended.

Mr Howse:

– We have .a navy.

Mi: WHITE. - There is mot rauch of it left. Four ‘cruisers which had been provided by previous governments were jost during the war, and five pre-war destroyers have gone. Vampire, Voyager and Waterken were lost, m action, and others have been scrapped. I should Like to know how it is proposed to spend the money which is being voted for defence. -.Science hae in effect made ‘the world so small that we ‘can no longer ‘escape o.ur obligations. Honorable member? opposite are always reluctant to .consider the introduction -of compulsory military “training, and I am not going to suggest i;t now, but there is no other way in which to prepare against the possibility of war. While it is too soon yet to suggest how ;a suita’ble training .scheme should be introduced, -a survey and census should be made. However, nothing: is being done. The Labour Government in Great Britain proposes to continue compulsory military training. Australia’s record in war is good, so fains its -fighting men are concerned, hut that does not -necessarily apply to its governments, and I suggest that if it is proper for Britain to maintain the nucleus of a trained force, Australia should also do its share. Mr. Dalton, the Chancellor of the Exchequer, speaking in a debate in the House of Commons when certain Labour members objected to compulsory training, said -

The Government asked ‘for continuance of conscription because the future .of international relations was obscure, .uncertain and :in some respects dangerous.

This was not an age for the laying down of arms or defending on the altar of credulity.

Britain must arm strongly and powerfully, for .she had the additional duty of contributing forces .to .the United Nations.

The Cabinet realised that the Labour opponents were either rigid pacificists or conscientious objectors.

Providence has been good to Australia in that it is geographically remote from other countries, and in that we are pant of a great Empire which possesses a powerful fleet, .and which, through the centuries, has always won the last battle. Nevertheless, we can no longer afford ito rest on our laurels. There are four service Ministers in the Cabinet, the Minister for the Army, -the Minister for the Navy, the Minister for Air, and the

Minister for Defence. The budget provides for the expenditure of £220,000,000 on defence, but is it likely that even one of the Service Ministers will rise in his place and tell us what is the Government’s defence plan, or what measures it is taking to provide for the training of military forces. The mere spending of money does not make for efficiency. That depends upon training, and upon the quality and calibre of the men. Untrained men, however gallant, cannot hope to win. We must ensure that the defence vote is wisely expended. Conditions in World War I. and World War FI. may be entirely different from those in World War III. Recently, in the United States of America the General Staff arranged a conference in an effort to discover what might be the dimensions of a future war, bearing in mind the possibility of atomic warfare. One of the new weapons is the ionosphere rocket, which recently set an American altitude record of 230,000 feet, or more than 40 miles. There has been developed in the United States of America a new troopcarrying aircraft, XC99, which can carry 400 men on a 10,000 miles non-stop trip. En addition, submarines have been developed from the new German type which can move undetected underseas and then emerge to hurl atomic projectors from short ranges. According to an article by .Joseph and Stewart Alsop, columnists, in the Saturday Evening Past, “ The only sure defence of this country is now the political defence”. That doe3 not mean just talking in Parliament. It means trying to make the United Nations work. At .any rate, we are trying to do that, if talking counts for anything. There is a danger, however, .that the United Nations anight prove as futile .as did the League of Nations, although -it must be admitted that the League did score some minor victories, as also has the United Nations. However, we must look carefully to the future while Russia, which is so often truculent, maintains its present attitude, and we should not forget the operations of Russian agents in Canada only a little while agoJapan is neutralized ‘by defeat, and for the next twenty years Australia will be safe from the possibility of Japanese attack. Russia cannot expand across the Pacific without a Pacific fleet. There ii always the possibility of trouble in Europe, and even at the present time there are serious border clashes going on in Greece between people of different nationalities and different ideologies. Guerilla bands from Macedonia are fighting the Greeks, and Greece is maintaining a precarious existence as a nation, faced as it is with the hostility of a powerful Slav bloc. Only the major powers can start a world war, but if such a war begins, there is the possibility that it will be conducted with powerful rockets and pilotless aircraft flying at a thousand miles an hour, and carrying atomic bombs. It should be remembered that only one atomic bomb was dropped on Hiroshima, but it devastated many square miles ‘of the city, and killed tens of thousands of people. I quote further from the article by Joseph and Stewart Alsop giving the findings and opinions of the United States General Staff -

Unless present trends ure reversed by political action, all major powers will stortly possess atomic armaments.

Rockets of immense range and speed, the perfection of which is now known to be possible, will be guided to their objectives by new electronic devices. Capable of carrying atomic war heads through the upper air to objectives halfway round the world, these long-range rockets will ultimately be the main offensive weapon of every national armament.

The new weapons, used en masse, have the terrible capabilities which imagination commonly attributes to them. In brief, expert opinion holds that a single fusillade of atomic bombs will be capable of killing a third or half of the people of a great na.tion, and demolishing an even higher percentage of its productive .capacity.

They go on to say that they believe that defensive measures -will be devised, as, for instance, rockets which will seek out other rockets; but if only a few of the attacking weapons reach their objective they will lay waste any country against which they are directed and do more damage than did the aircraft which got through the Empire and enemy defences at some stages of the recent war. The extract continues -

Population and industry will be dispersed in new urban .communities, planned .either on the ribbon or cellular principle. Long, narrow, ribbon cities, or cities composed .of widely spaced “ productive cells “ .connected by express highways, will both reduce the death rate under massive attack to a mere 20 per cent, of the people and conserve a sufficient industrial potential to permit some sort of limping output of war supplies.

Those are terrible possibilities, and we must take cognizance of them. In effect the world has been reduced in size because of the scientific achievements of recent years, and the result is that Australia is now as vulnerable as other countries wore a few years ago. What are we doing in the light of these facts? What is the state of our Army and Air Force? Our effective Army and Air Force is now in Japan, as there is no squadron in Australia which can be said to be operationally effective. The Royal Australian Air Force, which performed such wonderful feats during the war and earned praise in all countries, is disintegrating. Recently, I asked the Minister for Air (Mr. Drakeford) a question relating to the present strength of the Air Force. In reply, I obtained some of the information I sought, but other facts were withheld. The strength of the Royal Australian Air Force is supposed to be 15,000 men, actually it is only about 11,000, including the interim force. As the interim air force enlists men for only two years’ service, many of the best of our airmen, who earned high distinction in the war, were refused entry because they were too senior in rank, whilst others regarded the tenure of two years as insufficient lo induce them to enlist. The Government has not done anything about a citizens’ air force, such as existed before the war, and which formed a splendid nucleus of the Air Force, which ultimately included 187.000 men. I do not suggest that Australia should maintain an air force of that magnitude, but it should have a sufficient force of carefully selected men to ensure its efficiency; and it should be properly organized. In this respect Australia would do well to follow the example of Britain. I draw the attention of the committee to some views expressed by Peter Isaacson, an outstanding Royal Australian Air Force bomber pilot in the war -

Experienced operational commanders who won high rank in battle are resigning their commissions because of Government apathy in the future of the Royal Australian Air Force.

Those who are staying do so knowing that when their term of service is done they are likely to be thrown on the scrap heap in the prime of life, as were a dozen or more senior officers of the Royal Australian Air Force recently. The reason given for the disintegration of the Royal Australian Air Force is that th« full requirements for Empire defence are not yet known; but this reason does not hold water when one considers what the Royal Air Fore is doing.

The British Air Ministry recently announced that twenty auxiliary squadrons had been formed as part of Britain’s front line post-war air force, but nothing of a similar nature has been done in Australia. I know that at some Air Force stations in this country there are hundreds of aircraft and other equipment which is not being properly looked after because of lack of personnel to do so.

Mr Blain:

– Does the honorable member refer to Laverton ?


– There are machines hi Laverton, but some of them may hobsolescent. I had in mind other place.-, but I prefer not to mention them specifically. We are too apathetic in these matters. We talk about, the industrial issues which confront us but take little heed of these pressing matters. When I returned to Australia in 1943, and on many occasions since then, T. have urged the Government to decide what its postwar air force establishment shall be, so that men who wish to continue in the forces might be given the opportunity either to do so or ask for their discharge and the most efficient be chosen. If the Government were to say that it intended to maintain certain squadrons, and would provide pensions for men on their retirement, young men would know whether or not to enter the service. Suggestions along those lines have been made by me time after time but so far nothing has been done. The experience and enthusiasm of our young men should be available to their country instead of being lost. I regret that the Minister for Air is. not in the chamber at the moment, but I hope that he will heed my remarks, and also that other honorable members will support what I have said. The responsibilities resting on the Air Force are greater to-day than ever before because Australia is now in the front line.

I am convinced that big savings of government expenditure could be made, and that in consequence taxes could be reduced. One direction in which an immediate saving of £80,000,000, and an ultimate saving of another £200,000,000, could be effected would be by not proceeding with the standardization of railway gauges. The Government would do well to seek the advice of experts in various fields of endeavour. I believe that, despite the many difficulties confronting us, Australia, which has. been so blessed by Providence, will prosper, especially if action be taken to attract to these shores large numbers of people of British stock. What is needed is a government which understands the country’s needs and possibilities, and adopts a sound policy. Because of the Government’s inadequate proposals in respect of taxation, its hopeless trade policy, and its entire lack of a sound defence policy I strongly support the amendment of the Leader of the Opposition.


– The honorable member’s time has expired.

Wide Bay

– The budget is most disappointing to the people of this country. It provides practically no relief to citizens who willingly suffered great hardships during the war in the belief that when the war was over relief would be forthcoming. During the recent election campaign the Leader of the Australian Country party (Mr. Fadden)showed clearly that a reduction of taxes was possible, and the Government in the light of his revelations has provided some measure of relief. It has decided that customs and excise receipts can be reduced by about £4,000,000 and that sales tax concessions shall be made, but it is not correct to say that the budget provides relief amounting to £61,000,000. Before the budget was introduced and since the war ended, concessions amounting to £37,000,000 per annum were made, so that the budget can, at most, claim to offer a reduction of indirect taxation amounting to £24,000,000. No real lightening of the burden is being offered, however, because this year the Government will obtain from the people more revenue that ever before. In general taxation it expects to receive about £405,000,000: compared with approximately £391,000,000 in 1945-46. During this financial year a further £11,000,000 is to be extracted from the people of this country by way of income tax. No relief has been provided in this budget by way of income tax reduction. The Government’s generosity is restricted to niggardly reductions of indirect taxes. In customs revenue an additional £11,000,000 will also be extracted from the people during this financial year. The Government has announced some slight amelioration of the severity of the sales tax, the total reduction in this field being £20,000,000. I point out, however, that the returns from sales tax this year are expected to be so great that this reduction will result in a diminution of the yield by only £2,600,000 as compared with last year. A similar position exists with respect to other forms of taxation. The pay-roll tax is to yield an additional £1,500,000 this year and a similar additional impost is being levied by way of land tax. The people who develop this country and produce the primary products upon which i ts prosperity depends should not be taxed upon the instrument which they use for productive purposes, namely, the land, any more than a primary producer or a carpenter should have to pay tax upon his tools of trade. By way of social services contribution an additional £4,750,000 is to be provided. Further, from primary production - self-balancing items - the Treasurer proposes to secure an additional £20,000,000 this year. Thus, although the Government intends to afford relief in. certain directions, it proposes to collect by way of additional taxes from the suffering taxpayers of Australia who are groaning under the weight of taxes, particularly of the income tax which bears more heavily on our people than upon those of any other country in the world, an amount almost double the amount to be remitted. We know that our commitments in respect of the war were not greater proportionately than those of the people of Great Britain or of any other country engaged in the war, yet we continue to remain the highest taxed country in the world. It is time the Government realized its obligation immediately to reduce direct taxes to the greatest possible degree. The Treasurer should inform us why income tax levied upon persons in the lowest income group cannot be reduced. Immediate relief is absolutely essential in order to bring to fruition the post-war developments about which we heard so much from members of the Government during the war. The Government has frequently announced that in framing its post-war policy its object was to increase the population of this country, to seek markets overseas for our products, to increase the volume of production and to expand the national wealth which is so essential to meet the great interest burden on the war debt. How is this policy being pursued ? By maintaining the pay-roll tax and the existing high rates of income tax imposed on the workers of this . country, not only those engaged in industry, but also our primary producers who work far harder, the Government is deliberately hindering the development of Australia. In the interests of primary producers, who find the greatest difficulty in keeping their heads above water, and of workers generally, the Government should make a determined effort to bring about substantial reductions of direct taxes. It should come to the assistance of those exservicemen and others who have sought to establish themselves in rural industries. It has been lax in. that regard, as have also the State governments, particularly the government of the State which I represent in this chamber. The silence of the Prime Minister in respect of income tax relief is beyond understanding. The right honorable gentleman has given no satisfactory explanation as to why he has chosen merely to make small concessions in respect of the sales tax on commodities which are scarcely worth mentioning. Of what value is the lifting of the sales tax on paper straws, on meat pies and vinegar? It is time that relief was afforded to mothers by the lifting, of sales tax on baby carriages, but many will not fill the baby carriages whilst tax rates remain .at their present level. The people condemn the Government for its failure to take this opportunity to give expression to their wish that the wheels of industry be made to turn again, so that goods and commodities in short supply may be provided. Every honorable member opposite knows what is in the minds and on the lips- of the people to-day. They know that the people are saying, “ “What is the use of producing more when we merely hand over the rewards of increased production to Chifley ? “. To-day there is no incentive to develop industrial enterprises and the recent abolition of double taxation in respect of overseas companies desiring to establish branches of their undertakings in- Australia will have little result whilst the present state of affairs continues. I trust that during the remainder of the financial year the Government will find its revenues so buoyant that it will be forced to- bring about progressive reductions of taxes without delay.

During the course of his speech on the budget the honorable member for Hunter (Mr. James) referred to the desirability of accepting reparation payments from Germany in the form of plants for the extraction of oil from coal. The honorable gentleman has referred to this matter on several occasions, either through the press or by direct representation to- the Prime Minister, claiming that if reparations in such a form are good enough for Russia they should be good enough for this country. He suggests that we should acquire these plants and bring German experts here to reconstruct and operate them. But what of the record of the coal-miners of Newcastle upon whom we shall be largely dependent for the production of the coal to feed these plants? Would the Australian people be wise to place their future petrol requirements in the hands of the coal-miners of New South Wales, having regard, to the industrial unrest that has hindered the coal industry in this country throughout the years? Already the coal-miners have a stranglehold on the throat of Australian industry. In the press to-day will he found reports that many mines are again idle. If a plant for the production of oil from coal were established at a field like Blair Athol could we be assured that production of the requisite raw material would not be interrupted ? Having regard to the excellent record of the coal-miners in Queensland, it might be practicable to establish, plants in that State, bat the record of the New South Wales coalminers is so bad that the people would indeed be foolish to place in their hands the production of oil from coal in this country. No doubt if such plants were established a higher import duty would be placed on imported petrol in order to protect the local product. The honorable member will probably say, as he has urged on previous occasions, that the Government should nationalize the coal mines. In New Zealand, twenty mines, which provide 40 per cent, of the coal produced in that dominion,, have been nationalized, and, relatively, they have a fine record. For the year ended the 31st March last the operations of those twenty mines resulted in a profit of £1,409. That is a fair effort; but let us not overlook the fact that in order to recover that small sum for the Treasury, the. people of New Zealand contributed, in respect of those mines, from Government revenues subsidies amounting to £480,000. Surely, no one would propose that we should adopt a similar system in this country. Yet, honorable members opposite advocate it as an improvement on the present system, and, as I have said, the. honorable member for Hunter goes even so far as to urge the Government to take out what is due to Australia as reparations from Germany in highly expensive plant for the extraction of oil from coal, the operations of which presumably, will depend upon coal mines which are to be nationalized. That would be a retrograde step.

The disappointments, of the budget are toe numerous to deal with in this debate. I propose to devote particular attention to the justice of the claim of public servants and others in receipt of superannuation pensions, that such pensions should be exempt from income tax. This class of taxpayer includes not only public servants, postal’ employees, including school teachers and members of the police forces, but also many people who are enjoying superannuation ‘benefits under schemes instituted by private enterprise. First, I make the point that, permanent public servants are compelled by law to contribute to a superannuation fund. Provided they are not over-worked, and reach the retiring age, thus qualifying to draw a pension, their pension is subject to income tax. That imposition is most unfair. An employee of the Postal Department informs me that he contributes to the superannuation fund for six units, which will provide him with a pension of £3 a week, or £6 a fortnight, when he reaches the retiring age-. But, under the; means test, receipt of that amount will deprive him and his wife of the old-age pension. If he> were not forced to make contributions to the superannuation fund from his salary, and, theref ore, did not qualify to receive a pension at tha.t rate, he and his wife- would be eligible to receive combined old-age pensions amounting to £6 10s. a fortnight He has been contributing to the superannuation fund since he was fourteen years of age and is- now paying 12s. 10d. a fortnight. On the other hand, a! person who makes no contribution to a superannuation, found is eligible to- claim for himself and his wife a combined old-age pension of £6 10s. a fortnight. Under the means test, this officer is penalized because he has- been thrifty. I believe that honorable members will agree that pension payable under a superannuation scheme should not be subject to the means test. This postal official decided to take out an additional two units, that is, to increase his units to eight. When he made application to that effect he was advised that he would have to pay the cost of travelling 60 miles to a doctor for examination, and that he would not be paid in respect of any time he was off duty visiting the doctor. He was also informed that the additional two units- at his age would involve an additional contribution of 12s. Id. a fortnight. He did not proceed with that proposition. Instead, he applied to a life assurance company for a policy of £200 on which he pays a premium of 9s. 4d.. a fortnight until he reaches the age of 65 years when he, or in the event of his death his wife, will receive the sum of £200 plus a bonus of £50. He was informed that should he die a week after he took out that policy his wife would receive the sum of £200. Under the superannuation scheme, after paying 12s. lOd. a. fortnight for 30 years, his wife would, in the event of his death, receive a small payment. She would not be entitled to receive the pension of £6 a fortnight payable to him should he attain the age of 65 years” whereas in return for a life assurance premium of 9s. 4d. a fortnight for a period of sixteen years he, or his wife, would receive £250 at the end of that period or in the event of his prior death his wife would receive £200 plus bonuses accrued up to that time. The Commonwealth Public Service Superannuation Fund to-day holds approximately £12,000,000. The Postmaster-General (Senator Cameron) has admitted that postal officers are overworked. The Government has put its claws upon the fund which it is using for various purposes. If it continues to overwork these officers, thus reducing the number likely to reach the age of 65 years, it will find the scheme very profitable. I believe that there is general agreement that pensions payable under superannuation schemes should be exempt from income tax. The Government should also exempt superannuation pensions from the application of the means test. I sincerely hope that a fair actuarial adjustment will be made between superannuation pensions and benefits accruing under life assurance policies, and that the Government will review the whole subject in order to do justice to persons who are compelled to make these contributions throughout their period of employment. I press this proposal as a member of the Australian Country party whose policy is designed to safeguard the interests of every section of the community.

Mr Burke:

– Members of the Australian Country party stigmatize public servants as bureaucrats.


– We have never done so. When we describe as bureaucrats certain bosses appointed to public positions, we do not refer to public servants. The bureaucrats are not public servants. They are public autocrats, and the general community are their servants. When this Government appointed them, they at first occupied small offices, but they quickly built around themselves big departments. The public servants work for them, and the Government is unable to escape from their toils. Indeed, the bureaucrats have the Government by the throat.

Mr Burke:

– I welcome a revolution either in thought or in words among honorable members opposite.


– The honorable member for Perth (Mr. Burke) and some of his colleagues, will lead Australia to revolution if they do not think for themselves, and if they continue to express platitudes. We shall head for disaster unless we break t]* power of the groups which are holding this country and the Government to ransom.

Very few honorable members have referred in this debate to the subjects of water conservation and irrigation, and relief for primary producers in droughtstricken areas. I find it strange that Commonwealth grants for drought relief are restricted to New South Wales, Victoria and South Australia. Queensland is now in the grip* of the most serious drought in its history, and the desperate condition of the people who live in the parched areas deserves the attention of the Commonwealth and State governments. The three States which I mentioned have received drought relief from the Commonwealth for several years. For example, in 1944-45, South Australia received £323,000, New South Wales £750,000 and Victoria £500,000. Last year, South Australia was granted £100,000, New South Wales a credit of £1,146 and Victoria. £70,000. For the current financial year, the Commonwealth budget provides for drought relief payments of £75,000 to South Australia, £81,000 to New South Wales and £185,000 to Victoria, but for Queensland no provision is to be made. Although the sugar cane, fruit, dairying and pastoral industries of Queensland are suffering severely from the drought, the primary producers of that State will not receive any Commonwealth assistance. In the period 1944-47, South Australia will have received £509,000, New South Wales £806,000, Victoria £660,000, and Western Australia, which, like Queensland, is a Cinderella State, £40,000, but Queensland was completely excluded. Not one penny was paid to Queensland during the last two years, and not one penny will be granted to it in this year of unprecedented drought. The Minister for Commerce and Agriculture (Mr. Pollard) has explained that drought relief is a matter for each State. If that be true, why have these Commonwealth grants been made from year to year to New South “Wales, Victoria and South Australia? It does not make sense. In the period 1944-47, the Commonwealth will have paid to South Australia £4,200,000 by way of special grants and £509,000 for drought relief. Queensland will not have received any financial assistance. What is the reason? I do not know. I urge the Treasurer to examine the desperate plight of primary producers in Queensland. They are suffering severe privations. Even the women and children are helping to dig for water, and find feed for stock. The Treasurer should revise his policy of paying thousands of pounds a year to three States for drought relief, whilst not paying one penny to Queensland.

I regret that neither the GovernorGeneral’s Speech nor the budget contained any promise of a vigorous policy of water conservation and irrigation. For some time, I have urged the Commonwealth Government to appoint an expert authority to investigate this subject in the same spirit and with the same determination that the Commonwealth sent its experts through the States to inquire into the standardization of railway gauges, and to influence people in favour of the scheme. Obviously, the Commonwealth is determined to force upon the people its proposals for the standardization of railway gauges. Recently, the Premier of New South Wales announced a long-range plan for the expenditure of £30,000,000 upon water conservation and irrigation projects to supplement the already creditable work carried out by the New South Wales Government. Queensland, this year, has provided only £660,000 for a similar purpose. In the next fifteen years, New South Wales expects to expend £15,000,000 on water conservation. In Victoria, water for irrigation purposes is known as “ liquid gold “. I believe that the Commonwealth should assist New South Wales to provide the amount of £15,000,000 in order to safeguard the primary producers of that State against the ravages of drought. Water conservation and irrigation works are required, not fifteen years hence, but immediately. I note that £54,000,000 has been earmarked for expenditure on the standardization of railway gauges in Victoria, New South Wales and one other State. That money, if invested in water conservation projects, would enable a valuable national asset to be created for Australia. Nearly every leading country in the world owes its greatness to water. Yet Australia hesitates! When we ask for a vigorous programme of water conservation the Government informs us that lack of man-power makes our demands impossible. If that be true, why did the Minister for Transport (Mr. Ward) force through the last Parliament, in the early hours of the morning, a bill which provided for the standardization of railway gauges. This project will provide employment for “ navvies “. They should be trained as engineers, ironworkers, cement workers and specialists in the construction of water conservation and hydro-electric projects. Queensland urgently requires water conservation. If the State had extensive irrigation schemes, it could, with its long hours of sunlight and favorable climatic conditions, support more than the total population of Australia at the present time. Only water is required. The reason for the rapid population of the United States of America was the availability of abundant water. If we wish to attract people to this country, let us undertake national water conservation schemes; then they will come. To-day people are leaving Latvia and other Baltic countries in search of freedom in Great Britain. They would find freedom in this country. There are thousands of Polish citizens too who fought for the democratic cause against Germany. They are unwilling to return to their own land and, I am sure, would be prepared to come to Australia. Already they have amply demonstrated their belief in democracy. Let us bring some of them out here to assist us with our water conservation schemes. There will be enough work to provide employment for thirty years. I hope particularly that something will be done in the great Isis district in my electorate and in the Bundaberg area in which the honorable member for Capricornia (Mr. Davidson) has a great interest. Recently a deputation from the Burnett River district urged the Queensland Government to inaugurate an inexpensive water conservation and irrigation scheme on the Burnett River to assist cane-growers who to-day are suffering depredations of drought. Last year, and this year too, the sugar-cane crops died in the ground for want of water;; yet every time there is a flood vast quantities of water rush to the sea. TheCommonwealth should send its own experts to theseareas to see conditions for themselves, andevery encouragement should be given to the States by the provisionof money and labour to finance their waterprojects. In theoverpopulated countries ofthe world, people are looking for new lands. Surely, thiscountry is one that can offer outstanding attractions to migrants. Only a small irrigation scheme would be necessary ‘to supply the Isis district. Even nowsome fertile areas produce record quantities of vegetables and fruit. In one year from the Gympie district alone 379,203 casesof fruit and vegetables were despatched to other parts of the Commonwealth. A small water conservation scheme could treble production. The same may besaid of manyother parts of Queensland which I consider to be the queen State of the Commonwealth ; but development will come about only through the provision of adequate water supplies. The (potentialities are there. All that is required is the will to act. Apparently, there is no shortage of money, because £220,000,000 is to be expended on the useless standardization of railway gauges. Why not divert that money to water conservation? The profits from it would enable the Government to undertake any other developmental schemes it had in mind.

Mr Lemmon:

– In that case thehonorable member should not support the amendment toreducethe vote by £1.


– The amendment has been moved to indicate theOpposition’s belief that substantial reductionsof incometax should be made. Ibad hopedthat the budget wouldhave revealeda substantial reduction of ex penditure on the host of bureaucrats about whom we have heard so much lately; that it would have shown an endeavour on the Government’s part to tear down the many useless edifices that were erected during the war. Had that been done, the money saved could have been rased in the developmental schemes of which I have spoken. I do not believe that any avenue of expenditure offers so many advantages or such a sound return, us water conservation. Hydro-electric schemes undertaken in conjunctionwith water conservation, would enableevery home in the ‘Outback areas to be equipped with electric appliances. If we want our outback residents to remain on the farms, producing the goods that are the basis of this country’s wealth, they must be given more amenities ofcivilization. Exservicemenare returning to rural areas with a knowledge of modern living conditions in thecities, gained during their preparation forwar. Thereshould be a slogan inthis country “ a phone for every home “. The installation of telephones in remote areas should not be contingent upon the revenue that can be obtained from them. Amenities provided in country districts will produee revenue indirectly, because they willmake living’ conditions in those districts more attractive. To-day, manythousands of mothers and children , are living in the back-blocks of this country without contact with a medical service of any kind. Wehave flying doctors, and air transport for sick people, but what is the use of these services in an emergency if many country people have , no contact with them. When agroupofperhaps three or four settlers asks for the provision of a telephone line, they are told that it will costthem £200 or . £300.Inadditionacharge is made for the service the whole time it is in operation.

Mr Francis:

– They havemortgaged their farms to get telephones.


-They have tomortgage their livesortheir life insurance policies. This is a matter for thePostmaster-General whohas saidso much recently about his employees being overworked. In addition to being overworkedthey are being underpaidundertheGovernment’s policyof buildingupasurplus of £12,000,000 in the Commonwealth Superannuation fund - a fund into which theGovernment isnowdippingitshands. From the Government’s pointof view the greatest profitismade made if aContributor dies before reaching the retiring age of65.

Thedairying industry has shrank more than anyother industry in this country.In Queensland alone, more than 380,000 dairycows have goneout of production.It ask honorable members itf itis fairthattheGovernment should buy butter at ls.7½d. per1b. fromdairy- farmers andsell it to Great Britain at ls.11½. per lb., puttingthe difference intorevenue. Onebears of traders being prosecuted for having sold 1 lb. of beef at ½d. more than the fixed price; yet ‘the Government has got away with£4,600,000 from ithe dairy-farmers.

The poultry industry too is in a sorry state in Queensland. If the Government does not do something to assist poultryfarmers very soon there will be a completedebacle in this industry, which is of considerable value ‘to the economyof this country, particularly in relationto ourexport trade. We cannot say much about Australia’s overseas trade to-day, because we cannot be sure that there will be any trade at all. We do not know whenthe waterfront workers will go to work, or when thecoal-miners willproduce sufficient coal to supply the ships.

Soldier settlement schemes have not bad the assistance from this Government that they should have had. I amnot now referringto New South Wales, but to Queensland. There is too much delay in. referring eachselection to Canberra for approval. One ‘Condition upon which blocksof land are made available to ex-servicemen in Queensland is that theymusthave a certain amount of money.. For instance, it may be necessary for a prospective settler to nave £1,000 to be ‘eligible to participate in a ballot for grazing lands in ‘Queensland. Although the StateGovernment’s re- establishment scheme provides for loans of up to £5,000 for stocking and the purchase of equipment, the settler finds that he is obliged to go to a priva te banking institutionfor funds tobuy the land itself. However,when he goes to the Agricultural Bank he is toldthat he cannot get the money unless he has the land as a security. The other branchof the Startle department will not make blue loan,althoughthe man is qualified for it, because he does not then holdthe asset. The rules are not elastic enough to allow the loan to be made, and so young men are forced away from the land.. Very fewblocks have been submitted to a ballot yet. The Queensland Government claims that, during the war, it set aside 5,000,000 acres of land thatreverted to the Grown, yet it is holding up the allocation of blocks to eager young servicemen because assistance from the Com- monwealth is not forthcoming.

BATMAN, VICTORIA · ALP; FLP from 1931; ALP from 1936

.This budgetis essentiallya war budget, although the war Ira’s ended. Whether it wasa war to end waror, as has been confidently predicted, a war to make the world safe for democracy, I cannot ‘say. However, I can say with certaintythat there is much trouble in the world to-day. Although wef ought the warsuccessfully, according to military standards at all events, we did not end the troubles o’f th e world by that means. Therefore, I say that this budget, the nature of which is a direct consequence of the war, is a war budget. I remember - although Iam sure nobody else does - that I made a speech in this chamber at the beginning of the war. I said then that although the Labour partyandI,asamember of it, were busy prosecuting thewar,I would devote more attention to theprosecution of the peace. I suppose that peace amongst nations isstill desirable, though I doubt very much whether we have achieved the aureole of peaceto-day. I also tookoccasion in that speech to say that any member of this Parliament who failed to say the thing that he thought ought to be said was guilty ‘of greater cowardice than the soldierwho deserted in the face ofthe enemy,whether from emotional strain or from anyother cause. Having expressed that viewthen, I endorse it at a much later date. War, the budget in respect of which we are considering, settles nothing. In sayang that, I quote a remark made byan eminent Englishman. Furthermore, one may not discuss war, or a declaration of war, if one’s views have the effect of casting doubt upon the propriety or wisdom of war as a final arbitrament. Consequently, it is the practice, immediately after -the commencement of war, to place upon the statute-book, with the force of law at any rate, a regulation which prevents war from being discussed, at all events from the point of view that it is in any sense undesirable. Passion may not be curbed in warlime. Consequently, one may not say that war is undesirable, or that it settles nothing. When the last war, the budget in respect of which we are now considering, was first declared by Britain on Germany, the then Prime Minister of Australia, who was not the present Prime Minister, broadcast these words -

Britain lias declared war on Germany, and ns a result Australia also is at war.

Mr Blain:

– Midnight, Srd September, 1939.


– I accept the honorable member’s chronology, though I do not adopt his views. That matter was never discussed in this Parliament.

Mr Blain:

– Why discuss the obvious, unless there is a reason for discussing it with vigour?


– That matter was never discussed in this Parliament, although I believe that, as the Statute of Westminster had been passed, if not adopted, it might have been very properly discussed as a constitutional question. My honorable friend from the Northern Territory has asked, “ Why discuss the obvious?”. The reason why we should discuss the obvious is that it was a vital - as some thought - or at least a very important matter for consideration from the stand-point of its being or not being constitutional . It is one of the few things we can discuss in war-time. Mr. Bonar Law, an eminent statesman of Great Britain, during the progress of World War I. held and declared the opinion that if Australia desired - I believe that it certainly does not desire - to “cut the painter “ or sever itself from its association with Great Britain, there was nothing to prevent it from doing so. Australia could act as it willed. I believe that that view was generally accepted as being correct. Meantime, the Statute of Westminster had been discussed and passed. I am not prepared to say now how far that affected the position - I think not at all. I believethat Mr. Bonar Law was PrimeMinister of Britain at that time. Wehad his assurance that it did not matter whether the Statute of Westminster had been passed or not, in his opinion Australia could act as it willed. That was my view, too, and I do not think there is the slightest doubt that it was the correct view. Therefore, I consider thai the matter ought to have been discussed in this Parliament, at least on its constitutional side. I acquit the present Opposition, under whose direction we were then performing our duties, the right honorable member for Kooyong (Mr. Menzies) being Prime Minister, of blame in that regard, because undoubtedly the matter was not discussed when the Labour party came into office about five years ago. That party, it will be remembered, had at that time a doubtful majority, derived from two parties, one member from each party.

The Australian Government made quite a shower of declarations of war. I do not know how many were made on a specific day. I made a, speech in this chamber directed to showing that we had gone beyond the rules of civilized warfare, and I think that undoubtedly we have done so. The use of the atomic bomb was a definite transgression of those rules.

Mr Blain:

– Does the honorable member realize that not one Australian would have come back from Malaya if an atomic bomb had not been dropped on Japan.


– That does not affect the question whether it was or was not a transgression of the rules of socalled civilized warfare. In one of my earlier speeches on the progress of the war, I discussed the matter in more detail and with more thoroughness, and I came to the conclusion, as the result of my study and investigation, that unquestionably we had in many particulars transgressed those rules. What effect that would have on Army personnel I do not now declare, but that it was such a transgression is, I think, beyond all doubt.

In the early stages of the history of the Australian Labour party, it was unquestionably an internationalist party, but now, according to the gibe thrown at us by the Opposition, it is an isolationist party. At the commencement of World War II., I heard remarks by my leaders quoted as showing that the Australian Labour party had become an isolationist party, and was no longer an internationalist party. The present position is, as I said earlier in my speech, that we must not cast doubt on the wisdom of warfare. The regulations promulgated during the recent war prohibiting unfavorable comment on the manner in which it was conducted were justified on the poor ground of military necessity. When, in support of the 1914-18 war, my late respected leader, Mr. Fisher, promised the last man and the last shilling, he was indicating competition in the technique of war. I cannot object to that, because majorities rule, even in my own party. In the war just concluded, there has unquestionably been rivalry between the Opposition and the Government. The latter succeeded at the general elections in 1943 and 1946 because it was considered by the electors to have been more successful in prosecuting the war than the previous Administration had been. That applies to the Government which immediately preceded this one and to the Fisher Government. Successful competition was the order.

One of the consequences of war is communism. The Liberal, party puts that on to us on the ground that communism is democratic or cosmopolitan. It pretends to be, but it certainly is not. Communism is suspected of being irreligious. I think it is, and, therefore, I am utterly and completely opposed to it. Although there is not a great deal of religion in the world, nevertheless, one cannot succeed politically by making a frontal attack on religion. It is, among other things, bad politics. It is much worse than that, of course, but it is also bad politics. Such is the deep-rooted sympathy with the idea of Christianity that no political party can succeed in Australia by a frontal attack, or even a snide and sinister attack, on Christianity. I make that proposition, not as a theologian, but as a politician, and as one who has had considerable experience in politics. Communists do not always vote Labour. Eather do they support the Liberals.’ I say so because of my own experience. The Communist vote - and it might have been a very useful one, but in my case was not necessary - was cast indiscriminately between Liberals and Labour men.

Mr White:

– That was not the experience in Balaclava.


– Well, it was my experience, and I was very careful to observe the disposition of the Communist vote in my electorate. Although the gentleman who had assumed my name in order to get to the top of the ballot-paper naturally advocated the giving of second preferences to me, the Communist, on the other hand, for his own purposes, did not give the same advice or follow the same practice. I noted with approval that both of them forfeited their deposits. It is not necessary to quote from the book against communism written by the honorable member for Reid (Mr. Lang), because Communists are either irreligious or suspected of being irreligious. The result is the same, because a person cannot be suspected of being irreligious and at the same time be an active propagandist for Christianity. I hold the opinion that Christianity is the greatest fact in history and the most elevating force in the world. The Liberal party has tried to associate the Labour party with communism, and it is because I regard communism as a great danger, and .war as an even greater danger, that I have selected these two subjects for my short address on the budget, which reflects the period of the war.

Sitting suspended from 5.50 to 8 “p.m.

North Sydney

– I support the amendment moved by the Leader of the Opposition (Mr. Menzies). This budget was described by the honorable member for Parkes (Mr. Haylen) as a masterly budget. No doubt that description will serve well enough. One thing is certain, nothing like it has been seen before. We can very well understand why the Treasurer (Mr. Chifley) did not introduce it before the elections. I can hardly suppose that the people would have crowned it with garlands or welcomed it with open arms. It offers them nothing of substance; it proposes to reduce indirect taxation by a fractional amount and, as the Leader of the Opposition has said, insofar as it does relieve the community of the burden of taxation, it is designed to promote the well-being, of the wealthier section of the community. The Leader of the Opposition in. his policy speech set out what we conceived to be a sound, progressive policy attuned to the circumstances in which we find ourselves. The war has involved us in colossal expenditure; it has cost us £2,111,000,000 up to the date the last calculation was made; and of course the cost is still piling up day by d’ay. The community has to bear this burden. It has borrowed large sums of in oney; it has incurred great liabilities not only in regard to matters which arise naturally out of the war, but also in other directions. The Government is pouring: out money like water; it is scattering’ largesse with royal disregard of the consequences, and this year we are called upon to expend on defence no loss than £221,000,000. I remember very well that when the shadow of the coming conflict had darkened the heavens honorable members on the Government benches, who were then in Opposition, opposed a grant of £5,000,000 for defence, and even when the Munich pact had been consummated’ they opposed a grant of Jess than £10,000,000 to build up our defences. Now they ask us in the name of democracy and of progress to agree to- a grant of £221,000,000 for defence. In those all too infrequent references to defence that he has made, the Prime Minister has said that the next war will be fought by scientists. I listened with great interest to what the honorable member for Balaclava (Mr. White) told us to-day of the terrifying future that opens up before us - of aeroplanes flying at 1,000 miles an hour, of rocket bombs that wing their way to their targets without a pilot, of the awful effects of the atomic bomb-. And he told us, too, of the steps taken to meet this menace by the other nations of the world, particularly the United States of America and Great Britain and. of course, by Russia, which looks with a distrustful eye on the efforts of the scientists to preserve peace or to wage war. All the- great powers believe that effective land, sea and air defence forces are still necessary. In any case if, as a community, we- are to deal with the atomic bomb - if any community can deal with it. - there certainly should .be some kind of training or discipline in the community ; but we find that compulsory military training, which was at one time one of the basic planks of the Labour party’s platform - and I take some credit for being responsible for its inclusion in that platform - is brushed aside on the ground that the scientists will wage the next war and accordingly there is no need for such training. Apparently we are to be the mere targets for the bomb, and what does a target want with training? All it has to do is to stop still and wait for the bomb. What this country and the world wants is peace. Peace is vital not only to the- progress of this country but also to its very existence: How is peace to be preserved? The Attorney-General (Dr. Evatt) has gone to some trouble- to tell us that the rule of law is now to prevail in the international sphere. I remember very well hearing that promise being .made and received with joyous shouts by all the world in 1918. The- League of Nations established the rule of law. War was outlawed. The great enemy which had brought us to within an ace of destruction was humbled in the dust; and there was nothing then standing that menaced world peace if .the League of Nations, which had been formed to preserve the peace, exercised its powers. We know very well that it did not do that. It would have been quite easy to have prevented World War II. Under the Treaty of Versailles, which has been denounced by those who do not understand it or have never taken the trouble to acquaint themselves with its provisions, Germany had been rendered impotent. But the League of Nations failed because, although it spoke in the name of the peace-loving nations of the world, it had no force at its disposal to give effect to its decisions. We are told, of course, that the United Nations organization is quite different. The peace of the world which is vital to us, as it is to every other civilized nation, depends upon the rule of law, and the rule of law, upon which civilization itself rests, is in its turn dependent upon adequate forces being ,at the disposal of peace-loving- nations. When we are told that the- minds of men are disturbed at the possibility of another war, I. ask honorable members’ from what quarter can ‘such a war come? Germany and Japan are now “ down and out “. There can he bo danger to world peace from them. I speak not of tribal disturbances which may occur hee and there, but of world war; And the peace of the world cannot be seriously menaced except by one of these three great powers. On the other hand, it is to them we look for the preservation of peace. There can be no war so long as these three powers stand together; there .can be no serious threat of war ,so long as two of them stand, backed by the other peace-loving nations and members of the United Nations. Why do .nations go to war?’ Quarrels between nations; like, those between individuals, arise because one wants what another has. Nations want, first of all, security. They want access to the sea; they want ports. They want access .to raw materials. All these things are provided for in the Charter of the United Nations. They want markets for their goods, and further - and this is a matter which is vital to Australia - they want land available for their surplus peoples. The foundation of this Commonwealth rests upon what we call the White Australia policy. The last war proved conclusively to any sensible man, or woman, that standing by ourselves w.e were unable to defend this country. Of course, had the enemy landed, we should have done the best we could; but I point out that standing alone we cannot defend Australia against a major power. The White Australia policy, which has been in operation for many years, has been accepted by the world, not because we were able to give effect to a policy that slammed the doors of this country against the crowded nations of the East, but because there behind us was the British Empire. For no other reason has the White Ausralia policy prevailed for a generation and more, lt is vital to us that we shall maintain this policy. Therefore, I say we must consider what conditions the future is likely to create. We ane now standing on the threshold of a new world. We have been told this many times by those w.ho believe that, although in this new world there will be revolutionary changes, these will leave us exactly where we are - in undisturbed possession of all our .present rights and privileges. ‘Other people are to adjust themselves to the new conditions ; but not us. What is the position? The world to-day is occupied hy people who are where they are mainly as the result of war. War has shaped the distribution of territory in Europe, and over the world. The movement of people from worn-out pastures to better grazing over the hill, or across the border, has gone on from the beginning of man’s occupancy of the earth to the present day. I remind honorable members of what the position of this country is. We have a continent for a heritage. It is a great and splendid heritage. Unfortunately, in this country there are too many “knockers”, people who go about decrying it, declaring, for example, that we cannot maintain that population which, on the face of it, the country should be able to absorb. ‘I remind honorable members what this country is. After over 160 years of white settlement we have a population density, as the honorable member for Wimmera (Mr. Turnbull) .reminded us last night, of approximately 2.5 persons to the square mile, whilst that of the United Kingdom is 508.3 persons to the square mile, that of the Netherlands 679.5 persons to the square mile, and that of Belgium 696.7 persons to the square mile. In comparison, the population density of China, which is about 105 persons to the square mile, and that of Japan which is 397.4 persons to the square mile, are not very impressive. The population of the world has increased in a most disturbing way from our point of view. In 1.S50 it was 906,000,000; and in 1880 it was 1,170,000,000, whereas to-day it is 2,156,000,000. Thus, the population of the’ world has increased by over 1,000,000,000 in 66 years. The world around us is densely populated, whilst we have only 2.5 persons to the square mile. Now, we have set up a world, government - or, df that is too strong a term - a government, at any rate, whose duty will be to -deal out even-handed justice not only to us but also to those people who want elbow-room, an opportunity to live, and a place in the sun. If the pressure becomes strong enough, there will be -arc insistent demand that we shall open our gates. In that event, who will stand at our right hand, and keep the bridge with us? Certainly, it will not be the United Nations. I notice that the Attorney-General (Dr. Evatt) has been assiduous in his efforts to enlist the support of the United Nations for our position in the Pacific. If trouble occurs in the Pacific, who will stand by us? If this vital plank of our policy is questioned, who will support us? We want peace. Peace is vital. Peace rests upon the rule of law; and the rule of law, in turn, rests upon adequate force ar the disposal of peace-loving nations to enforce it. Whether the United Nations will make that force available to support our policy is a matter to be decided in the future. I contend that we can look in one direction, and in one direction only, for support, that will never, fail. That support will come, not from the United Nations, but from Great Britain.

Now, I have said that peace is vital to the world, and that peace rests upon the rule of law which must be enforced. I turn now to consider industrial peace, to which the same principle applies. Industrial peace can be preserved only by the rule of law. We have had an experience during the last year of an almost continuous state of unrest in the industries of this country. This does not occur because industry is without means of redress for its grievances. We have set up tribunals of various kinds which deal out justice on the merits of the case. But we see now on every side that the unions are resorting to direct action. To talk about industrial peace, after a great war is perhaps a counsel of perfection. We see all over the world these disturbances, and we should not be surprised at them. But I speak of industrial peace in normal times. There are forces at work now in our midst who are deliberately fomenting industrial disturbances and upheavals and who, owing to the failure of the Government to enforce the law of the country, are able to show substantial gains for their policy. I have had a wide experience of industrial affairs, and I note that the waterside unions, of which I was head for a generation, are now being led from one strike to another, and the journal which represents, or rather misrepresents them, boasts of this policy, “ This is what we get by direct action “. They denounce arbitration. They stand1 for direct action. But the rule of law isessential to the preservation of our democracy, The law is made by therepresentatives of the people, and all sections of society must obey it. But theGovernment makes no attempt to enforce the law.

Industrial peace is essential to a continuity of operations, without which wecannot increase production. The Leader of the Opposition suggested that a reduction of taxation would supply the incentive to increase production. Our circumstances demand that we produce in Australia substantially more than we have done in the past. There is a demand now for a 40-hour working week. About that I say nothing here. The 40-hour week is not relevant to the discussion. The point is, how much can be produced? If workers can produce in 40 hours more than they can in 44 hours, so much the better; but democracy cannot live without discipline, and this demands enforcement of the law. If we require striking evidence of that we should turn from, this country to review conditions in Russia. There, the law is enforced. There, there is continuity of operation. There, production is continuous. There, strikes are not permitted. The unions in Russia are merely the submissive agents of the Government. But in Australia, the head of a great union is able to speak as freely as if he were an independent authority. In Russia, he would speak with bated breath and whispering humbleness and if he did not watch his step, he would speak no more. In Australia, it has become a crime now to produce as much as possible. Not long ago, I was in Brisbane, and I heard that a member of the Boilermakers Union was expelled from the organization because he had put in too many rivets during an eight-hour shift. In Russia, the crown is given to that man or woman who produces most. The pace is set by the Stakonovites of industry. The class war, as carried on in Russia, gives to those who produce the most the best that the country has at its disposal. Medals adorn their breasts, and their names are emblazoned in letters of gold, so that their fellow workers may see and- do then reverence, whilst those who do not produce adequate quantities are turned adrift. We must overcome the problem of falling production. 3. remind honorable members that the most powerful union in Australia is the most law-abiding organization, and the conditions of its members are determined by piece-workers. We have in Australia, the fastest shearers in the world, and the “ ringer “ of the shed is considered to be the leading man. If we are to live in peace and prosperity, we must produce to the uttermost of our power. We must produce more, earn more, and get more. 1 am not one of those who would suggest that labour has uo cause for uneasiness or unrest. I believe that it is the turn of the “underdog “ - the man who through the ages has been oppressed, swept aside, and kept from the banquet table. I have shown by my life’s work that I believe in industrial organization; but unionists in this country are being led by “reds” and “ near reds “. They are following these “reds” and “near reds” as unsuspecting sheep whose throats are shortly to be cut follow the bell-wether into the abattoirs. What wc need is a realization that the rule of law is vital to this country and to civilization. A law is not worth anything without adequate force behind it, and that adequate force must be’ supplied in this country, iti the case of the unions by the unionists themselves, and in the case of a peace-loving nation by the Australian people. They must place their forces at the disposal of those who stand for peace.

I am disturbed that the Government should have turned its back upon compulsory military training. This is the Government, mark you, which for 25 years not only denounced conscription, but also denounced my policy of giving to the people of this country an opportunity to say whether or not they believed in conscription. Yet during the war, behind the backs of the people, the Government introduced conscription. Labour in England to-day is maintaining conscription. As to whether or not that is right, in the circumstances, I shall not offer an opinion now, but I remind honorable members that in almost every country of the world to-day, people are being disciplined. In this country they are not, and without discipline we cannot carry on. Leaders of unions such as the miner; federation and the Waterside Workers Union are able to score steadily because they can “deliver the goods”, without, the expenditure of very much money, and without serious risk, for they know that the Government will not enforce the law. It must enforce the law. I ask the Government to enforce the law, not for the benefit of employers, but for the benefit of the unionists, because if the law is not enforced, the trade union movement will become, as it is in Russia, a mere appanage and a tool of the government. In this country the unionist is a free man ; in Russia he is a poor, pallid, tongue-tied rat.

We are asked to approve the expenditure of £404,000,000 in the current financial year; and we may congratulate ourselves to some degree, because things might have been much worse. A year or two ago they were much worse. The Government is railing against high prices. It is urging the people to save their money. In support of its loans, it proclaims that people should put their money into government securities instead of competing for goods which are in short supply, thus forcing prices to new high levels. But when the Government gets the money it is poured out like water. Last night the honorable member for Barker (Mr. Archie Cameron) said that the Government, which denounced the expending of money because of the tendency to increase prices, was obtaining from Commonwealth Oil Refineries’ nearly £1,000,000 a year in taxation and profits. The Government is getting half of the “ boodle “. and putting it in its pocket ; yet it indulges in unctuous meanings about high prices. Presumably, the high profits that are being made by thi? quasi-governmental instrumentality are also being made by other oil companies. And the Government pats itself on the back for reducing the price of petrol by Id. per gallon. Let us have a little common sense. Let us look where we are going. We have lived so long immune from the disasters and disturbances that have beset other countries, that we have coram to Regard ourselves as being especially protected’ by Providence; but it is the British- Empire that has* protected vis. balding, as we are to-day, with a population of only 7,500^000 a great wide land) which without? doubt Couldabsorb ten or twenty times that number. We . speak of immigration ; what we want; most of aiM is. an increase of the birth-rate in. this country. At one time, we had a healthy birth-rate, but it has. been going clown and down. lit picked up a little during the war. Wars, tame a stimulating influence im many directions, bat we cannot have wans merely to stimulate the birth-rate. The population of this country is- ©n the verge of stagnation. The Government speaks, of its grandiose plans for immigration, but- what are we to do with the migrants when they come here? Unless we can find remunerative employment for them, they will be a burden on the community rather than an asset to us in shouldering our national responsibilities. We must spend millions, of pounds on irrigation. Abundant rain fulls, but it is not carried to the localities in which it is most needed. There are opportunities in this land for the settlement of millions of people. Migrants could, be brought here in a- steady stream if proper preparations were made for their reception. I read to-day that a number of refugees have come to this country; but what are they going to do? They are going to set up in business. But what kind of business? Our greatest need is for land settlement.

I am content to point out. to the committee that the Government has turned its back on the only policy that is likely to serve as an incentive to production; that it has not attempted to enforce discipline;, and that it has abrogated, its position as the Government of this country and handed its authority over to the Communist strike leaders.


.- One could not help being impressed by the repetition, during this debate, of the ageold! story of strikes and industrial unrest generally, and the different means by which the difficulty might be solved, without any definite or practical proposal being submitted by members of the Opposition. The debate alfords to us thi opportunity to answer once- again some of* those criticisms. and also, if I may say se, enables- me to comment on the fact that’ all’1 the propositions advocated by the right honorable member for Worth Sydney (Mr. Hughes) and other speakers, when put to the people on the 23th September last, resulted in the reelection of the present Government by an overwhelming’ majority, the greatest in the history of this country, and1 the endorsement of its industrial1 policy. Dur-ing the debate, the Leader of the Opposition (Mr. Menzies) and other honorable members opposite have dealt with industrial disturbances, which, they have alleged, have been fomented and encouraged by Communists who- have been permitted to prosper under the protection of the Government. For many months, the same story has been related again and again in this Parliament. In answering some of the criticisms, I intend to deal specifically with a few instances that have been mentioned by the right honorable member for North Sydney and the Lea der of the Opposition. Listening to the right honorable member for North Sydney, one would think that he had beer, the strong man of Australian politics in his dealings, with unionists who had gone on. strike. He stressed specifically thai unions are resorting, to direct action, but conveniently forgot to mention that on the Sydney waterfront to-day more than, 8,000 workers who are prepared to follow their occupation have been locked out by their employers. He did not mention, enforcement of the law against those employers, who are adopting the course which he condemns,, and which baa been condemned year in and year out by the Employers Federation. Whilst claiming that the law should be enforced, he did not bother to say what steps he would, take to enforce it. Would he adopt the method which a royal commission proved he applied a few years ago in connexion with the coal-miners, when he attempted, by the payment of a. certain sum as a bribe to- the leader of the miners federation, to maintain industrial peace on thecoal-fields, and thus destroyed the confidence of the. men in their leaders..


– The honorable member’s statement is. absolutely untrue. The royal commission exonerated the right honorable member for- North Sydney.


– He attempted to bribe the leader of the miners federation by making payments to him from a secretfund, and thus destroyed the confidence of the men in that officer. Such doubtful and, bad methods, for which the right honorable member for North Sydney and the Leader of the Australian Country party (Mr. Fadden) were responsible, are to-duy reacting against the people.

Mr Fadden:

– I rise to a point of order. I ask thai the honorable member l>e made to withdraw unreservedly the allegation that the right honorable member for North Sydney and I bribed the leader of the miners federation in order to destroy the confidence of the men in him. The royal commission which I set up absolutely exonerated us. Definite proof of that fact is to be found in the records of this Parliament.


– If the right honorable gentleman objects to the statement, on the ground that it is personally offensive to him, I ask the honorable member for Martin (Mr. Daly) to withdraw it.


– As the right honorable gentleman considers that the statement is offensive to him, I withdraw it. But I affirm that a sum was made available by the right honorable member for North Sydney and the Leader of the Australian Country party for payment to the leader of the miners federation, in return for his endeavour to keep peace on the coal-fields. I claim that those were not strong-man tactics, and that they did not constitute an enforcement of the law, but on the contrary were a very bad attempt to maintain peace on the coal-fields. This Government does not intend to stoop to such methods in ord or to maintain peace i.n industry.

The Leader of the Opposition, in the course o£ his remarks on arbitration and industrial affairs, said that we should have a flexible system of conciliation and arbitration. He condemned employees and employers alike for strikes and lock-outs, and told ma, ki ‘ answer to am interjection, that if I referred to his policy speech I would learn what methods he would adopt for dealing with strikes, lock-outs, and industrial unrest generally. I did that, and found that be would declare strikes and lockouts illegal. On another occasion, he was reported in a Melbourne newspaper as having said that he would treat: as criminals those who were concerned in strikes and lock-outs. The Leader of the Australian Country party has used even, stronger language in his statement of the means that he would adopt. Other honorable members have gone almost as far as to advocate that workers who engaged in strikes should be stood up against a wall and shot. Possibly, unjustifiable strikes . OCCur in industry occasionally. Naturally, I do not condone them. Bui I do say quite frankly that peace cannot be maintained in industry by the use of strong-arm or stand-over methods, by shooting men. or similar tactics.

So much is said about strikes in Australia, that one would be led to think they do not occur in other parts of the world. Yet in America to-day, according to to-night’s press, more than 140,000 of the nation’s 4O0,0Q0 softcoalminers are on strike, and their leaders have said -

Neither troops with bayonets, nor court injunctions nor incarceration of miners or their representatives, can serve to produce a single ton of coal.

More factors are involved in the industrial stoppages which, are occurring in Australia at the present time than the instigation of Communists. If every Communist were expelled from the unions . of this country, doubtless there would still be strikes. After six years of strife and struggle, men and women are finding it difficult to settle down in peace-time occupations and take their places in civilian life. There is a degree of unrest and uncertainty as to what their future is likely to be. Many men have vivid memories of the tragic days through which they passed between 1930 and 3910, when they were unemployed and their women and children were in absolute want in a land of plenty. They are fearful that they may again be beset by similar conditions^

The workers also have a just claim for an increase of the basic wage, and many people employed in industry consider that their hours of work should be reduced. Until1 the major matters to which I have referred, and also several minor grievances, are attended to, industrial peace cannot be brought about in this or any other country. The strong-arm tactics advocated by the Opposition will not produce harmonious relations between employers and employees. At the recent general elections the Opposition was told in no uncertain terms what the people thought of its demand for strong action against the workers. We heard the Leader of the Opposition say what he would do with the coal-miners. He threatened similar action during the strike of miners on the northern coal-fields of New South Wales in 1940. He said then that he would uphold the arbitration system; but for three months J;he community suffered severely from the effects of the strike. The stocks of coal were whittled down so severely that it has been impossible to restore them to the previous level. That was responsible, to some degree, for the recent shortage of coal for lighting purposes and for the generation of electricity. After the coal-miners had been on strike for three months, the right honorable gentleman visited the coal-fields and begged the miners to go back to work. That is a sample of the rigid enforcement of the law that might be expected from the Opposition if it were again in power during an industrial upheaval.

The Labour Government has endeavoured to ensure to the workers the best possible conditions of employment in order to produce harmony on the industrial front. Its policy is one of cooperation between employers, and employees. It denies that all of the faults lie on tl, e side of the people who work for wages. I do not condone strikes. ‘But they are due to many factors, and until we can remove the causes by modernizing the arbitration system and providing a better basis of compensation, we cannot expect industrial peace. My greatest regret is that the proposals submitted to the people at the recent referendum for the granting to this Parliament of increased powers in respect of industrial conditions were not accepted. Had an affirmative vote been recorded, the arbitration system would have been given a flexibility which is sorely needed. It is apparent that the proposals advanced by the Opposition have no practical value. No constructive suggestion has been made. At the recent elections the Opposition claimed to be able to supply all the answers to our industrial problems, but the Australian Labour party won nearly all of the seats.

According to the Opposition, general harmony would prevail in industry if taxes were reduced and the employers were allowed to make increased profits. The Leader of the Opposition declared that the reductions of tax for which the budget provides are negligible and of no use to workers on fixed wages. My considered opinion is that the reduction of sales tax by the amount of £16,000,000 or £17,000,000 will be of great value to the community. The burden of this impost falls most heavily on people in the lower and middle income groups, and the reduction of the tax on clothing and other commodities will prove of direct benefit to the people. I hope this impost will ultimately be completely removed. The Leader of the Opposition claimed that the reduction was not sufficient tu supply an incentive to increased production. I presume that he would prefer a substantial reduction of direct taxes. Recently he toured the Commonwealth and promised a flat rate reduction of the income ta. by 20 per cent., in order to give to the people a greater incentive than they now have to work. In his opinion, apparently, that is all that is needed to improve the economic position. Under his proposals, citizens such as factory workers who are paid about £300 a year, would receive a reduction of income tax of about lid. a week. Does anybody imagine that that would prove an incentive to increased production? The proposals of the Leader of the Opposition are farcical. A person in receipt of £400 a year- would, under this scheme, receive a reduction of income tax of only 2s. 7d. a week, but the man in receipt of an income of £5,000 a. year would get the substantial reduction of £11 a week. What an unfair approach to the whole problem, and what a strange way to attempt to bring about increased production! Such arguments as those advanced by the Opposition are mere catchcries. We all realize that taxes are high.

The Prime Minister (Mr. Chifley) has promised to keep the position under constant review, and bear in mind the necessity for a sound economy. Consistent with the maintenance of the people’s living standards, he promises that taxes will be reduced. Taxes having skyrocketed during the war period to an unprecedented height, reductions must necessarily be brought about gradually, and by a government that the people can trust.

Reference has been made to a lag in production said to be attributable mainly ro the taxation policy of the present Government, but a. check shows that production has increased by comparison with the results obtained in pre-war years. The quarterly statistics issued by the Commonwealth Statistician show that the total value of production in all industries in Australia in 193S-39 was £3S8,355,000, whilst in 1944-45 the total was £639,962,000. Therefore the present value of production is almost double that of the pre-war period. The real reason for the shortage of commodities is that, because of the Government’s sound economic policy, all men and women who are willing to work are, in fact, employed, so that the spending power of the community has been greatly increased, resulting in an increased demand for goods. Besides this, of course, the production of ordinary consumer goods was, in part, suspended during the war while the nation concentrated on the production of war materials. ‘ Present conditions are in marked contrast to those which prevailed between 1930 and 1939, when there was such wide-spread unemployment that thousands of people could not pay rent for homes, or buy ordinary necessaries. The honorable member for Fawkner (Mr. Holt) blamed the Government for commodity shortages ; then, in the next breath, he said that we should not worry about shortages on the Australian market, but should concentrate upon producing for export. “Whilst I appreciate the need to maintain and expand our export market, our first, care should be to produce goods for the home front. We should cater first for our own people, after which we can look further afield.

There has been much talk about high taxation destroying the incentive to pro duce. The other day, I picked up a financial journal in which I read that Tooth and Company had increased its profits to £862,956, an increase of about £5,000 over the previous year. Another company had increased its profits by £24,000. after allowing for £14,000 more for taxation than in 1940. It is evident that existing tax rates did not keep those firms from producing. I do not say that taxation should not be reduced, but we must understand that it can be reduced only gradually. As a matter of fact, persons on. fixed incomes, particularly in the lower range, who could not earn overtime, were hardest hit by taxation. A direct remission of a few pence per week would not be as beneficial to them as would increased family endowment and better social services. Even if a few shillings are taken from them in the form of a social service tax, they will be more than compensated by family endowment benefits, hospital benefits, and other social services.

The present method of assessing the basic wage is out-moded, and should be brought up to date. The method ha? hardly varied during the last 40 years, and since it was first introduced many items of expenditure have come to’ be regarded as necessary which were formerly unknown, or were regarded as luxuries. As a result, it is very difficult for a man. on the basic wage to carry on. With a little more luck, and with some assistance from the Opposition, the Government would have carried its referendum proposal, authorizing Parliament to set down a better method of compiling the basic wage and lay down broad principles governing industrial conditions, leaving to the Arbitration Court the responsibility to apply them in detail.

All sections of the community are greatly concerned over the present proposals to fix a 40-hour working week. I believe that this Parliament should have power to prescribe maximum and minimum working hours, as has the Parliament of New Zealand. Parliament, which consists of the elected representatives of the people, and has a good understanding of the requirements of industry and a proper appreciation of what is due to the worker, is well qualified to lay down broad principles for the control of industrial conditions, hours and wages. Ct is unfortunate that the referendum proposals providing for the granting of this power to Parliament were not agreed to. I hope that they will be submitted again shortly.

The budget provides for an expenditure during the current financial year of £444,000,000, which is substantially less than the amount expended last year. The Government has to meet a wide range of commitments, many more than had to be met before the war. The Treasurer has given an assurance that expenditure is being cut down wherever possible, .so that the burden on the taxpayers may be md need. Australia’s .financial stability is such as to have commanded the admiration of national leaders throughout the world. The Treasurer deserves credit for the way .in which he has managed the country’s -finances. Not the least factor in the attainment of that result has been the system of prices control which has been in operation. A comparison with the United States of America is all to the advantage of Australia. In all parts of the world there is nothing but praise for ..Australia’s achievements in this connexion, but I agree with the honorable member for Watson (Mr. Falstein) that the regulations should be more rigidly enforced. There is need to tighten up these controls and to curb the activities of those people who are charging unreasonable prices for the goods that they offer for sale. I hope that the proposals submitted by the honorable member for Parkes will have the endorsement of the Government, and that the law will be enforced against offenders. The system which has been in operation in this country has protected the people by maintaining their purchasing power, and it is to be hoped that any shortcomings in the system will be remedied quickly. I commend, the Treasurer on his budget, and particularly on the success which has attended prices control.

Speaking earlier to-day, the honorable member for Fawkner (Mr. Holt) said that housing conditions in Australia are deplorable and the Government is doing little to improve them. I am astonished that the honorable member should have the audacity to make such a ‘Statement, as he should know how little was accomplished in this direction by the Government of which he was a member and other governments which be supported. In pre-war years, when non-Labour governments were in office, there was a shortage of houses, but those governments did little or nothing to remedy that state of affairs. In my electorate, more bouses a-re now being built ‘by. the New South Wales Housing Commission, in cooperation with the Commonwealth Government, than were built in the rest of Australia by previous governments. There is, however, a grievous problem still to be faced. In pre-war years the building of homes was left to private enterprise, which was more concerned about making profits than with providing homes for the people. The result was that, even before the war, no progress had been made towards overtaking ‘the leeway. The situation was aggravated during the war by -.shortages of man-power and materials for the building of homes. It will be seen, therefore, that lie present Government .started well behind scratch, but it has made an honest attempt to cope with the shortage of houses, and has done good work in that connexion. Every effort must be made to meet the demand for houses and to give to every person who desires to own his home a chance to do so.

The housing target set by the Government for the year ended the 30th June, 1946, was “24,000 dwellings, to be either completed or in course of erection. That objective was realized ; the Commonwealth Statistician’s figures show that during that year 13,000 dwellings were completed and over 15,000 were in course of construction on the 30th June. Those figures included a carryover of 4,000 dwellings which were under construction at the. beginning of the year. The programme for the current financial year provides for the construction of 42,000 dwellings, and it is hoped that the rate of progress will ‘be accelerated so that in another twelve months it will have reached 50,000 a year. At no time had the Government promised to erect 70,000 dwellings in a year. It is hoped, however, that the number of dwellings erected will increase each year and that the building of homes, which was seriously interfered with during the war, will proceed at such a. pace as gradually to overtake the demand. Commonwealth and State governments have united to assist the building industry during the next ten years. Men will be trained in various trades, and it is expected that 33,000 men will receive training during the next two years. The trainees are not expected to reach full efficiency until 1950. It will be seen that the Government is making an earnest attempt to overtake the leeway. Its record in this sphere of activity compares more than favorably with that of any other government in either the Commonwealth or State sphere.

In dealing with the subject of repatriation I lay special emphasis on the needs of ex-servicemen suffering from war neurosis. It is not right that men who served their country in the fighting services should be treated in mental asylums, tn many instances, treatment for serious war neurosis could have been avoided had the men received proper attention when the trouble first made its appearance. I have in mind the case of a man who was declared insane and sent to a mental asylum, only to be discharged after it was found that a mistake had been made in the diagnosis of his complaint. That, unfortunately, is not an isolated case. These men are entitled to specialized treatment. There should be a new approach to this problem.

The recent referendum gave to the Commonwealth power to provide social services for every section of the community. The present Government has a splendid record of achievement in connexion with the provision of social services for the people. It has provided increased pensions to invalids and aged persons, and has inaugurated a wide range of other social services, such as the provision of hospital benefits and the treatment of persons suffering from tuberculosis. The Commonwealth Government now has the power to devise and carry out a comprehensive scheme in the interests of the health of the nation. A big field is open to it. I hope that before long all our social service legislation will be consolidated in one measure and that a comprehensive range of health and social services will soon be in operation throughout Australia. That would not only conf er great benefit on every section of the community but would also place the seal on our achievements as a Government in the field of social services. No doubt that will be costly but additional grants will be made as time goes on. The Parliament now has power, which it never had before, to deal with these matters, and I feel sure that the Government will take advantage of this power to extend the benefits of its social services programme within a short time. I have taken this opportunity to give my views in relation to some of the problems that have been commented on by honorable members opposite and generally to traverse the difficulties that confront the Government at the present time. Athough the war is over the task of rehabilitation is not an easy one. A tremendous leeway has to be made up in every avenue of national activity and it will require the united efforts of al] those interested in the welfare of .this country to achieve the results we desire to bring about. If we pursue the policy laid down by the Government, we shall make up the leeway in production; we shall provide the social benefits which are the rightful lot of every citizen of Australia, and we shall achieve harmony among all sections of the people ; but if we adopt the shortsighted policy of honorable members opposite, who put political prestige before the national interest, Ave shall not attain any of these objectives. Let us consider our problems from a broad national viewpoint. We certainly shall not solve them by adopting the policy of honorable members opposite who condemn everybody and refuse to seek the fundamental causes which give rise to unrest. In its task of stamping out the fundamental causes of the problems which beset us, the Government gets very little assistance from honorable members opposite. Let them work with us for the general well-being of the community. I commend the Treasurer for the budget which he has presented to this chamber. The right honorable gentleman has presented an honest budget compiled after due consideration of the financial position and having in mind the necessity for benefiting, as far as financial circumstances will permit, every section of the people. The budget proposals are sound and logical and I am pleased to have had this opportunity to present my views upon them. I am also glad to have been afforded an opportunity to explode many of the arguments advanced by honorable members opposite during this debate. I look forward to a new era of prosperity for Australia under the sound leadership of the Prime Minister and the Labour Government.

Mr. Beazley and Mr. Lang rising in. their places,


– The honorable member for Fremantle.


.- Mr. Chairman-

Honorable members interjecting,


– Order ! The honorable member for Fremantle has been given the call from the Chair. If order is not maintained I shall be obliged to name those who disobey the call for order.

Mr White:

– I rise to order. I do not wish to reflect on your decision, Mr. Chairman, in calling the honorable member for Fremantle, but are you aware that the honorable member for Reid (Mr. Lang) rose several times-


– There is no point of order. The honorable member for Reid rose for the first time when the honorable member for Martin, who has just concluded his speech, rose and received the call. His name was then noted. The names of several other honorable members were noted prior to that. The name of the honorable member for Reid was noted as a speaker from the Government side of the chamber; if he desires to have his name recorded as a speaker from the Opposition side, he should say so.

Mr Lang:

– I rise to order. ‘ Since the sitting began to-day I have been in my place waiting for an opportunity to speak. The honorable member for Martin (Mr. Daly) put his name on the list of speakers and left the chamber. He was requested by the Government Whip, not to speak. The Whip also asked other honorable members on the Government side not to speak and they have refrained from doing so.


– Who told the honorable member that?

Mr Lang:

– I heard it.


– The honorable member did not.


– Order ! The honorable member for Reid is stating a point of order.

Mr Lang:

– I am not aware of any standing order which provides that an honorable member intending to speak must first place his name upon a list. I have been in the chamber throughout the day, yet other honorable members who have been here for only part of the day have received precedence in the call from the Chair. My point of order is that I should have pre-audience over honorable members who have been absent from the chamber for the greater part of the day.


– The calling of members rests entirely with the Chair and calls are distributed between members on both sides of the chamber as fairly as possible. The honorable member for Martin and other honorable members had risen prior to the honorable member for Reid and their names were noted by the Chair on the list of intending speakers. I saw the honorable member for Reid rise on one occasion only, namely, when the call was given to the honorable member for Martin. The honorable member for Fremantle has the call.

Mr White:

– I rise to order, I draw your attention Mr. Chairman to Standing Order 255, which reads -

When two or more members rise together to speak the Speaker shall call upon the member who, in his opinion, first rose in his place-


– Order ! The honorable member for Balaclava will resume his seat.

Mr White:

– I have not yet concluded my point of order.


– I have already ruled on the point of order in relation to the call from the Chair, and I shall not accept any further submissions on that matter. If the committee objects to my ruling any honorable member may move dissent therefrom.

Motion (by Sir Earle Page) proposed -

That the ruling be dissented from.

The CH AIRMAN . - I put the question -

That the ruling be dissented from.

Mr Bernard Corser:

Mr. Chairman


– The honorable member is not entitled to rise after the question has been put.


– I rose while you wereputting the question.


– No ; the honorable member must resume his seat.

Mr Bernard Corser:

– I rose while yon were putting the question.


– Order ! The honorable member did not. If the honorable member does not resume his seat I shall name him.

Question put -

That the ruling be dissented from.

The committee divided. (The Chairman - Mr. J. J. Clark.)

AYES: 23

NOES: 29

Majority . . 6

Motion negatived.



I propose to discuss the subject of industrial unrest which the honorable member for Fawkner raised in the usual manner. “ We must have the rule of law “, he asserted. “We must have respect for arbitration. The trade unions are abusing their strength. We must have a restoration of industrial discipline “. All the ancient cliches were trotted OUt. A lawyer has no responsibility other than to explain the position to the judge. He has no administrative responsibility. He has no responsibility to cause activity outside. Therefore, we never yet have got from members of the Opposition who are lawyers an explanation of what they mean by “ industrial discipline”. They do not say, “We shall call out the police”, or “We shall confiscate, union funds”, or “We shall dissolve tho trade unions “. They do not refer to the coercive act3 which will impose industrial discipline. They dare not, for several reasons. The first is that, politically, they would be destroyed to an even greater degree than they are now. The second is that they know that the Commonwealth does not possess industrial powers to enable them, if they were in office, to coerce the trade unions. In 1926, the government of the day, led by Mr. Bruce, attempted to obtain powers for the purpose of coercing the trade unions. Under the Constitution Alteration (Industry and Commerce) Bill, the government of the day sought power to establish -

Authorities with such powers as the Parliament confers on them with respect to the regulation and determination of terms and conditions of industrial employment and of rights and duties of employers and employees with respect to industrial matters and things.

The Government also sought power to control^ -

Trusts and combinations in restraint of trade, trade unions, and associations of employers or of employees for industrial purposes, including the formation, dissolution, regulation and control thereof.

Those were the coercive powers which the Bruce-Page Government sought to obtain for the purpose of destroying the trade unions. The people overwhelmingly rejected the proposals relating to industry and to commerce. The major industrial State, New South Wales, rejected them. Victoria and Queensland agreed to them. South Australia rejected them by more than 190,000 votes to 78,000; Western Australia by more than 112,000 votes to 46,000; and Tasmania by more than 51,000 votes to “41,000. The Bruce-Pago Government, after attempting other coercive industrial acts, was emphatically thrown out of office by the Australian community.

The matter of industrial unrest must be removed from the atmosphere of false assertion and counter-assertion in which it rests. It is usual to say, “We stand for arbitration, and when the court has made its decision, the workers should accept it in the same sense as a decision is accepted in criminal jurisdiction “. But that never has been so, and not all the oratory in the Parliament will ever make it so. The industrial decisions of an arbitration court, by their very nature, will never be accepted as final by any of the parties to the dispute, whether they be employers or employees. It is not a decision in the realm of exact law or exact fact as is a decision in criminal jurisdiction. There is no proof that the decision of the Arbitration Court gives a just distribution of purchasing power as between the owners of the means of production, and those who sell their labour. Those decisions which are made from time to time as to how the wealth of the community shall be distributed, will never be accepted as final by those who consider that they are not getting an adequate share of their production, in the same sense as a decision in criminal jurisdiction is accepted. Every honorable member in this chamber knows that to be true. Yet, year after year, nonsense is talked about how Arbitration Court decisions should be accepted as final. People have been saying that ever since arbitration courts were established, but the decisions have never been accepted as final. The Arbitration Court is a means of getting as close as we can to industrial peace, but with the present distribution of wealth in the community, there will not be industrial peace. There cannot be industrial peace in our form of society. ‘Coercion, which the Opposition does not dare to say openly is its policy, would not succeed for the reason that the very people who go on strike - for example, members of I be Locomotive Engineers Union in West ern Australia, who are now paralysing the economy -of the State - are the essential people in the community who cannot be replaced. If 23,000 coal-miners in New South Wales do not go to work, we cannot find 23,000 persons who can mine coal in their place. If 700 key locomotive drivers in Western Australia do not go to work, we cannot find men to replace them. That is particularly true in the present situation of virtually full employment. We cannot lead men by the hand down the mines and compel them to hew coal unless we have a state of counter-revolutionary conditions, and where the full machinery of coercion is applied. That was a. characteristic of the Nazi state from its rise in 1933 until its fall.

There are times when the industrial workers in key unions accept arbitration, and there are times when they do not. Et is important, if we are to understand this problem, for us to examine the times when the industrial workers do accept arbitration. During the economic depression, industrial workers in Western Australia tended to cling to arbitration. There was no talk of respect for the law when the Mitchell anti-Labour Government set aside the decisions of the Arbitration Court and reduced wages by 20 per cent. A bill for that purpose passed rapidly through the Legislative Council. I should like to see legislation setting aside a decision of the Arbitration Court to increase wages by 20 per cent. pass as rapidly through any Legislative Council in Australia. Of course, that would not happen. There is no talk of respect for the final decision of the Arbitration Court when we set aside a determination and reduce wages during an economic depression. We find that, in respect of the decision of the Arbitration Court concerning wages, the employers had a sovereign need to continue to produce, and that they could not do so unless wages were reduced. In circumstances of an economic depression, the slowness of .arbitration is a means of preventing the downward trend of wages. In circumstances of a boom such as we are now experiencing, the slowness of arbitration is a means of preventing the upward movement of wages. Therefore, in a boom, we find a tendency on the part of industrial workers not to accept arbitration, whilst the employers emphasize it. But during an economic depression, there is a. tendency on the part of industrial workers to accept arbitration, and for employers to use their political representatives, and any other instrument that they have, to set aside the decisions of the Arbitration Court and reduce wages.


– <Th at has nothing to do with the statement which I . am making. It is a splendid appointment. Mr. Dunphy is handling the present dispute in an excellent manner. I am merely pointing out one aspect of reality, namely, that the slowness of arbitration in depression times acts as a safeguard to the worker, and in boom times, acts against his interest. I should like to hear from honorable members opposite what are the means by which they intend to impose industrial discipline, and why, if they believe that they have the constitutional power in this Parliament to do so, they bothered to hold j>. referendum in 1926 seeking that power. Let us get expressions such as “ industrial discipline “, and “ the rule of law “ out of the realm of airy generalization, and into the realm of specific fact. If Parliament passes an invalid and old-age pensions bill, something physical must happen in the universe. Money is handed ‘over the post office counters. So, presumably, if Parliament passes a bill to impose industrial discipline, something physical must happen, and we should like to know what the proposal of the Opposition is. Is it confiscation of union funds, or the dissolution of trade unions? Of course, it is still possible in any middle-class constituency to talk of “the rule of* law “, “ industrial unrest and communism, because after all, not much political analysis is made by the bulk of the electors; but in terms of real policy, we should like to know the physical means whereby the Opposition would impose industrial discipline, I point out, too, that arbitration is not accepted by employers in every instance. In 193S, when an award was made by the State Arbitration Court of Western Australia increasing the basic wage by 6s. a week, the management of a screw factory said, “ These wages are too high. These are circumstances in which the return to us is not sufficient to induce us to continue to operate our factory. Therefore, we shall not continue to produce. We shall close the factory “. What is that but a strike? What is that but a decision that the return to the investor is not sufficient to induce him to continue to invest or to operate the factory; and what is the moral distinction between an investor saying, “ These are circumstances in which I shall not go on producing because my return is not sufficient “, and a worker saying, “ These are circumstances in which I shall not go on producing because my wages are not sufficient”? There is no moral distinction. There is a practical political distinction in that the whole structure of our society as it has evolved tends to defend the rights of property, and the man who has only his labour to sell has no property rights in the same sense as they have been evolved for others; but there is no moral distinction. Trade unionism is good sound capitalism. It, is an agreement not to sell labour at less than a certain price, just as there are agreements between all kinds of companies not to sell their commodities for less than a fixed figure. If it means anything at all, the Opposition’s attitude on this question of industrial unrest is an invitation to class war.

Another practice that seems to be a feature of budget speeches, is to state first that taxes are too high and then, when the Estimates are under discussion to pick out all the popular points such as service pensions and say, “Expenditure on these items should be increased “. After submitting proposals which, if adopted, would involve a vast increase of expenditure, the endeavour is made to derive some political kudos for having proposed a substantial reduction of taxes. This game has gone on ever since parliaments have existed, but it does not get the community anywhere, or help it to understand the real problem*! that it is facing. Not in this debate, nor in the debate on the Financial Statement that took place before the elections, have we heard from the Opposition what expenditure should be cut. Honorable members opposite have not suggested that the £72,000,000 expended on deferred pay last year should not have been provided for this purpose, or that’ the £130,000,000 expended on service pay last year should not have been provided. These two items total £202,000,000, whereas the net proceeds from income tax amounted to £132,000,000; yet they claim that notwithstanding that discrepancy which ha? had to be met by borrowing, income taxshould be reduced.

The Government has drawn attention to the substantial reductions of expenditure that can be expected this year. The Opposition’s thesis is that these reductions should lead to drastic reductions of taxes. I say that if we are compelled to borrow, we have no right, to reduce taxes at all. We were compelled to borrow last year when certain reductions of taxes were made, and the effect of these reductions was to increase the burden on the community in the future, because increased borrowing means that an increased interest bill will have to be met by future taxpayers. During the war, we were informed that the most honest way that the community could face up to its problems was not to “ Pass the buck “ on to prosperity, but to meet its commitments out of taxation. Many of these commitments still exist, but drastic cuts of governmental expenditure, all of them ignored by the Opposition in the debate so far, have been made. For instance. the expenditure by defence and service departments last year was £307,000,000, whereas this year, the estimate is £124,000,000 representing a reduction of £183,000,000. Similarly, the estimated expenditure on production departments has fallen from £15,000,000 to £13,000,000. As one naturally would expect, lend-lease expenditure has fallen considerably, the figures being £5,000,000 compared with £26,000,000. Expenditure oh the payment of war gratuities was not an item of the budget last year, but this year £5,000,000 is required for that purpose. The cost of public debt charges and interest on war loans, has risen from £41,000,000 to £46,000,000. Expenditure on re-establishment and repatriation - the Opposition has been very sharp in its criticism of the Government’s proposals as being too slow and too mean - is being increased from £.14,000,000 to £35,000,000. The lend-lease settlement with the United States of America, which did not appear last year, accounts this year for approximately £8,000,000. To Unrra last year we gave £6,000,000, and this year we shall give £15,000,000. Expenditure on agricultural subsidies which were needed when we were cut off from our overseas markets during the war, is reduced from £33,000,000 last year to £23,000,000 this year, and other items have fallen from £10,000,000 to £4,000,000. These are drastic reductions of expenditure. We still have to provide, in the coming year, £15,000,000 for services pay and £17,000,000 for deferred pay, and there is no suggestion by the Opposition that these commitments should not be met. In addition, the National Welfare Fund requires £64,000,000 for expenditure on social services as against £51,000,000 last year. We are also tax-gathering for the States, and the reimbursement of the States this year will require £45,000,000, or £S.000,000 more than last year.

Mr Rankin:

– It is not the will of the States that we should be their taxgatherers.


– Nor is it suggested that in 1947-48 there should be no uniform taxation. The States believe that they should be given clear notice by the Commonwealth of the end of uniform taxation; but no State is so unreasonable as to suggest that at the present time, with all these war costs still in the budget, the Commonwealth should raise money for this purpose, and that there should be differing rates of taxation in the States. There has been no impediment to the States expanding their expenditure. Western Australia ha3 never previously had such high revenues as it now has; therefore, uniform tax cannot be said to have been an impediment to any schemes which it might have desired to carry out. The State Government asked for a grant of £750,000, and received it. It then asked for an additional grant of £950,000, and received it. It asked that a deficit of £912,000 with which it had ended the year’s operations should be met, and that was done. The total of the special grants above the ordinary reimbursement of revenue which it had lost because of the operation of uniform tax, was more than £2,600,000.

There has never been a specific analysis of the budget by members of the Opposition. Using the convention that any grievance may be aired before His Majesty is granted Supply, they do everything except analyse the budget, and invariably indulge in generalizations. There are one or two observations which I wish to make, concerning price-fixing and some other Commonwealth controls. There can be no question that price-control has not been nearly so effective as wagepegging. There is no doubt in ‘my mind that there has been a fall of real wages as a result of the upward movement of prices and the pegging of wages. I draw the attention of the committee, and of the Minister who represents the Minister for Trade and Customs, to one or two unsatisfactory features of price control. About eighteen months ago, the method adopted for fixing the prices of vegetables in Western Australia was to fix the prices at which they might be retailed. During this year, the method was altered, and the only price-fixing which now operates relates to the retailer’s margin of profit. The prices paid to primary producers for many important vegetables could increase indefinitely. The result has been spectacular increases of the prices of some vegetables. This tendency has been reinforced by the absence of an embargo on the export of certain, vegetables to southeast Asia, especially for sale in the tremendous black-market of Singapore: I express no resentment at the fact that permission has been given to export vegetables, even .though they were in short supply. We have a great diversity of food, for which there is urgent need in destroyed areas. But in my view the Commonwealth should have controlled the exports, and should have extracted some guarantee that the commodities would not be sold at blackmarket prices. If the exports accentuated a shortage, the Commonwealth should have adhered rigidly to the original form of price control, namely, control of the actual selling price, and not control of the retailers’ margin of profit.

The honorable member for Parkes (Mr. Haylen) referred to black-marketing operations in connexion with motor cars, and the widespread evasion of pricefixing laws in that connexion. I commend his utterance. But I consider that we ought to go the whole way, and say what preventive measures we propose to adopt. Wie have often been told that our economy is in grave danger from a runaway inflation. If that be correct - and I accept the statement’ that it is - then black-marketing is a crime which should be the subject of the most severe punishment. It is of no use merely to ?ay that -the prices of motor vehicles or of any other commodity are to be fixed. Some coercive machinery must be established for the enforcement of the law. I shall state my meaning specifically, because I do not deal in generalities. Since black-marketing in the sale of motor cars is so widespread, the Commonwealth Government should have a corps of agents to visit motor dealers and offer to purchase cars at the fixed prices. If the “stunt” of asking £200 above the fixed price is indulged in, the seller should be paid with marked notes, and should then be arrested and imprisoned.

Mr Bowden:

– A Gestapo.


– There cannot be effective wage-pegging without effective price control. I know that the wage- earner is not in a position to buy a motor car. I doubt whether a. politician in receipt of £1,000 a year would purchase a motor car at the present time unless he could be assured that the- sale was well controlled. Nevertheless, the price of a motor car or truck affects the purchasing power of the ordinary wageearner, because it becomes a part of the capital of the business man, and raises his costs, iff bought at the black-market price, the cost is passed on. to the community in the form of increased pricesfar the commodities which the truck carries- or the firm handles. So, -if we are- to have arbitration courts saying to the workers, because of the wage-pegging regulations of February, 1942, “ Your wages shall not increase “, then, in order to be consistent, we must have some real means for ensuring that prices also shall not increase. The honorable member for Gippsland (Mr. Bowden) may describe such action as Gestapo, action if he chooses; nevertheless, if we expect the community to accept wage-pegging, it is essential that we shall have some real means for ensuring also that price, control shall be effective-.

Mr Bowden:

– They would be a party to the transaction if they did that.


– It is well known that criminal investigation branches set traps in that way. I shall not indulge in generalities by saying that price control should be enforced in the way members of the Opposition generalize about the enforcement of industrial discipline. I propose to state what I consider should happen physically in order to enforce it. Police agents should set traps such as that which I have mentioned. Only in such circumstances will price control operate effectively.

Yesterday, the honorable member for Barker (Mr. Archie Cameron), referring to members of the Labour party, said that we were denouncers of profit yet our lily-white hands were dabbling in a profit of’ something like £1,000,000 that had been made by Commonwealth Oil Refineries Limited. It is a refreshing change to hear a government instrumentality denounced for having made a profit. Usually, it is denounced for having made a loss. I was very pleased to hear the honorable member mention that profit. But I should like to know how the Labour party, or any member of it, was able to dabble his fingers in it. Commonwealth Oil Refineries Limited is a public trust, and the profit which it earns is paid into a public account. I know that the honorable member did not allege corruption. Nevertheless, the suggestion that there was something nefarious was likely to be misunderstood over the air.

In the budget speech are certain statements concerning works in the Australian Capital Territory, in Papua and New Guinea and in the Northern Territory in respect of which vast expenditures are outlined. I hope that in the course of this debate reference will be made to the policy which the Government intends to pursue in the Mandated Territories and the dependent islands. In 1944, with a fan-fare of trumpets, the Australian-New Zealand pact was signed. Certain promises were made concerning the wellbeing of the native peoples, but so far those promises have apparently remained on paper. They may have been carried out in fact, but very little information regarding them has been given to the people. I should like to know specifically what policy of welfare promotion the Government intends to pursue. Is it training natives as medical orderlies in association with the health scheme? Is it training natives as teachers in association with the educational scheme? In furtherance of missionary enterprises, what specific assistance does the Government intend to give to- the missions which are working in the Mandated Territories and the dependent islands? There is growing criticism in south-east Asia of the way in which European nations have discharged their obligations to the coloured peoples in the Netherlands East Indies. There has been a considerable advance in the position of the natives, in that in a year of chaos they have extracted certain concessions from the Dutch. The successful establishment of Chinese independence will be a great stimulus to coloured peoples throughout south-east Asia to press for improved political, economic and social status. It would be highly advisable to forestall any such demand by having a positive policy, such as was outlined in the AustralianNew Zealand pact, towards our own coloured people, and we should show how it is being applied by specific acts. l am sure that every honorable member will welcome the proposed reductions of sales tax. The Opposition has come out with a policy of drastic reductions of direct taxes. The Leader of the Opposition (Mr. Menzies), in his policy speech prior to the recent general elections, declared that indirect taxes such as the sales tax should be reviewed from time to time, showing plainly that in his opinion direct taxes should be lowered before there is a reduction of indirect taxes. When the sales tax was originally implemented - and I regret to say that it was introduced by a Labour government - members of the Opposition quite rightly, in my opinion, as the debates of 1931 will show, pointed out that indirect taxes, unlike direct taxes, were not scientifically graded and that their incidence would be heaviest on the people in the lower income ranges. They said that the family man would pay more than a wealthier single man or a wealthier married man with smaller family obligations. That line of talk was entirely correct, but it is astonishing to see it reversed by the Leader of the Opposition by one of those quick somersaults for which he has become notorious. He says that this means of remitting taxes is unfairest to the man on the lower income, and that the reduction of direct taxes would be fairest. The astonishing proposal made by him, and. again exposed by the honorable member for Martin (Mr. Daly), was that there should be a flat-rate reduction of income tax of 20 per cent, on all incomes, which in the case of men in the higher income groups would result in reductions of £585 a year, whilst the reduction in respect of low incomes would amount to only lid. a week. Obviously, the first means of benefiting the lower incomeearners while we still have enormous war costs to meet should be by a reduction of indirect taxes which bear indiscriminately on people in the lower income groups. The scientific approach to the problem is to reduce the sales tax on necessary articles like clothing, because the income tax is scientifically graded and falls heaviest on those best able to bear the burden.

Many references have been made by members of the Opposition to the need to increase production. They present a perfectly correct statement and play variations on it. The statement is that the present surplus of spending power should be underwritten by increased production. That is true. They did not, of course, say the reverse during the last depression, namely, that surplus production should be met by increased spending power. When Mr. Theodore proposed a fiduciary note issue to increase spending power, at a time when inflation could not have been brought about if we had tried to do so, honorable members opposite did not accept the obverse of the argument that spending power must be underwritten by production. The honorable member for Fawkner (Mr. Holt), claiming how the Government’s taxation proposals were discouraging production, proceeded to say that the present employment levels in Australia established records, and that there was virtually no unemployment. If taxes are discouraging the employer from producing, why is he engaging men to work? The answer obviously is that the Government, through its budget proposals, particularly through social services and military pay, has been distributing purchasing power to the community. We often speak too lightly of taxation as a means of frustrating inflation. Last year £72,000,000 was made available to exservice personnel in deferred pay, £132,000,000 was expended in pay to members of the services, £53,000,000 in social services, £33,000,000 in agricultural subsidies, and £12,000,000 in war pensions, all of which went straight back to the community. The tendency was to shift the purchasing power to where the greatest tendency to spend exists, with a result that an unprecedented demand has been created for goods. If a person tries to do shopping in Canberra, he finds that all commodities available are purchased readily, because supplies are limited and the purchasing power of the people is great. So there is not much scientific notice by the Opposition of the effect of taxation on spending power. The Government has been rather a distributor of spending power after the money has been collected through direct and indirect taxes and by other means. That, of. course, explains the paradox why, when taxation was at a record high level during the war, savings in the hands of the community rose from £239,000,000 to £660,000,000. I should like to hear some honorable members opposite attempt to reconcile the contention that taxation is destroying incentive with this consistent tendency of savings to rise. Not only has the amount of savings risen spectacularly, but the number of depositors trebled during the war, thus indicating that there was an increased number of people able to save.

The major points in the budget speech have been covered adequately in this debate, and I turn finally to the expenditure which we may envisage because of the new constitutional powers conferred on the Government. I refer, not to direct money payments which the honorable member for the Northern Territory (Mr. Blain) termed ‘vote-buying”, but to disbursements under the authority granted to the Government to institute pharmaceutical, medical and dental services.


– The honorable member’s time has expired.

Progress reported.

page 494


The following paper was presented : -

Commonwealth Public Service Act - Appointment - Department of Supply and Shipping - E. J. B. Foxcroft

House adjourned at 10.23 p.m.

page 494


The following answers to questions were circulated: -

Sales Tax

Mr Harrison:

n asked the Treasurer. upon notice -

  1. Is it a fact that certain traders’ margins of gross profits are calculated as a percentage of cost into store after sales tax is added ?
  2. In the event of sales tax being reduced, is it the intention of the Government to protect the money margin of profit at present allowed to these traders?
  3. If so, are there likely to be instances where the full benefit of sales tax reductions will not bc passed on to the consumer?
  4. Is it expected that in order that the full nates tas concessions can bc enjoyed’ by the consumer, there will be instances in which price subsidies will be paid to maintain present profit margins 1
Mr Chifley:

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

  1. Yes. 2, 3, and 4. The Government’s intention is that the consumers will receive the full benefit of sales tax reductions. The method of carrying out the Government’s policy will be worked out by the Commonwealth Prices Commissioner.

Meat Prices

Mr Ryan:

n- asked the Minister for Commerce and Agriculture, upon notice -

  1. How many retail butchers in each State are believed to have broken the prices lav in order to obtain a margin of profit?
  2. How many retail butchers in each State have been prosecuted for proved breaches of the law, and what amounts have been collected in each State in fines and other penalties?
  3. How were the prices fixed before the recent increase and what margin was allowed for profit?
  4. What margins of profit for retailers are being allowed under the new prices?
  5. When are the cost-of-living figures reviewed, and when will the basic wage reflect the higher cost of meat?
  6. Fending revision of the basic wage, what provision, if any, will bc made for wageearners and their families who have to find the higher cost of meat out of their pegged wages ?
Mr Pollard:

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

  1. There are no grounds for expressing any belief concerning unconfirmed breaches of National Security (Prices) Regulations by retail butchers. Only actual breaches can be given as set out in answer to question No. 2.


  1. Meat prices are determined from time to time by the Prices - Commissioner on the basis of seasonal conditions and other factors which influence the supply of stock on the market. - Margins for profit vary from shop to shop and according to the type of meat handled, but are based generally on the margins being secured pre-war. Owing to the range of variable factors no specific margin cun be determined for any trader or type of meat.
  2. Similar to those prevailing prior to the recent increase in prices.
  3. At the’ end nf the current statistical quarter, namely, December, 1946. The basic wage will reflect the higher cost of meat on the first pay day in February, 1947.
  4. Normally there is necessarily a short time-lag between the movement in prices either upward or downward and the adjustment of the basic wage, which acts temporarily either to the detriment or benefit of the wage-earner as the case may be. This has always been an accepted condition and will continue to apply.


Mr Hamilton:

n asked the Minister for Commerce and Agriculture, upon notice -

In view of the likelihood of the State parliaments not passing the desired legislation required to enable the Commonwealth Government to give effect to its Wheat Industry Stabilization Act, and in view of the fact that the National Security Regulations will cease to operate after the 31st December, 1946, and also having in mind section 29 (/) of the Banking Act, which prohibits the importation or exportation of goods unless under licence, will he clarify the position of wheat-growers who harvest wheat after the 31st December, 1946?

Mr Pollard:

– It is the intention of the Government to introduce legislation which will protect .the interests of the wheat-growers who harvest wheat from the 31st December, 1946.

Housing : Pin rANCE

M.r. Chifley. - On the 14th November, the right honorable member for Darling Downs (Mr. Fadden) asked the following questions, upon notice: -

  1. What moneys hare been borrowed under the authority of the Loan (Housing) Act 104:) (a.) under the provisions of the Commonwealth Inscribed Stock Act 1011-1945j and (6) under the provisions of any act authorizing the issue of treasury -bills?.
  2. What are the amounts of advances which have been made to each State seriatim for the purposes of housing in pursuance of tha Commonwealth and State Housing Agreement, contained in the Schedule to Act No. 44 of 1945?
  3. What are (a) the rates of interest, and (b) the periods of repayment of the moneys mentioned in paragraph (2)?
  4. What have been the losses(if any) for each State, respectively, as calculated under clause6 of the Second Schedule to the Com- monwealth and State Housing Agreement?

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

  1. £11,905,000.

3.(a) (i) On advances made in 1945-46 - totalling £6,795,000 - 3 per cent. per annum; (ii) on advances made during the period JulyNovember,1946 - Interest rate is yet to be determined. (b) Fifty-three years.

  1. Up to the present no payment has been made to any State under clause6 of the Second Schedule to the Commonwealth and State Housing Agreement. One claim has been lodged and is being examined’.

Cite as: Australia, House of Representatives, Debates, 21 November 1946, viewed 22 October 2017, <>.