House of Representatives
6 May 1947

18th Parliament · 1st Session

  1. House of Representatives
  2. 18th Parliament
  3. 1947

Mr. Speaker (Hon. J. S. Rosevear) took the chair at 3 p.m., and read prayers:

page 1906

QUESTION

THE PARLIAMENT

Privilege: Rights- of Private Citizens - Deceased Members - Mr. a. w. Rudkin - Personal Explanations.

Mr SPEAKER:

– Has the honorable member boon misrepresented in debate?

Mr ABBOTT:

– I claim that I have.

Mr SPEAKER:

– By whom?

Mr ABBOTT:

– By the honorable member for Lang (Mr. Mulcahy).

Mr SPEAKER:

– The honorable member may proceed.

Mr ABBOTT:

– During my absence from’ the Parliament last week, the honorable member for Lang (Mr. Mulcahy) is reported in the press as having asked the Prime Minister (Mr. Chifley) a question in regard to -certain names which I. had mentioned when discussing the formal motion for the adjournment of the House that I had submitted, on the . 23rd April. According to the press, the honorable member for Lang asked the Prime Minister whether the’ persons whose names I had mentioned had any redress against me. The Prime Minister,- in reply, is reported ‘to have said that parliamentary privilege forbade their taking any action against me. During the week, the Sydney Daily Telegraph published a leading article, in which ‘i-t challenged me to surrender my parliamentary immunity.

In the speech that I made in the course of my duties as a member of this Parliament, I referred to matters of great public importance. My statements were made iri good faith, after careful inquiry, and in the public interest. I then had, and I now have, no reason to doubt tb accuracy of the source of my information. I therefore say that, bearing in mind my own rights, and the necessity to protect the privileges of members of Parliament and the parliamentary institution, I do not intend to establish a precedent by abandoning this essential right of the Parliament.

Mr BERNARD CORSER:
WIDE BAY, QUEENSLAND

– Since the inauguration of the Commonwealth Parliament, it has been the custom to allow members to associate themselves with motions of condolence made by the Prime Minister in connexion with the death of members and former members of the Parliament. Can the Prime Minister, say whether there is any particular reason why exceptions have been made in the cases of Mr. Hector Lamond, a former member for Illawarra, and Mr. Roland Green, a former member for Richmond, whose deaths were recently reported ?

Mr CHIFLEY:
Prime Minister · MACQUARIE, NEW SOUTH WALES · ALP

– As the honorable member has stated, it was the practice to submit motions of condolence upon the death of a sitting or former member of the Parliament. Unfortunately, no notice was received of the death of some former members, and because of lack of that information motions of condolence were not moved in such cases. Apart from that - and I say this with due reverence to the deceased gentlemen concerned - the subject of such motions in many eases was unknown to. honorable members and merely stereotyped speeches and replies were made on such occasions. Such a practice did not do justice to the deceased. For these reasons it was decided - and I commit nobody else to the decision - that motions of condolence should be moved in the House only in respect of the death of sitting members.

Mr Menzies:

– The Prime Minister was good enough to consult me about the matter.

Mr CHIFLEY:

– At the time that decision was made no motion of condolence in respect of any ex-member was pending, and, therefore, it had no reference to any particular person. It appeared to me that the practice of moving such motions came to be followed largely as a matter of formality, because in many cases, whilst the deceased were no doubt very worthy, they had been completely unknown to sitting members. Having regard to these facts, I did not think that such motions were appropriate, and, therefore, should be discontinued except in respect of the death of a sitting member.

Later:

Mr McLEOD:
WANNON, VICTORIA

– Has the AttorneyGeneral seen the challenge by Mr. A. W. Rudkin of the Council for Scientific and Industrial Research in last Saturday’s Melbourne press offering to give £100 to charity if the charges made against him in this Parliament by the honorable member for New England could be substantiated? Will the Attorney-General endeavour to ascertain from the honorable member whether if his charges are proved false, or if he does not accept the challenge, he will give £100 to the Food for Britain’ Fund as some amelioration for Mr. Rudkin ‘s outraged feelings?

Mr SPEAKER:

– Order ! It is quite clear that the question asked by the honorable member has no connexion with the Attorney-General or his department.

Mr ARCHIE CAMERON:
Postmaster-General · BARKER, SOUTH AUSTRALIA · ALP

– Will the Attorney-General lay upon the table of the House all the papers relating to the charge, trial and finding in the case in which Mr. A. W. Rudkin was sentenced in Perth, possibly in June, 1940?

Dr EVATT:
Attorney-General · BARTON, NEW SOUTH WALES · ALP

– I shall ascertain whether the honorable member’s request can be granted.

Later:

Sir EARLE PAGE:
COWPER, NEW SOUTH WALES

– I desire to make a personal explanation arising out of remarks in which I was misrepresented.

Mr SPEAKER:

– Did the right honorable gentleman take part in the debate in which he claims that he wasmisrepresented ?

Sir EARLE PAGE:

– No.

Mr SPEAKER:

– That being so, the right honorable gentleman may make a personal explanation only with the indulgence of the House. Is leave given to the right honorable member for Cowper to make a personal explanation?

Mr Ward:

– No.

Leave not granted.

Mr McEWEN:
Indi

.-I move -

That so much of the Standing Orders be suspended as would prevent the right honorable member for Cowper (Sir Earle Page) from making a personal explanation.

As only one voice was raised in opposition to the proposal that the right honorable member for Cowper (Sir Earle Page) be given leave to make a personal explanation, and as the refusal to grant leave was probably made without due consideration, I remind the House that it has been the invariable custom in this chamber to permit any honorable member who claims that he has been misrepresented to state his case. Any departure from that well-established custom would, [ submit, have serious repercussions on honorable members generally, and, therefore, I trust that the Government will not aline itself and its supporters with the objector.

Mr WHITE:
Balaclava

– I second the motion. The good taste of the House is outraged at the refusal of the Minister for Transport (Mr. Ward) to allow a former Prime Minister to make a personal explanation in regard to a matter concerning which he claims to have been misrepresented. On second thoughts, the Minister for Transport may realize that he was wrong. Should his objection be upheld, and the right honorable member for Cowper (Sir Earle Page) be refused permission to make a personal explanation, the House would be justified in obstructing government business.

Mr SPEAKER:

– I thought that I had made clear the position in regard to personal explanations. The Standing Orders provide that should an honorable member who hag taken part in a debate claim that another honorable member has misrepresented something that he’ said, he has the right to make a personal explanation, provided that no other honorable member is speaking. But if an honorable member who claims that he has been misrepresented did not take part in the debate he may make a personal explanation only with the indulgence of the House. Moreover, the consent of the House must be unanimous.

Mr Turnbull:

– Would the right honorable member for Cowper be in order in making a personal explanation on the motion for the adjournment of the House ?

Mr SPEAKER:

– Yes.

Sir EARLE PAGE:
Cowper

.- Lt has been the invariable practice of this House to grant an honorable member permission to make a personal’ explanation when he claims that he has been misrepresented. That custom has gone further than to grant that permission in respect of alleged misrepresentation in the House. On one occasion, a former member for the electorate of Maribyrnong, Mr. Penton, was granted permission to make a personal explanation arising out of a newspaper report which he claimed had misrepresented him. Had I been in the chamber when the remark to which I take objection was made I should have made an immediate protest, but I was unavoidably absent at the time. This is the first opportunity I have had to refer to the matter. I desire to state the facts as set out in a letter which I propose to read.

Dr EVATT:
Attorney-Genera · Barton · ALP

and Minister for External Affairs) 4.’5]. - ‘I hope the House will not suspend the Standing Orders. ‘The right honorable member for Cowper (Sir Earle Page) asked for the courtesy or the privilege to make a personal explanation, but objection was raised, and permission was refused. He has his remedy in that he can ma,ke a full explanation later. Therefore, the honorable member for Indi (Mr. McEwen) is not justified in attempting to convert a privilege into a right by taking the business of the House out of the hands of the Government. I hope he will not press his motion.

Mr WARD:
Minister for Transport and Minister for External Territories · East Sydney · ALP

– I desire to state briefly my reasons for objecting to the granting of permission to the right honorable member for Cowper to make a personal explanation at this stage, and also why I object to the proposal that the Standing Orders be suspended. Under cover of making a personal explanation, the right honorable member makes a practice of making additional speeches at convenient times when the proceedings of thB House are being broadcast. He knows that if he sits in his place long enough he will have an opportunity to make his explanation on the motion for the adjournment of the House.

Mr ARCHIE CAMERON:
Barker · ALP

– I take exception to the suggestion that the right honorable member for Cowper (Sir Earle Page) should seek his remedy by making an explanation on the motion for the adjournment of the House. Statements made in this House while the proceedings are being broadcast are one thing; a debate on the motion for the adjournment of the House, which is not broadcast, no matter when the motion is moved, is another thing. The Government is asking the Parliament to agree that it should have the freedom of the air to traduce the right honorable member for Cowper, but that he should not have the freedom of the air to defend himself. A more lop-sided, ill-balanced’, unfair and unjust proposal I have never heard. I am ashamed and amazed that the Attorney-General (‘Dr. Evatt), an exjustice of the High Court, should tolerate it. If there is one ounce of decency or one shred of respect for parliamentary practice in the mind of the AttorneyGeneral he will vote with those on this side of the House in order to show the Minister for Transport (Mr. Ward) that lie was wrong. The right honorable member for Cowper has the same right to put a case in his defence as anybody else has in this House to defame him.

Mr. HOLT (Fawkner). £4.8].- -I strongly support the motion of the honorable member for Indi (Mr. McEwen). Surely, if- parliamentary government means anything, and if the Parliament is to be in any measure responsible for its own affairs, honorable members from all parts of the House will support this motion. In this instance, a private member who feels that he has been misrepresented in the Parliament, seeks the right to make a personal explanation, and that right, which he holds in common with “other honorable members, has now been placed in jeopardy. He claims that he was misrepresented during proceedings which were broadcast throughout the length and breadth of Australia, but now Ite is being denied, upon the objection of one man. the right to state his own case. If the feeling of the House is as was shown by the voices, when permission was sought for the right honorable member for Cowper to make his personal explanation, then it is evident that every member of this House except one believes that the right honorable member was entitled to be heard. Surely, then, the House has enough sense of fair play to sweep aside the objection of a man who, time and time again, has claimed to have been misreported in the press or; misrepresented,, and has invoked the privileges of this House to reply. This is the man who claimed parliamentary privilege before a royal commission when the Parliament itself had waived its privilege in the matter.

Mr SPEAKER:

– Order ! The honorable member is departing from the question before the Chair.

Mr HOLT:
FAWKNER, VICTORIA

– You allowed the Minister for Transport to state his reasons for objecting; we should be allowed to give our reasons for believing that his objection should’ be overruled. He has himself claimed privilege in the past, and it has been accorded to him. Therefore, I hope that honorable members will forget their party alinements on this occasion, and will accept the situation for what it is, namely, one which affect3 the right of private members, and involves the privileges and responsibility of the House.

Mr ANTHONY:
Richmond

. “ The Attorney-General (Dr. Evatt) said he hoped that the business of the House would not be taken out of the hands ofthe Government, but I point out that the> Minister for Transport (Mr. Ward) has already taken the business out of the hands of the Government, and this is npt the- first time he has done so. We are witnessing the- spectacle of the body of the Government being wagged by the tait. Had it not been that one single voice, that of the Minister for Transport, was raised in objection to the request of the right honorable member for Cowper (Sir Earle Page) to make a personal explanation, this matter would have been disposed of long before now. What may we expect to happen if the objection of the Minister for Transport is upheld ? I do not make any threats, but it seems evident that when next a Government supporter desires to make a personal explanation, the tendency will be for some member or members on this side of the House to retaliate by refusing permission, which is quite understandable. Will the Government then permit- the Standing Orders to be suspended in order to permit one of its supporters to make a personal explanation? If it does so, then the Government will be using its majority to enable one of its own supporters to explain himself, while members on this side of the House are denied that right. Should that occur, we shall have reached a stage in the conduct of the Parliament very far removed from the example set us by the Mother Parliament of - the Empire. I suggest that the best way out of the difficulty would be for other members of the Government to discuss the matter with the Minister for Transport before it goes to a vote. Otherwise, the precedent which may be created on this occasion can have a boomerang effect on private members of all parties.

Mr FALSTEIN:
Watson

.- I oppose the motion. I, too, objected to the right honorable member for Cowper (Sir Earle Page) being permitted to make a personal explanation at this stage. The honorable member for Barker (Mr. Archie Cameron) made the positive assertion that the proceedings of the House were being broadcast at the time the question was asked to which the right honorable member for Cowper had taken exception. There is no evidence before the House that that was so. I believe that the question was asked on Thursday last when the Senate was sitting. I do not assert it as a fact, but it is possible that the proceedings of this House were not being broadcast at the time. But, surely, apart from that question, the business of the Parliament is not to be regulated by the fact that a debate is, or is not, being broadcast. The Standing Orders are well known to most honorable members, and particularly, I should say, to the honorable member for Barker. It would be very unfortunate, indeed, if the business of the House could not be carried on in accordance with the Standing Orders, and discipline applied inrespect of breaches. Tn this case, objection has been raised to a certain matter; and I do not see why we should be obliged to regulate our conduct on the basis of whether or not a certain debate was being broadcast.

Mr MENZIES:
Leader of the Opposition · Kooyong

– Now that the Prime Minister (Mr. Chifley) has returned to the chamber, I should like to traverse very briefly what has occurred. The right honorable member for Cowper (Sir Earle Page) asked for the indulgence of the House to make a personal explanation. Mr. Speaker ruled, acceptably to all honorable members, I think, that the indulgence of the House would be needed in the circumstances. In all my parliamentary experience I have never known that indulgence to be refused; and; indeed, it was questioned, as the event happened, only by one, or possibly two, honorable members sitting on the Government side of the chamber. Consequent upon that refusal, the honorable member for Indi (Mr. McEwen) has taken the only course then open to him of moving the suspension of the Standing Orders - to enable the explanation to be made. I want to impress upon the Prime Minister, first, that this is one courtesy extended by the House in justice to honorable members, and I for one have never known that courtesy to be refused before. In the second place, I point out that most ot the statements that are made in the Parliament by leave of the House, and, therefore, capable of being prevented by the objection of any one honorable member, are in the natural course of events made by Ministers.

Mr SPEAKER:

– Order ! When the Leader of the Opposition has concluded his speech, I shall call upon the honorable member for Moreton to apologize to the Chair for the remark he has just made.

Mr MENZIES:

– Ministers have been refused leave to make a statement only when it was thought by somebody that questions without notice ought to be continued a little longer, but in the long run I have not known that refusal to be persisted in. I say- this with all good will to the Prime Minister that if leave can be refused to a former Prime Minister of this country to make a personal explanation on a matter affecting his own repute and conduct, then leave can be refused by the Opposition to Ministers to make statements; and we may, with just as much logic as has been exhibited in the last ten minutes, say, to a Minister, “ If you want to make your statement, make it on the motion for the adjournment of the House “. This is not the way to conduct the business of the Blouse. It is now seventeen minutes past four, and for seventeen minutes we have been discussing whether the right honorable member for Cowper should have leave to make a statement which, had he been granted leave to make it at the time he asked the indulgence of the House, would probably have been completed by five minutes past four, and the business of the House would have proceeded. I suggest to the Prime Minister that in the interest of the harmonious working of the Bouse, he should take steps now to ensure that leave he extended to the right honorable gentleman so that he can make his personal explanation and we can proceed with the business of the country.

Mr SPEAKER (Hon J S Rosevear:
DALLEY, NEW SOUTH WALES

– When the Leader of the Opposition (Mr. Menzies) was speaking, the honorable member for Moreton (Mr. Francis) made a very audible and insulting remark to the Chair. He knows the remark he he made; and I ask him to withdraw it and apologize to the Chair.

Mr Francis:

– I did not make an insulting remark to the Chair.

Mr SPEAKER:

– - The honorable member made the remark, and I ask him to withdraw.

Mr Francis:

– In deference- to the Chair I withdraw.

Mr SPEAKER:

– It is very clear to me what the honorable member said. While the Leader of the Opposition was informing the House that I had placed the matter very fairly before honorable members, the honorable member for Moreton said that “ I looked to Ward “ clearly implying that I was giving the Minister for Transport (Mr. Ward) an opportunity to object. As a matter of fact, I did not look in the Minister’s direction until I heard the voice of dissent. The honorable member for Moreton should be very careful of what he say3.

Mr Francis:

– I desire to make a personal explanation. I did not say what has been attributed to me. Mr. Speaker is entirely mistaken in the matter.

Mr CHIFLEY:
Prime Minister and Treasurer · Macquarie · ALP

[4.20 1 . - I do not know what happened earlier; but it has been made perfectly clear that objection by any one honorable. member is sufficient to prevent another honorable member front making a personal explanation. L do not know really what all the fuss is about, because that has been the practice with regard to all these matters, and that practice has been accepted readily by ministerial supporters. Only on two occasions has a member of the Opposition objected to leave being given to a Minister to make a statement. Generally, leave is granted quite readily. The Leader of the Opposition (Mr. Menzies) has referred to precedents ; but we cannot ignore the Standing Orders. Ministerial supporters have not complained when Ministers have asked for leave to make a statement, and been refused leave because one honorable member opposite has objected. It is not quite true to say as the Leader of the Opposition has said that honorable members opposite have objected to leave being given to Ministers to make statements because they did not wish the time for questions without notice to be interferred with. Objection has been raised because a Minister wanted to make an important statement at a time when questions were being broadcast. The objection was raised on selfish grounds.

Mr Holt:

– Will the Prime Ministersay whether leave to make a personal explanation has ever been refused by a member of the Opposition?

Mr CHIFLEY:

– That has nothing todo with the real issue; we must observethe Standing Orders. Ministerial supporters have never complained when honorable members opposite have objected to leave being ‘ granted. The Leader of the Opposition has suggested that the Opposition could often refuse leave. I have appreciated the courtesies extended to me. I do not know what the fuss has been about, because we haveaccepted refusals, and full opportunity has been given to honorable membersconcerned to deal* with the matters involved on the motion for the adjournment of the House.

Mr FADDEN:
Leader of the Australian Country party · Darling Downs

– The statement just made by the Prime Minister (Mr. Chifley) is extraordinary, having regard to all the circumstances. He reentered the chamber after this debatehad commenced, and he stated- that hedid not know what all the fuss was about. The cause of the fuss is theattempt now being made to break down an old-established courtesy extended by members of the Opposition to theGovernment in a desire to maintain, parliamentary authority. Honorable’ members who have bad some experience of the working, of the House have stated that this is the first time during their long experience that an honorable member has been refused leave to make a personal explanation. In connexion with a statement that was made about him during his unavoidable absence) the right honorable member for Cowper (Sir Earle Page) took the first opportunity presented! to him under the Standing Orders to request the House to permit him to make a personal explanation. He has not been permitted to do so, because one honorable member opposite has voiced his- objection to leave being given. I hope that the Government will reconsider, even at this stage, the effect which persistence in the objection will have upon the harmonious working of the House. The present Opposition has always endeavoured to co-operate with the Government in maintaining harmony in the proceedings of the House by observing old-standing courtesies. To deprive the right honorable member for Cowper of the opportunity to make a personal explanation, in these circumstances, is calculated to have a detrimental effect upon the co-operation .between the Government and the Opposition.

Mr BERNARD CORSER:
Wide Bay

– I join with other honorable mem. bers on this side of. the House in supporting the motion submitted by the honorable member for Indi (Mr. McEwen). In doing so we are merely desirous of re-affirming an old established principle, subscribed to by honorable members opposite when they were in opposition, that every private member has a right, by way o’f personal explanation, to reply to matters in respect of which he has been misrepresented. The Prime Minister (Mr. Chifley) has referred to the right conceded to Ministers of the Crown to make statements upon matters of importance. By way of replies to “ Dorothy Dix “ questions Ministers are able to bring before the Parliament any matters which they deem desirable. They have never been refused the right to lay reports on the table of the House. Government supporters catch your eye, Mr. Speaker, on any matter at any time. These privileges are freely indulged in. Only one honorable member opposite, the Minister for Transport (Mr. Waa-d)., was. prepared to deny to the right honorable member for Cowper (Sir Earle Page) an opportunity to make a personal explanation. Apparently the Minister does not believe in freedom of speech or the preservation of the rights of private members. Perhaps he may be prevailed upon to withdraw his opinion, particularly as he is about to go to Geneva to represent Australia at a con:ference at which freedom of speech will, we hope, be a feature.. If the honorable gentleman remains adamant in his refusal ho will leave this country branded as one who rejects the principle of freedom of speech. Doubtless, when he refused the right honorable member for Cowper permission to make his explanation, the Minister spoke with his tongue in his cheek; I do not believe he was sincere in his objection. ‘I trust that every member opposite will support the motion. By their silence they have already given their consent to the right honorable member for Cowper to make a “personal explanation. I sincerely trust that they will do so by their vote, and that the vote will not be. recorded on party lines.

Mr POLLARD:
Minister for Commerce and Agriculture · Ballarat · ALP

– In normal circumstances I would support a motion for “the suspension of the Standing Orders to give the right honorable member for Cowper (Sir Earle Page) an opportunity to make a personal explanation; but in this’ instance the circumstances are not normal. The right honorable gentleman was absent from his place in this Parliament during the whole of last week, and I see no reason why the time of the House should now be taken up in listening to an explanation which could have been” made by the right honorable gentleman immediately after the statement to which he now objects was uttered, had he been present in the chamber. In the circumstances lie should make his personal explanation on the motion for the adjournment of the House, and I therefore intend to oppose the motion.

Mr HARRISON:
Wentworth

– I was amazed to hear the Minister for Commerce and Agriculture (Mr.

Pollard) make such an extraordinary explanation as to why he intends to oppose the motion. As I understand the Minister’s remarks, when, for an unavoidable reason an honorable member absents himself from the Parliament and during his absence another honorable member traduces him in this House, he should, upon his return, be denied the right, except on the motion for the adjournment, to make a personal explanation in respect of the matters on which he has been misrepresented. If that is what the Minister means, it is, to say the least, an extraordinary view, and the sooner he understands what a democratic Parliament means, the better it will be for Australia. It is true, as the Prime Minister has said, that this House is governed by Standing Orders, and that any honorable member has the right to object to a personal explanation being made, but it is equally true that in that event theStanding Orders also provide an opportunity for an honorable member to move for the suspension of the Standing Orders to enable the explanation to be made. The position in which we find ourselves to-day is that of all the members present in this House this afternoon, only one, the Minister for Transport (Mr. Ward), objected to the right honorable member for Cowper being given permission to make a personal explanation. Every other honorable member was satisfied that the right honorable gentleman was entitled and should be given an opportunity to do- so. It will be interesting for those outside the Parliament to learn how the division on this motion is recorded, to ascertain whether those who were prepared to listen to the right honorable member for Cowper are now willing, by their vote, to enable him. to make his explanation. The Leader of the Opposition made it clear that honorable members on this side of the House have a right to refuse leave to Ministers to make statements on matters which they believe should be brought before us. I make it perfectly clear that unless justice is meted out to the right honorable member for Cowper in this matter, for as long as I remain in this House I shall object to leave being given to Ministers to make such statements and insist that they be made on the motion for the adjourn ment of the House. If the Government wishes to overcome my objection it will be necessary for a Minister to move for the suspension of the Standing Orders, as the honorable member for Indi (Mr. McEwen) has done. I look upon the refusal to grant this privilege to the right honorable member for Cowper as a filching of the right of a private member, whose name has been impugned, to clear it at the earliest possible moment by way of a personal explanation.

Motion (by Mr.Chifley) put-

That the question be now put.

The House divided. (Mr. Speaker - Hon. J. S. Rosevear.)

AYES: 33

NOES: 26

Majority . . 7

AYES

NOES

Question so resolved in the affirmative.

Question put -

That so much of the Standing Orders be suspended as would prevent the right honorable member for Cowper (Sir Earle Page) from making a personal explanation.

The House divided. (Mr. Speaker - Hon. j. S. Rosevear.)

AYES: 25

NOES: 34

Majority . . . . 9

AYES

NOES

Question so resolved in the negative.

page 1914

HOUR OF MEETING

Motion (by Mr. Chifley) agreed to -

That the House, at its rising, adjourn to tomorrow, at 10.30 a.m.

page 1914

MINISTERIAL DUTIES

Mr. CHIFLEY (Macquarie - Prime

Minister and Treasurer). - I inform honorable members that, owing to the absence of the Minister of the Interior (Mr. Johnson), due to illness, I have asked the Minister for Works and Housing (Mr. Lemmon) to act as Minister for the Interior as from the5th May, and during the period of Mr. Johnson’s incapacity.

page 1914

QUESTION

COAL

Shortage in South Australia.

Mr THOMPSON:
HINDMARSH, SOUTH AUSTRALIA

– Periodical shortages of coal supplies in Adelaide cause the rationing of electricity and gas services to householders, and interrupt the operations of many industries. Will the Prime Minister state whether it is possible to obviate these recurring shortages, by making more shipping available? According to a press statement, several ships are being chartered in the Far East. When they have arrived in Australian waters, could they be used for the transport of coal to South Australia, thus easing the position?

Mr CHIFLEY:
ALP

– The matter to which the honorable member has referred has been the subject of representations by him and other South Australian members, as well as by the Premier of South Australia, Mr. Playford, last week. I immediately consulted with the Minister for Supply and Shipping, who took steps to ascertain what ships would be available to carry coal to South Australia. There is a shortage of shipping at the moment, but it is hoped that sufficient vessels will soon be available to carry sufficient coal to meet the immediate requirements of South Australia. This morning I informed Mr. Playford by telegram of the steps that have been taken. The honorable member for Hindmarsh may see a copy of the communication. I shall again consult with the Minister forSupply and Shipping on thesubject.

page 1914

QUESTION

OYSTERS

Shipment to Singapore

Mrs BLACKBURN:
BOURKE, VICTORIA

– Has the Prime Minister seen a paragraph which appeared in the Melbourne Herald of the 30th April, stating that 1,000 dozen oysters were being prepared and packed for shipment to Singapore? Will he state the policy of the Government in regard to shipping space, and how it is allotted ? Further, will he inform the House how it is possible to ship luxury foods to satisfy the appetites of persons in comfortable circumstances at a time when there seems to be great difficulty in providing shipping space for necessary foods urgently needed by starving and destitute persons in the same parts of the world ?

Mr CHIFLEY:
ALP

– I have not seen the press paragraph to which the honorable member has referred and was not aware that oysters had been shipped to Singapore. I shall have inquiries made, and shall supply the honorable member with a reply as soon as possible.

page 1915

QUESTION

SISTER SAVAGE

Mr RANKIN:
BENDIGO, VICTORIA

– Is the Prime Minister aware that a subscription list has been opened to enable Sister Savage, George Medallist and heroine of Centaur, to visit Great Britain to study for an advanced nursing certificate ? If so, will he inform the House whether the Government has given consideration to the New Zealand scheme under which nurses and others are sent abroad for specialized courses not available in the dominion, and will he consider taking similar action in respect of Sister Savage and others desiring to take such courses abroad?

Mr CHIFLEY:
ALP

– I was not aware that a subscription list had been opened to enable Sister Savage to visit Great Britain, but verbal representations on the subject have been made to me on a number of occasions. I understand also that the Minister for Health has considered the proposal. I shall discuss the matter with the Minister for Health, and shall let the honorable member have a reply, but it would appear that this is a matter for the State governments rather than the Commonwealth Government.

page 1915

QUESTION

NATIONAL SAVINGS CAMPAIGN

Radio Hook-up.

Mr FRASER:
EDEN-MONARO, NEW SOUTH WALES

– On Sunday night last, from 9.0 p.m. to 9.45 p.m., every radio station in Australia broadcast the same programme, namely, the national championship quiz in connexion with the National Savings Campaign. Canthe Minister rep resen ting the PostmasterGeneral say whether this “ blanket “ of the air was established by the exercise of powers vested in the PostmasterGeneral ? If it was the result of a voluntary arrangement entered into by the various radio stations concerned, will the Minister have the position examined with

  1. view to ensuring, now the war is over, that no matter how excellent the programme or how good the cause, the dangerous and undemocratic procedure of regimenting listeners shall not be resorted to?
Mr CHIFLEY:
ALP

– The arrangement referred to was made by the loans organization, which is under my adminisistration, in connexion with the National Savings Campaign. On several previous occasions, similar programmes have been arranged in connexion with such appeals. I am not aware that any coercion was exercised, or anydirections given, to ensure the co-operation of the commercial radio stations. As a matter of fact, they have been very helpful in connexion with appeals of this kind and, indeed, in connexion with all appeals of a national character. No direction was given by me, or by the Postmaster-General. A satisfactory arrangement was reached between the commercial stations and the loans organization. I shall make inquiries in order to verify that statement, and the honorable member will be supplied with the information later.

page 1915

QUESTION

AUSTRALIAN PRISONERS OF WAR

Mr WHITE:

– Recently, when the honorable member for Wimmera asked that ex-prisoners of war, who had been held by the Japanese, be paid subsistence money the Minister for the Army said that no deductions had been made from their pay in respect of rations supplied by the Japanese. I understand that that does not apply to former members of the Navy and the Royal Australian Air Force taken prisoners of war. Will the Minister for Defence confer with the Minister representing the Minister for Air and the Minister for the Navy with a view to according similar treatment to all prisoners of war, whether members of the Army, Navy or Air Force, and whether they were prisoners of the Japanese, the Germans or the Italians?

Mr DEDMAN:
Minister for Defence · CORIO, VICTORIA · ALP

-I shall consult with the Minister for the Army and the Minister for the Navy, in order to learn what is the position in regard to prisoners of war.

page 1916

QUESTION

QUESTIONS:

Mr McLEOD:

– Through you, Mr. Speaker, I desire to ask the honorable member for New England whether he has seen the challenge-

Mr SPEAKER (Hon J S Rosevear:

– Order! The honorable member may not ask a question of another honorable member.

Later :

Mr SPEAKER:

– In case some misunderstanding may have arisen with respect to the ruling I gave in connexion with a question asked by the honorable member for “Wannon, when I said that ah honorable member is not permitted to ask a question of another honorable member, “1 should like to qualify that ruling by stating that any honorable member may direct a question to another honorable member who is chairman of a parliamentary committee on the progress of the work of such a committee, or to another honorable member in whose name a motion stands on the notice-paper in relation to the subject-matter of that item. Those are the only occasions on which an honorable member may address a question to another honorable member.

page 1916

QUESTION

AMERICAN FLEET

Mr ANTHONY:

– Shortly, a task force -of the American fleet consisting of a number of major war vessels and about 1.0,000 personnel will visit Australia. I recall that in 1941, just prior to the entry of Japan into the war, when a similar visit was made to this country, the Parliament adjourned in order to enable a special welcome to be extended to the American visitors. In view of .the fact that the forthcoming visit will offer to the Australian people their first opportunity, since the war ended, to express their recognition of the aid given by the United States of America to this country during the war, I ask the Prime Minister whether the Government has made any special preparations to extend a fitting welcome to the Americans on this occasion ?

Mr CHIFLEY:
ALP

– Consultations have taken place on the matter, but I do not know whether any arrangements for a special welcome have been under .con sideration. I am sure that the Australian people will give to the visitors a very warm welcome. However, I shall examine the matter further with a view to seeing what might be done to arrange a special welcome.

page 1916

QUESTION

MOTOR VEHICLES

Mr FRASER:

– I ask the Minister for Transport whether there is any prospect of an improvement of supplies of motor cars and motor utility vehicles? Has he seen the figures i or March, which, for New South Wales alone, show that in ‘respect of one popular make of utility vehicles, distributors were able to supply only two, whereas 3,470 applications were made; whilst for another make 1,025 applications were received and distributors were able to supply only 33 vehicles. In respect of car.s, more than 3,505 applications were made for one make, but the distributors could provide only 100, and for another make although 2,119 applications were lodged, only 25 vehicles were made available. If there be no prospect of motor car companies- being able to increase supplies, will the figures of releases be published so that members of the public will know the position and not build false hopes when they lodge their applications?

Mr WARD:
ALP

– There is some prospect of the supply position improving. Considerable numbers of chassis are already in Australia but difficulty has been experienced in building bodies for them. The latest reports from” that section of the industry indicate that there is expected to be some speeding up of production. In-order that the honorable member may be fully informed of the position I shall secure the exact figures covering releases made during recent months.

page 1916

QUESTION

TAXATION

Exemption of Subscriptions for Memorial Buildings

Dame ENID LYONS:
DARWIN, TASMANIA

– Many communities throughout Australia are providing clubs and hostels for the use of ex-servicemen. In response to ‘representations made from my home town, Devonport, I ask the Prime Minister whether, in view of the fact that such community efforts provide valuable amenities for those who gave so much service to the people of Australia, will he sympathetically consider the possibilityofmaking donations for the building of such institutions free of income tax?

Mr CHIFLEY:
ALP

– I shall give con sideration to the honorable member’s request. It must be remembered, however, that many hundreds of worthwhile appeals are made not only for amenities for ex-servicemen, but also for the provision of semi-educational facilities and clubs and hostels which are of great value to the people. I shall examine the honorable member’s request when considering other matters relating to income tax rebates. I am not particularly hopeful at the moment, however, that the request can be acceded to.

page 1917

QUESTION

CORAL SEA BATTLE

Mr FULLER:
HUME, NEW SOUTH WALES

– In view of the vital importance of the Coral Sea battle to the eventual defeat of Japan in the recent World War will the Prime Minister at the next meeting of Commonwealth and State Ministers, raise the question of suitably commemorating future anniversaries of that great historic event?

Mr CHIFLEY:
ALP

– I had not thought of raising the matter at a meeting of Commonwealth and State Ministers. I shall have the honorable member’s proposal examined and if it be found to be one which I believe should be made the subject of joint consideration between the Commonwealth and theStates Ishall bring it before the State premiers.After the proposal has been examined I shall inform the honorable . member of the decision.

page 1917

QUESTION

COMMONWEALTH LITERARY FUND

Mb. J. M. Bawling : Statement by Mb. L. C. Haylen, M.P.

Sir EARLE PAGE:

– In view of the slanderous attack made on me during my absence last week by the honorable member for Parkes, will the Prime Minister agree to my reading the letter from Mr. J. M. Bawling, which the honorable member was good enough to send to me, which completely vindicates my attitude?

Mr CHIFLEY:
ALP

– I have nothing to do with the matter.

page 1917

QUESTION

RAIL TRANSPORT

Standardization of Gauges

Mr THOMPSON:

-following the agreement between the Commonwealth, New South Wales, Victoria and South Australia relating to the standardization of railway gauges, will the Minister for Transport inform honorable members as to the present position of the proposal and what progress has been made?

Mr WARD:
ALP

– As honorable members are aware, an agreement was reached some time ago by the Governments of the Commonwealth, New South Wales, Victoria and ‘South Australia, to proceed with the great national undertaking of standardization and modernizing the Australian railway services. The Commonwealth Parliament has passed legislation ratifying the agreement as has the South Australian Parliament, and just prior to the New South Wales elections, the Premier of that State, Mr. McGirr, assured me that upon his re-election his Government would introduce legislation at an early date to ratify the agreement. Mr. Cain, the Premier of Victoria, will not be lagging far behind. I understand that in South Australia certain work has already been put in hand. A substantial volume of preliminary work is awaiting ratification of the agreement, and as soon as the Labour Governments of New South Wales and Victoria have taken action, the work will be able to proceed apace.

Later:

Mr BERNARD CORSER:

– In view of the optimistic belief of the Minister for Transport that the work of standardizing the railway gauges of Australia would be proceeded with when the Parliaments of Victoria and New South Wales had ratified the agreement with the Commonwealth, will the Prime Minister state whether the Government considers that sufficient labour for this work will then be available, notwithstanding the existing serious shortage of labour for industrial purposes? When the requisite labour becomes available, will the requirements of the irrigation proposals of Victoria, the £30,000,000 irrigation proposal in New South Wales, and the small irrigation schemes in Queensland, receive priority over the standardization of railway gauges?

Mr CHIFLEY:
ALP

– On a number of occasions, the Minister for Transport has made- it perfectly clear in this House that, although extensive preliminary arrangements had to be undertaken, the State governments would have the right to determine when the constructional work could appropriately be proceeded with, having regard to the availability of man-power and materials. At conferences of Commonwealth and State Ministers held in Canberra, the Minister for Transport, in consultations with the Premiers and other representatives of the States, left no doubt, in their minds that the work would be undertaken at a time which they considered was appropriate.

page 1918

QUESTION

INDUSTRIAL UNREST

Victorian Metal Trades Dispute

Mr RYAN:
FLINDERS, VICTORIA

– I ask the Prime Minister whether the Amalgamated Engineering Union strike in Victoria has been settled as the result of an approach to the Arbitration Court? If so, does the right honorable gentleman consider that the time is now propitious for a peaceinindustry conference between organized labour and organized employers - a course that has been urged upon him on several occasions, but so far, without result.

Mr CHIFLEY:
ALP

– The Premier of Victoria, Mr. Cain, and the Commonwealth Government have insisted that the strike in Victoria should be dealt with by the Arbitration Court, and, whatever major conferences have taken place have been held under the jurisdiction, and at the direction of, the Acting Chief Judge of the Arbitration Court or the Industrial Registrar. The matter, I understand, has still to be presented to the court for consideration, therefore, I have no comment to make. In regard to the concluding portion of the honorable member’s question, a considerable time ago, a request for a peace-in-industry conference was made to me through the Minister for Labour and National Service, and, I understand, at the instigation, and with the concurrence of employers organizations and the Australasian Council of Trade Unions. I acceded to the request and accepted’ the invitation of both parties to act as chairman of the conference. At a later stage however, the parties intimated to me that they did not desire the conference to proceed, because the industrial situation at that time was such that they felt that satisfactory results could not be expected. Since that date, I have not had a request from either of the original parties for the calling of a conference, although some questions have been asked in this chamber in regard to the matter.

page 1918

QUESTION

BROADCASTING

Frequency Modulation

Mr FALKINDER:
FRANKLIN, TASMANIA

– I ask the PostmasterGeneral what progress has been made in considering the Broadcasting Committee’s recommendations on frequency modulation.

Mr CALWELL:
Minister for Immigration · MELBOURNE, VICTORIA · ALP

– The Broadcasting Committee’s reports have been the subject of a submission to the Cabinet by the Postmaster-General. Consideration is being given by a sub-committee of the Cabinet to all the questions raised concerning not only frequency modulation but also other matters. In due course the policy of the Government on those matters will be announced by the Postmaster-General.

page 1918

QUESTION

WOOL

Sales in Japan.

Mr SHEEHAN:
COOK, NEW SOUTH WALES

– I ask the- Minister for Commerce and Agriculture whether the Australian Wool Board intends to sell wool from the stock-pile to Japan. If it does, what quantities does it propose to sell to that country?

Mr POLLARD:
ALP

– The Commonwealth Government has made sala? to Japan from the wool stock-pile. The quantity so far sold to Japan is 7,300 bales.

page 1918

QUESTION

WHEAT

Payments to Growers

Mr McBRIDE:
WAKEFIELD, SOUTH AUSTRALIA

– I ask the Minister for Commerce and Agriculture when the wheat-growers of Australia may expect a further payment ‘on their last wheat crop. Can he assure the House1 that there shall be no delay in making a further payment owing to the low price for which wheat was sold to New Zealand?

Mr POLLARD:
ALP

– The wheat-growers of Australia may expect payment from the last wheat pool as soon as the finances’ of the Australian Wheat Board permit that to be done. There has never been delay in making payments to the growers.

page 1919

QUESTION

ROYAL AUSTRALIAN” AIR FORCE

Certificates of Service

Mr FALSTEIN:

– Will the Acting Minister for Air ascertain whether members of air crews in the Royal Australian Air Force, who served operationally and who, after the war, were compulsorily transferred to administrative and special duties work, have been issued with certificates of service that state that they served only in the administrative and special duties branch? If that is so, will he have all certificates of service, which are the equivalent of discharges, amended so that they shall state that those gentlemen served as air crew members?

Mr BARNARD:
Minister for Repatriation · BASS, TASMANIA · ALP

– I will ascertain whether the certificates give correct details of service. If the information given is not complete, I will arrange for their correction in order to ensure that such airmen receive full credit for the service they have rendered. I will inform the honorable member the result of my inquiries.

page 1919

QUESTION

FILMS

Suitability for Children

Mr GULLETT:
HENTY, VICTORIA

– Many films shown to school children at matinees in Victoria are undoubtedly most unsuitable and it is certain that they must have a harmful effect on them. Recently, a parents and citizens association arranged to make a number of broadcasts to parents in Victoria with the object of bringing the danger to public attention. After two broadcasts had been made they were told by the broadcasting station authorities that they could not- continue the broadcasts because they were opposed to the interests of the theatre owners who advertised through the station. What steps can the Minister representing the Postmaster-General take to ensure that information of this kind, which clearly the people should know about, shall not be suppressed simply because it is detrimental to the interests of powerful advertisers?

Mr CALWELL:
ALP

– I 1 do not know whether anything can be done in regard to the honorable member’s complaint, but I shall bring his observations to the notice of the Postmaster-General. I agree with the tenor of the honorable gentleman’s complaint and I shall ask the Postmaster-General to consult, if necessary, with the Minister for Trade and Customs, under whose control the censorship of films operates. It is obvious, in this case, that the evil should be attacked at its source. Possibly the Minister for Trade and Customs may be able to do something about the evil itself and the Postmaster-General may be able to take some action with regard to a broadcasting station carrying on a form of censorship of its own to protect .the interests of its advertisers.

page 1919

QUESTION

ARMED FORCES

Absence Without Leave

Mr CONELAN:
GRIFFITH, QUEENSLAND

– Is it correct that soldiers who were absent without leave during the war were given certificates of discharge showing service up to a certain date, but that soldiers who have offended by being absent without leave since the war ended, have been refused such certificates? In many cases these men saw active service during the war. Will the Minister for the Army inquire into the matter with a view to rectifying this anomaly?

Mr CHAMBERS:
Minister for the Army · ADELAIDE, SOUTH AUSTRALIA · ALP

– This matter has been brought to my notice and I am at present investigating it to ensure that those soldiers who rendered good service during the war years are not penalized.

page 1919

QUESTION

TRACTORS

Mr HOWSE:
CALARE, NEW SOUTH WALES

– In view of the limited number of tractors available to Australian farmers and the American decision to restrict its exports to 15 per cent, of its total production, has the Government taken any steps to secure delivery of tractors from the United Kingdom ? If not, will the Government make immediate representations to that country in an endeavour to overcome the acute shortage by importing British tractors ?

Mr POLLARD:
ALP

– An acute shortage of tractors in ‘ Australia has been brought about by industrial disturbances in America and production difficulties in the United Kingdom. However, Australianimporters, with the sponsorship of the Department of Commerce and Agriculture, have been active in encouraging manufacturers in Great Britain and the United States to export tractors to Australia. In addition, every encouragement has been given to local tractor manufacturers to increase production. The Government will be very glad to accelerate the importation of tractors to this country by airy reasonable means.

page 1920

PENICILLIN

Mr FRANCIS:

– On Saturday, I forwarded to the Prime Minister a letter which I had received dealing with the serious shortage of penicillin in Queensland, and I . now read a short extract from that letter -

I draw your attention to the situation which exists at present in Queensland in regard to the drug penicillin. I am particularly concerned in this regard because my father is at the moment an inmate of a private hospital suffering from a blood infection and he is being subjected to particularly large injections of drugs in the absence of-

Mr SPEAKER:

-Order! . The extract is far too lengthy.

Mr FRANCIS:

– The man referred to in the letter has since died. In view of the present shortage of penicillin, particularly during the recent protracted industrial disturbance in Victoria, and having regard to the fact that the Commonwealth Serum Laboratories are the main manufacturers of penicillin, will the Prime Minister have representations made to the Director of the Commonwealth Serum Laboratories to ensure that penicillin shall be made available and transported by air to sufferers in Queensland, where supplies of the drug are extremely low?

Mr CHIFLEY:
ALP

– The Minister for Health has been making every possible endeavour to ensure that all the needs of the community shall be met. I had not given any special thought to the matter of transportation. The honorable member mentioned the advisability of conveying suplilies of penicillin to Queensland by air, in order to make up shortages as expeditiously as possible, and I shall submit his suggestion to the Minister for Health.

However, the honorable member may rest assured that everything is being done to expedite the manufacture and distribution of penicillin.

page 1920

QUESTION

GLYCERINE. -

Mr BEALE:
PARRAMATTA, NEW SOUTH WALES

– Last Thursday, I asked the Prime Minister a question in relation to the shortage of supplies of glycerine in Australia for medical purposes. The right honorable gentleman promised to inquire into the matter, and give to me an answer as soon as possible. Having regard to the urgency of the matter, can he inform me of the position?

Mr CHIFLEY:
ALP

– Until the honorable member asked his question last week, the shortage of glycerine had not been brought to my notice, but I immediately instituted inquiries for the purpose of ascertaining whether supplies could be made available. I regret that I have not been able to give to him a complete answer as the result of the ‘investigation, hut 1 shall do so as early as possible1.

page 1920

QUESTION

PRICES CONTROL AND RATIONING

Dismissal of Officials - Rationed Goods to Cafes

Mr HARRISON:

– Following my statements recently about the supply of rationed goods to certain cafe proprietors, I handed some information to officers of the Commonwealth Investigation Branch. I should like the Attorney-General to inform me whether those officers have yet acted on the information and whether he is yet in a position to make a statement about it? Will he also inform me of the latest developments arising from my allegations about certain officials of the Prices Branch ?

Dr EVATT:
ALP

– As the honorable member stated, he handed to officers of the Commonwealth Investigation Branch, a letter which he had received from some person and which he read in the House. Those officers are now investigating the suggestions and imputations contained in the letter and in the honorable member’s speech. The Minister for Trade and Customs has made a public statement regarding the possibility of legal proceedings being instituted against certain officials of the Prices Branch. He also pointed out, and I agree with his submission, that in the meantime those officials should not be condemned before their cases have been investigated.

page 1921

QUESTION

NEW GUINEA

War. Damages Claims

Mr RANKIN:

– I understand that the War Damage Commission has decided that the 3rd September next shall be the “ deadline “ for the receipt of applications for compensation for damage to property in New Guinea. In. view of transport difficulties, particularly to New Guinea, will the Minister for External Territories make representations to Cabinet for the purpose of ensuring that those persons who have not been able to return to their plantations and properties shall not be excluded from receiving compensation for war damage?

Mr WARD:
ALP

– Transport to the territories of the Commonwealth has recently been vastly improved. If there are any persons who will be adversely affected by decisions of the War Damage Commission, I shall have the matter examined, with a view to making appropriate recommendations to the Prime Minister, to correct the position.

page 1921

QUESTION

SHIPPING

Freight Rates - King Island Service

Mr WHITE:

– Have overseas shipping, companies intimated to the Prime Minister or the Minister for Supply and Shipping, either officially or unofficially, that the slow turn-round of ships in Australian ports may necessitate a substantial increase of shipping freights to and from Australia? If so, what increase i3 contemplated, and when is it likely to be made?

Mr CHIFLEY:
ALP

– I have no recollection of having received any written statement on the matter raised by the honorable gentleman. In conversations that I have had with overseas shipping interests, they have been perturbed by the slow turn-round of ships in Australian ports. I believe that “that has applied to American as well as British, ships. As far as I know, the likelihood of overseas shipping freights being increased has not been raised. I understand, however, that there have, been consultations with the appropriate authorities in regard to an increase of shipping freights in Australian coastal waters. The honorable gentleman probably knows that the Government has given some financial assistance, particularly in connexion with ships that have been under charter. I shall consult the Minister for Supply and Shipping, with a view to ascertaining whether there is any further information that I can supply to the honorable member.

Mr White:

– Will the right honorable gentleman’ make a statement on the matter, in view of the fact that an increase of freights may cause internal prices to rise?

Mr CHIFLEY:

– I am afraid that I shall not be able to make a statement for some time. In the conversations that have been held, it has been indicated that, in the light of a number of circumstances, there should be an increase of shipping freights at some future date.

Dame ENID LYONS:
DARWIN, TASMANIA · UAP; LP from 1944

– Last week, I asked the Minister representing the Minister for Supply and Shipping to furnish information, for the benefit of the people of King Island, concerning alterations to -the steamer Tanbar and the restoration of the pre-war shipping service to that island. I have not yet received a written reply to my representations. Will the Minister state whether the information is yet available?

Mr DEDMAN:
ALP

– I am- not yet in possession of the information. I shall again ask the Minister for Supply and Shipping to provide it.

page 1921

QUESTION

REAL ESTATE TRANSACTIONS

Mr HOLT:

– I understand that, about February last, an expert committee which had been appointed under the auspices of the Government examined questions relating to the valuation of real estate. Has’ the Prime Minister received the report of that committee, and has the Government reached any decision in relation to its recommendations?

Mr CHIFLEY:
ALP

– The valuation of land and property, as the honorable gentleman must know, is difficult. Factors that have to be considered include the costs of buildings recently erected, compared with those that ruled when buildings were erected years ago, as well as the value of the land. The committee ? of which the honorable gentleman has spoken was a departmental body, composed of those officers who had been associated with and had some knowledge of the work. I am not able to make a statement on the matter, because the discussions and reports have involved administrative action rather than considerations of policy generally. However, I shall see whether I can supply more detailed information.

M.r. BEALE. - The Prime Minister will recall that, during the debate on the Defence (Transitional Powers) Bill last December, a good deal of criticism was directed against the National Security (Economic Organization) Regulations, especially with respect to the basis of valuation of real estate being the values that were ruling in 1942. During the course of that debate, the right honorable gentleman indicated to the House that it was proposed that that basis of valuation should be reconsidered, with a view to making it more liberal and up to date. >I now ask him what consideration has been given to this important matter by himself personally or by the Government?

Mr CHIFLEY:

– This matter has some relation to that raised by the honorable member for Fawkner.. It is, of course, constantly under examination. As the result of the first examination of it, without any direct instructions or a specific enunciation -of policy, somewhat wider discretionary power was given to the delegates to the Treasurer to have regard -to particular circumstances when dealing with each case. I have undertaken to prepare a statement for the honorable member for Fawkner. I shall see that the honorable member for Parramatta receives a copy of it.

page 1922

QUESTION

FOOD FOR BRITAIN

Mr ANTHONY:

– The Minister for Commerce and Agriculture, in the statement that he made to this House on the 1st May concerning food for Britain, said that a scheme had been outlined to him by the chairman of the Australian Meat Board, Mr. Seh u te, which he considered practicable, and which, with the co-operation of graziers and exporters, - could be expected to provide additional meat for Britain. The honorable gentleman also said that £10,000 would be allocated by Cabinet for the purpose of giving publicity to this scheme. Will he now mention some of the particulars of the scheme ?

Mr POLLARD:
ALP

– Whether due to his fault or mine, the honorable gentleman has completely misunderstood the text of my statement. My announcement that Cabinet had agreed to expend up to £10,000 in respect of the appeal embraced, not only the activities of the Australian Meat Board, but also genera] activities in connexion with the saving and collection of coupons, meatless days, and propaganda designed to encourage those of our people who can afford it to sacrifice some of their plenitude in order to help the people of Great Britain.

Later: ,

Mr ANTHONY:

– So that there shall be no misunderstanding as to the remarks made by the Minister for Commerce and Agriculture in his speech made on the 1st May regarding food for Britain I shall read the portion of it to which I desire an answer. The Minister said -

In respect to meat I mention that on the 27th March, 1947, the Chairman of the Australian Meat Board, Mr. Shute, outlined to me a practicable plan through which the Board, with the co-operation of graziers and exporters, would be prepared to arrange export to Britain of consignments of livestock designated by graziers specifically for. that purpose. On the Government’s behalf, I immediately endorsed the suggestion and authorized the Board to devote any necessary funds to the furtherance of this plan.

I now ask the Minister if he will supply the House with particulars of the scheme ?

Mr POLLARD:
ALP

– I did make that statement in outlining the- Government’s proposals to aid Britain by supplying additional food. The Chairman of the Australian Meat Board, Mr. Shute, interviewed me and outlined his plan, but he did not place any specific financial proposals before me, because, under its charter the board has definite powers in that respect. I told Mr. Shute that, in my opinion, the scheme was a good one, and that to the degree to which it may involve the Australian Meat Board- in expenditure I would be prepared to endorse it.

Mr Anthony:

– What is the nature of the scheme, or is it still secret?

Mr POLLARD:

– At that time, the scheme had not been fully developed. The board’s scheme has been launched, and I am sure that any financial commitments involved in aiding the people of Britain will meet with the approval of thehonorable member for Richmond. At this stage, I cannot give details of the scheme.

page 1923

QUESTION

ANTARCTIC RESEARCH

Mr FRANCIS:

– Can the Minister for

External Affairs say whether the Government has considered a proposal whereby the United States of America, New Zealand and Australia would combine their resources and activities in Antarctic research ? If so, can he inform the House what proposals have been made, and whether in any suggested agreement provision, had been made for joint action?

Dr EVATT:
ALP

– The notice-paper contains a question on this subject and an answer will be given later.

page 1923

QUESTION

PUBLIC SERVICE

Staffs of Repatriation Commission and war Service Homes Commission.

Mr FALKINDER:

– Can the Minister for Repatriation say how many Commonwealth employees who are not exservicemen or women have been transferred to the staffs of the Repatriation Commission and the War Service Homes Commission as the result of recent legislation enabling that to be done; and how many of such employees is it proposed to transfer in the near future?

Mr BARNARD:
ALP

– No Commonwealth employees who are not ex-servicemen or women have been transferred to the Repatriation Department, and it is not contemplated that any such persons shall be transferred in the future. The staff of the Repatriation Department consists of ex-servicemen, and the widows or dependants of ex-servicemen. The War Service Homes Commission is controlled by the Minister for Works and Housing, and I suggest that the honorable member direct his question concerning that department to my colleague.

page 1923

QUESTION

FINANCIAL STATEMENT 1947-48

Debate resumed from the 2nd May (vide page 1897), on motion by Mr. Chifley -

That the following paper be printed: -

Financial Statement by the Eight Honorable J. B. Chifley, M.P., Treasurer.

Mr BEAZLEY:
Fremantle

.- Lastweek we heard the Leader of the Opposition (Mr. Menzies) and the honorable member for Richmond (Mr. Anthony) lead the attack of the Opposition parties on the financial statement presented to this. House by the Treasurer (Mr. Chifley). The Leader of the Opposition was at same pains to make an analysis of inflationary tendencies, and alsoto discuss the general question of wagepegging and its effect on our economy. The honorable member for Richmond made certain strictures on companytax. and there are certain aspects of his statement that I propose to analyse later. The analysis presented by the Leader of the Opposition was most inadequate in that it failed to deal at all with the main causes of the inflationary tendency that undoubtedly has set in. The right honorable gentleman did not mention that for over six years hundreds of thousands of men in the armed forces had been paid while they were not producing anything and hundreds of thousands of persons working in the munitions factories had been paid wages while not producing consumer goods. He failed also to mention the effect of our export boom, our import deficiency and’ our gifts to Unrra as factors causing inflation. Our proposed gift of £25,000,000 to Great Britain will also have an inflationary effect in a manner to which I shall direct attention later in my speech. I do not suggest that gifts should not have been made to Unrra because they have an inflationary effect, or, that a gift should not be made to Great Britain because it will have an inflationary effect, but I do think that if one is to discuss the question of inflation one should discuss every aspect of it. In our first peace year Australia exported goods valued at £200.000,000. Oursterling balances in London have risen until Britain owes us £234,000,000 for goods it has received and has been unable to pay for with goods. That has occurred in the last few years, and the tendency has been accelerated since the end of the war because in the first eight months of the current financial year goods valued at £5S,000,000 were sent to Britain. Incomes have been generated and the volume of goods in circulation in Australia has been reduced by the export trade. Because the industries of Britain have been dislocated and other countries that are receiving our goods are not able to export their goods to circulate within the Australian economy the effect of our lopsided trade is completely inflationary. The gift of £25,000,000 to Britain may enable that country to receive £25,000,000 worth of goods from Australia that will further reduce the volume of goods in circulation in Australia. That gift exempts Britain from paying for those goods with £25,000.000 worth of British goods. At the same time, farmers and others who supply the food and the goods to be sent to Britain will receive returns from the £25,000,000. So we shall increase by this gift the volume of money in circulation in Australia and reduce the volume of goods in circulation. By that gift and the gift to Unrra of £21,000,000 the inflationary tendency is established. So far as they depreciate the purchasing power of the Australian £1 in Australia we carry our part of the burden that countries that were directly involved in the war must carry.

Other factors in the last eighteen months have accelerated the inflationary tendency. Deferred pay ‘amounting to £72,000,000 was paid to the armed services in the first ‘ year of peace. That £72,000,000 was paid to people who were not producing and its effect was inflationary. Military pay in the demobilization period was equally inflationary. So- the Commonwealth Government was forced to apply the wagepegging policy to which the Leader of the Opposition made superficial and inadequate reference. ‘Those in industry had to receive less because so many non-producers, to whom the country owed a great debt because they had defended it and who had not had the opportunity of producing, had to be paid that money. That produced an immense inflationary tendency that the Govern- ment has sought to arrest by wagepegging. The producers have been penalized because so many incomes were being generated without production to compete for the limited supplies of goods available. Party propaganda references to inflation - and the references of the Leader of the Opposition were party propaganda of the worst type - which fail to take into account these immense factors in causing inflation, which play around merely with what, honorable members opposite deem to be the inadequacy of wage pegging, do noi help the Australian community to understand their problems. I pay a particular tribute to the Australian people for their immense restraint in the first, eighteen month’s of peace. Savings in 1941 amounted to about £234,000,000, but the amount in savings banks to-day totals about £690,000,000, and there must be vast sums in other banks. The Australian people have shown the greatest restraint in spending when goods are necessarily in short supply because of the diversion of production to the war effort. Had there been, on the part of the Australian public, some of the lack of restraint that, has characterized other countries, and that £690,00,000 in the sayings banks or any considerable part of it had been pushed into circulation by the people’s impatience to buy, our situation would be chaotic.

The Leader of the Opposition attacked wage-pegging, or alleged anomalies in it and characterized -the Government’s policy as one of retreat in the face of intense pressure, particularly from the trade union movement. I. did not hear any speech from Opposition members explaining .to the Australian people that in the first year of peace the armed services were paid £130,000,000 while they were being demobilized, and a further £72,000,000 in deferred pay, making a total of £202,000,000 in wages not counterbalanced by production. I did not hear any member of the Opposition ‘assist the Government by explaining to the workers that they should wait for wage increases because of the competitive buying power created by the circulation of that enormous amount of money without production. Instead, they indulged in generalities about the Government’s need to restore incentives. They have never said that £202,000,000 had to be paid to the armed services. They suggested that taxes needed to be reduced despite the fact that income tax receipts fell short of the sum required to pay the armed services. The Leader of the Opposition last Friday suggested that wage-pegging was another feature of the Government’s .failure to allow incentives to be restored to the community. I consider that his speech, particularly as it related to the economic problems of the transition period, was entirely destructive and that the electors who wisely ignored him. at the general elections in 1946 instinctively showed politically the restraint they showed by withholding savings. They recognized the necessity for the Government’s transitional policy.

The Leader of the Opposition has frequently spoken about the need to reduce taxes. The Government has made substantial tax reductions. After the previous world war the Bruce-Page

Government made great reductions of taxes. The Government was facing a similar situation to that confronted by the present Government. Prices had risen greatly during World War I., and heavy expenditure was incurred by the Commonwealth Government in carrying out an orderly transition from war to peace. The Government needed revenue, and i,t followed a policy of spectacular. borrowing abroad. So did the State governments, which, incidentally, were in almost every instance .nonLabour governments. In 1918, the Commonwealth public debt overseas amounted to :£89,019,102. By .1928 it had ‘risen to £153,507,124. .Commonwealth borrowing overseas - which was a substitute for taxation - to finance the transition period totalled t£64,500,000. State governments borrowed similarly, and the Australian public debt overseas rose from approximately £350,000,000 to approximately £570,000,000. In the aggregate the spectacular borrowing overseas amounted to approximately £220,000,000. That borrowing took the form of credits to purchase- overseas goods, and was >another step in the “ rake’s progress “. Heavy, customs duties were levied- upon the goods which were imported by means of the credits made ; available abroad, so that customs revenue, which in 1917-18 totalled £9’,4S6,555, had by 1922-23 risen to £22,597,306, and by 1926-27 to £31,832,600. In other words, the goods which we imported were financed by overseas borrowing, and, further, when those goods came into the country customs duty was levied upon them. This customs duty produced almost half the revenue of the governments of the day. A more fictitious or insane policy, or one more certain to produce the slump which did ultimately occur, could not .’be conceived. Finally, in the concluding period of this “ tragic Treasurer’s administration “ the Government had to borrow money to pay interest on what it owed, and that is the alternative to the present Government’s policy, which is an austerity policy, of trying to pay our way so that we will not again accumulate a vast debt overseas nor experience the slump which must inevitably follow largescale borrowing. Of course, the governments responsible for this insane policy were not in office when the slump came. The Bruce-Page Government, -fortunately for itself, .had been. defeated on its policy of abolishing the Commonwealth arbitration system, and it was probably with the knowledge that it .would be defeated that it raised the arbitration issue, because it did not want to be in office when the consequences of its financial policy had to be faced. The Scullin Government, which succeeded it, .inherited an accumulated debt overseas of -£577,000,000. It .prohibited the importation of goods on credit, and by means of, a .number of other economic measures .restored Australia’s credit abroad. In the unpopularity .it incurred because of these measures it went out. of office, -and it. has been left to people who habitually resort to the use of cliches like the honorable- member., for Moreton (Mr. Francis) to’ contend to-day that “ the depression was. accentuated by the policy of the Soullin Government”. They ignore, completely the enormous accumulation of debt . overseas during the previous ten years. The honorable member for .Richmond (Mr. Anthony), .in his analysis of the present financial situation, said that. the. Government ought to budget against trade cycles, ,and that it ought. not’ to encourage public works at a time -when private enterprise is naturally .booming. He argued that if the Government spends money on public works now it will accentuate the present boom, and that it should hold back its public works programme until a slump develops. Then, it is contended, its expenditure on public works would be a corrective to a receding business cycle, and would lift the country out of the trough of the slump. It is a pity that he did not see fit to attune his policy to that of the Leader of the Opposition (Mr. Menzies), who pointed out that although some £5S,000,000 of loan .money was available for expenditure only £9.000,000 of it was being spent. That demonstrated conclusively the falsity of the contention of the honorable member for Richmond that the Commonwealth or the State Governments are now engaging in any large-scale public works programme. In any event, man-power is not available for any large public works programme. Such projects as the Wellington Dam irrigation scheme in Western Australia are essential public works, and whether there be a boom or a slump they represent an essential investment -for future development. The honorable member for Richmond ‘did not mention another important feature of counter-cyclical budgeting, namely, that in boom times governments should accumulate by1 heavy taxes the . funds to be spent on public works during a slump. He argued to the contrary that there should be a spectacular reduction in taxes at the present time. That would have the effect of accentuating the current boom, and, of course,i that proposition does not take into account the financial commitments of the Government, nor did’ he make the slightest attempt to show in what directions expenditure could be reduced. ‘ If he is going ‘ to advocate counter-cyclical budgeting he must accept that policy in its entirety. Whilst he was sound in saying that no large-scale public ‘works programmes should be embarked ipon. by governments till a .slump exists, he should have added that the Government ought to skim off the top by taxes and accumulate funds to spend in a slump. If that is not done, where are we going to raise the money during a slump period for a public works programme? Should we impose heavy taxes during a slump period ? Should we engage in large-scale borrowing when confidence is shaken? Obviously, the sound policy to follow is the very opposite of th.at suggested by the honorable member. In a boom time the Government’s object should be to accumulate’ surpluses to be spent if and when a slump develops. The governments which held office after World War I, and particularly the Bruce-Page Government, accumulated no surpluses, but, on the contrary, they incurred an enormous overseas debt, and because -of their large-scale borrowing they emphasized the natural bodin which followed the first war. _ However, the sudden and complete collapse of Australia’s credit, abroad accentuated the inevitable slump. If the honorable member for Richmond has enunciated the policy which the Opposition would adopt if it were in office it is a faithful repetition of the disastrous policy which followed World War I.

The honorable member made certain other points. In what must surely be one of the most astonishing statements that has been made in this House, he said that be knew of a small company which had made a profit of £13,000, that the taxes which it paid amounted to £11,000, and that the shareholders received only £2,000. Let us examine the reasoning by which the honorable member arrived at that conclusion. First, .he said that an amount of £3,500 was deducted from the salaries, of the employees of the ‘ company in respect of their taxes. What a new standard in generosity this company is establishing! It is paying its employees’ taxes out of its profits. That contention was patently false. The amount of £3,500 deducted from the employees’ salaries did not come out of the company’s profits of £13,000. Secondly, the honorable member said that the company paid in pay-roll tax an amount of £500. Pay-roll tax finances child endowment. The honorable member claimed, soundly enough, for the parties now constituting the Opposition credit for having introduced that scheme. But, of course, payroll tax is not deducted from profit. It is taken before the profit is declared. Consequently, the amount of £500 had no relation to the amount of £13,000.

By this sort of sleight of hand the honorable member suggested that the taxes payable by the company accounted for £11,000 out of its profit of £13,000. Actually, the amount of tax payable by a public or private company on a profit of £13,000 would amount to £3,900. Therefore, his astonishing performance, whereby he suggested that £11,000 would be deducted from £13,000, was patently false. We have not heard many contributions by members of the Opposition towards the necessity for ‘ countering inflation.

Mr DEPUTY SPEAKER (Mr Clark):

– Order! The honorable member’s time lias expired.

Mr MCBRIDE:
Wakefield

.- We have heard a rather remarkable contribution by the honorable member for Fremantle (Mr. Beazley). To honorable members on this side of the House such a speech is a novel experience. I have been a member of this Parliament for some years, and I well recall the financial theories which members of the Labour party advanced ten years ago. Those theories were in direct opposition to the views which the honorable member for Fremantle expressed to-day. During my first few years as a member of this Parliament members of the Labour party never grew weary of advocating national credit, Douglas credit, “ free “ money, and those kinds of theories that help to induce inflation. When we made any comment about their financial theorems,’ we were accused of being hard-baked, conservative financiers. Therefore, I find it a very pleasant experience when the principles which we advocated in those days are being endorsed, in no uncertain terms, by members of the Labour party.

This financial statement is one of the most conservative of its kind ever presented to this House. Whilst I do not object to that, because I have held rather conservative financial views for a long time, I am gratified to find that all the theories which members of the Labour ‘party promulgated for many years are now being rejected by a Labour Government. I believe that the Treasurer (Mr. Chifley) has sound views on finance. He has no illusions regarding the results of easy money. But whilst he sees very clearly in his own mind the dangers of inflation, I suspect that’ he has allowed those feelings to become an obsession. Although he knows all the causes of inflation, I doubt whether he has appreciated fully the ways in which inflation can be successfully combated. In, his budget speech last November the Treasurer said -

Finally, the danger of inflation is still present, as formidable as ever, and the fight against it must be carried on. Consumer demand banked up during the war, in the form of accumulated purchasing power, and has continued to bank up. Civil production, on the other hand, was severely curtailed.

It is very interesting to have evidence that that doctrine of finance has gradually permeated members of the Labour party. They have advanced it primarily as a reason for the almost punitive taxes imposed upon the people, not only during the war, when they were probably necessary, but also in the post-war period. The honorable member for Fremantle has now made the novel suggestion that these heavy taxes are not necessary to meet current commitments, but are required for the purpose of accumulating a fund to meet future needs. More than any other factor, the people of Australia would be very gratified to know that the Government of the day is not dissipating these huge revenues, but is either reducing war commitments or creating a fund with which to meet expenditure.- in the future. One of the matters which is exercising the minds of members of the Opposition and, I believe, of the public generally, is the fact that the Government seems to be devoting the ( major portion of its attention to discovering ways and means of expending more money. Despite the cessation of hostilities and all those activities which had to be undertaken during the war, government employment in the aggregate has increased since the end of World War II. Departments which were created to meet the needs of war are being not only retained but also expanded. For example, the Department of Information, which was set up to combat enemy propaganda, is expanding considerably, and, at the present rate of growth, its expenditure will amount to £300,000 per annum. I can cite other examples of the Government’s complete financial irresponsibility. Recently the Government, as a matter of policy, and against the advice of the body concerned, instructed the. Australian Broadcasting Commission to establish its own news service. No justification existed for that’ decision. Indeed, the members of that commission recommended against it; hut the Government, as a matter of policy, decided to establish it. I understand that the initial estimate of cost was £30,000 a year. I believe that that amount has already been substantially exceeded, and I am informed that in all probability the cost before long will be well over £100,000 a year. I suggest that the news service which we are now getting from the Australian Broadcasting Commission is no improvement on that which we formerly had.

I wish to say a few words on the subject of inflation, and the way in which we believe it should be prevented. It is admitted, of course, that spending power is drained off by means of taxes. But the honorable member for Fremantle did ‘ not -mention that inflation is not cancelled out by collecting taxes from one set of people and expending them on the payment of the wages of another set of people. It is futile to argue that the demand for civilian goods and services is cancelled out by govern- mental expenditure of a substantial proportion of the national income; all that that does is to transfer the money from one to another set of people, and the sooner the Government and its supporters realize this the quicker will effective results be achieved.

  1. great feature of the Government’s programme for cancelling out inflation, apart from taxation, is prices control. That control was instituted by a government of which I had the honour to be a member. I believe it to be necessary in time of war, consequently I” do not cavil at its having been operated in this country during the war years, .when it performed a very useful function in the economy of this country, even though it was not so successful as it might have been. But those who imagine that prices control can be administered in peace time and in war time with equal efficiency are the victims of confused thinking. In war time, the people are prepared to accept controls to which they will not submit in peace time. I agree that, in some directions, its continuance is neces- sary. But its continuance in the present form and on the present scale is develop- ing in our midst such a body of black marketing that will, be difficult to eliminate from our economy for years to come.

Having said that I believe in prices control, and having complimented the Government upon the administration of it during the war period, I want to comment briefly on some aspects of its operation at the present time, and indeed, during the war by this Government-. A very striking illustration of the deadening effect of prices control on enterprise and initiative was given by the Leader of the Opposition (Mr. Menzies) in the case of Miss Daveney ‘ Proprietary Limited. In other words, the administration of prices, control is calculated to remove incentive, and does not ensure those rewards which enterprise and the application of energy should receive. I- shall endeavour to show how inequitably it has been administered. I agree entirely with the case- presented by the Leader of the Opposition, particularly in respect of small companies, or companies that have just come into being. Enterprises of that type have felt its effects very severely. On the other hand, well-established companies seem to have been caused: very little inconvenience. It is extraordinary that the most blatant case that- I have been able to discover is that of a company of which the Commonwealth is the major shareholder - Commonwealth Oil Refineries Limited. Honorable members will recall that the prices administration said that Mi3s Daveney Proprietary Limited must not increase its gross profit, and that it must either reduce its output or have its prices lowered. Apparently, however, the same principles do not operate in respect of a major concern such as an oil company. Commonwealth Oil Refineries Limited was established and operated for years before the outbreak of the last war. I do not believe that it achieved the purpose for which it was established. According to its balance-sheet dated the 30th June, 1939, it had at-that date a paid-up capital of £S50,000. ‘ The total amount of profits invested in extensions, and in the general reserve, was £l’S8,104. . Its insurance reserve amounted to £49,63S. The total funds used in the operations of the company were of the order of £1,100,000. The gross profit of the company in that year was £259,154, which was reduced to £65,762 after deducting £161,259 for depreciation of fixed assets and £35,000 for taxation. A most illuminating story is revealed in the balance-sheet for the year ended the 30th June, 1946. It shows the result of the rigid price control of a basic commodity which was essential, not only to the conduct of the war, but also to civil operations. In that year,’ the paid-up capital was still £850,000, but the profits invested in extensions, and the general reserve, had increased from £1S8,000 in 1939 to £700,000, whilst the insurance reserve had increased from £49,63S to £118,000, making the total invested in the business £1,700,000 or £1,S00,000. The balance of the refining and trading account, after making allowance for the remuneration of the directors, including the managing director, was £940,457, compared with £259,154 in 1939. Those figures reveal a remarkable expansion of profits. They show that during the year ended the 30th June, 1946, the company made more than three times as much profit as it made in 1939. The position is the more remarkable when we reflect that during the later period petrol was rationed. I. admit that the quantity of petrol consumed during the year ended June, 1946, Was not much le3S than in the years before the war. During the war, service departments consumed large quantities of petrol, but the war ended several months before June, 1946. The pre-war price of petrol .in the capital cities was about ls. 6d. or ls. 8d, a gallon, compared with the present price of 2s. 4id. a gallon. During the year under review, the price was even higher than it is now. These figures show how the Government treats monopolies, especially those in which it has a controlling interest. How different is its treatment of these companies from ‘its. treatment of sma.ll traders! These things do not inspire confidence in prices control. Although I agree that it would be unwise to lift prices control completely at this stage, I firmly believe that the Government should, examine the situation, and that in respect of goods the supply of which can be expected, to meet the demand within a reasonable period, prices control should be entirely removed.

Notwithstanding what Mr. McGirr, the Premier of New South “Wales, has said regarding his Government’s housing programme, I fear that the housing .problem will remain for several years and, therefore, some control of rents must be continued. That does not necessarily mean that the system should be continued without alteration. In the light of the fact that fewer than 3,000 houses were constructed by the New South Wales Government during the last twelve months, the expectation ‘ of Mr. McGirr that. 30,000 houses will be erected next year seems rather optimistic.

I shall not say a great deal about wagepegging, but the history of the control of wages is a sorry story. In the common interest, wage-pegging was necessary during the war, and theoretically the system should work well in the post-war period also; but, unfortunately, as the Government found out soon after the war ended, the people are not prepared to accept wage-pegging in times of peace. The Government was slow to recognize that the people^ particularly its own supporters, were opposed to the continuation of wage-pegging. The Prime Minister (Mr. Chifley) and some of his colleagues have continued to give lip service to the principle of arbitration, but judges of the Arbitration Court have frankly admitted that, with wage-pegging regulations in force, the court could not deal adequately with many of the claims that came before it. Finally, the Prime Minister was forced to make certain relaxations of tha wage-pegging regulations. I say without hesitation that the existence of wagepegging regulations was the prime cause of the industrial chaos which has disrupted Victoria for several weeks; the court was hamstrung by the Commonwealth Government. We are all gratified that the dispute appears to be in the process of settlement. I hope that its lesson will be learned, and that in future the arbitration system will have the full support of the Government.

Much, has been said about the danger of inflation, but too little has been said about, the value of increased production as a check against inflation. In this connexion the following extract from the

Treasurer’s budget speech, which he delivered last November, may prove interesting : -

A notable feature of last year has been the rise in factory employment. In August this year the number of people recorded as employed in factories was 770,000, which is nearly 20,000 above the war-time peak and 230,000 above the level of June, 1939.

That, on the face of it, is a satisfactory position, but what has been the result of that increased employment? One would expect the natural result to be an increased output from the factories, but what are the facts? Would any honora bie member have the temerity to say that production has reached its peak and has broken all records? If that be not the case, what is the reason? Although it is difficult to get precise figures relating to production, I have obtained authentic figures in relation to one basic industry which, while not necessarily being a true reflex of production in all industries, gives an indication of what is happening. The figures relate to the iron and steel industry. . For the three years ended June, 1939, the monthly average index figure is set down as 1,000. Since that time the index production figures have been as follows : -

During the year 1940-41, when the index figure was 1,488, the Menzies Government was in office, and for the greater part of the following year it continued in office, although before the end of that year the Labour Government had come to power. The Government should concentrate upon increasing production. The principal , cause of the low output in the iron and steel industry is the hold-up on the coal-fields. The company that produces iron and steel has coal mines of its own, and normally could produce all the coal it needs, but part of the coal from its own mines has had to be diverted to other uses. What has the Government done about coal? There is a ‘Joint Coal Board which ‘ possesses wide powers, but the latest figures show that for the first four months of this year 700,000 tons of coal has been lost owing to strikes and hold-ups, which amounts to a loss at the rate of 2,000,000 tons a year. It is futile to think that we can get back to a peace-time basis of production while such losses occur. Excessive taxation, which was so lauded by the honorable member for Fremantle (Mr. Beazley), will not achieve our purpose. In. fact, it is producing an effect entirely opposite from what we want. We need, first of all, a. change of heart in members of the Government, and in those who support it. It is necessary to recognize realities, to get away from all this financial flap-doodle, and to return to a solid basis- of production. The honorable member for Fremantle spoke of the extraordinary boom in exports. Last week the Minister for Post-war Reconstruction (Mr. Dedman), in answer to a “ Dorothy Dix “ question, cited figures which purported to represent Australia’s production during the last twelve months, but production was stated in terms of money value, not volume. It is absurd for him to suppose that he can deceive any one by such specious reasoning. I know that the Government claims that costs in Australia have been kept down. I believe the statistician’s figures indicate that costs are only 25 per cent, above those of 1939, hut does any one really believe that production costs to-day are only 125 per cent, of what they were in 1939? My own opinion is that, at the very least, costs are 50 per cent, higher than they were before the war. If that is a fair estimate, what do our export figures actually reveal? Let us take one commodity in which I happen to be interested, and about which I know something. Our return for wool exported this year will be a record, in spite of the fact that 25,000,000 sheep were lost in recent droughts, but no one supposes that we produced more wool the last season than at any time in our history. Similarly, in practically every field of production, although the money value has increased, the actual, quantity of goods produced has declined. Employers and workers alike must be given an incentive to produce more. It must be made clear that if they do their best they will receive a reasonable reward for their effort.

Mr DEPUTY SPEAKER:

– Order i The honorable member’s time has expired.

Dr GAHA:
Denison

.- I have listened with -great interest to the speeches of members of the Opposition, and it appears evident that they have learnt nothing from two wars and a depression. Their views on finance, both national and international, remain what they always were. The fact is, of course, that the national approach to financial problems has undergone a radical change. Before the last war, when orthodox financial methods prevailed, our international financial dealings were largely in the hands of private persons and institutions. However, as a consequence of the war, and the disruption which it brought, it has become necessary for governments to interfere with trade relations. “We frequently have to listen to lectures in this House about the sterling bloc and the dollar bloc, and why we cannot get commodities from certain countries because we are short of dollars. With all due deference to those who are better informed on this subject than I, I repeat that we must look forward to more and more Government interference in trade. When we consider these questions we are brought face to face with numerous problems, both internal and external. The first which commands my attention, following the remarks of the honorable member for Wakefield -(Mr. McBride), is the effect of the reductions of taxes upon the economy of this country. A. few years ago, as the honorable member emphasized, any departure from financial orthodoxy was regarded as political heresy. It is very strange that not one voice was heard to protest against the methods by which we raised £400,000,000 to prosecute the war, yet a year before the war had one person suggested the use of bank credit for the purpose of financing the war he would have been charged with being a crank and a financial heretic. To-day we must repay that £400,000,000, and hundreds of millions in addition. That policy creates its own problem; but what is the real position in this country to-day? Our people never had so much money before as they have to-day. Deposits in the savings hanks total approximately £700,000,000 compared with a total of £240,000,000 when war broke out. -Business never was so stableas it is to-day, a fact which is evident when we find that very few bankruptcies are occurring now compared with thenumber recorded in the three years immediately preceding the war. The primary producers have never been in such a state of affluence as they are to-day. The honorable member for Wakefield has pointed out that our wool clip has never been so valuable as it is to-day. Therefore, one can only say that as a consequence of the war the Australian people, by and large, have not suffered financially. We have been treated to several treatises on inflation. I emphasize that we cannot regiment the economy of a country for purposes of war and on the day war ceases abandon entirely that regimentation without causing disastrous effects upon the life of the community. I shall illustrate that fact by citing a few practical examples, which are better understood by the man in the street than by members of Parliament. Apparently, the Government was panicked into’ effecting all the reductions of taxes during the last two years. Those reductions have conferred no benefit at all upon the worker, because of the natural competitive rise of prices and increase of black marketing due to such reductions. This country would be far better off today had the Government withstood the pressure exerted upon it by the capitalist section and the press to reduce taxes. We should now be far better off had we adhered to a policy of high taxation and at the same time intensified price-fixing, using our surplus revenue to reduce the national debt substantially and thus reduce our interest bill. But what is happening to-day? The additional money in the community due to reductions of taxes on lower incomes is tending to force up prices and encourage black marketing. For these reasons I do not believe that the workers, by and large, have gained one penny benefit as the result of the reduction of income tax on family incomes of £500 and less. I believe that the Government was forced into making such reductions by the pressure .politics of the Opposition and the press. Had we desired to create real hardship and panic and disturbance in this country, we could not have done so more effectively than by substantially reducing income tax generally.

Under such conditions persons on high incomes would have benefited, but persons on small incomes would have been worse off, because the additional money thus released in the community would have encouraged black marketing to a degree which could not possibly have been stemmed by the most stringent price controls. Consequently, a high taxation - policy in the immediate post-war period would have been of great benefit; and I regret that the Government, as the result of pressure by the press and pseudo- financiers, failed to follow such a policy.

I come now to the effect of uniform income taxation upon the constitutional relations of the Commonwealth and the States. X know that the validity of uniform income taxation has been upheld by the High Court; but I emphasize that a uniform income tax must be accompanied by adjustments in our constitutional machinery. It is unfair to ask the States to exercise wider powers when they have lost the power to levy income tax. I am not arguing against uniform income taxation, but I contend that constitutional alterations must be made in order to meet its impact upon the States. I do not believe that the people object to a uniform income tax. Many big business people ‘with whom I have spoken on the subject have said, “ We have got used to it, and we are satisfied with it But a uniform income tax -has one -very curious feature. ‘Of the revenues of the Commonwealth to-day £42j000;000 must be paid to the States to compensate them for vacating the income tax field, and £70,000,000 is earmarked for the payment of interest on the National Debt. I have no objection to’ the latter provision. That is properly one of the functions of the Commonwealth Parliament; but the Commonwealth generally gets “ knocked “ ruthlessly by the people who complain about the high taxes now levied by the Commonwealth. The people forget that of the revenue derived by the Commonwealth for. income tax £42,000,000 must be paid to the States, and that this amount will ‘continue to increase. It is a curious phsychological phenomenon that if you send -a bill for £20 to a debtor, he will grumble, whereas if you send him a bill for £10 at the beginning of the year, and another . bill for the balance at the end of the year, he will pay both those amounts without complaint. To-day, the State governments have an armchair ride, because, whereas taxation policy used to determine the fate of State governments, they are now spared that embarrassment, and the people direct all of their resentment in respect of taxation against the Commonwealth. That fact in itself demands that we should carefully -examine the effect of uniform income taxation upon the constitutional relations of the Commonwealth and the States; and the time has arrived when we should approach this problem on a grander scale than we have done hitherto. On each occasion that the Commonwealth has asked the people to increase the powers of the Commonwealth, its proposals have been turned into ugly political issues, with the result that the people themselves have been penalized. While I support the principle of uniform taxation I am not at. all keen on the idea of the Commonwealth taking responsibility for the collection of the whole of the income tax, and getting a bashing in the process, in order to give the States an armchair ride in the administration of their sovereign powers. At present the Commonwealth is taxing the people to .give the States £42,000,000 per annum in hard cash in addition to the grants to certain States when in necessitous .circumstances. The time has arrived when we should approach this matter from .an entirely different angle.

When the Ministers of .State :Bil] was brought before the House in the latter part of last year to maintain the number of Ministers of State at nineteen, I was shocked to find ‘that it was the subject of great jokes by honorable members opposite who quoted excerpts from Gilbert and Sullivan in their attempts to ridicule the proposal. It is amazing that a country which boasts of being democratic - :a boast which I have always challenged -that a country with the educational facilities we have here, should, politically speaking, be one of the most backward countries in the world. We still maintain six sovereign State parliaments and permit the exercise by the upper houses of five of them of the right to veto the decisions of the lower houses,’ notwithstanding the fact that the- upper houses represent only about 40 per cent, of the electors of the community. When we ‘refer to the democratic constitution of the Commonwealth Parliament we find that it relates only to 39 heads of power. When it was suggested that the number of Ministers of State should he increased the proposal was ridiculed by honorable members opposite; evidently they would prefer that the policy of this country should be determined by some official “ whipper-snapper “ rather than by a Minister of the Crown. In the changing responsibilities of ministerial functions it is impossible for Ministers of the Crown to carry out’ their duties as they would like. Consider the position that exists in relation to our trade with other countries. If a merchant wishes to import, or export a commodity he seeks permission from the responsible Minister, who invariably says “ This seems ali right; but I shall have to refer it to some other department “. Because Ministers are loaded up with all kinds of functions it is utterly impossible for them to give personal attention to all the matters submitted to them. In consequence of the world war we have an entirely new set-up in which ministerial intervention is more necessary that at any other time in our history. If it be necessary to have more international financial arrangements, it is even more necessary to have ministerial intervention in these arrangements. The time has arrived when there should be a great increase of the numbers of Ministers of State and a greater division of responsibility. I do not care whether they be given full portfolio rank, or whether we adopt the British system of appointing parliamentary secretaries. World trends over the last few years demand a. greater division of ministerial responsibility than we have to-day. People seeking permission to import commodities in this country are almost always referred to subordinate departmental officials.

Sitting suspended from 6 to S p.m.

Dr GAHA:

– It. is quite improper that one Minister should be charged with a multiplicity of functions, the adequate discharge or even understanding of which is beyond the realms of possibility. I refer specifically to such vital matters as exports and imports. Some portfolios al least should be broken up into their component parts, and additional Minister; appointed to give specific attention to these specific matters. To-day, much of the work is done by the “ permanent government “, which has no responsibility to the electors. It does not matter to these people what decisions they make or what effect their decisions may have oh individuals or governments. The time has arrived when we must approach the entire Australian constitutional makeup on much broader lines than at any time hitherto. The trouble, unfortunately, is that numerically and mentally Ave are a small people. We are more interested in whether or not a new butcher’s shop should be opened at Lithgow, than in matters of national and even international importance. It is time that we gave attention to the wider aspects of our national life and attempted to develop our community and our country on rational and intelligent lines. In “the thirteen years from 1387 to 1900, our forefathers drafted a constitution that has seen this country through two major wars; but as a result of new alinements and problems caused by these conflicts and by other unforeseen developments, the Constitution is now inadequate to meet our position in the scheme of things. Since federation, 24 referendums have been held, but not one really effective proposal has been agreed to. Only three minor amendments have been made-. Amendment of the Constitution by referendum seems beyond the intelligence not only of the people, but also of politicians, because as soon as certain proposals are made they see an opportunity for a party political battle and all reason goes out the door. We might well consider reverting to the method by which the Constitution was framed, namely, a convention of nonpolitical delegates, charged with the widest possible authority to draw up a new constitution providing not only for a central government, but also for provincial governments and municipal authorities. Then, we might get somewhere on a grand scale. Proposals for the alteration of the Constitution should be considered by a body of 20. or 30 reputable citizens of the highest integrity. At least, they could not give us anything less than we have, and they might produce something that would command the attention of the Australian people.

There are three fundamental essentials for national development. First, we must have a properly balanced population. Taking an extreme case to clarify the point I wish to make, what would happen in a country in which 50 per cent, of the people were in the old-age groups ? The national instability that would be caused is obvious. It is essential that there should be the right number of people in each age group, and that as people move into the older groups, there should be adequate numbers of young people to take their places. To-day, the whole tendency of the western world is towards the old-age groups.

The second essential is a proper national morality, and by that I mean all the things that are necessary to make a nation great - the obligation of employer to employee, the obligation of employee to employer, and the obligation of the individual to national goodwill, national expansion, and the national will to live. Thirdly, we must have a sound economy. Unfortunately to-day few people can see beyond economics. They say that population is no responsibility of theirs. If one asks, “What about your morality?”, they say, “ If the other chap can have so and so. I can have it too “. In that rotten state of mind we are trying to build up a nation in a land which has illimitable possibilities; and while that state of mind exists there will be strikes and reduced production. . It is up to all of us to play our part. When we speak of production, we must consider the whole broad picture. Nobody will argue that production should not be increased, but I remind the House that in World War II., out of a population of 7,500,000, we took over 1.000,000 for service in the armed forces, uprooting them from their normal life and sending them away to fight in defence of their country. This House has been warned many times that these people, because of their training and the terrible disturbance of war, cannot be expected to take up normal civil life immediately. They are told that their production is not good. What else could one expect? Young people must be trained for citizen- ship; but during the war boys were taken straight from school, put into the armed forces and told to fight or die. Yet we wonder why production cannot be increased. . We must look at this matter objectively. We must examine carefully the problem of the rehabilitation of these young people in the fields of production.

The second factor affecting production in this : Precisely the same theory as that being expounded to-day by the Opposition was expounded after the last war - we must produce.. But what happened ? We produced so much that by 1929 we had produced 400,000 .men out of employment. Not one word has been said by honorable members opposite about the stage of production reached at that time. If all the machinery in the world to-day were used to full capacity, I have no doubt that within five years there would be a repetition, of the state of affairs that existed in the depression period.

Mr Conelan:

– There is overproduction in the United States of America already.

Dr GAHA:

– Of course. If America could not export its surplus production, where would it be? We are told by the .pseudo-economists opposite, “ If you produce we can reduce the cost of commodities and- increase the purchasing power of the money that we give you “. So effective were they in stimulating production that, in 1929, 400,000 good Australians were without jobs. They had no hesitation in calling on them to defend this country, though. If they want peace in industry, the business people must set a new morality in this country and say, “ We will meet the situation and help you in every possible way “. It is significant that 40 years ago Mr. Justice Higgins spoke in unmistakable language about the necessity for profit sharing. Why is it that of 2,000,000 workers of all kinds in Australia we never hear of 1,750,000 . and only hear of the wharf labourers, the coal-miners and the workers in heavy industry, and transport - only one-eighth of a cross-section of the community? It is because those great soulless organizations that employ them take no interest in them. The employer with pride in his employees attends to their needs in every way, and, therefore, has the least trouble with them.

To-day, we hear a lot about the Arbitration Court. When employees in, say, heavy industries have a grievance that could easily be redressed by the employers they say, “ Oh, no ! You have your redress. Go to the Arbitration Court’’. But the Arbitration Court has been so cluttered up in the last few years that when the workers eventually have their grievances taken up by it, what began as an easily curable pimple, has become an incurable cancer.No one can point to the Commonwealth Arbitration system as a great institution. I cannot, anyway. It is extraordinary that when submarines were at the height of their activity all round the world and we were losing tens of thousands of tons of shipping, British and American shipping, new ships could be built to carry armaments and food to the troops, and, yet, in a period of peace, when the need for ships is greater than ever, the first thing we hear is, “We cannot get ships “. I cannot understand it.

Mr Holt:

-We can get ships, but we cannot get them to move quickly enough.

Dr GAHA:

– The good old Liberal jingoist ! I heard that sort of thing when I was only so high forty years ago. Like the Bourbons, honorable gentlemen opposite learn nothing and forget nothing. They are hopeless. It is the good old story, “ We cannot get them to move “. We cannot get them to move because of the rottenness of the employers. Conditions on the wharfs in Australia until the last few years were the lowest in the world. Honorable members opposite laugh, bnt facts do not register with them. The honorable member for Henty (Mr. Gullet) has never been on a wharf in his life but he is one of the “ experts “ on waterfront problems. The day the employers decide that there shall be peace in industry there will be peace in industry. Theirs is the responsibility. We have heard a lot of jargpn about Communists, but where are these terrible Communists that we hear so much about day after day? How did they fare when the people of New South Wales and Queensland went to the secret ballot boxes to vote on Saturday? This army of terrible people is invisible. Talk about communism is the old capitalist method of escaping blame. We can have peace in industry whenever the employers decide to have it. The employers know it.

Mr Holt:

– Does that apply to the Government? It cannot get work done.

Dr GAHA:

– The Government has no work to do.

Mr Harrison:

– It never does anything.

Dr GAHA:

– The honorable gentleman thinks he is smart. I speak subject to correction, but the Government provided in the Estimates for the expenditure of £45,000,000 on public works and could spend only £9,000,000.

Mr Holt:

– Who stopped it - the wicked employers?

Dr GAHA:

– Yes, the wicked employers if the honorable member likes it that way; but that is the position.

We have harnessed ourselves to the policy of tax reduction. We have done nothing but reduce taxes year after year. Income tax will have been reduced by £53,000.000 a year after the 1st July, but I bet that men whose salaries are less than £500 a year will not be 6d. better off as the result because of the inflationary trend. No government can keep prices from rising by whatever pricefixing methods it applies. It can do so under the terror of war, but not under the immoralities of peace. Public morality in Australia is so low that however efficient the price-fixing system may be the whole uncheckable trend is for prices to inflate. Nothing can stop that. Reduction of taxes can benefit only the “big bloke” and the “little bloke” is just as badly off.

We have had arbitration in this country for goodness knows how long. It was supposed to be the solution of all our ills, but it seems to me to have begotten new ills. Much remains to be done in the industrial field, but it will not be done by the arbitration system that we have had.

Mr DEPUTY SPEAKER (Mr Clark:
DARLING, NEW SOUTH WALES

– Order! The honorable member’s time has expired.

Mr FADDEN:
Darling. DownsLeader of the Australian Country party

– The financial statement presented by the Treasurer (Mr. Chifley) is a most important document for more than one reason. First, it gives- the latest possible revised opinions of the Treasurer’s former estimates of receipts and expenditure for the year to end on the 30th June next. It also, by its very nature, provides up-to-date information about the wisdom or otherwise of the- tax measures that will follow this financial statement as the basis of the tax proposals. According to the financial statement, total expenditure for this year has been estimated at £444,000,000, which is about the same as the amount spent from 1915 to 1919, during most of the World War I. The total Commonwealth and State public debt since Labour assumed office has jumped alarmingly from £1,467,000,000, or £206 a head, to £2,S03,000,000, or £375 a head. Of course, the biggest part of that was due to the need to finance a costly war. War by its very nature brings in its train not only necessary expenditure- but also wasteful expenditure. But it must not be overlooked that an undue part of the increase has been brought about by the implementation of the Labour party’s socialistic policy and has been aggravated by extravagance and lack of vigilance. Of the total amount of the public debt, £2,275,000,000 is due to Australian creditors, £4S7,000,000 in London and £40,000,000 in New York. The annual interest liabilities in respect of this aggregate debt approximate £S0,000,000, and this will be a continuing annual charge for many years to come because the records prove that over the last 23 years redemption payments have approximated only £236,000,000. or an average of only £10,000,000 a year. Therefore, because of the huge debt already incurred, we see how necessary it is to have full regard, not only to our present responsibilities, but also to those which lie ahead. Our only hope of maintaining financial stability and our social services and amenities is by the continuance of a. high level of national income, and this can be achieved only by a strong and vigorous Australian economy resulting from relaxation of the heavy thumbscrew of taxation, thus supplying the necessary drive for vigorous restoration of essential production levels.

Let us have a look at some of the commitments which, under Government policy, are unavoidable. Social services,, estimated to cost £68,000,000, are an everincreasing charge, because the Treasurer has pointed out on more than one occasion that the amount is likely to increase to about £100,000,000 within five years, he has -said, indeed, that that is his ambitious future plan for social services. Of this sum, the national medical schemewill absorb about £15,000,000 yearly when in full operation. From New Zealand’s experience of its scheme even this large sum is, in my opinion,, an underestimation. Furthermore,, medical services when established will be just as inefficient as they have been in New Zealand, and just as ineffective as all such government socialization schemes are. But, be that as it may, the Government plans to spend within the next five years £100,000,000, or* an increase of £32,000,000 on the sum of £68,000,000 provided in the current budget. Payments to the States is another large item of recurring expenditure, and the Government envisages substantial increases in such payments, although the Commonwealth ‘itself is assuming greater and greater responsibility and spending more and more money on education, health, housing and other social welfare measures. I draw the attention of the country to the fact that this policy is an insidious, if subtle, implementation of Labour’s unification policy by stripping the States of their power and authority and usurping for itself the means to make social service payments and- to control the administration.

The next matter to which I wish to refer is the future defence of this country, most especially concerning our joint responsibilities with other dominions and democratic powers. The normal defence expenditure is assumed to be of a .most substantial nature. The Treasurer does not forecast, either to this House or to the country, what that cost is likely to be, except to indicate that the present budget estimate is much more than £200,000,000. Service departments have become accustomed to spending hundreds of millions of pounds, hut a greater danger is that, because of bureaucratic inertia, inefficiency or official lack of foresight, orders may be placed for excessive quantities and for implements of Avar which, by their very nature, may be obsolete when delivered. Therefore, I say that the Government should by exacting a’nd continuous investigation satisfy itself that the service departments are keeping abreast of scientific discovery as it affects modern warfare. A basic question of policy to be decided is what proportion of defence expenditure should be on research and development in collaboration with Great Britain and the United States of America, and how much on actual implements of war as known to-day, such as aircraft carriers and the like. The United States Government budgets for an expenditure of 973,000,000 dollars this year on defence research and development, including atomic research. With our limited population Ave, naturally, cannot hope even relatively to approach this astronomical figure”. But we shall undoubtedly benefit from this programme by having determined for us the nature of defence weapons -with which Ave should be equipped in future, and Ave should collaborate with the Governments of the United States of America and Great Britain in the huge experiments they are undertaking. Consequently, caution indicates that Ave should not over-spend on obsolete and obsolescent equipment.

With regard to non-recurring expenditure included in the sum of £444,000,000, certain items of expenditure show by their nature that the country’s annual expenditure will not be anything like that sum. For instance, the saving in war expenditure- alone should be about £120,000,000. Final payments on lend-lease settlement of £8,000,000 will not recur, nor will the special payment to the United Kingdom of £20,000,000 to finalize Australia’s wartime commitments. The Treasurer himself claims a maximum absorption of demobilized servicemen, and consequently there should be a substantial saving in post-war rehabilitation. Payment to Unrra of £12,000,000 is also a nonrecurring item. If to this is added £22,000,000 provided for in the current estimate in respect of the Postmaster-General’s Department and the Department of Civil Aviation, the non-recurring items amount to about £200,000,000, and, consequently, the necessity for the appropriation of £440,000,000 is most difficult to understand. So also is the Treasurer’s statement that expenditure in the future cannot be expected to be less than £400,000,000 a year.

Let us have a look at the estimates before us and Ave shall find evidence of over-estimated expenditure. A cursory examination of the receipts and expenditure from Consolidated Revenue for the nine months ended March, 1947, shows that the Treasurer has greatly overestimated expenditure. For the complete financial year he expected to spend £385,000,000 from revenue, excluding £20,000,000 in respect of self-balancing primary production items. However, with only three months of the financial year left, only £274,000,000 odd has actually been expended. How can the Treasurer possibly justify his forecast that future Commonwealth expenditure is unlikely to fall below £400,000,000 a year . when he will not even reach the anticipated total of £444,000,000 this year, including, I emphasize, about £200,000,000 of non-recurring expenditure?

I turn now to loan fund expenditure. For a full year this expenditure was estimated at £71,000,000, which consisted of £59,000,000 from loan and £12,000,000 as housing grants to the States. For the first nine months a little less than £20,000,000 was disbursed and for the last three months the balance in the fund has remained almost stationary. In August the National Works Council made plans for the expenditure of £24S,000,000 by the Commonwealth and State Governments, in co-operation, to assist, they asserted, in effecting a full employment policy. Late in August the Loan Council endorsed a works programme of £91,000,000, to be commenced in 1946-47, if the necessary labour and materials could bo obtained. The Council decided to provide immediate finance for 75 per cent, of the programme. From a perusal of the small expenditure from loan funds it is obvious that in the main this ambitious programme has been allowed to lapse, and that labour and materials have not been forthcoming. No other reason can be offered for the lapse of that ambitious, programme except the absence of essential labour and materials.

It is equally clear that the Treasurer made a bad error of judgment in grossly underestimating the cash receipts- which bc expected to obtain. The total revenue from customs and excise for the full year was estimated at £89,000,000. For the first nine months £75,000,000 has already been received, an increase pf £19,500,000 over the comparable period last year. At the present rate, these receipts should exceed £100,000,000 for the full year. Sales tax was expected to yield £31,000,000 for the year. Even allowing for concessions already granted and not taken into consideration in that estimate, nearly £29,000,000 has already been collected, although only nine months of the year have passed.

I shall deal with the Treasurer’s income tax proposals when the relevant bills are before the House. Now’ I shall merely indicate that the proposals for taxation relief, which I outlined in my policy speech at the last elections, and which would aggregate £35,000,000 for a full year, have been completely vindicated by subsequent events, and by the Treasurer’s own estimates and financial statement. On the 14th April last the Commissioner of Taxation informed me that the estimated effect on revenue of the proposed tax reductions that have been submitted to the House is an annual reduction of £34,000,000. Never has there been such a complete vindication as that of financial proposals put to the people during an election campaign for a reduction of taxes and the means of achieving it.

Honorable members will recall that I promised taxation relief amounting to £35,000.000 a year. That figure was within £1.000,000 of the Treasurer’s present estimate. On two occasions last year the Treasurer referred to the absorption into remunerative employment of practically the whole of the demobilized members of the forces. On the 12th July, he estimated the total at 400,000. In his last budget speech the Treasurer said that in the fifteen months following the cessation of hostilities the Australian war organization had been/ largely dismantled and that about 520,000 members of the forces had been released. The right honorable gentleman proceeded to point out that nearly all these ex-servicemen, and, in addition, some hundreds of thousands of persons who were- .formerly engaged in war industry, had found civil occupations. aceording to figures given early this year, the number of service personnel who had been discharged had increased to 545,000. As the Treasurer has stated, employment has reached a record level. It follows that these 500,000 people, who were a charge on the Government from the financial standpoint while they were in the services, have now become a source of government revenue. The vast majority of them will be taxpayers. Naturally, some of them have required time in which to rehabilitate themselves, and the full benefit of their contribution to revenue will not be felt until the financial year 1947-48. The point which I emphasize is that, as a large amount of additional revenue will be obtained from this new field the Treasurer can well afford to reduce individual taxation to a much lower level than could reasonably be anticipated if based on figures relating to the war years. Expenditure from. loan funds and Consolidated Revenue for ‘ “ Defence and War’ (1939-45) Services” is given by the Commonwealth Statistician as follows : -

I invite honorable members to compare these figures with revenue collected from taxation of all kinds in the same period -

Obviously, whilst war costs have decreased by hundreds of millions of pounds, taxation is as heavy as ever it was. The. stark reality is that the Australian financial policy is lop-sided, with the inevitable result that economic recovery has been retarded for some years. All Statistical factors for months have indicated the feasibility of granting substantial reductions of direct taxes. This could and’ should have been done some time ago, but the Treasurer stubbornly resisted all our efforts in that direction until the last possible moment.

In addition to the revenue which is superficially available from an analysis of the financial statement, there are certain other reservoirs of finance which should be revealed. ‘ The last report of the Commonwealth Disposals Commission shows that realizations for 1946-47 will amount to nearly £45,000,000. According to a recent statement by the regional manager of the Commission in Queensland, sales will continue for another twelve months, .and the goods which will bc sold in that period will return about £50,000,000. To date, returns from disposals sales have exceeded £100,000,000, and are continuing to amount to approximately £3,000,000 a month. Arrears of income and land taxes, and the vast “ back-lag” of - assessments - particularly the assessments of large companies - for previous years, which have not yet been issued, will furnish many more millions of pounds to swell the coffers of the Treasury, and will provide the means of substantially reducing taxes. There are also balances in certain treasury accounts relating to the Avar, which will never be utilized for the purposes originally intended. Recently, the Treasurer told me that he expected that substantial balances would remain in these accounts after all liabilities had been met. Doubtless, these will also he available for Commonwealth purposes, unless they have already been replaced by treasury-bills. Of these, there is nearly £5,000,000 in the Marine “War Risks Account and a balance of more than El 1,000,000 in the “War Damage Fund. Therefore, it is clear that, as I pointed out at the time, the Treasurer overestimated the expenditure to be incurred in 1946-47, and, at the same time, underestimated receipts from revenue. A reflection of this over-buoyant position is shown by the fact that £65,0.00,000 wort 1 of Commonwealth short-term debt, comprising treasury-bills, has been redeemed in Australia since the 30th June last.

Provided we are given wise political direction, Ave shall be on the threshold of an economic boom in Australia. There is a tremendous deferred demand for goods, and accumulated savings of an amount undreamt of in pre-war times are waiting to be converted into goods and services. If controls be right, and financial wisdom of a high order should prevail, the level of the national income in the next few years should be greater than ever before. However, this desirable objective will not be attained unless conditions are re-established which will encourage and stimulate industry and enterprise, increase the production of goods, and sustain it as a high level. That will depend largely on whether the people are to be allowed to spend their own money in their own way for returns that will be commensurate with the risks involved, or whether the Government is to continue to spend it for them. Side by side with the implementation of socialistic doctrines and policy, there is always a tax system so onerous that it strangles private energy, ability and enterprise. Immediately substantial tax reductions became effective, output would increase, living standards would be raised, the necessary impetus would be given to industrial recovery, the need for rationing and prices control would diminish, and black markets and high prices would dwindle. From a national standpoint, high tax levels cannot be afforded ; and, as I have shown, means are available for the substantial lightening of the onerous lax burden which has assuredly retarded the progress of industry and production.

It has been truly said that the land is the basis of all wealth, and that it provides the wherewithal for the functioning of all civil ‘ enterprises and governmental undertaking’s. Here is the Commonwealth Statistician’s picture of rural Australia : Between 1943 and 1946, the sheep population of Australia declined by’2S,000,000, cattle and pigs by 132,000 each, horses by 250,000, and butter production by 21,000 tons. . The president of the Queensland State Council of Dairymen recently told me that butter productionfor 1946-47 would be 76,000 tons less than the normal production. The production in 1945-46 was approximately 53,000 tons, or 26 per cent, less than the average annual production in the three years which ended in June, 1941. Wheat production is now 11,000,000 bushels less than it was three years ago, and maize production has declined by more than 1,000,000 bushels, in the same period. Primary production is the surest index of prosperity in Australia. ‘To those who will take heed, these figures present a very - sorry picture, of the financial capacity and policy of the Government.

Admittedly, bacl seasons have been experienced in some areas. Nevertheless, high taxes, an unfortunate man-power policy, and unsympathetic treatment of rural producers, have contributed to the present position.

The Treasurer has pointed with pride to the increase of factory employment to 770,000, a rise of 230,000 since the end of the war. That increase has been achieved in no small degree at the expense of the great rural industries of Australia, and it emphasizes the drift of population, to the cities, which has been brought about by the lack of a realistic decentralization policy and a full realization of those factors that are so necessary to a contented life in the country districts of Australia. Any further drift will cause a serious rate of unbalance in Australia’s economy, with a further deterioration of our primary industries. It must not be overlooked that the primary industries are the source of supply -of all the raw materials that are essential to the secondary industries of Australia.

No financial survey would be complete without a reference to unjustifiable government expenditure. One of the most difficult of all tasks is to reduce extravagance, particularly by a Labour administration, and especially one committed to the inefficiency that is inevitably associated with socialization. For instance, £1,SOO,000 has been, provided this year for Government airlines, and we are committed to the expenditure of a further £1,500,000 on the aluminium industry. Wheat acreage restriction in Western Australia, one of the most shortsighted plans ever introduced in a country that is so dependent upon primary production as Australia is, has cost almost £2,000,000 to date. The second prize blunder of the Department of Commerce and Agriculture was the New Zealand wheat agreement, which will burden the Australian taxpayer with about fl,S00,000 this year. The AuditorGeneral’s report and the budget papers give other evidence of foolish government expenditure, which could be reduced appreciably.

As a result of the war, one person in every five of the population is a servant of some government instrumentality or activity. Of a total of 2,000,000 breadwinners,. 545,000 were in Government employment at the end of February last, and this number was only 2,000 fewer than the number employed at the peak period of the war. At the end of February, the number of Commonwealth public servants was 152,000 compared with 6S,000 before the war.

The standardization of railway gauges will cost £746,000 this year. The redundant Department of Information, the counterpart of which in Britain was disbanded long ago, is expected to cost nearly £33S,000. Petrol rationing^ which, as every motorist knows, is practically a joke- will involve an expenditure of £170,000. Never since the Government first assumed office have potato shortages been so frequent as they are at the present time, yet compensation for potato acreage reduction is expected to total about £25,000 this year, and the expenses of administration of the Australian Potato Committee will amount to another £45,000. No power alcohol was produced during 1-9.45-46, yet “stand-by “ charges for maintenance, &c, were incurred, amounting to £159,000. At the end of January, 517 persons were still employed by another war-time creation- - Commonwealth Food Control. The cost of Commonwealth Food Control up to that date was £833,400 in salaries and allowances,, and more than £256,000 in general expenditure, making the aggregate expenditure over £1,000,000. Each of these mistakes,’ errors of judgment, or attempts to implement Government policy, must eventually be reflected in higher individual tax assessments than are necessary.

When the taxation legislation is before the House,- I shall deal fully with this aspect of Government policy, and shall critically analyse the various factors involved in it. The heavy weighting of the tax tables against those who have family responsibilities, and the failure of the Government to rectify such absurdities in the proposed new tables, will also be dealt with fully. At present, I shall content myself with saying that the Government is in a dilemma of its own making. It wants to stimulate production; it desires to restore incentive; it would like to practice economy: hut it will not give up the things which prevent it from achieving these ends. Instead, it continues its role of spending the people’s money on socialized transport, socialized medicine, and other schemes, which are not wanted by the people, who see the clanger of becoming subservient to, and totally dependent on, a socialized state. Australia has the production potential, both primary and secondary, to enrich its people with a really high living standard, but between present-day conditions and the attainment of that goal are high and difficult barriers, namely industrial unrest, low output, strikes, class antagonism, weakened incentive, and lowered morale. Every one of these factors has been either brought about, or at least aggravated by the .faulty timing of the Treasurer, in not correctly estimating the revenue he would have available, and in procrastinating on the vital question of taxation relief, until the nation is on the brink of despair. If irreparable damage has been done to prospects for early post-war recovery to peace-time standards, then the Treasurer and his Ministers alone must accept full responsibility for it.

Mr DEDMAN:
Minister for Defence, Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP

[8.51J. - I congratulate the Treasurer (Mr. Chifley) on producing a financial statement of this character. Seldom has a Treasurer submitted to the Parliament a statement which reflects such prosperity as it does. Before emphasizing some points made by the Treasurer and dealing with certain factors behind the financial picture which he has given to us, I shall comment on the observations of the Leader of the Opposition (Mr. Menzies) and the Leader of the. Australian Country party (Mr. Fadden). The latter reminds me of Don Quixote, that character in Cervantes’ novel, who is continually tilting at windmills. On a previous occasion I successfully debunked the right honorable gentleman’s arguments. He sets himself up as an expert in finance, especially government finance. In effect, he says that if only the country would do what be advocates things would be much better. Happily the electors do not take him at his own estimation. On the occasion to which I have referred he submitted a proposal to the electors. He said, in effect, “ If only you will return me to power I promise not to take from you by way of taxes all the money that is required for the prosecution of the war. I shall take it from you in the form of post-war credits, and shall pay it back to you after the war. In the meantime, I shall pay interest to you at current rates”. I pointed out then that had the proposals of the right honorable gentleman been accepted at their face value by the people of Australia, the Commonwealth would have owed £200,000,000 to the people and -in the meantime would have paid out about £10,000,000 in interest-

Mr Holt:

– Was not that the policy of Britain and Canada?

Mr DEDMAN:

– The honorable member for Fawkner (Mr. Holt) will have his turn to address the House later. I am pointing out that, far .from being an expert in finance, the Leader of the Australian Country party knows very little about the subject. In his ‘speech to-night the right honorable gentleman said that the reductions of taxation and the concessions mentioned by the Treasurer are almost exactly what he himself advocated during the election campaign. That may be so, but the Treasurer has made these reductions and concessions on the basis of a definite financial statement, which has been submitted to the House, and not on the estimate of the Leader of the Australian Country party, submitted to the people in an election campaign. During that campaign the Treasurer said that if his Government were returned he would examine the financial position from time to time and would make reductions and concessions when possible. The Treasurer has not followed the . lead set by the Leader of the Australian Country party, but has fulfilled his own promise to the electors. ‘ .

The Leader of the Australian Country party referred to defence expenditure, and I agree that there is something in what he said, but he has merely given voice to opinions previously expressed by Ministers. In fact, a number of items mentioned by him will bc the basis of a statement on defence matters which I hope to make to the House shortly. My point is that the views expressed by the right honorable gentleman to-night have been held by members of the Government for along time. The right honorable gentleman expressed doubt whether during the transition from war to peace it was wise to spend large sums of money on what had been regarded in the past as normal means of defence, as it was not known what new techniques had been evolved and new weapons of warfare invented. He advocated the expenditure of more money on scientific research for defence purposes. He can rest assured that that matter has not been overlooked.

When the Leader of the Opposition (Mr. Menzies) spoke last week, I made some notes of his remarks, and I find that I am in complete agreement with him regarding some matters. He said that the present period is one of rising incomes in which there is a shortage of many materials as well as of man-power, and then he went on to say - and here’ I do not agree with him - that increased production was the only positive counter to inflation. The right honorable gentleman is astute. By the use of the word “ positive “ he implied that no other kind of action is of any value. It must be obvious to every honorable member that in a period of acute inflation a negative approach to theproblem can be most effective, as, for example, not creating more purchasing power in the form of additional hank credit. What the right honorable gentleman said about increased production being the only positive counter to inflation may be true in a strict sense, but it is not the only counter to inflation. Another counter, particularly when inflation is not acute, is heavy taxation. A study of the Estimates will show that the Government proposes to finance its expenditure this year by imposing taxes, raising loans and issuing bank credit. The estimated gap between receipts fromloans and taxes and the proposed expenditure was £59.000.000. Quite obviously, if there is a tendency to inflation, and if we raise a greater amount by taxation and so narrow the gap of £59,000,000, it becomes necessary to create something less than £59,000,000 of bank credit in order to bridge the gap. Therefore, a fairlyheavy scale of taxation is a real counter to inflation. However, I agree with the Leader of the Opposition that increased production is a positive method of countering inflation, but the right honorable gentleman seems to be somewhat of a Rip Van Winkle in this respect. Apparently, when he was a member of the Government in the 1930’s, when hundreds of thousands of people were unemployed, it did not occur to him that production was all important. It is all very well for him at this stage, when he is in Opposition, to pay such attention to production, but at that stage in his career, and at that time in our history, he did not think very much about the need for increased production. In fact, if one goes very deeply into this matter, it becomes evident that it is the Leader of the. Opposition and his supporters who are very largely responsible for our not being able to reach the scale of production that we should like. The most important factor in production is the man-power which can be put into the factories and the fields in order to produce goods and . services. As the Minister for Labour and National Service (Mr. Holloway) told us, there are, apart from dislocation caused by industrial disputes, 60,000 jobs waiting to be filled in Australia to-day, and there is no one to fill them. We are not producing as much as. we should like because the men and women are not here to fill the jobs. The greatest difficulty confronting producers to-day is lack of labour, and industry is suffering in this way, not only because we are short of men who were killed during the war, but also because we are short of the boys and girls who should have been born during the thirties, but who were not born because of the economic policy of honorable members opposite. The boy or girl born in 1930 is now in industry. Boys and girls born in’ 1931, 1932 and 1933 are now coming into industry, and it is because of the calamitous fall in the birthrate during those years when the Opposition parties were in power, that there is not sufficient labour available now to meet the requirements of industry.I have taken out some figures which prove my point. In 1921, the birth-rate was 24 per thousand of the population, and in 1946 it had again reached that figure. However, during the years 1931, 1932 and 1933, the birth-rate fell to sixteen per thousand. Had it remained at the 1921 figure, the total number of children born during the years 1931, 1932 and 1933 would have been 47S,000; in actual fact, the number born was only 341,000, so that there was a net decline of 137,000. It is clear, therefore, that had those children been born, all the present requirements of industry could be filled, seeing that the number of available jobs which cannot now be filled is- estimated at 60,000.

From time to time honorable members, particularly those on this side of the House, draw attention to certain evils in the community. They mention abortion, which has the result that children who ought to come into the world are not allowed to come. Another evil is the neglect of mothers, so that they are not in a condition to bear children. Another is the existence of diseases which attack children in their tender years, and prevent them from growing into healthy men and women. We condemn these evils as crimes against society, but there never was a greater crime against society than the crime of honorable members opposite, and the parties they supported, in adopting an economic policy during the early thirties which prevented children from being born, with the result that there is a shortage of labour -for industry to-day.

This has been a good year financially, and at the end of it the gap between revenue and expenditure will be much less than the estimated amount of £59,000,000. This buoyancy of revenue has made it possible to grant the concessions which it is now proposed to make. Concessions and reductions of taxes since the peak period of taxation during the war have now reached a very high figure. Including those which will become effective from the 1st of July next, the Labour Government has reduced taxes and allowed concessions to a total amount of £74,300,000. made up of income tax. reductions amounting to £59,000,000, and concessions, which have been ‘worth £15,300,000. Sales tax reduction and exemptions have amounted to £24,850,000, and the reduction of customs and excise duties to £4,000,000. Various smaller concessions- in respect of estate and gift duties bring the total to £103,000,000. By the 1st July next social service contributions and income tax contributions for a. great majority of taxpayers will have been at least halved during a period of eighteen months. For persons on the lower ranges of income the reductions over the same period range from 100 per cent, to 50 per cent. I am disturbed at the fact that many .workers and supporters of ‘the Labour party have fallen into the trap set by honorable members opposite. It is true that many have complained about the incidence of taxes without really knowing the degree to which reductions and exemptions have been made in the income tax* field. It is not generally understood that tax is not levied until the income reaches a fairly high level. I am speaking now of income tax proper, apart from social service contribution. After the 1st July next a taxpayer without dependants will not pay income tax until his income reaches £251. A taxpayer with a dependent wife will not pay tax until his income reaches £397. A taxpayer with a dependent wife and one child will not pay tax until his income reaches £514; A. taxpayer with a dependent wife and two children will not pay tax until his income reaches £573. A taxpayer with a- dependent wife and three children will not pay tax until his income reaches £633 ; and a taxpayer with a dependent wife and four children will not pay tax until his income reaches £6SS. That means that taxpayers coming within the categories which I .have enumerated will not pay anything at all towards the upkeep of law and order, the maintenance of police services, education and all the services rendered by the Government ; and they will pay nothing at all towards the defence of the Commonwealth, or towards the expenditure and debts incurred during the Avar, or for the repatriation of exservicepersonnel.

Mr TURNBULL:
WIMMERA, VICTORIA · CP

– What about indirect taxes ?

Mr DEDMAN:

– The honorable member knows that the great bulk of theGovernment’s revenue is raised by direct taxes. I believe that the exemptions which I have enumerated are very, generous indeed.

Turning now to social services, the Government has increased social service benefits very substantially. Whereas the total cost df social service’s before the war amounted to £17,000,000 annually, the expenditure under that heading to-day is approximately £70,000,000 a .year. That means that the cost of social services has almost quadrupled since the Labour party assumed office in this Parliament. If the community expects to receive social service benefits, and I believe that the majority of our people expect to receive them, such benefits must be paid for. On the basis of a total cost of £70,000,000 a year and a population of 7,000,000, the value of social service benefits now being paid to the community averages £10 per capita. Taking those benefits into account, I believe the imposition of taxes for the purpose of paying for them commends itself to the vast majority of our people. The incidence of the social services Contribution which is designed for that purpose does not inflict very great hardship upon any particular section of the community. That fact is illustrated by the payments in respect of certain categories. For instance, a taxpayer who has no dependant at all makes no social services contribution until his income reaches a level which will enable him to .pay such contributions without hardship. A taxpayer with a dependant wife and one child does not pay it until his income reaches £2S4. A taxpayer with a dependent wife and two children does not pay it until his income reaches £318. A taxpayer with a dependent wife and three children does not pay it until his income reaches £321; and a taxpayer with a dependent wife and four children does not pay it until his income reaches £401. When one is speaking about the contributions that are levied on taxpayers in order to pay for these social services benefits one must also take into account the value of the services received. A taxpayer with a dependent wife and one child, who does not begin to pay social service contribution until his income reaches £2S4, receives annually, on the average, benefits valued at £26 2s. The average value of these benefits increases as the number of dependants increases, until a taxpayer with a dependent wife and four children, who does not pay social service contribution until his income reaches £401, receives annually social service benefits of an average value of £90 12s. Taking into account the value of social service benefits received by the people, the contributions which those on the lower ranges of income have to pay is as small as can be expected in the circumstances.

Another feature of the Treasurer’s financial statement’ was the substantial reduction of defence expenditure; and it is obvious that this reduction was due largely to the rapid demobilization of service personnel. Demobilization was carried out more speedily and effectively in Australia than in any other country in the world. There can be no criticism on that score. The speed with which service personnel were demobilized meant that reductions of war expenditure would be made more quickly than would otherwise have been the case. At the same time, however, certain expenditure associated with the war has risen, particularly with respect to debt charges, pensions and allowances generally to ex-service personnel. No section of the community will quarrel with the Government’s action in making allowances ‘and paying benefits to our ex-service personnel who deserve s’o well of the country. These payments, of course, will be a continuing charge upon the community for many years to come. Another serious factor in limiting production at present is the fact that quite a large number of ex-service personnel are enjoying reconstruction training benefits. It is obvious that while men are in training they cannot produce; and the fact is that over 200,000 ex-service personnel are now enjoying either part-time or fulltime benefits under the Government’s reconstruction training scheme. I suggest that no honorable member opposite would propose that, in order to increase production, we should limit the volume of training and training benefits we are now providing for ex-service personnel.

Mr White:

– The scheme is too limited; the age limit should be raised.

Mr DEDMAN:

– I have explained on previous occasions that at any given time we cannot afford to have more than a certain percentage of our working people undergoing training; otherwise the burden falling upon those actually doing the work of the community would become too heavy. Therefore, in providing full-time and part-time reconstruction”- training benefits for 200,000 ex-service personnel, in addition to training for young people entering industry in the normal course, r ho community is bearing as heavy a hurden as it can be expected to bear in the existing circumstances. Had the Government taken the alternative course and limited the numbers who could undertake training we should have been able to increase production; but it was not prepared to do that. It said: “These men are entitled to the training . they are getting. If that means lower production than would otherwise be the case, the community has to put up with it for the i i mc being “.

The Leader of the Australian Country party -hud something to say about the statement of the Treasurer to the effect that our annual commitments in the years to come were unlikely to fall below :i certain figure. I. believe it will be admitted by every one that in the matter nf defence there is unfortunately no prospect of our being able to get back to anything like the defence votes of prewar days, which totalled approximately £3,000,000 per annum. Notwithstanding the evolution of organizations designed for the prevention of war in the future, I do not believe that honorable members opposite would contend that our defence votes should be cut down to anything like that degree. So there will be a. continuing heavy commitment for defence for some years to come

The Leader of the Opposition referred to the necessity for increased production, hut he did not say in what way it could be brought about. As I have already said, we are not only* in a condition of full employment, but there are also actually more jobs offering than men and women to fill them. During the transition stage nf the post-war period there will continue to he very great difficulty in obtaining the necessary man-power to fill all the labour requirements of industry. The Government has done its utmost to ensure that the conditions under which industry is operating to-day are such as to induce employers to employ the greatest possible number of people. The stability of our economy in general is one of the factor.which has promoted full employment. The Leader of the Opposition had someobservations to make in respect of prices(‘011 tl’01 which affects the stability of our economy to a large degree. In fact, thai part of the right honorable gentleman’* speech consisted of a plea for a relaxation, if not the entire abolition, of prices control. We have only to look at. what has happened in other countries in the world which have abolished prices control to see the resultant disastrous effect, upon their economy. It is true that at times our methods of prices control give rise to anomalies which are not easily explained. The Leader of the Opposition mentioned the case of Mis? Daveney Proprietary Limited, a firm of candy manufacturers in Sydney. Unfortunately I am precluded from replying t<> the charges made by the right honorable, gentleman in connexion with that case a» I am informed that it is to be made the subject of an appeal to the Privy Council.

Mr Holt:

– There are thousands of cases of that sort.

Mr DEDMAN:

– I thought ii w;tgenerally accepted that while a case was mb judice it should not be discussed in the Parliament. There is a complete answer to all of the charges made by the Leader of the Opposition in connexion with that case. I agree that everything should be done to increase production and productivity. The right honorable gentleman did not deal specifically with the methods by which he thought production could be increased, and I have noi time to go into them now. I commend the Treasurer’s Financial Statement because it reflects the innate healthiness of Australian economy in a world where so many countries are suffering a high degree of instability resulting in consequential hardships to their peoples.

Mr FALKINDER:
Franklin

– During this debate a vast field has been covered by previous speakers, but there are some matters I should like to touch upon which have not been mentioned by other honorable members. As a new member, it is my duty to attempt to understand the whole taxation system ; but I believe that most honorable members will agree that that is indeed a difficult task. For that reason I believe that an attempt should be made to ‘simplify the system and to this end I suggest to the Government that it establish a committee consisting of six persons, possibly three nominees of the Commissioner of Taxation - these would be men with practical experience - two nominees of the Australian tax agents, and a legal draftsman, to overhaul the whole of the taxation system. The average man in the street knows very little or nothing of the taxation system; indeed, few tax agents fully understand it. Recently a taxpayer challenged the Taxation Department’s assessment of his tax, stating that he had been overcharged £20. He won his case, the official excuse for the overcharge being that a new officer of the Taxation Department had assessed his income wrongly. That is only one of many instances of a similar kind that are brought to our notice. The promises made by the Opposition parties during the last election campaign that if they were returned to office they would reduce taxes substantially was referred to by Government, spokesmen as a bribe. That taunt was thrown at members many times during the campaign; but what do we now find? The reductions of taxes announced by the Treasurer constitute ample proof that our election promises were based upon sound premises. “We said then and we still maintain that tax reductions would increase the buoyancy of Commonwealth revenues and that is amply borne out by the statement now before us. Despite tax cuts estimated by the Treasurer to total £37,000,000, the revenue for the first nine months of this financial year amounted to £122,000,000 compared with £124,000,000 during a similar period of the preceding year. In other words, the tax reductions made by the Treasurer have, in effect, cost the country only £2,000,000. This bears out our contention that substantial tax cuts could be made and, indeed, should have been made much earlier than they were. High taxes - and the present rates are still far too high - have an undoubted ill effect on the industrial situation. In recent months we have witnessed the spectacle of strike after strike occurring, and there is no question that high taxes have been ‘ the major contributory cause. These constant strikes have resulted in decreased production and as goods have got scarcer, the inflationary trend has become greater and more* serious than it would otherwise have been. Had the parties on this side of the House been returned to office earlier tax cuts would have been made, production would have increased and the inflationary trend we see to-day would have been greatly minimized. For instance, many primary producers believe that with income tax rates at their present high levels, they are better off with a reduced effort, reduced output, and, consequently, less risk. That applies not only to the wealthier farmers, but also to the nien whose holdings are relatively small. This attitude, of course, reduces the incentive of the nation as a whole to produce. As the Leader of the Opposition (Mr. Menzies) has so often and so effectively pointed out, increased production is the key to many of our economic problems, yet this is a matter to which the Government has not devoted sufficient, attention. The uniform tax system was supposed to mean that all taxing authorities would come under central control and that there would be reduced staff and a simplified system. But what is the position to-day? Government departments arc being increased, and the taxation system, instead of being simplified, has become more complicated. Government departments have increased to such an extent that to-day one member of our working population in every four is a civil servant. Most of these people are employed on un.reprodi.icti ve work. This” expansion of the Public Service 1ms re-acted to the detriment of ex-servicemen, because government instrumentalities have acquired a vast amount of office accommodation, and young returned soldiers wishing ‘to start off in business cannot obtain the office space that they require.

Five hundred and seventy thousand ex-service men and women have been discharged from the armed forces, and that is another reason for the buoyancy of taxation revenue. No longer are these people paid by the Commonwealth. They have become income earners and taxpayers and the result of the transition has been a considerable increase of the national income, and therefore a wider income jus field. This is borne out by the fi n anc i a 1 sta tern en t .

One war-time imposition which appears io me to have been retained without justification is the surcharge of one halfpenny in the letter postage rate. The Postmaster-General’s Department has been making huge profits in recent years. Revenue has increased steadily and steeply. The answer given by the PostmasterGeneral (Senator Cameron) to the suggestion that the surcharge be abolished is that the additional revenue which it yields is being used for the development of telephonic services in country districts, but any honorable member who has received correspondence from various country centres asking for improved telephone facilities knows that little has been done in this regard. This is a pernicious tax which should be eliminated immediately.

The main matter with which I wish to deal to-night has been referred to by the Minister for Defence (Mr. Dedman). It is the present state of our armed forces, and the plans for their future. Undoubtedly, our defences are in a poor condition. We have practically no operational air defence at all ; our Navy is not what it might be, and our Army is in worse straits than the Navy. Particularly I wish to emphasize the serious plight of our Air Force. Expenditure on defence has been reduced, and with justification, because the war has been over for nearly two years, and the last of our actual war commitments has been met. But this expenditure must not be permitted to fall too far. Certainly it cannot go down to pre-war levels, and for very sane reasons. Just before World War II., the Labour party strongly resisted any increase of our defence commitments, and I am sure that honorable members opposite regret that attitude to-day. However, they may have learned their lesson, and I hope that they will be preparedto solidify our defences. Those of us who fought in World War fi. entered the conflict to fight for the security of our homes, our families, and of the Australian people generally. Are we to allow this country once again to fall into a state of unpreparedness from which it may again be awakened with a start, only to find that it lacks modern defence equipment, and has only a few partially trained servicemen? We must never permit a recurrence of that deplorable state of affairs. When one speaks on those lines, one is liable to be accused of being a sabre rattler; ‘but I maintain that what, J have said represents the sane approach to the problem. It is not a question of stirring up strife and being militant, but of taking a sane view of. our military problems. One- point upon which I. think emphasis should be laid - it has not been, emphasized in this chamber as yet - is the effect ou Empire defence of the economic straits in which the United Kingdom finds itself to-day, and the fact that Britain has been forced to withdraw from Egypt and Burma. A withdrawal from India seems imminent, and there is a possibility of even further withdrawals. All this leaves the other members of the Empire with no option but to increase their defence undertakings. It becomes for us a matter of vital local importance.

Many of our Empire routes have gone. The Empire route through Suez is one, and India, may cease ‘to be an integral part of the Empire. It is essential that even though the cost may be considerable, we should prepare sanely and substantially for any future war. Heaven knows we do not want another war. but we must prepare against the contingency of war. I have before me figures showing the defence expenditure of several countries. At a meeting of the two houses of the Supreme Soviet, held in Moscow, on the 21st February, 1947. the budget for the Soviet Union was introduced.’ It provided the sum of £stg. 2,970,000,000 for the armed forces. In the American House of Representatives, the sum of £stg. 3,625,000,000 was set aside for the armed forces. This was a reduction of 15 per cent, forced on President Truman by the House of Representatives. In Great Britain, in ihe Government White Paper Economic Survey for 1947, issued on the 21st February, 1947, the allocation for the armed forces was £stg. 899,000,000 compared with £stg. 1,667,000,000 for 1946-47. That reduction, of course, results from Britain’s reduced Empire commitments. There is considerable talk to-day of scientific warfare, and some people would lead us to believe that any war that may occur in the next ten years will be fought by scientists alone. I. disagree, although 1 admit that scientists must play an increasingly substantial and vital part in any future war as they did in the last war. In the final analysis, however, the controlling factor is man-power. Look at the position of our armed forces at the moment. The Government, we have been told, is. considering the defence factor. I hope that it will make substantial allocations of men to each of the three services and ensure that they shall be given modern aircraft, projectiles and ships, because increasingly armaments become obsolescent and obsolete in a short period. Defence is vital to this country and is a; matter on which we must take positive action.

Mr.SHEEHY (Boothby) [9.42].- The Financial Statement of the Treasurer (Mr. Chifley) delivered on the 25th March is in conformity with his election pledges, but before dealing with the financial statement itself I propose to refer to some points in the speeches of honorable gentlemen opposite. I was pleased to hear the honorable member for Wakefield (Mr. McBride) say that he supported prices control. Prices control has protected the Australian people, particularly those on small wages, against the exploiter and inflated prices of commodities. The honorable member expressed concern about the black market. My experience is that black marketing has not been carried on by members of the working class and the middle class. To move in the black market in an extensive way it is necessary to have capital. I am happy that the workers, who have enjoyed continuity of employment during and since the war for the first time in the lives of most of them, have accumulated some funds, but not enough to enable them to enter the black market to any degree. The honorable member said that he considered that wage-pegging had caused the recent industrial strife in Victoria. Last week we heard honorable gentlemen opposite say that the Communist-led unions had. caused the strike. We hear to-night that the cause was wage-pegging. Honorable members opposite would do well to ascer tain the tacts. Wage-pegging and prices control came into operation at the same time. After 1942, it was always competent for any industrial organization to approach theArbitration Court onthe grounds of an anomaly and later also on the grounds of altered circumstances. I know of many groups of employees having received awards from the Arbitration Court entitling them to more money on those grounds. So I cannot agree that wage-pegging has caused as much industrial strife as some honorable members would lead us to believe.

The financial statement sets out -

The Government intends to place before the House the following financial proposals: -

Reduction of the rates of income tax on individuals.

Increased income taxallowance for taxpayers with dependants.

Additional taxation concessions to certain groups and industries in the fields of income tax, estate duty and gift duty.

Increased invalid and old-age pensions, widows’ pensions, war pensions and re-establishment allowances.

Grant to the United Kingdom Government.

These proposals have been framed aftera searching review not only of the immediate financial positionbut of future trends and developments and I desire to outline certain basic considerations which have emerged from that review.

That is exactly the policy that the Treasurer outlined to the huge audience that listened to him at the Adelaide Town Hall during the election campaign. What seems to irritate the Opposition is that we have done what he promised to do. namely, to reduce taxes when and where possible. Once again the Labour Government has carried out its promise to the people. We were charged with having said during the election campaign that the Opposition promises to reduce taxes were dishonest. That is not the true picture. We asked the Opposition parties to tell us how they proposed to reduce taxes by 20 per cent., as promised by the Leader of the Opposition (Mr. Menzies), or 27 per cent., as promised by the Leader of the Australian Country party (Mr. Fadden), and, at the same time, remove the means test from social -orv ices, at. the cost of £44,000,000 a vear, endow the first child, as proposed in an amendment to a bill moved by the Opposition in the dying stages of the last Parliament, at the cost of £19,000,000, engage in an extensive public works programme and introduce a contributory social services scheme. 1 1 might bc as well if we were to glance at: cbe scheme proposed by honorable members opposite in 1938. They prepared a social service scheme for the Commonwealth which was passed by Parliament but was received with so much hostility by the people that it was never implemented. Under that scheme it was necessary for an employee to contribute ls. 6d. a week to receive £1 a week pension, and if he desired his wife to receive an old-age pension of 15s. a week it was necessary for him to pay another ls. 6d. a week. Honorable members opposite contended that they had conferred a great social service benefit on- the people, but I have here an extract from the Summary of the Principles of Hie National Health and Pensions Insurance Aci 1 93S, which T propose to read to the House -

Widows’ Pensions. - This is perhaps the most important new benefit to be derived under the net. The conditions are extremely liberal and i In- benefit will meet a need which is often iwy urgent. Tt will remove from the minds if many husbands and fathers a continual anxiety on account of their wives and families. A widow’s pension will continue until she remarries.

When we look at this scheme - and I emphasize this because honorable members opposite did not tell us what their scheme was - we find the huge benefit conferred on widows was 12s. 6d. a week! The preceding Labour Government introduced a widows’ pension scheme whereby a widow with children under the age of sixteen years receives 37s. 6d. a week, with the right to earn £32 10s. a year. Under this scheme, we find that a widow of 50 years or over is provided with a pension of 27s. a week. Honorable members can, therefore, realize why we asked Opposition members to convey to the people exactly what they intended to do for them.

The Minister for Post-war Reconstruction (Mr. Dedman) outlined the circumstances attending the’ requests made by all sections of the community for re duction of taxes. 1 have received in the last month or so 50 or 60 pamphlets urging the Government to reduce direct and indirect taxation by 50 per cent. I might say that I wrote to every constituent who sent a pamphlet to me. I spoke to one man from Toorak, who sent me a pamphlet and I explained to him the complete range of tax remissions which will operate from the 1st July next. When. I had done that he said : “ I fully realize that you are reducing taxation. That pamphlet was simply brought to my notice and 1 signed it “. That is the type of propaganda which Labour members are receiving to-day.

In assessing the merits of any social service scheme, we have to consider the actual benefits people receive from it. Tinder this Government’s administration invalid pensions totalling £26,962,000 were paid in 1945-46. The widows’ pensions scheme which I outlined earlier, and which was a most desirable reform, paid out. last year to the widows of this country £3,247,000. Child endowment payments last year absorbed £18,019,000. Funeral benefits cost £1S4,000 and maternity allowances £2,492,495. The estimated expenditure for the next financial year is £32,000,000 for invalid and oldage pensions, £3,500,000 for widows’ pensions, £.19,S00,000 for child endowment. £220,000 for funeral benefits and £2,630,000 for maternity allowances. Apart from that, a large number of exservicemen are receiving re-establishment allowances. The Commonwealth Government is paying £3 10s. a week to single men and £5 10s. a week to married men. and, in addition, an allowance of 15s. a week for living away from home, and 5s. a week to cover travelling expenses. It can be seen, . therefore, that over the period Labour governments have been in office they have not only reduced taxes from time to time, but have conferred on the people substantial financial benefits. Furthermore, in respect of World War L. the Commonwealth spent on’ war pensions, service pensions, medical treatment, vocational and other training, repatriation and other benefits, including the education of soldiers’ children, from 1914 to 1946 the sum of £250,S78,712. In South Australia, there are 10.485 war pensioners of World War T. receiving £556,60S. There are 21,793 pensioners of World War LT., which cost £692,469. Of the women’s section of the fighting services in World War fi ., 199 are receiving service and war pensions aggregating £12,8S3 a year.’ Altogether, a grand total of approximately £15,000,000 is being paid in pensions throughout the Commonwealth. In the light of these figures, one wonders not why the reduction of taxes is to be so small, but why it is to be so considerable. Hut the honorable member for Richmond (Mr. Anthony) has described it as miserable, though in the next breath he said the Opposition is prepared to expend within 2 per sent, of the amount this Government is providing for these services.

We have been told from time to time that uniform taxation has reacted to the detriment of the community in general, r went to some trouble to extract the following figures from a book entitled Commonwealth a.nd State Income Taxes, published by the Honorable R. G. Casey in 1939. I ascertained the amount paid in taxes by various groups, and in particular by the people of my own State in 1939, and compared it with what they will pay after the 1st July next. For an excellent reason, I have selected, the group in receipt of approximately £6 a week, because it was indicated recently that the average ‘wage of male workers in Australia was £6. a week. These figures are rather startling. In 193S-39, a man with a dependent wife, in receipt of £250 a year, paid under the combined Commonwealth and South Australian tax schedules, £7 7s. a year. Under the new tax proposals, which will operate from lbc 1st July next, he will pay £3 15s. a year. That is a clear indication of the benefits that wage-earners in that group in South Australia will receive. Similarly, a man with a dependent wife and one child, in receipt of £250 a year, paid a combined tax of £5 10s. Under the new schedules, he will not pay any tax. A man with a dependent wife and one child, in receipt of £300 a year, paid a combined tax of £S 12s. After the 1st July next, he will pay £2 5s. A man with a dependent wife and two children, in receipt of £250 a year, paid a combined tax of £3 12s., but under the new schedules, he will not pay any tax. Similarly, a man with a wife and two children in receipt, of £300 paid a combined tax of £6 14s. 7d ; under the new proposals, he will not pay any tux or social service contribution, but he will receive in respect of the second child endowment amounting to £19 10s. a year. Therefore, I am amazed when some honorable members opposite declare that the Government has not done anything to benefit the working class. A man with a dependent wife and three children, .in receipt of £250 a year, paid a combined tax of £1 15s. Hd. Under the new proposals, he will not pay any tax. Had his income been £300 a year, he would have paid combined tax of £4 16s. 7d. He will not pay any tax under the new scheme, but in respect of his second and third children, he receives £39 a year as child endowment. Had he received £350 a year, he would have paid a combined tax of £7. 19s. 6d. Under the new proposals he will not pay any tax, and he will receive child endowment amounting to £39 a year. Consequently, when some honorable members opposite declare that uniform income tax does not benefit the working class, I retort thai the proposed reductions of tax, which will operate from the 1st July next, must give some relief, at least to the people of South Australia, on the basis of the combined Commonwealth and State taxes that they paid in 1939.

The Prime Minister (Mr. Chifley)’ said that he would mete out justice to all. When we examine the taxation schedules, I am satisfied that the right honorable gentleman has adopted a plan that will alleviate the trials of every .person in the community. Later, honorable members will have an opportunity to examine the relevant bills that provide for the reductions of tax. I am -firmly convinced that the Prime Minister has kept his word which he gave to the people before the last elections. During that campaign, we said to our political opponents, “Put your cards upon the table, as the Labour party has done, and let the people judge between our respective policies “. What happened is history. I compliment the right honorable gentleman upon presenting this financial statement to the House. In my opinion, it, represent? further progress towards the attainmennf an era of prosperity for all. * Quorum formed.’]*

Mr THOMPSON:
Hindmarsh

– I am extremely gratified at the magnificent Financial Statement which the Treasurer (Mr. Chifley) has presented io the House. Before proceeding to dea with some of the items contained in it, 1 propose to analyze some of the remarks of the honorable member for Wakefield ( Mr. McBride). He explained to . thu House exactly why production is so low in Australia. He referred to one big industry - I believe he had in mind the Broken Hill Proprietary Company Limited - and showed at great length its production in 1939 and succeeding years. He then gave rather a remarkable dissertation on the reasons for the reduced production. First, he blamed the restricted coal output. He stated that the company had coal mines, and that the coal had to be used for purposes other than production, so that production had to be reduced. Shortly afterwards, he said that high taxation was the cause of the loss. He expressed the opinion that heavy taxes discouraged the people from giving a maximum output. The remarkable feature is that before giving those two reasons, the honorable member blamed wage-pegging for the decline of production. He also emphasized each of the three reasons as being the principal factor responsible. I was surprised that he did not raise the old bogey about the Communists being the cause of the reduction of output. I inform honorable members opposite that the decline of production in various industries in Australia may be- attributed to a number of reasons. There is a shortage of bricks, and it is said that the reason is lack of coal, but the real reason is a shortage of man-power in the brickyards. During the war numbers of men who previously worked in brickyards were employed in various war. industries where conditions were much better. The result was that when war ended they were not willing to return to the brickyards.. Some people in the .community would compel them to resume the work of brickmaking. What has happened in the brickyards has happened in other industries also; men are not willing to return to the hard work and uncongenial conditions. It is said that various industries lack man-power because operatives are now employed in the Public Service. I do not regard that as a proper explanation. The truth is that large numbers of men accepted work in other’ industries where conditions were better, and they are staying in those jobs. We must concentrate on improving conditions so that men will be prepared to work in all- industries.

The Leader of the Australian Country party (Mr. Fadden) claimed that the proposal to reduce tastes from the 1st July next will give effect to the policy advocated by him during the election campaign, when he was derided for advocating it. The honorable member for Franklin (Mr. Falkinder) accused the Government of putting into operation a plan advocated by the Leader of the Opposition (Mr. Menzies). I am pleased that tha taxation proposals of the Government are in line with what I advocated when on the hustings.

The great benefits which the taxpayers will receive under the proposal of the Government are vastly different from what they would have received had the Opposition succeeded at the elections. The Leader of the Opposition promised to reduce taxes on all incomes by 20 per cent, if be were entrusted with the formation of a government. The Leader of the Australian Country party went further, and promised a. 28 per cent, reduction. I shall show the difference between their proposals and the Government’s intentions. When those promises to reduce taxes were made, a man with a wife and one dependent child paid £1 16s. a year income tax on an income of £200 a year. Under the plan of the Leader of the Opposition that .tax would have been reduced by approximately 7s. I told the electors that a nian in that position should not pay any income tax at all, because bc was not in a position to do so, and I am glad that under the proposals of the Treasurer that will be so. The proposal of the Leader of the Opposition meant that a man and a wife and one dependent child, whose income was £250 a year, would have his tax of £5 4s. reduced to £4 3s. a. year. Under the Government’s plan he will not pay any tax at all after the 1st July next.

Let us now see how the proposals of die Leader of the Opposition compare with those of the Government in respect of the higher incomes. A man earning £300 a year paid. £15 12s. tax if he had a wife and one dependent child. A reduci ion of 20 per cent., as proposed by the Leader of the Opposition, would reduce that tax to £12 9s. 6d., a reduction of £3 2s. 6d. compared with a reduction of £13 7s. under the Government’s proposal. In other words, instead of a reduction of the tax by 20 per cent, the reduction will be 85 per cent. Similarly, a man with income of £400 a year and the same family responsibilities will, under the Government’s plan, pay £18, instead of £38 9s., a reduction of £20 9s., whereas under the proposal of the Leader of the Opposition his tax would have been reduced by only £7 14s. leaving him still. £30 15s. to pay. In his ease the reduction will be 53 per cent, instead of 20 per cent, as proposed by the Leader of the Opposition. The man on a thousand a year was at that time paying £225 10s. in income tax. The Leader of the Opposition would relieve him of £45 of this tax, but under the present proposal his tax reduction will amount to £54, or 24 per cent. The Government’s policy has been to help the man who is most in need of help. The Labour party believes that taxation should bear most heavily upon those who are best able to bear it. It also contends that the important- thing is. not how much tax a man pays, but how much income he has left after paying it - something which the public do not always realize. When I see a woman going intoa shop with her shopping bag I am- concerned, not with how much tax her husband pays, but with how much money she has in her purse to pay for the things her family needs. One of the reasons why the Leader of the Opposition advocated a flat tax reduction of 20 per cent, was because it. would benefit people on high incomes. I. know that some of our people had thi idea during the war that the big man was not being taxed enough, but the fact- is that on an income of £5,000 a year earned by personal exertion a man with dependent wife and child had to pay income tax amounting to £3,440. On an income of £5,000 derived from property the tax was higher still. However, 1 repeat that the important thing was, noi how much was taken from him, but how much he had left, and the man1 who paid £3,440 income tax on £5,000- still had £1,560 left. I do not think that he would feel the burden of taxation as much as would the man who paid £2 15s. a year tax out of a wage of £4 a week. If the proposal for a flat reduction of 20 per cent, had been accepted the man, on £5,000 a year would pay in tax £2,855 a year, a reduction of £5S9. The Treasurer was not prepared to go so far as that, because he did not believe that the man on £5,000 a year was as much in need of assistance as was the man on a lower income. However, even the man on £5,000 will benefit to the extent of £2S6 13s., under the new tax rates which will come into force on the 1st July.

Honorable members opposite claim thai the Government is now doing what they promised would be done if they were returned to power at the last election. During the election campaign, the Prime Minister said that, he would make no promises, but that taxes would be reviewed from time to time in the light of the current financial situation, and would be reduced if the situation justified it. The taxation ‘proposals which the Prime Minister has brought down for the ratification of Parliament are not those suggested by the Opposition, however much they would like to claim that they are. The total amount .remitted may be approximately the same, as the Leader of the Australian Country party has said, but the incidence of the remissions .falls very differently under the two proposals. For instance, under the Leader of the Country Party’s proposal the £5,000 a year man would benefit by nearly three times as much as he will under the Government’s proposal, while the man on the low wage, who is struggling with the cost of living, would receive very little benefit under the proposal of the right honorable gentleman.

It is necessary to take .a broad view of national finances. The honorable member for Denison (Dr. Gaha) referred to uniform income tax as did the honorable member for Boothby (Mr. Sheehy), who -cited figures which proved that a .resident of South Australia receiving £6’ a week will pay less tax under the system of. uniform taxation than he would have paid in 1939 before that system was introduced, while many persons on lower incomes will now pay no tax at all. I do not know what members of the Opposition will say in reply to that. I think I have heard them say that people should pay for what social benefits they receive. The thing they find hardest to swallow at the present time is the fact that a man with dependent wife and one child receiving £5 a week ‘does not pay anything directly for the social benefits to which he is entitled, such as sickness benefits, old-age pensions and child endowment. They would like to make him contribute so much out of every pound he earns whether he can afford it or not. I believe it is the duty of the Government and of the Parliament to ensure that every citizen receives a fair deal. It has frequently been said that babies are our best immigrants. We urge the people to increase the birth rate, and when, we do this we should be big enough to see that those who bring children into the world are not penalized. I am pleased to note that, in spite of the increased expenditure involved in liberalizing social service benefits, our finances are sufficiently buoyant to enable us to reduce taxes to the degree announced by the Government. Child endowment has been increased to 7s. 6d. ; and’ it is significant that no honorable member opposite has advocated in this debate that endowment should be payable in respect of all children, including the first child under sixteen years of age which is now excluded. I shall welcome the day when endowment is paid in respect of all children under sixteen years of age; and I sincerely hope that when that day comes such a reform will not be used in any way to reduce the standard of living of our people generally. I recall that the proposal to increase child endowment, put forward by the Opposition parties at the last general elections, was dependent upon a revision of the basic wage, and an inevitable reduction of that wage in order to offset the additional rate of endowment by basing the wage on the cost of living in respect o’f a dependent’ wife and no- children at all. In view of the silence of honorable members opposite on this subject now, it would seem that they have abandoned that idea. I am glad that the Government is able to continue the existing social service benefits without imposing additional hardships upon the taxpayers. When we examine the reductions of income tax which will take effect after the 1st July next, particularly in; respect of the lower ranges of income, we must admit the Government has tackled the problem honestly and effectively. All honorable members have had’ brought to their notice in the past numerous anomalies under our taxation laws. I recall, for instance, that no allowance was made to a taxpayer in respect of a daughter who was obliged to remain at home, and thereby be precluded from earning an income, in order to care for a’ sick mother or father. The proposals set out in the financial statement will remedy that and other anomalies. I am looking forward to the time when the old-age and invalid pension will be still further liberalized. I understand that legislation for that purpose will be introduced within a few months. The financial statement is too comprehensive to permit of a detailed analysis, but we have been assured that measures will be introduced dealing with many important matters dealt with by the Treasurer.

I should like to deal briefly with the relations between, the Commonwealth’ and the States. As most honorable members are aware, I was for a long period a member of the South Australian Parliament, and, consequently, I am conversant with many of the difficulties which South Australia, which is one of the financially weaker States, labours under. South Australia has been dependent to a large degree upon the generosity of the Commonwealth in the form of State grants.

Mr Conelan:

– The Commonwealth Government has been Father Xmas to South Australia.

Mr THOMPSON:

– The Commonwealth has done nothing for South Australia which that State has not entirely deserved. Honorable members from that State are very pleased with the assistance that has been given by this Government to South Australia, but unfortunately that fact has been quietly passed over by the Premier of the State who endeavours to take to himself all of the credit for any benefits made available to South Australia. We must ensure that our people as a whole are happy and contented; but we shall never attain that objective until the people of the different States, particularly the financially weaker States, are convinced that they are receiving an equitable deal from the Commonwealth. We must be prepared to recognize the disabilities under which those , States labour as part of the federation. Some honorable members from States other than the financially weaker States appear to believe that the former are not so well off because they do receive grants from the Commonwealth. However, those honorable members, instead of complaining, should be proud of the fact that the States from which they come do not need such assistance. I trust that the Commonwealth will continue to treat the financially weaker States as generously as it has done up to date, because I believe that all assistance given in that direction will be used primarily for the establishment of new industries, and the nation will gain full value for those grants. Many new industries have been established in South Australia. That fact is due largely to the policy pursued by the Commonwealth during the war of establishing war factories in South Australia, because those factories are now readily convertible to peace-time production. Australia as a whole will only progress provided its people foster an Australian-wide outlook. Reverting to old-age pensions, I again express my pleasure that it is the intention of the Government to introduce legislation to liberalize existing rates. Such legislation will redound to the credit of not only the Labour party but also the nation ‘as a whole.

Mi-. LANG (Reid) [10.39].- This Government is a government because of two pledges. The first pledge that was given by the Government was given to the Labour movement, and that was to carry out the platform of the Labour party. Its second pledge was that given to the people of Australia at the last general elections. Both pledges have been broken. The Government has Hot honoured its pledge to either the Labour party or the people of Australia. What were the circumstances in which it made its pledge to the people of Australia? Prior to the last elections the Government found itself in jeopardy because of the failure of the Prime Minister (Mr. Chifley) to include in his policy speech a promise of a tax reduction. Other parties had committed themselves to substantial reductions. The people seemed determined that their war-time .burden of tax should be eased, and eased immediately. If they could not get tax reductions from the Chifley Government, it appeared that they would seek them elsewhere. That was why, during the concluding stages of the election campaign, the Prime Minister abandoned his attitude of stubborn silence on taxation matters, and announced that if his Government were returned it would review the tax position from month to month. That statement was interpreted by the Government’s own supporters as a pledge to reduce taxes automatically as soon a.s the financial position warranted a reduction. The pledge became the central feature of the Government’s advertising. The campaign directors controlling that advertising were the Prime Minister and the Attorney-General (Dr. Evatt), and the pledge was repeated time after time over the Prime Minister’s personal signature.

Tax reduction was the only real issue in the last election campaign. On it the Government would either fall or survive. If the people believed that the pledge of the Prime Minister meant that taxes would be reduced immediately the financial position showed any improvement, and that they would be examined and reduced as war expenditure disappeared, then the Government indeed was safe. If the people had believed that the Opposition’s promise offered speedier relief from the tax burden then the Government would have been defeated. The electors decided to accept the Government’s pledge at its face value. They placed their trust in the Prime Minister’s word. They believed that at the end of each month the Treasurer, who also happened to be the Prime Minister, would examine the treasury returns, and if he found that the revenue justified a tax reduction he would give effect to that tax reduction immediately. That was one advantage which they, saw in the Government’s policy compared with the policy of the Opposition. The Government’s pledge appeared to be closer to reality and it appeared to be automatic in its operation. Therefore, there could be no argument, and, accordingly, the electors returned the Government on the understanding that it would review taxes’ from month to month. Very well ! Seven months have elapsed since then. The Treasurer has introduced his budget, and, despite improving finances, there has been no relief for the masses of taxpayers. The Government appeared to be waiting for bad times to turn .up; but, despite the Government’s pessimism, the financial position .continued to improve. Each month the budget was found to be more and more an understatement of revenue, and an overstatement of expenditure. Had the Government carried out its pledge remissions of tax would have been made as far back as October. Hut- the people are still paying the same tax to-day as they paid before the elections. They are still paying at the same rate as when war expenditure was still at a very high level.

In his budget the Treasurer estimated that Customs revenue for the present year would be reduced by £2,500,000 compared with the previous year; but the figures to the end of March show that instead of being reduced, customs revenue will exceed by £30,000,0.00 that of the comparative period during the preceding year. In respect of practically every item there is the same story. The revenue of the Postmaster-General’s Department has increased by £S85,000j and that for the first eight months of the year only. On the other hand, the Treasurer’s figures at the end of March show expenditure both from Consolidated Revenue and loan funds as far below the budget estimate. If in November the budget represented the Government’s own basis of taxation, then it is obvious that as soon as the true position of the finances became apparent the Government had a duty to carry out its election pledge. That would have meant immediate relief, month by month, in accordance with its promise to the people. On the 25th March the Treasurer presented his financial statement to this House. The right honorable gentleman admitted the facts. At the same time, ho attempted to discount the trend by adopting a gloomy outlook in regard to the future of Commonwealth finances. Is the Government afraid of prosperity? Then, with a strange show of reluctance, and much talk about illusions of better things to come, the Treasurer produced his taxation proposals about which we have heard something to-day. It was only then that the electors found that they had fallen for the old thimble-and-pea trick. The promise of automatic relief had been forgotten. Instead, the Government told them that they would have to wait until July for a reduction of taxes. On its own admission, the Government will still be reducing the .pay envelope of the workers for three months after the Treasurer made a belated admission that relief was already long overdue. What happened to the Government’s pledge? How can the people trust any government that trifles with public finances in that way? The responsibility of the taxgatherer does not end with the extraction of taxes. The tax-gatherer must also ensure that he does not extract too much from the pockets of the people. By deferring action the Government is creating a vicious time lag. When the Government introduced pay-as-you-earn taxation it also assumed an obligation to make certain that the tax lag would end. While that lag operates there is always a danger of a major economic crisis being brought about by the Government’s policy. The incentive to produce is destroyed. In this case there is every reason to defer production until the 1st July. That is taxation policy in reverse of common sense.

The other pledge broken by the Government is that to the Labour movement. The Labour platform ‘ provides that all income from personal exertion of less than £300 a year should be exempt from tax and that in addition there should be an exemption of £100 for a taxpayer’s wife and £60 for each child totally dependent upon the taxpayer. The Government and its followers are pledged to carry out that platform. During the war the Government argued that war commitments would not permit the introduction of Labour’s taxation policy; but the days of war finance are now over. On the Treasurer’s own admission, the new taxes are basedon peace-time requirements, so the pledge to implement Labour’s policy can no longer be ignored. This commitment to its own people should have priority over every other consideration. It should have priority over any concessions to wealthy mining companies. Labour’s taxation proposals are soundly based. The taxing of lower incomes destroys purchasing power and reduces the standard of living. No government that hopes to maintain a policy of full employment can afford to tax the lower income groups. The Government says it cannot afford to give effect to Labour’s taxation plan. One Minister has said that it would cost £31,000,000. That, after all, is only the a mount by which” customs revenue will probably exceed the Treasurer’s estimate. Experience shows that when taxes on lower incomes are reduced production is stimulated and increased taxation revenue is obtained from the higher income groups. The Government’s present financial policy operates to reduce the standard of living, and that is why the £300 exemption was proposed in the first place. To-day the need for it is greater than ever. Another representative of the Government said that the Government’s taxation plan would benefit those without family obligations. . That statement only proves that the Minister does not understand his own party’s platform, and that in itself is not surprising - he probably has not been long enough in the party to study its platform. The present system of income tax rebates which is being perpetuated by the current financial proposals is also contrary to Labour principles. The rebates for dependants are assessed on the gross income level instead of the net income level. That in itself is a contradiction - a contradiction from a government that purports to be concerned about family incomeobligations. So, while the present proposals provide for an increase of the amount of the rebates, they are still to be calculated on the gross tax rate.

The Government’s financial proposals fail also to give adequate ‘consideration to the claims of invalid and old-age pensioners. It is proposed to increase the invalid and old-age pension from 32s. 6d. to 37s. 6d. a week as from the 1st July. Surely old-age pensioner’s need not have waited for such a miserly pittance. A Labour government, true to its faith, would have abolished the means testand also have made certain that pensioners were in a position to meet the increased cost of living, which,in fact, is far greater than has been disclosed by any statistician’s figures. It is time that the Government recognized that the nation owes more than social service obligations to these people. A national retiring allowance is sound in principle. They should have the means of maintaining their home life. In New Zealand the Labour Government has recognized that principle. The present allowance does not even provide for the minimum subsistence, let alone proper housing. It makes no provision for housing at all. All that the people can expect from any government is that it will honour its pledges, and that is what the present Government has failed to do.

Debate (on motion by Mr. James) adjourned.

page 1956

PAPERS

The following papers were presented : -

Arbitration (Public Service) Act - Determinations by the Arbitrator, &c. - 1947 -

No. 23- Non-Official Postmasters’ Association.

No. 24 - Australian Third Division Telegraphists’ and Postal Clerks’ Union.

No. 25 - Fourth Division Postmasters. Postal Clerks and Telegraphists’ Union.

Commonwealth Public Service Act - Appointment - Department of Post-war Reconstruction - C. H. B.Norman.

Defence (Transitional Provisions) Act - National Security (Maritime Industry) Regulations - Order - No. 61.

National Security (Prices) Regulations - Orders-Nos. 2869-2933.

Regulations-Statutory Rules 1947, No. 46.

Lands Acquisition Act - Land acquired for Commonwealth purposes - Sydenham, New South Wales.

House adjourned at 11.2 .p.m.

page 1957

ANSWERS TO QUESTIONS

The ‘ following answers to questions vere circulated: -

Wool

Mr McDonald:
CORANGAMITE, VICTORIA

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

  1. What is the procedure governing the supply of Australian wool to Japan?

    1. What are the details of the classes of wool to be sold, the prices to .bc paid,- the method by which payment is to be made, and the quantity of the clip to be allocated’?
Mr Pollard:
ALP

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

  1. The Commonwealth Government made arrangements with the Australian Wool Realization Commission for the purchase of the wool destined for Japan. The actual purchases were made at public auctions in Melbourne and Sydney by Australian buyers approved by the commission and who had had previous experience in buying wool- for the Japanese trade.
  2. The classes of wool sold were - Type 122c, -133/sb; type 123c, 434/3b; type 124c, 434b; type 125c, 4340; type 1260, 435b ; type 162b, 435c; type 162c, 436/6B; type 163c, 436/7b type 169b, 479/b; type 169c, 479c; type 170b, 437b’; type 170c, 437c, The prices paid were current auction rates, and .payment will be made in United States dollars for 7,350 bales.

Wheat: 1945-46 Pool; Sale to New Zealand

Mr Archie Cameron:
ALP

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

  1. Does the. Commonwealth propose to pay to the Australian Wheat Board a aura per bushel sufficient to bring to 5s. 2d. per bushel the amount of 4s. 7;5d. per bushel realized for wheat’ of the 1945-46 pool sold for consumption in Australia (including Sour tax:) as indicated by the Minister on the. 1.8th April, 1947?
  2. Does he propose to honour the undertaking of his predecessor, vide Ilansard of the 20th June, 1946, page 1668?
  3. Will he clearly indicate whether bc intends to do either of these things?
Mr Pollard:
ALP

– The honorable member is referred to .the -reply given, him on the 16th . April, 1947, concerning the sama subject.

Mr McEWEN:
INDI, VICTORIA · CP; LCL from 1940; CP from 1943

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

  1. Did he recently write to .the Associated Poultry Farmers of Australia in relation to. wheat sales to New Zealand?
  2. If so, in view of the fact that certain references to a communication with the Associated Poultry Farmers has appeared .in .Ure newspapers, will he give ‘the full text of such letter?
Mr Pollard:
ALP

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

  1. Yes..
  2. No. It is not the practice to .publish the text of letters sent by Ministers.

Leather.

Mr Chifley:
ALP

y. - On the 17th April the honorable member for Wilmot (Mr. Duthie) asked if a certain order calling for a declaration of all stocks of leather held in Australia had had any tangible results. I am informed by the Minister for Trade and Customs that, in consequence of the order referred to, declarations of stocks of leather were obtainedand investigations failed to establish the existence of undeclared stocks. Further, the quantity of leather stored for export for which export licences had not been obtained from the Australian Hide and Leather Industries Board was infinitesimal.

Coal.

Mr Chifley:
ALP

y. - I refer to the question asked by the honorable member for Hunter (Mr. James) on the 16th -Apr.il concerning the .Coal Production . (Wartime) Act, and am now able to inform the, honorable member that 1 have discussed, the matter with the Attorney-General, who .has supplied’ the following informa- tion : -

It appears that the honorable member haR. been’ misinformed as to the dispute in question. It actually arose at the Abermain No. 1 Colliery. It did not come before Mr. Gallagher, under Part V. of the Coal .Production (Wartime) Act 1944, which has in fact already been repealed. The ‘ award made by Mr. Gallagher was in exercise of his authority as Coal Industry Tribunal, under the Coal Industry Act’ 1946 and. an act of the State of New South Wales of the same title. The industrial provisions of the war-time act ceased to operate as from the commencement of Part V. of the 1946 act. and there has therefore been no overlap between the two sets of industrial provisions.

Cite as: Australia, House of Representatives, Debates, 6 May 1947, viewed 22 October 2017, <http://historichansard.net/hofreps/1947/19470506_reps_18_191/>.

View PDF View XML View in Voyant