House of Representatives
8 September 1948

18th Parliament · 2nd Session

Mr. Deputyspeaker (Mr. J. J. Clark) took the chair at 2.30 p.m., and read prayers.

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Petition - Rates

Sir EARLE PAGE presented a petition from certain members of the

Coff’s Harbour and Woolgoolga branches of the Original Old Age and Invalid Pensioners’ Association of Australia and other citizens praying the Parliament to set up a competent tribunal to determine a pension rate, to be adjusted quarterly in accordancewith the cost of living, and to discontinue the means test.

Petition received and read.


-Can the Prime Minister say whether the right honorable member forCowper, Sir Earle Page, was a member of the Governmentwhich reduced invalid and old-age pensions to 15s. a week? Is it a fact that that Government made it a condition that old-age and invalid pensioners who owned their homes had to sign their homes away as a guarantee of the repayment of their pensions in the event of their death?

Mr.CHIFLEY.-I understand that the right honorable member forCowper did have some association with a government

Sir Earle Page:

– I was not a member of the. Government at the time. I was a member of the “ corner “ party, and opposed the whole proposal.


– Would the right honorable gentleman like to answer the question?

Sir Earle Page:

– I desire to make a personal explanation, Mr. Deputy Speaker.


– Order ! The Prime Minister has the floor. I ask the right honorable member forCowper to resume his seat. He cannot make a personal explanation at this stage.


– I understand that the right honorable member for Oowper was associated with the Government that introduced the system under which the property of invalid and old-age pensioners was taken into account after their death in connexion with the amount of pension that had been paid to them. I understand that at a later stage in the life of the same Government that practice was discontinued.

Mr.Calwell. - On the eve of a general election.


– I understand, too, that pensions were reduced by’ a govern-, ment with which the right honorable member for Cowper was associated. later:

Sir EARLE Page:

– I desire to make a personal explanation. I refute the misrepresentation of the Prime Minister and’ the honorable member for Werriwa, with regard to my association with a reduction of the j-ate of old-age and invalid pensions. When tha misrepresentation about which I complain was made, I endeavoured to correct it but I was not permitted to do so. I was not a member of the Australian Government during the period 1929 to 1934, when the rate’ of invalid and oldage pensions was interfered with by both the Scullin and Lyons Governments. The Hansard record shows that, by my vote in this House during that period, I attempted to have the pension rate restored to its former level.

Mr Chifley:

-. - I merely said that the right honorable member had been associated with the Government.

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– Can the Minister for Commerce and Agriculture give any information of the results which will follow . the ballot of wheat-growers now. being taken or about to be taken by the governments of the respective States ? My question is prompted by requests from farmers who desire to know whether an adverse vote in any one State or failure by any one State to legislate for fae plan will make it impossible to proceed with it. Will the Minister make a statement on this matter to guide wheatgrowers? Can the Minister state how soon the States will have completed their polk, and whether there will’ still be time thereafter for them to pass the necessary legislation and thus ensure that delivery of wheat by farmers will not be delayed if the Commonwealth plan operates? Can the Minister also state what will be the position in respect of the orderly marketing of next season’s crop if no State legislation is provided for marketing the crop? Those are important questions agitating the minds of many growers and it would be helpful if the Minister would make a statement.

Minister for Commerce and Agriculture · BALLAARAT, VICTORIA · ALP

– I thought that the position of the Government in regard to the proposed wheat stabilization plan had been made amply clear. The proposal is that if the States pass the necessary complementary legislation the Commonwealth will guarantee a price of 6s. 3d. a bushel, associated with an index number varying up or down according to the cost of production, and applying to an export quantity of 100,000,000 bushels. In addition, each State is to fix a home consumption price for wheat within its own borders. It is true that time is passing, and if the States do not enact the necessary legislation in time to handle the- incoming wheat crop. I do not know what will happen. It will then be necessary for this Government to review the situation. If it is made clear that the States will eventually pass the legislation, the Government will have to decide what it must do to receive the incoming harvest. One thing is clear. In no circumstances will the Government acquire the incoming wheat, crop on terms similar to those which operated during the war. The situation cannot be dealt with until we learn the result of tb,e ballots now being taken, in the States.

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Trans-Pacific Service - Loss ‘ of Aircraft “ Lutana “ - Air Accident in New Guinea.


– Can the Minister for Civil Aviation say whether the Canadian Government granted permission to Canadian Pacific Airways, a private company, to operate a transpacific service to Australia, and whether the Australian Government has asked the Canadian Government to reverse this, decision? If so, what was the reason for the request? Is it true that the Australian Government was actuated by a fear that Australian National Airways might share the service, and thus thwart the Government’s intention to prevent this company from operating an external service’


– A statement was published in the press that the Canadian civil aviation authorities had designated Canadian Pacific Airlines to operate a service between Canada and Australia.

Those authorities were then communicated with, in view of the fact that the Prime Minister of Canada had declared that the policy of the Canadian Government was that the Trans-Canada Airline, which is the Canadian Government line, was the only one that would be authorized to operate international services. So far as I know, Australian National Airways is not interested in the matter in any way. No suggestion has been made to that effect, and there is no ground for the suggestion that anything has been done to prevent Australian National Airways from operating services which it may be entitled to operate.


– In drafting the terms of reference for the inquiry into the Lutana disaster will the Prime Minister see that they will be wide enough to ensure inquiry into the whole question of the safe working of the Civil Aviation Department’s regulations? Will he arrange for the public to be invited to bring forward any instances of breaches of regulations or apparent dangerous practices that they are aware of? Will the terms of reference include provision for an inquiry into the class of maps issued by the Civil Aviation Department? Will an inquiry be held as to safety measures on aerodromes, particularly with reference to the filling of aircraft with petrol from leaky hoses with consequent spilling of petrol onto aircraft and the tarmac?

Mr Chifley:

– The Minister for Civil Aviation will answer the question.


– The fixing of the terms of reference is a matter for consideration by the Attorney-General and myself.

Mr Abbott:

– It is a matter for the public.


– It is a matter for the Ministers who accept full responsibility for the terms of reference. I remind the honorable member of two previous fatal aircraft accidents though not in recent years, into which public inquiries were held. If he takes the trouble to examine the terms of reference in those instances, he will see that no restrictions were imposed. He may accept my assurance that we are not likely to do anything to hide any one in relation to an accident like that which occurred to theLutana. Any implication that we are likely to do so has no justification in past conduct or present intentions. The Attorney-General and I will consider the terms of reference and draft them so as to ensure the obtaining of the fullest information about how the accident happened and how such accidents may he avoided.


– Can the Minister for Air inform me whether the Dutch Government or the K.L.M. airline has approached the Australian Government or the Civil Aviation Department since the end of the war for permission to operate an air service into and out of Australia and if such permission was granted?


– No such application has been received by me and I am unaware of any application having been made.


– Can the Minister for Civil Aviation state the reason for the unprecedented delay in announcing the result of the inquiry into the. air disaster in New Guinea early this year, as the result of which twenty natives lost their lives? Will the Minister make available to honorable members the report which he received on the causes of the disaster ?


– The report embodying the result of the inquiry into the unfortunate accident wherein a number of natives, as well as four employees of Guinea Air Traders, were killed, reached me on Saturday week last. It is very extensive, as the matter was gone into fully. I have read the report, and I am having it further examined in order to determine what action is necessary to deal with the matter.

Mr Ryan:

– When may we see the report ?


– I am not proposing that the honorable member shall see it at all.

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– Will the Prime Minister institute inquiries into the record of Reginald Edward Wellard, New South Wales secretary of the Amalgamated Postal Workers Union, to ascertain whether - (a) Wellard is a key member of the Communist party; (b) whether his recent activities included organizing work for the Victorian Branch of the communist Ironworkers Union, then as organizer of the Victorian branch of the Federated Clerks Union, and whether he assisted in taking illegal possession of premises at 64 Elizabeth-street, Melbourne, for the Communists; whether he was then transferred by the Communists to be an organizer for the Federated Clerks Union in Sydney, another Communist organization, in the key shipping clerks’ section; (c) whether “Wellard obtained temporary employment as a postman in a Sydney suburban post office in December, 1947 ; (d) whether Wellard was elected, six weeks later in January, 1948, on a show of hands at an emergency meeting, packed by the Communist party for that purpose, to the position of general secretary of the Amalgamated Postal Workers Union when Mr. N. W. Burke became federal secretary; (e) whether Wellard is now secretary of. the Commonwealth Public Service wages and salaries campaign, which includes the telegraphists and fourth division postmasters; (/) whether Wellard organized a special camp school for younger members of the Postal Union at the Communist Eureka Youth League camp at Springwood, from the 24th to the 28th April, to bring them into contact with Communist agents and influence; (g) whether Wellard proposed a regulations strike in the Post Office for the purpose of testing Communist party organization in its aim to disrupt the communication services of this country in the event of war? If the Prime Minister finds these statements to be facts, will he take action to see that Wellard is denied access to all vital communication facilities, and will he also publish Wellard’s record so that loyal members of the postal service may take the earliest opportunity to oust him from office?


– I shall refer the honorable gentleman’s questions to the Commonwealth Investigation Service for examination, as it deals with security matters, and furnish him with a full reply later.

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– Is the Minister representing the Minister for Shipping and Fuel aware that two Bass Strait steamers, Kowhai and Tambar, have been tied up indefinitely in Melbourne owing to the shortage of crews? Is it a fact, as stated by the secretary of the Seamen’s Union, that crews are not keen to work on these ships, but prefer vessels with better accommodation? In view of the acute shortage of shipping between the mainland and Tasmania, will the Government give urgent consideration to the desirability of affording all possible assistance to ensure the early restoration of these two vessels to the Tasmanian run?

Minister for Defence · CORIO, VICTORIA · ALP

– I am not aware of the circumstances to which the honorable gentleman has referred. I shall bring the matter to the notice of the Minister for Shipping and Fuel, who, I am sure, will do everything possible to adjust the position.

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Female Postal Assistants


– I direct a question to the Minister for Labour and National Service. On Friday last I asked a question, to which the Minister bad not a complete reply, concerning the wages of women postal assistants. My question was also applicable to the position of all women in the Commonwealth Public Service whose present wage rate under the temporary regulations promulgated under the Defence (Transitional Provisions) Act has not been written into their awards and whose wage is consequently protected only until the 31st December. Is the Minister able to reply to my question to-day?

Minister for Labour and National Service · MELBOURNE, VICTORIA · ALP

– I can give the honorable member the further information she desires. Since the question was asked on Friday I have discussed the subject with the Postmaster-General, who has informed me that no female employees in the Postal Department are working under the 75 per cent, regulation. The greater number of the females doing male officers work in that department are paid the full male rate; the remainder receive 90 per cent, of the male rate, the wage fixed by the Women’s Employment Board acting under the authority of the Women’s Employment Act. Consequently, there are not any women in the PostmasterGeneral’s Department who are working under regulations, which, they fear, may upset their wages when such regulations expire at the end of the year. Outside the Postmaster-General’s Department, many women are working under rates fixed in accordance with the Women’s Employment (Minimum Rates) Regulations, which provide that women shall be paid 75 per cent, of the male rate, applicable to the industry concerned. They were advised, and the court recognized the need more than a year ago, to have their rates reviewed and written into the awards. Most of them have done so. My advice to them more than a year ago was to take that action, and, indeed, I do not know of any who have not done so. If some have not yet taken the opportunity to have the rates reviewed and incorporated permanently in the awards, they should do so before the end of the year, when the Women’s Employment (Minimum Rates) Regulations will expire. However, that does not apply to women employed under determinations by the Women’s Employment Board. Judge Poster is still in charge of that section of arbitration work, and the rates determined by that authority will not automatically cease to apply as certain other rates will do, at the end of the year. Women may apply to Judge Foster, if they so desire, to have their rates reviewed, but I do not think that they would be wise to do so.

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– I ask the Minister for Post-war Reconstruction, who negotiated on behalf of Australia at the Havana conference on international trade to inform me whether an important document called the General Agreement on Tariffs and Trade and an important protocol were signed by Dr. Coombs on behalf of Australia? Was the document which the representatives of the United Kingdom signed laid on the table of the House of Commons last April, and has a similar document been laid on the table of the New Zealand Parliament? Why has not the Minister produced the document relating to Australia, and laid it on the table of this House? As the agreement may contain certain trade commitments detrimental to Australian interests, will the honorable gentleman say whether he intends to lay it on the table, and, if so, when?


– All the relevant documents in connexion with both the trade agreement which was reached at Geneva - not at Havana - and the International Trade. Organization which was drafted at Havana, have been laid on the table of the House. No document signed at Havana has committed the Australian Government to any action about which the Parliament has not been informed.

Mr White:

– What are the documents which have been laid on the table of tha House of Commons and also on the tableof the New Zealand Parliament?


– I do not understand the honorable member’s point.

Mr White:

– My authority for saying that the documents have been laid on the table of the House of Commons and also on the table of the New Zealand Parliament is contained in the Hansard of those legislatures.


– Neither the agreement which was signed at Geneva nor the International Trade Organizationcharter which was dealt with at Havana has yet been ratified by the New Zealand Parliament, although both of the documents have been submitted to that legislature. The Australian Government proposes to submit to the Parliament in the near future a short bill dealing with this subject. When the measure is introduced, the relevant documents will again be made available to all honorable members.

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– Can the Minister for Commerce and Agriculture supply any information about the progress being made in the growing of linseed in Australia? Was Tasmania included in the plan for the production of this important commodity? Are indications favorable for the future of linseed production in the Commonwealth?


– I am speaking entirely from memory, but I understand that this year approximately 20,000 acres are being cultivated for linseed in New

South Wales, and there may be areas in other States on which linseed is being produced. I am given to understand that the prospects are favorable in New South Wales. I am not aware of any plan for the growing of linseed in Tasmania, or, indeed, of any specific plan for any State, because to-day the growing of linseed and all other agricultural products is a matter entirely for the good judgment of the respective State Ministers for Agriculture and State governments.

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– Has the attention of the Minister for Immigration been drawn to a statement by the president of the United Kingdom Ex-.Services Welfare Association, Mr. Bennett-Wood, that British ex-service migrants, barred from jobs by the preference provisions of the Re-establishment and Employment Act, have been told by officials of the Commonwealth Employment Service that the best thing they can do is to take the next boat home? Is it a fact that these migrants have been denied preference and eligibility for war service homes, and that certain members of the Immigration Advisory Council have unsuccessfully fought to obtain preference for them? In view of the Government’s extensive propaganda designed to attract British people, particularly exservicemen, to Australia, will the Minister take immediate action to have these privileges extended to those who did so much to help us during the war?

Minister for Immigration · MELBOURNE, VICTORIA · ALP

-I do not take much notice of anything that is said by Mr. Bennett- Wood. For a considerable time he has been writing letters to the press criticizing everything that the Government tries to do in order to encourage immigration. I do not believe that any officer of any government department ever told any British migrant that the best thing that that person could do was to take the next boat home. If there is any real evidence that any officer has misconducted himself to the extent of giving such advice, I can assure the honorable gentleman that that officer will not be giving advice for much longer. I am sure that every officer who comes into touch with British migrants does his very best to give them the fullest possible information, and does not adopt the arrogant and truculent attitude that the question seems to imply. British migrants are not entitled to preference under the Re-establishment and Employment Act, and they were not given such preference by any legislation that was passed after World War I. What we have done is merely to continue the practice that has obtained since preference was introduced. Preference is a measure designed to assist an Australian citizen, whether he be of Australian birth or of other origin, who fought in the Australian forces, to rehabilitate himself in Australian civil life. British ex-servicemen who come to this country are not entitled to preference over an Australian citizen. In fact they come from a country that does not itself give any preference to its own ex-servicemen. In those circumstances, they are not entitled to anything more in Australia than they would get in their own country. Similarly, British ex-service migrants are not eligible for war service homes. There can be no doubt as to the position in regard to these matters. We have specifically said in all our propaganda in the United Kingdom and have told all prospective migrants that if they come here they will not be entitled to preference or certain other specified benefits, but, beyond that, we shall give them whatever other advantages we can. The president of the British Legion was recently in Australia, and I discussed this matter with him in Hobart and Canberra. That gentleman and others holding high office in the British Legion would no doubt like certain advantages to be given to the members of their organization, but those advantages have not been given. When the Re-establishment and Employment Bill was before the Parliament, the then president of the Returned Sailors, Soldiers, and Airmen’s Imperial League of Australia, Sir Gilbert Dyett, came to Canberra and asked members of all parties to support an amendment designed to give British ex-servicemen the same preference as Australian ex-servicemen. Not one member of any party in the House rose to support that plea, although all members had been individually interviewed by Sir Gilbert.

Mr.RYAN.- Will the Minister for Immigration inform me of the approximate average cost to Australia of migrants now coming to this country? The figure, in my opinion, should include costs to the Australian Government, State Government, and private institutions and individuals, as far as they can be ascertained. If the Minister cannot supply me with this information now, will he do so at a later date?


– I shall endeavour to obtain the information which the honorable gentleman desires. I take it that he wishes to know the cost not only of berths on the ships whichbring migrants to Australia, but also the cost of housing them temporarily, the cost of transportation from the point of disembarkation to their places of employment, as well as the amount of other relevant expenditure.


– I wish to know all the costs involved.


– If the honorable gentleman desires the information in respect of those coming to Australia under the free passage agreement and, also, separately in regard to those coming under the assisted passage agreement, I shall be able to give it to him within a few days, and I suggest that he repeat the question on Friday morning.


-Can the Minister for Immigration inform me of the progress of the scheme to allocate migrant domestic labour to Tasmania and, if possible, to other States, especially to hospitals, rest homes and private homes, where the need is desperate, and whether the scheme will continue for some time yet.


– I shall obtain the information the honorable gentleman desires in answer to the first part of his question. I can assure him that whatever the Government has done up to date in allotting Baltic and other foreign migrants to work in industries and homes will be continued and expanded. A number of ships are now on the water bringing such migrants to Australia. One such vessel arrived in Sydney within the last 72 hours and the flow of that particular type of labour to Australia will reach a total of at least 20,000 in the financial year ending 30th June next.

The Government has given consideration to plans for accelerating the intake, which may reach 40,000 people within the next twelve months. I shall be pleased to give the honorable gentleman any further information that he desires, and at a later stage, subject to the benevolence of honorable members in giving the necessary leave, and to their continued interest in this subject, I may make a statement on immigration covering questions raised by the honorable member for Wilmot and any other questions which are now agitating the minds of various people.

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report of Public Works Committee.


– I present the report of the Public Works Committee on the following subject:-

Proposed erection of a tubercular block and additions to Sisters’ quarters at Lady Davidson Home, Turramurra, New South Wales.

Ordered that the report be printed.

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– I lay on the table reports of the Tariff Board on the following subjects: -

Gloves (Interim report).

Spectacle frames and mountings, optical lenses and blanks.

Circuit breakers or switch units.

Aviation sparking plugs.

Handand breast drills and carpenters’ braces.

Gloves, n.e.i., including mittens.

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– During the last session I pointed out to the Minister for Commerce and Agriculture that producers of pig meats were complaining that it was impossible to increase production because the prices they received for their product were unremunerative. The Minister then stated that the Government was negotiating a fresh contract with the United Kingdom Government for new prices for pig meats. Can he inform me whether anything has yet transpired in respect of the new prices and when an announcement may be expected ?


– Negotiations between the Australian Government and the United Kingdom Government are still proceeding and the Australian Government hopes that an early announcement will be possible, perhaps within the next week or so.

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– In view of the grave uncertainty in the international sphere and the need for the public to be fully informed on Australia’s defence position, will the Prime Minister arrange to have a comprehensive statement made to the Parliament regarding the Commonwealth’s latest defence plans, as far as national security considerations will permit such a statement?Will the Prime Minister, in any statement, explain the discrepancy between defence expenditure per head of population in Australia and that of other countries?


– I had hoped, during the present debate, either before now or ata later stage, to deal with some aspects of this subject, and during the budget debate I am sure honorable members will have ample opportunity to refer to it. I shall give consideration to the question of making a special statement on the matter. I shall also endeavour to ascertain the position in regard to expenditure per head of population in Australia and in other countries for the information of the honorable member.

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– Can the Treasurer inform me whether the Australian Government still receives reimbursements from the British Government on the subsidy paid on Australian butter, and, if so, the amount involved last year? Is any such amount likely to be used as a “ set-off “ against the Australian Government’s recent gift of £10,000,000 to Great Britain? Will the recently reported increase in the price to be paid by Britain for Australian butter be passed on to the producer?

Mr Chifley:

– The Minister for Commerce and Agriculture will answer the question.


– Had the honorable member been here yesterday he would have heard my answer.


– I was here.


– Then apparently the honorable member was asleep.

Mr Bernard Corser:

– I would not have been while the Minister was talking.


– The United Kingdom Government does not make any reimbursement on account of the amount of subsidy paid to Australian producers. The United Kingdom Government has agreed to pay an increased price for Australian butter as from June, 1948, for a period of seven years, and that increased price is subject to a variation of7½ per cent, per annum under a mutual agreement. The increase in price over the prices at present being paid to the producers will, with the consent and the approval of the Australian Dairy Produce Board, be paid into a stabilization fund which will be available to protect the dairymen of Australia against the possibility of a future slump in prices for butter sold overseas. Under those circumstances the amounts could not be used for any other purpose than for payments to the dairyfarmers to whom they really belong.

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– As uniform taxation appears to be the subject of considerable controversy among State governments and is likely to be made a political issue, and in view of the lack of knowledge by the community on the system, will the Prime Minister cause tables to be printed, taking as a unit a man, wife and two children, showing the combined State and Federal tax paid by wage earners in such a unit in the last year in which both State and Federal governments levied taxation, compared with the tax levied to-day under the uniform tax system? Such tables would give to the Australian people information about the advantages or disadvantages which have accrued from the system of uniform taxation, particularly in respect of those who earn incomes in the lower brackets.


– The honorable member spoke to me personally about this matter some months ago, his attention having been drawn to the fact that persons on lower incomes, particularly a man with a wife and two children, paid less tax under the uniform tax system than he paid under the previous system of dual taxation. Some other honorable members have also mentioned the matter. After that discussion, I had a table prepared,which I have circulated to honorable members for their information.

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– In view of the continuous and steady decline in the number of female dairy stock, especially young heifer calves upon which depends the revival of dairying, and as the hulk of these calves must be bred on farms producing milk for butter or cream, will the Minister for Commerce and Agriculture consider offering some special encouragement for the breeding and rearing of calves, such as a price for milk used for the production of cream or butter equal to that paid for milk used for human consumption; or, alternatively, a special bonus on all female dairy calves reared to the age of twelve months ?


– I do not agree that there is a continuous decline of the number of female dairy stock in Australia: As a matter of fact, those in possession of the latest figures declare that there has been a substantial increase in the number of dairy cattle coming into production. This is due to the more attractive prices now payable for dairy produce, such as whole milk, ‘butter, cheese, &c. As for the suggestion that the Government should provide an incentive for the rearing of female dairy stock, the Government believes that the present prices for dairy produce, which have been guaranteed for a period of five years at the cost of production, provide sufficient incentive.

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Motion (by Mr. Chifley) agreed to -

That so much of the Standing Orders bo suspended as would prevent, before the Address-in-Reply is adopted, the taking of all necessary steps for the introduction of the budget and resolutions and bills consequent thereon and motions for the second reading of such bills.

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Motion (by Mr. Chifley) agreed to -

That the House will, at a later hour this day, resolve itself into a committee to consider the Supply to be granted to His Majesty.

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Motion (by Mr. Chifley) agreed to -

That the House will, at a later hour this day, resolve itself into a committee to consider the Ways and Means for raising the Supply to be granted to His Majesty.

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Debate resumed from the 7th September (vide page 155), on motion by Mr. Thompson -

That the following Address-in-Reply to the Speech of His Excellency the Governor-General be agreed to: -

May it please Your Excellency :

We, the House of Representatives of the Parliament of the Commonwealth of Australia, in Parliament, assembled, desire to express our loyalty to our Most Gracious Sovereign, and to thank Your Excellency for the Speech which you have been pleased to address to Parliament.

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

That the following words be added to the Address: - “and to inform Your Excellency that because the Communist party . . . (vide page 52).


.- The Address-in-Reply debate gives honorable members an opportunity to comment on a wide variety of subjects. Such an opportunity does not often present itself. Therefore, I propose to comment briefly on a number of subjects’ of some importance to the political and industrial life of the country. I first draw attention to the strange ommission from the Govern or-General’s Speech of any reference to communism. This is all the more strange when one realizes that, since this debate began, nearly all speakers have devoted most of the time at their disposal to discussing this most important and pressing subject. I have heard one member after another on this side of the House attack the Government for failing to take any action to Curb the activities of a foreign-inspired organization operating in our midst, and I have heard from the Government side of the House a series of explanations why nothing has been done or should be done in the matter, culminating last night in the strange reply of the Minister for Information (Mr. Calwell), who made a spirited defence of the Government’s policy of doing nothing about communism. The remarks of the Minister must have seemed strange to many persons outside the Parliament until they remembered that, at. the Easter conference of the Australian Labour party this year, he said that the real enemy was capitalism, noi communism. That remark was published in the Melbourne Age, and elicited a strong reply from Mr. Keon, a Labour member of the Victorian Parliament. While this Government is in power, we need not expect anything to be done to curb the activities of this fifth column enemy. Instead, we may expect that those operating private industrial enterprises in Australia, will be hounded and persecuted while the Communists will be left unchecked. The attitude of the Government seems all the more strange when we remember that only recently the Prime Minister went overseas. As a matter of fact, his trip was somewhat fantastic. He went to Great Britain, and in eight or nine days he sought to solve the problems of his own country and those of the whole Empire. He spent one day in and around Berlin. Surely, while he was there, he must ha ve been impressed with the danger and. difficulty of the situation in western Europe. I do not. think that; I atn saying anything wrong when I suggest that the nations are now preparing for a third world war. It is not wide of the mark to say that a careless finger on a trigger of a tommy gun may plunge the world into a third world war. The Prime Minister must have realized how seriously the leaders of Great Britain regard the situation, and he must have learned something of the preparations which the Government of the United States of America is making. It must have been evident to him, too, that, failing a miracle, another world war is almost inevitable. Therefore, we should plan accordingly. Nothing is so calculated to invite attack on the democratic countries as weakness. The Prime Minister travelled through Malaya, and he must have been struck by the situation existing in that country. It is true that he spent little enough time there - hardly enough to light his pipe, spit, and go on. It is strange that the Prime Minister, having been confronted during his trip with the realities of the world situation, should have failed to include in the document setting forth the proposals of the Government for the coming session any reference to the activities of Communists in this country. He must know that in practically every country of the world to-day the Communist * party constitutes a fifth column, which operates solely in the interests of a foreign power, and that power is Russia. He must know that disturbances in almost every nation are related and are a part of the Communist plan to stir up industrial strife in those nations in the interests of the Soviet. But apparently nothing is to be done. It is extraordinary that one of the Prime Minister’s first actions on returning from overseas was to plead for increased production when he knows that increased production is impossible until something is done to curb the menace of communism in Australia. That statement is borne out by the fact that, although the Prime Minister visited the northern coal-fields at the week-end and in pleading with the coal-miners to end their petty strikes told them that, notwithstanding that the Joint Coal Board had improved and was improving conditions in the coal-mining industry, the miners were letting their fellow unionists and their country down, the newspapers this morning reported the likelihood of another strike on the coalfields over tunnelling. It is said that the trouble has arisen from a dispute about whether the tunnellers should be members of the miners’ federation or the Australian Workers Union. One excuse for keeping production down is as good as another for the Communists, who are in charge of the key trade unions. They are obeying their instructions from overseas in doing all they can to prevent Australia and other democracies from preparing to defend themselves in the event of another world war. I repeat that until communism in Australia is curbed we can expect no real improvement in production. . Yet the

Governor-General’s Speech, makes absolutely no reference to communism, and it is plain that the Prime Minister intends to do nothing about it. I am prepared to concede that there can be two views about whether the Communist party should be banned or not, but if the party is given all the facilities it needs to disseminate its propaganda, such as buildings, equipped with telephones, supplies of paper for their publications and the necessary freedom, we must expect the Communist movement in Australia to remain at its present strength, if it does not actually expand. I say to those who do not like the idea of banning the Communist party that, if it were banned, it would be placed in exactly the same position as a business enterprise would be if it were denied all the facilities that it needs to conduct its operations, such as buildings, shop windows, telephones, paper and the means of advertising, all of which are necessary to the conduct of a modern business. So, if the Communist party were banned and deprived of all the facilities it now has to do its nefarious work, a brake would at least be placed upon its activities. If we are not prepared to -ban the Communist movement, other means exist by which its activities may be restricted. That remark brings me to the extraordinary circumstances in which a Minister of the Crown is president of the AustralianRussian Society. The society is, of course, one of the new movements that spring up from time to time.

Mr George Lawson:

– It is not new; it has existed for years.


– At any rate, it is one of the movements sponsored by the Communist party. My authority for that statement is the executive of the New South “Wales branch of the Australian Labour party. Many gentlemanly people, including clergymen, were hoodwinked into joining the society in the belief that it was a. means of advancing friendship between the nations. They were tricked by an attractive but false facade on the society’s aims and actions. The Minister of the Crown to whom I refer is a member of the Labour Government of New South Wales and a brother of the Attorney-General and Minister for External Affairs (Dr. Evatt).

Mr White:

– It runs in the family.


– I remind honorable members that the AttorneyGeneral once described the Communist movement or any branch of it as foreigninspired. Those are his words. We have had, too, the spectacle of the Minister for Transport (Mr. Ward) as a vicepresident of the Australian-Russian Society, which has been described by the executive of the New South Wales branch of the Australian Labour party as a. subversive organization. I say with certainty that the society was known to the Commonwealth Investigation Service as a subversive organization before it became so known to the Labour party. Yet, in reply to a question I asked, upon notice, the Prime Minister to-day said -

I am not aware that the society referred to is sponsored by the Communist party.

He is not aware of that when the party of which he is a prominent member is aware of it and the Commonwealth Investigation Service has been aware of it for a long time? He told me also -

It is not considered wise for security reasons to disclose the names of the organizations reported upon or the nature of the reports concerning them.

I can understand that. But the AustralianRussian Society is known to be a society sponsored by the Communist movement of Australia. I concede that the Minister for Transport has resigned from it, but until very recently he was a vice-president, and the brother of the Attorney-General is president of the body. It is extraordinary, when we are moving into an era that may be productive of another world war and is, to say the least of it, decidedly dangerous we have members of governments in Australia associated with a subversive organization, who. because of their places in the inner councils of administration, must, of course, be aware of defence secrets involved in the testing of modern defence weapons in central Australia. Perhaps it is not so much the actual members of the Communist party that we have to fear in relation to the betrayal of defence secrets as those other men who do not actually belong to the party but who belong or have belonged to bodies that have been described as subversive. I leave that subject at that point. If the Prime Minister will not ban the Communist party, he should at least ensure that every Minister in his Cabinet who has ever been associated with a subversive organization shall be sacked on the spot and kept well away from any places where he may learn State secrets.

In July the Melbourne Herald published an article under the heading, “Kindergarten of the Reds: Through Eureka Youth League, Communists catch em Young,” from which the following is an extract : -

Song and dance at a two-storeyed hall in Queensferry Street, North Melbourne, during the past week-end, marked the seventh birthday of the Eureka Youth League. Strong-girl acts, a “ working class mannequin parade “,. music and ballet rounded off seven years of Communist schooling. For, whatever its more naive supporters might say, the Eureka Youth League is nothing but the Kindergarten of the Reds.

The rest of the article went on to show that the Eureka Youth League is nothing more than an offshoot of the Communist party.

I read that report with only a fair degree of interest until I came across the name Mal,mach. It was stated that he was being sent by the Eureka Youth League to attend a conference at Warsaw. I understand that Yugoslavia was the venue ultimately chosen. The name echoed faintly in my mind. On making inquiries, I found that this gentleman, until a few weeks before the article was written, had been, employed as a metallurgist, grade I., at the Munitions Supply Laboratories, which are now known as the Defence Research and Industrial Laboratories, at Maribyrnong, Victoria. As a professional officer, he had complete access to all the confidential files and other confidential documents in the library. Marmach is a noted Communist, who was sent overseas by the Eureka Youth League. He bad been employed in the inner councils of our defence organization and had had ready access to. such information as he could obtain relating to the defence secrets in -Australia. It is idle for the Government to say that it knew nothing about this man. If it knew nothing about him. what was the Commonwealth Investigation Service doing? Surely it should keep tab of every known Commu- nist in this country. If Marmach were known to be a Communist, why did not the Minister for Munitions inform the Prime Minister that a known Communist was employed in the inner circles of the defence laboratories? The Commonwealth Investigation Service should search for any such men who are in positions of trust where by their access to defence secrets they may destroy the defence organization of Australia and of the Empire as a whole for the benefit of some foreign nation.

There has been some trouble in the Federated Clerks Union during the last few months. Certain members of that organization have been dealt with, it is said, in a way that smacks of Moscow methods. A short time ago about 500 clerks hired a hall in which to conduct a meeting of protest against the methods of the Communist dictators of their union. Attempts were made by the Communists to sabotage the meeting. Bogus telegrams were sent out purporting to come from the Australian Labour party stating that the meeting would be held in a hall other than that which had been hired for the purpose; but the plot failed. Those members of the union who had been misled by the bogus telegrams were picked up by representatives of the Australian Labour party and taken to the meeting. The meeting decided, among other things, that there should be -

Amendment, of the Arbitration Court to protect unionists against victimization by union leaders.

Is not that a sensible resolution? -

Full inquiry by the court into the control, rules, and conduct of the Federated Clerks Union.

Co-operation with the Australian Labour party groups in other unions, such as the Australian Railways Union and the Building Workers Industrial Union, which had allegedly victimized members for opposing Communist leadership.

Restoration of disbanded sections of thI union; and amendment of the rules to ensure democratic elections under an impartial returning; officer.

These are but a few of the measures demanded by avowed unionists who are in rebellion against the tactics pursued by the Communist leaders of their .organization. If the Government does not want to deal with the menace of communism by more direct means, it could so alter our arbitration laws as to assist the honest-to-God clerks and building workers. This Government, however, will do nothing to hinder the Communists.

I now wish to say a word or two about the situation in Malaya. After a brief visit to that country, the Prime Minister told us that he believed the situation in Malaya to be insoluble. That is the only contribution to the problem which the Prime Minister has yet made. He has given us the impression that the situation in Malaya’ does not very much concern him or Australia. Speaking in this House last night in reply to an interjection by the honorable member for Balaclava (Mr. White), the Minister for Immigration (Mr. Calwell) said that we had no desire to fish in those troubled waters. In other words, he said that we had nothing to do with the problems of Malaya, and nothing to do with the situation there. Apparently the honorable gentleman is content with sending a few rifles to Malaya. How the Government’s attitude towards Malaya has changed in the space of a few years! I have very vivid memories, as have many other Australian people, of how this Government screamed to the world for help in 1941 when the Japanese walked into Malaya. In those days Malaya was regarded as being right at our back door and its defence was regarded as important to the defence of Australia, as it still is. On that occasion the Minister for External Affairs (Dr. Evatt) said -

It now seems clear that the First Lord of the Admiralty, Mr. A. V. Alexander, and the few other public men in Great Britain who gave utterance to contrary sentiments will at long last learn the lesson that the defence of Malaya and the Netherlands Bast Indies is in truth the defence of Britain as well as the defence of Australia.

A good deal of talk was indulged in in those days about Malaya being one of our northern bastions; to-day apparently it means nothing to this Government. Malaya is as important to this country to-day as it ever has been. In the hands of a hostile race acting against our safety and security Malaya would constitute a definite menace not only to Australia but also to the British Empire. Great Britain recognizes that to be so, yet the Australian Government has consistently refused to play any part in the troubles in Malaya.

I come now to the rather interesting story of a certain gentleman who is fairly well known in Australia, Laurence Lewis Sharkey, who, a few months ago, passed through Singapore to attend a Communist conference overseas, a man who was granted by this Government all the facilities of exchange and travel. A report published by several Australian newspapers on the 10th and 11th August states -

Sharkey, on arrival in Singapore, found that the “ moderates “ in the Malayan party questioned ( 1 ) whether the party would be strong enough to start a full-scale revolution in June, and (2) whether the party was not making satisfactory gains through union domination, without resorting to widespread violence.

According to the testimony of Communist officials taken captive at Kuala Lumpur, Mr. Sharkey said to contacts -

You should be ashamed of yourself for thinking that way. You are strong enoughto attack now.

When Sharkey came back to Australia he said that he was opposed to terrorism in any form, and feverishly but unsuccessfully denied that he had taken any part in instigating the terrorist campaign in Malaya, but he said, and he cannot deny these words -

I firmly believe in the right of the Malayans to fight for their independence. What has to be struck down in Malaya is brutal British imperialism.

This is the kind of man who is provided by this Government with travelling facilities and allowed to wander around the world talking of “brutal British imperialism “. Is it any wonder that thousands of people in Australia, including many honorable members of this House, wonder to-day whether the Prime Minister merely desires the help of the Communists at the next elections, or whether the right honorable gentleman is a Communist sympathizer.

Mr White:

– Or whether he is a “ fellow traveller “.


– That is so. The Prime Minister made some remarks about the British people being in Malaya, not through any love of that country, but for profit. The right honorable gentleman makes statements of that kind from time to time. This is not the first occasion on which he has made allegations that British subjects are working in different parts of the world purely for profit. He says these things in his customary ingenuous manner and gets away with them; but behind his apparently open and frank criticism is a sneer at people who have migrated to other lands and have helped to develop them and so build up the British Empire. Let us get this straight. Ninety-nine out of every 100 people who embark upon a commercial venture expect to gain some reward for their initiative and enterprise. If it were not for the profit motive we would not have the better class homes, the amenities of civilization and the better clothes and food that we enjoy to-day. The profit motive and the competitive idea have been responsible for all those great advances. Man instinctively endeavours to make profits, and that trait of character will always ultimately bring about the downfall of communism, because its ideology is opposed to a man’s freedom to succeed. However, these veiled insinuations which are made offer encouragement to the Communists in Malaya and further endanger the 17,000 white people in that country, whose lives are now in peril. The British Empire has been developed largely by people who migrated from the United Kingdom to India, North and South America and Australia, in order to improve their own lot. Undoubtedly, the great majority of the migrants who settled in Australia more than 100 years ago believed that they would find opportunities in the new land to gain advantages for themselves. Migrants who come here to-day also have that motive. The pioneers had little money in their pockets, and certainly did not enjoy an entertainment allowance of £1,500 a year, free of tax. But they helped to build this nation. What is there to be ashamed of in that? But from time to time we hear such accusations as the Prime Minister has made. They add fuel to the flames of terrorism in Malaya and encourage Communists wherever they may be. The Prime Minister should refrain from making such statements.

I now desire to refer briefly to preference shares. For a considerable period, it has been the practice to keep a curb on new issues being floated on the Australian market, and it has been an unwritten law that preference shares issued to the public should not carry a dividend rate of more than 5 per cent. I took some trouble to check these details with the Treasury and I was informed that the remarks which . I have just made are correct. There is no definite regulation or law which restricts dividends on preference shares to a rate not exceeding5 per cent., but it is understood that if a company desires to float a new issue of preference shares, the rate must not exceed 5 per cent. That is one of the various means by which control of prices is exercised. In the issue of Smith’s Weekly published on the 26th June last, I read of an extraordinary situation which I shall recount to the House, and I hope that the Prime Minister will reply to assertions that have been made. The matter concerns the raising of money for Airsales Broadcasting Company Proprietary Limited, holder of the licence for radio station 2HD Newcastle, about which we had a rather acrimonious debate in this House some time ago. Smith’s Weekly sometimes unearths good material and sometimes bad material ; sometimes accurate material and sometimes inaccurate material; but this item is so interesting that it should be checked, and definite information should be given to the House about it. I do not believe that the article would have been published unless the information was correct. If it was not accurate, Smith’s Weekly would incur the risk of a libel action. The article states -

According to the latest records filed at the Registrar-General’s office in Sydney on the 10th December, 1047, here is how the shares are held -

The extraordinary feature is that most of the preference shares are held by men who are prominent in the Labour movement.

Mr Daly:

Mr. Whittle is not one of thom.


– Certainly the Prime Minister is a prominent figure in the Labour movement. So, to a lesser degree, is the honorable member for Lang (Mr. Mulcahy). The article continues - “ A “ and “ B “ preference shares in Air.sales Broadcasting Co. Pty. Ltd. have the right to receive a non-cumulative preferential dividend of Hi per cent, per annum, before the ordinary shares get anything.

After the latter have had 1(5 per cent., “ A “ and “B” preference shares participate Pa’:r, passu with the ordinary shares in any profits remaining.

A” shares have the right to appoint one director, “B” shares appoint three.

Both classes have the prior right in liquidation to receive £4 for each £1 of capital paid up before the ordinary shares get a penny back. 1 shall be most interested to hear the Prime Minister’s reply to those statements. As I stated earlier, my inquiries have revealed that, in accordance with an unwritten law, the dividend rate on preference shares must not exceed 5 per cent. If members of the Australian Labour party hold preference shares which guarantee a return of 16 per cent, before any payment is made in respect of the ordinary shares and if, in the event of liquidation, they are to receive £4 for each fi of capital paid up before any payment is made on ordinary shares, 1 regard it as a scandal, and a disgrace to the public life of this country. These allegations demand a complete reply from the Prime Minister. If Smith’s Weekly has published a He, it should be made to pay the penalty.

About a fortnight ago, the Prime Minister made a statement relating to the sale of Australian wool, and every Australian should be interested in it, because our fortunes rise and fall as the value nf wool rises and falls. The Prime Minister’s statement was to the effect that before foreign buyers would be allowed to export wool from Australia they would be required to obtain export licences and state exactly where they proposed to send the wool, -and what use was to be made of it. The Prime Minister named France as one of the countries which had been doing “ funny things “ in the resale of Australian wool for the purpose of obtaining dollars. The Prime Minister’s statement immediately drew a protest from a member of the French Diplomatic Corps. In no uncertain words, the French Government called the Prime Minister of Australia a liar for the statement that he had made about French participation in dollar transactions with wool purchased in Australia. That is the situation. In effect, Australia says to foreign woo] buyers, “You may come to Australia and buy our wool. We agree that when you have purchased it, it becomes your property, but you must npt utilize your own property in accordance with your desires, but must satisfy us as to how you propose to use it before weshall permit you to remove it from Australia”. Is not that the most extraordinary happening in the trading history of this country? Australia, with a population of approximately 7,000,000, is telling all the other countries of the world what they are to do with their own property after they have purchased it from’ us! The Prime Minister has explained that, unless this action is taken, Australia and other members of the British Empire will continue to be deprived of dollars which could be obtained from the sale of this wool. Some of these dollars are now being secured by certain foreign buyers. But will the action proposed have any value? Even if the Government compels foreign buyers to obtain an export licence and supply the required information, I do not think that it will ensure that the wool will always go to the destination .which the purchaser has disclosed. By one means or another, whether it be by running the wool through scouring machines or by other processes, foreign countries will ultimately do as they please with’ Australian wool. They will feel perfectly justified in doing what they like with their own property.

Mr Archie Cameron:

– If they have purchased the wool, they should be able to do as they like with it.-


– Yes. If we meddle excessively with the wool trade, as the Government is now doing, there will be a grave danger that the foreign buyers will look elsewhere for wool. Therefore,

Australians will be denied the full advantage of open competition in the sale of wool. If anything happens to drive values down, that will react not only upon those who grew the wool as individuals, but also upon the entire nation.


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


.- The recent opening of the second session of this Parliament was a truly notable occasion. I felt proud, as I am sure other honorable members did, that the ceremony was performed by an Australian-born Governor-General. I consider that the sound knowledge shown by His Excellency of the subjects to which he referred made his Speech one that compares more than favorably with those delivered by the other distinguished men who have occupied the high office of GovernorGeneral of Australia.

Mr Archie Cameron:

– It is not the Speech of the Governor-General; if is the speech of his Ministers.


– I thought it rather unfortunate that some members of the Opposition indulged in rather sneering criticism of the Governor-General’s Speech, or that of his advisers, if the honorable member for Barker (Mr. Archie Cameron) prefers me to put it in that way. The criticism appeared to me to be directed more towards His Excellency himself than towards his Speech. Iri other words, some honorable members opposite took advantage of the opportunity to offer a veiled insult to His Majesty’s representative in Australia. That was unfortunate. If my memory serves me correctly, and I believe that it does, that sneering criticism was not apparent in the speeches made by members of the Opposition in reply to that delivered by His Royal Highness the Duke of Gloucester when he opened the Parliament during his term as GovernorGeneral of Australia. I hope that there will be no repetition of such conduct when His Majesty the King opens the Parliament early in 1949. If there is, it will indeed be a sorry commentary on the conduct of those who are elected to serve the people in this great Parliament.

It will be interesting to see whether those who preferred to sneer during this debate will line up to participate in the festivities that will take place during the Royal Visit, the invitations to which will be extended by His Excellency the GovernorGeneral, who opened the Parliament a few days ago.

I propose now to comment briefly on some of the references to communism that were made by the honorable member for Deakin (Mr. Hutchinson). This debate has developed almost exclusively into a discussion on communism, and many important matters have been completely overlooked by honorable members opposite in their endeavours, as they would term it, to make the Government do something about communism. In the brilliant speech that he delivered last night, the Minister for Immigration (Mr. Calwell) pointed out that it was only comparatively recently that the honorable member for Deakin and other honorable members opposite had come to the conclusion that the Communist party should be banned. The Minister stated that the Governments of Victoria, South Australia and Western Australia are now in a position to ban the Communist party in those States, but they have not . taken the necessary action to do so. The Minister showed clearly that in regard to the banning of the Communist- party honorable members opposite indulge merely in talk. When they are’ in opposition they act like roaring lions, but when they are in power they behave like tame old tomcats.

The honorable member for Deakin criticized the .attitude of the Prime Minister (Mr. Chifley) to communism, and also the right honorable gentleman’s personal courage in political matters. It needs no speech of mine to show that the Prime Minister’s political courage is superior to that df any member of the Opposition, and that, in addition, he has won the respect’ of the people, who know that he will stand up for those things that will best advance the interests of Australia. In common with all other honorable members on this side of the chamber, the right honorable gentleman stands four-square against communism, and is leading the fight of the Labour party against it in the trade unions, workshops, and other places. Under the Prime Minister’s leadership, the Government is endeavouring to develop Australia so that all Australians will enjoy the benefits of social security and full employment. By its endeavours to make the country a place really worth living in, the Government is taking action that ultimately will kill the Communist menace. If there were a little more activity by honorable members opposite and their supporters in the places in which communism has to be beaten, it would be a good thing. Members of the Labour party have no connexion with members of the Communist party. Communists are not allowed to join any of the Labour party organizations. A few years ago, an antiLabour government banned the Communist party, but the Healys and others prospered, despite that ban. Even though a government other than this one decided to ban the Communist party, not one Communist was imprisoned, and honorable members opposite did nothing to arrest this menace.

Mr Harrison:

– The honorable member does not know what it is all about.


– The Acting Leader of the Opposition (Mr. Harrison) was actively associated with an organization of the extreme Bight that was just’ as bad as the Communist party,, but the honorable gentleman was not banned. Honorable members’ on this side of the House believe that every man should have full freedom in politics, but we are opposed to communism and are taking firm action to stamp it out for all time in this country by the progressive policy that is now being pursued and by the activities of supporters of the Labour party in the trade unions and other places where communism has to be eradicated.

The Governor-General’s Speech gave a very clear indication of the legislation to be introduced by the Government during this session. The Speech dealt with the Royal visit, the gift of £10,000;000 to Britain, international affairs, the referendum on rents and prices, the coal situation, banking, that excellent body, Trans-Australia Airlines, exports and many other matters.

I was extremely” pleased to note that His Excellency paid tribute to the work that has been done by certain Commonwealth Ministers. No matter how biased honorable members opposite may be, they will agree that the tribute that was paid to the Minister for Immigration (Mr. Calwell) was well earned and deserved, because the policy that he has evolved has not been equalled by any of his predecessors in office. The completion of arrangements to bring 70,000 migrants to Australia during this year, and greater numbers in ensuing years, is a fine achievement, especially in view of the shortage of ships and other means of transport.

Mr Harrison:

– The honorable member will get another passport.


– I do not want another passport. I say that quite sincerely and honestly, because, as the honorable member knows, I have already had a trip.

I was interested to hear the speeches made by the members of the parliamentary delegation that’ recently visited Japan, particularly those of the honorable member for Parkes (Mr. Haylen), the honorable member for. Flinders (Mr. Ryan) and . the honorable member for Moreton (Mr. Francis). I congratulate the Minister for the Army (Mr Chambers) upon his action in sponsoring this delegation, which provided members from all parties with an opportunity to study conditions in Japan at first hand’. I accept without reservation the statements that were made by members of the’ delegation regarding its activities. I view with extreme regret^ as I feel most other Australians, do, the uncalled-for criticism- of members of the delegation that was indulged in by the press of this country and by people who should have known better. In this regard I consider my colleague, the honorable member for Parkes, clearly explained to this House, and to the satisfaction of every one, the reasons for the delegation’s actions in Japan. He gave a complete answer to the adverse criticism of the actions of members of the parliamentary delegation while they were in Japan.

Mr Harrison:

– But what did he say to the Emperor?’


– That is a question which the honorable member for Moreton (Mr. Francis), who was a member of the delegation and is also a member of the Opposition, might answer. The Minister for the Army, during the course of his address, dealt with a number of allegations and inquiries which were made in regard to the British Commonwealth Occupation Force in Japan. He also discussed certain matters which the honorable member for Parkes and other honorable members had mentioned regarding statements made by press officers and others which had led to a certain amount of dissatisfaction and discontent amongst the troops in Japan. I cannot help hut commend the Minister for the manner in which he has discharged his responsibilities since he became the Minister for the Army, and for the sympathy he has always shown with members of the military forces. At the same time I am unable r,o agree with his attitude in regard to certain individuals who went to Japan to investigate charges against Australian troops. The Minister particularly mentioned the case of Mr. Massey Stanley, a member of that committee. He said he considered that Mr. Stanley was an admirable choice. My own views on the choice of Mr. Stanley are well known to the Minister, as I put them to him shortly after the announcement was made that Mr. Stanley would be a member of the committee. I cannot agree that Mr. Stanley was an admirable choice, as personally I do not know of a more unsuitable individual, either as a man or as a journalist. From my own experience of his activities in the press gallery of this Parliament, I would say he was not a man to be chosen for any position by this Government. Mr. Stanley is an employee of the Sydney Daily Telegraph and enjoys the confidence of the editor of that publication, a fact which should bo sufficient justification for placing him outside the scope of consideration by any Labour Minister when making an appointment for a position of this importance. Throughout my association with the Parliament I have found that any crawling criticism Mr. Stanley could make of members of the Government was never too low to write in his newspaper and to win the plaudits of those indi viduals who run the Daily Telegraph. During the course of the delegation’s visit to Japan, sneering references were made from time to time by this individual onpractically all the activities of the delegation. He seems to take a delight in trying, to undermine this Government and individual members and his criticisms are unfair and unjust. I entirely dissociate myself from the appointment of Mr. Stanley to the committee and I conclude my observations on the subject by saying that, in the words of the honorable member for Parkes, “ Mr. Stanley was a bad’ choice and should never have been sent toJapan “.

Turning to the proposed Australian Government gift to Great Britain of £10,000,000, the honorable member for Balaclava (Mr. White) saw fit to say that the gift was not much of an effort, would not mean much to the. people of Britain, and could have been improved upon. I point out, that the gift of £10,000,000 followed closely on a gift of £25,000,000 toBritain from the Australian Government and also on gifts of foodstuffs and on the launching of a great campaign to send food to Britain. The gift is a further example of the co-operation and support for the United Kingdom which Australia has given from time to time. It is a practical demonstration of Australia’s sincerity and appreciation of the part played by the people of Britain in the recent war. Australia is assisting the people of Britain ably and well to its fullest capacity to carry their severe economic burden not only by gifts but also by its attitude to the dollar shortage. Australia has rationed certain goods from dollar sources so as to help Britain, and from time to time notable men from Great Britain have reacted to those efforts quite differently from the honorable member for Balaclava. They have paid tribute to Australia for the efforts it is making to help Britain. Even as long ago as 1944, when Admiral Sir Bruce Fraser was in Australia, we had one such instance. Admiral Fraser said that Australia was doing a great deal to help Britain. Sir Henry French, who visited Australia on behalf of the British Government in 1945, also paid a tribute to Australia, ‘ and in 1946 the British Foreign Minister, Mr. Bevin, paid a tribute to Australia for its help, which was reported in the Sydney Sun as follows : -

Praise for that great Dominion, Australia, was voiced by the British Foreign Minister, Mr. Bevin, when announcing good progress in “the fight against famine.

Following the announcement of the gift of £10,000,000, the Sydney Morning Herald, on the 2nd September last, reported as follows: -

The British Prime Minister, Mr. Attlee, yesterday sent the Australian Prime Minister, Mr. Chifley, the following message of gratitude: “Australia’s contribution, at a time when Europe’s reconstruction needs are so pressing, is a great symbol of the common endeavour, and a great encouragement to those who believe that by the exercise of that spirit we shall succeed in our task “.

That proves quite clearly that even if in this country some people are prepared to write down what is being done by the Government to assist the people in Great Britain who so sorely need assistance, the Government has the support of the people.

A few days ago the Prime Minister (Mr. Chifley) paid a visit to the coalfields of New South Wales, and in a rather outspoken speech, told the miners that Australia required an increase in the production of coal. He spoke quite clearly and honestly to them, as he does to all sections of the Australian people, and impressed on them their responsibility to themselves, to the country and to the people. He called upon them to produce more of this important commodity. About twelve months ago I had the opportunity to represent this Government at the second session of the Coal Mines Committee in Geneva, at which representatives of the important coal-producing countries of the world had gathered to discuss the problems of the coal-mining industry. I could not help but be struck, during the course of these deliberations, by the similarity of the problems associated with coal-mining which affected each of the countries represented. I found that reports came from the delegates representing all the coal-producing countries of shortages of coal, and lack of essential equipment. They also spoke of the necessity for increased production, and of the distrust between coal-mine owners and mine workers similar to the distrust between mine owners and mine workers in Australia. I found, from reports given by the delegations, that in the United Kingdom, France, Belgium, the Netherlands, India, Poland, Turkey and the United States of America, as well as in other countries, the same problems existed as in Australia, and that those problems are common to coal-producing countries. It should be realized that in the coal-mining industry we face problems different from those in other sections of industry. We should consider these problems in that light. The Prime Minister made his visit to the coal-fields to endeavour to do something, by personally appearing on the spot, to ensure that Australia obtained the necessary coal for industry by means of a greater effort on the part of the miners and by greater co-operation between the mine owners and the mine workers. The Prime Minister desired to achieve a better spirit between those parties so as to gain an increased production of what is really the basis of our economic existence, and I commend him for his outspokenness when he put the attitude of the Government to the miners. I commend him also for the manner in which he emphasized the necessity of increased production. I support him in his attitude and trust that his visit will prove successful in attaining greater production, which will enable us to enjoy the prosperity which we are endeavouring to attain and maintain. Coal is our most essential and basic need if we are to continue our industrial and economic expansion. Australia’s estimated requirements of coal to-day are about 13,000,000 tons annually, and the demand is expected to rise by about 1,000,000 tons each year, so that by 1953 it is estimated that requirements will be about18,000,000 tons annually. What is constantly overlooked is that Australia’s industrial expansion has been so great in recent years that even with full production it may not be possible to produce sufficient coal for industry. Coal production in New South Wales last year was almost a record. It was more than 11,000,000 tons, which was higher than the 1939 figure. Honorable members should bear in mind that prior to the war, because of the lack of employ: ment in many industries, it was possible for the coal-mining industry to meet the demand. The position to-day is that there has been a tremendous increase in factory employment and production and the coalmining industry has not been able to provide all the essential requirements of coal. The present coal shortage is in many ways due, not to inadequate production, but to excessive consumption. In the last ten years this country has made giant strides industrially and has sharply increased its demand for coal. It should be pointed out both to honorable members and to the people of Australia that there were just over 200,000 people employed in factories in New South Wales prior to the war compared with 350,000 at the present time, which is an increase of 75 per cent., and that nearly every factory uses coal either directly or indirectly. Another instance of the increased demand for coal is that in 1939 Bunnerong Power House in Sydney used 450,000 tone of coal, but in 1947 its requirements were S07,000 tons or nearly double the pre-war requirement. The Joint Goal Board, which was set up for the purpose of re-organizing the coal-mining industry in co-operation with the New South Wales Government, is endeavouring to provide miners with improved conditions and to improve conditions in the industry generally so as to encourage more men to work in it. It is also undertaking a policy of mechanization of mines and various other means of increasing production. The board proposes to re-organize the underground production in New South Wales and large orders for essential machinery to a value of about £3,000,000 have already been placed as a first instalment of the board’s plan. In addition new railway rolling-stock, estimated to cost about £5,000,000, is required to handle the projected increased output of coal, but provision of that will take time. I have endeavoured to point out the problems associated with the coalmining industry. I believe, however, that full responsibility for those problems does not lie with either the workers or the management. The coal position is due to the great increase since the war in the requirements of coal. When the Joint Coal Board was set up it was not anticipated that it would bring about radical changes in the industry overnight. If the board is given time to re-organize the industry fully, to obtain the required machinery, and to improve the mine workers’ amenities generally, and if a greater spirit of co-operation is forthcoming from some sections of the miners whohave shown scant respect for the needs of the public and a scanty sense of their responsibilities, I consider that in thefuture we should be able to obtain enough, coal to keep industry going. Petty stoppages by irresponsible strikers should be condemned by all trade unionists,, members of Parliament, and the public. There can be no excuse for holding upwork in the coal mines for political purposes. Indeed, only for the most urgent reasons are stoppages justified. A great responsibility and an obligation rest upon those associated with the coal industry to produce the coal which isneeded to provide employment and tokeep industry operating.

I conclude by again paying a tribute toHis Excellency the Governor-General for the manner in which he opened thissession of the Parliament. I hope that members of the Opposition, instead of debating the subject of communism, will offer helpful and constructive criticism that will be of benefit to the Parliament in dealing with the legislative programme before it.


.- I wish to refer first to the bitter attack that has been made in this House upon, Mr. Massey Stanley. There is no need for me to defend him, because his record speaks for itself. It is over twenty yearssince he first became one of the distinguished members of the press gallery in this Parliament. At that time, he represented the Sydney Telegraph, the Brisbane Telegraph and the Canberra Times. The. fact that twenty years later he is still one of the most valued and respected representatives of the press is a clear indication that he has made good in his profession. It is extraordinary that, after the Minister for the Army (Mr. Chambers) had praised his work, a kind of civil war should have broken out among Government supporters, some of whom have condemned the Minister and Mr. Stanley as well. As I have said, the record of Mr. Stanley as a newspaper correspondent and a writer speaks for itself, Tout it is worth while to- point out what he has done during the last ten years. When war broke out, he joined the Australian Infantry Force as a private, and eventually became a sergeant in the Army Medical Corps, in which capacity he saw action overseas. When he returned to Australia the then Prime Minister, Mr. Curtin, approached kim and asked him to take over the editorship of the Army journal, Salt, which circulated among Australian troops, and did so much to maintain their morale. Mr. Stanley was given the rank of major, and he did his job as editor extraordinarily well. I have heard the highest encomiums regarding it from many quarters in the Army. Indeed, this is the first time that I have heard any attack made on his capacity or probity. Some time after the end of the war, he represented his newspaper in Japan, where he conducted himself in such a way, and did work which was so highly regarded by the Government, that the Minister for External Affairs (Dr. Evatt) chose him as one of a committee to inquire into matters affecting our occupation troops in Japan. After his return to Australia, his work in this connexion was praised by the Government itself. It was left to private members of the Labour party to attack him in a -scurrilous manner.

Mr Fraser:

– His capacity and probity are of the highest order.


– I am glad to hear the honorable member for EdenM’onaro (Mr. Fraser) pay that tribute to his capacity and probity. It is wrong that he should be attacked by honorable members on the floor of this House, particularly when the proceedings are being “broadcast.

I now wish to say something about the position in which Australia and the Empire find themselves. It is1 three years since Japan was overwhelmed and three and a quarter years since Germany was overwhelmed. At the conclusion of the war, the prestige of the British Empire stood higher than that of any other country in the world. Britain had maintained the war for years against all the forces of barbarism. For practically a whole year, during 1940 and 1941, Britain alone held the front for civilization. It had a frontier to defend in every quarter of the globe. Even after Russia and the United States of America entered the war, Britain continued to play a notable part. Probably the greatest epic of the whole war is the story of how Britain continued to send supplies of war material to Murmansk and Archangel, not only during the summer, but also during the winter. Millions of tons of war material were delivered to Russia during 1942 and 1943 at almost double the rate at which the Russian road and rail transport was able to carry it away. Britain fought campaigns in Burma, Malaya and Africa, and came out of the war the one great power which had fought in it from start to finish. Britain went into the war without being attacked, and emerged from it with great prestige. However, within one month of Japan being overwhelmed, Professor Lasky, chairman of the British Labour party, stated that Britain had been reduced to the status of a third-class power. During recent years, propaganda from many sources, some of them quite unexpected, has been directed towards undermining the power and influence of the British Empire. In the final analysis, however, most of it can be traced to the sinister influence of the Communist party. Undoubtedly, the influence of the Empire in world affairs has declined as a result of this propaganda, and because of the lack of support from Australia. On every hand, Communist activity has been directed towards promoting dissatisfaction and unrest. The effects have been aggravated by strikes, such as those in the meat industry and the transport system of Queensland, where what amounted almost to a state of civil war prevailed for nearly five months. In New South Wales, industrial stoppages were responsible for interfering with gas and electricity supplies, as well as with transport, while in practically every State in Australia strikes have interfered with work on the wharfs, railways and the tramways. During the last three years, I have had the feeling that we are living in an uncivilized land. Old men and women depending on a pension have been deprived of heating facilities during the winter because there has not been enough coal, yet nothing has been done to improve the position. I was glad to learn that the Prime Minister (Mr. Chifley), when speaking to the coal-miners after his return from abroad, said that he was ashamed to see the conditions which prevailed in Sydney because of the shortage of coal. They were, he said, in many respects worse than those inbombed-out Berlin.

In’ the international sphere, the Communist Russian Soviet has steadily “ mopped up “ one country after another. Simultaneously, it is fomenting unrest and spreading propaganda in Asian and East Indian countries, and trying to destroy the British Empire. The leaders of Russia know that the British Empire is the real fortress of freedom because of its traditions and institutions which recognize the rights of the common man. Therefore, it must be destroyed if the false doctrines of communism are to be accepted throughout the world. The Australian Government, and especially the Minister for External Affairs, seem to be almost leaning over backward in an attempt to avoid offending Russia. The British Empire, including Australia, went to war because of the rape of Poland, but no word of protest has been uttered by the Australian Government against the rape of Czechoslovakia, Hungary, Roumania and the Baltic States. Australia, which was the driving force of the Empire during the 1914-18 war, has become almost a negligible influence in Empire affairs. The strength . of the Australian Government has been dissipated in attempts to ensure that our representatives obtain high positions in the organization of the United Nations, although that organization has shown that it has no teeth. Therefore, we should stick closely to the British Empire, which has guarded us through difficult times in the past.

The Australian Government took no action in regard to the withdrawal of British troops from Egypt. At the time, I pointed out that in 1936 it was Australia’s influence which, through my own voice at the Empire Defence Council, ensured that there should be a clause in the Egyptian treaty assuring Britain of the indisputable right to maintain a defence force on the Suez Canal. Letus thank God now that such a stipulation was made. The Australian. Government has expressed no opinion regarding events in India and Burma. It often happens in the United Nations Council that the representatives of Australia take a different line from that of the representatives of other parts of the Empire. While the world situation is so disturbed, the countries of the Empire should present a united front. During the last two years, the system of Empire trade preferences, which helped us so much during the economic depression, was “ sold down the river “ to please the United States of America. Now, that country is demanding trade preference for the territories which it acquired’ during the war. When I came back from Africa I pointed out that trade preferences were being granted to exenemy countries at the expense of the British Dominions. I asked that some action be taken in regard to the matter, and I hope that something has been done. We should demand equality of treatment, no matter what is being done under the Marshall aid plan.

The Australian Government stood quietly by while the British Empire in. the Middle East and the Far East was melting away like snow under the sun. I was pleased to note that the Minister for External Affairs stated recently in London that the time had come to show the world; that there was an Empire force. However, it is of no use to make such statement unless we do something about it. For instance, the Government has admitted its obligation to assist the authorities in Malaya, but such help as we have made available has been given by stealth. The Government dare not risk offending the big maritime tradeunions, which have held it so long in thrall, by sending war material to Malaya in Australian ships.. At the same time, the position in Australia has deteriorated. Almost a state of anarchy prevails in which the arbitration law is practically disregarded. The 40-hour week has been forced upon the Government against its will by the action of the McGirr Government in New South Wales. The pernicious rebate system of” taxation has destroyed all incentive. The public service continually grows, and the-

Government is afraid to comb out Communists as the United States, Canada and Britain are doing.

As against this barren or disastrous record, the Government boasts that it has increased civil employment by 640,000 above the 1939 figures. What these people are not doing is told in the recent census and production figures issued by the Commonwealth Statistician. Production figures show that, despite the increased number of people at work, coal production for 1947 was about 500,000 tons below the production of 1943, when we bad over 600,000 men under arms. Our zinc production has declined from 248,000 tons in 1941 to 182,000 tons in 1947. Copper production has declined from 82,000 tons in 1944 to 17,000 tons in 1947. Pig iron production last year was 400,000 tons less than in 1942. Gold production has fallen from 1,600,000 fine oz. in 1939 to 900,000 fine oz. in 1947. Tin production has declined from 3,500 tens in 1941 to 2,000 tons in 1947; and lead from 289,000 tons in 1941 to 196,000 tons in 1947. Butter production has fallen from 220,000 tons in 1939 to 160,000 tons in 1947. Meat production was down about 100,000 tons in 1947. There are shortages of materials in almost every industry. Thousands of houses are unfinished because of the lack of baths, stoves, roofing materials and even nails to complete the job.

Tragic as these production figures are, they are overshadowed by census figures, which show the decline of population in rural areas and by the universal failure, outside of capital cities, of any district to hold its natural increase. The recent census for instance shows that the only part of New South Wales that held its natural increase was about 10,000 square miles running from Newcastle to Port Kembla and for 60 or 70 miles from the Pacific Ocean to the west. New South Wales has been divided into eighteen regions for statistical purposes. Sydney, Illawarra and Newcastle regions hold over 2,055,000 of the total New South Wales population of 2,977,000. The only other regions that show any increase are Richmond-Tweed, Clarence and Oxley areas, the population of which has increased by 14,000. From those regions, however, there has been a net migration of natural increase of over 32,000. The remaining twelve regions of the State have lost not only the whole of their natural increase, but also a substantial part of their original population. The Mitchell region, which contains the towns of Lithgow, Kandos, Bathurst and Orange, in which several very important war-time industries were placed by Mr. Thorby and the succeeding Ministers for Defence, lost 264 of its population, and the whole of its natural increase of 15,554. The region of Lachlan, one of the great wheat areas of Australia, which contain? towns like Parkes, Forbes and Grenfell, lost 14,012 of its 1933 population as well as its total natural increase of 16,875. which is a total migration from the district of 30,8S7. The reasons for this terrific loss in Lachlan may be explained by the report of the Western Australian Wheat Commission, which said that the wheat industry had made a contribution of £70,000,000 by way of concessions to consumers of wheat in Australia during the seven years of the war.

The position in Queensland is just as startling. In northern Queensland the population increased from 184,000 to 193,000, which meant that 34.000 of the natural increase had migrated from this most vulnerable defence area. In central Queensland the population increased by only 4,000, 22,000 having migrated. To my horror and alarm, I was told by Mr. Colin Clark, the Queensland Government Statistician, that Queensland, as a whole, is not holding its natural increase and that there is a steady migration to the great industrial centres of Sydney and Melbourne. What does that mean to our defences? The recent war proved conclusively that unless we very quickly populate the whole of eastern Australia from Sydney to Cape York the day may soon come when we shall not be able to hold Australia. In the event of another outbreak of war, we may find ourselves left to our own resources through Great Britain and the United States of America being too heavily engaged elsewhere to come to our aid, and in view of the way the world is moving, that is quite on the cards. How can we expect to hold the country when the great fertile north is losing not only its natural increase but also the migrants who had settled there? The 400,000-odd square miles from Newcastle to Cape York is the area most adapted to carry the large population that would enable us to defend ourselves.

In the whole of Queensland the increase of population of 70,000 was less than the natural increase. The following table sets out the position : -

As the defence of Australia depends in the last analysis on the rapid peopling of this area, it is obvious that there must be some alteration of our methods of dealing with this position. The stark fact is that the area that should hold the biggest population in Australia is not holding its natural increase. The best watered area of Australia lies between the Hunter River in New South Wales and Cape York in the north, and from the Pacific Ocean to 200 miles west. This area is a little more than one-tenth of the area of Australia. It provides three-fifths of the running water of the continent, and catchment basins for most of the artesian water. This area also has practically nine-tenths of the Australian coal, and three-fifths of our timber, including practically all the softwoods. It produces half of the butter, all the sugar, pineapples, bananas and other tropical fruits, and also- a great proportion of the meat, wool and wheat that we grow. Yet, this most fertile area of Australia, which compares favorably in productivity and rainfall with any other area of similar size in the world, does not hold it3 natural increase because of government policies backed by the great city policies of Sydney and Melbourne, combined ‘with delays in development in the unwieldy States of New South Wales and Queensland. The Queensland Government apparently has recognized the need for some striking change and, in its proposals to the Queensland Parliament a month ago, indicated that there should be three States in Queensland instead of only one. The people of New

England feel exactly the same about their own area, as do the people of the Riverina.

It is amazing that the areas I have referred to cannot hold their population when the prices prevailing for primary products are higher than ever before owing to the world shortage caused by the ravages of war. One-would think that when such high returns offered more andmore people would be keen to settle on the land. Yet nine-tenths of the area of New South Wales is being gradually depopulated. When I asked the reasons for the position in Queensland I was told that a boat had been lying at Mackay for three or four weeks unattended to by the wharf labourers because of orders not to touch it which had been received from the head-quarters of the Communistcontrolled Waterside Workers Federation. As a result, raw sugar for refining in the south has not been loaded, and the people, in Tasmania and Western Australia are almost out of stocks of sugar. At Mackay, just a small port,, another vessel has been tied up for about a month, not because of a local row, but because the Communist union bosses in Sydney and Melbourne have given their orders to the local men not to handle its cargoes. That is the sort of thing that led the Premier of Queensland, Mr. Hanlon, to1 force his drastic legislation through the Queensland Parliament. The area between Newcastle and Cape York, the most fertile in Australia, with all the natural resources that I have described, could contain five States comparable to Victoria, and Victoria has a population of a.bout 2’000,000. The key to the problem is increased local control. We must develop our resources as the resources of the United States of America have been developed by the State and Federal governments working in cooperation. I instance the Tennessee Valley and the Missouri schemes. They were brought into being by the co-operation of eight or nine small American States with the Federal government. Big schemes have been brought into being in Australia by co-operation between the State governments and the Australian Government. Other big schemes await development on the Burdekin and Clarence Rivers. Decision as to what should be done with the- waters of the Snowy River has been held up for about 70 years.

Mr Lemmon:

– What did the Government of which the right honorable member was Treasurer do?


– We started the Murray River Waters Scheme and found the money for the Wyangala Scheme, two of the three big schemes in Australia, but this Government has done nothing at all. I am appealing for a fresh start. Defence, which is involved in my suggestions, is not a party matter. Every one in Australia must be usefully employed. It is a good thing that 640,000 more people are employed now than were employed in 1939, but let them produce what we need - more baths, more power stations, more dams and more of everything else that we are short of. In that way we shall fulfil our destiny. The only way in which we can achieve success is by making common cause, regardless of the political parties to which we belong, against the infiltrating Communists who are sapping the strength of the industrial trade unions and encouraging anarchy. We have as much need for unity now as we had when we were at war. We are suffering the aftermath of war. We must root out the poison virus. My medical experience has taught me that it is useless to apply a poultice without dealing with the cause of the trouble. ‘The cause of our trouble to-day is communism. We must grasp it as firmly as we would a nettle and crush it out of existence. Kid glove methods must be abandoned.


.- I have perused the Governor-General’s Speech with great interest. In paragraph 22 of his Speech His Excellency stated that the Council for Scientific and Industrial Research proposes to devote considerable attention to the problems involved in developing the great unsettled areas of northern Australia, which may well make an important contribution to the problem of solving the world-wide shortage of food. In paragraph 38 he stated that immigration is vital to our future and has become a very important phase of the Government’s activity. These two statements should be taken together in order to appreciate fully Australia’s changing role in the world scheme of things. The Northern Territory in particular has always been of considerable interest tome.

I believe that I made it clear when I first came into this Parliament that, because I have taken some interest in statistics over a considerable number of years, the prime purpose for my presence here was to draw the attention of the Australian people to the deterioration and lack of balance of our population. I have frequently spoken on that subject in this House. I am glad that my professional colleague - seated on the other side of the House, unfortunately - takes the same view of this subject as I have always done. When the Minister for Immigration (Mr. Calwell) is considering his immigration policy he might well take into consideration some additional factors of the migration problem. Anydevelopmental project, no matter how good it may be, at first earns thehate and disapproval of the community,but that isno reason whywe should abandon it. We should not abandon the idea of developing ourcountry merely because some groups of persons insome particular place th atmighthave all the appearance of possessinga high voting power disapprove ofthe idea. If athing isgood it should bemade use of, irrespective of what significance it may have in the schemeof party polities. I propose to address myselfto some aspects of our immigration policy andto follow along the linesofthoughtexpressed by my professional though not political colleague, the right honorable member for Cowper (Sir Earle Page). The first partof our migration policy should be to apply ourselves as diligently as possible to the task of bringing to this country the people of our own kith and kin. We should go to extremes in trying tosecure them. Australia has assumed, geographically, a new place in the world set-up, and, being adjacent to the southern-most point of Asia, it must come into the sphere of world political and military operations in the future to a much greater degree than it has in the past. As the teeming millions in Asia shall go on increasing, there is no way for them to march except to the south. They cannot march into the great arctic regions of the north .because there is no hope for them there. With due diffidence, after diligently applying myself to the problem, I say that Australia, from being at one time the most remote and, in consequence, the safest portion of the earth, must, with the future development of Asia, become one of the most dangerous spots in the scheme of political, social and military developments in the future. Those Australians who think that the world is no longer informed about the great possibilities of the development of their country are merely burying their heads in the sand. As the Governor-General has said, the Council for Scientific and Industrial Research proposes to devote its attention to the problems involved in the development of the great unsettled areas of North Australia. I believe that in that, respect this Government, through its Prime Minister, has turned its attention to something of vital importance to the ultimate destiny -of this country. It may be politically unpleasant, though it is certainly not nationally so, to have to say that I believe that the time has arrived when this Government, as part of its wider concept if immigration, must apply itself to the problem of settling the Northern Territory with peoples who are capable of surviving in and developing and expanding an area of that kind. I have always strenuously run away from making speeches on medical subjects on the floor of this House because I have found that almost every honorable member thinks that he knows more about medicine than do the right honorable member for Cowper and myself - and because of that we have our professional discussions in the King’s Hall by ourselves - but I shall now turn to a nearmedical subject. I believe that there are’ certain races who, by virtue of their climatic environment are best suited to bring to Australia to engage in the development of the unsettled areas of the north of Australia. The peoples of the northern countries of Europe, who live under almost sub-arctic conditions, are not eminently suited to the development and colonization of areas such as our Northern Territory. However unpleasant my words may sound in the ears of some people, I must say that I believe that there are great numbers of people along the southern littoral of Europe, on the shores of the Mediterranean, who could best help us to develop and expand our unsettled areas in the north and who would establish trade relations with their kith and kin in their home countries to the ultimate good of Australia. I shall not mention any specific race. I merely say that, by virtue of the fact that these people live in climates akin to that of our northern areas, they would be more eminently suited to settle the north of Australia than would the peoples of the northern countries of Europe. Some people say that the southern European people will not become good Australians. If they do not do so, it will not be their fault but ours for not applying ourselves diligently enough to make sure that they do become good Australians. The American people have abundantly shown us over long years of experimentation that it is possible to bring migrants from any part of Europe and, provided the necessary application be given to the problem of properly nationalizing them, to make them good American citizens. Let us look at this problem from a military standpoint. The very fact that we are turning our attention to the Northern Territory as one of the possible great food sources of the world means that it may become a source of food equally for Asia as for Europe. If we are not careful the people who live in countries adjacent to our unpopulated northern areas will be found in great numbers using this great food source of ours and we shall be asked to endeavour to eject them. Is it not a far better proposition for us to bring in great numbers of people from the southern littoral of Europe who are so eminently suited to settle the lands of the north, and to “ Australianize “ them ? Will not they be the Australian people of the future who will protect their homes, their hearths and their businesses with all the vigour that we, in the south, would protect ours ? No one can gainsay that. If the Government can see its way clear to tackle the problem of developing the Northern Territory into one of the great sources of food supply for the world the time to apply ourselves to the task is now. We should ascertain what kind of migrant we should encourage to settle there and commence to develop the territory now. Undoubtedly we shall have to face the criticism of the public; but I am not afraid of that. I would not jeopardize the greater interests .of Australia merely because I was frightened of the criticism of one or two people in this country. After all, we are here to do what we believe to be right. Accordingly I would like to see the Minister for Immigration turn his attention to the development of the Northern Territory by instituting an immigration policy distinct from that u i)on which we are engaged in our attempt to increase the population of the southern littoral of Australia.

Another remark made by the right honorable member for Cowper which interested me was his reference to the exodus of our population from the country to the city. I have viewed this trend with growing alarm. Anybody .who is interested in Australian statistics is well aware that this drift to the cities has been going on for a. great number of years. What can governments do about it? It is true that if governments were willing, they could do much. Governments could make cheap money available to municipalities and country local governing authorities for the provision of amenities of one kind and another in rural areas in order that people may be attracted to them. That should he the first step in the correction of this lamentable trek to the cities. The State governments and the Australian Government, through the State governments, have in a small way devoted themselves to this problem; but we are coming on the scene much too late in the day. Let me reiterate something which I said in a speech delivered in this House a little while ago. The cities of Sydney and Melbourne were great cities when both had a population of approximately 750,000. Now, the population of Sydney is nearly 1,500,000, and that of Melbourne, 1,250,000. We could have utilized these additional people for the establishment of f rom twelve to fourteen great selfsupporting cities along the southern and eastern littoral of Australia, each with a population of 100,000. If somebody suggested in this chamber that, as part of our migration policy, there should be no more expansion of our great cities of Sydney and Melbourne, how would he fare at. the next election? No honorable member would be “ game “ to make such a suggestion. No government, irrespective of what brand it may bear, would be courageous enough to say, “ We are going to fix the population of Sydney and Melbourne for the next ten years. Our immigration policy in future will be devoted towards the opening up of new areas “. Nevertheless, that is the right way to tackle this problem. Let us look at the problem from another angle. In Germany there are more than 50 cities, each with a population of more than 500,000. One of the great problems of the air war against Germany was not merely to destroy Berlin, but also to destroy the big cities of Germany with their great resources and capacity for development and expansion. Those who have taken the trouble to attempt to understand what happened during the recent tests of the use of the improved atomic bomb at Bikini Atoll, or what happened to Hiroshima and Nagasaki, will appreciate the harrowing fate of the possible future victims of this destructive weapon. I am told, on the most reliable authority, that the latest atom bomb is 25 times as powerful as the one which was exploded at Hiroshima. If atom bombs were dropped on Sydney and Melbourne, our only national defence would be destroyed. As good Australians, we must take a broad view and apply our political sense to the new conditions of the atomic age. We must think, in the future, in terms of atomic energy. I have said before, and I fear that my words fell on deaf ears, that we have phases in government, and styles in government. I was amazed to find that in 1929 the government of the day introduced a bill which provided £20,000,000, at a low interest rate, for the erection of houses.

Mr Conelan:

– What government introduced that legislation?


– It may have been the Bruce-Page Government, but the name does not alter the fact that not onepenny of the money was expended on the erection of houses. However, I am not condemning the government responsible for that failure. All I am trying to do is- to show that there are fashions in politics. Housing was not popular in 1929, and during the next few years many Australians were unemployed and hungry, although £20,000,000 had been voted by Parliament for the construction of houses, and the work was necessary. Years ago, the Hobart health authorities condemned approximately 500 houses in the city area, but the dwellings are still occupied, and the landlords, under the capitalist system, are making a profit of often 20 per cent, per annum out of structures which are not fit to shelter a dog or cat. “When I was broadcasting on Sunday evenings, I repeatedly emphasized the value of housing schemes in providing employment for a large number of people, but, from 1934 to 1939, few people, if any, would listen to me. But in 1944-45, when World War II. was drawing to a close, housing became fashionable, and- now, wherever we go, we find that everything else is subordinated to housing schemes which should have been commenced in 1929, when the Bruce-Page Government introduced legislation providing £20,000,000 for the purpose. Housing projects should have been in operation in 1934, when the work would have provided employment for many people, and homes were urgently needed, but nothing was done because housing was not fashionable. The great newspapers of Australia could not be induced to launch a campaign in favour of a housing scheme, and I regret to say that even some members of the Australian Labour party complained to me about my broadcasts, and said, “ Can’t you talk about any subject but housing ? “ At present, everything is subordinated to housing, but if a crisis were to arise to-morrow, and a few houses became vacant, we should not be able to arouse the interests of the people in housing, no matter how we tried, because it would not be fashionable.

A comment has been made about the extraordinary effect of arbitration in this country. If ever any judicial system was top-heavy or lopsided, it was arbitration. It came into operation more than 40 years ago, when an eminent authority devoted himself to the problem of estimating a basic wage. From the time of the famous Harvester judgment until the present day, the basic wage has been the bible, or handbook, of the working class. If honorable members will read that award, they will notice that the judge himself said that the determination of the basic wage was a matter, not for thE judiciary, but for the legislature. The function of the judiciary was to apply such a rate to industrial enterprises. The first time that the basic wage has ever been properly applied to Australian workers was during World War II., when the Government exercised control over prices. The basic wage then began to mean something in relation to the fixed, urgent requirements of the people. Yet the critics of the arbitration system urged the people at the last referendum to refuse to grant to the Commonwealth Parliament power to control prices - although that was the only thing which gave the basic wage a real meaning. How can we determine what a man’s labour is worth if we cannot estimate what he can buy with the monetary reward for his labour? The capitalists did not want this Parliament to possess the power to control prices. Through the lack of such power, they can make tho Arbitration Court meaningless. During the referendum campaign in 3946, the Labour Government asked the people to confer on the Parliament authority to make laws with respect to terms and conditions of employment in industry, and the concentrated attack of our opponents was directed against the proposal. Had that power been granted to this Parliament, the Government would have been able to make arbitration mean something. As our opponents took care that the Commonwealth did not secure that power, they must bear some share of the blame for the discontent now prevailing in Australia. If we were able to say to the basic wage earner, “ This is the basic wage, and this is what it will buy “, it would begin lo mean something for the first time. But when the Government asked the people to confer on this Parliament the power to make laws relating to terms and conditions of employment, the matter became as a political football. Our opponents had no regard for the stability of industry. I believe that if the Government were again to ask the people to grant this power to the Parliament, the majority in favour of the proposal would be as large as chat which refused the power in 1946. Members of the Opposition laugh at that statement.If I chose to depart from the theme of my speech, I could change their expressions. Now that I am warming up to my subject, I remind them that they called on the whole of their junta, and the press, in an endeavour to defeat the Labour Government in Tasmania recently, and, to their amazement, they received the severest “ bashing “ that, they have ever sustained. The return of the Labour Government was the greatest Labour victory since federation.

Mr Harrison:

– The Labour party polled only 6,000 more votes than the Liberal party.


– If the Acting Leader of the Opposition (Mr. Harrison) continues to squeal, I shall give him another injection. He is looking for it.

Mr Harrison:

– What about the defeat of the Labour Government in Victoria last year?


– I shall tell the Acting Leader of the Opposition something about that. He has brought it on himself. The Liberal party in Tasmania had the assistance of the whole of their so-called democratic forces, but they were carried away by the result of the Victorian election, and thought that the tactics which were adopted in that State would prove successful in Tasmania. They came the greatest fluid in their lives. Both the Liberal party and the press should learn a lesson from the Tasmanian election. They should wake up to themselves.

Mr Archie Cameron:

– What is the secret that the honorable member was going to tell us?


– Any one who knows as much as the honorable member for Barker (Mr. Archie Cameron) does, should not want to. learn anything from me. I do not even know to what political party the honorable member now belongs.

The honorable member forReid (Mr. Lang) has moved an amendment to the Address-in-Reply to the GovernorGeneral’s Speech. If it were carried, it; would be an instruction to the Government to ban the Communist party. In my opinion, we are giving to the Communists an importance and significance to which they are not entitled at the present time. If communism ever rears its ugly head in this country with a display of force, we should blame, not the Communists, but ourselves for the way in which we have approached the problem.

Mr McBride:

– We should blame the Labour party.


– I shall give the honorable member for Wakefield (Mr. McBride) an injection if he continues to interrupt. A knowledge of history sometimes helps us to see things in a clear, cold light. From 1760 until 1830. the worst thing that a person could be in the British Empire was a democrat. Have honorable members opposite forgotten the Chartist riots? Do they remember the Todpuddle martyrs, 460 of whom were transported to this country because they were democrats, and all of whom, with six exceptions, died here? I have not forgotten the doctrines” of Bentham and Wilberforce, although I know that they are foreign to members of the Opposition, who would not like to read them. In addition, I have not forgotten the Reform Bill of 1831-32. For 60 years the worst thing that a person could be in the British Empire was a democrat. I recall Governor Denison’s speech in which he recommended the establishment of Upper Houses in Australia to stamp down the rising tide of democracy. That speech was made almost within living memory.

Mr Barnard:

– It appears in cold print.


– Yes, and thousands of members of the Liberal party have said to me, “For Heaven’s sake do not read that to the people “. Honorable members opposite do not like these historical references, but they should know that it was the suppression of democracy that made democracy. 1 warn honorable members to be careful. If they will read the history of the Russian revolution in 1917, they will glean some interesting information. For example, it was the women of Petrograd - now Leningrad - who precipitated the revolution. Then what happened? All the frustrated intelligentsia, who were opposed to the aristocrats, said to the people with one voice, “ You are not sufficiently educated to control this revolution. “We will take charge of it for you “. Stalin did not emerge as the leader of the revolution until later. “When the intelligentsia - the professional class - were in control, their rule was more tyrannical and exclusive than had been the rule of the aristocrats, will all its defects. I have no fears about the Healys, the Sharkeys and the waterside workers, but I do fear the intelligentsia of this country. I shall not mention any names. The Healys and the Sharkeys have not sufficient brains to control a revolution, but we should find, if revolution were to occur, that the frustrated intelligentsia including B.A.’s, the B.Sc.’s and the B.Coms.- 1 mean not the Communists but the Bachelors of Commerce - would emerge from their fox holes. Their estimate of themselves is much greater than is the public estimate of their ability, and they would seek to control the revolution. Members of the Opposition urge the Government to suppress the Sharkeys and the Healys in the Communist movement. But even if that were clone, we should not be approaching the solution of the problem. At least, they have the decency to reveal themselves as Communists. Do members of the Opposition want us to go into the fields of higher intellects - I shall not say the Public Service - and ferret out the Communists? If members of the frustrated intelligentsia were asked to admit that they were members of the Communist party, they would naturally deny it, because the time is not ripe for them to assert themselves. I say, therefore, that it would be idle to- attempt to ban the Communist party.

What is the alternative? It is to apply ourselves to the task of making this country one in which the people will have no use for any of these foreign “isms”. It is to apply ourselves diligently to the task of discovering what new political and economic theories are necessary to ward off the dangers, if there be any, from this source. Much could be done by the Government working in co-operation with Chambers of Manufacture, Chambers of Commerce and other organizations. If the business people tried to adopt a more liberal attitude towards the relationship between capital and labour and approached this problem intelligently, they could do a great deal to drive out or suppress communism. If they directed their attention to the sharing of profits, there would be no need for any foreign “ isms “

Mr Harrison:

– The honorable member does not believe in profits.


– There :s no doubt that honorable members opposite preach the doctrine of profit-making very well. .1 believe in profits, and I have never heard them condemned from this side of thu chamber. The interjection of the Acting Leader of the Opposition (Mr. Harrison) is a figment of the imagination of the distorted mentalities of honorable members opposite. I have full and plenty, thank God. I earned it by the sweat of my brow, and I am not going to give a “ bob “ of it to anybody. I do not know of any honorable member on this side of the chamber who would refuse a better house than he has now or a better salary than he is now receiving, and I do not know of any honorable member opposite who would refuse them either. There is no more Christian charity on the opposite side of the House than there is on this side. Honorable members on this side have never recommended anything other than intellectual and progressive capitalism.

Mr Harrison:

– The honorable member should cross to this side of the chamber.


– That is a cheap jibe. I first heard it 35 years ago, which shows how far the Liberal party is behind the times. If we wish to suppress this imaginary or real menace in Australia, we must apply ourselves diligently to the problem of how to introduce progressive and intellectual capitalism. We shall achieve nothing by the use of methods which are 100 years old.

There are many passages in the Governor-General’s Speech that command our attention, and not the least important is the one to which I have been devoting some attention and which refers to the development of northern Australia. The development of that area is desirable for the reasons I have already given and also because of its strategic value. Our migration policy should be examined to see whether migrants who were fitted to live in that kind of country could be attracted to it. 1 note that the Government is giving consideration to a scheme for the abolition of fees for patients in public mental hospitals. There is one aspect of that matter to which attention should be called. There are many mental defectives in the community. I do not refer to the politicians, who constitute a particular, type of mental defective, but to the generic type. I believe that no real provision has yet been made for mental defectives, and as a result, a great economic burden is often imposed upon the unfortunate parents of a mentally defective child.


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


.- Honorable members opposite, who have spoken in this debate, have prefaced their remarks with a tribute to the GovernorGeneral’s Speech. Honorable members on this side of the House are completely in accord with that insofar as the tributes relate to the personal part that was played by His Excellency himself. Wc resent the imputation of the honorable member for Martin (Mr. Daly) that every criticism offered by a member of the Opposition was a veiled personal attack upon the GovernorGeneral. That is completely untrue. Honorable members on this side of the chamber are just as appreciative of the way in which the Speech was delivered as are honorable members opposite, but that is, I am sure, as far as they are prepared to go. The Speech was, in the main, a collection of half-truths, evasions and omissions. It was of the most violent political colouring. Whatever opinion honorable members may have of His Excellency and the manner in which he acquits himself in his office, I say that the Government did him and his office an ill turn when they put into his mouth propaganda of the kind that he had to read out last Wednesday.

I intervene in the debate only because of certain remarks that were made by the Minister for the Army (Mr. Chambers). The honorable gentleman appears to be extremely touchy about any criticism of his department. Indeed, any criticism or question addressed to him is answered in an abusive manner, and the reply is not infrequently accompanied by personal reflections on the honorable member concerned. That is much resented by honorable members on this side of the House. Yesterday the Minister deliberately went out of his way to sneer at members of the Opposition, to whom he slightingly referred as the captains, majors and colonels, and even the men who did not attain commissioned rank at all. The honorable gentleman sneered at them because . they had the temerity to offer an opinion on the work and policy of his department. I point out to the Minister that those honorable members who have criticized his department have at least had some experience of these matters. As a matter of fact, nearly all of us have had some first-hand experience. I do not want to sound a personal note, but what qualifications does the Minister possess which entitle him to inflict his point of view upon us and at the same time to expect us to make no criticism of the activities of his department?

Mr Haylen:

– The honorable member will probably admit that the Minister was comparing generals and junior officers.


– That may be so, and I am prepared to accept it on that basis. The Minister says that it does not matter what is said by people like us, and that we should pay attention to what is said by him and the generals. I remind the House that even quite unimportant people may eventually have to give effect to the policies laid down by the Minister and the generals. I contend that it is perfectly in order for, and indeed the duty of, every honorable member of this House to rise and say what he likes about the Minister’s policy in the light of any experience he may have gained. The Minister is pleased to quote from what he says is the policy of the Government and senior army officers, but why does he not tell the whole story? He tells the House only that part of the generals’ recommendations that is in accord with his own policy, and he omits the parts that do not suit him. Why does the Minister not tell us what Field-Marshal Montgomery told Cabinet about military training? “Why does he not reveal to the House what the heads of the services recommended to the Government as the basis for our defence preparations after the war? Why does he not tell the House what General Blarney recommended? Why does he not take notice of men like the thirteen generals who wrote to him recently .and who were treated with scant courtesy? Why does he not put their point of view forward?

The Minister requested yesterday, in almost pathetic tones, that honorable members on this side of the House should co-operate with the Government in its defence plans. Although the honorable gentleman asks for co-operation, we receive from him nothing but evasive answers and insults. Recently I asked a question concerning enlistments in the Militia Forces. The object of the question was to point out what I considered to be certain defects in the scheme. The Minister did not give a direct reply to my question, but said that I was, in effect, a saboteur of the scheme and that I might be more usefully employed in taking some active part in it. He went on to say that the Government was very pleased with the manner in which the scheme was working and with the recruiting figures. I did not mind his imputation against me because, as a matter of fact, I am playing some part in the scheme. It is not because I have the least confidence in it but because, like many others, I feel obliged to do what I can. As to the recruiting figures, we need look no further than the unit that is to be raised in this city. The unit set out to enlist 400 private soldiers but, although recruiting has been going on for approximately six weeks, only 26 men have been enlisted. Is the honorable gentleman still very pleased with the recruiting figures, and are honorable members opposite completely satisfied that his ideas are working so well that no criticism is justified? I wonder whether the Minister is ignorant of what is happening in his department, or whether he deliberately attempts to mislead the House.

It was pleasing to hear the tributes that were paid to our troops in Japan by the members of the parliamentary delegation that recently visited that country, though I was very sorry to hear the despicable attacks made by the honorable member for Parkes (Mr. Haylen) and the honorable member for Martin (Mr. Daly) upon a journalist, Mr. Massey Stanley, who was referred to as unfitted for his job, insincere, a most unsuitable man on personal grounds, and a renegade to his country. Such a personal attack upon a working journalist was particularly despicable coming from the honorable member for Parkes. The honorable member is interjecting. Would he like to correct himself now ?

Mr Haylen:

– I should like to correct the ignorance of the honorable member for Henty.


– Let us have a look at the facts.

Mr Haylen:

– Have a look at Ilansard and see what I said.


– I have quoted the words the honorable member for Parkes used. Let us look at the facts concerning Mr. Stanley. This individual was asked by the Minister for the Army and by Cabinet to go to Japan and to investigate some very disturbing reports regarding the state of affairs and the behaviour of Australian troops there. Mr. Stanley went to Japan with General Lloyd and’ on his return delivered a report with which the Minister for the Army expressed himself as very satisfied, and to which neither of the honorable members made any objection at that stage.

Mr Haylen:

– I had not seen the report at that stage.


– All honorable members could have read it; it was in the Parliamentary Library. No fact or figure mentioned by Mr. Stanley in. his report has been contradicted by either of those honorable gentlemen, and the facts still stand. The honorable members however have decided to make a personal and unpleasant attack upon Mr. Stanley. What sort of role has the Minister who sent Mr. Stanley to Japan and who expressed himself as well satisfied with his services played in this affair ? He sat in silence while those honorable members defamed his servant who had done a good job. He did not have die gumption to contradict them in any way. Yesterday the Minister rose and stated that Mr. Stanley had done a good job but only after Mr. Stanley had written to bini and asked him to make some sort of defence. Until then he allowed those highly damaging and spiteful remarks to go unchallenged. Not only have the honorable members abused their privileges, but the Minister has played a despicable part. The main reason why I rose to speak was to defend Mr. Stanley, but since I am on my feet I shall say something about the remarks addressed to the Opposition concerning what some of its members have stated about the growth of the Communist party in Australia. Speakers on the Government side of the House have said that, as usual, the Opposition has ranted on and assailed the Government for its failure to attack the Communists. If that is true it is certainly equally true that honorable members opposite have apologized for that failure. The Government has avoided the issue of communism altogether by doing nothing about it whatever. The Prime Minister states, as did the honorable member for Denison, that communism, can only thrive in poverty and squalor and it is our duty to eliminate those conditions. That is a job for the Government of the country. The Labour party has been in power since October, 1941, and communism has never been more rife nor has it ever grown more rapidly than it is doing at present. If communism thrives in those conditions the Government is responsible. The ball is at its feet and it is up to Ministers to do something to cut the roots of communism. Honorable members opposite persist in the view that communism must be regarded as a political theory and that people may think and say what they like about politics. The Opposition believes that the Government should take some positive action against those who carry Communist doctrines into effect to the detriment and harm of this country. As usual the Government has produced excuses and has told the Parliament that no action will be taken. We are therefore back where we started from. As long as the present Government is in power we may look forward to the steady growth of the Communist movement in Australia. I consider that fear of the Communists has a great deal to do with the Government’s supine attitude. One of the reasons why the Government will not tackle the Communists is that the Communists help the Labour party at elections by supporting Labour candidates in electorates where no Communist candidates are seeking election. The Government is dependent on the Communists to that extent. It will resist any form of inquiry and exposure because it knows that in its own ranks are men who are fellow travellers with the Communists. The Minister for External Territories (Mr. Ward) is a man who is known to have been a member of an AustralianSoviet organization, which has been declared by the Australian Labour party to be a subversive organization.

Mr Chambers:

– It was his brother.


– The honorable member is confusing the Minister for External Affairs (Dr. Evatt), who is overseas, with the Minister for External Territories, to whom I refer. The Minister for External Territories has been given ample opportunity to deny his association with the organization. Not only was the Minister for External Territories a member of this association, but he appointed to the Public Service in the face of great criticism from the Opposition a very well-known Communist, Mr. “ Jock “ Garden, and he and Mr. Garden shared secretaries and were close associates. Their partnership was broken up only by the march of events. I repeat that the Government will not tackle the Communists because in its own ranks are many who are sympathetic towards the Communist movement.


.- The honorable member unfortunately devoted the greater part of his address to an attack on individuals in this chamber. His attack upon the Minister for the Army (Mr. Chambers) was utterly unjustified in its origin and in its detail. I propose at a later stage to deal in more detail with that and with some of the other matters that he raised, but I wished, before the honorable gentleman left the chamber, to express my very strong disapproval of the unfair manner in which he attacked the Minister. The matter before the House at the moment is the

Address-in-Reply. I listened to His Excellency the Governor-General deliver a very fine address to the members of both Houses and I was impressed then by the command of his subject shown by His Excellency and by the very fine manner in which he delivered the Speech. I recall the fierce criticism which revolved around His Excellency’s head at the time his appointment to his high position was announced, and I recall also an earlier occasion in Western Australia when the same circumstances existed, but to an even greater degree. A very fine citizen of Western Australia was taken direct from the political sphere and placed in the position of Lieutenant-Governor of that State. Only a day or so after His Excellency the Governor-General had delivered his very fine address to the Parliament, the Lieutenant-Governor of Western Australia was justly rewarded for long service and his status raised to that of Governor. That promotion was made by the Liberal- Australian Country party Government in that State. That appointment and the original subsequent promotion were received with enthusiasm in Western Australia by all sections of the people and those eulogies of the gentleman concerned were echoed and re-echoed throughout Australia. But when the Labour Government of this Parliament appointed to the Governor-Generalship a man who, at the time his appointment was announced, occupied the highest position in the largest State of Australia, we found the press of Australia loud in its denunciations, unfair in its criticism and utterly biased in the views it expressed. There is only one conclusion to be drawn, and that is that in the minds of the press of this country there is one rule to be observed when a Labour party follower is raised to a high position because of his valuable services, and another and very definite rule to be applied when the man so honoured does not belong to the working class or the Labour movement. I say deliberately that it reflects very little credit on the press of this country and on the political parties which were similarly loud in denunciation of His Excellency’s appointment.

An amendment to the AddressinReply has been moved by the honorable member for Reid (Mr. Lang), the major purpose of which is to declare the Communist party an illegal organization and to carry out certain actions which would follow naturally from legislation declaring that party illegal. Sufficient has been said about the honorable member for Reid’s former associations, and his occupancy of a high and honoured position in New South Wales. Honorable members should consider just how effective the move suggested by the honorable member for Reid would be, even if that honorable gentleman were completely honest and earnest in bis intention. It has been demonstrated time and time again that moves such as this are completely useless and fail absolutely to have any worthwhile effect. Experience in this country has proved that the Communist party grew stronger during an earlier period when it was declared illegal. The reasons for that are clear. After it was banned by the present Opposition, when it was in power as the Government, the Communist party no longer existed, but all types of other organizations rapidly sprang into being. They had very attractive names and objects, and many worthy people throughout Australia sponsored their cause and devoted themselves wholeheartedly to attain their objectives. The result was that those organizations, which were Communist auxiliaries under another guise, rapidly grew in strength and influence throughout Australia. When the Communist party came once more into its legal rights in Australia, many of the people who had joined these organizations left them, but it is undeniably true that many others, recruited during the period when the Communist movement was illegal, maintained their allegiance to the Communist movement and added considerably to,its strength. It is not only completely useless, but it is also utterly stupid to approach this major problem on the basis suggested by the honorable member for Reid. The honorable member for Henty (Mr. Gullett) said the Government was unwilling to take action because it feared that many of its own members were associated directly or indirectly or in spirit with members of the Communist party. Throughout its history the Labour movement has maintained an unwavering fight against the Communist party, but the evidence is clear that the Communist party, on major occasions, has been helped or sponsored by the Opposition parties with the intention of breaking the Labour movement. It is undoubtedly true that the Opposition has assisted the Communist party because it regarded it as a rival Labour organization of the Australian Labour party. The Opposition knows from long and bitter experience that the only way in which it can defeat a Labour government and destroy the Labour movement is to wreck the Australian Labour party from within by the use of the Communist party, or such organizations as the Independent Workers of the World, or by “buying” or seducing the leaders of the Labour movement. For all those purposes, those who normally sponsor the Liberal and Australian Country parties have undoubtedly lent support, either individually or collectively, to the Communist party. If the charge be true that the Government refuses to ban the Communist party because it has some affinity, either known or undisclosed, with the Communist movement, the same thing may be charged against the Liberal and Australian Country parties. It is true that after long resistance to proposals to ban the Communist party, the Loader of the Opposition some time ago announced that he had given way to pressure within the Liberal party’s ranks and from members of the Australian Country party and would forthwith and thenceforth proclaim as his ideal and object the banning of the Communist party. ‘But the time came when a censure motion was moved in this chamber. We expected on that occasion that the right honorable gentleman would advocate Hie banning of the Communist party, but he failed to do anything of the kind. He did not suggest that the party should be banned, or even that compulsory secret ballots should be held for the election of trade union Officials. Once more, he indulged in a species of wordy warfare of the kind which has characterized all his approaches to this subject, but he did no more than that. The Western Australian branch of the Liberal party held its annual conference recently, and, according to a report in the West Australian of the 13th July last, agreed “ that the proposed banning of the Communist party would be unwise, and a dangerous precedent “. Therefore, if the Labour party and the Labour Government are to be condemned for refusing to yield to the hysterical demand that the Communist party should be banned, the Liberal party is no less worthy of condemnation, at least so far as its Western Australian branch is concerned. Recently, a journal, called the News Review, printed at 9 Howardstreet, Perth, was sent to me. It is obviously published by some of the commercial nr political interests in the State, and this is what it says of a recent debate in the Western Australian Parliament- -

The Communists have received much publicity as a result of the Address-in-Reply debate. Members on both sides of the House have raised the subject of communism, aus! some of the speeches have left the impression that the speakers were defeating their own object by over-emphasizing their points and by seeing “ Ted “ where there waa often not more than a suggestion of pale “ pink “.

This comment emphasizes the inactivity of the Liberal party in the face of communism. I agree that a State government may be handicapped in any endeavour to ban the Communist party, but recently it has been suggested that the Commonwealth Public Service should be purged of Communist influence. This point of view was recently put forward very strongly by a member of the Western Australian Parliament, who declared that the Western Australian Education Department was harbouring Communists who were in a position to influence the minds of children. Nevertheless, the McLarty Government in that State has not dismissed a single Communist, nor even held an inquiry into the activities of Communists in the Public Service. This indicates quite clearly that all the talk about communism is merely so much propaganda designed to damage the Labour Government, and it is giving to the Communist party an importance out of all proportion to its real influence. Why does the Communist party, though small in number, exercise so much influence in the industrial unions, and in the public life of the community? I have said before, and I repeat it now, that the Communist party recruited its members during periods of economic depression, and why not? The condition of the people at such times could hardly be worse, and some turn to the revolutionary and materialistic philosophy which is communism, because it seems to them that any change must be for the better. Communism grows in strength as the bargaining power of the working class is weakened by economic conditions. So much for times of depression. Then, in boom times, when prices are rising faster than wages, the great bulk of the people on small, fixed incomes suffer hardship and are conscious of injustice. This situation enables the communists to exert an influence out of all proportion to their numerical strength. In all the European countries where Communists have risen to power there has been present this condition of sharply rising prices which far outstrip incomes. The Labour party sought to meet the situation by passing banking legislation designed to level off boom and slump conditions which have alternately characterized the economy of nations ever since the industrial revolution. We have learned from bitter experience that in no other way can recurring booms and slumps be avoided. Our proposals have been contested fiercely because they strike at, the very root of the financial power. The sacred name of democracy has been invoked to save the most undemocratic institution in all the world - the power of organized finance. The Labour Government further attempted to stabilize the country’s economy by seeking from the people authority to fix prices in , time of peace, as it did in time of war. Every one knows what happened. In my opinion, the opposition to the Government’s proposal was inspired by the private banks, which feared that the Government’s proposal that the Commonwealth should have power to fix charges meant that it was seeking power to fix interest rates. Therefore, the banks forced the Opposition parties to oppose the Government’s proposals, and they were defeated. As a result, the State governments arc now required to shoulder a burden which they would fain escape. Upon them now rests the responsibility of controlling prices, and I do not believe that they are capable of doing it effectively. Our Government sought to avoid the harmful effects of booms and depressions, but it was frustrated by the efforts of honorable members opposite. In this way they have done more to assist the spread of communism than have any of the official spokesmen of the Communist party.

Mr Archie Cameron:

– Is the honorable member arguing that the Opposition parties have assisted in the spread of communism ?


– I shall not argue with the honorable member. He does not reason on this subject. His approach to these matters is purely hysterical. The honorable member for Henty had a good deal to say about half-truths, but it is regrettable that he should use such an expression. I propose now to deal with the attack which has been made upon the Minister for the Army. He claimed that the Minister for the Army did nothing to defend Mr. Massey Stanley, his chosen delegate, who was sent to Japan to investigate the conditions of Australian troops. I do not wish to take any part in the controversy about the famous Mr. Stanley, but I assert that the Minister for the Army was at considerable pains to defend Mr. Stanley in the strongest terms. He declared publicly, and his words were broadcast, that he was highly satisfied with the report brought in by the committee of which Mr. Stanley was a member, and he praised the work which members of the committee had done. Therefore, it is grossly unfair for any one to state that the Minister for the Army was reluctant to justify his choice when he appointed the committee.

Honorable members opposite have stated that the Communist party helps the Labour party in elections. If that be so, the help is given in the strangest way. The Communist party put up a. candidate against me at the last election, which was an extraordinary way to help me to get into Parliament. By the same logic, the Australian Country party and the Liberal party could claim that they had assisted the Labour party into power by opposing itat the elections.

  1. ask leave to continue my remarks at a later date.

Leave granted; debate adjourned.

Silting suspended from 5.56 to 8 p.m.

page 233


Messages from the Governor-General reported transmitting Estimates of Revenue and Expenditure and Estimates of Expenditure for Additions, NewWorks and Other Services involving Capital Expenditure for the year ending the 30th June, 1949, and recommending appropriations accordingly.

Ordered to be printed, and referred to the Committee of Supply forthwith.

page 233

BUDGET 1948-49

In Committee of Supply:

Mr. CHIFLEY (Macquarie- Prime

Minister and Treasurer) [8.1]. - I desire to present the estimates of revenue and expenditure for 1948-49, together with details of actual revenue and expenditure in 1947-48.

The factor which did most to determine financial conditions in 1947-48 was the exceptionally large and widespread rise in incomes. As compared with the previous financial year, national income rose by no less than £276,000,000, an increase nearly twice as large and far more rapid than that of 1942-43, which was the year of greatest expansion in our war effort. The value of exports rose by £102,000,000 and total wage and salary payments by £131,000,000. These were the items mainly responsible for the general increase.

Civil employment increased during 1947-48 by 100,000 and is now 640,000 above July,. 1939. I may point out, however, that the increase last year was 62,000 less than in the year before and that it brings us virtually to the upper limit of our present man-power resources. There is practically no unemployment anywhere in Australia to-day. Labour is short in nearly all industries.

Prices and costs rose during the year at an increasing rate. The “ C “ series index of retail prices in the June quarter this year was 40 per cent. above the prewar level. It had risen approximately 9 per cent. in twelve months. In the June quarter this year average earnings of factory employees were 78 per cent. above pre-war, as against 54 per cent. in the June quarter last year.

Estimates of national income and expenditure in 1947-48 are contained in a separate paper which is being circulated with the budget papers.

Revenue and Expenditure, 1947-48

The budget estimates of revenue in 1947-48 allowed for some buoyancy in financial conditions but not as much as occurred.

Total revenue in 1947-48 was £457,000,000. The budget estimate was £397,000,000, so that the total increase over the estimates was £60,000,000. The major increases were -

Income tax and social services contribution £37,000,000. Thiswas due partly to the rise in incomes and partly to the overtaking of substantial arrears in tax assessments.

Customs and excise- £13,000,000. This was due to a rapid rise in imports, of which the total value was £130,000,000 greater than in the previous year.

Sales tax- £6,000,000. This reflected increased sales and higher prices of goods subject to tax.

Pay-roll tax- £1,600,000. This was caused by the rise in employment and in wage and salary payments.

Defence and Post-war Charges in 1947-48. were £180,000,000 as compared with estimates of £168,000,000, an increase of £12,000,000. Expenditure on defence and allied services fell short of estimates by £5,300,000, chiefly because various defence construction projects were retarded through shortages of labour and materials. Re-establishment and repatriation expenditure was £4,900,000 below estimates. Payments of subsidies for price stabilization and primary production, on the other hand, were £19,800,000 greater than estimates.

Payments of £10,200,000 were also made on account of Australia’s subscriptions to the International Monetary Fund and the International Bank for Reconstruction and Development. Provision had not been made for this item in the estimates of post-war charges. Credits offset against defence and post-war charges totalled £39,600,000, which was £7,600,000 greater than the budget estimate of £32,000,000.

The total of other expenditure in 1947-48 was £276,000,000 which exceeded estimates by £16,000,000.

The amount of £88,000,000 appropriated to the National Welfare Fund was £19,000,000 above the estimates and this is to be explained chiefly by the overtaking of arrears in tax assessments. As honorable members are aware, there is a statutory provision that the proceeds of social services contribution together with those of pay-roll tax shall be paid to the National Welfare Fund.

Post office expenditure in 1947-48 was £1,900,000 above the estimates, the increase being caused chiefly by wage and salary increases during the year.

On the recommendation of the Commonwealth Grants Commission, an additional amount of £1,000,000 was paid in June to Western Australia.

Mainly because of labour and materials difficulties, works expenditure in 1947-4S fell short of estimates by £7,100,000.

Expenditure under all headings in 1947-4S totalled £455,600,000 which was £1,400,000 less than total revenue. This is the first surplus since 1939-40 and I think it is a matter for deep gratification that in three years after the war ended it was possible to achieve this result. It meant that the huge war-time gap between revenue and expenditure had been eliminated and that budget equilibrium, a prime condition of financial and economic stability in these times, had been attained.

Details of revenue and expenditure in 1947-48, compared with the budget estimates; are given in Statement No. 1. In addition, the main heads of aggregate war expenditure to the 30th June, 1948, are set out in Statement No. 5.

Loan Transactions 1947-48

During the year, loans raised in Australia resulted in cash subscriptions amounting to £104,450,000. In addition, conversion operations were undertaken to deal with securities amounting in all to £68.722,000 which became due in September and November, 1947. The total amount converted was £47,130,000. Of the securities not converted, £15,000,000 was redeemed from the National Debt Sinking Fund, and £6,000,000 was paid off from funds provided by the Commonwealth Bank. The interest on the new loans is 3-J per cent, per annum.

Conversion operations were also undertaken in London to deal with loans over which options of redemption were available. The total amount of these loans which represented debts of the States was £32,45S,000. Securities amounting to £9,588,000 were paid off and 3 per cent, loans raised to convert the balance of £22,870,000. Of the amount paid off £2,58S,000 was redeemed from the National Debt Sinking Fund and £7,000,000 was transferred to Australia, with the assistance of the Commonwealth Bank.

Details are given in Statement No. 6.

Production, Trade and Finance, 1948-49

On present indications some further rise in national income may be expected during the current financial year. If the season is favorable and export prices are maintained the value of exports and hence farm incomes may be about the same as in 1947-48 or even somewhat more. It seems probable also that the present, upward trend in wage and salary payments will continue, although perhaps not as rapidly as in the last year.

The supply position is improving in most fields, but the improvement is uneven. Many post-war shortages have disappeared and the total volume of goods offering has steadily increased. Although still far from meeting all needs, housing has made substantial headway. There has been a marked rise in imports and this will probably continue from sources other than dollar countries.

Nevertheless, the supply of many important commodities is failing to keep pace with demand and inflationary pressure is still exceedingly strong. We must regard with serious concern the rate at which prices and costs have risen during the past twelve months. Unless firmly restrained, this movement must cause grave dislocation, provoke industrial unrest and lose for us an advantage in point of costs which we have had for some years in our trade with other countries.

Apart, moreover, from the internal supply situation, I am convinced that we must step up the quantity of our exports to other countries. The difficulties of the United Kingdom, in whose stability we have so vital an interest, and the needs of a world still impoverished by the effects of war, lay this clear obligation upon us. The volume of our exports has, in fact, increased substantially. Compared with pre-war, the volume of meat exported last year was 17 per cent. higher, dairy products were 21 per cent. higher, and foodstuffs as a whole 26 per cent. higher. Exports of manufactures showed the very notable increase of 69 per cent. But we must do better than this. Apart from our own advantage in the matter, these commodities we export are of the types most needed at present by people and industries overseas. We can, however, export more only if we produce more, not only of exportable commodities but of all commodities.

Two main factors are causing the shortages which now dominate our supply and production problem. One is the dollar situation, which I shall discuss presently. The other is the insufficient output in certain key industries, upon which the output of many other industries depends. Coal, iron and steel, timber and other building materials, are major examples, and of these the most fundamental is coal.

Whilst there are local and particular reasons for all these difficulties, the basic reason is undoubtedly the scarcity of labour, especially of labour to do heavy manual work. The shortage is intensified for the key industries by their inability to attract additional labour in competition with industries offering more congenial occupations. Thus although luring 1947-48 total employment in- creased by 100,000, employment in the iron and steel industry increased by only 1,000, in forestry by only 700, and in New South Wales coal-mining by only 500.

I have good hopes that the immigration plans which the Government has been strenuously developing will soon be the means of bringing here new people in numbers exceeding 100,000 a year. These people, of course, will provide us with a great many capable workers, as well as contributing to our national security.

Placement of migrant labour in basic industries, special housing schemes’ in key districts, and the provision of various amenities and services are direct means the Commonwealth is employing in a drive to get higher output in vital fields of production. So large and widespread are the benefits to be gained from success in this direction that no practicable effort can be spared. But the problems are complex and their ultimate solution requires patience and intelligent systematic work.

Beyond the special problem of basic materials, however, there is a clear need to raise output in practically all industries. This becomes all the more necessary now that direct controls are being slackened off and an inflated demand can exert itself with greater force upon prices and the distribution of goods. The main responsibility lies with producers - employers and employees alike - and the solution must be sought both in greater output per worker and higher standards of efficiency on the part of management. Lacking these, the greatest benefits of full employment will not be realized, standards of living will stagnate at levels satisfactory to no one, and we will fall short in the contribution due from us towards world recovery.

The Problem of Internationai. Payments

Through shortages abroad we have been unable since the war to obtain all the imports we require for consumption or developmental purposes and, especially during the past year, we have been forced to curtail dollar purchases with great severity. At the same time, because of high export prices and a strong demand for our foodstuffs and raw materials, our export income has reached record levels. This, together with some capital inflow, enabled us to increase our London funds. These factors have to a large extent shielded us from the profound difficulties which have afflicted many countries since the war, and which underlie the present grave disequilibrium in world trade and exchange.

Nevertheless the world economic problem has deep significance for this country. In particular we are vitally concerned with the difficulties of the United Kingdom which is still for us, and for many other countries, the heart and centre of the economic world. I had the opportunity during my recent visit to London of discussing the whole subject at first hand with United Kingdom Ministers. andI am convinced that in its solution this country has very great interests at stake.

In essentials, the problem is one of production. Many important countries in Europe and the east which the war devastated have so far been unable to get back to pre-war standards of output. Great efforts have been made and notable achievements have been recorded. Especially is this true of the United Kingdom, most of whose industries have made great headway since the war and the volume of whose exports is now no less than 38 per cent. above that of 1938. It is true also in large degree of some European countries, although others, and, in particular, Germany, have been grievously slow to recover.

But with the exception of Great Britain, most countries have concentrated upon home production at the expense of exports. Concurrently they have striven to get from abroad the equipment, materials and foodstuffs they could not produce themselves. They have looked in the main to North America for these goods - hence their demand for dollars.

Despite its great recovery effort, the United Kingdom has had to act vigorously to preserve its international position. Because of its own great needs for imports, particularly from North America, because it sacrificed investments and lost trade during the war, because import prices have risen against it, it has had the greatest difficulty in meeting inescapable payments abroad. It has done so only by increasing exports in every way possible, by cutting imports to bare essentials, and by borrowing from other countries. Its problem has been complicated on the one hand by the fact that other countries sought from it, as. a world financial centre, the dollars they could not earn for themselves, and on the other hand, by its inability to change a large part of the other currencies earned through its exports into the dollars it so urgently needed.

By August, 1947, the United States loan of 3,750,000,000 dollars and the Canadian loan of 1,250,000,000 dollars had largely been exhausted and although the great project of Marshall aid was announced not long afterwards, there has been a critical interval during which the

United Kingdom has had to draw upon its gold and dollar reserves to meet its own net dollar needs and those of other countries which finance their trade through London. These reserves were supplemented by a gold loan of £80,000,000 sterling from South Africa and by drawings upon the International Monetary Fund. Notwithstanding this, however, the reserves fell from £591,000,000 sterling in June last year to £473,000,000 sterling in June this yearat which point they are not far above the minimum which must be held as a working balance if the whole network of trade which centres upon the United Kingdom is to be carried on.

Since Australia normally spends more dollars than it earns and has in the past depended upon London to furnish its net dollar requirements this situation is of the most vital consequence to us. Every dollar we spend above our earnings must come from the central pool of gold and dollars. “We have therefore the clearest responsibility on the one hand to economize in our use of dollars and on the other hand to earn as many more dollars as the nature of our trade makes possible.

The measures taken by the Government were related to this Parliament in a statement on the dollar situation last December. I may say that it is planned: to keep the budget of dollar imports for 1948-49 within a total very much lower than that of last year, and the Government intends rigidly to adhere to that limit. On the export side everything possible is being done to increase our dollar earnings, consistently with the important principle that exports to sterling’ countries which save dollars for the common reserves are as valuable as exports which earn dollars.

What I have so far said’, however, should make it evident that to conquer these difficulties there must be a general recovery in world production and trade. The United Kingdom is faced with two over-riding necessities. One is that its production, especially its export production, must be still further increased. The other is that world trade, and, in particular, European trade, must rise to a level and flow in channels which will ensure that the currencies which Britain earns in countriesother than the dollar countries can be changed at will into the dollars it requires.

The object of Marshall aid is to furnish participating countries with the goods they need for economic revival but have not means of their own to buy. Two main conditions are prescribed for the receipt of such aid. One is that goods obtained shall be limited to necessaries and be put to the most productive uses. The other is that participating countries shall do their utmost to help themselves and one another by their own efforts and with their own resources. To this end, the Organization for European Economic Co-operation has been created with the functions, on the one hand, of framing and allocating minimum programmes of requirements on the part of member countries, and, on the other hand, of promoting all possible economic co-operation amongst those countries. The United Kingdom has from the beginning taken an active share in the work of the organization and has strongly supported its objectives.

PROPOSED GRANT to the United Kingdom.

Progress of the various European countries towards recovery has been uneven, and this is reflected in their trade, both with the world and with one another. Whilst all are unable to buy as many American goods as they need some are also unable to buy essential goods from neighbouring European countries, this for the simple reason that they do not earn enough from their exports to those countries or to others whose currencies could be transferred “in payment. This, in essence, is the problem of intra-European payments. Possible avenues of trade are being blocked and resources otherwise available for industry are being immobilized by shortages of particular currencies, resembling locally and in miniature the predominating dollar shortage. To find ways and means of surmounting this impasse is at once a test and an opportunity for intra-European cooperation.

Sterling is necessarily one of the currencies most in demand. The great productive effort of the United Kingdom has rendered it a major source of urgently needed commodities. Moreover, sterling represents a medium for obtaining goods from large areas of the trading world, beyond the United Kingdom. The position to-day is in fact that a number of European countries are practically as= short of sterling as they are of dollarsand it has become urgently .necessary to find means of financing their sterlingdeficits so that they may maintain their purchases from the sterling area. These purchases largely comprise raw materialsincluding, of course, wool.

Discussions have been proceeding in Paris and elsewhere to find a solution for this very pressing and intricate problem. It is closely connected with the allocation of Marshall Aid amongst participating countries, and representatives of the United States, the United Kingdom and European countries have been taking part in the discussions, which have now reached an advanced stage. The Commonwealth Government has been kept closely in touch with the position.

Whatever the details of the arrangement finally reached may be, it is clear that in one form or another the United Kingdom will be making a large contribution towards the sterling needs of Europe and that this contribution will be made on behalf of the whole sterling area.

Because Australia has important markets in Europe, we stand to benefit from any measure which improves and sustains the external buying power of European countries. Also, of course, we will gain if by a rise in the level of European production the trade and general prosperity of the United Kingdom is increased.

Moreover, it must be borne in mind that the United Kingdom has already done a great deal to stimulate European recovery. Despite its loss of investments and trade it has supported a number of European countries which have been critically short of sterling, and these measures on its part have been to our advantage.

Accordingly, after full consideration the Government has decided to make a grant of £10,000,000 to the Government of the United Kingdom as a means of affording it some assistance in the burdens it is carrying and in this latest of its special efforts to assist European economic revival. The payment will be made from balances held by the Commonwealth Bank in London arising out of our favorable trade position last year. Repayment will be made to the Commonwealth Bank in Australia from Consolidated Revenue. Further details will be given to the House when legislation is brought down at an early stage in this session.

Financial Prospects 1948-49

Clearly the present comparative ease of revenue conditions must not be taken as the sole guide to budget policy. On the one hand, export income, which always has such a strong influence upon conditions within Australia, could fall rapidly if droughts occurred or if export prices, especially wool and wheat prices, were to decline from their present high level. This would have a drastic effect upon public revenues. Moreover, delayed sources of revenue, such as those from tax arrears, which will again contribute substantially this year, must diminish in later years.

On the expenditure side, it must be borne in mind that increasing wages and salaries, although a source of higher revenue, also have their counterpart in rising costs which affect all branches of government as well as private industry. Besides this, expenditure on social services must rise, even without extensions of benefits, and there are certain large commitments, such as that for war gratuity, which must be met during the next few years.

  1. considerable saving to the budget this year will follow from the decision of the Government to discontinue a number of price stabilization subsidies. Beyond this, however, no major reduction ‘Can be foreseen for some years in budget charges which have been carried over from the war or which arise from the necessities of the post-war period.

Factors such as these make it imperative to look beyond the immediate future and to consider what measures, in relation to both revenue and expenditure, will contribute most to general economic stability and create safeguards against any adverse turn in conditions, locally or n broad. There are strong reasons for making all possible provision now against commitments due to be met in later years.

Defence and Post-war Charges 1948-4.9.

On the basis of existing commitments net expenditure on defence and post-war charges in 1948-49 is estimated at

Ifr. Chifley £166,000,000 as compared with £180,000,000 in 1947-48.

This makes provision of £65,000,000 for gross expenditure on defence and allied services, including capital works and services, as compared with £75,000,000 last year, and £112,000,000 for post-war charges, as against £144,000,000 last year. Credits for 1948-49 are estimated at £11,000,000. Last year credits were £39,600,000. Full details of defence and post-war charges are contained in Statement No. 4.

Defence and Allied Services

An amount of £61,000,000, of which it is expected that £51,000,000 will be spent in Australia and £10,000,000 overseas, is provided for service and production departments, whereas expenditure last year was £71,600,000.

Iii this £61,000,000, provision is made for estimated expenditure of £45,000,000 for the second year of the Government’s five-year defence programme of £250,000.000.

Major developments in regard to the Royal Australian Navy are that the first aircraft carrier is expected, to arrive in Australia in March, 1949, two “Battle” class destroyers have been launched in Australia, and additional destroyers are also planned to be built here.

Army estimates are based on an average strength of 19,000 full time personnel and 20,000 in the Citizen Forces. The rate of recruiting for the regular army is satisfactory and general recruiting for the Citizen Military Forces commenced on the 1st July, 1948. The strength of the Australian Military Forces in the British Commonwealth Occupation Force in Japan is to be reduced to a size commensurate with the smaller commitment required under stabilized conditions.

Satisfactory progress has been made in the development of the Royal Australian Air Force on its approved post-war basis. All units have their full complement of aircraft and the Royal Australian Air Force will be developed and operated in 1948-49 in accordance with the planned increase of that force.

Provision made for research and development in 194S-49 is £5,000,000, including expenditure on the long range weapons project and associated projects.

The balance of £16,000,000 provided for service and production departments this year relates to terminal war charges. Of this £4,000,000 is for cash payments of war gratuity in 1948-49. Payments last year were £3,400,000. In addition it is proposed to appropriate an amount of £23,400,000 to a war gratuity reserve, details of which I shall give presently.-

Post-war Charges.

Expenditure on post-war charges is estimated at £112,000,000 in 1948-49. In 1947-48, actual expenditure was £144,000,000.

Price stabilization subsidies are expected to cost £10,300,000 in 1948-49, as compared with expenditure of £35,000,000 in 1947-48. Primary production subsidies this year are estimated at £9,400,000 as against £10,800,000 last year. Total subsidy payments are therefore estimated at £19,700,000 which is £26,100,000 lower than actual expenditure in 1947-48, this reduction being the result of the decision by the Government to discontinue subsidies on wool, raw cotton, imported textiles and yarns, whole milk, potatoes, coal, coastal shipping freights and certain minor items. Full details of price stabilization and primary production subsidies are contained in Statements Nos. 8 and 9.

Estimates of expenditure on international relief and rehabilitation in 194S- 49 show an increase of £1,400>000 above last year. The total amount of £3,600’,000 includes £1,000,000 for the [nternationa.1 Children’s Emergency Organization, £S00,000 for the International Refugee Organization, and £1,800,000 for general post-Unrra relief.

Other Expenditure 1948-49

On the basis of existing legislation and commitments total expenditure other than defence and post-war charges in 1948-49 is estimated at £303,000,000, an increase of £28,000.000 above expenditure in 1947-48.

The main increases are £7,000,000 in payments to the National Welfare Fund, 1:3,500,000 for postal services, £12,700,000 for capital works and services, £1,000,000 for the territories and fi ,300,000 for other departments.

Social Services

Statutory payments to the National Welfare Fund are estimated at £95,000,000 of which £77,000,000 is from the social service contribution and £18,000,000 from pay-roll tax - compared with £88,000,000 last year.

Capital Works and Services

Provision of £3S,000,000 for capital works and services, excluding defence works, includes £10,500,000 for the Post Office, £5,500,000 for civil aviation, £9,100,000 for war service homed, £1,500,000 for immigrant hostel.*, £1,000,000 for conversion of migrant ships and £3,200,000 for capital works and services in the territories.

Special Grants to States

An amount of £6,750,000 has been tentatively included in the Estimates for special grants to South Australia. Western Australia and Tasmania, pending receipt of the report of the Commonwealth Grants Commission. Provision is also made in the Estimates for payment of £300,000 towards the share of the Commonwealth in the agricultural areas and southern towns waterworks scheme in Western Australia.

Other Departments

Expenditure on other civil departments for the year is estimated at £26,900,000, which compares with £25,600,000 in 1947-4S, an increase of £1,300,000.

Of the total expenditure budgeted for this year, £16,000,000 is in respect of salaries and £10,900,000 for general departmental charges.

With costs rising strongly, the Government has been increasing its efforts to secure the utmost economy in departments. Since the war, the Public Service administration has had two main tasks, one, to adapt the war-time organization to peace requirements, the other to lift the general level of efficiency in the Public Service to cope with the new and difficult problems of government.

Two years ago the Public Service Board, which controls staffing in all departments, except special activities and certain wages staffs, was re-organized for these purposes, and its authority widened.

It has since been pushing ahead with a thorough and systematic review of the whole Commonwealth Public Service. “Wage and salary costs, however, necessarily follow the general trend and staffing of departments must be adequate, though not more than adequate, to handle the tasks of government which arise in a growing economy in the changeable conditions of to-day.

Total Expenditure, 1948-49

On existing legislation and commit ments total expenditure in 1948-49 is therefore estimated at £469,000,000 as against £455,000,000 in 1947-48. This excludes certain self-balancing items. Defence and post-war charges are down by £14,000,000 and other expenditure is up by £28,000,000.

Estimated Revenue. 1948-49

On the basis of existing rates of taxa tion it is estimated that revenue in 1948-49 would be £498,000,000.

At present rates, income tax and social services contribution are estimated to yield £268,000,000 this year. It is expected that by the end of this financial year, the lag in the issueof tax assessments will largely be overtaken.

At existing rates revenue from sales tax is expected to be £38,350,000 and revenue from pay-roll tax £18,000,000.

Customs and excise is estimated to be about the same as last year.Whilst there will be some increase in imports from nondollar sources, dollar imports will be very much lower than in 1947-48.

Post Office revenue is expected to show an increase of £1,400,000 and other items of revenue will be close to last year’s figures.

Accordingly, on the basis of estimates which do not allow for the proposals affecting both revenue and expenditure to be detailed presently, revenue for the current year would exceed expenditure by £29,000,000.

Taxation Proposals

In keeping with its policy of reducing taxation as the position warrants, the Government proposes to make further reductions of taxation to operate in this financial year.

Income Tax and Social Services Contribution - Individuals

It is proposed to reduce rates of individual income tax and social services contribution for the current financial year. The reduced rates will apply as from the 1st July, 1948, but it will not be possible to vary instalment deductions from the earnings of employees before the 1st October, 1948. Any consequent adjustment of the amount deducted will be made after the close of the year when the returns of employees are lodged and assessed.

The cost to revenue of the proposed reductions will be £26,000,000 in a full year and £20,000,000 in the current year. This reduction is approximately 162/3 per cent. of the total amount at present paid by individuals. The percentage reduction is substantially greater in the lower and middle income groups.

The combined ceiling rate of tax and contribution will be retained at the present figure of 15s. in the £1. In the case of income from personal exertion, however, the ceiling rate will apply to that part of the income in excess of £9,000 instead of the present figure of £5,000.

Taxpayers with property income in excess of £5,000 or personal exertion income in excess of £9,000 will benefit by the reduction of rates on the first £5,000 or £9,000, respectively, of their incomes.

Tables showing the total levy of tax and contribution that will be payable by various classes of taxpayers at different income levels, and comparing these amounts with the amounts payable at war-time and present rates, are being circulated.

Certain other measures affecting the liability of individuals are also proposed at an annual cost of about £750,000. The concessional allowances are being expanded to include gifts to the United Nations appeal for children and. to increase rebatable amounts in respect of funeral expenses from £20 to £30. Cash living-away-from-home allowances paid under industrial awards will now be completely exempt up to 50s. per week and the remuneration of visiting industrial experts in the third and fourth year of the visit will not be subject to Australian tax to a greater extent than the tax that would be payable in the country in which the expert is ordinarily resident.


It is proposed to reduce the flat rate of tax on companies from 6s. to 5s. in the £1 on the first £5,000 of taxable income at an estimated cost to the revenue of £1,500,000 per annum. The reduced rate, which will apply in assessments based on incomes derived during the year ended the 30th June, 1948, will operate in conjunction with amendments to the special provisions of the Income Tax Assessment Act relating to private companies. These amendments, although they will not affect the volume of revenue, will remove several anomalies from the legislation and place the private company tax on a simpler and more equitable basis.

Sales Tax

It is proposed to make certain sales tax concessions, which will cause a loss of revenue estimated at £475,000 in a full year and approximately £350,000 in the current financial year. The concessions will consist principally of additional exemptions from tax, and details will be announced when the relevant bill is introduced later this evening.

Excise Duty

It is proposed to reduce excise on matches by 9d. per 12 dozen boxes. This will allow more equitable margins to manufacturers and distributors, whilst avoiding the necessity for an increase in the retail price of matches. It is estimated that the annual cost to revenue of the. reduction will be £130,000 and it will operate retrospectively from the 1st July, 1948.

It is proposed also to abolish excise on petrol produced in Australia directly or indirectly from coal and shale mined in Australia. This reduction will take effect as from to-morrow, the 9th September, 1948. It is estimated to cost the revenue £S5,000 in a full year and £56,000 in this financial year.

Total Tax Reductions

In all, therefore, the proposed tax reductions, as outlined above, will cost £29,000,000 in a full year and £22,300,000 in this financial year.

I have had prepared a comprehensive statement covering the full tax reductions made by the Government during its term of office. This paper will be available to honorable members. It shows that the total yearly value of these reductions to taxpayers now approaches £140,000,000. In passing, I might point’ out that if the earlier reductions were calculated upon the present level of taxable income instead of upon taxable income at the time they were given, this total figure would be very greatly increased.

Social and Health SERVICES

In addition to its proposals for reductions in taxation, the Government proposes to increase the rates of a number of social service benefits and also to make a further easement of the means test.

Age and Invalid Pensions

It is proposed to increase age and invalid pensions by 5s. to £2 2s. 6d. a week, and to ease the means test by raising from £1 to £1 10s. a week the income from other sources which a pensioner may enjoy without any reduction of pension. At the same time, ‘the amount of property, apart from the pensioner’s dwelling and other exempt property, which the pensioner may have without reduction of pension, will be increased from £50 to £100, and the property limit above which no pension will be payable will be raised from £650 to £750. The additional expenditure involved is estimated at £7,600,000 in a full year and £5,100,000 in this financial year.

The combined effect of the increase in pension and the liberalized means test will be to allow a man and wife where both are eligible for age pension a maximum permissible income plus pension of £7 5s. per week.

Means Test

This proposed easement of the means test will be the second made by the Government in the last two years. The complete abolition of the means test for age and invalid pensions at the rates now proposed would, it is estimated, cost an additional £54,000,000 a year.

Widows’ Pensions

It is also proposed to increase widows’ pensions by 5s. a week for all classes of widows, so raising to £2 7s. 6d. a week the pension payable to a widow with a dependent child. Tha income test also will be eased from £1 to £1 10s. a week and for widows other than those whose property limit is now £1.000. the property limits will be the same as those proposed for age and invalid pensioners. Expenditure, it is estimated, will be increased by about £700,000 in a full year and £400,000 in this financial year.

Child Endowment

It is proposed to increase to 10s. the present child endowment of 7s. 6d. a week. The additional cost is estimated at £6,700,000 in a full year and £4,500,000 in this financial year.

Hospital Benefits

Since the 1st January, 1946, the Commonwealth has been paying to the States an amount of 6s. a day for each bed occupied in the public wards of public hospitals. A condition of this payment is that no fees be charged to patients in public wards. It is proposed now to increase this payment to 8s. a day. A similar increase to 8s. per day is proposed in the Commonwealth contribution towards the fees payable by patients in the intermediate and private wards of public hospitals and in private hospitals. These increased payments are expected to cost an additional £1,400,000 in a full year and £1,300,000 in this financial year.


In collaboration with the States, the Commonwealth is planning a campaign to reduce the incidence of tuberculosis in Australia. The plan envisages the provision of facilities for the diagnosis and treatment of the disease and the aftercare of those suffering from it. On behalf pf the Common-wealth the Government has offered to meet all approved additional maintenance costs and to provide all approved new capital moneys required.

Additional maintenance under the new plan, tuberculosis allowances, and other expenditure under existing legislation will cost £600,000 in 1948-49.

Payments on account of maintenance are expected to rise to £1.500,000 per year. Total capital expenditure under the scheme will be very substantial but it is not yet possible to give an estimate.

Mental Institutions

The Commonwealth is at present negotiating with the States on a scheme under which fees will no longer be collected in respect of patients in public mental institutions. The Commonwealth has offered to recoup to the States the amount of revenue they would thus forego. Legislation introducing the scheme will be submitted to Parliament when agreement with the States has been reached. Expenditure in a full year is estimated at £500,000 and in this financial year at £300,000.

Disablement Benefits

A scheme for assisting and rehabilitating disabled people will be the subject of legislation shortly to be introduced into the House. Expenditure under that scheme is estimated at £600,000 in a full year and £250,000 in the current financial year.

National Welfare Fund

The total annual cost of the above proposals will be £18,000,000. In the current financial year the estimated additional expenditure will be £12,000,000. This will of course be - met from the National Welfare Fund and together with the increased costs of existing benefits will bring estimated cash expenditure from the fund in 1948-49 to £88,500,000 as compared with cash expenditure last year of £68,600,000.

Details of payments to and from the National Welfare Fund in 1947-48 and estimated receipts and payments during 1948-49 are given in Statement No. 7. If the proposals for the reduction of income tax and social services contribution are given effect, the statutory payments to the fund will be reduced by £3,000,000 to an amount of £92,000,000. A, comparison of Commonwealth health and social services for the period 1938-39 to 1948-49 is contained in Statement No. 11.

War and Service Pensions

The Government also proposes increases in war and service pensions. General rate war pensions will be increased by about 10 per cent., which will mean an additional 5s. a week for pensioners whose incapacity has been assessed as “ total “. An increase of 5s. a week is proposed in the present special rate war pension for cases of total and permanent incapacity, the war widow’s pension, and the maximum rate pension for a dependent parent, brother, sister, &c, of a deceased member of the forces. For some classes of dependants of deceased members, the increase will he greater than 5s. a week; for example, the pension for certain widowed mothers will be raised from £2 10s. to £3 a week.

As the same rate and means test conditions apply to service pensions as to age and invalid pensions, the maximum service pensions will be increased by 5s. to £2 2s. 6d. a week, and the property and income-plus-pension limits will be raised to £750 and £3 12s. 6d. a week or, for a man and wife, £1,500 and £7 5s. n week respectively.

The pension for the wife of a special rate or full general rate war pensioner and also for the service pensioner’s wife will be increased by approximately 10 per cent. .

Other proposals include the payment of the special rate war pension, at present limited to permanent total incapacity, in cases of temporary total incapacity; making available, as far as practicable, free medical, including in-patient, treatment to widows and children and certain classes of widowed mothers of deceased members of the forces; and a further extension of the educational and training allowances under the soldiers’ children’s education scheme.

The additional full year cost of the war and service pension increases and the other repatriation proposals is estimated at about £2,100,000. The increase for 1948-49 is estimated at £1,500,000.

Commonwealth Reconstruction Training Scheme

Re-establishment, and University Training (Civilian).

Et is proposed that the allowances now being paid to Commonwealth reconstruction training scheme trainees, exservicemen being re-established on the land and in business, and university students under the Commonwealth financial assistance scheme will all be increased by 5s. per week. The estimated cost will be £500,000 in a full year and £340,000 in this financial year.

War Gratuity Reserve

The total estimated liability on account of war gratuity is £80,000,000. Whilst limited payments are being made to meet special cases within the provisions of the act and the recommendations of the Par liamentary Committee on War Gratuity, the main liability will fall due in the financial year 1950-51.

To provide funds all in one year to meet such a large commitment would be very difficult and it would certainly be wise to make provision in preceding years to cover at least part of the liability.

Accordingly, the Government proposes to establish a war gratuity reserve, into which will be appropriated the revenue surplus of £1,400,000 in 1947-48, a further £5,000,000 from this year’s revenue arid £17,000,000 representing part cf certain trust balances. The total appropriation’s to the reserve in this financial year will thus be £23,400,000. Legislation for the purpose will be brought before the House at an early date:

Trust Balances

During the war and the period since the war, substantial balances have accumulated in certain trust accounts and consideration has been given to the sums no longer required for the purposes of these accounts.

The Parliament will be asked to amend the Audit Act to permit unrequired balances in trust accounts to be transferred to Consolidated Revenue Fund or to Loan Fund as may be appropriate.

The moneys available in certain trust accounts are not directly attributable to war loan expenditure but have accumulated through provision made against certain war-time risks and contingencies such as war damage to property and marine war risks. It is from these balances that the £17,000,000 which it is proposed to appropriate to war gratuity reserve will be transferred. Sufficient balances will, however, remain in the accounts to cover any commitments likely to accrue.

A further aggregate amount of approximately £19,000,000 which has accumulated in trust accounts financed fromwar loan expenditure and which has arisen mainly from recoupment of cost of manufactures and from proceeds of the disposal of material will be transferred to loan fund in reduction of war debt.

Payments to States

It is also proposed to increase the payments made to the States in respect of tax reimbursement and roads, and to provide for the reimbursement to the States of the cost of controlling prices, rents and land values. These increases are tentatively estimated to amount to £10,500,000 in the current year. fax Reimbursement Grants.

Under the uniform tax legislation passed in 1946 it was provided that the aggregate reimbursement grants should be £40,000,000 in each of the years 1946-47 and 1947-48. The legislation also provided that in 1948-49 a formula would operate to increase the basic aggregate grant of £40,000,000 in accordance with variations in population and increases in average wages. Last year, however, it was found necessary to increase the grant to £45,000,000. In the current year the operation of the formula would increase the basic grant to only £43,200,000 thus rendering necessary an additional grant of £1,800,000 to bring the aggregate to £45,000,000. In other words, under present legislation, the aggregate grant this year would be £45,000,000, the same as last year.

The Commonwealth has conferred with the State Premiers and has reached the conclusion that in view of the effect of rising costs upon State budgets it is necessary to increase the tax reimbursement grants payable to the States.

At the same time the Commonwealth lias made clear to the Premiers that, in its view, the States might reasonably be expected to make greater efforts” to exploit their own revenue resources and, in particular, to ensure that the costs of business undertakings were as far as possible covered by the charges for the services rendered:

It is now proposed to amend the formula incorporated in the existing legislation in a way which will increase the aggregate tax grant in 1948-49 to £53,700,000- an increase of £S,700,000. On the basis of present trends in population and average wages the amended formula would bring about a further increase next year of perhaps £6,000,000.

The Premiers expressed their satisfaction with this proposed revision of the formula, and the Australian Government trusts that if this revised formula is brought into operation, the States will be in a position in future to assume complete financial responsibility and to formulate their budgets without - making yearly requests to the Commonwealth for special assistance.

Details of the amendments proposed and of the effect on the tax grants to each State are contained, in Statement No. 10 and legislation to give effect to this proposal will be introduced shortly.

Commonwealth Aid Roads Grant

It is also proposed to increase by £1,000,000, the amount made available each year under the Commonwealth Aid Roads Act 1947. for roads through sparsely settled areas, timber country and districts not otherwise served by adequate transport facilities. This will bring the amount provided for that purpose to £2,000,000 per annum and the estimated total of the Commonwealth Aid Roads Grant this year will be £7,300,000. An amendment of the act will be necessary to give effect to the proposal.

Controls over Prices, Rents and Land Sales.

In 1948-49 the States will incur additional expenditure by reason of their assumption of control over prices, rents and land sales. To assist the States, it is proposed to make a grant to each State equal to the additional costs in which the States will be involved by reason of their administration of these controls. A tentative figure of £750,000 has been included in the Estimates for this purpose. Legislation to give effect to this proposal will be introduced shortly.

Total Payments to or for the States.

After allowing for these proposals and for some increase in other grants the total payments to or for the States this year are, in the aggregate, estimated at £78,000,000, an increase of £11,300,000 over the amount paid last year.

Payments to the States from the National Welfare Fund in respect of Hospital Benefits and similar items are not included in this total. Under the proposal to increase the hospital benefits rate to 8s. a day the States will receive an increase this year of £856,000.

Budget Summary

After allowance lias been made for the revenue and expenditure proposals outlined above, the budget for 1948-49 may be summarized as’ follows: -

This summary excludes certain selfbalancing items of revenue and expenditure. Further, the foregoing figures for additional expenditure do not include the cost of the health and social service proposals, which are of course met from the National “Welfare Fund. Full details of estimated revenue and expenditure, after allowing for the Government’s proposals, are given in statements Nos. 2 and 3.

Loan Council Programmes 1948-49

The borrowing programmes approved by the Loan Council aggregate £70,000,000 to cover expenditure by governments on public works and housing. The Commonwealth’s share of this amount is £14,000,000, which will be used wholly for advances to the States under the Commonwealth-State Housing Agreement. The Loan Council also approved a total borrowing programme of £3.0,000,000 for semi-govern mental and local authorities.


Sound achievements in the Australian economy lie behind the facts and proposals I have just related to you. On the financial record of the past three years, war costs have been scaled down, the budget has been balanced, direct taxation on the majority of taxpayers has been more than halved, provision has been made for ex-service men and women, and many valuable services have been established for the community. Far less than this would have been possible, however, had not industry expanded, production increased, and employment kept up to a ceiling level. “We have, of course, been helped by good seasons and high export prices.

Yet we could quickly waste these gains by unsound financial policies or through an excessive rise in costs and prices. It is an illusion that social welfare and other benefits can be had by same easy method of finance. They must be paid for from taxation, either direct’ or indirect.

Much has been said about providing incentive for workers, but I believe that the best’ incentive that can be given to workers is a sense of security - security of employment and security against sickness, unemployment, and the disabilities of old age. The industrialist, again, can forward his project with most confidence if he knows that demand will be sustained. Of this the best guarantee is full employment and the provision of adequate social services to those people who have to spend the greater part of their incomes on necessaries.

Therefore, security, in the largest sense, has all along been the key-note of the Government’s financial and economic programme. “We have aimed to reduce taxation and have done so, but not at any stage before financial conditions warranted the step. “We have aimed to lift standards of social benefits and have done so, but, again, no measure has been adopted before the resources were in sight.

I have stressed earlier the need for greater all-round production. That is a job for every one, as well as being a national responsibility. The Government can assist in many ways, but most of all by the wise use of its resources and n careful but progressive approach to economic and financial problems.

page 251


Termination of Subsidies

Following its decision to terminate Commonwealth price controls, the Government announced on 16th June, 1948, that a review had been made of the practicability of continuing the payment of various subsidies and that the decision had been taken to discontinue all subsidies with the exception of the subsidies being paid on tea, butter and cheese, and fertilizers. Provision in the 1948-49 Estimates has been made on the basis that the principal subsidies will be terminated, as follows: -

Potatoes - 31st October, 1948

Wholemilk- 30th September, 1948

Wool for home consumption - 31st July, 1948.

Coal - 30th September, 1948

Coastal shipping freight - 30th June, 1948.

Raw cotton - 30th June, 1948.

Imported textiles and yarns - 31st July, 1948.


This subsidy will be discontinued on 31st October, 1948. Its continuance was dependent upon the acquisition of potato crops by the Commonwealth under the contract system introduced by the Government during the war period. When extending the contract system to cover the 1947-48 season, it was decided that the system would terminate on the expiration of the contracts for that season.


It was decided to continue this subsidy provided central buying by the Tea Control Board and rationing are retained, and the State governments assume control of: prices. The amount of £5,750.000 shown in 1948-49 Estimates is required to meet the cost of continuing the subsidy at the approximate rate of 2s. 4d. per lb. This rate of subsidy will not be increased to meet any further increases in the landed cost of tea or in distributors’ margins.


The Commonwealth withdrew from the control of wholemilk prices on 30th September, 1947, and entered into an arrangement to subsidize wholemilk on a reduced basis for a further period of twelve months. It was not contemplated that this arrangement would be renewed after its expiration on 30th September. 1948.

Wool for Home Consumption

This subsidy was already under review because it was giving rise to difficulties at wool auctions and because of its excessive and rising cost. The Government decided to terminate the subsidy on 31st July, 1948, but as considerable stocks of subsidized raw wool and manufactured and partly manufactured woollen goods exist, retail prices need not rise on account of the withdrawal of subsidy for a period of from nine to twelve months. The State governments have been asked to ensure that consumers receive the benefit of. subsidized stocks.


The major part of the subsidy on coal was withdrawn in November, 1947, when the price of coal in New South Wales was increased by an average of 5s. a ton. The Government decided to discontinue the residual subsidy as from 30th September, 1948.

Coastal Shipping Freights

This subsidy was introduced in August, 1947, when the requisitioning of interstate shipping was discontinued and was designed only as a temporary measure. Numerous items had been deleted from the original schedule of sub- sidizable freights prior to the decision to withdraw the subsidy entirely as from 30th June, 1948.

Imports (Other than Tea).

These subsidies have been paid to private importers to cover the difference between the. basic cost at ceiling date and landed cost. On a review of the growing difficulties involved in administering these subsidies, the Govern ment decided to discontinue them on the following dates: -

Raw cotton - 30th June, 1948.

Imported textiles and yarn - 31st July 1948.

Goat skins - 30th June, 1948.

Miscellaneous items - 10th June, 1948.

Other Items

The subsidies on these items covereda number of Australian goods and services During 1947-48 a progressive policy of eliminating these subsidies was followed and the Government decided to discontinue subsidies on the residue as at the following dates: -

Pickled pelts- 30th June, 1948.

Freighting of meat to Tasmania-11 th, September, 1948.

Balance of items - 10th June, 1948.

page 252



The dairying industry has been given a guarantee by the Government that for five years as from the 1st April, 1947, farmers* returns will be based on the cost of production which will be the subject of investigation and report each year by the Joint Dairying Industry Advisory Committee. In June, 1948, the committee completed its first annual review under this arrangement, and, as a consequence the return to the farmer at the factory door was increased, as from the 1st July, 1948, by 2d. per lb. commercial butter to 2s. 2d. per lb.

To enable the current price to consumers of manufactured butter and cheese to be maintained, whilst at the same time securing the guaranteed factory price of 2s, 2d, per lb. commercial butter to farmers, it is estimated that a subsidy of £5,600,000 will, be necessary during 1948-49. The Government decided that, as it is desirable to preserve the system of home-consumption prices, the subsidy is to be continued provided the States and industry co-operate for this purpose.

page 253


Following the decision of the Commonwealth Government to continue uniform taxation of incomes and entertainments, provision was made in the States Grants (Tax Reimbursement) Act 1946 for the payment as from the 1st July, 1946, of tax reimbursement grants to States which remained out of the field of income taxation.

This act provided for the aggregate grant to be £40.000.000 in each of the years 1946-47 and 1947-48 and for the aggregate grant in subsequent years to be varied in accordance with a formula which takes account of -

The distribution of the aggregate grant of £40,000,000 among the States in 1946-47 and 1947-48 was set out in a schedule to the 1946 act whilst the act provides that in years subsequent to 1947-48 the aggregate grant is to be distributed in accordance with a distribution formula which takes account of the respective populations of the States after adjustments have been made to those populations for relative sparsity of population and the number of children aged five to fifteen years inclusive in each State. The effect of this distribution formula is such that by 1957-58 the aggregate grant will be distributed solely in proportion to the adjusted populations of the States.

In 1947, following representations by the Premiers that some increase above £40,000,000 in the aggregate grant would be necessary in 1947-48 if the State Governments were to avoid serious financial difficulties in that year, amending legislation was introduced providing for the payment of -

The amending legislation provided that this additional grant is to be distributed among the States in the same proportions as the tax reimbursement grant of £40,000,000 payable in 1946-47 and 1947-48 under the 1946 act.

Under existing legislation, the aggregate grant in 1948-49 would be the same as in 1947-48, namely, £45,000,000. Of this amount. £43,160,000 would represent the amount arrived at by varying the basic grant of £40,000,000 in accordance with the formula laid down in the 1946 act whilst £1,840,000 would represent the additionalgrant payable in accordance with the provisions of the amending legislation passed in 1947.

Following discussions with the States it is now proposed to amend the formula in the following ways: -

It is not proposed to alter the provisions in existing legislation regarding the manner of distribution of the aggregate grant amongst the States.

The effect of these amendments to the for inula would be to increase the aggregate grant in 1948-49 to £53,680,000, whilst on present trends in population and average wages, the aggregate grant would be increased by a fur ther amount of about £6,000,000 in 1949-50

The tax reimbursement grants which it is proposed to pay in 1948-49 are comparedin the following table with the grants paid in 1947-4.8 under the States Grants (Tax Re imbursement) Act 1946-47 -

The tax reimbursement grants paid annually to “each State are reduced by the amount of any arrears of income taxation which may be received in that year by the State. In 1947- 48 these arrears amounted to £412,000, and are estimated at £260.000 in 1948-49.

I move -

That the first item in the Estimates under Division No. 1 - The Senate - namely, “ Salaries and allowances, £12,000 “, be agreed to.

Progress reported.

page 256


The following papers were presented : -

The Budget 1048-49 - Papers presented by the Right Honorable J. B. Chifley, M.P., for the information of honorable members on the occasion of the Budget of 1948-49.

National Income and Expenditure Estimates 1947-48

Ordered to be printed.

page 256


Motion (by Mr. Chifley) agreed to -

That leave be given to bring in a bill for an act to amend the Sales Tax (Exemptions and Classifications) Act 1935-1947.

Bill presented, and read a first time.

Second Reading

Prime Minister and Treasurer · Macquarie · ALP

– I move -

That the bill be now read a second time.

This bill is designed to implement the sales tax concessions mentioned in the budget speech. These consist of further exemptions from the tax, and the removal of certain goods from the Third Schedule to the Sales Tax (Exemptions and Classifications) Act, thereby reducing the rate thereon from 25 per cent, to 10 per cent. A statement which is being circulated for the information of honorable members sets out details of the goods affected by the proposed amendments.

The principal amendment- is a reexpression of the existing exemption of clothing and household drapery, which has the effect of substantially enlarging its scope. At present, with the exception of certain footwear, industrial clothing and robes, the exemption is confined to clothing and drapery which were coupon goods under Rationing Order No. 27 as in force at the 13th September, 1945. The exemption was so expressed to suit the convenience of traders, who already had to classify their goods into two categories, uamely, coupon goods and non-coupon goods. It was desired to avoid imposing upon these merchants the need for any different classification of their goods for sales tax purposes, although it was realized that the course being followed was open to criticism on the ground that some classes of goods which were never subject to coupons were just as worthy of sales tax exemption as certain goods which were coupon goods.

The termination of rationing of clothing and household drapery has rendered it desirable to re-express the relevant sales tax provision in terms independent of the rationing schedules. The opportunity is being taken to extend the scope of the item to include a number of classes of goods which have hitherto been taxable. These goods include blankets and travelling rugs, sewing thread of the kind used for domestic purposes, heavy textile fabrics and table cloths, curtains, quilts, and certain other articles made of materials which were not coupon goods. Full details will be found in the statement circulated among honorable members.

It is proposed also to extend the exemption of fish paste, which commenced on the 20th September, 1947, and which is at present confined to goods of Australian production. Since the commencement of this exemption, fish paste has been imported in considerable quantities from the United Kingdom, and it has been represented that the requirement of payment of tax in respect of fish -paste so imported is a breach of the spirit of the Ottawa Agreement. The bill extends the exemption so as to cover all imported fish paste.

With a view to alleviating the difficulties of travellers in clearing their baggage through the Customs upon arrival in Australia, it is proposed to authorize exemption from sales tax in respect of passengers’ baggage comprising articles which are not in commercial quantities and not for sale or trade, and which are not required to be entered at the Customs House. There will be a corresponding exemption of these good? from primage duty.

In accordance with an international convention, exemption from sales tax is being authorized in respect of goods imported for the use of the United Nations. Action is also being taken to remove a time limit which is imposed by the existing law upon the exemption of goods imported for the use of consuls and trade commissioners.

Plate, plated ware and pewter are being omitted from the Third Schedule to the Sales Tax (Exemptions and Classifications) Act, thus reducing the rate of tax thereon from 25 per cent. to 10 per cent. This action is being taken in order to remove anomalies, arising from the fact that goods made of plated ware, &c., are sold in competition with similar goods which are made of other material, and which are subject to tax at the rate of 10 per cent. only.

Except where otherwise indicated in the circulated statement, the amendments will be operative on and from to-morrow, the 9th September, 1948.

Debate (on motion by Mr. Harrison) adjourned.

page 257


Message recommending appropriation reported.

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

Motion (by Mr. Chifley) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to amend the States Grants (Tax Reimbursement) Act 1946-1947.

Resolution reported and adopted.

Ordered. -

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

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

Second Reading

Prime Minister and Treasurer · Macquarie · ALP

– I move -

That the bill be now read a second time.

The purpose of this bill is to amend the formula laid down in existing legislation for determining the aggregate of the tax reimbursement grants payable to the States each year under the uniform tax plan. Under the States Grants (Tax

Reimbursement) Act 1946 provision was made for the aggregate tax reimbursement grant to be £40,000,000 in each of the years 1946-47 and 1947-48. In respect of each subsequent year, the legislation provided for the aggregate grant to be varied in accordance with a formula which takes account of - (a) variations in the populations of the States since the 1st July, 1947; and (b) half the percentage increase (if any) in the level of average wages per person employed over the level in 1946-47.

Early in the financial year 1947-48, however, it became clear that the State governments would be involved in serious financial difficulties unless some increase was made in the aggregate grant of £40,000,000 specified for payment in that year under the 1946 legislation. Accordingly, amending legislation was introduced in 1947 providing for the payment of an additional £5,000,000 in 1947-48, and for an additional grant to be paid in each subsequent year to cover any deficiency between the aggregate grant as determined by the formula and the sum of £45,000,000. In this way, the formula, which was due to come into operation in 1948-49, was left intact.

It is now known that in the current financial year the operation of the formula would increase the aggregate grant to £43,200,000, thus rendering necessary an additional grant of £1,800,000 to bring the total to £45,000,000. Under present legislation, therefore, the aggregate grant” would be the same as last year.

In general, the tax grant of £45,000,000 paid last year was sufficient to meet the reasonable financial needs of the States in 1947-48. After conferring with the State Premiers, however, the Commonwealth is satisfied that, even after allowing for the greater effort which the States might reasonably be expected to make from their own revenue resources, particularly in regard to the charges made by their business undertakings, some further increase in the tax reimbursement grants is necessary to assist the States to meet rising costs. It is also clear that because of changed conditions since 1946, in- cluding the extent of the effects of rising costs on State budgets, the tax reimbursement formula evolved in 1946 is not fulfilling its purpose of giving to the States a flexible tax grant which would vary with their financial needs, and so avoid the need for the States to make yearly requests to the Commonwealth for special assistance.

Accordingly, it is proposed to amend the formula in a way which will not only increase the basic amount on which the formula operates but will also make greater allowance for the effect of movements in the level of average wages - a factor which was included originally in the formula in order to relate the agreegate grant to trends in prices and wages.

The bill therefore provides for the basic amount on which the formula operates to be increased from £40,000,000 to £45,000,000, and for that basic amount to be increased by the full percentage increase in the level of average wages, instead of only half that percentage. The calculation of the increase in average wages will be based on the year 1945-46 instead of 1946-47 - this variation also resulting in a substantial additional payment this year. These amendments would increase the aggregate grant in 1948-49 to £58.700,000-an increase of £8,700,000. On present trends in population and average wages the amended formula would bring about a further increase of about £6,000,000 next year.

The effect on the tax reimbursement grant to each State in this financial year is estimated as follows: -

The Premiers expressed their satisfaction with the proposed revision of the formula and the Australian Government trusts that, if these amendments are adopted, the formula will succeed in its original purpose and enable the States to manage their own affairs, maintain their financial responsibility, and avoid yearly requests to the Commonwealth for special assistance.

Debate (on motion by Mr. McBride) adjourned.

page 258


Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message) :

Motion (by Mr. Chifley) agreed to -

That it is expedient that an appropriation of revenue be made for the purposes of a bill for an act to grant and apply out of the Consolidated Revenue Fund a sum for the purpose of making a grant to the State of Western Australia for the purpose of water supply development.

Resolution reported and adopted.

Ordered -

That Mr. Chifley and Mr. Dedman do prepare and bring in a bill to carry out th*foregoing resolution.

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

Second Reading

Prime Minister and Treasurer · Macquarie · ALP

– 1 move -

That the bill be now read a second time.

The purpose of the bill is to provide a grant to the Western Australian Government towards the cost of a proposal to reticulate water from the eastern goldfields water supply scheme to certain agricultural areas in the north-eastern portions of the State’s main mixed wheat and sheep belt which are intersected by the Trans-Australian railway, and to provide a supply from the Wellington Dam to towns along the Great Southern Railway. The scheme is that referred to in the act of the State of Western Australia known as the Agricultural Areas, Great. Southern Towns and Gold-fields Water

Supply Act 1947. The agricultural areas included in the scheme total approximately 4,000,000 acres and at present carry a population of about 32,700 of whom 23,700 live in towns and 9,000 on farms. Within this area there are 23 towns, none of which has a satisfactory water supply, with the exception of those situated alongside the existing gold- fields water supply main. The towns along the Great Southern Railway to he serviced extend from Beverley to Katanning. This additional assured water supply is necessary to meet the demands on the gold-fields water supply system,’ which already exceed its capacity, to increase primary production, to provide for the expansion and development of secondary industries and to assist in the provision of amenities by making reasonable water supplies available to farms and towns in the areas under consideration.

The total cost of the part of the scheme for which the State has requested assistance is estimated at £4,300,000 and it is anticipated that construction will, unless the need to provide employment becomes paramount, be spread over a sixyear programme. The proposed Commonwealth financial assistance to the Western Australian Government is limited to meeting one half of the cost of the project, with an upper limit of Commonwealth contribution fixed at £2,150,000.

The programme of work to be undertaken by the State in regard to increased water supplies to the areas under consideration is as follows : -

  1. Raise the Mundaring Weir, increasing its capacity from 4,600,000,000 gallons to 15,000,000,000 gallons ;

Raise the Wellington Dam increasing its capacity from 7,500,000,000 gallons to 38,000,000,000. gallons;

  1. Increase by stages the capacity of the pumping stations and mains on the gold-fields water supply system to enable water to be reticulated throughout certain north-eastern agricultural areas comprising approximately 4.000,000 acres;
  2. Construct a steel main with pumping stations from Wellington Dam over the Darling Ranges to the Great Southern towns extending from Beverley to Katanning;
  3. Construct high level storages with the necessary pumping stations and reticulation system throughout the area.

The State has undertaken to accept full responsibility for costs incurred in increasing the storage capacity of the Mundaring Weir and the Wellington Dam. Commonwealth assistance is sought for only the remainder of the proposed works.

This scheme was fully investigated by an expert Commonwealth committee which visited the areas and reported on the desirability of the extension of water services as now proposed in order to stabilize the existing towns and farming community. It is recognized that the scheme cannot be self-supporting and it is estimated that it will result in an annual loss of about £34,000. It is anticipated, however, that this cost will be more than counterbalanced by increased productivity and the social wellbeing of the people in the areas.

The development of Western Australia is a matter of considerable importance to not only that State but also the nation as a whole. With this in mind, the Commonwealth is already giving considerable financial assistance to Western Australia through the medium of special grants and other direct payments for revenue purposes. The assistance now proposed is for capital purposes. The Commonwealth Government feels that in view of the developmental possibilities associated with the project and the limited financial resources available to the State, this Commonwealth financial assistance for capital purposes is fully justified.

Debate (on motion by Mr. Hamilton) adjourned.

page 259


Message recommending appropriation reported.

In committee (Consideration of GovernorGeneral’s message) ;

Motion (by Mr. Chifley) agreed to -

That itis expedient that an appropriation of revenuebe made for the purposesof a bill for an act to establish a War Gratuity Trust Account, to provide for the payment of moneys to the credit of that account, and for other purposes.

Resolution reported and adopted.

Ordered -

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

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

Second Reading

Prime Minister and Treasurer · Macquarie · ALP

– I move -

That the billbe now read a second time.

In my budget speech I called attention to the fact that the total liability for war gratuity is estimated at £80,000,000 and that, whilst limited payments are being made to meet special cases within the provisions of the act and the recommendations of the Parliamentary Committee on War Gratuity, the main liability will fall due in the financial year 1950-51. It would obviously be very difficult to provide funds all in one year to meet such a large commitment and it will certainly be wise to make provision in this financial year and the next one to cover at least part of the liability. Accordingly, it is proposed in the bill to initiate a war gratuity reserve by appropriating from the Consolidated Revenue a sum of £23,420,430 and by creating a trust account within the meaning of section 62a of the Audit Act to which the amount will be credited. The payment to this reserve will be financed as follows : -

  1. £1,420,430 representing the excess of receipts over expenditure of the Consolidated Revenue Fund last financial year;
  2. £5,000,000 from general revenue; and
  3. £17,000,000 comprising balances in excess of requirements in certain trust accounts. it has been the practice to appropriate for a specific purpose any surplus of a financial year. In providing by this bill for the appropriation of the surplus of last financial year, I am following that practice and at the. same time giving effect to the undertaking I gave in June last.

The money in certain trust accounts which it is proposed to transfer to the Consolidated Revenue are not directly attributable to war loan expenditure but have accumulated through provisions made against certain war-time risks and contingencies. The Import Procurement Suspense Account, from which it is proposed to transfer £4,000,000, was established during the period when lend-lease supplies were being received in Australia and the Government was at the same time making extensive cash purchases abroad of supplies for both war and civilian purposes. These supplies were distributed at stabilized prices which included an insurance loading. From the Marine War Risks Insurance Trust Account it is proposed to transfer £4,500,000. The balances in this account represent chiefly the difference between marine war risk premiums and claims. Balances in the Overseas Shipping Trust Account, from which it is proposed to transfer £3,000,000, arose through the operation of chartered shipping during the war and post-war period. From the War Damage Fund, the purpose of which was to provide a coverage to property during the war period against certain forms of war damage, it is proposed to transfer £5,500,000. In all the accounts to which I have just referred, sufficient balances are for the present being held to meet any expenditures likely to be required from these accounts. Having in view the origins of these balances which it is proposed to transfer, the Government considers it appropriate that the moneys involved should be applied to meeting a commitment which, in the strictest sense, arose from the war and has been carried forward from the war period. As I mentioned in my budget speech, the Parliament will be asked at a later date to amend the Audit Act to permit any future unrequired balances in trust accounts to be transferred to the Consolidated Revenue Fund or to the Loan Fund as in each case may be appropriate.

Debate (on motion by Mr. Archie Cameron) adjourned.

page 261


Customs Tariff Amendment (No. 1) ; Excise Tariff Amendment (No. 1)

In Committee of Ways and Means:

Minister for Commerce and Agriculture · Ballarat · ALP

. -I move - [Customs Tariff Amendment (No. 1).]

  1. That the Schedule to the Customs Tariff 1933-1948 be amended as hereinafter sot out, and that, on and after the ninth day of September, One thousand nine hundred and forty-eight, at nine o’clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Customs be collected inpursuance of the Customs Tariff 1933-1948 as so amended.
  2. That, without prejudice to the generality of paragraph 1 of these Proposals, the Governor-General may, from time to time by Proclamation declare that, from a time and date specified in the Proclamation, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of any British or foreign country specified in the Proclamation.
  3. That on and after the time and date specified in a Proclamation issued in accordance with the last preceding paragraph, the Intermediate Tariff shall apply to such goods specified in the Proclamation as are the produce or manufacture of a British or foreign country specified in that Proclamation.
  4. That any Proclamation issued in accordance with paragraph 2 of these Proposals may, from time to time, be revoked or varied by a further Proclamation, and upon the revocation or variation of the Proclamation, the Intermediate Tariff shall cease to apply to the goods specified in the Proclamation so revoked, or, as the case may be, the application of the Intermediate Tariff to the goods specified in the Proclamation so varied, shall be varied accordingly.
  5. That in these Proposals, unless the contrary intention appears - “ Proclamation “ means a Proclamation by the Governor-General, or the person for the time being administering the government of the Commonwealth, acting with the advice of the Federal Executive Council, and published in the Commonwealth of Australia Gazette ; “ theIntermediate Tariff” means the rates of duty set out in the Schedule to these Proposals, in the column headed “ Intermediate Tariff”, in respect of goods in relation to which the expression is used.

[Excise Tariff Amendment (No. 1).]

That the Schedule to the Excise Tariff 1921-1948 be amended as hereinafter set out, and that, on and after the ninth day of September, One thousand nine hundred and forty-eight, or such earlier date as is specified in the Schedule to these Proposals, at nine o'clock in the forenoon, reckoned according to standard time in the Australian Capital Territory, Duties of Excise be collected in pursuance of the Excise Tariff 1921-1948 as so amended. {: type="1" start="2"} 0. That, without prejudice to the generality of the preceding paragraph of these Proposals, where - {: type="a" start="a"} 0. it is provided that an item or portion of an item in the Schedule to the Excise Tariff 1921-1948 shall be omitted on a date to be fixed by Proclamation, the Governor-General may, by Proclamation, fix a date on which that item or portion of an item is omitted ; and 1. in respect of any goods covered by an item or portion of an item in these Proposals, it is provided that the rates of duty in respect of those goods shall be imposed on and after a date to be fixed by Proclamation, the Governor-General may, by Proclamation, fix a date on and after which the rates of duty in respect of those goods shall be imposed. The tariff variations resulting from the Customs and Excise Proposals I have just introduced are shown in the summary of alterations which has been distributed to honorable members. From the summary it will be seen that the only significant variations of customs duties are those relating to the establishment of protective tariff rates on dress gloves, hand and breast drills and carpenters' braces. The tariff changes made in these instances are in accordance with recommendations made by the Tariff Board. The board's reports on these industries were tabled by me earlier to-day. The industries concerned have developed during and since the war, and have demonstrated, to the satisfaction of the Tariff Board, the justice of their claim for reasonable tariff protection. The proposals also include a number of amendments principally of an administrative nature. Of this group the most important is the establishment of a new general by-law item 449 in lieu of items 174 (v), 219 (c), 404, 404a, 415a and 434, which have been deleted from the tariff. This amendment will simplify customs by-law administration without affecting rates of duty in any way. Full details of these amendments are shown in the summary of alterations. The final group of customs amendments represents merely reintroduction of items contained in the Tariff Proposals placed before the House in June last. There was no opportunity to debate these amendments during the last parliamentary session and they lapsed with the prorogation of Parliament. It will be recalled that validation acts were passed to ensure continuity of the amendments. The reintroduction of the items concerned, which are listed on the first page of the summary of alterations, will enable the Parliament to debate the amendments when the opportunity arises. The Excise Proposals contain two amendments which were foreshadowed in the budget speech of the Treasurer **(Mr. Chifley).** In the first place, excise duties have been removed from petrol distilled from coal and shale mined in Australia. This measure of relief to local producers will cost the revenue £46,000 in the current financial year and approximately £S5,000 in a full year. The excise duty on matches has been reduced by 9d. on 8,640 matches, that is a gross of boxes containing 60 matches. The reduction will operate from the beginning of the current financial year and arrangements will be made to refund the excess collections which have been made. The variation of this duty will not affect the retail price of matches. Its purpose is to offset increased costs in the industry and to obviate an increase of the present price, which is the only alternative to a reduction of duty. Corresponding adjustments have been made in the customs duties on imported matches so as to maintain relativity between the rates. The remaining items represent reintroduction of amendments contained in the excise proposal of June last, which lapsed when Parliament was prorogued. Progress reported. {: .page-start } page 266 {:#debate-31} ### INCOME TAX BILL 1948 *In Committee of Ways and Means:* **Mr. DEDMAN** (Corio- Minister for Defence, Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research) [9.47]. - I move - >That a tax he imposed upon incomes at the following rates: - > > *Division A. - Rate of tax in Respect of* *a* *Taxable Income Derived from Personal Exertion.* > >If the taxable income does not exceed £1,000 the rate of tax for every £1 of taxable income up to and including £350 shall be nil and the rate of tax for every £1 of taxable income in excess of £350 shall be 21.03 pence increasing uniformly by .03 of one penny for every £L ' by which the taxable income exceeds £351. > >If the taxable income exceeds £1,000 but does not exceed £2,000 the rate of tax for every £1 of taxable income up to and including £1,000 shall be 26.325 pence and the rate of tax for every £1 of taxable income in excess of £1,000 shall be 60.02 pence increasing uniformly by .02 of one penny for every £1 by which the taxable income exceeds £1,001. > >If the taxable income exceeds £2,000 but does not exceed £5,000 the rate of tax for every £1 of taxable income up to and including £2,000 shall be 53.1625 pence and the rate of tax for every £1 of taxable income in excess nf £2,000 shall be 100.009 pence increasing uniformly by .009 of one penny for every £1 by which the taxable income exceeds £2,001. > >If the taxable income exceeds £5,000 but does not exceed £9,000 the rate of tax for every £1 of taxable income up to and including £5,000 shall be 97.465 pence and the rate of tax for every £1 of taxable income in excess of £5,000 shall be 154.001 pence increasing uniformly by .001 of one penny for every £1 by which the taxable income exceeds £5,001. > >If the taxable income exceeds £9,000 the rate of ta.t for every £1 of taxable income up to and including £9,000 shall be 124.3694 pence and the rate of tax for every £1 of taxable income in excess of £9,000 shall be 162 pence. > > *Division B. - Rate of Tax in Respect of a Taxable Income Derived from Property. '* > >If the taxable income does not exceed £500 the rate of tax for every £1 of taxable income up to and including £350 shall be nil and the rate of tax for every £1 of taxable income in excess of £350 shall be 30.06 pence increasing uniformly by .06 of one penny for every £1 by which the taxable income exceeds £351. > >If the taxable income exceeds £500 but does not exceed £1.000 the rate of tax for every £1 of taxable income up to and including £500 shall be 11.7 pence and the rate of tax for every £1 of taxable income in excess of £500 shall be 48.03 pence increasing uniformly by 03 of one penny for every £1 by which the taxable income exceeds £501. > >If the taxable income exceeds £1,000 but does not exceed £2,000 the rate of tax for every £1 of taxable income up to and including £1,000 shall be 37.35 pence and the rate of tax for every £1 of taxable income in excess of £1,000 shall be 78.021 pence increasing uniformly by . 021 of one penny for every £1 by which the taxable income exceeds £1,001. > >If the taxable income exceeds £2,000 but does not exceed £5,000 the rate of tax for every £1 of taxable income up to and including £2,000 shall be68.175 pence and the rate of tax for every £1 of taxable income in excess of £2,000 shall be 120.007 pence increasing uniformly by 007 of one penny for every £1 by which the taxable income exceeds £2,001. > >If the taxable income exceeds £5,000 the rate of tax for every £1 of taxable income up to and including £5,000 shall be 111.87 pence and the rate of tax for every £1 of taxable income in excess of £5,000 shall be162 pence. > > *Division C - Rates of Tax in Respect of a Taxable Income Derived Partly from* *Personal* *Exertion and Partly from Property.* > >For every £l of taxable income derived from personal exertion, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under Division A, if the total taxable income of the taxpayer were derived exclusively from personal exertion, by the amount of the total taxable income. > >For every £1 of taxable income derived from property, the rate of tax shall be ascertained by dividing the total amount of the tax that would be payable under Division B, if the total taxable income of the taxpayer were derived exclusively from property, by the amount of the total taxable income. > > *Division D. - Rates of Tax by Reference to an Average Income.* > >For every £1 of taxable income derived from personal exer tion by a taxpayer to whose income Division 16 of Part III. of the Income Tax Assessment Act 1936-1948 applies, the rate of tax shall be ascertained by dividing the tax that would be payable under Division A upon a taxable income from personal exertion equal to his average income by that average income. > >For every £1 of taxable income derived from property by such a taxpayer, the rate of tax shall be ascertained by dividing the tax that would be payable under Division B upon a taxable income from property equal to his average income by that average income. > > *Division E.* - *Rates of Tax by Reference to a Notional Income.* > >For every £1 of the actual taxable income from personal exertion of a taxpayer deriving a notional income, as specified by subsection (1.) of section eighty-six of the Income Tax Assessment Act 1936-1948, the rate of tax shall be ascertained by dividing the tax that would be payable under Division A upon a taxable income from personal exertion equal tohis notional income by that notional income. > >For every £1 of the actual taxable income from property of such a taxpayer, the rate of tax shall be ascertained by dividing the tax that would be payable under Division B upon a taxable income from property equal to his notional income by that notional income. > > *Division F. - Rates of Tax Payable by a Trustee.* > >For every £1 of the taxable income in respect of which a trustee is liable, in pursuance of either section ninety-eight or section ninety-nine of the Income Tax Assessment Act 1930-1948, to be assessed and to pay tax, the rate of tax shall be the rate that would be payable under Division A, B, C, D or E, as the case requires, if one individual were liable to be assessed and to pay tax on that taxable income. > > *DivisionG. - Rates of Tax Payable by a Company, other than a Company in the Capacity of Trustee.* > >In the case of a company which is not a life assurance company, the rates of tax shall be- > >for every £1 of so much of the taxable income as does not exceed Five thousand pounds - Sixty pence; and > >for every £1 of the remainder of the taxable income - Seventy-two pence. > >In the case of a mutual life assurance company, the rates of tax shall be - > >for every £1 of so much of the taxable income as does not exceed Five thousand pounds - Forty-eight pence; and > >for every £1 of the remainder of the taxable income - Sixty pence. > >In the case of a life assurance company other than a mutual life assurance company the rate of tax shall be - > >for every £1 of so much of the mutual income of the company, as defined in sub-section (1a.) of section one hundred and sixtyc of the Income Tax Assessment Act 1 936-1948, as does not exceed Five thousand pounds - Forty-eight pence; > >for every £1 of the remainder *of* the mutual income of the company, as so defined - Sixty pence; > >for every £1 of so much of the taxable income of the company, other than mutual income as so defined as does not exceed the amount by which the mutual income of the company as so defined, is less than Five thousand pounds - Sixty pence; and > >for every £1 of that part of the taxable income to which none of the preceding provisions of this subparagraph applies - Seventy-two pence. > >For every £1 of that portion of the taxable income which has not been distributed as dividends, on which thecompany is liable in pursuance of PartIIIa. of theIncome Tax Assessment Act 1936-1948 topay further tax. the rate of further tax shall be Twenty-four pence. > >For every £1 of interest in respect of which a company is liable, in pursuance of sub-section (1.) of section one hundred and twenty-five of the Income Tax Assessment Act 1936-1948, to pay income tax, the rate of tax shall be Seventy-two pence. *Division H. - Tax Payable where Amount would otherwise include Odd Pence.* Where, apart from this Division, the income tax which a person would be liable to pay under the preceding Divisions, before deducting any rebate to which he is entitled in his assessment, leaves an amount of pence remaining when expressed in pounds and shillings - The Treasurer has indicated, in the course of his budget speech, that the Government proposes that the income tax and social services contribution be substantially reduced as from the 1st July last. This resolution introduces the rates of income tax to be declared for the financial year 1948-49, that is, the rates that will be applied to taxable incomes derived by individuals during the year ending the 30th June, 1949, and by companies during the year ended the 30th June, 1948. Under the pay-as-you-earn plan, the reduced rates for -individuals will be reflected in the tax instalments to be deducted from salaries or wages payable on and from the 1st October, 1948. There will, therefore, be some overdeduction during the first three months of the financial year and any consequent adjustment of the amount deducted will be made after the close of the year when the returns of the employees are lodged and assessed. The reduced rates will be taken into account in ascertaining the provisional tax payable in respect of income other than salary or wages of the year ending the 30th June, 1949. The revenue involved in the reduction of the income tax rates for individuals is estimated to be £18,000,000 per annum. When the proposed reduction of the rates of social services contribution contained in another measure is taken into account, the estimated reduction of individual taxation will amount to approximately £26,000,000 in a full year, and to £20,000,000 in the current financial year. The new rates of income tax, as distinct from social services contribution, will commence when the income reaches £351, instead of £251 as formerly, and will be graduated to 13s. 6d. in the £1. The combined ceiling rate of tax and contribution will, therefore, be retained at 15s. in the £1. In respect of income from personal exertion, however, the ceiling rate will apply to that part of the income in excess of £9,000 instead of the present figure of £5,000. It is proposed to follow the usual procedure of declaring a separate scale of rates to be applied to income from property. The tax payable under the property scale will be higher than the amount payable on a corresponding income from personal exertion. The maximum difference occurs at about an income of £1,000 when the combined property tax and social services contribution is approximately one-quarter greater than the combined personal exertion tax and contribution. The ceiling rate on property is the same as for personal exertion, but, for income from property, it applies to that part of the income in excess of £5,000, whereas, for income from personal exertion, the ceiling rate applies to that part of the income which is in excess of £9,000. Taxpayers with property income in excess of £5,000, or personal exertion income in excess of £9,000, will benefit by the reduction of rates on the first £5,000 or £9,000 respectively of their incomes. The new rates will have the effect of raising the limits of income which may be derived by persons with dependants before incurring any liability for income tax as distinct from social services contribution. Compared with existing limits, the amounts which will be free of income tax under the new scale will be as follows : - I should emphasize that this statement relates to income tax only. Social services contribution will be considered in a separate resolution. Details of the amount by which the liability is being reduced in individual cases may be ascertained from the tables which have been circulated, setting out the amounts payable at the new rates and comparing those amounts with the amounts payable at the war-time and present rates. The budget speech also foreshadowed a reduction in the rate of tax payable by companies. The reduction is reflected in the proposed company schedule which has been recast to ensure that the various classes of companies will benefit by the reduction of1s. in the £1 on the first £5,000 of the taxable income. It is estimated that the reduction in the company rate will reduce the revenue by about £1,500,000 per annum. The super tax payable by companies on the excess of the taxable income over £5,000 is being maintained. With minor exceptions, the classes of companies exempted from the super tax will be the same as previously. The exceptions comprise certain companies that receive dividends in excess of £5,000 from other companies. Since 1940, these companies have enjoyed immunity from super tax under a general exemption that was intended for application to small companies whose taxable profits for war-time company tax purposes did not exceed £1,000. Dividends received by companies were excluded in calculating the taxable profit of those companies. The exemption was fortuitous and there is no sound reason for its continuance. It should be mentioned that dividends are liable to super tax to the extent only that super tax has not already been paid on the income out of which the dividends were distributed. I commend the resolution for the favorable consideration of honorable members. Progress reported. {: .page-start } page 269 {:#debate-32} ### SOCIAL SERVICES CONTRIBUTION BILL 1948 *In Committee of Ways and Means:* **Mr. DEDMAN** (Corio- Minister for Defence, Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research) [9.55]. - I move - >That, notwithstanding anything contained in section five of the Social Services Contribution Act 1945-1947, where a person has, in accordance with section two hundred and twenty-one ii of the Income Tax Assessment Act 1936-1947, forwarded to the Commissioner any tax stamps sheet or group certificate issued to him in respect of deductions made in a year from his salary or wages, and the difference between the available deductions and the contribution which would otherwise be payable by that person in respect of the contributable income derived by him in that year is not more than Two shillings, the contribution payable by that person in respect of that contributable income be an amount equal to the available deductions. > >That the preceding paragraph of this resolution do not apply - > >in relation to a person who is liable to pay provisional contribution in respect of his income of the year immediately succeeding the year referred to in that paragraph; or > >in any case in which the amount of contribution which would, apart from that paragraph, be payable is Ten shillings and the available deductions are more than Ten shillings. > >That in the two preceding paragraphs of this resolution " the available deductions " mean the amount by which the sum of the amount represented by the face value of the tax stamps duly affixed to any tax stamps sheet referred to in paragraph 1 of this resolution and the amount of the deductions specified in any group certificate so referred to exceeds the income tax (if any) which the person so referred to is liable to pay in respect of income derived in the year so referred to. > >That, in lieu of the basic rate of contribution and the concessional rate of contribution set *out* in paragraphs (1.) and (2.) of the First Schedule to the Social Services Contribution Act 1945-1947, the following rates apply:- (1.) The basic rate of contribution for every £1 of the contributable income shall be Threepence, increasing uniformly by three-fiftieths of one penny for every £1 by which the contributable income exceeds £100, but the rate shall not in any case exceed One shilling and sixpence. (2.) The concessional rate of contribution for every £1 of the contributable income shall be the rate which bears the same proportion to the basic rate as the amount by which the contributable income exceeds the rebatable amount bears to - > >the contributable income; or > >Three hundred and fifty pounds, whichever in the lesser amount, but if the rate so ascertained exceeds the basic rate, the concessional rate of contribution shall be the same as the basic rate. > >That paragraphs 1 , 2 and 3 of this Resolution apply to all assessments for the financial year which commenced on the first day of July, One thousand nine hundred and forty-seven, and all subsequent years. > >That paragraph 4 of this Resolution do not apply to assessments for a financial year prior to that which commenced on the first day of July, One thousand nine hundred and fortyeight. The purpose of this resolution is to reduce the rate of social services contribution payable by persons in the lower income ranges to coincide with the reduction made in the income tax for persons in the higher ranges. As in respect of the income tax, the new rates of contribution will take effect as from the 1st July, 1948. The cost of the proposals contained in this resolution is approximately £8,000,000 in a full year. At present, the basic rate of contribution commences at 3d. in the £1 and is graduated to a maximum of 18d. in the £1 at an income of £250. The proposed basic rate will also commence at 3d. but the range of graduation will be extended so that the maximum of 18d. will not apply until an income of £350 is reached. Corresponding reductions are also proposed in the concessional rate of contribution payable by persons entitled to concessional allowances in respect of dependants, &c. The proposed concessional rate will not reach the maximum of 18d. in the £1 until the income is £100 higher than at present. The result of the adjustments to the basic rate and the concessional rate, respectively, will be to alter the range of graduation of the contribution to 18d. in the £1 as follows: - The resolution also introduces a new provision designed to economize in the costs of administration. A procedure was adopted last year under which a salary or wage earner attaches his group certificate or his tax stamps to his return of income. In the notice of assessment sent to him, he is allowed credit for the amount of the certificate or the value of the stamps as the case may be. This procedure frequently results in the taxpayer being called upon to pay a small balance, or becoming entitled to a small refund. The resolution provides for the amount of social services contribution to be adjusted to meet the value of the group certificate or stamps in any case where the balance payable or refundable would be 2s. or less. Such an adjustment will save the administrative costs involved in collecting, in refunding, and in accounting for these small balances. It is proposed that this provision shall commence to apply in assessments based on the income of the year which ended on the 30th June, 1948 - that is, in the assessments made in the current financial year. I commend the resolution for the favorable consideration of honorable members. Progress reported. {: .page-start } page 271 {:#debate-33} ### INCOME TAX ASSESSMENT Motion (by **Mr. Dedman)** agreed to - >That leave be given to bring in a bill for an act to amend the Income Tax Assessment Act 1936-1947. Bill presented, and read a first time. {:#subdebate-33-0} #### Second Reading {: #subdebate-33-0-s0 .speaker-KCF} ##### Mr DEDMAN:
Minister for Defence, Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP -- I move - >That the bill be now read a second time. The provisions of this bill to amend the Income Tax Assessment Act are mainly concerned with the incidence of taxation on private companies and their shareholders. While it has been generally recognized and accepted that, in the interests of the protection of the revenue and in fairness to taxpayers generally, some special form of taxation on the undistributed profits of private companies is essential, the basis on which the tax should be levied has been the subject of controversy for many years. The present tax has been criticized on the score that it is unequal in its incidence, bearing too heavily on some private companies while favouring others. The subject has received the consideration of the. Government, and a plan, within the framework of the present law, has been formulated which, it is considered, will bring the measure of income tax payable by private companies and their shareholders into harmony with the liabilities of other taxpayers. A matter of primary importance in connexion with the Government's proposals is the criteria by reference to which the classification of private companies should be determined. Under the present law, a private company may broadly be described as one which is controlled by or in the interests of seven or fewer persons. The present definition of "private company" in the Income Tax Assessment Act has been examined by the High Court in recent years and, in the light of observations made by the Court, it has become evident that some companies are outside the compass of the special taxing legislation, although they are essentially private in character. In. determining whether a company should be classed as a private company, a comparison may be made between the company and a partnership. In many instances, companies represent the incorporation of partnerships, the business of the company being conducted in exactly the same manner as by the partnership before incorporation. The maximum number of members of a partnership permitted under State laws is twenty. If more than twenty persons desire to carry on business collectively, it is necessary for them to incorporate a company of which they are the shareholders. On this ground, there is reason for regarding any company comprised of twenty or less shareholders as being a private company. Accordingly, the first branch of the proposed definition of " private company " includes a company, all the issued shares of which are held by twenty or less persons. In determining whether a company with more than twenty shareholders should be classified as private, the main factor to be taken into consideration is the number of persons who are capable of exercising control of the company, more particularly in respect of its dividend policy. It is generally accepted that the dividend policy of a company in which the shares are held by the general public is not greatly affected by consideration of the amount of tax that will be payable by individual shareholders. In any event, reliance can be placed on the influence of shareholders on the directorates of these companies to ensure that reasonable distributions of profits will he made. The Government affirms the principle of the present law that the special taxation provisions should not apply to companies in which the public is substantially interested. These companies and subsidiaries of public companies are specifically excluded from the scope of private company taxation. However, there are many companies with more than twenty shareholders which are operated substantially, in the interests of one person or in the interests of relatively few persons. In conformity with the principle on which the present definition is based, it is proposed that these companies should he taxed as private companies. The second branch of the definition will accordingly apply to a company which is capable of being controlled by not more than seven persons. There are also companies which represent the incorporation of family groups. In these companies, it is usually found that, although the shareholders may be more than twenty in number, the real control of the companies, including their dividend policies, is allowed to be exercised by comparatively few persons. Members of a family ordinarily permit their voting power to be exercised by, or will themselves vote in accord with, the leading members of the family group. Correspondingly, nominees exercise their voting power at the direction of their principals. It is accordingly proposed in the third branch of the definition of a private company to retain the provision of the present law that a person and his relatives and nominees shall be regarded as one voting unit. It is also proposed to alter the basis upon which, for taxing purposes, the distributable income of a private company is ascertained. Since the inception of the present system of taxation of the undistributed profits of private companies, those companies have been permitted to deduct payments of undistributed profits tax in the ascertainment of their distributable incomes. This deduction has afforded a strong inducement to many private companies to refrain from distributing their profits within a reasonable period after closing their accounts for a year. By so refraining from distribution, the companies incur liability to undistributed profits tax, which becomes a deductible amount in ascertaining the distributable income of the year in which the tax is paid. This deduction has proved to be the most fruitful source of inequality in the incidence of the tax on private companies generally, and has conferred an undue advantage on large companies whose shareholders are in the higher income brackets. Upon close examination, the Government has come to the conclusion that there is no sound principle on which the continuance of this deduction can be defended. It is a privilege conferred on private companies which is denied to individual taxpayers. Accordingly, the definition of " distributable income " is being altered to withdraw the deduction in assessments for the current financial year and future years. Consideration has been given by the Government to representations that there is need for the conservation of private company profits to meet the contingencies of business and generally to preserve the structural stability of private companies and that such reserves should be free from undistributed profits tax. While ensuring that the taxation payable by private companies will be commensurate with the tax payable by partners in a comparable partnership, the Government has found it possible to allow a measure of freedom from undistributed profits tax dependent on the level of the company's profit. The allowance will be on a graduated scale commencing at 30 per cent, on the first £2,000 of distributable income, 25 per cent, on the second £2,000, 20 per cent, on the third £2,000, 15 per cent, on the fourth £2,000 and 10 per cent, on the balance of the company's distributable income. As an indication of the graduated scale of the allowance, I point out that a distributable income of £2,000 will be free from undistributed profits tax to the extent of £600; a distributable income of £8,000 will be free to the extent of £1,800 ; and at the level of £40,000, the portion of the distributable income that will be free from undistributed profits tax will be £5,000. The proposed allowance, and the withdrawal of the deduction to which I previously referred, will substantially restore the equitable balance of taxation as between private companies and, to a large extent, cause the measure of taxation payable by private companies and their shareholders to accord with the liabilities of other taxpayers. The foregoing are the most important of the measures proposed by the Government for altering the incidence of tax on private companies, but there are some other proposals contained in the bill which I think should be mentioned. One of these proposals is designed to give a clear specification of the fund which is available to a private company for payment of tax-free dividends to its shareholders. In this connexion, I explain to the House that, when a private company has paid tax on its undistributed profits, dividends paid wholly and exclusively out of the taxed fund are free from tax in the hands of the shareholders. It is proposed to amend the law in conformity with the principle that the tax payable on profits is a charge against those profits. Only the balance of profits remaining after deduction of the taxation applicable thereto will be available to a company for distribution as tax-free dividends to the shareholders. The bill also contains provisions that are designed to nullify devices that have been employed by some private companies to defeat the general intention of the present legislation. Before leaving the subject of private company taxation, I should mention that the bill provides for a measure of simplification in the assessment of the undistributed profits tax. For the purposes of these assessments, concessional rebates of tax in respect of dependants, &c, are to be disregarded, and the incomes of private company shareholders are to be treated as being derived wholly from property. These simplifications of the calculation will not materially affect the amounts of undistributed profits tax payable by private companies. A clause in the bill extends the concession granted in 1946 for the purpose of encouraging industrial experts to come to Australia in the interests of the development of our industries. The provision made in 1946 granted immunity from Australian taxation in respect of the earnings of these experts during the first and second year of the visit to this country if their earnings were subject to tax in the country in which they were ordinarily resident. It has now been found that the services of some of these experts in Australia will be required beyond the period of two years. In these cases, it is proposed that during the third and fourth years of a visit, an expert will not be obliged to pay a measure of Australian taxation any greater than would be payable by him in his own country. Another clause modifies the taxability of allowances that are received by employees when they are obliged to work away from their home. In 1945, a provision was included in the Income Tax Assessment Act, the effect of which was generally to cause tax to be levied to the extent of 15s. a week on these allowances. The sum of 15s. a week was at that time regarded as the general average of saving in the domestic budget of the employee However, it has been represented that, in many instances, industrial tribunals have taken into account the domestic saving when reaching a determination of the rate of payment of the allowances. In these cases, where the allowance is paid in cash, it cannot fairly be said that there is any saving by the employee after he has met the expenses for which the allowance was granted. It is accordingly proposed that away-from-home allowances up to 50s. a week granted by industrial tribunals and paid in cash will be free from taxation. In order to encourage donations by taxpayers to the United Nations Appeal for Child Ten, the Government is including in the bill a provision extending the concessional allowances to gifts to this appeal. In the interests of governmental administration, the secrecy provisions of the Act are being amended to authorize the Commissioner of Taxation to communicate essential information to the Director-General of Social Services and to the Universities Commission. The opportunity has been taken to remove a misunderstanding in some quarters that social services contribution is a rebatable amount for income tax purposes. Clauses in the bill clearly state that an income tax rebate is not allowable in respect of the contribution. The bill is particularly technical in its nature, and in order that honorable members may better understand its provisions a memorandum explanatory of the clauses is being prepared and will be delivered to honorable members in the course of the next few days. Debate (on motion by **Mr. Fadden)** adjourned. {: .page-start } page 274 {:#debate-34} ### SOCIAL SERVICES CONTRIBUTION ASSESSMENT Motion (by **Mr. Dedman)** agreed to - >Thatleave be given to bring in a bill for an act to amend the Social Services Contribution {:#subdebate-34-0} #### Assessment Act . 1945-1947 Bill presented, and read a first time. {:#subdebate-34-1} #### Second Reading {: #subdebate-34-1-s0 .speaker-KCF} ##### Mr DEDMAN:
Minister for Defence, Minister for Post-war Reconstruction and Minister in charge of the Council for Scientific and Industrial Research · Corio · ALP -- I move - >That the bill be now read a second tim.e. This is a short bill to amend the Social Services Contribution Assessment Act 1945-1947. Its provisions are complementary to amendments proposed to the Income Tax Assessment Act by the hill just introduced to the House. The Income Tax Assessment Act and the Social Services Contribution Assessment Act are closely allied as, in the assesment and collection of social services contribution, the income tax provisions are largely adapted and applied for the purposes of the social services contribution. The proposed amendments concern the secrecy provisions and the provisions relating to the assessment of social services contribution on the undistributed profits of private companies. The effect of clause 2 of the bill is to authorize the Commissioner of Taxation to communicate essential information to the Director-General of Social Services and to the Universities Commission. As explained in connexion with the Income Tax Assessment Bill, the communication of this information is necessary in the interests of governmental administration. Clause 3 relates to the assessment of social services contribution on the undistributed incomes of private companies. New clauses which it is proposed shall be included in the private company division of the Income Tax Assessment Act are being adapted and applied for the purposes of the computation of social services contribution on the undistributed incomes of private companies. The amendment to the private company provisions will become operative in assessments for the current financial year. Debate (on motion by **Mr. Ryan)** adjourned. {: .page-start } page 274 {:#debate-35} ### LOAN (HOUSING) BILL 1948 Message recommending appropriation reported. *In committee* (Consideration of GovernorGeneral's message) : Motion (by **Mr. Lemmon)** agreed to - >That it is expedient that an appropriation of moneys be made for the purposes of a bill for an act to authorize the raising of moneys to bo advanced to the States for the purposes of housing. Resolution reported and adopted. *Ordered -* >That **Mr. Lemmon** and **Mr. Holloway** do prepare and bring in a bill to carry out the foregoing resolution. Bill presented by **Mr. Lemmon,** and read a first time. {:#subdebate-35-0} #### Second Reading **Mr. LEMMON** (Forrest - Minister for Works and Housing) [10.16]. - I moveThat the bill be now read a second time. The purpose of the bill is to obtain parliamentary approval for further advances to the States of capital funds totalling £14,000,000 in accordance with the provisions of the Commonwealth and State Housing Agreement Act 1945. From the commencement of the agreement in 1945 to the 30th June, 1948, advances totalling £31,115,000 have been made to the States. During the same period parliamentary appropriations amounting to £38,000,000 were approved leaving a balance of £6,8S5,000 available towards the current year's expenditure. In August last the Loan Council approved of a works programme which included £14,130,000 for rental houses under the Housing Agreement. The provision of £14,000,000 will cover expenditure to the end of the current financial year and, in addition, enable the building programme to continue in the early months of 1949-50. From the inception of the Commonwealth and State Housing Agreement in April, 1944, 25,361 dwellings were commenced in the five States operating under the scheme up to the end of June, 194S. Of this total, 15,271 dwellings were completed and 10,090 were under construction at the 30th June, 1948. More than 25 per cent. of housing built under the agreement' is being carried out in country areas, in which nearly 4,000 houses were completed and over 2,800 were under construction at the 30th June, 1948. At the same date, 11,304 houses had been completed and 7,261 were under construction in the capital cities. The allocation of houses to tenants by the State Housing authorities has been subject to the provision that at least 50 per cent, of tenants should be ex-servicemen. Each State has adhered to this provision and, in practice, the average proportion in the five States has been over 60 per cent. The main aim of the agreement is the provision of good standard housing for the lower income groups. A feature of the rental arrangements is the system of rebates, the basic principle of which is that families whose income equals the basic wage need not pay more than onefifth of that income in rent, regardless of the economic rent of the dwelling. As the family income rises above or falls below the basic wage, the rebate diminishes or increases. The total amount of rental rebates granted to tenants from the inception of the scheme to the 30th June, 1948, was £87,098. Although the agreement is primarily intended to make provision for rental housing, it is also provided in the agreement that the houses may be sold subject to certain conditions, and negotiations with the States to settle the administrative procedure in this connexion an. now in train. Debate (on motion by **Mr. Harrison.** adjourned. {: .page-start } page 275 {:#debate-36} ### COMMONWEALTH AID ROADS AND WORKS BILL 1948 Message recommending appropriation reported. *In committee* (Consideration of GovernorGeneral's message) : Motion (by **Mr. Ward)** agreed to - >That it is expedient than an appropriation of revenue be made for the purposes of a bill for an act to amend the Commonwealth Aid Roads and Works Act 1947. Resolution reported and adopted. *Ordered -* >That **Mr. Ward** and **Mr. Holloway** do prepare and bring in a bill to carry out the foregoing resolution. Bill presented by **Mr. Ward,** and read a first time. {:#subdebate-36-0} #### Second Reading {: #subdebate-36-0-s0 .speaker-KX7} ##### Mr WARD:
Minister for Transport and Minister for External Territories · East Sydney · ALP -- I move - >That the bill be now read a second time. The purpose of this bill is to seek the approval of the Parliament to the payment to States of an additional £1,000,000 a year for the construction and maintenance of roads through sparsely populated areas, timber country and rural areas, or, if the States think fit, upon the purchase of road-making plant for use in areas where the purchase of such plant is beyond the resources pf local authorities. It will be recalled that under the Commonwealth Aid Roads and Works Act 1947 provision is made for payment to States of an amount equal to 3d. per gallon on petrol (other than aviation petrol) entered for consumption, this amount to be used for general road purposes, and that, over and above this payment, an amount of £1,000,000 is to be provided each year for expenditure on what may be called secondary roads. It is expressly laid down that, except with the approval of the Minister, no part of this £1,000,000 shall be spent on State highways, main roads or trunk roads. The object of this special grant was to assist State governments and local authorities in building up the general Standard of roads which lie off the principal thoroughfares but which nevertheless have great importance in opening up new country and in serving settlers in outback areas. It also recognized the problem of those local authorities which have not the resources to buy modern road-making machinery but which would be greatly helped in maintaining their roads if such machinery were available "to them. The Government has had testimony from many quarters to show that this measure has met a very real need and that it is highly valued throughout the whole country. After consideration, therefore, the Government proposes to increase the grant by £1,000,000 a year, which will make the total funds provided for this purpose £2,000,000 a year. The grant will take effect as from the 1st July of this year and will apply until the 30th June, 1950, at which date the term of the present Commonwealth Aid Roads andWorks grant expires. The full position as to Commonwealth assistance for roads purposes is then to be reviewed. Construction and maintenance of roads in Australia is primarily the responsibility of State governments and local authorities, but the Commonwealth has long recognized the national importance of an adequate roads system from the stand-point of both defence and development and, year by year, the amount of funds it has provided for roads purposes has steadily grown. During the present financial year the amount is estimated at £7,300,000, which may be compared with an average payment of £3,800,000 in the three years immediately preceding the war. Expenditure on roads and thoroughfares in Australia at the present time is estimated to exceed £25,000,000 a year. This is a very large figure, and road works are undoubtedly making considerable demands upon resources of manpower and materials. At the same time it has to be considered that there was a serious lag in construction and main tenance of roads during the war period, and that this lag must be overtaken as soon as possible. Moreover, costs have risen substantially in recent years. That the Australian Government has fully recognized these problems is shown by the additional funds which it has made available for roads, first, by the act of last year and, now, by the proposal in this bill. I commend this measure to the favorable consideration of honorable members. Debate (on motion by **Mr. McDonald** ; adjourned. {: .page-start } page 276 {:#debate-37} ### PAPERS The following papers were presented : - >Commonwealth Public Service Act - Appointments - Department - > >Defence - D. J. Richardson. > >Health- A. T. Stocker. > >Postmaster-General - W. B. Beard, > >A. W. Bluett, W. A. Brooker, > >D. R. E. Edmonds, P. O. Gillard. > >A. King-Smith, K. E. White. > >Defence (Transitional Provisions) Act - > >National Security (Prices) Regulations -Orders- Nos. 3333, 3360, 3373-3391. > >Regulations - Statutory Rules 1948, No. 109. > >Land Tax Assessment Act - Applications for relief dealt with during the year 1947-48. House adjourned at 10.26 p.m. {: .page-start } page 276 {:#debate-38} ### ANSWERS TO QUESTIONS *The following answers to questions were circulated: -* {:#subdebate-38-0} #### Waterfront Employment {: #subdebate-38-0-s0 .speaker-JLL} ##### Mr Abbott: t asked the Minister representing the Minister for Shipping and Fuel, *upon notice -* >Will he have a statement prepared showing > >wages, (b) overtime rates, and (c) any other allowances payable to wharf labourers at (i) the 30th June, 1941. and (ii) the 30th June, 1948, or latest available date? {: #subdebate-38-0-s1 .speaker-KCF} ##### Mr Dedman:
ALP -- The Minister for Shipping and Fuel has supplied the following information: - {: type="a" start="a"} 0. Wages. - As at 30th June, 1941 : Hourly rate of pay at all ports other than those north of Bundaberg, 3s.1d.; at Rockhampton, 3s. 4d.; at Gladstone, Mackay and other ports north of Bundaberg, 3s.6d. As at 1st August. 1948: Hourly rate of pay at all ports other than those north of Bundaberg, 4s:10d. ; at Rockhampton, 5s.1d.; at Gladstone, Mackay and other ports north of Bundaberg, 5s. 3d. 1. *b* ) Overtime rates.-Week days, 30th June, 1941, and 1st August, 1948: 5 p.m. till midnight, time and one-half; midnight till 7 a.m., double time. Saturdays, 30th June, 1941.: 8 a.m. till 12 noon, ordinary rates; afternoon, double time. Saturdays, 1st August, 1948: Double time. 2. Allowances. - Tropical allowance of 3d. per hour at Rockhampton and 5d. per hour at Gladstone, Mackay and ports north of Mackay is included in the hourly rates shown in (a). Meal allowance: 30th' June, 1941, 2s.; 1st August, 1948, 2s.6d. Appearance money of 12s. is paid to those waterside workers who report at a pick-up centre but who are not employed on that day. {:#subdebate-38-1} #### Wool {: #subdebate-38-1-s0 .speaker-JLL} ##### Mr Abbott: t asked the Treasurer, *upon notice-* {: type="1" start="1"} 0. Has he seen a letter in a Sydney daily newspaper of the 2nd September, signed by **Mr. P.** A. Wright, president of the Graziers Association of New South Wales, wherein he said, referring to an exchange control notice issued to wool exporters by the Governor of the Commonwealth Bank on the 13th August last : - " Consultations either with the leaders of the wool-growers organizations or with their representatives on the Australian Wool Realization Commission should have been a preliminary to any Government move"? 1. Will he ascertain why the Governor of the bank stated in paragraph8 of the exchange control notice referred to : " The Commonwealth Bank in its exchange control administration has been greatly concerned at those developments and the problem has been examined in conjunction with the Australian Wool Realization Commission ", and whether consultations with the commission took place? {: #subdebate-38-1-s1 .speaker-A48} ##### Mr Chifley:
ALP -- The answers to the honorable member's questions are as follows : - {: type="1" start="1"} 0. No. 1. Consultations took place with the chairman of the Australian Wool Realization Commission on 28th July, 1948, and 11th August, 1948. I am advised that, at the meeting of the commission on 21st July, 1948, the chairman fully informed the other members of the commission of the nature of the problem involved and of the conference tobe held at the Commonwealth Bank. Bott le-l abelling *&* Machines. {: #subdebate-38-1-s2 .speaker-JLL} ##### Mr Abbott: t asked the Minister representing the Minister for Trade and Customs, *upon notice -* {: type="1" start="1"} 0. Is it a fact that, prior to October, 1947, an allocation of dollars was made and an im port licence granted for the purchase and export to Australia from the United States of America of a bottle-labelling machine? 1. Is it a fact that when the dollar restrictions were enforced in October, this licence and allocation were cancelled? 2. Subsequent to the withdrawal of Chit licence and the allocation of dollars, were representations made to the Minister for the import licence to be re-granted, and to the Treasury for a fresh allocation of dollars? 3. Is it a fact that the licence and allocation were re-granted and permission given to import the machine, subsequent to the 1st July, 1948? 4. Will he state the nature of the representations made to him for the renewal of the import licence, and by whom they were made, and will he state what representations were made by him or other parties to the Treasury for the re-allocation of the necessary dollars? 5. Will he lay on the table of the House the whole of the papers in connexion with this matter ? {: #subdebate-38-1-s3 .speaker-KYC} ##### Mr Pollard:
ALP -- The Minister for Trade and Customs has supplied the following information : - {: type="1" start="1"} 0. Prior to October, 1947, there was a num ber of licences in force for importation from the United States of America of various makes and kinds of bottle-labelling machines. 1. In conformity with the Government's decision of 26th November, 1947, a number of these import licences was revoked. 2. Since early this year, representations have been received from a number of companies for the re-instatement of some of the licences that were revoked. The circumstances surrounding each case were re-examined by my department and in certain instances it was decided to approve of the importation of the machines on the condition that they were not imported prior to the 1st July, 1948. 3. See answer to No. 3. 5 and 6. As several kinds and makes of bottle-labelling machines were involved in these transactions, I am unable to determine from the honorable member's question the particular machine that he has in mind. If he will supply me with fuller details I shall be glad to furnish whatever further information is available. Subsidies. {: #subdebate-38-1-s4 .speaker-A48} ##### Mr Chifley:
ALP y. - On the 3rd September, the honorable member for Griffith **(Mr. Conelan)** asked me a question regarding subsidies on. imported textiles and yarns. As promised in my oral reply, the following notification in regard to these materials has been forwarded to traders : - >It has been decided that items of imported textiles and yarns already eligible for import subsidy are to continue to be eligible provided they are in Australia or in direct transit to Australia on 31st July, 1948. The term " direct transit " is to be interpreted to include goods actually on board the vessel bringing them to Australia, on the 31st July, 1948, as well as goods actually on the water, provided that the ship containing the goods reports for entry to an Australian port by the 12th September, 1948. {:#subdebate-38-2} #### Broadcasting {: #subdebate-38-2-s0 .speaker-F4T} ##### Mr Fadden: n asked the Prime Minister, *upon notice -* {: type="1" start="1"} 0. Have any inquiries been made by a subcommittee consisting of the PostmasterGeneral, the Minister for Shipping and Fuel and the Minister for Information into the future control of broadcasting in Australia? 1. If so, have they submitted a report to the Government? 2. Does this report contain a recommendation that commercial broadcasting stations should be Government controlled? 3. If so, has the Government yet made a decision ? 4. Before any action is taken to nationalize commercial broadcasting stations, will he give Parliament an opportunity to debate the matter ? {: #subdebate-38-2-s1 .speaker-A48} ##### Mr Chifley:
ALP -- The answers to the right honorable gentleman's questions are as follows : - {: type="1" start="1"} 0. A sub-committee of Cabinet consisting of the Minister for Shipping and Fuel, the PostmasterGeneral and the Minister for Information was appointed some time ago to consider certain matters relating to the operations of broadcasting in Australia including television and frequency modulation. 1. A report has not yet been received. 3, 4 and 5. See answer to 2. {:#subdebate-38-3} #### Australian-Russian Society {: #subdebate-38-3-s0 .speaker-KIX} ##### Mr Hutchinson: n asked the Prime Minister, *upon notice -* {: type="1" start="1"} 0. Is it a fact that a Federal Cabinet Minister was a member of the Australian-Russian Society now officially declared a subversive organization by the New South Wales executive of the Austraiian Labour party? 1. Is it a fact that this Minister was a vice-president of that society? 2. Was the Prime Minister aware that this society is sponsored by the Communist party, and did he allow one of his Cabinet Ministers to accept a high position in that society, and at the same time remain a member of his Cabinet? 3. If he was not aware of this, how does he reconcile this with the fact that the Security Section of the Attorney-General's Department had reported to the Government that this society was a subversive organization? 4. Following the action of the State Executive of the Australian Labour party, does the Prime Minister intend to take action to ensure that vital defence secrets are not made available to any person, whether a Cabinet Min ister or otherwise, who has been a member of a subversive organization? 5. Further, is it a fact that **Mr. J.** S. Garden was also a member of this society? {: #subdebate-38-3-s1 .speaker-A48} ##### Mr Chifley:
ALP -- The answers to the honorable member's questions are as follows : - 1 and 2. I understand so and that the Minister has since resigned office in the organization. {: type="1" start="3"} 0. I am not aware that the society referred to is sponsored by the Communist party. I am aware, however, that its membership included representatives of other organizations and high church dignitaries. Although they usually do so, Ministers are not required to advise me as to details of organizations to which they belong. 1. It is not considered wise for security reasons to disclose the names of the organizations reported upon or the nature of the reports concerning them. 2. Both the Minister for Defence and I have stated on several occasions that every precaution is taken to see that vital defence secrets re not available to any one other than trustworthy persons. 3. I do not know whether **Mr. J.** S. Garden was or was not a member of the AustralianRussian Society. Distillate and Power Kerosene. **Mr. Chifley.** - On the 3rd September the honorable member for Richmond **(Mr. Anthony)** asked me a question regarding supplies of distillate and power kerosene for farmers on the. north coast. The Minister for Shipping and Fuel has advised as follows: - >In view of the dollar position and the worldwide shortage of petroleum products generally, the Commonwealth Government has found it necessary to fix sales and import quotas for various oil companies for power kerosene, lighting kerosene, gas oil and diesel oil and fuel oil. The Commonwealth Government appreciates the importance of these products to the community and the quotas have been determined on the basis of normal established demands of consumers. The quota scheme provides for oil companies to distribute these products through their usual channels and quantities available for consumption are sufficient to meet anticipated requirements based on sales made last year, which was one of high demand consequent upon the bountiful harvest and increased industrial activity. In implementing this scheme the Commonwealth Government has sought the co-operation of all members of the oil industry, but unfortunately has not received the support which might have been expected from certain companies. The Commonwealth Government has direct evidence that these companies have adopted intensive sales programmes, and it is possible that they have already sold the quotas allotted to them. > >There is no conclusive evidence, however, that the total quotas allotted to all companies by the Commonwealth Government are insufficient for normal requirements and *bona fide* consumers should be able to obtain adequate supplies. It may be necessary, however, for consumers ordinarily trading with companies not co-operating with the Government to obtain their requirements from other than their usual sources. The Government is anxious to avoid such a situation and will do everything possible to meet legitimate requirements of all consumers. Joint Coal Board. {: #subdebate-38-3-s2 .speaker-JLL} ##### Mr Abbott: t asked the Minister representing the Minister for Shipping and Fuel, *uponnotice -* {: type="1" start="1"} 0. When did the Joint Coal Board commence operations ?' 1. Who are its members? 2. What salary and/or allowances have been drawn by each since taking up his duties? 3. What stall is associated with the board? 4. What are (a) their names; (6) designations, and (c) salaries? 5. How much has been contributed by (a) the Commonwealth and (b) the States to the board? 6. What amounts have been allocated by the board in connexion with the coal industry and for what purpose in each case? {: #subdebate-38-3-s3 .speaker-KCF} ##### Mr Dedman:
ALP -- The Minister for Shipping and Fuel has supplied the following information : - {: type="1" start="1"} 0. The Joint Coal Board commenced operations on 1st March, 1947. 1. Theboard is constituted . as follows : - **Chairman, Mr. K.** A. Cameron; members, Messrs. A. E. Warburton and R. P. Jack. 2. Salaries are - Chairman, £5,000 per annum; members, £2,500 per annum. No allowances are payable other than travelling allowance' at the rate of £2 2s. per day when away from head-quarters. 4 and 5. Following is a summary of ' staff at present employed by the board at its head office and the four district offices in the coalfield areas, including staff made available to the Coal Industry Tribunal and Local Coal Authorities: - The submission of the further detailed Information originally asked for by the honorable member in respect of each member of the board's staff would involve the preparation of a lengthy document, but; should the information now supplied not meet the honorable member's requirements, further details required by him can be made available in due course. {: type="1" start="6"} 0. From the inception of the board until the 30th June, 1948, the amounts paid by the two governments to the board have been -

Cite as: Australia, House of Representatives, Debates, 8 September 1948, viewed 22 October 2017, <>.